Top Ten Biggest Tax Breaks

January 10, 2013 Shamsey Oloko Leave a comment Business Expense, Business Expenses, Capital Gains, Charitable Contributions, News, Representation, Social Security Benefits, Taxable Income, Veterans Benefts

A lot of speeches have been given of late about tax cuts, tax breaks, deductions, etc. So, who gets the biggest tax breaks? According to New York Tax Attorney at Thorgood Law Firm, the Top Ten tax breaks are:

$181 billion – Employer contributions towards workers’ medical insurance premiums and medical care
$165 billion – Various retirement plan contributions and earning not taxed
$101 billion – Mortgage Interest deduction
$84 billion – Lower tax rates on long-term capital gains and qualified dividends
$69 billion – Deduction for state and local taxes
$46 billion – Deduction for charitable contributions

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Return of the Tax Penalty?

December 26, 2012 Shamsey Oloko Leave a comment Deductions, News, Standard Deductions

Unless Congress avoids the Fiscal Cliff, we will have a return of the so-called Marriage Penalty, resulting in higher taxes for many couples 2013.

Prior to the Bush tax cuts, there was a indeed a “penalty” against married couples under the tax code, as their standard deduction and income tax brackets were less than twice those of singles. In essence, married couples were paying higher taxes than their non-married counterparts.

When Congress passed the Bush tax cuts, however, they corrected the imbalance by, among others, giving married couples a standard deduction that’s exactly twice that of individuals. They also established income ranges for the 10% and 15% tax brackets to be exactly double that given to individual taxpayers.

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Debt Forgiveness and the Fiscal Cliff

December 26, 2012 Shamsey Oloko Leave a comment Debt Forgiveness, Deductions, Income, News, Representation, Taxable Income

According to New York Tax Attorney Shamsey Oloko, if the country goes over the fiscal cliff, the average taxpayer, and the real estate industry, may feel the pain in yet another way – debt forgiveness.

Normally, if a lender forgives a portion of a loan, the beneficiary is required to pay taxes on the forgiven portion of the loan, as it would on an income.

However, in 2007, Congress passed a law, the Mortgage Forgiveness Debt Relief Act of 2007, which allowed taxpayers to avoid paying such taxes. Thus, if a lender agrees to a short sale or agrees to take less than you owe on your mortgage, you would not have to pay taxes on the unpaid balance of the loan.

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TIPS FOR YEAR-END GIVING

December 19, 2012 Shamsey Oloko Leave a comment Capital Gains, Charitable Contributions, Income, News, Representation, Taxable Income

With the year about to come to an end, taxpayers may want to make charitable contributions, including clothing and household items, to good causes, and take deductions on their tax returns in the process. It is helpful to keep in mind IRS requirement in making these contributions, to avoid audit problems along the way.

To deduct clothing and household items, they generally must be in good used condition or better. If you think the item is worth more than $500, you should get an appraisal and keep records.

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BUSINESS OR HOBBY? Will the IRS allow you to deduct losses?

September 17, 2011 Shamsey Oloko Leave a comment Audit, Business Expenses, Income, News, Ordinary and Necessary Expenses, Representation, Taxable Income

At one time or the other, most of us get involved in one kind of venture or another, sort of trying your hand at something different. Sometimes we make money in these ventures and the IRS can be counted on to expect its share of the profits. But what if you lose money in the venture, will you be entitled to a deduction on your return for the loss?

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HOW TO PICK THE MOST SUITABLE TAX PREPARER

September 16, 2011 Shamsey Oloko Leave a comment News

The first thing to keep in mind when picking a suitable tax preparer is the cardinal rule: you are responsible for your tax return. Translation – pick your tax return preparer carefully! Unqualified tax preparers may not only overlook legitimate deductions or credits that could cause clients to pay more tax than they should, but they may also make costly mistakes causing their you additional money in assessed deficiencies, penalties, and interests. A few rules to consider:

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TOP TEN WAYS TO GET YOUR RETURN AUDITED

September 15, 2011 Shamsey Oloko Leave a comment Audit, Business Expenses, Charitable Contributions, Civil Liabilities, Civil Penalties, Deductions, News, Representation, Taxable Income

1. Unreported 1099 Income – This is perhaps the easiest way IRS can track down non-complying taxpayers. Every single Form 1099 issued to a taxpayer is only but a copy of the one in IRS records – IRS is aware of the income as it is also reported to them by the third party payer of compensation, interests, dividends, etc. Failure to report this income is one of the easiest flags for further review of tax returns.

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WHY YOU NEED EFFECTIVE REPRESENTATION DEALING WITH THE IRS

September 14, 2011 Shamsey Oloko Leave a comment Audit, Deductions, Income, News, Representation

When appearing before the IRS, for audits, collection actions and appeals, it is extremely critical to have effective representation to state and defend your interests.

Generally, only three classes of professionals are qualified to represent taxpayers before the IRS – Attorneys, Certified Public Accountants and Enrolled Agents. (Enrolled Agents are tax professionals who have successfully completed a set of examinations given by the IRS). Other professionals may represent taxpayers before the IRS but only relating to tax returns they prepared.

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