Posts Tagged: ‘Fiscal Cliff’

12 Tax Breaks You Have Never Heard Of

February 20, 2013 Posted by kingcade

Many Americans pay more in taxes than they are required, simply because they are unaware of the approximately 200 tax breaks in the system. The Government Accountability Office estimated that as many as two million taxpayers overpay by not itemizing their deductions. Many breaks target tiny constituencies and specific companies.

Here are 12 little known deductions and credits that you may not know about:

1. Charity Donations from your IRA: The early January fiscal cliff deal resuscitated an expired provision that allows people ages 70 ½ and older to donate up to $100,000 from their IRA to a qualified charity without paying taxes on the transfer.

2. Your Child’s Tuition or Medical Care: Parents or grandparents can pass along up to $5.12 million to their children or grandchildren over the course of their lifetime, (or $14,000) per year without incurring an inheritance tax. If parents want to give even more than that, they can get around those limits by paying for their children’s education or medical expenses.

3. Fostering a Pet: Foster pet owners can deduct expenses such as food, litter, vet bills, paper towels, etc. while waiting for the foster pet to be placed in a permanent home. Foster pet owners can even deduct mileage to the vet, in some cases.

4. Alternative Medical Treatments: The IRS allows alternative medicine including acupuncture, vitamins, herbal supplements and Christian Science to be deducted as medical care. Deductions extend to alternative forms of treatment as long as a medical practitioner prescribes them.

5. Private Mortgage Insurance: Another provision revived by the Fiscal Cliff deal allows taxpayers to deduct their premiums for private mortgage insurance. Many homeowners are unaware of this deduction, which can run from $50 to $220 a month on a loan of $250,000.

6. Moving Away for your First Job: One deduction that helps recent graduates is the one that allows you to deduct moving costs for your first full-time job. If you move at least 50 miles away from your old home, with at least 39 weeks of full-time work during your first year at a new employer, you qualify for this deduction.

7. Driving for Charity: If you do any driving related to charity work, it is deductible at 14 cents per mile. This deduction includes parking costs, along with other out-of-pocket expenses you incur during charity work.

8. Retirement Investments: Taxpayers with limited incomes can get a deduction and a tax credit for putting away money in retirement plans. Most who invest in a plan such as an IRA receive a deduction, however approximately 57 million households also qualify for a Savers Credit.

9. Whale Hunting with Alaskan Natives: Boat captains involved in subsistence hunting of endangered bowhead whales in Alaska can deduct up to $10,000 of their expenses. In order to qualify for this deduction, you must be hunting to provide food or materials for your family.

10. Stock Donations to Charity: If you donate stock rather than cash, you can receive a larger deduction on your donation. If you donate stock that has appreciated in value, you can write off the fair-market value and avoid the capital-gains tax on the stock sale.

11. Work Overseas: If you have worked overseas, the first $95,100 of your income is excluded from U.S. taxes. This deduction recognizes no distinction between low-tax and high-tax countries.

12. Harvest Your Investment Losses: If you sell an investment at a loss, such as a mutual fund, you can use the loss to offset either capital gains on other investments or their regular taxable income. Losses that you do not use now can be carried forward to offset gains future tax years.

To read more on this story visit: http://money.msn.com/taxes/12-tax-breaks-youve-never-heard-of

If you have any questions on this topic or are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.

How Your Taxes Will Be Affected by the Fiscal Cliff Deal

January 11, 2013 Posted by kingcade

The Fiscal Cliff deal will likely affect every taxpayer. Below are the effects it could have on your taxes:

1. Payroll Taxes: Wage earners will pay 6.2% in payroll tax on their first $113,700 in wages as opposed to the 4.2% rate that has been the payroll tax rate for the past two years.

2. Tax Rates: Individual taxes are going up for filers with incomes above $400,000 and couples above $450,000. Upper class taxpayers will pay 39.6% above the threshold. In the past, they paid 35% since 2001.

3. Investment Taxes: Capital gains and dividend tax rates for filers earning more than $400,000 or $450,000 for couples will increase from 15% to 20%. Taxpayers in the lowest bracket will pay 0% and all others will pay 15%.

4. Family Tax Breaks: President Obama’s Recovery Act has been extended for five years including:
a. American Opportunity Tax Credit: a partially refundable credit of up to $2,500 per year for four years for low-income families.
b. Child Tax Credit: Low-income parents can claim as much as $1,000 per child under 17.
c. Earned Income Tax Credit: provides a credit for working American with low- and moderate-incomes.
d. Expanded Dependent Care Credit: allows certain taxpayers to deduct up to 35% of expenses to a max of $6,000 for two children (permanently extended).

5. Itemized Deductions/Personal Exemption: Taxpayers who make $250,000 and above and couples who make $300,000 and above will soon be limited with the personal exemptions and itemized deductions they can take.

6. Alternative Minimum Tax: The income exemption level will be permanently adjusted for inflation.

7. Estate Taxes: The estate tax exemption will remain at $5.12 million and will be indexed to inflation going forward.

8. Marriage Penalty: Married couples will continue to receive a deduction that is twice that of individuals and income ranges for the 10% and 15% tax brackets are also doubled.

9. Debt Forgiveness: Homeowners who receive principal forgiveness or go through a short sale or foreclosure will not have to pay tax on the amount of debt forgiven. This will extend for one year.

10. Tax Breaks: Filers can continue to deduct state and local sales taxes. This deal extends to a bevy of tax breaks.

To read more on this story visit: http://economy.money.cnn.com/2013/01/02/taxes-fiscal-cliff/?iid=SF_PF_River

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.

January the Most Popular Month for Divorce

January 2, 2013 Posted by kingcade

The first month of the New Year is reportedly the most popular time of the year to file for divorce. Below are five financial reasons why:

1. Year-End Bonuses are a contributing factor of why many couples wait until January to divorce. In most states, once a divorce has been filed, any income that comes in after, is separate. Year-end bonuses are commonly fought over in divorces.

2. Cooling Off can be another factor in why spouses wait until January to file for divorce. Spouses are aware of the fact that their significant other might be less likely to settle if their holiday was ruined.

3. Holiday Shopping can be disastrous if spouses are angry at one other. The spouse that has been served the papers may go on a spree with the idea that he/she deserves it while the opportunity is present.

4. Tax Returns are commonly thought to be a contributing factor to whether a divorce is filed in December or January. While it really makes no difference when the divorce is filed, many couples are under the assumption its best to start the New Year with a clean slate.

5. More Time to Plan is available if a spouse waits to file for divorce in January. Both spouses have most likely had some time off for the holidays and are able to get end-of-year statements together. There is more time for spouses to sift through finances and gain a better prospective on what the future holds.

To read more on this story visit: http://www.nbcnews.com/business/considering-divorce-wait-until-january-1C7659310

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.

Fiscal Cliff Controls the Fate of Four Key Tax Breaks for Parents

December 26, 2012 Posted by kingcade

President Obama and Congress have yet to reach an agreement regarding the Fiscal Cliff. Many areas of the economy will be affected if we go over the Fiscal Cliff, one of them being a loss or lessening in certain tax breaks. Four of the tax breaks that will negatively affect parents’ financial state are the Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit and the American Opportunity Credit. Some families are at risk of losing money on more than one of the tax breaks, which will result in either the loss of thousands or owing thousands.

See below for the way each tax break will be affected if the country goes over the Fiscal Cliff:

1. The Child Tax Credit allows lower income families to claim up to $1,000 per every child under the age of 17. If the Bush and Obama tax cuts expire, the tax break will drop back to $500 and only extend to working families with three or more children. A family with only one or two children could end up paying $1,000.

2. The Child and Dependent Care Tax Credit allows working parents to claim up to $3,000 worth of expenses per child on up to two children. The parents could receive a maximum of 35 percent of this amount as a credit. If the Bush tax cuts expire, parents can claim up to $2,400 per child and receive a maximum of 30 percent as a credit.

3. The Bush and Obama administrations formulated the Earned Income Tax Credit, which allows married couples with a joint income below $50,270 and three or more children to receive up to $5,891. Obama also raised the maximum credit from 40 percent to 45 percent of earned income for families with three or more children. If the country goes over the Fiscal Cliff, the rate will fall back to 40 percent and the credit allotted by Bush’s Earned Income Tax Credit will drop approximately $5,000.

4. The American Opportunity Tax Credit was a part of Obama’s 2009 stimulus plan. The plan allows low-income families to claim up to $2,500 of credit for four years to help them pay for college fees. At the end of the year, Obama’s American Opportunity Tax Credit will expire and revert back to the Hope Credit, where the maximum credit will drop to $1,800 for only two years.

To read more on this story visit: http://money.cnn.com/2012/12/18/pf/taxes/parents-tax-breaks/index.html

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.

Economists Forecast Growth in 2013

December 20, 2012 Posted by kingcade

Economists are hopeful for a modest growth in 2013 as the housing market continues to stabilize. The economy saw a 2.2 percent growth during 2012 and economists expect a 2.1 percent growth rate during 2013. Although it is a good sign for economic recovery, it is at such a slow pace that it will not have much effect on the unemployment rate. Economists from the National Association of Business Economics (NABE) say they expect the unemployment rate to level off next year to around 7.7 percent.

Economists have seen a slight stunt in economic growth during the October-December quarter and believe Hurricane Sandy is the cause. The Gross Domestic Product (GDP) or the country’s output of goods and services has sharply declined during this quarter. However, if we go over the fiscal cliff in two weeks, this will likely cause even more damage to the economy. Economists say their anticipated growth rate is based on the hope that the federal government will find a solution to avoid tax and spending cuts.

NABE expects the growth in 2013 to include:

• 165,000 jobs added to the job market
• The inflation rate to increase 1.8 percent
• A 75 percent increase in long-term interest rates

To read more on this story visit: http://www.miamiherald.com/2012/12/17/3145564/economists-forecasting-moderate.html

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.