http://businessarticlesdirectory.com/ Articles at Business Articles Directory | Small Business Articles en-us http://businessarticlesdirectory.com/finance/taxes/strategy-to-reduce-capital-gains-tax-exposure.html http://businessarticlesdirectory.com/finance/taxes/strategy-to-reduce-capital-gains-tax-exposure.html Tue, 11 May 2010 11:35:20 -0500
Any profit realized by an American Citizen from the sale of an asset is usually taxable as a capital gain. This type of tax is often associated with the sale of real estate, stocks, life insurance policies in life settlements and bonds.

Charitable Installment Bargain Sales are a new strategy being used to reduce one's capital gains tax exposure. This strategy can actually produce a tax deduction where a taxable event would have traditionally occurred.

A Charitable Installment Bargain Sale occurs when an asset is sold at a discount from an asset owner to a charity. The difference between the asset's market price, which is established by an appraisal, and the actual sales price creates a charitable contribution. Consequently, the asset seller is entitled to a tax deduction. The charity then pays the asset seller in installments over a predetermined amount of time.

Once an asset is purchased by a charity, it can be resold or held. The asset's seller is paid in installments usually funded by an annuity. The charity benefits by obtaining a valuable asset at a discounted price.

Charitable Installment Bargain Sales can be utilized for a variety of asset classes. Recently, Charitable Installment Bargain Sales have gained traction in the life settlement industry. Real estate also represents a good opportunity for the tax strategy as an alternative to 1031 exchanges.

Charitable Installment Bargain Sales will not be the most appropriate solution for every asset sale. However, it is always prudent to identify ways to retain more of an asset's profit and to fully understand the options available. Then asset sellers can move forward armed with the most educated strategies. ]]> http://businessarticlesdirectory.com/finance/taxes/a-look-at-the-history-of-the-income-tax.html http://businessarticlesdirectory.com/finance/taxes/a-look-at-the-history-of-the-income-tax.html Fri, 07 May 2010 14:39:23 -0500
The drafters of the US Constitution called for a tax to be imposed on US citizens. Article 1, Section 8, Clause 1 specifies that Congress can levy a tax on citizens. The first income tax was put in effect during the US Civil War in the 1800s. This tax enacted in the Revenue Act of 1861 established a three percent tax on income over $800 and helped fund the war efforts. The tax was active only one year before it was abolished.

Federalist Alexander Hamilton explored the constitutionality of the income tax in Article 33 of his Federalist Papers. He advocated that the Necessary and Proper Clause of the Constitution established the grounds necessary to allow the federal government to collect tax on its citizens.

Since then, the court system has held that taxes directly to the people and property are acceptable under the law. Since the inception of federal taxes in the 1800s, we have come to know many types of taxes. For example, we pay Social Security, Medicare and employers pay payroll taxes. However, most of our taxation comes from federal income tax.

In 2008 alone, more than 150 million income tax returns were sent to the Internal Revenue Service (IRS). Lately, the IRS has gotten stricter about attempting to collect back taxes. It is easy to make mistakes and find yourself in a financial pinch with the IRS. If you find yourself up against a tax audit, collections or outrageous penalties, contact a trusted tax resolution specialist. ]]> http://businessarticlesdirectory.com/finance/taxes/tax-return-online-a-good-method-for-all-of-you.html http://businessarticlesdirectory.com/finance/taxes/tax-return-online-a-good-method-for-all-of-you.html Wed, 28 Apr 2010 15:20:30 -0500
It is pretty important to note that it is one of the best methods of tax return. You can easily locate several websites on the net which will help you in each and every step. Now, we are going to talk about some of the positive aspects of tax return online.

Now, listed below are some of the benefits of online tax return.

1. Time and money

Every one understands that time and money both are essential. In fact, time is money for every one. One should never waste any extra time or money in this regard. Online tax return enables you to store your data using software without writing all your data manually. Thus, you can save a huge amount of time and money. It is important to note that appointing a professional for this job is more expensive than filing a return online. So, one can save a good amount of money as well.

2. Convenience

Yes, it is very true that this way of returning tax is pretty simple for each and every tax payer. Well, if you can internet through your home PC then you can conveniently file tax return online.

3. Reduction of errors

Once you start filing your tax return online, I can assure you one thing that your errors in tax filing would definitely reduce a great deal. It assists you easily appraise your tax file. Thus, you can recognize your mistakes and easily correct them. The tax return software would also do the basic calculations for you. So, there is no chance of any error being left out.

4. Tax refund in quick time

By filing online tax return then you can surely get access to your refund in pretty rapid time. The entire sum of money would be transferred to your account directly without a bother.

So, these are some of the benefits of online tax return. It is one of the best methods available with you. Make sure you go through this article properly. ]]> http://businessarticlesdirectory.com/finance/taxes/history-of-income-tax.html http://businessarticlesdirectory.com/finance/taxes/history-of-income-tax.html Tue, 27 Apr 2010 17:41:17 -0500
Article 1, Section 8, Clause 1 of the US Constitutions allows the United States Congress to impose an income tax on its citizens. But this wasn't used until the American Civil War in 1861. The Revenue Act in that year allowed for the collection of about a three percent tax on any income over $800. The tax act was repealed a year later in 1862.

Federalist Alexander Hamilton explored the constitutionality of the income tax in Article 33 of his Federalist Papers. He advocated that the Necessary and Proper Clause of the Constitution established the grounds necessary to allow the federal government to collect tax on its citizens.

The income tax has been challenged in US courts and has been found to be constitutional. Other taxes have been created since the 1800s including a tax for Social Security, Medicare and taxes businesses pay to employ personnel.

In 2008 alone, more than 150 million income tax returns were sent to the Internal Revenue Service (IRS). Lately, the IRS has gotten stricter about attempting to collect back taxes. It is easy to make mistakes and find yourself in a financial pinch with the IRS. If you find yourself up against a tax audit, collections or outrageous penalties, contact a trusted tax resolution specialist. ]]> http://businessarticlesdirectory.com/finance/taxes/how-to-document-your-home-office-deduction.html http://businessarticlesdirectory.com/finance/taxes/how-to-document-your-home-office-deduction.html Sun, 25 Apr 2010 06:23:48 -0500
Working from home has become very popular in the last few years and many people will not take the deduction simply because they will not take the time to document their expenses.

Don't lose out on your deduction. It's worth the effort to be able to take the tax deduction.

Keeping the proper records is necessary because the home office deduction is easily disallowed if you are not able to produce the correct documents.

Your home office deduction is calculated based on the percentage of your home that you use as office space. You need to know the total square footage of your home and the square footage of your office space.

Your office space consists of the space where you handle administrative tasks, storage space and the area where the actual "work" of your business is performed.

For example, lets say your business is the sale of bookcases that you build yourself. Your office space would consist of the office space where your computer resides, the storage space in the garage where you store the wood used to build the bookcases and the workshed in the backyard where you actually build the bookcases.

You should measure all three of these spaces to figure out the total square footage of your office space. Let's say the square footage of the three areas equals 400 square feet. Let's say the total square footage of your home is 4000 square feet so the business use percentage of your home would be 10%.

This number is important because you will deduct 10% of the expenses of your home. If you are renting your home, you can deduct 10% of your rent and 10% of your utilities.

If you own your home, you are able to deduct 10% of your mortgage interest, real estate taxes, utilities, home insurance, repairs, security system, home owners association dues, pest control and depreciation of your home.

Below are the documents your need to substantiate your home office deduction:

1. The Settlement statement from your home purchase which proves your depreciation deduction. 2. Mortgage Statement from the current year 3. Property Tax Statement from the city and the county 4. Utility Bills including Gas, Electric, Water, Sanitation, Internet 5. Home insurance statement 6. Receipts for Office Repair/maintenance like painting, pest control and carpet installation. 7. Receipts for repairs covering the whole house like heating/air conditioning system and roof 8. Receipts for Office furniture such as desks, chairs, bookcases and file cabinets 9. Receipts for Office equipment such as computers, printers, faxes, etc. 10. Receipts for Office Decor like Plants, paintings, posters, knick-knacks ]]> http://businessarticlesdirectory.com/finance/taxes/tax-season-ways-you-can-spend-your-returns.html http://businessarticlesdirectory.com/finance/taxes/tax-season-ways-you-can-spend-your-returns.html Sun, 18 Apr 2010 03:10:33 -0500 average tax refund that Canadians receive is approximately $1,400.

Many Canadians will use that money to go on a holiday or have a shopping spree; however, there are many other ways that you can put your tax refund to use. Your tax refund can help you get ahead with your personal finances.

Here are several, useful things you can do with your tax refund.

1. Invest it Why not put the money you just got back and invest it on your own future? Invest it into your mutual funds, or put it away into your retirement fund. Grow a nest egg that you can enjoy when you finally go into your well deserved retirement.

2. Pay Off Debts Owing money to creditors can bring a lot of unwanted stress and pressure. Use your tax refund to pay off debts and get your finances back in order. Even if the money isn't enough to clear all your debts, the money will reduce the principal and bring you that much closer to being debt free.

3. University Fund It's never too early to start saving for your children's education. Put it away into an RESP. With the rising costs of tuition, this may be one of the smartest moves you're doing to secure a bright future for them. In addition, it's a valuable lesson for your kids to plan ahead. As a result, when they find out they have a nice fund waiting for them to complete their education; they can focus on what's important, learning.

4. Home Improvement Have you been waiting for the right time to do that perfect renovation? Why not spend your return on improving your home? You can renovate your kitchen, change the bathroom, even change the overall theme of your house! This is a great way to breathe new life into your home, while increasing its value.

5. Save it. If all else fails, you can always first put it into a savings account, and worry about it later. At the very least, it will still earn some interest (even if it is at historical lows), and in the long run, compound interest will take its effect.

The number one reason why people file their taxes in the first place is so they can get their tax returns. Use the windfall to pay off some debt, save it for the future, or even dabble in some investing. This money is yours to spend as you will; however, using it wisely can help towards gaining greater financial stability. ]]> http://businessarticlesdirectory.com/finance/taxes/the-environmental-benefits-of-the-uk-govt-reducing-vat-on-all-insulation-to-5%25-hole.html http://businessarticlesdirectory.com/finance/taxes/the-environmental-benefits-of-the-uk-govt-reducing-vat-on-all-insulation-to-5%25-hole.html Fri, 09 Apr 2010 07:49:27 -0500
One group left out is the householder. Yet, under the credit crunch and falling market price of houses era we face, householders are likely to go the do it yourself route. Not surprising the Construction Products Association has seen the light and said it supports the extension of the reduced rate to those who decide to do renovations this way.

It has been noted that the market for thermal insulation has grown due to favourable regulation and rising energy prices. A reduced rate would enhance the appeal for this measure. A test mimicking the VAT exemption increased sales by 120 percent to reveal the potential of what is possible if this is done. This would lead to reduction in CO2 emissions.

As pointed out by the Construction Products Association many homeowners are able to install insulation by themselves. However, they would pay the full rate for such an effort under the current paradigm. As we know buildings are the biggest single energy-using sector and account for 40 percent of energy consumption in Europe

A study commissioned by EU has found that a reduced VAT rate on insulation products might not be passed through fully by installers to the consumers. Despite the rate cut for commercial installation, this is one reason it has been surmised why the uptake in the UK market has been low. This is because since the installer purchases the product on behalf of the residential customer, the reduced rate may not be clearly apparent to the end consumer. Of course, when the residential owner is the installer, this is not the case.

The experiment of the Isle of Man of a rate reduction, which led to increased revenue from taxation shows the economic gains that are a potential ignored by the UK government. The improvement in the stock of existing housing and a reduced push on development of green field location reveal the ancillary beneficial results. The UK government should learn from the example set by the Isle of Man Government. A change uncurrent Government policy would demonstrate the Government would like consumers to participate in doing what they can to aid the environment. It can also point out the economic gains to be had by taking this path to prod them in this direction. Meanwhile, the Government should keep in mind the message of that report about peak oil and how this rate reduction would encourage people towards changing their consumption habits. ]]> http://businessarticlesdirectory.com/finance/taxes/things-to-know-about-tax-free-shopping.html http://businessarticlesdirectory.com/finance/taxes/things-to-know-about-tax-free-shopping.html Tue, 06 Apr 2010 16:53:39 -0500
There are many foreign countries that offer Value Added Tax savings so if you are going to be traveling internationally, be sure to check and see if that country participates in such a program. You should be able to go online and find all the information that you will need to know about another countries policy on tax free shopping.

There are also states in the United States that offer sales tax free shopping to international visitors. Restrictions apply so check with the state that you are going to be visiting to see if they participate and what you need to do to get a refund of taxes paid.

Inside the United States, there are some states that do not have a sales tax so you never pay it. New Hampshire and Delaware and just two states that do not have a sales tax so you can take advantage of tax free shopping anytime.

Many states hold an annual tax free holiday. These are usually held in late summer right before school starts. Not everything is tax free so you need to know what items you can buy that will qualify. Usually, you can purchase back to school supplies, clothes, computers and other items. Not all states hold these sales at the same time, so if you live near the border of another state, be sure to watch for their tax free holiday sales as well. And if the sales are held at the same time, sometimes eligible items will vary from state to state so check your neighboring states list to see if they have an item you need that your state does not.

To get the most out of your shopping trip, make a list of the items you need to buy. Be sure to check your list against your states eligible items list. Check store sale ads as many stores run sales on items that qualify as tax free purchases. Expensive items such as computers may have prices slashed to make them qualify for a tax free event. Quantities are usually limited so if you want one of those items, you need to plan to get to the store early. Make a list of the stores that you want to shop and prioritize the list so that you can be sure to pick up items that you need.

You may have to spend some time doing some planning and researching before you head off on your vacation or shopping trip. However, the time spent could very well be worth it when it helps you save a lot of money. And saving money these days is a good thing! ]]> http://businessarticlesdirectory.com/finance/taxes/deductions-can-help-you-financially.html http://businessarticlesdirectory.com/finance/taxes/deductions-can-help-you-financially.html Sat, 03 Apr 2010 07:30:18 -0500
A lot of hype about car donations is going on right now because it can be used for a lot of causes. Depending on the cause where you will donate the car, it may go for the children, medical mission, elderly and many more. With this, you just need to choose the right places where the car will be donated and you will find a lot of organizations online.

The best thing about donating a car is that there are allowable deductions by the IRS once you donate it. This is permitted since the registration of the donated cars will soon be recorded under the name of the charitable institution.

If you want to know first how much it would cost before you bring to a donation center, you may consider knowing the deduction amount and the group of the car donation. You will only be able to know this by searching lots of websites that render evaluation procedures of the vehicles. Once you are decided about the organization where you will donate your car, then all you have to do is secure all the required documents needed to be submitted in the process.

The tax deductions can still be used by you all throughout the entire year due to the car donation you just made. It could serve as one of the best financial moves you can do this year. Comparing it to the other types of deductions which you may not be able take advantage of for the year. Just make sure that you have proof that you are the owner of the car.

However, you should know that you may not be able to get the deduction until the tax filing has been done. With this, it will be better if you will donation your car towards the latter part of the year. This is because it will be nearer the time when the taxes will be filed.

You can surely stumble upon a lot of charitable groups and institutions which accept online car donations. You may also search the Web for all the relevant information about tax deductions that you can acquire and receive clarifications about.

Instead of just leaving your car useless at home, why not put it up instead for a car donation? By doing this, you can start using your car properly by helping others too for a worthy cause. ]]> http://businessarticlesdirectory.com/finance/taxes/taking-advantage-of-new-tax-credits.html http://businessarticlesdirectory.com/finance/taxes/taking-advantage-of-new-tax-credits.html Mon, 29 Mar 2010 04:25:40 -0500
A Tax credit is meant to help stimulate the economy. The government wants to do all it can to get people to spend money. The economy grows when people spend it is just this plain and simple. Many financial experts advise their clients to apply for tax credit rather than tax deductions. This is because a tax credit means you actually pay less tax. A tax deduction is good also, but it if based on your taxable income and your tax bracket.

It is strange but for an individual to be financially secure he needs to save his money. But for the economy to be secure people have to spend money. The government knows people will buy houses if they can save money on the sale. People will buy no matter how they save money. A tax credit is as good a way to save money as any.

The government also knows that as the home buying market goes so goes the economy. And home owners are better citizens the government believes.

There is pride of ownership. People who own homes are more stable. They will make sure they have jobs to pay for their house payments. Homeowners are more concerned about their community. They are more concerned about the school system because their kids are going to school.

Home foreclosure is a threat to the community. This is why the government is encouraging people to buy homes. The tax credit is one incentive they offer to help boost home sales.

Final Thoughts

If you think you qualify for a tax credit on the purchase of your home speak with your tax adviser. Find out other tax credits you might qualify for. If you have your own business there may be tax credits you do know about that could save you money. The government is looking to stimulate the economy in many ways so take advantage of the many tax credits that are now available. Speak with your tax adviser today. ]]>