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Kick off the New Year… by getting organized! – Tax Tip of the Week December 30, 2009

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Organizing your financial records is a great way to make tax preparation less taxing, and ensures you don’t miss any potential deductions.

For your 2009 tax return, create a file to store all the W-2s, year-end statements, 1099s, etc. that will be arriving in your mail box in January and early February.  In prior years, the IRS required that 1099s be sent no later than January 31st of each year.  A couple of years ago the IRS extended that deadline to February 15th of each year.  This was done as an attempt to curtail the number of those irritating “Corrected 1099s” the brokerage firms issue each year.

Secondly, look at your 2008 tax return to determine what records you should be looking for to complete your 2009 tax return.  The IRS requires you to have substation of each deduction you take—this means receipts.

Start now to organize for 2010.  At a minimum, create a 2010 file to store receipts as they accumulate during the year.  Better yet, create a separate file for each income source and deduction shown your tax return.  For example, create files for the following:  Income (pay stubs), brokerage statements, rental income, medical expenses, mortgage statements, charitable contributions.  Having these files in place throughout the year will make it a lot easier for you this time next year.  Also create a file of items you are unsure about, tax related news articles you read or questions that come up during the year.  This way, you won’t forget about them at tax time.

If you take any type of mileage deduction (business miles, medical miles, and/or charitable mileage) the IRS requires you to keep contemporaneous records.  This means you need to keep a daily log of the miles you drove.

These are only minimal suggestions.  Review the Tax Preparation Checklist on our web site. And for additional ideas to get organized, the IRS provides some good suggestions in their Publication 552.

You may not keep that resolution to go to the gym every day in 2010, but we do hope you can fulfill this resolution.

For specific organizing ideas for you, give us a call.

Rick Prewitt – the guy behind TTW

For specific organizing ideas or tax preparation advice, give us a call. In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com.

…until next week.

A week off from thinking about taxes! Tax Tip of the Week December 23, 2009

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We are going to take a break from tax planning this week.  Instead, the
family of Bradstreet & Company would like to wish you and your family the
most joyous holiday season and best wishes for 2010.

We hope you have enjoyed the Tax Tip of The Week this year.  Please let us
know what topics you would like us to cover as we enter the new year.

Rick Prewitt – the guy behind TTW
rickp@bradstreetcpas.com

PS – Even though there’s no TTW, don’t hesitate to call if you have
questions about year-end-tax strategies. In Dayton, call 937-436-3133 and in
Xenia, call 937-372-3504.- -Or visit http://www.bradstreetcpas.com.
…until next week.

Tis the season for charitable giving and tax savings – Tax Tip of the Week December 16, 2009

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Before Santa comes to visit, here is a year-end tax savings tip to consider:
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Go through your house and garage and see what items you have not used in the last two years and donate them to charity.  You can clean out space for all the new toys that are coming and receive a tax deduction for it!

The IRS requires that these non-cash donations must be in “good condition or better.”  Furthermore, you can only deduct the Fair Market Value (FMV) of the items donated.  Access the Salvation Army’s Valuation Guide for Donated Items.

If the FMV exceeds $500 you will need to complete Form 8283 as part of your tax return.  On this form you will need to list: name and address of the donee organization, date of the contribution, description of the items donated, FMV and the original cost of the items donated.

If you donate a car, or have non-cash contributions exceeding $5,000 give us a call to discuss the details.

We hope Santa is good to you this year while you take as many tax deductions as you can.

Is TTW Real?
While your kids are questioning if santa is real, we’ve received some interesting feedback that some of you don’t realize this is really Bradstreet CPAs reaching out each week (… some suspect this is a “packaged” communication to which we add our logo.) Well, rest assured it’s us and we’d love to hear from you. Let us know if there are any topics you’d like covered or SUBMIT a Tax Tip of the Week question.

Enjoy the week and  yes, Virgina, there is a Santa Claus,
Rick Prewitt – the guy behind TTW

Questions about year-end-tax strategies? In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com.

…until next week.

Are your kids subject to the Kiddie Tax? – Tax Tip of the Week December 9, 2009

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In 2009, dependent children (up to age 18, or age 23 if a full time student) with investment income exceeding $1,900 will be subject to the Kiddie Tax.  This means the income will be taxed at the parent’s highest marginal tax rate.

It wasn’t that long ago that the Kiddie Tax went away at age 13.  Now, you must make some financial and tax planning decisions for your college-age students as well.
The tax needs to be calculated using both Form 8615 (child’s return) and Form 8814 (parent’s return) to determine the lowest tax liability.

Now that the Kiddie Tax has been extended up to age 23, one tax planning strategy would be to invest a larger portion of the child’s investments in Section 529 education savings programs.  Earnings in a 529 plan are not subject to tax, and distributions if used for education expenses are not taxable.
Give us a call to discuss the details.

Give us a call to discuss other year-end tax planning strategies.

In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com.

…until next week.

Pay your state and local estimated tax payments now – Tax Tip of the Week December 2, 2009

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If you are required to make a fourth quarter estimated state or local (city) tax payment you have until January 15, 2010 to make your payment.  However, if you make the payment now you may be able to take the tax deduction on your 2009 federal tax return instead of waiting until 2010 to take the deduction.

Note:  If you are subject to Alternative Minimum Tax (AMT) this tax planning tip will not help you.

Give us a call to discuss other year-end tax planning strategies.

In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com.

…until next week.