If you decide to make an appeal to the IRS on your own there are some tips that you need to know. This article will deal solely with how to prepare a protest in the event you need to appeal some decision made by the IRS.

A protest should be a document that is presented to the IRS which contains all the facts, documents and any other supporting article that can persuade the IRS to view the taxpayer in a more favorable way. This protest should be drafted in a way that will maximize things that favor the taxpayer and minimize things that do not favor the taxpayer. The importance of putting together a protest is to help the IRS see the taxpayer in a different and ultimately more favorable way.

Make sure to be realistic about writing a protest because it can be very time consuming. You will need to research your specific problem in the tax law and then interpret it to the IRS correctly. Interpreting tax law can be a very daunting task if you are not familiar with it. Seemingly simple problems can turn into complex jargon very quickly and this is why it is very important to take your time and understand the law when drafting your proposed protest.

It is important to remember that the Appeals Officer is going to have limited knowledge of your case when you decide to make a protest. Make sure that you research how the IRS examiner put your case together in the first place because it is possible that they misinterpreted the law. It can happen where an examiner puts a case together against the taxpayer and did not do their homework thoroughly enough.

Below I will list the important points to remember when drafting your protest:

1. Gather all the facts in the case

The first thing you want to keep in mind when drafting your protest is to write in a that presents all the facts of the case in a truthful manner but at the same time would convince the court to view the taxpayer in a favorable and sympathetic way. You want to write in a very clear and concise way to present the case in the best way possible. It is very important that after you have finished drafting your protest that you go back and review it against the tax laws that apply to it. Make sure that you have presented your case in favor of yourself but at the same time laid out everything in accordance with the law.

2. Bring to light any problems in their procedures

After you present your case against the IRS you may choose to present an analysis of how your case was handled by the examiner within the IRS. If you were able to find any weaknesses in the examiner’s report of your case then this is the time to present them. These weaknesses can include misinterpretation of the law, the logic used by the examiner and any procedures used that were not conducted correctly. The purpose of this is to show the IRS that you have a strong case and avoid going to court.

3. Leave no argument out

All your arguments should be made to the IRS no matter how small you believe them to be. This is because even if you believe them to be not important it is very possible that the IRS will view them in a completely different way.

4. Show cases that favor your case

You should present all previous cases that have taken place to the IRS that will be favorable to you. These can include revenue rulings, revenue procedures and tax law cases that dealt with a subject manner close to yours and will make your case more favorable for settlement.

5. Show all relevant cases, good and bad

Do not hide cases that have taken place and had outcomes that make your own case unfavorable. Make sure that you discuss these cases with the IRS and distinguish your individual case from them; you want to gain credibility with the IRS in every possible instance.

6. The devil is in the details

Make sure that you are as detailed as possible when drafting your case. The burden of proof is on you to prove to the IRS that you are entitled to a settlement. If you cannot provide detailed answers to all of the issues brought up by the IRS then they will have little incentive to provide a settlement to you.

7. Shift the burden of proof

If possible, you can actually shift the burden of proof to the IRS by providing all the facts in the case. Remember that the burden of proof cannot shift until you go to court but if you are able to show the IRS that it is possible, the Appeals Officer will review the case and may side with you instead of going to court.

8. Present an affidavit

You can use affidavits to persuade the IRS in your favor by showing them that you are very serious about the case. If you can show that you are able to prove the facts of the case in your favor the Appeals Office will be forced to review the case in a way that is favorable to the taxpayer. Keep in mind that if you submit an affidavit you are going to have to sign it under penalties of perjury.

Submitting a protest to the IRS is a very lengthy process depending on the size and scope of your case. Do not under estimate the amount of time it will take you to research the tax law relevant to your case, put your research in writing and then practice presenting your case to the IRS. Remember the most important part is to take your time and do a thorough investigation into your case.

Ms. Cruz has extensive experience in the financial and accounting sectors. Ms. Cruz has 15 years of tax expertise and more than eight years of experience in the tax relief industry, preparing tax returns on personal and corporate levels. Having negotiated IRS penalty and interest assessments, she has received more than $1.5 million in abatement’s per annum. Experience in payroll and payroll tax processes has informed her vast knowledge of financial services. At Ceridian, she was awarded the Vice President Award for Excellent Compliance Control and Highest Production and Quality Service.

FIN 48 is an interpretation that was meant to provide clarity around certain aspects of FAS109, specifically, the computation and disclosure of Uncertain Tax Positions (“UTPs”). As such, FIN 48 is an integral part of FAS 109 and needs to be considered within the tax provision work flow.

Under FIN 48, UTPs formerly computed under FAS 5 must now be reviewed under new standards for identification, probability, computation, and disclosure. Once this has been done, the results need to be fully integrated with the rest of the tax provision.

The integration of UTPs under FIN 48 applies to all of the schedules required to be disclosed in the tax footnote. For example, an increase in a UTP that has a significant impact on the tax rate might have to be separately disclosed in the effective tax rate reconciliation. Likewise, the breakdown of the tax provision into federal, state, and foreign components need to reflect UTPs in each of those jurisdictions. If there are UTPs set up for temporary differences, this could impact the presentation of deferred tax balances.

Under FIN 48, UTPs formerly computed under FAS 5 must now be re-viewed using new stan-dards for identification, probability, computation, and disclosure.

Integration of UTPs with the current taxes payable account presents special challenges. Before FIN 48, tax reserves computed under FAS 5 were typically recorded in the current payable on the theory that the government could demand payment at any time. This meant that refunds and payments due with the filing of the return were co-mingled in the ending balances. Past FIN 48, these items are still included in the ending balances; however, the movement in the UTPs must be disclosed in a separate rollforward using the following prescribed categories: Beg Balance, PY Increase, PY Decrease, CY Increase, CY Decrease, Settlements Expiration.

In the past, companies often shifted reserves within the payable with little or no disclosure. The rollforward of UTPs now requires companies to clearly breakout increases and decreases due to changes in judgment and the expiration of statute of limitations, both of which are offset by charges to the current tax provision. In practice, this means that the current tax provision related to the tax return needs to be tracked separately from the current provision related to UTPs to allow for separate rollforwards. Likewise, payments and refunds related to the filing of the tax return will have to be separated from payments and refunds related to the settlement of UTPs in order to populate the Settlement column of the UTP rollforward. Where a UTP is relieved with an audit settlement, a “true up” may have to be recorded as a PY Increase or PY Decrease, offset by an adjustment to the current tax provision.

The rollforward of UTPs within the current taxes payable may give rise to a cumulative translation adjustment where activity is recorded in local currency and is translated into a different reporting currency. A cumulative translation adjustment arises because the beginning and ending balances are recorded at the beginning and ending spot rates, and the activity is recorded at the rates used in the income statement for the period. In their presentation of the UTP rollforward, companies will have to decide the best presentation of this item; i.e. should the cumulative translation be combined with the activity columns or should it be separately stated. For calendar year filers, this disclosure is not required until the 4th quarter of 2007.

The rollforward of UTPs now requires companies to clearly breakout increases and decreases due to changes in judgment and the expiration of statute of limitations, both of which are offset by charges to the current tax provision.
Changes in tax rates can also have a signifi-cant impact on the integration of UTPs into the tax provision.

Changes in tax rates can also have a significant impact on the integration of UTPs into the tax provision. UTPs will normally be recorded at the tax rates used to file the tax return for the year in which the issue arose. For example, a potential disallowance of an expense in a prior year must be measured at the tax rates in effect for that year. This could be different from the tax rates used to compute the tax provision in the current year. This means that UTPs must be tax effected and carried forward using a unique rate structure that is not dependent upon the rates used in the tax provision for the current year. As noted above, the UTPs must be integrated into all aspects of the tax footnote disclosure. The different tax rate structures make it difficult to simply add UTPs and tax return activity together on a pretax basis. Instead, it may be advisable to tax effect the UTPs separately and then add them to the standard tax provision computations.
Under FAS 109, de-ferred tax assets and liabilities arising from the return are adjusted for future tax rate changes, normally with an offset to the deferred tax provision.

Where a UTP is expected to increase a state tax liability, the federal benefit of the state deduction must be taken into account. If this computation is made within the FIN 48 exercise, care must be taken not to duplicate the federal benefit of state tax within the rest of the FAS 109 calculation. In practice, this can lead to a state tax procedure that is different for UTPs than it is for items reported on the tax return in the normal course.

If a company records UTPs that are temporary in nature, these items must be included in the deferred tax accounts. Under FAS 109, deferred tax assets and liabilities arising from the return are adjusted for future tax rate changes, normally with an offset to the deferred tax provision. Since temporary UTPs are recorded at the rate used to file the return (which is the rate that will be used by the government to assess the tax) future tax rate changes will also impact the ultimate relief when the disallowed tax deduction is claimed on a future return. In this sense, temporary UTPs operate in the same manner as regular return-driven temporary differences. There is, however, one notable exception.

In the case of an expense caused by a tax rate decrease which reduces the value of an uncertain deferred tax asset, there is general agreement that this expense should be recorded in the deferred tax provision along with similar adjustments to return-driven deferred tax assets. However, some practitioners have taken the view that benefits resulting from an increase in tax rates applied to uncertain deferred tax assets should not be immediately recognized, but rather, companies should wait until either: 1. the expense is in fact disallowed by the government, or 2. the deduction is claimed on a future return. In either case, the uncertain deferred tax asset is not adjusted in the normal course with other return driven temporary differences. Following this view, uncertain deferred tax assets will have to be tracked separately, so that they are not adjusted for future tax rate changes in the current period.

Interest and penalties on UTPs can be reported above the line (gross) or below the line within the tax provision (net of tax benefit). Here, too, tax rates can have a significant impact. If reported above the line, the accured interest which is typically not deductible until paid will give rise to a deferred tax asset, subject to the same impact of tax rates on uncertain UTPs noted above. Non-deductible penalties will create a permanent difference that will impact the tax rate. If reported below the line, interest (net of tax benefit), will not be recorded in the current tax payable account with an offset to deferred tax asset (net of tax benefit). When the interest is actually paid (gross), the deduction is claimed on the return, but not the books, and the deferred tax asset is relieved. In practice a decision to report interest and penalties below the line can lead to bookkeeping problems in matching up the gross cash payment against the net liability recorded in the current taxes payable account. The choice to present interest and penalties above or below the line will also impact the presentation of the effective tax rate reconciliation disclosed in the tax footnote. This is due to the fact that the tax provision is divided into two potentially different figures for pretax book income, one which is reduced by interest and penalties and another which is not. This creates two different starting points for the effective tax rate reconciliation, thereby creating alternate presentations.

Most companies have procedures in place to “true up” their tax provision to the actual results reported on the tax return. FIN 48 can be viewed as a final “true up” which takes into account the final settlement of the return on examination by the government. In order to make this final adjustment, it is necessary to keep records of the return as filed, stated on a FAS 109 basis, so that the final “true up” can be recorded. In practice, this means keeping detailed records of the current and deferred accounts for all open years.

FIN 48 can be viewed as a final “true up” which takes into account the final settlement of the return on examination by the government.

FIN 48 is a clarification of FAS 109 which extends the basic tax provision computations into the area of UTPs. The creation of UTPs under FIN 48 creates some new issues related to additional disclosure such as the UTP rollforward as well as some computational challenges in the area of tax rates and cumulative translation adjustments. Companies need to consider the ways in which FIN 48 will impact their existing tax accounting procedures under FAS 109.

Property taxes are one of the largest line item costs incurred by apartment owners. However, many owners do not appeal effectively. Even though owners realize that property taxes can be managed and reduced through an appeal, some view taxes as an arbitrary estimate provided by the government which can’t effectively be appealed. It tends to boil down to the old adage, “You can’t fight city hall”.

Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner’s overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.

Why some owners don’t appeal

Some property owners don’t appeal because they either don’t understand the process, or don’t understand that there is a good probability of achieving meaningful reductions in property taxes. Some owners believe that since the market value of their property exceeds the assessed value, then it is not possible to appeal and reduce the property taxes. Although appeals on unequal appraisal are relatively new, there is a clear-cut way to appeal property taxes at the administrative hearing level based on unequal appraisal. Unequal appraisal occurs when property is assessed inconsistently with neighboring properties or comparable properties. Also, some owners are reluctant to hire a property tax consultant, even though many consultants will work on a contingent fee basis, in which there is no cost to the owner unless property taxes for the current year are reduced.

Overview of appeal process

The following are the primary steps in the annual process for appealing property taxes:

· Request notice of accessed value

· File an appeal

· Prepare for hearing

. Review records

. Review market value appeal

. Review unequal appraisal appeal

· Set negotiating perimeters

· Administrative hearings

· Decide whether binding arbitration or judicial appeals are warranted

· Pay taxes timely

Requesting a notice of assessed value

Property owners have the option of requesting a notice of assessed value for their property annually. Section 25.19g of the Texas Property Tax Code provides the owner the option to request a written notice of the assessed value from the chief appraiser. Owners benefit from requesting and receiving a written notice of assessed value for each property because it ensures they have an opportunity to review the assessed value. This notice should be sent on an annual basis. The appraisal district does not have to send a notice of assessed value if the value increases by less than $1,000. However, if an owner was not satisfied with a prior year’s value and the value remained the same, the appraisal district probably will not send a notice of the assessed value for the current year. In this situation, the owner might forget to protest since a notice of assessed value for the property was not received.

Nobody likes to pay taxes and that’s a fact. But taxes are necessary for the state to fulfill its purposes and the IRS is implacable when it comes to collecting. Yet, nobody should pay more than one is obliged to and so, when it comes to calculating the exemptions, benefits and deductions on taxes it is imperative to be trained. As a homeowner you are entitled to many benefits and deductions on taxes that can provide a lot of ease to your finances. Learn what you can deduct, what you cannot and where to turn to if you have any doubts.

Home Loan Interest Tax Deduction

When you take a mortgage loan, the payment for the money owed is the interests on the loan. The interests you pay each year on your mortgage are tax deductible and thus, you can include them on your tax presentations for reducing your tax payments. Bear in mind, however, that there are certain limitations for these deductions, especially when the amounts are significantly high because the administration believes then that your payment capacity is higher and any amounts that surpass certain level are no longer deductible. For more information about this issue, you need to contact a tax advisor or certified public accountant that will be able to evaluate your particular situation.

Home Equity Loans, Lines of Credit or Second Mortgages

Just like with mortgage home loans and due to the fact that these loans are also secured with your property and the administration wants to protect ownership, the interests on home equity loans and lines of credit or second mortgages are also tax deductible. Remember that just like with home mortgages, there are limitations that should be taken into account when the amount of interests is high. Remember that the loan needs to be secured with the property as only home loans and loans based on equity have interests which are tax deductible.

Home Improvement Costs Can be Tax Deductible

Though with some limitations, when you transfer ownership of the property you can deduct some of the costs associated with repairs or improvements to the asset from the capital gains tax associated with the property’s sale. Thus, you should keep this in mind if you are considering selling your property in the future as you will need all documentation that proves the costs and charges you incurred in due to the repairs or improvements you had to do on your home or condo if you want to be able to deduct them.

Non Deductibles

If you have a second property and the IRS considers that property a rental property you can deduct several costs like insurance, property taxes and other costs associated with the commercial transaction. However, there are costs that cannot be deducted regardless of the use you give to a property. For instance, utility fees, non-interest charges on mortgage loans, and non-rental insurances like fire insurance cannot be deducted from taxes. But always remember that all particular situations are different and you should contact a tax advisor for proper guidance.

The key to financing National Health Care, solving Social Security’s long term funding problem, and going to college free of charge is to lower taxes. As incredible as this sounds, it’s true. This can be accomplished by eliminating tax deductions and a simple restructuring of the tax code.

Eliminating tax deductions is the key to tax reform. This is because tax deductions are the main cause of tax fraud and the inequities associated with our current tax system. It is the tax deduction that allows the tax code to favor some segments of society over others, decrease the amount of revenue the government needs to properly fund the programs our society deems important, and leads directly to waste, fraud and corruption.

No serious attempt at tax reform can take place without addressing this problem. Therefore, abolishing the tax deduction is the first and most important reform that must take place. When combined with a simple restructuring of the tax code, these simple reforms create a tax system that treats everyone equally. And, when everyone is treated equally three things happen: First, the current codes ability to favor some segments of society over others is eliminated. Second, tax fraud will decrease. And third, government revenue will increase.

For example, in order to increase tax revenue from corporations we must first change the tax structure that allows businesses to reduce, delay or eliminate the taxes owed. Currently, corporations subtract from their gross sales those deductions found in the tax code and labels the resulting number the net profit. This figure is then used as the basis for determining the taxes owed. The first $50,000.00 of net profit is taxed at 15% and above $50,000.00 of net profit the tax increases up to 35%. This creates a very strong incentive to add as many deductions to the tax code as possible in order to reduce the net profit so that the corresponding tax liability is lowered.

The solution is to replace the tax on net profits with a small tax on the gross sales. By definition, the tax on gross sales means that there are no deductions. This reform eliminates the ability of corporations to use the deductions found in the tax code to reduce, delay or eliminate the taxes owed, eliminates the corruption associated with the current tax code, and creates the level playing field that requires all corporations to pay their fair share of taxes. And, when all corporations pay their fair share of taxes, government revenue increases.

The small tax on gross sales also produces a very small corporate tax liability. In fact, the business tax corporations will now be required to pay is so small that employer payroll taxes can be expanded to include National Health Care and still produce an overall tax liability lower than what corporations are currently required to pay. This overall lower tax liability will be the basis for corporate acceptance of their expanded payroll obligation.

These same principles apply to individual taxes. When deductions are eliminated, the ability of individuals to reduce, delay or eliminate the taxes owed comes to an end. This means that the scenario that now occurs, where wealthy individuals end up paying less in taxes than poorer individuals, is no longer possible. This translates into increased revenue for the government.

The elimination of personal tax deductions also heralds the end of personal income taxes. The elimination of income taxes presents as a tax reduction and this tax reduction allows for the expansion of payroll taxes to include National Health Care and Public Education. These new payroll taxes will be readily accepted because individuals will still be paying less in overall taxes and yet will receive more in benefits. Most people will simply wonder why these reforms had not been implemented earlier.

The elimination of tax deductions and a simple restructuring of the tax code needs to be implemented as soon as possible. This is because government revenue raised under the current system is inadequate. For example, in fiscal 2007 the government collected $2.4 trillion dollar, however, it spent $2.8 trillion dollars. This created a deficit of $400 billion dollars and this $400 billion dollars was added to the national debt (which is rapidly approaching $10 trillion dollars). Contrast these amounts with the revenue generated by the reforms set forth in my proposal. Based on very conservative numbers, my tax reform plan will increase government revenue from $2.4 trillion dollars to a staggering $3.31 trillion dollars. This means that rather than running a budget deficit we will be running a budget surplus.

If you don’t know about a possible tax break, you won’t use it. Here are the deductions that many taxpayers often forget. How many times have you done your taxes and, a few weeks later, discovered you had overlooked the chance for a deduction? Many times, surely. How can you not leave out these deductions the next time? Start preparing now!

Here are 10 very commonly missed deductions that can impact your tax bill for 2008 and your tax planning for 2009.

1 – Noncash contributions

Charity, as we hope everyone recalls, begins with a tax deduction. If you didn’t have the cash to give in 2008, let’s hope you charged it. And, likewise, if you don’t have the cash when it comes time to contribute in 2009, charge it. The deduction is permitted in the year of the charge, not when you actually pay the bill.

Get a receipt from any charity to which you gave a contribution, and, if you’re still concerned about documentation, get the credit card company to mail you their record of the transaction.

Let’s assume you emptied your closets and gave everything to Goodwill or a similar charity. The value of your donated items — clothes, furniture, etc. — is deductible. Obtain a written receipt. With noncash charitable donations, the rule is easy: No receipt means no tax deduction if you get audited. Clothes and household items must be in good or better condition to get the deduction.

If you’ve already dropped your old clothes in a Salvation Army box and walked away without a receipt, take the deduction anyway. You’ve legitimately made the donation. You simply may not be able to prove it in an audit. Beginning with 2007 returns, the law has required a receipt or some kind of written verification for all charitable contributions. Feel lucky? Play the audit lottery. You’re still an honest person.

If you are able to, reconstruct as much as you can the list of items you donated and then work out their market value. The simplest way is to go to a thrift store and check prices there. And then, naturally, when you make the contribution, get that receipt.

2 – New points on refinancing With interest rates so low over the past couple of years — even in 2008 and unquestionably in 2009 — tons of homes have been refinanced, occasionally more than once.

Any points you pay to refinance your home can be deducted on a monthly basis over the life of the new loan. So, if you refinanced your mortgage on June 1, 2008, for a 20-year term, seven out of 240 months will have elapsed after Dec. 31. If you paid $2,400 in points, you can write off $70 ($10 a month for seven months) for 2008. You can write off $120 for 2009 and each year thereafter until the points have been deducted in total. The sum may not be large, but every little bit helps.

3 – Old points on refinancing This is one deduction many people overlook. All unamortized points on an old refinancing can be deducted in the year of a new refinancing.

So, let’s assume you refinanced on June 1, 2007, and paid $2,400 in points. You refinanced once more on June 1, 2008. You will be able to deduct all the unexhausted points on the 2007 loan on your 2008 return. That’s $2,280 plus the $50 you could deduct for January through May 2008. Similarly, if you refinance the 2008 loan in 2009 (if interest rates remain low and a lender still likes you), you can write off the remaining balance on your 2009 return.

4 – Health insurance premiums Any health insurance premiums you pay, including some long-term-care premiums based on your age, are potentially deductible. You have to add these, however, to your medical expense pile. Medical expenses must exceed 7.5% of your adjusted gross income (AGI) before they bring you any tax break.

But if you are self-employed and not covered by any other employer-paid plan, you can deduct 100% your health insurance premiums “above the line.” Above the line means the expense is included in adjusted gross income and doesn’t get lumped in with itemized deductions. That means that you not only do not have to exceed the 7.5% floor, you don’t even need to itemize!

5 – Educator expenses If you’re a qualified educator, you are able to get an above-the-line deduction of as much as $250 for supplies you bought in 2008 and may buy in 2009. That includes books, supplies and even computer equipment.

You qualify if you’re a kindergarten through grade 12 teacher, aide, instructor or principal.

Congress extended the law through 2009, and will likely renew the break for 2010.

The alternative minimum tax was in the beginning designated to ensure high-earning Americans paid their fair portion of income taxes. But it hasn’t been considerably altered over the years and ensnares more and more middle-class people.

6 – Student higher education expenses For 2008 and 2009, if your adjusted gross income isn’t higher than $65,000 ($130,000 on a joint return), you can take an above-the-line deduction of as much as $4,000 for any higher-education expenses you paid.

Check if you qualify for the Hope and Lifetime Learning credits. The Hope credit is worth as much as $1,800 per student in 2008 and 2009. The Lifetime Learning credit is worth as much as $2,000 per return. Compare the credit with the deduction, and go with the one which gives you the biggest benefit. And, if you don’t qualify for either credit, you may be able to deduct up to $4,000 in education expenses in 2008 and 2009.

7 – Clean fuel credit Credits are great since they are a dollar-for-dollar reduction in tax. And if you purchased a new hybrid gas-electric auto or truck in 2008, you can take a conservation tax credit of between $250 and $1,000 and an further fuel economy credit of between $400 and $2,400, dependent on the make and the fuel economy. A hybrid car combines an electric motor with a gas fueled internal combustion engine.

But move quickly. The credit begins to phase out when the auto manufacturer sells its 60,000th hybrid vehicle. That’s the total per manufacturer, not 60,000 per model. Once the cap is hit, the phaseout starts at the start of the second subsequent calendar quarter.

You can’t get a credit anymore on a Toyota Prius, and credits were to run out Honda Civics on Dec. 31, 2008. A number of cars still qualify, including models from Ford, Chevrolet, Mazda, Saturn, Nissan and Volkswagen.

Once 60,000 cars are sold, buyers over the next two quarters can claim just half the credit. In the six months after that, 25% of the full credit. After that, nothing. You acquire the deduction in the year you start using the car, and you must be the original owner. Take the deduction on Form 1040 by writing in “clean fuel.”

Consumers must do more legwork to understand what sort of tax savings they might get if they’re purchasing a particular hybrid car or truck. Check with a dealer or tax preparer.

8 – Investment and tax expenses Many people forget tax planning and investment expenses because they’re part of miscellaneous itemized expenses. Their total must exceed 2% of your adjusted gross income before you get any tax break.

Expenses to track include your employee business expenses, tax preparation fees and even the part of your legal or accounting fees related to tax planning. For instance, in a divorce, the legal time spent bearing on the tax aspects of alimony and child support would qualify. As would the tax aspects of estate planning.

A lot of people short themselves on the deduction of investment expenses. They remember the safety deposit box fees. But what about the annual fee paid to your broker and any IRA fees you pay directly? You may remember the cost of your investment publications on subscription — such as Forbes, Fortune, BusinessWeek, Worth and Barron’s. But how about the investment newspapers you purchase off the newsstands? You keep track of your long-distance phone calls to your broker and investment advisor, but how about the gas mileage to go meet them?

9 – Casualty deductions Last year bestowed forest and range fires aplenty, and everybody recalls Hurricanes Katrina and Rita, which ravaged the Gulf Coast in 2005 and Hurricane Ike, which hit Texas and Louisiana in 2008.

If President Bush declared your area a disaster area, you can claim your loss either on your 2008 return or your 2007 return. You can confirm whether you qualify on the Federal Emergency Management Agency’s Web site.

Compare your 2007 return with what you anticipate filing for 2008 and figure out what year fetches you more money. You also should receive interest back to April 15, 2007. Unless your income for 2008 was substantially less than 2007, it’s probably better to take the deduction in 2008. If you do qualify for a refund for 2007, you’ll want to file a revised 2007 tax return. For that, you will need Form 1040X.

10 – Retirement tax credit This one also can come with a deduction. This credit is fashioned to give moderate- and low-income taxpayers a motivator to save for retirement. Make a contribution into your retirement account. That money isn’t taxed presently. So, it’s like you acquired a deduction off your income. In addition, you get a credit of as much as 50% of the first $2,000 invested. That’s as much as a $1,000 reduction in your tax.

You receive the $1,000 tax reduction in addition to the $2,000 reduction in your income. That’s a good rate of return on a $2,000 investment. Furthermore, if you qualify, you can deduct as much as $4,000 in contributions to an IRA. The tax credit goes away as your adjusted gross income increases. But singles with AGIs up to $25,000 and joint filers with AGIs up to $50,000 will qualify. The limit is $37,500 for heads of households.

These are the taxes that are levied against the property possessed by a person or group. In many countries these taxes are managed at the local level and usually fall into two categories of personal property taxes and the real estate taxes. The very term, tax relief is a sort of a benefit given to the property owner to remove or reduce the burden of property taxes.

Presently, there are various categories of property tax relief which are applicable at different stages of income period to provide some leverage to the owners during their vulnerable income days. The tax relief works according to its category, differently every time in separate cases.

The various kinds of property tax relief, which is applicable at different situations. The categories are listed below for your reference.

Property tax relief for Senior Citizens – This particular tax relaxation is meant for those who have retired from their job and have a low income to meet the tax payments. Earlier they were able to pay as they had a good income out of their work but after retirement that part has emaciated. In this phase the senior citizens pay more for their health related issues as well other related expenses, so the tax relaxation on properties provides them lots of ease and reprieve.

Property tax relaxation for first time homebuyers – There is another great piece of benefit provided to the first time home buyers where they are exempted from property taxes and also offered discounts, which can be included in the income tax. Usually, the first time buyers often purchases a new property to settle with their family to establish themselves that made the government to come up with the tax relief option and also to encourage the home loan services as well as the construction business.

Property tax relaxation for low income tax payers – There are also people that have low income even if not retired. For those with a low income there are also tax relief solutions. Just like with senior citizens, people with low income cannot afford high taxes since they need their income to cope with other expenses. Recognizing this fact, the government provides reductions on property tax for those who can show proof of a low income that wouldn’t otherwise let them afford the full tax returns.

Property tax relief for individual income tax payers – This one is particularly for the people who does not have a sustainable income and belongs to the category individual tax payers who are excused from the property tax. At the time they pay their income taxes, they are offered a refund of taxes in the form of tax relief. This is a great way to support and control the lower income group of the country by returning them back a substantial amount, cut from their taxes.

Statistics suggests that there is high percentage of uncollected credit being lined up with the government. It is either due to the fact, that people still is not aware of its guidelines or they did not bother to apply so as to take back the refunds.

Property tax relief for long term owners – The long term possessors of the property are also allowed some tax relief on the money they pay for their taxes. Although there is difference in the regulations as well in the allowance of the tax reduction between long terms owners and the first time buyers.

One of the major campaign promises that President Obama offered to U.S. citizens was that he would ensure equitable taxation for all so that those who earned more would pay the lion’s share of taxes. The President criticized the Bush Administration for offering tax holidays to the rich, who he felt, did not need any tax advantages (because they were financially comfortable). True to their word, the Obama Administration and the Democrats in Congress has gone a long way in ensuring that the rich will be removed of tax cuts and will bear the largest share of taxes. They have come up with several bills and proposals to have the rich taxed more:

The Three Percent Surtax Proposal

One of the more recent tax moves targeted at the rich is the 3% surtax proposal by Democratic Senate members. If passed, the surtax will be loaded onto high income earners. The Senators are seeking to introduce a bill to have a surtax charge on individuals who earn an income of $1,000,000.00 and above. The proposed tax is part of the attempts to narrow a widening tax deficit in the government.

Democrats Seeking Removal of Bush Tax Cuts

There have been talks from the Democratic politicians in the past two years to have tax cuts removed for high income earners. The Obama Administration has been keen to have the tax cuts removed, but they have compromised their stand owing to various negotiations with the Republicans. However, the removal of the Bush Tax cuts for the rich now seems to be a matter of time. The proposal is to remove the tax cuts for any taxpayer who earns more than $250,000.00 a year. Removal of the Bush tax cuts will raise the effective tax rate for the top income tax bracket by about 6.5%.

0.9% Surtax on Medicare

In 2010, Congress passed a bill to make changes on the Medicare Law. These changes were an attempt to solve the Medicare situation, whereby more retiring citizens are seeking to get free Medicare from the program. As part of the Medicare Law, Congress introduced a 0.9% Medicare Surtax for income earners in the top tax brackets. The Medicare Surtax is to be levied on all taxpayers who earn more than $200,000.00 a year and for couples who file taxes jointly who earned more than $250,000.00 annually.

Proposal to Remove Tax Ceiling on Social Security

In May 2010, President Obama mentioned that the government was seeking to make a proposal to remove the ceiling on Social Security taxes. Presently, Social Security taxes are applied to a maximum of $106,800.00 a year and any amounts above this maximum are not levied for Social Security. If the change is made to have no cap on Social Security payments, tax experts project that the move will effectively raise the taxation on the top income earners by about 10%.

Given that the top income earners are currently taxed at a top rate of 35%, with the addition of these new taxes and the aforementioned proposed tax changes, some tax analysts say that this may result in the top income earners paying an effective tax rate of over 60%.


Canada-based people actually have more concerns than what they hoped for. A pressing issue that they would have deal with in the country is the issue of sales taxes present in the country. Further, the people also need to put up with state sales taxes as well as the provincial ones. Also, people living in certain parts of the country such as Nov Scotia and Newfoundland among others must also endure 14% harmonized tax on provincial taxes regarding the arrangement together of some goods as well as services. The average person in Canada could pay up to 16% with regards to federal and provincial sales taxes in the country. The percentage of the sales taxes could still increase by 14% depending on the case if you are residing in the province. Provinces have imposed harmonized sales taxes as well.

Because of the high sales tax imposed in the country, there are areas thinking that it might be best to have the minimum wage increase from an $8 rate per hour to a rate of $10. This measure is to keep up with high taxes imposed on sales. There are several factors that could be affected when it comes to high sales tax rates. For example, taxes in restaurants could go up to 12%, this in turn would have effects on customers such that one family may not choose to eat anymore considering the high amount. This could effects on the social aspects of the family as well as the economy specifically for the restaurant industry. Though given with the present case and situation, Canadians don’t necessarily have that much problem even with the cost of the sales in such a high rate. This is because, opportunities in employment is not as hard to find in the country. For example, a fresh graduate could earn $40, 000 in a year. For other countries, earning such would be difficult and long. There are fresh graduates who wouldn’t be able to earn in as much in a year given that they reside in a different country elsewhere. In Canada, the high taxes are not so much of a problem since people have the opportunities for jobs that give high incomes.

You might be wondering how come taxes in Canada as high as that or why are people imposed to pay provincial taxes as well as federal ones since they are just similar in a way. For those people who are not in Canada may just be wondering why the scenario is like that? Looking at the rate of taxes in the country and other countries like for example the United States, there is a difference by almost 2%. For New York which is undeniably a big city, the difference comes by in as much as 4%. Although given the situation, the rates of taxes in these areas is still comparatively lower considering the amounts added to the rate by the local governments in Canada. In case you are paying the high rates, it would be wise to inquire about why the taxes have high rates, what functions do these taxes play and what do you get in turn when you pay such taxes.

All people have the right to ask and seek information for correct information when it comes to the taxes we pay. The rates of taxes in countries like the US and Canada have gone a bit out of control or very high. It pays to know what use the government has for such high rates more importantly the taxes themselves.

Donating your car to your favorite charity lets you help the charitable cause that you really believe in supporting. It is however the car donation tax deduction that you receive from that nice tax man at the IRS that rewards you the most in your donation. As your donation will probably be the largest that you ever give to charity, for you to receive your vehicle donation tax break it is vital that you follow all the rules of the donation process. Although not complicated, you need to ensure the correct paperwork for your car donation tax deduction to stick on tax return day.

Car donation tax deduction – procedures to follow & paperwork needed for a successful donation

When it comes to donating a car for tax deduction, first and foremost you need to check that the charity you are considering is one that is IRS-approved and listed as a 501(c)(3) non-profit organization. You will find a list of eligible charities on the IRS website under publication 78. If the charitable organization that you wish to donate a car to is not listed then you would be unable to claim a car donation tax deduction and you should probably consider another charity for your tax break.

When to use vehicle fair market value for your car donation tax deduction

You can use the fair market value of your vehicle in two scenarios:

If you know that your car will have a value when sold of less than $500, or

If the charity beneficiary of your donation uses the vehicle in their day to day charitable business, rather than selling at auction, then you can use the fair market value in this situation as well. If your charity takes this option, due to tax rules that came into force several years ago, the charity concerned will have to provide you with an acknowledgement inside thirty days of your donation stating the cars intended business use. This same tax law also makes it necessary for the charity to provide you with a receipt of the proceeds within 30 days of the sale at auction of your vehicle. You can find the current tax break rules with the IRS Donors Guide to Car Donations publication under IRS Publication 4303 on the IRS website.

If you are in the position of using the fair market value of your car for your tax return, then your easiest option is to find your car value with one of the many trusted sources online like Kelley Blue Book.

If you are not in a position to donate a car to charity then keep in mind the same tax breaks apply to the donation of other vehicles as well. Motor homes, trailers, trucks, boats, snowmobiles and jet ski’s, plus motorbikes often have the same tax benefits as a tax deductible car donation. However, for these vehicles it is vital to check for any tax rules that apply specifically to these other modes of transport. Your accountant should be consulted if in any doubt of the validity of your vehicles tax deductible status before you list the vehicle as an itemized tax return item.

If you simply keep these rules in mind when you donate your vehicle, then your car donation tax deduction will be assured and you will have made a big difference to your charitable organization. More importantly you will have the satisfaction of knowing you have helped someone in need, and at the same time be rewarded with a tax present from the IRS.