Use ‘Em or Lose ‘Em: 5 Tax Breaks Set to Expire This Year

Barbara Weltman, writes:  Dozens of federal tax breaks are scheduled to end on December 31 unless Congress extends them. No one knows for sure which ones, if any, will apply next year, so business owners should explore expiring rules and take advantage of them while they can. Here are some expiring breaks that may appeal to you:

Break 1: Faster write-offs for buying needed equipment

Need to upgrade your computers? Provide staff with tablets and smartphones? Add new machinery? You have two better ways to deduct your costs this year than merely depreciating the costs over a number of years:

• Deduct up to $500,000 of the cost of qualified equipment (whether new or pre-owned) this year as long as you’re profitable. Next year, the deduction limit is scheduled to be $25,000.
• Deduct 50% of the cost of new qualified equipment, even if it adds to or creates a business loss. Next year, this deduction is set to disappear entirely.

Note: You can use either break even if you finance your purchase in whole or in part.

Break 2: Faster write-offs for improving your facilities

Usually when you make capital improvements to your workspace, the cost can only be depreciated over a period of 39 years. However, for improvements to leaseholds (by the lessor, lessee, or subleasee), restaurants, and retail establishments, you can use any or all of the following rules as long as the improvements are completed before the end of this year:

• $250,000 first-year expensing for eligible improvements
• 50% bonus depreciation for eligible improvements
• 15-year amortization period for any costs not deducted with first-year expensing or bonus depreciation

Find details about write-offs for qualified property in IRS Publication 946 .

Break 3: Tax credits for hiring certain workers

If you need more employees on your payroll and have projected the cost of this hiring after factoring in future health care obligations, think about hiring from certain targeted groups. Doing this may entitle you to a tax credit that can be used to offset your tax bill:

• Work opportunity credit for hiring certain disadvantaged workers, including certain veterans. Make sure that you timely submit IRS Form 8850  to your state work force agency to get eligible workers certified as entitling you to the credit.
• Indian employment credit if you hire an enrolled member, or spouse of an enrolled member, of an Indian tribe who performs services within an Indian reservation.
• Empowerment employment credit if your business is located within a federally-designated empowerment zone.

The amount of each credit and eligibility rules vary, but each requires that you hire an eligible employee before the end of this year.

Break 4: Exclusion for gain on certain stock

If your business is a C corporation involved in technology, manufacturing, retail, or wholesale and is seeking new investors, consider issuing new stock before the end of the year. If the stock meets the definition of qualified small business stock  and investors hold it for more than five years, then all of their gain will be tax free. Stock issued next year will give investors only a 50% exclusion for their gain unless the current 100% exclusion is extended.

Note: You can issue qualified small business stock to employees as payment for services (i.e., year-end bonuses) to enable them to reap tax-free returns.

Break 5: Tax credit for doing research

If your company does research to create a new product, you may be eligible for a tax credit of up to 20% of increased research expenses. This credit is set to expire at the end of this year unless Congress extends it. While an extension is probable—the research credit has been extended 14 times since its inception in 1981—it’s still smart to use the credit while you can.

The credit is not limited to research to create products for sale. It also applies to research for internal processes (e.g., internal use software) that improve your business operations. For more details see the instructions to IRS Form 6765. 

Conclusion

A bi-partisan Congressional budget committee is supposed to decide by December 13, 2013, what measures (including tax rules) will apply for the future. By that time, it may be too late for certain actions that would otherwise be helpful for your business and tax savings this year. Meet with your tax advisor to explore which of these or other expiring tax breaks you may want to use before the end of the year, and what steps you need to take to nail them down now.

Online Accounting Solutions – ClearBooks Review (from the U.K.)

Plasterers News writes:  At Plasterers News, it’s not all about plastering as we know that although plastering maybe your trade and that is how you make your money but actually running a business is what you spend more of your time doing and that is where a lot of plasterers come unstuck.

A lot of plasterers struggle with the everyday running of their businesses from sorting out insurance for their vans, public liability and managing all of their marketing and promotion. However, one thing that is not really discussed, and that is how they organise their accounts and invoicing system.

When I started plastering I didn’t bother with an accountant, I just did it myself. It seemed easy enough at first, and then I started to get busy, and the receipts started to stack up and when April the 6th came I would have a massive pile of receipts to trawl through and organise into categories and what not and to be honest I hated doing it and it would take a huge amount of time to do.

I subsequently decided to get an accountant, and suddenly my life became easy. All I had was 12 envelopes, and I stuck that month’s receipts in there and then at the end of the year I would hand them to my accountant.

That method worked up until I needed to give invoices out to customers and start organising the order and what not. I would be so far behind with invoicing that I swear I would forget if had invoiced someone and they had not paid.

The other thing was that I had no idea where I was financially and whether my company was even making any money, and that started to worry me. Oh and on the side of plastering I had a few online businesses that also created receipts and invoices so it was starting to get complicated.

So here where the main problems

• Invoicing took ages and a lot or messing around
• Organising reciepts was complicated and time consuming
• Keeping track of who has paid and who hasn’t
• Not knowing if you company was making money

So these were my problems, and I wanted a solution that was easy to use but also accessible from anywhere in the world as I like to travel a lot, furthermore, the risk of losing a laptop was quite high so it had to be cloud based.

I looked at Quickbooks and to be honest they really annoyed me, all they tried to do was get me to upgrade to the more expensive package and in the end I told then to do one as the software was tragic and very complicated. Bearing in mind I am very tech savvy, and I struggled to get my head around things with QuickBooks.

The next solution was not a very obvious one, but it was great and very affordable. In fact, it is only a small fee each month but had so many benefits it was rude not to go and have a play with it especially as they offered me a months free trial.

ClearBooks are a cloud based accounting and invoicing service, and it is brilliant I have been using them for a long time now and to be honest it does everything I need it too, and they only costs me about £6 a month.

I will go through some of the uses and how it can help you.

Invoicing Solutions

So ClearBooks means you can quickly create invoices for your customers and then email them directly to them with just a few clicks of a button. You can also set up recurring invoices, which mean if you do work that needs invoicing monthly you can set ClearBooks to create an email the invoice at set intervals. An example of this is when I charge advertisers on The Plasterers Forum every year it will create an invoice.

There is now no need to spend hours creating invoice designs in Microsoft word or crying your eyes out if you accidentally delete your invoice template. It’s all set up on the system and set up for you so every invoice looks the same and more to the point easily found if you need to.

Managing Receipts

With ClearBooks you copy your receipts onto the system, and it organises them so that it can work out your profit and loss out. At the end of the year or at any point, you can see how much you spent with any particular company. It is really handy.

I found that putting your receipts on the system at the end of the week only takes a few minutes and makes life a lot easier at the end of the tax year.

Managing Payments

With ClearBooks you can see straight away who has paid you and who still owes you. When someone does pay you select the invoice is paid and how they paid and very quickly you can be sure that everything is in order and be certain that people have paid. You can pay extra and haveClearBooks go into your bank account and check for you, but I don’t use this option.

Financial Status

I didn’t realise how important knowing your financial status was until I started using it. I thought that because I had a slack week, the year’s profits were over but when you have all the data, you can see that its just a blip of that you need to pull your finger out.

Knowing your financial situation is always going to help you as it helps make very important decisions and also highlight any wasted money that you may otherwise have missed.

My Conclusion Of ClearBooks

I am still using it and for me its the perfect solution. As with anything, it doesn’t suit everybody, but I think it is something that should be considered, and your accountant will thank you once he gets your first-year accounts.

You can do a month’s trial, and the support is fantastic there are lots of videos on YouTube that can help you and show you ways of doing things but like anything, I like to keep things simple.

If you have any questions, then please either ask them below or go directly to ClearBooks and they will be more than happy to help.

Doing Well by Doing Good with Year-End Tax Planning

BRUCE GIVNER AND ROBERT PAGLIARINI for accounting today write: Now that the October 15 extended filing deadline for personal income tax returns has passed, we have only 10 weeks to help our clients plan for the tax returns that will be due April 15.

Is there good-quality income tax planning that we can help clients to do at this late date? Of course there is. Unfortunately, most income tax planning opportunities are only available to business owners. Happily, one is available whether the client has their own business, is an employee of a company, or is retired. The bonus is that this income tax deduction will also make the client feel good.

Taxes are, after all, a type of forced charitable contribution. A client may feel better if he or she can direct the way in which the forced charitable contribution is spent. If there are certain programs in the federal and state governments of which the client disapproves, the client may prefer to have the funds spent on their favorite house of worship. alma mater or a charity that combats a disease afflicting one of the client’s family members.

Now, imagine that the client—let’s call him Joe—could contribute $100,000 to a trust, get a $100,000 income tax deduction for the charitable contribution, and at the end of 15 years have the $100,000 comes back to him (or be distributed to his children or other heirs)? During the 15 years, $100,000 will have been distributed to Joe’s favorite charity (or to Joe’s own private foundation).

The Internal Revenue Code encourages precisely this type of structure. It works well if Joe is able to grow money faster than the interest rate required by the IRS —currently 2 percent—and through capital gains instead of ordinary income. Why capital gains? Because Joe will be taxed on the trust’s income each year, so we want to minimize ordinary income.

Take this example: Joe contributes $100,000 to the trust in year one and gets a $100,000 income tax deduction. Each year for 14 years the trust’s assets appreciate in value by 6 percent. Each year for 14 years the trust distributes 2 percent ($2,000) to Joe’s favorite charity. In year 15, the trust will be worth $195,104. To make the total payments to the charity over the 15-year period worth $100,000, the year 15 distribution to charity must be $88,938. As a result, $106,166 (that is, $195,104 minus $88,938) will be returned to Joe, or distributed to Joe’s children or other heirs.

What was that worth? Assume Joe is in the 50 percent state and federal income tax rate for ordinary income and a 35 percent combined rate for capital gains. Joe saved $50,000 up front and paid capital gains tax of $40,928.30 ($2,000 X 14 = $28,000 + $88,938 = $116,938 X 35%).

From an income tax point of view, Joe is only $9,071.70 better off. However, if Joe gets $106,166 back (or it goes to his children) and the other $100,000 went to Joe’s favorite charity, that may be a more thoroughly satisfying result compared to paying $50,000 of tax in year one and being left with $50,000. (At the end of 15 years, $50,000 at 6 percent would be worth $119,828.)

What is this structure called? The technical term is a grantor charitable lead annuity trust. This is not mysterious: the IRS issued a sample form grantor charitable lead annuity trust in Revenue Procedure 2007-45. Is it for everyone in every situation? Of course not. There are complex rules that require each taxpayer to sit down with their CPA to discuss that taxpayer’s unique facts.

However, this is a drastically underused structure given the significant tax advantages provided by Congress, highly charitable nature of our citizens and historically low interest rates required by the IRS.

Some people use this structure as a way to accomplish three goals: current income tax deduction; support important causes; and pass assets tax free to their heirs. Instead of having the $106,166, in our example, come back to Joe, those funds can go to Joe’s children or other heirs. Joe need not file a gift tax return because the entire $100,000 initial transfer to the trust was accounted for by the initial $100,000 charitable gift.

Others use this structure also as a way to fund their own private foundations. In other words, the $2,000 per year for 14 years and the $88,938 final distribution can go to Joe’s own family controlled charitable foundation. Therefore, at the end of the 15th year Joe can have three good results: a $100,000 income tax deduction, $100,000 to a charity he controls and $100,000 returned to Joe or transferred to his heirs.

One use for this structure is to endow a chair at the client’s alma mater. Suppose Joe wishes to give $2,500,000 (a not unusual figure for universities) to establish an endowed chair to support a full professor. The university might accept payments of $250,000 per year for 10 years. A charitable lead annuity trust can be structured to accomplish that by Joe contributing $5,000,000 to distribute $250,000 per year for 10 years. Joe would earn a charitable deduction of $2,245,650 and, if the assets grow by 6 percent, there would be $5,600,000 returned to Joe at the end of the 10-year term.

Of course the economic results are determined by how much is distributed to charity each year (some advisors do not like this small amount distributed in the first 14 years, a so-called “shark fin CLAT”); how much the assets appreciate in excess of the interest rate required by the IRS; and the nature of the income. That is why the client needs a thoughtful approach to money management.

If your clients are interested in an attractive income tax deduction that will offer them the opportunity to use what would otherwise go in income taxes to support their favorite causes, get them to your office now. Time is running out on calendar 2013.

Don't Miss These Year End 2013 Tax Deadlines

Juliette Fairley for MainStreet writes: Some year-end tax moves never change but 2013 presents special challenges and opportunities.

Tax rates for the average American have stayed the same but the affluent will pay more thanks to a new tax of 3.8% on net investment income.

"Since this is the first year these taxes are in effect -- high-income taxpayers may not have planned for them," said ReKeithen Miller, a certified financial planner with Palisades Hudson Financial Group in Atlanta. "Make sure you've paid enough tax through withholding and/or quarterly estimated payments to avoid underpayment penalties."

The tax applies to investment income, such as interest, dividends, capital gains, royalties and annuities and is implemented for single taxpayers with $200,000 of modified adjusted gross income (MAGI) and married couples with $250,000 of MAGI.

There is also a new 0.9% Medicare tax on wages and self-employment income starting at $200,000 for single taxpayers and $250,000 for married taxpayers and the Affordable Care Act (ACA) increased the income threshold this year from 7.5% to 10% of adjusted gross income for medical expense deductions.

"It's harder to meet this requirement than last year. So, taxpayers may need to prepare or defer medical bills to lump expenses in a single year to get the deduction," said Rick Rodgers, a certified financial planner in Lancaster, Penn. "For example, if you have medical insurance premiums due in January 2014, pay it now so you can claim it in 2013."

In addition to medical insurance premiums, co-pays, prescriptions, lab work, X-rays, sonograms and eye exams all fall under medical expenses that can be itemized and deducted once over the taxpayer's 10% adjusted gross income.

The cut off remains at 7.5% for those 65 and older.

Tax provisions set to expire on December 31 include payments of private mortgage insurance, state and local sales tax deductions and discharge of principal residence indebtedness.

Private mortgage insurance is typically half to 1% of the average cost of the mortgage. So on a $100,000 mortgage, expect a deduction of $500 to $1,000.

As for deducting state and local income tax versus sales tax, use the sales tax deduction calculator at IRS.gov to determine the amount of sales tax paid throughout the year based on your income. It's either claiming state and local income tax or sales tax. You can't do both but like other provisions, they are expiring year end.

"If you are thinking of making a bigpurchase that's subject to sales tax, it may tip your decision one way or the other. For example, taxes on a new car might outweigh state or local income tax," Rodgers said. "Taxpayers who will benefit the most are those who live in a state with no state income tax."

Nationally, one in every 998 housing units received a foreclosure filing in September 2013, according to RealtyTrac.

"This year, any amount forgiven on a principal residence by a financial institution in foreclosure can be excluded from gross income, but the provision won't be available in 2014," said Rodgers.

For the first time, same-sex couples married before 2013 can file amended joint tax returns to claim refunds for prior tax years. "There's a three-year limit from the due date of the original tax return or two years from the date the tax was paid, whichever is later, for filing an amended tax return, so now is the time to file," said Miller.

Next year will be an even bigger year for tax changes because of Obamacare.

Starting in 2014, individuals are required to maintain health insurance or face a tax penalty.

I have not filed my business tax returns or my personal income tax returns in about five or six years / Failed to file taxes?

Dan Henn writes: Question: I have not filed my business tax returns or my personal income tax returns in about five or six years. I have not received any notices, but what should I do?

Answer: You would be surprised how many people are actually in this situation. Some people just don’t think about it, some people actually choose not to file, and yet others have legitimate reasons such as dealing with personal matters or family health issues. But no matter what your reason, it is always recommended to file any delinquent returns as soon as possible. If you do not file a return, the statute of limitations never runs out, and therefore does not expire. Also, it is possible that the IRS could open a criminal investigation for tax evasion and say you are negligent and willfully not filing your returns.

I have dealt with dozens of people in the past couple of years who are in this situation.
In regards to your business return, if it is a pass-through entity (partnership or S-corporation), there is currently a penalty for filing a return late. The penalty is $195 a month (and part of a month) per partner or shareholder that the return is filed late. (Note: this penalty came into being at $85 a month for 2008 tax returns for S corporations and used to be $50 a month for partnerships). This will be assessed for each return that is filed late starting in 2008.

If you are an LLC filing as a sole proprietor or just a sole proprietor filing a Schedule C on your individual return, then penalties only exist if you have a tax due amount on your return. If your individual return is filed late and you owe, then the IRS will assess a late filing penalty of 5 percent a month (which includes part of a month, but not to exceed 25 percent), late payment penalty of .5 percent a month (not to exceed 25 percent) and interest (which has been 3 to 4 percent during the past couple of years).

It is important to know that if you are due a refund on your individual return and it is more than three years old, you will not receive that refund. So it is important that you file your returns within that time. As of now, you can only get a refund for your 2010 return to the current year.

If you find yourself in the situation where you have not filed your tax returns in a number of years....it's time to contact a Certified Public Accountant / CPA for professional help.

QuickBooks Hosting is Better than QuickBooks Online

SageNext InfoTech (hosting co.) writes:  QuickBooks Online vs. QuickBooks Hosting – Which one is right for your business?

 Because of some similarity between QuickBooks Hosting and QuickBooks online, businesses are left with a difficult choice between QuickBooks Online and QuickBooks Hosting. It is important to analyze your business needs so that you could be able to choose a platform that will be most beneficial to your unique business model.

Major advantages of QuickBooks Hosting:

QuickBooks Hosting lives in the cloud. It functions as software-as-a-service (SaaS), which means you must have an Internet connection to connect to the QuickBooks Hosted server. But you do not need to install the program on your local computer or any computer from where you want to access the QuickBooks application on the cloud and can access your data from any device, including most smartphones and tablets. You get the same features which is available in the desktop version of QuickBooks on the cloud whereas the QuickBooks Online doesn't have all those features included in it.

Where QuickBooks Hosting is Better than QuickBooks Online

There are a few features that QuickBooks Pro, Premier and Enterprise have that QuickBooks Online does not.

• Sales Orders
• Inventory Assemblies
• Progress Invoicing
• Receiving Partial Purchase Orders,
• Item Receipts
• Balance Sheet by Class
• QuickBooks Statement Writer
• Budget v Actuals for Jobs
• With QuickBooks Enterprise and the optional Advanced Inventory feature:
  • Serial Number/Lot Number Tracking
  • Multiple Warehouse Locations

Year-End Tax Planning Tips

Through CPA Practice Advisor Grant Thornton Offers Year-End Tax Planning Tips: The dawn of 2013 brought the biggest tax changes in more than a decade and this dramatic reshaping of the tax code will change tax planning according to Grant Thornton LLP.

The dawn of 2013 brought the biggest tax changes in more than a decade and this dramatic reshaping of the tax code will change tax planning according to Grant Thornton LLP.  

The resolution to the fiscal cliff standoff increased taxes by more than $600 billion and rewrote scores of rules. The rates on many types of income have risen in 2013 for high-income taxpayers, and a new Medicare tax on investment income is effective for the first time this year. Grant Thornton’s Year-end Tax Guide for 2013 discusses all the issues taxpayers and tax paying entities should be thinking about right now. 

“Some strategies that worked for taxpayers in the past won’t make sense anymore, and the law created new opportunities that didn’t exist previously,” said Mel Schwarz, partner in Grant Thornton’s Washington National Tax Office. “New planning techniques are needed to address the new taxes, rule changes and rate increases.”

Here are some of the most important 2013 tax planning considerations for businesses:

1. Understand how the new rates affect your business entity. The 2013 tax increases came on individual income, but they also affect businesses. C corporation rates remain the same at the entity level, but rates are now higher when the corporation distributes its earnings as dividends or the owners sell the stock. Pass-through businesses like partnerships and S corporations are affected more directly by the individual rate increases because these entities are taxed only at the individual level. Taxpayers should understand how the new rates will affect their entity and whether it affects their planning.

2. Expense business investments. Keep in mind that 2013 may be your last opportunity to deduct so much of your business investments upfront. Lawmakers extended two provisions, bonus depreciation and Section 179 expensing, which allow you to deduct investments in your business more quickly.

3. Understand health care reform requirements. While some health care reform legislation requirements have been delayed, employers are still facing many new rules. Important requirements that take effect between 2012 and 2015 include: a $2,500 limit on flexible spending arrangements; a new fee of $1 per person covered by health insurance; and employee disclosure on benefits and coverage. The IRS has delayed until 2015 the “pay or play” mandate that was scheduled to begin imposing penalties for employers with more than 50 full-time equivalent employees who do not offer health insurance that meets certain standards.

4. Take advantage of business extenders. Many valuable business tax provisions commonly known as “extenders” were carried forward through the end of 2013. These provisions were put in place retroactively for 2012 and prospectively for 2013 and include: the research credit; 15-year cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements; the new markets tax credit; Subpart F exception for active financing income; look-through treatment for payments between related controlled foreign corporations under foreign personal holding company income rules; and the alternative fuel credit.

Here are some of the most important 2013 tax planning considerations for executives and business owners:  

1. Understand the new investment income rates. The top tax rate on ordinary income increased from 35 percent to 39.6 percent in 2013. The rate on long-term capital gains and qualifying dividends also increased from 15 percent to 20 percent. But these rates don’t tell the whole story. The new 3.8 percent Medicare tax on net investment income can push top tax rates on income like capital gains, dividends and passive business earnings even higher.

2. Group your business activities. The new Medicare tax on net investment income is levied against all passive trade or business earnings. To avoid being passive, you must meet one of seven IRS tests for “material participation.” The IRS allows you to group different business activities together in order to meet these tests. In the past, these rules usually only mattered for taxpayers with losses, but the new Medicare tax means you may need to group your activities together for the first time.

3. Boost tax-protected savings with a Roth rollover. Rollovers into Roth accounts have become very popular since the $100,000 income limitation on conversions to Roth IRAs disappeared in 2010. To convert into a Roth account, you must pay tax on the investments in your traditional account immediately in exchange for no taxes at withdrawal.

4. Leverage historically low interest rates. The past two years presented a historically favorable time for transfer tax planning. Although tax rates are higher and asset values are recovering, the unified gift and estate tax exemption is still very generous, and this may be one of your last opportunities to take advantage of historically low interest rates.

5. Bunch itemized deductions. Timing significantly affects your itemized deductions, because many of those deductions have adjusted gross income floors. Bunching these deductions into a single year may allow you to exceed these floors and save more.

National Breast Cancer Awareness Month: Tax Deductions

Mark Steber for the HuffingtonPost writes: Did you know that breast cancer is the most common cancer among women and the second leading cause of death for women worldwide? It is estimated there will be more than 230,000 women diagnosed with breast cancer in the U.S. in 2013. Even more chilling, approximately 39,000 women will die from breast cancer in the U.S. this year.

We have approximately three million breast cancer survivors in the U.S., which makes the chances pretty good that you know, or are related to, one of these survivors. The struggle with this terrible disease has been long, but thanks to the help of people across the country, and all over the world, we are making progress, and hopefully one day it will no longer exist.

October is a time we give additional visibility to the disease and those affected by it. But, what does any of this have to do with taxes? This is, after all my tax blog. So, let me tell you. 
If you are fighting breast cancer right now, granted taxes are the last thing on your mind, but there are some things you should know. If you itemize deductions and have medical expenses, you may be able to deduct a portion of your out-of-pocket expenses on your tax return and reduce your taxes and maybe make that refund a bit larger. Tax return deductible medical expenses include the cost of preventive screening (any kind of preventive medical screening including all cancers), the cost of treatment from lab tests, medical procedures, hospital and clinic visits and stays, and other medical expenses that range all the way to rehabilitation costs including prosthetics, and prescriptions. Travel to and from doctors, hospitals, pharmacies and even rehab centers are deductible at 24 cents per mile plus any tolls, parking or other transportation costs. Lodging is deductible if you, or your caretaker, must stay overnight to receive treatment or consult with a doctor. The cost of wigs for patients who lose their hair during treatment are also deductible. The list of medically related, and by extension, tax deductible expenses is very large and very inclusive. It may even include home renovation to the extent that the renovation is related to an illness or treatment or medical need.

When determining allowable medical deductions, taxpayers must first reduce any out-of-pocket costs by those reimbursed from a medical flexible spending account (FSA). Also any expenses paid by insurance are not included. Once you have your total allowed expenses, subtract 10 percent of your adjusted gross income from the total, and the remaining expense amount is the allowed deduction. These deductible medical expenses along with other allowed deductions such as mortgage interest, property tax, state sales or income taxes and charitable contributions are all added up as itemized deductions and used instead of the annual standard deduction to reduce your income before determining your taxes.

The next common deduction related to breast cancer is for charitable contributions you make to one of the many organizations working towards finding a cure and supporting cancer patients undergoing treatment. So if you gave a donation, sponsor a runner or walker or any cash or non-cash gift or donation -- it may be tax deductible. If you have given or donated or are planning to give to this cause or any charitable cause, keep your receipts and cancelled checks or credit card statements supporting your donation.

If you participate in any of the annual walks, runs,or other community organizations during Breast Cancer Awareness Month, or any other time of the year, keep track of the out-of-pocket cost of participating. These costs include 14 cents per mile for travel while organizing, working and cleaning up the event. Any postage, printing, mailing or other costs of advertising should also be tracked. Many volunteers dig deep to provide food, drinks and gifts to the volunteers and even the participants. Make sure you keep receipts of all of your expenses, a logbook of all your miles, and include them with your annual tax return records. Better documentation likely means a bigger tax deduction and lower taxes.

The suggestions for medical expenses and charitable expenses are true for any type of illness or volunteer work. So many events in our lives have a tax impact that we don't think about.. With a little organization and planning to keep receipts in a central location, we can use these events to reduce our tax bite when we file our tax returns. It certainly does not hurt to spend a bit more time understanding the rules, keeping better records and saving much needed tax dollars, possibly allowing you to provide even more support for your favorite organization or cause.

TaxACT Expands Affordable DIY Tax Filing Solutions for Small Business Owners / Preview Versions Empower Partnerships, Limited Liability Companies and Corporations to Take Control of Their Year-End Tax Planning to Maximize Business Deductions

TaxACT(R), the value leader in tax preparation and filing solutions, has expanded its suite of do-it-yourself tax preparation products for small business owners with online solutions and additional State Editions. TaxACT has offered download software for small businesses since tax year 2003 and has now extended its product line to better meet the needs of today's small business owners.

Preview Versions of TaxACT Federal 1065, 1120 and 1120S Editions, launched in early October, cover the latest tax law changes so business owners can calculate their 2013 business and personal (1040) taxes, identify strategies for reducing their taxes before year's end and make better informed business decisions for 2014.

For tax year 2013, TaxACT Business products are now available as web applications, allowing busy and often traveling small business owners to sign into their TaxACT Online 2013 accounts anytime, anywhere on a computer or tablet browser. TaxACT Online products are always risk-free to try, as users don't have to pay until they preview tax forms, call for help, print or e-file.

Programs will be updated with final IRS forms in early January, including Form 1120-H for Homeowners Associations in 1120 Edition, after which users can finish and file their returns. TaxACT will also release new State Editions in January so that 1065, 1120 and 1120S each support 32 states, with e-filing for most.

Q&A guidance, integration and quick entry for faster tax preparation

As business owners answer easy-to-understand interview questions, TaxACT personalizes the question sequence to streamline the interview and completes the necessary tax forms. Information is saved along the way so users can finish their returns as their schedules allow, and bookmarks can be personalized for one-click navigation back to selected questions.

Time-saving, error-reducing tools include:

        
        --  Import of last year's TaxACT business return data, including asset and
            depreciation schedules, owner K-1s and rental properties.
        --  Automatic allocation of partner or shareholder income and deductions
            in TaxACT 1065 and 1120S. Once complete, Schedule K-1 data can be
            quickly imported into TaxACT Deluxe 1040.
        --  The new Accounting Records Import debuting in January's updated
            program. Import a trial balance report in comma separated values (CSV)
            format from QuickBooks(R) or other accounting software, and TaxACT
            will transfer the information to the appropriate lines of the tax
            return.
        --  Quick entry tools for depreciation and Schedule L data.
        --  Investments import from GainsKeeper(R) or a brokerage-provided CSV
            file. Or, enter transactions into Stock Assistant, a spreadsheet-like
            page that enables users to quickly enter, review and print investment
            sales.
        --  Simplified reconciliation of book income for Schedule M-1.
        --  Storage of digital copies of tax documents with the TaxACT return.
            Images can be uploaded from a local drive or TaxACT DocVault(TM), a
            secure mobile app for creating and saving encrypted copies of tax
            forms, receipts, and documents.
        --  Summary reports for partner distribution, asset depreciation and
            disposal, capital gains and year-over-year comparison.

Personalized help is available every step of the way in the Answer Center, on TaxACT's website and via email or phone.

Maximize deductions

Whatever the industry, TaxACT's interview helps business owners maximize the number and amount of deductions, from vehicles and utilities to office expenses and startup deductions for new businesses. As users answer questions about business income and expenses, TaxACT provides guidance to help users discover all deductible expenses incurred during the year.

After expenses are entered, TaxACT covers potential tax credits to further reduce businesses' tax liability.

When users have finished the interview, TaxACT Alerts scan the return for errors, missing information and tax-saving opportunities.

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TaxACT automatically completes state forms as users answer questions about their federal taxes, so state returns can be finished and filed within minutes.

During the filing steps, users can choose to receive email and text notifications from TaxACT when e-filed returns are processed by the IRS and states.

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TaxACT Online and download 2013 Federal Business Editions are $39.99* each through December 31, 2013. Federal prices will increase by $5 on January 1, 2014.

State Editions are $19.99 per edition and $59.99 for each All-States Edition.

One free e-file is included with each federal and state edition.

Home & Business Bundles, $59.99 each, include download software for Deluxe 1040, State 1040 and one Federal Business Edition.

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Federal Tax Brackets for 2013 / The federal tax brackets for 2013 differ by almost 30 percent lowest to highest.

Kent McDill for Spectrem writes: There are seven federal tax brackets for 2013, no matter whether you are filing as married, individual, or head of household.

Now that we are in the fall of 2013, tax considerations are on the mind of American taxpayers.  Here are the federal tax bracket details for 2013, with some details on how they can affect your personal tax situation.

The lowest tax bracket simply pays 10 percent of taxable income. The highest income level for the lowest federal tax bracket is different depending on filing status, and ranges from $8,025 to $17,850.

After the lowest tax bracket, a set tax fee is assigned to taxpayers, and then a percentage of income is added. For instance, individual taxpayers with a taxable income of between $8,926 and $36,250 pay $892.50 plus 15 percent  of anything over the low end of income, in this case $8,926. For the same type of filing on the high end of the spectrum, anyone making $400,001 or more is taxed $116,163.75, plus 39.6 percent of anything above $400,000.

The tax rates are the same at each of the seven federal tax brackets across all filing statuses (10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, and 39.6 percent). The initial payment amounts change, as do the figures for the amount which the percentages apply. For instance, at the 15 percent rate, married taxpayers filing jointly pay the percentage based on anything made over $17,850, while married taxpayers filing separately pay the 15 percent on anything over $8,925.

A Spectrem's Millionaire Corner research study on wealthy investors based on income levels finds that most investors believe the federal income tax should range between 8 percent and 25 percent, although the opinion changes based on income levels. Most investors who have a net income of less than $100,000 think the tax rate should be between 8 percent and 15 percent, while most investors with a net income of between $100,000 and $250,000 think the tax rate should fall between 11 percent and 20 percent.

Twenty-three percent of investors with a net income of $750,000 or more think the tax rate should be between 26 and 30 percent.   

There are deductions and credits that are taken out before your taxable income level is determined. They include deductions or credits for mortgage, adoption, children, personal exemptions and standard deductions. There are also itemized deductions, but there are limits to how much a taxpayer can deduct based on adjusted gross income.

Also, for 2013 tax purposes, personal and dependent exemptions are either lost in whole or in part for single taxpayers with an AGI of $250,000, married jointly at $300,000, head of household at $275,000 and married filing separately at $150,000.  

There are still deductions for school teacher expenses and tuition and fees.

Tax professionals expect changes in the federal tax brackets for 2014 that will take into account inflation rates, and that could produce savings for most taxpayers.