Anatomy of Form 1040 and Adjusted Gross Income
May 4, 2010 Tax Strategies
Anatomy of Form 1040 and Adjusted Gross Income
We study anatomy to identify parts of the human body. We study physiology to understand how those human parts work together to, for example, find and digest food, procreate, and pay taxes. This simple study approach is the foundation of modern medicine and, for the most part, the basis for most of us living healthy and productive lives. We can apply this same study approach to personal federal income taxes; we need to first classify parts of a federal tax return and then study how parts work together to achieve one end; how much you owe in taxes. With every passing year and the passing of revisions in the income tax code, running your life is increasingly like running a home-based business. There is no valid disagreement that paying our share in taxes is clearly the responsible way to support, at the very least, our great nation but, we similarly want to exercise control over our lives and have the freedom and wherewithal to pursue our own bliss. Careful management of YOUR cash, YOUR credit, and YOUR taxes, now more than ever, are the foundation for maintaining financial health and achieving your life-time goals. Just like sports medicine attempts to optimize speed and strength through knowledge of anatomy and physiology, understanding the interaction of income with deductions and credits can similarly maximize a refund and minimize a tax liability.
A new IRS.gov section for the unemployed…
Mar 16, 2010 Tax Strategies
A new IRS.gov section for the unemployed…
Are you unemployed or struggling with personal finances? There is a new informational section on the government website, IRS.gov, that has information and web links to tax-related resources, tax assistance information, and suggestions that could help you through these difficult financial times. The Tax Center to Assist Unemployed Taxpayers has been created to offer advice, free publications, links to sources for tax planning, tax settlement plans, offers in compromise, etc. as well as other relevant topics for which you need planning information. There are also links to videos, health insurance information, and other IRS publications covering topics like bankruptcy, cancellation of debt income, and bartering income. Get information directly from the “horse’s mouth” rather than your well-intentioned neighbor or friend.
Avoiding Tax Penalties
Mar 16, 2010 Tax Strategies
Avoiding Tax PenaltiesThe IRS wants you to know about penalties if you don’t file your 2009 tax return by April 15, 2010. The government website’s newsroom offers the following advice:
Tags: Tax Penalties
Qualifications for claiming an adult as a dependent
Mar 4, 2010 Tax Strategies
Qualifications for claiming an adult as a dependentThere are several qualifications for claiming an adult as a dependent:
1. You as the taxpayer must provide over 50 percent of your dependent’s living or support costs.
2. Your dependent must either live with you for 12 months or be your parent, grandparent, step-parent, aunt, or uncle.
3. Assuming the person does not have a disability, your dependent cannot have a gross income that exceeds the tax year’s exemption amount. The exemption amount in 2009 is $3,650.
4. Your dependent cannot file a joint return with another person for the year unless that tax filing is only completed in order to claim taxes that had been withheld.
5. Your dependent must be a US citizen, a US national, or a resident of the US, Canada, or Mexico.
Tags: 2009
Eligible for the Elderly Tax Credit?
Feb 18, 2010 Tax Strategies, Taxable Income
Eligible for the Elderly Tax Credit? Are you 65 or older (or under 65 and disabled)? Are you a US citizen? Are you a Single filer with an adjusted gross income (AGI) less than $17,500? Is the nontaxable portion of your Social Security or other nontaxable pensions, annuities, or disability income under $5,000? You need to file Schedule R for a tax credit of $750! Read IRS Publication 524, Credit for the Elderly or Disabled or call 1-800-829-3676 and ask to have a copy mailed to you.
Don’t forget the IRS Helpline – 1-800-829-1040 or your nearest IRS Taxpayer Assistance Center.
Tags: 2009
