Charitable Donations

Can I deduct my donations on my taxes? It’s a question I get fairly frequently as a professional tax preparer. The answer is, it depends. In this TaxAssurances YouTube video I walk through how taxpayers can or cannot deduct the donations they make to different charitable organizations.

Also, here’s a helpful IRS website that goes over how taxpayers can potential take charitable donations as a deduction on their tax return. https://www.irs.gov/taxtopics/tc506 

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How Can a Married Spouse File Head of Household?

For a number of reasons some married couples want to file their tax returns separately. Usually that means they have to file their individual tax returns as “married filing separately.” Unfortunately, filing that way causes them to lose certain valuable tax credits.

However, there is a way they can file as “Head of Household” and keep those credits. In this TaxAssurances YouTube video I walk through those options.

Also, here is a helpful IRS website that provides more guidance for couples that want to file their tax returns separately but still keep valuable tax credits: https://www.irs.gov/publications/p504#en_US_2019_publink1000175861

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Is My IRS Corona Virus Check Taxable?

Millions of American have received checks from the IRS as a result of the corona virus. One of the outstanding questions about this check has been whether or not it’s taxable on the 2020 tax return. In this TaxAssurances’ YouTube video I answer that question.

Also, here is a helpful IRS website that provides more information about the economic impact of the corona virus. https://www.irs.gov/coronavirus/economic-impact-payment-information-center

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I Can’t Get Through to the IRS

Employees at the IRS are dealing with the impact of the coronavirus as well. Some people are at work but many are not. Because of that, reaching someone to answer any questions will be difficult. In this TaxAssurances YouTube video, I talk about the challenges taxpayers will facing in trying to reach a representative at the IRS.

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The Different Types of Business Entities

When it comes to setting up a business, the owners of the business have a number of options to choose from. In this TaxAssurances YouTube video I give a brief listing of the different types of entities available to choose from. I also provide the year end tax forms that need to be filed for the business entity.

Along with my video summary here is an IRS summary of the different business entity types to choose from: https://www.irs.gov/businesses/small-businesses-self-employed/business-structures

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FREE REVIEWS!!! That’s Why TaxAssurances Loves Turbotax.

At TaxAssurances we LOVE turbotax by intuit and all of the other self prepare tax software out there! We would give it away for free if we could.

To most people that sounds strange. Why would a professional tax preparer like something that cuts them out completely and is cheaper competition?

I’ll tell you why. FREE REVIEWS!!! That’s why TaxAssurances loves turbotax.

Over the years, in doing FREE REVIEWS of turbotax and other self prepared tax returns that have already been filed with the IRS, TaxAssurances has realized that between 25 – 30% of the returns were wrong. Flat out!

The taxpayer cheated themself out of a bigger tax refund because they didn’t want to “pay someone a lot of money just to put numbers in the computer.” They could “do it themselves and save money.” So when we’ve shown the taxpayer the hundreds or thousands of dollars extra in refunds they were entitled to but missed, they gladly pay the extra $250 or more to fix it and get their bigger refund. And tell friends what we did.

So if you’ve already done your own taxes over the last 3 years (2018, 2017, 2016) and filed it with the IRS, DM or call us today at 914-278-9241. We cover all 50 states and we’ll see if we can get an even bigger refund for you.

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Avoid IRS Phone Scams

At least once a month I’ll receive a nervous phone call from someone worried about the IRS. They just got off the phone with someone that said they were an IRS agent and unless they send a few thousand dollars in a day or two, the IRS is going to send the police to their home or job to arrest them. That’s a phone scam. The IRS does not operate that way.

If you have done your taxes in the past and you have a bill, then you’re going to know that you owe. But the IRS does not just out of the blue call and tell a taxpayer that they owe some unexpected amount. They also don’t just send the police to someone’s home or job like that.

Here’s a TaxAssurances YouTube video I did about these IRS phone scams.

Here’s what the IRS says they will never do when it comes to taxes and communicating with the public.

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So if you get a phone call like this, hang up. If you’re still not sure and want peace of mind, call the IRS at 800-829-1040. They can go over your tax history to let you know where you stand with them.

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Chapter from TaxAssurances’ Book: Child Tax Credit

 

The following post is a chapter in the TaxAssurances’ book, “Top 12 Tax Deductions You Might Have Missed. Tax Tips For People Who Do Their Own Federal Taxes.”

You can purchase the full book on Amazon.

Chapter 1  Child Tax Credit

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Besides being a blessing to a parent’s life, children can provide some real tax benefits. There are a few to consider.

First and foremost, they increase the number of exemptions and deductions a parent can have on their tax return. That’s a great start. But in this chapter, we’ll specifically discuss the child tax credit.

The $1,000 credit per child helps lower a parent’s tax liability for the year. And parents can use the credit for each one of their children.

There are some requirements to take the child tax credit and the IRS has provided some guidance. Here’s exactly what they say:

A qualifying child for purposes of the child tax credit is a child who:

  1. Is your son, daughter, stepchild, foster child, adopted child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, your grandchild, niece, or nephew),
  2. Will be under age 17 at the end of the year,
  3. Did not provide over half of his or her own support for the year,
  4. Lived with you for more than half of the year (with certain exceptions),
  5. Is claimed as a dependent on your return,
  6. Does not file a joint return for the year (or files it only to claim a refund of withheld income tax or estimated tax paid), and  
  7. Was a U.S. citizen, a U.S. national, or a U.S. resident alien. For more information, see Pub. 519, U.S. Tax Guide for Aliens. If the child was adopted, see Adopted child.

Now, it is worth noting that the IRS imposes limits on taking the credit. Also, some parents may not be able to take the credit at all. Here’s what they says about those limits specifically:

You must reduce the maximum credit amount of $1,000 for each child if either (1) or (2) applies. 

  1. The amount on Form 1040, line 47; Form 1040A, line 30; or Form 1040NR, line 45, is less than the credit. If this amount is zero, you cannot take this credit because there is no any tax to reduce. But you may be able to take the additional child tax credit. This credit is for certain individuals who get less than the full amount of the child tax credit. The additional child tax credit may give you a refund even if you do not owe any tax. 
  1. Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status. 
  1. Married filing jointly – $110,000. 
  1. Single, head of household, or qualifying widow(er) – $75,000. 
  1. Married filing separately – $55,000.

Now if that seems confusing don’t worry. The tax prep software works out the details for you. Just know that it is a credit that should appear on your tax return if you qualify.

So if you’re a parent that meets all of these qualifications, make sure you include all your child’s information on your tax return. It can help lower your taxes and potentially get you a larger tax refund.

For more information about the child tax credit and the additional child tax credit, read IRS Publication 972 on the IRS.gov website.

Again, You can purchase the full book on Amazon.

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Alimony Payments Are Tax Deductible

Here’s how the IRS describes what is tax deductible when it comes to divorce or separation:

Amounts paid under divorce or separate maintenance decrees or written separation agreements entered into between you and your spouse or former spouse are considered alimony for federal tax purposes if:

  • You and your spouse or former spouse do not file a joint return with each other
  • You pay in cash (including checks or money orders)
  • The payment is received by (or on behalf of) your spouse or former spouse
  • The divorce or separate maintenance decree or written separation agreement does not say the payment is not alimony
  • If legally separated under a decree of divorce or separate maintenance, you and your former spouse are not members of the same household when you make the payment
  • You have no liability to make the payment (in cash or property) after the death of your spouse or former spouse, and
  • Your payment is not treated as child support or a property settlement

So as you can see, for taxpayers that are going through a divorce and have to pay alimony there is a silver lining. The payments are tax deductible.

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Accounting is a Boring Subject…

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Not everyone will master the art of accounting.

An art is the study of implementation of techniques and methods. Accountants are the artist that turn the scientific method into practical use. The art of accounting is taking those diverse ranges of human activities, studying them, and presenting the financial findings by following and implementing GAAP.

Having an accountant can drastically influence the success of your business or your finances. TaxAssurances specialize in bookkeeping, payroll, tax return preparation (both business and personal) and IRS and state tax relief.

Check our Yelp reviews to see the experience other clients have had with us. Also we’re TAKING $50 OFF TAX RETURNS FOR THE NEXT 5 NEW CLIENTS.

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