Tax news

Tax

IRS will likely let you slide on minor tax form errors

When I was looking over my 1996 taxes (while I was doing the 1997 one), I noticed I put my Schedule C income on the wrong line (alimony line I think) on the 1040. Do you think they will figure out the mistake since they have the Schedule C, or do you think I need to send them a letter or an amended return, or just let well enough alone? P.H., Indianapolis
Tax

You must itemize to deduct gambling losses

I recently won a lump sum gambling out of state. Must I itemize my taxes next year to be able to deduct my gambling losses? Also, does it matter from which state my gambling losses come? S.B., Indianapolis Yes and no.
Tax

Roof can be depreciated separately from office

I own a small office building which I've been depreciating over 31.5 years. I've had the building for 6 years. I just put a new roof on the building. Do I add the cost of the roof to the cost of the building and keep depreciating for the remaining amount of years? Or do I have to start over on the roof with 31.5 years? That would mean I' m still depreciating the roof when the building is finished. Can you depreciate a roof if the building under it is supposedly used up? C.B., Indianapolis
Tax

IRS has formula for storm damage

During a March snowstorm, I lost five oak trees that were between 60-70 years old each'Can I write this loss off on my taxes? If so, what do I do? R.D., Portage
Tax

$400 Child Tax Credit goes to $500 in 1999

Please tell me about the new child tax credit'Who gets to take it, and which children qualify? I’ve heard that the credit is $400 and I’ve heard that it is $500'Which is right? Is it so much per child, or is it one credit per family? O.H., Indianapolis
Tax

Self-employed individual's insurance deduction on the rise (again)

I am self-employed'If companys can give health insurance to their employees and take a tax deduction for the insurance costs, can I buy health insurance for myself in my company name and take a tax deduction for it on my Schedule C? D.I., Indianapolis
Tax

Holidays are time for last minute tax maneuvers

Once again, it’s time for my annual holiday tax checklist'Just because the year is quickly coming to a close doesn’t mean you can’t take advantage of several last minute tax saving tips'Here are some holiday treats that can help cut your 1998 tax bill'All of the items below may not apply to you, but if you’re facing a hefty tax bill next April, you may be able to make a few changes before the year ends'Take a quick look at your income and withholding for 1998'Try to rough out an estimate of what you expect to owe for 1998 taxes'If it appears your withholding is too low
Tax

Purpose for party could net you tax deduction

I recently hosted a party at my home and invited several business associates and potential clients'Am I allowed a tax deduction for the expense of the party? If so, how do I show this on my tax return? M.C., Fishers
Tax

Rules for pension contributions can be confusing

I have a small consulting business and I am the only employee'I have opened a Simplified Employee Pension plan'I am somewhat confused however as to the amount I can deduct as contributions to the plan, and who is doing the deducting'Several sources have not lessened that confusion'Specifically, can I as an employer contribute to the plan and deduct that amount on Schedule C as a business expense? Also, can I as an employee contribute to the plan and deduct that amount on line 29 of Form 1040? Finally, of course, how much can be
Tax

Winter Weather Provides Possible Tax Deduction

Yesterday, I ventured outside for the first time in over a week'One of the benefits of working from home is I don’t have to risk my life on the nation’s highways heading to and from the workplace'Although I did get to see several people risking their lives while I took my first snow excursion of the year, I was warmed by the thought of the huge quantity of drivers that no longer have to worry about life-threatening snow and slush conditions, due to the fact that they drive All-Terrain, 4-Wheel Drive, Sport Utility Vehicles with names like Yukon King, Road Warrior, and Grand Cherokee
Tax

Special MONEYWATCH Edition

What are some easy steps taxpayers can take to lower their taxes in 1999? Have several children so you can take Child Tax Credits Send them all to college so you can take Hope Scholarship or Lifetime Learning Credits Start paying off their college loans so you can try to deduct the interest expense Drive at least 50,000 miles for charity, resulting in an itemized deduction of $7,000 at the new, generous rate of 14¢ per mile
Tax

IRS Offers Saturday Help To Troubling Tax Returns

In an effort to make your tax return preparation somewhat less of a headache, the IRS has instituted exciting new measures that are now in effect'To make themselves better available to the scores of taxpayers who masochistically rely on the IRS for help in preparing their tax returns, the IRS is now offering SATURDAY hours'That's right! You can spend part of your precious weekend visiting with official IRS employees who will be glad to help you sift through your shoe boxes and shopping bags of receipts and piece together something resembling a tax return.
Tax

Time Plus Distance Equals Deduction For Job Move

I'm aware that one can deduct expenses for relocating because of a new job, so long as they pass the 50 mile distance test and the 36 (?) week time test'But, I thought I remembered hearing that college graduates moving to a new job from college could not take this deduction'Is this true, or just a figment of my imagination? E.Y., Indianapolis
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.

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