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Creative Tax Deductions

Here are a few tax deductions that may make sense if you are looking for some creative deductions.   Always consult a CPA or qualified accountant before taking any of these deductions. Moving the family pet.  The IRS says if you are changing jobs and meet a couple of tests, you can deduct your moving expenses — including the cost of moving your dog, cat or other pet from your old residence to your new home. Your pet — be it a Pekingese or a python — is treated the same as your other personal effects. Wrecking a car while driving drunk.  A reveler drank too much at a party and had the good sense to arrange a ride home. A few hours later, after slowing down in his revelry, he thought he was okay to drive. Unfortunately, the vehicle he was operating slid off the road and rolled over. The cops arrested him for drunken driving because his blood alcohol ...

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Capital Gains On Your Primary Residence?

If you sell your main home or primary residence, up to $250,000 may be excluded from your income.  The amount jumps up to$500,000 for married couples that sell their primary residence. In order to meet the primary residence exclusion requirement you must meet the following requirements: You owned the residence for any two of the last five years. You occupied your residence for any two of the last five years. You haven’t used the capital gains exclusion within the last two years. If you are married you need to meet the following requirements: You are married and file a joint return for the year. Either you or your spouse has owned the residence for at least two out of the last five years. Both you and your spouse have used the home as your principal residence for two out of the last five years. Neither you nor your spouse has used the tax exclusion within the last two years. The required 2 years ...

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Rental Income: Here Is The Bad News

Attention owners of rental homes and properties . . . You aren’t going to like one of the tax changes that appears to be on the horizon for 2011 as part of the revenue offset of the recent Small Business Jobs and Credit Act of 2010. The legislation would require an IRS Form 1099 for rental property expense payments.  The provision would subject all recipients of rental income from real estate to the 1099 reporting requirement, with the exception for taxpayers that rent their principal residence on a temporary basis, receive minimal amount of rental income, or would experience a hardship under this provision.  This provision would give the Department of Treasury the authority to determine what constitutes a “minimal amount” of rental income and what constitutes a “hardship.”  According to JCT, this provision would increase revenue by $2.546 billion over 10 years.  (source:  www.gop.gov/bill/111/2/hr5297senateamendment) In simple terms, the bill makes recipients of rental income fall underneath the same information ...

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Why Doesn’t The Government Understand The 80-20 Rule?

I spent many years of my life running and leading sales organizations. One of the principles I learned along the way is sometimes referred to as Pareto’s principle.  This principle is also known as the 80-20 rule, the law of the vital few, and the principle of factor scarcity.  It states, for many events, that 80% of the effects come from 20% of the causes. (source: Wikipedia). Italian economist Vilfredo Pareto observed in 1906 that 80% of the land in Italy was owned by 20% of the population, and developed the principle by studying that 20% of the pea pods in his garden contained 80% of the peas. In modern theory, many businesses will often share with their sales force that 80% of the sales come from 20% of the clients. In the past year, we have heard all sorts of ideas from politicians about how to fix the recession, restore jobs, and get the economy moving again in the ...

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