Category: Canadian Taxes

Tax Carnival Ecstasy – January 3, 2012

Welcome to the January 3, 2012 edition of Tax Carnival Ecstasy. We have the top 5 articles this week for the carnival including how to get Free Tax Advice by Phone this tax season from a software company. Joe Morgan takes a look at being Prepared to Pay $3,598 More in Income Tax for 2012. And Clint Cora examines the W8BEN Form For Canadians,  this form is for Foreigners Who Work In The US. Hope you find the information helpful, bookmark, share, tweet, like on Facebook, and come back soon.

tax law

Lawyer presents What is Tax Law? Do You Need to Pay Tax Law? posted at Legal Advice & Legal Aid, saying, “Read our comprehensive review about new Tax Law for 2012!”

taxes

Darren Marks presents Free Tax Advice by Phone… From a Software Company? posted at Consumer-Rankings, saying, “Introducing a free new feature from Turbotax just in time for tax season, free phone consultations with tax experts.”

Joe Morgan presents Are You Prepared to Pay $3,598 More in Income Tax for 2012? posted at Simple Debt-Free Finance, saying, “This article covers the effect of expiring tax laws and how they could cost the average American family $3,598 in additional taxes for the 2012 tax year – without any change in their income.”

tips

Clint Cora presents W8BEN Form For Canadians And Foreigners Who Work In The US posted atMotivation Diversity Success Blog, saying, “To help foreigners who get some income in the US reduce withholding tax”

Tyler presents Are You Sure You Want to Pay Taxes With a Credit Card? posted at Credit Card Chaser, saying, “I hope you find this article fitting for your readers! Some people don’t realize they’re instantly paying a significant extra charge! Please let me know if you have any questions or concerns. Look forward to seeing this on your next blog carnival! Have a great day! Tyler”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

 

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Rules for Charitable Contribution Deductions

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Charitable contributions made to qualified organizations through the year may help reduce your tax bill.  Many organizations give donors pertinent details about their tax-deductible donation including the amount that can actually be reported on your tax return.  The following tips may help ensure donation made will be beneficial on your taxes.

  • Make sure you report charitable contributions on the correct form. The IRS states that form 1040 must be used to itemize deductions using Schedule A.
  • Upon reporting the deduction, make sure it was made to a qualifying charitable organization.  Contributions reported shouldn’t be donations made to individual or political organizations.
  • There are rules to review if your contribution included a vehicle.  Clothing and other goods should be fair market value and in good condition in order for it to deductible.
  • Items received for making a contribution such as ball game tickets or services; deduct the amount that exceeds fair market value.
  • When reporting cash contributions, make sure you have proper documentation that proves the amount.  This may include bank statements, a correspondence from the organization or even paystubs if donations were made via payroll deduction.  A phone bill will suffice for text donations as long as it states the name of the organization, date of donation and the amount given.
  • Donations of $250 or more must have proper documentation such as a bank record or written notice from the qualifying organization.  You may need to report if you were given anything in exchange such as any gifts or services. Noncash donations of $500 or more should be reported on IRS Form 8283 (Noncash Charitable Contributions) and attached to your tax return.
  • If you donation was an item that valued over $5,000 an appraisal is required.  Obtain an appraisal from a qualified appraiser and report data on the IRS Form 8283 section B.

Additional details can be reviewed in the IRS Publication 526: Charitable Contributions.  Information regarding property value can be review in IRS Publication 561: Determining the Value of Donated Property.  It is important to report contributions to the best of your knowledge with honesty.  The IRS may question donations made and contact you for proof.  If you are found to have provided false information on your federal income tax return, you may face penalties.  Contact a tax professional with questions or concerns about charitable contributions made.

Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from credit cards to mortgages to how to setup an umbrella company.

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The Reverse Mortgage Disadvantages Are Whoppers

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There are many retirees out there who are in a world of hurt.  The economy has all but killed the American dream of retirement.  Trying to work until they are forced out, many seniors find that they just cannot survive on the pittance of a pension that they receive and social security is little more than a stipend.  For this reason, many of them are telling their heirs that there is no such thing as Santa Clause.  It is starve or sell the home.  There is another option, however, that many are considering, the reverse mortgage.

Standing Toe To Toe

The reverse mortgages pros and cons, when stood toe to toe, look at first to be quite lopsided.  It really appears that the pros far outweigh the reverse mortgage disadvantages… at first glance, that is.  When you really get a good look at the reverse mortgage disadvantages, however, you begin to realize that the pros are fluffed up to look bigger by agents and companies that want the business.

A Bunch of Whoppers

The reverse mortgages disadvantages are whoppers, even if there are only a few of them.  You have to have reached the age of 62 to receive the loan.  The interest is really big and there are huge up front fees involved.  The reverse mortgages pros and cons have to be scrutinized with a magnifying glass to see the details, but they are right there in black and white.  On the pros side of the coin, however, you do no have to repay the loan as long as you live in the house that you cherish so much.

Better Than the Alternative

The worst of the reverse mortgage disadvantages is that your children will never get to live in the home or benefit from its equity.  This is really sad if any of the children wanted to move into the place once you were gone.  The reverse mortgages pros and cons are hard to digest, but it is better than the hardships that are its alternative.

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Inheritance Planning Takes Careful Consideration

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When someone inherits a sum of money from a loved one, there is a certain level of healthy stress that is created. It can be exciting to know that you’re about to receive an amount of money, no matter how large it is, but it’s important to contain the stress and use it for good reasons. This energy should be put toward inheritance planning in order to ensure that only smart moves are made with the money. If you have a list in your mind of what you’ll spend it on, it helps to write it down and evaluate the significance of your financial planning ideas. Seeking out professional advice is the best thing to do at this point to make sure that the financial decisions you’re making are smart.

If the inheritance doesn’t come with a specific purpose set up by the deceased, there should be careful consideration for it. Sometimes loved ones want to make sure that the money is spent wisely so they assign certain expenses, such as education, mortgages, or business purposes to the money so that their heir’s future will be secure. Inheritance planning is still required for this type of inheritance because the details need to be ironed out.

A financial adviser or attorney will be able to point out the best ways to invest the money if that’s what you decide to do. Inheritance tax planner may also help out a lot so try to find one. Reaching the best conclusion will only come about if you carry out inheritance planning with a professional and follow their advice. They may suggest investing the money in something that will pay off even more in the future, whether it’s a business venture or other investment. That’s a move that you loved one would be proud of and definitely falls in the category of why it was handed down to you in the first place.