Deducting Charitable Contributions

  • Tax Tips about Deducting Charitable Contributions
    When you give a gift to charity that helps the lives of others in need. It may also help you at tax time. You may be able to claim the gift as a deduction that may lower your tax. Here are eight tax tips you should know about deducting your gifts to charity:
    1. Qualified Charities. You must donate to a qualified charity if you want to deduct the gift. You can’t deduct gifts to individuals, political organizations or candidates
    2. Itemized Deduction. To deduct your contributions, you must file Form 1040 and itemize deductions. Benefit in Return. If you get something in return for your donation, your deduction is limited. You can only deduct the amount of your gift that is more than the value of what you got in return. Examples of benefits include merchandise, meals, tickets to an event or other goods and services.
    3. Donated Property. If you gave property instead of cash, the deduction is usually that item’s fair market value. Fair market value is generally the price you would get if you sold the property on the open market.
    4. Clothing and Household Items. Used clothing and household items must be in at least good condition to be deductible in most cases. Special rules apply to cars, boats and other types of property donations. Records to Keep. You must keep records to prove the amount of the contributions you made during the year. The kind of records you must keep depends on the amount and type of your donation. For example, you must have a written record of any cash you donate, regardless of the amount, in order to claim a deduction.
    5. Donations of $250 or More. To claim a deduction for donated cash or goods of $250 or more, you must have a written statement from the charity. It must show the amount of the donation and a description of any property given. It must also say whether the organization provided any goods or services in exchange for the gift.

Child and dependent care tax credit

  • Reduce your taxes with child and dependent care tax credit
    The Child and Dependent Care Tax Credit can reduce the taxes you pay.
    Child, Dependent or Spouse. You may be able to claim the credit if you paid someone to care for your child, dependent or spouse last year.
    1. Work-Related Expense. The care must have been necessary so you could work or look for work. If you are married, the care also must have been necessary so your spouse could work or look for work. This rule does not apply if your spouse was disabled or a full-time student.
    2. Qualifying Person. The care must have been for “qualifying persons.” A qualifying person can be your child under age 13. A qualifying person can also be your spouse or dependent who lived with you for more than half the year and is physically or mentally incapable of self-care.
    3. Earned Income. You must have earned income for the year, such as wages from a job. If you are married and file a joint tax return, your spouse must also have earned income. Special rules apply to a spouse who is a student or disabled.
    4. Credit Percentage / Expense Limits. The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on the amount of your income. Your allowable expenses are limited to $3,000 if you paid for the care of one qualifying person. The limit is $6,000 if you paid for the care of two or more.
    5. Dependent Care Benefits. If your employer gives you dependent care benefits, special rules apply.
    6. Qualifying Person’s SSN. You must include the Social Security Number of each qualifying person to claim the credit.
    7. Care Provider Information. You must include the providers information in your return.

Health Care Tax Credit for Small Business

  • Small Business Health Care Tax Credit
    Do you own or run a small business or tax-exempt group with fewer than 25 full-time employees? If you do, you should know that the Small Business Health Care Tax Credit can help you provide insurance to your employees. You may be able to save on your taxes if you paid for at least half of their health insurance premiums.
    A small business tax credit may be available for employers who purchase insurance coverage through the Shop Marketplace and who have less than 25 employees. The credit could be worth up to 50% of the insurance plan’s premium cost. The employer paid portion of the insurance plan’s premium cost is deductible on the employer’s business tax return; however, the amount deducted would be reduced by the amount of small business tax credit allowed.

Itemize your Deductions

  • Itemize your Deductions

There are two options the government gives you: standard deduction or itemized deductions – the standard deduction changes depending on your filing status. If you itemize all your allowed deductions from medical expenses to charitable donations, etc. plus your mortgage interest, which can be written off entirely. All these could be a large amount of money. Perhaps even more than your standard deduction. It is worth looking into this carefully to get all the benefits you can get.

Pay for Medical Expenses with a Flexible Spending Account.

  • Pay for Medical Expenses With a Flexible Spending Account
    Many employers offer Flexible Spending Account (FSAs) and they can be a valuable tool for lowering your tax bill by shielding the money you pay for medical and child care expenses from taxes. A health flexible spending arrangement (FSA) allows employees to be reimbursed for medical expenses. FSAs are usually funded through voluntary salary reduction agreements with your employer. No employment or federal income taxes are deducted from your contribution. The employer may also contribute.A flexible spending account allows you to set aside part of your salary on a pre-tax basis.

How to get the maximum tax refund?

how to get the maximum tax refundHow to get the maximum tax refund?

The number one question from our  Daytona clients, is how to get the maximum tax refund? That is a top question that all taxpayers have.  Here are 5 top tips to get the maximum tax refund.

  • Increase Your Retirement Savings
    Contributions made with pre-tax dollars helps to lower taxable income for each year that is contributed to the plan. Contributions to a 401(k) plan offered by an employer is a smart way to protect income from taxes and build up savings for the future. Making contributions to an individual retirement account (IRA) works, too. Up to $ 18,000 can be put into a 401 (K) each year (up to $ 23,000 if you are 50 or older). That income of $ 18,000 does not count as taxable income, however you will get taxed when you distribute the funds from your 401(k), and that income you will receive from is taxable.
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