TIPS YOU CAN USE: DANGERS OF GOING BARE ON WATERCRAFT COVERAGETIPS YOU CAN USE: DANGERS OF GOING BARE ON WATERCRAFT COVERAGE Boatowners typically face large property and liability loss exposures from * Your cruiser collides with a speed boat whose operator fails to yield * An expensive bass boat you just purchased is stolen from your home. * Your 27-foot-long sailboat is damaged by a major hailstorm while docked * Your sport fishing boat is struck by lightning, incapacitating its * Your son's friend is water skiing behind your boat and he falls into the * You negligently cause another boat to overturn to avoid a collision. * Your outboard motor explodes, seriously injuring your next door If you have any watercraft exposures, please call our office for a review This article is brought to you by Peter Tuttle, CPA at Cool Springs Insurance.com. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed TIPS YOU CAN USE: ARE THE LIMITS OF INSURANCE FOR YOUR HOME ACCURATE?TIPS YOU CAN USE: ARE THE LIMITS OF INSURANCE FOR YOUR HOME ACCURATE? Is the amount of property insurance on your home correct? What is the Many homes are either underinsured or overinsured. For example, some homes Sometimes homes are mistakenly insured for their market value. However, In addition, some homes may be insured improperly to meet mortgage company The bottom line is that you should work with your insurance agent to * Square footage of the home, including its configuration * Construction costs for your community * Exterior wall construction type, including frame, stucco, brick, or * Style of home * Number of bathrooms and bedrooms * Roof type * Attached garages, fireplaces, built-in cabinets, and other special The more advanced replacement cost estimating programs require detailed As a final note, you should request an annual review of your homeowners This article is brought to you by Peter Tuttle, CPA at Cool Springs Insurance.com. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed TIPS YOU CAN USE: WINDSTORM RISK CONTROL TIPSTIPS YOU CAN USE: WINDSTORM RISK CONTROL TIPS Windstorm and hurricane losses account for an inordinate share of * Roof -- The installation and design of a roof is a critical factor Lastly, hurricane clips should be considered in hurricane-prone areas. * Windows -- One way to protect your windows is to install * Entry doors -- Solid wood or hollow metal doors are more effective in * Garage doors -- Because of their width, doublewide garage doors are more This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed CELL PHONES AND DRIVER DISTRACTIONSTIPS YOU CAN USE: CELL PHONES AND DRIVER DISTRACTIONS According to the National Highway Traffic Safety Administration, driver Cell phones are considered one of the leading driver distractions. As a * You should wait until the car trip is complete before placing a call. * Absolutely essential calls should only be performed while stopped. * The phone should be placed where it is easy to see and reach. * You should take advantage of speed dialing capabilities. * You should never drive and talk on the cell phone during stressful, * You should consider using a hands-free cellular phone since some studies * You should never text message while driving. This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed Itemizing Tax Deductions - Should You or Shouldn't You?Itemizing Tax Deductions - Should You or Shouldn't You? Each year, taxpayers everywhere ask whether it's better to itemize their deductions or opt for the standard deduction. What's the difference and how does it affect your bottom line? Some taxpayers must itemize, even if their deductions are less than the standard deduction. Those taxpayers include nonresident aliens, dual-status aliens, and individuals who file returns for periods of less than 12 months. Additionally, when a married couple files separate returns and one spouse itemizes deductions, the other spouse must itemize as well. In general, itemizing your deductions saves you more tax dollars only if the deductions exceed the standard deduction. For 2007, the standard deduction for single filers is $5,350 and $10,700 for those filing jointly. For married taxpayers who file a joint return, the standard deduction will remain twice that of single filers through 2010. Itemized deductions are certain expenses that you can use to lower total income, and thus, your taxes. The categories include: • Medical and dental expenses; • State and local income taxes, or sales tax; • Real estate and personal property taxes; • Home mortgage and investment interest; • Charitable contributions; • Casualty and theft losses; • Gambling losses; • Job expenses; and • Miscellaneous deductions. Some itemized deductions, including medical expenses or miscellaneous deductions such as investment expenses, safe deposit fees, professional education, employee job-hunting expenses, and tax-preparation fees, are not allowed until they exceed a certain "floor" amount. For this reason, grouping expenses so you can itemize certain years often helps. The highest floor to exceed is for medical expenses. Your medical expenses are not allowed as itemized deductions unless they exceed 7.5 percent of your adjusted gross income (AGI). That means if you have an AGI of $100,000, the first $7,500 of your medical expenses won't count. Miscellaneous itemized expenses are also deductible only after they exceed 2 percent of your AGI. So, with an AGI of $100,000, your first $2,000 of miscellaneous itemized deductions won't count. If your itemized deductions do not exceed these floor amounts, there are a few things you can do to maximize your tax savings. You can elect to accelerate or defer the payment of certain expenses such as property taxes, certain medical expenses, charitable contributions, or interest payments. For example, the cost of elective medical procedures can be deferred until a later year. If you lack the cash for the cost, you can charge the expense on your credit card and pay the next month. The cost is deductible in the year it is charged, not when the payment is made. With the standard deduction rising each year, careful planning is required to determine if bundling deductions will work for you. Then the standard deduction can be used every other year, maximizing your tax savings. This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed TIPS YOU CAN USE: EVALUATE YOUR NEED FOR FLOOD INSURANCETIPS YOU CAN USE: EVALUATE YOUR NEED FOR FLOOD INSURANCE According to FEMA, flooding causes billions of dollars of property damage * Contact us to see if you live in a community that participates in the * Ask us to see if you are in a floodplain. Or, if you prefer, go to * Consider purchasing flood insurance even if you are in a low-to * Note that a flood policy does not take effect until 30 days after you * The maximum limit of insurance in the NFIP for your home itself is * Don't assume that the government will bail you out if you suffer a flood * Discuss all the pros and cons of flood insurance with us before making This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed Covering the Cost for College While Saving Tax DollarsCovering the Cost for College While Saving Tax Dollars Saving for college should ideally take place well before your child reaches college age, but for many reasons that isn't always possible. Whether you have years to go before your children are ready for college or you already have a coed in the house, there are options available to help minimize your expenses by taking advantage of tax benefits. Below are some suggestions to get you started: • A Qualified Tuition plan, also called a Section 529 plan, is a trust naming your child as the beneficiary. Contributions to the trust are considered taxable gifts; however, you can contribute up to $12,000 annually ($24,000 if your spouse also contributes) and escape the gift tax. If you contribute more, you can treat the gifts as if they are made over a five-year period. The earnings on the contributions accumulate tax-free until the college costs are paid from the funds. Distributions are tax-free to the extent the funds are used to pay qualified higher education expenses. • You can establish a Coverdell Education Savings Account (ESA) and make contributions of up to $2,000 for each child under the age of 18. Although you can't deduct contributions, distributions - including earnings - are tax-free if spent on higher education expenses. If the child doesn't attend college, the money must be withdrawn when the child turns 30, or transferred tax-free to a Coverdell ESA of another member of the child's family who hasn't reached age 30. Tuition tax credits will help save you tax dollars once the tuition bills arrive. Tax credits reduce your tax liability dollar for dollar. There are two different credits available: • The Hope Tax Credit is available up to $1,650 in 2007 per student for the first two years of college. This equals a 100-percent credit for the first $1,100 in tuition and a 50-percent credit for the second $1,100. • A Lifetime Learning Credit is available up to $2,000 per family for every additional year of college or graduate school. This equals a 20-percent credit for up to $10,000 in tuition for 2007. Some deductions are also available. Deductions reduce your overall taxable income, which ultimately reduces your tax bill. • You can deduct up to $2,500 of the interest on loans used to pay for your child's college education. The deduction is available even if you don't itemize. • Through 2007, you may be permitted to take an above-the-line deduction of up to $4,000 for college tuition and related expenses that you pay. Your income must be less than $65,000 ($130,000 if filing a joint return). If your income is over these limits, you are allowed a deduction up to $2,000. You are allowed no deduction if your income exceeds $80,000 ($160,000 of filing a joint return). This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed E-mails From the IRS? Be SkepticalE-mails From the IRS? Be Skeptical Have you ever received an e-mail that promises you an additional tax refund? In one day, I received six of them, each with a higher amount than the last. Unsuspecting people may fall for such a gimmick and unwittingly start providing the sender with personal information with the hope that free money will come their way. Senders of these types of e-mail have found the perfect means to intimidate taxpayers into filling out legitimate-looking, but phony, IRS forms. There are several variations of the e-mail. The newest version will be related to the 2008 "Stimulus rebate." Others will say you have a refund coming to you and all you need to do is fill out a form online and the IRS will send it to you. Another scam involves a "Tax Avoidance Investigation" e-mail claiming to come from the IRS' "Fraud Department" in which you are asked to complete an "investigation form," for which there is a link contained in the e-mail. It is believed that clicking on the link may activate a Trojan horse that has the potential to take over your computer hard drive and allow someone to have remote access to your computer. Common sense tells you to always exercise caution when you receive unsolicited e-mails or e-mails from senders you don't know. Most importantly, the IRS never sends out unsolicited e-mails and it never e-mails requests for personal and financial information including PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts. If you do receive a questionable e-mail claiming to be from the IRS, do not open any attachments or click on any links contained in the e-mail. The IRS encourages you to forward those e-mails to phishing@irs.gov. "Phishing" is the sending of an e-mail that claims to be from some well-known organization to trick the recipient into revealing information for use in identity theft. Since the IRS established the e-mail fraud mailbox last year, it has received more than 17,700 e-mails from taxpayers reporting more than 240 separate phishing incidents. The Treasury Inspector General for Tax Administration (TIGTA) has currently identified host sites in at least 27 different countries, as well as within the United States. To protect yourself from having your identity stolen, guard your personal information, and always verify the validity of any forms or correspondence requesting you to divulge personal information. If you have any question at all, look up the number and call the organization that sent the correspondence BEFORE supplying any information. Do not rely on phone numbers or e-mail addresses provided with correspondence. Be suspicious of any unsolicited correspondence that requests the following types of information: - Date of birth Any website that collects personal information should contain "https" in the URL address at the top (the "s" indicates that it is a secure site). It should also have a padlock in your browser's status bar. Double-click on the padlock to see the website's security certificate. Certificates show the owner of the website in the "Issued to" line. An @ sign, "under construction," or "cannot be located" in this line is reason for suspicion. The certificate should also show dates with a range of only a few years in the "Valid from" line (such as 7/29/05 - 7/29/07). If there is ANY question in your mind about any website, do not use the link. Instead, log onto the website directly (such as www.irs.gov), and find phone numbers to call. Be safe, not sorry. This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed Are You Reporting All of Your Income?Are You Reporting All of Your Income? The IRS is stepping up its efforts to close the tax gap and taxpayers who underreport income are their prime targets. For those of you who are unaware, the tax gap, or the amount of taxes that go unpaid each year, results from taxpayers underreporting their taxable income. Current estimates place the tax gap at nearly $350 billion. Fortunately most of you want to pay your fair share of taxes, and others simply need a better understanding of their obligations. While most of you are aware you must include wages, salaries, interest, dividends, tips, and commissions as income on your tax returns, many don't realize that you must also report other income, such as: • Cash earned from side jobs; • Barter exchanges of goods or services; • Awards, prizes, contest winnings; and • Gambling proceeds. You are required to report all income from any source and any country unless it is explicitly exempt under the U.S. tax code. There may be taxable income from certain transactions even if no money changes hands. Generally, the IRS considers all income received in the form of money, property, or services to be taxable income unless the law specifically provides an exemption. It is a common misconception that if a self-employed taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that you may exclude from gross income. All income earned through your business, as an independent contractor, or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Independent contractors must report all income as taxable, even if it is less than $600. Even if the your client does not issue you a Form 1099-MISC, you must report the income, whatever the amount. Fees received for babysitting, housecleaning, and lawn care are all examples of taxable income, even if you are paid less than $600 for the year. Bartering is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included on Form 1040 in the income of both parties to the exchange. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. Income from bartering is taxable in the year in which you received the goods or services. Subject to certain exceptions, the cash value of prizes or awards won in a drawing, quiz show program, beauty contest, or other event must be included as taxable income. You must also include as taxable income the fair market value of merchandise or products you won as a prize or award. Gambling winnings are fully taxable regardless of the amount. Gambling income includes winnings from lotteries, raffles, horse races, poker tournaments, slots, and casino games. It includes cash winnings as well as the fair market value of prizes such as cars, boats, and trips. Even if you are not issued Form W-2G, all gambling winnings must be reported as taxable income regardless of whether any portion is subject to withholding. In addition, you may be required to pay an estimated tax on the gambling winnings. Losses may be deducted only if you itemize your deductions and only if you also report gambling winnings. The losses you deduct may not be more than the gambling income you report on your return. The general rule is that all income, from whatever source, is taxable unless there is a specific exclusion. For example, a gift is not taxable to you even if it is a gift of money. The thing to keep in mind is that the IRS is on the look-out for underreported income and is known for employing some crafty ways to find it. This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed Keeping your name in front of potential clientsMost Real Estate Agents, not unlike other business people, strive to keep their name in front of potential clients. We send notes and congratulations, by US mail and e-mail. We pick up the phone and call them. We send Birthday cards, Anniversary cards, cards on their children's birthday. We mail Christmas cards and calendars. One great move that Real Estate Professionals can do is a very simple one. It doesn't matter if you were the selling agent or the buyers agent. If you have access to the HUD-1 closing statement from transactions you were involved in, what a better way to follow up with a client for the past year than to mail them a legible copy of their closing statement. I suggest you do this no earlier than January 15 of the following year, and certainly if you do it in February or by March 15, it may still have an impact. But during the second half of January will have the most impact. Why you may ask. Well, one of the changes in people's lives that often has them seeking professional tax advise and tax preparation is the purchase or sale of their personal residence. And the HUD-1 Settlement Statement is full of information that is helpful in determining deductions for your clients on their tax return. The allocation of mortgage interest and property taxes being the two most prominent items. So send a follow up letter to your client, suggest that the attachment may be helpful to them when they prepare their tax return this spring, and wish them well and encourage them to contact you if they are in the market to buy or sell or have friends who are. This article is brought to you by Peter Tuttle, CPA. You may contact me by sending an e-mail via the link to the right of my active rain blog page. Please visit my website at http://www.petertuttlecpa.com/ "I help individuals, families, small-businesses & non-profits with their income tax & insurance needs." IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed |
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