A division of Dream of Dréa, LLC, Fine Dreams & Finances offers tax preparation services and consultation on how to finance your dreams!
Fine Dreams & Finances was born due to an issue that arose from the development stage of a feature film's production. In an effort to save money, producer, Dréa Lewis (Dream of Dréa, LLC) began taking tax classes to rewrite a budget that would equal the work of a licensed and bonded contract worker. In that process, she gained the knowledge to be credential by the IRS to be a tax professional.
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Tax Tip of the Day: Foster parents who receive payments from a state, political subdivision, or tax-exempt child placement agency may have charitable deductions. If you spend money to provide support for a foster child that is greater than the payments received, you may be able to deduct the additional amount as an itemized deduction on Schedule A.
Ever heard of the kiddie tax? Once upon a time, a popular tax-saving strategy for high-income families was to funnel unearned income through their children to reduce their overall taxes. So the IRS created the kiddie tax as a tax rule that is levied on unearned income (interest, dividends and capital gains) earned by children under the age of 19 and college students under the age of 24. The threshold amount for 2013 is $2000, and all unearned income kids receive above the threshold amount is taxed at their parent's highest income tax rate.
The estimated Powerball Jackpot for December 13, 2013 is $400 million. If you win, that money will be reported to the IRS and you will be issued a Form W-2G showing the amount of your winnings as well as any tax taken out of them. If you don't win, you can deduct your gambling losses. HOWEVER, you cannot deduct gambling losses that are more than your winnings.
If your adjusted gross income is $28,749 or less (Single); $43,124 or less (head of household); or $57,499 or less (Married filing jointly), you can take a credit for qualified retirement savings.
If you are self employed, you can deduct the employer-equivalent portion of the self-employment tax (Social Security and Medicare) you owe. There is no limit to the amount you can deduct.
Did you know? If you rent your home to someone (example: to a producer for the production of a film) at a fair rental price for 14 days or less during a calendar year, you DO NOT have to include any of the rental income in your income for the year.
You may be able to take a nonrefundable tax credit of up to $1000 ($2000 if married filing jointly) for making eligible contributions to an employer-sponsored retirement plan such as elective deferrals to a 401(k), 403(b), 457, SEP or SIMPLE plan, voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan) or to an IRA. The credit is a percentage of the qualifying contributions, with the highest rate for taxpayers with the least income. To claim the credit, complete Form 8880 and enter the credit on line 50 of your 1040.
If you moved to a new home because you changed job locations or stated a new job, you may be able to deduct some of your moving costs as an adjustment to income. See Form 3903 and include total on Line 26 of your 1040.
You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your Adjusted Gross Income. Example: Your AGI is $40,000, 7.5% of which is $3000. You paid expenses of $2500. You cannot deduct any of your medical expenses because then are not more than 7.5%
A nonrefundable credit reduces or eliminates your income tax but will not give you an additional refund. A refundable credit reduces or eliminates your total tax and also gives you a refund of any amount of the credit that is more than your tax liability/
Did you know? You may be eligible to file Head of Household even if your parent does not live with you if you pay more than half the cost of keeping up their home for the year and claim them as a dependent.
Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions for yourself and your spouse, and exemptions for dependents. While each is worth the same amount ($3800 for 2012, different rules apply to each type.