Tax

Tax

Financial Tips for December 2011 – Buy a New Car

Buy a New Car
If you need a new car, now is a great time to purchase or lease one. Frequently, dealers are anxious to clear out last year’s inventory prior to year-end. In making your choice, consider the federal tax (and occasional state tax) advantages for buying fuel-efficient vehicles such as plug-in hybrids and electric vehicles.

Tax

Financial Tips for December 2011 – Make Charitable Contributions

Make Charitable Contributions
Consider making charitable contributions before year-end both to obtain the maximum tax deduction and to fulfill any charitable programs or commitments you may have established for the year.

Tax

Filing Status – What You Need to Know

Your federal tax filing status is based on your marital and family situation. It is an important factor in determining your standard deduction and your correct amount of tax, and whether you must file a return.

Your marital status on the last day of the year determines your status for the entire year. If more than one filing status applies to you, you may choose the one that gives you the lowest tax obligation.

There are five filing status options:

    • Single. Generally, if you are unmarried, divorced, or legally separated according to your state law, and you do not qualify for another filing status, your filing status is Single.

 

    • Married Filing Jointly. If you are married, you and your spouse may file a joint return. If your spouse died during the year and you did not remarry, you may still file a joint return with that spouse for the year of death. This is the last year for which you may file a joint return with that spouse.

 

    • Married Filing Separately. Married taxpayers may elect to file separate returns.

 

    • Head of Household. Generally, you must be unmarried and paid more than half the cost of maintaining a home for you and a qualifying person for more than half a year.

 

  • Qualifying Widow(er) with Dependent Child. You may be able to file as a qualifying widow or widower for the two years following the year your spouse died. To do this, you must meet all four of the following tests:
    1. You were entitled to file a joint return with your spouse for the year he or she died. It does not matter whether you actually filed a joint return.
    2. You did not remarry in the two years following the year your spouse died.
    3. You have a child, stepchild, or adopted child (a foster child does not meet this requirement) for whom you can claim a dependency exemption.
    4. You paid more than half the cost of maintaining a household that was the main home for you and that child, for the whole year.

    After the two years following the year in which your spouse died, you may qualify for head of household status.

We can definitely help you determine which filing status is best for your situation. Just call us up or send an email.

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