Wednesday, 10 February 2016 14:20

Maine's Best Tax Credit?

Emmys, Grammys, Tonys what awards should we give for great tax credits? The Creddys?

I may not have a good name for the award, but I have a great nominee the Maine Educational Opportunity Tax Credit.

What is the Maine Educational Opportunity Tax Credit?

It's a credit on your Maine tax return, reimbursing you for student loan payments made.

Published in Money
Tuesday, 29 December 2015 19:35

Your last tuition payment

Everyone has innocuous things which make them cringe. In my case, it's people announcing they've just sent in their last tuition payment.

I know they're proud, and I understand their relief, but I'm tempted to ask if that was a good tax decision. Specifically; is there an advantage to pay at the end of 2015, or is it better to wait until the start of 2016? How do you make this decision?

Published in Money
Tuesday, 17 November 2015 18:38

Hobby or business?

Do you have a hobby or a business? The line isn't always clear. Take, for example, a sculptor: sometimes people sculpt purely as a hobby, maybe once in awhile they sell a sculpture or win a prize, but they aren't primarily in it for the money. Then, there are sculptors who do nothing else. Their days are spent in the studio, or arranging for exhibits and publicity. Sales of their work provide their primary source of income. In between those two points, there is an infinite spectrum of individuals; how do they determine whether they have a hobby or a business?

Profit motive

Published in Money
Tuesday, 08 September 2015 21:56

Mid-year tax reminders and notices

There's three reminders for the mid-year. The first is important for everyone, the second for those who had marketplace health insurance in 2014, and the third for anyone who currently has marketplace insurance or looking to replace their insurance mid-year.

The IRS cautions of more sophisticated scams. For years, the IRS has reminded filers that they do not contact taxpayers by phone or email. Requests for information or immediate payment by phone or email are scams and should be ignored. Unfortunately, the scammers have been listening as well, as they have added letters to their schemes. Some people are receiving letters with official looking IRS letterhead looking for information or payment. That creates more of a challenge, since the IRS does contact taxpayers by mail and these letters often have short deadlines.

Published in Money
Tuesday, 11 August 2015 14:49

Revised tax return deadlines

Tax deadlines: miss them and you could wind up owing penalties and interest. Not fun, so I'd thought I'd give you a head's up about changes included in the recent highway funding bill. These changes especially effect business partnerships and overseas investors and, mostly, go into effect for your 2016 return, filed in 2017.

Partnership Returns, series 1065, will be due a month earlier than before. Returns for calendar year filers will be due on March 15. For fiscal year filers, partnership returns will be due on the 15th day of the third month following the close of their fiscal year. A six-month extension may be allowed for partnership returns.

Published in Money
Tuesday, 10 February 2015 18:47

Oops, I'm self-employed

Some people dream of opening their own restaurant, running a construction company or developing a killer app. Others fall into self-employment when they agreed to lead lessons on a favorite topic, perform beta testing for a software company or install wiring at a house construction site. Planned or not, being self-employed is an entry in to a whole new level of taxes. If you find yourself self-employed here are some things to watch out for:

It's not your imagination; taxes are a bigger bite than before

Published in Money
Wednesday, 28 January 2015 11:49

ACA comes to your tax return

Welcome to 2015 - the first year when questions about whether you have health insurance will impact your federal tax return. A quick summary of the major impacts:

You will be asked if you have health insurance. You will be asked to confirm you had qualifying health insurance all year for yourself, your spouse and each dependent listed on your return. On the paper copy of returns, there's a simple checkbox near the end. How that checkbox gets filled in (or not) will vary depending on how your taxes are prepared, but you should expect questions about insurance. Qualifying health insurance is defined at (search for 'minimum essential coverage'). Employer-sponsored, individual and government-sponsored plans all are acceptable plans.

Published in Money
Wednesday, 19 November 2014 11:59

If you hear from the IRS

There it is, sitting in your mailbox, the unexpected envelope from the IRS. For many people it's a moment of dread.

Don't panic and don't ignore it. Receiving a letter doesn't mean the IRS will be beating down your door tomorrow. It means they have a question with your return, or are wondering why you haven't filed. Millions of these letters are sent out every year. To be fair, often times it is a request for more money. But not always; once in a while people get notices saying they will be issued a larger refund than expected. Whatever it says, don't burn it and hope it will go away. If no timely response is received, the IRS assumes you agree with their correction and begins making plans to collect it from future refunds or other sources.

Published in Biz
Wednesday, 13 August 2014 14:18

Taxing reading

Midsummer is upon us, and perhaps you've grown tired of frothy summer fare about spies, zombies and fashion models. If you're ready for a change of pace, here are three books related to U.S. taxation. Not a single one tells you how to fill out a form, but each is intriguing.

Charles O. Rossotti was the IRS Commissioner from 1997 to 2002. His book is 'Many Unhappy Returns: One Man's Quest to Turn Around the Most Unpopular Organization in America,' published in 2005 by Harvard Business School Press. Rossetti was instrumental in overhauling IRS procedures giving taxpayers more rights. It's nice to read about a time when the IRS was becoming more responsive to taxpayers, and how Rossetti hoped for future simplification of the tax code.

Published in Money

Starting a new job? Switching jobs? You'll probably be asked to complete a Form W-4, Employee's Withholding Allowance Certificate. A W-4 sets how much tax is withheld from your income. Taxes are due when income is earned; if you owe too much at the end of the year you may owe a penalty. On the other hand, you don't earn any interest on large refunds, so you might not want excess withholding.

So what should you do? Most people don't read tax forms, and in the case of the W-4 that's probably just as well. That's because the W-4 instructions are not perfect. Here are two common problems with the W-4.

Published in Biz
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