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Tax Tip

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BUSINESS
January 25, 1995
Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.Q: My son was married in November 1994. I supplied full support for him during the year up to the time of his marriage. He has since purchased a condo and moved into it with his new wife. Do I have any way of claiming his support as an exemption during the year he was attending college? I paid for his tuition, and if I can claim at least 11 months of the year, how do we go about splitting the exemption so that he can get one month and I can get the other 11?
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BUSINESS
By Eileen Ambrose, The Baltimore Sun | January 30, 2013
Tax season officially kicks off Wednesday, later than usual because lawmakers only this month passed legislation to address expired tax cuts. The IRS needed time to update its forms and systems. Not a problem for procrastinators, but a problem for others used to the tax season starting in mid-January. "It is very painful and very inconvenient" for early filers counting on refunds to pay off holiday credit card bills or other debt, said Mark Steber, chief tax officer for Jackson Hewitt Tax Service.
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BUSINESS
By Gail MarksJarvis and Gail MarksJarvis,Tribune Media Services | October 1, 2006
Now is the time of year to build a fortress around your hard-earned money so that Uncle Sam can't get across the moat when tax time rolls around in April. Use what's commonly called year-end tax-planning, or forcing yourself to think ahead to tax time. Once the end of the year passes, it's typically too late to act. But if you think about your income now, here are some strategies that might make a difference: Max out 401(k) and IRAs For the average American, this is the easiest way to cut taxes fast.
BUSINESS
By Lorene Yue | April 4, 2004
If you were 65 or older on Jan. 1, 2004, you may not have to file a tax return as long as you don't trip the income trigger. According to the Internal Revenue Service, you must file a return if your filing status is: Single and you have non-Social Security income of more than $8,950. Head of household and your non-Social Security income is more than $11,200. Married, filing jointly and either you or your spouse is 65 or older and you have non-Social Security income of more than $16,550.
BUSINESS
By Lorene Yue | March 28, 2004
If you had any capital gains or dividends in 2003, you'll want to pay close attention to your broker statements, thanks to a tricky set of new rules. Capital gains for stocks held more than one year will be taxed at two different maximum rates: 20 percent for sales before May 6, 2003, and 15 percent for sales on or after that date. And for taxpayers in the lowest brackets - 10 percent or 15 percent - the tax rate on long-term capital gains drops to 5 percent. You will need to check your records for when you bought and sold a stock because broker statements won't tell you how long you held it, which you need to know to determine whether you qualify for the new capital gains rate.
BUSINESS
By Lorene Yue | March 21, 2004
If you find yourself perpetually short of itemized deductions, you may want to consider bunching some of them every other year. Taxpayers younger than 65 who are not blind and not claimed as a dependent on someone else's return should take the standard deduction if the total of their itemized deductions for things such as mortgage interest, unreimbursed job expenses and charitable donations is equal to or less than: $4,750 for single filers or married...
BUSINESS
By Lorene Yue | March 14, 2004
Who foots the college tuition bill and whether the student can be claimed as a dependent are determining factors in claiming a tuition deduction. If you paid for your 25-year-old son who lives at home to attend college full time, you can't get the tuition deduction because he does not qualify as a dependent. He, however, can get the deduction as long as he meets the modified adjusted gross income requirement, even if he didn't pay a cent. If your 19-year-old daughter paid her own way, then you get to lay claim to the credit, as long as she can be claimed as your dependent, even if she files her own return.
BUSINESS
By Lorene Yue | March 7, 2004
Parents with children in college have a few choices when it comes to claiming tuition expenses on their personal income tax returns. Tax experts said filers can choose between education credits and deductions. The difference? Tax credits lower the amount of taxes you owe, while deductions lower the amount of income you are taxed on. You'll have to choose one. You can't claim a credit and a deduction for the same expense. This week we'll talk about tax credits. Although tax experts recommend choosing a credit over a deduction, you'll want to take a deduction if your income knocks you out of taking a credit.
BUSINESS
By Lorene Yue | February 29, 2004
All is not lost for taxpayers who realize they neglected to claim a deduction on a previous year's return, as long as they don't wait too long. "Tax returns don't close until three years after the due date," said Joe Equale, a partner in Equale & Cirone, certified public accountants in Danbury, Conn. That means you have until April 15 to amend your return for the 2000 tax year. Not surprisingly, most people don't submit a 1040X form if they forgot to include some income or wrongly claimed a deduction, he said.
BUSINESS
By Lorene Yue | February 22, 2004
Personal income-tax filers looking to reduce their tax burden can take advantage of several ways to lower adjusted gross income regardless of whether tax returns are itemized. "Contrary to popular myth, the IRS does want you to take legal deductions," said Jackie Perlman, who researches tax law for H&R Block Inc. in Kansas City, Mo. "It's the illegal ones they don't want you to take." These deductions are allowed as adjustments to your total income. But you must wade through the full 1040 form to get the advantage.
BUSINESS
By Lorene Yue | February 15, 2004
Income tax itemizers may not be getting the maximum from deduction opportunities. "You do one tax return a year, and the law is so complicated that you just miss things," said Paul Manghera, senior financial counselor for Ernst & Young. To claim these, you must file the full 1040 and Schedule A forms. Your deductions must total more than the standard deduction to be worthwhile. For the 2003 tax year, the standard deduction is $4,750 if you are single or married but filing a separate return; $9,500 if married and filing jointly; and $7,000 if filing as head of household.
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