Welcome to Our Tax Tips Newsletter:

Continuing our effort to provide you with valuable, practical tax information, we will periodically update this page with useful income tax tips and income tax advice from the best sources -- information on issues that you commonly deal with. Be sure to check our newletter from time to time to stay on top on of the latest and most effective tax strategies.

TaxEdge will provide income tax tips that will help you save money when it’s time to file your tax returns. It’s a good idea to use a well planned strategy so that you aren’t surprised in April. Using TaxEdge Income Tax Preparation Software and keeping good records could mean the difference between paying a large chunk of money in April and receiving a big refund check. Use our income tax tips as part of your ongoing preparation.

Most taxpayers are concerned they may be making costly mistakes or overlooking tax breaks that could save them money, according to findings from a nationwide TaxEdge TaxEdge® survey.

Nearly two thirds of all individual taxpayers fear overlooking tax breaks or making mistakes that could cost them fines or penalties, based on the results of a random survey of more than 1,000 adults. Adding validity to their fears, the survey also found that most taxpayers don't understand which tax breaks may be most beneficial to them.

"It's always important for taxpayers to understand what they can do to minimize their tax obligation, but it's even more crucial in tough economic times when people are watching every penny," said David Bergstein, CPA, a tax analyst for TaxEdge TaxEdge, an online tax preparation and e-filing service for the do-it-yourself taxpayer. "Yet, many people are simply not up-to-speed on tax rules, which may mean they are paying more in taxes than required."

Specifically, the TaxEdge TaxEdge survey asked taxpayers about basic tax breaks. Most taxpayers were generally unable to understand the added value of a tax credit over a tax deduction. They were unable to identify the most beneficial tax breaks tied to various life events, such as raising children or sending children off to college. For example:

• Less than one-fourth could identify that tax credits are generally more advantageous than deductions;
• Only about one-third could identify the child-related tax break offering the greatest savings; and
• Less than one-half identified the education-related tax break offering the greatest savings.

"Tax rules also change so it's important to keep current. For example, for 2009 and 2010, the Hope Credit is being renamed the American Opportunity Tax Credit; the credit amount is increasing and the coverage expanding," said Bergstein. "So, it's important to stay current so that you can maximize your tax savings."

To review more of the specific results, see our full story on the just-released survey.

Income Tax Tips from the 2010 Tax Guide

The Basics of Tax Planning
As the clock ticks down to the April 15 filing deadline for 2008 income tax returns, nothing grabs our attention like ideas for tax planning that will reduce our taxable income.   For some help in identifying planning steps that may help you to reduce your taxable income, please review The Basics of Tax Planning.

Tests for Dependency
Confused about whether to treat your college-age son, your live-in mother-in-law, or another loved one that you help to support as a dependent? The tests for dependency are getting more complicated all the time.   For an overview of the issues related to claiming a dependent on your tax return, please read Tests for Dependency.

Depreciation Limits on Passenger Cars
You may have purchased new business assets in 2008 intending to take advantage of the new special expensing and bonus depreciation provisions for the year. But, if you bought a passenger car for your business, know that there are some special limitations on the amount of depreciation you can deduct.   For clarification on the allowable depreciation deduction, please review Depreciation Limits on Passenger Cars.

Business Travel Expenses
As you near April 15 and the end of the tax filing season, a reminder about the deductibility of travel expenses incurred for business may prove useful.   For a quick refresher course on deducting travel expenses, please read Business Travel Expenses.

Tax News

Last-Minute Tax Filing Tips
George Washington once said, "No taxes can be devised which are not more or less inconvenient and unpleasant." But, with the clock ticking down to the April 15 federal income tax filing deadline, procrastinating over this inconvenient and unpleasant task is no longer an option. It's time to overcome your anxieties and frustrations and get busy!    And to help you in this dutiful effort, please read Last-Minute Tax Filing Tips.

Prepare Now for Next Year's Tax Season
As you wrap up your work on the 2008 return this April, remember that, as taxpayers, we have continuing obligations, and another tax filing season is only a year away. It may be the perfect time, while your mind is still churning with tax information, to consider the planning you can do to handle tax-related issues during the coming year.    For more on this topic, please read Prepare Now for Next Year's Tax Season.

Get Tax Refunds from Prior Years with NOL Carrybacks
If your small business suffered a loss in 2008, tax refunds from prior years (which can provide an immediate infusion of cash to your business) may be within your reach. The IRS announced that small businesses with deductions exceeding their income in 2008 can use a new net operating loss (NOL) carryback provision to get a refund of taxes paid in up to five prior years.    For more on this story, please read Get Tax Refunds from Prior Years with NOL Carrybacks.

White House Announces Task Force on Tax Reform
President Obama has tasked the Economic Recovery Advisory Board headed by former Federal Reserve Board Chairman Paul Volcker with considering measures to overhaul and simplify the current tax system. A tax reform task force, composed of four advisory board members, will make recommendations on tax simplification, closing tax loopholes, and reducing tax evasion and "corporate welfare," according to Office of Management and Budget (OMB) Director Peter Orszag.    For more on this story, please read White House Announces Task Force on Tax Reform.