Merry Christmas!

This is a little late, but I wanted to wish all of you a Merry Christmas!  I have a big family, so I’ve spent the last four days visiting family, giving and receiving presents, and eating lots of food.  Although it was great to spend time with everyone, I’m glad it’s finally over.

Right now I’m sitting in front of a cozy fire, watching "The Mystery of Christmas" (a 48-Hours special) on tv, and catching up on reading blogs.

Here are a couple that have caught my attention on this Christmas night…

The Bible and Taxes, Now and Then – this is an interesting post about how taxes are mentioned in the Bible, and how many states may actually be violating biblical principals in the way they tax their residents.

Tax Relief for Homeowners Struggling to Pay PI and PMI – The Mortgage Forgiveness Debt Relief Act of 2007 eliminates the tax on debt that is discharged or cancelled, and also extends the deduction for PMI thru 2010.

Plop, Plop, Fizz, Fizz: Lame AMT Relief It Is – the name says it all… we finally got  the long awaited AMT relief we have been waiting for, but it’s just another patch.  Looks like we’ll have to wait for permanent AMT relief.

That’s all my tired eyes can handle at the moment.  Enjoy!

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How to Report Miscellaneous Income

The IRS recently released guidance on how to report miscellaneous income.  The following fact sheet will help you understand miscellaneous income better and how to report it…

FS-2007-26, November 2007

While most people are aware they must include wages, salaries, interest, dividends, tips and commissions as income on their tax returns, many don’t realize that they must also report most other income, such as:

    * cash earned from side jobs,
    * barter exchanges of goods or services,
    * awards, prizes, contest winnings and
    * gambling proceeds.

This fact sheet, the 18th in the Tax Gap series, will help taxpayers better understand miscellaneous income and what they are required to report as taxable on their Form 1040.

Continue Reading How to Report Miscellaneous Income

Bunch Deductions to Get the Most Out of Itemizing

Tax laws are at times nothing if not infuriating.  Indeed, with
phaseouts and sunsets coming and going, taxpayers may find it difficult
planning from one year to the next.

Case in point: In 2006 and 2007, the overall limitation on itemized
deductions that reduces the value of certain itemized deductions
claimed by upper-income individuals is scheduled to be phased out.

In effect, higher income individuals will have a small tax rate
reduction, according to PricewaterhouseCoopers 2007 Guide to Tax and
Financial Planning.

By way of history, the tax law limits the amount of certain itemized
deductions that individuals can use to reduce their taxable income.
For instance, miscellaneous deductions are limited to those in excess
of 2 percent of Adjusted Gross Income or AGI.

Continue Reading Bunch Deductions to Get the Most Out of Itemizing

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Merry Taxes 2007!

The 25th Tax Carnival: Merry Taxes 2007 is up at Don’t Mess With Taxes.

As I mentioned in my year end tax tips post, now is the time to do tax planning to reduce your 2007 tax bill.  Kay continues this theme in the 25th tax carnival…

"
To paraphrase a beloved seasonal song, it’s the most wonderful tax time of the year!

That’s right. During this time of gift giving, make sure you get the best present of all — a lower 2007 tax bill.

If you wait until April to ask what you can do to lower your tax bill, the answer will be not very much!

But if you consider your tax situation and options now, before
the tax year is over, you still have a chance to keep money in your
pocket instead of putting it in Uncle Sam’s grasping hands.

Heck, you might even be able to save enough to pay off your post-Christmas credit card bills! So let’s get right to our holiday edition of Merry Taxes 2007!"

Click here to continue reading and to see my own contribution to the tax carnival!