Tax news

Tax

Indiana Returns Surplus To Taxpayers With Tax Breaks For Everyone

Occasionally people ask me about the name of this column, with gentle comments like, 'Are you nuts? What's fun about taxes?'or 'I heard about someone who had fun with his taxes once, and it landed him in jail! You may not rank taxes at the very top of your list of fun things, like bunji jumping and tackle basketball, but after you read today's column, you might at least start thinking of taxes as interesting.
Tax

Save On Taxes With Indiana College Savings Plan

If you're planning on sending a family member to college any time soon (like, in the next 25 years), or if you would like to contribute to the college education of a friend, or the child of a friend, here's something to think about'You can start saving for college now, and save yourself some tax money while you're at it.
Tax

Indiana Offers Tax Breaks For Elderly, Insulation, Property Taxes

In your recent column about Indiana tax breaks, you said elderly taxpayers are entitled to an additional exemption of $500 if income is below $40,000'If we are a married couple and both are over age 65, can our income be $80,000 to qualify for the tax break? E.C., Indianapolis
Tax

Indiana Earned Income Credit New For 1999

In yet another effort to reach out to Indiana taxpayers, the Indiana Department of Revenue has created a new Earned Income Tax Credit, a credit that was spawned from the former Earned Income Tax Deduction. This credit may not affect you personally, but you may have friends or family members who can benefit from this credit and you will be doing them a service if you explain it to them'Mark St'John, Executive Director of The Indiana Coalition on Housing and Homeless Issues estimates that as many as 132,000 Indiana families may be eligible to benefit from this credit.
Tax

Sale Of Old Coins Generates Tax On Capital Gain Income

I have collected coins for over 50 years'The coins are different ones, there are no perfect sets'If I sell them, do I have to report them on my income tax return, and if so, how do I report this because I have no idea what I paid for them. I.Q., Indianapolis I know, it seems unfair'You did all the work of collecting the coins 'purchasing them, storing them, caring for them 'and now that you want to sell them the IRS steps in and holds out its greedy hand.
Tax

College Apartment Doesn't Qualify For Renter's Deduction

Our daughter is a full time student at Purdue' In prior years we have paid housing costs to her sorority'This semester she is living in an apartment'Can my wife and I claim a deduction for the apartment rental expenses in addition to the deductions that we use for our own home (mortgage interest, taxes)? Can any of the sorority costs be deducted on our taxes? C.C., Indianapolis
Tax

Self-Employed Taxpayer Gets Break By Hiring Children

If you are self-employed and you want to hire your children, is there any age limit to the children that you hire? Is there a limit to how much you can pay them? Do you have to pay taxes on their income? S.T., Indianapolis There is no upper or lower limit to the ages of the children you hire to help you in your business'However, hiring an infant to help with the bookkeeping is probably a bit of a stretch'Assuming the child is able to perform the job for which he is hired, you can pay the child and take a deduction for the wages.
Tax

IRS Warns Y2K Woes Could Delay Refund Check

One day, Tax Commissioner Rossotti,While munching his favorite biscotti,Declared to his crew,I' ve got bad news for you:Our Y2K system is spotty!The evidence here on the tableSuggests our PCs are unstable.We may have to holdThe refunds, I'm told,We'll
Tax

IRS Allows Fourteen Days Of Rental Income To Be Tax-Free

My family owns a cottage in Wisconsin that we use for vacations in the summer time'This past summer, some friends wanted to use the cottage and they insisted on paying us for the time they spent there'Do we need to show this money on our tax return? And since I own this cottage with my brother and sisters, should we split the money evenly on all of our returns? L.L., Indianapolis
Tax

Pastor Owes Social Security Tax On Housing Aid

I do the treasurer job for a small church' Recently we called an interim pastor and voted to compensate him with a $100/week housing allowance'I know housing allowances are tax free for the clergy'The question is, do we need to deduct FICA from this amount? J.L., Indianapolis
Tax

Delay Marriage Penalty Tax By Putting Off Year-End Wedding

Planning a wedding? Have you considered the tax consequences of your impending actions? I realize it may be rather late to start thinking about postponing plans until after the first of the year, but even waiting until that apple drops on New Year's Eve (assuming, of course, that it doesn't have some sort of Y2K curse at its core that prevents it from actually making it to the ground) can end up saving you a bundle of cash.
Tax

Plates' Excise Tax, Not Auto's Sales Tax, Is Deductible Expense.

Is sales tax paid on the purchase of a new automobile deductible on either state or federal forms? RPK, Indianapolis Not really'Years ago the IRS allowed a deduction for automobile sales tax on the federal form, but that deduction was removed over a decade ago'Indiana doesn't allow any such deduction.
Tax

Tax Increase On Tap For Year 2000

We've all heard about the tax reductions that keep coming our way from our friends in Washington, in the form of greater exemptions, higher standard deductions, credits for children, credits for sending children to school, credits for sending yourself to school, credits for having a job where you don't earn very much money, and so on'I just want to point out that, while one hand of the government seems to be reaching out to taxpayers, the other hand is quietly slipping in our back pockets and taking back what is so generously being handed out.
Tax

Even In The Giving Season, Tax Rules Do Apply

While you're busy wrapping packages, tying bows, and thinking merry thoughts this week, here are some merry tax thoughts to go with those gifts you are giving and the ones you hope you receive. Giving business gifts
Tax

IRS Clear On Subject Of Severance Pay

My wife is about to be eliminated in her job because the job is being eliminated and she's going to receive a 9-month pay settlement'I'm under the impression that there is a certain kind of account that she can put these funds in and she can defer the taxes on them until they are withdrawn on an interest only basis'Is that a possibility? M'D., Indianapolis
Tax

Income Averaging Provision Now Available Only To Farmers

I recall several years ago when I had experienced an unusually high one-year taxable income, I was able to reduce my Federal income tax liability by averaging my income over a five-year period'Is the Income Averaging provision still available to taxpayers? G.L., Indianapolis
Tax

Much-Maligned IRS Aims To Be Nicer, More Helpful

IRS losing in government popularity contest A recent survey designed to gauge citizen satisfaction with various government agencies determined that the IRS is the least popular of all government agencies that were examined'Of 29 federal agencies examined, the IRS came in dead last in the popularity contest'This, of course, has to be startling news to the folks at the IRS who thought their campaign to become a kinder, gentler IRS was going to be successful in changing public opinion of the agency.In response to the results of this American Customer Satisf
Tax

IRS Is COLTS Biggest Fan

I was told I needed to turn my column in early this week so that the Star could spend the weekend focusing on the important news, that being the fact that the Y2K disaster and global warming have conspired to provide Indianapolis with what seems to be a winning football team'Not since Jack Trudeau gave new luster to the term 'sack'has there been so much interest in our local football heroes'And so it seems only fitting that I too devote extra space to a commentary on the success of the Colts.
Tax

New Tax Credits Will Make Tax Returns Fun

Last week, President Clinton unveiled a wish list of new tax credits that he would like to see enacted by Congress'Congress, in the form of Bill Archer, chairman of the House Ways and Means Committee (the group responsible for writing our “simple” tax laws), replied that since 2000 is an election year, there probably wouldn’t be any major tax legislation passed for a while'After all, we wouldn’t want any of our elected representatives voting on controversial tax laws in a year when their constituents are actually paying attention to what they are doing.
Tax

Mortgage Deduction Only Useful On Itemized Return

We received a mortgage interest statement showing that we paid $3,800 in 1999'It's just the two of us and we file with the TeleFile'My question is, do we have to file any forms and if so, what forms should we use?

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