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Tax Tips From Tony Navarro

sarah — Tue, 13 Apr 2010 14:59:25 +0000

This is the final tip on tax preparation from Tony. Thanks, Tony!

Tip Number Seven: Offsetting Education Expenses, If Qualified • American Opportunity Credit helps pay for college’s first four years. • Hope Credit helps pay for college’s first two years and allows a maximum annual credit of $2,500 per student, of which up to $1,000 may be a refund, if no taxes are owed. • Hope Credit deductions of $3,600 may be claimed for college in a Midwestern disaster area. • Lifetime Learning Credit (LLC) helps pay for undergraduate, graduate and professional degree courses – including job skills improvement. • LLC includes computer technology, Internet access and related services as legitimate expenses. • Students and parents may be able to deduct college costs up to $4,000 as an adjustment to income, reducing their income subject to tax. • The Tuition and Fees Deduction may be beneficial when not qualified for other tax credits.

Tony Navarro, UCLA, B.A, Economics, 1990: Investment Consultant since 1992; Tax Preparation since 1996 tax year; IRS Audit Representation; IRS-designated Enrolled Agent; Investment Advisor LPL; Notary Public; Bookkeeping Services. 12803 Venice Boulevard • Mar Vista, CA 90066 (310) 398-3231 • tony@taxplusla.com http://www.taxplusla.com

Tax Tips From Tony Navarro

sarah — Tue, 06 Apr 2010 15:01:38 +0000

This is the sixth of 7 tips on tax preparation from Tony. Check back each Tuesday to read them all.

Tip Number Six: Understanding Unemployment Benefits • American Recovery and Reinvestment Act (ARRA) provides a tax break if you collected unemployment in 2009. • Except for workers compensation, unemployment compensation includes amounts received through federal or state unemployment compensation laws, state unemployment insurance benefits, railroad unemployment compensation benefits and benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund. • Unemployment benefits are usually taxable; however, under ARRA, persons who received unemployment benefits in 2009 can exclude the first $2,400 of benefits on their federal tax return. • If each spouse of a married coupe received unemployment compensation both can exclude $2,400. • Form 1099-G shows the total unemployment compensation paid to you in 2009 in box 1.

Tax Tips From Tony Navarro

sarah — Tue, 30 Mar 2010 16:00:31 +0000

This is the fifth of 7 tips on tax preparation from Tony. Check back each Tuesday to read them all.

Tip Number Five: Alternative Minimum Tax (AMT) • The AMT for 2009: • Applies to high income taxpayers who claim so many deductions they owe little or no tax; • Isn’t indexed for inflation, so it covers growing numbers of the middle class; • May apply if your taxable income, adjustments and preference items are more than the AMT exemption; • Exemption amounts are set by law – they are; • Married couples filing jointly and qualifying widows and widowers – $70,950; • Singles and heads of household – $46,700; • Married people filing separately - $35,475; • Minimum exemption for children whose unearned income is taxed at the parents’ tax rate is $6,700; • Tax deductions for state/local sales/excise taxes on new motor vehicle purchases qualify as AMT deductions.

Tax Tips From Tony Navarro

sarah — Tue, 23 Mar 2010 16:00:07 +0000

This is the fourth of 7 tips on tax preparation from Tony. Check back each Tuesday to read them all.

Tip Number Four: Early Distributions from Retirement Plans • Early distributions are funds taken from IRAs before age 59½. • They are subject to an added 10% tax. • They must be reported to the IRS. • Distributions rolled over to another IRA are not taxed. • Rollovers must be done within 60 days after you receive the distribution. • Rollovers are taxed when the new plan makes a distribution. • Early distributions from nondeductible IRA contributions are not taxed. • Early distributions from Roth IRAs are not taxed. • Non-IRA plan distributions are taxable unless contributions were after tax. • Among exceptions to the early distribution tax are when it is used for first home purchases, medical or educational expenses, or if disabled.

Tax Tips From Tony Navarro

sarah — Tue, 16 Mar 2010 16:00:32 +0000

This is the third of 7 tips on tax preparation from Tony. Check back each Tuesday to read them all.

Tip Number Three: First-Time Homebuyer Tax Credit Tips • Homebuyers must attach Form HUD-1 or other properly executed settlement statements that show all parties’ names, signatures, property address, sales price and purchase date. • Settlement documents vary depending on location and may not include both buyer and seller signatures – thus when filing tax return the IRS encourages buyers to sign settlement statements, even that have no signature line. • Mobile homes buyers without settlement statements must attach a copy of retail sales contracts showing all parties’ names, signatures, property address, purchase price and date. • For newly constructed homes, where settlement statements aren’t available, attach a copy of the certificate of occupancy showing owner’s name, property address and certificate date. • For long-time residents claiming the credit, the IRS recommends that you include documentation, i.e., Form 1098, for the five-consecutive-year period, Mortgage Interest Statement or substitute mortgage interest statements and property tax records or homeowner’s insurance records.

Tax Tips From Tony Navarro

sarah — Tue, 09 Mar 2010 16:00:09 +0000

This is the second of 7 tips on tax preparation from Tony. Check back each Tuesday to read them all.

Tip Number Two: 2009 Tax Changes • American Recovery and Reinvestment Act has incentives for first-time home and new car purchases, home energy efficiency improvements, college expenses, and persons collecting unemployment. • IRA deductions may apply if adjusted gross income is less than $65,000 or $109,000 married filing jointly. • New standard deductions: $11,400 for married couples filing jointly and widows and widowers; $5,700 for singles and married individuals filing separately; $8,350 for heads of household. Other deduction increases include state/local sales/excise taxes paid on car purchases (after 2/16/09), state/local real estate taxes and losses from federally declared disasters. • New cents-per-mile rates: business 55 cents; medical reasons or deductible moves 24 cents; services to charitable organizations 14 cents. • Taxable investment income a child can have without being taxed at the parent’s rate is $1,900.

Tax Tips From Tony Navarro

sarah — Tue, 02 Mar 2010 16:00:14 +0000

Tony has given us 7 tax preparation tips to share with you. Check back each Tuesday to read them all.

Tip Number One: Most-Overlooked Tax Deductions 1. State sales taxes. 2. Reinvested dividends. 3. Out-of-pocket charitable contributions. 4. Student-loan interest paid by Mom and Dad. 5. Moving expenses to take your first job. 6. Military reservists’ travel expenses. 7. Child-care credit. 8. Estate tax on income in respect of a decedent. 9. State tax paid last spring. 10. Refinancing points. 11. Jury pay turned over to your employer. 12. Property-tax deduction for nonitemizers. 13. Casualty-loss deduction for nonitemizers. 14. Hope credit for college juniors and seniors. 15. Making Work Pay credit. 17. Credit for energy-saving home improvements. 18. Break on the sale of demutualized stock. 19. Home-buyer credit.