The Federal Tax Credits Blog

Archive for August, 2009

Question: Tuition fee for income tax?

I live in BC Canada and I have spend about $30,000 for tuition fee for college in the past 3 years. Last year when I did my tax return, my total income was about $3,000.

Someone told me that I still have a credit for $27,000 for this year. Is that true?

If so, how do I claim for the credit? is it something that I just get when I do my tax?

Thanks

Answer: Hopefully, you were still filing income tax returns for those years even if you didn’t have any income. The tuition and education amount is a non-refundable credit, meaning you use as much as needed to bring your tax liability as close to zero as possible and then carry forward the rest (if there is any). Since you made only $3000 last year, you are already non-taxable so the amount would have been carried forward. These amounts can actually get carried forward indefinitely until you use them all up… so you don’t lose your credits if you don’t have enough taxable income within a certain time period. The amount that you have left to carry forward would have appeared on your notice of assessment that you would have received within a few weeks of filing your taxes last year. If you don’t have it, call CRA at 1-800-959-8281. Be prepared with your SIN and last year’s return if possible. If you don’t have that, they’ll just ask a few questions to verify your identity. Also, if you have an “epass”, you can get that info on the My Account section of the CRA website. http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/myccnt/menu-eng.html

Info on carry forward amounts:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/323/crry-frwrd-eng.html

Apollo Group, Inc. Reports Fiscal 2010 Third Quarter Results

PHOENIX—-Apollo Group, Inc. today reported financial results for the three and nine months ended May 31, 2010.

Whether you need – a tractor, an earth-mover or bulldozer, erection equipment, an excavator, drilling equipment, other heavy machinery Excavators, Wheeled Excavators, Dozers, Graders, Wheel Loaders, Compactors, Backhoes, Off Road Trucks, Backhoe Loaders, Bulldozers, Crawler Dozers, Shovels, Graders, Excavators, Crushers, Skid Steer Loaders, heavy equipment leasing is an excellent way to grow your business without the significant initial investment and usage of your existing lines of credit. Leasing is faster, requires less of your attention and less upfront money than a bank loan. These days companies also offer immediate write-offs, Balance sheet management, Customized solutions, Solid asset management, improved cash flow, Easy upgrades. Plus, in these economic hard times, it is better to lease heavy equipment then it is to purchase it because of the low resale value the equipment has.

In leasing your heavy equipment, lease payments are tax deductible. Because of that you can have a wide access in your money while traditional loan only offers half of its tax deduction. A typical lease arrangement is for between two and five years. If one is opting for heavy equipment lease, then it might be because of one of the following reasons:

There are still more concerns which are as:

These days it has become too risky to invest in new equipments. You never know when it will be out of trend. If it all happens then you won’t be in a position to claim your money. And most important, it is a sweat free, simple process.

More than three dozen new laws take effect Jan. 1

RALEIGH – While more than three dozen new laws are set to take effect when the new year begins on Jan. 1, most have a narrow focus and don’t target the broad population. However, some North Carolinians will notice the changes. For example, military…

Industrial Test Equipment Maker Moves to Larger Michigan Location

Question: can i get credit score with my tax id number? “i have 8 credit cards but no social security”?

Answer: Pedro:
The credit score that really matters is FICO.
As you can see, in order to set up an account at myFICO.com, you’ll need a Social Security Number.
Bob

Projections on tanning-parlor tax appear to be far too high

Just before leaving Washington, lawmakers cut a controversial cosmetic-surgery tax from the Senate version of the health-care bill and, in its place, tucked in a 10 percent tax on indoor tanning services. The new tax, proposed by the American Academy of Dermatology Association, is meant to discou…

Senator Johnny Isakson in Reintroducing the Housing Tax Credit

One of the most important elements of a successful investment experience is the investment policy statement. This is essentially a written investment plan that allows you (and your advisor, if you have one) to have a written implementation, management, and review program for managing your investments. This is comparable to a business plan, without which very few businesses succeed. Writing an investment policy statement is a critical first step towards successful investing.

Institutional investors operate with investment policy statements as a standard matter of practice. It is a way for them to outline their investment processes and expectations, and effectively communicate these to their investment managers. It also provides a means for measuring results. Individual investors should be using investment policy statements for the same reasons, especially if they are working with a financial advisor.

An investment policy statement outlines an investor’s circumstances including their objectives and constraints, risk tolerance, return objectives, time horizon, liquidity needs, funds available for investment, and the investment methodology to be followed. It is a written roadmap or set of guidelines to help you, your family members, and your advisor navigate through an uncertain future to achieve your investment objectives.

A written policy statement helps you maintain a disciplined investment approach even when market movements are distressing and your emotions may be causing you to second-guess your strategy. It also encourages effective communication with your advisor if you have one, or with other family members if you are investing on your own. A investment policy statement also creates a framework for reviewing important factors as they may change over time.

Here are the steps to creating an investment policy statement:

(1) Establish long-term goals and objectives — for most individual investors, long-term objectives include the need for supplemental retirement income, but can also involve large future expenditures such as the purchase of a vacation home, educational funding, or other long-term financial need. Retirement income planning should account for future inflation expectations and the need to generate sufficient income to maintain your quality of life throughout retirement.

(2) Define your investment time horizon— you may have several investment objectives, each with a different investment period. These should all be identified in your policy statement. Your time horizon is important because it will affect your asset allocation and risk profile and how your investments might change over time as you get closer needing money for various goals.

(3) Determine your risk profile — investment markets can be volatile and uncertain, so it is important to establish an acceptable and appropriate amount of risk for your situation. There are many different methods that can be used to evaluate risk. Most attempt to quantify the possibility that your expected returns or asset growth will be less than expectations. A skilled financial advisor can be of great help in this area.

(4) Establish an expected rate of return — in order to reach your financial objectives, your portfolio will need to appreciate at a certain rate. You will want to consider the required rate of return and work this into your investment plan. Of course, your portfolio’s expected return is a direct result of its risk level. You should establish criteria for periodic review of your results compare to benchmarks and expectations.

(5) Develop asset allocation guidelines — having a written asset allocation policy will help guide your portfolio management decisions and assist your financial advisor in the ongoing management of your assets. Your portfolio’s asset classes should have a low correlation with each other to provide diversification benefits. You should also consider the expected return and risk of each asset category as it relates to the portfolio as a whole. Other considerations include liquidity, tax efficiency, and rebalancing guidelines.

(6) Document an investment methodology — there are a variety of investment strategies you can follow to implement an investment program. Be sure to carefully evaluate the pros and cons of different approaches and memorialize your personal preferences in your policy statement. This will help guide you and your advisor as market conditions change and as you might consider new investment vehicles and strategies in the future.

Year-end book squaring continues

Year-end book-squaring continued during the overnight hours, this time in favor of gold, oil, and the euro for a change.

Question: Would traditional IRA be better?

My husband and I are both in our early 30’s. We are probably peaking at our salaries now and are in the 25% tax bracket. Also, our AGI (adjusted gross income) is such that certain deductions are starting to be phased out for us (student loan interest, dependent care credit, child care credit). I would expect for us to be in a lower tax bracket at retirement, relying mainly on investment income and social security income.

We would like to start contributing the maximum to IRA’s for each of us. Currently, that would be $8,000 per year for both of us. I have almost convinced myself that a traditional IRA would be better for us given our circumstances. Any thoughts or advice (from professionals, preferably)?
No, neither one of us are self-employed and neither one of us have retirement plans at our places of employment.

Answer: Personally I would go with the Roth. If you’re going to max it out either way, the Roth will be better for you in the long run. Say you max out your IRA for the next 20 or 30 years and end up with $1.5 million. If that money is in a Roth, you can withdraw the entire balance–you have $1.5 million. If that money is in a regular IRA, you can only withdraw around $1.2 million, assuming you’re in the 20% bracket. Is the minor tax deduction you’ll get each year really worth losing out on $300,000 in retirement funds?

Besides, you’re assuming tax rates stay the same. I think we’ll all be in higher tax brackets in 20-30 years because the government will have to raise them. 25% or 30% might seem very low when we retire! I’d rather not worry about that and pay taxes now.

Looking back at a year on the West Shore

This week residents will say goodbye to 2009 and hello to a new year.

HHS Secretary Sebelius Takes Questions from BlogHer on Health Reform