The Federal Tax Credits Blog

Archive for October, 2009

Question: Claiming Education Credits for 2008 Taxes?

I am preparing all of my documents and statements to do my taxes and I just ran into an issue regarding education credits. I took out $3500 loans in 2008 to pay for a school tuition debt that carried over from 2007. Since I did not take out the loan until 2008 can I claim the credit for 2008 tax purposes?

Thank you!

Answer: No.

The tution was in 2007. That’s the year you claim it.

PM urges whole nation to strive for higher achievements * Key targets achieved in 2009 compared with 2008’s figures

The year of 2009 is over. It witnessed many complicated issues in the world and domestic economies, causing huge difficulties for business and production and people’s lives.

How to Pay Zero Taxes, 2008 $4.98 Make 2008 the year you pay zero taxes!. . Fully updated to include all the latest tax law changes, How to Pay Zero Taxes outlines the easiest, most practical strategies you can use to lower your taxes this year, next year, and beyond. From converting personal expenses into business expenses to avoiding or surviving an IRS audit, Jeff Schnepper’s guide comprehensively covers more deductions than …

Rep. Ryan on Higher Education Tax Credits

Question: Cashing in a savings bond — Tax Concern?

When I was young, my grandma would buy me (and my brothers) US Savings Bonds. I am now a grown man, and I am still holding on to them. Well, I have some home improvements coming up, and I could take out a home equity loan or line of credit to pay for them. But I’ve got these savings bonds sitting there just collecting dust. So I could cash them in and offset the amount of equity I’d have to use for these improvements. But here is my concern. I know that if you cash them in, you have to claim the interest earned on your federal taxes. So let’s say I have a $2500 savings bond that is now worth $5000 (so it has earned $2500 in interest). If I would cash that in, how badly would I get hurt come tax time? Can anyone tell me approximately what percentage of that $2500 I would end up having to give back to Uncle Sam? I am just trying to avoid getting myself into trouble, where I’ll end up owing $2000 next year. That would pretty much defeat the purpose of cashing them in.

Answer: The percentage you would pay would be based on your other income, it’s hard to say without knowing your situation. On $2500 it would range from about 10% up to 35% depending on your income. Most people about 15%.
A way around this for the future, if your children get savings bonds, you can file a tax return for the child each year, declaring the amount of interest the bond earns that year. Unless your kid is quite wealthy they won’t pay any tax yearly and when time comes to cash the bonds they will already have been declared and no tax is due.

Know the code: claiming credits; Pay attention to these if you want to reduce your federal tax liability

Editor’s note: This is the second in a series of three articles examining tax changes that took effect in 2009, some of which were due to the American Recovery and Reinvestment Act. This week, The Bulletin looks at changes to nonrefundable tax credits, which reduce the taxes you pay the federal government.

Tax Credit for Replacement Windows

If you are trying to save money on your electricity bill there are several steps you can take when you are in the market to lease your next apartment home. Remember that many choices you will make before you even you choose your apartment can impact what you will be spending. Although energy rates have come down what they once were, it is always helpful to keep your energy usage low so you can keep more money in your pocketbook. Here are a few quick tips that can assist you now or in the future.

Rent A Green Apartment Home

Many newer apartment homes have lots of green friendly comforts. Energy saving appliances including your dishwasher, oven, and washer and dryer, are usually rated energy efficient and use either a diminished amount of energy and/or water.

Many of these “green” apartment homes will also have light-bulbs called LEDs or light-emitting diodes. These types of bulbs use less energy and last longer than conventional bulbs. They are pricier than normal bulbs, but if your apartment community has already installed them before you move in this will not affect upfront costs.

Double pane windows are also another feature that some apartment communities are installing in the apartment homes themselves. With double pane windows, hotter air and noise have a much more difficult time of penetrating your home. This provides for a more enjoyable experience as a renter.

Choose The Right Location

Once you have decided what apartment community you prefer to call home, the next step will be to select the actual unit. If you live in a hot city like Houston or Miami you may know that hot air rises. Choosing an apartment home on the top floor may require that you run your air conditioner a little more in the hotter summer months. Also choose units that don’t face the West. The sun can really cause the temperature in your apartment home to increase if it shines right into your apartment home.

Laid-off executives struggle to find any kind of job

Highly compensated executives, typically insulated from heavy job losses during recessions, have been hit much harder in the current slump.

Infinity Turbine IT10 5-12 kw ORC – Organic Rankine Cycle – Waste Heat to Power Generator

If you have recently been laid off and are considering career options, it may be well worth looking into the field of tax preparation. This is a career with minimal entry requirements, offers a great deal of scheduling flexibility, along with attractive earnings potential.

It is a fact that many of those who have been laid off are older workers who may face some barriers with regard to obtaining new employment but are also not yet ready to retire. The relatively short length of training needed to start work in this field (little as 10 weeks) combined with the earnings potential, even working on a part time basis, provides these workers with a ready method by which they can remain in the workforce while ensuring a steady stream of income.

Even if you are not thinking to make tax preparation a long term career, it can still provide a method of earning an income while seeking work in your field. Much tax preparation work is performed on an evening and weekend basis since most clients are unable to visit the office during the work week. In addition, by performing this work you will be gaining some valuable skills that can be readily transferred to nearly any career. You may even find that what you thought would be a temporary “gig” until you locate suitable employment in your field, turns into a long-term situation! Many tax preparers continue to perform this work on a part time basis while also holding full time career.

If you have been laid off from a career within the banking of financial sectors you will find that many of the skills you have developed in your prior career are directly applicable to the field of tax preparation. The specific areas of similarity include:

In the end, no matter the industry from which you come, the field of tax preparation can be a great way to supplement your income or launch a whole new career! The most important prerequisites for entry into the field are basic facility with numbers and good people skills. The rest can be learned! Take the time now to start looking for a tax course today.

Utah County, UT’s Excise Tax Revenue Bonds Assigned ‘AA-’ Rating

Standard & Poor’s Ratings Services assigned its ‘AA-’ rating to Utah County, Utah’s $6 million series 2010A excise tax revenue bonds, $15.4 million series 2010B taxable excise tax revenue bonds (Build

Before a donor can claim a tax deduction for any single contribution of $250 or more, the IRS requires a written acknowledgement of the contribution from the nonprofit organization. Nonprofit organizations typically send these acknowledgments to donors no later than January 31 of the year following the donation.

QuickBooks Premier for Nonprofits has a nice built-in report called Donor Contribution Summary which can be used by many nonprofits to prepare their year-end donation acknowledgement statements. However, this report includes all revenue including fees for services that aren’t tax deductible. But you can create a custom report in QuickBooks that excludes these fees. Here are the instructions:

1. Go to Reports > Custom Transaction Detail Report

2. Click on the Modify Report button

3. Select your date range, most likely “Last Fiscal Year”

4. Select Cash for report basis

5. Select Customer in the Total box

6. Check the columns you want on the report and uncheck the columns you don’t want – at the very least I recommend using Date, Name, Memo and Paid Amount

7. Select the Filters tab

8. Select Account in the Filter box, Multiple Accounts in the Account box and check off the revenue accounts you want to include on the report

9. Select the Header/Footer tab and change the report title to Donor Contribution Summary

10. If you want each donor printed on a separate page, check the box next to “Page break after each major grouping” after clicking the Print box

11. Once you have the report looking the way you want it, click on the Memorize button

End-of-year tax tips for small business

As amazing to me as ever, we are in the end-of-the-year holiday tax season. To many people, this time of year means many things, so let me add just one more item to your checklist.

WVIT: Congressman Joe Courtney announced new legislation extending first-time homebuyer tax credit