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Current Mileage Tax Deduction for 2011, 2012

Business Purposes

As of July 2008, you are able to deduct up to 58.5 cents per mile driven for business. This is almost a 9 cent increase from the previous amount allowed. This amount covers cars, vans, pickups, or panel trucks.

This deduction can be used if you are an employee of a company and use your own vehicle or if you are self-employed. This amount for 2011 will be 51 cents per mile as the piece of gas has decreased.

Medical & Moving Purposes

You may deduct mileage for either one of these expenses. For 2011this amount will be 19 cents per mile. Your move must be related to the start of new work, at least 50 miles farther from your previous home, and you must work full time for at least 39 weeks during the first 12 months after your move. To deduct medial related mileage expenses then the medical appointment must fall under deductible medical expenses.

Charitable Driving Purposes

You may deduct up to 14 cents per mile driven for charitable purposes. This amount will remain unchanged. The organization that the driving is done for must be a qualified organization and you must be using your vehicle to provide some type of free service to the organization.

 

To find even more mileage deductions, visit TurboTax online.TurboTax online offers maximizers to get you the most savings possible.

 

2011, 2012 Tax Credit for New Windows

Unfortunately if you installed new energy efficient windows in 2008 then you will not be able to take advantage of the new energy tax credit signed into law on February 17, 2009.

To qualify for the new 30% credit then the windows must have been placed in service between January 1, 2009 and December 31, 2010. The previous energy credit expired before 2008 so if you put off putting in those new windows then you may have made a smart choice.

As of January 1^st, 2009 any new windows that are installed and qualify as energy efficient could earn you up to a 30% credit of your purchase.

This credit will not cover the cost of installation or sales tax. The whole goal of the new plan is to reduce the amount of electricity and natural gas that we use. So don’t forget about the savings you will receive in energy costs.

The windows must have U-Value of .30 or less and a SHGC of .30 or less. The U-Value is designed to measure the amount of heat transmission through the window. The lower the U-Value the better.

The SHGC will measure how the window blocks heat from the sun. The lower the amount of SHGC the better. If you have trouble determining these values then keep an eye out for the Energy Star logo. These items are sure to qualify for the credit. So if you have put off any energy efficient purchases this will be the year to take advantage of the credits offered for these purchases.

TurboTax online takes the worry out of deciding which forms to use to claim this credit. Just answer a few simple questions and TurboTax will fill out the forms for you.

 

College Tax Credit for 2011, 2012

College Tax Credits

College Tax credits can provide a great savings for students and their families.

There are currently two different programs that allow you to take a tax credit rather than just the regular deductions.

Hope Credit

The Hope Credit will provide a credit for your first two years of higher education. To be eligible for this credit you must meet the following guidelines.

• Must be currently enrolled in college at least half-time.

• You must not have completed more than two years of undergraduate classes.

• To receive the entire credit of up to $1,800.00, your income must be below $48,000.00.

Lifetime Learning Tax Credit

This credit is different from the Hope Credit as you can claim this credit for your entire college career. For this credit the following rules apply:

• The credit will allow you to claim up to 20% of expenses paid for tuition.

• Your income must also be below $48,000.00 to take the full credit.

• The maximum credit will allow you to take up to a $2,000.00 credit.

Both of these credits can be claimed on your federal tax return by completing either form 1040 or form 1040A. You are not able to take both of these credits at the same time and must pick one. These credits will allow you to reduce your federal tax liability dollar for dollar before your taxes are calculated. Taking either one of these credits could be more beneficial for you than taking the deductions so be sure to find out if you are eligible for these credits.

TurboTax Online offers free tax calculators. Visit TurboTax Online to find out if you qualify for any college Tax Credits.

 

Energy Efficient Windows Tax Credit 2011, 2012

What makes a window “energy efficient”?

There are many components to a window that make it energy efficient. The frames of the windows have been improved to reduce heat transfer and insulate the window better. The windows come with a coating that reflects infrared light that helps keep the heat inside and to prevent heat from getting in during summer months. If you have purchased double pane windows than you may be surprised to learn that a special non-toxic gas has been inserted between the panes that will insulate much better than air. They have also developed new edge spacers that will help reduce the flow of heat and to help prevent any condensation.

What does this mean for you?

If you plan on purchasing energy efficient windows this year then you may be able to take advantage of a great new tax credit aimed. This credit will be applied against any new window purchasing during the upcoming tax year that qualifies as energy efficient. You could receive a tax credit for up to 30% of your window purchase that caps out at a $1,500.00 credit. The windows must be placed in service from January 1^st, 2009 through December 31, 2010 The windows must be federal guidelines to be considered energy efficient.

To learn more about the energy efficient guidelines, visit TurboTax Online. Just answer a few simple questions and TurboTax will determine the amount of credit you are eligible for.

 

What is a Ponzi Scheme?

The words Ponzi scheme have recently been heard all over the new with the arrest of Bernie Madoff. Many Americans are unfamiliar with what a Ponzi Scheme actually is.

A Ponzi Scheme is when the operator of the scheme attracts investors by offering large returns on their investments. They even offer guarantees on the amount of returns which makes these businesses hard to turn away. The operator essentially takes the investors money and does not invest it at all. They simply keep on collecting more money and using other people’s investments to pay out returns. This scheme will bring in a lot of money but will fall apart as soon as the cash flow slows down.

Many Americans have lost their entire life savings in the latest Ponzi scheme that was operated by Bernie Madoff. He has been convicted of the largest scheme of it’s kind in American history. He managed to swindle investors out of almost 65 million dollars.

If you or someone you know has lost money in a Ponzi scheme, the government has recently made changes to tax laws to allow you to reclaim a small portion of your investment losses. The investment loss can be claimed on your return as theft, capital loss, or as phantom income. This will allow you to deduct your losses in a fraudulent business such as this. Taking this deduction could possibly help you regain almost 30% of your original investment.

For more information on Ponzi scheme losses, visit TurboTax online.

College Tax Deduction for 2011, 2012

There have been some new additions to the list of deductions you can take if you have paid college tuition. Starting out this year you can deduct up to $4,000.00 dollars of tuition paid. This is the maximum amount that can be claimed annually. The amount does not change based on family size or how many individuals in the family are currently enrolled in college.

Of course there are some requirements that must be met:

• If you are married, you must file jointly. You are ineligible for this deduction if you are married and file separately.

• If you are single your adjusted gross income must be below $65,000.00 to qualify for the whole amount. Your deduction will be reduced as your income exceeds this amount.

• The individual taking the deduction cannot be claimed on anyone else’s return.

• This deduction cannot be taken if you have paid your college expenses with earnings that are from a Section 529 plan or from a Coverdell Education Savings Account.

 

If you are not familiar with a Section 529 plan, it is a state sponsored college savings plan that is aimed at provided a tax advantage. There are two different types of 529 plans. They are a prepaid tuition plan and a college savings plan.

Prepaid Tuition Plans

Prepaid tuition plans will let you buy a future college education at the current prices. There can be plan fees involved, depending on when you start the plan and when you intend to use it.

College Savings Plan

A college savings plan will allow you to contribute money that will be tax-deferred and all withdrawals will be tax free if they are used for educational expenses. College savings plan will only allow you to contribute so much annually.

To learn more about college tuition deductions, visit TurboTax Online. TurboTax Online offers free deduction maximizers.

 

Special Needs Adoption Tax Credit for 2011, 2012

The special needs adoption tax credit will provide a credit for adoption expenses in regards to the adoption of a special needs child. The credit is used to reduce your tax liability. It will not provide you a refund but the credit can be carried over in to future tax years to reduce your tax liability.

A special needs child is considered one of the following:

• Older Children

• Minority Children

• Sibling Groups

• Children with Medical Needs

• Physical Handicaps

• Mental Handicaps

• Test Positive for HIV

• Forms of Pre-Natal Exposure to Drugs or Alcohol

They do not necessarily have to be disabled to be considered special needs in regards to adoption. Most of the time these children are in foster care and are above the age of five.

The credit can be applied against any adoption related expenses that are considered qualifying expenses. Such as; attorney fees, adoption fees, travel expenses, etc. The maximum amount that can be claimed is $12,150.00 per adoption. The full credit can be taken for special needs children even if the expenses do not reach the limit.

If the adoption is an international adoption then you will not be able to claim the credit until the adoption is finalized and the child becomes a United States citizen. If the adoption is a domestic adoption then you can claim this credit even if the adoption does not go through. The special needs adoption tax credit does not apply if the child is your spouse’s child that you are adopting.

If you are planning on adopting a special needs child, visit TurboTax Online for more helpful information.

 

Federal Adoption Tax Credit Amount for 2011, 2012

If you are planning on adopting a child then you may be able to receive a tax credit. The credit will apply for expenses that were paid in the previous year that the adoption was finalized if the adoption was a domestic adoption and not an international adoption.

The following is a list of qualifying expenses:

• Adoption Fees

• Court Costs

• Attorney Fees

• Necessary Travel Related Expenses

The expenses must be incurred while adopting a qualifying child. This means that the child must be under the age of 18 and a United States citizen. The child will qualify once the adoption is finalized if they were not previously a United States citizen. The credit will not include adoption expenses if you are planning on adopting your spouse’s children.

How Much?

The total credit that is allowed to be taken is $12,150.00 per qualifying adoption. This is not an annual amount and will apply to each adoption. This credit can be applied over a six year period or until the cap is reached. To take this credit you will need to complete Form 8839. You must be sure to deduct any contributions made by your employer. You may also be able to receive tax benefits from your state as well so be sure to check that out as well. This credit can still be taken if the adoption is never finalized as long as the adoption was domestic. The credit amounts will begin to decrease if your income exceeds $182,180.00.

To learn more about the Federal Adoption Tax Credit, visit TurboTax Online. TurboTax Online will provide you with all of the up to date adoption credit information.

 

Education Tax Benefits for 2011, 2012

There have been some new and improved credits and deductions allowed for student and their families. If you are not familiar with these you may be losing out on huge savings when it comes to your tax bill.

Hope Credit

This scholarship was recently improved and now provides almost a $700.00 increase. You can also claim this credit for four years versus the previous two year maximum. This credit can also be taken for each individual in the family that attend college.

Lifetime Learning Tax Credit

The Lifetime Learning Credit will allow you to take up to a $2,000.00 for any higher education expenses. This credit will be more beneficial to you if you have only one person in your family that will be attending college as the Hope Credit will allow you to take for each individual as the lifetime learning credit will only allow a certain dollar amount.

Student Loan Interest

This is a very easy deduction to take as you do not have to itemize for this one. You can deduct up to $2,500.00 in student loan interest. If you have high income levels this amount will begin to decrease.

Tuition Deduction

You can deduct up to $4,000.00 of your tuition expenses without itemizing. You may not take this deduction if you claimed a education tax credit. If you have high income levels then this would probably be the best option to choose.

 

There are many more benefits available, to learn more visit TurboTax Online.

How to save more money in 2009

Many Americans are looking to save more money and cut their losses as a result of the slow economic situation.

Stocks & Bonds

If you have noticed a loss in your stocks and bonds, try and hang in there as long as you can. If you do not need this money immediately then try to leave it where it is. You will not actually incur a loss until you sell these stocks and bonds. So wait if you can and things should get better.

Taxes

There are many new tax credits and deduction that can offer a larger than expected tax return. Many services are offering great deals on tax preparation as well. TurboTax online is currently offering free filing services for simple returns. As well as guarantees that you will receive the largest return possible.

First Time Homebuyer

If you are a first time homebuyer, then now is the time to take advantage of the new home buyer’s tax credit. This credit is essentially an interest free loan. You can take this new credit of up to $8,000.00 and pay down some of your interest bearing debt. This could save you a lot in interest charges that can easily be avoided.

COBRA Insurance

If you have recently become unemployed, then you may receive some assistance from the government to cover your COBRA premiums. The new plan could help pay up to 65% of your portion of premiums for a limited amount of time. These premiums are usually pretty high so make sure not to miss this one.

To file your free return, visit TurboTax Online. TurboTax Online offers free tax advice and return calculators.

Help Paying for College

There are many options to help you ease the pain of paying for college.

Section 529

A Section 529 plan can help you prepare for the expense of paying for your child’s college tuition. The standard 529 plan allows you to prepay for college at the current rate for future use. This plan also allows the plan to be free from federal income tax. These plans are increasing in use as the price of college continues to increase annually. If this money is withdrawn for any other purpose than to pay for higher education, the funds will be taxed again.

Coverdell Education Savings Account

This is a type of savings account that will allow you to deposit up to $2,000.00 annually to save for college. Using this type of savings account will allow you to deposit this money and let it grow at a tax free rate. This plan also offers a tax penalty for withdraws for any other reason than higher education expenses.

College Tuition Tax Breaks

There are new tax breaks that allow you to deduct up to $4,000.00 of your college education expenses.

Qualified expenses include:

• Tution

• Books

• Course-related supplies

With the rising cost of college tuition, now is an important time to start saving for the future but if you are already paying for college and did not plan ahead then take full advantage of all the available deductions. These tax deductions are fairly simple to take and can put money back in your pocket.

To learn more about college tuition tax savings, visit TurboTax Online.

New Tax Breaks for 2011, 2012

As we approach the tax deadline we are all looking for those last minute tax breaks that may have been overlooked.

You may have found yourself in a new situation that will allow for new tax breaks such as being unemployed or a new homeowner.

Unemployed

If you have recently lost your job in the previous year then there are some new deductions you can tax if you want to take the time to itemize. You can deduct any job search related expenses as long as you are searching for a new job in the same area as your previous position. The following expenses could be eligible for deduction:

• Travel

• Telephone Usage

• Out of Town Lodging

• Resume Preparation Assistance

• Health Insurance Premiums (from the time you became unemployed

New Homeowner

If you have purchased a home in the previous you are now able to take a credit of up to $7,500.00. This credit is a little different as you are required to repay the credit over the next fifteen years. The good thing about this credit is that it is interest free. There is also a new credit under the stimulus package that will not require that you pay it back. So if you have purchased recently or you are thinking about, now would be an excellent time in order to receive this credit.

There are also those credits and deductions that are often overlooked such as the earned income credit, real estate taxes, and the child tax credit. An online tax preparation service such as TurboTax online can be a great to help you ensure you don’t miss anything.

Visit TurboTax Online to make sure you are getting all of the credits and deductions you are entitled to.

Moving Scams in 2008, 2009

With the recent economic downturn, many Americans have been forced to move out of their homes and this has increased business for many moving companies as long as they are a legit moving service. As if it weren’t hard enough to lose your job, then your home, and then be scammed by someone you hired to help.

There are new scams out there that can cost you big time if you do not research the moving company that you have hired. There are a number of deceiving ways these companies are taking money from your pocket.

A Hostage Scam

This scam is where there moving company will give you a very low discounted estimate to move your things and then once they have all of your stuff loaded in their trucks they find some reason to increase the rate. You are left without many options in this situation if you hope to get your things back.

The Company Goes Bankrupt

As with many companies, moving companies are also experiencing financial difficulties and they too are going out of business at an alarming rate. If your items are loaded up on their trucks and set to be delivered when the company realizes it can no longer stay open, then your stuff will most likely be abandoned in a storage facility somewhere. If you are able to locate your items then be prepared to pay a hefty fee to get them returned.

So be sure to get a copy of the full contract that is signed before allowing your items to be picked up. Also, remember that if you have moved recently there are many new tax breaks that can save you money if you have had to move. This could ease your situation a little bit.

To learn more about moving expense deductions, visit TurboTax Online.