Tax Tidbits

For more tax tips, subscribe to Diane's quarterly e-newsletter, the "Blarney Blab," by sending an e-mail to Diane@dianeobrienkelly.com with "newsletter" in the subject line.

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Upcoming Deadlines - Don't forget!  The next estimated tax payment is due Sept. 15th.  Tax returns for those who filed an extension are due on Oct. 15th.  If you can't pay, go ahead and file anyway.  Failing to file can subject a taxpayer to an additional penalty.  Ask for an installment agreement (by filing Form 9465) or consider paying by credit card.  It's better to owe just about anyone else than the IRS! 

More help for homeowners!  With the recent mortgage crisis, Congress has put into place all kinds of tax breaks for homeowners, now including a provision that will allow homeowners who claim the standard deduction to get an additional tax break for homeownership.  More details to come as they become available. 

Breaking news!  The IRS has just increased the standard mileage rate for business miles to 58.5 cents per mile, starting July 1st.  Thank goodness!

Has your area been recently hit by a natural disaster?  You may be entitled to special considerations.  Check out this link:  http://www.irs.gov/newsroom/article/0,,id=108362,00.html.

Mortgage Woes are being suffered all over the country.  But if you lose your home or do a short sale with your lender, did you know that the lender will report the cancelled debt to the IRS and that the cancelled debt is generally treated as taxable income?  Yikes!  But never fear - there are exceptions.  Thanks to the Mortgage Forgiveness Debt Relief Act of 2007, a taxpayer can exclude from taxable income up to $1 million ($2 million if married filing a joint return) of debt relief on their principal residence.  In addition, cancellation of debt income is not taxable if the taxpayer was in bankruptcy or insolvent (debts>assets) at the time the debt was forgiven.  To claim the exclusion, file Form 982 with your tax return.  The form is available at www.irs.gov.

the IRS comes to collect the actual tax due.

Check out my article "Federal Income Tax Basics for Newbie Writers" at http://www.magespages.com/writing-industry-career/40-writing-industry-career/78-income-tax-deductions-for-newbie-writers.

Check out my article "Don't Lose out!  Commonly Missed Tax Deductions" on page 14 of the July 2007 issue of "NINK" at http://www.ninc.com/general/nink_sample.pdf.