West Tax|Western Tax and financial Information

Many employers continue to pay employees’ full salary while they serve on jury duty, and some require the employees to turn over their jury fees to the company coffers. The only problem is that the IRS demands that you report those fees as taxable income. To even things out, you get to deduct the amount paid to your employer. But how do you do it\/ there’s no line on form 1040 labeled “jury fees”. Instead the write-off goes on line 36, which purports to be for simply totaling upo the deduction that get their own lines. Add your jury fees to the total of your other write-offs, and write “jury pay” on the dotted line.

14.  American Opportunity Credit

This tax credit, is available for up to $2,500 of college tuition & related expenses paid during the year. The full credit is available to individuals whose modified adjusted gross income is $80,000 or less $160,000, or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above those levels. This credit is juicer than the old hope credit, it has higher income limits and bigger tax breaks, and it covers all four years of college. And if the credit exceeds your tax liability, regular and AMT, it is partially refundable.

15.  Making Work Pay Credit

You’ve probably been enjoying the fruits of this credit via reduced payroll tax withholding throughout the year. But to look in your savings, you’ll need to actually claim the credit on your 2010 tax return. This is by reducing your tax bill by $400 if you’re single or $800 if you’re married and file a joint return. You’ll use schedule M to do so. The credit is equal to 6.2% of your earned income, capped at $400 or $800. For single filers, it starts phasing out at $75,000 of adjusted gross income and drives up at $95,000. The phase-out zone for couples is $150,000 to $190,000.

16.  Credit For Energy-Saving Home Improvements

You can claim a tax credit equal to 30% of the cost of energy-saving home improvements up to a maximum of $1,500. This cap applies to both 2009 & 2010 combined, so if you claimed the maximum $1,500 in 2009, you don’t get another crack at it for 2010. The credit applies to biomass fuel stoves, qualifying skylights, windows and outside doors and high-efficiency furnaces, water heaters and central air conditioners. For 2011, this credit goes back to pre-2009 limits. For example, $500 maximum credit for all years with no more than $200 for windows. There’s also no dollar limit on the separate credit for homeowners who install qualified residential alternative energy equipment such as hot water heaters, geothermal heat pumps and wind turbines. Your credit can be 30% of the total cost, including labor, of such systems installed through 2016.

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5. Job-Hunting Costs
If you’re among the millions of unemployed americans who were looking for a job in 2010, keep track of your job-search expenses. If you’re looking for a position in the same line work, you can deduct job-hunting costs as miscellaneous expenses if you itemize, but only the extent that the total of your miscellaneous itemized deductions exceed 2% of your adjusted gross income. Job-hunting expenses incurred while looking for your first job don’t qualify. Deductible job-search costs include, but aren’t limited to: food, lodging & transportation if your search takes you away from home overnights, cab fares, employment agency fees, costs of printing resume, business cards, postage, and advertising.

6. Moving Expenses to Take Your First Job
As we just mentioned, job-hunting expenses incurred while looking for your first job are not deductible. But, moving expenses to get to that position are. And you get this write-off even if you don’t itemize. To qualify for the deduction, your first job must be at least 50 miles away from your old home. If you qualify, you can deduct the cost of getting yourself & your household goods to the new area, including 16.5 cents per mile for driving your own vehicle for a 2010 move, plus parking fees &tolls.

7. Military Reservist’s Travel Expenses
Members of the national guard or military reserve may tap a deduction for travel expenses to drills or meetings. To qualify, you must travel more than 100 miles from home & be away from home overnight. If you qualify, you can deduct the cost of your meals plus 55 cents per mile for driving your own car to get to and from 2010 drills. In any event, add parking fees or tolls. You get this deduction regardless of whether you itemize.

8. Health Insurance Deduction to Reduce Self-Employment Tax
Business owners have always been allowed to deduct health insurance premiums for themselves & their family. This is in computing adjusted gross income on the front page of form 1040. For 2010, they can also deduct the cost of those health insurance premiums in calculating self-employment tax on schedule SE. The IRS has hidden this write-off on line 3 of schedule SE. On that line, you are told to add your self-employment income from lines 1&2 subtract the amount claimed, on line 29, of form 1040, your health insurance premiums and enter the net amount on line 3.

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Now, our topic is “4 common tax myths all home business owners should be aware of”. Now on home office is get a bad wrap. There’s so many rumors out about the home office deductions that you may want to avoid the whole subject. But if you have a home office and not deducted it, you could be missing now about on some very valuable tax savings. Lets take a look the trurth behind the myths about the home office deductions.

So, starting with the myth number 1, is that the home office deductions is a red flag for an audit. 20 years ago, this might be true, simply because it’s unusual. But now, the home business seems almost  as popular as home ownership. Millions of individuals operate some kind of business activity out of their homes, others telecomute and deduct their home office expenses and itemize deduction. The home office deduction is no longer an automatic flag for an audit. The key to avoid the audit is reasonableness. The IRS uses computer analyzes on all tax returns. Any deductions and your income, then the benchmark to your industry may be question. So bottom line, deducting the portion of your home expenses as a cost of operate home business is has expected.

Then, myth number 2, if i take the home business deductions, i can deduct all the costs of my home. You can deduct the portion of your home expenses as a home office expense based on the square footage of your home office space. Your home office space must be used exclusively for business. Your kitchen will not qualify as home office space simply because you use the table to complete the paperwork. For use the space for personal and business is does not qualify. Now the easiest way to keep tracking this is the basic need of your room or rooms for your home office purposes. If you don’t have the complete room to use as the home office, then use furniture to saparate the persoal part from business space. Of course ther is an exception for this rule. If your business is a house-sale retail and youu do not have any other fix location, you can include any spaces you use for storage or storage as the part of your home office. The space does not have to be
exclusively, but must be used regularly and suitable for storage. So bottom line, calculate the square foot that you use exclusively for business and the square foot that you use as storage inventory to determine your home office deductions.

Myth number 3, i can only take the home office deduction if i work at home exclusively. That’s an old rule! The congress expanded the home office deductions to allow business owners without any other fix business location to take home office deduction regardless a number of hour that they spend at home. If you provide services to customers or clients to their location, you still qualify for the home business office dedcutions. You simply must use your home office for administrative or management duties. Bottom line that you can deduct your home office as long as you don’t pay for other office space to run your business.

Now myth number 4, the home office deduction will make me lose my tax exclusion on the sale of my home.now the rules has change for you too. If you use 10% of your home for business purposes, you no longer have to recognize 10% you gain on the sale that could be excluded if you met the requirements for the sale of your principal residents. Now what you need to do is include any depreciation deduction you took in prior years as a tax locate no gain. You still benefit because your capital gain rate most likely lower than your ordiary income tax rate. Your depreciation deduction can also reduce your self employment taxes. So bottom line, you could still save taxes overall but taking the home office depreciation deduction each year.

Operating your business from home is a very smart move financial for the new or small business owners. You can save yourself thousands dollars on rent by operating that home rather than renting business space. But the costs of housing your business are expenses and you should be treating that way. You will not hesitate to deduct rent expense for your business, treat your home business the same way. The tax money you save can be use to grow your business or even to fun your family vacation.

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For years, Dr. Ron Mueller has made his patients to research the hidden tax advantages available to home-based businesses. And he has become America’s leading home business tax expert. He found the secret to increasing your tax refund by thousands of dollars every year. “for the average american workers, there are a part-time home-based businesses. If the american understood the five biggest tax breaks, they’ll be able to put $3,500-$5,000 extra cash on their pocket from additional tax refund. This above and beyond whatever refund they may have gotten before. Congress pay a lot tax breaks for home business, but if you don’t know what they are, it doesn’t has any good. The more you know about the tax deduction is, the less you owe. You can not take advantage of tax deduction you don’t understand. And you can’t take advantage the tax deductions for which you don’t keep on record. Here’s an example, if you have and earn millions of dollars, and you make your tax under-controll, then you are a millionaire.

It’s how much you keep the counts, not how much you make, and you can keep a large portion of what you make if you really understand taxes and take advantages of tax breaks that are legals. “So, when did this tax breaks apply? When can a home-based business start using them? The very first day they get in home-based business. As long you can show what you’re working on becoming profitable, that’s all it take. You do not have to make a profit, or even any particular numbers for years.

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Do you have a rental home and wander am i maximizing the use of this rental home for tax purposes? The first thing i have to tell you, and you might not like to hear, it’s a common miss conseption. But you do benefit from having the rental home when you actually sell the rental home. So, first you have to assume that all of the requirements are met, and i’m sure there are a lot of them. But one requirement that easy to remember is that you need have to used and live in the rental property for at least 24 months at the past 5 years. Well, does it mean you have to spent two years there? No, you just have to spent at least 24 months. So you could have long summer there, then go back to your property then go back then go back again. However you can get those 24 months is fine. And then, you start getting into the improvement and what kind of income you can have and things like that. The end of the date, easiest way to explain to you is that when you sell the property, that’s when you gonna see the benefits. Unfortunately, it is a little bit complecated of the topic, and my best recommendation would be for you to visits your local CPA and get some of advice.