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Taxes

What Medical Expenses Can I Claim To Lower My Income Tax?

Canadians are not always aware of what they can claim on their income tax return with regards to their medical expenses. I have outlined below some of the items that you need to be aware of in order to ensure you are claiming your medical expenses properly.

Medical Mileage

You can only claim mileage for distances greater than 40kms one way. Note, if your hometown offers the same medical service, then you cannot claim mileage if you choose to go to a different location. For instance, if your hometown has a dentist, then if you go to a dentist in a different town you cannot claim mileage for that trip. You don’t need to keep your fuel receipts as accountants use a simplified method to figure out how much you can claim for mileage.

Medical Meals

You can claim meals when you travel a distance of 80kms or more one way for a medical service. Once again, however, you cannot claim meals if you have the option of obtaining the same medical service in your hometown. Ideally, it’s a good idea to keep a medical travel log indicating when and where you went, what the trip was for, etc. That way it’s easier to claim your medical travel and meals come tax time. You don’t need to keep your meal receipts as accountants use a simplified method to figure out how much you can claim for meals.

September 21, 2013

Taxes

How To Negotiate Taxes With The IRS

The people of America have felt the full impact of the financial crisis. Many have had trouble finding money to cover the bills and luxuries to which they’d previously been accustomed. There has also been an increase in the number of redundancies as companies have attempted to keep their costs to a minimum. The government has added to the pressure by making cutbacks and demanding the payment of taxes. However, the Internal Revenue Service (IRS) has played a key part in enabling people to pay their taxes. They are hoping that the American citizens will take the opportunity to manage their outgoings.

It is now possible to pay taxes in regular installments meaning that people don’t have the worry of having to recover from a huge splurge. They can pay an agreed amount each month however, it is worth bearing in mind that individuals who are unable to keep up with regular payments may not be granted tax relief. They are likely to accrue sizable debts, which must be repaid in the long term.

Details of the IRS Agreement

As previously specified, the IRS agreement details the payment of taxes over a defined period. It is a means of clarification for individuals who may be unsure of their financial responsibilities. A payment schedule is included in the main document for reference by the tax payer. There are also details of the actions which will be taken if payments aren’t made on time. In certain circumstances it may be possible to obtain an offer in compromise. This means that IRS will demand a reduced amount. However, the tax payer must prove that they meet strict criteria if such an agreement is to be made.

July 20, 2013

Taxes

5 Tax Tips For Independent Contractors

Working as an independent contractor is a great way to make a living without answering to a boss, but unfortunately it doesn’t absolve you of your responsibility to pay taxes. Everyone must pay their due, and that includes independent contractors like you. If you’re unsure how to go about filing your taxes as a contractor, or just want to maximize your benefits, read on to learn about the top tax tips for independent contractors everywhere.

Learn About the Filing Process
Independent contractors go through a different filing process from that of standard employees. Rather than incurring automatic tax deductions from your pay and receiving a W-2, as an independent contractor you are expected to make calculated tax payments on a quarterly basis throughout the year. You handle your own taxes, rather than relying on an employer to calculate pay deductions. It may seem like a lot of trouble, but learning this new filing process and sticking to a quarterly payment schedule makes sure that you won’t fall behind.

March 30, 2013

Taxes

What Is The Difference Between Direct And Indirect Tax?

Nothing is certain in life, they say, except for death and taxes. We all have to deal with taxes in one way or another, which would lead the average person to believe that we all have a relatively firm grasp on what taxes we pay. On the contrary, most of us are surprisingly uninformed about our taxes and how they work. There are actually two kinds of taxes that all of us pay–direct and indirect. While we all pay these taxes, very few of us really understand the difference between them. In order to be an informed citizen and an intelligent consumer, it is important to know the difference between direct and indirect taxes.

Some taxes are relatively straightforward and simple, while others can be rather complicated. A direct tax, to begin, is a tax that is imposed directly onto a specific group of people or organizations, and collected directly from them. Income tax, for example, is a tax that is imposed directly onto people in the United States who earn an income. This tax is collected directly from them, either in the form of pay withholding or a personal payment after filing. When you pay your income tax, you are being taxed directly, and if you overpay on this direct tax you are issued a direct refund.

Indirect taxes work in a rather different way. When an indirect tax is imposed, the tax is collected from someone other than the individual or entity responsible for the tax. If that sounds unusual, or possibly even criminal, think about it on a deeper level to see what is really happening. Consider sales tax. Depending on the city and state in which you live, you might pay a tax of anywhere from zero to ten percent on the items you purchase. This sales tax is imposed on the vendors who sell the items, but it is absorbed by the consumers who buy them.

March 11, 2013

Taxes

Different Options Available When You Cannot Afford To Pay Your Taxes

There is no way to avoid paying your taxes and every year we must cough up our fair share. Unfortunately, you might get a tax bill that you might not be able to afford. This can be due to a number of reasons, like an increase in your tax bracket or perhaps you didn’t take into account your total taxable income. While you won’t go to jail, you might have to pay a penalty for being late, but often times the IRS will be lenient. There are a number of options for people that can’t pay their total tax bill and as long as you make the right arrangements you should be able to avoid the stiff fines. Here are some different options that are available when you can’t afford to pay your taxes.

First things first, you always want to send in your return. You want to do this because the penalty for filing your taxes late is far greater than the fines for not paying your taxes on time, especially if you don’t make an arrangement with the IRS first.

When you are looking for some money to pay your taxes, you want to search high and low. Chances are that you will find some money somewhere so that you can start paying off your taxes. This source of cash can be from friends and family, and even credit cards, or cashing in on your paid time off at work. In the end, you will free up your financial burdens by taking care of your tax bill, sooner rather than later.

March 6, 2013

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