Now that your taxes have been completed for 2010, you are probably wondering what old records can be discarded.  If you are like most taxpayers, you have records from years ago that you are afraid to throw away.  It would be helpful to understand why the records needed to be kept in the first place.  (more…)

Why do you care?  Well for starters, people with a better credit rating enjoy significantly lower interest rates that can add up to thousands of dollars less in interest payments over the term of the loan.  For example, a fixed 30-year mortgage payment varies with respect to credit score and the interest rates corresponding to the credit score.  Having a score that is two hundred points higher can offer a savings of $448 a month for the same $200,000 house loan.  Good credit ratings also provide for quicker loan approvals, fairer loan terms, and more credit.    (more…)

Most small businesses have receivables that cannot be collected.  These receivables can be from the sale of products, providing services to customers, or a combination of the two. 

Whether or not a bad debt deduction will apply generally depends upon which accounting method is used (either the cash or accrual method).  Why does this make a difference?  Let’s look at what happens under both methods of accounting. (more…)

To prevent parents from placing investments in their children’s names to take advantage of the child’s lower tax rate, Congress created, several years back, what is referred to as the “Kiddie Tax”.  Under the Kiddie Tax, a child’s investment income in excess of $1,900 is taxed at the parent’s tax rate rather than the child’s.  These rules do not apply to married children who file a joint return with their spouse or self-supporting children.   (more…)

With summer just around the corner, there is a tax break that working parents should know about.  Many working parents must arrange for care of their children under 13 years of age during the school vacation period.  A popular solution — with a tax benefit — is a day camp program. (more…)

Each year, the IRS releases a publication entitled the “Data Book.”  The 2010 version of the book was released in early March, which provides statistical data on its fiscal year (FY) 2010 audit activities.  The book provides valuable information that include how many tax returns the IRS examines (audits), how they examine them, and what categories of returns IRS is focusing its resources on. (more…)