While most of us try to identify as many possible write-offs on our taxes that we possibly can each year, there are many qualified write-offs that are often overlooked. Recognize these obscure write-offs and get ready to optimize your next tax return:

• Job Seekers: Expenses related to job seeking can be a legitimate deduction on your taxes. Qualified expenses include phone calls, unemployment agency fees, resume preparation costs, travel and transportation fees, and career counseling services.
• Teachers: Any classroom related expenses such as books, computer equipment (including software and services), supplies, and other materials used in the classroom are legitimate deductions. Save your receipts!
• Home Office: If your home has a space solely dedicated to use as a home office, depreciations in home office equipment, computer expenses (if solely used for business purposes), and even the percentage of heat and electricity used by your home office are qualified deductions.
• Charitable Contributions: Any donation you make to a legally recognized charity is tax deductible, as long as it meets IRS standards. Double check charitable organizations to which you have donated to ensure they qualify.
• Military Personnel: Active military personnel qualify for many legitimate deductions regarding travel, uniforms, and educational expenses. Check with your tax professional to see which write-offs you can claim.
• First Time Home Buyer: As a first time home buyer, expenses such as property taxes and mortgage interest are legitimate deductions on your tax return.
• Energy Efficiency: Tax credits for using energy efficient appliances and heating systems are deductible in addition to alternative energy systems such as solar panels, wind turbines, and residential fuel cells. Energy saving home improvements such as insulation, lighting, windows, and roofs also qualify.

Identifying and claiming these additional tax write-offs positions the educated taxpayer for a greater return come April. Make sure you are claiming every possible deduction and limit the amount of money you shell out to Uncle Sam.

This article is for informational and educational purposes only.  It is not intended to provide legal, tax or financial analysis.  Please consult your attorney, accountant or tax advisor if you have legal, financial planning, or tax related questions.

While tax season is still a few months away, take some time today to set yourself up for an optimal filing with Uncle Sam. Donations and charitable giving are a great way to limit the amount you owe, and you might be surprised by the types of donations that qualify.

The simplest donation is of course cash. Most non-profit charitable organizations qualify. Keep all your receipts to make sure your itemized donation deductions are accurate. In addition to cash, property donations such as clothing, books, land, and even cars qualify.

The general rule of thumb is to deduct the fair market value of the item, although the rules for donating cars have changed recently from fair market value being determined by a blue book value, to the actual price the car is sold for at auction. For donations of cash or property under $250, merely holding on to the receipt is enough to qualify for a deduction. If the donation is between $250 and $5,000, you will need to explain how you received the property, when you received/created it, and your cost basis for the deduction. If the donation is over $5,000, then you will need a qualified written appraisal of the property in addition to everything else.

Look around your home today to identify items that may qualify for a donation deduction. Not only will you be helping charitable organizations continue to help those in need, but you can hold on to some of your hard earned money at the same time.

This article is for informational and educational purposes only.  It is not intended to provide legal, tax or financial analysis.  Please consult your attorney, accountant or tax advisor if you have legal, financial planning, or tax related questions.

As Benjamin Franklin once said, nothing is sure in life but death and taxes. We all contribute a sizeable portion of our wages to Uncle Sam, and the majority of us receive a portion of this back each year in the form of a tax refund. Planning ahead and using this money wisely is a great way to help settle your debt, particularly if placed in a structured savings account for use in debt settlement.

Many programs offered by today’s leading debt settlement companies allow clients to build funds in an F.D.I.C. insured special purpose savings account through a structured monthly budget. Once these funds have grown to an adequate level, the debt settlement company will then negotiate with creditors on the client’s behalf to settle outstanding accounts for a portion of the amount owed. The quicker these funds accumulate, the faster the debt settlement company can help clients settle their unsecured debt.

Although tax refunds can be a great way to pay for that next vacation or put a down payment on a new car, the most effective use of the money for a debt settlement client is to place it in their structured savings account. This allows the debt settlement company the opportunity to negotiate with creditors and use the funds to settle additional accounts, placing you that much further down the road towards financial independence.

So the next time you cringe at the amount of taxes being withheld from your paycheck, think of it as a form of debt resolution. In the long run, using this money to pay down your debts can bring you that much closer to the day you can finally say “I am debt free!”

If you’re like most Americans, you dread the annual period known as “tax season”. Adding up all those receipts, itemizing deductions, and accounting for all your yearly expenses is a painstaking and tedious task. Enlisting the help of a seasoned tax preparer, however, can make this process nearly pain free and is well worth the costs due to the likelihood of a greater refund.

As specialists in the specific laws, guidelines, and loopholes that can be found in the complicated U.S. taxation system, qualified tax preparers stand a greater chance of helping you optimize your annual tax return. In fact, according to the Government Accountability Office (GAO), an average savings of $438 is found through the use of a licensed tax preparer versus do-it-yourself filing. 

Perhaps the greatest way licensed tax preparers can help optimize your tax return is by helping you itemize your tax deductions, rather than simply listing the standard deduction for your tax bracket. Itemizing each specific deduction allows you to qualify for additional tax breaks that your preparer will identify according to your unique personal information and situation.

Additionally, tax preparers greatly reduce the risk of making errors on your tax form which can greatly affect the outcome of your return. See below for a list of the most common tax return errors a licensed tax preparer can help eliminate:

• Claiming the Wrong Filing Status: Claiming the wrong status could ruin your eligibility for the child tax credit, the earned-income credit, and exemptions for dependents.
• Omitting or Using Incorrect Social Security Numbers: The Social Security numbers you list for your dependents, the earned-income credit, and the child tax credit must match your dependents’ Social Security cards. Otherwise, the IRS will reject your credits and deductions.
• Failing To Use Correct Forms and Schedules: Think of the IRS as a vast bureaucracy that responds to the directives of an outdated computer system for audit direction. Using the correct forms for all your deductions is crucial for an optimal return.
• Failing To Sign and Date the Return: Technically, if you don’t sign the return, you haven’t filed. And, if you haven’t filed, you’re going to be subject to all kinds of penalties, not to mention interest on any amounts not paid in full. Don’t forget, both spouses MUST sign a joint return.
• Claiming Ineligible Dependents: When the IRS started requiring Social Security numbers for claimed dependents, millions of dependents disappeared. In any case, the qualification criteria to claim a dependent are very specific.
• Not Using the Earned-Income Credit: Unfortunately, because it is one of the most convoluted provisions in our tax code, the IRS reports failure to claim the earned-income credit as one of its top taxpayer mistakes.
• Failing To Report All Income: Not all income is reported on a W-2 form or a 1099. The fact that there’s no reporting to the IRS doesn’t prevent the agency from auditing your receipts and reconciling your bank deposits with your reported income. Unreported income can even lead to civil and criminal sanctions.
• Failing To Check For the Alternative Minimum Tax: The AMT, or “Awfully Mean Tax” as the industry refers to it, was created to catch high-income taxpayers who used allowable deductions and credits to greatly reduce their tax liability. Unfortunately, because it hasn’t been updated to reflect inflation since the original bill was passed, the AMT was projected to hit about 19 million families in 2007.

In addition, most reputable tax preparers offer some form of protection or guarantee of an accurate return. Coupled with increased chances for a greater return, the use of a licensed tax preparer can have huge returns for most individuals and families.

This article is for informational and educational purposes only.  It is not intended to provide legal, tax or financial analysis.  Please consult your attorney, accountant or tax advisor if you have legal, financial planning, or tax related questions.

Have you ever had the unpleasant – but increasingly common experience of finding that your credit card provider has boosted your annual percentage rate (APR) without warning or explanation? Do you suspect that the grace period for making payments has been steadily shrinking? Does it seem as though the bank is applying your payments in such a way as to maximize interest charges? In other words, do you have the helpless feeling that you’re being taken for a financial ride?

Good news! Some welcome relief is in the works, courtesy of the U.S. government.

At the beginning of May, the Federal Reserve Board proposed a set of new regulations that would help to protect consumers against the aforementioned practices and a number of others considered to be unfair. These rules, proposed for public comment under the Federal Trade Commission Act, are a follow-up to the board’s 2007 proposal for improving credit card disclosures under the Truth in Lending Act.

The proposal includes five major protections for credit card users. (Note that although we’ll use the term “bank” throughout, these rules would also apply to other institutions such as savings associations and federally chartered credit unions.)

1. Rates on Preexisting Balances — Banks would be prohibited from increasing the APR on a preexisting balance (except under certain limited circumstances), and would have to permit the consumer to pay off that balance over a reasonable period of time.
2. Above-Minimum Payments — Banks would not be permitted to apply payments over the minimum in a way that maximizes interest charges.
3. Discounted Promotional Rates — Banks would be required to extend the full benefit of discounted promotional rates by (1) applying payments over the minimum to any higher-rate balances; and (2) offering a grace period for purchases for which the consumer is otherwise eligible.
4. “Two-Cycle” Billing — Banks would be prohibited from assessing interest charges using the “two-cycle” method, which calculates interest on balances on days in billing cycles preceding the most recent one. (In effect, the cardholder gets hit with a double whammy because interest is charged retroactively to the date of purchase—even if it’s the month before.)
5. Reasonable Payment Time — Banks would have to give consumers a reasonable amount of time to make payments.

Also included are regulations affecting payment of deposit account overdrafts, whether they’re created by a check, an ATM withdrawal, a debit card purchase, or some other type of transaction. Financial institutions would be required to provide consumers with notice and an opportunity to opt out of overdraft payments.

According to a Federal Reserve Board member, these and other proposed rules “would provide the benefits of substantial protection against practices that can harm consumers.” At a time when consumers are under relentless financial pressure on so many fronts, it’s reassuring to know that someone is watching our backs.

Did you know that if you find extra savings and put it towards your debt settlement program, we’ll be able to settle your debts faster? Here are 66 different money saving tips to help you find some spare change!

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