Posts Tagged: ‘Tax Breaks’

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.

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.