Sale of Your Home

If you have a gain from the sale or exchange of your main home, you may be able to exclude all or part of the gain from your income. Individuals may be able to exclude up to $250,000 of capital gain, and married taxpayers filing joint returns may be able to exclude up to $500,000…

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Home Office Deduction IRS Publication 587

If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities,…

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New Form for Employees Misclassified as Independent Contracts

IRS Form 8919, Uncollected Social Security and Medicare Tax on Wages, may be used if you were an employee and your employer did not withhold your share these taxes and you meet certain criteria. These taxes will then be credited to you social security records. Generally, a worker who received a Form 1099 for services provided…

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Child and Dependent Care: IRS Publication 503

If you paid someone to care for a child under age 13 or a qualifying spouse or dependent so you could work or look for work, you may be able to reduce your tax by claiming the Child and Dependent Care Credit on your federal income tax return. To qualify, your spouse, children age 13 or…

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Are you eligible for tax credits?

A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Taxpayers should consider their eligibility for the credits listed below: The Earned Income Tax Credit is a refundable credit for low-income working…

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Flipping Houses – reporting requirements

If you actively in an ongoing capacity buy property to fix up and resell even if you are doing it aside from your regular voacation you are”flipping” real estate and as such not eligible to treat those properties as capital assets. If you are holding property for sale on a continuous and regular basis in…

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The easist way for investment ‘traders’ to report transaction gains and losses to the IRS

According to the instructions for Schedule D (page 6), instead of entering the details of each transaction separately on Schedule D or D-1, you can attach a statement containing all of the same information as Schedules D and D-1 as long as it is in a similar format. The combined totals are entered on lines…

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Who is a qualifying relative for tax credit purposes?

For someone to be a qualifying relative, four tests must be met: The person cannot be a qualifying child of another person. The person must either live with the taxpayer for the entire year or be a relative. The person’s gross income must be less than $3,400 for the year. The taxpayer must provide over…

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Should YOU File a tax return?

You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive. For example, a married couple both under age 65 generally is not required to file until their joint income reaches $17,500. However self-employed individuals generally must…

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What are the Options for Tax Filing Status?

Your federal tax filing status is based on your marital and family situation. It is an important factor in determining whether you must file a return, your standard deduction and your correct amount of tax. Your marital status on the last day of the year determines your status for the entire year. If more than one…

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