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Are your children working at summer jobs this year?
If so, here are some tax reminders.
* If a child did not owe any income tax last year and doesn't expect to owe any this year, the child can claim "exempt" when completing the federal withholding allowance form (Form W-4). This will eliminate having federal income tax withheld from his or her paychecks. * For 2010, your child can earn as much as $5,700 without owing federal income tax. There will still be
withholding from your child's paycheck for social
security and Medicare tax.
* As long as you provide more than half of your child's support, you can still claim the child as an exemption on your 2010 tax return. * Earnings from a summer job will qualify a child to
contribute to an IRA - up to $5,000 or the child's 2010
earnings, whichever is less. If your child would rather
spend his earnings than save for retirement (and most would), you could provide all the cash, or agree to match what your child saves. As long as the amount
put into the IRA doesn't exceed the child's wages
(or the $5,000 limit), it doesn't matter where the
cash comes from.
If you have questions about taxes and your child's summer job, give me a call. |
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You can enjoy a vacation home and cut your taxes - with some careful planning and a little discipline.
The IRS rules can be complex and potentially restrictive, so a word of caution is in order as you plan the use of your vacation home. Owners of vacation homes often rent out the property
when they're not using it themselves. Renting out your
vacation home may or may not make sense for you. The principal variables are the number of days you rent the property, the number of days of personal use, your individual tax situation, and your personal wishes for the use of your vacation home.
RENT FOR 14 DAYS OR LESS and a simple tax break is available. If you rent your vacation home for 14 days or less, all of the rental income is tax-free. This attractive tax benefit can help provide cash for your mortgage and other expenses. RENT FOR MORE THAN 14 DAYS and your tax planning and personal life become more complex. If you rent your vacation home for more than 14 days, all your rental income is reportable. Whether you treat the income and expenses as a second residence or as rental property depends on the personal use of your vacation home relative to the time the home is rented out. This test is made annually and determines the nature of deductions and the tax treatment if the vacation home is sold.
Please call me to guide you through the IRS rules to
find the rental strategy that meets your financial goals
yet ensures the personal enjoyment of your vacation home.
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The Tax Tip of the Week has more information on the extension of the Homebuyer Tax Credit.
The Business Tip of the Month gives some helpful ideas for the small business on how to extend your cash flow. The Financial Tip of the Month will help those who are thinking of paying off their mortgages from their retirement savings. Is this a smart financial decision?
The Fraud Alert: "Cash for your gold "- legitimate or a scam? Here are some tips to give you more info before selling your gold. |
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Photos © Bigstockphotos.com, istockphoto.com, Felix Orona
Sincerely,
Linda Heineman
Linda L. Heineman, CPA, CITP
email:
linda@llhcpa.com
phone:
626-577-0979
web:
http://llhcpa.com
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