Tax fraud and Internal Revenue Service (IRS) Tools

What is tax fraud, and how does our government control it? That's a really big question to answer, so let's break it apart and answer it in two different paragraphs. Tax fraud is the intentional avoidance of tax due by a taxpayer, corporation, or other legal entity. There is a vast difference between the opportunity to minimize your tax liability and the direct avoidance of any responsibility. The tax laws and regulations of the Internal Revenue Service are there for the benefit of the taxpayer. If there is a way to reduce or minimize the amount of tax due, legally, by all means citizens are encouraged to take the break. There are all sorts of ways to commit tax fraud, and many famous cases have been tried, such as Al Capone and Willy Nelson.

When, as a taxpayer, you seek whatever legal means possible to avoid tax liability, you are guilty of no crime. It is your given right to seek a means to minimize your liability, in order to keep more of your money. However, when companies, individuals, or any other legal entities attempt to avoid their legal responsibility, we as a country suffer. The government operates on tax dollars. Tax dollars that everyone who has been deemed liable must provide, and if not provided, penalizes everyone.

Tax fraud has been a part of society for as long as there have been societies. Even during Roman rule, there were tax collectors, and individuals who evaded their payment of taxes. This country was founded on the precept that England charged an unfair tax on tea (and other various assorted sundry) to the point that the colonists were unfairly taxed, without a voice in the government. The Internal Revenue Service is charged with overseeing the regulation and prosecution of any person or entity that avoids payment of taxes due, and can assess penalties for those who succeed.

What tools does the Internal Revenue Service (IRS) use to control tax fraud? There are actually several means by which the IRS can control tax fraud, once they discover the crime has been committed. How do they detect tax fraud? The IRS has some 2800 special agents that are trained to gather information that is used to detect tax fraud; they have unlimited access to tax returns, the power to issue summons regarding needed financial information, and the right to seize or freeze monies in the attempt to collect the necessary financial information.

Once the tax fraud has been detected, the Internal Revenue Service can levy tax liens, seize assets, freeze money in checking and savings accounts, and garnish wages. Any and all properties held by the individual taxpayer can be seized, and sold at auction if no attempt is made to repay the liability. Everyone that is determined to be involved in an evasive or fraudulent act of tax liability has the opportunity to be heard, to meet with the Internal Revenue Service, and receive a trial to determine if the accused party is guilty. It is generally in the individual's best interest to settle with the Internal Revenue Service if there is any possible doubt as to their innocence.

That's not to say that the Internal Revenue Service has always played fairly, or that they are free from mistakes. This is not so. There have been many instances of improper intelligence access, and errors on the part of the Internal Revenue. But, in the majority of cases, the tax fraud accusation was legitimate, and the individual charged was guilty. Many individual taxpayers rely on accountants and business managers to handle their financial affairs; in fact, many are not even aware of the status of their finances. It is however, ultimately, the individual taxpayer's responsibility to be held accountable for the information provided to the Internal Revenue Service. So, if you're going to be the one in front of the Internal Revenue, you should do yourself a favor and examine your return, understand what you're reading, and check the return for accuracy.



By : Hans Hasselfors
Hans Hasselfors is the founder of http://www.SubmitYourNewArticle.com. You may find varied tax fraud articles in our article directory.

Tax Deduction Software - Calculate Your Earnings

We all love computers and the fact that it exists to make our jobs simpler. And they have invaded the field of taxation like never before.

A multitude of tax deduction software is available in the market at dirt cheap prices.
1. for complex tax returns: If you have a huge business or multiple entries, then TurboTax Premier and Complete Tax is the best option available for you.

Both are web-based tax programs though Turbo Tax has a PC-based version too. Turbo Tax premieres an icing on the cake for people with rental income. Complete Tax, a time saver, on the other hand is very good when it comes to importing capital gains entries directly from Gains keeper.

2. For Straight-Forward Tax Returns: this is for people who enjoy bank interest in their accounts or from mutual funds. Tax Act is the best bet available in the market. Calculates returns as well as penalties.

The web version of Tax Act charges $7.95 to e-file a federal return and another $7.95 to file a state return. Good tax software is Snap Tax. It is reliable, quick and fills out Form 1040-EZ in 15 minutes and e-files your returns in half an hour.

3. for unique tax situations: a lot of complexities can occur while filing the returns. To manage such a web of intricacies, you have the Turbo Tax Premier which is near to the professional help that you can get.

4. Free Tax Software: The IRS, in partnership with various software companies, provides easy-to-use, free or almost free software to customers who meet a certain eligibility criteria.
- Complete Tax - offers web-based interface;
-Free File- which can help prepare and e-file your state return for no extra charge;
-Tax Act Online- which has a very good free file version and is one of the fastest;
-Tax Engine - which is free for everyone, ($10 extra to prepare state return) and offers an easy-to-use tax program that features both the interview-style and forms-based input?
-H&R Block Free File - which offers free tax preparation if your adjusted gross income is $34,000 or less. It is recommended only for the simplest tax returns. Preparing a state return costs an extra $19.95 to $29.95.

And the last but not the least, Online Taxes can be used for free if your gross income is less than $150000.

Could calculation of tax be simpler than this? I don't think so. Your tax returns now should be a simple affair and you don't need a consultant to do this either.



About the Author
Find more about Tax Deductions at http://taxdeduct.net

Child Custody Agreement and Taxes

A child custody agreement can have serious implications on your tax filing and your taxes overall. This issue should be addressed with your attorney or with your accountant while you are going through the process of negotiating or litigating child custody or a divorce agreement. Waiting until after you have finalized a child custody agreement to investigate the tax impact is not adviseable.

State law on child custody does not dictate who gets the tax deductions. If your child custody agreement is entirely silent on this issue, the parent with primary residential or sole custody will have all of the tax benefits available through the children. That party will be able to claim the children as deductions, and so forth. This can be a significant issue. There are parents who simply assume that if they are paying thousands of dollars per year in support, they will be able to take the children as deductions. Not so. This is incredibly important when you consider that all child support payments are not tax deductible to the payor and they are not taxable to the recipient parent.

Thus, when negotiating your cusody agreement, you must address the issue of how custody will be structured and who will recieve the tax benefits. This negotiation should be a part of an overall financial scheme that encompasses a consideration of all issues, including child custody, child support, property, alimony, and tax impact.

The ability to claim head of household instead of married filing separate or even filing single can be incredibly important to your overall tax scheme. You can claim head of household if you have your children for more than 50% of the time. Thus, a head of household tax filing should be a part of the overall negiating outline in a divorce or separation situation. A child custody that is silent on this issue is really not a well negotiated or written agreement.

Your child custody agreement can address this issue in a number of ways. If your child custody agreement provides for joint shared custody, it must state who has the children for 50% of the time. If you have two children, you can divide that up so that each parent has the possibility of fiing for head of household. If you simply have joint custody and one parent has residential custody, you can still provide a head of household deduction to the other parent by wording the agreement in a way that allows for that filing.

There are other tax benefits available to parents that have to be considered when negotiating a child custody agreement. Many or most of those tax benefits are variable depending upon your income level ad whether or not you can claim the child or children as deductions. If you are really thinking through your child custody agreement, you will negotiate all of these benefits. The objective should be to maximize all available benefits for both parties, thereby providing an overall highly advantageous tax impact for your child custody agreement.



About the Author
Uk divorce law is an informative website that looks into all aspects of divorce law, from money and house sharing all through to children laws. To find out more visit http://www.ukdivorcelaw.com

Top 5 Missed Tax Deductions

How many times have you done your taxes, and a week or a month later realized you forgot a deduction? The tax law is very complicated, so it's easy to miss a deduction or two. In my experience, these are the top 5 missed tax deductions.

1. Non-Cash Donations

Did you clean out your closets this year? Chances are you donated those items to Goodwill or a similar non-profit organization. The value of donated items (clothing, furniture, etc.) is deductible. You will need to get a written receipt and assign a value to these items, but the tax savings are worth the effort.

2. Points on Refinancing

With interest rates so low the past few years, there have been a record-number of houses refinanced. If you refinanced, you may have paid points to get a lower interest rate. These points are deductible over the life of the new loan. In addition, if you incurred points on an old refinancing, any unamortized points are deductible in the year of the new refinancing.

3. Educator Expenses

If you're a qualified educator (teacher, aide, instructor or principal), you can deduct up to $250 for materials you bought for the classroom. Qualified expenses include books, supplies, and computer equipment. This law is set to expire in 2006, so take advantage of it now if you qualify.

4. Investment and Tax Expenses

Expenses for tax planning and investment advice are deductible as a miscellaneous deduction, subject to the 2% Adjusted Gross Income (AGI) limitation. Expenses that qualify include tax preparation fees, safe deposit box fees, fees paid to investment advisors, legal and accounting fees related to tax planning, broker and IRA fees paid directly, investment publications, and more. Many people assume that they won't have enough miscellaneous expenses to exceed the 2% AGI floor, but all of these expenses combined can be substantial, especially if you have unreimbursed employee expenses to add to these expenses.

5. College Savings or 529 Plan Contributions

Depending on which state you live in, contributions to 529 college savings plans may be deductible on your state income tax return. Because this deduction is only available on the state return (no deduction available on your federal return for 529 contributions), many people fail to include this deduction on their state tax return.



By : Kristine A. McKinley
Kristine A. McKinley, CFP, CPA, and founder of Beacon Financial Advisors, offers financial and tax planning on an hourly, fee-only basis. To sign up for free financial planning tips, worksheets, checklists and more, visit http://www.beacon-advisor.com.

Home Business Tax Deductions You Should Take

In any home business you definitely have more tax advantages than if you were self-employed. The tax advantages become substantial when you consider how you can improve the profitability of your business by declaring all of the home business tax deductions you are entitled to.

You may be missing some very important deductions. You must itemize your deductions for your home business operation on a separate schedule just as you would for your personal deductions. Knowing which deductions you are entitled to can save your home business hundreds of dollars a year.

Here is some background information on how your income tax amount is arrived at by the IRS.

The U.S. taxation code states that almost all income is subject to federal income tax. The way that you, as the owner of your home business, arrive at the final amount of income tax is as follows:

Gross Income - (All Expenses + Miscellaneous Deductions + Depreciation on Assets) = Taxable Income.

Taxable Income X (Your Tax Rate) = Income tax for the fiscal year.

Here is a quick definition of the terms in the above taxation equation:

Gross Income = The total of all income for the year after the cost of the inventory has been paid for.

Expenses = All costs of doing business during the fiscal tax year. Examples include payroll, materials, supplies and interest on business loans, etc. To find out if an expense qualifies as a legitimate business expense, consult your accountant or the IRS.

Depreciation = This is the way of spreading out the deductibility of an asset over a period of more than one year.

The IRS has certain different depreciation schedules for different business property. This is done for assets like real estate, equipment and other assets with a long economic life. This method of taxation write-off has certain advantages. Be sure to talk to your accountant regarding proper depreciation rules. These rules are subject to change by the Congress and the IRS.

Miscellaneous Deductions:

This is an often misunderstood and overlooked way to save a lot of money on taxes. Remember that these types of expenses must be totaled up and declared on a separate schedule of your income tax forms.

Always track your expenses and be sure to save at least one copy of every deduction. You will be asked for proof of every transaction that is declared as a deduction if you are audited by the IRS!

Here is a list of some of the things you can deduct from your income taxes:

Business related expenses include:

1. Air fares
2. Auto expenses
3. Books and Magazines
4. Educational Expenses
5. Home Office Space* + a portion of utilities, telephone, and maintenance costs
6. Office Furniture
7. Cleaning Expenses
8. Meals with Business Clients
9. Laundry Expenses (When Traveling)
10. Advertising
11. Impairment-related Expenses
12. Licenses and Regulatory Fees

* If you own your home you must use the IRS depreciation rules to determine this deduction. If you rent you may also deduct a portion of your rent.

Check IRS Publication 535 to find out if you can deduct any or all of the above.

As you can see there are many deductions that are allowable for your home business. The best way to get more information on tax deductions and related information on income taxes is to go online to www.irs.gov. There you will find a helpful search engine containing thousands of government publications that you can research and print out if you need to.

Now you have a good idea of the deductions you are entitled to take. So do your research, keep track of your expenses and take all of the deductions you can for maximum profit every year.



By : Jeff Schuman
Jeff Schuman helps people make money at home by starting their own home business. For hundreds of money making ideas and articles please visit his website here: http://www.team-schuman.com

How Do You Get A Real Estate Tax Deduction?

Everybody loves a piece of land. That is the real limited resource we have on earth. And the government allows us some deductions on them too.

Real estate tax deduction is a policy whereby owning a piece of property like your house gives you many tax advantages. Some of these include:

1. Interest paid on mortgage: permissible unto a maximum if you have bought your first and second homes within $1.1 million.

2. Fee points: completely deductible points, these are arrived at when you have taken mortgages. One point converts to 1% of the original amount and this is literally thousands of dollars and completely deductible.

3. Equity loan interest: certain rules imposed by Internal Revenue department, but partially deductible as it are loan on your home credit.

4. Home improvement loan interest: interest on making improvement but remember, there is a slight difference between a repair and an improvement. You can flout the rules by knowing the difference.

5. Home office deduction: if your home doubles up as your office too, then this is the deduction to make.

6. Selling Costs: these are costs that you normally include like legal costs, transfer costs advertising and admin costs and so on.

7. Capital gains exclusion: is a house which you resided for two years in the past five years, you need not pay any capital gains tax. Married taxpayers can get a maximum limit of $500000 and 4250000 if filed individually.

8. Home moving costs: this is an option available to ones who are relocating. If you are moving to any other part of the stator country, claim it.

9. Property Tax: Finally, the real estate tax (property tax) that you pay to your local government is completely deductible from your federal income tax.

So you see, taxes are not really that harsh, if you plan and make the most of it. Just keep those years and eyes open and make a small payment to those smart tax consultants, they will ensure they will the rest.



About the Author
Find more about Tax Deductions at http://taxdeduct.net

Federal Income Tax Deduction

The American laws are great fun to play with if you know how to handle them, but better be sure you know the rules, or else you fall into trouble.

The federal income tax deduction is a statutory requirement under the American laws. All American citizens who fall under this category have to pay this. Taxable income is calculated by removing (a) excluded income, (b) exemptions, and (c) permissible deductions from the individual's gross income.

The following are the heads under which you can avail the tax deduction:

1. Exemptions: Some common exclusion from gross incomes is:
I) Earnings made from life insurance contracts
ii) Earnings made from gifts and inheritances
iii) Proceeds granted for personal injuries
iv) Interest received from state and municipal bonds

certain conditions have to be kept in mind before availing these deductions.

2. Deductions: In addition to the standard deduction, some common "above-the-line" deductions include:
i) Trade/ Business expenses
ii) Alimony
iii) IRA contributions
iv) Net capital losses
v) Expenses incurred due to property used for income generation

income tax laws are not everybody's cup of tea and so should be handled with care.

3. The Standard Deduction: When individuals have minimal "below-the-line" deductions, they are directly granted a standard deduction. The standard deduction under different heads in 2004 was as follows:
i) Single $4,850
ii) Head of household $7,150
iii) Married filing a joint return $9,700
iv) Qualifying widow(er) with dependent child $9,500
v) Married filing a separate return $4,850

4. Miscellaneous Itemized Deductions: These usually include:
i) Interest paid
ii) Taxes paid
iii) Losses incurred
iv) Charitable contributions
v) Medical costs borne

Such miscellaneous deductions are permissible if and only if they surpass 2% of adjusted gross income.

5. Alternative Minimum Tax: applicable when minimum tax revenue is less than the predetermined amount. the individual would now be paying a very negligible tax and helps him in saving some money.

6. Itemized Deductions: The alternative to the standard deduction is itemized deductions. For the year 2004, the major items included in itemized deductions were:

i) State and local income and property taxes
ii) Donations made to charitable organizations
iii) Employee transference expenses
iv) Medical expenses incurred
v) Casualty losses
vi) Interest paid on mortgage

However, the individual can either avail standard deduction or itemized deduction.

the best alternative in understanding such a complex structure is to catch a person who knows the tax structure better and let him do all the work, but keep your eyes and ears open.



About the Author
Find more about Tax Deductions at http://taxdeduct.net

Save On Taxes By Investing In Municipal Bonds

Bonds issued by the local, state, or city governments are known as Municipal bonds or debt obligations. The government uses the funds accumulated by issuing these for construction work, such as building hospitals, schools, sewer systems, highways or some other specific work related to the benefit of the public. This means that these investments issued by local governments help the local governments to finance certain projects.

Similar to other types of bonds, these also have a maturity date and a rate at which the value increases. When they reach their maturity date, the investors obtain their investment cashed in full. This investment is like a loan forwarded to the local government to assist it in its ventures. The interest received is the interest that the local government pays on the loan. The government sometimes issues these bonds to fill up temporary deficits in the budget or to finance some other urgent financial need of the local government.

Investments made in municipal bonds are similar to investments made in any other type. The difference is that these are traded locally and not publicly in big stock exchanges. People can purchase them at the capital building, the city hall, or any other hub of the government used for issuing these bonds. People learn about these investment opportunities through tabloids, newspapers, and financial papers that handle the local financial news. When a big city's municipal bonds are to be issued, the city releases this news on a much larger scale. The government contacts the former investors first, when issuing them.

Types
Municipal bonds fit into the following categories.
1.General Issue: The government guarantees these to the full credit and faith of the issuer. Large cities or states, that are financially stable entities, are usually the ones to issue these types of bonds.

2.Revenue: These guarantee an identifiable source of revenue in the future. The source of revenues, in this case, is usually mineral royalties or income from the city's utility payments.

3.Assessment: As the name suggests these bonds are based on property taxes and depend on the value of the property along with the health of the regional economy.

What The Experts Say
Experts consider investments in municipal bonds to be profitable because of their tax-free status. People are willing to invest in these bonds, even below the market rate. In this manner, the government earns a profit by issuing bonds as a cheap source of finance.



By: David Gass
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com

How to Increase Your Income, Lower Your Taxes and Help Your Favorite Charity

Given the fact that most seniors are interested in a secure income, reducing risk and lowering taxes, here is a planning technique to consider if you are trying to increase your income.

Maybe you have a CD that is coming up for renewal and you discover the rate is going to be lower. You could have some stocks or mutual funds that were invested for growth and are thinking about selling some off and re-investing in something that would pay you an income. The only reason you haven't sold them is that you don't want to pay the capital gain.

I would suggest including a charitable gift annuity in your list of options.

A charitable gift annuity is a combination of a gift to charity and an annuity. For older people, annuity rates may be 8%, 9% or even higher. Since part of the annuity payment is a tax free return of principal, the gift annuity may provide you with a substantial income. The combination of partially tax free income and the initial charitable deduction makes this planning device attractive.

While this arrangement has its own unique benefits, the rate of return is less than if you had bought a commercial immediate annuity. Therefore, your decision to use a gift annuity should include a desire to eventually leave money to a qualified charitable organization that you have an interest in, such as a church, school, hospital, etc.

Gift annuities are easy to set up. You simply transfer property to the charity and the charity promises to pay a given amount monthly, quarterly, semi-annually or annually to you for as long as you live. Alternatively, you could elect to have the payments paid to you and another person for as long as you both live. Or you could elect to have the payments made to you for the rest of your life and then to the second person for the rest of their life. But the maximum number of people per gift annuity is two.

Gift annuity rates are set by the American Council on Gift Annuities. Charities don't have to use these rates, but most do. So you don't have to out shopping for the best rate. Make your choice based on the charity that you would like to support.

There are two tax issues that you should take into consideration when comparing a gift annuity to your other alternatives.

The first is that if you fund the gift annuity with cash, part of the payment you receive is taxed (as ordinary income) and part of it is not taxed as it is treated as a return of principal. If you fund it with appreciated property, and are the recipient of the income, part will be taxed as capital gain, part as ordinary income and part could be treated as a return of principal and not taxed. However, if you live past your life expectancy, all later annuity payments will be ordinary income.

The second tax issue is that when you give the charity your asset in exchange for a life income, you get a large income tax deduction. For most people, this income tax deduction is so big it cannot be taken in one year. So there are provisions to spread the deduction out over the year of your donation and five more. Your accountant can tell you if this will eliminate income taxes for the next 6 years or not. Chances are good that it will.

Please note that I am only giving general guidelines about taxation. Before you set up a gift annuity, you should sit down with your tax advisor to determine the exact tax ramifications for your situation.

There are a number of charitable gift annuity options and applications. This brief overview has given you some of the basics. If this seems like it may fit, contact the charitable organization of your choice and get a proposal. Then sit down with your accountant and financial planner and have them help you compare a gift annuity with your other options.



By : Robert D. Cavanaugh
Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". To subscribe and get a free video of one little known planning concept, go to http://theestatepreservationadvisor.com/freevideo.htm

Decoding the IRS Dependent Rules! How Do I Know When to Claim a Dependent?

Everyone who earns any type of income knows how confusing federal taxes and dealings with the Internal Revenue Service can be. When the April 15th deadline begins to sneak up every year, the entire nation begins to feel the frustration of sorting out their income taxes. With the thousands of areas in which people can find deductions, one of the most confusing areas to consider is the handling of dependents.

Having a dependent may seem straight forward; however, there are many situations which bring up questions. For example, claiming a child as a dependent typically requires providing that child's social security number. However, what if you've just adopted the child and have no access to that number yet? In this situation, there are two solutions. If the child was adopted domestically, the parents must request an Adoption Taxpayer Identification Number (ATIN). This will allow the parents to claim the child as a dependent AND file for the child care credit. If the adoption is of a child that is not a U.S. citizen or resident, the application should be for an Individual Taxpayer Identification Number (ITIN).

Perhaps you've allowed a relative to live with you free of charge during the last year, and that person did not have a job. Can you claim this person as a dependent? The IRS has provided specific guidelines for this type of situation. As of December 31, 2004, the following must apply in order for you to claim the individual as a dependent:

1. The relative should be a child or grandchild of your brother or sister;
2. The relative is under 19 (or 24 in the instance of a full time student);
3. The relative has lived with you for more than half of the tax year in question; and
4. The relative has not provided at least half of his or her own support during the tax year in question.

In this day and age, many people are choosing to file separately, even if they are married. If you have both provided the same amount of care and support for a child, can you both claim that child as a dependent? Unfortunately, a child can only be claimed as a dependent on one tax return. Therefore, you should discuss between the two of you which will claim him. If you cannot come to an agreement, Publication 501 from the IRS has a "Tie-Breaker Rule", which will aid you in the determination.

What about separated couples? For instance, the child has lived with his or her mother for the majority of the tax year in question. However, the father has provided all financial support for the care of the child. Who would claim the child as a dependent? In this situation, the party with which the child resides maintains the right to claim him or her as a dependent. This, however, can be waived to allow the financially supportive parent to claim the dependent by filling out Form 8332, entitled "Release of Claim to Exemption for Child of Divorced or Separated Parents".

As you can see, there are many situations in which the dependency of a child is not straight forward. However, with the right sources, you can find the answers to most or all of your tax questions regarding the filing of dependent credits.



About the Author
Confused about your taxes and the functions of the IRS? Not sure what deductions you can take this year? Find your answers to these questions and more at http://www.irsdnld.com!

Will You Pay Tax on Your Retirement Accounts ?

There are several retirement accounts with tax implications. 401K accounts, Keogh accounts, Roth IRAs and standard IRAs are some of the most important and widely know retirement accounts.

What is an Individual Retirement Account (IRA)?

An Individual Retirement Account (IRA) is a retirement investment into which you put contributions on which you do not pay taxes until you withdraw the money from the account after you retire. Usually, your tax bracket will be lower after retirement and so you won't have to pay as high a percentage of the money in taxes as you would have if the money had been taxed at the time it was originally earned. When you put money into an IRA, you get a tax deduction. When you take a "distribution" from that IRA later, it counts as taxable income. There are penalties for early withdrawal up to age 59 1/2.

You are required to start taking money out of your IRA no later than at age 70 1/2.

You should check with your accountant or the IRS to see how much you can contribute in the current tax year. How much of this money is tax deductible depends on your Adjusted Gross Income (AGI) and whether you are covered under an employer retirement plan.

There are other variations of the standard IRA, such as the "Simple IRA," a relatively new but popular employer based plan allowing employer contributions and a higher contribution by the taxpayer.

What is a 401K Retirement Account?

A 401K plan is named after a section of the 1978 U.S. Tax code. It is a plan offered by employers which allows you to automatically save a portion of your income for retirement without paying taxes now on the money you are saving. As with the IRA, the idea behind it is you'll be in a lower tax bracket after retirement and therefore will have less tax to pay on the saved money than you would pay now at your higher salaried income rate. You only pay taxes on the money when you withdraw it from the 401K account after retirement.

Usually, the 401K money is automatically deducted from your paycheck by the company's payroll system in much the same way your taxes are withheld.

In its basic configuration, a 401K account is similar to a standard IRA, but in many employers' plans, there is a matching contribution from the employer which provides the real power to the plan. Beware. Many companies invest the 401K plan money heavily in their own company stock. If the company has an unusually bad financial problem, you might find this money in jeopardy as well as your job. The best 401K plans allow you to control the investment vehicles for your money.

Typically, at the time of retirement, a 401K plan is "rolled over" into a standard IRA, from which the retiree then makes withdrawals over time to provide retirement income.

What is a Keogh Retirement Account?

A Keogh retirement account is a tax deferred retirement plan for self employed people. If you are self employed, with a sole proprietorship or a partnership, then this is the plan you may want to consider setting up. Any type of qualified retirement account can be set up to cover self employed individuals. You should also look into 401K plans, and standard and Roth IRAs.

There are advantages and disadvantages to each. One advantage to the Keogh plan is that contributions are deducted from the gross income. Contribution limits are more liberal than those allowed with some other retirement accounts. As with other retirement accounts, tax is deferred until money is withdrawn, usually after retirement. In some cases, lump sum withdrawals may be eligible for 10 year averaging which can provide a tax benefit.

Another IRA type used for self employed sole proprietors is a SEP IRA which has less complex filing administrative paperwork and allows higher contributions.

What is a Roth IRA?

The Roth IRA came into existence in 1998 and is named after the late Senator William V. Roth, Jr. The chief advantage of a Roth IRA is obvious. Although there is no deferral of taxes on the money originally invested in a Roth IRA, as in other IRAs, all income earned by the investments in a Roth account is tax free when it is withdrawn. Another benefit is that you are not required to take distributions beginning at age 70 1/2 as with other accounts, so if you don't need the money to live on, it can continue growing and earning for you tax free. Also, a Roth IRA makes it easier in some cases to take early withdrawals without penalties compared to other retirement accounts.

For many people, the Roth IRA is a wonderful retirement investment account. Some employers offer Roth 401K plans.

There are, however, limitations on who may contribute and under what conditions. Individuals with higher incomes may not be able to use a Roth IRA. Check with your accountant or the IRS for current rules.

You need to plan early and do your homework thoroughly. Review your choices regularly since rules and types of accounts change over time. Don't wait until you are 60 to start planning for your retirement or you'll be sorry.



By : Ian Williamson
For more tax Marketing Articles by Ian Williamson please visit http://www.real-articles.com/Category/Tax/123

Sign Up For A Mobile Home Tax Deduction

Some of us are a bit unfortunate that we may be living in mobile homes. Nothing wrong with that. In fact the government recognizes their needs and gives them some relief too.

People who pay taxes to the local government for having parked their homes in that state also come under the purview. Thanks to IRS rules which define a home as a house, co-op, condominium, mobile home, trailer, or even a houseboat. The basic condition for any property to qualify as a home is that it should have sleeping, cooking, and toilet facilities. Since mobile homes meet all these conditions they can avail the tax deductions notified by the federal government.

Mortgage interest is the biggest tax deduction available to these guys. Joint tax holders, in fact, can deduct the entire interest amount up to a maximum of $1 million in mortgage liability paid on a first and possibly second house.

You don't have to calculate how much amount you deduct. All that you need to do is to wait for the lender to send Form 1098 at the end of the year. This form will tell you how much interest you have paid on the loan, and the points that are due to you. This becomes your deductible interest. It is much simpler than you think.

Home acquisition debt is where your second advantage lies. This debt is equal to the first or second mortgage used to buy, build, or improve your home.

The third is Home equity debt .Basically, this is any loan amount in excess of what was spent to purchase, build, or improve your home. Points paid during refinancing are also tax deductible.

Fourthly, you can deduct any property tax that you paid to a local or state government where you parked your mobile home. These are great tax benefits and every mobile home owner must avail them. What's the point in paying the local taxes and not making the best use of our elected bodies? They are our source of inspiration in saving some money. Aren't they?



About the Author
Find more about Tax Deductions at http://taxdeduct.net

Delinquent Taxes - What Happens if I Don't Pay the IRS?

Depending on how much time has past, an individual will see hundreds; even of thousands of dollars owed in back taxes that were not originally assessed when first receiving a letter from IRS. Similar to a credit card company, penalties and interest can and will be applied.

Delinquent Income Tax Return Defined -
A delinquent income tax return is defined, in the eyes of the IRS and federal government as:

Income tax return having a US mail postmark after April 15th, if an extension was not granted. If an extension was applied for and granted, a delinquent income tax return is defined as an income tax return with a US mail postmark after the due date of that extension.

Does the IRS Keep my Return Money if I am Late? -
After three years, yes. There is a statute of limitations, or certain period of time allowed, by the federal government applied to receiving income tax refund money for a given year. That is three years from the due date of the tax return, not January 1st.

Just think, you could have money owed to you that you could apply toward your IRS tax debt if you have not filed.

Tax Return Stature of Limitations Example -
For example this is 2007, if your unextended delinquent income tax return for 2003 is fixed this year, you must do so before April 15th, 2007 to receive any refund from the IRS.

After that date, the government legally does not have to pay any refund owed even if it is thousands of dollars. If you mail or the return after the third anniversary date, the IRS will keep your refund check.

Delinquent Tax Penalties & Interest -
If you owe tax from the year's income, you could possibly be subjected to several penalties on the amount due. The failure to file penalty assesses a 5% charge on the amount due each, up to a maximum amount of 25%.

The failure-to-pay penalty equals one-half of 1% of the amount owed per month, maxing out at 25% as well. You will be charged interest on an unpaid balance at the prevailing rate (varies month-to-month).

You may be subjected to a penalty for not paying sufficient estimated taxes. There are several other penalties that may also apply.

If you have not filed and have not heard from the IRS, it is only a matter of time, even if you have not heard from them in years. They will contact you and find a way to collect.

How the IRS will Settle Delinquent Taxes by Force -
If none of these previously mentioned options above are arranged, some of the enforced collections measures the IRS can use, but are not limited to:

- Wage attachments
- Bank Account Levies
- Seizures of property
- Referrals to a private collection agency
- License or permit revocations
- Corporate responsible person assessments

Do not let the IRS scare you into signing an agreement that demands high dollar tax payments that you can not afford. Let a tax professional with years experience working with the IRS help you.



By : Neil Lemons
Neil Lemons represents Allied Tax Solutions, a 30 year leader in IRS help & tax relief solutions helping individuals and companies. For more information or a free consultation visit http://www.alliedtaxsolutions.com.

How To Sell Assets Without Fear Of Capital Gains Tax

Assets we own that have appreciated in value make us tremendously happy. The taxes we pay on these gains make us tremendously unhappy. If you own appreciated assets such as real estate, business, fine art, jewelry, planes, boats, or even a race horses, you face a large tax bill if you sell these assets and do not plan properly. However, there is finally a way to sell off almost every appreciated asset ranging from real estate to collectibles without paying hefty capital gains taxes using a powerful, tax-efficient selling resource called the Private Annuity Trust.

Not only is the Private Annuity Trust an ideal way to avoid capital gains taxes, it's also one of the most secure asset protection tactics offered today. The Trust cannot be sued for the value of your personal property or real estate. Securing your valuables in a trust is a critical piece of the financial puzzle for any type of investor, and the Private Annuity Trust has the added benefit of allowing you to avoid capital gains taxes when property is sold. The Private Annuity Trust will also allow you to pass all assets left in the trust when you pass away to your beneficiaries completely free of estate taxes and probate fees.

Who's using The Private Annuity Trust?
Private Annuity Trusts have traditionally been utilized by real estate investors, but even in this circle, the Private Annuity Trust is a new concept for many. The Wall Street Journal recently ran an article about various ways to defer capital gains tax and received an enormous number of inquiries asking for further information about the details of Private Annuity Trusts. This method of deferring capital gains on real estate is gaining momentum, but many people still don't realize that Private Annuity Trusts can also defer capital gains on property such as fine arts, jewelry, and other valuables.

How the Private Annuity Trust Defers Capital Gains Taxes Legally
Let's assume that Jim, a 45 year old man, owns a collection of fine art that will net him $5,000,000 once sold. If Jim were to sell his art collection tomorrow without a Private Annuity Trust, he could be responsible for paying a large amount of capital gains tax on his profit, potentially creating a $1,000,000 tax bill! Had he transferred ownership of the property into a Private Annuity Trust before selling, he could have paid $0 in capital gains taxes this year.

A Private Annuity Trust is designed to pay the owner of the trust a special annual payment, or annuity, over the course of his or her lifetime. Capital gains taxes on the earnings from the property sold are still due on the sale of the asset, but taxes aren't due until the money is taken out. The seller of the asset is able to "stretch or spread" his or her taxation over his or her entire lifetime without any interest or penalties from the IRS. This gives investors tremendous financial power, and flexibility - if they don't need the income from the Trust right now, they can defer payments, and not begin paying taxes until they decide to take the income.

The amount of the annuity payment is determined by a number of factors determined by the IRS. A very simple estimation of the program states that if Jim's life expectancy is another 40 years, he will receive annual payments of 1/40 of the value in the trust plus interest as calculated by the IRS. This means he will only be responsible for 1/40 of the capital gains tax from the sale of the property each year, which means that he will have more of his profits invested, and working for him, creating financial security for the future.

A Smart Way to Protect Your Assets and Grow your Wealth
The Private Annuity Trust isn't just beneficial when you sell your property, but also offers long term protection of your assets from lawsuits, liens, or any other threat to your investments. You can use the money gained from selling to reinvest and continue to grow your wealth. In the previous example, Jim can use the trust to buy new art-or any type of investment property, watch it appreciate, and then sell the property and defer the capital gains taxes again, by placing it in his Private Annuity Trust.

If you're a collector of fine art, jewelry, planes, boats, race horses, or anything of value, you owe it to yourself to look into the benefits of the Private Annuity Trust. There is no minimum or maximum value for property that can be transferred into a Private Annuity Trust. The Trust structure, as a planning tool, is a resource that can help you pass wealth to generations of your family, without worry about losing large chunks to taxes at each transfer. For many investors, it may be a key to safe, smart, investing.



About the Author
Author is a writer for QFN who specialize Private Annuity Trusts. For more information you can visit http://www.QAPlan.com.

Child Tax Deduction Law Is For Your Own Benefit

Save money, save money and save some more money. This is what we have been hearing ever since we were kids. And why not when the law is allowing you to?

Hiring kids between the ages of 7 to 17 not only makes them smarter but you too. You could be laughing all the way to the bank.

As a rule, every child has a standard deduction of $4,570; thus it follows that children are exempted from paying the first $4,570 in income. Now, if you have a kid working for you and you fall in the 30% bracket, you can coolly save $1450 in taxes after spending the whole $4570 on your kid. Nice stuff right?

You needn't have to pay the social security taxes on 'wages' paid to kids as they come out of sole proprietary and not from business corporations.

In tax saving exercise, you are not free from paper work. Form 941 is to be submitted four times in a year. This is basically a form used to withhold finances generated by an employee; however, for a child there will be no withholding. Further, at the end of the year, you will have to issue a W-2.

Kids are legally allowed to be hired as employees by their parents when they are 7 years old, provided that the work assigned to them is not mentally and physically challenging, and is within their means to achieve it. The number of hours and the type of assignments completed by the child should be recorded on an Excel Sheet. As long as the pay and the work given to the child are reasonable, you can avail of the tax deduction.

Moreover, the wages that you are paying goes into your hands and not theirs. This means that you are the true owner of

Ultimately, make sure that your kids don't spend more than 50% of their expenses, if they do, then you lose the itemized deductions.

You know that you don't want to make your kid work a bit too much. Let the work be reasonable. Let him enjoy and you can enjoy yourself too.



About the Author
Find more about Tax Deductions at http://taxdeduct.net

Work For Yourself And Slash Your Tax Bill

One reason that many people like the thought of working from home and freelancing is that you need to pay lower taxes. As a freelancer you pay taxes four times a year instead of monthly and many extra expenses can be taken as tax deductions. If you are involved in freelance employment these additional tax deductions can greatly benefit you.

One of the tax deductions which freelancers working at home are able to make is for a portion of their rent. If you work from home on freelance contract then the room where you work is considered like business property and is therefore eligible for tax deductions. Unfortunately this only counts if you are making a profit from your freelance business and you are not using your tax deduction from your home office to create a loss in your taxes.

If you are involved in freelance employment you should also have a look at the items you use - your stationery, magazines, books, computer accessories and find out what tax deductions you are able to get on these items.

There are also those items that you use for business that last longer than a year - such as your computer. You have two options for decreasing your tax with these items. You can take it as an expense in the first year (or the year it is bought) or you can spread the cost out over a couple of years taking into account depreciation. By taking it all off in the first year you will get a larger break in that year but you will not be able to use it as a deduction in the following years, or you could opt for a smaller deduction in each of the following years.

As someone involved in freelance employment you are also able to claim some expenses on professional memberships and seminars that are necessary for your work. For example if you are a freelance writer and belong to a writer's organization then you may be able to claim these fees from tax, or if you attend a seminar to do with your work then you can claim it from tax.

As a freelancer it is highly recommended that you find a professional tax consultant experienced in handling taxes for those involved in freelance employment and who has your best interests at heart to help you find all the tax benefits you can get from your freelance employment. Some one who is an expert in this field will be able to point out to you all the areas that you may not even know about as well as being able to offer you tax advice on some of the areas we have mentioned above. Take advantage of your tax breaks as a freelance worker and find someone who is an expert in tax law for freelance employment.



By : Rob Palmer
Rob Palmer is the Editor of Freelance Work Exchange, the leading jobs site for contract professionals worldwide. Join Freelance Work Exchange for just $2.95 and get access to thousands of freelance jobs and work-at-home jobs. http://www.freelanceworkexchange.com

IRA Tax Deduction - Pay Your Taxes And You'll Benefit

Everyone saves for the rainy day, our parents taught us to save money from a young age so that it is of some use at a later stage. Even the tax man says that.

IRA, or Individual Retirement Arrangement, is a personal savings plan that lets you save up for rainy days and gives you tax benefits in the form of tax deductions. All contributions made to this plan are entitled to the IRA tax deduction. This also includes earnings from these contributions unless they are distributed to you.

2 basic rules govern the working of IRA.

The first is the simple IRA. The more traditional way which helps for that long retirement plan. Contributions to IRA are exempted unless you receive any kind of distribution.

Setting up an IRA is very simple, you need to be less than 70.5 years of age before you can apply. A taxable income is necessary to avail this. Only salaries, commissions, alimony, maintenance or any other means of income
Generated by self constitutes this. Rental or any other income from property, annuity or deferred compensation does not qualify as taxable compensation.

The maximum you can contribute to your IRA is either $ 3,000 or your taxable compensation for the year, whichever is less. It goes to $3500 if you are 50 or older. If you are uncovered, you can claim the complete deductions. If, however, you are covered by a valid retirement plan, your IRA deduction can either be reduced or eliminated, depending on the amount of your Modified Adjusted Gross Income and your filing status.

If in case you have made any withdrawals, then you have to pay tax on the amounts available. And it is wholly taxable.

Roth IRA - Roth IRA is the reverse of the traditional IRA. Contributions that you make to this RA will get you no deductions. No taxes on withdrawals or earnings. Everything else about Roth IRA is like the simple IRA. Like the latter it can be either an account or an annuity. To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up.

These two basic rules now sum up what you want to know about taxes and especially the savings aspect. Just make the most out of them,



About the Author
Find more about Tax Deductions at http://taxdeduct.net

How To Protect Your Assets And Live The American Dream By Moving Abroad

Taxes are a drag for every US citizen who is forced to give away part of their earnings on a yearly basis. While most Americans simply complain over taxes, others are taking a more proactive approach: retirement abroad.

For folks who have spent a lifetime trying to build an estate and set aside hard earned assets, paying taxes on said assets becomes a huge burden. Not so much because they cannot afford it, they just do not feel as though they should be required to pay.

Many people, not just retirees, feel that their quality of life is not up to par. In fact, 25% of the college educated say that they have thought about leaving the country to pursue more suitable locations. Whether it is a cultural or a financial chasm, there are many citizens who have considered relocation. It's not to say that they despise the United States government or the way of life that the US promotes, they are simply fed up with taxes and other financial issues that can be appeased elsewhere.

Some may think that the capitalist society and other freedoms that America offers is the ticket to financial freedom and happiness. The term "American dream" stems from this notion. However when delved into further than face value, the American dream may not seem so dreamy after all. It is a semi truth in America that if you work hard you will be successful. All things being equal this statement has merit, however, all things are not often equal. Once income deductions begin, they tend to pile up until income feels more like "outgo", so to speak. In order to bounce this phenomenon off of themselves, many people are picking up and leaving the home soil.

Retirees often dream of relaxation and a subdued life after completing their working stint. However, in the US, they are often met with undue stress relating to taxes, healthcare cost, and the like. This forces the thought of something or somewhere better, and this is where moving abroad enters the picture. Obviously it is not an option for all retirees considering health issues and the necessity to be close to extended family and familiar medical care.

For others, however, there are no strings to connect them to America, and they are free to go and enjoy the tax freedom. This notion may hit home to retirees who have been basking in the dread of American taxes their entire lives, but it may also hit those far from retirement who are making long term plans for the future. If the working class decides they are fed up with income taxes in America, they may actually consider the option of moving abroad, and if they are in the prime of their careers, they may even do it sooner that expected.



By : Gregg Hall
Gregg Hall is an author living in Navarre Beach Florida. Find more about this as well as easy asset protection at http://www.easyassetprotection.com

How Taxes Apply To Corporations

A corporation is a designated entity where the company and the individuals related to it, have different legal identities. The reason most companies prefer to incorporate is asset protection. Incorporation protects your personal assets from seizure during a lawsuit.

If you decide to incorporate your small business, you can choose the S corporation, C corporation or LLC model. Before choosing any kind of corporate model, you should look at the tax rules and regulations related to a corporation.

Tax Laws for Various Corporations
Tax laws vary from country to country and state to state. You need to go through them before and after incorporating. In general, all countries have mandatory tax requirements for companies. Your corporation needs to pay taxes on the profits it earns. Even if your corporation is registered abroad, you may need to pay taxes if you reside in your home country.

1. C Corporations have to go by standard corporate tax laws. They need to pay taxes on their profits, and are subject to certain deductions depending on their shareholding structure.

2. S Corporations are the best option if you have a startup company or a small business. S corporations do not have to pay income tax, and still get to enjoy the advantages of being a standard corporation. The eligibility condition is that your small business should have less than 75 shareholders who are all citizens of the US. To get the benefits associated with the Subchapter S Corporation, you need to file an application with the tax authorities. If you want to submit taxes under an LLC structure, you need to submit another application before the current financial year ends.

3. Limited Liability Partnerships, or LLC, are preferred by businesses that need streamlined allocation of profits and losses. This facility is not available to S Corporations. LLCs need to file form 100 ES and form 100.

S Corporation Taxes
Since this article is primarily concerned with entrepreneurs and small businesses, it would be relevant to go into the details regarding the S-corporation. If you decide to register yourself as an S corporation to avail tax breaks, you need to keep in mind the eligibility conditions. Apart from the conditions already discussed, you need to remember that you must use the calendar year as the financial year of the company. In addition, any shares your company sells must be of a single kind.

Advantages of Being an S Corporation
1) The best thing about the S Corporation status is that the shareholders shoulder the responsibility for paying the taxes as their personal income tax. Therefore, the corporation need not pay income tax twice, first as a company and secondly as individual shareholders. In fact, most S corporations do not pay any taxes.

2) It reduces the need for extensive paperwork when filing tax returns or declaring income.

Additional Help
If you wish to incorporate your small business and need more information about tax structures of various corporations, you can consult a small business advisor or tax consultant. Choose the type of incorporation carefully, as taxes will apply to your business based on that. Get yourself educated on the advantages and disadvantages of each type of incorporation according to the tax laws. This will help you reap the benefits of a corporation without having to pay huge taxes.



By : David Gass
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com

Top 7 Ways to Reduce Income Taxes

Are you paying too much in income taxes? Are you getting all the credits and deductions you are entitled to? Here are 7 tips to help you minimize taxes and keep more in your pocket:

1. Participate in company retirement plans. Every dollar you contribute will reduce your taxable income and thus your income taxes. Similarly, enroll in your company's flexible spending account. You can set aside money for medical expenses and day care expenses. This money is "use it or lose it" so make sure you estimate well!

2. Make sure you pay in enough taxes to avoid penalties. Uncle Sam charges interest and penalties if you don't pay in at least 90% of your current year taxes or 100% of last year's tax liability.

3. Buy a house. The mortgage interest and real estate taxes are deductible, and may allow you to itemize other deductions such as property taxes and charitable donations.

4. Keep your house for at least two years. One of the best tax breaks available today is the home sale exclusion, which allows you to exclude up to $250,000 ($500,000 for joint filers) of profit on the sale of your home from your income. However, you must have owned and lived in your home for at least two years to qualify for the exclusion.

5. Time your investment sales. If your income is higher than expected, sell some of your losers to reduce taxable income. If you will be selling a mutual fund, sell before the year-end distributions to avoid taxes on the upcoming dividend or capital gain. Also, you should allocate tax efficient investments to your taxable accounts and non-efficient investments to your retirement accounts, to reduce the tax you pay on interest, dividends and capital gains.

6. If you're retired, plan your retirement plan distributions carefully. If a retirement plan distribution will push you into a higher tax bracket, consider taking money out of taxable investments to keep you in the lower tax bracket. Also, pay attention to the 59 and one half age limit. Withdrawals taken before this age can result in penalties in addition to income taxes.

7. Bunch your expenses. Certain expenses must exceed a minimum before you can deduct them (medical expenses must exceed 7.5% of your adjusted gross income and miscellaneous expenses such as tax preparation fees must exceed 2% of your AGI). In order to deduct these expenses, you may need to bunch these types of expenses into a single year to get above the minimum. To achieve this, you might prepay medical and miscellaneous expenses on December 31 to get above the minimum amount.

The most important thing is to be aware of the tax deductions and credits that apply to you and to plan for taxable events. And don't be afraid to ask for help. The benefits from consulting an experienced tax professional far outweigh the cost to hire that professional.



By : Kristine A McKinley
Kristine A McKinley, CPA, and Certified Financial Planner, is a fee-only financial planner. For more personal finance and tax tips, please visit our blog at http://beaconfinancialtips.typepad.com/financialtipsforwahms/

This Year, Try Using Tax Software to File Your Taxes

Every year, we citizens of the United States have to "pay our dues" so to speak, in the form of filing our income tax documentation with the federal, state, and in some cases, municipal government.

For many years, people and businesses have filed their taxes with the government using the post office. Taxpayers could (and still can) obtain the required forms for their claim at their local post office, then take them home where they can be prepared by themselves or by a professional tax specialist with services such as H&R Block or Jackson Hewitt.

Many people who do their own taxes get many of the benefits of a professional tax preparer by using tax software to prepare their tax documents and transmit them to the government using the internet.

Using tax preparation software is an excellent, efficient way to do your taxes and can help you get your taxes filed as quickly as possible. All of the forms that you could possibly need to file your taxes is included in the major tax preparation software packages.

You can opt to digitally complete and transmit your forms via the software interface using fully digital documents (you will still need to file the hard copies with your W2 forms as well, but your claim is considered received when the digital files are transmitted and accepted) or you can complete the forms using the software and it's helpful wizards, and then print the forms using the tax software in order to fulfill your tax requirements the old fashioned way (with a little help from digital era technology.)

Whatever way you choose to use it, tax preparation software can be a very convenient way for you to take control of another aspect of your financial destiny without having to learn complicated accounting procedures.

There are several reputable software packages out there such as Quicken, TurboTax and Microsoft Money that can help you get started in the world of digital tax filing.



By : James Hunt
James Hunt has spent 15 years as a professional writer and researcher covering stories that cover a whole spectrum of interest. Read more at www.tax-software-guide.com

Plastic Power to Pay Taxes

Tax time is not necessarily everybody's favorite time. However, taxes have to be paid whether we like it or not. Taxes are our obligation to the country and one should not attempt to evade this expense. Small businesses are especially affected by the high taxes they have to pay. First of all, they may not have hands-on accounting staff on their rolls. Second, they may not be in the position to provide adequate cash to meet the high tax amounts. Being a small business in the modern world may add to the many insecurities. However, it need not always be that way.

These days, large numbers of smaller businesses are choosing to pay their taxes through their business credit cards. If you thought that credit cards were only good for clothes and groceries and buying products online, things have changed a great deal. Credit cards are slowly taking over as the favored mode of payment for everything -- from mortgage and house rent to electricity, necessities, and taxes. Small businesses are especially pleased with this development. Even if they do not have enough cash on hand to fill in their taxes, they can depend on their credit cards to settle that large-ish expense. Later when the money is recovered from their various debtors, the credit card bill can be paid off.

One of the scariest things about defaulting on your taxes is that you might end up having to pay quite a large fine. However, paying by card deals with this problem effectively. The business still has to pay the credit card company, but at least it will not get the tag of a tax defaulter. It is true that the tax authorities charge a relatively low interest on defaulting payments. However, expenses will keep adding up. If you want to avoid paying exorbitant amounts of interest on your credit card bills, it would be worth the effort to find some really cheap credit cards. In fact, while looking out for cards, I have on occasion found credit cards that charge no interest for up to fifteen months. If that is not a steal, what is?

The power of plastic has been on the rise of late. Of late, even governments have realized the power of a plastic card. Credit cards are clearly on their way to becoming the currency of the future. We must all get set for this. Maybe it is time for us to recognize the power of a credit card, and get used to making use of this currency of the future.



About the Author
Be smart and compare credit cards before getting yourself another one. Visit the credit card site at http://www.cardguide.co.uk and find out about the best deals on 0% balance transfers.

Get Tax Help To Avoid Getting Caught In A Financial Mess!

Nowadays we have to pay taxes on most things. We pay tax on the money we earn at work and this is called income tax. Income tax is applicable to business income, capitol gains, wages and salaries. There are two specific rates of income taxes and these are known as flat or progressive tax rates.

Flat tax rates are defined as the same flat rate of taxes on all income regardless of earnings. Progressive tax rates on the other hand are based on the amount of money earned by an individual or business. The progressive rate goes up as the level of earnings rise.

We all have to pay sales taxes. This is the way that businesses charge consumers for a product or service sold. Because of the many forms that taxes take it is advisable to get some tax help if you want to know exactly where you stand.

Some other forms of taxes include personal property tax, inheritance tax, transfer tax, property tax, use tax, toll tax, excise tax, corporation tax, and others. These could all become confusing when it comes to determining which applies to you, therefore, you need tax help.

Where To Get Tax Advice

When income tax time comes around each year, businesses and individuals seek tax help. Many people simply do not understand all aspects of filing their tax and so it makes sense to seek help from tax professionals in this matter. Income tax professionals can help you when it comes to preparing and filing your tax forms.

Accountants and lawyers are both able to advice on income tax matters. Your particular tax problems will determine which one you would be the most suited to your needs. The IRS and other financial websites can also be excellent resources for tax help if you need it.

Resources On The Net

The internet is a good place to start when you are looking for tax help. The first place you should visit for tax information is irs.gov. This is the website of the Internal Revenue Service, where most of your tax dollars are dealt with. The IRS website can provide you with plenty of information when it comes to different areas of tax, as well as information on which areas may apply to you. It will also tell you where you can find help for specific problems.

Try H R Block at hrblock.com. They can help you with filing your income taxes, and if you require it, they can provide you with software to help you prepare your taxes yourself. They also offer advice on other financial matter.

Summary:

It has been said that there are two certainties in life, death and taxes. While you can do nothing about the first there is all kinds of help available when it comes to paying taxes. Getting the right kind of advice is crucial if you are to save at least some of your dollars.



By : Brooke Hayles
Check Out More Helpful Information About Tax Help For FREE! Visit http://helptaxonline.com/ Now!

The Tax Connection: Small Businesses and Tax Time

I'm sure you've heard the daunting statistics that only 1 out of every 5 businesses makes it to their 5th year. But do you know why this is true?

While I can only speculate, I have heard one of the biggest reasons for business bankruptcy is taxes.

The problem is a cyclic one. The owner starts making money hand over fist, and of course, spends it just as quickly. Money comes in and goes right back out. Sure, putting money back into your business is necessary, but you must manage your spending wisely.

Remember, the U.S. government takes about one-quarter to one-third of our income. Plant that firmly in your mind! As a self-employed individual living in the U.S., it will probably be closer to one-third. So it might be best to just set aside one-third of your income for the tax man. If it turns out it's a little less, then you'll have some extra cash.

In other countries, this number may actually go up to as much as one-half to two-thirds of your total income. Isn't that why we all love socialist economies?

All joking aside, the point is, if you spend everything you have, you will not be able to pay your taxes come tax time. Obviously, you don't want to get yourself in the position where you owe $10,000 or more (especially if you already spent your profits) all at once.

The best way to avoid this frightening situation is to spread your tax payments out. Monthly is best, but quarterly is a great start. A good accountant will be able to help you estimate what to pay based on what you're earning. That way, your taxes are spread out evenly throughout the year.

So remember to factor your taxes into your overall financial situation before it's too late!



By : lginger
Would you like to learn how to start increasing your profits by creating a unique image for your small business or professional service? Discover how by visiting http://www.positioningtactics.com/usp.html and sign up for our free ecourse (Value $37)

The Tax Connection: Small Businesses and Tax Time

I'm sure you've heard the daunting statistics that only 1 out of every 5 businesses makes it to their 5th year. But do you know why this is true?

While I can only speculate, I have heard one of the biggest reasons for business bankruptcy is taxes.

The problem is a cyclic one. The owner starts making money hand over fist, and of course, spends it just as quickly. Money comes in and goes right back out. Sure, putting money back into your business is necessary, but you must manage your spending wisely.

Remember, the U.S. government takes about one-quarter to one-third of our income. Plant that firmly in your mind! As a self-employed individual living in the U.S., it will probably be closer to one-third. So it might be best to just set aside one-third of your income for the tax man. If it turns out it's a little less, then you'll have some extra cash.

In other countries, this number may actually go up to as much as one-half to two-thirds of your total income. Isn't that why we all love socialist economies?

All joking aside, the point is, if you spend everything you have, you will not be able to pay your taxes come tax time. Obviously, you don't want to get yourself in the position where you owe $10,000 or more (especially if you already spent your profits) all at once.

The best way to avoid this frightening situation is to spread your tax payments out. Monthly is best, but quarterly is a great start. A good accountant will be able to help you estimate what to pay based on what you're earning. That way, your taxes are spread out evenly throughout the year.

So remember to factor your taxes into your overall financial situation before it's too late!



By : lginger
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How To Reduce My Taxes Being Self Employed

Being self employed creates some special tax challenges. And, often business owners wonder how to reduce my taxes being self employed. They may not be obvious, but there are some ways to reduce your taxes. But, when you’re self employed, it will take some diligence to keep track of the deductions you can take.

If you’re wondering how to reduce my taxes being self employed, one of the first items you should look at is your retirement savings. Saving for retirement helps you reduce your adjusted gross income, which is the amount you pay taxes on.

Everyone who is self employed should be contributing to an IRA of some sort. If you’re single, and have no access to a company sponsored 401k, your contributions to an IRA are tax deductible up to $4000, or $5000 if you’ll be 50 years old by year end.

If you’re married and your spouse is involved in a company sponsored 401k, then you can contribute up to $4000 or $5000 if you’ll be age 50 by year end, provided that your joint adjusted gross income is less than $156,000. Reducing your adjusted gross income is a great way to save on taxes each year. In addition, you’re saving for retirement, which is important for all of us. And, in an IRA account, you won’t pay taxes on the interest you accumulate until you begin to make withdrawals from your account during retirement.

If you’re still wondering how to reduce my taxes being self employed, take a look at your deductions. The self employed are afforded many deductions for business expenses, and there are some that you may not have thought of. The IRS says that you can deduct any reasonable business expense. For example, if you use a cell phone to do business, you can deduct not only the cost of the phone itself, but also some or all of your monthly bill. If you’re required to wear uniforms that you must pay for yourself, these can be deducted.

There are still other deductions for those wondering how to reduce my taxes being self employed. For example, if you entertain clients as part of doing business, you can deduct 50 deductible.

Hopefully these tips have helped you learn how to reduce my taxes being self employed. For more tips on reducing your taxes, talk to your tax advisor.



About the Author
More articles in tax savings and reductions at www.TaxOnlineGuide.com Find out how self-employed and small business owner can saves thousands of dollars on Taxes

All the Different Ways to File Your Taxes Online

As the tax season approaches, more and more people are beginning to worry about how they are going to file their taxes. As many people are going to mail their taxes through the mail, you may want to file your taxes online! For many, filing their taxes online may be much easier and quicker!

As most people are not aware of, there are many different ways to file your taxes online! In fact, there are many different ways of even filing your income taxes! Mostly it is a matter of what you want, and how quickly you want to file your income taxes. In fact, it does not matter to the state or government how quickly your taxes are filed, all they care about is that they are filed by the due date.

It is not hard for people to find all the different ways to file your taxes online. In fact, one of the ways to find all the possibilities of filing your taxes online is to go directly to a tax preparation business; and ask them. Many times when you file your taxes online with the tax preparation company, they will give you all the different options when it's time for the filing.

Another way that people are filing their taxes is by e-filing; just not through a tax preparation agency. Most of the time when people e-file their taxes, they purchase tax software; that requires to be downloaded onto the computer. It is extremely easy to file your taxes online using taxes software. Another way that you can file your taxes online is by using the websites that the government offers. Not only are the websites free to use, by they are also easy and quick!

Because there are so many different kinds of taxes software that can be purchased, it is best if you do some comparing between them all before you purchase one. However, one of the best known tax software that can be purchase is TurboTax. TurboTax not only helps you file your taxes online, but it explains every step of the way until you are completely finished. Also, there is not only one tax software; there are a couple different tax softwares that can be purchased. That is to make it possible to match the software for your needs of filing!

Once you decided that you wanted to file your taxes online, all you have to do is figure out if you wanted to do them yourself or if you want to hire someone! Either way, your taxes have to be filed!



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To read more on tax savings and reductions, visit www.TaxOnlineGuide.com Find out how self-employed and small business owner can saves thousands of dollars on Taxes

Taxes - Need I say More

Taxes Defined: Sums imposed by a government authority upon persons or property to pay for government services

A Home based business can be extremely rewarding, but please do not going into this thinking that it will be cake walk because I guarantee you,that cake is the only thing you will be able to afford.

A home based business is a business whose primary office is in the owner's home. The business can be any size or any type as long as the office itself is located in a home.

When you run a business, it can feel like you spend far too much of your time worrying about tax. Here's a quick guide to the what you need to know about tax.

You need to keep records of everything -- literally everything -- you spend on your home business. You should especially keep records of things when their use might be shared between personal and business, such any business-related travel expenses you run up on your car. If you have stock, you need to go through and inventory it at least once a month.

When you work from home, you are legally self-employed. This can put you in a sticky situation, meaning that you have to pay for medical and other taxes that your employer would normally pay for you. In the US, for example, you will be responsible for your own social security and Medicare payments, while in the UK you will need to pay national insurance.

If you're not sure where to begin, get some tax software. Choosing your circumstances from its lists and giving any additional information it asks for should show you most of the tax rules that apply to you.

If you want to save as much as you can on your taxes, don't rely on things you read on the Internet, or even on computer software -- get an accountant. They'll be up-to-date with all the latest tax laws, and will know thousands of tips and tricks that there's no space to list here. See if you can find one who will take a percentage of what they save you in tax as payment instead of charging a flat fee -- this is an ideal solution for you and for them.

Whatever you do with your taxes, you absolutely must not file them late or pay them late. It's an all-too-easy trap to fall into, but there are automatic fines. Tax collection agencies will look upon you very unfavourably if you pay late, and are likely to start immediately charging interest on any money you owe them. Write your tax dates on your calendar and underline them in red. Twice.

People often say death and taxes are the same, but they are wrong. Death is a taxable event, but taxes never die.



By : David McLauchlan
For more articles by this author on this subject and over 100 other subjects visit his world of articles at http://www.david-mclauchlan.com