Tag Archives: Taxes

Author : Mike McCoy

Want to help manage your year-end taxes? Here are some tax-saving planning tips to help you plan for your family Donate to your favorite charity Charitable contributions are an excellent way to decrease your taxable income, plus they help others Do you have an older vehicle sitting around that nobody uses? What about older clothes? Donate them!

Make sure to get a receipt or written acknowledgment showing the dollar amount of your donation (this will be needed for tax purposes) The IRS does not consider a cancelled check alone as sufficient proof of a donation of $250 or more Split your income Consider shifting income to your children who are in a lower capital gains tax rate Children only pay a 5 percent tax on capital gains, making it worthwhile to consider transferring some of your income to them to lower your taxes For instance, consider giving your kids investments that defer income until that time Stocks with an appreciated value are a popular vehicle for this tactic Buy U S Savings Bonds

These investments are tax-free until the day they are cashed In other words, the income is deferred until the day you cash them in Hire your children If you own a business, consider hiring your children to shift some taxable dollars to them By hiring your kids to work in your business, you lower your taxable income and the kids receive tax-free income

If they are too young to perform easy tasks such as washing the company car, include their pictures in your company literature Older children can perform tasks such as filing and answering phones Open a stock option trust Consider putting some or all of your non-qualified stock options in a trust for your children

Although you have to pay income tax on the value of the options when they are exercised, you can significantly save on estate and gift taxes Most option plans need to be amended to allow this type of transfer Consult with your financial planner for more details Life insurance proceeds Another way of transferring money to other members of your family is with life insurance

The recipient does not pay taxes on the face value of the policy if the amount is paid because the insured died Life insurance is considered a form of trust, whereby the insuring company is the trustee Interest received from the policy is taxable to the recipient, however Distribution amounts (income) will be shown on Form 1099-R Gifts

Consider giving gifts of either property or cash to help reduce your tax liability Excluded from gross income are the following: -Cumulative gifts to minors who are 21 years old or younger, only when held in a custodial account until that age -Direct payments to educational institutions and medical care facilities on behalf of ANY family or non-family member

-One-time lifetime/death-time exclusion of approximately $2,000,000 (actual amount varies according to the year the gift is given) -One annual exclusion of up to $12,000 as a donation recipient per taxpayer There is no limit to the number of recipients

The education and help to reduce your taxes to the legal minimize for your unique situation as well as protect your assets from potential lawsuits. Most business don’t realize the liability they carry-and it can completely wipe someone out.
For more info:www.freetaxstrategies.com

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Author : Terry Cartwright

Allowable costs for tax purposes include the cost of goods bought for resale including the cost of raw materials and all costs of production after adjusting the cost of sales for changes to the opening and closing stock of stock including stores being held, work in progress and finished stock

The adjustments of opening and closing stock values being to adjust the cost of sales to represent the cost price of the goods included in sales turnover Also included in the calculated cost of sales are commissions paid and discounts given to suppliers

Contractor costs are allowable at the gross invoiced value before deduction of any with holding taxes Where sub contractors costs and expenses directly produce goods or services for resale they may also be considered for inclusion in the cost of sales

All employee costs are included as allowable costs at the gross value paid including salaries and wages of both employees and directors of the business and temporary staff and consultants employed by the business In addition to the gross wages businesses may also claim employment costs such as fees paid to employment agencies, bonuses paid to staff and the costs and contributions made to pension schemes on behalf of staff employed

Employer national insurance and additional medical insurances are allowable as business expenses

Travelling and distribution costs are permissible business expenses and include running costs of cars, vans and lorries which would consist of fuel and servicing costs, repairs, insurance, vehicle licence fees and membership of breakdown organisations Also included in travel costs would be bus, train, air and taxi fares, and hotel room costs including private accommodation and meals or subsistence allowances in respect of food during the business trip

Allowable expenses fro property include business rent, rates and other invoices for use of the property including local government charges for general rates and water rates The cost of maintaining the property, repairs and maintenance and environmental expenses include light, heat and power costs plus expenditure on property insurance and security arrangements

The same costs as applicable to use of the home are also claimable in so far as the extent of the use of the home for business purposes

Repairs and maintenance of tools and equipment would also include renewals of smaller items of expenditure on tools and equipment where these items had not been capitalised as fixed assets

General administrative costs of running the business would include telephone and stationery costs, fax and mobile phones, printing and postage, computer software and small office equipment costs that have not been capitalised Other general costs may include trade and professional journals and subscriptions including the expenses of employees in respect of these items

Advertising and promotion costs in all media areas such as newspapers, magazines, websites, television, posters, mail shots and free samples are allowable Internet website costs including hosting and promotion would be advertising expenses

Business bank interest payable including business loans and financing arrangements on overdrafts and loans plus bank charges and business credit card charges are claimable Other allowable expenses would include hire purchase interest, leasing payments and other finance payments Financing costs also including the administration charges for the potential various finance arrangements

Legal and professional expenses to be claimed are accountants, solicitors, architects, surveyors and other fees from members of professional bodies including professional indemnity insurance

Specific sales income which has been included in sales turnover in the current or previous years and remains unpaid and unlikely to be recovered would be designated as a bad debt and may be deducted as an expense but also has to be written back if the money owed is subsequently recovered

Depreciation on fixed assets that have been capitalised and the profit and loss on sale of assets are not claimable but instead replaced with capital allowances which write off the costs of those fixed assets over a period of years according to the tax rates and rules applicable

Any other costs properly incurred in the business may also be claimed subject to specific items disallowed under the tax authority rules

Terry Cartwright, CEO DIY Accounting, a qualified accountant in the UK, designs Accounting Software on excel spreadsheets and Payroll Software for small to medium sized business providing a complete accounting solution and also supplies Company Formation packages for new limited liability companies

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