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Happy Birthday Rocky and Bullwinkle
http://www.toontracker.com/bullwink/bulleps.htm
http://www.amazon.com/exec/obidos/tg/detail/-/B00009PJT0/mywishlistA

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Ask TaxMama comes to you each Friday
Read it ONLINE (by Sunday) http://www.taxmama.com/asktaxmama

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*** Ask TaxMama Volume 6, Issue #283 November 13, 2004
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Deadlines LOOMING - http://taxmama.com/taxcalendar.html

December 31, 2004 - Last day to open KEOGH for 2004
December 31, 2004 - Last day for charitable contributions for 2004

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VISIT OUR NEW JOBS PAGES http://taxmama.careerbank.com/
Run a city in Idaho as their Controller - get away from it all! http://taxmama.careerbank.com/seeker/view_job.cfm?id=80999
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Dear Family,

I spent yesterday morning in a crowded conference room at IRS. The room was packed for IRS's quarterly meeting with the tax professional community leaders. One of the items covered was the new Offer in Compromise application. The new booklet is 64 pages thick.

But it has one very interesting new feature. IRS has finally taken the guesswork out of the big question - "How much should I offer?" IRS has included a worksheet to walk you through the computation IRS uses internally. They are hoping this feature, plus the very detailed explanations included in the workbook, will make it impossible for people to submit incomplete or bad offers.

Reading IRS News today, you'll find good news about mileage and sensible news about car donations. (I will be updating my articles on the site in the next week or so.) And also about missing refunds.

Have a wonderful weekend.

Best wishes,

Eva Rosenberg, EA Your TaxMama is watching...out for you.

P.S. Remember, TaxMama's Secrets is now available on CD http://www.cafeshops.com/taxmama.6819226

P.S.S. Drop by TaxMama's Shopping pages http://taxmama.com/resources/shopping.html

P.P.S. TaxMama is starting to schedule speaking/teaching engagements for next year. http://www.speakermatch.com/showcase/speakerinfo.asp?id=-667529472

P.P.S. If you're using spam blocker software, please add
taxmama.com to your approved list. I don't have time
to keep responding to each request for authentication.
I get hundreds.

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To comment on any articles in this issue, please,
DON'T send me back the whole issue. Send a note to
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ADDRESS CHANGES - Please, do NOT send them to me to do.
There is a link at the bottom of this issue. Please click
on it and you will be able to make updates and changes
yourself. And faster.

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In 2003, Americans OVERPAID their taxes by more than $500 MILLION!

Play a simple, two minute game and learn what tax professionals call "the most overlooked tax deduction in America." ItsDeductible will put $300 to $1200 back in your pocket -- guaranteed -- or your money back.

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Pre-Thanksgiving Comments and Tips
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This is the last weekend before Thanksgiving. So, I know you have a lot to do. Most people take this time to visit their family. It's one of the few 4-day weekends we get each year that don't require vacation time.

If you're not joining your family, you're probably feeling a bit lost or lonely. This is the time of the year that depressions start to set in. Rather than succumb, rather than feeling alone, waiting for someone to invite you over - how about this?

YOU invite someone over. Look around. You're not the only one alone. It just feels like it. I'll bet there are other people at work or in your gym, or other places you go regularly that would love to have someone include them in any festitivies.

Use some of the recipes you can find at ClubMom to help you create a simple dinner. http://www.clubmomlinks.com/b.asp?id=1479&img=banner1.gif

Or just grab a couple of cornish game hens, soak them in your favorite marinade overnight (or for a little while if you find one of those quickie marinades). Fill them with your favorite packaged stuffing or your favorite frozen vegetables. Put them in the oven for about an hour and half... And voila! You have personal mini-turkeys!

Let your guest(s) bring side dishes and/or desert.

And while the mini-turkey is roasting, do me a favor. Take a minute to think about all those people who've meant a lot to you this year. Please send me a note about them - and I'll set up a special page just so you can honor your special folks. mailto:taxmama@taxmama.com?Subject=THANKS_FRIENDS

(uh, please, don't write it about me - sucking up is not necessary - this is about the people in your real life.)

Best wishes,

Eva Rosenberg, MBA, EA

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COUNTDOWN - 10 DAYS TO PRINT DATE = 11/29/2004

SMALL BUSINESS TAXES MADE EASY -
How to Increase Your Deductions,
Reduce What You Owe, and Boost Your Profits
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Amazon has the book for about $11.
You'll be able to get it in time for Christmas and Kwanzaa... but too late for Chanukah.

Great for New Years Resolutions!

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COLLEGE GIRL II
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Last week, David asked about deducting his daughter in college. http://www.taxmama.com/AskTaxMama/283/article4.html

Well, one of our favorite tax pros has some additional tax tips for us.

Dear Eva,

"David" was asking about his daughter in college.

Did he also remember to take the Hope Credit for the
first two years and the lifetime credit in year 3 for
her educational expenses?

Best regards,
Roger B. Adams, EA
http://www.TaxOverseas.com
[coming soon]

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Tax-Free Rewards - Frequent Flier Miles

Visit Tim Winship's FrequentFlier.com to get lots of them
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Mama Comes Home
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From: The Internet

Dear TaxMama,

According to the U.S. Census Bureau, 2000, 5.6 million or 6.2 percent of American children lived in a household maintained by a grandparent. About 15% of grandparents provide some level of child care for their grandchildren, up from 8% in 1998.

About half the grandparents help pay for their grand- children's education, while 45% say they assist with living expenses. The average grandparent spends about $500 a year on their grandchildren, but two out of five spend between $500 and $2,500.

In my case, my son,(aged 22) died in July 2003 of leukemia leaving behind a grief-stricken wife, and two babies: ages 2 yrs and 15 months old.

In addition, my daughter and her husband , due to the state of the economy, unemployment rate of 5.4% or 8 million people and the jobless rate for blacks (10.3%) (2004 Bureau of Labor Statistics of the U.S. Department of Labor)--have been simultaneously experiencing layoffs and unemployment since 2002 and they have a 13 month old child.

Thus, since 2003, I have found myself in the role of caregiver for my children and grandchildren to insure that at least their basic needs are met (food and shelter).

When totalling up the living expenses I have shelled out for just 2004, it totals to $13,000! How can I claim this on my personal income taxes?

thanks in advance,

Dana

Dear Dana,

WOW! Was that a question or research article, or political speech?

What an amazing amount of information!

And with all that, you didn't give me any information that would help me give you guidance.

So, first of all, accept my deepest sympathy for your family's tragedies. Any one of those things is bad enough for one family - but to have all those things happen....well....that's a real test of faith.

You're coming through it with great spirit, though.

Now, let me see if I can give you any guidance at all through this. These are things that ARE important when it comes to giving you guidance:

1) You didn't say if any of these family members were living in your home - just that you were providing funds for food and shelter.

2) You didn't say anything about whether or not they were earning money in 2004 - and if they will be filing their own income tax returns.

Bottom line? If your daughter-in-law worked in 2004, and earned more than the amount of her personal exemption, about $3,100, she'll be filing a tax return. Since her income probably won't be all that high, it may be worthwhile for her to claim at least one of her children, so she can be head of household and get the Earned Income Credit.

Now, if your daughter-in-law and grandchildren were living with you, you might also be able to claim a head of household status, and claim one of the children as dependents.

The only problem is, the government doesn't generally allow two heads of household at the same address.

So, you may want to sit down with a good local tax pro to play with the numbers and see how you split the dependents and the various expenses so each of you get the best advantage.

With dependents, you'll have claims to the Child Tax Credit, Child Care Credit (if there were pre-school costs), medical expenses and/or medical insurance costs.

As to your daughter and her family...I don't get the impression that they lived with you. So, I don't think there is anything you can get from that direction as far as tax relief goes.

But, from a personal point of view, aren't you feeling just great that you are in a position to help them out at this time of their need? You're a wonderful parent, strong and stalwart, when they need you.

No doubt, the love you've lavished on them will be rewarded over the years in the special relationship you'll have with your grandchildren.

Although my grandfather died when I was 8 years old, whenever I need comfort, I send myself back to the times I spent, sitting in his lap, listening to his stories. He and my dad were the best storytellers, ever.

Hugs

Eva Rosenberg, MBA, EA
http://www.TaxMama.com

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Hey! Look at your teeth. Come on - get them cleaned. http://www.qksrv.net/click-241922-8219039

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Kid Stuff
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From: False Pass, Ak

Dear TaxMama,

I'm starting a day care center and was wondering what items I purchase can be deducted?

Thanks,

Beverly

Dear Beverly,

How wonderful. Now you'll always hear the patter of little feet around the house.

Just about anything you buy for the business will be deductible, either as a direct expense, or using depreciation.

Since you'll be buying food and household supplies specifically for the children, when you go to the market, separate the stacks of personal and school purchases. Pay for them with a separate check or credit card.

You'll find more information, some tips of paying taxes and a lead to an excellent book here: http://taxmama.com/AskTaxMama/252/care.html

Good luck with your new business.

Best wishes,

Eva Rosenberg, MBA, EA

http://www.TaxMama.com
http://www.iHelpMate.com

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MONEY FUNNIES
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ELDERLY COUPLE

While on a road trip, an elderly couple stopped at a roadside restaurant for lunch. After finishing their meal, they left the restaurant and resumed their trip.

When leaving, the elderly woman unknowingly left her glasses on the table, and she didn't miss them until after they had been driving about twenty minutes. By then, to add to the aggravation, they had to travel quite a distance before they could find a place to turn around in order to return to the restaurant to retrieve her glasses.

All the way back, the elderly husband became the classic grouchy old man. He fussed and complained and scolded his wife relentlessly during the entire return drive. The more he chided her the more agitated he became. He just wouldn't let up one minute.

To her relief, they finally arrived at the restaurant. And, as the woman got out of the car and hurried inside to retrieve her glasses, the old geezer yelled to her....While you're in there, you might as well get my hat and credit card."

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Courtesy of Blakely Sanford, EA in San Diego

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IRS NEWS
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IRS CRACKS DOWN ON VEHICLE DONATIONS

Starting New Year's Day, when you donate a car to charity, you'll need more than just the Fair Market Value or Blue Book printouts to establish the value of your donation.

Taxpayers have been taking these very large donations, encouraged by the aggressive radio campaigns of some charities. Yet, the charities haven't gotten anywhere close to the value we've deducted.

IRS is closing that gap. From Januaury 1, 2005, if you donate a car to a charity, you won't be able to deduct more than $500 without documentation from the charity itself.

They will have to let you know one of two things:

1) If they sold it - how much money they received at sale or auction. That will be the value of your donation. They must notify you within 30 days.

2) They must inform you, in writing, that they are using the vehicle themselves. As long as the vehicle is being used by the non-profit organization, you will be able to use the Blue Book (www.kbb.com) or Edmunds value (www.edmunds.com).

The best explanation I've seen on the subject comes from Jennifer Openshaw, on CBS.MarketWatch.com http://snipurl.com/ar6t

For more information:

A Donor's Guide to Car Donations

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New Mileage Rates:

2005 2004
Business miles 40.5 37.5
Moving 15.0 14.0
Charity 14.0 14.0
Medical 14.0 14.0

[TaxMama Note: I don't really understand how IRS's independent researchers determined that auto costs have increased for business drivers and folks who are moving, but not for those doing medical or charity driving. Go figure.]

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Oh yes...and IRS has money for you. Did you give them the right address when you filed?

It's their annual, Where's Your Refund campaign

If you haven't gotten your money from them...
follow the instructions here: http://www.irs.gov/newsroom/article/0,,id=131152,00.html

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