Posts Tagged "tuition"

Alert: Expired home and education tax breaks revived

Posted on Feb 28, 2018

Congress passed a federal budget bill in early February that revived dozens of expired tax breaks for the 2017 tax year. They include a deduction for education expenses as well as several tax breaks for homeowners. If you have not yet filed your 2017 tax return, please be aware these late changes are retroactive to the beginning of 2017. Check out this list of the most useful tax breaks to see if they apply to your situation: Tuition and fees deduction. If you paid qualified tuition and related higher education expenses, you may be able to deduct as much as $4,000 of those costs. This can be done on a regular return (without itemizing). The deduction is capped at $4,000 for single filers with adjusted gross income (AGI) of $65,000 or less ($130,000 joint) and at $2,000 for single filers with AGI of $80,000 or less ($160,000 joint). Mortgage insurance deduction. If you paid mortgage insurance premiums, you can now once again deduct those amounts as an itemized deduction. This deduction begins to phase out for taxpayers with AGI of $100,000 or more. Mortgage debt forgiveness exclusion. If qualifying mortgage debt on your primary residence was discharged or forgiven, you can exclude that amount from your income. Energy-efficient home improvement credit. Energy-efficient home improvements (such as upgrades to windows, or heating and cooling systems), may be eligible for a tax credit equal to 10 percent of the amount paid, up to $500. If you think any of these apply to you, bring all the related documentation to your tax filing appointment. If you have already filed, you may need to file an amended tax return to capture these very late law changes. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

Read More

Don’t pay tax on nontaxable income

Posted on Mar 25, 2014

There are several sources of revenue that are not subject to income tax. Here are the most common sources of money that are not taxed on your federal income tax return: * Borrowed money, such as from banks or personal loans. * Money received as a gift or inheritance from family or friends. * Money paid on your behalf directly to a school or medical facility. * Most life insurance proceeds. * Cash rebates from businesses when you buy an item. * Child support payments. * Money you receive for sustaining an injury. * Scholarships for tuition and books. * Disability insurance proceeds from a policy purchased with after-tax dollars. * Up to $500,000 of profit for a married couple selling their personal residence. * Interest received on municipal bonds. If you have included any of these as taxable income on your income tax return for the past three years, you can amend your return for a tax refund. If you would like assistance in determining what to include on your income tax return, please contact us. We are here to help you. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ <> , LinkedIn <> , Facebook <> , and Twitter <>  ...

Read More

Pay attention to restored deductions for 2012

Posted on Feb 21, 2013

A number of tax breaks that had expired at the end of 2011 or were to expire at the end of 2012 were extended by the recently passed law, the “American Taxpayer Relief Act of 2012.” Keep these deductions and credits in mind as you gather the paperwork for filing your 2012 tax return. Those that apply to you or your business could cut your 2012 tax bill. FOR INDIVIDUALS. The law restored for 2012 through 2013 the following tax breaks: * The optional deduction for state and local sales taxes instead of deducting state and local income taxes. * The above-the-line deduction for up to $4,000 for qualified tuition and related expenses. * The deduction for mortgage insurance premiums. * The above-the-line deduction for up to $250 for classroom supplies purchased by teachers. * The exclusion from income for cancellation of mortgage debt of up to $2 million on a principal residence. FOR BUSINESSES. Included in the law’s provisions were the following items that could affect your business: * The Section 179 first-year expensing option was increased retroactively for 2012 and extended through 2013 at $500,000 for the purchase of new and used equipment. The investment limit is set at $2,000,000. * 50% bonus depreciation, which applies only to new equipment purchases, was extended through 2013. * Both the research tax credit and the Work Opportunity Tax Credit were extended through 2013. For assistance in identifying and utilizing all the tax deductions, both new and old, to which you are entitled, please give us a...

Read More

What’s more important – saving for children’s college or your retirement?

Posted on Aug 21, 2012

A college education. Retirement. What do these major life events have in common? One shared characteristic is that each comes with a price tag. Here’s another: If you have school-age kids, you might be facing the challenge of having to decide which goal to save for. They’re both important. So how do you make the choice? Here are some suggestions that can help you reach a sensible solution. * Eliminate excuses for not making a decision. Procrastination can be costly. For example, to accumulate $100,000 in five years, you’d have to deposit a little over $1,500 every month in an account that earns 4%. But with a ten-year time horizon, assuming the same return, you can build up $100,000 by socking away less than half that amount, or approximately $700 per month. What you need to know: Estimate the total amount required for both goals, how much time you have, and how much cash you’ll need to set aside on a regular basis. * Expand your resource horizon. Once you’ve computed the expense side of the equation, figure out how much you can afford to save. You may find that, with one pool of income and two goals, there’s not enough money to fully fund both goals. But who says you have to pay for everything yourself? Turn an obstacle into an opportunity by searching out alternatives. For instance, while your income in retirement may be dependent in large part on your savings, there are plenty of options for paying college tuition. Where to look: Investigate the possibility of advanced placement credits while your child is still in high school. Other potential sources of help include scholarship prospects, federal work/study programs, and summer internships.  * Adopt a flexible approach. Broadly speaking, you have three alternatives for divvying up your available savings between the two goals. You can save for retirement only, save for college only, or opt to do both. Yet within each alternative are creative strategies. As an illustration, you could start out by saving strictly for retirement, shift toward saving for college when your child reaches a certain age, then switch back after graduation. Caution: Be careful of falling into the deadline trap. It’s likely your kids will attend college before you retire. Since the tuition deadline is closer, you might be tempted to reduce or eliminate retirement plan contributions in the early years of your savings plan in order to focus on education savings. But consider this: A typical retirement will generally last longer and cost more than your child’s education. By putting college tuition first, you could end up with less than you need in your retirement nest egg. Instead, take your overall time horizon into account. For assistance with the numbers, give us a...

Read More

Delayed tax returns can be filed starting February 14

Posted on Feb 1, 2011

Taxpayers who itemize deductions, claim the educator expense deduction, or claim a deduction for tuition and fees were told by the IRS not to file their 2010 returns until the IRS had reprogrammed its computers to handle these late-2010 changes. The IRS has just announced the filing start date for these returns: February 14, 2011. On that date, the IRS will begin processing paper and e-filed returns claiming any of these...

Read More