A taxpayer who is in the business of providing family day care in their home may deduct the ordinary and necessary expenses of their business. The two primary deductions include the business use of their home and the cost of providing meals and snacks to children in their care. The following is a rundown on deductible business expenses for home day care providers. Read more
Tag Archive for tax benefits
With the first chill of fall most people’s thoughts turn to the activities of autumn: Football, Thanksgiving, pumpkins, apples, (did I mention football?) and, of course, the holidays.
For those looking to limit how much they give to Uncle Sam at tax time, this is also the time to turn your thoughts to giving to a favorite charity.
Taxes are complex. Accounting for income taxes, the ASC 740, is difficult. But with Tax Prodigy, the process becomes easy, comprehensive, and accurate. If you have the tools to help you, why would you choose to ignore them?
Last spring, I become a relatively involved with St. Peter’s Stewardship Committee out here in Greenwood Village, Colorado. With membership ranks and pledged donations struggling, my wife and I developed a plan to drill down into several aspects of charitable giving and report findings along the way.
When you leave your tax preparer’s office each year, there are two very important questions you should probably be asking yourself.
How secure is your personal information after you leave it with your tax preparer? Probably not very secure! Do they leave your paperwork lying about the place, accessible to all, after they have completed your taxes? Are their computers adequately protected by firewalls and effective anti-virus software? Is there adequate background checks done on their employees, who obviously will have unlimited access to your sensitive personal information? The honest truth is that you really don’t know.
Also, you should be concerned about hackers. These criminals have been successful in hacking into supposedly very secure government computer systems; the Office of Personnel Management, and even the IRS itself come to mind immediately. These people know that they will have access to a treasure trove of personal information if they were to hack into the computers of H&R Block, Liberty Tax, or any CPA or other tax preparation office. So what is to stop them from hacking into your tax preparer’s computer, which obviously will be a lot less protected than the government’s computers? Read more
The code includes a number of benefits for individuals with disabilities, but you can’t take advantage of these benefits unless you know about them and understand how they might benefit you and your special circumstances. Many of the benefits also apply to the parents of children with disabilities. Here is a rundown:
ABLE Accounts – Under tax law, states can offer specially designed, tax-favored ABLE accounts to people with disabilities who became disabled before age 26.
Recognizing the special financial burdens faced by families raising children with disabilities, ABLE accounts are designed to enable people with disabilities, who became disabled before age 26, and their families to save for and pay for disability-related Read more
Closely-held companies that export have a tax-savings opportunity by creating an Interest Charge – Domestic International Sales Corporation (IC-DISC). While about 6,000 small and medium businesses take advantage of the tax incentives of an IC-DISC, the IRS statistics suggest that only about 25 percent of the potential IC-DISC benefits that are available are actually being captured.
The IC-DISC is a creature of the Internal Revenue Code that provides a significant tax incentive for business owners who manufacture and export. Small to mid-size businesses can set up a separate corporation that elects to be treated as an IC-DISC. Businesses can allocate approximately half of the profits from export sales to this entity. Read more
As a synopsis, Movie Production Tax Incentives (hereinafter “MPIs”) are tax benefits offered on a state-by-state basis throughout the United States to entice, as applicable, in-state qualified phases of filmmaking production such as the “Qualified Pre-Production Phase”; the “Qualified Production Phase” and the “Qualified Post-Production Phase”. The state-by-state legislative histories and policies driving MPIs are clearly aimed at increasing economic growth at the state and local levels through filmmaking and television production throughout the United States while curtailing the departure of movie production to other countries.
While the applicable Qualifying Production Activities (hereinafter “QPAs”) vary significantly from state-to-state many common QPAs include, but are not limited to, feature films; Read more
If your tax deductions normally fall short of itemizing your deductions or even if you are able to itemize, but only marginally, you may benefit from using the “bunching” strategy.
The tax code allows most taxpayers to utilize the standard deduction or itemize their deductions if that provides a greater benefit. As a rule, most taxpayers just wait until tax time to add everything up and then use the higher of the standard deduction or their itemized deductions.
If you want to be more proactive, you can time the payments of tax-deductible items to maximize your itemized deductions in one year and take the standard deduction in the next. Read more
Tax law allows you to deduct two types of travel expenses related to your business, local and what the IRS calls “away from home.”
First, local travel expenses. You can deduct local transportation expenses incurred for business purposes such as the cost of getting from one location to another via public transportation, rental car, or your own automobile. Meals and incidentals are not deductible as travel expenses, but you can deduct meals as an entertainment expense as long as certain conditions are met (see below).
Second, you can deduct away from home travel expenses, including meals and incidentals, but if your employer reimburses your travel expenses your deductions are Read more
With summer just around the corner, there is a tax break that working parents should know about. Many working parents must arrange for care of their children under 13 years of age (or any age if handicapped) during the school vacation period. A popular solution – with a tax benefit – is a day camp program. The cost of day camp can count as an expense towards the child and dependent care credit. But be careful; expenses for overnight camps do not qualify.
For an expense to qualify for the credit, it must be an “employment-related” expense; i.e., it must enable you and your spouse, if married, to work, and it must be for the care of your child, stepchild, or foster child, or your brother or sister or stepsibling (or a descendant of any of these) who is under 13, lives in your home for more than half the year and does not Read more