tax deductions http://www.wisebread.com/taxonomy/term/3543/all en-US You Should Make These 11 Easy Donations Before Time Runs Out http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/you-should-make-these-11-easy-donations-before-time-runs-out" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman-donation-volunteers-Dollarphotoclub_45319912.jpg" alt="woman donation volunteers" title="woman donation volunteers" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's natural this time of year to feel a little more charitable. Many nonprofit organizations <a href="http://www.slate.com/articles/life/holidays/2013/12/year_end_charitable_giving_most_people_are_terrible_at_it_don_t_be_one_of.html">report that they see a surge of donations in the last month</a> of the year, and there are some advantages to making donations before the calendar turns another page.</p> <p>In addition to keeping with the holiday spirit, giving to charity before year's end ensures that you can get a tax deduction to count for 2014. In in some instances, corporations are in an extra giving mood and will match many cash donations. (See also: <a href="http://www.wisebread.com/15-ways-to-give-to-charity-that-fit-a-holiday-budget?ref=seealso">15 Ways to Give to Charity That Fit a Holiday Budget</a>)</p> <p>If you're feeling charitable or just have some stuff you want to unload, consider these simple donations you can make before 2015 comes around. (Just make sure you keep good records for the tax man!)</p> <h2>1. Clothes and Household Items</h2> <p>There's a good chance you'll get some new clothes and other stuff for the holiday season. Now may be a time to donate some of your older (but still usable) items to a thrift shop or charity such as Goodwill. You'll free up some closet space and get a 2014 tax deduction in the process. This time of year, coats and other warm-weather items are especially needed.</p> <h2>2. Food</h2> <p>Local food pantries are always in need of donations, especially during the winter months. Drop off a few bags of canned goods, or get in touch with a charity such as Meals on Wheels to donate food to a shut-in. You're probably cooking a ton for the holiday feast anyway, so set some aside for a needy family.</p> <h2>3. Shares of Stock</h2> <p>If you've seen portions of your investment portfolio rise in 2014, why not share the wealth? Donating shares of stock is a great way to help out a charity because unlike a cash donation, the contribution may rise in value. You get a tax deduction by donating, and also avoid any capital gains fees you might have otherwise incurred by selling.</p> <h2>4. A Car</h2> <p>If you're thinking of buying a new car in 2015, consider donating your car to charity this year to get the tax benefits. Many charities will accept donations of cars, which they then sell at auctions and pocket the proceeds. Other charities turn the cars over directly to needy families. A car donation is tax deductible, and many charities will even go through the effort to pick up the car from your house free. Donating your car makes sense if you feel like you wouldn't get much for a trade-in anyway.</p> <h2>5. New Toys</h2> <p>It's almost impossible to avoid seeing the U.S Marines manning Toys For Tots stations all over the country. A donation of a new toy will help ensure a great Christmas for an underprivileged child. This year, Toys For Tots is looking to collect 7 million toys. Go to <a href="http://toysfortots.com">Toysfortots.com</a> to find a drop-off location near you.</p> <h2>6. Old Building Materials</h2> <p>When my family built a new addition to our house, we donated some old windows and a sliding glass door to <a href="http://www.loadingdock.org/">a local charity</a> that recycles such things. It was a stress-free way to unload the items, and we got a sizable tax deduction. Contact the <a href="http://bmra.org/">Building Materials ReUse Association</a> to see if there's a charity near you.</p> <h2>7. Your Time</h2> <p>Rather than spending a day at a mall indulging in retail excess, consider taking time to help out at a soup kitchen, food pantry, or other charity. Better yet, consider making a commitment to volunteer not only during this holiday season but throughout the year.</p> <h2>8. Your Artistic Talent</h2> <p>This time of year, it's common for organizations to have parties featuring silent auctions as fundraisers. If you're an artist or photographer, why not donate a painting or photograph? It's a great way to direct money to a charity and perhaps also get some exposure for your skills. Similarly, a musician could volunteer to perform holiday music at a charitable event, or even offer free lessons.</p> <h2>9. Cash</h2> <p>This may seem lazy, but most charities are more than happy to receive monetary donations. In fact, sometimes money is the best gift to a charity because they know better than anyone what specific items they need. Donating cash could be as easy as dropping some coins into a Salvation Army pot, or writing a sizable check to another non-profit group.</p> <h2>10. Blood</h2> <p>This time of year, blood donations are often low because people are so busy. But it's a great way to give back in a way that won't cost you a dime. I make a point of donating blood every December 24 at my local Red Cross donation center. It gets me in the Christmas spirit, and there are usually free cookies. Go to <a href="http://www.redcross.org/">RedCross.org</a> to locate a blood drive or donation center near you.</p> <h2>11. Money to Your Future Self</h2> <p>This may not be a &quot;donation&quot; in the classic sense. But it's still a great idea to try to max out your retirement accounts by the end of the year. If you have an IRA, you can contribute up to $5,500 for 2014. Any contribution up until April 15, 2015 counts toward 2014, but why wait?</p> <p><em>What will you be giving this year? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ten-great-charities-that-deserve-your-dollars-this-year">Ten Great Charities that Deserve Your Dollars This Year</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/charitable-giving-get-a-receipt">Charitable giving - get a receipt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-local-charities-that-could-use-your-stuff">10 Local Charities That Could Use Your Stuff</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Taxes charity donations giving tax deductions taxes Wed, 24 Dec 2014 14:00:10 +0000 Tim Lemke 1271198 at http://www.wisebread.com Best Money Tips: Commonly Overlooked Tax Deductions http://www.wisebread.com/best-money-tips-commonly-overlooked-tax-deductions <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-commonly-overlooked-tax-deductions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/magnifying-4057616-small.jpg" alt="magnifying glass" title="magnifying glass" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found some stellar articles on commonly overlooked tax deductions, where you can learn home improvement skills, and tips for escalating your productivity.</p> <h2>Top 5 Articles</h2> <p><a href="http://ptmoney.com/tax-deductions-commonly-overlooked/">10 Commonly Overlooked Tax Deductions for 2014</a> &mdash; Don't overlook the tax deductions of state sales tax and jury duty pay. [PT Money]</p> <p><a href="http://lifehacker.com/where-can-i-learn-home-improvement-skills-1535195959">Where Can I Learn Home Improvement Skills?</a> &mdash; You can learn home improvement skills at your local hardware store or via technology. [Lifehacker]</p> <p><a href="http://www.dumblittleman.com/2014/03/10-tools-tips-for-escalating-your.html">10 Tools &amp; Tips For Escalating Your Productivity</a> &mdash; To increase your productivity, utilize your commute time and take breaks. [Dumb Little Man]</p> <p><a href="http://www.mainstreet.com/article/moneyinvesting/insurance/finance-must-do-2014-often-forgotten">This Finance Must-Do in 2014 Is Often Forgotten</a> &mdash; If you are renting your home or apartment in 2014, get renter's insurance! [MainStreet]</p> <p><a href="http://frugalportland.com/the-essential-items-in-a-minimalist-closet/">The Essential Items in a Minimalist's Closet</a> &mdash; Every minimalist should have two or three pairs of jeans in their closet. [Frugal Portland]</p> <h2>Other Essential Reading</h2> <p><a href="http://parentingsquad.com/little-things-go-a-long-way-4-tricks-that-make-being-a-mom-easier">8 Tax Breaks You Should Take Advantage of Now Before They Expire</a> &mdash; Take advantage of tax credits for energy-efficient homes and appliances and tax credits for electric vehicles. [PopSugar Smart Living]</p> <p><a href="http://www.marcandangel.com/2014/03/02/40-regrets-you-dont-want-to-have-in-40-years/">40 Regrets You Don't Want to Have in 40 Years</a> &mdash; Make sure you don't have the regrets of ignoring your intuition or letting your health go. [Marc and Angel Hack Life]</p> <p><a href="http://www.lifehack.org/articles/lifestyle/10-simple-ways-cure-hangover-effectively.html">10 Simple Ways To Cure A Hangover Effectively</a> &mdash; Cure your hangover effectively by drinking coffee and eating honey on toast or crackers. [Stepcase Lifehack]</p> <p><a href="http://timemanagementninja.com/2014/02/5-work-from-home-habits-that-are-killing-your-productivity/">5 Work from Home Habits That Kill Your Productivity</a> &mdash; Starting your day without a plan can kill your productivity if you work from home. [Time Management Ninja]</p> <p><a href="http://parentingsquad.com/little-things-go-a-long-way-4-tricks-that-make-being-a-mom-easier">Little Things Go a Long Way: 4 Tricks That Make Being a Mom Easier</a> &mdash; To make being a mom easier, don't be afraid to delegate. [Parenting Squad]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/best-money-tips-commonly-overlooked-tax-deductions">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-on-last-years-taxes-right-now">Save on Last Year&#039;s Taxes Right Now</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-tax-deductions-you-can-never-take">3 Tax Deductions You Can Never Take</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes best money tips tax deductions Thu, 06 Mar 2014 11:00:26 +0000 Ashley Jacobs 1129456 at http://www.wisebread.com 6 Tax Deductions Job-Hunters Can’t Afford to Overlook http://www.wisebread.com/6-tax-deductions-job-hunters-can-t-afford-to-overlook <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-tax-deductions-job-hunters-can-t-afford-to-overlook" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4797027866_37fe25954b_z.jpg" alt="man walking" title="man walking" class="imagecache imagecache-250w" width="250" height="223" /></a> </div> </div> </div> <p>When you&rsquo;re out of work, any help you can get with expenses is more than welcome. Sometimes these gifts come from unexpected sources, such as the Internal Revenue Service. The IRS provides tax deductions for job-hunting expenses that reduce your taxable income and decrease your tax bill. As an added bonus, you can claim them even if you didn&rsquo;t land a job that tax year. (See also:&nbsp;<a href="http://www.wisebread.com/16-great-tax-deductions-you-may-have-overlooked">16 Great Tax Deductions You&nbsp;May Have Overlooked</a>)</p> <p>However, there are a few caveats:</p> <ul> <li>Your job hunting expenses must add up to at least 2% of your total gross income to qualify as deductions.&nbsp;<br /> &nbsp;</li> <li>You must be looking for work in the same field. Unfortunately, career changers aren&rsquo;t able to benefit from the government&rsquo;s generosity.<br /> &nbsp;</li> <li>People looking for their first job are out of luck, too. You can only deduct job search expenses if you&rsquo;ve already been employed, even if it was part-time.&nbsp;<br /> &nbsp;</li> <li>The IRS doesn&rsquo;t recognize job hunting expenses you incur after a &ldquo;substantial break&rdquo; between losing your job and starting your search. While the agency doesn&rsquo;t provide a specific definition for &ldquo;substantial break,&rdquo; waiting months to start your search may be a mistake.<br /> &nbsp;</li> <li>Most of these deductions allow you to write off the costs in full, but some do have limits. Check with a tax professional if you&rsquo;re unsure.</li> </ul> <p>The sum of these expenses is listed as a single itemized deduction on line 21 of Schedule A. You won&rsquo;t have to send in any receipts or other documentation with your return, but make sure you have them just in case the IRS initiates an audit. Without comprehensive records, the IRS may disallow them and make you pay any additional tax you owe.&nbsp;</p> <h2>1. Employment Services</h2> <p>Using employment services can give you a boost in your job search, but the costs can get steep. Luckily, job seekers can deduct the fees associated with <a href="http://www.wisebread.com/12-unique-ways-to-score-a-job-interview">employment counseling, headhunters, or other job placement services</a>. You can also deduct the costs of placing job-seeking ads in newspapers or on classified websites. Fees you pay for access or membership to job ad websites are similarly deductible.</p> <h2>2. Resume Preparation</h2> <p>Your resume is the first impression potential employers have of you, and sometimes you need to shell out a good bit of money to get it just right. You can deduct expenses you incur from professional resume preparation services, as well as books that provide resume-related advice and instruction. You can also write off printing and copying costs such as ink and paper, mailing when you send your resume to employers.</p> <h2>3. Communication</h2> <p>Local and long-distance phone calls you make via land line or cell phone to inquire about work or for job interview purposes are deductible. Keep in mind that unless you use the phone service solely for job-hunting purposes, you cannot deduct your entire phone bill. Only the portion of the charges that directly relate to your employment search are eligible. Request itemized bills so you can see exactly when you made the calls, how long they lasted, and how much they cost.</p> <h2>4. Networking and Professional Development</h2> <p>The fees you pay to attend job fairs, seminars, conferences, and other <a href="http://www.wisebread.com/15-simple-networking-tricks"> networking events</a> while looking for work are also deductible. You can even write off fees for online networking sites and premium employment services such as those offered by LinkedIn. If you take any classes or training courses to build your skills and make yourself more marketable to employers, you can write off those expenses as well.</p> <h2>5. Travel</h2> <p>Travel expenses can be a little tricky, but if you don&rsquo;t mind a little math, you should be able to write off a good portion of your costs. The IRS gives job hunters a $0.55 deduction per mile that covers both local and out-of-town driving to job interviews, networking events, and other job-related trips. You can also write off parking fees. If you use mass transportation or travel via air or rail, you can deduct the costs in full. Hotel or other lodging costs are deductible as well. And if you grab a bite to eat while you&rsquo;re hitting the pavement, whether it&rsquo;s a fast food breakfast in your car or a lunch interview at a fancy restaurant, you can write off 50%of each meal.</p> <h2>6. Childcare</h2> <p>While this last one isn&rsquo;t actually a deduction, it&rsquo;s still a huge help for many job seekers. The child and dependent care credit covers up to 35% of your day care or <a href="http://www.wisebread.com/how-to-save-on-babysitting-without-ending-up-on-the-local-news">babysitting costs</a> dollar-for-dollar, directly reducing the amount of tax you owe instead of reducing your taxable income. You can only claim expenses that you incurred while looking for a job and you must have the provider&rsquo;s Social Security or Employer Identification number to qualify.</p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lauren-treadwell">Lauren Treadwell</a> of <a href="http://www.wisebread.com/6-tax-deductions-job-hunters-can-t-afford-to-overlook">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/job-search-tips-that-will-get-you-a-job-in-2012">Job Search Tips That Will Get You a Job in 2012</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-awesome-websites-to-help-you-get-a-job">25 Awesome Websites to Help You Get a Job</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-the-twitter-job-search-guide">Book Review: The Twitter Job Search Guide</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-on-last-years-taxes-right-now">Save on Last Year&#039;s Taxes Right Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Job Hunting Taxes job hunting expenses networking resumes tax deductions Tue, 09 Apr 2013 10:24:31 +0000 Lauren Treadwell 973338 at http://www.wisebread.com How to Get Rid of Your Old Electronics http://www.wisebread.com/how-to-get-rid-of-your-old-electronics <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-get-rid-of-your-old-electronics" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/7904351958_ddb0efe239_b.jpg" alt="old tv" title="old tv" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We have an old TV. It's old and huge and heavy and not at all flat-screened. By &quot;old&quot; I mean to say that our TV probably rolled off the assembly line about 10 years ago, a fact that, unless you're a teenager, will probably make you feel very old yourself. This TV is not high-tech or beautiful, but it does work, so we keep it around.</p> <p>As it turns out, that's increasingly rare.</p> <p>According to the Consumer Electronics Association, American consumers consistently spend more than $1,000 per year on household electronics like televisions, computers, and smartphones. That's a lot of money, but assuming we all have the money to pay for these gadgets, what's more distressing is what happens to the older, less-advanced devices they aim to replace.</p> <p>To be blunt, most of these discarded gadgets end up in landfills, says the Environmental Protection Agency. In fact, it is estimated that Americans throw out more than 350,000 cell phones and 130,000 computers every day, making electronic waste, or &quot;e-waste,&quot; one of the fastest growing components of landfill waste. And while that huge, old computer monitor may seem innocent enough, it's packed with lead and other toxic chemicals, which isn't just bad for the environment, it's bad for us too.</p> <p>So what can you do with your electronics when they're no longer of use? Here are a few environmentally friendly options. (See also: <a href="http://www.wisebread.com/25-things-to-throw-out-today">25&nbsp;Things to Throw Out Today</a>)</p> <h2>Safety First</h2> <p>First things first &mdash; whether you're offloading an old cell phone to a recycling service or selling a laptop to a friend, you need to wipe any and all electronic devices that store data.</p> <p>When it comes to your cell phone, you also need to ensure that your account with your service provider has been terminated. If you aren't sure how to wipe an electronic device (hint: it involves more than just deleting your files), you may want to consult a professional (or tech-savvy friend) for advice. Leaving personal data on a device could make your private life more public than you'd like &mdash; and put you at risk for identity theft.</p> <h2>Sell It</h2> <p>If your old devices still work, you could try selling them on eBay, Craigslist, or through a local classified ad. There are also several services that are willing to <a href="http://www.wisebread.com/make-money-recycling">pay cash for certain gadgets</a>. <a href="http://www.nextworth.com/" target="_blank">Nextworth</a>, <a href="http://www.gazelle.com/" target="_blank">Gazelle</a> and <a href="http://www.recellular.com/" target="_blank">ReCellular</a> all offer such programs. Some will only buy devices that work, others will buy things that are broken.</p> <p>There are many such services out there, so take some time to research whether there's anyone who'll pay for what you're trying to offload. If you can't find any takers for a device that still has some life left in it, you could try to find a new home for it on <a href="http://www.freecycle.org/" target="_blank">Freecycle</a>.</p> <h2>Trade It In</h2> <p>Many electronics retailers and manufacturers are now offering trade-in programs for retired electronics. Turn in your old PC, for example, and you'll get a gift card or credit for what the company deems your item to be worth. After all, even broken electronics often contain valuable materials that companies can recycle. <a href="http://www.bestbuy.com/site/Electronics-Promotions/Online-Trade-In/pcmcat133600050011.c?id=pcmcat133600050011&amp;DCMP=rdr101887" target="_blank">BestBuy</a>, <a href="http://www.targettradeinprogram.com/" target="_blank">Target</a>, <a href="http://www.radioshacktradeandsave.com/online/home/index.rails" target="_blank">RadioShack</a>, <a href="http://www.apple.com/recycling/gift-card/" target="_blank">Apple</a>, and <a href="http://store.sony.com/webapp/wcs/stores/servlet/ContentDisplayView?storeId=10151&amp;hideHeaderFooter=false&amp;cmsId=tradeup&amp;langId=-1&amp;catalogId=10551" target="_blank">Sony</a>, among other retailers, all offer this type of service. If you're looking to replace a device, this might be an option worth considering.</p> <h2>Donate It</h2> <p>There are many charities, schools, and community centers that will happily accept working computers, printers, and other electronic devices. Others will take electronic devices in any condition to refurbish or recycle.</p> <p>You can start by looking locally, but there are also a number of national organizations to consider. These include <a href="http://www.goodwill.org/get-involved/donate/donation-acceptance-guidelines/" target="_blank">Goodwill</a>, <a href="http://www.salvationarmyusa.org/usn/www_usn_2.nsf/0/e3610fb5ddd550a1802573250030e32a" target="_blank">Salvation Army</a>, <a href="http://www.recyclingforcharities.com/index.php" target="_blank">Recycling for Charities</a>, and <a href="http://www.komputers4rkids.com/index.html" target="_blank">Komputers 4 Kids</a>. They all accept donations, and may even <a href="http://www.wisebread.com/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">provide a tax receipt</a>! <a href="http://www.thinkrecycle.com/en/" target="_blank">ThinkRecycle</a> allows organizations to run drives for electronics and raise money for a cause, all while helping to remove a few more devices from the waste stream.</p> <h2>Recycle It</h2> <p>For devices that no longer work or that are undesirable (like my old TV, when it finally meets its re-maker), recycling may be the only option. The best place to find out where to recycle your old electronics is the Environmental Protection Agency, which offers a great <a href="http://www.epa.gov/epawaste/conserve/materials/ecycling/donate.htm">search tool</a> for finding manufacturers and retailers that will take old stuff. Many do.</p> <p>The other option is to connect with a recycling program like <a href="http://www.call2recycle.org/locator/" target="_blank">Call2Recycle</a>, <a href="http://search.earth911.com/" target="_blank">Earth911</a>, <a href="http://ecyclingcenter.com/" target="_blank">ECycling Center</a>, <a href="http://www.ecyclingcentral.com/" target="_blank">Electronic Industries Alliance</a> and <a href="http://greenergadgets.org/" target="_blank">GreenerGadgets</a>.</p> <p>According to the EPA, there's no federal mandate to recycle e-waste. There have been numerous attempts to develop a federal law to deal with the issue; unfortunately, sometimes waiting for new legislation is like watching grass grow...only slower.</p> <p>If you're concerned about keeping electronic waste out of landfills, you're the one who'll have to take the initiative to ensure it's properly disposed of. I know I'll be looking for some way to recycle my old TV in the next few years. Fortunately, that appears to be getting easier all the time. If only I could say the same for carrying the darn thing down the stairs.</p> <p><em>How have you responsibly retired your old electronics?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/how-to-get-rid-of-your-old-electronics">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-money-recycling">Make Money Recycling: Get Paid to Recycle by 15 Websites</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-save-cash-by-purging-your-place-of-plastics">10 Ways to Save Cash by Purging Your Place of Plastics</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-i-saved-30000-and-helped-the-earth-at-the-same-time">How I Saved $30,000 and Helped the Earth at the Same Time</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-to-cut-down-on-garbage-and-save-money-too">12 Ways to Cut Down on Garbage and Save Money Too!</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-helpful-and-weird-uses-for-hair-and-excess-pet-fur">9 Helpful (and Weird) Uses for Hair and Excess Pet Fur</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Green Living donating electronics recycling tax deductions Thu, 04 Apr 2013 10:36:31 +0000 Tara Struyk 971504 at http://www.wisebread.com 3 Tax Deductions You Can Never Take http://www.wisebread.com/3-tax-deductions-you-can-never-take <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-tax-deductions-you-can-never-take" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man-doing-taxes.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I spent a fair share of my mid-twenties lugging around a two-volume set of the Internal Revenue Code to class every day (picture a small woman with two encyclopedia-sized bricks on the subway), so I know first hand just how overwhelming our tax laws can seem. Every tax season, people ask me about the same mythical deductions &mdash; stuff they feel they <em>ought</em> to be able to deduct on their tax returns, even though the government doesn't exactly see eye-to-eye with them. While it may be freezing in some parts of the country, tax season <em>is</em> right around the corner, and it pays to take a look at these three common points of confusion before filing this spring.</p> <p>(See also: <a href="http://www.wisebread.com/16-great-tax-deductions-you-may-have-overlooked" title="16 Great Tax Deductions You May Have Overlooked">16 Great Tax Deductions You May Have Overlooked</a>)</p> <h3>1. Can I deduct my personal credit card interest?</h3> <p>Nope, unfortunately not. When you make personal charges on your plastic &mdash; like going out to eat, trips to the grocery store or Disneyland, really any of the expenses you associate with your daily life &mdash; the interest is never deductible.</p> <p>Here's the source of the misunderstanding. You <em>used to</em> be able to deduct credit card interest. But you can thank President Reagan and Congress (Democrats and Republicans alike) for eliminating the interest deduction for consumer loans, which includes your Mastercard or VISA. They believed that consumer interest deductions generally encouraged folks to overspend and over-borrow, so they changed the law.</p> <p>People may also be confused because you often <em>can</em> deduct the interest that you pay on the <em>business expenses</em> you put on your credit card.</p> <p>A note of caution: If you are self-employed or run your own shop, I always recommend having a separate credit card for business purposes (or else it's nearly impossible to calculate which portion of the interest is deductible).</p> <h3>2. Can I deduct my new interview suit or work clothes?</h3> <p>Here's another one I get all the time, especially in the current job market when so many people are out there pounding the pavement, and the cost of getting your foot in the door adds up pretty quickly.</p> <p>The tax laws are a little tricky here. You <em>can't</em> deduct your new <a href="http://www.wisebread.com/5-ways-to-snag-budget-friendly-business-clothes" title="5 Ways to Snag Budget-Friendly Business Clothes">interview outfit</a> (on the theory that you could also wear it for personal use, like to a cocktail party, wedding, date or any other event where you want to look pulled together). And you can't deduct the cost of your ordinary, run-of-the-mill work clothes, either. Think: no deduction for things I could otherwise wear out in public anyway &mdash; normal pants, dresses, skirts, shirt &mdash; even if you work at a clothing store that asks you to dress nicely while you're on the clock.</p> <p>But there are some good news. While your fancy interview suit is off limits, you may be able to deduct some of the expenses you rack up <a href="http://www.wisebread.com/25-awesome-websites-to-help-you-get-a-job" title="25 Awesome Websites to Help You Get a Job">looking for a job</a>, like the amount you pay to an employment service, and the cost of preparing and sending out all those resumes under certain circumstances. And there is a clothing deduction exception if you wear a specialized uniform to work and it's not suitable for everyday life. (How many UPS guys are going to whip out their uniforms to wear around town on their day off?)</p> <h3>3. Can I deduct my commuting costs?</h3> <p>Again, this one is a no-go for the IRS. You <em>can't</em> deduct the cost of commuting from your house to your job, on the theory that you choose where you want to live in relation to your workplace and the time in your car or on the train is personal.</p> <p>But of course, because it's the tax code, there <em>is</em> an exception. People who are self-employed with a home office may be able to write off some of the costs of traveling between their residence and another location where they have work-related business. You may also be able to deduct the costs of going from your job (wherever you work) to other work-related meetings and outings. My advice? Sit down with an accountant or tax professional if you plan on deducting these kinds of costs on your return this April, so you can make sure you're calculating everything properly.</p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p><em>Jacoba Urist is a tax and estate attorney from New York. She is a regular contributor to The Huffington Post and is writing a book &quot;The Happiest Parent&quot; about preparing the best possible future for every child. Follow her on Twitter at <a href="https://twitter.com/#!/TheHappiestPare">@TheHappiestPare</a>.</em></p> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jacoba-urist">Jacoba Urist</a> of <a href="http://www.wisebread.com/3-tax-deductions-you-can-never-take">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/surprise-5-reasons-you-might-not-get-your-tax-refund">Surprise! 5 Reasons You Might Not Get Your Tax Refund</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wisdom-from-my-favorite-frugal-tv-character-julius-rock">Wisdom from My Favorite Frugal TV Character - Julius Rock</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-on-last-years-taxes-right-now">Save on Last Year&#039;s Taxes Right Now</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-tax-return-mistakes-even-smart-people-make">8 Tax Return Mistakes Even Smart People Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Taxes accounting tax deductions tax returns Thu, 09 Feb 2012 11:36:37 +0000 Jacoba Urist 892649 at http://www.wisebread.com Start 2012 Off Right With 5 Tax-Wise To-Dos http://www.wisebread.com/small-business/start-2012-off-right-with-5-tax-wise-to-dos <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/start-2012-off-right-with-5-tax-wise-to-dos" target="_blank">http://www.openforum.com/articles/start-2012-off-right-with-5-tax-wise-to-dos</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/start-2012-off-right-with-5-tax-wise-to-dos" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/tax_wise_to_dos.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="157" /></a> </div> </div> </div> <p>As the new year is about to begin, make it your <a target="_blank" href="http://www.openforum.com/articles/18-year-end-financial-must-dos">resolution to start the year off right</a> from a tax perspective. This includes doing the following:</p> <p><b>1. Read Your Odometer.</b></p> <p>If you use your personal car, truck, or van for business, be sure to jot down your odometer reading on January 1. This will help you track your business mileage throughout the year, so you can claim a deduction for this driving. You&rsquo;ll also need to keep a record of all your business driving; without this record, your deduction may be disallowed.</p> <p><b>2. Decide Whether to Become an S Corporation.</b></p> <p>If your business is already incorporated, you generally have until March 15, 2012, to elect to be taxed as an S corporation. This means the owners, rather than the corporation, pay tax on the business&rsquo; profits. Electing by this date lets you be treated as an S corporation for the entire year. The election is made by filing <a target="_blank" href="http://www.irs.gov/pub/irs-pdf/f2553.pdf">IRS Form 2553</a>.</p> <p>If you incorporate a business in 2012, you have two months and 15 days from the start of the corporation to make the election. For example, if you incorporate on January 7, 2012, you have until March 21, 2012, to file the election form with the IRS.</p> <p>Talk with your tax advisor about whether an S election makes sense for your company.</p> <p><b>3. Determine Contributions to Your FSA.</b></p> <p>If your company has a flexible spending arrangement (FSA), you usually have to decide how much to contribute for the new year before the year begins. For 2012, it is up to the company to set limits on how much an employee can contribute from salary to the FSA. (Starting in 2013, the tax law sets the limit at $2,500 per year.)</p> <p>If your company does not yet have an FSA, discuss with your tax advisor the feasibility of adding one now. Even if you start mid-year, you and your staff can benefit from it.</p> <p><b>4. Decide on contributions to your 401(k).</b></p> <p>If your company has a 401(k) plan, just like the FSA, you usually have to decide how much to contribute for the new year before the new year begins. The elective deferral limit for contributions from an employee&rsquo;s salary is higher in 2012 than it was in 2011 ($17,000 in 2012 versus $16,500 in 2011). Those who are at least 50 years old by the end of 2012 can add another $5,500 to the account. Contributions, however, cannot exceed wages.</p> <p>If your company does not have such a plan, you might want to start one. You can use a 401(k) plan even if you are the only one who works for the business. A solo 401(k) can enable you to maximize your annual retirement plan contributions for yourself because you can use the maximum employer contribution permitted in addition to the employee elective deferrals. These contributions are allowed whether you are an employee of your corporation or you are a self-employed person.</p> <p><b>5. Decide Whether to Use an HSA for 2012.</b></p> <p>If you do not yet have health insurance in place for your company, you might want to use a high-deductible health plan combined with a savings account called a Health Savings Account (HSA). This can be an affordable way to provide health coverage.</p> <p>You can decide whether you, your employees, or a combination will pay the health insurance premiums and/or make the HSA contributions. If you pay the premiums, you may even qualify for the smaller employer health insurance credit of up to 35 percent of these premiums!</p> <p><b>Bottom Line</b></p> <p>Hopefully 2012 will be a very good year from a revenue perspective. This is all the more reason to get your tax ducks in a row so you can minimize the portion of your profits that you&rsquo;ll have to share with Uncle Sam.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/barbara-weltman">Barbara Weltman</a> of <a href="http://www.wisebread.com/small-business/start-2012-off-right-with-5-tax-wise-to-dos">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wait-are-you-about-to-lose-more-money-in-your-fsahsa">Wait! Are You About to Lose More Money in Your FSA/HSA?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center 401(k) FSA HSA small business tax deductions taxes year end taxes Mon, 26 Dec 2011 22:04:44 +0000 Barbara Weltman 835743 at http://www.wisebread.com 5 Myths about Deducting T&E Expenses http://www.wisebread.com/small-business/5-myths-about-deducting-te-expenses <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/5-myths-about-deducting-tampe-expenses" target="_blank">http://www.openforum.com/articles/5-myths-about-deducting-tampe-expenses</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/5-myths-about-deducting-te-expenses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000017020332Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Travel and entertainment costs are a common expense for most businesses. Unfortunately, the <a href="http://www.openforum.com/idea-hub/topics/lifestyle/article/whats-tax-deductible-for-your-next-business-trip-1" target="_blank">rules for deducting T&amp;E costs</a> can be complicated and are often misunderstood. Here are five myths that you should be aware of.</p> <p><strong>Myth 1. The Full Cost of Business Meals and Entertainment is Tax Deductible</strong></p> <p>Taking a customer to lunch, wining and dining a vendor, or taking a prospective client to the theater or sporting event are normal business practices. Regardless of how much or how little you spend, you can only write off 50 percent. For example, you take an out-of-town customer to dinner and the theater. It costs you $350 for the evening. You can deduct $175; the balance is not deductible.</p> <p><strong>Myth 2. The Cost of Commuting To and From Work is Deductible</strong></p> <p>Regardless of how far you have to commute, the method of transportation you use, or what it costs you, you <i>cannot </i>deduct the cost of commuting. This is considered to be a nondeductible personal expense.</p> <p>If you have to pay extra to transport business-related tools during your commute, such as heavy equipment or large musical instruments, the added expense is deductible.</p> <p>Once you are at work, your travel to other business locations becomes deductible. A doctor can deduct the travel costs between her medical office and the hospitals at which she had privileges, but not the cost of getting to the medical office. If you have a home office for which you take a tax deduction, all trips from home for business&mdash;to see a customer or vendor, do banking, or buy supplies&mdash;are deductible; this is not commuting.</p> <p><strong>Myth 3. You Need Receipts for All T&amp;E Costs</strong></p> <p>You do <i>not</i> need receipts for expenses of $75 or less. Thus, if you take a taxi from your office to see a customer for a cost of $12, no receipt is required. Exception: You need a receipt for lodging of any amount, even at a Motel 6.</p> <p>While you may not be required to keep all receipts, it doesn&rsquo;t hurt to do so. They often serve as a reminder for a deductible expense, especially if you&rsquo;ve paid cash (e.g., the taxi ride).</p> <p><strong>Myth 4. There is a Dollar Limit on What You Can Deduct</strong></p> <p>There is no overall dollar limit on your deduction for T&amp;E expenses. However, you can&rsquo;t deduct meal and entertainment costs that are &ldquo;lavish and extravagant.&rdquo; The tax law does not define these terms. It&rsquo;s up to you (and your tax advisor) to decide whether costs are &ldquo;too much&rdquo; before you deduct them.</p> <p><strong>Myth 5. You can&rsquo;t Deduct a Trip if Your Family Comes Along</strong></p> <p>The tax law lets you combine business with pleasure under the right conditions. If you travel within the U.S. and the <i>primary</i> reason for the trip is business, you can deduct all of your travel (e.g., airfare) costs. The fact that your spouse, significant other, or your family comes with you does not negate your deduction.</p> <p>It may not even cost you anything extra (other than meals) to bring your spouse with you. If you drive, there&rsquo;s no extra cost, and usually there&rsquo;s no additional charge for another person in your hotel room.</p> <p>You can&rsquo;t deduct your costs for the portion of your trip spent sightseeing, visiting family, or pursuing other personal endeavors. For example, say you travel from Trenton to Los Angeles to meet with clients on Monday, Tuesday, Wednesday, and Thursday. You spend the rest of the week sightseeing and take the redeye home on Sunday night. The cost of your hotel and meals on the non-business days is not deductible. But your entire airfare remains deductible because the primary purpose of the trip was for business. Remember, even on the business days, only 50 percent of your meals are deductible.</p> <p><strong>Final Word</strong></p> <p>You can learn more about deducting travel and entertainment costs in <a href="http://www.irs.gov/pub/irs-pdf/p463.pdf" target="_blank">IRS Publication 463</a> (the IRS has not yet released the version for the 2011 return, but the general rules still apply). Also check with your tax advisor to determine the tax impact of your T&amp;E activities.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/barbara-weltman">Barbara Weltman</a> of <a href="http://www.wisebread.com/small-business/5-myths-about-deducting-te-expenses">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/101-tax-deductions-for-bloggers-and-freelancers">101 Tax deductions for bloggers and freelancers</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-the-one-skill-you-need-if-you-want-to-work-for-yourself">This Is the One Skill You Need If You Want to Work for Yourself</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-surprising-tax-deductions-you-might-miss">7 Surprising Tax Deductions You Might Miss</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center Taxes Travel deductible expenses expenses small business t&e deductions tax deductions travel and entertainment Mon, 12 Dec 2011 21:36:58 +0000 Barbara Weltman 816775 at http://www.wisebread.com Are Capital Improvements Required By Law Tax Deductible? http://www.wisebread.com/small-business/are-capital-improvements-required-by-law-tax-deductible <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/are-capital-improvements-required-by-law-tax-deductible" target="_blank">http://www.openforum.com/articles/are-capital-improvements-required-by-law-tax-d...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/are-capital-improvements-required-by-law-tax-deductible" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000012068272Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="182" /></a> </div> </div> </div> <p>From time to time, the government may step in to tell you what to do about your facilities, such as <a href="http://www.openforum.com/articles/5-things-to-know-about-the-ada">improvements required by the American with Disabilities Act</a> (ADA). You have little choice about compliance; make the changes that the government wants or pay penalties. What <a href="http://www.openforum.com/idea-hub/topics/money/article/31-small-business-tax-deductions-1" target="_blank">tax relief can you claim</a> for compliance with the improvements you have to make?</p> <p><strong>General Rules</strong></p> <p>Usually, the costs of capital construction and improvements are not immediately deductible. The costs are added to the basis of property and recovered through depreciation. This can be a long process, giving little tax relief upfront when you incur the costs.</p> <p>If you are forced to pay penalties for noncompliance or law violations, the penalties are <i>not </i>tax deductible. The tax law specifically denies deductions for fines and penalties paid to government for violating the law.</p> <p>Thus, you have little choice but to comply with government-ordered improvements, and do it as quickly as possible, to minimize or avoid penalties. Special rules may help you accelerate your write-offs for making certain improvements.</p> <p><strong>ADA Compliance</strong></p> <p>If you have to make changes to your facilities to accommodate the handicapped and elderly in order to be in compliance with the ADA, such as adding ramps and railings, you may be in line for a tax break. There are two options that could apply to your situation:</p> <ul> <li><i>Disabled access credit</i>. You can claim a tax credit of 50% of the cost of expenditures over $250 and up to $10,500 a year, for a top tax credit of $5,000. This credit applies only for small businesses, defined as those with gross receipts of $1 million or less, <i>or</i> fewer than 30 employees in the preceding year. Details about the type of improvements eligible for the credit are explained in the instructions to <a href="http://www.irs.gov/pub/irs-pdf/f8826.pdf" target="_blank">IRS Form 8826</a>.</li> <li><i>Deduction for costs of removing barriers to the disabled and the elderly</i><b><i>. </i></b>The deduction is capped at $15,000 per year. If costs are greater, the amount over $15,000 can be capitalized and recovered through depreciation.</li> </ul> <p>You can only use a cost once (you can&rsquo;t use it for both a credit and a deduction), so decide how to maximize your write-offs from ADA-related improvements.</p> <p><strong>OSHA Compliance</strong></p> <p>The Occupational Safety and Health Administration (OSHA) is concerned with safety for employees in the workplace. There are no special tax breaks immediately tied to OSHA-ordered changes or improvements. Depending on the type of changes required, the costs may be immediately deductible or will have to be capitalized.</p> <p><i>Examples</i><b><i>: </i></b>Personal safety equipment you buy for workers, such as goggles and protective gloves, may be immediately deductible as an ordinary and necessary business expense, or if expected to last more than one year, as an immediate write-off under <a href="http://www.irs.gov/pub/irs-pdf/p946.pdf" target="_blank">first-year expensing or bonus depreciation rules</a> for 2011. Re-wiring, constructing exit overhead protection, or other capital improvements to a facility may have to be capitalized. However, for a limited time, special rules may help leaseholds, restaurants, and retail establishments write-off improvements more quickly than over lengthy depreciation.</p> <p>You may want to consider <a href="http://www.osha.gov/dcsp/smallbusiness/consult.html" target="_blank">OSHA&rsquo;s free on-site consultation</a>. The program does not entail penalties or citations; it merely makes recommendations for improvements to be a safer workplace. This can help you prevent penalties that could result from inspections down the road.</p> <p><strong>Environmental Remediation Costs</strong></p> <p>The Environmental Protection Agency (EPA) may require you to take certain actions, such as encapsulating or removing asbestos. You may be eligible for accelerated write-offs for doing so. As long as the cost merely restores property to its pre-contamination condition and does not improve the value or extend the life of the property, the costs can be immediately deducted.</p> <p><i>Examples</i><b><i>: </i></b>One nursing home that replaced mold-contaminated drywall could immediately deduct the cost as an ordinary and necessary business expense. The cost of encapsulating asbestos is deductible, while the cost of removing it must be capitalized.</p> <p>Even if costs to clean up contaminated soil and groundwater and removing hazardous waste would normally have to be capitalized, there is a special rule for remediation costs related to so-called &ldquo;brownfields.&rdquo; These costs are immediately deductible; there is no annual dollar limit. However, this special break is set to expire at the end of 2011, unless Congress extends it. There is <a href="http://www.epa.gov/brownfields/tax/index.htm" target="_blank">EPA guidance</a> on this tax break.</p> <p>Check state-level tax breaks that can be helpful in paying for the cost of cleanup. These can include:</p> <ul> <li>A current deduction for capitalizable remediation costs;</li> <li>Income tax credits;</li> <li>Property tax abatements and exemptions;</li> <li>Special financing.</li> </ul> <p><strong>Bottom Line</strong></p> <p>Before undertaking any improvement program for your facilities, talk with your tax adviser. You may be able to plan out the changes to maximize upfront write-offs.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/barbara-weltman">Barbara Weltman</a> of <a href="http://www.wisebread.com/small-business/are-capital-improvements-required-by-law-tax-deductible">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/filed-an-extension-heres-what-you-need-to-know">Filed an Extension? Here&#039;s What You Need to Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-rid-of-your-old-electronics">How to Get Rid of Your Old Electronics</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/101-tax-deductions-for-bloggers-and-freelancers">101 Tax deductions for bloggers and freelancers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center ADA building improvements compliance deductions epa improvements IRS OSHA renovations small business tax deductions Tue, 15 Nov 2011 23:26:15 +0000 Barbara Weltman 781124 at http://www.wisebread.com How to Write Off Start-Up Costs http://www.wisebread.com/small-business/how-to-write-off-start-up-costs <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/how-to-write-off-startup-costs" target="_blank">http://www.openforum.com/articles/how-to-write-off-startup-costs</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/how-to-write-off-start-up-costs" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000014587143Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Some businesses, such as consultants, may be able to get up and running on a wing and a prayer. More typically, it costs money to get things set up right before the doors open for business. The <a href="http://www.restaurantowner.com/public/Industry_Survey_How_Much_Does_it_Cost_to_Open_a_Restaurant_2011.cfm" target="_blank">average cost of starting a restaurant</a> is nearly half a million dollars (without purchasing land). <a href="http://www.openforum.com/idea-hub/topics/money/article/10-tips-from-bootstrapping-entrepreneurs-1" target="_blank">Start-up costs</a> mean you&rsquo;re laying out funds before any revenue starts to come in.</p> <p><strong>The Problem</strong></p> <p>Ordinary and necessary business expenses generally are deductible by your business. But what about expenses you have <i>before </i>you open your doors? You&rsquo;re not yet in business, so there&rsquo;s no business to deduct them. However, certain costs associated with starting a business can be deductible, either in the first year of business or over time. These are called start-up costs in tax law and the same deduction rules apply whether the business is a sole proprietorship, partnership, or corporation.</p> <p><strong>What Are Start-up Costs?</strong></p> <p>These are costs that normally would be deductible if you&rsquo;d been operating at the time you paid or incurred them. These do not include the cost of purchasing a business or franchise, or other capital costs, even though your start-up capital may be used to cover the purchase price.</p> <p>There are three categories of deductible start-up costs:</p> <ul> <li><b>Investigatory expenses</b> made to decide whether to go into business and which business to buy or start. Costs in this category include surveys and analysis of potential markets, products, and labor, as well as travel costs to look at businesses or business sites.</li> <li><b>Business start-up costs after deciding to go forward but before the business begins to operate</b>. These include advertising, training employees, traveling to line up vendors, distributors and customers, consulting fees, and fees to set up accounting books.</li> <li><b>Pre-opening costs are any other costs paid or incurred before the day that the business starts.</b></li> </ul> <p>Again, not all costs associated with starting a business fall into these categories. Costs that normally must be capitalized in addition to the purchase price of a business, such as legal fees to buy property, are not immediately deductible. Instead, they become part of the cost basis of that property. Costs for building out a store or restaurant are also not deductible as start-up costs (although there may be other write-offs available).</p> <p><strong>How Much Can You Deduct?</strong></p> <p>Start-up costs paid or incurred after October 22, 2004, can be deducted up to $5,000 this year if the business starts in 2011. If costs exceed $5,000, that dollar limit is reduced by one dollar for each excess cost. Once expenses exceed $55,000, no immediate deduction is allowed.</p> <p>Expenses that cannot be immediately deducted can be claimed over a period of 180 months. For example, if a business opened its doors on January 1, 2011, and had $60,000 in start-up costs, no immediate deduction could be claimed. However, $4,000 ($60,000 &divide; 180 x 12) is deductible in 2011.</p> <p><b>Bottom Line</b></p> <p>If you&rsquo;re thinking of starting a business, keep good records on what you&rsquo;re spending money on, such as travel to see potential vendors and lunches you take them to. Save receipts and keep good notes about what the expenditures are for. Then you&rsquo;ll be able to maximize the write-off for your start-up costs.</p> <p>The tax law treats you as automatically electing to deduct start-up costs if you&rsquo;re eligible to do so; no special election is required. But you can opt <i>not </i>to deduct them immediately and instead amortize them over the 180 months, or merely capitalize them (add them to basis). Newly <a href="http://www.us.kpmg.com/microsite/taxnewsflash/2011/Aug/TD-9542.pdf" target="_blank">issued final regulations</a> explain how to make this election. It&rsquo;s best to work with a tax advisor to make sure you get all the write-offs you&rsquo;re entitled to.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/barbara-weltman">Barbara Weltman</a> of <a href="http://www.wisebread.com/small-business/how-to-write-off-start-up-costs">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-rid-of-your-old-electronics">How to Get Rid of Your Old Electronics</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-the-one-skill-you-need-if-you-want-to-work-for-yourself">This Is the One Skill You Need If You Want to Work for Yourself</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-i-got-over-the-hump-and-sold-my-blog-for-3-million">How I Got Over the Hump and Sold My Blog for $3 Million</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center business write-offs small business start-up costs start-ups tax deductions Sun, 04 Sep 2011 21:20:45 +0000 Barbara Weltman 677371 at http://www.wisebread.com How To Combine A Personal And Business Trip Without Angering Uncle Sam http://www.wisebread.com/small-business/how-to-combine-a-personal-and-business-trip-without-angering-uncle-sam <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/how-to-combine-a-personal-and-business-trip-without-angering-uncle-sam" target="_blank">http://www.openforum.com/articles/how-to-combine-a-personal-and-business-trip-wi...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/how-to-combine-a-personal-and-business-trip-without-angering-uncle-sam" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000001925406Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="165" /></a> </div> </div> </div> <p>If you intend to take some time off this summer, <i>how </i>you arrange your vacation can save you serious tax dollars. You can combine business with pleasure and write off a good deal of the cost of your trip. Here&rsquo;s what you need to know to avoid problems with the IRS.</p> <h3>Make Business the Primary Purpose of the Trip</h3> <p>If you&rsquo;re traveling within the Unite States, and the main reason you&rsquo;re going on the trip is for business, then the cost of getting to and from your destination(s) is deductible as a business expense. There is great flexibility in arranging your time away without missing the tax deduction, and you&rsquo;ll be able to get in some R&amp;R as long as you schedule wisely.</p> <p>For example, your business is located in Seattle, Washington, and you have to see suppliers in Orlando, Florida. You schedule meetings there on Monday through Thursday. Nothing prevents you from visiting Disneyworld, Universal Studios, or other theme parks in the area over a long weekend. The cost of airfare to and from Orlando is fully tax deductible. The cost of hotel stay for the days on business is also tax deductible, as well as 50% of your meals on those days.</p> <p>If the primary reason for the trip is a vacation, then travel costs aren&rsquo;t a business expense. However, if you do see a customer or client while on vacation and take that person to dinner, the cost of this meal can be a deductible business expense.</p> <p><b>Note</b>: Different tax rules apply to deducting the cost of foreign travel as a business expense when personal time off is involved.</p> <h3>Taking a Companion</h3> <p>In general, you can&rsquo;t deduct the travel costs of a spouse or other companion on a business trip. As a practical matter, however, it may not cost you extra to have company:</p> <ul> <li>Consider using frequent flyer miles for a companion;</li> <li>Drive to the destination; there&rsquo;s no extra charge for a passenger in your car. Driving your personal vehicle on business this summer can be clocked at <a href="http://www.irs.gov/newsroom/article/0,,id=240903,00.html" target="_blank">55.5&cent; per mile</a>; driving from January through June was at the rate of 51&cent; per mile.</li> </ul> <p>There usually is no additional charge in a hotel or motel for a second person in the room.</p> <h3>Brush Up on Business Skills</h3> <p>If your summertime is your slow time, it may be an ideal time to take required continuing education courses or other business-related classes. Travel for education purposes is a business expense &ndash; the cost of the education and the trip can be deductible.</p> <p>The deduction is not barred simply because the courses are held in a resort area. Even though you take the courses by day and party by night, all of the travel and accommodation costs are deductible. Be sure to meet the attendance requirements for the course to lock down the deduction.</p> <h3>Create a Paper Trail</h3> <p>Travel, with or without an element of personal recreation, requires special recordkeeping. Failure to adhere to the strict (and somewhat burdensome) rules can cause you to lose an otherwise legitimate write-off. The requirements for travel include notations in a diary, expense account form, or other record, of the following information:</p> <ul> <li>The cost of each business expense (e.g., travel, lodging, meals). Incidental expenses may be totaled in any reasonable category (e.g., tips, taxis, laundry).</li> <li>Dates of the trip.</li> <li>Destination (area of travel).</li> <li>Purpose of the travel and the benefit gained or expected to be gained.</li> </ul> <p>More details about business travel can be found in IRS Publication 463, <a href="http://www.irs.gov/pub/irs-pdf/p463.pdf" target="_blank"><i>Travel, Entertainment, Gifts, and Car Expenses</i></a>. Enjoy your time away!</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/barbara-weltman">Barbara Weltman</a> of <a href="http://www.wisebread.com/small-business/how-to-combine-a-personal-and-business-trip-without-angering-uncle-sam">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-get-free-or-almost-free-airline-tickets">10 Ways to Get Free (or Almost Free) Airline Tickets</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-budget-items-you-may-be-forgetting">7 Budget Items You May be Forgetting</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/traveling-to-asia-snatch-up-airasias-asean-pass">Traveling to Asia? Snatch Up AirAsia&#039;s Asean Pass</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/101-tax-deductions-for-bloggers-and-freelancers">101 Tax deductions for bloggers and freelancers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center Travel business expenses expenses small business tax deductions taxes travel travel expenses Thu, 04 Aug 2011 18:31:24 +0000 Barbara Weltman 629787 at http://www.wisebread.com Uncle Sam Boosts Standard Mileage Deduction http://www.wisebread.com/small-business/uncle-sam-boosts-standard-mileage-deduction <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/uncle-sam-boosts-standard-mileage-deduction" target="_blank">http://www.openforum.com/articles/uncle-sam-boosts-standard-mileage-deduction</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/uncle-sam-boosts-standard-mileage-deduction" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000009203313Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>If you drive your car for business, as many business owners do, there are two ways to write-off the cost of driving: deduct your actual costs or rely on an IRS-set mileage rate. Either way, you&rsquo;re in for savings now.</p> <h3>Standard Mileage Rate</h3> <p>Whether you own or lease your vehicle, you can use a per-mile rate that&rsquo;s fixed annually by the IRS to figure your deduction for business driving. Using the standard mileage rate relieves you of the need to keep track of car costs throughout the year.</p> <p>Because of the increase in gasoline prices, the <a target="_blank" href="http://www.irs.gov/newsroom/article/0,,id=240903,00.html">IRS raised</a> the rate mid-year. For driving from January through June, the rate is 51&cent; per mile; for driving in July through December, the rate is 55.5&cent; per mile.</p> <p>If you use the standard mileage rate, you can also deduct what you spend for parking, tolls, and interest on car financing. However, no deduction is allowed for parking tickets and fines for traffic violations.</p> <p><b>Caution:</b> Using the standard mileage rate doesn&rsquo;t relieve you of the need to keep records of business driving. Records must include mileage, the date, the destination, and the purpose of each trip. Consider using an app for a smartphone, such as <a target="_blank" href="http://www.tap2track.com/">Tap2Track</a>, to simplify this record-keeping chore.</p> <h3>Actual Expense Method</h3> <p>Instead of a mileage rate, you can deduct the expenses you actually pay to drive your car for business, including gas and oil, maintenance and repairs, lease payments if you lease the car or depreciation (up to a dollar limit) if you own it, insurance, and vehicle registration fees.</p> <p>With the agreement announced June 23, 2011, by the U.S. and 27 other countries to release 60 million barrels of oil from strategic reserves, expect to see the price at the pump decline somewhat. This should ease your expense budget. As of June 23, 2011, the average price of gasoline in the U.S. was $3.60 per gallon. Experts predict that the release of oil reserves will drive down the price even more, but by how much no one knows.</p> <p>Again, when deducting your car expenses under the actual expense method, be sure to keep records of your business driving. No deduction usually can be claimed without them. For details, see <a target="_blank" href="http://www.irs.gov/pub/irs-pdf/p463.pdf">IRS Publication 463</a>.</p> <h3>Which Write-Off Option to Use?</h3> <p>The answer depends on the number of miles you drive, what you pay for your car, and other factors. For example, a costly lease and minimal driving favors the use of the actual expense method. Buying an inexpensive vehicle and driving it extensively for business favors the use of the standard mileage rate. Unfortunately, the only way to know which method will save more taxes is to keep great records throughout the year (including receipts for gasoline and other car-related expenses). Then you can figure the deduction both ways and use the better alternative. However, your choice in a prior year can affect this year&rsquo;s write-off method.</p> <ul type="disc"> <li>If you own the car, you must use the standard mileage rate in the first year. You can later switch to the actual expense method.</li> <li>If you lease the car, you must use the standard mileage rate or the actual expense method for the entire term of the lease; there&rsquo;s no switching allowed.</li> </ul> <p>As always, when in doubt, talk with a trusted tax advisor!</p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/barbara-weltman">Barbara Weltman</a> of <a href="http://www.wisebread.com/small-business/uncle-sam-boosts-standard-mileage-deduction">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/lessons-we-can-learn-from-blockbusters-demise">Lessons We Can Learn From Blockbuster&#039;s Demise</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/effective-networking-in-a-one-horse-town">Effective Networking in a One-Horse Town</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-ways-to-use-social-media-in-business">13 Ways to Use Social Media in Business</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career Building Entrepreneurship Financial News Small Business Resource Center Taxes business expense company car IRS mileage deduction small business tax deductions Sun, 17 Jul 2011 23:56:19 +0000 Barbara Weltman 601429 at http://www.wisebread.com 16 Great Tax Deductions You May Have Overlooked http://www.wisebread.com/16-great-tax-deductions-you-may-have-overlooked <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/16-great-tax-deductions-you-may-have-overlooked" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple-paying-taxes.png" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><i>Brought to you by <a href="http://turbotax.intuit.com/personal-taxes/online/free-edition.jsp" target="_blank">TurboTax Federal Free Edition &mdash; Free to prepare, Free to print, Free to efile</a>.</i></p> <p>There are so many frequently missed deductions, according to the IRS, that I can&rsquo;t see anyone with a life outside of professional income tax preparation wading through them all. I have, therefore, vetted them for you so you can jump to the categories that apply to you and skip the rest.</p> <p>First of all, let&rsquo;s draw a distinction here. Though most people speak in generic terms of income tax &ldquo;deductions,&rdquo; (as our title implies), there are also frequently overlooked adjustments and frequently overlooked credits. This is an important distinction, because not all taxpayers are able to amass enough itemized deductions to exceed their standard deduction, so itemized deductions do them no good. Generally speaking, though, most people can use adjustments and credits if they qualify for them. Adjustments reduce your Adjusted Gross Income (AGI), and credits reduce your tax.</p> <p>Here's an explanation of my vetting process: If you are NOT able to accumulate enough itemized deductions to exceed your standard deduction (see the chart titled &quot;<a href="#2010_standard_deductions">2010 Standard Deductions</a>&quot; below), then skip the section &ldquo;<a href="#itemize_their_deductions">For Those Who Itemize Their Deductions</a>&rdquo; and move on to &ldquo;<a href="#itemizers_and_non_itemizers">For Itemizers and Non-Itemizers</a>&rdquo; and beyond.</p> <p>Itemized deductions, if you're not familiar, include such things as mortgage interest, investment interest, state income taxes, property taxes, charitable contributions, unreimbursed medical expenses in excess of 7.5% of your AGI, miscellaneous itemized deductions like unreimbursed work expenses and tax preparation fees and expenses, and the other frequently overlooked deductions included below.</p> <p><strong><a name="2010_standard_deductions"></a>2010 Standard Deductions</strong></p> <ul> <li>$5,700 for single filers</li> <li>$5,700 for married couples filing separately</li> <li>$11,400 for married couples filing jointly</li> <li>$8,400 for head-of-household filers</li> <li>$11,400 for qualifying widow(er)s</li> </ul> <p>The IRS has a <a href="http://www.1040.com/site/TaxTools/FinancialCalculators/ShouldIItemizeOrTakeTheStandardDeduction/tabid/298/Default.aspx" target="_blank">Should I Itemize or Take the Standard Deduction?</a> calculator to aid in your decision. For an extensive overview of whether you should itemize your deductions, <a href="http://turbotax.intuit.com/tax-tools/tax-tips/Tax-Deductions-and-Credits/Tax-Deduction-Wisdom---Should-You-Itemize-/INF12061.html" target="_blank">check out this handy guide from TurboTax</a>.</p> <p><strong>Deduction Categories</strong></p> <ul type="disc"> <li><a href="#itemize_their_deductions">For Those Who Itemize Their Deductions</a></li> <li><a href="#itemizers_and_non_itemizers">For Itemizers and Non-Itemizers</a></li> <li><a href="#self_employed">For the Self-Employed</a></li> <li><a href="#selling_investments">For Those Selling Investments</a></li> <li><a href="#students_and_parents">For Students and Their Parents</a></li> </ul> <h2><a name="itemize_their_deductions"></a>For Those Who Itemize Their Deductions</h2> <p><strong>1. Non-Cash Charitable Contributions</strong></p> <p>This is my favorite overlooked deduction, because many people take things to their local Salvation Army or Goodwill without even thinking of the potential tax benefit. If you <a href="http://turbotax.intuit.com/personal-taxes/itsdeductible/index.jsp" target="_blank">keep track of these items and document them</a>, you can deduct the lesser of your basis for the items or their fair market value at the time you donate them. These items can really add up depending upon how charitable you have been. If the deduction amounts to more than $500 for the year, you will be required to file another form to back it up, providing considerably more information.</p> <p>Your basis is usually the original cost to you. If you received an item as a gift, your basis would be the cost to the person who gifted it to you. If an item was bequeathed to you upon someone&rsquo;s death, your basis would be the fair market value of the item at the date of that person&rsquo;s death.</p> <p><strong>2. Sales Taxes</strong></p> <p>This one makes the most sense for people who live in states without a state income tax, because it is only available in lieu of the state income tax deduction, and state income taxes usually exceed sales taxes. The IRS has tables indicating the amounts of <a href="http://www.irs.gov/individuals/article/0,,id=152421,00.html" target="_blank">sales tax deductible by state</a>. However, if you purchased a vehicle during 2010 (including automobiles, boats, and airplanes), you can add the amount of sales tax paid on that transaction (at your own state&rsquo;s sales tax rates, in case you purchased out-of-state) to the amount on the IRS chart. If this results in a bigger deduction than state income taxes would, go for it!</p> <p><strong>3. State Income Taxes Paid with Last Year&rsquo;s Return</strong></p> <p>If you decide that income taxes provide the greater deduction, don&rsquo;t forget the amount you had to pay with your 2009 income tax return when you filed it in 2010! Many people apparently do.</p> <p><strong>4. Personal Property Taxes</strong></p> <p>In many states, if you own a car, a boat, or a luxury asset, you are assessed personal property tax on it. Sometimes it can be part of your vehicle licensing fee. Sometimes it can be billed as personal property tax by your county.</p> <p><strong>5. Points Paid on Purchasing or Refinancing Your Home in 2010</strong></p> <p>If you paid points on the purchase of your personal residence in 2010, the entire amount is deductible this year. If you paid points to refinance your home in 2010, you must amortize the points (deduct them a little bit at a time) over the life of the loan. So if you paid $3,600 in points to refinance your home over a 30 year mortgage, you would deduct $10 per month over the life of the loan ($3,600/360 months).</p> <p><strong>6. Points Paid in a Prior Year</strong></p> <p>If you had to amortize points paid on refinancing on a previous year&rsquo;s return, don&rsquo;t forget to keep deducting them over the entire life of the loan.</p> <p><strong>7. Job-Hunting Costs</strong></p> <p>This is a timely topic for many given the current unemployment conditions in the country. As long as you are not hunting for your first job ever, your costs (such as long-distance calls, travel to and from interviews and meetings, postage, and printing) may be deductible. The catch is that they fall under the heading, &ldquo;Miscellaneous Itemized Deductions,&rdquo; which only help your cause to the extent that they exceed 2% of your AGI. Other miscellaneous itemized deductions include union dues, tax-preparation costs, safe deposit box fees to store investments, and unreimbursed employee business expenses. If the aggregate of all these expenses exceeds 2% of your AGI, the excess helps your cause.</p> <p>(See also: <a href="http://turbotax.intuit.com/best-tax-software/life-changes/" target="_blank">How Getting a New Job Can Affect Your Taxes</a>)</p> <h2><a name="itemizers_and_non_itemizers"></a>For Itemizers and Non-Itemizers</h2> <p><strong>8. Armed Forces Reservists&rsquo; Expenses</strong></p> <p>For those of you brave men and women serving our country as reservists in the armed forces, you get special treatment for your &ldquo;employee&rdquo; business expenses. Unlike most other employees, who must be able to itemize their deductions in order to deduct their expenses (and then only after reducing them by 2% of their AGI), you get a deserved break. Your qualifying expenses for travel more than 100 miles from home go straight from Form 2106 to line 24 of your Form 1040 &mdash; no itemizing or 2% reduction necessary. See <a href="http://www.irs.gov/pub/irs-pdf/i2106.pdf" target="_blank">Form 2106 instructions</a> (PDF) for line 10.</p> <p><b>9. Moving Expenses to Take a New Job</b></p> <p>This is another timely topic in today&rsquo;s economy. The good news is that this is another adjustment for non-itemizers, and (unlike job-hunting costs) it also applies to people getting their very first job. If you have to move 50 miles farther away from your old home than your old job was to take a new job, keep track of the costs. Allowable expenses include transportation of household goods and personal effects, the mileage to move your car (at 16 &frac12; cents per mile for tax year 2010), and lodging while on the road. See IRS <a href="http://www.irs.gov/pub/irs-pdf/f3903.pdf" target="blank">Form 3903</a> (PDF) to make sure you meet the time and distance requirements.</p> <p><b>10. Educator Expenses</b></p> <p>If you are an eligible educator (K-12 teacher, instructor, counselor, principal, or aide who works more than 900 hours during the year at a school), you can deduct up to $250 of ordinary, necessary expenses you paid out of your own pocket in connection with your work. If your spouse is also an educator, you can each deduct up to $250. See <a href="http://www.irs.gov/pub/irs-pdf/i1040.pdf" target="_blank">Form 1040 instructions</a> (PDF) for line 23.</p> <p><b>11. Energy Saving Home Improvements Credit</b></p> <p>If you invested in energy-efficient improvements to your home, such as insulation, windows, doors, or roofing, you are entitled to a credit against your taxes. The credit amounts to 30% of the investment, to a maximum of $1,500 for 2009 and 2010 combined. Remember, a credit reduces your taxes, not just your income. After 2010, the maximum credit will drop back down to $500 per year. See <a href="http://www.irs.gov/pub/irs-pdf/f5695.pdf" target="_blank">Form 5695</a> (PDF) instructions.</p> <p><b>12. First-Time Homebuyer and Long-Time Resident Homebuyer Credits</b></p> <p>The deadline for closing a house deal qualifying for this credit was extended from June 30, 2010 to September 30, 2010. You must have entered into a binding contract to buy a home in the U.S. by April 30, 2010. To qualify for the First-Time Homebuyer Credit, neither you nor your spouse can have owned a home for the previous three years. To qualify for the Long-Time Resident Homebuyer Credit, you and your spouse must have lived in the same residence for any consecutive five year period of the eight-year period ending on the date the new home was purchased. The maximum first-time credit amount is $8,000, and the maximum long-time credit amount is $6,500. See <a href="http://www.irs.gov/pub/irs-pdf/i5405.pdf" target="_blank">Form 5405 instructions</a> (PDF) for details.</p> <h2><b><a name="self_employed"></a></b><a name="self_employed"></a>For the Self-Employed</h2> <p><b>13. Health Insurance Reduction to Self-Employment Income</b></p> <p>Here&rsquo;s a brand new one for the growing class of self-employed. While you have been able to reduce your AGI by varying percentages of your health insurance premiums over the years, you are now allowed to reduce your self-employment income by the same amount. Thus, not only is your regular income tax based on the reduced income amount, but so is your self-employment tax. (For the uninitiated, this is a separate tax that covers both the employer&rsquo;s and employee&rsquo;s portions of Social Security taxes.) This is an obscure deduction that is somewhat hidden in ambiguous wording on line 3 of <a href="http://www.irs.gov/pub/irs-pdf/f1040sse.pdf" target="_blank">Schedule SE</a> (PDF), so here is your heads-up.</p> <h2><a name="selling_investments"></a>For Those Selling Investments</h2> <p><b>14. Reinvested Dividends</b></p> <p>This is admittedly a smaller subset of people &mdash; those selling stock or mutual funds in which their dividends have been reinvested to buy more of the investment. They have paid taxes on the dividends even though they haven&rsquo;t received dividend checks. So the reinvested dividends add to the basis of the stock sold, thereby reducing the capital gains and the resultant taxes.</p> <h2><b><a name="students_and_parents"></a><a name="students_and_parents"></a></b>For Students and Their Parents</h2> <p><b>15. American Opportunity Credit</b></p> <p>This credit allows for up to $2,500 of qualifying expenses for each qualifying student, to offset income taxes, for up to four years. This cannot be used with the Lifetime Learning Credit, which allows up to $2,000 per year, but is not limited to four years per student. For more details, see <a href="http://www.irs.gov/publications/p970/" target="_blank">IRS Publication 970</a> &mdash; Tax Benefits for Higher Education.</p> <p><b>16. Student Loan Interest Paid for You by Your Parents</b></p> <p>If you otherwise qualify to deduct your student loan interest, but it doesn&rsquo;t occur to you to do so because your parents are paying it for you, read on.</p> <p>According to the IRS, you may claim the student loan interest deduction if you meet all of the following requirements:</p> <ul> <li>Your filing status is not &ldquo;married filing separately&rdquo;</li> <li>You (and your spouse if filing jointly) are not claimed as a dependent in the exemptions section of another person&rsquo;s tax return</li> <li>You are legally obligated to pay interest on a qualified student loan</li> <li>You paid interest on a qualified student loan</li> </ul> <p>Your parents are not allowed to deduct the interest because they do not meet the third requirement &mdash; they are not legally obligated to pay the interest. You may think you don&rsquo;t meet the fourth requirement because you did not actually pay the interest yourself. However, in the eyes of the IRS, your parents have gifted you the money to make the payment, and you have paid it yourself. So, if you meet all of the other requirements, you are entitled to the deduction, which can amount to as much as $2,500. This is taken as an adjustment to your income, so you do not have to itemize your deductions to benefit. See the <a href="http://www.irs.gov/pub/irs-pdf/i1040.pdf" target="_blank">Form 1040 instructions</a> (PDF) for more information.</p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/marla-walters">Marla Walters</a> of <a href="http://www.wisebread.com/16-great-tax-deductions-you-may-have-overlooked">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-on-last-years-taxes-right-now">Save on Last Year&#039;s Taxes Right Now</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-tax-deductions-you-can-never-take">3 Tax Deductions You Can Never Take</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes tax deductions Tue, 01 Mar 2011 14:00:09 +0000 Marla Walters 498228 at http://www.wisebread.com How to Donate a Car to Charity http://www.wisebread.com/how-to-donate-a-car-to-charity <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-donate-a-car-to-charity" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/rusted_car.jpg" alt="Rusted car" title="Rusted car" class="imagecache imagecache-250w" width="240" height="160" /></a> </div> </div> </div> <p>I just love tax time, don't you? I mean, getting to count up all those receipts, fill out those boring forms, and talk to accountants: What could be more fun? Well, there is one good thing about this time of year &mdash; getting a refund check back from the government.</p> <p>For most of us, getting a tax refund usually involves having deductions that reduce our taxable income...and if you have a car parked in the driveway that isn't worth much, it could become a nice tax deduction for you. If that isn't enough, you also get the satisfaction of knowing that you are helping support a charity that is likely in desperate need of your donation (as many are these days). Even though we are past the point of deducting a car in 2010, it is always good to be planning ahead for when you are <a href="http://christianpf.com/free-state-income-tax-filing-online/">filing your taxes</a> next year!</p> <h3>Tax Rules for Donating A Car</h3> <p>There have been some changes to the tax rules for donating a car. In previous years, people were able to write off the car for the fair market value of the vehicle. But people were claiming a lot more money than their cars were worth, so the process had to change. Due to the fraudulent behavior, the government was losing great amount of money, and you know Uncle Sam doesn't like that!</p> <p>Under the new system, if you state that the car or vehicle is worth more than $500, you also need to record how much money the charity you chose sold it for (when I last donated a car to charity, the charity sent me a notice in the mail with this info). So if the charity sells your car for $1,000, then you can deduct $1,000. If they sell it for $1,500, then you can deduct that amount from your taxes.</p> <h3>Things to Have Ready</h3> <p>In order to donate your car, you have to take care of a few things. You need to be sure that you have the car title. If you don't have a copy of the title, you can get a duplicate by contacting the DMV. You also have to make sure the car registration is up to date. If you have not driven the car for several years, the registration is probably not valid.</p> <h3>Choosing the Charity</h3> <p>The charity has to be a 501(c)(3) registered charity recognized by the IRS. The IRS website has a page where you can <a href="http://www.irs.gov/app/pub-78/">search for charities</a> in your area. Once you choose your charity, contact them, and let them know you want to donate your car. If the charity is near where you live, you can drive the car there yourself. Or if you live farther away from where the charity is located, you can have somebody come out and pick it up for you. I suggest checking out <a href="http://CharityNavigator.org">Charity Navigator</a>&nbsp;to find out a little bit more about the efficiency of your charity before donating your old clunker.</p> <h3>Transferring Ownership</h3> <p>Whether you drive the car in yourself or have the car picked up, you'll need to sign over the title of the car to the charity. On the paperwork, write the word &quot;gift&quot; where it says to enter the sales price. Make sure you receive a copy of your receipt for the donation of the car. The receipt is absolutely necessary to get your tax deduction.</p> <p>Though it may sound obvious, make sure you clean out the car. Empty the trunk, glove box, and any other compartments in the car, because once she is gone, you probably won't see her again! Also, unless your state laws dictate otherwise, remove your license plates when you hand them over &mdash; the last thing you want is for them to get into the wrong hands and you find that you have an warrant out for your arrest because someone used your plates when they robbed a bank.</p> <p><em>Have you ever donated a car to charity? What was your experience?</em></p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>&nbsp;This guest post is by Bob Lotich of&nbsp;<a href="http://christianpf.com/">ChristianPF.com</a>, a website that approaches financial topics using timeless Biblical principles. Read more from ChristianPF.com:</p> <ul> <li><a href="http://christianpf.com/10-free-household-budget-spreadsheets/">10 Free Budget Spreadsheets</a></li> <li><a href="http://christianpf.com/top-10-best-laptop-computers/">Best 13-inch Laptops of 2010</a></li> </ul> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/bob-lotich">Bob Lotich</a> of <a href="http://www.wisebread.com/how-to-donate-a-car-to-charity">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-13"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/giving-to-charity-is-great-but-how-do-you-pick-one">Giving to Charity is Great. But How Do You Pick One?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-what-charities-do-you-give-to">Ask the readers: What charities do you give to?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/charitable-giving-give-in-order-to-receive">Charitable Giving: Give in Order to Receive</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Cars and Transportation charitable giving charity donate tax deductions Thu, 13 Jan 2011 13:00:10 +0000 Bob Lotich 453039 at http://www.wisebread.com Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation http://www.wisebread.com/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/goodwill.jpg" alt="Goodwill" title="Goodwill" class="imagecache imagecache-250w" width="240" height="171" /></a> </div> </div> </div> <p>If you've ever thought about moving during December, I have one contraction for you: don't. I was stupid enough to do so this year, taking the stress of hauling my belongings to a new apartment, finding a storage unit, and trying to remember how my bed frame fits together and adding it to an already busy schedule of shopping, baking, and holiday parties.</p> <p>There is, however, one great thing about moving during December: It forced me to go through my belongings and make a substantial goods donation to my local Goodwill store. Since Goodwill is a registered 501(c)(3) charity organization, I can deduct the value of what I donated to them when I submit my taxes in April (er, did I say April? March. I'll definitely get them in by March this year).</p> <p>If you're thinking of donating gently used clothing, furniture, or other items before the end of 2010, here's what you need to know:</p> <h3>Make Sure the Charity You Donate to Is Eligible</h3> <p>Not every thrift store is a registered 501(c)(3) organization. Before you donate your goods, call the store to make sure that donations to them are indeed tax deductible, and read more about <a href="http://www.irs.gov/publications/p526/ar02.html#en_US_publink1000229643">qualified organizations</a> on the IRS website.</p> <h3>Make a List of What You're Donating</h3> <p>Just in case you fall under the watchful, auditing eye of the IRS, always keep a detailed list of what you've donated so you can back up any deduction claims.</p> <h3>Be Reasonable in Estimating the Value of Goods</h3> <p>When you're figuring out how much to claim as a deduction, you need to estimate what the IRS refers to as the &ldquo;fair market value&rdquo; of each item. For example, if you're donating a used pair of jeans that you bought for $40, their fair market value isn't going to be $40 &mdash; more likely $3-$10. If you need help estimating the fair market value of your goods, take a walk around a thrift store and see how items are priced.</p> <h3>Give Useful Items</h3> <p>Charities like Goodwill have to go through a lot of stuff, and it makes their job even more difficult if you bring in your broken printer and pass it off as working just because you want to claim it as a tax deduction. If something is broken and unrepairable, don't give it to a charity to deal with.</p> <h3>Get a Receipt</h3> <p>Always, always, always get a receipt from the charity you're donating to. You can't claim your deduction without it.</p> <h3>Fill Out the Appropriate IRS Form</h3> <p>According to the IRS, &quot;If your total deduction for all noncash contributions for the year is over $500, you must complete section A of <a href="http://www.irs.gov/pub/irs-pdf/f8283.pdf">Form 8238</a>&quot; (PDF). If you are deducting one item that is worth over $5,000, you must complete Section B of the same form.</p> <p>So take a day to clear out your closets, and make sure to get your donations in by December 31. It'll help you have a happy new year with less taxes &mdash; and less clutter.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/meg-favreau">Meg Favreau</a> of <a href="http://www.wisebread.com/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-donate-a-car-to-charity">How to Donate a Car to Charity</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/charitable-giving-give-in-order-to-receive">Charitable Giving: Give in Order to Receive</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/109-random-acts-of-kindness-you-can-start-doing-today">109 Random Acts of Kindness You Can Start Doing Today</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-on-last-years-taxes-right-now">Save on Last Year&#039;s Taxes Right Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> General Tips Taxes charitable giving charity donating tax deductions Tue, 28 Dec 2010 13:00:10 +0000 Meg Favreau 411140 at http://www.wisebread.com 5 Ways to Save More Taxes in 2011 http://www.wisebread.com/small-business/5-ways-to-save-more-taxes-in-2011 <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/5-ways-to-save-more-taxes-in-2011-barbara-weltman" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/5-ways-to-save-more-taxes...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/5-ways-to-save-more-taxes-in-2011" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000001966978XSmall.jpg" alt="Working child" title="Working child" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>With the new year approaching, taxes continue to be an area of concern for many business owners. Here are some tried-and-true ways you can minimize your 2011 taxes so you can get a jump on the new year.</p> <p><strong>1. Adopt an accountable plan for reimbursing your employees. </strong></p> <p>If you meet IRS requirements, the reimbursements to employees for their travel and entertainment costs are not treated as additional compensation. This saves you employment taxes because the reimbursements are not subject to FICA or FUTA taxes. Employees like this arrangement because they do not have any income included on their W-2 form for the reimbursements.</p> <p>An <a href="http://www.openforum.com/idea-hub/topics/money/article/accountable-plans-are-win-win-taxwise-barbara-weltman">accountable plan</a> is an arrangement adopted by your company that requires:</p> <ul> <li>A business connection for the expense and that the expense is reasonable.</li> <li>Reasonable accounting by employees for the expenses.</li> <li>Repayment by employees in a reasonable time of all excess reimbursements they received.</li> </ul> <p>An accountable plan can be used for more than just travel and entertainment costs. As long as the accountable plan meets IRS requirements, it can be used for reimbursements of employee tools, uniforms, and other items.</p> <p>Details of accountable plan requirements are in <a href="http://www.irs.gov/pub/irs-pdf/p463.pdf">IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses</a> (PDF).</p> <p><strong>2. Keep receipts for vehicle expenses. </strong></p> <p>If you use your personal car, light truck, or van for business, you can rely on a fixed mileage rate set annually by the IRS to determine your write-off for business use of the vehicle. The rate for 2011 is 51&cent; per mile. However, if you keep receipts for gasoline, repairs, and other vehicle-related expenses, you can deduct your actual costs rather than relying on the IRS rate. The only way you&rsquo;ll know whether the IRS rate or the actual expenses result in a greater deduction is to compare the two at the end of the year.</p> <p>Either way:</p> <ul> <li>Be sure to keep a good record of your driving. Include the date, odometer reading, destination, and purpose of each trip. No deduction is allowed without this substantiation.</li> <li>You can deduct your parking fees and tolls as long as you have proof of what you paid.</li> </ul> <p><strong>3. Put children on your payroll. </strong></p> <p>If you have teenagers who live at home and can provide services for your business, you can pay them and save money for the family. They learn responsibility and job skills, and they can receive up to $5,700 of earnings in 2011&nbsp;tax-free. Plus you get work done that needs to be done, transforming a nondeductible allowance into deductible payments:</p> <ul> <li>The earnings paid to your child are a tax-deductible business expense.</li> <li>If you are a sole proprietor and your child is under age 18, you do not have to pay and FICA or FUTA taxes on their earnings.</li> </ul> <p>Keep good records of the time the child works and the work performed in case the IRS questions your return.</p> <p><strong>4. Choose the right retirement plan. </strong></p> <p>If you want to maximize your retirement savings for 2011, especially if you work alone and have no employees, consider using a 401(k) plan rather than a SEP. For example: You work alone, are under age 50, and have net earnings from self-employment of $100,000. If you create a 401(k) plan, you can add a total of $49,000 to the plan, comprised of $16,500 of salary reductions, the so-called employee share, plus $32,500 of employer contributions. (Those who are age 50 or older can add up to $54,500 to the plan in 2011.) In comparison, a SEP, which requires no annual reporting, would limit your annual deductible contribution to $18,587 ($20% of $100,000 reduced by one half of the self-employment tax, or $7,064).</p> <p>Details of retirement plans are in <a href="http://www.irs.gov/pub/irs-pdf/p560.pdf">IRS Publication 560, Retirement Plans for Small Business</a>&nbsp;(PDF).</p> <p><strong>5. Change accounting methods where appropriate. </strong></p> <p>There are a myriad of special accounting rules that can result in quicker write-offs, deferred income, or other tax-saving measures. For example: Your business has inventory and you currently use FIFO (a first-in first-out rule) to determine your cost of goods sold. If you change to LIFO (a last-in last-out rule), you may be able to minimize the income from inventory sales. When changing methods, some changes can be automatic as long as you file IRS Form 3115; some require IRS consent, which is requested by filing the same form. Be sure to work closely with your CPA or other tax advisor to survey the accounting method changes that might benefit your company.</p> <p>Details of changing accounting methods are in <a href="http://www.irs.gov/pub/irs-pdf/p538.pdf">IRS Publication 538, Accounting Methods and Periods</a> (PDF).</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/barbara-weltman">Barbara Weltman</a> of <a href="http://www.wisebread.com/small-business/5-ways-to-save-more-taxes-in-2011">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-15"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/101-tax-deductions-for-bloggers-and-freelancers">101 Tax deductions for bloggers and freelancers</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-the-one-skill-you-need-if-you-want-to-work-for-yourself">This Is the One Skill You Need If You Want to Work for Yourself</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Small Business Resource Center Taxes 401(k) hiring retirement plans small business tax deductions Sat, 25 Dec 2010 13:54:52 +0000 Barbara Weltman 392103 at http://www.wisebread.com