Top 10 Halloween Season Tax Tips

Halloween is one of my favorite holidays. I always look forward to my law firm’s annual celebration. However, there is more to Halloween than costumes and trick-or-treating. The end of the year is only a few weeks away, and Halloween season is a good time to start thinking about taxes. To help my readers save a little money this year, I have put together ten spooky Halloween tax tips.

1. Haunted Home Renovations

Before you have guests over for a Halloween party, you might want to consider making some green renovations to save on energy. By installing a programmable thermostat, or upgrading to dual pane windows, you can keep your guests comfortable and also qualify for an Energy Star tax incentive. For more information, check out EnergyStar.gov.

2. Spooky Soiree's

Most teachers try to throw Halloween parties for their students, but due to budget cuts many educators are forced to finance these events out of their own pockets. Fortunately, if you are a qualifying teacher then you can use these expenses as part of your educator expense deduction.

3. Supernatural Savings

The average consumer spends about $66 each year on Halloween decorations, costumes and candy. Unfortunately, if you visit your local party supply store then you may end up paying more then you need to for your Halloween supplies. Instead, check out deals online to make your money stretch.

4. Eerie Extensions

If you had to file a tax return extension in 2009, then October 15th was the deadline to get your return in. The longer you wait to file your return, the more you will have to pay in IRS late penalties. If you have not yet competed your return, I highly recommend calling a tax professional right away.

5. Chilling Charity

As the weather cools down in October, charities begin asking for cool weather donations. When you have some free time, go through your winter wardrobe with your family to see if you have any extra sweaters, or blankets to donate. Keep the receipt for your contributions, and you can deduct the donation on your next tax return. However, you will need to itemize your return to qualify for this specific tax incentive. For more information, you can read this article explaining the charitable contribution deduction on RDTC.com.

6. Tip or Treat

If you receive tips at your job, then the IRS requires that you keep track of your total tips and report them to your employer. According to Topic 761, if you get $20 or more in tips during a calendar month then you are required to report them to your employer by the 10th of the following month.

7. Witchy Work Party

Throwing a Halloween party at the office is not only great for moral, but also comes with a nice little tax deduction. Food and supplies purchased for your employees can usually be written off if the party is held on the premises. If you plan a dinner or get together at a nearby restaurant then you can deduct half of the expense.

8. Dastardly Deadlines

Since every taxpayer is not required to make estimated quarterly tax payments, it can be easy to forget about the deadlines. Unfortunately, September 15th was a payment due date, and if you did not remember to send in your check then you should try to do so as soon as possible to avoid excessive penalties.

9. Franken-Farming

October is a busy month for many farmers. Luckily, there are several ways for taxpayers who own farms to save on their taxes. Hiring family members or depreciating capital farm assets are both tax savvy moves to make. For more information, you can read IRS Publication 225, Farmer’s Tax Guide.

10. Creepy Calculating

Like it or not, Halloween means that there are only two months left in the year. It is a good idea to think about calculating your tax liability so that you get a head start on end of the year tax planning. If you are looking for ways to prevent owing the IRS a large payment, then check out this article on RDTC.com with advice on how to lower your tax liability.

Can the Postal Service be Saved?

Over the weekend, the United States Postal Service announced that it had lost $3.8 billion over the past fiscal year, which ended on September 30^th. Their report claimed that they also delivered about 26 billion less pieces through the mail then they had the prior year, which translates to a nearly 13% drop.

The Postal Service, as it is quick to point out, is legally prohibited from taking tax dollars. But in order to stay afloat, the agency has been actively borrowing from the U.S. Treasury: At last count, according to Postal Service spokeswoman Yvonne Yoerger, it owes the government $10.2 billion.

Federal law dictates that the Postal Service can borrow up to $3 billion per year - but the debt cannot grow beyond $15 billion. That means that while the agency, which had revenues of $68.1 billion last year, could potentially borrow another $3 billion in 2010, it will soon no longer be able to legally borrow billions from the government.

Meanwhile, the Postal Service is estimating that without significant changes, it will lose another $7.8 billion in the coming year - and deliver another 11 billion fewer pieces of mail.

Which raises the question: Could the Postal Service be doomed?

"I don't think the Postal Service is in danger of going away totally," said Yoerger, the Postal Service spokeswoman. "But our current business model needs to be reviewed and revised to come up with a sustainable model so that we can get back to profitability while still continuing to meet our mission of serving all of the country with affordable, universal Postal Service."

Continued at CBS News…

New York Income Tax Revenue Falls 36% in Year, Paterson Says

Over the past year there have been dozens of reports of states struggling because of the recession. However, experts were shocked by the huge decrease in revenue the state of New York has seen over the past year. According to an announcement made by New York Governor David Paterson, the states tax revenue has fallen an astounding 36%.

The report comes out after what Paterson describes as a “frustrating” attempt to close the state’s budget gap, which exceeds $2 billion. Checkout the following article on the shocking announcement courtesy of Bloomberg.com.

“We added personal income tax, which we thought would make the falloff 10 percent to 15 percent,” Paterson, a Democrat, said on CNBC today, referring to $5.2 billion in new or increased taxes. “This is what is so frustrating. It’s still 36 percent, meaning our revenues fell more in 2009 than they did in 2008.”

Wall Street companies lost $42.6 billion last year and year-end bonuses to workers fell 44 percent to $18.4 billion. Income tax receipts were down 24 percent as of Aug. 31, according to the state comptroller’s office. Paterson’s estimate includes data since then.

Besides boosting taxes for the fiscal year that began April 1, lawmakers made $5.1 billion in spending cuts. The plan also includes $6.2 billion in federal stimulus money and $1.1 billion in one-time revenue, according to the Assembly.

The budget will still be $2.1 billion in deficit because spending plans exceed revenue projections, the state Division of Budget said July 30. The report predicted deficits of $4.62 billion in 2011, $13.3 billion in 2012 and $18.2 billion in 2013.

Year Round Tax Planning Tips

Last week the Roni Deutch Tax Center – Tax Help Blog posted a new article discussing some year round tax planning tips. As the blog entry explains, even if you are a regular wage-earning employee and do not have to worry about making quarterly payments, you should still get in the habit of thinking about your taxes all year long. It will make tax season less stressful, and by planning your finances in advance you can keep your tax liability as low as possible. Below is a snippet of the article with some fall tax tips, but be sure to check out the full entry at RDTC.com.

Fall (September – November)

When your children go back to school and the leaves start falling from the trees, you need to start thinking about taxes. The year is coming to an end, and if you have a steady job then you should have a pretty good idea about what your total income is going to be for the year. Once you calculate your yearly income, you will know what tax bracket you fall in, and can make any necessary adjustments to your withholdings. If you have not paid enough, you can have your employer take out additional taxes from your paycheck. It will mean less money each month, but it sure beats having to pay the IRS a large payment in April. On the other hand, if you have overpaid your taxes then you can lower your withholdings and get a little extra holiday season cash.

The fall months are also your last chance to make any longer-term tax moves that cannot be made last minute come December. For example, if you plan to make a large charitable donation, then you will want to make it now so that you can make sure you get proper receipts and documentation. Finally, if you are trying to buy a house and take advantage of the $8,000 Federal tax credit then you are going to want to make sure you close escrow during the fall months. The credit expires on December 1st, and is unlikely to get extended into next year.