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What are CPA - Tax Moms?

CPA Moms no 7 “CPA - Tax Moms” are trade names given to Accounting and Tax Professionals who chose to work in an “relaxed” environment.

This is a picture of Debbie. She is experienced with tax adoption credit. Two of grand children are adopted. She is the mother of five growth children.

Some "Mom" work from home, other work from personal offices. Debbie works from a relaxed office.

Not all are Moms, there are some Dads. We call them Mr. Tax Moms and CPA Dads.

Each Mom is independent. Once you start working with a Mom, you will keep the same “Mom” year after year regardless of where you move or relocate.

Being in a “relaxed” environment has many advantages. Lower overhead, faster response time, more availability, etc.

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Honey, I Eliminated The Mortgage Interest Deduction - Plan 2

Dan Lewis

A bipartisan committee has made two recommendations to President Bush regarding tax reform. In this article, we take a look at the second option.

Tax Reform

A year ago or so, President Bush decided to spend his political capitol on tax reform and fixing social security. Social security reform went down in flames, so now it is time to see if tax reform is an option.

In an effort to eliminate the Alternative Minimum Tax, the committee was charged with coming up with alternative revenue sources. The biggest deduction on the books is the mortgage interest deduction and the committee has offered two plans. The first puts a cap on the deduction and would be a disaster. The second option, however, is very interesting.

The committee on tax reform has recommended a unique approach to eliminating the mortgage interest deduction entirely. Before you go ballistic, consider what they are replacing it with.

In this second option, a homeowner would be unable to deduct any mortgage interest. They would, however, be able to claim a tax credit equal to fifteen percent of the interest paid up to an undefined mortgage cap. While that is a lot of jargon, the key is the difference between a tax deduction and a tax credit.

A tax deduction is reduced from your overall income. If you earn $80,000 and pay $10,000 in interest, your taxable income will be reduced to $60,000. It looks good, but it doesn't make as big a difference in the actual tax you pay. A tax credit, however, is a different story.

A tax credit is an amount deducted from the actual amount of tax you have to pay each year. Assume you whip together your taxes and owe $10,000 to the IRS after claiming all your deductions and checking the tax owed chart. Under the tax reform plan, you would total the interest paid for the year and then reduce your tax owed by 15 percent. If you paid $10,000 in interest during the year, you would take a tax credit of $1,500 against the tax owed. In short, this would reduce the check you have to send in from $10,000 to $8,500.

The tax credit plan offered by the tax reform committee is very interesting. It could be windfall for some people. Apply the numbers to your 2004 taxes and see how you come out.

Dan Lewis is a mortgage broker with http://www.gwhomeloans.com - San Diego mortgage brokers providing home loans and refinances. Visit http://gwhomeloans.com/services.html to learn more about options for San Diego mortgages.

On the pages of this web site you will find additional tax information that has been collected from many independent sources. Each article or news item offers a different point of view, but not necessary the CPA Moms.

This information is for general information only.

If you desire to ask a specific question, feel free to contact me.