Important Documents

What Are the Most Commonly Missed Tax Deductions?

Every April, businessmen, entrepreneurs, and other self starters anticipate that dreaded day of filling out those familiar W-2 and 1099 workbooks. While some look forward to receiving a refund, many lack the necessary education to help them maximize their tax earnings. The following are some tax deductions that are commonly overlooked by all types of taxpayers.

Whether owning a small business or large company, keeping tight records of all business transactions is the key to a worry-free tax season. This includes keeping track of all receipts related to the business. Lunch expenses can be an acceptable write-off if it is purchased as it relates to business. If using a car to carry out business related tasks, then expenses used for the car can be deducted at the end of the year. This includes gas mileage and any other necessities to keep the car in good condition while conducting business. Oil and tire changes, tune-ups, and any other cost related to car maintenance are examples of deductions that suit independent contractor delivery jobs or sales jobs that require a great deal of independent travel.

Materials that are needed to produce sellable goods can also be deducted. This benefits artists and craftsmen who make their living selling their art and crafts. For example, if an artist sells their work for $200 and their materials needed to produce it costs $40, then the artist can write that off come tax time as long as he or she keeps all of their receipts. These are all considered business expenses that ideally should not cut into the entrepreneur’s individual profit margin.

If a business needed to close down and thus resulted in a loss of income, then the business owner can report that as a loss on their tax forms. Each individual taxpayer needs to pay attention to what amount of profit loss constitutes a “loss” because each state may have different laws regarding these specifics.

Other forms of deductions that often go unnoticed are sometimes not so obvious. Most people may not know that charitable contributions made to organizations can also be deducted. This may include foundations such as Muscular Dystrophy or non-profit agencies.

Many homeowners reap the benefits of paying those monthly mortgage payments around tax season, but renters may not know that they might benefit as well. As long as he or she is the head of household and it’s their primary residence, some states will allow them to deduct rent from their taxable income. When filing Federal tax returns, the residence must be used for a business purpose in order to qualify for deductions.

Whether a business owner or average Joe trying to make an honest living, tax deductions are not always the most obvious. By identifying commonly overlooked deductions, taxpayers can now be a little more cautious this tax season. Hopefully, this article is helpful in helping the average taxpayer determine what an appropriate deduction is and which is applicable in their individual situation.

What is a Living Will

Imagine a man who was in a serious accident with injuries so severe that he was being kept alive by a respirator and a feeding tube. His family has been at his bedside for weeks with no response from him and prospects for his recovery are grave at best. His family and doctors are helpless to do anything but wait because he can not speak for himself and let them know that he would rather they pull the plug and let him go peacefully than to exist like this. This situation could have been prevented if this man had a living will.

living will
Always be careful when signing important documents!

A living will is a legal document that lets a person inform their family and doctors of his/her wishes regarding life-sustaining procedures in the event that they are incapacitated or rendered permanently unconscious. People don’t really expect this to happen to them, but the fact is that it happens all the time. Most people don’t want their family to be burdened with the choice about “pulling the plug”, and in some states, if there is no living will stating a person’s wishes, the doctors are not permitted to discontinue life-support. For this reason, it is important for everyone to draw up a living will.

Because laws surrounding living wills vary from state to state, it is advisable to seek out the help of an attorney who specializes in estate planning. A lawyer can answer all questions and make appropriate recommendations as to what documents should be set up and whether a Medical Power of Attorney should be named. (A Medical Power of Attorney is a person who will make medical decisions on someone’s behalf if they are incapacitated, but their medical condition is non-life threatening.)

The living will contains a list of directives for doctors and family to follow relating to resuscitation, life support, breathing tubes and feeding tubes. The person writing a living will has the right to decide how they want their medical care to be handled in all of these situations and others not mentioned in the scope of this article. The decisions made in the living will are not automatically acted upon in any life threatening situation. A heart attack, for example, is life threatening, but the prospects for recovery are good after a heart attack, so medical personnel will resuscitate and do anything possible to revive the person. The living will usually comes into play for a person with either a terminal illness or someone who has been declared permanently unconscious with no prospects of recovery.

After a person takes the steps to set up a living will, the most important thing to do is make their doctors and family aware of the document. It can be a difficult discussion to have, especially with family members, but the living will only works if the right people know it exists. After the document has been completed, copies of it should be provided to the family doctor and immediate family members so that they can carry out its directives.

 

How to Avoid Home Foreclosure

Foreclosure is a potentially devastating problem that faces homeowners. When a homeowner is not able to pay the mortgage loan, the bank will reclaim the mortgage property. This is the beginning of a foreclosure proceeding. Foreclosure can occur suddenly. If the financial situation of the homeowner changes, he could be facing the real danger of losing his property.

Before foreclosure happens, it is important that the homeowner takes steps to avoid this problem. Here are some steps to prevent this from occurring:

1. Get a fixed interest rate.

A variable interest rate on your mortgage is highly unstable. If changes in the economy occur, the rates could shoot up in an instant especially during economic recession. When this occurs, the monthly payments that the homeowner has to pay will rise drastically to the extent that the he could no longer afford it.

To avert this potential disaster, it is a good idea to get a fixed rate on the mortgage loan. A fixed rate will remain the same even if market situation changes. This means you know exactly how much monthly premium you need to pay each and every month. And, you need not worry about fluctuations in the economy because your interest rates on loans will be unchanged.

2. Dialogue with lender.

If you lose your job and you think you cannot make monthly payments anymore, it is good to arrange a dialogue with the lender or bank before the problem becomes full-blown. Talk to the creditor about your financial situation. And give him a satisfactory and valid reason explaining why you cannot pay monthly premiums. The lender might take into consideration your reason and give you a grace period, enough time for you to secure the money for payment.

3. Debt forgiveness.

This is one option that a debtor may resort to if he has a very considerate lender. A lender might waive your missed payments once he hears your reason. This is called debt forgiveness which seldom happens but it is a possible solution. However, you must agree to pay the monthly premium after the missed payments are waived.

4. Loan repayment plan.

This is another option that a homeowner can request from a lender. In this plan, the payments that the homeowner missed will be divided into easy to pay monthly plan. This way, he can catch up with the monthly premium payments.

5. Loan modification.

This is another option available for homeowners to evade foreclosure. In this process, the homeowner will negotiate with the bank for lower interest rates or lower monthly premiums. This will make the payments more affordable for the homeowner who is in a temporary financial bind.

6. Short sale.

The house is sold before reaching the point of foreclosure. This way, the homeowner is able to pay the debt in full. Sometimes, the sale price of the home could be lower than the actual mortgage. It is good to discuss this with the bank. The bank might accept the amount and forgive the unpaid balance.

7. Foreclosure mediation.

An arbitrator acts as the mediator between the homeowner and the bank. The meeting between the debtor and lender will focus on the reduction of principal or interest or issuing deed-in-lieu of foreclosure.

What Is Proof of Ownership

There are few things in this world that someone does not own. When I say things I am referring to property, that includes both real property and personal property. Real property is land, water, and the things located on them. Personal property is tangible items that one possess that can be carried about or items that are not related to the land nor sea, or restricted to being used only in a particular location. All real property located in the developed areas of this country has some form of documented ownership by someone or some entity. Some personal property requires documented ownership.

The document that shows proof of ownership for real property is call a deed, or in some cases when the land is used as collateral to secure a loan it will have a deed of trust to show the ownership to the loan holders, and those paying the loan. Personal property that require or offer documentation of ownership is noted by a title.

Real property is either owned by individuals, corporations, or the government, either local, state, or federal. Records are kept in the local court houses that show ownership of land. The owner of the land should also be in possession of a copy of the deed to any land they own. These records are public, and not private.

Personal property that require a title to it is also owned by individuals, corporations, or the government, be it local, state, or federal. Since most personal property that require titles are vehicles, mobile homes, or trailers, the title for this property is located in the local Division of Motor Vehicles. If personal property is used to secure a loan the title will have listed on it that their is a lien against it. Once the lien is satisfied, the lien will be removed and the title will show no liens. The title to personal property is held by a public entity, but is not made accessible to the public as easily, and as readily as a deed is. If one desire to find out about a title, in some case a freedom of information act request may have to be submitted and approved. Of course the police departments have easy access to this information, and sometimes they will share it with individuals they deem to have a need to know.

There are two ways to obtain a deed and a title. The first way to obtain a deed is by homestead, that is done by claiming land that has never been deeded to anyone. The second way to obtain a deed is by transfer, that is to receive it from a previous owner. The first way to obtain a title is by being the original owner to possess a brand new car, trailer, mobile home or the like. The title will indicate that you are the original owner. The second way to obtain a title is by transfer from a previous owner. So by title or deed, one is designated as the owner of property.