All About Tax Deductions

Income tax time can be a dreadful season if you are not aware of all of the income tax breaks you can get through income tax deductions.  It is important to understand what is tax deductible so that you can get as large of a tax refund as possible.

Probably the most well known income tax deduction is the Earned Income Credit.  The earned income tax credit is available to those who make a minimum amount of money and can file tax as single, married, or head of household.  The more money you made, the more your earned income tax credit is until you hit the peak, which is around $30,000.  Once you hit that peak, the earned income tax credit goes down until you reach the maximum income allowed to receive the earned income tax credit.

The second well known income tax deduction is the Child Tax Credit.  The child tax credit is available to you if you have two or more children in the home for more than six months out of the year for which you are filing tax, and if you have a tax liability.  Through the child tax credit, you receive around $1000 per child.  This total amount is then applied to your tax liability, and any amount of child tax credit left over is made a part of your income tax refund.

Another income tax deduction is for child day care, when the child day care is needed in order for one or both parents to work outside the home.  This day care income tax credit is equal to a percentage, up to a maximum amount, of the actual day care expenses paid for that tax year. 

Other expenses can also be tax deductible.  Interest paid on a mortgage for the primary residence can be claimed as an income tax deduction.  Medical expenses can also be claimed as an income tax deduction, although this is not very helpful unless you have an excessive amount of medical expenses to deduct on your income tax return.  Tax paid to another state can be used as an income tax deduction in the state that you live in.  Donations and contributions to charities, fundraisers, churches, etc. can also be tax deductible. 

If you are self-employed, you can also claim business expenses as income tax deductions.  This includes any expenses directly related to running your business.  You can take a mileage income tax deduction for any miles you put on your vehicle for business purposes.  You can also take an income tax deduction for your office space in your home if it is used only for business purposes in the form of a portion of your rent, utilities, and phone bills.  You can also take an income tax deduction for your personal computer, printer supplies, and other office supplies as long as you have the receipts for the tax deductible expenses, and usage logs for the personal computer and other equipment to show that it is used primarily for business.

As you can see, there are many income tax deductions available to you.  If you have any questions about what is tax deductible, you should contact a qualified, certified, licensed tax accountant today.

Steps to Become an Accountant

If you have an ambition in pursuing a career in accounting or accountancy, then you might want to start planning first before jumping into this field. This will enable you to become successful in achieving your career goals in the accounting field. Always remember that the first step to success is by having good knowledge and making the right decisions. So, here are the steps to success in order for you to become successful in your chosen career.

The first is that you should excel in math.

You have to remember that accounting is all about numbers and how to manipulate it. Therefore, you have to make sure that you are good at math in high school. A person who doesn’t like math doesn’t succeed in the accounting field. Take extra attention on your math subjects and always ask your teachers and counselors for guidance on which courses you must take if you plan on pursuing a career in accounting. This will help you out in making a clear path for your goals.

The second thing that you have to do is request information from a college or university you plan on attending about their accounting course offer.

Always remember that getting good education on your chosen course is very important. In this case, you have to choose a college or university that can offer you a solid education for their accountancy courses. Companies are particularly choosy when it comes to the educational background of their prospective accountants.

As mentioned before, information will get you well-prepared. So, the third thing that you should do is research on the requirements for becoming a Certified Public Accountant or a CPA. Although being a CPA is not required by companies, it is preferred. If you want to stand out when you are applying as an accountant in a company or an accounting firm, you might want to get certified. Basically, in order to become a CPA, you will need to get a bachelor's degree in accounting or in other courses related to business. By knowing what is required, you will be become better prepared when you are going to pursue a career in this field.

Also, if you are now going to start your first career or job, you will normally do it in your own state after graduating. So, try to know if you fulfilled the state requirements. If you don't, then you might get problems in starting your accounting career in the future.

Computers are now used in most companies today. Because of this, you have to know and become proficient with the different types of accounting software. Everything today is now computerized and not knowing how to work an accounting software program will lead to difficulty in finding jobs in the accounting field.

Experience is very valuable. Having more will mean opening up more career opportunities. So, try getting jobs that is related in the accounting field you choose.

Being prepared for your future career is what you should be doing if you have ambitions in starting a career in the accounting or accountancy field. By being prepared, you can be sure that you will not run into any problems in the future and ensure a smooth career path that can lead to your goals and success.

What happened At Enron

Everyone knows at least a little about the Enron story and the devastation it created in the lives of is employees. It's a story that belongs in any discussion of ethical accounting processes and what happens when accounting standards and ethics are discarded for personal greed.

Enron began in 1985 selling natural gas to gas companies and businesses. In 1996, energy markets were changed so that the price of energy could now be decided by competition among energy companies instead of being fixed by government regulations. With this change, Enron began to function more as a middleman than a traditional energy supplier, trading in energy contracts instead of buying and selling natural gas.  Enron's rapid growth created excitement among investors and drove the stock price up. As Enron grew, it expanded into other industries such as Internet services, and its financial contracts became more complicated. 

In order to keep growing at this rate, Enron began to borrow money to invest in new projects. However, because this debt would make their earnings look less impressive, Enron began to create partnerships that would allow it to keep debt off of its books. One partnership created by Enron, Chewco Investments (named after the Star Wars character Chewbacca) allowed Enron to keep $600 million in debt off of the books it showed to the government and to people who own Enron stock. When this debt did not show up in Enron's reports, it made Enron seem much more successful than it actually was. In December 2000, Enron claimed to have tripled its profits in two years. 

In August 2001, Enron vice president Sherron Watkins sent an anonymous letter to the CEO of Enron, Kenneth Lay, describing accounting methods that she felt could lead Enron to "implode in a wave of accounting scandals." Also in August, CEO Kenneth Lay sent e-mails to his employees saying that he expected Enron stock prices to go up. Meanwhile, he sold off his own stock in Enron. 

On October 22nd, the Securities and Exchange Commission (SEC) announced that Enron was under investigation. On November 8th, Enron said that it has overstated earnings for the past four years by $586 million and that it owed over $6 billion in debt by next year. 

With these announcements, Enron's stock price took a dive. This drop triggered certain agreements with investors that made it necessary for Enron to repay their money immediately. When Enron could not come up with the cash to repay its creditors, it declared for Chapter 11 bankruptcy.

No Balance Transfer Fee Credit Card

When you are looking to repay your debts quickly, you should consider a no balance transfer fee credit card.  This is a special deal offered by some financial institutions when they are trying to break into the market, for example a foreign owned bank entering the US lending arena.   

It may also be that the bank has too much cash and needs to earn a return on that money.  How can you make a profit by lending money without charging a fee?  They are going to earn interest on the money you owe to them every month. They just won't earn anything when you move your account. They are likely to be offering a low interest rate as well as an incentive for people to move their debts. Financial institutions know that the majority of people will not repay their debts within the time frame of the low incentive rate.  It will usually take a lot longer and the majority will actually take out more credit.

But you can profit from the banks alleged generosity. If you are determined to clear your debts, you will have worked out your finances and will know how much extra you can afford to repay these monies quicker.  Now look for a no balance transfer fee credit card with an excellent interest rate for as close as possible to the period you have worked out you need.

So for example, you have estimated it will take you 12 months to repay your debt. You will need a credit card offering a low interest rate for a year.  If it will take you longer than a year, you have to decide whether the deal is sufficiently good enough for you to take a chance that you will not end up paying a much higher rate than the rest of the market at the end of the 12 months. 

I would suggest that you go for the deal and worry about interest rates when the time comes.  Why?  I am sure that when you see how fast you can repay your debt, you will become motivated to have that money repaid by the end of the deal as you won't want to face costly interest charges. 

When the end of the deal comes, if you have maintained your account properly your creditor will probably be willing to negotiate with you on the charges. If not, you should have an excellent credit record and be able to get a new deal elsewhere.

When repaying debt, every penny that you can put towards clearing the balance rather than interest counts.  If the special interest rate is only for a short period say three to six months and you have significant debts it might not be worth transferring.  You could end up paying much higher charges then you are currently paying. 

Instead play the companies against one another.  Contact your current creditor and explain that you have been offered this very attractive deal elsewhere.  You may find that your existing account manager may match the interest rate on your offer.  That is another way to benefit from a no balance transfer fee credit card.