Like it or not, we are way ahead of saying that the internet is something that WILL and you MIGHT WANT TO THINK being part of it…

Not any more…

The internet WORKS and you MUST be part of it…

However the question still remains… If the taking your business online works, why it hasn’t worked for other people I know? If it works why it hasn’t helped me?

The Lifetime Learning Credit is a credit of up to 20% of the first $10,000 of qualifying educational expenses for (1) undergraduate, graduate, or certificate level courses for a student attending classes on at least a half-time basis, or (2) any course at an eligible institution to acquire or improve job skills of the student (no attendance time requirements).

Example: A taxpayer has two children attending college on a full-time basis. The taxpayer pays qualified tuition expenses for the two children in the amount of $12,500, and there is no reimbursement or other tax benefit claimed for the tuition expense. The taxpayer is entitled to a tax credit of $2,000 (20% of the first $10,000) for the tax year.

Qualifying expenses…for both credits include tuition and fees but generally not expenses for room, board, equipment*,materials*, books* and other nonacademic fees such as student activity, athletic, insurance, etc. Also excluded are expenses for courses that involve sports, games or hobbies that are not part of a degree program. Tax-free scholarships or fellowships and other tax-free educational benefits must reduce expenses qualifying for the credit. *However books and certain other materials that are provided by the school and included in the tuition and fees may also be deductible.

Qualifying students…must attend a qualified educational institution (one that is eligible to participate in U.S. Dept. of Education student aid programs). The student must be the taxpayer, spouse, or someone who is a dependent of the taxpayer. In addition, in the case of the Hope Scholarship Credit, the student must have no federal or state felony drug convictions for the academic period to which the credit would apply.

The allowable credit phases out when a taxpayer’s modified 2009 AGI is between $50,000 and $60,000 for single taxpayers and between $100,000 and $120,000 for joint return filers. These phase-out levels are annually adjusted for inflation.

Standard Mileage Rate Method: To use the standard mileage rate, you:

• Must own or lease the car,
• Cannot use it for hire, such as a taxi,
• Cannot operate five or more cars at the same time,
• Must not have claimed a depreciation deduction for the car in an earlier year, and
• Must have chosen to use it in the first year you placed the car in service at your business.

Then, for a car you own, in subsequent years, you can choose to use the standard mileage rate or actual expenses. However, if the car is leased, you must use the standard mileage rate method for the entire lease period. The standard mileage rate is determined by the government annually.

Actual Expenses Method: To use the actual expense method, you determine the entire actual cost of operating the car for the year and then determining the business portion attributable to the business miles driven. As example, a vehicle’s operating costs for the year totaled $7,000, the miles driven for business was 6,000 and the total miles driven was 10,000. The business portion would be 60% (6,000/10,000) of $7,000 or a business deduction of $4,200. Operating expenses include gas, oil, repairs, wash and wax, tires, insurance, registration fees, depreciation (or lease payments). The actual expense method can include interest paid on the car loan when deducted on business returns. However, the interest deduction is not allowed for employees deducting car expenses as part of their itemized deductions. Parking fees and tolls attributable to business use are also deductible.

Generally, cars are depreciated using an accelerated method of depreciation subject to the luxury auto rules, which limits the amount of allowable depreciation that can be deducted in a year. If the standard mileage rate was used in the first year the car was placed in service and you decide to switch to the actual expense method, straight line depreciation must be used and subject to the same luxury auto limits.

What’s wrong with a refund you ask? Well, it means you’ve overpaid your tax all year. That’s actually your own money you are getting back and you made an interest-free loan to Uncle Sam. Such unintended generosity costs you more than you might imagine. Consider what would have happened had you instead invested $141.67 ($1,700/12) per month into an investment program rather than overpaying the IRS. Instead of waiting for a $1,700.00 refund check in April, you would have had the refund plus investment earnings for the year.

The alternative is to pre-plan your annual prepayments through withholding and quarterly estimate payments so they more closely match your projected tax liability for the year. Your withholding is generally adjusted by changing the number of allowances claimed on the W-4 Form you turn into your employer. The more allowances, claimed the less the withholding. However, be careful that you do not claim too many and end up owing Uncle Sam at the end of the year. You should always double check your payroll deductions once the change has taken effect to insure the proper adjustment has been achieved.

For instance, your employer may be using information about your income that is no longer current. Employers compute withholding for their employees using IRS Form W-2, Withholding Allowance Certificate. To make sure W-4 data is accurate, you need to fill it out based on the latest data available about your income and deductions.

Mid-year is a good time to review the withholding situation and forecast your tax liability because there’s still time to make adjustments if you’re under-withheld. It’s especially vital to plan ahead if you’ve had any of the following:

• A gain from the sale of property, e.g. stocks, bonds, or real property;
• Income from a second job;
• Other income from which there is no withholding (for example, a pension, alimony, IRA, interest or dividends);
• A change in marital status.

All of the above can cause problems as far as your withholding is concerned and the only way to know for sure is to compute a projection. To be on the safe side, why not give us a call? This office will be happy to assist you in determining safe withholding or estimated tax levels, or help you with long-range tax planning.

1. When comparing multiple car insurance quotes, make sure the liability limits and physical damage deductibles are identical on each quote!

2. Higher physical damage deductibles can save money on your car insurance premiums. Consider $500 or even $1,000 deductibles if you can pay them if you have a claim!

3. Insuring an older car? Consider dropping collision and/or comprehensive coverage on cars worth less than 10 times the premium!

4. Your credit rating impacts your car insurance premium substantially. Clean up your credit and save as much as 50% on your car insurance!

5. Make sure your annual mileage is correct on your policy, as low-mileage vehicles may qualify for a discount!

6. Staying with a company for the long-term may earn you a longevity discount or better insurance rates!

7. Ask your agent about special discounts for senior citizens, group memberships or organization affiliation!

9. If your vehicle has passive restraints such as automatic seat belts or airbags, make sure you are getting the proper discounts on your car insurance!

10. Check to see if you’re paying for towing or rental reimbursement coverage on your current policy. If you don’t need it, don’t pay for it!

11. By shopping well ahead of your current policy renewal, you can obtain a discount from some companies for quoting early!

12. If you take a safe-driver training course, most companies offer discounts on your car insurance!

13. If possible, pay your full policy premium in one payment. Most companies charge installment fees for monthly or quarterly premium payments!

14. Let up on the gas! Speeding tickets and other moving violations increase your car insurance premiums substantially!

15. Before buying that new car, quote the insurance coverage to see how it compares to alternative, lower-premium vehicles!

17. Don’t let your car insurance lapse! Gaps in your insurance coverage will cost you more on your car insurance!

18. Do you have drivers who are good students? Most companies offer discounts to teenage drivers who maintain a certain grade point average in school!

19. Is your child a college student away from home with no vehicle? You could obtain significant savings by rating them accordingly.

20. Make sure your vehicles are rated for the correct location. Mis-rated vehicles can cost you a lot of extra premium!

21. Double check your vehicle model and body-type on your policy. Vehicles that have been mistakenly rated as 2-door instead of 4-door or LX instead of GX can cost you more money!

22. By insuring that parked “clunker” for liability-only coverage, you can obtain multi-vehicle discounts which could more than offset the increased premium!

23. Double check your accident history and make sure you’re not being surcharged for accidents that weren’t your fault!

24. Ask your agent to shop your coverage around! As the saying goes, the squeaky wheel gets the grease!

25. Drive safe! Drivers with no accidents or violations will pay substantially lower rates than their accident-prone counterparts!

26. By not submitting those small claims to your insurance company, you can maintain your claims-free discount. This may actually save you more than what you would collect on those small claims!

www.youtube.com/watch?v=R7mRSI8yWwg