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I filed for a tax filing extension until Oct. 15th for the first time ever. However, as I’m getting closer to the date I’m finding I might have trouble getting everything compiled for my accountant. Is there another extension that I can file? What happens if I miss the Oct. 15th date?

The business expenses tax deduction can be a workers best friend if they know how to properly take advantage of it. What exactly is a business expenses tax deduction and what can qualify you for it or can be claimed under it? First you will need a Schedule A, Form 1040 to get started and the ambition to itemize your deductions. After this it is almost limitless, as long as it can be claimed as a business expense, such as transportation, lodging and food and gifts, there’s a pretty good chance it can be claimed under a business expenditure tax reduction.

One thing that pretty much can be ruled out when considering the business expenses tax reduction is local travel or commuting. There are however a few exceptions to this rule. They include if you are traveling between two work sites, including if you have a home office and you are traveling between there and another office. Another exception to this would be if you are traveling to a temporary work site, which is considered some place for less than a year. In these instances only would local travel qualify under the tax deduction?

However when traveling outside of your city you can claim any mode of transportation. Under the expenses tax deduction you claim airfare, cab fare, train fare or bus fare, and even gas if you drove your own vehicle. Gifts that you may have been required to buy for clients may also qualify under the tax deduction. There are many rules and regulations regarding this, so be careful. Make sure you understand exactly what can and cannot qualify for a biz expenses tax deduction in regards to this matter.

One last thing to consider is if the business has allowed for an advance for the businesses expenses, because then you could be liable for taxes. If you are careful in how you account for these you should be fine when trying to qualify for a business expenditure tax reduction.

When it comes to working it shouldn’t have to be as much work to figure out what kind of deductions you qualify for in regards to expenses you may incur in trying to do your job. If you care about saving as much money as you can, you should follow these easy steps and be on your way to deducing as much as you can and getting the most out of your tax return. Being able to qualify your business expenditures under the tax deduction is a great opportunity to give your self a tax break.

Say a firm has a net loss of 8803 in one month and 6573 in the second month. In month three, it makes a profit (before income tax) of 20824. There are no dividends and the retained profits at the start of the month are -6573. How do I calculate income tax for that month, assuming we are taking into account the previous net losses?

Saving for college seems to be one of the most mysterious and daunting tasks in our financial lives since it is nearly impossible to guess what college costs will be 18 years from now if you have a child born today.  In fact, depending on which college your little protégé wants to attend, your best guess should be “it will cost a lot”.  Saving as much as you can over the longest period of time will give you more options to choose from.  The IRS has made it easier by authorizing a special savings program designed for paying future college costs known as a “qualified tuition plan” or “529 plan”, so named by Section 529 of the Internal Revenue Code. 

Withdrawals from the plan can be used for a student (also known as the beneficiary) to pay for “qualified higher education expenses” including tuition, room and board, books and computers, and other mandatory fees as listed in the plan’s disclosure document. As long as the proceeds are used for eligible college expenses, and IRS restrictions are followed, the earnings in a 529 plan are not federally taxable. If money is withdrawn from these programs and not used for qualified education expenses, the earnings will be subject to income taxes and an additional 10% federal tax penalty.

Each state in the United States’ sponsors their own 529 plan, and each one offers you different minimum and maximum contribution limits.  These programs are popular with wealthy grandparents as an estate planning device because some states have plans with contribution limits in excess of $300,000 during the life of the plan. The IRS allows individuals to gift up to $12,000 - married couples up to $24,000 – per year per person in 2008, which can be used to fund a 529 plan for a child or grandchild.  In addition, you may be able to accelerate the plan by contributing 5 years of the annual gift amount at one time.  That means a couple could contribute up to $120,000 in one year, per child, if the plan permits. 

You can also move, or rollover, one states plan to another states plan as long as you adhere to each state’s restrictions.  You are not required to choose a program in the state you, or the child you are saving for, live in. However, your state of residency may provide additional state income tax savings.  As a bonus, 10 states offer matching contributions to residents who contribute to an in-state 529 savings plan. Those states currently include Colorado, Kansas, Louisiana, Maine, Michigan, Minnesota, New Jersey, North Dakota, Pennsylvania, and Rhode Island. The matching is limited to your contribution amount and income.  

Beneficiaries of a 529 plan can attend any accredited college or university in the United States as well as certain foreign institutions.  Although a four year tuition can easily surpass $200,000 at some universities, I must throw in a “what if…” here.  What if you have more money in one of these programs than you can spend on college expenses?  To avoid the federal and state income tax, and subsequent 10% penalty imposed by the IRS, you have the option to change the beneficiary of the plan to another member of the original beneficiary’s family as the new future college student.  Money can also be withdrawn without adverse tax consequences due to the receipt of a scholarship by the student, or the death or disability of the student.

Since there are so many rules and regulations regarding contributions, withdrawals, qualified expenses, residency requirements, tax implications, etc. and because there are so many investment options available specific to each state, I recommend consulting with your financial advisor or tax advisor to determine if this type of college saving is right for your specific situation.  There are many other options to choose from to save money for your child or grandchild’s future that may be less restrictive even though you may have to pay taxes as-you-go (such as a Uniform Gift To Minors Act account).  You may also decide to develop a different strategy for different children based on their specific needs. 

As in any investment decision, make sure you understand, and are comfortable with, the benefits and limitations of any vehicle you are considering in order to help you reach a particular financial goal.

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1. Automatic Extensions

Although we all rush to get our tax returns filed before the April 15th filing deadline ever year, the IRS actually provides you with an easy way to get an extra six months to file your return. By requesting an automatic extension using IRS Form 4868, you can get a few extra months to file your return. In many cases, it is often better to request an extension then to file a flawed return that will result in an audit or back tax liability.

In addition, filing for an extension alone carries no penalty with it. Rather, it is the failure to pay on time that will result in interest and penalties. An automatic extension does not extend the deadline to pay taxes to the IRS. Therefore, if you anticipate having an outstanding tax liability, you will still need to pay the IRS by April 15th to avoid penalties and interest. On the other hand, if you are expecting a refund, then you need not worry about being penalized for requesting an extension.

2. The IRS Wants To Settle Quickly

It may not seem like it when you are dealing with them, but the IRS actually wants to settle your delinquent account as quickly as possible because pursuing collections against you can be expensive. In some cases, the IRS can even be convinced to settle your account for less than what you owe. However, you will need to convince the IRS that because of your financial circumstances it is better for them to accept your offer to pay a reduced amount.

3. The IRS Does Not Want to Seize Your Assets

One common misconception is that the IRS prefers to seize your personal property and liquidate it to satisfy your tax debt. However, the process of identifying, locating, seizing, and selling your assets is a very difficult and labor-intensive process for the IRS. As such, the IRS would much rather settle with you then go down this path. Additionally, issuing a wage garnishment or bank levy is much easier and cheaper for the IRS to obtain. If you ignore your tax debts, then the IRS will likely try to use a wage garnishment or bank levy to try to collect from you as opposed to seizing your assets.

4. The Fear Tactic

One of the IRS’s most common tactics to collect from you is the use of fear. The IRS will often remind you of their power to garnish your wages, issue liens, seize assets, etc. And they will leave it up to you to find out about your rights and options. This is enough to leave most people feeling a little fearful such that you will divulge harmful information about your tax situation or will agree to enter into a less than beneficial resolution for your particular financial circumstances.

5. The Streamlined Installment Agreement

One of the IRS’ biggest secrets is the Streamlined Installment Agreement (SIA). Unlike the traditional Installment Agreement, you can get an SIA accepted by the IRS without providing a full financial disclosure so long as your tax debt is less than $25,000 and you agree to repay your entire tax debt in five years or less.

6. The IRS Can Waive Your Application Fees

When you submit an Offer in Compromise (OIC) or another tax debt resolution application, the IRS will require you to pay a small fee as well as some type of deposit. With an OIC, the IRS requires that you pay a $150 fee and a 20% deposit on your tax debt before the IRS will review your application. However, if you meet certain income restrictions, the IRS will waive both the fee and deposit.

7. The TAS Is Part Of The IRS

The Taxpayer Advocate Service (TAS) promotes helping taxpayers with their IRS problems, but they are actually part of the IRS. Although the TAS is supposed to be an independent organization within the IRS, who would you rather have fighting the IRS on your behalf – an experienced tax attorney or another IRS employee? Keep this in mind when you are thinking of requesting help from the TAS.

I payed for an electronic refund and insurance . after many years filing head of household i was denied that filing status . after many weeks and months filing documentation on the advice of HR blocks local tax manager. i asked them to pay me for my claim they denied me for it was over a year after waiting on all responses from IRS and HR block told me too much time has passed.

My sister is considering taking over a business, she recvd income tax forms filled out by an accountant but they appear to be filled out incorrectly wanted to know if we can obtain IRS records for the business and also would like to know if there is a way to find out via the internet the debts of the business to find out exactly what my sister is getting into.

The Capital Gains Tax has always been a hefty portion of the equation when you invest in real estate.  Up until now, the benefits were generous for residents or investors who lived in their homes.  Now, however, the tables seem to be turning on the investors.

If you are a homeowner who lives in their primary residence for at least two years and you’re single, the capital gains allowance for you is $250,000.  If you are living under the same circumstances, but married, the same allowance is $500,000.  That has not changed.

Capital gains are assessed on the profit made when selling your house.  That is not, generally, equal to the amount of sale.

There has been a change in the law under circumstances where the owner purchased the home, and then rented it for a period of time before taking possession of it as their primary residence for at least two years.

It was once possible to sell the home under these circumstances and convert the profit from renting the home into a tax-free income under the capital gains protection.

Even though the owner has lived in the home as their primary residence for at least two years, as the tax law requires, the time during which it was rented is now considered a taxable period.  The new law states the capital gains allowance is to be tabulated pro-rata, and that it shall be divided between the time it was taxable (while it was rented) and the time it was not (while the owner lived there).

Let’s draw an example of how this works.  You buy a house in June of 2009 for $400,000.  You rent it for three years and then live in it for two before selling it in June of 2014 for $700,000.  So, you have a net gain of $300,000 for our example.  Under the prior set of tax laws, you could use your allowance as a single person to the tune of $250,000.  That means you would only have to pay tax on $50,000.

Under the new law, you can claim your capital gains allowance of $250,000, but only against two fifths of the $300,000 you made selling the property.  This means that your allowance covers only $120,000 of the money you got for selling the property.  That leaves you in the bucket for capital gains tax on the remaining $180,000

You are now going to pay capital gains tax on $180,000 as opposed to $50,000.  Some change, huh

Sooner or later, every American is bound to deal in real estate.  There comes the question of capital gains tax.  The Congress is determined to plug the loopholes in this area.  How is it going to affect you? Chintamani Abhyankar explains.

Nowadays, starting and taking care of a business represents a real change and the most difficult part is dealing with your business’s finances. Although there are many types of software that can help you with your business available nowadays, you need to be sure you are choosing what suits your business needs. One of the most efficient software nowadays is quickbooks, which is easy to use and highly recommended for small and medium businesses.

As far as accounting is concerned, quickbooks will help you manage all of your expenses. This software will make things much easier for you and for your accountant, allowing you to keep track of the checks you write and of your credit card bills. Furthermore, by using this software you can be sure that you will never miss an expense. Another quickbook benefit is the fact that it has several different reports which can help you see how your business is doing. Thus, you can print graphics so that you can see how much profit and loss you have every month. You can even have an annual report which will help you see how your business has fluctuated and if it needs any improvement or not.

Next, besides keeping track of your expenses and offering useful reports, quickbooks will help you create estimates and take care of the billing tasks. This program enables you to draw up estimates for your clients and also to create invoices. One of the essential aspects of using quickbook is making tax time a lot easier, since you will already have your expenditures and your income. If you decide to use this software the data will be entered just once, which enhances the efficiency of the program.

Furthermore, quickbooks integration will allow fewer errors because it is well known that people make more mistakes when entering data then professional computerized programs. Another quickbook advantage is the fact that the billing will take place a lot faster, thus increasing the cash flow of the business.  The information will be updated automatically, thus diminishing the number of errors and allowing the accountant to work faster and more efficiently.

Clients will spend less money on bookkeeping services, being able to focus on other aspects. Nowadays there are 2 ways of facilitating the integration of quickbooks: batch imports and backend integration. Batch imports enable the manager to create an export file, to view the contents and to choose to import that file into quickbooks, while backend integration will allow to the systems to communicate directly, all the data being completed in real time.

We suggest resorting to quickbook if you are an accounting firm, a staffing agency, an online store, a construction company and others. This program can be easily integrated into most web applications, enabling businesses to increase efficiency and to enhance the productivity of the company. These days most companies have started to use quickbooks to handle their accounting needs such as accounts payable, accounts receivable, time tracking, vendor and client databases. Managers or accountants can import anything into this program, thus increasing their productivity and eliminating redundant data entry.