March 7, 2017

Nine Common Filing Errors to Avoid

The IRS encourages taxpayers to file an accurate tax return. If a taxpayer makes an error on their return, it will likely take longer for the IRS to process it. This could delay a refund. Avoid many common errors by filing electronically. IRS e-file is the most accurate way to file a tax return. All taxpayers can use IRS Free File at no cost. Here are nine common errors to avoid when preparing a tax return: Missing or Inaccurate Social Security Numbers. Be sure to enter each SSN on a tax return exactly as printed on the Social Security card. Misspelled Names. Spell all names listed on a tax return exactly as listed on that individual’s Social Security card. Filing Status Errors.  Some people claim the wrong filing status, such as Head of Household instead of Single. The Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status. E-file software also helps prevent mistakes. Math Mistakes.  Math errors are common. They range from simple addition and subtraction to more complex items. Transactions like figuring the taxable portion of a pension, IRA distribution or Social Security benefits are more difficult and result in more errors. Taxpayers should always double […]
August 24, 2016

Back-to-College Tax Tips – Financially Simple

“Back-to-College Tax Tips”If you, your spouse, or a dependent is heading off to college, there are some important tax-saving tips you should know about. Here’s what the IRS says: Back-to-College Tax Tips You can claim only one type of education credit per student on your tax return each year. If you have multiple eligible students, you could claim a different credit for each student. To qualify, education expenses must be for tuition, fees, and “related expenses” for an eligible student. Expenses must be paid for attendance at eligible higher education institutions, including most colleges and universities. Ask the school whether they are an eligible institution or check the school’s accreditation status in the U.S. Department of Education’s Accreditation Database. The American Opportunity Tax Credit: The AOTC is worth up to $2,500 per year, per eligible student. You may claim this credit only for the first four years of higher education. 40% of the AOTC is refundable, which means if you are eligible, you can get up to $1,000 of the credit as a refund, even if you do not owe any taxes. The Lifetime Learning Credit: The LLC is worth up to $2,000 on your tax return. There is no […]
August 2, 2016
Tax Tip: Rules for Home Office Deductions

Tax Tips for Vacation Rentals – Financial Simple

Tax Tips for Vacation Rentals The IRS generally requires that you report all rental income on your tax return. However, if you only occasionally rent out a property for short periods of time and use it as a home for the rest of the year, you may not have to report the income. Here’s what the IRS says about vacation homes: A vacation property is defined as “a house, apartment, condominium, mobile home, boat, or similar property.” If you rent out a home for less than 15 days per year and use it as a home the rest of the time, you may not need to report the income. If your house is considered a rental property, you may deduct rental expenses related to the property from your taxes as long as they do not exceed the income received. If you also use the house as a home, you must segregate expenses accrued during the personal use period. Personal use may include use by family, friends, or anyone who pays you less than market rate in rent. For more information about tax issues around rental or vacation homes, consult a tax professional in your area or see IRS Publication 505, […]
June 9, 2016
Tax Tip: Rules for Home Office Deductions

Summer Wedding? Remember These Tax Tips

“Summer Wedding?  Remember These Tax Tips”, If you or someone you love is getting married this summer, keep these important tax issues in mind. Taking care of them now can help reduce your stress at tax time. Change names: IRS rules require that the names and Social Security numbers on your tax return match your Social Security Administration records. To formally change your name, file Form SS-5, “Application for a Social Security Card”, with the Social Security Administration. Change tax withholding: A marital status change means you must give your employer a new Form W-4, “Employee’s Withholding Allowance Certificate.” You should also meet with a tax professional to determine how your combined income affects your tax liabilities. Change filing status: If you’re married on or before December 31, you are married for the whole year for tax purposes. You and your spouse can choose to file your federal income tax return either jointly or separately each year. You may want to ask a tax professional to run the numbers to see which status results in the lowest tax liability. For more information about filing taxes as a newlywed, consult a tax professional in your area. Tip courtesy of IRS.gov[18] 18 http://www.irs.gov/uac/Newsroom/Summer-Weddings-Mean-Tax-Changes