Taxes are on everyone's minds right now. With debate about the Bush Tax Cuts and the Alternative Minimum Tax and the upcoming filing deadline, it's apparent that October has become the new April. Now is the time for a tax tune up to bring your tax picture into focus so there are no surprises next spring
• Top questions to consider when tuning up your taxes
1.
If you took the home buyer credit this summer, when should you file?? There's no reason to wait. File an amended 2009 return and get your money sooner.
2.
If you filed an extension this spring, what do you need to do now?- Remember that an extension to file was not an extension to pay. If you haven't paid most of your tax bill remember there are likely penalties and interest. There's still time to see a tax professional and get all the credits and deductions to which you're entitled. The filing deadline for those who filed an extension is Oct. 15.
3.
Unemployment is still close to double digits, many have been unemployed for more than a year, do they need to file?? All individual tax situations are different. However, it's important to remember that all unemployment compensation is taxable this year. In addition, because they may be in a lower income bracket, they may qualify for more deductions or different types of deductions than they have in the past. Also, keep in mind that certain job search expenses can be deductible for some taxpayers.
4.
How can taxpayers still lower their tax bill this year?? There are three primary ways to reduce your tax bill with just three months remaining – investing in yourself, your retirement or your home. Go back to school for a $4,000 higher-education credit, contribute to an IRA or increase 401(k) contributions and finally take advantage of up to $1,500 of home energy efficiency upgrades.
5.
What do taxpayers need to do now to be ready to file next January?? Start gathering receipts now and organizing them based on categories such as charitable, medical, school and work. Have a W-4 tax tune-up to determine if you are having enough taxes withheld from your paycheck.
6.
What will happen if the Bush tax cuts expire?98 percent of all taxpayers will be affected in some way if the Bush tax cuts expire. These are some of the key tax credits and rates in jeopardy:
a. Tax Brackets, all taxpayers will face across-the-board increases as tax rates will increase of all income groups.
Current brackets will increase from 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent by income level to 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent
b. Parents will get $500 less for to deduct from their taxable income for children under the age of 17 if the Child Tax Credit expires.
c. Parents will get $600 less for child or dependent benefits.
d. College graduates will no longer be able to deduct the loan interest payments
7.
Is there anything people can do to offset the impact of the Bush tax cuts expiring?The time for planning is now. There are still three months remaining in the year. Have a W-4 tax tune up to determine if you are having enough taxes withheld from your paycheck.
8.
What is the AMT?The AMT was first introduced in 1969. Its purpose was to cut down on the number of Americans who would claim so many deductions they ended up not having to pay any federal taxes at all. Here's the catch: the AMT is not indexed to inflation.
a. Even though incomes have increased since the 1970s, AMT income exemption levels have not been adjusted in the same way.
b. As a result, millions of unassuming middle-income taxpayers have been stung by the AMT.
9.
What are the impacts of the AMT expiring?Our experts at The Tax Institute expect that as many as 25 million taxpayers will have to pay $3,000 to $5,000 more in federal taxes this April if Congress takes no action on the AMT.
Courtesy of H& R Block – (760) 631-2090.
• Top questions to consider when tuning up your taxes
1.
If you took the home buyer credit this summer, when should you file?? There's no reason to wait. File an amended 2009 return and get your money sooner.
2.
If you filed an extension this spring, what do you need to do now?- Remember that an extension to file was not an extension to pay. If you haven't paid most of your tax bill remember there are likely penalties and interest. There's still time to see a tax professional and get all the credits and deductions to which you're entitled. The filing deadline for those who filed an extension is Oct. 15.
3.
Unemployment is still close to double digits, many have been unemployed for more than a year, do they need to file?? All individual tax situations are different. However, it's important to remember that all unemployment compensation is taxable this year. In addition, because they may be in a lower income bracket, they may qualify for more deductions or different types of deductions than they have in the past. Also, keep in mind that certain job search expenses can be deductible for some taxpayers.
4.
How can taxpayers still lower their tax bill this year?? There are three primary ways to reduce your tax bill with just three months remaining – investing in yourself, your retirement or your home. Go back to school for a $4,000 higher-education credit, contribute to an IRA or increase 401(k) contributions and finally take advantage of up to $1,500 of home energy efficiency upgrades.
5.
What do taxpayers need to do now to be ready to file next January?? Start gathering receipts now and organizing them based on categories such as charitable, medical, school and work. Have a W-4 tax tune-up to determine if you are having enough taxes withheld from your paycheck.
6.
What will happen if the Bush tax cuts expire?98 percent of all taxpayers will be affected in some way if the Bush tax cuts expire. These are some of the key tax credits and rates in jeopardy:
a. Tax Brackets, all taxpayers will face across-the-board increases as tax rates will increase of all income groups.
Current brackets will increase from 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent by income level to 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent
b. Parents will get $500 less for to deduct from their taxable income for children under the age of 17 if the Child Tax Credit expires.
c. Parents will get $600 less for child or dependent benefits.
d. College graduates will no longer be able to deduct the loan interest payments
7.
Is there anything people can do to offset the impact of the Bush tax cuts expiring?The time for planning is now. There are still three months remaining in the year. Have a W-4 tax tune up to determine if you are having enough taxes withheld from your paycheck.
8.
What is the AMT?The AMT was first introduced in 1969. Its purpose was to cut down on the number of Americans who would claim so many deductions they ended up not having to pay any federal taxes at all. Here's the catch: the AMT is not indexed to inflation.
a. Even though incomes have increased since the 1970s, AMT income exemption levels have not been adjusted in the same way.
b. As a result, millions of unassuming middle-income taxpayers have been stung by the AMT.
9.
What are the impacts of the AMT expiring?Our experts at The Tax Institute expect that as many as 25 million taxpayers will have to pay $3,000 to $5,000 more in federal taxes this April if Congress takes no action on the AMT.
Courtesy of H& R Block – (760) 631-2090.