Q: In a recent article, you said people could deduct mortgage interest on a refinanced loan up to the amount of the original loan balance. (See 2/7/05 issue.) Isn't the limit the outstanding amount of the loan before the refinancing? M.L., New York
Small Business Tax
Section 179 vehicles should be a key part of your small business tax deduction strategies. Can Section 179 property fit in with your business tax strategies?
Let Business Management Daily help you get each and every rental property depreciation credit and business tax deduction you’re entitled to.
Did you set up a charitable remainder trust (CRT) at the height of the bull market? If so, your returns may have slipped lately as the market fluctuates. You may be rethinking your idea of setting up a CRT in the first place.
Q: I bought Intel shares at different times and prices during the past few years. At the end of February and the first few weeks in March, I sold all those shares (and incurred some losses). All the stock sales occurred within 30 days. Can I still claim the losses? Norristown, Pa.
1. Keep receipts, not a list 2. No deduction for 'common' products
If you're like most small business owners, your spouse does odds and ends around the office and pitches in when you need help. This is particularly true in the summer months when other employees take vacation leave.
You may have amassed hundreds of thousands of dollars in your retirement savings accounts, or maybe even a million or more. When you finally tap into that money, you'll be taxed on the withdrawal at rates that could reach a staggering 35 percent, plus any state income taxes due.
If you're planning to hire your spouse, he or she (and your company) still must pay federal employment taxes on the wages. But don't let that scare you away from putting your spouse on the payroll. By shifting salary from your pocket to your spouse's pocket, you can successfully pay less in employment taxes than if you earned all the income yourself.
Q: I'm having a problem with my 2004 return, so I had to file an extension. My wife and I separated last year, and we're filing separate returns. I'm in the 25 percent tax bracket. If she claims the standard deduction as a head of household, do I need to do the same? B.S.F., Norfolk, Va.
The sheer complexity of the tax code causes many people to put their faith in anyone who promises tax-reduction magic. That's why the IRS rings its warning bell each spring, identifying the top tax scams being pitched by unscrupulous tax promoters.
Q: One of my business associates says top-heavy requirements exist for employee group insurance plans as well as 401(k) plans. Is that true? J.A., Monterey, Calif.