Many people are struggling to make ends meet and are scared about their financial future. Filing taxes early in 2009 will help many people with their cash flow. If you are one of the millions of taxpayers who gets a refund every year then you should plan to file as early as possible. With so much information available to us on the internet we can all expedite our filing. Home mortgage interest, student loan interest and other vital year end information is now at our finger tips. We used to have to wait until the end of January to roll around to begin gathering our tax documentation. Now we can go online January 1st and get everything we need. If you need a refund of your taxes earlier than ever, be proactive and start gathering your information ASAP. With electronic filing you could see a refund check hit your bank accounts much sooner than ever before.
If you need help with your filing or have questions please give us a call.
MB Tax Professionals, LLP
2580 NW Upshur St.
Portland,OR 97210
503.595.5895
www.MBTaxpro.com
Erin@MBtaxpro.com
Monday, December 8, 2008
Monday, November 3, 2008
2009 Hybrid Vehicle Federal Tax Credit
Hybrid Vehicle Tax Credits are often misrepresented at the dealership. Be informed and check the IRS website or call your tax professional before making any purchase. There are a limited number of each model that qualify so make sure your new car is one of them.
A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation. The tax credit for hybrid vehicles applies to vehicles purchased or placed in service on or after January 1, 2006.
The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.
Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles may qualify for the tax credit.
These models have been certified for the credit in the following amounts:
†† This credit amount does not phase out. The full amount of the altenative fuel vehicle credit would be available for vehicles purchased on or before December 31, 2010.
2009 Model Year Hybrid Vehicles
Make Model Credit Amount
Ford Escape Hybrid 2WD $3,000
Ford Escape Hybrid 4WD $1,950
Mercury Mariner Hybrid 2WD $3,000
Mercury Mariner Hybrid 4WD $1,950
Advanced Lean Burn Technology Vehicles
Purchasers of advanced lean burn technology motor vehicles may claim a credit of $1,300 per vehicle.
Make Model Credit Amount
Volkswagen 2009 Jetta –2.0L TDI Sedan manual and automatic $1,300
Volkswagen 2009 Sportwagen –2.0L TDI manual and automatic $1,300
Mercedes-Benz GL320BLUETEC $1,800
Mercedes-Benz R320 BLUE TEC $1,550
Mercedes-Benz ML320 BLUE TEC $900
Have Questions? Contact us at:
MB Tax Professionals, LLP
503.595.5890
www.MBtaxpro.com
Office@MBtaxpro.com
A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation. The tax credit for hybrid vehicles applies to vehicles purchased or placed in service on or after January 1, 2006.
The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.
Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles may qualify for the tax credit.
These models have been certified for the credit in the following amounts:
†† This credit amount does not phase out. The full amount of the altenative fuel vehicle credit would be available for vehicles purchased on or before December 31, 2010.
2009 Model Year Hybrid Vehicles
Make Model Credit Amount
Ford Escape Hybrid 2WD $3,000
Ford Escape Hybrid 4WD $1,950
Mercury Mariner Hybrid 2WD $3,000
Mercury Mariner Hybrid 4WD $1,950
Advanced Lean Burn Technology Vehicles
Purchasers of advanced lean burn technology motor vehicles may claim a credit of $1,300 per vehicle.
Make Model Credit Amount
Volkswagen 2009 Jetta –2.0L TDI Sedan manual and automatic $1,300
Volkswagen 2009 Sportwagen –2.0L TDI manual and automatic $1,300
Mercedes-Benz GL320BLUETEC $1,800
Mercedes-Benz R320 BLUE TEC $1,550
Mercedes-Benz ML320 BLUE TEC $900
Have Questions? Contact us at:
MB Tax Professionals, LLP
503.595.5890
www.MBtaxpro.com
Office@MBtaxpro.com
Friday, October 31, 2008
Obama Vs. McCain - Tax Plans
This is the best non-democrat/non-republican view of our presidential candidates I have seen yet. This shows the difference between the two candidates’ tax plans using the Marginal Tax rate.
Top 1% of filers pay 40% of the tax collected. (about $370,000 AGI and up)
Top 5% of filers pay 60% of the tax collected. (about $150,000 AGI and up)
Top 10% of filers pay 71% of the tax collected. (about $1050,000 AGI and up)
Top 25% of filers pay 86% of the tax collected. (about $64,000 AGI and up)
Bottom 50% of filers pay 13% of the tax collected.
Senator Obama
Here are some of the factors of Senator Obama’s tax plan and how it would affect the Marginal Tax Rate of Taxpayers. (More on Senator Obama’s plan http://www.taxfoundation.org/publications/show/23724.html)
1. Roll back the reduction in the top two tax rates enacted in 2001 and 2003. These changes would increase the top two tax rates from 33 percent to 36 percent and 35 percent to 39.6 percent.
2. Restore the phase out of the personal exemption for higher-income taxpayers (the so-called PEP provision) and the limitation of certain itemized deductions for higher-income taxpayers (the so-called Pease provision).
3. Increase Social Security taxes paid by higher-income taxpayers. It is unclear exactly what is being proposed by Senator Obama on Social Security taxes, and his proposal may not even take effect until 2018, outside of the ten-year budget window. Nevertheless, it is assumed here that he would increase Social Security taxes by 4 percent to illustrate the likely effects of his plan on marginal tax rates.6
Senator McCain's tax plan also affects marginal rates, but for very different reasons. His tax plan includes only two individual tax proposals and only his health tax credit has a material effect on effective marginal tax rates. The McCain health tax credit—$5,000 for family coverage and $2,500 for individual coverage—replaces the current income tax exclusion for employer-based health insurance. The repeal of this exclusion has the effect of increasing taxpayers' taxable incomes, which then pushes some taxpayers into higher income tax brackets. This effect is shown in Figure 4 which compares marginal tax rates under current law to those that would prevail if McCain's tax plan became law. Note the leftward shift of the marginal tax rate schedule. Some taxpayers' effective marginal tax rates go up and others go down.
Pay close attention to Figure 2 for Obama and Figure 4 for McCain to see where your tax rate would go depending on who is elected president. Remember to VOTE and always make an educated decision.
Monday, October 27, 2008
Unclaimed Money
IRS will not forward refund checks. So to be sure to receive refunds and other correspondence make sure to keep your address current with the IRS.
If you change your address after filing your return you may complete a Form 8822, Address Change Request, and send it to the address shown on the form. You should download Form 8822 from the IRS website (www.irs.gov) or order it by calling 1-800-TAX-FORM ( 1-800-829-3676 ).
Make sure your family members are current as well. Often elderly family members stop filing tax returns and may move. Make sure they are not missing out on money due them. Other good places to check for lost cash are these two websites:
www.missingmoney.com
www.unclaimed.org
Play around and see if you can find some free money!
Questions? Contact us at:
MB Tax Professionals, LLP
503.595.5890
www.MBTaxpro.com
If you change your address after filing your return you may complete a Form 8822, Address Change Request, and send it to the address shown on the form. You should download Form 8822 from the IRS website (www.irs.gov) or order it by calling 1-800-TAX-FORM ( 1-800-829-3676 ).
Make sure your family members are current as well. Often elderly family members stop filing tax returns and may move. Make sure they are not missing out on money due them. Other good places to check for lost cash are these two websites:
www.missingmoney.com
www.unclaimed.org
Play around and see if you can find some free money!
Questions? Contact us at:
MB Tax Professionals, LLP
503.595.5890
www.MBTaxpro.com
Oregon Cultural Trust Tax Credits
The deadline to make charitable contributions for 2010 is December 31st. The Oregon Cultural Trust Tax Credit allows you to double your donation to 1,300 nonprofits in this state and to claim a 100% tax credit. This means you get dollar for dollar off your Oregon tax return up to:
$500 for individuals
$1000 for joint filers
$2500 for C-Corporations
What you need to do:
Donate money to one of the 1,300 participating nonprofits
Donate the same amount to the Oregon Cultural Trust
Write off 100% of the Oregon Cultural Trust donation on your 2010 tax return
Example of the benefit:
donation to nonprofit $1,000
donation to OCT $1,000
Federal Tax Savings $ 500
State Tax Savings $ 90
State Tax Credit $1,000
Total Savings $1,590
Net cash cost $ 410
Benefit to Oregon Charities $2,000
For more information check out the website at http://www.culturaltrust.org/
Or contact us at:
MB Tax Professionals, LLP
503-595-5890
http://www.mbtaxpro.com/
$500 for individuals
$1000 for joint filers
$2500 for C-Corporations
What you need to do:
Donate money to one of the 1,300 participating nonprofits
Donate the same amount to the Oregon Cultural Trust
Write off 100% of the Oregon Cultural Trust donation on your 2010 tax return
Example of the benefit:
donation to nonprofit $1,000
donation to OCT $1,000
Federal Tax Savings $ 500
State Tax Savings $ 90
State Tax Credit $1,000
Total Savings $1,590
Net cash cost $ 410
Benefit to Oregon Charities $2,000
For more information check out the website at http://www.culturaltrust.org/
Or contact us at:
MB Tax Professionals, LLP
503-595-5890
http://www.mbtaxpro.com/
Thursday, October 9, 2008
Roth IRA
WHAT IS A ROTH IRA?
It is an individual retirement account with special tax benefits. Your contributions are made with after-tax dollars, they grow tax-deferred and when you start withdrawing the money, it is TAX-FREE. Because it is an ACCOUNT, you can invest in whatever you like (mutual funds, stocks, bonds).
WHO CAN INVEST?
You can only contribute to or open a ROTH if you make less than $116,000 as a single person or $169,000 as a couple.
HOW MUCH CAN I CONTRIBUTE TO A ROTH IRA?
You are able to contribute up to $5,000 per year. If you are over 50, you can contribute up to $6,000.
CAN I OPEN A ROTH IRA EVEN IF I HAVE A 401k OR SEP?
Absolutely! However, you should maximize your 401k and SEP first, because with those plans you save money on your taxes, you are able to contribute more and chances are your company is matching (with the 401k). However, if you have maximized your 401k and SEP, definitely open a ROTH.
WHEN CAN I TOUCH THE MONEY PENALTY-FREE?
You are eligible to start withdrawing the money after age 59 1/2. If you need the money before that, you will be charged a 10% penalty only on ROTH earnings. Withdrawals of the principal are penalty free if it has been in the account for at least five years.
WHEN AM I REQUIRED TO START TAKING WITHDRAWALS?
That is one of the great benefits about a ROTH IRA. There is no age where you are required to begin taking withdrawals. With other IRAs and 401ks, you are required to start taking a minimum distribution at age 70 1/2, but there is no age limit with the ROTH.
WHAT IF I NEED THE MONEY BEFOREHAND?
That is another great things about the ROTH. If the principal has been in the account for at least five years, you don't pay any penalty. You also don't pay any penalty if it is used for a first home, qualified education expense or certain hardships.
THIS INFORMATION IS FOR INFORMATIONAL PURPSOSES ONLY AND SHOULD NOT BE TAKEN AS INVESTMENT OR TAX ADVICE. WHEN MAKING A DECISION ALWAYS CONSULT YOUR FINANCIAL PLANNER OR TAX PROFESSIONALS FIRST.
If you are not currently working with a financial advisor or think that your financial advisor could be working a bit better for you, we have excellent referrals that we work with on a regular basis.
Contact Us
BOOKSTORE
Our Bookstore includes books on starting your business, wealth creation and managing your time.
Bookstore
MOTIVATION
“Gratitude unlocks the fullness of life. It turns what we have into enough, and more. It turns denial into acceptance, chaos into order, confusion into clarity.... It turns problems into gifts, failures into success, the unexpected into perfect timing, and mistakes into important events. Gratitude makes sense of our past, brings peace for today and creates a vision for tomorrow.”
-Melodie Beattie
= = = = = = = = = = = = = = = = = = = = = = = = = =
Contact us today and we can set up an appointment.
MB Tax Professionals, LLP
Phone 503.595.5890 Fax 503.282.0513 2580
NW Upshur St. Portland, OR 97210
All rights reserved.
It is an individual retirement account with special tax benefits. Your contributions are made with after-tax dollars, they grow tax-deferred and when you start withdrawing the money, it is TAX-FREE. Because it is an ACCOUNT, you can invest in whatever you like (mutual funds, stocks, bonds).
WHO CAN INVEST?
You can only contribute to or open a ROTH if you make less than $116,000 as a single person or $169,000 as a couple.
HOW MUCH CAN I CONTRIBUTE TO A ROTH IRA?
You are able to contribute up to $5,000 per year. If you are over 50, you can contribute up to $6,000.
CAN I OPEN A ROTH IRA EVEN IF I HAVE A 401k OR SEP?
Absolutely! However, you should maximize your 401k and SEP first, because with those plans you save money on your taxes, you are able to contribute more and chances are your company is matching (with the 401k). However, if you have maximized your 401k and SEP, definitely open a ROTH.
WHEN CAN I TOUCH THE MONEY PENALTY-FREE?
You are eligible to start withdrawing the money after age 59 1/2. If you need the money before that, you will be charged a 10% penalty only on ROTH earnings. Withdrawals of the principal are penalty free if it has been in the account for at least five years.
WHEN AM I REQUIRED TO START TAKING WITHDRAWALS?
That is one of the great benefits about a ROTH IRA. There is no age where you are required to begin taking withdrawals. With other IRAs and 401ks, you are required to start taking a minimum distribution at age 70 1/2, but there is no age limit with the ROTH.
WHAT IF I NEED THE MONEY BEFOREHAND?
That is another great things about the ROTH. If the principal has been in the account for at least five years, you don't pay any penalty. You also don't pay any penalty if it is used for a first home, qualified education expense or certain hardships.
THIS INFORMATION IS FOR INFORMATIONAL PURPSOSES ONLY AND SHOULD NOT BE TAKEN AS INVESTMENT OR TAX ADVICE. WHEN MAKING A DECISION ALWAYS CONSULT YOUR FINANCIAL PLANNER OR TAX PROFESSIONALS FIRST.
If you are not currently working with a financial advisor or think that your financial advisor could be working a bit better for you, we have excellent referrals that we work with on a regular basis.
Contact Us
BOOKSTORE
Our Bookstore includes books on starting your business, wealth creation and managing your time.
Bookstore
MOTIVATION
“Gratitude unlocks the fullness of life. It turns what we have into enough, and more. It turns denial into acceptance, chaos into order, confusion into clarity.... It turns problems into gifts, failures into success, the unexpected into perfect timing, and mistakes into important events. Gratitude makes sense of our past, brings peace for today and creates a vision for tomorrow.”
-Melodie Beattie
= = = = = = = = = = = = = = = = = = = = = = = = = =
Contact us today and we can set up an appointment.
MB Tax Professionals, LLP
Phone 503.595.5890 Fax 503.282.0513 2580
NW Upshur St. Portland, OR 97210
All rights reserved.
2008 Roth IRA Conversions
For those of you who converted a Traditional IRA into a Roth IRA during 2008 consider recharacterization. When you converted from the Traditional to the Roth you created a taxable event based on the value of the IRA. With the recent decline in the markets most accounts are worth far less today than when the conversion was done. Take advantage of this and turn it into a positive! You can recharacterize the conversion, basically turn it back into a Traditional IRA and not pay tax on value that has been lost. Really wanted a Roth? No problem, just convert the account again at the lower value and benefit even more. You have time - it just must be done by the due date of your 2008 income tax return. If you have questions contact us!
MB Tax Professionals, LLP
503.595.5890
2580 NW Upshur Street
Portland,OR 97210
MB Tax Professionals, LLP
503.595.5890
2580 NW Upshur Street
Portland,OR 97210
Tuesday, February 26, 2008
Debt Forgiveness
The past year has been a wild ride for many homeowners. Foreclosures have been at an all time high all over the country. Some people have prevented foreclosure by selling their home for less than what they owed on the mortgage. This is called a short sale. Before Dec, 20th this created taxable income, but now there is a way around this which can save taxpayers from financial ruin. If you were involved in a short sale in 2007 make sure to let us know so we can report it correctly on your tax return. Also, if you are being threatened with foreclosure talk to your bank about the possibility of a short sale. If you have questions about how things will impact your tax world please give us a call. We are including an article below that we thought you might find interesting. Please feel free to share it with others.
DEC. 21 -
Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million. The limit is $1 million for a married person filing a separate return. Details are on Form 982 and its instructions, available now on IRS.gov.
“The new law contains important provisions for struggling homeowners,” said Acting IRS Commissioner Linda Stiff. “We urge people with mortgage problems to take full advantage of the valuable tax relief available.”
The late-December enactment means that reporting procedures for this law change were not incorporated into tax-preparation software or IRS forms. For that reason, people using tax software should check with their provider for updates that include the revised Form 982. Similarly, the IRS is now updating its systems and expects to begin accepting electronically-filed returns that include Form 982 by March 3. The paper Form 982 is now being accepted, but the IRS reminds affected taxpayers to consider filing electronically, which greatly reduces errors and speeds refunds.
The new law applies to debt forgiven in 2007, 2008 or 2009. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. In most cases, eligible homeowners only need to fill out a few lines on Form 982.
The debt must have been used to buy, build or substantially improve the taxpayer's principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.
Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available.
Borrowers whose debt is reduced or eliminated receive a year-end statement (Form 1099-C) from their lender. For debt cancelled in 2007, the lender was required to provide this form to the borrower by Jan. 31, 2008. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.
The IRS urges borrowers to check the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. Borrowers should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for their home (Box 7).
DEC. 21 -
Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million. The limit is $1 million for a married person filing a separate return. Details are on Form 982 and its instructions, available now on IRS.gov.
“The new law contains important provisions for struggling homeowners,” said Acting IRS Commissioner Linda Stiff. “We urge people with mortgage problems to take full advantage of the valuable tax relief available.”
The late-December enactment means that reporting procedures for this law change were not incorporated into tax-preparation software or IRS forms. For that reason, people using tax software should check with their provider for updates that include the revised Form 982. Similarly, the IRS is now updating its systems and expects to begin accepting electronically-filed returns that include Form 982 by March 3. The paper Form 982 is now being accepted, but the IRS reminds affected taxpayers to consider filing electronically, which greatly reduces errors and speeds refunds.
The new law applies to debt forgiven in 2007, 2008 or 2009. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. In most cases, eligible homeowners only need to fill out a few lines on Form 982.
The debt must have been used to buy, build or substantially improve the taxpayer's principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.
Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available.
Borrowers whose debt is reduced or eliminated receive a year-end statement (Form 1099-C) from their lender. For debt cancelled in 2007, the lender was required to provide this form to the borrower by Jan. 31, 2008. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.
The IRS urges borrowers to check the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. Borrowers should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for their home (Box 7).
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