Small Office Home Office (SOHO) Tax Tips

Better now than December 31…

Nov 14, 2009 Tax Strategies

Passing along an opinion piece published on the SouthBend Tribune website, here is a quick list of “Tax ToDo’s” before the end of the year. Here is an annotated list from their posting.

• This is the perfect time to collect what you don’t need or want and make a donation to your favorite charity organization. IRS Publication 526, Charitable Contributions and Publication 561, Determining the Value of Donated Property are your best references. You will need to complete IRS Form 8283 for non-cash contributions. Remember that cash or property contributions of $250 or more will need a WRITTEN receipt that includes both value and description of the donated property. Organizations like Goodwill Industries, the Salvation Army, and local groups recycle many contributions. You add value to what you don’t need or want as a personal tax deduction, employment for charity workers, and either free or affordable gifts to those who are suffering hard times in this economy.  Bring your donations to these organizations BEFORE Thanksgiving and don’t forget to keep your receipts.

Tags: 2009, Energy Credits, Sales Tax

Form 1040A Schedules 1, 2, and 3 obsolete in 2009

Nov 8, 2009 Tax Changes, Taxable Income

Trish McIntire, an IRS Enrolled Agent in Arkansas, in her blog, reports that the IRS is “simplifying” our 2009 income tax filing procedure by discontinuing the use of three supporting tax forms associated with the short IRS Form 1040A.  She says that interest income over $1,500 will now be reported on Form 1040 Schedule B, Interest and Dividend Income (part of the longer IRS Form 1040) rather than Form 1040A Schedule 1. A similar substitution affects Form 1040A Schedule 2, Child and Dependent Care Expenses. In 2009, she says filers will use IRS Form 2441 (see IRS). The final filing change affects those seeking a credit for the elderly or disabled. The Form 1040A Schedule 3 form is replaced by Form 1040 Schedule R, Credit for the Elderly and Disabled (see IRS). I can’t express how excited I am that our government’s paperflow has been reduced by 3 IRS forms! While this definitely simplifies filing personal income taxes for some Americans, why don’t we save more paper, time, and money by simplifying the tax code for everyone?

Tags: 2009, Child Care, Dependent Care Expenses, Dividend Income, Form 1040 Schedule B, Income Tax Filing, Interest Income, Personal Income Taxes