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Continuing our effort to provide you with valuable, practical tax information, we will periodically update this page with useful income tax tips and income tax advice from the best sources — information on issues that you commonly deal with. Be sure to check our newsletter from time to time to stay on top of the latest and most effective tax strategies.
CompleteTax will provide income tax tips that will help you save money when it's time to file your tax returns. It's a good idea to use a well planned strategy so that you aren't surprised in April. Using CompleteTax Income Tax Preparation Software and keeping good records could mean the difference between paying a large chunk of money in April and receiving a big refund check. Use our income tax tips as part of your ongoing preparation.
Consider Incorporating to Leverage 100-percent Capital Gain Exclusion
If you are a small business owner, 2011 might be the year to incorporate your business. Why? Because you won't owe any tax on gain from the sale of qualified small business stock acquired before 2012 and held for at least five years is tax-free.
Congress provided this special tax break to encourage investment in small businesses (those with gross assets under $50 million.) While there are requirements regarding the type and size of the business, how the stock is acquired and how long it must be held, most small business owners should be able to incorporate and shelter their businesses increase in value.
For more on this strategy to keep money in your pocket, rather than in Uncle Sam's, be sure to read Consider Incorporating to Leverage 100-percent Capital Gain Exclusion.
Tax Aspects of Corporations
If you run your own business, the form of business organization that you choose can have a major impact on your tax situation. Don't make the mistake of assuming incorporation is just for "the big dogs," without first learning more about corporations and taxes. Check out "Tax Aspects of Corporations" to see if incorporation might help your tax situation.
Business or Hobby?
Perhaps this is the year you are going to keep that resolution you make to turn your passion into a money-making endeavor—a full-fledged business. The IRS looks for "profit motive" and not just your financial results to determine if you are in business or simply pursuing a hobby. To find out what tests the IRS uses to determine if you have a profit motive, consult our article: Business or Hobby?.
Vacation Home Rentals
Even if you live in the cold and rain-soaked Midwest, you know that summer is coming. And, if you own a second home that you rent out to vacationers, then you need to know the tax rules governing vacation home rentals. Learn about the 15-day test and more at Vacation Home Rentals.
Stock, Bond, and Other Capital Asset Sales
Stocks, bonds and other investments can make you rich, or can break your heart, depending on the whims of the market. And, these investments are like poker hands—you "gotta know when to hold 'em" and "when to fold 'em." Tax considerations play a major role on when you should buy and sell stocks and bonds. For an introduction to capital gains and losses, read Stock, Bond, and Other Capital Asset Sales.
Expanded Form 1099 Reporting Repealed
The controversial and onerous provisions that expanded the information reporting requirements to include all business and rental property expense payments over $600 were repealed on April 14—as if they had never been enacted. Expanded Form 1099 Reporting Repealed.
IRS Makes Checking on Tax Refunds Easy
If the IRS owes you money, you probably are interested in knowing when you can expect to see your refund. The IRS has three ways to check your refund: online using Where's My Refund, by telephone, or through the IRS's smartphone application IRS2Go. IRS Makes Checking on Tax Refunds Easy.
Social Security Administration Suspends Earnings and Benefits Statements
The Social Security Administration is saving money—by suspending the annual mailing of Earnings and Benefits Estimate Statements to workers. The SSA is also suspending the option to request an Earnings and Benefits statement. The individualized statements have been replaced with an online Benefits estimator, which doesn't provide you with the ability to verify that your wages have been credited properly. Social Security Administration Suspends Earnings and Benefits Statements.
'Dirty Dozen' Tax Scams Trigger IRS's Wrath
Most of us would prefer not to receive personal correspondence from the IRS, unless it's our refund check. Luckily, the IRS provides us with fair warning of actions that definitely will land us on its bad side. This "Dirty Dozen" is an annual list of the most egregious tax schemes that the IRS is monitoring. As the IRS warns, these scams "may look tempting, but these fraudulent deals end up hurting people who participate in them." 'Dirty Dozen' Tax Scams Trigger IRS's Wrath.
Past Tax Tips Newsletters
Each month, CompleteTax sends out the informational Tax Tips Newsletter.
Read past Tax Tips Newsletters.