Full Description

Following even a few of the tax-saving strategies found in Tax Power for Individuals can have a dramatic reduction in your tax obligation and substantially increase the size of your refund.

Accessible by anyone, it provides the reader with the latest IRS rules and answers everyday tax-related questions. It explores the IRS’s definition of income and how to lower yours through expense deductions, tax credits and depreciation. Its extensive glossary of financial and tax terms makes it an easy-to-understand and essential reference for every home’s bookshelf.

Table of Contents

Introduction

Chapter 1: Income
- Assigning Income
- Ordinary Income
- Income Excluded from Taxation

Chapter 2: Self-Employment Income
- Distinguishing Between Employees and Self-Employed Independent Contractors
- Distinguishing Between Independent Contractors and Employees
- Distinguishing Dealers from Investors

Chapter 3: Hobby Income and Losses
- Deductions Available for Activities Not Engaged in For a Profit
- Activities that are Presumed to be Engaged in For a Profit
- Offsetting Income

Chapter 4: Deductions for Adjusted Gross Income
- Business Deductions

Chapter 5: In-home Office Expense Deduction
- Uses That Must be Both Exclusive and Regular
- Uses That Must be Regular but Not Exclusive
- Allocating Percentage of Use for Calculating Deduction
- Expenses Eligible for Home Office Deduction
- Drawbacks to Taking a Deduction for Business Use of a Residence
- Special Rules Concerning Deduction for Business Use of a Residence
- Limitations on the Home Office Deduction

Chapter 6: Nonbusiness Deductions for Adjusted Gross Income
- Specific Nonbusiness Deductions for Adjusted Gross Income
- Deduction for One-half of Self-Employment Tax
- Self-Employed Health Insurance Deduction
- IRA Deduction
- Payments into Self-Employed SEP, Simple, and Qualified Plans
- Penalty on Early Withdrawal of Savings
- Alimony
- Student Interest Loan Deduction
- Domestic Production Activities Deduction

Chapter 7: Deductions from Adjusted Gross Income
- Medical and Dental Expenses
- Taxes Paid
- Itemized Interest Expenses
- Charitable Contributions
- Casualty and Theft Losses
- Miscellaneous Deductions
- The General Limitations on Itemized Deductions
- Tax Planning Techniques to Maximize Benefits from Itemized Deductions
- Reductions in Itemized Deductions Due to High Income
- The Impact of the Alternative Minimum Tax on Itemized Deductions
- The Standard Deduction
- Determining Filing Status
- Additional Standard Deduction Allowance for the Aged or Blind
- The Standard Deduction for Those Claimed as a Dependent by Others
- Those Ineligible for the Standard Deduction

Chapter 8: Exemptions
- Personal Exemptions
- Exemptions for Dependents
- The Phaseout of Exemptions

Chapter 9: Federal Taxes Based on Income
- Regular Federal Income Taxes
- Tax Rates
- Alternative Minimum Tax
- Calculating Alternative Minimum Taxable Income
- Calculating and Applying the Alternative Minimum Tax Exemption
- Determining the Alternative Minimum Tax
- Self-Employment Taxes

Chapter 10: Tax Credits
- Personal Credits
- Refundable Credits

Chapter 11: Retirement Planning and the Tax Laws
- Individual Retirement Accounts
- Roth IRA
- Simplified Employee Pension Plans
- Simple IRA
- Other Retirement Plans

Chapter 12: Tax Breaks for Individuals
- Real Estate-Related Tax Breaks
- Special Tax Rates for Capital Gains and Dividends
- Tax-Free Interest Income
- Tax Benefits for Education
- Fringe Benefits
- Pass-Through Entities

Glossary

Appendix: Checklists

Excerpt

Editorial Reviews

ForeWord
"Tax laws change regularly, which means that taxpayers may not know as much as they think they do. Even some tax preparers fail to keep abreast of year-to-year changes enough to adequately advise their clients. Consequently, taxpayers run the risk of paying more in taxes than they should.

Tax Power for Individuals describes how selected sections of the Internal Revenue code affect both employed and self-employed taxpayers. Examples illustrating application to individual situations follow each code description.

Types of income, deductions for and from adjusted gross income, alternative minimum tax and in-home office, and medical deductions are among the subjects covered. Checklists of classifications within the major categories conclude the book.
In addition to earning a law degree from Memphis State University, the author holds a master’s degree in taxation law from Emory University School of Law. Parker’s areas of private practice, in Memphis, Tennessee, include taxation, business law, probate, and real estate.

Self-employed taxpayers comprise more than two-thirds of small businesses in the United States, but they pay more in self-employment taxes than employed individuals whose employers pay half their FICA taxes. Other monetary advantages for employed workers include matching contributions to employee retirement accounts, health and welfare benefits such as disability and health insurance, vacation time, and sick leaves—all subsidized, at least partially, by employers. “Realizing what a burden self-employment taxes have become for self-employed taxpayers,” Parker writes, “Congress has enacted measures that soften the blow of these taxes a bit.”

Personal tax credits give taxpayers the advantage of a dollar-for-dollar tax liability offset and are intended for individuals in specific circumstances. For instance, Education Tax Credits may be used for tuition and related expenses for post-secondary education, with certain stipulations. A taxpayer, his spouse, and the dependents for whom he takes a deduction can use this credit. “The education tax credits are of particular importance to taxpayers who find it necessary to take courses in order to become qualified or certified for a new career,” Parker explains.

Use of the passive voice challenges the reader’s interest in persevering through this book. However, those who do will discover useful information. This book merits the attention of people seeking deeper comprehension of tax law that might help minimize their annual tax liability. (January)
Review by: Margaret Cullison"

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