Tuesday, May 18, 2010

Best ways to save tax


Don't wait until you file your return to find ways to lower your tax bill. These moves will help you save throughout the year.
If you managed to claim every possible tax break that you deserved when you filed your 2009 return this spring, pat yourself on the back. But don't stop there. Those tax-filing maneuvers are certainly valuable, but you may be able to rack up even bigger savings through thoughtful tax planning all year round. The following ideas could really pay off in the months ahead.

Give yourself a raise.
If you got a big tax refund this year, it meant that you're having too much tax taken out of your paycheck every payday. So far this year, the average refund is nearly $2,900, up about $200 from last year. Filing a new W-4 form with your employer (get one from your payroll office) will insure that you get more of your money when you earn it. If you're just average, you deserve about $225 a month extra.
Boost your retirement savings.
One of the best ways to lower your tax bill is to reduce your taxable income. You can contribute to up to $16,500 to your 401(k) or similar retirement savings plan in 2010 ($22,000 if you are 50 or older by the end of the year). Money contributed to the plan is not included in your taxable income.
Switch to a Roth 401(k).
But if you are concerned about skyrocketing taxes in the future, or if you just want to diversify your taxable income in retirement, considering shifting some or all of your retirement plan contributions to a Roth 401(k) if your employer offers one. Unlike the regular 401(k), you don't get a tax break when your money goes into a Roth. On the other hand, money coming out of a Roth 401(k) in retirement will be tax-free, while cash coming out of a regular 401(k) will be taxed in your top bracket.

Fund an IRA.
But if you are concerned about skyrocketing taxes in the future, or if you just want to diversify your taxable income in retirement, considering shifting some or all of your retirement plan contributions to a Roth 401(k) if your employer offers one. Unlike the regular 401(k), you don't get a tax break when your money goes into a Roth. On the other hand, money coming out of a Roth 401(k) in retirement will be tax-free, while cash coming out of a regular 401(k) will be taxed in your top bracket.
If you don't have a retirement plan at work, or you want to augment your savings, you can stash money in an IRA. You can contribute up to $5,000 in 2010 ($6,000 if you are 50 or older by the end of the year). Depending on your income and whether you participate in a retirement savings plan at work, you may be able to deduct some or all of your IRA contribution. Or, you can choose to forgo the upfront tax break and contribute to a Roth IRA that will allow you to take tax-free withdrawals in retirement.
Go for a health tax break.
Be aggressive if your employer offers a medical reimbursement account -- sometimes called a flex plan. These plans let you divert part of your salary to an account which you can then tap to pay medical bills. The advantage? You avoid both income and Social Security tax on the money, and that can save you 20% to 35% or more compared with spending after-tax money.
Pay child-care bills with pre-tax dollars.
After taxes, it can easily take $7,500 or more of salary to pay $5,000 worth of child care expenses. But, if you use a child-care reimbursement account at work to pay those bills, you get to use pre-tax dollars. That can save you one-third or more of the cost, since you avoid both income and Social Security taxes. If your boss offers such a plan, take advantage of it.
Ask your boss to pay for you to improve yourself.
Companies can offer employees up to $5,250 of educational assistance tax-free each year. That means the boss pays the bills but the amount doesn't show up as part of your salary on your W-2. The courses don't even have to be job-related, and even graduate-level courses qualify.


Pay back a 401(k) loan before leaving the job.
Failing to do so means the loan amount will be considered a distribution that will be taxed in your top bracket and, if you're younger than 55 in the year you leave your job, hit with a 10% penalty, too.
Tally job-hunting expenses.
If you count yourself among the millions of Americans who are unemployed, make sure you keep track of your job-hunting costs. As long as you're looking for a new position in the same line of work (your first job doesn't qualify), you can deduct job-hunting costs including travel expenses such as the cost of food, lodging and transportation, if your search takes you away from home overnight. Such costs are miscellaneous expenses, deductible to the extent all such costs exceed 2% of your adjusted gross income.
Keep track of the cost of moving to a new job.
If the new job is at least 50 miles farther from your old home than your old job was, you can deduct the cost of the move ... even if you don't itemize expenses. If it's your first job, the mileage test is met if the new job is at least 50 miles away from your old home. You can deduct the cost of moving yourself and your belongings. If you drive your own car, you can deduct 16.5 cents per mile for a 2010 move, plus parking and tolls.
Save energy, save taxes.
This is the last year to cash in on a tax credit for home improvements designed to save energy. One tax credit is worth 30% of the cost of new insulation, doors, windows, high-efficiency furnaces, water heaters and central air conditioners up to a maximum credit of $1,500. The credit applies to both 2009 and 2010, so if you took full advantage of it last year, you don't get another crack at it. But if you didn't make any eligible home improvements in 2009, get busy before this opportunity slips away. Don't think you need to do anything?
Think green.
A separate tax credit is available for homeowners who install alternative energy equipment. It equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, and wind turbines, including labor costs. There is no cap on this tax credit.
Put away your checkbook.
If you plan to make a significant gift to charity in 2010, consider giving appreciated stocks or mutual fund shares that you've owned for more than one year instead of cash. Doing so supercharges the saving power of your generosity. Your charitable contribution deduction is the fair market value of the securities on the date of the gift, not the amount you paid for the asset, and you never have to pay tax on the profit. However, don't donate stocks or fund shares that lost money. You'd be better off selling the asset, claiming the loss on your taxes, and donating cash to the charity.
Tote up out-of-pocket costs of doing good.
Keep track of what you spend while doing charitable work, from what you spend on stamps for a fundraiser, to the cost of ingredients for casseroles you make for the homeless, to the number of miles you drive your car for charity (at 14 cents a mile). Add such costs with your cash contributions when figuring your charitable contribution deduction.
Time your wedding.
If you're planning a wedding near year-end, put the romance aside for a moment to consider the tax consequences. The tax law still includes a "marriage penalty" that forces some pairs to pay more combined tax as a married couple than as singles. For others, tying the knot saves on taxes. Consider whether Uncle Sam would prefer a December or January ceremony. And, whether you have one job between you or two or more, revise withholding at work to reflect the tax bill you'll owe as a couple.
Beware of Uncle Sam's interest in your divorce.
Watch the tax basis -- that is, the value from which gains or losses will be determined when property is sold -- when working toward an equitable property settlement. One $100,000 asset might be worth a lot more -- or a lot less -- than another, after the IRS gets its share. Remember: Alimony is deductible by the payer and taxable income to the recipient; a property settlement is neither deductible nor taxable.

Don't wait until you file your return to find ways to lower your tax bill. These moves will help you save throughout the year.
The stork brings tax savings, too.
A child born, or adopted, during the year is a blessed event for your tax return. An added dependency exemption will knock $3,650 off your taxable income, and you'll probably qualify for the $1,000 child credit, too. You don't have to wait until you file your 2010 return to reap the benefit. Add at least one extra withholding allowance to the W-4 form filed with your employer to cut tax withholding from your paycheck. That will immediately increase your take-home pay.
Tally adoption expenses.
Thousands of dollars of expenses incurred in connection with adopting a child can be recouped via a tax credit, so it pays to keep careful records. In 2010, the credit can be as high as $12,170. If you adopt a special needs child, you get the maximum credit even if you spend less.


Save for college the tax-smart way.
Stashing money in a custodial account can save on taxes. But it can also get you tied up with the expensive "kiddie tax" rules and gives full control of the cash to your child when he or she turns 18 or 21. Using a state-sponsored 529 college savings plan can make earnings completely tax free and lets you keep control over the money. If one child decides not to go to college, you can switch the account to another child or take it back.
Be aware of new rules for Coverdells.
A former boon to parents and grandparents who wanted to use tax-free dollars to pay private-school tuition and other education-related costs for elementary and high-school students is about to get a lot less generous. You can contribute up to $2,000 to a Coverdell Education Savings Account for any beneficiary in 2010, but starting next year, that maximum contribution will be slashed to $500. You don't get a deduction, but money you stash in a Coverdell grows tax-deferred and can be withdrawn tax-free to pay education bills. Beyond tuition and fees, you can use Coverdell money to pay for tutoring, books and supplies, uniforms and transportation. You can buy a computer for the whole family to use and pay for Internet access, too. But you better hurry. Starting in 2011 any earnings you withdraw from a Coverdell that are not used for college expenses will be taxable as ordinary income and subject to a 10% penalty. Consider rolling over the Coverdell money into a 529 savings plan next year. It’s a penalty-free move, as long as the accounts have the same beneficiary.
Use a Roth IRA to save for college.
Sure, the "R" in IRA stands for retirement, but because you can withdraw contributions at any time tax- and penalty-free, the account can serve as a terrific tax-deferred college-savings plan. Say you and your spouse each stash $5,000 in a Roth starting the year a child is born. After 18 years, the dual Roths would hold about $375,000, assuming 8% annual growth. Up to $180,000 -- the total of the contributions -- can be withdrawn tax- and penalty-free and any part of the interest can be withdrawn penalty-free, too, to pay college bills.
Fund a Roth IRA for your child or grandchild.
As soon as a child has income from a job -- such as babysitting, a paper route, working retail -- he or she can have an IRA. The child's own money doesn't have to be used to fund the account (fat chance that it would). Instead, a generous parent or grandparent can provide the funds, or perhaps match the child's contributions dollar for dollar. Long-term, tax-free growth can be remarkable.
Use a Roth IRA to save for your first home.
A Roth IRA can be a powerful tool when you're saving for your first home. All contributions can come out of a Roth at any time, tax- and penalty-free. And, after the account has been opened for five years, up to $10,000 of earnings can be withdrawn tax- and penalty-free for the purchase of your first home. Say $5,000 goes into a Roth each year for five years for a total contribution of $25,000. Assuming the account earns an average of 8% a year, at the end of five years, the Roth would hold about $31,680 -- all of which could be withdrawn tax- and penalty-free for a down payment.
Convert to a Roth IRA.
Switching a traditional IRA to a Roth requires paying tax on the converted amount, but that can be a fabulous tax-saving investment because all future earnings inside the Roth can be tax free in retirement. (Withdrawals from traditional IRAs are taxed in your top tax bracket.) If you convert to a Roth in 2010, you have up to three years to pay the tax bill. Rather than reporting the income (and paying tax on the conversion) with your 2010 return, you can report half of the conversion on your 2011 return (due in 2012) and the remainder on your 2012 return (due in 2013).
Undo a Roth conversion gone bad.
When you convert a traditional IRA to a Roth, you must pay tax on the amount you convert. But what if the investments in the new Roth IRA fall in value? You get a chance for a do-over. You have until October 15 of the year following the conversion to "unconvert" and avoid paying tax on the money that evaporated. You can then redo the conversion the following year.
Protect your heirs.
Be sure beneficiary designations for your IRAs and 401(k)s are up to date. If your IRA goes to your estate rather an a designated beneficiary, unfavorable withdrawal rules could cost your heirs dearly.
Roll over an inherited 401(k).
A recent change in the rules allows a beneficiary of a 401(k) plan to roll over the account into an IRA and stretch payouts (and the tax bill on them) over his or her lifetime. This can be a tremendous advantage over the old rules that generally required such accounts be cashed out, and all taxes paid, within five years. To qualify for this break, you must name a person or persons (not your estate) as your beneficiary. If your 401(k) goes through your estate, the old five-year rule applies.
Help your adult children earn a credit for retirement savings.
The Retirement Savers Credit can be as much as $1,000, based on up to 50% of the first $2,000 contributed to an IRA or company retirement plan. It's available only to low-income taxpayers, though, who are often the least able to afford such contributions. Parents can help, however, by giving an adult child (who cannot be claimed as a dependent and who is not a full-time student) the money to fund the retirement account contribution. The child not only saves on taxes, but also saves for his or her retirement.
The bank of mom and dad.
If your adult children ask for a loan to help them buy a house or start a business, beware that Uncle Sam has something to say about the deal. If the kids want to borrow more than $10,000, you may be required to charge a minimum amount of interest. And if you don't? You have to report the "phantom" interest as income anyway.
Deduct interest paid by mom and dad.
Until recently, parents had a good reason not to help their kids pay off student loans. If the parents were not liable for the debt, then no one got to deduct the interest. Now, however, when parents pay it's treated as if they gave the money to the real debtor who then paid off the loan. The child gets the tax deduction, as long as the parents can't claim him or her as a dependent, even if he or she doesn't itemize.
Make the most of the tax-free home sale profit.
Up to $250,000 of home-sale profit is tax free ($500,000 if you are married and file a joint return) if you own and live in the house for two of the five years leading up to the sale. If you are bumping up on the limits, consider selling and buying a new home to start the tax-free clock ticking again. There is no limit on the number of times you can claim tax-free profit on the sale of a home.

Don't underestimate the cost of home-equity debt.
Generally, interest on up to $100,000 of debt secured by your home can be deducted, no matter what you use the money for. But if you are among the growing number of taxpayers subjected to the alternative minimum tax (AMT), home-equity debt is only deductible if the loan was used to buy or improve your home.
Second homes can offer a vacation from taxes.
If you're trying to figure whether you can afford a second home, remember that you'll get some help from the IRS. Mortgage interest on a loan to buy a second home is deductible just as it is for the mortgage on your principal residence. Interest on up to $1.1 million of first- and second-home debt can be deducted. Property taxes can be written off, too. Things get more complicated -- and perhaps more lucrative-if you rent out the place part of the year to help cover the bills.
Watch the calendar at your vacation home.
If you hope to deduct losses attributable to renting the place during the year, be careful not to use the house too much yourself. As far as the IRS is concerned, "too much" is when personal use exceeds more than 14 days or more than 10% of the number of days the home is rented. Time you spend doing maintenance or repairs does not count as personal use, but time you let friends or relatives use the place for little or no rent does.
Stay actively involved in rental real estate.
Generally, anti-tax-shelter legislation prevents losses from real estate investments from being deducted against other kinds of income. But, if you are actively involved in a rental activity, you can deduct up to $25,000 of such losses ... if your adjusted gross income is less than $100,000. You don't have to mow grass and unclog toilets to qualify as actively involved; but you should make sure you're involved in setting rents and approving tenants and management firms.
Use a tax-free exchange to acquire new property.
By trading one rental property for another, for example, you avoid the capital gains taxes you'd incur if you sold the first property ... leaving you with more to invest in the second.
Use an installment sale of real estate to defer a tax bill.
If the buyer pays you in installments, the IRS will let you pay the tax bill on your profit in installments, too. You must charge interest on the deal, and each payment you receive will have three parts: interest (taxable at your top rate), capital gain (taxed at a maximum of 15% in 2010) and return of your investment (tax-free).
Convert a vacation home to your principal residence.
Until 2009, there was a sweet tax break for folks who sold their homes, claimed tax-free profit and then moved into a vacation property. After they lived in that home for two years, they could sell and claim tax-free profit again ... including appreciation from the days the place was a vacation home. There can still be some real tax benefits to this strategy, but the value will fall over the years. Starting in 2009, a portion of any profit on the sale of a vacation-home-turned-principal-residence will not qualify as tax-free home-sale profit. The taxable portion will be based on the ratio of the time after 2008 the property was used as a vacation home to the total period of ownership. So if you have owned a vacation home for 18 years and make it your main residence in 2011 for two years before selling it, only 10% of the gain would be taxed. The rest qualifies for the exclusion of up to $500,000. Homes owned for a short time prior to a post-2008 conversion fare the worst tax wise.

Don't wait until you file your return to find ways to lower your tax bill. These moves will help you save throughout the year.
Take advantage of tax-free rental income.
You may not think of yourself as a landlord, but if you live in an area that hosts an event that draws a crowd (a Super Bowl, say, or the presidential inauguration), renting out your home temporarily could make you a bundle -- tax-free -- while getting you out of town when tourists overrun the place. A special provision in the law lets you rent a home for up to 14 days a year without having to report a dime of the money you receive as income.
Home buyer's Bible.
Be a packrat with paperwork. Some costs associated with buying a new home affect your "tax basis," the amount from which you'll figure your profit when you sell; others can be deducted in the year of the purchase, including any points you pay (or the seller pays for you) to get a mortgage and any property taxes paid by the seller in advance for time you actually own the home.
Home seller's Bible.
Costs associated with selling -- from the real estate commission to points paid for a seller to property taxes paid in advance for time the buyer actually owns the home -- all reduce your profit on the deal. Sure, most home-sale profit is tax-free these days, but keep track of big basis-boosting improvements in case you get close to the limit.
Pinpoint the "stepped-up" basis of property you inherit.
In most cases, the tax basis of inherited property -- that's the value from which you will figure gain or loss when you sell -- is "stepped up" to the value on the day the previous owner dies. Tax on all appreciation during his or her lifetime is forgiven. Although the estate tax and stepped-up rules on inherited property expired at the end of 2009, Kiplinger’s believes Congress will reinstate the $3.5 million estate tax exclusion and step-up rules retroactive to January 1, 2010. If you inherit assets in 2010, be sure you pinpoint your basis so you don't overpay your tax later. Taxpayers who know about this break save billions of dollars each year.
Don't buy a tax bill.
Before you invest in a mutual fund near the end of the year, check to see when the fund will distribute dividends. On that day, the value of shares will fall by the amount paid out. Buy just before the payout and the dividend will effectively rebate part of your purchase price, but you'll owe tax on the amount. Buy after the payout and you'll get a lower price, and no tax bill.
Check the calendar before you sell.
You must own an investment for more than one year for profit to qualify as a long-term gain and enjoy preferential tax rates. The "holding period" starts on the day after you buy a stock, mutual fund or other asset and ends on the day you sell it.
Keep a running tally of your basis.
For assets you buy, your "tax basis" is basically how much you have invested. It's the amount from which gain or loss is figured when you sell. If you use dividends to purchase additional shares, each purchase adds to your basis. If a stock splits or you receive a return-of-capital distribution, your basis changes. Only by carefully tracking your basis can you protect yourself from overpaying taxes on your profits when you sell.
Mine your portfolio for tax savings.
Investors have significant control over their tax liability. As you near the end of the year, tote up gains and losses on sales to date and review your portfolio for paper gains and losses. If you have a net loss so far, you have an opportunity to take some profit tax free. Alternatively, a net profit on previous sales can be offset by realizing losses on sales before the end of the year. (This strategy applies only to assets held in taxable accounts, not tax-deferred retirement accounts such as IRAs or 401(k) plans).
Tell your broker which shares to sell.
Doing so gives you more control over the tax consequences when you sell stock. If you fail to specifically identify the shares to be sold, the tax law's FIFO (first-in-first-out) rule comes into play and the shares you've owned the longest (and perhaps the ones with the biggest gain) are considered to be sold. With mutual funds, an "average basis" can be used when determining gain or loss; but that alternative isn't available for stocks.
Avoid the wash sale rule.
If you sell a stock, bond or mutual fund for a loss and then buy back the identical security within 30 days, you can't claim the loss on your tax return. The IRS considers the transaction a wash, since your economic situation really hasn't changed. It's easy to avoid being stung by the "wash sale" rule, though. Watch the calendar or, buy similar but not identical securities.
Ask your broker for a favor.
The law allows investors to deduct a loss on a worthless security, but only if you can prove the stock is absolutely worthless. If you own stock you're sure isn't coming back, ask your broker to buy it from you for a nominal amount. You can then report the sale and claim your loss.
Think twice about selling stock for a profit if you're subject to the AMT.
Although long-term capital gains benefit from the same 15% maximum rate under both the regular tax rules and the alternative minimum tax, a capital gain can effectively cost more than 15% in AMT-land. The special AMT exemption is phased out as income rises so, for example, a $1,000 capital gain can wipe out $250 of the exemption, effectively exposing $1,250 to tax. That means your tax bill rises by more than $150 for that $1,000 gain.
Pay tax sooner rather than later on restricted stock.
If you receive restricted stock as a fringe benefit, considering making what's called an 83(b) election. That lets you pay tax immediately on the value of the stock rather than waiting until the restrictions disappear when the stock "vests." Why pay tax sooner rather than later? Because you pay tax on the value at the time you get the stock, which could be far less than the value at the time it vests. Tax on any appreciation that occurs in between then qualifies for favorable capital gains treatment. Don't dally: You only have 30 days after receiving the stock to make the election.
Minimize the bite of the "kiddie tax."
The rule that taxes a child's income at the parents' rate now covers children up to age 19, or up to age 24 if the child is a full-time student. You can minimize the damage by steering a child's investments into tax-free municipal bonds or growth stocks that won't be sold until the child turns 19, or 24 for full-time students.
Consider tax-free bonds.
It's easy to figure whether you'll come out ahead with taxable or tax-free bonds. Simply divide the tax-free yield by 1 minus your federal tax bracket to find the "taxable-equivalent yield." If you're in the 33% bracket, your divisor would be 0.67 (1 - 0.33). So, a tax-free bond paying 5% would be worth as much to you as a taxable bond paying 7.46% (5 ÷ 0.67). A bond swap may pay off. It's a fact of life: As market interest rates rise, bond values fall. If you have bond that have lost value, consider a bond swap. You sell your losers, cash in the tax loss and invest the proceeds in higher-yielding bonds to maintain your income stream.
Use Treasury bills to defer taxes.
Interest on three- and six-month Treasury bills is taxed in the year it is paid. So, buying a T-bill that matures in 2011 means you don't have to report the income until you file your 2011 return in 2012. Remember, Treasury interest is completely exempt from state or local taxes, too.
Death and taxes.
Someone who is terminally ill may want to sell investments that show a paper loss. Otherwise, the "tax basis" of the property -- the value from which the heir will figure gain or loss when he or she sells -- will be "stepped-down" to date-of-death value, preventing anyone from claiming the loss. If you want to keep property, such as a vacation home, in the family, consider selling to a family member. You get no loss deduction, but it could save the buyer taxes later on.
Time claiming Social Security benefits.
If you stop working, you can claim benefits as early as age 62. But note that each year you delay -- until age 70 -- promises higher benefits for the rest of your life. And, delaying benefits means postponing the time you'll owe tax on them.
Dodge a 50% tax penalty.
Taxpayers older than 70½ are required to take minimum withdrawals from their IRAs each year. Failing to do so, subjects them to one of the toughest penalties in the tax law: the IRS claims 50% of the amount that should have come out of the account. Your IRA sponsor can help pinpoint the amount of the required payout. is available More on the ins and outs of the minimum withdrawals.
Keep careful records of the cost of medically necessary improvements.
To the extent that such costs -- for adding a wheelchair ramp, for example, lowering counters or widening a doorway or installing hand controls for a car -- exceed any added value to your home or vehicle, that amount can be included in your deductible medical expenses.
Include travel expenses in medical deductions.
In addition to the cost of getting to and from the doctor, you can deduct up to $50 a night for lodging if seeking medical care requires you to be away from home overnight. The $50 is per person, so if you travel with a sick child to get medical care, you can deduct $100 a day. As with other medical expenses, you get a tax benefit only to the extent your expenses exceed 7.5% of adjusted gross income.
Crank in the value of deducting long-term-care premiums.
As you shop for long-term care insurance, remember that a portion of the cost is deductible. The older you are, the more you can write off. For employees, this is a medical expense which means it only saves money if your medical expenses exceed 7.5% of your adjusted gross income. If you're self-employed, you avoid the 7.5% haircut and get this deduction even if you don't itemize.
Double your family's estate tax break.
If yours is among the minority of families that has to worry about the federal estate tax, realize that planning ahead can save your heirs a fortune. A simple plan employing what's called a "by-pass trust", for example, can double from $3.5 million to $7 million the amount you can pass tax-free to the next generation. Although the estate tax and stepped-up rules on inherited property expired at the end of 2009, Kiplinger’s believes Congress will reinstate the $3.5 million estate tax exclusion and step-up rules retroactive to January 1, 2010
Give it away.
Money you give away during your lifetime won't be in your estate to be taxed at your death. That's one reason there's also a federal gift tax. The law allows you to give up to $13,000 to any number of people in 2010 without worrying about the gift tax. If your spouse agrees not to give anything to the same person, you can give $26,000 a year to each individual. If you have four married kids, for example, and you give $26,000 to all eight children and in-laws, you can shift $208,000 out of your estate gift-tax free each year.
Choose the right kind of business.
Beyond choosing what business to go into, you also have to decide on the best form for your business: a sole proprietorship, a subchapter S corporation, a C-corp or a limited-liability company (LLC). Your choice will have a major impact on your taxes. Hire your children. If you have an unincorporated business, hiring your children can have real tax advantages. You can deduct what you pay them, thus shifting income from your tax bracket to theirs. Since wages are earned income, the "kiddie tax" does not apply. And, if the child is under age 18, he or she does not have to pay Social Security tax on the earnings. One more advantage: the earnings can serve as a basis for an IRA contribution.
Watch start-up costs.
Generally, the costs of starting up a new business must be amortized, that is, deducted over years in the future. But you can deduct up to $5,000 of start-up costs in the year you incur them, when the tax savings could prove particularly helpful.
Avoid the hobby-loss rules. There's a heads-the-IRS-wins-tails-you-lose rule if the IRS determines your activity is a hobby rather than a for-profit business. You still have to report any earnings as income, but there are restrictions on deducting expenses and you can't deduct a loss. To avoid this problem, run your activity in a business-like manner, including having a separate bank account and having business cards printed.
Time receipt of self-employment income. Those who run their own businesses have a lot of flexibility at year-end. To push the receipt of income into the following year , delay mailing bills to clients until late in December that payment is received after December 31. Or, pay business expenses before January 1 to lock in deductions.
Don't be afraid of home-office rules. If you use part of your home regularly and exclusively for your business, you can qualify to deduct as home-office expenses some costs that are otherwise considered personal expenses, including part of your utility bills, insurance premiums and home maintenance costs. Some home-business operators steer away from these breaks for fear of an audit. But if you deserve them, claim them.
Cut compensation, boost dividends.
Principals in closely held businesses may want to shift part of their compensation from salary (which is taxed in their top bracket) to dividends (which is taxed at a maximum 15% rate). This can pay off if the corporation is in a low tax bracket, so the loss of the deduction for dividends paid is more than offset by the owner's savings.
Stash cash in a self-employed retirement account.
If you have your own business, you have several choices of tax-favored retirement accounts, including Simplified Employee Pensions (SEPs) and individual 401(k)s. Contributions cut your tax bill now while earnings grow tax-deferred for your retirement.
Pay estimated taxes ... or not.
If you receive significant income not subject to withholding -- from self-employment or investments, for example -- you probably need to make quarterly estimated tax payments to avoid an IRS penalty. But, if withholding will equal 100% of your 2009 income tax bill (or 110% if your income was over $150,000), you don't need to make estimated payments ... no matter how much extra income you make in 2010.
Take Uncle Sam shopping for your new business vehicle.
It may not be the greenest of strategies, but if you need a new vehicle for your business, realize that Congress offers special tax incentives if you buy a heavy sports-utility vehicle or a pick-up. While the first-year write-off for most business cars is limited to around $12,000, you can "expense" much more if you buy a heavy SUV or pick-up truck for your business.
Buy a hybrid, take Uncle Sam for a ride.
You can drive away with a tax credit if you buy a gasoline/electric hybrid or qualifying clean diesel vehicle in 2010. The size of the credit depends on how fuel-stingy your new car is, but the tax savings can range from several hundred to over $3,000.

Tnx 2 Yahoo&Kiplinger

Copyrighted, Kiplinger Washington Editors

Friday, May 14, 2010

IPL 20-20 night party Pic





English a strict no no in BPOs!

Hinglish may have unofficially become the language of urban India but it is a strict no no in BPOs as Indian English expressions often tend to create problems for international customers and confuse them, an award-winning book says.

"British customers don't understand some of the expressions in Indian English. This can cause confusion and sometimes amusement. You need to be aware of what Indian English expressions are in your speech. Then you need to adapt to the customer's style," write Barry Tomalin and Suhashini Thomas in "International English for Call Centres".
"In talking to British customers you need to avoid the Indianisms wherever possible and substitute standard British English expressions. If you can improve your use of grammar, it will improve your image vis-a-vis the British customer. However, it won't normally affect comprehension," says the book which won the Highly Commended by the Duke of Edinburgh English Speaking Union Award in 2009.
The authors, who have practical experience of working in call centres and training call centre personnel, believe that Indian BPO representatives lead in keenness and commitment to the job but still need support in matching their communication skills with UK customer requirements.
"When you use Hinglish with people on the phone or face to face, they don't realise you are using Hinglish and neither do you. They just think you are speaking funny or in an uneducated and ignorant fashion," the book, published by Macmillan, says.
"Indian English isn't always understood on the international stage. The reason is that Indian English is affected by interference from Indian mother tongues. Although Indian English is a variety of English, just like US or British English, it isn't yet recognised internationally.
Since the customer (in BPOs) is king you have to adapt to the international variety used by the customers, not the other way round."

According to the authors, the key differences are in vocabulary, grammar and pronunciation.
Another drawback call centre executives have is irritating intonation couple with terrifying speed which can be overcome by getting rhythm, pitch and intonation right.
"Rhythm describes the way words are grouped together to create a unit. It's made up of stressed and unstressed syllables or words grouped together to create a sense of harmony between them and in the sentence. We absorb these rhythms as soon we learn to talk and unconsciously we are listening out for them. When we hear them we feel reassured. When we don't, we feel uncomfortable."
A simple technique called 'Leave a beat when you speak' can help one speak more slowly, the book says. "When you are delivering a call centre script, divide the text into 'rhythm groups.' Then leave a short pause at the end of each rhythm group. Just a beat or two to allow the listener to catch up."

Pitch is also another important factor. "English in the Indian subcontinent is sometimes spoken at a very high pitch. This can be very irritating for international English customers, who are used to a more modulated tone of voice," the book says.

Tnx 2 Yahoo....

Wednesday, May 12, 2010

TEN STEPS TO A PERFECT KISS {husband and wife}



Ten kissing commandments

 "Our date was extremely romantic, until I offered to seal the night with a kiss, which unexpectedly turned out to be quite awkward. While, I was gravely ashamed, she never came back," shares 23-year-old, Rishi Gulati (name changed on request), a sad victim of a kissing-faux-pas.

Well, the misfortune of a bad kiss can fall upon any of us. Consider yourself lucky if your kiss left your partner craving for more. And keep your fingers tightly crossed for no one plans a kissing blunder, it simply happens! And mind it, you are hardly left with anything to mend the embarrassment caused by a 'dud kiss.' If a perfect kiss can register success in your relationship, a kissing bummer is good enough to bring your love journey to a dead end even before it starts.

Follow our '10 commandments of perfect kissing' and you'll never be tagged as a 'poor kisser'...

1. Thou shall not be a stinking fish 

 Nothing can kill a kiss like foul breadth. So, the first commandment keeps you off kissing, if your mouth is stinking due to hygiene issues, food, tobacco or excessive smoking. If you don't want your partner to remember the kiss for all the wrong reasons, try to look out for solutions. Dr. Kamal Bisht, a general physician suggests, "Begin by brushing your teeth before you go out on a date, irrespective of the time. Cleaning your tongue is also important as it removes bacteria. Avoid kissing if you have just had smelly food products like garlic, onions etc. Keep a breath spray handy and use it periodically throughout the day." Last but not the least, if you are a smoker, the pleasure of smooching your partner can be your motivation to kick the butt! 

  2. Thou shall open your mouth with care 

 "My girlfriend has this habit of opening her mouth very little while kissing, which does not allow me to enjoy a passionate kiss to the fullest," avers Rajdeep Bhawmik, a Delhi-based architect.

While, there's no accurate rule for opening the mouth, it's generally seen that a deep kiss using tongue is a huge turn on. Equally terrifying are gulpers who open their mouth wide open while kissing, ready to swallow their partner. The trick is to keep one's lips lose enough to let the lips of both the partners glide smoothly over each other making it a yummy kiss. Also, “start with a lip-to-lip kiss and gradually taste the depths of pleasure," suggests sex expert, Dr. Rajan. 

3. Thou shall not be a dead dud 

 "For both men and women, responsiveness is the chief factor that makes for a better kisser," says author William Cane in his book, The Art of Kissing Book of Question and Answers . So, rather than pouncing upon your partner's mouth, try and figure out the styles and movements that your partner enjoys. Try to figure out his/her likes and dislikes and adapt your technique accordingly.

Going with the other partner's rhythm is crucial. Don't expect your beau to do all the work while you enjoy his kissing moves. "My girlfriend is a hesitant kisser. She doesn't even move her head; forget about getting playful with her tongue and lips. It's just like I'm trying to find pleasure with a stiff stick," reveals Chandan Gupta, a 20-year-old college student. 

  4. Thou shall be a learner 

 No body is a born kisser. So, if you are an amateur kisser, who is apprehensive about locking lips, just follow your partner and the rest will fall into place, the way it happened with Jayati and Mayank. "During the initial days of our courtship, my girlfriend Jayanti was quite clueless about kissing, which was a big turn-off for me. But soon she realised her awkwardness and made a smart move. She simply started copying my style and now she can beat me in a passionate kiss," tells Mayank Taneja, a Mumbai-based PR professional.
Remember kissing is all about adapting and learning.

5. Thou shall use your hands appropriately 

 Agreed, that using hands results in elevating levels of passion. But do not pull his hair or grab her waist as if she'll run if you leave. Kissing is about imparting pleasure rather than inflicting pain. “Keep your hand movements limited to sensual and soft strokes on your lover's arms, back, neck, waist and hair or simply cup the face,” suggests Cane. Don’t get too aggressive in the name of showing wild passion. "My first boyfriend almost gave me bruises every time we kissed. Pinching and grabbing me gave him a sense of high, but I failed to match up with his wild passion and we broke up after a few dates and kisses," relates Madhurima Goel, a 19-year-old college student.

6. Thou shall not let your tongue go loose 

 You don't have to gag your partner by shoving off your tongue deep down into his/her mouth. Take it easy. The kissing rule for tongue says –less is more! Let the tip of your tongue perform the magic with subtle and gentle strokes. You can use your tongue for exploring, but that doesn't allow you to reach between your partner's teeth –as it can be a big turnoff. "Remember, slower the tongue movements, hotter is the passion," says Dr. Shivi Jaggi.  

 
7. Thou shall not give me a saliva bath


Wet kisses undoubtedly work when it comes to getting into some raunchy action, but that doesn't give you the liberty to go lap,lap,lap all over your partner's face. "My girl is a passionate kisser. But, the only problem with her is that her kisses are really wet. She licks my chin, cheeks, forehead etc, which becomes quite messy for me," complains Jatin Sharma, a 24-year-old, management student. So, slobbery is not welcomed while kissing.


8. Thou shall not have sex on your mind


It is not necessary for a kiss to end in some hot action between the sheets. Your kiss shouldn't give away the hint that you are getting desperate to hit the bed. "Kissing brings people close physically and emotionally. And this closeness satisfies a deep emotional need for connecting with your partner," explains Cane.
So, while you are kissing, be sensitive to your partner's need. He/she may or may not be ready for sex immediately. Don't use a kiss as a means to reach a sexual climax. Let your kiss be romantic rather than plain sexual.
"I can still remember my first kiss, though for unpleasant things. The way the guy was busy groping me, gave clear clues that he wanted to have sex with me on our first date itself and I wasn't ready. And soon after that date, within no time I made up my mind to never meet him again."


Another way to keep your first kiss plain romantic, rather than hard core sexual can be to keep your hand-work limited to the non-erotic zones like the neck, arms, back waist etc., rather than reaching out to the erotic zones. Though, imagination and experimentation can be your yardstick if both of you are ready and enjoying.



9. Though shall not stare while kissing


You might be curious; you might feel like watching your partner taking pleasure in the act, but continuously staring at him/her while kissing is a big no no! Whenever a person is enjoying something to the hilt, their eyes automatically shut. Closing the eyes is an autonomous stimulus to pleasure. So, kissing is no exception to this rule and people tend to close their eyes. “Also, the sight of your partner almost eating you might not look very beautiful if you watch it continuously, though there's nothing wrong in getting a peep every now and then," suggests Dr. Rajan.


10. Thou shall be confident of your kiss


Be it a plain pucker or a passionate lip lock, not just the initiator, but even the recipient ought to be confident. Remember, to go with the flow and you'll do fine. When passion reaches its zenith, no guide-book or tips remain in one's mind. So, just be yourself and let the warmth of your lips take over. "Be it approaching your lover for a kiss or accepting his proposal, both should be utmost confident. Jitters may spoil the mood, irrespective of who is getting them," explains Dr. Jaggi.


 
Tnx 2 Times of India

Saturday, May 8, 2010

How to Get Blood in Emergency!!!!!



 I believe this is really use to all of us.....

How to Get Blood in Emergency!!!



Above table indicates suitability of BLOOD آ– donor v/s recipient.

Now it has become easier to get the blood we need.

All you have to do is just type "BLOOD and send SMS to 96000 97000" (in India )

EX: "BLOOD B+"

A BLOOD DONOR WILL CALL YOU within minutes!!
pass this message to all. It certainly would save many lives.

It's a Must to Know & Share. Please do it now....



Why Donate Blood?

Blood is the part of life that is given to those who need it by
those who have the resource to satisfy the need. The love of fellow human and a desire to share something of oneself is what singles out a blood donor from the others. Emergencies occur every minute. For each patient requiring  blood, it is an emergency and the patients could have set back if blood is not available.


Your blood donation may be even more special than you realize
A single donation from you can help one or more patients. This is possible because whole blood is made up of several useful components. These components perform special functions in your body and in the body of patients who receive your blood. The various blood components are Red Blood Cells, White Blood Cells, Platelets, Plasma and selected Plasma Proteins. Each of these components can be separated from your donated volume of blood and transfused into a specific patient requiring that particular component. Thus, many can benefit from one unit of blood.
Blood is needed every minute
  • To replace blood lost because of accidents or diseases.
  • To treat shock due to injury.
  • For Major & Minor surgeries including open heart surgeries, transplants etc.
  • For burn victims.
  • For patients suffering from Anemia.
  • During child birth for the mother.
  • For exchange transfusion for new born infants.
  • To make blood derivatives which are used to treat medical problems.
  • For children suffering from ailments like Thalassaemia, Hemophilia (bleeding disorders) , Leukemia, Blood Cancer.