The introduction of a child care tax deduction is an incredibly pleasing idea to most parents’ ears. The expense of raising a child can cost a lot. It can overwhelm most if not all of the other bills. Having to settle on a lesser day care because of the expense of it can be a disappointing and frustrating prospect. However, when you have the tax deduction, this can make the prospects a bit brighter.
Previous laws got updated in 2001 when Bush cut back taxes; this increased the tax deductions. Now parents are entitled to use the child care tax reduction and claim up to $1,000 per child. Being able to use this deduction can open up better options in day care for parents and their children.
The child care tax is aimed mostly at helping out the middle class. The middle can fall in the gaps a lot when it comes to day care and this child tax deduction aims to correct this problem. Even with certain qualifying factors regarding income, the middle class can benefit from the child care tax reduction.
Of course to have your child qualify for the child care deduction you must meet the following requirements. First they must be claimed as a dependent on your taxes. They must be 16 or younger at the end of the year. They must also be a United States citizen, alien, or resident to qualify. They must also be related to you by birth, adoption, marriage, or as foster children. There are only two limits that may disqualify you from using the deduction. One if your income exceeds $75,000 for single or widow, $110,000 for married filing jointly or $55,000 married filing separately, you cannot use the deduction. If you do exceed any of these amounts you may still be able to apply for a tax deduction, but it must be calculated to reflect your income. Your tax liability can also affect your qualification as well.
Being able to use the child tax reduction to help in the daycare of your child can be worth more than you would think. Not only does it bring you peace of mind, being able to choose a day care that you are comfortable with, but it can also save you money in the long run. If you qualify, remember to apply for the child deduction, it’s worth it.
Business Owners and Their Accountants to Be Fined For 412i and 419 Plan Participation
Tax shelters No Comments »For those who participated in a 419 welfare benefit plan or a 412i retirement plan or other abusive tax shelter as well as those who prepared and/or signed a tax return for someone who did participate in such a plan, the information that follows is critical.
Participants probably did not properly file with either the IRS or the Office of Tax Shelter Analysis, as required by IRC Section 6707A, or with their state. Non-filed or incorrectly filed forms mean the Statute of Limitations is open, and participants will probably be fined $200,000 or a lot more.
In July I started receiving a lot of phone calls from business owners who are being advised that the IRS is considering asserting penalties provided under Internal Revenue Code 6707A for not adequately disclosing a listed transaction. If plan participants have not yet gotten the letter, they will shortly.
Even if plan participants stopped contributing to their plan years ago, they will still get the fine. Even if plan participants got out of their plan years ago, or think they did, they will still get the fine. Even if they have been audited already, they get the fine. The fine is for not filing properly, or not at all.
The fines for 419 and/or 412i plan participants have averaged about $600,000. The accountants probably cannot help the plan participants because the accountants that signed the tax returns in question also get fined.
It was not the responsibility of the plan administrator or insurance agent to assist the plan participants with Form 8886, which is required by the IRS. The accountants should have advised plan participants and helped them. It is now after the fact, and the accountants probably have no experience with these matters after the fact. They will not know how to repair the damage that has been done at this point. In fact, accountants also had to file properly for themselves, and they probably did not.
Small businesses are facing potentially huge tax penalties over certain types of retirement plans. The plans were marketed in the past several years as a way for small business owners to set up retirement or welfare benefit plans while leveraging huge tax savings, but the IRS put them on a list of abusive tax shelters and has more recently focused audits on them.
The penalties for such transactions are extremely high and can pile up quickly – $100,000 per individual and $200,000 per entity per tax year for each failure to disclose the transaction – often exceeding the disallowed taxes.
There are business owners who owe $6,000 in taxes but have been assessed $1.2 million in penalties. The existing cases involve many types of businesses, including doctors’ offices, dental practices, grocery store owners, mortgage companies and restaurant owners.
A 419 plan is a type of health and benefits plan and a 412(i) plan is a retirement plan. Typically, these were sold to small, privately held businesses with fewer than 20 employees and several million dollars in gross revenues.
Under §6707A of the Internal Revenue Code, once the IRS flags something as an abusive tax shelter, or “listed transaction,” penalties are imposed per year for each failure to disclose it. Another allegation is that businesses weren’t told that they had to file Form 8886, which discloses a listed transaction.
The vast majority of accountants either did not file the forms for their clients or did not prepare them correctly.
Because the IRS did not begin to focus audits on these types of plans until some years after they became listed transactions, the penalties have already stacked up by the time of the audits.
The penalties are not appealable and must be paid before filing an administrative claim for a refund.
In 2004, the IRS issued notices and revenue rulings indicating that the plans were listed transactions, but plaintiffs’ lawyers allege that there were earlier signs that the plans ran afoul of the tax laws, evidenced by the fact that the IRS is auditing plans that existed before 2004.
An attorney filed a class action in federal court against four insurance companies claiming that they were aware that since the 1980s the IRS had been calling the policies potentially abusive and that in 2002 the IRS gave lectures calling the plans not just abusive but “criminal.”
Last July, in response to a letter from members of Congress, the IRS put a moratorium on collection of §6707A penalties. That moratorium was recently extended until June 1, 2010, at which time the Service allowed it to expire. So time is now obviously more of the essence than it ever was.
Thousands of business owners are being hit with million-dollar-plus fines…. The audits are continuing and escalating. A bill has been introduced in Congress to make the penalties less draconian, but nobody is expecting a magic bullet.
Florida Home loan with No Fico, ( Florida Mortgage with NO Credit Score )
Tax shelters No Comments »
Yes it is very possible to buy a Florida home with No Credit Score or No FICO.
Developing a Credit History or Enough Credit
The lack of a credit history, or the borrower’s decision to not use credit, may not be used as the basis for rejecting the loan application.
Some Florida No credit mortgage applicants may not have an established credit history. For these borrowers, including those who do not use traditional credit, the lender must obtain a non-traditional credit report from a credit reporting company or develop a credit history from one of the following examples
? 12 months canceled rent checks, Money orders, or direct deposit Receipts from the bank
? Other means of direct access from the credit provider.
o gas
o electricity
o water
o land-line home telephone service, and
o cable TV.
? Insurance coverage (for example, medical, auto, life, renter’s insurance (not payroll deducted) payment to child care providers – made to a business providing such services, school tuition, retail stores – department, furniture, appliance stores, specialty stores, rent to own – (for example, furniture, appliances) payment of that part of medical bills not covered by insurance, Internet/cell phone services, a documented 12 month history of saving by regular deposits (at least quarterly/non-payroll, deducted/no NSF checks reflected), resulting in an increasing balance to the account, automobile leases, or a personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments. The More ammunition we have to prove you pay your bills the better. letters from a direct service
providers must be on letter head and include the following:
? creditor’s name
? date of opening
? high credit
? current status of the account
? required payment
? unpaid balance, and
? a payment history in the delinquency categories (for example, 0×30, 0×60, and so on).
Apply today for a Florida No Fico score home loan at
http://www.FHAmortgagePrograms.com
http://www.fhamortgageprograms.com/
http://www.fhamortgageprograms.com/florida/Dade-County/
http://www.fhamortgageprograms.com/faq/fha.shtml
http://www.fhamortgageprograms.com/mortgage/fha-loan-program.shtml
http://www.fhamortgageprograms.com/florida/Miami/
http://www.fhamortgagefhaloan.com/
Hi there! Lorraine here from HOUSEDRESSINGS Ltd AUCKLAND.
www.housedressings.co.nz
Here are some vital tips for presenting your home for sale.
1. De-clutter your living spaces. Start first on the kitchen area. Clear all clutter on bench tops,window sills and clean all surfaces. All papers,bills,debris, file neatly away.
MOTTO: When in doubt – chuck it out! Or at least store it away!
2. Re-arrange living room for a good spacial flow & layout. Any pictures on walls should be placed at eye level and curb all the personal pics and effects scattered throughout.
Minimalism is best as most potential buyers can’t imagine themselves living in that space with your accumulated clutter.
3. Add some bright funky cushions to your existing sofas to modernize and enhance the setting and place a nice rug under the coffee table (maybe shagpile or something contemporary ) to complete and define the living area.
Lighting is paramount for ambiance, so include a modern standard lamp or side table and lamp.
Accessories and modern art play a huge role in creating the ‘wow’ factor and clever use of colour is most important.
These are the important factors which brings it all together.
4. Beds should be dressed up with modern duvets/plump pillows/valances/ cushions/bedside cabinets and stylish lamps. These don’t have to be expensive-go for style.
5.Bathroom: Add soap pumps/quality towels and choose colours to co-ordinate the existing.theme.
6. Don’t forget the entrance area. This is the first introduction to your home. Add a hall table with a floral arrangement or maybe a candleabra with canvas artwork above. (Abstracts work well in most settings.)
When having an open home – make sure you have some music playing in the background. Light jazz works well or easy listening classics. This helps curb the awkward silences and helps people to linger longer to create a ‘connection’ with prospective buyers.
If you feel you are out of your comfort zone in acheiving this, then call a Home Staging Professional.
HOUSEDRESSINGS Ltd are experienced in putting it all together, taking into account the style of home, existing colour scheme, best spacial layout. and your budget .
Staging can be : Partial – just a living area and a bedroom to full staging of your home, complete with outdoor furniture.
We can also pack and store your existing furniture while your home is on sale.
If you have any questions feel free to ask.
Visit our website and leave a message on our contact page.
www.housdressings.co.nz
Email: lorraine@housedressings.co.nz
Kindest regards,
Lorraine Wilson (director)
Illegal Shelters
While 401(k)s and other similar \”tax shelters\” are completely legal, there are dozens out there that are not. Hundreds of people fall for tax shelter schemes. Promoters will boast that they can legally hide or store away your income so that it cannot be taxed. Be warned that you should always be weary of anyone trying to \”hide\” your money from the IRS. Always check with a local tax professional to make sure you are not doing anything illegal.
Zero Wages
A common way tax scammers try to avoid paying taxes is by using IRS Form 4852 (Substitute Form W-2) or a \”corrected\” Form 1099 to reduce their taxable income to zero. Some taxpayers will even put a note on the form arguing the definition of wages, or a false story of a company that refuses to issue a corrected form. The IRS is on the lookout for this.
Hiding Income Offshore
Much like the Swiss banks accounts you see in movies like \”Bourne Identity,\” there are (usually very wealthy) people who hide large amounts of money in accounts overseas. Although the hope is always that the IRS will not see it, they usually do. Since September 11th, the federal government has had the power to monitor foreign bank accounts as well as those in the country.
Donation Fraud
False charities have been popping up for tax fraud for years, but now there is a new twist. Donor-advised funds were created so that a person could make a large donation at once and take a deduction from that year’s tax return, but the donation itself would be distributed over time to various charities. This is rarely done right, and many IRS audits get mailed out when these types of scams go down.
Tax Preparer Fraud
The lowest of the lows is a tax preparer committing tax fraud. They will use one of many tactics to take advantage of their own clients. Often this means over-inflating prices and then taking portions of their clients’ rightful return for themselves. The IRS has a hard time tracking these guys down because they are camouflaged within the large tax preparation industry. So be careful with who you work with!
Unconstitutional Taxes
Who has not heard this one before? Hundreds of Americans resist paying taxes claiming that taxation is somehow unconstitutional. However, this is simply not true. The court has been heard case after case arguing this same case, and each time they have struck it down. Unless you would like to be the next one in line, it is probably better to just pay your taxes.
Home Business Scams
It is hard enough being a small business owner with a whole new tax system to understand, without a scam artist telling you t deduct more than you should from your taxes. The IRS claims that more and more people are taking advantage of home business deductions and small business deductions, and at the advice of \”professionals\”. Before you make any large deductions, be sure to check with a tax specialist you trust.
Misuse of Trusts
Although some scammers will tell you that you can lower your tax liability by transferring funds into trusts, this is not always the case. Not all trusts provide tax benefits, and as with all major financial decisions it is always a good idea to speak with a professional before doing anything rash.
The Roni Deutch Tax Center is one of the nation’s hottest income tax franchise. For more information on owning a franchise visit RDTCFranchise.com, or check out Watch Me Franchise to see what it is really like to run a franchise business.
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