About Experts Sitemap - Group 50 - Page 55 2015-01-27

Tax Law (Questions About Taxes): Prize tax in MN, irs gov, effective tax rate
irs gov, effective tax rate, payroll check: Jill: For federal go to www.irs.gov and look for 1040ES print off the form fill it out and mail it with payment no later than 1/15/2011. I believe you will be safe claiming 20% of the 2500.00 which will be $500.00 that you will mail with the form. Do...

Tax Law (Questions About Taxes): Promised "Acme" stock followup, charitable contribution deduction, bequests
charitable contribution deduction, bequests, bequest: Dave, Couple of things. The estate would be entitled to a charitable contribution deduction - not a credit. The rest of your question is outside the tax area, but I think it would be rather unusual for the company to match a contribution that occured...

Tax Law (Questions About Taxes): Property Tax Lien, property tax lien, tax liens
property tax lien, tax liens, irs: They could sell the property but it is highly unlikely. If they did, they would also have to turn over half the proceeds to your wife. The IRS will allow a payment plan. If the amount owed is less than $25,000, you are guaranteed a payment plan. The payment...

Tax Law (Questions About Taxes): Is my payroll information confidential?, income tax withholding, federal income tax withholding
income tax withholding, federal income tax withholding, federal income tax: Reba: Your filing status is NOT confidential for the owners of the company. They are required by internal revenue rules to insure that all tax forms are completed correctly and make the required federal with holdings on all employees wages. No they have...

Tax Law (Questions About Taxes): qualifying child question, irs regulations, dependency deduction
irs regulations, dependency deduction, divorce decree: Kimberly, Thanks for your question. According to IRS regulations, you can take a dependency deduction for your son if he was a full time student for part of five months during the year. So it sounds as if he qualifies. In order to take an exemption...

Tax Law (Questions About Taxes): Responsibility for Penalties & Interest, Tax Preparer Liability
Tax Preparer Liability: Lloyd, Technically, you are responsible for all taxes, penalties and interest. Most responsible tax preparers would certainly offer to pay the penalty if the error was their fault. I would certainly ask your tax preparer to cover the penalty. If...

Tax Law (Questions About Taxes): Section 179 deduction, section 179 deduction, business income loss
section 179 deduction, business income loss, sole proprietorships: John, Thanks for your question. The Sec 179 limitation applies to your aggregate taxable income from a trade or business. For an individual this means income from sole proprietorships. partnerships, S Corporations, and employee wages. However, a...

Tax Law (Questions About Taxes): Sign On Bonus Repayment, irs publication 17, federal taxable income
irs publication 17, federal taxable income, adjusted gross income: Steven, Thanks for your question. You have a couple of options. Since the amount in question exceeds $3,000 you can deduct the repayment as a miscellaneous itemized deduction on Schedule A in the year you repay it. You can only deduct the portion tht...

Tax Law (Questions About Taxes): State of Residency, virginia state income tax, state income tax
virginia state income tax, state income tax, fraudulent act: Phil, Thanks for your question. To be a resident of Florida you have to live there. Your tax home would be considered the general area in which you work. Even if you could be Florida residents you would still tax to the state in which it was earned....

Tax Law (Questions About Taxes): sale of property at primary residence, short term capital gain, stancil
short term capital gain, stancil, principal residence: Judy, Thanks for your question. No, it would not qualify as you are not selling your residence. Additionally, you have not met the 24 out of 60 month criteria for owning and living in it as your principal residence. If you met the criteria and sold...

Tax Law (Questions About Taxes): security dates, ex dividend dates, settlement date
ex dividend dates, settlement date, dave thanks: The settlement date is the date by which the transaction must be settled, - that is, the date by which the purchase must be paid. Purchase is the actual date the transaction occurs. If the stock date of record is Friday, the ex-dividend date is Tuesday,...

Tax Law (Questions About Taxes): stupid question about worldwinner 1099, worldwinner, stancil
worldwinner, stancil, gross amount: Donna, Thanks for your question. You report the gross amount of gambling winnings on line 21 of the 1040. Any gambling losses up to the amount of your winnings are deductible on Schedule A as a miscellaneous item NOT subject to the 2% limitation. ...

Tax Law (Questions About Taxes): Tax Bill, tax gap, credit crisis
tax gap, credit crisis, tax attorneys: Avi, Thanks for your question. You have limited options. First, the tax attorneys and others who advertise they can get you a settlement are generally scams. They charge a large up-front fee, file a couple of papers and that s it. In my experience,...

Tax Law (Questions About Taxes): Tax Liability, stancil, personal name
stancil, personal name, business venture: Greg, Thanks for your question. The amount is probably correct. If you withdrew funds from a 401(k) plan, they would be subject to income tax at ordinary rates. At that level, it is most likely being taxed at 35%. In addition, there will be a 10%...

Tax Law (Questions About Taxes): Tax question, ssi payment, dependency exemption
ssi payment, dependency exemption, divorce decree: Chris, Thanks for your question. Assuming that there are no legal documents such as a divorce decree or a Form 8332 signed by you that gives the exemption to your son s father, you can take a dependency exemption for your son and file a return. Hope...

Tax Law (Questions About Taxes): Tax treatment of a perpetual easement, capital gain laws, perpetual easement
capital gain laws, perpetual easement, stancil: Catherine, Thanks for your question. If it is a perpetual easement that denies you the beneficial use of hte property, it can be treated as a sale. You would need to allocate basis to the affected property and pay taxes on the excess of proceeds over...

Tax Law (Questions About Taxes): Tax Withholdings, home based business, taxes
home based business, taxes, witholdings: Zero dependents would have you pay the maximum withholdings. That would possibly result in having a large refund at the end of the year, or covering some other un-withheld income source. I would hesitate to consider any Universal recommendation as valid...

Tax Law (Questions About Taxes): Taxable Income for Full Time Grad Student Filing Individual, self employment tax, stancil
self employment tax, stancil, schedule c: Andrew, Thanks for your question. Your student status does not have any effect on the taxability of your income. You owe taxes on it just the same as anyone else. If a 1099 filer, you will need to complete a Schedule C and Schedule SE, paying self-employment...

Tax Law (Questions About Taxes): Taxes while creating a small business, full time job, hobby activity
full time job, hobby activity, sec 179: Brett, Thanks for your question. Any equipment would have to be depreciated, rather than taking an immediate expense. However, you might be able to expense some of it under Sec 179 which permits small businesses to expense equipment. There are several...

Tax Law (Questions About Taxes): Taxes on inactive llc?, business owners institute, incorporate
business owners institute, incorporate, loan capital: Can I ask? Did you give your friend any proof of ownership? Then we d know if it is capitalization. Did you create a Note, for the money? Then we could determine it was a loan. Paperwork is critical. I know it is no fun, but paperwork is the foundation of...

Tax Law (Questions About Taxes): Taxes on money borrowed from overseas, 1040nr investment
1040nr investment: Hello, 1. You cannot deduct the money you borrowed, but the interest paid would indeed be a proper deduction. 2. Yes, but the interest rate must be a market rate, and the interest must have actually have been paid. 3. I would recommend you have a tax...

Tax Law (Questions About Taxes): Traveling employee, reimbursement checks, physical presence
reimbursement checks, physical presence, stancil: Saj, Thanks for your question. Your situation is rather complex, and I doubt if I can give you complete answers with just the information that I have, but I will provide some guidance. First, if you are working in CA for months it is likely you...

Tax Law (Questions About Taxes): tax question, Sale of a business, avoid cap gain tax
Sale of a business, avoid cap gain tax: they are listed assets and would be considered compensation. There is no Gift options available for a corporation. You can check the rules under De Minimus Fringe Benefits on the IRS website IRS.gov. If you are selling and are going to make a significant...

Tax Law (Questions About Taxes): taxes on inherited stocks, long term capital gain, morgan bank
long term capital gain, morgan bank, stepped up basis: Shannon, The answer depends. If you inherited the stock in 2010, your basis is his original basis. You would pay tax on the excess of the sale price over the transferred basis from him. If he purchased the stocks more than 12 months prior to your selling...

Tax Law (Questions About Taxes): taxes on an investment, stancil, gift taxes
stancil, gift taxes, amount of money: Jessica, If she is listed as the owner, she must pay tax on any gain. Any transfer to you would be considered a gift, and possibly subject to gift taxes if it exceeded the annual and lifetime exclusion amounts. Putting it into a joint account does not...

Tax Law (Questions About Taxes): truck llc fl corporate tax, florida income tax, swift transportation
florida income tax, swift transportation, trucking co: John, Thanks for your question. Since the LLC will be a sole owner enterprise, you can file the LLC as a Schedule C business on your 1040. This would not involve any Florida income tax on the business. If you are interested, I could prepare your...

Tax Law (Questions About Taxes): W-4 declaration changed by employer, social security and medicare, irs rules
social security and medicare, irs rules, tax witholding: Rodney: I do not understand to their benefit ? The company only matches your social security and medicare taxes. You pay your own income taxes tax. A $6,000.00 deficit in withholding for a year could require the IRS to penalize your employer for not...

Tax Law (Questions About Taxes): 1099 Per Diem, www irs gov, employee relationship
www irs gov, employee relationship, gov pub: You refer to your relationship as your employer. If you have an employee relationship and they tell you how and when to do the work (control) they should be giving you a paycheck and W-2 and not a 1099. If they are paying a separate per diem that would tend...

Tax Law (Questions About Taxes): 1099 Fuel Reimbursements, fuel cards, trucking company
fuel cards, trucking company, stancil: Kate, Thanks for your question. As independent contractors, you should reflect on their 1099-s everything you pay them, regardless of what it is for. They can deduct their fuel expense on their own Schedule C. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): 401K withdraw 1st year of retirement, mortgage interest deductions, 401k contributions
mortgage interest deductions, 401k contributions, effective tax rate: Manfred, Thanks for your question. You should focus on your marginal rate rather than the effective rate for the amount of tax you would pay on the withdrawal. At the level of income you mention, most of the 80K would be taxed at 25% - some would be...

Tax Law (Questions About Taxes): Advances, 1099
1099: Hi Tammy, This is a very interesting question that I don t believe has an exact answer in the IRS code, as with most tax issues. I will give you my interpretation and how I would handle it. Assuming you are a cash basis business I would treat the advances...

Tax Law (Questions About Taxes): Athletes/Sports Agent, irs code, term sponsorship
irs code, term sponsorship, unrelated trade: Very long. Just search for the term sponsorship about half way down. Nothing is required of you they are the ones taking the deduction. TITLE 26 - INTERNAL REVENUE CODE Subtitle A - Income Taxes CHAPTER 1 - NORMAL TAXES AND SURTAXES ...

Tax Law (Questions About Taxes): benefit tax reporting, benefit tax, irs tax
benefit tax, irs tax, stancil: Kay, Thanks for your question. The problem is that you are conduting an activity in which, I presume, you are giving people something for their contribution. Since you are not a qualified IRS tax exempt entity, you are conducting a for-profit activity...

Tax Law (Questions About Taxes): bonus check taxes, bonus checks, payroll officer
bonus checks, payroll officer, payroll office: Pattie: There is no FLAT tax rate. A bonus check is another pay check an is treated as such by the payroll officer. Tax is calculated as thought it was another payday. Tax will be calculated based on the information contained on your W-4 form maintained...

Tax Law (Questions About Taxes): business loss, opening a restaurant, personal return
opening a restaurant, personal return, business loss: Hi Roger, Sorry to hear about that. I think there might be more details needed to give you the exact numbers, but I will give some insight. The cash lost would be able to be taken as a loss because there should be expenses that the money was used for...

Tax Law (Questions About Taxes): Capital Gains on inherited stocks, fair market values, long term capital gain
fair market values, long term capital gain, duke energy: Jill, Thanks for your question. Your total basis is the fair market value of the Duke stock on the date of your mother s death. Then you will need to determine the fair market values of the Duke stock and the Sprectra stock on the date of the split....

Tax Law (Questions About Taxes): Capital gains, ira withdrawals, income tax rates
ira withdrawals, income tax rates, self directed iras: I apologize- I thought that I already answered the follow-up. IRA withdrawals are typically taxed at ordinary income tax rates. The only time they aren t in entirety is if post-tax contributions were made. Unfortunately, you can t get the favorable capital...

Tax Law (Questions About Taxes): Cashing 403b for settlement debt, loan provision, 403b
loan provision, 403b, income tax: Unfortunately no. You can not avoid the income tax or the 10% penalty if you are under 59 1/2. You can see if the 403b has a loan provision, but it would need paid back so it probably doesn t solve what you are looking for. Hope it works out for you....

Tax Law (Questions About Taxes): Childcare expenses, social security and medicare, household employer
social security and medicare, household employer, social security number: Jenn, Thanks for your question. You can take a credit for the childcare expenses if you provide the name, address, and social security number of the provider. If she provided the care in your home, she is likely to be treated as your employee and you...

Tax Law (Questions About Taxes): Christmas bonus and gifts, salary amounts, christmas bonus
salary amounts, christmas bonus, supplemental payment: Matt, Thanks for your question. You cannot give any gift of cash to your employees. You can give them a gift valued at under $25 and it cannot be cash or a gift card. For example, it could be a turkey or ham. It would not be taxable income unless...

Tax Law (Questions About Taxes): Christmas bonuses, christmas bonuses, bonus payments
christmas bonuses, bonus payments, budget line: Luci, Thanks for your question. Yes, the bonus payments are subject to the same rules as the normal compensation, should have withholding, and be included on the W-2. These are considered supplemental payments when not paid as a part of regular...

Tax Law (Questions About Taxes): Collision, adjusted gross income, casualty loss
adjusted gross income, casualty loss, itemized deduction: Bill, Thanks for your question. A couple of issues. First, since you have insurance coverage and choose not to submit the amount to your insurance company, the IRS will not allow you to deduct any amount that would have been reimbursed by the company....

Tax Law (Questions About Taxes): Contract Labor, state unemployment tax, medicare payments
state unemployment tax, medicare payments, tax responsibilities: Jana, Thanks for your question. The employer can be subject to fines for improper classifying an employee. In addition, the employer can be held liable for social security/medicare payments. In addition, there are likely to be state unemployment tax...

Tax Law (Questions About Taxes): Contract labor taxes, self employment tax, w9 form
self employment tax, w9 form, social security number: Mike, Thanks for your question. A W-9 is that provides his social security number to the company he is contracting with. He is being treated as an independent contractor (probably incorrectly and illegally) which means he will have to make quarterly...

Tax Law (Questions About Taxes): Corporate Partner's Compensation, business bank account, compensation question
business bank account, compensation question, s corp: Hi Pattie, There is one aspect of a S Corp that many people have trouble with. A S Corp is a pass through entity meaning all income passes through to the personal return. So the amount taken out of the s corp has no affect on their personal taxes (there...

Tax Law (Questions About Taxes): CPA won't give me final papers, open invoice, better business bureau
open invoice, better business bureau, workpapers: Sorry I miss understood that part. I would contact any principal of the firm stating the issue. If it is a smaller firm you might already be at the top. Secondly I would definitely contact the accountancy board of your state and file a complaint. All...

Tax Law (Questions About Taxes): capital losses, capital loss, unemployment
capital loss, unemployment: Did you receive unemployment in 2010? If so, all of it is taxable and you may have more taxable income then you realize. I guess the core of your question is do you have to waste your capital losses in 2010? If you sold the stock, bond, mutual fund or...

Tax Law (Questions About Taxes): Deceased husband back taxes, back taxes, irs
back taxes, irs, delinquent taxes: No, you are not responsible for his back taxes. Furthermore they cannot come after your assets to satisfy them. However, they could try to come after any jointly held assets, but that is unlikely unless it was real property and there was significant equity...

Tax Law (Questions About Taxes): Deductibility of Mortgage Interest, county recorders office, federal tax return
county recorders office, federal tax return, home mortgage interest: Hi James, There are a couple conditions that need to be met in order for you to deduct the interest. First, You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument that:...

Tax Law (Questions About Taxes): Designated church funds, breaking faith, several thousand dollars
breaking faith, several thousand dollars, exempt purpose: Stan, Thanks for your question. Since the funds are not subject to taxation, the only tax issue is if they are utilized for the exempt purpose of the church. There could be some legal issues involved, but I am a CPA and not an attorney and am prohibited...

Tax Law (Questions About Taxes): Didnt file for 2009, time penalties, turbo tax
time penalties, turbo tax, year one: You will need to file your 2009 and 2010 returns separately. And note that even though you filed an extension failure to pay on time penalties and/or interest will be accruing if you have a balance due. If you do not have a balance due then you will not...

Tax Law (Questions About Taxes): Per Diem for 13 month contract, alabama taxes, state income tax
alabama taxes, state income tax, contract job: Jason, Thanks for your question. The IRS will consider TN as your tax home under those circumstances. And the per diem is taxable. It is not necessary to maintain a residence in AL. If you do, I would minimize any AL contacts, as they may try to...

Tax Law (Questions About Taxes): Distribution of Irrevocable Trust, stocks and bonds, income distributions
stocks and bonds, income distributions, brokerage accounts: Bill, Thanks for your question. The liquidated fund would be handled the same as the distributions of stocks and bonds to you. You would pay tax, at capital gain rates on the gain from the sale. Any interest or dividend income that happened to be included...

Tax Law (Questions About Taxes): Donating a house to the ministry, stancil, battered women
stancil, battered women, amount of money: Jerry, Thanks for your question. Paying them a small amount of money would only tend to complicate the issue. It would still be a gift for the difference in what was paid and the fair market value. Just accept the gift and give the donor an appropriate...

Tax Law (Questions About Taxes): What can i deduct for taxes?, full time job, friday to sunday
full time job, friday to sunday, irs: That is a tough one. One factor is that the IRS typically only allows you to deduct travel related expenses if the assignment is expected to be temporary (less than one year). You MIGHT fall under that depending upon how long you expect this to last. However,...

Tax Law (Questions About Taxes): deducting bad loan on tax return, short term capital gains, cancellation of debt
short term capital gains, cancellation of debt, return money: Hal, You do not have to issue a 1099 for cancellation of debt, as those are only issued by financial institutions. I presume from your statements, that these are personal, not business loans. This means they are deductible as short-term capital gains...

Tax Law (Questions About Taxes): dependent, personal income tax, dependency exemption
personal income tax, dependency exemption, person claims: Yes, that is all true and I confirm your statements. However, it is rather unusual for someone to be claimed as a dependent and then that person claims someone else as their dependent. You must be able to prove, beyond any doubt that you provided over half...

Tax Law (Questions About Taxes): eminent domain and condo association property, condo association, taxable gain
condo association, taxable gain, stancil: Ken, Thanks for your question. Distributing the money to the members depends upon state law and the by-laws of the association. If it is distributed to the owners the money would be treated as a sale and you would have to allocate basis to the portion...

Tax Law (Questions About Taxes): how much to expect back, state tax, social security
state tax, social security, income level: How much federal (not including social security) and state tax have you had withheld? At that income level YTD you should get everything back. You most likely aren t even required to file but should file to get your refund (if due one). Adam http://www.wilmingtontaxesandaccounting.co...

Tax Law (Questions About Taxes): Foreign Earned Income, expat taxes, expatriate tax return
expat taxes, expatriate tax return, foreign earned income exclusion: Hello Sir, From the facts presented it seems you would indeed qualify for either of the tests. I think your question was more geared towards how it would affect your eligibility if part of the year you worked for the US government; it does not affect your...

Tax Law (Questions About Taxes): Mileage for Substitute Teachers, best savings interest rates, best savings accounts
Tax Law (Questions About Taxes): Mileage for Substitute Teachers, best savings interest rates, best savings accounts, savings interest rates

Tax Law (Questions About Taxes): Roth IRA, gold etf, private letter ruling
Tax Law (Questions About Taxes): Roth IRA, gold etf, private letter ruling, private ruling

Tax Law (Questions About Taxes): filing status, food money, stancil
food money, stancil, december 23rd: James, Thanks for your question. You can file a joint federal return. State laws vary - most likely you would have to file separately for the states. If you file a joint return your father cannot claim. Additionally, he cannot claim you if you have...

Tax Law (Questions About Taxes): filing status, dependents, paycheck
dependents, paycheck, contrary: Chris: If your children are under 18 and you pay for all their up keep then you can claim them as your dependent. However, if there is a court order to the contrary then you may not claim the children. If the children are 18 and older and not in school...

Tax Law (Questions About Taxes): first time home buyer, first time buyer, time home buyer
first time buyer, time home buyer, first time home buyer: Larry, Thanks for your question. If you did not qualify for it, the entire amount must be repaid. Your liability on a joint return is joint and several which means both of you could be held fully liable for anything on the return. Hope this helps....

Tax Law (Questions About Taxes): foreign currency, tax ramifications, foreign currency
tax ramifications, foreign currency, current value: you are correct on the gift max. this is the threshold per person per year. before you have to file a return. not pay tax. what amount of current value (and potential re-value) is there in the mix? you can up the amount by giving to spouse or children....

Tax Law (Questions About Taxes): Gifts Paid to Church Employees, staff christmas, payroll system
staff christmas, payroll system, staff hope: Linda, Thanks for your question. The money is taxable income to the employees and should be treated just like any other compensation paid to them, reported on their W-2. It is included on the 941 and the church is liable for the employer s share of...

Tax Law (Questions About Taxes): Home stepped up basis after spouse dies, stancil, co owner
stancil, co owner, cpa: Norine, Thanks for your question. Assuming that the spouse was a co-owner of the house, there would be a stepped up basis for 1/2 of the house. The other half, belonging to the surviving spouse, would not get a stepped up basis. The step-up in basis...

Tax Law (Questions About Taxes): Husband DOD contractor overseas, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: 2 1/2 weeks is approximately 18 days so it is not sufficient to disqualify him. It just lowers the number of days he was physically present in a foreign country and it reduces the amount he can exclude in 2010. The key is to make certain he is in country...

Tax Law (Questions About Taxes): home repairs, home repairs, sales taxes
home repairs, sales taxes, invoice: Are you talking about sales taxes? In most states, sales tax have to either be paid upfront by the contractor when he purchases the materials or if that is not done then on the back-end when the customer settles up with the contractor. However, realize this...

Tax Law (Questions About Taxes): Inherited houses, successor trustees, stancil
successor trustees, stancil, tax benefit: A 2011 return will not be required if the trust did not have $600 or more of income, or no expenses to allocate to the owners. The part about taking a capital loss when sold for less than fair market value depends on when the death occurred. With the...

Tax Law (Questions About Taxes): Investment Land, investment land, investment interest
investment land, investment interest, real estate taxes: Alan, Thanks for your question. The taxes are deductible on Schedule A. The interest is investment interest, deductible on Schedule A if you have sufficient qualifying investment income. The other costs add to the basis of the land. Hope this helps....

Tax Law (Questions About Taxes): IRS Debt, irs office, medical challenge
irs office, medical challenge, criminal matter: Bob: Contact your local IRS office for guidance. Tax returns are required for all years that a person has income. When a tax return has not been filed it becomes a criminal matter especially when its this many years late. In your situation the local...

Tax Law (Questions About Taxes): independent/dependent, full time job, bieng
full time job, bieng, 23 years: There are a variety of factors that contribute to whether someone can came you. Typically, someone with your age and income would not be claimed as a dependent on their parent s tax return because you would not meet the requirements to be a qualify child...

Tax Law (Questions About Taxes): inheritance, executor of estate, state inheritance
executor of estate, state inheritance, state taxes: Hi Pam, Receiving the inheritance will not cause any tax due federal or state. Inheritance is tax free so there will be nothing to worry about on your mothers side. Depending on where she puts the money it could generate interest or such that she might...

Tax Law (Questions About Taxes): Large cash gifting tax-free and gift splitting, 1 million dollars, moving target
1 million dollars, moving target, dad gift: 1. It will be tax free no matter which year you make the gift. Those tax laws have not changed. 2. Not at this point as he has already passed away. 3. Not cleared just written and physically handed over. 4. No holding a joint account is not considered...

Tax Law (Questions About Taxes): Loan Forgiveness, loan forgiveness, fringe benefits
loan forgiveness, fringe benefits, s corp: Kelli, Thanks for your question. Simply issue a 1099-MISC as non-employee compensation. Non-employees don t receive fringe benefits. This answer assumes that the loan was somehow related to her work for the corporation and not from some other issue....

Tax Law (Questions About Taxes): loaning money to my son to buy a house together, principle residence, stancil
principle residence, stancil, house price: Shell, Thanks for your question. He can only deduct the interest on his debt if the mortgage you give him is recorded, giving you a lien on the property. If he (or you ) lives in the the house for 24 of the 60 months prior to the sale, you can...

Tax Law (Questions About Taxes): no longer rent MIL, five months, single family
five months, single family, apartment: You would prepare a schedule E for the income and expenses for the portion of the year that it was rented. You may have other considerations if you depreciated that part of the house in the past- whether triggered on the transition back to residential or when...

Tax Law (Questions About Taxes): MBA Repayment, fringe benefit, exact situation
fringe benefit, exact situation, hr department: I would ask your HR department how they are treating it and if they are taxing it under what tax law. With those facts I think the buyout would be taxable to you. I can honestly say I have not come across this exact situation or been able to find a direct...

Tax Law (Questions About Taxes): Medical FSAs, deductible medical expenses, qualified medical expenses
deductible medical expenses, qualified medical expenses, couple questions: Chris, William could not take your question, but I can give you an answer. 1) The 7.5% of AGI applies only on Schedule A for your itemized deductions. Any unremimbursed, qualified medical expenses can be reimbursed up to your amount contributed. ...

Tax Law (Questions About Taxes): Mileage for Substitute Teachers, commuting
commuting: I d say that would typically be considered commuting mileage that is not deductible. If you were to drive to a central office and go from there each day it could be a different story. The other alternative (typically only applies to self-employed individuals)...

Tax Law (Questions About Taxes): Mineral Lease taxes, mineral lease, bonus payment
mineral lease, bonus payment, happy new year: Hi, You didn t mention the amount of the income from the mineral lease so it s hard to determine how much would be taxable. If you could provide me with that information I could be more helpful. In general it would be added to your other income and taxed...

Tax Law (Questions About Taxes): Monetary gift to church member, charitable contribution deduction, irs rules
charitable contribution deduction, irs rules, tax evasion: Colin, Thanks for your question. It is legal for the church to accept the contribution and send the amount to the specified person. However, in this situation, the donor is exercising undue control over the contribution by specifying a particular recipient...

Tax Law (Questions About Taxes): mileage for volenteer firefighters, volunteer firefighters, stancil
volunteer firefighters, stancil, mileage: Todd, Thanks for your question. Yes, those are miles incurred in relation to the activity, the mileage is deductible assuming that you are indeed a volunteer. If you are reimbursed for expenses, you would reduce your deduction by the reimbursement amount....

Tax Law (Questions About Taxes): minor tax return, irs website, partime job
irs website, partime job, tax refund: Hi Erika, I believe you are asking if you will be receiving a tax refund. Most likely yes you would be getting a refund of your income taxes withheld if you made less than $3000. The IRS website and some others allow you to input your income and withholdings...

Tax Law (Questions About Taxes): moving expenses, full time work, work test
full time work, work test, household goods: Sorry, I gave too brief an answer on the lodging. Lodging enroute is decutible, but not once you have reached your destination. I was thinking too narrowly in giving you the answer. All I can say on the work portion is that you should be able to demonstrate,...

Tax Law (Questions About Taxes): moving expenses, google maps, straight route
google maps, straight route, google: James, I don t see any problem with that. It is certainly reasonable to take a route where there is a lower probability of poor road conditions. If they audited it, they would want receipts, but you should be able to defend your reasoning successfully....

Tax Law (Questions About Taxes): New York physical presence for non-resident tax purposes, physical presence, stancil
physical presence, stancil, client meetings: Pedro, Most likely not. From you description, it sounds as though you are not conducting business that gives you nexis in the state of NY. Merely being in NY does not consititute sufficient activity to subject you to NY tax. If you were there on an extended...

Tax Law (Questions About Taxes): NJ LLC Fees/filing requirements, income tax purposes, njbgs
income tax purposes, njbgs, sole member: Larry, Thanks for your question. For income tax purposes an LLC is what is known as a disregarded entity which means it does not pay tax as an LLC. You have a choice (as a sole member LLC) to include the LLC on a Schedule C or to file it as a corporation....

Tax Law (Questions About Taxes): Non Resident Tax, US trade or business
US trade or business: Hello David. 1. No 2. It depends, but likely you are. A key factor for you to understand my answers above would be the concept of US Trade or Business see: http://www.irs.gov/businesses/small/international/article/0,,id=96409,00.html And the concept...

Tax Law (Questions About Taxes): nonprofit CHURCH, stancil, money in the bank
stancil, money in the bank, tax liability: margorobinson, Thanks for your question. If they sold any of the property there would be no income tax due, no matter who it was sold to. It is not permissable for the members to distribute the proceeds (or remaining funds) to themselves. As a...

Tax Law (Questions About Taxes): Offer in Compromise, offer in compromise, self employment taxes
offer in compromise, self employment taxes, innocent spouse: You will still be on the hook for any jointly filed taxes after he does an Offer. One option is to try an Offer yourself. Another possibility is to file an Innocent Spouse Claim for the 2007 taxes. I cannot tell you what your chances are for either one since...

Tax Law (Questions About Taxes): Officer's compensation, self employment tax, gross receipts
self employment tax, gross receipts, c corp: Hi Alik, First let me recommend that you go talk with a CPA as the taxes of a C Corp are more difficult than just a 1040. With that being said you report your expenses on the 1120 which is the C Corp return. Without sitting down and talking with you I...

Tax Law (Questions About Taxes): Organization Structure, self employment tax, self employment taxes
self employment tax, self employment taxes, couple notes: Hi Tone, This is a great question and this planning can be extremely beneficial in the long run of companies. Unfortunately it is not something that can even be attempted to be done in a forum such as this. These type of planning sessions last hours over...

Tax Law (Questions About Taxes): Oye! Tax thing, recorders office, interest deduction
recorders office, interest deduction, time is of the essence: Mr. Tudor: If you have since the inception of the house payment been paying a portion of the house payment you should be claiming your part of the interest. If your girl friend is receiving the full interest payment credit via a 1099 she can give you one...

Tax Law (Questions About Taxes): online earnings, gross earnings, self employment taxes
gross earnings, self employment taxes, stancil: Misti, Yes, that is taxable income. You will need to report the earnings as a self-employed individual on Schedule C. Any expenses you incur would be deductible from your gross earnings to determine profit. Earnings are taxable from the first dollar...

Tax Law (Questions About Taxes): Partially Paid Corporate Housing, furnished apartment, personal expense
furnished apartment, personal expense, business expense: Nick, Thanks for your question. The housing supplement is taxable income. You cannot deduct the portion you pay as that is considered a personal expense. Since each location is considered your tax home while you are there, it is not a business expense....

Tax Law (Questions About Taxes): Personal Miles, irs rule, irs rules
irs rule, irs rules, personal cars: Karen S.: Each employee who drives a company vehicle is required by IRS rules to pay income tax on the value of personal miles driven. Even if its 1 mile. We know how difficult that would be to enforce it nation wide. IRS will allow employers to set...

Tax Law (Questions About Taxes): Personal residence exclusion after marriage?, personal residence, capital gain
personal residence, capital gain, tax form: Hi, The capital gain exclusion is calculated using days. The day you last lived there is the end of your use of the home. When you sell the homes you each calculate your gain separately but you can claim the exclusions on a joint tax return. Regards,...

Tax Law (Questions About Taxes): Personal taxes, head of household, stancil
head of household, stancil, marital status: Gale, Thanks for your question. Since your marital status on Dec 31 is married, your choices are married filing jointly or married filing separately. You, or your husband, cannot file as head of household or single. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): potential tax liability - for US resident moving overseas, US Taxes, expat taxes
US Taxes, expat taxes, expatriate tax returns: Hello, It doesn t sound like you would be considered self employed (Just working for an overseas employer does not make you self employed). I think this IRS document would be your best guidance: In the event you might be considered self employed, you...

Tax Law (Questions About Taxes): For-profit entity accepting charitable donations, income tax return, charitable donations
income tax return, charitable donations, profit entity: Hi Alex, Yes you would be able to only claim the fee as taxable income. I will caution you that I have a client that does something similar and he spent hours and hours researching all the different rules that need to be followed in order to do these...

Tax Law (Questions About Taxes): property taes, filing income taxes, filing taxes
filing income taxes, filing taxes, state tax: Hi Cyndiann, Each state has it s own rules to claim it as your home, most are be there more than 6 months. As far as filing taxes you would file in each state and you can file jointly. You will only pay state tax on the income earned in that state. There...

Tax Law (Questions About Taxes): property taxes, filing income taxes, act of contrition
filing income taxes, act of contrition, hail mary: you can only have one tax home. i would find it sort of incredulous that you and your husband were not residents of the same home. I am sure that one or both of the towns would feel the same if they figured it out. if somehow you really do live apart and...

Tax Law (Questions About Taxes): propety gift received, real estate taxes, mortgage interest
real estate taxes, mortgage interest, gift tax return: Hi, Recipients of gifts are not taxed. The donor should have filed a gift tax return and paid any tax due. If you are constructing your primary residence, you can deduct mortgage interest and real estate taxes. If it isn t your primary residence you...

Tax Law (Questions About Taxes): Question about 2010 taxes, stancil, mortgage interest
stancil, mortgage interest, fiancee: RL, Thanks for your question. You are correct, you cannot file as married for 2010. There are two requirements to deduct mortgage interest and property taxes on the house. You must be legally liable for the amount and you must make the payments....

Tax Law (Questions About Taxes): Rental, property tax deductions, stancil
property tax deductions, stancil, living in california: Antony, Thanks for your question. You are in a tax no man s land at this point in time. Since you are collecting the rent you must report it on Schedule E. You can also deduct expenses of the rental. However, since you are not legally liable on...

Tax Law (Questions About Taxes): Rental Property, property question, stancil
property question, stancil, max flow: Greg, An LLC is a disregarded entity at the IRS, meaning you would report it on a Schedule E, the same as if the LLC did not exist. So thre is absolutely no tax advantage to an LLC. However, it would provide liability protection. Hope this helps. ...

Tax Law (Questions About Taxes): When to Report Business Start-Up Costs, business start up costs, stancil
business start up costs, stancil, home based business: Scott, Thanks for your question. Start up costs are to be capitalized and amortized over a 15 year period starting in the month the business opens. However, current law allows a deduction of up to $5,000 of start up costs when the business opens without...

Tax Law (Questions About Taxes): Residency/State income taxes, georgia state income taxes, state income taxes
georgia state income taxes, state income taxes, nc dept of revenue: Jimmy, Thanks for your question. NC has the right to tax property or earnings occurring in the state of NC. Since you had rental income in NC, it is subject to NC taxes. None of your other income would be subject to NC tax. Normally, you would be...

Tax Law (Questions About Taxes): Roth IRA, roth ira account, roth ira investment
roth ira account, roth ira investment, gold etf: Rupen: You have lost me. What is a GOLD ETF? A ROTH IRA is an account that you deposit after tax money into that you treat the same as any other IRA and when you meet the withdrawal edibility can with draw the money without paying tax on the with drawl....

Tax Law (Questions About Taxes): real estate tax, recreational acreage, real estate taxes
recreational acreage, real estate taxes, investment interest: Hi John, You can deduct the real estate taxes on your Schedule A. You cannot deduct the loan interest as mortgage interest, but could possibly deduct the interest as investment interest. You must be able to show you purchased the property with the intent...

Tax Law (Questions About Taxes): renting income property to my corporation, mortgage deduction, secondary residences
mortgage deduction, secondary residences, home office deduction: I dont think that your statement about gain/loss on the sale of income... makes any sense. There is currently tax on the gain and deductible losses on loss. That is not in any proposal I have seen. nobody is ever going to propose to phase out tax on...

Tax Law (Questions About Taxes): Sale of home, capital gains exclusion, sleeping dogs
capital gains exclusion, sleeping dogs, appropriate boxes: Scott, William couldn t take your question at this time, but I will give it a shot. Since you qualify fully for the exclusion, I would not report it on the return. The IRS has no formal provision for you reporting it on your 1040. If you e-file you...

Tax Law (Questions About Taxes): Small business deductions and charitable donations, small business deductions, adjusted gross income
small business deductions, adjusted gross income, irs tax: Jason, Thanks for your question. You could not deduct any of the costs involved as business expenses as you do not meet the definition of operating as a business. However, if the food is donated to a qualified IRS tax-exempt charity, you could deduct...

Tax Law (Questions About Taxes): Spec House 1099s for labor, 1099s, contract labor
1099s, contract labor, stancil: Pam, Thanks for your question. You must send out the 1099 s in the year the income is earned. The 1099 s do not show up on Schedule C as contract labor, but as an asset as part of the cost of the house. In short, they are not expenses that are shown...

Tax Law (Questions About Taxes): SSD AND CHILD SUPPORT, irs publication 17, stancil
irs publication 17, stancil, ssd: Tanya, Child support is not taxable. SSD may be taxable depending on your total income level. You can check the worksheet in Chapter 11 of IRS Publication 17 to determine how much, if any, of your SSD is taxable. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): State income tax residency law, state income tax, stancil
state income tax, stancil, tax purposes: Jake, Thanks for your question. For tax purposes, for Tennessee to be your residence, or tax home, you would have to live in TN for over half the year. Regardless of where your residence is, if you work in NC, you will owe income tax to that state....

Tax Law (Questions About Taxes): Stock Losses, stock losses, worthless stock
stock losses, worthless stock, judicial decisions: Hi Tom, I will give you the section where it explains worthless stock, but if you can sell the shares I would recommend you do that because one of the conditions is you must relinquish future rights which a sale would. Sorry for the long selection below,...

Tax Law (Questions About Taxes): Stock Transfer, irrevocable trust, gift tax
irrevocable trust, gift tax: Hi Abe, Thanks for the question. The funding of an irrevocable trust is treated as a gift. So the simple answer is, no it is not considered a sale and you will not receive a 1099B. The original cost basis will follow the stock into the trust. If the...

Tax Law (Questions About Taxes): How much to spend on business?, self employment tax, self employment income
self employment tax, self employment income, sole proprietorship: This is a tough one to answer without sitting down with someone and understanding their situation in detail. I d recommend you do so with someone local as the money spent to do so can save you substantial money. That being said, at a high level here...

Tax Law (Questions About Taxes): stock, income tax liability, brokerage account
income tax liability, brokerage account, person year: Robert, Thanks for your question. You are making a gift which does not create any income tax liability. Your donees will have the same basis as you in the securities transferred. If the amount to any one person is under $13,000 there is no gift tax....

Tax Law (Questions About Taxes): Tax Credit, credit
credit: Hi Ben, I will try to give you a basic explanation, but feel free to follow up if it is not clear. The credit is considered a non refundable tax credit. What that means is it cannot reduce your total tax tax below 0. This is line 60 on the 1040. The...

Tax Law (Questions About Taxes): Tax questions on IRS Form 982, chapter 11 bankruptcy, retirement assets
chapter 11 bankruptcy, retirement assets, debt cancellation: Richard, Thanks for your question. You must be insolvent just prior to the debt cancellation. This would include the full amount of your debts. You can only escape taxes on the debt cancellation up to the amount of your insolvency. In other words,...

Tax Law (Questions About Taxes): Tax Return, irs gov, where s my refund
irs gov, where s my refund, mail: I would typically not put them in the same envelope. You know that they got both of them, but now have to hope that they did not only process it as one return. I don t know how their inner workings truly work with paper returns. Paper returns can usually...

Tax Law (Questions About Taxes): Tax Sale, deceased mother, tax lien
deceased mother, tax lien, dad: If there is an outstanding tax lien on a piece of property, typically that lien has to be taken care of before it can be transferred. In English that means if there is an outstanding lien the lien has to be paid before it can be transferred to you or the...

Tax Law (Questions About Taxes): Taxes while deployed as a civilian contractor, irs website, air national guard
irs website, air national guard, withholding allowances: Al, Thanks for your question. As you apparently know, if you are physically present in a foreign country for 330 days in a 12-month period, you are permitted to exclude up to $92,500 in income from taxation. I don t know what state you are from, but...

Tax Law (Questions About Taxes): Taxes on inactive llc, investment money, stancil
investment money, stancil, schedule c: Thanks for your question. An investment is not income to you, nor to your friend. He must report any gain from the investment, which has not happened yet. Neither of you report it on your tax return this year. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Theft tax write off, insurance settlement, stancil
insurance settlement, stancil, cpa: Robert, Thanks for your question. You must take the theft loss in the year it occurs, or the year in which the insurance settlement becomes final. You would have to file an amended return. You have until April 15, 2011 to file an amended return for...

Tax Law (Questions About Taxes): Transferring Earnings to Another SSAN, ssan, john thanks
ssan, john thanks, stancil: John, Thanks for your question. Not really. The bank is required to issue the 1099 to the holder of record. You could issue her a 1099 for the interest from you, but you would not get a deduction for the interest income, so that is not a workable solution....

Tax Law (Questions About Taxes): tax, frivolous law suits, tax implication
frivolous law suits, tax implication, corporate stock: Meshia, Thanks for your question. It would have been better to form a corporation in which to place the patent. Placing the ranch in the corporation doesn t do much, as you could still be sued personally. Since you own the corporation that holds the...

Tax Law (Questions About Taxes): tax filing question, stancil, independent insurance
stancil, independent insurance, schedule c: Len, Thanks for your question. To answer it, yes, the 1099 would be Schedule C. However, the company is in violation of the law by treating that portion as 1099. She is either a W-2 employee or a 1099 independent contractor - she cannot be both for...

Tax Law (Questions About Taxes): tax pension, cpa license, general discussion
cpa license, general discussion, chat board: With a balance of $1.2m and a payment to the IRS of almost $300k, he can afford to hire someone to give him advice that considers all the facts and circumstances! caveat - this response is not tax advice, but a general discussion on a free chat...

Tax Law (Questions About Taxes): tax on Social Security Income, irs publication 17, social security income
irs publication 17, social security income, reportable income: Robert, Thanks for your question. The social security would be taxable. However, it is unlikely that the total income would be sufficient to bump the SS into the area where it would be taxable income. The calculation is some complex, and could not...

Tax Law (Questions About Taxes): taxation of referral fees, massage business, 1099 misc forms
massage business, 1099 misc forms, referral fees: Typically, 1099-MISC forms are required to be issued when you pay an independent contractor over $600 in a given tax year. Most states stick with the federal rule. As for, CO, your best best would be to talk with someone local or call the CO department of...

Tax Law (Questions About Taxes): back taxes, innocent spouse form, tax situation
innocent spouse form, tax situation, irs: I can speak to the IRS. I am on the east coast and don t know a lot about CA s practices. Typically, if you file jointly and are due a refund at any point in the future they can collect it to pay for 08. That would include any refund due because of your...

Tax Law (Questions About Taxes): Unemployment and 1099, unemployment benefit, unemployment office
unemployment benefit, unemployment office, unemployment benefits: Veronica: When you call in each week to certify for unemployment benefits you must declare that you are able and available for work. If for any reason you are not able and available for work that will effect your unemployment benefit. In this case if...

Tax Law (Questions About Taxes): Unemployment Question, private contract, time thanks
private contract, time thanks, severance: Liz: Your husband s company is making an agreement with your husband that they will for 2 months after closing their door pay him his regular paycheck. However, if he goes to work for someone else or files for unemployment the paychecks stop. Yes he...

Tax Law (Questions About Taxes): VA Benefits, taxable income, neighbor
taxable income, neighbor, relationship: Typically, if they considered her to be a contractor they would have to issue her a 1099-MISC. Is the payment in her name with her social? Or the father s? The main issue is how the VA qualifies their relationship. Adam http://www.wilmingtontaxesandaccounting.co...

Tax Law (Questions About Taxes): VA benefits, self employment income, stancil
self employment income, stancil, schedule c: Larry, Thanks for your question. According to my information, that income is taxable to her and is defined as reportable to the IRS. Which means that she should be getting a 1099. Regardless, this would be reported on Schedule C as self-employment...

Tax Law (Questions About Taxes): 10-99b, time college student, treasury securities
time college student, treasury securities, us treasury: John: Your sons tax consequence is the difference between what your dad paid for the bond and what the bond cashed in value. I believe the 1099B (B stands for BOND) earnings can be offset by the allowable education expense for 2009. That will not be true...

Tax Law (Questions About Taxes): 1099-A and 1099-C different lenders, cancellation of debt, 1099c
cancellation of debt, 1099c, 1099a: Thanks for your question. Only the 1099A needs to be reported on Form 982. Since the FMV is greater than the amount owed on the 1099C there is no cancellation of debt income from that one. However, when you report the sale on Form 4797 and Schedule...

Tax Law (Questions About Taxes): 1099-A, Taxes, IRS
Taxes, IRS, Delinquent Returns: Alicia, The Mortgage Forgiveness Debt Relief Act of 2007 allows taxpayers to exclude debt cancellation from income. It appears that your case qualifies for this but below is a link to the IRS website for you to read more about it. http://www.irs.gov/individuals/article/0,,id=179414,00.html...

Tax Law (Questions About Taxes): 1099, cpa tax business, business advisory services
cpa tax business, business advisory services, turbo tax: Dear Cristal, Yes, you must file an amended tax return and include this income (Form 1099X). It s not a big deal to do so, but not doing it can get you in trouble. I m not sure where your friend got her numbers, but you certainly have to include $747.50...

Tax Law (Questions About Taxes): 1099-A, recourse loan, cancellation of debt
recourse loan, cancellation of debt, losing sleep: Brett, Thanks for your question. The information you have given is inconsistent. You state it is non-recourse, but that box 5 is checked yes that you are personally liable. Being personally liable means it is a recourse loan and you are liable to...

Tax Law (Questions About Taxes): 1099-C, form 4797, capital improvements
form 4797, capital improvements, stancil: Basis is what you paid for it plus capital improvements minus depreciation. If you don t have capital gains, you can deduct $3,000 per year. If you have capital gains you subtract them from your loss, then subtract another $3,000. John Stancil, CP...

Tax Law (Questions About Taxes): 1099 C, Taxes, IRS
Taxes, IRS, Delinquent Returns: Judy, There can be a long discussion regarding this issue but I am going to keep it short. You should not have to pay taxes on the amount cancelled because of the The Mortgage Forgiveness Debt Relief Act of 2007. This act allows taxpayers to exclude debt...

Tax Law (Questions About Taxes): 1099-C Short Sale and Divorce, Taxes, IRS
Taxes, IRS, Delinquent Returns: Kevin, The Mortgage Forgiveness Debt Relief Act of 2007 allows taxpayers to exclude debt cancellation from income. It appears that your case qualifies for this but below is a link to the IRS website for you to read more about it. If you meet the qualifications...

Tax Law (Questions About Taxes): 1099-credit card forgiveness, stay at home mom, income tax return
stay at home mom, income tax return, effective tax rate: Kim: I am assuming that you and he files a joint return. I am also assuming that the credit card company gives you a 1099 for you to count as income the balance that they write off. Personally I do no enjoy answering hypothetical questions with hypothetical...

Tax Law (Questions About Taxes): 1099-A Forms, Taxes, IRS
Taxes, IRS, Delinquent Returns: Ronalee, The Mortgage Forgiveness Debt Relief Act of 2007 allows taxpayers to exclude debt cancellation from income. It appears that your case qualifies for this but below is a link to the IRS website for you to read more about it. http://www.irs.gov/individuals/article/0,,id=179414,00.htm...

Tax Law (Questions About Taxes): 1099-A foreclosure, debt cancellation, stancil
debt cancellation, stancil, cost basis: Dave, Your loss is the difference in your cost basis and the sale price. Your sale price would be the amount of debt cancellation income, if any, that you had. According to the form you received, there was no debt cancellation, however. Hope this...

Tax Law (Questions About Taxes): 1099-INT for deceased person, social security number, certificate papers
social security number, certificate papers, deceased person: Chris, Thanks for your question. The bank should be presented with the death certificate, papers authorizing them as the personal representative of the deceased, and with information to change the listed social security number prior to cashing the CD...

Tax Law (Questions About Taxes): 1099-Misc Non-employee compensation, sponsorship money, race winnings
sponsorship money, race winnings, employee compensation: Mike: I would consider it to be a hobby. However, a 1099 has been filed and the IRS will be looking for the 1099 income to be reported. Since he has a car and sponsorship money and probably enough expenses to off set the income. It should be reported...

Tax Law (Questions About Taxes): 1099-misc, self employment tax, income tax purposes
self employment tax, income tax purposes, w2 forms: Hi, She reports the 1099MISC income on Schedule C (or CEZ) and it is subject to income tax and self employment tax. Her W2 income is also included for income tax purposes but not for self employment tax. If she had any expenses to earn the 1099MISC income...

Tax Law (Questions About Taxes): 1099-misc, self employment income, self employment tax
self employment income, self employment tax, social security and medicare: Hi, Yes he needs to file a tax return. He won t owe any income tax but that 1099MISC income is self employment income and is subject to self employment tax (social security and medicare). He needs to use a Schedule C or CEZ to report his income and expenses....

Tax Law (Questions About Taxes): 1099-misc, wrong box selected, 1099 Correction
1099 Correction: Hi Larry, You should ask for a corrected form. Regardless, if the 1099 is incorrect you will still have to report the income. The 1099 is just an informational return and the income has to be reported if you receive a 1099 or not, or it is correct or...

Tax Law (Questions About Taxes): 1099-R, ira account, mass mutual
ira account, mass mutual, 401k: Yadira: Yes, generally speaking, when the transfer is made institution to institution this is of no tax consequence. However, I am not privy to your situation and your tax information, therefore, I will only address your question in general. You should...

Tax Law (Questions About Taxes): 1099 on short sales, circular 230 disclaimer, confidential consultation
circular 230 disclaimer, confidential consultation, avoiding tax: Hi Curtis, For 2007 and 2008, California conformed, with modifications to IRC section 108 (a)(1) (E) that allows a limited amount of COD income resulting from the foreclosure or short sale of a qualified principal residence to be excluded. However, this...

Tax Law (Questions About Taxes): 1099 Taxes, self employment tax, circular 230 disclaimer
self employment tax, circular 230 disclaimer, adjusted gross income: Hi Larry, Income from a 1099 is subject to income and Self-Employment tax. The SE tax is 15.3 percent, but you get a deduction before adjusted gross income for one-half of this amount. Any individual seeking legal advice for their own situation should...

Tax Law (Questions About Taxes): 1099a, Income form debt cancellation
Income form debt cancellation: Hi Debbi, If you have income from cancellation of debt, and it does not meet an exception, it is reported on line 21 of your form 1040. The exceptions would include the following: 1) The note securing the debt was non-recourse. 2) You were insolvent...

Tax Law (Questions About Taxes): 1099C, circular 230 disclaimer, ch 7
circular 230 disclaimer, ch 7, governmental agency: Hi Becky, Canceled debts can be excluded from income if you are insolvent or bankrupt. You should not receive a 1099C for debts relieved in the bankruptcy. For the 1099C your already received just claim the bankruptcy exception. You do not need to claim...

Tax Law (Questions About Taxes): 1099C, cancellation of debt, debt cancellation
cancellation of debt, debt cancellation, portfolio recovery associates: Dorothy, Thanks for your question. Based on your description, everything sounds legitimate. The cancellation of debt income is reported on Form 982 and line 21 of the 1040. You may be able to avoid the tax on this debt if you are insolvent - if...

Tax Law (Questions About Taxes): 401(k) for a 1099-Misc Independent Contractor, stancil, independent contractor
stancil, independent contractor, strong signal: Shlomo, Thanks for your question. Legally, it depends on your plan. From a tax standpoint, putting an independent contractor is a strong signal to the IRS that the person is not an independent contractor, but an employee. Hope this helps. John...

Tax Law (Questions About Taxes): Acquisition, bank auditors, acquisition or abandonment of secured property
bank auditors, acquisition or abandonment of secured property, mortgage company: Taffy: Did your parents abandon their home or did it go into foreclosure? If neither of those situations occurred, then their is nothing to do. This something required by the federal bank auditors to let mortgagees know the situation of their property...

Tax Law (Questions About Taxes): Attorney fees, stancil, attorney fees
stancil, attorney fees, taxable income: Deanna, Thanks for your question. Attorney fees are deductible for the purpose of producing or collecting taxable income. Since this does not appear to be the case in your situation, the fees would not be deductible. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Babysitter Taxes, Taxes, IRS
Taxes, IRS, Delinquent Returns: Katie, Since you are a babysitter you are considered self-employed. You should report the amount that you make on Form 1040 Schedule C-EZ. The amount you made less expenses is subject to self-employment taxes (Medicare and Social Security). The amount you...

Tax Law (Questions About Taxes): Bad Debt, divorce decree, decree states
divorce decree, decree states, student loan debt: Hi, Actually alimony is deductible so if you are paying that take the deduction. From what you wrote you are equally responsible for the student loan. The fact that a divorce decree assigned it to your spouse doesn t make you any less responsible. ...

Tax Law (Questions About Taxes): Boat Tax Deductions, first time home owner, stancil
first time home owner, stancil, mortgage interest: Mary, Thanks for your question. If the boat is given as security for the loan, the interest payments will be deductible as mortgage interest. In order to qualify for the first-time home owner tax credit, the boat must be your primary residence and...

Tax Law (Questions About Taxes): Business Code and Income Reporting for Form 1065, gross receipt, real estate investment
gross receipt, real estate investment, form 1065: You should have an accounting system that tracks all of that anyway, you can attach a spreadsheet that itemizes each property and show the totals on 8825. The general expenses are shown on page 1 - your situation is not uncommon, the IRS sees this all the...

Tax Law (Questions About Taxes): Business tax question, personal income taxes, partnership taxation
personal income taxes, partnership taxation, form 1065: Crystal, Thanks for your question. Your question indicates a lack of understanding of several tax issues. I suggest you employ a competent professional to help you keep your books and tax records. An LLC is not a partnership. The LLC may elect to...

Tax Law (Questions About Taxes): Buy house to rent to LLC for office space, smllc, richard fritzler
smllc, richard fritzler: Well, the LLC is disregarded so all these transactions would just be money shuffling on the Schedule C attached to your 1040. I understand your goal, but there are far better ways. All of this to reduce your taxes by $1800 or less (or less, because once...

Tax Law (Questions About Taxes): babysitting tax implications, childcare provider, self employment taxes
childcare provider, self employment taxes, stancil: Ben, The babysitting income is earned income and must be reported on Schedule C. You will also need to file Schedule SE for the self-employment taxes. You may be able to take some deduction for the use of your house, but I would not term it to be a good...

Tax Law (Questions About Taxes): where is the boundary, irs laws, boundary question
irs laws, boundary question, church treasurer: Willa, Thanks for your question. There is no hard line on this. The snacks, when provided as a convenience in relation to a church activity is ok. Going out to dinner can be ok if it is not overdone. Occasionally, fine. Frequently, I see a problem....

Tax Law (Questions About Taxes): CA Form 3885A, circular 230 disclaimer, depreciation method
circular 230 disclaimer, depreciation method, depreciation methods: Hi David, You only have to file Form 3885A if your State Depreciation is different form you Federal Depreciation. If they are the same the form is not required. If you use a different depreciation method for Federal and State - Complete the form. If...

Tax Law (Questions About Taxes): Cancellation of Debit in CA, irs questions, cancellation of debt
irs questions, cancellation of debt, debt cancellation: Rosina, You don t really claim insolvency. It is a financial condition. You are insolvent if the fair market value of everything you own - investments, clothing, jewelry, retirement plans, houses, vehicles, etc. - are less than the total of your debts....

Tax Law (Questions About Taxes): Capital Improvements on Vacation Property, ac appliances, capital improvements
ac appliances, capital improvements, counter tops: Todd, Thanks for your question. The capital improvements must be capitalized and depreciated over their specified class life. If you do not take the depreciation, the IRS will treat your gain as if you did, so there is no reason not to take the depreciation...

Tax Law (Questions About Taxes): Capital loss, circular 230 disclaimer, tax basis
circular 230 disclaimer, tax basis, personal loss: Hi Ken, Your wife would calculate her gain or loss on the sale by deducting the proceeds she received from her tax basis in the property. Since this was a gift her tax basis is a carry over basis that is equal to the basis her mother had in the property....

Tax Law (Questions About Taxes): Changing IRS filing status for past years, irs filing status, irs problem
irs filing status, irs problem, head of household: If he qualifies you for HOH status (I am not making that determination here) then you can amend the last three years for that. You only have three years to do that so you have until 04/15/10 to amend 2006. The earlier years are lost. Yes, it will be worth...

Tax Law (Questions About Taxes): Child Support & Claiming Dependents, claiming dependents, circular 230 disclaimer
claiming dependents, circular 230 disclaimer, form 8332: As the non-custodial parent you can only claim the deduction if you have a signed Form 8332 from your ex wife releasing the deduction. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides...

Tax Law (Questions About Taxes): Claimed, head of household, stancil
head of household, stancil, gross income: Bill, Your gross income exceeds the amount that would permit her to claim you so she is not entitled to it. If you can t work it out with her, file a paper return. The IRS will send you and the other person a letter, instructing you to file an amended...

Tax Law (Questions About Taxes): Claimed, head of household, irs
head of household, irs, unemployment: Bill, Your sister may have claimed you as a dependent because you were living with her. However, she must provide more than 50% of the support for you. It sounds like you paid for your own expenses so she should not be able to claim you as a dependent....

Tax Law (Questions About Taxes): Claiming a dependent with income, caution
caution: No, you do not report his income. He must file his own return and indicate on it that he is a dependent of someone else. One caution, if he provided more that 50% of his own support, you cannot claim him. That is not likely but I wanted to make you aware of...

Tax Law (Questions About Taxes): Claiming a Relative, immigration lawyer, stancil
immigration lawyer, stancil, orthodontist: Glenn, Thanks for your question. No, you cannot claim her as a dependent, primarily because she is not a U. S. resident or citizen. Additionally, she must live in your household for at least half the year, must be a full-time student under age 24, and...

Tax Law (Questions About Taxes): Claiming a stepchild while legaly seperated, legaly, stancil
legaly, stancil, custodial parent: Miranda, Thanks for your question. Unless their is an agreement between them, in writing, or a court order the dependency exemptions go to the custodial parent. This would be your friend in this case. The best approach for her at this point unless...

Tax Law (Questions About Taxes): Co Home owner tax laws., first time buyer, mortgage interest
first time buyer, mortgage interest, ustreas: Hi could the house qualify for the first time buyer credit ? see the IRS site for a definition at WWW IRS.ustreas.gov. whoever paid the property taxes and interest on the mortgage may qualify for a deduction again you may get more detail at...

Tax Law (Questions About Taxes): Continuing Education for Educators, employment business expenses, opportunity tax credit
employment business expenses, opportunity tax credit, adjusted gross income: Kimberly, While you may be over the income limitation for those credits, you can still take them as a miscellaneous itemized deduction on Schedule A. However, you can only deduct those that exceed 2% of your adjusted gross income. Hope this helps. ...

Tax Law (Questions About Taxes): CPA review course tuition fee, becker cpa review, personal tax return
becker cpa review, personal tax return, cpa preparation: Because the law specifically excludes any costs involved in qualifying you for the trade or profession. Acquiring job skills is not the criteria for a deduction. Improving skills in an existing profession or trade is the criteria. Moving from private accounting...

Tax Law (Questions About Taxes): capital gain, homestead law, stancil
homestead law, stancil, capital gain: Marie, Thanks for your question. That is NOT correct. The basis in the house is somewhat complicated. When grandma s husband died, grandma inherited his half, so her basis is 1/2 the original purchase price plus 1/2 the value as of date of death....

Tax Law (Questions About Taxes): cell phone deduction, circular 230 disclaimer, road trucker
circular 230 disclaimer, road trucker, governmental agency: To the extent he uses the phone for business it is deductible, the personal use portion is not deductible. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general...

Tax Law (Questions About Taxes): charitable contributions, sole proprietor, charitable contributions
sole proprietor, charitable contributions, stancil: JJ, Thanks for your question. No, charitable contributions must be Schedule A items. The IRS does not recognize a Schedule C business as a separate entity and requires that charitable contributions be listed on Schedule A. Hope this helps. John...

Tax Law (Questions About Taxes): charitable donations, Taxes, IRS
Taxes, IRS, Delinquent Returns: Jess, Technically the donation has to be in the name of the person who is going to claim the deduction. He could take the deduction but there is a chance the IRS will audit the return and will require documentation of the donations. If the donation was...

Tax Law (Questions About Taxes): child tax credit, child care provider, federal tax return
child care provider, federal tax return, child tax credit: Tawanna: I do not understand why your daycare provider is being so difficult. All parents who have children in daycare are required to provide the tax number of the provider in order to tax the deduction. If it was me I would write a statement regarding...

Tax Law (Questions About Taxes): if I could claim myself, cpa tax business, business advisory services
cpa tax business, business advisory services, personal exemption: Dear Patricia, Yes, you can amend your 2006 return up until April 15 of this year (the statute of limitations is 3 years). If you did not take a personal exemption in 2006 then you can probably take one, but I can t give you direct advice on that without...

Tax Law (Questions About Taxes): claiming adults as dependants, catholic charities, dependency exemption
catholic charities, dependency exemption, son 28: Elaine, In order to take a dependency exemption the following requirements must be met: 1. The son and brother must live in your household for the entire year. Living in a separate house would not qualify them. His mother does not have to live in your...

Tax Law (Questions About Taxes): claiming a child and form 8332, circular 230 disclaimer, dependency deduction
circular 230 disclaimer, dependency deduction, form 8332: Hi Bianca, No this is not legal. The purpose of Form 8332 is to release the dependency deduction from a custodial parent to a non-custodial parent. Further, if someone does not qualify to take a dependency deduction, you cannot just give it to them. ...

Tax Law (Questions About Taxes): claiming child on taxes, Dependency Deduction by Non-custodial parent
Dependency Deduction by Non-custodial parent: Hi Sara, Fortunately, in the law regarding dependent deductions changed in 2009 to your benefit. In order for a non-custodial parent to deduct a child as a dependent on their tax return, they are required to obtain a Form 8332 form the custodial parent,...

Tax Law (Questions About Taxes): claiming a child witout a SSN, social security number, passport office
social security number, passport office, dependency exemption: Janelle, Thanks for your question. You cannot take a dependency exemption without the social security number. It is my understanding that the temporary number you received is a temporary number for DEERS purposes only. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): claiming foreign nephew, Taxes, IRS
Taxes, IRS, Delinquent Returns: Joan, Unfortunately you cannot claim your nephew. To be claimed as a dependent the person must be from the US with a valid Social Security number or a resident of Canada or Mexico. Since you cannot claim him you are not allowed to deduct his tuition...

Tax Law (Questions About Taxes): claiming my mother, dependency exemption, stancil
dependency exemption, stancil, gross income: Deborah, Thanks for your question. You can claim a dependency exemption for your mother if 1) you provided over half her support and 2) her gross income was less than $3,650 for the year. Social security does not count as income for this purpose. ...

Tax Law (Questions About Taxes): Deducting rental expense, maintenance painting, passive investment
maintenance painting, passive investment, rental expenses: Peter: Yes you can deduct any expenses up to the amount of income. That is, you can not offset other income such as wages with losses from passive investment expenses. If on the other hand, you were also the active manager of the property then it would...

Tax Law (Questions About Taxes): Deducting windows of parents home in my name, shelly shelly, energy efficient windows
shelly shelly, energy efficient windows, unrelated matter: Shelly, Thanks for your question. No, you are only allowed that credit for energy-efficient installations in your principal residence. In an unrelated matter, you state that their home is now in your name. This may not be the best tax strategy. ...

Tax Law (Questions About Taxes): Divorce and 1099-c, divorce decree, irs tax
divorce decree, irs tax, divorce attorney: Dear Pat, Unfortunately you may have a tax liability for the discharged debt. There are, however, some very specific exclusions that might apply to you, so you should seek the advice of a tax preparer who understands your particular situation. You might...

Tax Law (Questions About Taxes): DOT right of way land sale, berkeley county, stancil
berkeley county, stancil, capital gain: Michael, The fact it was a forced sale is not a factor. You will owe taxes on the gain from the sale. If owned the property more than 12 months, it will be taxed as a capital gain with a rate of zero of 15 percent depending on your filing status and total...

Tax Law (Questions About Taxes): Donation Receipt from Church, donation receipt, canceled checks
donation receipt, canceled checks, stancil: Peter, Thanks for your question. In regards to getting it correct, show them the checks. Technically, you should report the amount on the statements. However, if it is correct you can go with your actual amounts. The only problem is that if you...

Tax Law (Questions About Taxes): dependent, exemption, dependent exemption, dependency exemption
dependent exemption, dependency exemption, stancil: Darren, Thanks for your question. That is possible, but apparently not in your case, as the criteria for qualified relative requires that he live in your household for the entire year. It does not appear you can take a dependency exemption for him....

Tax Law (Questions About Taxes): dependents, social security number, exhusband
social security number, exhusband, stancil: Violet, Thanks for your question. You can t. The IRS will not reveal that information. You will have to contact the IRS, give them the relevant information, and let them investigate. Not much help, but that s how it is in these cases. John Stancil,...

Tax Law (Questions About Taxes): dependents, contacting the irs, circular 230 disclaimer
contacting the irs, circular 230 disclaimer, governmental agency: Hi Bryana, Inform your mother that you will be contacting the IRS if this does not stop immediately. This is illegal activity. If they do not stop, contact the IRS by phone and in writing. Any individual seeking legal advice for their own situation...

Tax Law (Questions About Taxes): per diem, irs rate, form 2106
irs rate, form 2106, deim: Michelle: Per deim is much discussed least understood allowable expense of a business. Most labor law across this vast country requires the employer to pay for some of its employee daily living expense (food and sleeping). Year ago (back in the day) the...

Tax Law (Questions About Taxes): dod civ contractor, working in iraq, form 2555
working in iraq, form 2555, federal gov: Lloyd, Thanks for your question. The amount of the exemption for 2009 is $91,400 rather than $80,000. I would be glad to prepare your taxes. My website has secure file transfer. IF you sign up as a client on www.johnstancilcpa.com, I will then send...

Tax Law (Questions About Taxes): dollar store, store question, leasehold improvements
store question, leasehold improvements, stancil: You seem to be confusing two issues. You first asked about getting it off the books, then you talk about zeroing it out according to the laws. From a tax standpoint, you have a charitble contribution which can be passed on to the shareholders via the K-1....

Tax Law (Questions About Taxes): Education Expenses, irs website, free scholarships
irs website, free scholarships, college expense: Anita: At the college where your husband works the cost of the college may have been added to his gross income and he pays income tax on that amount. If so, then yes it would be a deductible college expense. Also, you can deduct out of pocket expense...

Tax Law (Questions About Taxes): EITC, www irs gov, return thanks
www irs gov, return thanks, stancil: Bill, Ivan didn t handle your question, but I can guide you. You can get instructions and forms for past years at www.irs.gov. Just click on forms and publications. You should attach any form that has changed from the original submission. The IRS...

Tax Law (Questions About Taxes): Employer Tuition Reimbursement., tuition reimbursement plan, sallie mae
tuition reimbursement plan, sallie mae, employer tuition: Jennifer: The question you are asking me is not a tax question. I do not know what a tution reimbursement plan is, I have never seen one. If you could please give me the information on their reimbursement plan. I will then give you my opinion. Joh...

Tax Law (Questions About Taxes): ESOP rollover to 401k early Distribution, irs publication 575, form 5329
irs publication 575, form 5329, exception number: Ray: If you did a qualified roll over then you will have not tax liability. However, if you did not do a qualified you will owe a penalty. Your plan manager can provide you with that information. All plans send you tax information at the end of the year...

Tax Law (Questions About Taxes): eic, circular 230 disclaimer, governmental agency
circular 230 disclaimer, governmental agency, short answer: Hi Kacandra, The short answer to your question is no. Without earned income you cannot receive an earned income credit. The credit percentage is multiplied by your earned income to determine the credit, and if your earned income is zero, so is your credit....

Tax Law (Questions About Taxes): existing home buyer tax credit, home owner insurance, existing home
home owner insurance, existing home, moths: Susan, Thanks for your question. You must complete Form 5405 and include it with your return, along with a copy of the HUD-1 closing statement. You do not have to submit proof of prior homeownership or how long you lived there. If you sell the house...

Tax Law (Questions About Taxes): Failed to file 1041 for Grantor Trust, grantor trust, stancil
grantor trust, stancil, beneficiary: Jean, Thanks for your question. File returns for all past years. Since the income was taxed to the beneficiary (you) there will be no tax due, but it will set things right with the IRS and you will not have to concern yourself with a future investigation...

Tax Law (Questions About Taxes): Failure to pay personal income taxes, Uncollectible Tax Debt
Uncollectible Tax Debt: Hi Jim, There is not a criminal penalty for failure to pay personal taxes. There is a criminal penalty of up to one year imprisionment for each year you do not file a tax return when one is due. Therefore, always make sure you file. I was not clear on...

Tax Law (Questions About Taxes): Fed tax witholding from paycheck, fed tax withholding, waitress job
fed tax withholding, waitress job, irs office: Ryan: You can complain to the local IRS office about the employer not taking out the proper amount of Federal Withholding or to the State for not withholding the correct state income tax but at the end of the day She is responsible for her income tax. ...

Tax Law (Questions About Taxes): Federal tax withholdings, Taxes, IRS
Taxes, IRS, Delinquent Returns: William, Yes it is legal for them not to withhold federal taxes. Your wife should have received a W-4 to determine how much federal tax she wanted withheld. If she is still working for the employer she can ask to have federal taxes withheld. It is also...

Tax Law (Questions About Taxes): Filing status, circular 230 disclaimer, social security number
circular 230 disclaimer, social security number, governmental agency: Hi Alicia, If you are married on the last day of the tax year (12/31) you can only file as married filing separately or married filing jointly. Based on the facts you present, file as married filing separately. That way you will not take any responsibility...

Tax Law (Questions About Taxes): Filing taxes with SS-8 Submission, employee portion, business deduction
employee portion, business deduction, odd job: Josh: If you have documented evidence that you only received a certain amount then file it only on the amount that you were paid. It will be up to your employer to show his evidence that you received the amount he reports. However, I will say if he provides...

Tax Law (Questions About Taxes): First Time Home Buyer, New Home Buyer Credit
New Home Buyer Credit: Hi James, The original first-time buyer credit law nixed the credit if the home sale was between related parties, but there was a loophole for the situation you describe. Since you are not related to your wife’s parents – except by marriage – you could...

Tax Law (Questions About Taxes): Flex Savings Account payments while on COBRA, cobra administrator, time employee
cobra administrator, time employee, tax money: Thomas: You do not get to claim that you paid in after you were no longer employed with your employer. That account was pre-taxed money earned with that employer. If you went to work for another employer the new employer will be required to make payment...

Tax Law (Questions About Taxes): Foreign Earned Income, unemploymnet, foreign earned income
unemploymnet, foreign earned income, mark thanks: Mark, Thanks for your question. You can file now, but you cannot take the foreign earned income exemption until you meet the 330 day physical presence rule. You can file now, then file an amended return, or you can file for an extension and file...

Tax Law (Questions About Taxes): Foreign Earned Income and Military service, military deployment, foreign earned income
military deployment, foreign earned income, military drill: Jacob, There are no exceptions. However, the requirement is 330 days in a 12-month period. You do not have to be working in your contractor position, just be out of the country. So, unless you came back to the US for more than 35 days, you would qualify...

Tax Law (Questions About Taxes): Foreign earned income, fm3 visa, form 2555
fm3 visa, form 2555, foreign earned income: Cody, You will have to file Form 2555 with your 1040 to determine how much of your income can be excluded. All your income is included on the return. Since you were not in a foreign country for the entire year, the amount of the exclusion may be less than...

Tax Law (Questions About Taxes): Foreign Pensions, professional preparer, worldwide income
professional preparer, worldwide income, pension issues: Anna, Thanks for your question. As a U. S. citizen or resident you are liable for taxes on your worldwide income. You should file amended returns for past years. You might talk with a professional who could discuss working a deal for you with the IRS....

Tax Law (Questions About Taxes): Form 1099, 1099, richard fritzler
1099, richard fritzler: He is obligated to send 1099 to any individuals that he paid more than $600 to in that year. If her sent you a 1099 for more than you actually received, then you have a fight on your hands and you should note it correctly on the tax return. The 1099 is...

Tax Law (Questions About Taxes): Form 1099-DIV/ 1099-R, dividend distribution, dividend income
dividend distribution, dividend income, form 1099: Jon, Thanks for your question. You receive a 1099-R for any distribution from your 401(k) plan. These are not considered dividend distribution even though the amount withdrawn may match some dividends paid. 1099-DIV is for dividends received that...

Tax Law (Questions About Taxes): Form 1099R & 2009 Tax Return, ira custodian, lump sum payment
ira custodian, lump sum payment, form 1040ez: Rick, Thanks for your question. You will have to use Form 1040. On line 16a show the amount of the distribution. On line 16b show the amount that is taxable. This should be zero, if you rolled the entire amount. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Form 8453 8332, internal revenue service, mail form
internal revenue service, mail form, form 8453: Gary: File form 8453 to the below address within 3 days after receiving acknowledgement of the return being received by the IRS. Also mail form 8332 to the IRS to the address listed below when you get it completed. Internal Revenue Service Attn:...

Tax Law (Questions About Taxes): Follow up question, self employment tax, social security and medicare
self employment tax, social security and medicare, statutory employee: You are not a statutory employee. As a sole member LLC you are considered self-employed and should not have been filing a 941 unless you have employees. You cannot pay yourself a salary and withhold SS and Medicare from your own business. You report your...

Tax Law (Questions About Taxes): can my fiance claim my kids?, return tests, half brother
Tax Law (Questions About Taxes): can my fiance claim my kids?, return tests, half brother, stepsister

Tax Law (Questions About Taxes): Non Resident Sate Taxation Issue, tax liability, severance
Tax Law (Questions About Taxes): Non Resident Sate Taxation Issue, tax liability, severance, proof

Tax Law (Questions About Taxes): can my fiance claim my kids?, cpa tax business, business advisory services
cpa tax business, business advisory services, dear jennifer: Dear Jennifer, If your kids lived in the same household as your fiance all year and he provided more than half of their support (which it sounds like he did from your description), then yes he can claim them as dependents. Best regards, Alexandra...

Tax Law (Questions About Taxes): filing, circular 230 disclaimer, turbo tax
circular 230 disclaimer, turbo tax, h r block: When you are married you can no longer file as single. Your only choices are Married Filing Jointly or Married Filing Single. That is the problem with these tax programs, they do not no the correct tax law for your situation. You can get a professional...

Tax Law (Questions About Taxes): filing state taxes, stancil, state taxes
stancil, state taxes, tax returns: Russell, Yes, you must file a non resident form in Iowa, reporting the income earned in that state. You will file a NE resident form reporting all your income. NE will give you a credit for taxes paid to IA. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): foreclosure 1099, cancellation of debt, paul thanks
cancellation of debt, paul thanks, stancil: Paul, Thanks for your question. If the bank that owned the mortgage bought the house, your tax liability will be the difference in what they sell it for and the amount owed. If it was a different bank, you have no cancellation of debt income, as sale...

Tax Law (Questions About Taxes): foreign income exclusion, physical presence test, income exclusion
physical presence test, income exclusion, maximum credit: Kim, Thanks for your question. No, you must meet the 330-day requirement before you file. You can file and not take the credit, then file an amended return or you can get an extension and file when you qualify. The credit will be prorated based upon...

Tax Law (Questions About Taxes): GM Common Stock, gm stock, employee options
gm stock, employee options, stock broker: Karen: It can not be considered worthless until you receive a notice from court or you sell the stock or attempt to sell the stock and get a statement from a stock broker that the stock has no value. The profit or loss from the sell of stock determine...

Tax Law (Questions About Taxes): Gross Proceeds from Home Sale, gross proceeds, stancil
gross proceeds, stancil, tax form: Jason, The proceeds you got from the sale is not a factor. You will not owe taxes on the gross proceeds. First, if this was your primary residence and you owned and lived in it for 24 of the past 60 months, you will not owe any taxes on the sale. ...

Tax Law (Questions About Taxes): gift taxes , donor and donee, tax consequences, gift taxes
tax consequences, gift taxes, donee: Gifts are never taxable to the person receiving them and they are never deductible to the person giving them. A person may gift to any person up to $13,000 per year with no tax consequences at all. If they gift more than that, they are required to file...

Tax Law (Questions About Taxes): Head of Household filing, circular 230 disclaimer, divorce proceeding
circular 230 disclaimer, divorce proceeding, head of household: You can claim HOH status still. You must provide over half the support of a household and have a qualified individual living with you. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides...

Tax Law (Questions About Taxes): health insurance reimbursement, insurance reimbursement, medical provider
insurance reimbursement, medical provider, insurance money: Pat, Thanks for your question. The payment is for reimbursement for medical expenses. Assuming the amount is owed to the medical provider, it is not income to him until and unless the medical provider cancels the debt. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): home buyer tax credit, irs questions, proof of residency
irs questions, proof of residency, claiming tax: Karen, Thanks for your question. The credit can be divided among those who qualify for it, however they wise to claim it. You cannot e-file and take the credit as the IRS requires that you include a copy of your HUD-1 form with the return. Simply...

Tax Law (Questions About Taxes): home improvement expenses, bassis, cost basis
bassis, cost basis, home improvement: Hi Dana that means that improvements such as a new roof can be added to the cost of the home to determine the profit or loss resulting from a sale. On the other hand the first $250,000 of gain (500,000 if married ) of profit are excluded anyway so the cost...

Tax Law (Questions About Taxes): homebuyer tax credit, stancil, interest income
stancil, interest income, tax liability: Harry, Thanks for your question. The type of income does not affect the homebuyer credit. It is a credit not a deduction, so it does not work as you illustrate. You would determine your tax liability, then deduct $8,000 from that. If you tax liability...

Tax Law (Questions About Taxes): Income tax on French pension?, form 1116, worldwide income
form 1116, worldwide income, government pension: Arlyne, Thanks for your question. As a U. S. citizen or resident you are subject to tax on your worldwide income, regardless of source. If you are compelled to pay French income tax on the French income, you can take a credit for those taxes on your...

Tax Law (Questions About Taxes): Inheritance taxes, Tax on Inheritance
Tax on Inheritance: Hi Jonathan, Estate taxes are paid by the estate and not by the recipient of the inheritance. Therefore, this is not taxed to the heirs and they do not have to report it as income to the federal government or the state of CA. Any individual seeking...

Tax Law (Questions About Taxes): IRA, retirement package, statutory limits
retirement package, statutory limits, john thanks: John, Thanks for your question. If the W-2 shows wages in Box 1, that is considered earned income and qualifies you for an IRA up to the statutory limits for IRA s but not greater than your earned income. Hope this helps. John Stancil, CPA ...

Tax Law (Questions About Taxes): IRA conversion to Roth IRa, roth ira conversion, 1099r
roth ira conversion, 1099r, john thanks: John, Thanks for your question. I do not think that is correct. I have not recently handled a traditional - Roth IRA conversion, but in the past there has always been a 1099R issued for a conversion or a rollover. Logic tells me that this has not changed,...

Tax Law (Questions About Taxes): IRS property seizure, circular 230 disclaimer, property seizure
circular 230 disclaimer, property seizure, back taxes: Hi Cid, Most likely the IRS will place a lien on the property. However, you are not responsible for your brother s taxes. Your portion of the property cannot be taken for the taxes. You need to protect your rights. You should consult with an attorney...

Tax Law (Questions About Taxes): Itemized deductions, cpa tax business, state tax return
cpa tax business, state tax return, business advisory services: Dear Yelena, You can deduct state tax that you actually pay for the year. That means what was taken out on the W-2 plus/minus the state tax that you pay/get refunded (on your state tax return for the yar). Yes, you can also add SDI as a state tax. ...

Tax Law (Questions About Taxes): no incom tax taken off checks, time college student, incom tax
time college student, incom tax, paying on time: Ms. Bushman: When she files her tax return, and with the amount she earned, she will need to claim an exemption herself. Her parents will not be able to claim her because she is earning her upkeep. She needs to file early and pay the tax due, hopefully,...

Tax Law (Questions About Taxes): income tax fraud, taxpayer advocate, tax relief
taxpayer advocate, tax relief, irs problem: You should take this matter to the IRS Taxpayer Advocate program, and tell them your story. Request that they secure a copy of the return for 2007, which will show that a signature not yours was placed on it. They will then abate the erroneous assessment...

Tax Law (Questions About Taxes): independent student contractor income, government research lab, tax law questions
government research lab, tax law questions, irs gov: Allie: This statement I am a graduate student that does my research at a government research lab by you speaks volumes about where your office is located and what your expenses you can write off. Since your office is provided by the university you...

Tax Law (Questions About Taxes): insolvency, partership, solvency
partership, solvency, insolvency: Nicolelesher: Once you short sold you house you no longer have an asset. You only have a liability. That will be difference between how much you owed and the amount you got for the sale. Your husband has an interest in a partnership and his value in...

Tax Law (Questions About Taxes): intrest free loan from a friend, irs rate, interest free loan
irs rate, interest free loan, could lose everything: Joanne: I do not know anything about the tax law in the United Kingdom. However, In the United States an interest free loan is considered to be a gift by the tax law. In order for a loan not to be considered a gift the repayment schedule must be made...

Tax Law (Questions About Taxes): joint filing, tax debts, form 8379
tax debts, form 8379, injured spouse: Priya, Thanks for your question. You choices are limited to married filing joint or married filing separately. Usually, it results in a lower tax liability if you file a joint return. In filing jointly, however, any refund can be used to offset his...

Tax Law (Questions About Taxes): joint return, filing taxes, tax money
filing taxes, tax money, poa: Edna: I do not understand you question. I hope you are not filing a joint between you and your son. Your son can only file a joint return between he and his wife. Does your son have income. If so, from what source? Does his wife have income, if so,...

Tax Law (Questions About Taxes): K-1 vs 1099, massage therapist, ss8
massage therapist, ss8, independent contractors: Dawn: She can file a form SS8 and request from the IRS a ruling on her status with the employer. Yes it is my opinion that she is an employee. I believe that I would be working somewhere else. Not getting your information file your return on time is...

Tax Law (Questions About Taxes): LLC, startup investment, unemployment office
startup investment, unemployment office, dollars and change: If I understand your question, the LLC has $400 in the bank, and you have been unemployed. And you want to know if the $400 will affect your Unemployment Benefits. The short answer is no. the longer answer actually has some details that you need to know...

Tax Law (Questions About Taxes): LLC deductions, travel expense, prospective properties
travel expense, prospective properties, schedule c: Amy: All start up cost is depreciated not expensed. However, yes if properly documented. I do not know what you mean by SLLC. LLC is a LLC no distinction is made between single member, two member, or multi-member LLC. The IRS will allow a single member...

Tax Law (Questions About Taxes): LLC in PA, personal returns, question thanks
personal returns, question thanks, 1120s: Pete: No I do not know how it will affect you or the rate. The state you are in will be one return and then in the state that you are working you will be a foreign LLC to that state. There maybe taxable issues in one state does not apply in the other...

Tax Law (Questions About Taxes): LLC for real estate investment ???, personal income tax, income tax return
personal income tax, income tax return, real estate investment: Amy: The difference between passive an active is whether personally do the renting such as advertising, leasing, collecting rent, or passive you have an agent doing these activities for you. If you are passively doing the work then it would be better...

Tax Law (Questions About Taxes): Local tax, disability insurance fund, state disability insurance
disability insurance fund, state disability insurance, california nonoccupational disability benefit fund: Hi Yelena the best I can make of this is that the portion that the employer deducts from the employee is deductible by the employee however the portion the employer pays on behalf of the employee is like any other payroll tax deductible only by the employer...

Tax Law (Questions About Taxes): LTD company paid premiums, ltd company, earings
ltd company, earings, taxable income: Linda: The company can pay the premium and deduct the premium as an expense. I know of no law that requires the company to charge the premium to the employee. I do know that the employee that is paid disability the first 26 weeks your company will be...

Tax Law (Questions About Taxes): loss of unemployment as a consequence of working for a pseudo-employer, financial devastation, unemployment claim
financial devastation, unemployment claim, california employer: Edward: Let me see first that I understand the situation. You were drawing unemployment on a prior claim. In the process of looking for work you went to work with a temp agency. The temp agency then decided that you were an independent contractor and...

Tax Law (Questions About Taxes): Marital Settlement Buyout of Home, marital settlement agreement, federal tax returns
marital settlement agreement, federal tax returns, irs pub: Hi Jim, Since you meet all of the requirements for a division of property incident to divorce, this transaction does not have to be reported on your income tax return. Any individual seeking legal advice for their own situation should retain their own...

Tax Law (Questions About Taxes): Married filing seperatley vs. Married filing jointly in regards to child support issues, child support payments, injured spouse
child support payments, injured spouse, higher hope: Amy, You cannot file as injured spouse unless there is reason to believe that a portion of your refund will be applied to debts of the other spouse. Since there are currently no such debts, you cannot file in anticipation that there might be. You do...

Tax Law (Questions About Taxes): Milage Write off, Taxes, IRS
Taxes, IRS, Delinquent Returns: Dan, Yes you can include the miles on Sch. A, Itemized Deductions as long as they are charitable miles. For 2009, the charitable mileage rate is $0.14/mile. However, you will only benefit from this if you itemize and do not take the standard deduction...

Tax Law (Questions About Taxes): Mileage, adjusted gross income, form 2106
adjusted gross income, form 2106, itemized deduction: Laura, Thanks for your question. Yes, you can deduct the additional 15 cents per mile. You would complete Form 2106 and transfer the amount to Schedule A as a miscellaneous itemized deduction. However, you will only be able to deduct the portion that...

Tax Law (Questions About Taxes): Mileage on company car, vehicle mileage, form 2106
vehicle mileage, form 2106, company car: Chris: Yes you can deduct the use of the vehicle but you must keep up with the mileage. You will put this information of form 2106. You must log the business use of the vehicle and the personal use of the vehicle. Mileage from your home to the office...

Tax Law (Questions About Taxes): Mileage Deduction, mileage deduction, business mileage
mileage deduction, business mileage, adjusted gross income: Jeremy, Thanks for your question. Likely because the mileage deduction is a miscellaneous itemized deduction and you can only deduct the portion that exceeds 2% of your adjusted gross income. A second factor may be that you are do not have enough deductions...

Tax Law (Questions About Taxes): Mileage reimbursment, mileage reimbursment, business mileage
mileage reimbursment, business mileage, deductible business: Cory, Thanks for your question. If you have a home office that is your regular place of business, the first step out the door is deductible business mileage. Any business mileage until you return is deductible. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Missionary work fund, self employment tax, foreign earned income
self employment tax, foreign earned income, income tax return: Thanks for your question. The amounts that are not intended as salary should not be included in your salary check and should be sent separately. You appear to be doing a good job in keeping them separate. Anything that is ministry-related and not a...

Tax Law (Questions About Taxes): Money gifts, income tax purposes, adjusted gross income
income tax purposes, adjusted gross income, money gifts: Curtis, Thanks for your question. Gifts are not deductible on your income tax and they are not income to the recipient. They are non-items for income tax purposes. If you give more than $13,000 to any one person in a year, you need to file a gift...

Tax Law (Questions About Taxes): Multiple states tax filing question, source income, client location
source income, client location, apartment for rent in ny: As I said, she lives and works in NY, that should be the source of her income. Maintaining residency is not a clear cut issue. Driver s license is one point. Her intent is another. From a tax standpoint, if she expects to be in NY for more than 12 months,...

Tax Law (Questions About Taxes): main home sale, neighbor hood, capital gains taxes
neighbor hood, capital gains taxes, stancil: Jeremy, Thanks for your question. What you do with the proceeds from the sale does not have any effect on the taxability of the transaction. If you lived in the house you sold for 24 of the past 60 months as your main home, and you owned it for 24...

Tax Law (Questions About Taxes): mom, dependency exemption, old mom
dependency exemption, old mom, dependency status: Cyn, She reports her own earnings, not you, regardless of her dependency status. You can take a dependency exemption for her if her gross income is under $3,650. Social security does not count as gross income for this purpose. If she is your dependent...

Tax Law (Questions About Taxes): mortgage insurance premium on FHA loan, mortgage insurance premiums, mortgage insurance premium
mortgage insurance premiums, mortgage insurance premium, upfront mortgage insurance: Chris, Mr. Roth could not answer your question, but I have an answer for you. The mortgage insurance premium is to be amortized over the life of the loan or 84 months beginning in the month the insurance was obtained. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Negative Adjusted Gross income., circular 230 disclaimer, adjusted gross income
circular 230 disclaimer, adjusted gross income, personal loss: Hi Angela, This is a personal loss and cannot be carried back. Also, if you did not use the Tuition Deduction in 2008 it is lost forever. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response...

Tax Law (Questions About Taxes): Non Resident Sate Taxation Issue, state income tax, issue question
state income tax, issue question, law states: Joe: Thank you for the kind words. I am in Tennessee and we do not have a state income tax and we are surrounded by 8 states that do have state income tax. My Tennessee clients pull their hair out trying to report the wages paid to employees working in...

Tax Law (Questions About Taxes): non-resident income tax, state tax forms, new york state tax forms
state tax forms, new york state tax forms, new york state tax: Rick, You would have to file a NJ form for each year in question. You would file a NJ non-resident form. Then you would have to file amended NY State forms to take the credit for NJ taxes paid. However, most states will only honor a request for refund...

Tax Law (Questions About Taxes): Order of Corporate NOLs, fifo lifo, circular 230 disclaimer
fifo lifo, circular 230 disclaimer, nols: Hi Suzanne, NOL s are accumulated, and carried forward or back based on then existing law. They are carried back to the earliest year allowed first, then the next, and so on. There is no relevance to accumulating and using NOL s on a FIFO, LIFO or any...

Tax Law (Questions About Taxes): Overseas Tax Exemption (partial?), physical presence test, earned income exclusion
physical presence test, earned income exclusion, foreign earned income exclusion: James, Thanks for your question. Yes, you would still qualify to exempt your salary as a contractor up to the limits for the foreign earned income exclusion. The 330-day test does not require you to be working in an excludable job, just be present....

Tax Law (Questions About Taxes): Paid Church Musician, sole proprietorship, medicare tax
sole proprietorship, medicare tax, church musician: You are self-employed and are considered a business as far as the IRS is concerned. Unless you incorporate or form a partnership, you are a Sole Proprietorship . You report your income and expenses for your business on a Schedule C, which is attached to your...

Tax Law (Questions About Taxes): Partnership tax question, non US investor, richard fritzler
non US investor, richard fritzler: Well, distributions to non US investors is subject to 30% withholdings. If you are investing in the US you should do it like all of the most successful investors do, and do it as a Real US Tax Paying Corporation. If you make a profit in the stock market,...

Tax Law (Questions About Taxes): Pass through simple trust - capital loss > $3000, passive losses, richard frizler
passive losses, richard frizler: The entire loss is passed on, then the beneficiary deals with it as best they can. The $3000 limit is limited only to writing it off against ordinary income. If you have $6000 in Capital Gains, the Capital Loss can be deducted dollar for dollar, and then any...

Tax Law (Questions About Taxes): Paying Corporate debt with Life Insurance payout, Taxation of Life Insurance Policy Proceeds
Taxation of Life Insurance Policy Proceeds: Hi Denna, You may want to consider two life insurance policies to accomplish your goals. One where his parents are the beneficiaries of the policy for the amount to pay off the business, and another where you are the beneficiary for the pay off of the...

Tax Law (Questions About Taxes): Paying down my Mortgage, investment horizon, fixed mortgage
investment horizon, fixed mortgage, stancil: Nevin, Thanks for your question. It depends on what you would do with the money. If the choice is between a CD and paying down the mortgage, it makes economic sense to pay down the mortgage since CD rates are low. If you are broadening your investment...

Tax Law (Questions About Taxes): Property Interest, income tax return, interest amounts
income tax return, interest amounts, stancil: Marietta, Thanks for your question. The interest is deductible by you if you are legally liable for the debt and if you make the payments. Please note that you and the estate are two separate taxpayers and entities. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): R.I. State Notice Of Deficiency, paul thanks, interest charge
paul thanks, interest charge, stancil: Paul, Thanks for your question. The IRS and most states have requirements for estimated payments. If you do not pay in an amount equal to 90% of your liability or 100% of your prior year liability you will be assessed penalties and interest if the amount...

Tax Law (Questions About Taxes): RESIDENTIAL RENTAL DEPRECIATION, stancil, mortgage interest
stancil, mortgage interest, depreciation: Darren, Thanks for your question. Mortgage interest and taxes are deductible on second homes. If it is used as a rental the depreciation is based on the cost of the house not including the land value. It would be depreciated over 27.5 years, taking...

Tax Law (Questions About Taxes): Regarding Per Diem..., irs publication, form 2106
irs publication, form 2106, comuting: Hi Robin it has to be paid that way. However you can still use form 2106 to show unreimbursed employee expenses as the comuting is in excess of 50 miles from your primary residence PS you can obtain form 2106 and instructions at www.irs.ustreas.go...

Tax Law (Questions About Taxes): Rental Income, stancil, mortgage interest
stancil, mortgage interest, rental payments: Jean, Thanks for your question. If you are renting the property at something close to fair market value you must report it on Schedule E. A rental not-for=profit usually arises in a case where it is being rented to relatives, close friends, or in association...

Tax Law (Questions About Taxes): Requirements for claiming a dependant, full coverage insurance, magazine subcription
full coverage insurance, magazine subcription, vet bills: Nathan, Thanks for your question. Sounds to me like you can claim her. You must provide over half her support, and her gross income must be under $3,650. Social security does not count as gross income for this purpose. Hope this helps. John...

Tax Law (Questions About Taxes): Retention, Taxes, IRS
Taxes, IRS, Delinquent Returns: Derek, This question is vague. I can t say how much because I don t know all of your information. The bonus will be taxed as income and at your normal tax rate. As far as the exemptions, the more you claim on your W-4 the less tax withheld from your...

Tax Law (Questions About Taxes): Revocable Living Trust, inheritance law, capital gains tax
inheritance law, capital gains tax, living trust: Paul: For the year 2010 and until congress passes a bill on inheritance, I will not answer or give advice for the year 2010. It is a mess for congress s lack of action on the issue. Generally when property is put into a trust the value of the property...

Tax Law (Questions About Taxes): Royality Tax on Rental Property, royalty income, input problem
royalty income, input problem, stancil: GJ, Thanks for your question. Because you do not need to complete line1 1 and 2 for the royalty income, I would report it in a separate column. However, $415 in income should not eliminate $5,000 of loss. I can t tell you what s going on there, as it...

Tax Law (Questions About Taxes): $$ received as Beneficiary, 1099s, compensation program
1099s, compensation program, turbo tax: Karen: Make sure the amount withheld from the inheritance is added to the amount of taxes paid. The program maybe also computing AMT on the inheritance. I do know that the top tax rate of 28% for federal tax will cause the tax due on the inheritance of...

Tax Law (Questions About Taxes): How to report to the IRS, sole proprietorship, sole proprietor
sole proprietorship, sole proprietor, form 4797: Michael, Thanks for your question. A sale of a sole proprietorship is treated as a sale of assets, so you will need to complete Form 4797. The instructions will direct you to where to place the numbers generated on that form. Hope this helps. ...

Tax Law (Questions About Taxes): over-the-road trucker question, independent contractor report, otr truck driver
independent contractor report, otr truck driver, road trucker: Liz, Thanks for your question. That could be correct, depending on the situation. However, it is not a big deal. Since he is an independent contractor, report the full amount on Schedule C, then take a deduction for the fuel. Hope this helps. ...

Tax Law (Questions About Taxes): S Corp loan loss, circular 230 disclaimer, s corp
circular 230 disclaimer, s corp, loan loss: Hi Lydia, The loss is treated as a short-term capital loss on Schedule D. You can use this loss to offset other capital gains, and to the extent the loss is not used you can deduct $3000 each year and carry over the rest indefinitely. Any individual...

Tax Law (Questions About Taxes): S-Corp shareholder buyout, stock distributions, stockholders meeting
stock distributions, stockholders meeting, s corp: Tami: You need to find a good CPA to work through this situation. The corporation stockholders meeting that addressed the stock sell set the value of the stock or should have set the value. Since I need to look at the corporate books to determine what...

Tax Law (Questions About Taxes): SALE OF INHERITANCE IN THE PHILIPPINES, circular 230 disclaimer, american citizen
circular 230 disclaimer, american citizen, form 1040: Hi Maria, You will not need to pay any tax on the original amount you received. However, you will need to determine your tax basis in the property - the Fair Market Value at the date of inheritance. If the property has appreciated any amount over and...

Tax Law (Questions About Taxes): Schedule M, Taxes, IRS
Taxes, IRS, Delinquent Returns: Nick, You should qualify to receive the $250 credit as long as you do not also receive Social Security. Individuals on Social Security should have received $250 from the government earlier in the year. If you received this $250 you cannot receive the $250...

Tax Law (Questions About Taxes): Self Employed, Leased Vehicle deduction, Taxes, IRS
Taxes, IRS, Delinquent Returns: Shara, I am assuming you use the cash method of accounting and not the accrual method. Under the cash method of accounting, expenses paid in advance (lease paid up front) can be deducted only in the year to which they apply. Therefore, you should calculate...

Tax Law (Questions About Taxes): Sign on bonus, 1099 misc, stancil
1099 misc, stancil, independent contractor: JJ, Thanks for your question. The $5,000 should have been included on your W-2, with taxes withheld. You can put it on line 21 and pay the SE tax. Technically, you could file Form 8919, but it might not sit well with your employer. Hope this...

Tax Law (Questions About Taxes): Specifying Tenancy by the Entirety in Operating Agreement, Richard Fritzler, LLC
Richard Fritzler, LLC, asset: You are attempting to make a stretch that would misshapen the rule to the point of uselessness. The home is is one of the basic necessities to sustain life that we were taught in grade school: Food, shelter, clothing, Love. A membership interest would not...

Tax Law (Questions About Taxes): SSD backpay & taxes, social security disability, circular 230 disclaimer
social security disability, circular 230 disclaimer, cash basis: Hi Sheri, Unfortunately, as a cash basis taxpayer you recognize the income in the year received. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in...

Tax Law (Questions About Taxes): State Of Illinois General Obligation Savings Bond, zero coupon bond, u s savings bonds
zero coupon bond, u s savings bonds, tax exempt status: Sorry, I misread the question. Bond redemptions are not tax free, only the interest. If you redeemed the bond for a price other than your purchase price you have a taxable gain or loss reported on Schedule D. You will get a 1099-B for this transaction....

Tax Law (Questions About Taxes): Out of State Move in 2009, form 3903, state move
form 3903, state move, moving expense: Leah: You may deduct some of your moving expense. However, you must file form 3903 and after completing the form the results will be entered on line 26 of your 1040. You moved from one state that has income tax to another state that has income tax and...

Tax Law (Questions About Taxes): sch. E or sch. A, Reporting Rental Property
Reporting Rental Property: Hi Yuki, Income and expenses from a rental property are reported on Schedule E of Form 1040. When you come back you can convert the property back to your personal residence. Until then you should take the deductions, including depreciation because depreciation...

Tax Law (Questions About Taxes): schedule D installment sale default, installment sale agreement, rental properties
installment sale agreement, rental properties, period of time: Hi Karen on the instalment basis you reported the gain over a period of time so that your portion of gain corresponds to the amount you received so in effect there is no gain or loss so show this year s instalment as Zero and the remaining balance as Zero...

Tax Law (Questions About Taxes): splitting mortgage interest deduction, mortgage interest deduction, loan papers
mortgage interest deduction, loan papers, real estate taxes: Susan, Thanks for your question. In addition to having liability, you must be the one making the payments to deduct the interest and taxes. You can only deduct the amount you actually paid from your funds. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): stock receive for service rendered, circular 230 disclaimer, governmental agency
circular 230 disclaimer, governmental agency, fmv: Receiving stock for services is a taxable event. Your basis in the stock is equal to the income you paid taxes on for the services. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides...

Tax Law (Questions About Taxes): stock tax write-off, Stock Loss Carry Over
Stock Loss Carry Over: Hi Robert, Capital losses carry forward indefinitely. It seems that your problem will be a matter of proof. You will need to do your best to mind the missing information and document your losses. If you cannot document your losses they will not be allowed...

Tax Law (Questions About Taxes): Tax Deduction, individual tax return, course hope
individual tax return, course hope, course tuition: D, Thanks for your question. The bar exam prep course and fees are not deductible as they qualify you for a new line of work or new profession, regardless of whether they are on a 1040 or other return. Once admitted to the bar, additional licensing...

Tax Law (Questions About Taxes): Tax on gift, gift tax return, lifetime
gift tax return, lifetime: Hi, Recipients of gifts pay no tax. If the amount is over $13,000 this year, the donor is required to file a gift tax return. Most likely there would be no tax to pay but it would reduce the amount a person can give during their lifetime and at death....

Tax Law (Questions About Taxes): Tax implications on a gift from a church to an individual, tax exempt status, tax exempt organization
tax exempt status, tax exempt organization, financial crises: Cassandra, Thanks for your questions. 1. Gifts are never taxable income, so you do not report it as a gift on your 1040. 2. Because the funds were raised and given specifically to you and not out of a general benevolence or missions fund, the donors...

Tax Law (Questions About Taxes): Tax on inheritance, Tax on Inheritance
Tax on Inheritance: Hi Brandon, Your research is correct. Under section 102 of the Internal Revenue Code inheritances are excluded from your income. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides...

Tax Law (Questions About Taxes): Tax Question, dependency exemption, stancil
dependency exemption, stancil, tax question: Kellie, Thanks for your question. You owe because you are only supposed to claim one exemption total, not one for each job. You can take a dependency exemption for family members if you provide over half their support, they have less than $3,650 in...

Tax Law (Questions About Taxes): Tax Question, Taxes, IRS
Taxes, IRS, Delinquent Returns: Peter, If you received a 1099-MISC you must report the amount as income. This is because the IRS has record of you receiving the 1099-MISC and will be looking for you to include it on your return. If you fail to report the amount a red flag will be raised...

Tax Law (Questions About Taxes): Taxable financial aid, california santa cruz, form 1098 t
california santa cruz, form 1098 t, university of california santa cruz: Grant, Thanks for your question. Yes, you will need to file, as the amount of taxable scholarships is above the threshold for filing. You report 27,374 - 8934 as taxable scholarship on line 7 of the 1040. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Taxable income for pension payment disability, Taxes, IRS
Taxes, IRS, Delinquent Returns: Thelma, The amount of income that is taxable from the 1099-R is the amount in box 2a even though box 2b says the taxable amount is not determined. The distribution code of 3 for disability entitles her to not having to pay the additional tax for early distribution....

Tax Law (Questions About Taxes): Taxes, social security benefits, contract work
social security benefits, contract work, tax return: Robert: If you want a refund you must file a tax return on any income. If you do not expect a refund, then and you have wages and social security benefits amount that are $3,000.00 or more or if you have more than $400.00 of contract work, you must file...

Tax Law (Questions About Taxes): Taxes, ss numbers, 1040x
ss numbers, 1040x, dependents: Frank: If you are married you and your wife would file a joint return list your children on your return as your dependent. You can file a 1040X for the other years involved correcting the filing status and including your children on your return as your...

Tax Law (Questions About Taxes): Taxes, tax consequences, stancil
tax consequences, stancil, tax purposes: Ronda, Thanks for your question. Gifts are not considered income for tax purposes, so you would not report it on your taxes. The donor will probably need to file a gift tax return, however. Unless they have used up their $1,000,000 lifetime exemption,...

Tax Law (Questions About Taxes): Taxes and buying stock, Richard Fritzler, stock
Richard Fritzler, stock, basis: I m a little confused. What percentage of the company did you own before the trade? You traded the stock that you received for stock in the same company, but this time it became a 50% interest in the company? That sounds like a good trade; Or, did you...

Tax Law (Questions About Taxes): Taxes in Texas, head of household, electric bills
head of household, electric bills, tax form: Ms. Morrison: When you son turn 19 and was no longer in school he was no longer your dependent. He must file his own return and yes unless he is married he will file single not head of household. Yes he will claim himself as an exemption. Joh...

Tax Law (Questions About Taxes): Trust and a rollover question, circular 230 disclaimer, 401k rollover
circular 230 disclaimer, 401k rollover, 1099r: Hi Bridget, Your Mom does not receive any special benefit for the non-taxable distributions, they are not included in the dividends or interest amounts. For the rollover, you show the total distribution, then show zero for the taxable amount. Then write...

Tax Law (Questions About Taxes): Tuition Reimbursement - Taxable Income?, tuition reimbursement plan, fringe benefit
tuition reimbursement plan, fringe benefit, separate checks: Bridget, Thanks for your question. If the amounts over $5,250 are to improve your job skills and not qualify you for a new job and your employer has a written policy on reimbursements for tuition, it should not be taxable. How he reimburses is up...

Tax Law (Questions About Taxes): tax audit ....help, mileage expenses, tax audit
mileage expenses, tax audit, professional assistance: Very little is likely to happen beyond additional tax and related interest and penalties. Padding expenses is not as big an issue to the IRS as understating income - even if the result is the same. If they are talking about significant dollars in exposure,...

Tax Law (Questions About Taxes): tax credit for donated items already written off as medical expense, circular 230 disclaimer, medical expense
circular 230 disclaimer, medical expense, charitable deduction: Hi Margie, You are mixing up tax credits and tax deductions. Tax credits are a direct offset to taxes due, and tax deductions are a deduct from your taxable income before the tax is calculated. Tax credits are much more beneficial. You can receive a...

Tax Law (Questions About Taxes): trust taxes, grantor trust, circular 230 disclaimer
grantor trust, circular 230 disclaimer, form 1041: Hi William, If your family trust is a revocable grantor trust you do not need to file a Form 1041, and your property tax payment is reported on Schedule A of Form 1040. Send me a follow question and describe what kind of trust this is if it is not a...

Tax Law (Questions About Taxes): tuition, Student Loan Interest
Student Loan Interest: Hi Christine, Yes, Student loan interest is tax deductible if you meet the following criteria: 1. Your filing status is any filing status except married filing separately. 2. No one else is claiming an exemption for you on his or her tax return. 3....

Tax Law (Questions About Taxes): Unpaid Salary from LLC Deductable?, personal tax return, circular 230 disclaimer
personal tax return, circular 230 disclaimer, gracious assistance: Hi Larry, As an individual tax payer you are on a cash basis for reporting income and taking deductions. Since the salary was never paid, you do not have to claim the income. However, you also cannot claim a deduction for the amount that was not paid...

Tax Law (Questions About Taxes): Unreported 1099 Income, irs regs, form 9465
irs regs, form 9465, c route: Jeanne, You re pretty much on track. File the 2009 return on a timely basis but do not include it with the others. Timing does not matter, it can be before or after the others. Simply enclose a letter with the past due returns, requesting a waiver of...

Tax Law (Questions About Taxes): Uruguay, form 1116, stancil
form 1116, stancil, tax return: Maureen, Thanks for your question. Yes, as a U. S. citizen or resident, you are required to pay taxes on your world wide income, regardless of source. However, you may file Form 1116 with your 1040 and take a credit for taxes paid to Uruguay. Hope...

Tax Law (Questions About Taxes): Vehicle Accident Tax Deduction, adjusted gross income, blue book value
adjusted gross income, blue book value, form 4684: Steve, Thanks for your question. Unfortunately, you probably don t have a deduction. First, the rental car expenses are not deductible. A casualty/theft loss is a Schedule A itemized deduction. However, to take a deduction, you must subtract $500...

Tax Law (Questions About Taxes): Volunteer milage, stancil, charitable organization
stancil, charitable organization, mileage: Lenny, Thanks for your question. Volunteer mileage and other deductible out of pocket expenditures incurred on behalf of a qualified charitable organization are deducted as though they were by cash or check on line 16. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): W-9 tax question., Taxes, IRS
Taxes, IRS, Delinquent Returns: Andres, I am not familiar with Massachusetts taxes however, 25% is a good amount to set aside for your Federal taxes. This is because as an independent contractor you must pay self-employment taxes of 15.3%. This amount consists of Social Security (12.4%)...

Tax Law (Questions About Taxes): W4 form, cpa tax business, irs money
cpa tax business, irs money, business advisory services: Dear Kay, The number of allowances you put on your W-4 affects the amount of that will be withheld from your paychecks, so yes it will affect what you owe (or get back) at the end of the year. You should follow the instructions on the form, unfortunately...

Tax Law (Questions About Taxes): 1040 or other form - trustee, form 1041, form 1040
form 1041, form 1040, mortgage interest: Sandi: You should consult with a local CPA to file the return. Depending on the situation the trust or the individual may not owe any tax. I do not know when the trust was set up what the value of the home when it became part of the trust. Many more...

Tax Law (Questions About Taxes): 1041 tax filing, Taxes, IRS
Taxes, IRS, Delinquent Returns: Frank, Even though there will be a loss for the year you still must file a 1041. This is because the sales price is the only amount reported to the IRS. So as the IRS sees it you had a gain of $30,000. You must file the 1041 to show the cost basis to the...

Tax Law (Questions About Taxes): 1099-A, irs questions, debt forgiveness
irs questions, debt forgiveness, stancil: Dan, Thanks for your question. One point of clarification. You say you owned the property for 24 of the past 60 months, you must also have lived in it as your primary residence for this exception. If this is the case, you do not need Schedule D. ...

Tax Law (Questions About Taxes): 1099, stancil, schedule c
stancil, schedule c, subcontractor: Julie, They will not fix it, they will fine you for filing an incorrect 1099. My advice is to try and contact the subcontractor. However, you should have a copy of the original 1099 that you submitted, or a copy of the W-9 that he completed. Hope this...

Tax Law (Questions About Taxes): 1099, 1099 forms, contracter
1099 forms, contracter, febuary: David: Generally speaking your joint return tax due from year to year is about the same. Therefore, review your 2008 return net tax due to the tax withheld on your wife s return and what you had withheld it should become apparent if the amount withheld...

Tax Law (Questions About Taxes): 1099-B, info karen, stancil
info karen, stancil, investment account: Karen, Thanks for your question. What occurred is that you sold one mutual fund and you purchased another with those funds. The sale is a transaction that triggers a taxable event, regardless of what you do with the funds. You will report your gain...

Tax Law (Questions About Taxes): 1099-B due to ESSP transaction, employee stock purchase, stock purchase plan
employee stock purchase, stock purchase plan, employee stock purchase plan: XC, The 1099-B should be reported on Schedule D. The amount in box 2 is the proceeds from the sale. For basis, you need to figure your cost of the shares sold and include that on Schedule D. This would be based on the total number of shares issued divided...

Tax Law (Questions About Taxes): 1099-C (Short-sale), renting an apartment, mark thanks
renting an apartment, mark thanks, stancil: Mark, Thanks for your question. You lived in the home as your primary residence from August 2005 to January 2007. That does not consist of enough time to qualify you for an exception. It does not matter that the house was enpty from Dec 08 to June...

Tax Law (Questions About Taxes): 1099- MISC as a hobby, miscellaneous itemized deductions, time tim
miscellaneous itemized deductions, time tim, stancil: Tim, Thanks for your question. Report the income on line 21 as miscellaneous income. Any expenses are miscellaneous itemized deductions subject to the 2% limitation. You can only deduct expenses up to the amount of income. Hope this helps. John...

Tax Law (Questions About Taxes): 1099 -MISC tax form, unemployment tax act, state unemployment tax
unemployment tax act, state unemployment tax, necessary tax: Mr. Rodriguez: Just because the contractor says the person working for him is a sub contractor does not mean that person is not a covered employee according to State Unemployment Tax Act (SUTA). All workers are entitled to draw unemployment when they lose...

Tax Law (Questions About Taxes): 1099 misc/easement settlement, involuntary conversion, ornamental trees
involuntary conversion, ornamental trees, 1099 misc: Jeff, Thanks for your question. This is an involuntary conversion and the tax treatment can be somewhat detailed. A 1099-S should have been issued. You are responsible for taxes on the sale. This is reported on Schedule E. You can allocate basis...

Tax Law (Questions About Taxes): 1099A, cancellation of debt, abandoment
cancellation of debt, abandoment, true owners: Angelia: This is a mess. I think that, If he is not being sued by the bank, that I would pass the 1099 to the respective true owners of the property for them to deal with these issues. First insure that he did not sign the papers as the owner of either...

Tax Law (Questions About Taxes): 1099A & Bankruptcy, chapter 11 bankruptcy, form 4797
chapter 11 bankruptcy, form 4797, stancil: Laurie, Thanks for your question. If the debt was discharged in Chapter 11 bankruptcy, you report it on Form 982 but pay no tax on the canceled debt. If it was not discharged in a Chapter 11, you show the canceled debt on Form 982 and pay the tax on...

Tax Law (Questions About Taxes): 1099A and Chapter 7 Bankruptcy, chapter 7 bankruptcy, 1099a
chapter 7 bankruptcy, 1099a, debt cancellation: Chris, Thanks for your question. Chapter 7 bankruptcy does not result is the debt cancellation being non-taxable. However, since your liabilities exceeded your assets you were insolvent. This will make the debt cancellation non-taxable. You should...

Tax Law (Questions About Taxes): 1120 ? form, gross receipts, contract labor
gross receipts, contract labor, schedule c: Jana: If you are an individual you would use a Schedule C. If you are a corporation you would use an 1120. However, if you have not legally incorporated with the secretary of state in your state you will file all you information on a Schedule C attached...

Tax Law (Questions About Taxes): 1120S Corporate tax return, s corp, form 4797
s corp, form 4797, money need: Lisa, Thanks for your question. The due date of the return depends on the fiscal year selected by the corporation. Most likely it is a calendar year, meaning the return is due 3/15. If the corporation had operations prior to becoming an S Corp, it...

Tax Law (Questions About Taxes): 18 yrs old should i claim myself?, circular 230 disclaimer, part time jobs
circular 230 disclaimer, part time jobs, own clothes: Hi Amanda, Only one person can take the deduction. If your mom claimed you, then you cannot claim your self. This does not mean she was correct in doing so. If you provided over one half of your own support, then you mom should not claim you. Talk to...

Tax Law (Questions About Taxes): 2008 CP2000 Notice, annuity plan, form 1099
annuity plan, form 1099, insurace: Janet, If you inherited money from someone s annuity plan you must claim the amount as income unless you roll over the amount into your own IRA or annuity. If you received 2 1099-R s from the company you must report them on your return as the IRS also received...

Tax Law (Questions About Taxes): 401k Withdrawal, ira account, retirement funds
ira account, retirement funds, 401 k plans: That is true. I based my answer on your retiring in 2010. If you retire this year, you must take an RMD by April of 2011. However, if you take the distribution in 2011 (as opposed to 2010) you must take two distributions in 2011. If feasible, you could...

Tax Law (Questions About Taxes): 4361 ss exemption question, stancil, ordained minister
stancil, ordained minister, garrett: Garrett, Thanks for your question. As an ordained minister your church should not do any withholding for you unless you voluntarily request it. This would be reflected on your W-2 as box 2 withholding. Nothing should be taken out for social security...

Tax Law (Questions About Taxes): 8,000 first time home buyers tax credit. Do I claim it as income?, income tax refund, circular 230 disclaimer
income tax refund, circular 230 disclaimer, federal income tax refund: A federal income tax refund is not income. You do not need to claim this as income for 2009. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature...

Tax Law (Questions About Taxes): 8000 first time home buyer credit., time home buyer, first time home buyer
time home buyer, first time home buyer, amy thanks: Amy, Thanks for your question. The law states that the home must be your primary residence. However, it is somewhat vague about how soon it must become your primary residence. I don t think there would be any question if you moved into the house during...

Tax Law (Questions About Taxes): American Opportunity Credit Questions, michigan education trust, post secondary education
michigan education trust, post secondary education, american opportunity: Amanda, Thanks for your question. Not that it makes any difference now, but the Hope credit was available for the first two years of post secondary education. And it could only be taken for two tax years. The American Opportunity Credit is available...

Tax Law (Questions About Taxes): BANKRUPT STOCK LOSSES, stock losses, worthless stock
stock losses, worthless stock, bankrupt stock: Joyce, Thanks for your question. Losses on worthless stock are deductible in the year in which the stock becomes worthless. You have three years from the due date of the return (of the date filed whichever is later) to amend your returns. Hope this...

Tax Law (Questions About Taxes): Bad debt, form 1040x, stancil
form 1040x, stancil, several letters: Drew, It will lower your tax liability. You can file an amended return, Form 1040X and attach Schedule D. You need to document the efforts you took to collect the loan and why you deem it to be worthless but you do not need to include that on the amended...

Tax Law (Questions About Taxes): C corp-Alternative Vehicle/Sales tax, c corp, s corp
c corp, s corp, stancil: Being an S Corp would not change anything regarding the vehicle as a corporation is still a separate entity. To determine if you should elect S Corp status, you should look at the tax liability you and the corporation have under the present situation and then...

Tax Law (Questions About Taxes): Capital Gain, capital gain distributions, capital gains distributions
capital gain distributions, capital gains distributions, stancil: JJ, Thanks for your question. From a tax standpoint, there is no difference. Capital gains distributions are capital gains realized by the mutual funds on the sale of shares they hold. To give you the benefit of the capital gain rates, these are segregated...

Tax Law (Questions About Taxes): Changing from Joint to Separate, MFJ to MFS status
MFJ to MFS status: Once you file a joint return you can change your filing status to separate only if you file an amended return prior to the due date of the return. After the due date of the return, your only option is to apply for innocent spouse relief. If this is your...

Tax Law (Questions About Taxes): Claiming loss on joint brokerage account, circular 230 disclaimer, brokerage account
circular 230 disclaimer, brokerage account, lifetime gift: Hi John, This is a little more involved than you think. When your mother in law transferred the amount into a joint account it was considered a gift to you and may expose her to gift taxes. When you gave the money back you made a gift to her which may...

Tax Law (Questions About Taxes): Company Vehicles and driving them home., government vehicle, state auditors
government vehicle, state auditors, company vehicles: Mr. Davidson: No they are not excused. They should be charged so much a day for perceived personal use of the government vehicle and it should be added to their pay record. If the IRS or State Auditors audit local government they insure that this is being...

Tax Law (Questions About Taxes): Contract for Deed, interest question, time home buyer
interest question, time home buyer, first time home buyer: Frank, Thanks for your question. Bottom line on this is that if you are not legally liable for the debt, you cannot deduct the interest. Since you are not on the loan, and there appears to be nothing in writing you can t deduct the interest. Anything...

Tax Law (Questions About Taxes): Contract Employee Taxes?, self employment tax, federal income taxes
self employment tax, federal income taxes, form 1040 es: Sarah, Thanks for your question. Quarterly estimated payments are due the 15th of April, June, September, and January submitted with Form 1040-ES. There is a worksheet with the 1040-ES instructions that will guide you in the determination of the amount...

Tax Law (Questions About Taxes): Converting Pension plan money to existing ROTH, rollover ira, roth ira
rollover ira, roth ira, plan assets: RL, Thanks for your question. No, that is not correct. An employer pension plan is a deferred tax plan, meaning that money contributed to the plan is not taxed. Therefore, when the funds are withdrawn, the withdrawals are taxed. A Roth IRA, on the...

Tax Law (Questions About Taxes): Corporate Tax FL, nevada tax, trading stocks
nevada tax, trading stocks, c corp: Matt: That is a general overview of the tax structure. You may want to review Florida tax law regarding asset tax such as equipment, rent, and other methods to calculate corporate tax versus Nevada tax law. I have not review all aspects of each individual...

Tax Law (Questions About Taxes): Correcting Roth IRA contribution year, roth ira contribution, ok john
roth ira contribution, ok john, mistake: Chris: I believe that a Roth IRA is of no tax consequence until you start to draw out of the account then all earnings is not taxable when you receive them. A 2007 contribution must have been marked as a 2007 contribution by April 15, 2008 not November...

Tax Law (Questions About Taxes): CPA Review As A Tax Deduction, cpa review course, sole purposes
cpa review course, sole purposes, steve thanks: Steve, Thanks for your question. Sorry, no. The IRS position is that, regardless of your motivation for obtaining the CPA, any costs involved are not deductible. This includes the cost of a CPA review course. Becoming a CPA qualifies you for a new...

Tax Law (Questions About Taxes): cancellation of debt question, Short Sale Taxation
Short Sale Taxation: Since you were renting the house and claiming it most likely on your schedule E of your form 1040 for the last several years, you will not be able to claim this as your principal residence. That is the bad news. However, you may have a capital loss that...

Tax Law (Questions About Taxes): claiming a dependant, common law wives, common law marriage
common law wives, common law marriage, common law wife: Chuck: If you mean your common law wife? The answer is no. Legally, according to IRS own law, a common law wife IS NOT a dependent. If you and she were married then you would combine her wages with your wages an report it on the same return. Otherwise,...

Tax Law (Questions About Taxes): claiming a dependent, child tax credit, dependency exemption
child tax credit, dependency exemption, stancil: Shelly, Thanks for your question. You can claim a dependency exemption for him as long as he is under age 18 as of 12/31. In addition, if he is a full time student, you can take the exemption until the year he reaches age 24. I would add, however,...

Tax Law (Questions About Taxes): condo rentals deduction, circular 230 disclaimer, form 1040
circular 230 disclaimer, form 1040, rental business: Hi Val, When you rented the condo for tax purposes you are considered in the rental business. You report the rent and your expenses on Schedule E of your Form 1040. You can deduct the utilities, interest, taxes , repairs, advertising, etc on this form....

Tax Law (Questions About Taxes): corporate vehicles, circular 230 disclaimer, corporate vehicles
circular 230 disclaimer, corporate vehicles, business thanks: Have the corporation give you a car allowance that covers your monthly expenses. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific...

Tax Law (Questions About Taxes): credit for dependent care, dependent care credit, ss number
dependent care credit, ss number, form 2441: Laura, Thanks for your question. Yes, those expenses would qualify for the dependent care credit, assuming you meet all the qualifications for the credit. You do not have to issue him a 1099, as you will report his SS number on the Form 2441 when you...

Tax Law (Questions About Taxes): Deduction from selling investment property, rental investment, adjusted basis
rental investment, adjusted basis, stancil: Simon, Thanks for your question. No, you cannot deduct the loss on a sale to a related party. However, your adjusted basis is not 200K. Your adjusted basis is the purchase price minus any depreciation that is allowed or allowable. It may be that you...

Tax Law (Questions About Taxes): Deductions connected with part residency across two states, charitable deductions, two states
charitable deductions, two states, shan: Shan: On your Federal 1040 it makes no difference what state you are in or move from or move to it. For the state returns its straight forward if they allow charitable deductions it can only be what you can deduct from the income reported in that state....

Tax Law (Questions About Taxes): Delinquent tax warrant, tax warrant, delinquent tax
tax warrant, delinquent tax, taxing authority: Billy: It is always prudent to contact the taxing agency an try to work out a deal. The lien can be filed against you and any property that you may purchase in the future. It would be to your advantage to work out a deal with the taxing authority. ...

Tax Law (Questions About Taxes): Dep and court orders, head of household status, high school graduation
head of household status, high school graduation, head of household: Larry, Thanks for your question. Although they are related, claiming a dependency exemption and taking head-of-household status are two separate issues with differing qualifications. If the court order is no longer in effect, you would have the right...

Tax Law (Questions About Taxes): Dependent, irs form 8332, income tax purposes
irs form 8332, income tax purposes, college savings plan: Hi, You should enter part of the year and calculate how many months that comes to. If you said she lived with you the entire year you could be eligible for the earned income tax credit and since she didn t live with you 7 months or more that would be incorrect....

Tax Law (Questions About Taxes): Dependent, irs form 8332, income tax purposes
irs form 8332, income tax purposes, college savings plan: Richard, Thanks for your question. The dependency exemption is all or nothing, the questions are to determine your eligibility to take the exemption and credits. There should be a box to check to indicate that you are divorced and have the right to take...

Tax Law (Questions About Taxes): deductions, income losses, tax situation
income losses, tax situation, real estate taxes: Dee, Thanks for your question. This is what is known as a closed-fact tax situation. The transaction has occurred and the taxpayer/preparer is seeking how to minimize the taxes. This is somewhat like shutting the barn door after the horses have left....

Tax Law (Questions About Taxes): dependents, dependency exemption, stancil
dependency exemption, stancil, dependents: David, Thanks for your question. Not really. At certain levels income, the amount of the dependency exemption is phased out. The income level varies with filing status. However, the exemption cannot be reduced to less than $2,433. Hope this helps....

Tax Law (Questions About Taxes): depreciation on semi truck, standard mileage rate, sole proprietor
standard mileage rate, sole proprietor, ramification: Beverly: If the truck was placed in service on 1/21/2009 and was repossed before 1/20/2010 then a year will be difficult to argue. Standard mileage rate I believe is .55 a mile. I do not know what will work better in this case. I am not looking at...

Tax Law (Questions About Taxes): distribution of corpus from Complex trust, circular 230 disclaimer, form 1041
circular 230 disclaimer, form 1041, form 1040: The distribution from the trust will be shown on Form 1041. Any income from the distribution will also be shown on Form 1041 and this is what you pick up on your Schedule E of your Form 1040. Not all of what you receive is necessarily taxable. Any individual...

Tax Law (Questions About Taxes): Enter Principal Business Code, mileage expense, code question
mileage expense, code question, business code: Therese, Yes, if you are completing Schedule C, you may deduct the full amount of the mileage. However, I would caution you that if you continue to show a loss, the IRS could classify it as a hobby and deny the deductions. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Estate Tax Return on 1041, partial distribution, tax bite
partial distribution, tax bite, stancil: Brian, Thanks for your question. By and large your approach is correct. With an estate you have two choices - the estate can pay the tax or the beneficiaries can pay the tax. The estate rate jumps to 35% rather quickly, so it is usually more advantageous...

Tax Law (Questions About Taxes): Ex paying my share in payments, divorce agreement, legal question
divorce agreement, legal question, good answer: Linda: I wish I could give you a good answer. Since your divorce and the agreement you have is part of a court order your only redress is to contact your attorney for his assistance. Your question is not a legal question. I am not an attorney and can...

Tax Law (Questions About Taxes): Excess Traditional IRA Contributions, ira contributions, traditional ira
ira contributions, traditional ira, excess contributions: Hi, It sounds like you made excess contributions to an employer s retirement plan - perhaps a 401(k). And it s true that you will be penalized if you don t withdraw the excess contributions. Talk to your employer s plan administrator on how to go about...

Tax Law (Questions About Taxes): Expense account, ownership, expense account, stancil
expense account, stancil, relevant laws: Aaron, Thanks for your question. The ownership of the books is a legal issue. As a CPA and not an accountant, I am prohibited by law from giving legal advice outside the area of taxation. I can tell you that much of the answer will rest on a decision...

Tax Law (Questions About Taxes): estate executor fee as income, executor fee, federal tax id
executor fee, federal tax id, estate executor: Caileen, Thanks for your question. You should issue a 1099-MISC to yourself from the estate, using the tax ID of the estate. The amount will be reflected as non-employee compensation. You will report it on line 21, other income on your personal 1040....

Tax Law (Questions About Taxes): FEI revoke?, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: Doug, Thanks for your question. To revoke the election, simply attach a statement to your return stating what you are revoking - the earned income exclusion/credit or the housing credit, or both. You and your wife must each submit a separate statement...

Tax Law (Questions About Taxes): Federal Tax withholding from severance pay, federal tax withholding, income tax purposes
federal tax withholding, income tax purposes, case citation: Amy, Thanks for your question. That is correct. Severance pay is considered (in IRS terms) a supplemental payment and required to have 25% withheld for federal income tax purposes. On a related issue, a district court recently ruled that a severance...

Tax Law (Questions About Taxes): Figuring Basis for rental sold as an installment sale., gross profit percentage, hud settlement
gross profit percentage, hud settlement, balloon payment: Lynne, Thanks for your question. Your cost basis is the original purchase price plus any capital improvements minus depreciation allowed or allowable. This must be determined as of the year of sale. You will need to calculate your gross profit percentage...

Tax Law (Questions About Taxes): Filing a final return for the deceased, circular 230 disclaimer, form 1040
circular 230 disclaimer, form 1040, governmental agency: Sorry to hear of your loss. You would be required to file a return at the end of the year by April 15, 2011 on form 1040 if your mom has a filing requirement. Since she has not filed in years, you probably do not have a filing requirement, and no return...

Tax Law (Questions About Taxes): Fines in another state, irs refund, offsets
irs refund, offsets: Yes. The IRS has arrangements with most states for refund offsets. So if a state has an assessment against you, they can take your IRS refund. It may be that the state filed a return for you in error and that you may not really owe the tax. You will have to...

Tax Law (Questions About Taxes): First time homebuyer tax credit, First Time Homebuyer Credit
First Time Homebuyer Credit: Hi Kim, You can only take the home buyer credit for the purchase of a new home. You cannot get the credit for a refinance, or adding your name to the deed. You would have to purchase the residence from him and he would have to be off title for you to...

Tax Law (Questions About Taxes): FMV of home sold within family?, comparative market value, real estate sales contract
comparative market value, real estate sales contract, lifetime gift: You can have a local broker give you a letter of value indicating the value of the home. A formal appraisal is not required. The gift amount will be the difference between the fair market value as indicated by this letter and the amount that you pay (discounted...

Tax Law (Questions About Taxes): Foreign Earned Income & Cancelled Debt., foreign earned income, chapter 7 bankruptcy
foreign earned income, chapter 7 bankruptcy, earned income credit: Michael, Thanks for your question. I don t deal with Block, so know absolutely nothing about their website. My guess would be that your situation is more complicated than it can handle. The debts were discharged in bankruptcy, therefore you do not...

Tax Law (Questions About Taxes): Foreign engagement - per diem, employee business expenses, income tax purposes
employee business expenses, income tax purposes, miscellaneous itemized deductions: Yes you must itemize. If your assignment is more than a year, you cannot deduct per diem amounts for meals. You may qualify for the foreign housing allowance, however. As I pointed out the per diem rates are given in the link I sent you. They are far...

Tax Law (Questions About Taxes): Foreign gifts, form 3520, stancil
form 3520, stancil, monetary gifts: Allen, Thanks for your question. I can only address the tax implications in the U. S. There would not be any gift tax involved, and gifts are not subject to income tax. However, depending on the amount you may have to complete Form 3520 if the amount...

Tax Law (Questions About Taxes): Form 1065 Line 16H, form 1065, 16c
form 1065, 16c, k1: Mr. Vijay: Line 16C from Schedule K determines if the partner or partnership has foreign earnings if so that amount is reported here. K-1 form is required with all 1065. Form 1065 is only an information return and K-1 form is how the income (loss) is...

Tax Law (Questions About Taxes): Form 8832 C Corporation Eleciton, form 8832, form 1120
form 8832, form 1120, stancil: Mara, Thanks for your question. In order to be taxed as a corporation, a Form 8832 should have been filed. The default classification is as a partnership if no form is filed. You can contact the IRS and see if that has been done. I would check with...

Tax Law (Questions About Taxes): Full-time resident of Massachusetts?, massachusetts tax, time resident
massachusetts tax, time resident, john thanks: John, Thanks for your question. I am not an expert on Massachusetts tax law, so I don t know exactly how the law is worded. You were a FULL TIME resident of MA until 10/14. You were not a FULL YEAR resident however as you moved out of the state. ...

Tax Law (Questions About Taxes): Claiming loss on joint brokerage account, brokerage account, joint tenant
Tax Law (Questions About Taxes): Claiming loss on joint brokerage account, brokerage account, joint tenant, stocks

Tax Law (Questions About Taxes): Company Vehicles and driving them home., jurisdictional limits, personal use
Tax Law (Questions About Taxes): Company Vehicles and driving them home., jurisdictional limits, personal use, law enforcement officer

Tax Law (Questions About Taxes): cancellation of debt question, retirement plan, fmv
Tax Law (Questions About Taxes): cancellation of debt question, retirement plan, fmv, insolvency

Tax Law (Questions About Taxes): fica tax on severance pay, tax court case, statute of limitation
Tax Law (Questions About Taxes): fica tax on severance pay, tax court case, statute of limitation, quality stores

Tax Law (Questions About Taxes): fica tax on severance pay, social security and medicare, medicare tax
social security and medicare, medicare tax, severance pay: Wendy: That pertains to current employers hiring workers that have been unemployed for 2 months or more, drawing unemployment, being put back to work. The tax credit of the employers share of the social security and medicare tax match (7.65%) from the...

Tax Law (Questions About Taxes): first time buyer tax credit, first time buyer, time home buyer
first time buyer, time home buyer, first time home buyer: Gary, Thanks for your question. The credit can be allocated by the parties however they choose. This means that one party may take the full amount of the credit. However, a spouse cannot take a credit if the other spouse is not eligible. Hope this...

Tax Law (Questions About Taxes): foriegn entity buying a sub chapter S, circular 230 disclaimer, s corporation
circular 230 disclaimer, s corporation, tax implications: No, a foreign entity is not allowed to own S Corporation stock. It would cause a disqualification of the entity for tax purposes. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides...

Tax Law (Questions About Taxes): Gift of property, tax form 709, stancil
tax form 709, stancil, gift tax return: Michael, Thanks for your question. A gift tax return, Form 709, is due April 15 after the year of the gift. A six-month extension may be obtained. Assuming the amount of the gift does not exceed $1,000,000 there would not be any tax due as there...

Tax Law (Questions About Taxes): gambling winnings and losses, injured spouse relief, state tax return
injured spouse relief, state tax return, head of household: Ashley, Thanks for your question. Since you signed a joint return, the IRS can hold you liable for anything on the return, including payment of any amount due. However, you may be able to file Form 8857 as an injured spouse. If injured spouse relief...

Tax Law (Questions About Taxes): gift deed, lifetime gift, gift deed
lifetime gift, gift deed, lawyer fees: Gerald, Thanks for your question. Unless the value of the land exceeds $1,000,000 there will be no taxes on the exchange. There is a $1,000,000 lifetime gift exemption in addition to the $13,000 per person annual exemption. If it is in excess of $13K...

Tax Law (Questions About Taxes): Home Office Deduction, william sherrod, home office deduction
william sherrod, home office deduction, inadequate facilities: William, Thanks for your question. The convenience of the employer criteria is met if the employer does not furnish facilities or furnishes inadequate facilities. You can use Form 8829 to help you determine the amount of her deduction, but do not submit...

Tax Law (Questions About Taxes): Home Office Expense Deduction, irs website, home office deduction
irs website, home office deduction, office expense: Debbie, Thanks for your question. You have an area that is regularly and exclusively used for business. In addition, since he is an employee the home office must be for the convenience of the EMPLOYER. Since the employer has no physical location in...

Tax Law (Questions About Taxes): Homebuyer credit/Basis increase, homebuyer tax credit, casualty loss
homebuyer tax credit, casualty loss, hydraulic pressures: Jeff, Thanks for your question. It cannot be a casualty loss, as the situation was in place before you purchased the house. The repair amounts do not qualify for the first-time home buyer credit as they were not included in the purchase price. ...

Tax Law (Questions About Taxes): HSA Excess Contribution?, health savings accounts, online tax prep
health savings accounts, online tax prep, excess contribution: Allen, Thanks for your question. I can t tell you how to solve your problem with the software, but it should not be indicating an excess contribution with those amounts. It does not matter if you have one account or two, there should be no excess contributions....

Tax Law (Questions About Taxes): hardship disbursement, Taxes, IRS
Taxes, IRS, Delinquent Returns: Roy, You should have received a 1099-R from the company that manages your 403(b). There is a code in box 7 that they fill out. If it is a code 1 they considered the distribution and early distribution with no known exception. It should be marked as a code...

Tax Law (Questions About Taxes): Incarcerated husband, child divorce, divorce papers
child divorce, divorce papers, mfj: Heather, Since your were married as of 12/31 and you lived with your husband at some time during the last six months of they year you must file married - either separate or joint. To file jointly, you must get his signature on the return. Hope this...

Tax Law (Questions About Taxes): Income limits for IRA tax deductions; IRA's for college, ira withdrawals, ira ira
ira withdrawals, ira ira, adjusted gross income: Wendy, Thanks for your question. At that level of income and as an active participant in a 401(k) plan you cannot make deductible contributions to a traditional IRA. You cannot make a Roth contribution. You can make a non-deductible contribution to...

Tax Law (Questions About Taxes): Income Tax, form 4684, federal income tax
form 4684, federal income tax, tom mcguire: Tom: When you acquired the tree what was its value? That is the answer that you are looking for. You need to find an expert to determine that value. John Tom: When you acquired the property on which the tree was growing it was a certain age it...

Tax Law (Questions About Taxes): Independent contractor, stancil, independent contractor
stancil, independent contractor, surcharges: Karen, Thanks for your question. Take the entire monthly cost of the phone plan - taxes, surcharges, fees, cost of the plan, etc. Then divide his minutes used by the total number of minutes used. Apply that fraction to the total cost of the phone and...

Tax Law (Questions About Taxes): Inheritance 1099-S, medicare bill, 1099s
medicare bill, 1099s, stancil: Karen, Thanks for your question. You report the sale on Schedule D. It does not matter what you did with the funds, that is irrelevant to the gain from the sale. Since it was in the name of a sibling and not the mother-in-law it is not an inheritance...

Tax Law (Questions About Taxes): Installment sale of Section 1250 property Forms 6252 and 4797, installment sales method, long term capital gain
installment sales method, long term capital gain, balloon note: Peter, Thanks for your question. First, you need to get an amortization table to determine the amount of interest, it will not be a fixed amount each year. Even though it is a balloon payment, the first five years must be amortized on some fixed basis....

Tax Law (Questions About Taxes): IRA Contribution Deductibility, deductible ira contributions, employer retirement plan
deductible ira contributions, employer retirement plan, non deductible ira: Kim, The law did not change. From the beginning, an IRA was designed primarily for those not having coverage under an employer retirement plan. The limits on income and the amount of contributions that have been made have been increased over the years,...

Tax Law (Questions About Taxes): IRA contribution AND employer 401k contributions, employer 401k, deductible ira
employer 401k, deductible ira, ira contribution: Jeanette, Thanks for your question. Since you were an active participant in an employer-sponsored plan in 2009, you are considered to be one for the entire year for IRA purposes. However, if your AGI is under $89,000 for 2009 you can have a fully deductible...

Tax Law (Questions About Taxes): IRA contribution after losing a job, ira contribution, losing a job
ira contribution, losing a job, retirement plan: Hi, You won t be able to make a deductible contribution to an IRA because if you are covered by a retirement plan at any time during the year, you are considered to have been covered for the entire year. You ll just have to pay the taxes on your income....

Tax Law (Questions About Taxes): IRA distribution, tax ramifications, ira distribution
tax ramifications, ira distribution, 1099r: Dan, You acted too late. In order to avoid the tax ramifications, you would have to have rejected the inheritance in writing. Since you received it, it is too late to formally decline it and you are responsible for the taxes involved. Hope this helps....

Tax Law (Questions About Taxes): IRAs, roth ira, red flag
roth ira, red flag, iras: Mike, If you received a K-1 you must report it on your tax return. The IRS received a copy of the K-1 and if you do not include it a red flag will be raised and the IRS may come back to you with interest and penalties for not reporting the income. Also...

Tax Law (Questions About Taxes): IRS 2010 CHILD EARNED CREDIT, child tax credit, credit question
child tax credit, credit question, daughter age: Angelo, Thanks for your question. Yes, she must file her own return for her income. You can t use your 17 year old for the child tax credit because the law states that a child must be under age 17 as of 12/31 to get the credit. Hope this helps....

Tax Law (Questions About Taxes): IRS Audit, necessary business expense, business tax return
necessary business expense, business tax return, circular 230 disclaimer: If this was an audit of your business tax return, then it is deductible as an ordinary and necessary business expense for the business. If this was a personal audit, then you can deduct it as a miscellaneous itemized deduction subject to the 2 percent of...

Tax Law (Questions About Taxes): Ira, IRA Distribution
IRA Distribution: Hi Robert, Sorry to hear about your illness. I truly hope you are in the 6 percent that survive this disease. You can take out your IRA money penalty free if you are permanently disabled, use it to pay medical insurance premiums, and/or your medical...

Tax Law (Questions About Taxes): income from two states, federal adjusted gross income, adjusted gross income
federal adjusted gross income, adjusted gross income, form 540a: Paul: I believe that California has a different form for someone who has lived in the state for only part of the year. Please go to www.ca.gov an review form CA (California Adjustment) an the instructions for this form. I believe that you reduce your...

Tax Law (Questions About Taxes): income from two states., federal tax purposes, state purposes
federal tax purposes, state purposes, oyler: Ms. Oyler: For federal tax purposes you add the two incomes together that becomes your total income for the year. For state purposes you have to report all your income to the state that you live in and report the earnings of the state that you do not live...

Tax Law (Questions About Taxes): inheritance, stancil, inheritance
stancil, inheritance, cpa: Lee, Thanks for your question. You will have to report any interest earned on the CD and the gain on the sale of the condo. The gain is the excess of the sale price less the fair market value as of date of death. If you have a loss on the sale, that...

Tax Law (Questions About Taxes): inheritance and taxes, country hope, foreign earned income
country hope, foreign earned income, stancil: A U. S. citizen or resident is taxed on all their world-wide income regardless of source of origin. The sale of land is no exception. Earned income is eligible for the foreign earned income credit up to $91,400 but if you don t qualify for the credit, it...

Tax Law (Questions About Taxes): installment sale, gross profit percentage, mortgage principle
gross profit percentage, mortgage principle, principle interest: Patrick, Thanks for your question. You should have filed a Form 6252 in the year of sale to report the sale on the contract basis, and a subsequent 6252 for each year until it is paid off. Each payment received is a combination of interest income, taxes,...

Tax Law (Questions About Taxes): is a insurance settlement taxable?, circular 230 disclaimer, malpractice lawsuit
circular 230 disclaimer, malpractice lawsuit, dental malpractice: A settlement is not taxable to the extent that it is compensation for physical injuries. Look at your settlement agreement and see what you were compensated for with your settlement. If you can state this was all for physical injuries, none of it would be...

Tax Law (Questions About Taxes): international student tax, f1 visa, visa holder
f1 visa, visa holder, american citizen: Sammy: If you have wages in the USA and have paid in income tax. You must file a return to document your activity for the year of 2009. If you are entitled to a refund of taxes paid in,this is the only method to receive your refund of over paid taxes....

Tax Law (Questions About Taxes): investment to child, lifetime gift, capital gains tax
lifetime gift, capital gains tax, capital improvements: R, Thanks for your question. A very important factor is the age of your child. I will assume that the child is an adult. In giving the house to your child, a couple of things happen. First, the difference in the sale price and the FMV is considered...

Tax Law (Questions About Taxes): investment loss, irs documents, economic downturn
irs documents, economic downturn, interest earnings: Jeff, Thanks for your question. You will not have any documentation in form of official IRS documents. You should maintain copies of your purchase records to prove your cost basis. Report the losses on Schedule D, giving zero as the sale price and...

Tax Law (Questions About Taxes): K-1 & Cap gain/loss, fidelity investments, partnership shares
fidelity investments, partnership shares, time assistance: Carol, Thanks for your question. With a partnership, you must pay tax on the profits realized from the business without regard to distributions. This is separate from any gain or loss on the sale of the partnership shares. Having said that, however,...

Tax Law (Questions About Taxes): K-1s, smith barney, 1099b
smith barney, 1099b, paul thanks: Paul, Thanks for your question. It sounds as if the information is being duplicated. If the account is in the name of the LLC, you should not receive a 1099-B in your name. If the account is in your name, it should not be a part of the LLC records....

Tax Law (Questions About Taxes): Kindergarten costs as partially deductible, afternoon kindergarten, private kindergarten
afternoon kindergarten, private kindergarten, irs rules: Francis, Thanks for your question. IRS rules state that expenses for before or after school care for a child in kindergarten may be expenses for care. Since they are with pre-schoolers, that portion sounds as if they could be considered expenses for...

Tax Law (Questions About Taxes): Late 1099, stancil, wrong address
stancil, wrong address, schedule c: Lauren, Since it is a 1099, presumably with no withholding, you can include it on your Schedule C without receiving documentation. You should first contact the employer to see if it has been sent. It could have gone to the wrong address or gotten mis-delivered....

Tax Law (Questions About Taxes): Limited partnership passive losses, circular 230 disclaimer, passive losses
circular 230 disclaimer, passive losses, quantum physics: Hi Bob, As Einstein said: The hardest thing in the world to understand is the income tax. When a taxpayer sells an entire interest in a passive activity to an unrelated party, both current and suspended losses generated by that activity (as well...

Tax Law (Questions About Taxes): LLC or S or C corp, darlene darlene, social security and medicare
darlene darlene, social security and medicare, sole proprietorship: Darlene, Thanks for your question. A couple of observations. First, if you converted to a corporation, you would have to pay yourself a salary and withhold social security and medicare taxes. As a C Corp, any distributions above the salary would be...

Tax Law (Questions About Taxes): Loss of Business Investment, business assets, form 4797
business assets, form 4797, stancil: Greg, Thanks for your question. Depending on how the closing was handled, it would be a sale of business assets reported on Form 4797 or a sale of an investment, reported as a capital loss on Schedule D. Probably it would be a combination of the two....

Tax Law (Questions About Taxes): landlord not reporting tenants, tax time, landlord
tax time, landlord, tax return: Jeff: I do not know what you mean. You can not claim rent on your tax return as a deduction. You can if where you live is also being used as a business but only the part of the space that you use for the business. Please let me know what you mean. ...

Tax Law (Questions About Taxes): llc dissoluion, form 1065, zero return
form 1065, zero return, stancil: Regina, Thanks for your question. Yes, you should complete a 1065 as a zero return, marking it final. Assuming all members are aware that it is zero, you do not necessary to issue K-1 s as there is nothing to allocate. You don t need to show that...

Tax Law (Questions About Taxes): Milage on 1099, 1099 misc, business deductions
1099 misc, business deductions, h r block: Jim: If you delivered the papers for the newspaper company part of your pay was so much a mile for driving your vehicle. You could file a 2106 if you had kept a log of the miles you drove to offset the mileage they paid you. That is your only choice....

Tax Law (Questions About Taxes): Mistake on Schedule C, 1099misc, discrepency
1099misc, discrepency, schedule c: Hi, Since you show a net profit there must have been income. But if you got a 1099MISC the IRS will match it up and tell you that you didn t report the income. You can wait until you here from them or you can file an amended return. Regards, Carol...

Tax Law (Questions About Taxes): Mistake on Schedule C, circular 230 disclaimer, math errors
circular 230 disclaimer, math errors, filing an amended return: You should file an amended return to correct this. You know about the error and are now obligated to correct it. The IRS will usually find math errors. I am not sure if you are saying that the net profit was reported correctly. If it was you will not have...

Tax Law (Questions About Taxes): Mistake on Schedule C, self employment taxes, hefty fees
self employment taxes, hefty fees, discrepency: Sallie, You should not face any large fines if the IRS catches the error as long as you included all of your income in computing your net profit. If the IRS finds that you did not report all of the income you received then you will be faced with some fines....

Tax Law (Questions About Taxes): Mobile Home Sold, stancil, mobile home
stancil, mobile home, tax return: Cindy, Thanks for your question. You do not state how long you lived in it as your primary home. I will assume it was for more than 2 years. If this is the case you do not owe taxes on the gain, as it was the sale of your main home. Also,...

Tax Law (Questions About Taxes): Mortgage Interest Rate Deduction, Mortgage Interest Limitation
Mortgage Interest Limitation: You can write off the interest on your principal residence up to a loan amount that is equal to your acquisition indebtedness (Your original Loan Amount) plus $100,000, to a maximum of $1.1 Million dollars. If your loan exceeds this amount, the interest related...

Tax Law (Questions About Taxes): Mortgage and Real Estate deductions, divorce agreement, stancil
divorce agreement, stancil, custodial parent: Sharon, As far as him claiming the child, the divorce agreement is the determining factor there. Lacking any direction in the divorce agreement, the custodial parent normally has the right. Regarding the taxes and interest, that is deductible by the...

Tax Law (Questions About Taxes): Mother Rent Tax Credit, social security benefits, mr smith
social security benefits, mr smith, tax credit: Mr. Smith: No Mr. Smith you may not claim her as a dependent. First, she would have to live with you. Second, you would have to provide her more than $13,000 and the value of the social security benefits she received in that year. If you live in one...

Tax Law (Questions About Taxes): Move From Kansas To Georgia, circular 230 disclaimer, georgia resident
circular 230 disclaimer, georgia resident, state taxes: Hi David, You pay taxes in the state where you intend to be a resident (it is intent based). You would file a non-resident tax return for Kansas for January 1 2009 through October 14, 2009, then you would file the rest of the year as a Georgia resident....

Tax Law (Questions About Taxes): Move From Kansas To Georgia, hi john, state taxes
hi john, state taxes, georgia state: Mr. Levins: If you had no connection to Indiana, physically, then you should get your income tax refunded. The rule is if you work in a state that has an income tax or reside in a state that has an income tax you report it and file a return. However,...

Tax Law (Questions About Taxes): massage therapist & 1099, unemployment tax act, state unemployment tax
unemployment tax act, state unemployment tax, massage therapist: Mr. Vagnoni: Just because the chiropractor says the person working for him is a sub contractor does not mean that person is not a covered employee according to State Unemployment Tax Act (SUTA). All workers are entitled to draw unemployment when they lose...

Tax Law (Questions About Taxes): misc income, Taxes, IRS
Taxes, IRS, Delinquent Returns: Ann, If you received a 1099-MISC from your former employer as non employee compensation you should report the amount on Schedule C. The amount after expenses is subject to self employment tax and will be reported on Schedule SE. The different Schedules...

Tax Law (Questions About Taxes): NOL carry forward, NOL Carryover
NOL Carryover: You combine all your NOL s and report them on your 1040 just as you have in the past. This can, and in your case does, create a greater negative AGI. That is ok. You will now carry forward the NOL to future years and hopefully be able to use it. Any...

Tax Law (Questions About Taxes): Non-US citizen living in Egypt, with US stock market gain, buying and selling shares, social security number
buying and selling shares, social security number, stock market trading: Islamri, Thanks for your question. Yes, you must file a return as the income is considered effectively connected U. S. income. As a non resident you are not allowed the standard deduction as well as other deductions, so most, if not all, of the income...

Tax Law (Questions About Taxes): negative AGI?, student loan interest deduction, student loan interest
student loan interest deduction, student loan interest, zero tax: Cait, Thanks for your question. Yes it is possible. Just complete the return and send it in with a zero tax liability. If you had any earned income you may be eligible for the making work pay credit, which would send you additional dollars. Hope...

Tax Law (Questions About Taxes): Options for shares due to company merger, company merger, denbury
company merger, denbury, taxable gain: Juan, Thanks for your question. Yes, if you take cash that will be considered a sale reportable on Schedule E. The amount of cash received less your cost basis in the shares will be the taxable gain/loss. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Part-Time Residency Form, stancil, workmen
stancil, workmen, carrie: Carrie, Thanks for your question. There are no forms needed. Since you are residents of Michigan, you are subject to tax on all your earnings regardless of the state in which they were earned. Just file a regular MI resident return. Florida has no income...

Tax Law (Questions About Taxes): Partnership Loss, Taxes, IRS
Taxes, IRS, Delinquent Returns: Jan, While you should include the K-1 on your 1040, in your case the IRS shouldn t care as long as the only amount on the K-1 is a loss. The IRS usually only goes after people who did not report income they received. Next year wait for the K-1 before filing...

Tax Law (Questions About Taxes): Prior year depreciation, depreciation method, stancil
depreciation method, stancil, rental property: Warren, Thanks for your question. You must file Form 3115 to change your depreciation method from none to the new method. You must file amended returns for all open years. Anything prior to the 2007 return is closed. 2007 closes on April 15, 2010....

Tax Law (Questions About Taxes): Property Tax Deductions, county property taxes, property tax deductions
county property taxes, property tax deductions, kind remarks: For the allocated amounts forget when the taxes are actually paid to the county. Your concern is that you paid certain taxes in 2009 at the closing. Those amounts can be deducted in 2009. Any other amounts would be deducted in the year paid (adjusted for...

Tax Law (Questions About Taxes): partnership loss carry forward, limited liability partnership, limited liability companies
limited liability partnership, limited liability companies, single family houses: Sam: If the LLP (Limited Liability Partnership) is being treated as a corporation for tax purposes, It can not carry over losses on the books merely to accommodate the members (Limited Liability Companies only have member) individual tax situation. When...

Tax Law (Questions About Taxes): over payment of commission draw, water under the bridge, country water
water under the bridge, country water, w2: Ken: You do not. Once paid it is wages. You will have to insure that in the current year that the commission or skip of a draw to catch the two together for this year. Once you have been paid its as we say in the country water under the bridge. You...

Tax Law (Questions About Taxes): personal tax- rental income, full time job, sewage pipe
full time job, sewage pipe, roof leaks: Hi Michael and Mary, I will answer your questions in the order you presented them: 1) No, you do not have to rent your building out. 2) There is no specific tax rule that dictates how fast repairs need to be done. There may be building code, or habitability...

Tax Law (Questions About Taxes): property tax on aircraft - seriously?, personal property tax, knid
personal property tax, knid, stancil: I don t know where you live, but everywhere I have ever lived, I have paid an annual property tax on my cars. You mention a yearly property tax for parking. If this is not the annual personal property tax that I refer to, it is most likely not a tax, but...

Tax Law (Questions About Taxes): property tax on parsonage on church property, unrelated business taxable income, tax exempt status
unrelated business taxable income, tax exempt status, church budget: Joyce, Thanks for your question. As long as your income from the rental is under $1,000 you do not have any concerns. If it exceeds that amount you may have unrelated business taxable income and might have to pay tax on the profits from the rental. ...

Tax Law (Questions About Taxes): Raw Land Tax Question, mortgage interest deductions, mortgage interest deduction
mortgage interest deductions, mortgage interest deduction, investment interest: Trevor, Thanks for your question. The law cannot look into your mind and determine your intent. If your intent is to use it for investment property, they you can take a deduction for the mortgage interest now as investment interest. However, if your...

Tax Law (Questions About Taxes): Rental Property, sec 179, time tom
sec 179, time tom, carpeting: Tom, Thanks for your question. Yes, since it was being prepared for rental, you can deduct those expenses. You could treat the personal property items such as the dishwasher and stove as Sec 179 and expense them. Items that are components of the house,...

Tax Law (Questions About Taxes): Repayment of bonus, w2c, 1040x
w2c, 1040x, gross amount: Daniel: You will file a 1040X along with the w2c. Once you have completed the form you should know how it will effect your tax liability. Make sure the W2C if for 2009. Its my opinion that since the retrieving the bonus occurred in 2010 that it occurred...

Tax Law (Questions About Taxes): Reporting dividends on joint account, 1099s, queston
1099s, queston, steve thanks: Steve, Thanks for your question. You can handle the dividend and sale of shares as you wish. It would probably be cleaner if it was on one of your returns only, however. The balance paid can be deducted however you wish - all on yours, split, or...

Tax Law (Questions About Taxes): Restraunt not withholding employee Fed taxes, stancil, irs
stancil, irs, cpa: Ralph, Thanks for your question. I am not aware of any such law. However, I do know that state law cannot override Federal law on an issue like this, so the employer is apparently mistaken. I would suggest calling the IRS 800-829-1040 and lodge a complaint....

Tax Law (Questions About Taxes): recharacterized roth ira contributions to traditional ira, roth ira account, roth ira contributions
roth ira account, roth ira contributions, traditional ira: Ames: Please list it as an IRA rather than an Roth IRA on your return. However, I do not believe that you are entitle to have an IRA. If your employer has a retirement plan for you, you can not take a deduction for a traditional IRA, you can only have...

Tax Law (Questions About Taxes): S-Corp Inventory, accrual accounting, hybrid method
accrual accounting, hybrid method, gross receipts: That is correct, if they are using hybrid, they must show inventories. You can correct it by staying with hybrid and doing it properly or by filing Form 3115 for a change in accounting method to cash. The cost of inventory would be labor, supplies, etc...

Tax Law (Questions About Taxes): Us Savings Bonds, annual gift tax exclusion, gift tax exclusion
annual gift tax exclusion, gift tax exclusion, circular 230 disclaimer: When you were added as a joint tenant this was a gift. If the amount exceed your mother s annual gift tax exclusion at the time (is now $13,000) she would have made a taxable gift to you for the amount over the annual exclusion. However, she has a $1,000,000...

Tax Law (Questions About Taxes): Schedule E loss, rental losses, portfolio income
rental losses, portfolio income, passive activities: Wendy, Thanks for your question. I think the problem is in your definition of passive income. You mention interest income - that is not passive, but is referred to as portfolio income. Passive activities, in addition to rental real estate, consist...

Tax Law (Questions About Taxes): Schedule F, home office expenses, livestock supplies
home office expenses, livestock supplies, fuel credit: Sandi, Thanks for your question. Calculate the amount of the home office deduction using Form 8829, then just enter the amount on your Schedule F. The fuel credit is for fuel not used on the highways. Donations are Schedule A items, deductible at...

Tax Law (Questions About Taxes): Schedule L income, standard deduction, w2s
standard deduction, w2s, real estate taxes: Hi, You only use Schedule L if you are increasing your standard deduction with real estate taxes or sales tax paid on a new vehicle purchase last year. Earned income is income from W2s or Schedule C or Schedule F. Interest and dividends are not included....