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Tax Free Money? Take advantage of IRS 8b payouts
Interest on state and local bonds (i.e., obligations of a state, the District of Columbia, a U.S. possession, certain Indian tribal governments or any political subdivision of the foregoing) is exempt from federal income tax. You can take advantage of the special tax treatment of interest income from earned on state and local bonds. Even though the interest from these sources is tax exempt, it must be reported on line 8b of your federal income tax return, thus "IRS 8b payouts."
You also need to consider the other tax implications of tax exempt income. Even if interest isn't subject to federal income tax, it may have to be taken into account, e.g., in calculating the taxable portion of social security benefits or determining if you must pay the alternative minimum tax.
Seven states are constitutionally required to make these interest payouts prior to paying any other debt. These states are NY, GA, WA, MN, NM, NV and MD. You don't have to live in these states to be able to buy their bonds, so take advantage of this opportunity!
Get more information in our members only section, including the taxation of other states interest in your state.
For questions or more information, contact us at
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or 404-944-3172. |
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Six Months Until the Largest Tax Hike in HISTORY
Source: Americans for Tax Reform, http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#
In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:
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State Tax Amnesty and Sales Tax Holiday Programs
States sometimes offer tax amnesty periods. These allow taxpayers to file prior tax returns with reduced or no penalties - a great opportunity to file back taxes for only the amount of tax plus interest. See the chart to see if your state is having a tax amnesty program. Contact us at
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to help you file those old tax returns.
Additionally, typically around the start of school season, many states will offer sales tax holidays. These allow taxpayers to purchase items with no charge for sales tax. These items typically include clothing, computers, printers, and other back to school items. Each state has it's own version and it's own "season."
See the chart in our members only section to see if your state is offering amnesty or has a sales tax holiday.
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Gulf Oil Spill - Tax Q&A
Source: www.irs.gov
Q1. Is a taxpayer required to include in gross income payments the taxpayer receives for lost business income, lost wages or lost profits?
A1. Yes. The law requires that a taxpayer include in gross income payments the taxpayer receives for lost business income, lost wages or lost profits. For information on whether estimated tax payments may be required, see Publication 505, Tax Withholding and Estimated Tax.
A self-employed individual who receives a payment that represents compensation for lost income of the individual’s trade or business should include the amount of the payment in net earnings from self-employment for purposes of the self-employment tax. For more information about reporting self-employment income and paying self-employment tax, see Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ).
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