Charitable Summer Giving Equals Tax Deductions

During the leisure-driven summer season, people should still want to increase their charitable giving. Not only is this a noble enterprise, but it also benefits the taxpayer during tax season. There are many avenues of giving that can earn a tax deduction for the average person.

For instance, children’s summer camps provide fun and safe day care to many needy kids. They rely on donations to help parents with summer time care while parents are working and the kids are not in school. Another good avenue is finding a community fan and air conditioning drive which helps families and the elderly avoid heat-related illnesses during the sweltering summer months.

The national debt clock outside the IRS office...
The national debt clock outside the IRS office in NYC. (Photo credit: Wikipedia)

Or, finish your spring cleaning in the summer. Donate the clothing, household goods and other items no longer needed to not for profits who refurbish and resell them in their thrift stores.

Here is a caution, however. While charitable giving is important and worthwhile, be sure to check that the organization is legitimately not for profit. Check its references online. Ask friends and relatives what they know about it. Call the organization to inquire about its tax exempt status. Don’t donate unless you know all the proper paperwork is in the hands of the Internal Revenue Service.

To further credential your charitable giving this summer, be sure to save the receipts the not for profit provides with a donation. Use online tax software such as Turbo Tax to keep your donation records in good order. Turbo Tax Its Deductible records everything necessary to give correct documentation to the IRS come tax season.

Remember, no matter how you spend your leisurely summer days, plan to send some money, time and belongings to the charitable organization of your choice. Correctly recorded and documented, those donations will add up to nice tax deductions in April.

Consider Investing In H&R Block – Soon!

In the past, many people have filed their taxes for free with H&R Block. January through April is H&R Block’s make-or-break season due to tax filings. The company brings in enough revenue in the early spring to cover any losses over the rest of the year. 2014 stands out as a year of smart, positive changes at H&R Block.

H&R Block

This year, the company has decided to downsize its unprofitable retail operations and cut down on free tax form preparation. As a result of these changes, there was a slight drop in tax returns prepared in H&R Block offices this tax season. Industry analysts polled by FactSet predict earnings per share of $3.26, quite an increase from $2.42 a year ago. This increase can be attributed to the aforementioned strategic changes at the company.

There are other changes happening within H&R Block in 2014. In April, the company signed a deal to sell its bank. This deal has been in the works for quite some time, and the stock market rejoiced upon the news. This is not to say that the bank is a drag on earnings. Selling the bank frees management from the burden of regulatory oversight on banks, and it gives people the option to buy back even more shares.

Another recent development at H&R Block is their plan to increase revenue as a result of the Affordable Care Act. As the law is implemented, health insurance and taxes are becoming more and more intertwined. Difficulties with connecting consumers to insurers presents an opening for H&R Block to expand its business model beyond tax preparation and financial services.

Despite the good news on the bank sale and health insurance opportunity, the company’s stock is still priced to sell. Get it below cost, before the stock price catches up to these recent improvements.

Turbo Tax And Mortgage Tax Deductions

Turbo Tax 2014 and Mortgage Tax Deductions

Many homeowners feel that it is more beneficial to claim a mortgage tax deduction than to pay off their mortgage. However, they really need to consider whether it is more beneficial to build up their savings or to pay off the mortgage debt completely.

English: mortgages Green Bay, WI
English: mortgages Green Bay, WI (Photo credit: Wikipedia)

First, a homeowner needs to look carefully at all the items on the return. You need to know that a tax credit is not the same as a deduction. Deductions decrease the taxes you are obligated to pay; while tax credits reduce your taxable income. If you do not have a mortgage, you may pay more taxes; however, the taxes you pay may be lower than the annual interest you pay on your mortgage. It is not good long term planning to keep a mortgage on your home for a tax break.

What you need to be careful with is using your savings to pay off your mortgage in this uncertain economy. Look carefully at your job security, health and what would happen if you lost your job. You never know when you will need to utilize your emergency funds. If you pay off your mortgage, you might have to sell the house or borrow against it if your emergency funds are depleted. Ensure that you are saving for retirement and maintaining an emergency fund before considering paying off your mortgage.

Tax Season Dates And Tips

The new tax season is approaching quickly, and now is the time to get helpful information about state and federal tax filing.

The recent government shutdown prompted the Internal Revenue Service to delay federal income tax processing until the end of January 2013. Income tax agents may complete your return prior to January 31st, but they will have to hold onto it until the 31st.

Federal refunds should still be received within three weeks if filed electronically and within eight weeks for paper returns. TurboTax 2014 may be a great resource to help you get ready no matter how you end up filing your 2013 or 2014 taxes.

State tax processing is scheduled to begin on January 22nd and 23rd, with a processing window of four to twelve days. Electronic processing may occur within four days, and paper returns may be processed within eight to twelve days. You still have the option of receiving a physical check or a direct deposit, but the electronic filing and direct deposit options may speed up the entire process for you. You may be anxious to file your taxes, but a good review with TurboTax 2014 may result in more savings than you ever imagined.

IRS Fresh Start Program

IRS Fresh Start Program

There is a new system called the IRS Fresh Start Program which aims to make it easier for people to pay back taxes and avoid a lien coming against them. There are three major parts to the IRS program. Tax liens, installment agreements and offers of compromise are the three features of the program.

The program increases the amount a person can owe before the IRS will file a notice of federal tax lien. Even though the IRS can file before the 10,000 limit this does increase it for the average person.

The IRS has also agreed to more installment options. One can file for an installment plan right over the internet. This could increase monthly payments for up to six years. If the agreement needs to be extended for longer than six years, financial hardship would have to be shown to the IRS.

Offers in Compromise are another agreement for taxpayers to be able to pay off debt but at a lesser amount. The IRS is now more flexible in its way to look at the taxpayers ability to pay. Generally the IRS will accept an offer if they feel it is a fair amount for a reasonable amount of time offered.

This new program will hopefully help taxpayers starting with the 2012 taxes. With compromise from both the IRS and the taxpayer all parties can be satisfied. The taxpayers will also feel less likely that they are being targeted and forced to pay amounts that they can never reach.