Posts Tagged ‘Tax’
Leasing Incentives for Small Business Growth
The key to economic growth and productivity is the ability for businesses – particularly small businesses – to invest in needed equipment. Thanks to the recent passing of the Small Business Jobs and Credit Act of 2010, these businesses can insure their working capital remains accessible through leasing the equipment they need to not only stay afloat through these lean times but also help them expand and grow.
The Small Business Jobs and Credit Act increases the amount of investments that businesses would be eligible to immediately write for 2010 and 2011-from $250,000 to $500,000. Before this bill passed, the expense limit would have been only $25,000 next year.
This act temporarily eliminates all capital gains taxes on investments if held for five years. The bill would allow certain small businesses to “carry back” their general business credits to offset five years of taxes-providing them with a break on their taxes for this year-while also allowing these credits to offset the Alternative Minimum Tax.
Some of the highlights of the bill include:
* Higher SBA loan limits: from $2 million to $5 million; and 504 loans rise from a maximum of $1.5 million to $5.5 million. Loan fees for these stay gone for the 2010 tax year.
* A write-off of up to $10,000 of start-up expenses for new businesses.
* A business can take any credits their business has and apply them against any of the previous five years of this bill, as does Section 179 expense of up to $500,000 in the year of purchasing business equipment.
Small businesses that need tax deductions will certainly have more incentive to use bargain purchase option leases in lieu of this bill; particularly the right to “carry back” losses for five years.
Life Insurance Tax Benefits – Things You Should Know
Buying life insurance is practical, since it provides your beneficiaries with financial stability in case you die. It provides for your family to live a lifestyle that they need. It can send your children to school, even if you are not there with them. They can eat and have some food on the table, even though you long gone.
Life insurance provides an income tax free death benefit and no tax on the increase in the cash value as it grows over time. People buy insurance for many different reasons such as to cover funeral costs, replace lost income, provide liquidity to pay expected estate taxes, etc. Actually not only the beneficiaries can obtain a lower tax burden but as well as the policy holder wherein he can be able to cash on some tax free benefits during his lifetime.
Beneficiaries are not required to pay income tax on life coverage benefits especially both in term and whole life coverage. One thing more, there is no tax also on borrowing money against the cash value of your insurance policy but if ever you do not pay the policy back, then you will lose the commensurate amount of tax free death benefit. So always be sure to pay it back on time.
Take note that if you own an insurance policy on yourself in your own name, then the death benefit becomes part of your estate and considered taxable under the estate tax laws. That is why to avoid this thing to happen, place the policy in an irrevocable insurance trust. However, that means you give up direct control of the policies and even lose access to any cash value that may accumulate. So good planning and thinking twice is needed before doing it.
Tax Relief for Disabled Taxpayers
Taxpayers who are disabled and parents whose children are disabled may be eligible for various types of tax relief. Some of the tax credits and benefits available if you or someone else included on your tax return is disabled consists of:
Credit for the Elderly and Disabled: This credit is basically provided to specific taxpayers who are above the age of 65 years, as well as to specific taxpayers who have disabilities and are below the age of 65 years, and have retired permanently on the grounds of total disability.
Standard Deduction: Taxpayers who are lawfully considered to be blind may qualify for a higher standard deduction on their tax return.
Work Expenses Related to Impairment: Employees who have a mental or physical disability that limits their work may be in a position to claim business costs in connection to their place of work. The costs must be essential to allow or enable the taxpayer to work.
Gross Income: Specific payments related to disability, Supplemental Security Income, and Veterans Administration disability benefits, are exempted from gross income.
Earned Income Tax Credit (EITC): This is available to disabled taxpayers as well as parents whose children are disabled. If you have retired on disability grounds, the taxable benefits that you get under your employer’s disability retirement plan are regarded as earned income until you get to the minimum retirement age. EITC reduces a taxpayer’s tax liability and it may also result in a refund. If the taxpayer’s child has a disability, the age restriction for the EITC is put aside. The EITC has no effect on some public benefits. Whatever refund you receive due to the Earned Income Tax Credit will not be regarded as income when establishing whether or not you qualify for benefit programs.
Tax Tips for Home Buyers
Though fewer people are buying homes at the moment, for those who are in the market there are a number of tax breaks available. In fact, for those who haven’t owned a primary residence in the past three years, there are actually sizable tax deductions available. Certain buyers in this category may be eligible to claim deductions up to $8,000. For those who have purchased homes recently, there are still deductions available that can amount to almost $6,500.
So forget potential tax debt- for those in need of a new home, now could be the perfect time to look. By following these tips you can find your perfect home and minimize the impact on your tax bill:
1. Moving Expenses.The IRS has allowed tax deductions for moving expenses for individuals who have had to move distances in excess of 50 miles for a new job, or to look for a job. Unlike some other kinds of deductions, moving expenses do not need to be itemized. It is therefore possible to include a number of different kinds of expenses, including costs for relocating your favorite family pet.
2. Vacation Properties.Under certain circumstances, property taxes paid on vacation homes may be deducted. This tax deduction usually applies to those who group-purchase their home, or purchase a time-share, and who have the property taxes listed separately on the bill of owner dues.
3. Homes Purchased from Relatives.Unfortunately, properties purchased from family members do not qualify for the tax credit. The exclusion applies to ancestors, such as parents and grandparents, lineal descendents, such as children and grandchildren, and spouses. However, homes purchased from aunts and uncles still qualify for the tax credit.
Tax Planning and Return Preparation Services
Taxes are so annoying. How awful is it that you have to save all of your documents for seven years? There almost always seems to be no point in doing taxes ever because you are always going to have to pay out and not give back no matter how hard you try to make it work. That’s why you should hire a tax planning and return preparation service. They will help you budget out your year and be able to save for your taxes at the same time. They really work to make you save the most you can and pay out the least that you can so you can keep the money you worked hard to earn and should rightfully be able to keep.
You will be able to do your taxes and pay out less. They will find so many ways for you to make tax write-offs so you will not have to pay the government extra money they don’t deserve of yours. You can always do a little bit of planning ahead to make sure everything runs smoothly. Having a professional there with you to watch over you and guide you really helps too. They will let you know exactly how much you have to spend, what you need to save, and what you can write off.
They will teach you things such as writing off your tithing at church. Did you know that every penny you give away is eligible as a tax write-off? Did you also know that gas mileage, lunch meetings and even some vacations are considered worthy? How about if you have your roof redone on your house? Part of that is a tax deductible too. These people will explain everything to you so you have a fair chance.