Tax Carnival Ecstasy – April 5, 2012

Welcome to the April 5, 2012 edition of Tax Carnival Ecstasy. In this edition we start with Learning About Tax Liability by Bill Smith. We also have an article on starting a small business, Home Business, Yay or Nay? from the site 2010 Tax. Jeffery Weber looks at Using Credit Card Rewards to Reduce the Cost of Paying your Taxes. Finally, Edward Webber examines How Much Can a tax payer can Earn Without Paying Taxes 2012. Hope you enjoy the articles, bookmark, share, tweet, like on Facebook and come back real soon.

Amy Gardner presents Social Media Marketing Basics for Small Businesses posted at Small Business Credit Cards.

Jill Thompson presents What Debt Collectors Cannot Do To Collect Your Debts posted at How Does Rent To Own Work?.

Maria Clark presents Phrases to Avoid When Negotiating With Lenders posted at Credit Cards for Bad Credit Resource.

filing

Bill Smith presents Learn About Tax Liability posted at 2010Taxes, saying, “Tax liability can have you make wrong choices. However, the IRS has been helpful to some people in difficulties such as these.”

taxes

Bill Smith presents Home Business, Yay or Nay? posted at 2010 Tax, saying, “While the old American dream was once to land a steady job with good benefits and an early retirement, the updated version often entails becoming an…”

Jeffery Weber presents Using Rewards to Reduce the Cost of Paying Taxes with a Credit Card posted at Smart Balance Transfers, saying, “Paying taxes with a credit card is costly, but these costs can be mitigated with certain rewards credit cards.”

Edward Webber presents How Much Can You Earn Without Paying Taxes 2012? posted at TaxFix Feed Update, saying, “Each year the amount that you can earn tax free changes. This article will look at how much you can earn in 2012 without being taxed”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Tax debt reduction: Offers in Compromise explained

turbotax

There are many different types of debts that people are struggling with these days and for some people it is their tax debt that is causing them a huge problem. Whilst the Internet Revenue Service does, of course, expect people to pay the taxes that they owe, but in some cases an exception may be made and the tax debt may be reduced through the use of an Offer in Compromise.

If the IRS has reason to believe that there is little to no chance of being able to receive the total amount of the tax debt that you owe, or maybe there is dispute over whether someone is definitely liable for any tax debt that they are in, the IRS may – at its discretion – accept the submission of an Offer in Compromise. This is where you basically make an offer to the IRS, which would see you paying less than the amount that you owe.

The reason why the IRS is sometimes willing to accept an Offer in Compromise is because it means that it will at least be able to recoup some of the debt owed whereas without the Offer in Compromise the IRS risks losing out on the whole tax debt.

If you do enter into an Offer in Compromise with the IRS you have to make sure that you adhere to the terms and conditions of the contract, which you will have to agree to as part of the submission process. Form 656, or the Offer in Compromise, needs to be completed in addition to Form 433-A, which is the Collection Information Statement. Form 433-A Worksheet is also used when calculating the amount that you offer to pay to the IRS as part of the Offer in Compromise.

As part of any Offer in Compromise you will be agreeing to a number of things, which includes:

  • You will pay the sum of money that has been offered as part of the Offer in Compromise
  • For the next five years you will make sure that you both file your tax returns regularly and on time and that you pay your tax bills on time
  • Any refunds or credits relevant to your taxation debts prior to submission of the Offer in Compromise can be kept by the IRS
  • During the year for which your Offer in Compromise is approved the IRS will be able to hold on to any potential taxation refunds that might have been paid to you
  • The IRS has the power to revoke any Offer in Compromise and demand the total  amount of the debt if you fail to adhere to the contractual rules

Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from credit cards to mortgages to how to setup an umbrella company.

Home Energy Tax Credits: Save Money With Energy Efficient Appliances

Home Energy Tax Credits: Save Money With Energy Efficient Appliances

Homeowners know that energy bills comprise a hefty chunk of monthly bills, and have recently been getting even higher. Add to that the responsibility many Americans feel toward being more environmentally conscious, and making more green choices becomes a clear choice. The federal government has made this an even easier option by offering a number of home energy tax credits, given to homeowners that choose to save money with energy efficient appliances.

How You’ll Save Money Using More Efficient Appliances

The biggest benefit to using high efficiency appliances in your house is that greenhouse emissions are reduced significantly. However, from a financial perspective, utilizing Energy Star or similar appliances can save you up to 30% on your monthly utility bills, even with the same usage. Your house will be more comfortable, and with replacing windows and insulation, the units that provide heating and cooling for your home will not have to work nearly as hard. You won’t have to sacrifice style or features on these greener items, as most manufacturers are making environmentally-conscious versions of the majority of their products.

What Tax Credits Are Available?

For the past several years, the government has been offering incentives to taxpayers for switching over to environmentally conscious devices. Not only will this mean money in your pocket, but will hopefully extend the lifecycle of our planet. The tax credits are available to those who own their own home, and it must be an existing house (as opposed to a new build). There may be more credits available dependent upon which state you reside in, so be sure to check your particular local government website for more details.

The amount of credit received depends on what type of appliance you’re installing in your house. The general rule is 10% of the cost of your purchase, up to $500. However, there are a number of appliances with a set dollar figure for their tax credits. Once you’ve determined what rebates or credits you qualify for, complete IRS form 5695 and submit it with your taxes. Save your receipts in the event you need to show proof of purchase.

So how much can you get for purchasing a “green” appliance? For replacing your insulation, roof, or doors, you will receive 10% of the cost, up to $500. This is often an ideal area to prioritize, as a better insulated home is a more efficient one. The home energy tax credit on windows is capped at $200, and to replace a furnace or boiler, the cap is at $150. Installing an advanced main air circulating fan, you’ll receive a $50 credit. Lastly, for any central air conditioners, air source heat pumps, water heaters, or biomass stoves, you will receive a $300 credit.

While the home energy tax credits can seem quite beneficial, it’s always best to remember to maintain low usage in the interest of reducing greenhouse gasses. Excessive usage of any utility will increase the bills, no matter how efficient.

Steve Tlapnek is a real estate investor who buys and sells homes throughout the St. Louis, MO area. For more information about Steve visit We Buy Ugly Houses Saint Louis.

4 Steps to Setting Your Own Debt Ceiling

Use Your Tax Return for 2011 To Pay Down Your Debt

Debt is on everyone’s mind these days. The national debt has been covered by every major and minor news outlet for months. They finally reached a resolution to raise the debt ceiling. How nice. If only it were so easy for individual Americans to do the same. Unfortunately it is not, and many Americans find themselves in the same situation as their country. They are living beyond their means and are facing an impending crisis. So how do average American’s deal with their own debt crisis and pay the money owed to their creditors and on their tax return 2011?

1)Refinance

Interest rates have bottomed out and are at record lows. It is a good idea to look into transferring any debt held on high interest credit cards to a those with a lower rate. Pay close attention to transfer fees. You might also take out a home equity loan and go ahead and pay those cars off an cut them up.

2)Cut back

Austerity measures are something that has been advocated for the nation and it can work for you to. Find places where you can sacrifice some creature comforts for long term financial viability.

3)Pay more

By paying down your outstanding debt you reduce the amount of interest owed on outstanding balances. No one ever got out of debt paying only the minimum. Apply your 2011 tax return to this end.

4)Balance your budget

Set up a budget and stick to it. It sounds simple, but it is much harder to establish a budget and stick to it. However, once it is established it becomes habit.

Is transforming debt into wealth easy?

If anyone tells you that transforming debt into wealth easy is possible, it is time to stop seeking their financial advice. It is important for you to clear credit card debt first and foremost as most credit card companies charge high interest rates. And with missed or minimum payments made, you often end up paying far more than you bargained for. If you truly want to get out of credit card debt you need to take some dramatic steps. The first step involves shredding your credit cards into bits. The next requires you to create a game plan for how you intend to become debt free.

Now that you have ensured that you can’t add to your credit card debt, the next step involves a budget your expenses. You may decide to use a program to help you or decide to seek the assistance of a financial advisor. To bring down your debt you need to reduce your expenses and use the extra money to pay off your debts. If you have several loans, then focus first on the one with higher rate of interest. It is important to clear this off first so that you don’t end up paying far more than you need to. If you find it difficult to deal with creditors, you can contact a debt consolidation company. Such a company will charge you for its service but it will also help you deal with your debts in an organized manner. Instead of paying off several debts you would have to make a single payment. Furthermore, you will not need to deal with unsavory creditors.

Once you slowly gain control of your debt situation you will also gain the experience and understanding of how credit needs to be used. With your budget in place you will soon have adequate money for additional purchases without having to depend on credit or loans. Your credit rating will also improve and you will receive better rates of interest on loans and mortgages.

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Student Credit Cards that have 0% APR

The success of this offer has a lot to do with the attitude of the person holding the credit card towards money and his or her finances. There are those who go through trouble because of this supposedly amazing offer.

Companies can inform you that 15 days after you have received the notification, the interest rate on your credit card can climb up to 15% to 30% from 0%. They might have offered you a grace period which might have just caused for more debt to pile up. The saddest part about it is that you might not be allowed to pay it off before the interest rate gets adjusted and they may allow you to send only the minimum payment.

This is the reason why it’s always best to read the Terms and Conditions on the card so that you’d know how and when the interest would change. An instant student credit card could have an interest of 0% for 6 or 12 months depending on the offer of the credit card company.

When I was in college, I had a lot of debt because of a failed business venture and I felt hopeless. I had to find a job so that I could be able to pay the debt. I took a cash advance for $10,ooo at that time to pay off my debt. I had until December to pay it off but it was in August that I realized that I won’t be able to pay it off on time although I have already improved my spending and had a good job. I then found another company that offers an APR of 0% for 12 months and grabbed the opportunity. I paid the first loan through the second and this bought me 12 more months.

It depends on how you use offers for zero and low interest student credit cards to your own advantage.

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