TAX DEDUCTIONS THROUGH CHARITY
What is tithe? Tithe is the process whereby you give one-tenth of your personal income to a church or similar institution.
According to one source, tithing first became popular in the 7th century when everyone was required to pay a tithe to help support the religious, assist in the building of churches, and helping the poor.
While in some parts of the world tithing is mandatory, today it is generally encouraged and as it relates to charities, it is tax deductible.
So the question before you is: Do you tithe? Do you offer a contribution to a church, ministry, or any number of charitable organizations?
While the original mandate of offering 10% of your income is no longer in place, most individuals give as much as 1% of their income today.
If you research tithing online, you will find that several websites offer many reasons why tithing should be dutifully maintained.
On parentalguide.com, their explanation of tithing seems a bit extreme: "Every person is to give 10% of their total income to God. This is called a tithe. Tithing is a command from God. In addition, as the Lord provides, a person should give extra (an offering) and also should give to the poor (alms). Giving an excuse, such as, "I don't have enough," is not acceptable to God. Obey the Gospel."
The more you research tithing, the more you come to realize its many ambiguities. For some, it is the law of the Church; for others, it is unscriptural.
Giving whatever you can to any charitable institution has its rewards. Whether you contribute one dollar or one hundred dollars, tithing affords you the opportunity to help someone in need. While there are a plethora of charitable organizations for which your donation would be much appreciated, tithing is a personal choice.
If you have a loved one who has been diagnosed with breast cancer, you may contribute to the American Cancer Society; if you have a child with cancer you may wish to contribute to St. Jude's Hospital; if you lost a loved one on 9/11, you may contribute to that foundation. Or, if you attend church, you may want to make a contribution there.
The bottom line is not how much you give, but that you give
Friday, November 21, 2008
Start Early For Tax Season
IT IS BETTER TO START EARLY
Believe it or not tax season is just around the corner and it is time to get your books in order. If you haven't done so, set aside a few hours each week over the coming month to catch up before year end and identify possible tax savings. If you're not sure where to start, you can begin with the following five easy steps.
1. Determine where your money came from. Gather all the sales register tapes, invoices, and customer receipts to calculate sales for the year. This will help you to record deposits listed on your business bank statement. Without this information you could misclassify transactions such as owner investments and loans received as income. Doing this will cause you to be taxed on non-income related deposits.
2. Find out where your money went. Pull out your receipts for business purchases. They will show expenses incurred and paid as well as debt incurred and payments for lines of credit and loans. Any funds used to buy furniture, equipment, and other business assets must be included because of the special treatment they have for depreciation purposes.
3. Once you have the paper receipts ready for processing, you will need all bank, credit card, and loan statements to date. You need this information for a few reasons. First, it will paint an accurate picture of your company's performance. Without it you miss out on allowable tax deductions and higher profits.
4. Remember the non cash items. Other items that you will need to track are donations to tax-exempt organizations. Be sure to locate receipts for the charitable donations. These transactions often include items such as furniture, equipment, and in-kind services.
5. You'll also need a record of automobile mileage incurred in the course of business and for charitable purposes. The best way to track mileage is by using a mileage log. You can find one online or at your local office supply store. Be sure to have this information at the time of your tax appointment.
Now that you have a simple process for preparing ahead for tax filing, get started. Waiting until the last minute can be costly in terms of accounting and tax fees, penalties, and missed tax deductions. Build a lasting and profitable business with good financial management and remember that bookkeeping is a critical piece of the puzzle.
Believe it or not tax season is just around the corner and it is time to get your books in order. If you haven't done so, set aside a few hours each week over the coming month to catch up before year end and identify possible tax savings. If you're not sure where to start, you can begin with the following five easy steps.
1. Determine where your money came from. Gather all the sales register tapes, invoices, and customer receipts to calculate sales for the year. This will help you to record deposits listed on your business bank statement. Without this information you could misclassify transactions such as owner investments and loans received as income. Doing this will cause you to be taxed on non-income related deposits.
2. Find out where your money went. Pull out your receipts for business purchases. They will show expenses incurred and paid as well as debt incurred and payments for lines of credit and loans. Any funds used to buy furniture, equipment, and other business assets must be included because of the special treatment they have for depreciation purposes.
3. Once you have the paper receipts ready for processing, you will need all bank, credit card, and loan statements to date. You need this information for a few reasons. First, it will paint an accurate picture of your company's performance. Without it you miss out on allowable tax deductions and higher profits.
4. Remember the non cash items. Other items that you will need to track are donations to tax-exempt organizations. Be sure to locate receipts for the charitable donations. These transactions often include items such as furniture, equipment, and in-kind services.
5. You'll also need a record of automobile mileage incurred in the course of business and for charitable purposes. The best way to track mileage is by using a mileage log. You can find one online or at your local office supply store. Be sure to have this information at the time of your tax appointment.
Now that you have a simple process for preparing ahead for tax filing, get started. Waiting until the last minute can be costly in terms of accounting and tax fees, penalties, and missed tax deductions. Build a lasting and profitable business with good financial management and remember that bookkeeping is a critical piece of the puzzle.
EMPLOYMENT TAXES INFORMATION
EPLOYMENT TAXES INFORMATION
Employers are required to deduct and withhold a specified percentage of the wages actually or constructively paid to your employees - and then pay that amount to the Internal Revenue Service. The employer is liable for these amounts whether or not the taxes are actually withheld from the employee's wages - and to pay certain other taxes also based on a percentage of the employee's wages.
The amounts required to be withheld from an employee's wages are called "trust fund" taxes. They consist of withholding for federal income tax and withholding for the employee's share of Social Security ("FICA") taxes. There is no general requirement that the withheld sums be segregated from your general funds or be held in a special account. In addition to the trust fund portion of employment taxes, an employer is required to pay its allocable share of FICA taxes and all of the Unemployment Insurance ("FUTA") taxes.
Collectively, the amounts withheld from employees' wages and paid directly by the employer are called "employment taxes.
Can the employer use the withheld funds? While there is no requirement that the employer put the funds in a separate account, it may be a good idea to do so - and a bad idea to use those funds for any purpose other than payment of employment taxes.
When an employer is struggling, perhaps on the brink of going under, the employer may be put in the position of having to choose between paying a creditor for needed services or products or remitting employee withholding and employer employment taxes to the IRS. Perhaps the employer's only available source of cash is that withheld from employees' wages; or, the employer may justify the use of such funds as a short-term loan. Whatever the circumstances or justification, it is a bad idea to not properly withhold or not remit employment taxes and may subject the employer, even if doing business as a corporation, to personal liability for the taxes as well as penalties and interest. The plain fact is that few creditors have the collection power of the IRS and few creditors can shut you down and collect their money faster than the IRS.
The IRS views employment taxes as the government's money, not your money, not the taxpayer's money, but money belonging to the United States Treasury. The IRS takes this very seriously. Thus, in general, the IRS is extremely strict with regard to the payment of employment taxes and the collection of outstanding employment tax obligations. You simply should not expect any leniency from the IRS in this area. For more information on employment taxes, consult with an tax attorney in your area.
Employers are required to deduct and withhold a specified percentage of the wages actually or constructively paid to your employees - and then pay that amount to the Internal Revenue Service. The employer is liable for these amounts whether or not the taxes are actually withheld from the employee's wages - and to pay certain other taxes also based on a percentage of the employee's wages.
The amounts required to be withheld from an employee's wages are called "trust fund" taxes. They consist of withholding for federal income tax and withholding for the employee's share of Social Security ("FICA") taxes. There is no general requirement that the withheld sums be segregated from your general funds or be held in a special account. In addition to the trust fund portion of employment taxes, an employer is required to pay its allocable share of FICA taxes and all of the Unemployment Insurance ("FUTA") taxes.
Collectively, the amounts withheld from employees' wages and paid directly by the employer are called "employment taxes.
Can the employer use the withheld funds? While there is no requirement that the employer put the funds in a separate account, it may be a good idea to do so - and a bad idea to use those funds for any purpose other than payment of employment taxes.
When an employer is struggling, perhaps on the brink of going under, the employer may be put in the position of having to choose between paying a creditor for needed services or products or remitting employee withholding and employer employment taxes to the IRS. Perhaps the employer's only available source of cash is that withheld from employees' wages; or, the employer may justify the use of such funds as a short-term loan. Whatever the circumstances or justification, it is a bad idea to not properly withhold or not remit employment taxes and may subject the employer, even if doing business as a corporation, to personal liability for the taxes as well as penalties and interest. The plain fact is that few creditors have the collection power of the IRS and few creditors can shut you down and collect their money faster than the IRS.
The IRS views employment taxes as the government's money, not your money, not the taxpayer's money, but money belonging to the United States Treasury. The IRS takes this very seriously. Thus, in general, the IRS is extremely strict with regard to the payment of employment taxes and the collection of outstanding employment tax obligations. You simply should not expect any leniency from the IRS in this area. For more information on employment taxes, consult with an tax attorney in your area.
Tips On Finding The Best Tax Attorney
Getting the best tax attorney is very important when you want someone to take care of your finances. In order to do that you need to know how to choose the best tax attorney. Doing some research will surely help you to know what aspects to look for when you intend to hire the best tax attorney. You will then know exactly what question to ask the aspirants for the job that you offer. If you do your research you will also know what kinds of references to search for when you want the best tax attorney. It is in your interests to ensure the investment you are making is worthwhile.
If you really need the best tax attorney the first thing that you have to inform yourself of is the experience that the attorney has. This means that you have to know what education he/she has and if he or she actually worked as a tax attorney. You should ask if the person ever worked for the IRS because if he or she did, it will be much easier to negotiate in your benefit. If your problem is a non-criminal issue then the best tax attorney for you is the one that has experience in the IRS Office of Chief Counsel. Even if we should give a chance to people that do not have yet this kind of experience if you have a difficult tax matter the best tax attorney is the one that has worked for the IRS or for another financial authority.
The minimum that a tax attorney should have is a Master’s of Law in Taxation. This is also named the LLM in taxation and it shows that the person studied the tax law for at least one year. The best tax attorney should continue to learn about the tax law even after he or she graduated because the tax law is constantly changing. This aspect could be verified by searching for evidence like articles published by the tax attorney in publications in the domain. Quality advice can be given only by the tax attorney that knows what changes occurred in the tax law evolution.
A specialist is the best tax attorney for you if he or she already handled the exact matter that you have now. When you want to know this you have to put questions to the about the topic that you are interested in and you should start a detailed discussion. You can read more about tax attorney essentials
There are some other general but important aspects that you must consider too when you want the best tax attorney. The specialist should have good communication skills and should be a good negotiator. In this way, he or she will be able to do the best in your case. An essential requirement is for you to search more than one option when you intend to employ the best tax attorney.
If you really need the best tax attorney the first thing that you have to inform yourself of is the experience that the attorney has. This means that you have to know what education he/she has and if he or she actually worked as a tax attorney. You should ask if the person ever worked for the IRS because if he or she did, it will be much easier to negotiate in your benefit. If your problem is a non-criminal issue then the best tax attorney for you is the one that has experience in the IRS Office of Chief Counsel. Even if we should give a chance to people that do not have yet this kind of experience if you have a difficult tax matter the best tax attorney is the one that has worked for the IRS or for another financial authority.
The minimum that a tax attorney should have is a Master’s of Law in Taxation. This is also named the LLM in taxation and it shows that the person studied the tax law for at least one year. The best tax attorney should continue to learn about the tax law even after he or she graduated because the tax law is constantly changing. This aspect could be verified by searching for evidence like articles published by the tax attorney in publications in the domain. Quality advice can be given only by the tax attorney that knows what changes occurred in the tax law evolution.
A specialist is the best tax attorney for you if he or she already handled the exact matter that you have now. When you want to know this you have to put questions to the about the topic that you are interested in and you should start a detailed discussion. You can read more about tax attorney essentials
There are some other general but important aspects that you must consider too when you want the best tax attorney. The specialist should have good communication skills and should be a good negotiator. In this way, he or she will be able to do the best in your case. An essential requirement is for you to search more than one option when you intend to employ the best tax attorney.
How to Hire a Tax Resolution Company
Tax-burdened Americans seeking professional help in solving their IRS problems have more options today than ever before. The tax debt relief industry has seen dramatic growth over the past 5 years as many companies have entered the arena to offer help to taxpayers impacted by a sharp increase in IRS tax compliance enforcement.
But lately, many of these so-called tax resolution firms have been making headlines for misleading consumers with deceptive advertising and false claims that they can settle taxpayers' debt for "pennies on the dollar." Consequently, many firms have been exposed for taking advantage of people seeking tax assistance. For a fee, they promise to help taxpayers, but instead leave them with their original tax debt, plus additional interest and penalties.
Now consumers are being urged to use caution when dealing with firms that claim they can help taxpayers reduce their back taxes. But how do consumers choose from the large number of companies out there that offer tax relief assistance? And more importantly, how do they know they won't end up getting ripped off?
When selecting a firm, remember that these are the people who will represent you before the IRS. Therefore it is important that you hire a professional who is well versed in tax law and IRS procedures. IRS representation is a complicated field with many different laws to interpret. While any Attorney, CPA or Enrolled Agent can represent clients before the IRS, few are truly qualified to provide the knowledge, experience and negotiating skills needed to successfully represent a taxpayer before the IRS.
When hiring a tax resolution company, keep in mind the following:
1. As a rule, the firm's track record is the best objective indicator of how that firm will manage your case. What is the firm's success rate? How many Offers in Compromise has the firm successfully settled? What is the total dollars negotiated in settlements divided by total dollars in tax, interest and penalties owed? Additionally, the credentials should be substantiated by an independent third party, like the Better Business Bureau. You can also ask the firm if they have been designated a Certified Tax Resolution Specialist.
2. Be leery of demands that the company be paid in full upfront. Trust is a two-way street. If you can trust that the company will provide the services as promised in their agreement, they in turn must trust that you will pay them and begin working 100 percent for you upon receiving a "good faith" retainer.
3. A taxpayer with a troubling problem should turn and run the other way if a company "guarantees" specific results. They are telling you what you want to hear, whether or not it's really possible. Know that there are no sure fire ways to reduce your liability and that contrary to some companies' claims, not everyone qualifies for the IRS Offer In Compromise program. Companies must obtain your background information and proper documentation before evaluating your situation and determining your options. An honest company will ask you lots of questions upfront in your initial consultation in order to understand the precise needs and specifics of your case.
4. Don't be afraid to ask for the names of the owners of the company. Any hesitation by their representatives is a definite cautionary red flag that they don't want you to know who is behind the company and ultimately responsible for your case.
5. Be sure to ask, "How long has your company been in business?" Most new companies (no matter what the business is) never make it due to a wide variety of reasons. In today's difficult financial climate you don't want to get stuck with a company that hasn't been in business for at least five years. Otherwise, they might not even be in business six months from now.
6. Be especially cautious when dealing with high-pressure sales people. They are usually working in a "boiler room" where they've been trained to prey upon a taxpayer's fears.
7. Always ask about the people who will be doing the work on your behalf. When will you be contacted once you retain their services? ? Will your phone calls and emails be returned promptly? Will your case be assigned to someone in particular so that there is real accountability? That's another reason to never give a firm 100 percent of your hard-earned money upfront. Once they have your full payment, you have no recourse.
But lately, many of these so-called tax resolution firms have been making headlines for misleading consumers with deceptive advertising and false claims that they can settle taxpayers' debt for "pennies on the dollar." Consequently, many firms have been exposed for taking advantage of people seeking tax assistance. For a fee, they promise to help taxpayers, but instead leave them with their original tax debt, plus additional interest and penalties.
Now consumers are being urged to use caution when dealing with firms that claim they can help taxpayers reduce their back taxes. But how do consumers choose from the large number of companies out there that offer tax relief assistance? And more importantly, how do they know they won't end up getting ripped off?
When selecting a firm, remember that these are the people who will represent you before the IRS. Therefore it is important that you hire a professional who is well versed in tax law and IRS procedures. IRS representation is a complicated field with many different laws to interpret. While any Attorney, CPA or Enrolled Agent can represent clients before the IRS, few are truly qualified to provide the knowledge, experience and negotiating skills needed to successfully represent a taxpayer before the IRS.
When hiring a tax resolution company, keep in mind the following:
1. As a rule, the firm's track record is the best objective indicator of how that firm will manage your case. What is the firm's success rate? How many Offers in Compromise has the firm successfully settled? What is the total dollars negotiated in settlements divided by total dollars in tax, interest and penalties owed? Additionally, the credentials should be substantiated by an independent third party, like the Better Business Bureau. You can also ask the firm if they have been designated a Certified Tax Resolution Specialist.
2. Be leery of demands that the company be paid in full upfront. Trust is a two-way street. If you can trust that the company will provide the services as promised in their agreement, they in turn must trust that you will pay them and begin working 100 percent for you upon receiving a "good faith" retainer.
3. A taxpayer with a troubling problem should turn and run the other way if a company "guarantees" specific results. They are telling you what you want to hear, whether or not it's really possible. Know that there are no sure fire ways to reduce your liability and that contrary to some companies' claims, not everyone qualifies for the IRS Offer In Compromise program. Companies must obtain your background information and proper documentation before evaluating your situation and determining your options. An honest company will ask you lots of questions upfront in your initial consultation in order to understand the precise needs and specifics of your case.
4. Don't be afraid to ask for the names of the owners of the company. Any hesitation by their representatives is a definite cautionary red flag that they don't want you to know who is behind the company and ultimately responsible for your case.
5. Be sure to ask, "How long has your company been in business?" Most new companies (no matter what the business is) never make it due to a wide variety of reasons. In today's difficult financial climate you don't want to get stuck with a company that hasn't been in business for at least five years. Otherwise, they might not even be in business six months from now.
6. Be especially cautious when dealing with high-pressure sales people. They are usually working in a "boiler room" where they've been trained to prey upon a taxpayer's fears.
7. Always ask about the people who will be doing the work on your behalf. When will you be contacted once you retain their services? ? Will your phone calls and emails be returned promptly? Will your case be assigned to someone in particular so that there is real accountability? That's another reason to never give a firm 100 percent of your hard-earned money upfront. Once they have your full payment, you have no recourse.
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