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Follow on Google News | Freedom Tax Relief Announces 9 Tax Benefits To Evaluate Before Seeking Help With Tax Debt2010 Tax Relief Act could help, but tax payers must address tax debt
By: Aimee Bennett “It is important for all tax payers to understand their tax obligations as early in the year as possible to prepare for the tax filing deadline of April 15,” Staley said. “People who will have a tax debt that they cannot pay should seek out help from a reputable tax resolution consultant. Options do exist with the IRS to manage significant tax debt.” Staley highlighted these nine aspects of the 2010 Tax Relief Act that might benefit tax payers: 1. Extended unemployment benefits. The tax compromise that passed in mid-December extended emergency unemployment compensation (EUC) so that unemployed workers can receive a total of up to 99 weeks of unemployment payments. Benefits are issued according to specific rules. Workers who have already received benefits for 99 weeks will not be eligible for any additional benefits. 2. Tax cuts extended. The 2010 tax compromise extends existing tax cuts for all taxpayers for two years. This means taxpayers will still benefit this year from several tax breaks, such as the removal of the marriage tax penalty -- meaning that tax payers who are married filing jointly do not pay more tax than two tax payers filing separately. 3. Tax credits extended. Tax payers will also benefit financially from the extension of several tax credits. These include the Child Tax Credit (up to $1,000 for each dependent child under age 17), the Earned Income Credit (which benefits people with a low income – and the maximum income to qualify increases this year), and the American Opportunity Tax Credit, which benefits people attending college. 4. More money in paychecks. For 2011, workers will pay 2 percent less in Social Security deductions from their paychecks. This could amount to more than $2,000 for a worker earning the maximum subject to FICA tax (just below $107,000 per year). 5. Unlimited deductions. For 2011, deductions can be itemized no matter what percentage of income they comprise. This should allow more taxpayers to claim deductions. 6. Estate and gift taxes have big breaks. The 2010 Tax Relief Act makes estate and gift tax limits “portable” 7. New IRA rules. More taxpayers will qualify for deductions for payments to individual retirement accounts (IRAs). The IRS calculates how much tax payers can deduct based on their AGI. The limits are slightly higher for 2011 than in 2010. 8. Changes to AMT. Taxpayers will be able to take more credits against alternative minimum tax (AMT). The AMT exemption also will decrease. 9. Mileage deduction. Self-employed people who drive their cars for business and people who use their car to travel to medical appointments or for charitable causes might be able to deduct their mileage at 2011 deductible amounts. Drivers must follow certain tax guidelines, including keeping a record of total miles driven and the specific tax-deductible purpose. For 2011, the IRS has established deductible mileage amounts at 51 cents per mile for business miles driven, 19 cents per mile for medical miles, and 14 cents per mile for charitable purposes. Mileage also might be deductible (at 19 cents per mile) for some moving purposes. Many of these credits and deductions are subject to income limitations or other restrictions. To learn more, visit www.irs.gov and/or consult a tax preparer. Freedom Tax Relief also recently created an objective guide to help U.S. taxpayers understand their taxes, avoid tax debt problems, and get help if they need it. The free guide is available for download at http://www.freedomtaxrelief.com/ # # # Freedom Tax Relief (www.freedomtaxrelief.com) Based in San Mateo, Calif., Freedom Tax Relief (FTR) provides tax representation services. Working directly with the IRS, FTR helps individuals and businesses prepare back tax returns, become compliant with the IRS, determine the optimal IRS tax resolution program and resolve tax problems. Since inception, FTR has achieved a savings rate of 87 percent on IRS-accepted offers in compromise. The company, which has served nearly 9,000 consumers since 2004, is a wholly owned subsidiary of Freedom Financial Network LLC. End
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