Cash Flow Planning for Life

This is the third installment of Tax Deductions & You: What You Need to Know which can also be downloaded from our free eBook library.

A student loan is designed to help students pay for university or college. It is a calculated amount that should assist with the cost of tuition, books, and living expenses. This loan may differ from other types of loans in that the interest rate may be substantially lower. In addition, the repayment schedule may be deferred while the student is still in education.

Student loan interest is another form of interest that is deductible, but with limitations. These limitations are as follows:

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This is the second installment of Tax Deductions & You: What You Need to Know which can also be downloaded from our free eBook library.

Any loans that fall under the nondeductible category need to be reviewed along with your cash or equity availability. If possible, they also need to be re-characterized to a deductible form of interest.

An example of this would be having availability on a home equity loan (balance after transfer must be below $100,000) and paying off an auto loan or credit card. This will increase cash flow two fold:

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If you deduct vehicle mileage on your tax return(s), you’ll be happy to know that the IRS has increased the standard mileage rate for business, medical, and moving expenses. The new rate is increased 4.5 cents per mile and it goes into effect for miles driven starting July 1, 2011 through December 31, 2011.

I encourage you to update your mileage log/calendar as of June 30, 2011 and record your odometer reading(s) on those vehicles. It would also be helpful to attach an oil change or other maintenance receipt from a third party to back up any mileage reading as of June 30th.

Did you receive notice of this increase in standard mileage rate for business from your current accountant? Does your C.P.A provide you with a free eBook library where you can learn about:

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For this blog post, I’m happy to have Patricia Briggs as a guest blogger for you:

There is no doubt that bankruptcy must always be the last resort. Before filing a bankruptcy, you should try every option available. It may be either credit counseling or debt settlement programs. You can also go for a debt consolidation through a home equity loan or ask your creditors for a reduced payment plan or a discounted lump sum payment. In this article, we will discuss about the last method as it has some pitfalls.

Often, lenders agree to compromise the balance if it is paid in one lump sum payment. However, troubles arise when they compromise more than $600 on the bill. If done so, the bank has to file form 1099C with the Internal Revenue Services (IRS) declaring that discount as an income. Now, you have to pay tax on that money, as IRS will consider it as taxable income. The IRS has a very instructive publication on this issue. However, there are always exceptions. In this case, there are the following:

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This is the first tip in our series 7 Things You Should Know About the Tax Consequences of Debt Forgiveness which is also available as a free eBook from your Fort Myers Accounting Firm.

With all of the foreclosures and short sales occurring all over the United States in recent years have you ever wondered how the I.R.S will treat your short sale when it comes to filing your income tax? If this thought has occurred to you, you’re certainly not alone. Please read on…

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With the real estate market crisis, more and more families have been forced into foreclosure or finding other ways, such as a short sale to eliminate their mounting debt. However, many are unaware of the tax consequences of such actions. Our goal is to ensure that you understand exactly what is involved in debt forgiveness, so that there are no unpleasant surprises when you file your taxes.

During the next few months, we’re going to teach you about The Tax Consequences of Debt Forgiveness. You will learn about:

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