|
Happy Summer!
DON'T LET THEM STEAL YOUR
IDENTITY
Dear Family,
Deadlines looming :
Your Partnership Returns are due on July 15th
Get cracking on finishing all that bookkeeping -
your partners need their K-1s
---------
Lisa Hupman of http://wildxangel.com/
sent us this alert
For people who bought the
TaxCalc software online.
Beware, your credit card information may be compromised.
--------
This brings to mind, credit cards, credit, loans, etc.
No doubt, your mailbox contains at least one, maybe 10
solicitations from credit card companies offering you shiny
new cards. Be very careful - cut up or shred those offers when
you discard them. You don't want someone else sending it
in, pretending to be you.
When you move, make SURE you notify the credit card
companies in writing to STOP sending you anything at the
old address. I've had several clients forced to spend months
repairing their credit due to oversights like that.
Watch out for some of those pre-approved offers. They all
ask you for sensitive information (SS#, date of birth, mother's
maiden name, passwords or PINs). All too often, you can't even
find the name of the bank on the form or envelope. If you can't
quickly and easily identify the financial institution, don't give
them ANY of those answers.
Don't be misled. Sometimes, you'll get things, like an offer of
loan or mortgage insurance - it will have the name of your bank
or credit card on it. Read it again. It's NOT coming from your
bank. (I have one in my hand.) The company name line on the
envelope is 'marketing department' for an address in Las Vegas.
NOWHERE on two pages inside is there a company name. The
only company name that appears is my bank. So if you don't
pay attention, you would think your bank had sent it. This is
a great way to set yourself up for identity theft.
One other scam being perpetrated by legitimate companies is
the low interest rate loan offers - watch out for rates that are
quoted "after tax." That means, the 5.75% interest rate offered
by the First Union Equity Line is really 7.74%. Read the fine print.
Don't let yourself be scammed.
Oh, by the way, did you know it's now summer? Go out and enjoy
the beautiful days, your children at home, watching your teens
get to goof off while you work...oh, I mean, the lakes, the rivers,
the pools, the boats, the fishing, hiking and simply being outdoors.
Love and Best wishes,
Eva Rosenberg, EA
Your TaxMama is watching...out for you.
NOTE TO TAX PROFESSIONALS: Join a weekly discussion
list just for tax professionals, please sign up at
http://taxmama.com/Insider/guidelines.html
-------------------------------------------------
Learning About Taxes
---------------------------
From: Petaluma, CA
Dear TaxMama,
I would like to know how to do my taxes.
When I was married my wife did the taxes and I did not try
to learn on my own.
My question is what is the means to be able to figure out what
is the correct deductions I need to claim on my W-4 form so
I get the most amount on my payroll check and still not pay
additional taxes at the end of the year?
Thanks.
Ozzie
Dear Ozzie
Hmmm. So you want to learn all about taxes?
It only took me about 20 years to feel I knew most
of the questions. I'm still not sure about all the answers.
But at least I know where to look and who to ask. <g>
But if all you want to know is how to fill out your W-4,
there is an excellent article right here
"Paying the Piper or Five Simple Steps to Filling Out Your W-4"
You are very welcome to explore TaxMama.com and
use the search engine
to transport you to more information
than you could imagine about practically any personal
or small business tax issue.
When you get far enough to understand more of your
own questions...I'll be happy to direct your study a
little further along.
Best wishes,
Eva Rosenberg
Please Support Our Sponsor
You're paying $70 for your domain name?
Why?! Pay only $15.00
TaxMama's sites and domains are hosted by WebWizards
What a great value only $20.00/month and tools you can use!
---------------------
Deeply In Debt
---------------------
From: Bell City Mo.
Dear Tax Mama,
My husband & I owe approximately $19,000 to credit cards
which we have cut up. We make $425.00/month payments on
these. We should have them paid off in 6 to 7 years. We owe
only approx. $6,000 on our home.
Financially would it be better to refinance our home with a
locked in interest rate for 15 years, since we can deduct the
interest off our taxes? Or would we end up paying more money
in the long run because of the more years we would be paying?
Our credit card debt is locked in at a interest rate o 9%.
Thank you
Betty
Hi Betty,
I don't know what the rest of your financial situation looks like.
But these days, you can probably get a mortgage for about 8%
interest on your home, which would, indeed, be deductible.
The only problems are
1) You are now encumbering your home. Some people don't
like to do that, for other reasons. After all, if you get behind
on your payments, you could lose it...)
2) Your mortgage interest expense for the whole year would be
less than $2000. If you're not already itemizing due to other
deductions (medical, business expenses, tithing to your religion),
it won't be enough to make it possible for you to itemize.
Your married, joint standard deduction is over $7000.
So, don't do it just to get a non-existent tax deduction.
Some points in your favor though,...
You can probably get a lower interest rate.
You don't need to spread the payments over 20 or 30 years.
There is no reason you can't make higher payments and pay
it all off in five years.
That's what I would do.
In fact, I just got an equity line at about 7.15% for that
very purpose.
Eva Rosenberg
Need a very unique Wedding or Anniversary gift?
Turn his favorite photo into a PhotoMasterpiece
http://photomp.com
We Turn Photos into full-size oil paintings or watercolors
-----------------------------------
Sell Your House - Tax Free!
-----------------------------------
From: Green Cove Springs, FL
Dear TaxMama
Someone told my sister that after you reach 50 years of age
that you can sell your house and you do not have to pay
taxes on the gain.
Is this true?
George
Dear George,
You can do that now.
The first $250,000 ($500K for couples) of profits on
the sale of your residence are yours, tax free.
Best wishes
Eva Rosenberg
*** Special Deal ***
Those Entertainment2001 books are great! Movies for $5.00,
2for1 dinners, discount theater tickets, FREE nights at good hotels
They're $10.00 off
this month. Great value for summer play & travel
Give one to your teen or graduate and keep them occupied all summer
------------------------
Oops. Too Fast
------------------------
From: Denver, Colorado
Dear TaxMama,
I intended only to extend my 2000 return, but instead I send in
my whole return with the extension. How can I find out if IRS
considered my return as filed or still waiting on my return
(since I included a extension request)?
Is there a 1-800 I can call to find out?
Thanks
Bobby
Dear Bobby,
Oh My. If you sent in your return....you're filed.
(Did you sign it? If you didn't, it will come back to you.)
Meanwhile, you can use a Form 4506 to request a free
transcript of the return for 2000 to see just what IRS is
showing in their records for you.
Or, you can call 800-829-1040 and see if they can just look
up your file.
If there are things you left off, you can do an amended return
and correct your 2000 1040.
Best wishes,
Eva Rosenberg
--------------------------
New To Our Shores
--------------------------
From: San Francisco, California
Dear TaxMama,
Hello, I came from Europe so maybe my question will
be funny for you. Anyway, I want work home for one
company but I will be responsible for tax.
Could you be so kind and tell me how much pay from
$2000 per week?
Thank you so much!
Marky
Dear Marky,
Welcome to America.
Our tax laws are a bit complicated, but offer ways to reduce the
taxes you pay. Quite frankly, if you deal with it all yourself and
don't really get familiar with the rules, you may as well put away
half of the money right now. Why? Here are the taxes you will
have to pay, and for what:
Due to:
IRS 30% Federal Taxes
Calif 8% State Taxes
SS/Medi 15.3 Social Security/Medicare you'll never benefit from
Total 53.3%
On the other hand, if you engage the services of competent
professionals, they can help you identify expenses that can be
deducted against your income...
Paying someone $500 or $1000 will save you $10,000 - $25,000
or more. Literally. That's how much difference knowing the tax
laws can make if you are self-employed .
Best wishes
Eva Rosenberg
TaxMama
---------------------
Gifts to Family
---------------------
from: Somewhere, Out There
Dear TaxMama,
Hello. I would appreciate an answer to this situation I heard about.
A person can give up to $10,000 as a gift to as many people
as they want.
The gift can be given to family, friends or ?. What are the
tax benefits (if any) to the person giving the gift.
BUT it is not given to a non-profit organization, that I know
is tax deductible if you are itemizing.
Thanks,
Brinda
Dear Brinda,
The tax benefits are that, as long as the gift is $10,000 or
less per person, the donors (the persons giving the gift) do
not have to pay any gift taxes AND the asset is removed
from their estates.
In a large estate, this is a good tactic to reduce their Estate Taxes.
There is no Income Tax deduction or benefit.
Remember, we have a new tax law in place. Estate Tax may
no longer be an issue in a few years.
Best wishes
Eva Rosenberg
Your TaxMama
-----------------------------
Sign on the Dotted Line
-----------------------------
From: Doylestown OHIO
Dear TaxMama,
My mother wants to sign over her house and property
to me as a gift. There are no liens, etc. on the house,
no mortgage, etc.
But what should I expect come next tax season, and also
what should she expect?
Amy
Dear Amy.
That's so generous of her.
If she does that now, simply have your tax pro file a gift tax
return, Form 709 Form 709
reporting the gift and taking the estate tax exclusion.
You won't have any tax consequences.
However, there are other considerations.
1) Odds are, if there is no mortgage, your mother has had that
house for a long time. So, it has a very low basis (tax cost).
If she signs it over to you now, you pick up her basis as yours.
So if you want to sell it, you'll have a huge capital gain. (if you're
going to live in it for two years or more, of course, you'd be
entitled to exclude $250K)
2) However, if mom holds the house until death, the house picks
up the fair market value at the date she dies. There would be no
gain, not even under the new law, as long as the estate is worth less
than $1.3 million
3) be sure to handle the property tax reporting properly for the
transfer - most tax collectors do have a provision for transfers
between family members.
Honestly, Amy? I'd sit down with a local tax pro to review both
your and your mother's tax situation before I did something
this major.
Eva Rosenberg
Your TaxMama
-------------------------
Because We Care
-------------------------
A.N.G.E.L.S. DAY
http://taxmama.com/care/
Drop in on the DJ Martin Foundation to help families of
murder victims deal with the trauma resulting from a
loved one's death http://www.djmartin.net/
Do your good deed for today... it only takes a second.
Go to this site http://www.thebreastcancersite.com
-------------------------------------------------------
Free Networking Guide
-------------------------------------------------------
If you ever go to trade shows, seminars, networking meetings
here are some great tips on getting the most out of them.
Get your free eBook - Your Networking Guide
And if you want to learn how to make money with
affiliate programs, use this as great starting point!
-------------------------------------------------------
TaxMama On the WWW & Tooting Her Own Horn
-------------------------------------------------------
Critical Dates:
_________________________________________
Ask TaxMama is published by the good folks at http://taxmama.com
ISSN 15320790
© copyright, Eva Rosenberg, 1999, 2000, 2001
Written (email) permission is required to copy or redistribute this
publication or to use it on your site. mailto:taxmama@taxmama.com
However, you are encouraged to forward an intact copy to all your
friends and invite them to subscribe!
legalese and disclaimer
This publication is not designed to offer legal advice. It is designed
to point you in the right directions so you can ask the right questions
or do your own research. It is designed to alert you to issues and
encourage you to think and plan. When you read it, the information
may already be outdated. Tax laws do change quickly. Please, please
engage the services of a competent tax professional if you do anything
the least bit complicated. It will save you so much money and grief
in the long run.
-------------------------------------------------------
Got questions?
-------------------------------------------------------
|
