Martin Cantu, EA - Tax Consultant - Tax Relief Services Blog

Tax Tips for the Self-employed  There are many benefits that come from being your own boss. If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed. Here are six key points the IRS would like you to know about self-employment and self- employment taxes: 1. Self-employment can include work in addition to your regular full-time business activities, such as part-time work you do at home or in addition to your regular job. 2. If you are self-employed you generally have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. You figure self-employment tax using a Form 1040 Schedule SE. Also, you can deduct half of your self-employment tax in figuring your adjusted gros...

This is Part One of my continuing series of basic tax help articles.    This series of articles applies to the 2012 tax filing season for the tax year ended December 31, 2011 – Fling status and exemptions. As always, consult a tax professional for specific guidance on your individual situation.  Contact the Law Office of Martin Cantu for more information, or www.sataxhelp.com . Filing Status This is step number one in filing your tax return. You have five choices - Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child.   Filing status determines basic tax items such as filing requirements, your standard deduction, eligibility for certain credits and deductions, and your correct tax. This is the foundation of your tax return and making the wrong choice here will have detrimental impacts throughout your return. You may qualify for more than one filing status, so the choice of filing sta...

Here is some information on how to determine your tax filing status. For more information or other tax related questions, place contact the Law Office of Martin Cantu or sataxhelp.com. Determining your filing status is one of the first steps to filing your federal income tax return. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child. Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits and deductions, and your correct tax. Some people may qualify for more than one filing status. Here are eight facts about filing status you'll need to know so you can choose the best option for your situation. 1. Your marital status on the last day of the year determines your marital status for the entire year. 2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligatio...

Here is some basic information on Dependents and Exemptions that you may find helpful in filing your 2011 tax return. Contact the Law Office of Martin Cantu or www.sataxhelp for more information on this question, or other tax issues you may have.  Even though each individual tax return is different, some tax rules affect every person who may have to file a federal income tax return. These rules include dependents and exemptions. The IRS has six important facts about dependents and exemptions that will help you file your 2011 tax return. 1. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,700 on your 2011 tax return. 2. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross ...

The income tax filing season has begun and important tax documents should be arriving in your mailbox. Even though your return is not due until April, you can make tax time easier on yourself with an early start. Here are the Internal Revenue Service’s top 10 tips to ensure a smooth tax-filing process. For more questions contact the Law Office of Martin Cantu . 1. Gather your records. Round up any documents you’ll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you’re claiming on your return. 2. Be on the lookout W-2s and 1099s will be coming soon; you’ll need these to file your tax return. 3. Have a question? Use the Interactive Tax Assistant available on the IRS website to find answers to your tax questions about credits, deductions, general filing questions and more. 4. Use Free File. Let Free File do the hard work for you with brand-name tax software or online fillable forms. It's available e...

Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits. Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012. The law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 201...

Six Year-End Tips to Reduce 2011 Taxes Here are six tax-saving tips for you to consider before the calendar turns to 2012: 1. Make Charitable Contributions – If you itemize deductions, your donations must be made to qualified charities no later than Dec. 31 to be deductible for 2011. You must have a canceled check, a bank statement, credit card statement or a written statement from the charity, showing the name of the charity and the date and amount of the contribution for all cash donations. Donations charged to a credit card by Dec. 31 are deductible for 2011, even if the bill isn't paid until 2012. If you donate clothing or household items, they must be in good used condition or better to be deductible. 2. Install Energy-Efficient Home Improvements – You still have time this year to make energy-saving and green-energy home improvements and qualify for either of two home energy credits. Installing energy efficient improvements such as insulation, new win...