Archive for the ‘Site News and Updates’ Category
Tax season is just around the corner, and many taxpayers are already trying to calculate just how much they’ll get back – or how much they’ll owe! – come tax time.
If you have children, you may know about the $1,000 per-qualifying-child Child Tax Credit, but did you know that the Earned Income Tax Credit and Child and Dependent Care Tax Credits could also help you keep some of your hard earned dollars in your pocket?
Here’s a quick overview of the top tax credits for couples and singles with children:
Child Tax Credit. The Child Tax Credit is worth up to $1,000 per qualifying children under the age of 17. What’s a qualifying child? Qualifying children must meet five specific criteria:
- Child must be your biological child, step child, foster child, brother, sister, stepbrother, stepsister, or a descendent of any one of these (so long as they are younger than the person claiming the credit)
- Child must be under 17 years of age by the end of the tax year
- Child must not have provided more than 50% of their own support costs during the year
- Child must have lived with you more than half of the tax year
- Child but be a U.S. citizen, U.S. national, or resident of the U.S.
There is no limit to the number of eligible dependent children you can claim this credit for.
However, it’s important to note that you must have earned at least $3,000 in income during 2009 in order to receive any benefit from this credit. It’s also important to note that this earning threshold is valid only through 2010, as indicated in the ARRA. After 2010, that threshold may be adjusted upward once again.
Earned Income Tax Credit. As we’ve already pointed out, there’s some great news about this year’s EITC. What’s EITC? The EITC is a refundable federal income tax credit specifically designed to assist low to moderate income individuals and their families make ends meet. You do not have to have a child to qualify for EITC, but you must have worked at some point during the year. The amount of the credit also goes up the more dependent children you have.
For tax year 2009, the credit and dependent allowances have increased! So, if you have 3 or more children, you qualify for an even larger tax credit (no more two-child credit cap). The tax credit limit for individuals with no children has also been increased, as has the earned income limit. See our previous post on the 2009 EITC 2009.
Child and Dependent Care Tax Credit. If you paid someone this year to take care of a child, spouse, or dependent, you may qualify for the Child and Dependent Care Tax Credit. This credit is designed to help offset some of the expenses for child and dependent care that families face.
If you have qualifying care expenses, you can claim a percentage of expenses up to $3,000 for one child or dependent and up to $6,000 for two or more children or dependents. Note that the percentage you can claim will drop depending on your income, and will never be more than $2,100. It’s also been created to offset your federal tax liability only: it’s not a credit that will be refunded to you.
In order to qualify, the care expenses must have been provided for one or more qualifying children/dependents under 13 years of age. Spouses and certain specified individuals who are considered mentally or physically incapable of caring for themselves may also qualify. The care must have also been necessary in order for you and/or your spouse to work.
Note also that in order to take this credit, you must be filing single, married filing jointly, head of household, or qualifying widower with dependent child.
We’re getting into the holiday giving spirit with a $5,000 giveaway during the month of December! To enter to win, text keyword TOYS to 41040.
The contest is open from December 1st, 2009 at 8:00am EST to December 19th, 2009 at 11:59pm EST. Winners will be announced by December 21st, 2009. One grand prize winner will receive a check for $5,000.
In addition to the $5,000 giveaway, over 200 Instant Tax Service stores are participating in toy giveaways across the country on December 19th. Entries for the giveaway will be open through the evening of the 19th to encourage toy giveaway participants to enter.
For official rules, terms, and conditions visit: http://www.instanttax.com/5KRules/. There is no purchase necessary to enter or win!
Great news coming out of the Senate this week as unemployment benefits are extended by up to 20 weeks in states hardest hit by job loss. The good news also extends to those interested in buying a new home who don’t foresee making the November 30th deadline for the first-time homebuyer’s credit. The credit is due to be extended through June 30th, 2010.
According to the National Employment Project, 7,000 people a day are currently losing their unemployment benefits, which are subsidized by a tax on employers. Unemployment has reached a 26-year high of 9.8% and shows no signs of getting any better over the next few months. Extending unemployment benefits is expected to help unemployed workers survive the downturn until the economy improves and more jobs become available.
Lawmakers also hope that extending and expanding the homebuyer’s credit will help revitalize the rocky real estate market and create and/or save jobs in the industry. This reasoning led to the expansion of the homebuyer’s credit to existing home owners in the proposed bill. Existing homeowners who have been in their home for at least five years can now receive a $6,500 tax credit if they purchase a new home.
The current tax credit seems to have successfully stabilized – or at least greatly improved – the housing market. Sales have increased, resulting in slightly fewer homes on the market. Fewer homes and more buyers means an increase in housing values. That’s the idea anyway, and the tax credit expansion is predicted to reduce inventory and increase housing values even more in the coming year.
If you plan on buying a home in the next few months and qualify for these credits, keep an eye on this legislation. It’s expected to pass, but speak with your local tax preparer before you file to be sure you qualify.
We’ve recently launched our official ITS social networking sites across the web (yes, we know… it’s about time!).
Check out our new “official” Instant Tax Service headquarters fan page on Facebook. Just click here or search for “Instant Tax Service headquarters” on Facebook the next time you log in… and become a fan! We’ll be posting all the latest news and information about Instant Tax Service on FB, and sharing some great tax tips and advice. We’d love to connect with you there.
Our Twitter feed is also now live. Go directly to our twitter feed at: www.twitter.com/InstantTax. Hope to see you there!
In addition, we’ve had a LinkedIn profile and YouTube account for a few months now. Feel free to connect with us on LinkedIn and/or view some videos about our company on our YouTube account. Our username on YouTube is ITSFinancial.
Just a reminder that we welcome your questions and feedback! Contact us on FB or at our Twitter page and let us know how we’re doing….
Always wanted to hear what the tax experts really think? Check out the award-winning webcast, Tax Talk Today – sponsored by the IRS. Visit www.taxtalktoday.tv to view the episodes.
The program features roundtable discussions with tax experts and professionals. Viewers can also email their questions directly to the program for the opportunity to have them answered “on air.” Just email Questions@TaxTalkToday.tv
Whether you’re a small business owner or part-time worker, Tax Talk Today offers a wealth of tax information directly from the professionals.
View the program’s archives here.
Think it’s too early to start thinking about your taxes?
Think again.
Eligible deductions for this tax year must be taken… this tax year. Don’t wait until December 31st to start calculating your tax deductions. There are steps you can take right now to improve your tax situation come April 15th. Here are just a few of them:
Home buyer’s credit. Are you thinking about buying a home? With housing prices lower than they’ve been in decades, many experts think this is a great time to take the plunge. To add a little spice to the deal, the government is offering a home buyer’s tax credit of 10% of the purchase price of the house – up to $8,000 – for qualifying first-time home buyers.
Why act now? Because homes that qualify for this credit must be purchased on or after January 1, 2009 and before December 1, 2009. The purchase date is considered the date when the closing occurs and the title of the property is turned over to the new homeowner.
Energy Efficiency Credit. Have you been putting off getting energy efficient windows for your home? How about upgrading your central air conditioning unit or furnace to a more efficient model? Want to get a hybrid car? The government is offering a new tax credit for taxpayers looking to run their lives just a little more efficiently. There’s a $1,500 maximum amount that can be claimed on products placed in service in 2009 and 2010, with a few exceptions. For hybrid electric cars, the tax credit starts at $2,500 and goes up to $7,500.
Why act now? Because all those improvements must be “placed in service” (available and ready for use) between January 1, 2009 through December 31, 2010. If you’re looking for the most energy efficient products, now is a good time to start shopping to ensure that you get the items placed in time. This is especially important if you’re planning to do massive upgrades, like installing solar panels. For hybrid vehicles, the vehicles must be “placed in service” on or after January 1, 2006 (yep, that’s not a typo – all the way back to `06) and before December 31, 2010.
College Tax Credit. Ready to go back to school? The government is giving us all a little extra push this year with a tax credit of up to $2,500 for qualifying college expenses like books, tuition, and activity fees. Students must be studying at least half-time at an eligible educational institution. This is a major upgrade to the previous college tax credit (the Hope Credit), which only offered $1,800 for qualifying expenses.
Why act now? Because it’s already June! Apply now to get signed up for fall quarter.
For more information about these credits and many more, visit IRS.gov.
Fear can be an extremely powerful force. How we react in the face of fear can change our lives and shape our futures. This is especially true in the business world – particularly for small business owners.
As entrepreneurs, one of the most daunting obstacles to achieving small business success is our own unique and very personal fears. We limit our potential or fail to try something new because of fear. We get locked into a mindset and hesitate to change even when we produce mediocre or poor results – all because of fear.
Unfortunately, fear of change is a vision buster. History has shown us time and time again that successful entrepreneurs are not afraid to take calculated risks, reach outside their comfort zone, or think outside the box.
Take, for example, the story of Instant Tax Service, which has grown from a one man operation to the 4th largest tax preparation company in the United States. In 1994, Fez Ogbazion was just a 19-year-old kid looking for a piece of the American dream. Fez wanted to dive into a potentially profitable business that still allowed him the flexibility to finish his degree at the University of Cincinnati.
Fez saw a need in his Ohio community for fast, local tax preparation services. He understood that people wanted exceptional service from professional tax preparers in their neighborhoods – not just in the suburbs. So on a leap of faith (and with the help of a few credit cards), Fez opened the doors to Instant Refund Tax Service. He prepared over 600 tax returns his first year.
Knowing complacency would never allow his business to grow, Fez developed his business significantly over the next 5 years into 26 retail locations. In 1999, a Fortune 500 company – sensing a major local competitor – offered to buy Instant Refund Tax Service.
Fez, ever the entrepreneur, accepted the deal and went on to re-invest the money from the sale into a bigger and better income tax business. That fresh start became Instant Tax Service, founded in 2000.
During its first year of operations, Instant Tax Service ran 60 locations. The company expanded into five new markets across the country in 2001, doubled its business in 2003, and started franchising in 2004.
Today, Instant Tax Service is one of the nation’s fastest growing franchises and currently operates over 1,200 locations nationwide. In fact, Instant Tax Service was recently named Entrepreneur magazine’s 2009 Top New Franchise, #1 Low Cost Franchise, and one of the Top 10 Fastest Growing Franchises in the country.
The key to Instant Tax Service’s success and Fez’s accomplishments are partly due to what Fez did in the face of fear – major competitors, a shaky financial start, and being a college student didn’t dissuade Fez from taking a risk. He learned to manage his fear and embrace his entrepreneurial spirit.
The dream of starting a business can be daunting, but the only way to make that dream a reality is by learning how to make that fear work for you.
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