Estate Tax Planning Tips for 2011

The 2010 Tax Act extends to December 31, 2012, the income, estate, gift and generation-skipping tax provisions enacted during the administration of President George W. Bush (“EGTRRA”). For the two-year period beginning January 1, 2011, it reinstates the unified federal estate, gift and GST exemption, sets the exemption at $5 million and sets the tax…

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How to Determine if Your Social Security Benefits are Taxable

If you received Social Security benefits or payments in 2010, some of that money may be taxable. You should receive a Form SSA1099 which will show the total amount of your benefits. How much of your Social Security benefits are taxable depends on your total income and marital status. Generally, if Social Security benefits were…

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Identity Theft Manifesting Itself Through Surprise Arrival of IRS Form 1099-C from Collection Agencies Reporting Cancelled Debt as Income

I’ve been asked 3 times in the last 24 hours or so about how and why an IRS 1099-C form was received when one was not expected because no debts were cancelled. The IRS 1099-C form is used by qualified lenders to report to the IRS as Income the Cancellation of a tax payer’s debt,…

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Impact on Your Taxes of Changing Your Name

If you changed your name as a result of a recent marriage or divorce you’ll want to take the necessary steps to ensure the name on your tax return matches the name registered with the Social Security Administration. A mismatch between the name shown on your tax return and the SSA records can cause problems…

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Medical and Dental Expenses

If you itemize your deductions on Form 1040, Schedule A, you may be able to deduct expenses you paid in 2010 for medical care – including dental – for yourself, your spouse, and your dependents. You may deduct only the amount by which your total medical care expenses for the year exceed 7.5 percent of…

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Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is for workers earning $48,362 or less a year. Four of five eligible taxpayers filed for and received their EITC last year.   As your financial, marital or parental situations change, you should review the EITC eligibility rules to determine whether you qualify. If you qualify, the credit could…

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Tax Benefits for Parents

1. Dependents In most cases, a child can be claimed as a dependent in the year they were born. For more information see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. 2. Child Tax Credit You may be able to take this credit on your tax return for each of your children under age…

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Colorado Now Assessing Sales Tax of 1.4% on Prepaid Wireless Telecommunication Services

Hmmm….. Leave it to Colorado to slide this tax in ……. It is common knowledge that for the most part people purchasing prepaid wireless services tend to be socioeconomically challenged to begin with, so lets keep taxing them, keep kicking the weakest taxpayers and pretend like you are doing ‘your best’ to balance the state…

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Forgiven Debt Exempt From Income Requires Tax Attribute Consideration IRS Form 982

If you are forgiven debt and that forgiven debt is not considered income then you should prepare and file IRS Form 982 – Reduction of Tax Attributes Due to Discharge of Indebtedness. Generally, the amount by which you benefit from the discharge of indebtedness is included in your gross income.  However, under certain circumstances described in section 108 such as…

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How to Report Net Operating Loss (NOL) Carry Forward on an IRS Form 1040

If you carry forward your NOL to a tax year after the NOL year, list your NOL deduction as a negative figure on the Other income line of Form 1040 or Form 1040NR (line 21 for 2009). Estates and trusts include an NOL deduction on Form 1041 with other deductions not subject to the 2%…

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