EITC: Money from Uncle Sam for Low/Moderate Income Earners

Uncle Sam2010 was a really tough economic year. Many Americans lost their jobs and a lot of the ones that were able to keep them got a pay cut. For those lucky enough to find a new job, many had to settle for a less compensation than they got before. But there is help from Uncle Sam in the form of a refundable federal income tax credit for low to moderate income working individuals and families.
It’s called The Earned Income Tax Credit or the EITC. Let’s take a look at how it works.
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American Recovery & Reinvestment Act: How it Affects You

Can you benefit from Recovery Act tax credits? Try the White House Tax Savings Tool to find out.

Many of the Recovery Act provisions are geared toward individuals:

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Roth IRA Opportunities – for 2010

This tax year, 2010, is the first year in which taxpayers—including married taxpayers filing separately—are able to convert funds in regular IRAs (including SEP and Simple IRAs) to Roth IRAs, regardless of their income.  This represents a significant opportunity for certain taxpayers.

There are several advantages to a Roth IRA Read more…

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Tax Planning Can Save You Money

Planning involves looking ahead to the future to reach a goal. People are generally motivated to make plans when they are consider purchasing a home, accepting a job, or investing for their retirement. But when it comes to taxes, most people leave it all to chance, not realizing that they could be losing valuable tax savings. Tax Planning can save you money!

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Voluntarily Disclosure – Offshore Transactions

Taxpayers with unreported income relating to offshore transactions who wish to voluntarily disclose the information to the IRS can find information on the process. For a complete understanding of the voluntary disclosure procedures, see Internal Revenue Manual (IRM) 9.5.11.9

Taxpayers wanting to participate in the IRS voluntary disclosure process should call the phone number associated with the state in which they reside. See Contact IRS About Voluntary Disclosure. Read more…

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Help for Victims of Ponzi Schemes

Investment swindler Bernie Madoff

Ponzi Investment swindler Bernie Madoff

The IRS provides two documents which provide guidance to help the victims of losses from Ponzi-type investment schemes.

  • Revenue Ruling 2009-9 provides guidance on determining the amount and timing of losses from these schemes, which is difficult and dependent on the prospect of recovering the lost money (some of which may not become known for several years).
  • Revenue Procedure 2009-20 simplifies compliance for taxpayers by providing a safe-harbor means of determining the year in which the loss is deemed to occur and a simplified means of computing the amount of the loss.

Check out an overview of this guidance: see IRS Commissioner Doug Shulman’s March 17, 2009, testimony before the Senate Finance Committee .

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No Tax on Unemployment Benefits for 2009?

February 25, 2009 Leave a comment

Okay… you lost your job along with millions of other Americans. In past years you could collect unemployment benefits (up to $575  a week in Ma.), but you’d still have to pay tax on it. But something has changed for 2009!

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