Tips for Mid-Year Tax Prep

The last thing you want to do come March or April is scramble for tax information. So why not start now? Here are some tips on how to make the tax season easier for you and for your accountant.

http://money.msn.com/personal-finance/10-midyear-tax-moves-to-make-now

What tips do you have?

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Keeping Records

Most people store their old records, (such as old tax documents, receipts, and bills), in boxes in their basement. There will be a section of the basement devoted to boxes of old documents that people keep for those “just in case” moments that will probably never happen. However, many people would rather be safe than sorry, so they stockpile all of these old documents and hoard them until they finally see that there is no use for them any more.

The IRS has some tips on what documents are good to keep, how long you should keep them, etc. so that you can store other useful things in your basement.

What tips do you have for storing your documents?

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Recordkeeping

Babies and Taxes

Duchess Kate

With the Royal Baby on it’s way into the world, we would like to inform you of how those little bundles of joy can actually be quite handy on your tax return. Turbo Tax gives us a list of things that babies help save you money on when it comes time to fill out your 1040 form. Can you think of any other ways that having a baby might save you money?

http://blog.turbotax.intuit.com/2013/01/01/life-events-series-how-having-a-baby-can-save-you-money-on-your-taxes/?cid=soc_tw_f_soc_ttfan_blg_20130722_10019294

RI Tax for Unemployment Under Scrutiny

Rhode-Island-facts-rhode-island

Rhode Island is trying to figure out how to best handle it’s unemployment tax. Many companies will hire an employee and lay them off for a season when their business is slower. They will then rehire them after a period of time once business picks up again and there is a need for more workers. Rhode Island’s unemployment tax is the highest in the nation, as well, which is what is causing much of this new questioning.

“They point to a pattern that suggests some businesses, despite the high costs, are finding the tax to be a real bargain. These businesses lay off on a regular basis, which raises their tax bills. But even with the extra money they pay in, the return on investment is bigger. That is, their contributions fall short of what the fund pays out to their laid-off employees.” (Providence Journal)

What is your take on this new policy? Do you think it will help businesses?

http://www.providencejournal.com/breaking-news/content/20130622-r.i.-unemployment-tax-targeted-as-unfair-bad-for-business.ece

Tax Benefits for Families with Special Needs Children

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Having a child with special needs can be financially challenging for a family. They have the responsibility of paying for medications, medical bills, possibly equipment, and school as well as many other things. If you or someone you know has a child with special needs, this may come as a sort of relief, or just a helping hand. Either way, instead of spending money on taxes, spend it on necessities for your child.

Because of the large increase in special needs, there has become an increased awareness as well as more tools to ease the situation. It is also common knowledge that these children need specialized attention and curriculum in school. Many times schools have to administer medical help to children because of the specific needs of the child.

“[…] according to Regs. Sec. 1.213-1(e)(1)(v), the unreimbursed cost of attending a ‘special school’ for a neurologically or physically handicapped individual is deductible as a medical expense if the principal reason for sending the individual to the school is to alleviate the handicap through the school’s resources.” (Journal of Accountancy)

There are many benefits to having these expenses deducted as medical expenses. The expenses include transportation, food, housing, and the cost of special education. A regular school that has a special needs program can also count for this deductible. If a child attends a special school but can function in a regular school over time, there is another policy for that:

“In Rev. Rul. 78-340, the IRS concluded that a taxpayer whose child had severe learning disabilities caused by a neurological disorder (e.g., an ASD) could deduct as a medical expense amounts paid for tuition and related fees for the child’s education at a special school that has a program designed to ‘mainstream’ these children so they can ultimately return to a regular school.” (Journal of Accountancy)

Though having a child with special needs can put a family through financial strain, parents still want their child to have a quality education. Now those families can do that with less stress.

For further information, read the whole article that I was citing: