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8200 Humboldt Avenue So.
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When
is it Worthwhile to Refinance Your Home? Example:
Your refinancing costs will be $2,000, your new monthly payments
will be $600 and your current payments are $700. It will take you
20 months to recover the costs of refinancing your mortgage, viz.,
$2,000¸ ($700-$600). Refinancing can be a good idea if you:
Please feel free to contact us at (952) 948-1105 with any questions or for assistance during normal business hour. When
you are approached by a door-to-door solicitor for a contribution
of either your time or your money, ask questions-and don't hand
over any cash (or charge your credit card) until you're completely
satisfied with the answers. Charities with nothing to hide will
encourage your interest. Be wary of reluctance or inability to answer
reasonable questions.
1.
Ask for the charity's full name and address and demand identification
from the solicitor. 2.
Ask if the contribution is tax-deductible as a charitable donation.
3.
Ask if the charity is registered or licensed by state and local
authorities (required by most states and many communities).
4.
Watch out for statements such as "all proceeds will go to
charity." This can mean that money left after expenses, such
as the cost of written materials and fund-raising efforts, will
go to the charity. These expenses can make a big difference, so
check carefully. 5.
When you are asked to buy candy, magazines, or show tickets to
benefit a charity, be sure to ask what the charity's share will
be. Sometimes the organization will receive less than 20% of the
amount you pay.
6.
Call your local Better Business Bureau if a fundraiser uses pressure
tactics, such as intimidation, threats, or repeated and harassing
calls or visits. Such tactics violate the Council of Better Business
Bureau's recommended standards for charitable solicitations. Many homeowners fail
to keep proper records of what their homes cost them in total. Because
of this, Congress enacted an exemption of up to $250,000 of home
sale gain (up to $500,000 for many husband-wife sales). For taxpayers
whose homes will - or someday might - generate gain in excess of
the $250,000/$500,000 exemption, good records of you home costs
can avoid an overpayment of tax or a conflict with the IRS.
These costs often add up to a substantial amount. If you fail to add them to the cost of your house, you may, if you sell your home at a profit, end up paying a greater tax than is actually due. Pre-Paid
Legal: Membership Simply Makes Good Sense Having
access to the legal system is becoming increasingly important in
our society. But, for most people, getting legal assistance is simply
too expensive. People don’t seek the advice of an attorney
because they think it’s too costly or unnecessary. However,
statistics show that most people do need one. The American Bar Association
estimates that nearly half of all households have a legal situation
right now. The National Resource Center for Consumers of Legal Services
says that even law-abiding Americans will encounter a potential
legal situation an average of 4-6 times per year. These
are only a few of the everyday situations that you may have faced
in the past and could see in the future. If
you are interested in learning more about Pre-Paid Legal please
contact TLC Business Services. Babysitters and Child Care Credit Are you planning on hiring a babysitter for your children this summer while you are at work? The amount you pay for the child care may qualify for the child care credit on your tax return when you file next year. Make sure you have your care giver's taxpayer identification number. It is required to be included on your tax return before you can claim the credit. If the care giver is an individual, you will need his or her Social Security number. If you take your child to a day care center, you will need their employer identification number. Spouse or Employee?Schedule C Wage & Related Medical Expenses DeniedRichard Haeder hired his wife, Judith, to work for his self-employed law office, which he operated out of their home. She answered the telephone (one line for both personal and business), greeted visitors, cleaned the house including Richard's office, and performed general secretarial, clerical, and bookkeeping duties. Judith was Richard's only employee during the years in which they were audited. Her pay was based on the maximum amount that a qualified individual could deduct for contributions to an IRA. One time, he wrote a check payable to himself that Judith then endorsed and put into her IRA. He did not issue W2's for most of those years. Richard also provided health insurance and a medical expense reimbursement policy (up to $10,000 for "all employees"). Sole proprieters often hire their spouses, then provide family health insurance for those employee spouses and their dependents (which also includes coverage for the sole proprieters). The right to claim these items as a business expense is well-documented in Revenue Ruling 71-588. Two key issues in determining whether these items are allowable are the status of the employee and whether the expenses claimed are "ordinary and necessary expenditures of the business." In this case, the IRS denied both the wage and medical expense deductions. It reasoned that "wages" were not actually paid; rather, that they were an attempt to reduce self-employment tax, permit the spouse to contribute to an IRA, and claim a deduction on Schedule C for personal medical expenses. Tax Court agreed with the IRS in denying the wage expense, citing a lack of proof that any employer-employee relationship existed between the Haeders. Their decision was based on Richard's failure to 1) establish a contract with Judith; 2) pay her on a regular or normal basis; 3) pay her wages directly to her; and 4) document the time that she performed work-related services. Since Tax Court determined that Judith was not Richard's employee, the medical expenses were automatically denied as Schedule C deductions and were reportable only on a Schedule A. And, because it followed that Judith did not have earned income, her IRA deductions were also disallowed. --Richard and Judith Haeder, TC Memo 2001
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