It seems that no matter what you do with your money or where you put it, the government wants some part of it. You can’t even buy a cheap and greasy fast food meal without paying taxes on your plate of poison these days! And when it comes to property sales, many homeowners and sellers are looking for ways to cut back on that tax liability of theirs, and 1031 deferred exchanges may be the answer or at least part of the answer for many. These arrangements have become more and more popular in recent years and many are taking advantage of them. But what exactly are 1031 exchanges, and how do they work? What are the benefits, and what are the requirements? Of course you should consult with an attorney to be sure of all the requirements for you, but we can give you a general review in this brief article.

Paying Taxes on Equity

The government typically assumes that if you sell a home that has equity in it, that amount of money that you make over and above any mortgages or liens on the home should be considered as profit. Typically a seller would then pay taxes on that amount at the end of the year. However, with 1031 deferred exchanges, you may actually put off paying taxes on this home for some time. How so?

The IRS Code provides for a deferment of taxes on the disposal of a property if that property is replaced with the reinvestment of the proceeds from the sale into another property of equal or greater value. The arrangement of 1031 deferred exchanges provides for the idea that there has been no real equity from the sale of the property since it has been traded or exchanged for property of approximately the same value.

Taxes Deferred, Not Excused

It’s important to remember that deferred means that your tax bill is not excused; it is simply deferred or put off. When the property you’ve purchased as a replacement is sold then the original gain you received along with any additional gain from this sale is then subject to taxation. Of course, this is assuming that there will be gain from the sale of the second property, but that tax bill will of course eventually become due.

Benefits of 1031 Deferred Exchanges

Why would a property owner investigate such an option? One of the most obvious benefits of the deferred exchanges is that if you are allowed to defer your tax bill, then you have that money available to you to invest to do what you want with it, rather than making a payment to the government for it. Also, if you are able to defer you tax bill you can then reallocate your investment in your portfolio without immediately paying taxes on those gains.

Requirements for 1031 Deferred Exchanges

Obviously there are some stringent requirements for a property sale and purchase to qualify for exchanges. For one, the value of the replacement property must be equal to or greater than the value of the property that has been sold or exchanged, as must the equity in the replacement property.

Also, the debt on the replacement property must be equal to or greater than the debt on the exchanged property, and all proceeds from the sale of the relinquished property must be used to acquire the replacement property. The seller of the property may not receive the proceeds or take receipt of funds for the sale in any way. The seller also has only 180 days to after the sale of the relinquished property to complete the exchange.

These of course are just some basic requirements for 1031 deferred exchanges. You should of course consult a property attorney before you agree to such an exchange to be sure that your taxes will in fact be deferred.

David Cowley has created numerous articles on real estate investing. He has also created a Web Site dedicated to real estate investing. Visit Real Estate Investing

It’s tax time and everyone is feeling the pain. There is a widely unknown source of write-offs for any every day person. Having a home business allows anyone to take the write-offs that the Corporate Giants get. Yes, you can get great business deductions with a home business! The best thing about a home business is that you probably will not have nearly as much overhead as a traditional brick and mortar business. You do not have to pay for office or business space; just pay your rent along with your other bills. And you can get all of the tax write-offs those corporate giants get with your home business. Plus, you are working as an independent, which means you get to manage your own hours, work where you want, take time off when you need it, do the work you love to do, and more.

Tax Advantages for the Home Business Office

Home businesses have many tax advantages and benefits. Here is an example of some various home business deductions you can take advantage of:

Home Office Deductions -

If you use a room in your home or apartment for your business office, you can take the home office deduction. You simply need to use one space in your home for work for your business solely, and nothing else. This will have you qualified to take the deduction. To make sure that you will qualify for the home office deduction utilize one room in your home as your work office, and use it for nothing else.

Home Office Renovation Deductions -

If you make any upgrades to your home office you can deduct those expenses in your taxes. For example, if you paint your home office, fix something, have an addition created, or any other renovations you can write-off those expenses in your taxes.

Property Cost Deductions -

You can also write-off a portion of your rent or mortgage payments for the year due to your use of your home office. You will need to figure out how much square footage your home office is in relation to your entire home. Then you can calculate how much you can deduct depending on how much you pay in rent or in your mortgage.

Tax Deductions for a Home Business -

There are so many deductions to take advantage of. You should make yourself fully aware of all of the tax write-offs you can take advantage of. Here is an outline of those many possible home business tax write-offs:

Home Office Security -

If you keep your home office under security, such as by using a security alarm system, using camera monitoring, or other similar ways to keep your home office safe, you can probably write-off those expenses in your taxes.

Utility Expenses -

The cost of your electric payments can be deducted for as much electricity you use in your home office. You will have to calculate how much you spend on this in order to deduct those expenses. If you pay for a business telephone line, you can write-off that expense.

Transportation Expenses -

You can deduct your expenses for traveling to destinations to conduct business, such as going to the bank, visiting a client, dropping off paperwork - anything you do when you run errands for your business - you can deduct those expenses. If you move into a new home during the year you can deduct the expenses of moving the business part of your home.

Miscellaneous Home Business Deductions -

When you entertain clients or meet them for dinner, you can deduct the travel costs, as well as the cost of the meal or entertainment. Usually you can deduct up to 50% of these expenses.

When you buy something such as software, office supplies, and etc. you can deduct those expenses because they are a direct expense of your home business. Do you want a new computer? You can deduct a new computer, printer, scanner, or any other office equipment you use. Do you contact clients via internet or have a business web site? Deduct your Internet Provider, hosting costs, and your Domain name costs.

Have you taken any classes, seminars, or other training that is directly related to your home business? You can deduct those expenses.

How to Manage Home Business Taxes -

The one main key to getting all of the home business tax write-offs is managing your home business taxes well. You will need them well maintained and well organized. You need to keep records of all of your expenses in order to be able to take advantage of those home business deductions.

Receipts: Keep receipts from every expense you have throughout the year. You will need these so you can show that you did pay for these business costs.

Travel Logs: In order to take advantage of the travel deductions you will need to keep a log (best kept in your vehicle) of where you travel, why you are traveling there, the time and date, the starting mileage, and finishing mileage.

Maintaining Your Home Business Taxes Throughout the Year -

As mentioned above, it is advised that you keep your receipts and logs well maintained throughout the year by keeping them well organized. You can do this by starting some files for each month or quarter and track your expenses for each amount of time. Keep them all calculated for the period of time you choose so that when tax time comes around you won’t have to do as many calculations all at once.

Having your own home business has numerous benefits from all ends, and the best one may just be the tax write-offs you can take advantage of!

Ron Toomes has been in the Automotive Business for 25 years the last 10 as a home based Synthetic Lubrication Executive Jobber and Web Site Owner.

http://www.go-synthetic.com

April is the month you will find yourself rushing all over to try and meet the deadline for filling your tax return. But why haven’t you been keeping up to date with your tax returns by having all your tax information stored in a safe place, making it very easy to file your taxes and avoid paying any IRS penalties. Many of you are filing taxes yearly, but are paying tax penalties, but have no clue why or are not trying to prevent this from happening. This article will explore 6 tips that will help you avoid paying IRS penalties and show you the IRS interest that you will have to pay.

Top sis IRS penalties:

1) Late filing - You will be paying 5% to 25% on interest penalties. So why not make sure you file on time.

2) Paying your taxes late to the IRS - 0.5% to 1% interest. Pay Uncle Sam what you owe in a timely fashion.

3) Neglecting IRS tax rules - 20% interest, due to underpaying. Don’t underpay your taxes, if you don’t know how to file your taxes correctly, get the help of a CPA.

4) Fraud - 75% interest, due to underpaying. The IRS loves dealing with fraudulent cases, if you believe this to be incorrect, simply contact the IRS and negotiate and send in your tax papers again.

5) Over evaluating your taxes - 20% to 40% interest charges. This can be avoided by filing your exact amounts earned during that fiscal year.

6) Under evaluating Estate tax and gifting taxes - 20% to 40% interest charges. Don’t believe Uncle Sam can’t find out how much your gifting or what your property is worth. File correctly at all times.

As you can probably tell by now, the IRS sends out stiff IRS penalties with very high IRS interest tags attached, and it is amazing how many of us still end up paying heavy late fees on our taxes. You can take this one simple tip to avoid many IRS tax issues, and that is to always file on time, and pay your taxes due on time.

Alexander Marlin runs an informational website that deals with IRS Penalties and other tax related issues.

Late on Friday April 13, 2007, the Internal Revenue Service discovered a new tax scam on the Internet that “lures taxpayers into filing tax information on a site masquerading as a member of the Free File Alliance.”

There is only one place to access the Free File program, according to the IRS. That one place is IRS.gov.

To be eligible for Free File a taxpayer needs to have Adjusted Gross Income (AGI) of $52,000 or less.

If you use this program be sure to start at IRS.gov, then click “2007 Free File”, then click “Start Now” which will give you the further choices you want.

Payments Are Still Timely Through Free File

Throughout the tax season, the IRS issues newswires, mostly with valuable tips but also with warnings of scams taking place and exactly how they work.

If taxpayers owe money, they can use Free File to electronically file their return on time and schedule their payment on the last possible day, April 17.

As with any e-file product, Free File reassures taxpayers they have filed on time by issuing an acknowledgment from the IRS saying the return has been received.

Once again, to avoid tax scams, make sure it starts out with IRS.gov, if you’re dealing with the IRS.

IRS provides some wonderful help on its site. The following is particularly helpful in many areas.
It’s called TAX TRAILS. It has many topics for typical middle class homeowners and a click through system leading in many cases to a final answer or source where the final answer can be found.

VISIT IRS “TAX TRAILS” FIND A QUICK CLICK TO MANY CATEGORIES

The IRS home page is laid out in a very helpful manner. To go there click IRS

Mick McNesby is a former tax advisor, consultant and negotiator. He was a frequent guest on political talk shows in Atlantic City, N.J., discussing the benefits of the lower cost of government. He can be visited at http://conservative-politics-infofind.com

January has zipped by in a rush, faster then you can say, “tax time”! Are you ready for the tax
man/woman? Confused as to how to get started? Here are some basic rules for keeping track of your
business expenses so you are ready now and for the years to come.

*First, take 33% for taxes purposes, State and Government (out of gross income). You probably won’t be paying out that full percentage, but it’s better to be safe then sorry. Put it in a savings account, or better yet, set up a separate checking account that pays higher interest if you keep a balance under $500 (check your bank with this).

*Next, put 37% (average) back into your business expenses for overhead, office supplies, travel expenses, advertising, websites, etc.

*Finally, you can pay yourself 30% for your earnings.

Now, everyone runs their business differently so you will need to consult your local tax advisor on what is best for you. Different states have different laws in regards to your local taxes as well.

What is the best way to keep track of your expenditures? You can simply get a log book like Simplified Weekly Bookkeeping Records at your local office supply store and log your entries daily, weekly, monthly. Keep your receipts as well, file them in a folder per month or per type of expense with a log.

Keep track of your mileage if you have any per week and if it’s the same average every month, then you can round it out for the year. It is also important to keep track of your gas receipts, write off the one that gives you a better tax return. Ask your tax person for more info.

This is basic info, but when it comes time for filing, you’ll thank yourself for keeping your bookkeeping
organized and simple, so will your tax man/woman.

The IRS has some helpful info at their official site. They have all the necessary forms for you to print
as well. You can go to http://www.irs.gov . They’re even offering a way for you to file your taxes for
free! Go to 2007 Free File for more information.

Tax time can actually be fun (did I say that?!), if you stay organized and develop a system that works for you.

This Article is Written by Kathleen Schmidt (c) 2007

To find more helpful articles or business advise, please visit us at http://www.findworkathomeideas.com

If you are self employed, and own a business, whether you have an office or it is a home based business, you should be sure to make use of the mileage tax deduction. It is basically a way the IRS allows you to be reimbursed, through a tax deduction, for the business use of you vehicle. You can deduct the expenses either by totaling up all of your receipts, or by using a miles. I would personally recommend using the mileage tax

All you need for this is a mileage book. Then, just keep track of the miles you drive to and from places for business purposes. There are also deductions allowed for charitable contributions and for medical expenses. Below is a list of the mileage rates, as published by the IRS, for 2006 and 2007.

2006 Mileage Tax Deduction Rates

• For business, you can deduct 44.5 cents per mile
• For charity, you can deduct 14 cents per mile. If it was for Katrina reasons, the deduction amount then increases to 32 cents per mile
• For medical and moving, you can deduct 18 cents per mile. This means the mileage you drove to and from the doctors or dentist is deductible, as well as any mileage to needed to move your business

2007 Mileage Tax Deduction Rates

• For business, you can deduct 48.5 cents per mile
• For charity, you can deduct 14 cents per mile
• For medical and moving, you can deduct 20 cents per mile

Being self employed, and running your own business has huge benefits. And better yet, the IRS tax laws are really established and favor the business owner. So, if you own, or are thinking about starting a business, then make sure to make use of the mileage tax deduction.

For more resources about starting a business for tax deductions, visit Business Information and Strategies

Did you know that you have tons of items you can write off on tax day? You can write off gifts you have made and donated to charity. You can write off office supplies if you own a home business.

You have many items you can write off on tax day. So take time to learn about what you can write off.

When you prepare your taxes make sure that you search the IRS web page to take advantage of the many items you can write off.

If you own a home business, take time to read itemized tax deductions. Some of the things you can write off are faulty printers, computers, or other office equipment. You will need receipts to write off the equipment. You will need an itemized spending for the product.

If you use a computer and the PC stops working make sure that you provide a details description of the equipment, the use, and dates you purchased the item. Any other equipment that you used for your business and are not working now, you can write it off.

Keep in mind, you can only write off equipment that you purchased in that tax year. If you own a vehicle and use it for business purposes, you can write off damage or loss. If you lost the vehicle due to fire, or overuse it will give you a great-itemized tax write off.

Besides write offs you have options in tax deductions. If you own a home, business you can received deductibles for computers, desk, printer paper, printer, paper, pens, percentage of your home area, and so on. Anything that you invest in for your business is a tax-deductible item. The home area is around 6 by 9 but in some instances, you can receive report larger space to request a tax deduction.

You can also request tax deductibles for your furniture, heat, phone, and so on. If you own a business, be sure to learn more about tax write offs and tax deductibles. Get a list of the itemized items that you can write off or receive tax deductions on.

Taking time to learn about write offs and tax-deductible items can get you off the hook if you owe the IRS too much money. You may even receive money back from the IRS by taking advantage of all the items you can deduct or write off.

Be sure to check out the weirdest tax write offs and deductibles also. You may find some interest in some of the items listed. Go online to visit the IRS website to learn more about tax write offs and deductible items.

Martin Lukac represents RateEmpire.com Tax and Credit Cards financial marketplace. RateEmpire.com is a destination site of personal finance, investing and taxes. For more information please visit Writing Off on Tax Day

Being prepared for tax day can be very time consuming and complicated. Trying to keep one step ahead as you go along can and will help you get prepared a lot faster and easier.

Talk to your tax preparer to find out what and how you can help them at the end of the year. For instance using your PC or just paper jot down all the things you can use as a deduction on your property. Using land expenses, home improvements, landscaping, building repairs, taxes, as well as utilities, insurance, and many other things can all be tax deductible. Interest rates on your mortgage can be used as a tax dedication too.

You will also have to claim income made from the property. Income that you might get from selling your crops or for the sale of the property by making a profit all need to be claimed. These all have to be claimed as an income at the end of the year.

Be prepared for the big day of the year takes a lot of time and effort if you have to do it all at once. Going back 12 months trying to remember what you spent and made and than finding all the receipts for back up can be a hard task. You can make life easier on yourself and the tax preparer by keeping your records as you go through the year.

Get yourself a fireproof box to hold important papers through the year. Once you have a list of items that you can use for deductions keep the receipts and sort them out into groups. Start a spreadsheet having it in order by month is a great way to be prepared for that dreadful day.

At the end of each month take an hour or so give or take and sort out everything in groups such as utilities, taxes, improvements or what ever you paid out during the month. Recording this information total for each group and clipping them together may take an hour each month.

Making a spreadsheet once a month might use up one hour at a time is a total of 12 hours. If you wait until the end of the year, it could take two or three weeks to gather up all the information. Using a spreadsheet can save you and your tax preparer will thank you for all your effort in saving them time as well.

Taking a little time out to talk to your tax preparer finding out what exactly you can do and need to have at the end of the year might even save you money. Some tax preparer charge according to how much time it take to prepare your taxes and some may charge one fee. Save you both many headaches and time by being prepared at the end of the year.

Martin Lukac represents RateEmpire.com Tax and Credit Cards financial marketplace. RateEmpire.com is a destination site of personal finance, investing and taxes. For more information please visit How to Prepare for Tax Day

Everyone pays taxes all their lives. We pay taxes on our purchases as well as property tax to cover the road in from of our homes, the school down the street and the value of our home.

Taxes can be costly but it is important when you are buying or own your own real estate property. Real estate property is based on the value of your home the higher the value is the more your property taxes are going to be each year.

Every state, county, school system, or city has individual tax percentage rates that we pay on property. The rates are calculated by the state, county, school, and city as individual taxes and than calculated accordingly. If your area school needs more money to accommodate, the children that attended the facility, your taxes might be higher than the property owner down the road in a different school district. The percentage rates depend on the area that you live in.

Some states cost more to live in than others. The more state parks, schools, population and even the weather have a lot to do with our taxes. For instance the taxes might be higher in Florida that in Michigan because of the tourist that come through there making living expenses higher as well as taxes.

Michigan might have many ski resorts to attract more people but Minnesota might have more so their taxes would be higher than Michigan. Factories and different workplaces will increase the value of your home because people will move to the area where job are more plentiful than somewhere else will. The more lake property around you that attracts people from other places will increase your property taxes because it will takes more money for the state to keep them up. All of the above will increase your property taxes because they make your property value go up.

The more buildings on your property and the sizes of them will increase your property. The larger the building the more money it is worth to you and the state so the more the property taxes are going to be. The looks of your buildings will increase your taxes because looks mean a great deal to the value.

Landscaping around your property is a big and when it comes to selling and buying property. One tree planted or a couple of shrubs will increase the value tremendously. Trees are nature and very expensive but when you sell the property you will make money because it is worth more each year that it grows.

The value of your property may bring up you taxes but in the end, you can profit from the high taxes because of the increase of the property value as a whole.

RateEmpire.com, an internet consumer banking and mortgage marketplace, is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Home Loans and #1 American Financial

I was meeting with a current client and an IRS Revenue Officer in my office this afternoon and we were discussing his tax liability and the enormous amount of penalties and interest that his company owes on top of the modest amount of tax that is due. Along the way we have attempted to have the penalties abated, but the IRS concluded that his reasons for not paying the taxes when due did not meet the “reasonable cause” qualification for allowing an abatement of penalties.

About five years ago an entire market sector (textiles) basically disintegrated in our area, leaving many people without a job and many companies closing their doors. My client’s business served the textile industry heavily and when they took a hit, so did my client’s business. When the market turned down, so did my client’s business and he was forced to lay many of his employees off - including his bookkeeper. So he had to learn on the fly how to file 941 quarterly returns, and how to make weekly tax deposits at the IRS. Unfortunately, he did not make these payments or filings on time, but rather sporadically, and the IRS doesn’t really care the reason for the company not making the payments or filings on time.

The Revenue Officer gave my client this advice, and this applies not only to business owners but also to individual taxpayers as well: File your returns on time, whether you can pay or not. The non-filing penalty is one penalty you can prevent all together and you won’t have to ask the IRS to abate at a later time. Then all you would have to worry about is the failure to pay penalty (and the failure to deposit penalty if you are a business owner not making the deposits for your 941 taxes).

Short and sweet, but should save taxpayers a lot of money in penalties: File your returns no matter what.

Tripp Atkins is a Greenville, South Carolina lawyer practicing in the area of IRS Tax Resolution. If you have a tax problem, whether it is a levy, wage garnishment, or you just owe a lot of money and you want to get the IRS off of your back, contact Tripp through his website (http://www.atkinssc.com). There are many solutions and ways he can help take care of your IRS debt. Tripp writes a blog and weekly question and answer column about the area of tax resolution.