Back-to-School Expenses of Educators
While our children are getting ready for going back to school, so are their educators. Out-of-pocket purchases for supplies are often quite common when teachers are trying to ready their classrooms for the oncoming year. Why not help the children and lower your tax liability at the same time?
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Charitable Deductions for Vehicles
With the passage of the American Jobs Creation Act of 2004, calculating the amount of the allowable deduction for the donation of a vehicle, boat, or airplane to a charitable organization is no longer a simple procedure. In an attempt to end past abuse in the valuation of donated used vehicles, the 2004 Tax Act changed the way the charitable deduction for vehicles is calculated for donations made after December 31, 2004.
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Defining a "Qualifying Child"
Defining a "qualifying child" for the various code sections is not always an easy process. There are tests for relationship, age, residency, and support. Prior to the Working Families Tax Relief Act of 2004, each code section had its own unique requirements. Fortunately, the 2004 Act created a more uniform definition of a child for tax purposes.
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Defining Residency for Tax vs. Immigration Purposes
When you are determining a persons residency status, the standards differ for federal income tax purposes versus for citizenship and immigration purposes. It is necessary to determine an individuals status so as to know how the income tax rules should be applied and which form, if any, needs to be filed. Resident aliens are not taxed the same as nonresident aliens. While the IRS does tax qualifying individuals as residents, it sometimes treats aliens who are in the U.S. illegally as resident aliens for federal income tax purposes.
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Economic Stimulus Act of 2008
The Economic Stimulus Act of 2008 (H.R. 5140), signed into law on February 13, 2008,
is intended to jump start the economy. The Act provides rebate checks to the majority of
taxpayers to encourage consumer spending and it also gives significant incentives to
businesses to invest in new capital equipment.
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Emergency Economic Stabilization Act of 2008: Effect on Individual Tax Returns
The legislation, signed into law on October 3, 2008, actually contains three separate acts: the Emergency Economic Stabilization Act of 2008; the Energy Improvement and Extension Act of 2008; and the Tax Extenders and Alternative Minimum Tax Relief Act of 2008. While the main focus of this Act was to address the recent financial crisis, it ended up including $150 billion in tax incentives for both individuals and businesses.
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Executive Compensation
Executive compensation seems to be in the news a lot lately. In particular, Congress (and the public at large, for that matter) has expressed outrage at those companies receiving federal bailout money but which continue to pay exorbitant salaries. This is an issue that came to the forefront after the passage of the Troubled Assets Relief Program, a.k.a., TARP, late last year.
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Fringe Benefits
Fringe benefits are given to someone in connection with the performance of services. Fringe benefits may be given to an employee, an independent contractor, a director of a corporation, or a partner in a partnership. (Unless otherwise indicated, this article discusses fringe benefits given to employees by their employers.)
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Frivolous Positions on Tax Returns
If a frivolous position is either taken on a tax return or claimed as a defense in Tax Court, penalties may be assessed.
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Health Coverage Tax Credit (HCTC)
The Health Coverage Tax Credit (HCTC) is an innovative program that represents a combined effort between the federal and state governments and private industry. It was created by the Trade Adjustment Assistance Act of 2002 to help certain individuals pay for their health insurance.
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