Personal Finance - Herman & Co. CPA

Taxing a Child’s Investment Income

Some children who receive investment income are required to file a tax return and pay tax on at least a portion of that income (and possibly at the parents’ marginal tax rate). This is often referred to as the kiddie tax

Tax Collection and Payment Alternatives

The IRS may take action to collect money if you do not pay the taxes you owe in full, if you do not pay the taxes you owe on time or if you do not make arrangements with the IRS to develop a tax payment plan.

Implications Of Filing An Extension For Your Tax Return

Tick… tick… tick…

That’s the sound of the tax-filing clock winding down to April 15. What if you don’t think you’ll make the deadline? The consequences may not be as serious as you fear — if you take some simple steps before the deadline.

Deductible Taxes

Did you know that you may be able to deduct certain taxes on your federal income tax return? The IRS says you can if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation. There are four types of deductible non-business taxes.

Spring Cleaning Tax Tips

With spring right around the corner, many people have been doing some spring cleaning around the house. Instead of bringing old clothes, sporting equipment, and household items to the dump, you should consider donating them to a local charity or thrift store. Someone will find a use for your unwanted items and you could potentially lower your taxable income if you qualify for itemized deductions. You can qualify for itemized deductions if you exceed the allowable standard deduction, which in 2011 is $5,800 for singles and $11,600 for married couples filing jointly.

Passive Activity Loss Limitations

The passive activity loss (PAL) rules were introduced by the Tax Reform Act of 1986 and were designed to curb perceived tax shelter abuses. However, the PAL rules are far-reaching and affect activities other than tax shelters. Additionally, these rules limit the deductibility of losses for federal income tax purposes.

Lifetime vs. Testamentary Contributions

Many taxpayers with charitable intentions struggle with the decision of whether to donate property to charity during their lifetimes or to make a charitable bequest in their wills that will be fulfilled from property included in their estates (testamentary bequests). While taxpayers frequently base their choice between lifetime charitable gifts and testamentary bequests on nontax considerations, they need to be aware of the tax implications of their decision.

“Dirty Dozen” Tax Scams

The Dirty Dozen are the 12 most prevalent scams detected by the IRS. Taxpayers should take precautions to avoid these and other suspicious activities of scam artists. The following scams make up the IRS’s 2012 “Dirty Dozen” listing.

The Importance of Good Recordkeeping

Benjamin Franklin once said: “An ounce of prevention is worth a pound of cure.” When it comes to record keeping, the 18th century inventor could not have been more correct. In the event that a natural disaster strikes your home or office, being well organized and redundant in your record keeping can save you or your loved ones considerable time and effort getting life back to normal when the dust settles. Here are a few useful tips any taxpayer can use to help minimize potential damage.

Reducing the Burden of Organizing Your Tax Information in 3 Basic Steps

The stress of tax season is upon us, but there are ways that you can make sure everything is all in order when it comes time to file your taxes. Here are some easy tips for keeping tax info organized, so you can stay on top of your taxes all yearlong and nothing gets lost in the craziness of tax season!