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Ten Common Mistakes Tax Filers Make

Don’t you hate that thought of getting your taxes done only to realize later that you make a common mistake that could cost you time or money? The tax code seems to be getting more and more complicated every year (500 changes alone in 2008), and we all seem to be strapped for time these days. Here are 10 mistakes we see taxpayers make all the time which could put a few dollars in your pocket this tax season. 1) If you are single and are caring for an elderly parent, you should investigate seeing if you qualify for ‘head of household’ for your filing status. As a general rule of thumb, you should be paying for 50% or more of the elderly parent’s expenses. 2) You should make sure you have kept track of your charitable mileage that you drove during the year. Eligible miles will have a .14 cents on the mile write off on your tax return ...

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What If I Do Not File My Taxes?

I am still amazed about how many people call us or come into our office having not filed their taxes for multiple prior years.   Some people file for an extension ever year at tax time, while others work feverishly to get them done by April 15th.  What happens if you don’t file your taxes? Obviously, we don’t ever recommend using this as a strategy.  As the famous saying goes, the only thing you can count on in life are death and taxes.  Beyond the interest you will owe for failure to file/failure to pay/underpayment issues, there could also be a number of penalties that you could face as well. Criminal Fraud – Unless you want the old Wesley Snipes issue, evading pay taxes is illegal anyway that you slice it up.   It’s my opinion that the IRS is going to get even tougher on these non-taxpayers, and if you are found guilty you could be subject to massive court determined ...

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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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