Our Guide to Taxes

It's time once again for our annual review of tax changes for the coming year.  For those of you preparing for the tax year 2007, we've got a lot of helpful information summarizing all of the income tax changes in 2007

For those of you preparing for the tax year 2006, we thought it would be helpful to summarize all of the income tax changes in 2006.   We're going to start off with good news again because as was the case in 2005, April 15th falls on a weekend.  That means the official filing date should be April 16, 2006.  But that's just for starters.

Each year the laws outlining the collection of federal income taxes expire, are extended, or modified, just a little bit.  Here we're going to explain some of the income tax changes taking place in the tax year 2005 - including some good news concerning deadlines for filing your taxes with the IRS.

If you didn't take advantage of the IRS efile system last year, then you're among a shrinking segment of America that still files paper copies of their federal tax forms.  If you're reading this publication, then you've got Internet access, so there is really no good excuse not to file electronically.

When tax time rolls around everyone's interested in the latest developments - and they've also got a lot of questions.  They're all looking for explanations for any of the recent changes to tax code and what that means to them on their tax return.  Believe it or not, the IRS loves it when people pay their taxes on time.  Finding mistakes on tax forms just makes more work for everyone involved.

There is no doubt that the IRS is a wealth of information when it comes to federal income tax forms.  To help round out our section devoted to taxes, we've taken some of the most common income tax forms and grouped them by type for you.

As the April tax deadline draws near, most taxpayers start gathering up all of the IRS forms they need to complete their income taxes.  Even if you're quite confident that you don't need help finding any of the many IRS forms out there, we'd thought it useful to provide a bit of a guide to the most common tax forms used.

In casual conversation, the term tax return is used rather loosely for two related, but different subjects.  When some people talk about tax returns, they are really talking about filling out a tax form.  Other folks use the phrase tax return to talk about their refund.  So as not to play favorites, we'll talk about both in this article.

Here is the latest information on federal income tax brackets for the tax year 2006, 2007, and 2008.  You'll also hear these tables referred to as tax rate schedules or schedules.  The tables can be used to figure out the incremental tax you pay on each additional dollar of income.  For example, if you are in the 25% tax bracket, then for each additional dollar of income you had in 2008, you would owe $0.25 in federal income taxes.

If you're looking for the 2005 tax brackets you've come to the right place.  You can use these tax rate schedules to calculate the incremental tax you pay on each additional dollar of taxable income for the tax year 2005.

Many publications circulate their tax planning tips at the end of the tax year.  Quite frankly tax planning can take place all year long.  And with the calendar year about half over, it's something you really want to start planning now.

It's always the right time to be thinking about new tax-savings ideas.  Whether it's the start of a new year or you're up against the April income tax-filing deadline, there's usually something you can do to help reduce your tax bill - but it often helps if you've got a plan.

You've prepared your income tax return, filed it with the IRS, and now comes time for the waiting game.  Although this time around you're not just waiting for a tax refund - you're waiting to see if you're going to be involved in a tax audit.

If you've ever filled out a tax form, you understand that the entire process is all about taxable income and tax deductions.  You start out by identifying all of your sources of income such as wages, salaries and tips - all from your W-2 form.  Then you figure out how much income you've had from other sources.  That could be from rents, interest income, capital gains, pensions, and other similar types of income.

When filing your taxes, you are always faced with the decision of taking Itemized Deductions or the standard deduction.  To be exact, you had to make that decision on line 39 of the IRS Form 1040.  In nearly all cases, your taxes will be less if you take itemized tax deductions instead of the standard deduction.

Beginning in the tax year of 2007 there were several important changes made to the tax code concerning gifts to a charity.  There were also some significant tax breaks for IRA owners if they're willing to transfer funds to charitable organizations in the tax years of 2006 and 2007.

The best approach to tax planning is to start early in the year.  But it's never too late - even as the April tax filing deadline approaches - for some last minute tax savings tips.  After all, our obligation is to pay our fair share of income taxes, and not a dollar more.

Tax Credits are on a lot of minds as the April filing deadline draws near.  Just in case you don't know what a tax credit is, these are a little bit different than tax deductions.  If you consider preparing your taxes "fun", then you will enjoy taking tax credits even more than deductions - here's why.

Generally, a tax shelter is a program that allows individuals or businesses to permanently reduce or defer the payment of income taxes.  Certainly tax shelters are not right for everyone - even legitimate tax shelters involve a level of risk that not every investor will be comfortable undertaking.

Federal Inheritance Tax is one of those things you really don't feel like dealing with, but in some ways it is part of the cycle of life.  Possessions have been passed down from generation to generation throughout history and they provide us with both sentimental and monetary value.  Thankfully, we don't have to deal with inheritance issues all the time, but we want to provide that information for those that need it.

Inheritance tax is paid when property is transferred to someone else after the passing away of the original property owner.  Inheritance taxes, or estate taxes, are calculated based on the fair market value of all of the property transferred to the beneficiary of the estate.

Alternative Minimum Tax is nothing new; in fact it first appeared on tax forms dating back to 1978.  The problem is that more and more individuals are falling victim to the alternative minimum tax and don't completely understand its purpose.  There are even some ways to create a tax shelter and avoid paying a minimum tax, and we will discuss some strategies later in this article.

Capital Gains Tax, or CGT, is owed on any type of property you sell for more than paid for it - almost.  To be more accurate, we first need to completely understand what a capital asset is, then figure out the cost basis for the asset.  The cost basis or simply "basis" is usually what you paid for the asset, adjusted for money you may have spent fixing it up.  But before we go too far down that road, let's revisit the concept of a capital asset.

On November 27, 2007, the IRS announced the standard mileage reimbursement rates for the calendar year 2008.  These are the rates that should be used to calculate the tax-deductible costs for using a car for business, charitable, medical, and moving purposes.  The most common use of these mileage rates is to reimburse employees for expenses involving use of their own cars for business purposes.

As the saying goes, if it sounds too good to be true, then it's probably a tax scam - something like that.  Peak activity of these scams occurs around tax preparation time, but even scammers need to make their monthly mortgage payments so you can run into one of these ploys all year long.

You've got a new job and they're offering you $1,000 a week to start!  That's good news, but even more important than how much money you're making each week is how much money is going to make it into your pocket.  That's because there is a little thing called payroll taxes that can take quite a bite out of our weekly paychecks.

As you travel from state to state, things can get a bit confusing when it comes to state sales tax rates.  Add to that confusion this world wide web of ours, which makes purchasing merchandise from a company doing business in another state an everyday affair.

We've put together a lot of information on federal income tax brackets, so here were going to add to the income tax story with a listing of state income tax rates.  Keep in mind that state income tax is not the end of your tax bill, because there are a couple of little things called property tax and sales tax that come into play too.

In this publication we're going to discuss the topic of tax-friendly states.  That point of view will be from both a residential standpoint, as well as a business perspective.  When we pay taxes we're providing sources of income to those that are providing the essential services we all enjoy.  But there is no doubt that some states are more tax-friendly than others.

As the close of the year draws near, many taxpayers are concerned about limiting their tax liability in 2007.  By understanding their incremental federal income tax rates, taxpayers can better understand the benefit received from a potential tax deduction.

Payroll taxes for Social Security benefits are collected under the authority of the Federal Insurance Contributions Act or FICA.  Most people simply refer to these taxes as FICA tax.  This tax had its origins back in 1935 when the tax was part of the Social Security program.

Politicians like to talk about property taxes all the time.  In fact, it's hard to find a politician that ever promised to raise property taxes; yet in most towns across the nation this tax creeps up a little bit each year.  Why is that?

If you've got rental property or another property used for business purposes, Section 1031 of the Internal Revenue Code has a special tax shelter in store for you.  Section 1031 simply states that no gain or loss will be recognized on the exchange of property held for productive use in a trade or business, or for investment, so long as the property is exchanged for like kind.

When we first put this article on tax liens together, we weren't sure if it belonged in the Investing, Buying a Home or Tax section of this publication.  That's because the subject of tax liens cuts across all three of these areas depending on your perspective.

We've had quite a few natural disasters over the last several years, so it's appropriate to talk about some of the tax relief that might be available to those that have been affected by storms or other natural disasters.  Fortunately, there is special disaster tax-relief provision that helps taxpayers recover from the financial impact of nature's wrath.

As the saying goes, taxes are one of those guarantees in life.  That's why tax relief programs are always a source of debate among politicians.  If you're wondering if you qualify for some kind of income tax relief, then we're here to help you by running through some of the recently introduced tax relief programs in the United States.

The income tax filing deadline is quickly approaching, so we thought this might be a good time to do an article on income tax.  We'll talk briefly about the history of the tax itself, the concept of tax brackets, where to get various IRS forms, and even some information on websites that allow you to complete your income tax forms online and submit them to the IRS - for free.

IRS Forms are on the minds of most taxpayers as the April 15th deadline quickly approaches.  Even if you've already conquered your taxes for the years, we thought it would be nice to offer our readers a more complete guide to the most common IRS tax forms used.

Tax Brackets is the term generally used to describe the incremental tax you pay on each additional dollar of earnings.  For example, if you are in the 28% tax bracket, then for each additional dollar of income you had in 2004, you would owe $0.28 in federal income taxes.

The 100 year old investment-banking firm of Warburg, Dillon Read (on Park Ave. N.Y.) (now UBS Warburg) has offices in 39 foreign countries - including the Bahamas, the tiny Cayman Islands, Hong Kong and the Channel Islands. Makes you wonder why, doesn't it?

The old adage says that there are only two sure things in life - death and taxes.  Actually there are three sure things - death, taxes and when it comes to the subject of taxes, the Democrats can't do math.

These are some tax strategies frequently overlooked by many tax preparers. Keeping up with the many tax law changes that are made each year is quite a job. You can help yourself and your accountant by making yourself familiar with how some of these fairly simple strategies can reduce your taxes, sometimes by thousands of dollars each year. The key to staying out of trouble with the IRS is consistent documentation. These strategies can be used even if you don't claim the home office deduction on your home.

For average Americans, taxes are the single largest bill they will pay. Almost 40% of every working person's wages go to taxes: that's more than most people pay in utilities, rent, car loans, or education expenses. And while the burden of most bills can be lessened by working harder and earning more money, the tax liability only increases, so earning more money just equals paying more taxes.

In what may be the biggest tax deduction scheme around, some self-employed individuals are sheltering as much as $165,000 or more per year with tax deductible contributions to their retirement plans.  Such high levels of deductions can be legitimately achieved through the use of a defined benefit, or DB, retirement plan.

Consider these 5 Tax Shelters to SLASH your income taxes over the long term.

1. Your Castle = Sweet Tax Goodies
Homeowner taxpayers who are married can exclude up to a $500,000 gain on the sale of a principal residence, and $250,000 for single taxpayers.

Recent changes in tax laws have given many Americans greater assurance that their assets will go to their loved ones and not the government. While an estate may not be subjected to taxes, taxation isn't the primary problem.

Thanks to a recent ruling by the IRS, you can replace your management intensive or non-income producing real estate -- such as apartments or farm land -- into interests in blue-chip, trophy commercial properties and sleep better at night.

Any individual, who is self-employed, retired, laid-off, or disabled, knows they are responsible for filing and paying Federal estimated quarterly taxes and in states having a state income tax, for filing and paying State estimated quarterly taxes. This can be very different from the taxation that takes place while you are employed.

The concept of aggregation may sound familiar to many people as a word, but simply put, it is used to signify the bringing together of information about a specific topic. When applied to the financial situation of an individual or married couple, this concept might mean the collecting of all financial information for a specific kind of money such as an annuity. In one example, the sum total of all income earned by an individual or married couple is the aggregation of income for the individual or married couple.

Looking for an easy way to increase your business deductions? Look no further than your driveway.  First, the general rule: your vehicle is deductible to the extent you use it for business. So, if you drive your car 100% for business, all car- related expenses are deductible.