Your Distressed Property and Short Sale Expert in Maryland
OK - We get a small break - final filing day(unless you file an extension to file), is April 18th.
Why? Do you know?
In Washington DC, April 15th is a legal holiday - Emancipation Day, and the 16th and 17th are weekend days....so.. you have until April 18th to file - and a whole weekend to have fun with taxes.
Emancipation Day recognizes the end of slavery in the US - just in case....
Back to filing an extension - you can reveive an automatic 4 month extension to file by...filing an extension... to file taxes.
Big caveat - if you owe Federal income Taxes now, then intererst and penalties will start... April 18th!
OK - time for a April 15th joke, or two - before the really useful stuff.
"The taxpayer - that's someone who works for the Federal Government, but doesn't have to take the civil service exam"
* Ronald Reagan
"To you tax payers out there, let me say this: Make sure you file your tax return on time! And remember that, even though income taxes can be a 'pain in the neck' the folks at the IRS are just regular people like you, except they can destroy your life"
* Dave Barry
Now for the useful stuff!
OVERLOOKED DEDUCTIONS OR CREDITS:
State tax refunds: not taxable on AMT returns - if you do an AMT return, you know what AMT is.
Charitable Donations: Mileage, donations, and unreimbursed expenses for some
Charitable Donations: redux - if you give at work, don't forget to deduct.
Health Insurance Premiums: for self-employeed. Check the rules.
Medical Expenses: if you itemize and they excede 7.5% or your AGI.
Sale/Local Sales Tax Deduction: Especially for the 6 states that have no income tax - maybe in other states.
Moving Expenses: Did you move at least 50 miles for work?
Domestic Production Deduction: for sole proprietors, partnerships, and corporations - hard to find, but generous.
AUDIT TRIGGERS
Mortgage Interest Deduction: if it exceeds $50,000 - could exceed maximum allowable.
Large Charitable Deductions: Complex rules - have receipts, or don't attempt.
Home Buyer Tax Credit: all require proof - don't mess up here!
Rental Real Estate: Must be a "Real Estate Professional", because of income offset rules - think 750 hours and read further.
Large Deductions: related to income - does that income support that lifestyle?
Home Office: Very careful - strict rules - read up.
COMMON ERRORS:
Overstating Charitable Deductions; you can only claim the part of the "donation" that is not for meals, etc.
Deducting Mortgage Points Incorrectly: refinanced points must be spread over life of loan.
Overlooking "kiddie tax": investments, you should know that ahead of time. Do the parents return first.
Missing the Make Work Pay Credit: refundable $800 credit for couples($400 for singles) - don't forget!
Small Interest Payments: if your savings account earned less that $10, add that income, from you year end statement, as the banks don't have to send a 1099.
Roth Conversions: Tax will come due in following years - or you can reverse until you file for 2010.
WAYS TO CUT YOUR TAX BILL
Start an IRA before filing for 2010, until April 15th.
SEP IRA - same as above, but you have until October 17th, 2011.
Health Saving Account(HSA): May deduct up to $6,150 per family if you had a qualifying high deductible health plan in 2010. Contributions due by April 18th.
GALLOWS HUMOR TIME:
Ralph went to an IRS office with his tax attorney, as he was summoned to do so.
The IRS official explained that his lifestyle did not seem to be supported by his claim of being a successful gambler.
" I'm a great gambler, and I can prove it", said Ralph.
"No way - it's a bet", said the auditor.
Ralph; "I'll bet you one thousand dollars that I can bite my own eye".
Auditor: "You're on!"
Ralph takes out his glass eye and proceeds to place it between his teeth.
Ralph: "I'll bet you two thousand dollars that I can bite my other eye."
Figuring Ralph would be blind if he can do that, the auditor takes the bet, and Ralph takes out his dentures and "bites" his good eye.
The Auditor is down three thousand dollars!
Ralph says: "Double or nothing - I'll bet you I can stand on one side of the desk and pee into a wastebasket on the other side, without getting anything on your desk."
The Auditor is sure he cannot lose this bet, and feels good - sure enough, Ralph fails in this attempt - doesn't even hit the wastebasket.
The auditor is happy, but notices the attorney is looking mighty pale.
"What's wrong?", he asks the attorney.
"This morning Ralph bet me twenty thousand dollars that he could come in here and pee all over your desk, and you would be happy about it"
Dennis
www.Frederick-MontgomeryCountyHomes.com
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