Archive for the ‘Family’ Category

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Take a Vacation from Taxes

In Accounting & Finances,Business,Culture,Entertainment,Family,Taxes on August 20, 2012 by Sufen Wang Tagged: , , , , , ,

Rent Smart and Take a Vacation from Taxes:

Hopefully you were able to sneak away from work this summer and relax with your family at your vacation home: swimming, fishing, trying to keep up with the kids on breath-taking hikes. Unfortunately, it’s time to go home. The kids are tired of wearing sunscreen, and just want to go back to their air-conditioned rooms, and video games. Worse, your boss already sent you a dozen e-mails about what’s due next week. As you’re loading up the car, you wish you could find a renter to put the vacation home to good use for the last few weeks of summer.

Actually, that’s a very good idea. See, if you rent out your vacation home for fewer than 15 days a year, you don’t have to report it to the IRS. And if you don’t report something to the IRS, you don’t have to pay taxes on it. In other words, your rental income for 14 days or less is tax free.

14 is the magic number though (or more specifically, 14 days, 23 hours, 59 minutes, and 59 seconds). Anything over that and you must report the income on Schedule E. So if Joe Schmoe Renter is really enjoying the lake house after two weeks and wants to stay longer, you have to decide if you want to deal with the hassle of kicking him out, or the hassle of filling out Schedule E.

If you choose the latter option, things get a little confusing. You have to start looking at how much you used the vacation home for personal use versus how many days it was occupied by a renter. Then you’ll be able to figure out how much you can deduct, which expenses you can claim, and how you report them. You can check out how to do the math on Publication 527: Residential Rental Property. If only vacation could always be all play and no work… 

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State Sales Tax Holidays

In Accounting & Finances,Business,Culture,Family,Taxes on August 10, 2012 by Sufen Wang Tagged: , , , , , ,

Almost Better than Christmas…

A lot of people accept the fact there’s sales tax on most products and they pay it without complaint. Other people accept the fact that there’s sales tax, and they pay it, but grumble every time they do so. And then there are the people who order everything online so they don’t have to pay sales tax, or if they can’t find an item online, they drive around from city to city, looking for the one with the lowest sales tax rate. And finally, there are the die-hard-no-sales-tax believers, who have moved to Alaska, Delaware, Montana, New Hampshire, or Oregon by now, so they don’t have to worry at all about a state sales tax.  

Now is the perfect time for anyone in those last three groups to take an end-of-summer trip across the United States. Many states have an annual, back-to-school State Sales Tax Holiday where consumers can buy certain items without paying sales tax. For example, from August 10-11 in Georgia, you can purchase school supplies worth up to $20 each, clothing items up to $100 each, and computers worth up to $1,000 each, without having to pay – you guessed it – sales tax.

In Connecticut, you have from August 19-25 to update your wardrobe – tax-free – on any clothing and footwear items under $300 each. While you missed your chance to buy a tax-free Energy Star air conditioner in Texas on Memorial Day weekend, you can still purchase tax-free clothing, backpacks, and school supplies ($100 max. cost each item) from August 17-19. Or you could just head over to Virginia anytime from October 5-8 to get your Energy Star products with no sales tax, at a maximum cost of $2,500.  Louisiana had the best offer in the first days of August with all tangible personal property (pretty much any item you can think of under $2,500) tax-free.

Unfortunately, there seems to be an absence of sales tax holidays on the west coast – perhaps that’s the price of good weather year-round.  However, Georgia just got on the State Sales Tax Holiday bandwagon in 2012, so it’s likely that other states will participate in the near future.  Texas, Connecticut, and the Carolinas have been doing this for over a decade, so if you missed the holiday this year, you can be pretty sure it will be back next year. That gives all of those “frugal” individuals out there time to look for the cheapest deals on flights and hotels. 

Happy Shopping, Sufen Wang, Wang Solutions

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Get a Summer Job!

In Accounting & Finances,Business,Culture,Education,Family,Insurance & Liability on July 31, 2012 by Sufen Wang Tagged: , , , , , , ,

At first, working during the summer sounds awful to most young adults. Then they usually stop complaining when their first paycheck arrives. However, they usually start complaining again once they realize that with income, comes taxes.

Meet Form W-4: Employee’s Withholding Allowance Certificate. This form is used by employers to determine the amount of tax that will be withheld from your paychecks to cover your income tax liability. You, along with everybody else, must fill out a W-4 when you start a new job – even if you work at that job for just one day.

Maybe you were lucky and found work as a waiter. Dealing with customers is difficult, but it also means you can get extra money from tips, and who’s going to say no to free,extra money? Unfortunately, you can’t just pocket your tips and forget about them– all tips you receive are taxable income which you must report. 

Perhaps you decide you want to be your own boss for the summer. You start doing odd jobs around town: babysitting, mowing your friend’s dad’s lawn, walking your neighbor’spoodle up and down the street. Congratulations on being a young entrepreneur,but the earnings you receive from self-employment are still subject to income tax. And if you end up mowing a lot of lawns and make $400 or more from self-employment, you’ll have to pay a self-employment tax.

If you get a job as paperboy (or girl), at least you’ll be done with work by the time most of America wakes up for work. And teens have special rules when it comes to federal taxes. Because newspaper deliverers are generally treated as self-employed, they have to pay the self-employment tax. However, if you’reunder 18, and you don’t meet all of the carrier self-employment conditions, you are exempt from that tax.

Everyone has to start working at some point. If you have nothing do this summer except wait for school to start, then you might as well start mowing some lawns! 

On the Money,

Sufen Wang

Wang Solutions

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H20 – 101:

In Culture,Education,Family on July 29, 2012 by Sufen Wang Tagged: , , , ,

Stay Smart about Water Safety

It’s summer. Which means it’s hot. Which means people like to go swimming. Which means people should brush-up on their water safety knowledge. Especially since drowning is the fifth leading cause of unintentional injury death in the U.S.

It might seem obvious, but a major factor in drowning is not being able to swim. That refers to both children and adults. So guys, drop the macho man act, and don’t pretend you can swim if you can’t. There’s a reason why nearly 80% of people who drown are male.

This might also be news to some men out there: alcohol impairs both your motor abilities and motor boating abilities, and the sun heightens its effects. Alcohol is a factor in 70% of water recreation death sand it causes at least 1 in 5 boating fatalities. Water + heat + alcohol = one dangerous cocktail.  

Children are another group at risk, and 1 in 5 people who die from drowning are age 14 or younger. This is often due to lack of close supervision: leaving the kids alone in the pool for a minute is putting their lives at risk for a minute. There also needs to be a four-sided fence around water areas, such as your home pool, to keep out curious kids – and all kids are curious! 

You can prevent the worst from happening before you head out on the water. Take swimming lessons first. Check the forecast and if the weather looks stormy, postpone your day at the beach. If you see a rip tide, don’t even risk it.  (Rip Tide Safety Tip)  And don’t swim alone – pick a buddy and keep an eye on each other.

Life jackets got that name for a reason – they’re jackets that save your life. At least half of all boating deaths would not have been deaths if the victims had been wearing life jackets.  Yes, we know that wearing a life jacket may spoil your fashion style.  But put common sense over fashion sense and put on that puffy, orange jacket; it may be the best outfit you will ever wear in your life time!

If worse does come to worst, be prepared. Stop saying that you’ll learn CPR someday and take a class today, before you go to the lake. You won’t regret it.
On the Summer Fun,
Sufen Wang
Wang Solutions

Articles

Government On-The-Go:

In Accounting & Finances,Business,Culture,Education,Entertainment,Family,Human Resources on July 8, 2012 by Sufen Wang Tagged: , , ,

Mobile Apps for Every Occasion

Poke. Poke. Poke. Need a break from Facebook during your lunch break? Put your smart phone and mind to better use by trying out the apps your government has to offer. Oh yeah, they’re all free, so you’ve got nothing to lose.

While not everyone will find all these government apps useful, there’s something useful for everyone. For example, it’s unlikely that a teenager would scramble to download the “Budget of the U.S. Governmentapp, which provides info from the FY13 Budget book, or the “House and Senate Member Guide,” which offers a picture directory of every single Member of the 112th Congress. Exciting?! Eh?!

However, if that high school student forgot to do their homework, they might want to download “Science.gov Mobile” to find quick answers to all their science questions. Or if they think they’re too cool for school, tell them to download “SatelliteInsight” – it looks like a video game, but it really teaches kids about NASA’s GOES-R,the Geostationary Operational Environmental Satellite, R series. If you don’t know what that is, then get the app too!

Of course, many of the apps are perfect for the average, working American. First, check the forecast with the “National Weather Service.” Then, when you make it to work and start to feel claustrophobic in your cubicle, whip out the “Tactical Breather” app and gain control over your stress level. If that doesn’t help, and you need a cigarette, use the “QuitSTART” app to become tobacco free. When you’re done for the day, use “DOL-Timesheet” to record the hours you worked. If your boss doesn’t pay up, you can always use the “USAJOBS” app to find federal employment.

Admittedly, some apps are very strange. The “MojaveDesert Tortoise” application allows you to upload a photo, take a survey, and find out more info if you happen to encounter this threatened species in the middle of the desert. Though, you’ll probably be more concerned with finding water than taking pictures.

There’s a lot more where these came from. Be aware that some apps were designed only for the iPhone, some only for Android,etc., so pick those compatible with your device. Now all you need is an app for finding apps.

On the Apps,
Sufen Wang
Wang Solutions

Articles

Hosting an Exchange Student?

In Accounting & Finances,Business,Culture,Education,Family,Taxes on June 25, 2012 by Sufen Wang Tagged: ,

Don’t Expect the IRS to Help Much!

School’s out for summer and students across the country get to sleep in and watch cartoons. However, summer is also the time when foreign exchange students get ready to travel and arrange their fall residence with their foreign hosts. If you’re thinking of being a host, you might want to do some homework, especially on how much tax relief (or how little) you’ll get from the IRS.  

$50! That’s the MAXIMUM amount a taxpayer who hosts a foreign exchange student can deduct from his/her federal income tax as a “charitable contribution in qualifying expenses per month for maintaining the student.” If you buy the kid a pair of sneakers, you’ve already spent more than your deduction. And let’s just say that the IRS doesn’t make it easy to get even this small amount.

No frat boys, sorority girls, or any college students for that matter. To get the tax relief, the student you host must be a full-time 12th grader (or lower) in a U.S. school. And don’t try to pass your teenage son off as an exchange student, although he might seem like a stranger to you.  The person you host can’t be a dependent or a relative. Most restrictively, the student must live in your home “under a written agreement between the taxpayer and a qualified organization as part of the organization’s program to provide the student with educational opportunities.” These are only the key limitations, so be sure to check out the IRS publication for more fine print.

Luckily, lots of expenses count towards the deduction: the cost of books, food, clothing, transportation, entertainment,etc. We all know that teenagers hate books, but they love food, clothing, and especially entertainment, and so you’ll probably hit the $50 mark the first day your exchange student arrives. Just keep reminding yourself that $50 per month is as much as you’re going to get back from the IRS.

And it doesn’t look like that amount is going to be raised anytime soon. Back in 2005 a bill was introduced to increase the deduction to $200 per month, but the bill flopped. So if you’re going to be hosting an exchange student, don’t do it for the money. Do it because it’s agreat learning experience for everyone involved!

 

On the Money,
Sufen Wang
Wang Solutions

 

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The Joy of Adoption:

In Accounting & Finances,Culture,Education,Family,Taxes on March 30, 2012 by Sufen Wang Tagged: , , , , , , ,

Now with an Added Bonus from the IRS

Have you read the tabloids lately? Brangelina is having another baby! No, not adoption this time, but for those adoptive parents out there who need extra money, here are some IRS tips on taxes and credits.
 
With adoption, comes responsibility – and lots of bills. Luckily, if you paid expenses to adopt an eligible child in 2011, you have even more to be excited about than just a new member of your household. Say hello to an expanded adoption credit. The Affordable Care Act increased the credit to a maximum $13,360 and made it refundable. In other words, you can get the adoption credit as a tax refund even after your tax liability has been reduced to zero.
 
Of course, there’s always fine print when money is at stake. While you may consider the Chihuahua you rescued from the animal shelter to be your baby, the IRS defines an eligible child as “under 18 years old, or physically or mentally incapable of caring for himself or herself.” And those expenses don’t refer to the big screen TV you bought on the way to the courthouse. They mean adoption fees, court costs, attorney fees – basically all the “reasonable and necessary expenses” directly related to the legal adoption. One more qualification: if you are rich like (Brangelina), then you are out of luck. Anybody with a modified AGI of $225,210 or higher cannot receive the credit.
 
Unfortunately, getting the credit requires actual paperwork. Yes, you read that right. You must file a paper tax return, Form 8839, Qualified Adoption Expenses, and attach documents supporting the adoption. No, a hand-written note on a piece of binder paper doesn’t count as a supporting document. The IRS wants you to include stuff like a final adoption decree or a placement agreement from an authorized agency. All of this doesn’t mean you can’t use IRS Free File or other software to prepare your returns first. However, you must eventually print your returns and mail them if you want the IRS to show you the money.

So, for those of you with a big heart and an ache to have children running around the house, adopt away!  Hope this article helps the road to adoption a little easier….

On the Money,
Sufen Wang
Wang Solutions