Last Minute 2014 Tax Savings Tip

December 28, 2014

tax-deduction-time-to-save-taxes    It is not too late to consider a very easy tax deduction for 2014.  Gather up some your stuff that you no longer use, no longer fits or flatters or maybe just takes up space to make room for your new Christmas and Hanukkah gifts. If you take these to your local charity before December 31 and you itemize your deductions, you may decrease your 2014 taxable income by the fair market value of these items. If at all possible, get a receipt and take a picture of the donated items to document the deduction. If you donate by dropping it off at a collection box, take a picture of you, the donation and the collection box. Then download the pictures to your computer. The file date on your computer will be on or before December 31 so you have documented your deduction. Keep a list of what was in the bags and boxes so you can put a value on the donation. (Watch for a future blog on how to determine the value of your donation.)  And have a Happy New Year!

Advertisements

Happy April 15.

April 15, 2014

Well, it is the TaxTax Deadline Preparer’s annual celebration – April 15.

There are 3 things to remember:

1. The IRS can’t eat you.

2.  They can’t take away your birthday.

3. We do not have debtor’s prison in the United States.

All that being said, even if you owe money and can’t pay your taxes, file an extension.  It is only an estimate or even a guestimate.  That’s OK.  The penalties for not filing something can be brutal

And have a great day.  For those who filed extensions – October 15 is 6 months away.

Civil and Criminal Tax Evasion

March 27, 2014

Jail and money

The difference between tax avoidance and tax evasion?  About 5-10 years in jail.

However, there is a big difference between civil and criminal tax evasion

Civil tax evasion adds penalties to the tax that you owe.

Criminal tax evasion means jail time plus penalties and restitution.

So the difference is money or time or both.  Not worth the risk.

The IRS has a job to do just like you and me. That job is to enforce the laws that Congress enacted.

So, be as aggressive as you are comfortable with.  Hire a tax professional.

But remember that pigs get fat and hogs get slaughtered.

When Should You File Your Tax Return?

January 7, 2014

IRS ReturnThe IRS announced that it would begin accepting individual tax returns (Forms 1040 and 1041) on January 31, 2014.  Business returns (Forms 1120, 1120S and 1065 ) will start being accepted on Jan 13, 2014.  Unincorporated businesses that report their income on Form 1040 Schedule C, Schedule E or Schedule F are not included as business returns so the January 31 date applies.

When is the best time to file your tax return?  There is a simple answer.  That depends.

Many people want to file their returns early to get their refund back as soon as possible.  That is one consideration.  If you have a simple return and really need the money this is probably a good strategy for you.  And yet there are other considerations.

The earlier you file your return, the more months the IRS has to decide if there is something that needs further explanation.  More months of exposure to IRS examination.

And the later you file, the more returns are already in the audit pipeline when yours arrives.  This may reduce your audit exposure (but no guarantees).  Many of our clients pay their tax when they file their extension on April 15 but wait until October 15 to file the actual return for this very reason.

Look at all your personal factors and then decide what is best for you.  If you have a question, contact a tax professional.


%d bloggers like this: