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Tax Law (Questions About Taxes): stock purchase agreement, stock purchase agreement, form 1120s
stock purchase agreement, form 1120s, personal income tax: Hi Nancy: Thanks for the question. The transaction is not recorded on the S-Corps books, but by the purchaser. The seller reports the sale on his personal return and may report the gain on the installment method. Hope this helps John Kirk, CP...

Tax Law (Questions About Taxes): stock purchase question, question question, stock purchase
question question, stock purchase, minimum investment: Shanna, First, you could form an LLC. Cash out your retirement and place the funds in the company. Second, depending on the type of 1099 completed and the boxes that were completed, the income would retain its capital character. Third, I cannot agree...

Tax Law (Questions About Taxes): stock purchases, irs pubs, irs publications
irs pubs, irs publications, irs pub: Hi, You don t report purchases of stock to the IRS. When you sell the stock you report the sale including the date you purchased the stock, how much you paid for it, the date of sale and the selling price. Be sure to keep a record of your purchases...

Tax Law (Questions About Taxes): stock sale/rollover, short term capital gain, long term capital gain
short term capital gain, long term capital gain, traditional ira: Hi, The sale of the stock will be a capital gain. If you held the stock more than one year, it will be a long term capital gain taxed at a maximum rate of 15%. If you held it one year or less it will be a short term capital gain taxed at ordinary income...

Tax Law (Questions About Taxes): stock sale, payroll deduction, purchase dates
payroll deduction, purchase dates, seperately: You must list each sale date seperately since this is how IRS matches the 1099. You must also seperate the sale date by shares that were held long term or short term. You can use various as the purchase date as long as you maintain the short/long status...

Tax Law (Questions About Taxes): stock sales in an IRA account, ira account, stock sales
ira account, stock sales, stancil: Don, Thanks for your question. Transactions in your IRA account are not reportable, as this is a tax deferred investment. At the time you begin distributions, you will pay tax on the amount distributed to you. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): stock sales in an IRA account, ira account, stock sales
ira account, stock sales, distributions: Hi Don, You re quite correct about not reporting stock sales in your IRA. In fact they will never be reportable. When you begin taking distributions from the IRA the distributions are taxed as ordinary income. Thanks for the Easter good wishes and...

Tax Law (Questions About Taxes): stock sales / tax consequences, drip plan, tax accountant
drip plan, tax accountant, tax consequences: Hi, From what you wrote, you inherited the stock so your basis would be the fair market value on the date of his death (or 6 months after his death if the executor of his estate chose an alternate valuation date). For inherited stock what the deceased...

Tax Law (Questions About Taxes): stock tax, self employment tax, income tax liability
self employment tax, income tax liability, social security and medicare: Hi, Actually social security can be taxable if your other income plus half of your social security exceeds $25,000 (single) or $34,000 (married filing jointly). If your income other than social security is less than the total of your standard deduction...

Tax Law (Questions About Taxes): stock unrealized appreciation, 401k withdrawal, 401k plan
401k withdrawal, 401k plan, stock certificates: Ask them to show you an IRS cite. While I did miss the fact that it was after tax money, you cannot just take that out as your MRD. You must also take your required distribution in cash. But I m still not saying you are out of the woods. This is big...

Tax Law (Questions About Taxes): stock wash sale rule, irs pub, wash sale rule
irs pub, wash sale rule, investment income: Hi, If you sell at a loss and have bought shares within 30 days before or after the sale date, it is a wash sale and you can t claim the loss. Instead the amount of loss is added to the basis of the shares you bought. This applies to each sale at a loss....

Tax Law (Questions About Taxes): stock, stock dividend, spinoff
stock dividend, spinoff: Hi Gerald, To determine your gain you deduct your basis in the stock from your selling price. Your basis is usually what you paid for it but in the case of a spinoff or stock dividend your basis may be zero. Generally when there is a spinoff or a stock...

Tax Law (Questions About Taxes): stocks deemed worthless, return thanks, business relationship
return thanks, business relationship, cost basis: This will be listed on Schedule D on the first line of the section(long term or short term)to which it applies. You must attach a statement including name of stock, date of purchase, cost basis, date and method you deem it is worthless, and personal/business...

Tax Law (Questions About Taxes): stocks as a gift, stock basis, microsoft stock
stock basis, microsoft stock, credit card debt: Hi Dianne, If you are selling the stock at a gain, your basis is the donor s basis. If he bought the stock, it would be what he paid for it. If you are selling it at a loss, your basis is the lesser of the donor s basis, or the fair market value of...

Tax Law (Questions About Taxes): stocks loss, stock losses, capital gains tax
stock losses, capital gains tax, money management: Yes you can deduct you losses against any future gains. If you have no gains you can deduct $3000 this year and in the future each year on schedule D an carried as negative income on your 1040 until all your loss is used up. Good luck make some gains...

Tax Law (Questions About Taxes): stocks, kelli, dividend
kelli, dividend, stocks: Hi Kelli, Gain on the sale of stocks is taxable. Losses on the sale of stocks are deductible within specified guidelines. If you are paid a dividend on stock, that dividend is taxable. Merely owning stocks has no effect on your taxes. Regards, Carole...

Tax Law (Questions About Taxes): stste taxes, double taxation, time ca
double taxation, time ca, time resident: you would file as a VA resident and a part time CA resident if you do the forms correctly you will not end up paying tax to both states on all of your earnings that would be double taxation!!. Va should end up giving you a credit for the Ca part time...

Tax Law (Questions About Taxes): student EIC, child care expenses, child care credit
child care expenses, child care credit, irs gov: Hi, I don t know what you read to lead you to the $250/month EIC because you were a full time student but that isn t correct. Please let me know what and where you read. Since you are married, if you and your wife file jointly you can claim child care...

Tax Law (Questions About Taxes): student exempt, maricopa community college, social security and medicare
maricopa community college, social security and medicare, unemployment tax: Hi, Students aren t exempt from taxes simply because they re students. But a student working for a school, college or university is exempt from FICA (social security and medicare) and FUTA (unemployment tax) if the student regularly attends classes and...

Tax Law (Questions About Taxes): student expenses, printer scanner, student expenses
printer scanner, student expenses, education expenses: Beth, Thanks for your question. Unfortunately, no. The only things that are deductible for college expenses are what the IRS calls qualified education expenses. That includes tuition and fees. Books and other items, even though required, are not...

Tax Law (Questions About Taxes): student loans, student loan company, eligible educational institution
student loan company, eligible educational institution, stancil: Peggy, Thanks for your question. Paying tuition directly to an educational institution is not considered a gift. Paying off a loan for tuition is considered a gift if the payment is not made directly to the educational institution. However,...

Tax Law (Questions About Taxes): student and parent taxes, form 1040ez, 19 years
form 1040ez, 19 years, tax return: Dear Justin, You won t know the answer to this question until you actually do your tax return.... You will do form 1040EZ and check the box that says can a parent or someone else claim you and continue with the rest of the return... thank you, kare...

Tax Law (Questions About Taxes): sub chapter s, w holdings, withholding allowances
w holdings, withholding allowances, s corp: Chris, Thanks for your question. If you take 3 withholding allowances, it is likely you will have to pay at the end of the year unless you have a large amount of itemized deductions. As an owner of an S-corp, you are taxed on the profits of the business,...

Tax Law (Questions About Taxes): sub contactor/taxes, self employment taxes, form 1040 es
self employment taxes, form 1040 es, stancil: You can send Form 1040-ES into the IRS at the address given for your state. This info is included in the instructions to the form. At only $60 every two weeks, you probably would not need to make estimated payments. That is less than $2,000 in income...

Tax Law (Questions About Taxes): sub-contract labor in KY, tax id number, sole proprietor
tax id number, sole proprietor, stancil: Dustin, Thanks for your question. Most likely, you would simply operate as a sole proprietor, which means you would file your income and expenses on Schedule C under your own name. Unless you have employees, you would not need a tax ID number for this...

Tax Law (Questions About Taxes): sub-contracted driver, self employment tax, standard mileage rate
self employment tax, standard mileage rate, oil insurance: Hi Kelley Because you drive a vehicle for hire you can t use the standard mileage rate( by the way it is 48.5 cents/mile) but not to worry you still get to deduct all kinds of expenses including depreciation gas oil, insurance,tolls etc etc.but you must ...

Tax Law (Questions About Taxes): sub contractor taxes, negative repercussions, confusing tax
negative repercussions, confusing tax, self employment taxes: She could submit the SS-8 to the government and get a determination that she is an employee, forcing the employer to treat her as such. Of course, there could be negative repercussions from that. Otherwise she will need to file a Schedule C with her...

Tax Law (Questions About Taxes): sub S corp, self employment tax, limited liability company
self employment tax, limited liability company, sole proprietor: Let me first apologize for the delay in you receiving this answer. The AllExperts.com Website has been unable to process answers for the past week, and it is still very slow. Looks like someone is attacking it, and Forcing the servers to lock up. I can...

Tax Law (Questions About Taxes): sub-s, llc, partnership, self employment tax, franchise tax
self employment tax, franchise tax, form 1065: yes changing to a sub S would eliminate for the time being the self employment tax ( 13%) but there is talk of elimanating this break in the next tax reform you missed out for this year as yo need to make an election by March 15 get the election form from...

Tax Law (Questions About Taxes): sub -s taxes, passive activities, passive activity
passive activities, passive activity, s corp: If the investment in the partnership is a passive activity the losses are a tax benefit to the corporation to the extent of income from passive activities. If the partnership is a non-passive activity, the profits and losses flow to the shareholders. John...

Tax Law (Questions About Taxes): subchapter s corp obtains a mortgage and distributes the proceeds to it's members, subchapter s corp, income tax purposes
subchapter s corp, income tax purposes, loan proceeds: You are correct that the Sub-S would not be required to credit a taxable event to the stockholders based upon it being a loan. If the loan is repaid, it will be paid with after tax dollars, and it will take more after tax dollars to pay it back than were...

Tax Law (Questions About Taxes): subchapter s corp obtains a mortgage and distributes the proceeds to it's members, subchapter s corp, income tax purposes
subchapter s corp, income tax purposes, long term capital gain: Assuming that the S-Corp has no accumulated Earnings and Profits from the time the corporation was a C-Corp, the distribution is treated as a tax free return of capital to the shareholders to the extend of the basis of their stock. Any excess is considered...

Tax Law (Questions About Taxes): subcontracting, adjusted gross income, contract company
adjusted gross income, contract company, necessary expense: Hi Brannon. In order for expenses that you pay as an employee to be deductible, the expense must be ordinary and necessary for your job. The instructions to Form 2106 (where you would deduct these expenses) state: ----- An ordinary expense is one that...

Tax Law (Questions About Taxes): subcontractor, self employment taxes, chef manager
self employment taxes, chef manager, estimated taxes: S, Thanks for your question. It sounds to me like you are an employee. There is a form, SS-8 that lists the criteria the IRS uses to distinguish between an independent contractor and an employee. The overriding issue, though, is control. They provide...

Tax Law (Questions About Taxes): supplemental taxes on severance pay, income tax withholding, federal income tax withholding
income tax withholding, federal income tax withholding, severance pay: Hi, The Federal income tax withholding on severance pay doesn t vary by state but an employer has more than one options for calculating withholding on any type of pay. The best way to find out which option the employer uses is to ask the employer. ...

Tax Law (Questions About Taxes): surrender, convenient store, stancil
convenient store, stancil, cost basis: Jess, Thanks for your question. You would be treated as having sold the business for the amount of the loan. The difference in that and your cost basis would be the amount of gain. Some of the gain would be ordinary, some would be capital depending...

Tax Law (Questions About Taxes): surrendered insurance, insurance premiums, prepaid insurance
insurance premiums, prepaid insurance, surrender value: Hi Craig, Most likely some of it will be taxable and the company will tell you the amount. The way it works with a plan I have is that the amount paid for insurance premiums over the years is deducted from the cash payout and the balance is taxable. You...

Tax Law (Questions About Taxes): surrendering a roth ira, medical insurance premiums, roth ira
medical insurance premiums, roth ira, money asap: Dena, Thanks for your question. There are two issues involved here. First, if the Roth has not been in place for 5 years there will be a 10% penalty on the amount of the distribution. Second, if you do not meet one of the exceptions, there will be...

Tax Law (Questions About Taxes): T-Bills & Tax Deferment, t bills, treasury bills
t bills, treasury bills, stancil: Bill, Thanks for your question. Putting the money in t-bills will not relieve you from paying any taxes on gains already realized. All this strategy will do is assure that you don t make any significant gains or losses for the 4-week period. Whenever...

Tax Law (Questions About Taxes): TAX, pre construction, capital gains
pre construction, capital gains, 4 months: I am sorry to tell you NO except for $3000 What you have is a capital loss which you can only offset against capital gains now or in the future .However there is a bit of good news you can deduct $3000 of your loss and continue deducting$3000 a year until...

Tax Law (Questions About Taxes): TAX, stancil, pre construction
stancil, pre construction, 4 months: Al, Thanks for your question. If the house is personal use property, you cannot take a deduction for the loss. If it is an investment, you will incur a short-term capital loss. These losses are deductible. However, you can only show a maximum...

Tax Law (Questions About Taxes): TAX, form 1040es, www irs gov
form 1040es, www irs gov, full time job: Day trading gains are short term so, the net profit would be subject to whatever tax bracket they put you in. There is no way anyone can tell you what that tax bracket is without knowing a ton more info, info that this media does not allow. Regarding...

Tax Law (Questions About Taxes): TAX, tax rate schedules, head of household
tax rate schedules, head of household, form 1040: Hi Al Thanks for the question Using the taxable income number from your form 1040, find the applicable bracket on Tax Rate Schedules X, Y, or Z depending on your filing status as Single, married or head of household. Hope this helps John Kirk,...

Tax Law (Questions About Taxes): TAX Break, child tax credits, federal income tax
child tax credits, federal income tax, standard deduction: Hi, No it is not true that if you have 5 kids you are exempt from paying Federal income tax. For 2006 taxes you would deduct from your income $3,300 for each child and your wife and yourself. Assuming you are married that s a total of $23,100. In addition...

Tax Law (Questions About Taxes): TAX DONATIONS, antique car museum, tax donations
antique car museum, tax donations, form 8283: Ken, Thanks for your question. The museum should give you a receipt acknowledging the donation, but specifying no amount. You report the donation as an itemized deduction - non-cash charitable contribution. You assign the value. If the value is...

Tax Law (Questions About Taxes): TAX FORM QUESTION, form w9, mind boggler
form w9, mind boggler, form 1099: Hi Ken this is a mind boggler a 1099 is used to report interest income misc income or dividends.Normally you would not be required to attach a 1099 to your return. I suspect that some way you got some sort of income and you did not file form W9 stating...

Tax Law (Questions About Taxes): TAX LAW, injured spouse form, federal taxes
injured spouse form, federal taxes, irs: She filed a joint return and she is as liable as he is. She should get a transcript of the account and find out what the IRS is fixing or not. They may be right or they may be wrong, but if she signed that return and all the income, etc was on it,...

Tax Law (Questions About Taxes): TAX LIABILITY ON SALE OF HOME, excusion, 1099s
excusion, 1099s, taxable gain: The exclusion applies only if it was your main home for 24 of the past 60 months, which does not apply in your case. Your taxable gain is the proceeds from the sale minus your basis divided by your share of the ownership. In your case, you gain would be...

Tax Law (Questions About Taxes): TAX QUESTIONS, expense deductions, s corp
expense deductions, s corp, company debt: Annie: Any company taxable income is gross income less allowable expense deductions. Sometime its the same as a financial statement and sometimes its not. The accounting has to be done before you know what the taxable income is. No the stockholders...

Tax Law (Questions About Taxes): TAX RETURN, federal tax return, mahalo
federal tax return, mahalo, hanalei: Mr. Chai: You need to file a federal tax return for those years listing your income from your w-2, calculate the tax you should have paid, subtract the tax that was withheld from your check if it is greater than what you should have paid you will get a...

Tax Law (Questions About Taxes): TAX RETURN, mahalo, hanalei
mahalo, hanalei, chai: Henry, Every year, your employer should give you a W-2, indicating your income and taxes withheld. Use this as the basis for filing your return. You can file a late return but the IRS is not obligated to send your refund if it is over 3 years old. If...

Tax Law (Questions About Taxes): TAX RETURNS, state taxes, previous years
state taxes, previous years, tax returns: the statue runs for 3 years so you are ok for 2002 2001 and 2000 I would also try 1999 and see what reaction you get You may also want to talk to some one in the State to see if under your circumstances they would let you go back further Good luck and...

Tax Law (Questions About Taxes): TAX, capital gains tax rate, capital gains tax
capital gains tax rate, capital gains tax, unforeseen circumstances: Hi John, If you own it and live in it as your main home for 2 years during the 5 years preceeding the date of sale and you have not excluded gain on another main home within 2 years, you can exclude $250,000 of gain ($500,000 if married filing jointly)....

Tax Law (Questions About Taxes): TAXABLE REFUNDS AND CAPITAL GAINS & LOSSES, income tax refunds, federal income tax refunds
income tax refunds, federal income tax refunds, federal tax return: Carolyn, Generally speaking, you have a taxable state refund if you deducted state income taxes on your prior year s Federal tax return. Federal income tax refunds are not taxable income on your Federal income tax return. One way you could have a capital...

Tax Law (Questions About Taxes): TAXES, business schedule, maximum contribution
business schedule, maximum contribution, question thanks: Hi, Yes your net SE income is on line 31 of Schedule C. You don t deduct your full SE tax, you deduct half of your SE tax since that is the amount that is taken as a deduction on Form 1040 line 28. You have until April 15 to make the contributions but...

Tax Law (Questions About Taxes): TAXES, tax liabilities, indiana business
tax liabilities, indiana business, tax break: Filing in Nevada would not give you a tax break. In fact if that is all you did, you would actually increase your overall costs. Here s why: If you file in NV you ll have a few costs, filing fees, licensing, etc. And then when you do business in another...

Tax Law (Questions About Taxes): TAXES, sole propritorship, best bet
sole propritorship, best bet, s corp: Ca has an $800 minimum tax on corporations the minimum is even larger f0r an LLC taxwise your best bet is a sole propritorship however if you are concerned about personal liability incorporate by all means I think in your case an S corp would be best...

Tax Law (Questions About Taxes): TAXES, intity, c corporation
intity, c corporation, tax question: Dear Phillip, This is really an individual decision.... I would suggest that you get consultation from a TAX attorney who can fully explain each type of intity and help you make that decision..... Not enough room here to explain them all to you.. thank...

Tax Law (Questions About Taxes): TAXES, sole proprietorship, concrete answer
sole proprietorship, concrete answer, c corporation: Philip, Thanks for your question. There are a number of factors that would determine which form of organization you should use. A one-owner LLC would be taxed as a sole proprietorship or as a corporation, depending on your election, so there is no tax...

Tax Law (Questions About Taxes): TAXES, stancil, due date
stancil, due date, ira: Mary Jo, Thanks for your question. You can file an amended return for up to three years from the due date or date of filing, whichever is later. It sounds like you may have overpaid your taxes and you can amend that. However, at this point you cannot...

Tax Law (Questions About Taxes): TAXES FOR OREGON, child tax credit, tanf
child tax credit, tanf, taxable income: Hi Adeena, As far as the Federal government is concerned you can get the child tax credit if you have tax from which to deduct it. Obviously to have tax you must have taxable income so if your only income is nontaxable, you would have no tax and so no...

Tax Law (Questions About Taxes): TAXES, STOCK INVESTMENT, long term investment, tax consequences
long term investment, tax consequences, stock investment: Hi, There are no tax consequences when you purchase stock. When you sell the stock you are taxed on the gain. If you sell at a loss you can use it to offset other gains and up to $3,000 of other income. I don t know what you mean about avoiding payment...

Tax Law (Questions About Taxes): TAXES, california state income tax, sole proprietor
california state income tax, sole proprietor, state income tax: Dear Manny, YES, you can file married filing jointly if your has NO/ZERO income.... However, as you stated first in your original question, your wife gets a W-2 from a teaching job.... Therefore, she must have income.... You file your federal tax return...

Tax Law (Questions About Taxes): Taking Care of Momma, social security check, social security benefits
social security check, social security benefits, townhouse condo: Hi, Your profit on the sale of the condo is taxable as a long term capital gain. What you did with the money doesn t matter and isn t an expense of the sale. To calculate your gain you deduct your adjusted basis from your adjusted selling price. Your...

Tax Law (Questions About Taxes): Taking depreciation on real estate investments, real estate investments, capital gains tax
real estate investments, capital gains tax, stancil: Margaret, Thanks for your question. The IRS requires you to reduce the basis of your properties by depreciation allowed or allowable. This means you are treated as if you took the depreciation whether you deducted it or not. However, you can file...

Tax Law (Questions About Taxes): Taking draws on my small business, self employment income, payroll check
self employment income, payroll check, self employment taxes: Hi, As a one-man business you should be filing Schedule C to report your income and expenses. Your net self employment income (gross income less expenses) is your income. You pay self employment taxes as well as income tax on it. A copy of your Schedule...

Tax Law (Questions About Taxes): Taking Parent as Dependent, social security benefits, mom lives
social security benefits, mom lives, stancil: Caryl, Thanks for your question. You need to provide over half her support. I would add that she cannot have over $3,400 in gross income. Social security is NOT included in gross income for this purpose. Hope this helps. John Stancil, CPA ...

Tax Law (Questions About Taxes): Tapping IRA funds without paying a withdrawal fee, ira funds, credit card debt
ira funds, credit card debt, withdrawal fee: You can roll money out of your IRA for 60 days (NO MORE and EVERY day counts), but if it is not replaced within that time, you will pay taxes and penalty on the money as well as lose earnings and depending on the amount, principal. It is not a good idea....

Tax Law (Questions About Taxes): Tax, stancil, title deed
stancil, title deed, decease: T. C., Thanks for your question. If you add his name to your title, you are joint owners. Your basis would be half of your cost, his basis for half the house would be the purchase price (assuming he paid fair value). Upon your decease, he inherits...

Tax Law (Questions About Taxes): Tax, federal income tax, stancil
federal income tax, stancil, foreign countries: Brison, Thanks for your question. They are under the same set of laws. However, qualifying citizens living abroad may exclude up to $82,400 in income from U. S. taxation. Normally, they will have to pay income tax in the country where they reside....

Tax Law (Questions About Taxes): Tax, hot water system, clothes line
hot water system, clothes line, lisa lisa: Lisa: No you may not depreciate the install items seperate from the rest of the property. If it were repairs that you paid for you could received special deductions but since u did not pay for them. You purchased the property in whole not in part. ...

Tax Law (Questions About Taxes): Tax, tax liabilities, internal revenue service
tax liabilities, internal revenue service, tax payers: Sakda: It is a refund of the tax payers over payment of tax liability. You are required to pay your tax liabilities as it accrues during the year. If you do not pay it as it accrues you will be charged penalties and interest on what is not paid or reported....

Tax Law (Questions About Taxes): Tax, tax lein, register of deeds
tax lein, register of deeds, tax debt: Mike: Tax lien is a legal document used by taxing authorities either state or federal to protect their interest in property you own until a tax debt is satisfied. They are filed with the register of deeds to establish and put on notice the date and time...

Tax Law (Questions About Taxes): Tax, form 1120, tax preferences
form 1120, tax preferences, world questions: Haq: I am not sure of your question. The information you have provided is not in depth enought for me to give a correct answer. I only answer real world questions. The information you have provided does not fit any real world corporate tax return that...

Tax Law (Questions About Taxes): Tax, minimum wage job, dependent exemption
minimum wage job, dependent exemption, household expenses: Rose, It s very generous of you to help out your family. You might be able to claim your niece as a dependent if you provide more than half of her support. Buying diapers, formula, etc. goes toward support, but the more than half test would be tough based...

Tax Law (Questions About Taxes): Tax, automobile purchase, reputable dealer
automobile purchase, reputable dealer, investment purposes: Jeannie, I m sorry your automobile purchase didn t turn out so well. Unfortunately, there isn t any relief from a tax standpoint. The IRS doesn t allow you to deduct losses from personal property. Automobiles not held for investment purposes are considered...

Tax Law (Questions About Taxes): Tax, state tax rate, state internet
state tax rate, state internet, bussiness: All states have a sales tax however there is no sales tax on out of state internet sales Nevada is a good state to incorporate it has no corporate income tax etc however if you are doing bussiness in another state that state will require compliance with...

Tax Law (Questions About Taxes): Tax on 2nd home - multiple owners, tax transactions, taxable gain
tax transactions, taxable gain, interest tax: Dan, you have problems. Unless you paid 100% of the interest and taxes, you must amend your returns and back out half. You cannot deduct what you did not pay and your father cannot allow you to take his deductions. And mortgage interest is a VERY HOT...

Tax Law (Questions About Taxes): Tax, notice of levy, tax lein
notice of levy, tax lein, tax lien: Hello, Failure to pay tax when demanded results in a tax lien in all one s property. State law comes into play to determine ownership of property. Federal law determines priority among creditors and whether specific property is exempt from levy. One...

Tax Law (Questions About Taxes): Tax, tax lein, tax lien
tax lein, tax lien, unpaid property taxes: Mike this is not my field but in general a tax lien is the result of having unpaid property taxes if the tax is not paid after the lien is placed the property can be auctioned to pay the tax so it is important that the lien be handled as soon as possible...

Tax Law (Questions About Taxes): Tax on 401k at Retirement, periodic distributions, income tax rate
periodic distributions, income tax rate, retirement age: Monica, Thanks for your question. Capital gain rates do not apply to qualified retirement plans, so it would be taxed at your ordinary income rate. However, depending on the nature of your plan, the entire withdrawal may not be taxable. Hope this...

Tax Law (Questions About Taxes): Tax, income tax money, state income tax
income tax money, state income tax, tax lein: Dear Mike, If you owe the IRS or your state income tax money, then the one you owe money to has a right to place a lein on your property until the tax debt is paid in full... This will prevent you from selling or refinancing the house without the debt being...

Tax Law (Questions About Taxes): Tax, contacting the irs, state tax returns
contacting the irs, state tax returns, intrust: Jim, I don t practice in CO, but I would suggest contacting the IRS and get a verification of non-filing letter and see if that works. If that does not work, it looks like you will have to file a return. Obviously, CO has had reporting that you have...

Tax Law (Questions About Taxes): Tax or not?, intity, tax id number
intity, tax id number, stancil: A, Thanks for your question. As I understand it, you are operating a business, it just happens to be in a Christian school. The location does not matter, you do need a tax ID number and you will need to collect sales tax if this is the case. If you...

Tax Law (Questions About Taxes): Tax, irs bill, tazes
irs bill, tazes, ss number: Lauren, I don t have any concrete answers for you, but I can give you some general guidance. It is highly unlikely that the entire amount would be taxable. Only the income would be taxable in the year in which it was earned. Most likely these earnings...

Tax Law (Questions About Taxes): Tax, irs bill, social security number
irs bill, social security number, tazes: Hi, Recipients of gifts do not have to pay taxes on the amount of the gift. It sounds as though your mother may have purchased something like stock or shares in a mutual fund using your daughter s social security number and then sold whatever it was. ...

Tax Law (Questions About Taxes): Tax Amendment, form 1040x, adjusted gross income
form 1040x, adjusted gross income, dependent exemption: Hi Alex, The amount on line 6 is the tax on the taxable income on line 5. Look it up in the tax tables for the 2002 tax year being amended and for the marital status of the taxpayer (you didn t mention her marital status). You didn t say if this is...

Tax Law (Questions About Taxes): Tax Audit, stancil, health reasons
stancil, health reasons, tax audit: Doug, Thanks for your question. If the CPA improperly prepared your return, he should pay any penalties. If you did not give him correct information, he should not pay the penalties. In either case, he would not be responsible for the interest, as...

Tax Law (Questions About Taxes): Tax Audit Question, tax fraud, question question
tax fraud, question question, letter states: If you did not sign the returns, that is a different matter as you have not made a statement about the truthfulness. However, if they were electronically filed, your electronic signature is the same, legally, as a handwritten one. I would not volunteer...

Tax Law (Questions About Taxes): Tax Audit, state income taxes, federal income taxes
state income taxes, federal income taxes, sole proprietor: Filing an extension is very straight forward and simple. The extension is for an additional 6 months to file your return. I said file, NOT pay the amount due. There s no extension for payment. After April 17th any unpaid tax starts accruing interest. If you...

Tax Law (Questions About Taxes): Tax accountant fee as a deduction, adjusted gross income, tax accountant
adjusted gross income, tax accountant, miscellaneous itemized deductions: Ted, Thanks f0r your question. Both of those fees are for tax preparation and are deductible as miscellaneous itemized deductions on Schedule A. However, miscellaneous itemized deductions are subject to the 2% limitation, meaning that you can only deduct...

Tax Law (Questions About Taxes): Tax accounting for M&A, short term capital gain, tax guidance
short term capital gain, tax guidance, stock portion: Brad, Thanks for your question. This gets a little technical and is difficult to explain in writing, so I hope I can put it in terms you can understand. Start with your original basis in the Nextel stock. Just to keep things simple, let s say that...

Tax Law (Questions About Taxes): Tax advantage?, disproportionate amounts, liquid assets
disproportionate amounts, liquid assets, california interest: Richard is either an LLC or an S corp it can t be both even in California!! Interest is charged on loans not on assets that belong to an entity If the members have lent a disproportionate amounts then paying interest would compensate them for the use...

Tax Law (Questions About Taxes): Tax advantages for owning a small business, self employment tax, profit motive
self employment tax, profit motive, money loss: Pros are the additional income, her ability to earn quarters of income for ss benefits, personal satisfaction, etc. Cons include the cost of doing business in time and money, loss of personal freedom, cost of income tax and self employment tax(ss and medicare)...

Tax Law (Questions About Taxes): Tax advice, medical retirement, real estate taxes
medical retirement, real estate taxes, happy holidays: Hi Mike, Thank you for your rating. Taxwise it doesn t matter if you buy this year or next. So buy when you find the home you want at the price you want to pay. If you carry a mortgage you would be able to include the mortgage interest and real estate...

Tax Law (Questions About Taxes): Tax allowances, sailing company, irs publications
sailing company, irs publications, withholding allowance: Ronan, Thanks for your question. If you are single with no dependents, you should not be claiming more than 1 withholding allowance. The fewer allowances you claim, the more will be taken out of your check. As an employee, there are not that many...

Tax Law (Questions About Taxes): Tax allowances, www irs gov, sailing company
www irs gov, sailing company, company thanks: Ronan (nice name, btw), I really can t tell you if you are doing things correctly without seeing your return, etc. If you are happy with your refund, you are in good shape. If not, you can do some calculations using pub 15 (at www.irs.gov) to see what you...

Tax Law (Questions About Taxes): Tax amount on withdrawal from Life Insurance, federal taxes, taxable income
federal taxes, taxable income, polices: I m going to guess your taxable amount is probably not going to be that great. But to make a quick estimate, take your 2005 return. Divide the total tax into the taxable income (after deductions and exemptions) and you should get a percentage. (if you get...

Tax Law (Questions About Taxes): Tax audit, income tax return, stancil
income tax return, stancil, tax audit: Helene, Thanks for your question. There is no obligation for a continuing relationship in this case. Besides, I don t think she would be a strong advocate for you given the feelings between the two of you. My advice is to consult another CPA and see...

Tax Law (Questions About Taxes): Tax Basis, inherited real estate, county appraisal district, real estate appraiser
county appraisal district, real estate appraiser, tax basis: Tax basis means nothing. The value of the home to you is the appraised value on the day the person died that you inherited it from. If there was an estate tax filed, that form will have the value on it you need. If not, a good real estate appraiser can give...

Tax Law (Questions About Taxes): Tax Basis, stock basis, stancil
stock basis, stancil, executor: Vince, Thanks for your question. The stock basis is determined by the FMV on the date of death. Alternatively, the executor of his estate may choose to value the estate on the date that is 6 months after the date of death. If the executor makes...

Tax Law (Questions About Taxes): Tax and Bonds, savings bonds, tracie
savings bonds, tracie, taxpayers: Since you inherited the bonds, you will pay tax on the entire amount of interest the bond made. For example, if a $25 bond was cashed in at $60, you will owe tax on $35. The ONLY way this is not true is if your father was declaring the interest yearly...

Tax Law (Questions About Taxes): Tax on Bonus, constructive receipt, legal opinion
constructive receipt, legal opinion, buying a house: Jay normally I would say that when you file you final NY tax return CT3 resident/non resident return the Bonus would be excluded from NY income however there is the question of constructive receipt so that NY could take the position that the bonus was deferred...

Tax Law (Questions About Taxes): Tax Bracket question, self employment income, self employment tax
self employment income, self employment tax, form 1040es: Hi, Since your husband is an independent contractor he will report his income and expenses on a Schedule C. In addition to income tax he will be required to pay self employment tax (social security and medicare) on his net self employment income. The...

Tax Law (Questions About Taxes): Tax Bracket, income tax brackets, state tax bracket
income tax brackets, state tax bracket, federal tax bracket: Tax brackets are determined by Congress and the President. These vary quite often thru the years. For 2003 the ordinary income tax brackets are: 10%, 15%, 25%, 28% and 33%. There are other brackets for specific tax issues(especially capital gains and Alternative...

Tax Law (Questions About Taxes): Tax Breaks, mfj, standard deduction
mfj, standard deduction, work thanks: You may still use MFJ which will give you the highest standard deduction and will allow an exemption for her on the tax return as well. You will not be limited on credits and deductions. You may elect to use MFS and claim her exemption amount(3050) even...

Tax Law (Questions About Taxes): Tax - Business Expenses & Deductions, don p, related travel
don p, related travel, residence hotel: Don the rules applying to your situation get pretty complicated but in essence having two homes will reduce your travel deductions. my suggestion for tax deductions would be for you to work out a deal with a long term residence hotel and keep your primary...

Tax Law (Questions About Taxes): Tax basis, stancil, cost basis
stancil, cost basis, tax basis: T.C., The monetary basis is what he paid for it. Some sort of documentation should be made of the transaction, evidencing the sale, etc. As regards the documentary transfer tax, that is a legal issue that I cannot address as a CPA. John Stancil, CP...

Tax Law (Questions About Taxes): Tax benefits to investor, limited liabilty company, sweat equity
limited liabilty company, sweat equity, s corp: On the contrary You guys ought to form a partnership whereby your friend retains the tqx adventages of ownership ie depreciation and capital gains while you receive income or ownership based on your sweat equity. Ps maybe you should consider a Limited...

Tax Law (Questions About Taxes): Tax on bonds, savings bonds, tax form
savings bonds, tax form, redemption: Daniel, Unfortunately, your mother will have the burden of reporting and paying the tax on the redemption of the savings bonds. Ownership of savings bonds can only transfer upon the death of the owner. Besides, the bonds have already been redeemed. Even...

Tax Law (Questions About Taxes): Tax on bonus, marginal tax bracket, state income taxes
marginal tax bracket, state income taxes, annual salary: Alli, Thanks for your question. It will be taxed at your marginal tax bracket, which can vary from 10 to 35 percent depending on your taxable income for the year. In addition, it will be subject to 7.65 social security/Medicare and state income taxes...

Tax Law (Questions About Taxes): Tax bracket for Senior Citizen, mortgage interest rate, retirement money
mortgage interest rate, retirement money, equity line of credit: Patricia, I can t tell you what tax bracket Mom will be in, but I can give you some insight. And this is federal insight only, I don t practice in CA. Assuming Mom is single - for 2006, some of her SS benefits will be taxable, I m gonna guess around 40%...

Tax Law (Questions About Taxes): Tax on Cash Bonus, marginal tax rate, cash bonus
marginal tax rate, cash bonus, stancil: Rob, Thanks for your question. The amount would vary, depending on your marginal tax rate, which could vary from 10 - 35%. You would need to determing which bracket you fall into and apply that rate. Hope this helps. John Stancil, CPA ...

Tax Law (Questions About Taxes): Tax on Child Support, additional child tax credit, irs taxes
additional child tax credit, irs taxes, child tax credit: Child support is not deductible by you or taxable to her. In your example, your taxable income is $2,000. As for the exemptions, as long as she is the custodial parent, she can claim all the children. You cannot unless she allows you to do so. Also,...

Tax Law (Questions About Taxes): Tax Claims, irs publication 17, environmental construction company
irs publication 17, environmental construction company, www irs gov: Kolece, Thanks for your question. There is no book like that that I am aware of. IRS Publication 17 has a discussion of what is and is not deductible for Employee Business Expenses in general. These guidelines would apply to environmental construction...

Tax Law (Questions About Taxes): Tax on Class Action Lawsuit, class action lawsuit, class reps
class action lawsuit, class reps, stancil: Don, Thanks for your question. Amounts received for damages to property are not taxable income if they are less than the dollar amount of the damage. This is the case in your situation. For the separate award, it is not taxable to the extent of expenses...

Tax Law (Questions About Taxes): Tax Consequences for me During Sale of Ex-Wife's Home?, tax consequences, amount of money
tax consequences, amount of money, checking account: Michael, this sounds fishy. It sounds like she is trying to launder money thru you and I m not going to advise anything on that feeling. I would see a lawyer first and have the lawyer talk to an accountant, something is not quite right, depending on why...

Tax Law (Questions About Taxes): Tax Consequences of Marriage, higher tax bracket, tax consequences
higher tax bracket, tax consequences, question thanks: At 200K, you could see a tax increase for sure. At that point, you are probably topped out for a lot of credits and deductions. So you might be looking at an increase of 25% to a 28% tax bracket. You are going to see it more in her income then yours, since...

Tax Law (Questions About Taxes): Tax Course, financial planning office, professional career development
financial planning office, professional career development, career development institute: The courses you mentioned are more intricate than any basic course should be. I am afraid they will confuse your accounting background since tax preparation and accounting are definitely not the same. I don t believe the courses you mentioned will transfer...

Tax Law (Questions About Taxes): Tax Credit - Car Accidents, irs homepage, gap insurance
irs homepage, gap insurance, car accidents: Dear Katie, The only tax break you have here is that you can take the deductable you had to pay off on the 1040-schedule-A.. You can not take the balance that you owed, since this is considered a car payment and not a legal deduction... thank you, ...

Tax Law (Questions About Taxes): Tax capitol gain, long term capital gains, capitol gain
long term capital gains, capitol gain, capital gains tax: Hi, It makes no difference whether or not you invest in another home. If you owned and lived in it as your main home for 2 years during the 5 years preceding the date of sale and have not excluded gain on another main home within 2 years, you can exclude...

Tax Law (Questions About Taxes): Tax capitol gains, capitol gains, john thanks
capitol gains, john thanks, hi john: Hi John: Thanks for the question. You can exlude from income $250,000 of the gain ($500,000 if Married). The amount of tax you will need to pay is dependant on your tax bracket but generally 15%. You gain is determined by the excess of the sales proceeds...

Tax Law (Questions About Taxes): Tax consequece of stock sale., tax situation, disposable income
tax situation, disposable income, ira: Gary: It all depends on your tax situation. when you know your tax situation divide the amount you must have =100% add to it the percentage say 28% will equal 128%. divide what you have to have by 128% that will be what u need to sell to arrive at 100%....

Tax Law (Questions About Taxes): Tax consequence, federal tax purposes, irs gov
federal tax purposes, irs gov, publication instructions: Don: I do not know. The parameters as I understand them. A Parent my give a child $10,000.00 a year for a lifetime of $100,000.00. Upon her death the value of her home becomes the bases for your inheritance. It maybe no consequence its all based on...

Tax Law (Questions About Taxes): Tax consequences to co-op apt sale, tax consequences, 1099s
tax consequences, 1099s, rental period: Hi Wendy, If they owned and lived in the home as their main home for 2 years during the 5 years preceeding the date of sale and have not excluded gain on another main home within 2 years, they can exclude $500,000 of gain (assuming that they file jointly)....

Tax Law (Questions About Taxes): Tax consequences for sale of home after one owner passes away, marginal tax bracket, long term capital gain
marginal tax bracket, long term capital gain, capital gains tax: Alex, Thanks for your question. The house is inherited at its fair market value as of the date of death. Since your mom was on the deed, I presume she is a 50% owner. Her basis will be her basis in the 50% that she already owned, plus her percentage...

Tax Law (Questions About Taxes): Tax consequences of selling a residential property, maximum gain, tax consequences
maximum gain, tax consequences, principal residence: Adriana, Thanks for your question. You do not state if this property is your principal residence. If so, the gain on the sale (up to $500,000) is not taxable if you lived in the home for 24 of the past 60 months as your principal residence. August...

Tax Law (Questions About Taxes): Tax consequences, federal withholding tax, employee stock ownership
federal withholding tax, employee stock ownership, employee stock ownership plan: Hi, If all your contributions were before-tax (they weren t included in your taxable income), you have no basis. If any contributions were after-tax (they were included in your taxable income), you have a basis. Generally contributions are before-tax...

Tax Law (Questions About Taxes): Tax consequenses of home rented to parents while in school., rental questions, consequenses
rental questions, consequenses, stancil: Jason, Thanks for your question. The income is not taxable. In situations like these, the rent is often structured so that it covers the monthly out-of-pocket costs such as utilities and maintenance. This leaves you free to deduct the mortgage interest....

Tax Law (Questions About Taxes): Tax credit, irs publication 17, sales tax deduction
irs publication 17, sales tax deduction, deducting sales tax: Robin, Thanks for your question. There is no form for deducting sales tax, you simply do it on Schedule A instead of deducting state income tax. IRS Publication 17 has the tables for the standard amounts deductible, as well as a worksheet to determine...

Tax Law (Questions About Taxes): Tax credit, social security tax, payroll tax
social security tax, payroll tax, fica tax: as an emploer you do not get a crredit as such what you paid instead you get a deduction the amount on form8846 is an additional expense for your portion of the FICA tax that you paid on behalf of your tiped employees if you fil it out corectly turbo tax will...

Tax Law (Questions About Taxes): Tax on Death Benefits, life insurance policies, life insurance policy
life insurance policies, life insurance policy, insurance distribution: Pat, Proceeds from life insurance policies are not considered taxable income. Sometimes an insurance company will pay some interest on the proceeds from the date of your daughter s death until the date the proceeds were paid to you. The interest income...

Tax Law (Questions About Taxes): Tax-Deductible Donations, tax deductible donations, charitable contribution deduction
tax deductible donations, charitable contribution deduction, stancil: For charitable contributions modified taxable income is defined as taxable income computed without regard to the charitable contribution deduction, any NOL carryback, capital loss carrybacks, and dividend received deductions. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Tax Deductible Donations, boy scout camp, tax deductible donations
boy scout camp, tax deductible donations, goodwill industries: Marty, Thanks for your question. Yes, the donations are deductible. At a minimum they can deduct the cost of the services. If it is inventory, they can normally deduct cost plus 50% of the profit they would have made on it if sold. All you need...

Tax Law (Questions About Taxes): Tax Deduction, vet school, college expenses
vet school, college expenses, education credit: Hi Jim, As long as he was a full time student and you provided more than half of his support, you can claim him. You may even be able to claim an education credit for his college expenses. I don t have enough information to be certain of that but be sure...

Tax Law (Questions About Taxes): Tax Deduction, owing money, hubby
owing money, hubby, tax deduction: The W-4 has a worksheet on it. If you follow the lines, it will tell you the maximum hubby can claim on his W-4. This will only work if you claim married withhold at higher single rate and -0- on YOUR W-4. If you do not claim in this fashion, you will end...

Tax Law (Questions About Taxes): Tax Deduction, adequate income, personal exemptions
adequate income, personal exemptions, personal exemption: Annie, I am assuming you file a joint tax return with your husband. You can not claim a spouse as a dependent. On your joint tax return, you get personal exemptions for both you and your husband. The value of a dependent is the same as personal exemption,...

Tax Law (Questions About Taxes): Tax Deduction, employee business expenses, casualty losses
employee business expenses, casualty losses, adjusted gross income: Hi, You will pay more taxes if you work but the tax isn t 100% so you will still have more money than if you don t work. As I mentioned the income tax on your income will be about 25%. You will also pay social security and medicare (7.65%) and state income...

Tax Law (Questions About Taxes): Tax Deduction, child care expenses, state income taxes
child care expenses, state income taxes, income interest: Hi You will still file as married filing jointly, so the matter of your dependency is disregarded. You are not a dependant for tax purposes, and should not have been listed as such on your husbands return. Your spouse can never be your dependant. John...

Tax Law (Questions About Taxes): Tax Deduction - Cell Phone, personal hope, stancil
personal hope, stancil, independent contractor: Jay, Thanks for your question. The deductible portion is based on usage. You will have to keep (or obtain from the company) a record of your usage and make a determination about what portion is busines and what portion is personal. Hope this helps....

Tax Law (Questions About Taxes): Tax Deduction - Cell Phone, home office expenses, employee business expenses
home office expenses, employee business expenses, adjusted gross income: Melissa, Thanks for your question. You can deduct any expenses that you incur in your business activity that are reasonable and necessary in conducting your business. This would include toll phone charges, a pro-ration of the internet charges based...

Tax Law (Questions About Taxes): Tax Deduction for Day Care, care expenses, fragile x
care expenses, fragile x, tax deduction: If your son is not able to be alone per a medical condition, you would still be able to claim child care for him, providing you meet all the other conditions (day care due to work or school, etc). I would definitely have some documentation that he needs...

Tax Law (Questions About Taxes): Tax Deduction Questions for Designated Offerings, salisbury nc, church finance
salisbury nc, church finance, recipient organization: Doug, When church members give for specific, known needs of the church, that would be deductible by them. If they designate funds to be given to a qualified organization, it is really a moot point, so it could be deducted. I say it is a moot point,...

Tax Law (Questions About Taxes): Tax Deduction/Vehicle Expenses, vehicle expenses, form 2106
vehicle expenses, form 2106, turbotax: Dear Jim, You can only take these expenses on form 2106 which is then transfered to the 1040-schedule-C and subject to the 2% rule.... You can NOT take commuting miles to and from work... Only actual miles that you put on the vehicle for things like...

Tax Law (Questions About Taxes): Tax Deduction, filing an amended tax return, business expense
filing an amended tax return, business expense, tax deduction: Dear Men, NO........ You can only take deductions for the year that they apply.... Therefore, for 2005 you can only take 2005 expenses and the same for 2004, 2003, 2002, 2001... Therefore, you can only take the business expense for 2001 by filing an amended...

Tax Law (Questions About Taxes): Tax Deductions, medical insurance premiums, disability insurance plan
medical insurance premiums, disability insurance plan, income tax returns: Hi Tim, Your medical expenses including prescriptions, medical insurance premiums, doctor bills etc. are deductible to the extent they exceed 7.5% of your adjusted gross income. The premiums for a disability insurance plan are not deductible. Regards,...

Tax Law (Questions About Taxes): Tax Deductions, playing poker, proration
playing poker, proration, sous chef: Yes, IF (and it is a big if) you log every minute of use on the PC, from webhosting to playing poker (or whatever) and then you can take a proration of the use (the portion for the webhosting). And you must itemize to take these deduction and then you have...

Tax Law (Questions About Taxes): Tax Deductions, www irs gov, business visit
www irs gov, business visit, last business: Haircuts were never a deduction, no matter what you do. If you are self employed, any expenses ordinary and necessary to your business is deductible. Travel would be deductible from your first business visit of the day (not from your home) to the last...

Tax Law (Questions About Taxes): Tax Deductions, federal income taxes, retention fund
federal income taxes, retention fund, stancil: Michael, Thanks for your question. The PAC deduction is not deductible on your taxes. I do not know for certain about the Jobs Recovery deduction, as I am not familiar with what that is, but if it is not a tax or union dues, it is probably not deductible....

Tax Law (Questions About Taxes): Tax Dependants, tax dependants, relationship test
tax dependants, relationship test, support tests: Craig, Thanks for your question. There are 5 tests for dependency. You must meet all five in order to claim the exemption. As her father, he meets the relationship test. Since he lives with you he is obviously a citizen or resident of the US. I...

Tax Law (Questions About Taxes): Tax/Divorce, final divorce decree, retirement pay
final divorce decree, retirement pay, military retirement: Hi Jen, If she is getting a part of his pension she should receive a 1099R. This type of income is reported on Form 1040 about line 16 (sorry, I don t have a form in front of me just now). If she also received alimony it is reported on line 21 of Form...

Tax Law (Questions About Taxes): Tax & Divorce, divorce settlement, tax liabilities
divorce settlement, tax liabilities, lump sum: Dear Larry, This all depends on what is in the settlement... If she is going to get allimony then this WILL be taxable... If there is a sale of a house then there may be capital gains.... She is going to have to go to a LOCAL CPA and talk to him/her...

Tax Law (Questions About Taxes): Tax deductable, self employment income, self employment tax
self employment income, self employment tax, sole proprieter: Hi Mike, As a sole proprietor if you buy a piece of equipment for your business (such as a computer), you can elect to depreciate it over time or use the 179 expense deduction to take a larger deduction the first year of use. You must have purchased it...

Tax Law (Questions About Taxes): Tax deductible contributions, foriegn student, deceased wife
foriegn student, deceased wife, eligible student: Larry, The fund would have to be set up to put deserving students through school. You could be more specific and make it international students in a particular major or school. Then, any eligible student could apply and a committee would make a decision...

Tax Law (Questions About Taxes): Tax deductible donations, tax deductible donations, preparation specialists
tax deductible donations, preparation specialists, household items: Ashley, Thanks for your question. The requirement is for an item or similar group of items that are valued at $5,000 or more. So if you have $4000 in clothing and $4000 in books, you do not need an appraisal. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Tax deduction or not?, medicare insurance, adjusted gross income
medicare insurance, adjusted gross income, supplementary insurance: Kathy, Thanks for your question. Medical insurance is deductible as an itemized deduction on Schedule A, as are Medicare insurance premiums. Unfortunately, you can only deduct your medical expenses that exceed 7.5% of your adjusted gross income. You...

Tax Law (Questions About Taxes): Tax deduction, personal losses, happy new year
personal losses, happy new year, tax preparer: Hi, Both losses are non-deductible personal losses. I know it doesn t seem fair that you have to pay taxes on a gain but can t deduct a loss but that s the law. But when you sell a main home at a gain and you have owned and lived in it for 2 years during...

Tax Law (Questions About Taxes): Tax deduction, coverdell education savings, coverdell education savings account
coverdell education savings, coverdell education savings account, education savings account: Smriti, Thanks for your question. To fully answer it would require more time and detail than is appropriate in this forum. However, I can give you some tips. First, gifts are not deductible, so they do not create any tax savings opportunities. Unearned...

Tax Law (Questions About Taxes): Tax deduction for heavy SUVs, stancil, rule of thumb
stancil, rule of thumb, steve thanks: There are a number of factors that you should take into consideration for that decison - % of business use, how often you plan to trade vehicles, how much mileage will you put on the vehicle, your tax situation - just to mention a few. I could not hope to...

Tax Law (Questions About Taxes): Tax deduction for nanny/babysitter, irs publication 926, acknowledgement receipt
irs publication 926, acknowledgement receipt, day care provider: It does not change the answer, but it complicates your tax situation. Nothing changes from what I previously stated. However, since most of the services are provided in your home, you are probably a household employer. If you are a household employer,...

Tax Law (Questions About Taxes): Tax deduction for Sales Tax on Commercial Vehicles, bonus question, time bonus
bonus question, time bonus, commercial trucks: The sales tax is paid by the lease company and included in the calculation of the lease payment. A lease being open ended is actually a rental agreement, and rent payments are deductible at the time of payment. So at first glance a lease is 100% deduction,...

Tax Law (Questions About Taxes): Tax deduction timing, federal income taxes, 2002 federal income taxes
federal income taxes, 2002 federal income taxes, stancil: Bill, Thanks for your question. You can take the deduction when you made the payment. It is not your problem when the payment was processed. This would require an amended 2002 return, as taxes are dedutible in the year paid. Hope this helps. John...

Tax Law (Questions About Taxes): Tax deduction, garbage collection, retirement community
garbage collection, retirement community, stancil: Harold, Thanks for your question. Sorry, but the law does not allow you to take a deduction for the property taxes. Property taxes are deductible only by the persons who are legally liable for the taxes and who actually pay them. Hope this helps....

Tax Law (Questions About Taxes): Tax deductions, stancil, medical expense
stancil, medical expense, alimony: Lloyud, Thanks for your question. If the payments are characterized as alimony, they may be deducted as such. Of course, this means that your ex would report this as income. The cannot be deducted by you as medical expense. Hope this helps. ...

Tax Law (Questions About Taxes): Tax deductions, lifetime learning credit, dependency exemption
lifetime learning credit, dependency exemption, hope credit: Ronald, Thank for your question. If you can claim a dependency exemption for your daughter, you may be able to take the Hope Credit or Lifetime Learning Credit. These are limited in amount, so you would most likely not get a credit for the full amount...

Tax Law (Questions About Taxes): Tax deductions for self employed antique dealer, stancil, antique dealer
stancil, antique dealer, upkeep: Judy, Thanks for your question. The purchase price is decpreciable over the life of the truck. Upkeep is deductible. You can only deduct the depreciation and upkeep in proportion to the percent of business use. In other words, if the truck is used...

Tax Law (Questions About Taxes): Tax deductions for a small business, irs rate, business mileage
irs rate, business mileage, own mortgage: Shellie, Thanks for your question. You can deduct any expenses incurred in earning your business. This includes the business portion of internet fees and long distance phone calls. You cannot take as a business deduction the cost of the first phone...

Tax Law (Questions About Taxes): Tax deductions for youth soccer coach., youth soccer coach, form 2106 ez
youth soccer coach, form 2106 ez, www irs gov: Hi Mike. For the team that you do not receive a W-2 from, do you receive a 1099? If so, you are an independent contractor. This will have several tax ramifications (you ll have to file a Schedule C, for instance). For the moment, let s assume that for...

Tax Law (Questions About Taxes): Tax deductions, medical insurance premiums, salary reduction agreement
medical insurance premiums, salary reduction agreement, health insurance premiums: Todd, Thanks for your question. Medical insurance premiums are deductible as a medical expense on Schedule A (Itemized Deductions) if they are not paid with pre-tax dollars. Many employees today enter into a salary reduction agreement with their employers...

Tax Law (Questions About Taxes): Tax difference between different business types., necessary expense, business meals
necessary expense, business meals, business deductions: The following is from CCH Tax Services: Ordinary and Necessary Expenses The first, most basic guideline to remember is that a tax deduction for an expense paid in connection with your business will be allowed only if the expense is ordinary and necessary...

Tax Law (Questions About Taxes): Tax due on Stipends, self employment taxes, jennifer thanks
self employment taxes, jennifer thanks, transportation reimbursement: Jennifer, Thanks for your question. You should receive a 1099- MISC from the organization, however many not-for-profits are lax about reporting such payments. Either way, you owe taxes on the amount. You can report it on Schedule C and deduct any expenses...

Tax Law (Questions About Taxes): Tax Excempt, true thanks, happy holidays
true thanks, happy holidays, standard deduction: Hi, A family of 8 is not automatically tax exempt. However you get to claim 8 exemptions unless your income is so high that your exemptions are reduced. For 2006 multiply 8 times $3300 = $26.400. Add that to your standard deduction of $10,300 for a total...

Tax Law (Questions About Taxes): Tax Exclusion Rules, tax exclusion, maximum tax
tax exclusion, maximum tax, stancil: Carrie, Thanks for your question. Sorry, But there are no exceptions. She will only be able to exclude $250,000 of gain if she qualifies for the exclusion. To get the $500K you must file a joint return. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Tax Exclusion Rules, stepped up basis, tenants by the entirety
stepped up basis, tenants by the entirety, gross estate: Hi Carrie, I don t know of any special rules for widows or widowers to be able to exclude $500,000 of gain. But be sure that the gain is calculated correctly. If the property was held as joint tenants or tenants by the entirety, one-half of the property...

Tax Law (Questions About Taxes): Tax Exempt, foreign earned income, earned income credit
foreign earned income, earned income credit, stancil: A, Thanks for your question. There are no exceptions, the rules state the time you must be physically present in the foreign country to qualify for the foreign earned income credit. It is an all or nothing - you either fully qualify for it or you do...

Tax Law (Questions About Taxes): Tax Exemption- income, human resources department, threshhold
human resources department, threshhold, limited brands: The filing threshhold for 2006 as a single person that their parents claimed them on their tax return was $5,150. If the persons parents didn t claim them the threshhold was $8,450. Anything beyond that threshhold is subject to tax and you would pay it...

Tax Law (Questions About Taxes): Tax Exemption- income, human resources department, federal income tax
human resources department, federal income tax, limited brands: Kathy, For 2007, you wouldn t pay any Federal income tax on the first $5,350. I don t know what state you work, so I can t answer that part of your question. If you earn more than $5,350, how much Federal tax you might owe depends on whether or not your...

Tax Law (Questions About Taxes): Tax Exemption- income, income tax liability, human resources department
income tax liability, human resources department, federal income tax: Kathy, Thanks for your question. If you claim your own exemption, you will not have a federal income tax liability with an income of $6,000. If someone else claims your exemption you will owe taxes. State laws vary, so I cannot tell you if you would...

Tax Law (Questions About Taxes): Tax Exemption, income tax liability, stancil
income tax liability, stancil, exempt status: Elecia, Thanks for your question. You can only claim exempt status if: 1. You had no income tax liability for the previous year, and received a refund of all amounts paid in, and 2. For the current year you expect to have no tax liability and a...

Tax Law (Questions About Taxes): Tax Exemptions - California, california exemptions, withholding allowances
california exemptions, withholding allowances, john hope: Bridget, Thanks for your question. About the only advice I can give you is to complete the worksheet that accompanies the W-4 form. Your combined incomes, as well as your separate incomes, have an impact on the number of withholding allowances you should...

Tax Law (Questions About Taxes): Tax error, turbo tax, audits
turbo tax, audits, irs: The first question is - who s mistake was it? If there was an error in the Turbo Tax program itself, then you should take it up with them. They should be responsible for the penalty and interest. You will have to explain the error in detail to determine...

Tax Law (Questions About Taxes): Tax event or not?, maintenace, on the waterfront
maintenace, on the waterfront, capital gains: as you describe it would have Capital Gains now however if you and your neighbors would form a partnership contribute the money and land as capital to a partnership for the upkeep and maintenace of the beach and then you withdraw the money as a...

Tax Law (Questions About Taxes): Tax exempt church donations, church donations, church nursery
church donations, church nursery, monetary gift: Larry, No, no, no. You have read too much into what I have been telling you. Donations for a specific purpose do not benefit specific individuals, therefore are deductible. So you can designate $X for a window, a crib, etc. That money is designated...

Tax Law (Questions About Taxes): Tax exemption in the states?, canadian citizen, tax exemption
canadian citizen, tax exemption, computer parts: Bill: At the point of sale show your id and identify that you are from Canada and wish not to be tax since you are not a resident of Georgia. I am not sure if Georgia has an agreement with Canada for collecting sales tax on residents of your country....

Tax Law (Questions About Taxes): Tax exemptions for small wine touring start-up, sec 179, home office deduction
sec 179, home office deduction, stancil: Desmond, Thanks for your question. Nothing hidden or elusive. You are allowed to deduct ordinary, necessary, and reasonable expenses of operating your business. Capital items such as the vans must be depreciated, but you can expense some of this through...

Tax Law (Questions About Taxes): Tax exemptions for subdivided land sale?, credit card debts, irs publication
credit card debts, irs publication, acre parcel: I found the section you refer to. You are correct in your reading of the law on this point. I don t think selling it to a related party would be a problem as long as the sale was made at or near FMV and the title properly transferred, etc. John Stancil,...

Tax Law (Questions About Taxes): Tax exemptions, dependent care credit, dependent parent
dependent care credit, dependent parent, dependency exemption: raj, Thanks for your question. You can take a dependency exemption for the parent. You may be able to get a credit for Child & Dependent care credit if you pay someone to watch him while you are at work (form 2441). You can deduct medical expenses...

Tax Law (Questions About Taxes): Tax Filing Status, head of household status, tax filing status
head of household status, tax filing status, head of household: Paula, Thanks for your question. One of the requirements for head of household is that they provide over half the support for the household. If they each provided over half the support for their household, they can claim HOH. Hope this helps. ...

Tax Law (Questions About Taxes): Tax Forms..., form 1040 schedule c, schedule a itemized deductions
form 1040 schedule c, schedule a itemized deductions, elementary question: Dear Bill, First the donation will go on the 1040-schedule-A itemized deductions , so if you do not have enough items to itemize and the itemized deductions are NOT more than the standard deduction, you can NOT take this writeoff anywhere else.... The...

Tax Law (Questions About Taxes): Tax Fraud, fraudulent returns, fraudulent return
fraudulent returns, fraudulent return, tax fraud: Hi, Since she obviously forged your signature, or had someone else do it, she has filed a fraudulent return. I don t know what the penalties may be. Tax preparers who file fraudulent returns can be fined and sent to prison but I don t know whether or...

Tax Law (Questions About Taxes): Tax Fraud, survival instinct, tax fraud
survival instinct, tax fraud, anonymous tip: Nancy, Thanks for your question. Normally, the IRS would not become vindictive toward you based on a tip unless they determined you gave them the tip without basis in order to harass someone. I can t answer if they disclose the fact they are acting...

Tax Law (Questions About Taxes): Tax Free Sale of Land, irs publications
irs publications: Hi Ryan, Several years ago a person of 55 or over could exclude gain on the sale of his/her main home. The law has since changed to allow a taxpayer to exclude $250,000 gain ($500,000 if married filing jointly) on his main home if he owned and lived in...

Tax Law (Questions About Taxes): Tax filing for previous year, state tax returns, www irs gov
state tax returns, www irs gov, internal revenue service center: There probably will be no penalty if you owe no tax. You have to file the state return with the appropriate state agency. Just file the regular 1040 and whatever state form coincides with that for CA. Since the return is for a past year, you cannot...

Tax Law (Questions About Taxes): Tax filing, income tax return, floral park
income tax return, floral park, tax filing: Sanjay: If your legal state of residence is Minnesota then you will only have to pay income tax in that state. However, it appears your legal state of residence is New York and if thats the case you may be required to file a income tax return to both states....

Tax Law (Questions About Taxes): Tax on foreign revenue, form 1040 schedule c, form 1040 schedule se
form 1040 schedule c, form 1040 schedule se, self employment taxes: Dear Lev, Where you filled out any W-4 or W-9, this is still income and any and all income must be reported... You will file this as if you are self-employed on form 1040-schedule-C and you will also have to use form 1040-schedule-SE to pay self-employment...

Tax Law (Questions About Taxes): Tax free gifts?, john thanks, stancil
john thanks, stancil, gift tax return: John, Thanks for your question. You and your wife can each give your son up to $11,000 per year in gifts without filing a gift tax return. If he is married, you each could give his wife and additional $11,000 each for a total of $44,000. Above that...

Tax Law (Questions About Taxes): Tax free veteran benefits and tax education credits, tax education credits, free veterans
tax education credits, free veterans, lifetime learning credit: Patrice, Thanks for your question. You can take the education credits for any tuition and qualified education expense you paid that are in excess of amounts received on the GI Bill. In other words, if you paid any of these costs out of your own pocket,...

Tax Law (Questions About Taxes): Tax Gain - Sale of Vacation Home, marginal tax bracket, tax transactions
marginal tax bracket, tax transactions, taxable gain: Dan, Thanks for your question. The tax on the gain should be paid by the respective owners, so it should be divided up. The capital gain rate applicable is 15%. If you were in the 15% or lower marginal tax bracket 5% would apply. The 25 and 28%...

Tax Law (Questions About Taxes): Tax on Gift Stock, stancil, cpa
stancil, cpa, trish: Trish, Thanks for your question. Yes, you must pay tax on the gain from the sale of the stock. The gain must be reported in the year of sale. Your gain is determined by subtracting your basis from the proceeds of the sale. Your basis is the transferred...

Tax Law (Questions About Taxes): Tax on Gift Stock, tax basis, inheritance
tax basis, inheritance, receipt: Hi, The basis of a gift is the donor s basis plus any gift tax paid at the time of the gift. If the donor s basis is higher than the fair market value of the stock at the time of the gift, the recipients basis is limited to the fair market value. Regards,...

Tax Law (Questions About Taxes): Tax on Gift Stock, historical stock prices, long term capital gain
historical stock prices, long term capital gain, capital gains tax: Hi, By passed down I assume you mean his parents inherited the stock. That being the case the parents basis is the fair market value on the date of death. You can search on the internet for historical stock prices. Just google historical stock prices...

Tax Law (Questions About Taxes): Tax on gambling winnings, stancil, red flag
stancil, red flag, tax rate: Ryan, Thanks for your question. You should file an amended return for 2005, reporting the winnings for that year on the 2005 return. Report the 2006 winnings on the 2006 return. One item will not usually precipiate an audit. However, failure to...

Tax Law (Questions About Taxes): Tax on gift from parents, form 3520, resident aliens
form 3520, resident aliens, h1b visa: Turbotol, Thanks for your question. You must file the Form 3520 but you do not pay income taxes on the gift. According to the instructions for Form 709, the Gift Tax, non-resident aliens are subject to gifts of property in the United States. However,...

Tax Law (Questions About Taxes): Tax from gift for property., stancil, getting a loan
stancil, getting a loan, additional income: Matt, Thanks for your question. If his name is on the title for the land, you may have difficulty getting a loan unless he is also liable on the loan. This ie especially true if you attempt to build a house in your name only on the land. There are...

Tax Law (Questions About Taxes): Tax gift, lifetime learning credit, hope scholarship
lifetime learning credit, hope scholarship, microsoft stock: Valerie, Thanks for your question. Unfortunately, you will have to pay taxes on the dividends. However, they will be taxed at the capital gain rate if they are qualified dividends (probably are). You cannot offset the capital loss against these...

Tax Law (Questions About Taxes): Tax Headache, irs gov, capital gain tax
irs gov, capital gain tax, tax headache: Dear Rob, You have to live in that home as your main home for 2 full years as of the date of sale inorder to get the exemption..... You need to go to www.irs.gov and down load publication 523 Sale of Home to see if you qualify for a pro-rated exclusion...

Tax Law (Questions About Taxes): Tax Help, self employment tax, self employeed
self employment tax, self employeed, quarterly estimated taxes: Hi Bryce You do not send you invoices or expenditure to the IRS a summary based on an excel schedule will be fine You would put all that information on Schedule C of your 1040. Please get a copy of the schedule C so you will have an idea of how to classify...

Tax Law (Questions About Taxes): "Tax Home" and Deductible Expenses, irs regulations, food subject
irs regulations, food subject, auto expenses: As long as you are expected to be in Detroit for less than a year, your expenses are deductible. The SECOND that you find out you will be in Detroit for more than a year, your expenses are not deductible and you have made Detroit your tax home. It does...

Tax Law (Questions About Taxes): Tax on Home Sale, long term capital gain, tax consequences
long term capital gain, tax consequences, stancil: Edith, Thanks for your question. Her basis in the house is the fair market value as of the date of your mother s death. When she sells it, her gain or loss is determined by subtracting her basis from the proceeds of the sale. The resulting gain or...

Tax Law (Questions About Taxes): Tax help, personal exemption, time student
personal exemption, time student, tax help: You do not get SS or medicare taxes back. And Mother cannot claim you. You are too old and your income is too high. The more you make, the more you pay. However, by claiming your personal exemption, you will receive more back. Helen, EA in P...

Tax Law (Questions About Taxes): Tax help, relationship test, sister brother
relationship test, sister brother, half brother: Hi Marcia, Then he meets the relationship test. If he did not have more than $3100 of income, cannot file a joint return, is a citizen and you provided more than half of his support for the entire year, you can claim him as a dependent. Regards, Carol...

Tax Law (Questions About Taxes): Tax help, self employment tax, employer identification number
self employment tax, employer identification number, estimated tax payments: a partnership would file a 1065 information return it distributes the profit or loss to the partners who then pickup the profit or loss in their personal 1040 the partners should be making quarterly estimated tax payments on their 1040. do not forget...

Tax Law (Questions About Taxes): Tax on hourly wage, irs gov, federal withholding
irs gov, federal withholding, temporary job: Federally, you can go to www.irs.gov and look at pub 15 for your federal withholding. For SS, the employer will withhold 6.2%, for medicare 1.45%. You may have state and local taxes withheld also, check your state s website for those. Helen, EA in P...

Tax Law (Questions About Taxes): Tax ID # for a business, state business license, federal tax id
state business license, federal tax id, business bank account: Dear Sheila, If you are going into this business on your own, then this is called a sole-proprietorship... You can go to www.irs.gov then click on forms/publications, then click on forms and then scroll to form SS4.... Download the FORM and the instructions.......

Tax Law (Questions About Taxes): Tax Impact of Charitable Donation, self storage business, personal tax return
self storage business, personal tax return, deductible charitable contributions: Bob, You handle this one of two ways. You can give the charitable contribution to the new customer. You would apply $35.00 of the first month s fee toward the contribution. For your accounting purposes, you would only recognize the net fee as income....

Tax Law (Questions About Taxes): Tax Implications of Transferring Family Business, capital gains taxes, tax consequences
capital gains taxes, tax consequences, stancil: Nathan, Thanks for your question. As far as the loan is concerned, there should be no tax consequences, other than you having interest expense and the lender having interest income. There may be some legal implications about the company loaning you...

Tax Law (Questions About Taxes): Tax Implications of Transferring Family Business, lifetime credit, setting up a trust
lifetime credit, setting up a trust, tax consequences: Nathan the IRS considers family transactions as the equivalent of kissing your sister so A loan from your father must be properly set up and not repaid from income you might or might not get also tax wise your interet expense may result in less tax...

Tax Law (Questions About Taxes): Tax Info/Filing Status Singing Group, payroll tax reports, payroll liabilities
payroll tax reports, payroll liabilities, quarterly payroll: Learell, Thanks for your question. There are several types of organizations that you can operate under - partnership, corporation, S-corporation, LLC, LLP to name the most common. Which form you select would depend largely upon characteristics of your...

Tax Law (Questions About Taxes): Tax Information, mortgage company, form 1099
mortgage company, form 1099, mortgage interest: Dear Wendy, IF you can itemize, you can only take the mortgage interest you ACTUALLY paid before letting this house be taken back/repossed.... You can also take any property tax you paid in 2004 on this property before the house was taken back.... Also,...

Tax Law (Questions About Taxes): Tax implications on inherited property, palm springs california, income tax purposes
palm springs california, income tax purposes, local issue: Paula, Thanks for your question. Reassessment is a local issue, most likely it would as there is a change in ownership. This would, of course, result in a higher amount of property taxes. For income tax purposes, your basis in the house will be the...

Tax Law (Questions About Taxes): Tax implications of Life Estate Deed, income tax implications, home hope
income tax implications, home hope, insurance property: Sandy, Thanks for your question. You would not have to pay a gift tax. However, each of them would need to file a gift tax return, as the gift exceeds the annual exemption of $12,000 per person. There is a $1,000,000 lifetime exemption so it is likely...

Tax Law (Questions About Taxes): Tax implications on new business, personal tax return, sole proprietor
personal tax return, sole proprietor, audit risk: for tax purposes: You pay personal taxes on all the income if you are a Sole Proprietor, Partnership, limited Partnership, LLC, or Sub-S corporation. A properly structured real Corporation pays a lower tax. The business cannot deduct your medical...

Tax Law (Questions About Taxes): Tax implications from second home purchase, irs gov, form 1040 schedule e
irs gov, form 1040 schedule e, dear barbara: Dear Barbara, This is a complex situation and therefore, you will have to go to www.irs.gov and download the instructions for form 1040-schedule-E (rental income) and read whether or not you will have to count this rent your son pays you plus the fact...

Tax Law (Questions About Taxes): Tax implications of taking a roommate in a co-op apartment I own, measurable percentage, gain exemption
measurable percentage, gain exemption, maintenance payments: Itis just not what you want to do. First is intent. You are not intending to have a renter, you are intending to live with a friend. Secondly, it will not be your intent to pay taxes when you sell your place (which you will with a renter). Basically, Tim,...

Tax Law (Questions About Taxes): Tax implications of withdrawing principle from Roth IRA, early withdrawal penalty, roth ira
early withdrawal penalty, roth ira, pub 590: A qualified distribution is generally, any payment or distribution made after the 5–taxable–year period beginning with the first year for which a contribution was made to a Roth IRA set up for you, and that is made on or after you reach age 59 1/2, made because...

Tax Law (Questions About Taxes): Tax information for LLC startup, limited liability companies, golden triad
limited liability companies, golden triad, venerable c: Sorry I forgot to attach the article, here it is: Limited Liability Companies: What, When, and Why? This discussion, will compare and contrast the benefits and liabilities of the LLC to other business structures. We will explore the Tax, Liability, and...

Tax Law (Questions About Taxes): Tax on inheritance, savings bonds, husbands name
savings bonds, husbands name, bond money: Heather, Thanks for your question. Inheritances are not subject to income tax, so the only thing from the savings bonds to report would be the interest income, if any. This would be reported on Schedule B. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Tax issues: Dad a beneficiary of Grandpa's CD, state department of revenue, federal estate taxes
state department of revenue, federal estate taxes, bank policies: Jennifer, Thanks for your question. First, he will not pay any Federal estate taxes. They are levied on the estate of the deceased and should be handled by the administrator of the estate. You need to check with the state department of revenue to see...

Tax Law (Questions About Taxes): Tax issues on residential property, confusing tax, stancil
confusing tax, stancil, mr c: IV, Thanks for your question. You re making it much too complicated. C will owe income taxes on the gain from the sale of his portion, unless he can exclude it as being his primary residence for 24 of the past 60 months. B is unaffected by the transaction...

Tax Law (Questions About Taxes): Tax on Land Sale, first wife, medical bills
first wife, medical bills, sole owner: VA is not a community property state. Your husband s basis calculated as follows - what the land was purchased for, WHEN it was purchased, plus half the value when his wife passed away. For example - if the land was purchased for $5,000 and when his...

Tax Law (Questions About Taxes): Tax on Land Sold, personal income tax, best wishes for the holidays
personal income tax, best wishes for the holidays, long term capital gains: Hi, Yes you have to pay Federal capital gains tax on the difference between your adjusted selling price and your adjusted basis. The maximum long term capital gains tax is 15%. Your adjusted selling price is the gross selling price less expenses of...

Tax Law (Questions About Taxes): Tax Law, ee savings bonds, series ee savings bonds
ee savings bonds, series ee savings bonds, safety deposit box: Gary, Thanks for your question. First, ownership of bonds is not transferable except in cases of the death of the owner. So you do not have the option of becoming a co-owner. This is a link to a Savings Bond Owners Manual published by the Department...

Tax Law (Questions About Taxes): Tax Law on claiming a child in Georgia, thier children, shirley franklin
thier children, shirley franklin, unfit mother: Dear Corlis, You said you have full custody of the child and the child lives with you, which would give you the right to blaim this child.... However, in the next to the last paragraph here, you stated that your X is filing and claiming the child BECAUSE...

Tax Law (Questions About Taxes): Tax Law Question, tax law question, child ren
tax law question, child ren, aprox: Dear William, There are many reasons why you may owe or break even, and I simply do not have enough information here to help you 100%.... I do not know how much you are owing or getting back based on this current information, but normally people who have...

Tax Law (Questions About Taxes): US Tax Law on Rental Income from Apt in Dubai, mortgage interest, pocket expenses
mortgage interest, pocket expenses, tax implications: Alok, You will need to report the rental income on Schedule E of your US tax return. You will also be able to deduct mortgage interest and any other out of pocket expenses related to the rental property on Schedule E. If you have any other questions,...

Tax Law (Questions About Taxes): Tax-Law - Renting my Primary Residence, marginal tax rate, property tax deduction
marginal tax rate, property tax deduction, john thanks: Nathan, Thanks for your question. The mortgage interest and property taxes are now rental activity costs and cannot be deducted on Schedule A as itemized deductions. When you rent the condo out, you must file a Schedule E reporting the income from...

Tax Law (Questions About Taxes): Tax Law for a SBA and Tax ID, car stereo amplifier, car stereo store
car stereo amplifier, car stereo store, personal tax return: You can certainly create a tax ID number by filing a SS4. However, you will be required to file a schedule C on your personal tax return, whether you have income or not, attaching a schedule C to your tax return increases your risk of audit 10 times. Living...

Tax Law (Questions About Taxes): Tax Law, mortgage holder, adjusted basis
mortgage holder, adjusted basis, tax professional: Hi Mike, This sale should have reported in 1999. At that time it would have been determined if you had a gain or loss on the sale. Your gain or loss is determined by deducting your adjusted basis on the property from your adjusted selling price. Assuming...

Tax Law (Questions About Taxes): Tax Liability for completing on-line surveys, form 1099 misc, line surveys
form 1099 misc, line surveys, stancil: Stephen, Thanks for your question. Yes, you would be considered self-employed or an independent contractor in this situation. It should be reported on Schedule C, along with any deductions for expenses incurred in the business. If your tax due...

Tax Law (Questions About Taxes): Tax Liability for LLC, distribution decisions, questionable character
distribution decisions, questionable character, departure date: Normally, it is apportions based upon the percentage of the year that you hold the ownership position. The Income happens all year, it is merely accounted for at the the end of the year for tax purposes. But the apportionment would still reflect hat you...

Tax Law (Questions About Taxes): Tax and Lien Questions, competent representation, state authorities
competent representation, state authorities, stancil: Dianne, Thanks for your question. What he needs to do is hire competent representation so his case can be properly presented before the IRS and state authorities. This will involve reconstructing his financial records for that five year period. I know...

Tax Law (Questions About Taxes): Tax Lien reported on Credit Report, tax question, tax liens
tax question, tax liens, tax lien: Hi Maria this is not a tax question but I am happy to give you information that may be useful The lender is required to give you a copy of the report then contact the company that did the credit report and you should also contact the state and the IRS they...

Tax Law (Questions About Taxes): Tax Lien reported on Credit Report, tax liens, credit score
tax liens, credit score, tax lien: If the liens are released, just add a statement to your credit report that the liens have been released and the date of release. That will work for your state, how to get them to report it would be state specific. The IRS is not going to release the...

Tax Law (Questions About Taxes): Tax Liens, corporate shell, corporate minutes
corporate shell, corporate minutes, income stream: No. However, if you continued operating the same business under another corporate shell, using the same assets, employees, customers, etc., then the IRS could challenge the transfer of those assets and income stream. If they are separate and you have maintained...

Tax Law (Questions About Taxes): Tax on Life Insurance, life insurance proceeds, life insurance policy
life insurance proceeds, life insurance policy, john thanks: John, Thanks for your question. The face amount of the policy is not taxable. Thus, if you have a $50,000 policy and take the amount as a lump sum, there is no income tax. If you leave the proceeds with the insurance company and they pay you interest...

Tax Law (Questions About Taxes): US Tax law, wage taxation, generous fringe
wage taxation, generous fringe, federal income taxes: Jack, Wages were subject to income tax before World War II. Prior to World War II, most people paid their own medical bills directly, like other essentials such as food, clothing, and shelter. Health insurance (and company-paid retirement) developed as...

Tax Law (Questions About Taxes): Tax laws on Grants, education credit, tuition and fees
education credit, tuition and fees, taxable income: Coby, I have no way of knowing if the advertised grants are legitimate. If they were, chances are they would not be considered taxable income. Let s say you do obtain a grant for your education. While you don t have income to report, you also could...

Tax Law (Questions About Taxes): Tax liability, l c company, roofing business
l c company, roofing business, unobtainable goal: You certainly can make the innocent spouse argument. But that would be making an argument. Trying to solve the problem is your best option, before there is an audit. Even if they can t hold you personally liable they can make you personally miserable....

Tax Law (Questions About Taxes): Tax liability on disbursement used to purchase main home, 401k rollover, disbursement
401k rollover, disbursement, first time home: Hi, No it isn t true. If you take a disbtribution from an IRA ($10,000 maximum) and use it for a first time home purchase you can exclude the $10,000 from the 10% penalty but not from ordinary income tax. That exception doesn t apply to distributions...

Tax Law (Questions About Taxes): Tax liability on purchase of automobile, income tax liability, state income tax
income tax liability, state income tax, prize winnings: Dear David, Without knowing all the official rules of this GAME, I really can t say for sure.... However, I would think that this would be treated just like any other prize winnings and you will be sent a 1099-MISC showing the purchase or cost of this car...

Tax Law (Questions About Taxes): Tax liability on settlement, comp case, itemized deduction
comp case, itemized deduction, household income: Hi JR, Generally workman s comp settlements are not taxable. An exception would be if she paid some of her own medical expenses and claimed them as an itemized deduction in a previous year. In that case she would have to include in income the amount claimed...

Tax Law (Questions About Taxes): Tax liability, form 1040 schedule c, medicare tax
form 1040 schedule c, medicare tax, sole proprietor: Dear Alan, If you have any income AFTER expenses (which would be your net profit), then you will have to report that as income on your 1040 and if the net profit figure is $400 of more you will also owe s.s. and medicare taxes at 15.3% on that amount that...

Tax Law (Questions About Taxes): Tax liablity on a property, auto repair business, irs rules
auto repair business, irs rules, concrete answer: HI Phil I think you suspect correctly but you might have a little bit of all I would suggest that you set up a spread sheet Year of gift/ Amount allocated to land/ Depreciation / ...

Tax Law (Questions About Taxes): Tax lien, federal tax lien, irs files
federal tax lien, irs files, court judgment: Beverly, You should contact the title company and find out if they actually paid the IRS. If they did, you should try and get the cancelled check. If the title company did not pay off the IRS, the ultimate responsibility of ensuring payment rests on you....

Tax Law (Questions About Taxes): Tax liens, quarterly estimated taxes, speedy reply
quarterly estimated taxes, speedy reply, offer in compromise: Karen, contact Bob Lind of Camelback Tax Service. 602-841-5414 I don t know if Bob does offers, but most definitely can tell you who does in your area. Please tell him that Helen said to call, Bob and I have known each other as Tax Experts on AOL for...

Tax Law (Questions About Taxes): Tax limits on passive losses, passive activity limits, passive losses
passive activity limits, passive losses, passive investor: Hi Mike: Thanks for the follow-up question. You could put the Rental Property into a C-Corp, but then the corporation gets the tax benefit, not you. If you were a licensed real estate broker you are not considered as a passive investor and the passive...

Tax Law (Questions About Taxes): Tax loss on LLC, retail clothing store, cash basis accounting
retail clothing store, cash basis accounting, income tax liability: Unfourtunatelly your accountant is right even in a cash bussines Inventory is only considered when sold however if your clothing bussines has a loss when it files you will have a NOL Since both of you own both both entiries you should nerge both into one...

Tax Law (Questions About Taxes): Tax loss on LLC, retail clothing store, cash basis accounting
retail clothing store, cash basis accounting, personal income tax: I don t have the original sources to quote from, but from Prentice Hall s Federal Taxation 2006, Principles page 11-7 Exceptions permit businesses with inventories to use the cash method if their average annual gross receipts for hte preceeding years do not...

Tax Law (Questions About Taxes): Tax loss selling/self dealing conflict, partnership bill, fiduciary obligation
partnership bill, fiduciary obligation, unexpected bonus: AS long as the taxes are paid the IRS doesn t really care. However, the Limited partners probably have a very good claim against him. AS far as the exact transaction with the IRS, they may disallow bills 25-30% loss since he did not really take the loss....

Tax Law (Questions About Taxes): Tax-losses from burglary, adjusted gross income, theft losses
adjusted gross income, theft losses, tax losses: Mel, Thanks for your question. Yes, there is a deduction you can take, but it may not do you much good. You can take casualty and theft losses as an itemized deduction. However, before you can deduct any loss, each loss is first reduced by $100....

Tax Law (Questions About Taxes): Tax on military pension?, household expenses, head of household
household expenses, head of household, military pension: First things first, if Mom owns the home, it will be really hard for you to prove head of household. As far as Mom putting your name on the deed, it will not cost you anything now, it may cost you tax dollars when you or Mom go to sell the home. For...

Tax Law (Questions About Taxes): Tax on money received as a gift, stancil, grandchildren
stancil, grandchildren, gift tax return: Ed, Thanks for your question. No matter how much he gives you, you will not pay any tax on it. Gift are not income and therefore not subject to income tax. If the amount exceeds $12,000 in any one year, he will have to file a gift tax return, ...

Tax Law (Questions About Taxes): Tax on mutual fund upon shareholders death, copley fund, marginal rate
copley fund, marginal rate, cost basis: First of all, if you are not paying taxes on those gains, they CANNOT be adding to your basis. Tax law just does not allow that. When funds are inherited, their basis is date of death value. Someone is going to pay tax on the gains, either your estate...

Tax Law (Questions About Taxes): Tax Obligation, formal termination, termination letter
formal termination, termination letter, job offer: Hi Sue I am sorry to tell you NYS is a stickler for proper corporate terminations (even if inactive) so if you formed a corporation in NEW York you should file the 2007 Final Franchise Return and contact NYS for a formal termination letter do it before...

Tax Law (Questions About Taxes): Tax Obligations from selling a home, realtor commissions, home mortgage interest
realtor commissions, home mortgage interest, long term capital gain: Hi Dan, If you owned and lived in your Encino home as your main home for 2 years during the 5 years preceeding the date of sale and have not excluded gain on another main home within 2 years, you can exclude $500,000 of gain (assuming that you are married...

Tax Law (Questions About Taxes): Tax Penalty and 2210 / Schedule A1, overdue tax, credit card debt
overdue tax, credit card debt, stancil: Connie, Thanks for your question. Basically the penalty is calculated at 5% of the underpayment for each month the payment is late. Interest is additional and varies from month to month. Both are calculated from the due date of the payment until the...

Tax Law (Questions About Taxes): Tax Penalty and Early IRA withdrawal, domestic relations law, irs purposes
domestic relations law, irs purposes, joint bank accounts: Hello, For state purposes, if applicable there may be a pension exclusion. For IRS purposes a qualified domestic relations order is specified . You may try an offer in compromise to IRS in light of hardship or an installment arrangement. A better...

Tax Law (Questions About Taxes): Tax on Pension, pension payments, tax contributions
pension payments, tax contributions, pension contributions: Hi, That s a good question. If you don t pay income taxes on your pension contributions now, you will pay income tax on them when you start taking distributions. When you have a mixture of pre-tax and after-tax you will pay income tax on a portion of...

Tax Law (Questions About Taxes): Tax Planning, plywood sheet, stancil
plywood sheet, stancil, business expenses: When I stated that the deductions were the same, I should have elaborated some. For purposes of the investment property, the repairs, etc. that you did to it are added to your basis in the property, thus reducing your gain. The only expenses that are deductible...

Tax Law (Questions About Taxes): Tax Planning, qualified education expenses, investment education
qualified education expenses, investment education, stancil: James, Thanks for your question. That is probably not deductible. In order to take a deduction for tuition or other qualified education expenses, the amounts must have been paid to a elibible education institution. Primarily, this means an institution...

Tax Law (Questions About Taxes): Tax Planning, mortgage holder, year mortgage
mortgage holder, year mortgage, mortgage interest: Dear Douglas, It really does not matter which one you pay off first, and this will be your personal decision... When you make an extra payment you simply need to tell the mortgage holder that this payment is to be taken off the END of the loan, thus paying...

Tax Law (Questions About Taxes): Tax Prep, income tax return, individual income tax return
income tax return, individual income tax return, individual income tax: Bryce: You are only required top keep the documents as a historical file to document the expenses if or when the IRS request to see them. You only send in an information return (Schedule C) listing the income and expenses attached to your 1040 (individual...

Tax Law (Questions About Taxes): Tax Preparation, e filing, allexperts
e filing, allexperts, preparation software: If I get a byline in the article, I ll give you so much info, your article will write itself. The most common mistake is trusting the software and not knowing how the tax laws work. Double entering income and expenses, not carrying forward proper items,...

Tax Law (Questions About Taxes): Tax Preparer Education, state tax bracket, federal tax bracket
state tax bracket, federal tax bracket, eidson: Mike, Yes, the federal rates go higher than 30%. State rates depend on your state of residence, but some are in excess of 5%. To determine your rate, you simply need to calculate your income and deductions and see where you fall. The instruction books...

Tax Law (Questions About Taxes): Tax Preparer Education, state tax bracket, federal tax bracket
state tax bracket, federal tax bracket, state tax rate: Hi Mike, The highest Federal marginal rate is 35% but that doesn t mean that you pay 35% on all of your income. For example, if you re single you pay 10% on the first $7,000 of taxable income, 15% on the next $21,400, 25% on the next $40,400, 28% on the...

Tax Law (Questions About Taxes): Tax Preparer, royalty issues, intricate work
royalty issues, intricate work, turbo tax: You do not need anything else however you won t be able to represent your client at the IRS unless you meet qualifications for that but you don t need this now I you want to E file you need to sign up with IRS www.irs.ustreas.gov Turbo tax is fine...

Tax Law (Questions About Taxes): Tax's on Property, property tax deduction, capital gains tax
property tax deduction, capital gains tax, itemized deduction: Hi, Yes, you will have to pay capital gains tax on the gain. You can deduct expenses of the sale from the gross selling price (commissions, legal fees, title fees, etc.). In the years you held the investment property you could have deducted the mortgage...

Tax Law (Questions About Taxes): Tax paid in 2003 for 2002, o keefe, federal income tax
o keefe, federal income tax, instruction booklet: Dear Kevin, NO....... Taxes owed to the IRS from one year paid in another year are NOT deductable.... The only taxes like this that are deductable are if you itemize deductions and have state taxes that were paid in 2003 for 2002, then these would be part...

Tax Law (Questions About Taxes): Tax payment for year 2005, irs gov, retirement check
irs gov, retirement check, investment profits: Mike, if you sold the stock in June, your $6000 is due in the September payment, so you can make some now and the rest in September. If you sold in May, you need to make a $6000 payment now. The address varies - check www.irs.gov and do a search under...

Tax Law (Questions About Taxes): Tax penalties, dear philip, tax penalties
dear philip, tax penalties, unpaid taxes: Dear Philip, The penalties are very difficult to figure since ther are so many different types of penalties the IRS can charge you for.... If you are due a REFUND when you file your 2002 and 2003 tax return there will be NO PENALTIES..... However,...

Tax Law (Questions About Taxes): Tax position question, limited liability partnership, corporate franchise tax
limited liability partnership, corporate franchise tax, commercial new construction: Ken In the state of Texas taxwise your best bet is the Limited Liability partnership as it is not subject to the corporate franchise tax ,an LLC is. your Nevada corp could be the GP with a nominal interest and you could be the limited partner so...

Tax Law (Questions About Taxes): Tax preparation as a profession, national society of tax professionals, tax preparation experience
national society of tax professionals, tax preparation experience, pension specialist: Cary, Thanks for your question, and the kind remarks. As someone with some experience in tax preparation, I don t think any courses per se would be of much benefit. I would recommend joining an organization such as the National Society of Tax Professionals...

Tax Law (Questions About Taxes): Tax preparation, credit card debts, income tax rates
credit card debts, income tax rates, investment loan: As an individual you are very limited in any tax advantage. IF you made a short term gain on the construction, that is taxed at ordinary income tax rates. Credit card debts, vehicle interest, and other bills are not deductible. Effectively, you will have...

Tax Law (Questions About Taxes): Tax preparer fees -- Form 1041, proseries software, form 1041
proseries software, form 1041, software shipping: In that case, I would say that the $100 fee would not be deductible on the 1041, as it would have been otherwise incurred. But as I originally stated, this is a gray area, you are unlikely to pay a penalty if they audit it and rule against you. John...

Tax Law (Questions About Taxes): Tax on proceeds from a land sale, death time, granddad
death time, granddad, time value: Gains equal taxes due, that is a fact of life. Dad s basis is the date of death value of your granddad s plus any improvements. The top tax rate federally is 15%, but if dad is on SS, that size of gain is going to make 85% of his SS taxable. Dad can...

Tax Law (Questions About Taxes): Tax Question, fed oasdi ee, state tax returns
fed oasdi ee, state tax returns, state return: Dear Travi, I do NOT do state tax returns and have no idea what the California total would be, but the California state withhold total is the $1594.00 figure... I do not know what the CA VOL Dis/EE even is or where it would go on the state return... ...

Tax Law (Questions About Taxes): Tax Question 1099-S, dear michael, cost basis
dear michael, cost basis, tax question: Dear Michael, You are going to have to go to your local assessors office and find out what your LAND is valued at (not including house).... Then determine the sq.ft or sq. yds. taken by the township to determine the cost basis of the land they took.......

Tax Law (Questions About Taxes): Tax Question, tax question, paying taxes
tax question, paying taxes, disposable income: If you have been investing and marking to market , that means paying taxes on the gain as it accrues, then there is no tax due. On the otherhand, if you haven t paid tax on the gain for the last 10 years, you ll have to pay Cap gain tax rates. Federal Long...

Tax Law (Questions About Taxes): Tax Question, long term capital gains, tax question
long term capital gains, tax question, long term capital: Long term capital gains are taxable at 15% for federal. I have no idea what CA s tax rate is. You would just have to work backwards to come up with your figure you need, doing the calculation is beyond the scope of this media. Helen, EA in P...

Tax Law (Questions About Taxes): Tax Question, personal exemption, standard deduction
personal exemption, standard deduction, stancil: The amount would vary each year, as the amount of the standard deduction and personal exemption change annually. However, for 2005, you could exclude $5000 for the standard deduction and $3200 for the personal exemption. So the first $8200 of gain would...

Tax Law (Questions About Taxes): Tax Question, state income tax, stancil
state income tax, stancil, tax question: David, Thanks for your question. No, you would have to file an amended return. Taxes (or any other item) are deductible only in the year paid. I would add that most states do not have sales tax on real estate, so you may need to look at what was acutally...

Tax Law (Questions About Taxes): Tax Question, marginal tax bracket, dependency exemption
marginal tax bracket, dependency exemption, stancil: Bel, Thanks for your question. Yes you would get less money back, because the dependency exemption reduces your taxable income by $3,300. The amount depends on your marginal tax bracket. If you are in the 10% bracket, the effect would be $330. Brackets...

Tax Law (Questions About Taxes): Tax Question, head of household, filing taxes
head of household, filing taxes, bread winner: You have two choices in how to file. Those are married filing jointly or married filing separately. I would suggest married filing joint. As for the state, you need to check those rules locally. I only deal in federal issues here. Helen, EA in P...

Tax Law (Questions About Taxes): Tax Question/ Capital Gains, denise thanks, stancil
denise thanks, stancil, tax question: Denise, Thanks for your question. First, your profit is the diffrence between what you purchased the house for and the sale proceeds. So you are looking at a profit of approximately $165,000. However, if you have lived in the house for 24 of the pasat...

Tax Law (Questions About Taxes): Tax Question Regarding Mileage, business mileage, adjusted gross income
business mileage, adjusted gross income, standard deduction: Hi Brett, The part of your mileage that was not commuting is an unreimbursed employee business expense to the extent that it exceeds 2 1/2 percent of your adjusted gross income. The deduction is taken on Schedule A. If that and your other itemized deductions...

Tax Law (Questions About Taxes): Tax Question regarding Schedule C income, proprietor company, irs law
proprietor company, irs law, tony dear: Dear Tony, THe IRS law states that if a company or even an individual pays another company or individual for contract labor or subcontract labor and the amount in $600 or more, that company or individual is suppose to issue a 1099-MISC form inorder to be...

Tax Law (Questions About Taxes): Tax Question, question 1c, real estate taxes
question 1c, real estate taxes, 2 sisters: QUESTION 1 since the one sister is not paying the taxes etc the ones living there get to deduct their payment of real estate taxes Question 2 The one who received the rent should be able to deduct from the rental income the necessary expenses related...

Tax Law (Questions About Taxes): Tax question, question 1c, joint checking
question 1c, joint checking, 2 sisters: Hi, Each of the 3 are entitled to claim 1/3 of the taxes assuming they each pay 1/3. It doesn t really matter who signs the check. I m assuming here that each is reporting 1/3 of the rental income but even if only one claims the rental income each of...

Tax Law (Questions About Taxes): Tax question, real estate commissions, real estate consulting
real estate commissions, real estate consulting, real estate consulting services: Hi David, The fee for his services or for the services of a realtor are not deductible. Real estate commissions reduce your selling price which benefits you in calculating your gain. Fees paid for the services of an individual investor would not reduce...

Tax Law (Questions About Taxes): Tax question about 1099, mail outs, tax question
mail outs, tax question, housing authority: Dear Arvie, A 1099-misc is issued inorder to make the paerson or company claim this income.... When dealing with lawyers, doctors, dentist etc, it is NOT really necessary to issue 1099 s, but if you want to then you will issue it for EVERY item that you...

Tax Law (Questions About Taxes): Tax question, corporate crap, tax question
corporate crap, tax question, friend doesn: KG: Your friend is a domestic employee and should be reported as such by her employer. She should report it to the local department of labor and to the IRS. I do not know the tax situation of your friends employer therefore any answer i gave would be...

Tax Law (Questions About Taxes): Tax question, dividend income, happy thanksgiving
dividend income, happy thanksgiving, form 1099: Paul, I m not really clear on a number of things. Was the distribution to you as a beneficiary or to the estate? What was the source of the $62,000 distribution? The amount seems awfully high to be reported on a 1099-DIV. 1099-DIV forms are used to...

Tax Law (Questions About Taxes): Tax question, social security benefits, tax question
social security benefits, tax question, good health: Hi, If your mom owned and lived in her home as her main home for 2 years during the 5 years preceding the date of sale and has not excluded gain on another main home within 2 years, she can exclude from taxation $250,000 gain on the sale. If she gives...

Tax Law (Questions About Taxes): Tax question, capital gain tax, irs gov
capital gain tax, irs gov, publication 523: Dear Jaun, If you have used this house as your main home for 2 of the past 5 years as of the date of sale, you have an exemption on the capital gains of the first $250,000.00 if you are single and file your return as SINGLE... You get an exemption on the...

Tax Law (Questions About Taxes): Tax question, marginal tax bracket, stancil
marginal tax bracket, stancil, tax question: Juan, Thanks for your question. If you occupy the house as your main residence for 34 of the past 60 months, you can exclude $250,000 ($500,000 if married, filing jointly) of gain from taxation. Any additional gain would be taxed at 5 or 15% depending...

Tax Law (Questions About Taxes): Tax question, long term capital gain, capital improvements
long term capital gain, capital improvements, room additions: Sales price minus purchase price minus capital improvements while you owned the home minus expenses of the sale will be your long term capital gain. This will be taxable at 15%. You may qualify to exclude up to 250000 (500000 if your spouse also qualifies)...

Tax Law (Questions About Taxes): Tax question, property management business, good excuses
property management business, good excuses, tax question: You can respond to the letter informing you of the penalty. In the response you should request a waiver of the penalty if you can show that undue circumstances prevented your completion of the forms on time. Generally, casualty, illness, lack of tax id#...

Tax Law (Questions About Taxes): Tax question, property management business, tax question
property management business, tax question, ombudsman: first it should be $50 per owner so unless you had 50 owners the amount is wrong? second this does seem harsh probably computer generated, write to them explain the circumstances and ask that the penalties be waived and state that you have corrected your...

Tax Law (Questions About Taxes): Tax question, property management business, irs law
property management business, irs law, irs forms: Dear Gloria, THe IRS law specifically states that ALL 1096 s, 1099 s, W-2 s, W-3 s, must be POSTMARKED and MAILED by February 28th of each year.... You say you were a month late which means you did not mail your 1096 s and 1099 s until END of March........

Tax Law (Questions About Taxes): Tax question, real estate consulting, real estate consulting services
real estate consulting, real estate consulting services, individual investor: David, Thanks for your question. I presume this is your personal residence. My answer is based on that assumption. The issue of when you pay him is between the two of you. However, the fee you pay him is not deductible. If he were a licensed realtor...

Tax Law (Questions About Taxes): Tax question about ESPP stock, www irs gov, estimated tax payments
www irs gov, estimated tax payments, form 1040 es: Brian, Thanks for your question. In order to avoid penalties for not making adequate payments, there are three safe harbours. Meeting any one of these eliminates any penalty for underpayment: 1. You owe less than $1,000 when you file. 2. The amount...

Tax Law (Questions About Taxes): Tax question ref to car, automobile purchase, reputable dealer
automobile purchase, reputable dealer, tax question: Jeannie, I m sorry your automobile purchase didn t turn out so well. Unfortunately, there isn t any relief from a tax standpoint. The IRS doesn t allow you to deduct losses from personal property. Automobiles not held for investment purposes are considered...

Tax Law (Questions About Taxes): Tax question regarding estate, social security number, tax question
social security number, tax question, paying taxes: Tracey, You won t be liable for any taxes on the inherited accounts, but you will be paying taxes on the earnings. Since you were on the accounts as the survivor, the banks will issue 1099s to your social security number. I suggest before you distribute...

Tax Law (Questions About Taxes): Tax question regarding my son, higher tax bracket, income threshold
higher tax bracket, income threshold, tax computation: Yes you can and should When your son files he should for his tax computation He must check the box that you have taken him as a dependant. You can claim an exemption only once obviously you stand to benefit more from it as you are in a higher tax bracket...

Tax Law (Questions About Taxes): Tax question relate to resident of multiple states, state c, tax question
state c, tax question, mortgage interest: You do not get to choose you are a resident of state B and file a tax return there. you are a non resident of state and if they have an Income tax most likely your employer is withholding taxes on your earnings If your mortgage interest is deductible for...

Tax Law (Questions About Taxes): Tax question on rental income, irs law, irs gov
irs law, irs gov, form 1040 schedule e: Dear Gary, The IRS law permits as many maintenance days as it takes to get the property ready for RENT..... However, if you actually live there in this house then this WILL count towards your 14 days and your expenses will have a limit on them.... For...

Tax Law (Questions About Taxes): Tax question sole proprietorship, sole proprietorship, selling on ebay
sole proprietorship, selling on ebay, course business: Dear Don, As long as you have income, you have expenses and if it is a loss, then so be it.... However, I would advise that you don t draw this out for more than this year or next year or you may be audited and if this happens the IRS may look at it differently......

Tax Law (Questions About Taxes): Tax question for out of state worker, prudhoe bay alaska, job offer letter
prudhoe bay alaska, job offer letter, anchorage alaska: Hi Nicole You cannot take the trips to/from Anchorage as deductible travel they are commuting expenses. You could if you were an independent contractor with Acuren Inspection, but since your expectation is that you will be at the job site indefinitely,...

Tax Law (Questions About Taxes): Tax question, partnership tax return, starting a small home business
partnership tax return, starting a small home business, form 1065: Chris, Thanks for your question. You are approaching from the entire perspective. If you are going to divide up the income as you state, you need to keep a record of how much earnings each partner is attributed. The amount of cash in the bank is...

Tax Law (Questions About Taxes): Tax questions on spousal support/interest/real estate tax, allimony, divorce decree
allimony, divorce decree, support interest: Dear Greg, When you say spousal support of $1200 per month, I am assuming you mean allimony .... If that is true, then you can claim the spousal support as a DEDUCTION on YOUR tax return and your ex-wife will have to claim the spousal support as INCOME...

Tax Law (Questions About Taxes): Tax questions, capitol gains tax, franchise tax board
capitol gains tax, franchise tax board, irs website: yes because you deducted that amount in 2003 in excess of what you owed if you did not or used the standard deduction contact me again you are corect the joint excemption would be $500,000 Not unless you paid real estate taxes as part of the closing...

Tax Law (Questions About Taxes): Tax Ramifications on Short Sales, tax ramifications, hison
tax ramifications, hison, time karen: Hi Karen an example will explain better than 1000 words, but first short sale for real estate is a misnomer it mostly refers to stock there is a saying he who sells what isn t hison must pay or go to prison In the case of real estate say you bought property...

Tax Law (Questions About Taxes): Tax Rates, gross wages, irs gov
gross wages, irs gov, state income taxes: Dear Liam, It does seem like to us that we pay a lot of taxes.... Unfortunately, those that pay the most are the least that can afford it because everything is based on percentages and us people who are in the low income to moderate income pay more because...

Tax Law (Questions About Taxes): Tax on Receivables & Inventory, s corp, dollar profit
s corp, dollar profit, wholesale distributor: What I am saying is that the earnings are distributed on the K1 no cash needs to be distributed however the shareholder must pick up the earnings in their own tax return and of course if they do not have the cash to pay their taxes then they must borrow...

Tax Law (Questions About Taxes): Tax Refund, offer in compromise, installment agreement
offer in compromise, installment agreement, tax refund: The IRS can collect taxes for at least ten years after the tax was assessed and if you did something else like ask for an offer in compromise or declare BK, or sign a statute extension, the time will be longer. So if your civil penalty was assessed in...

Tax Law (Questions About Taxes): Tax Reporting, profit motive, 1099 misc
profit motive, 1099 misc, household items: She should make every effort to recreate her sales amount and report this as income. She may use Schedule C if this venture was for profit motive. If not,(poor recordkeeping indicates it is a hobby) she will report the income on Form 1040, Line 21. ...

Tax Law (Questions About Taxes): Tax Return, ohio state refund, mail form
ohio state refund, mail form, declaration control number dcn: Sean, Did you receive an acknowledgement from Turbo Tax that the Federal and Ohio tax returns have been accepted. If so, you should have received something called a Declaration Control Number (DCN). This number needs to be listed at the top of Form 8453-OL....

Tax Law (Questions About Taxes): Tax Return for Deceased - Estate not settled, income tax return, personal return
income tax return, personal return, deceased estate: Doug, Thanks for your question. Good to hear from you. Include on his 2005 return any deductions that were incurred - such as the property taxes, interest expense, medical expenses, etc. This will be his final personal return. Write across the top...

Tax Law (Questions About Taxes): Tax Return, married filing seperately, individual tax return
married filing seperately, individual tax return, social security number: Dear Sonya, First of all since you are married you husband can NOT file his tax return as an individual (single) and he can NEVER claim you as a dependent... Husbands and wifes MUST file a Married Filing Joint tax return or a Married Filing Seperately,...

Tax Law (Questions About Taxes): Tax Returns, government assistance, federal taxes
government assistance, federal taxes, tax refund: Dear Christina, I am assuming that you mean a tax REFUND.. Anyone can file a tax return, if they have EARNED income or interest as income etc.... BUT, if you have not paid in federal taxes, there will be NO REFUND, OR if you have NO EARNED INCOME, then...

Tax Law (Questions About Taxes): Tax Returns & W2s, supeona, legal purposes
supeona, legal purposes, tax return: Dear Krysta, Your attorney will have to handle this via supeona through the courts.... This is ALL private information not available to anyone other than the person filing his/her tax return etc.... Only the courts can order disclosure.... Thank you,...

Tax Law (Questions About Taxes): Tax Returns, cherry hill area, sole proprietorship
cherry hill area, sole proprietorship, interest dividends: Hi Dave, I work in a small community so prices are undoubtedly lower than in your area. The $365 fee would be on the high side here assuming that your business is a Sole Proprietorship. If you have trust in his advice I wouldn t change just to save...

Tax Law (Questions About Taxes): Tax/re-payment for HUD, form 1099 misc, wrongful death actions
form 1099 misc, wrongful death actions, wrongful death suit: Hi, Any interest on her award is taxable. Punitive damages are taxable except in certain wrongful death actions. She should receive Form 1099-MISC reporting any taxable punitive damages or other amounts. In the meantime her attorney should be able to...

Tax Law (Questions About Taxes): Tax on renting a room, rental property insurance, property questions
rental property insurance, property questions, renting a room: The rental property is treated as a separate property. You would take depreciation based only on the rental portion, and all common costs (taxes, interest, etc) would be allocated on that basis also. You can deduct a pro-rated portion of taxes, insurance,...

Tax Law (Questions About Taxes): Tax reporting obligations to IRS, reporting obligations, source income
reporting obligations, source income, tax treaty: There is tax to be paid. A US Citizen is required to report and pay taxes in it s world wide income . that would income the LLC/partnership. So it reports the total revenue the business received from all over the world on the 1065. Then it can distribute...

Tax Law (Questions About Taxes): Tax reporting for proceeds from Securities litigation, traditional ira account, long term capital gains
traditional ira account, long term capital gains, class action lawsuit: Chuck, Thanks for your question. Since they were reported as long term capital losses, these are reported on Schedule D as long term capital gains. Presuming the IRA account did not report the losses, the gain does not get reported for the IRA. ...

Tax Law (Questions About Taxes): Tax on retirement used to buy a house, retirement plan, first time home
retirement plan, first time home, closing costs: Hi, If you took up to $10,000 from an IRA (not a 401(k) or other retirement plan) and used it for a first time home purchase you are not penalized but you do pay income tax. The closing costs are part of the purchase of the home so that would not disqualify...

Tax Law (Questions About Taxes): Tax return, head of household, divorce decree
head of household, divorce decree, kiddos: If the divorce decree does not say which parent can claim the kids, then by default the custodial parent can either claim them or allow another to claim them, but then the claiming parent must have a form signed by the custodial parent. So, if the decree...

Tax Law (Questions About Taxes): Tax return never received by state, state of california, mail
state of california, mail, tax return: yes (stop payment but that will cost you) or you can just send them a copy of the return you filed along with the copy of the original check and mark the second check as replacement to the first one send it along with a letter explain your problem if you offer...

Tax Law (Questions About Taxes): Tax return required or not required, federal withholding, gross pay
federal withholding, gross pay, first job: If she has any federal withholding, she will want to file to get her money back. She cannot claim herself, you will still claim her. See form 1040EZ. Check your state law to see if she must file or not. If she lives in PA, she would have a filing requirement....

Tax Law (Questions About Taxes): Tax returns for inactive business, zeros, tax return
zeros, tax return, irs: Yes you can file a tax return with all zeros. If you fail to file a tax return you will get a nastygram from the IRS asking why you did not file a tax return, and one of the choices will be no business done. To avoid the nastygram, file a return...

Tax Law (Questions About Taxes): Tax on Sale of a Business, legal paperwork, oral contract
legal paperwork, oral contract, business profits: Hi John. The answer depends on how the sale is structured. Is it a sale of assets or a sale of equity in the business? If it’s a sale of assets, then the holding period will simply be determined on an asset-by-asset basis. If it’s a sale of ownership...

Tax Law (Questions About Taxes): Tax on Sale of land, adjourning, stancil
adjourning, stancil, tax purposes: Deborah, The two pieces of land have separate bases. The inherited land has a basis of fair market value at the date of death of the person from whom he inherited it. The basis for the purchased land is the price he paid for it. He will have to pay...

Tax Law (Questions About Taxes): Tax Saving, home mortgage interest, annie annie
home mortgage interest, annie annie, h4 visa: Annie, It s better to itemize deductions if you can. You should be claiming the higher of your itemized deductions and the standard deduction. Generally speaking, it s hard to get enough itemized deductions if you don t own a home. Mortgage interest...

Tax Law (Questions About Taxes): Tax on Savings Bonds, savings bonds, bennies
savings bonds, bennies, 123456: They can just attach a statement saying $xx of interest on bond 123456 was paid by SSN 123-45-6789. That, and your copy of the tax return (don t give it to the bennies, keep it and use it if any of them get a letter asking for an explanation) should take...

Tax Law (Questions About Taxes): Tax Schools, financial planning office, professional career development
financial planning office, professional career development, career development institute: I think any reputable school should be ok by the way when I went to college we had a texbook on federal taxation this was extremely useful in my carer the publisher was Prentice Hall I used it in my work and kept buying new editions from time to time...

Tax Law (Questions About Taxes): Tax on Selling Land, strange question, charitable contributions
strange question, charitable contributions, charitable organization: Dear Chad, You will have to take the FMV (fair market value) of the land and use that as your BASIS... The FMV can be what the property was valued at at the time of inheritance or the FMV as of NOW.... You use the BASIS of the property against the SALE...

Tax Law (Questions About Taxes): Tax on Stock option, income tax rate, capital gains tax
income tax rate, capital gains tax, stancil: Bill, Thanks for your question. There is no separate capital gains tax. When people refer to that, what they mean is income that is taxed at the capital gain rate. So, you don t pay both. If you hold for over a year, the gain is subject to the capital...

Tax Law (Questions About Taxes): Tax on Sweat Equity, self employment taxes, rich thanks
self employment taxes, rich thanks, sweat equity: Rich, That is exactly what I was responding to in my first answer. Since the value of your 5% appears to be $5,000, you have $5,263 of earned income from this transaction. If 95% of the ownership is worth $100,000, then your 5% is worth $5,263. This is...

Tax Law (Questions About Taxes): Tax on Sweat Equity, sweat equity, investing in real estate
sweat equity, investing in real estate, management fee: Sure you are going to owe taxes on any income that the partnership makes. You will get a K-1 from the partnership and that will flow to your Sch E of your 1040. As for your basis, etc, that is too involved to go into here, I would suggest you sit down with...

Tax Law (Questions About Taxes): Tax on sale of acreage, 1031 like kind exchange, long term capital gains
1031 like kind exchange, long term capital gains, stancil: Jason, Thanks for your question. The answer is neither. Wben your wife was given the land, her basis in the land was the basis that her parents had in it. So you must go back to when they purchased the land to determine what your basis is. Subtract...

Tax Law (Questions About Taxes): Tax on sale of inherited property, 2006 form 1040, brick house
2006 form 1040, brick house, t claim: Hi, Assuming that you sold the property at a gain, you will report that gain on Schedule D. Since you didn t live in it as your main home you cannot exclude any gain. Your gain is the difference between your adjusted selling price and your adjusted...

Tax Law (Questions About Taxes): Tax on sale of land, taxable gain, stancil
taxable gain, stancil, capital gain: Tricia, Thanks for your question. Since the land was inherited your basis is the fair market value as of the date of her death. To determine your taxable gain you subtract the basis from the proceeds of the sale. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Tax on sale of split land, professional point, tax impact
professional point, tax impact, cost basis: You are correct. When you sell the house that is your main residence, you may exclude up to $250,000 ($500,000 MFJ) of gain on the sale if it has been your main home for at least 24 of the past 60 months. In deciding whether to sell the lot separately...

Tax Law (Questions About Taxes): Tax on second property, long term capital gain, gain maximum
long term capital gain, gain maximum, long term capital: Hi Melanie, Your husband is right that it is an investment but when you sell an investment you pay taxes on the gain. If you sell it after you have held it more than one year, your gain will be taxed as long term capital gain (maximum 15%). If you sell...

Tax Law (Questions About Taxes): Tax on sell of assets in Limited partnership, carrying cost, limited partnership
carrying cost, limited partnership, stancil: Your summary is correct, but lacks a complete understanding. In a partnership, you are taxed on your share of the profits, even if you don t take a distribution. This is most likely the phantom income to which you refer. However, when this occurs, your...

Tax Law (Questions About Taxes): Tax shelter, personal income tax, cooporation
personal income tax, cooporation, stancil: Geillermo, Thanks for your question. Unfortunately, the process of sheltering gains from tax is a planning situation. Since the gains have already been realized the planning opportunity has passed. I suggest you contact a CPA who can help you plan...

Tax Law (Questions About Taxes): Tax shelters for the not-so-wealthy?, irs pubs, capital gains tax rate
irs pubs, capital gains tax rate, www irs gov: Hi Rob, The long term capital gains tax rate is a maximum of 15%. However having so much additional income in one year may mean that they will be subject to Alternative Minimum Tax and/or have their deductions/exemptions reduced so that their actual tax...

Tax Law (Questions About Taxes): Tax for small business (Sole Proprietorship), self employment income, self employment tax
self employment income, self employment tax, sole proprietorship: Hi, Quarterly estimates are due April 15, June 15, September 15 and January 15 of the following year. Since you are just starting your business your first quarterly estimated payment would be due January 15, 2006. If you have no profit you would have...

Tax Law (Questions About Taxes): Tax structure for a kid run company, secrecy agreements, kid run
secrecy agreements, kid run, s corp: Hi Derek SCorp by all means Cs get taxed at higher rates and losses are of no use to you. It would have to be YOU (sounds like a song!) She and her friends can have stock but remember an S Corp can not have more than 35 shareholders they can work but...

Tax Law (Questions About Taxes): Tax & subcontractors, social security act, irs office
social security act, irs office, uemployment: Lisa: The term subcontracted usually means your employer considered you to be an independant contractor. That is, you had your own business. The Social Security Act of 1934 which included the Federal Uemployment Security Act that delegated the powers...

Tax Law (Questions About Taxes): Tax Treatment of a lump sum payout, lump sum payment, underpayment penalty
lump sum payment, underpayment penalty, lump sum payout: Lori, Having the new owners put money into the annuity is really the same as handing cash to seller. This would be considered constructive receipt of the final lump sum payment. Perhaps putting a lesser amount in the annuity, but with a guaranteed...

Tax Law (Questions About Taxes): Tax Treatment on Sale of Rental Property, stancil, decison
stancil, decison, capital asset: Michael, Thanks for your question. No, that should not subject you the AMT. However, a gain of that magnitude will put you into the 15% bracket for much of that gain. In addition, you will probably have a depreciation recapture for the amount of depreciation...

Tax Law (Questions About Taxes): Tax Treatment: Selling a Business, capital gains tax, john thanks
capital gains tax, john thanks, stancil: John, Thanks for your question. The answer depends on the nature of the asset. You would pay tax on the gain over your basis. Your basis is cost minus any depreciation taken. Some of the depreciation would be recaptured, meaning you pay tax at ordinary...

Tax Law (Questions About Taxes): Tax - a term, obtaining a birth certificate, long term capital gain
obtaining a birth certificate, long term capital gain, currency unit: Patricia: I have not a clue of your question or subject matter. Currency values change on the international market but in the us if dealing in dollars all the time you do not raise or lower the value. If you are changing the value it would either be a...

Tax Law (Questions About Taxes): Tax about transfer of property, quick claim deed, allowable exemptions
quick claim deed, allowable exemptions, kind answer: T.C., I think you are referring to a quit claim deed. This would be treated as a gift, and possibly subject to gift tax. With allowable exemptions, there would probably be no gift tax to pay. On a gift, his basis would be your basis carried over to him...

Tax Law (Questions About Taxes): Tax treatment for GMAC zero coupon bonds, zero coupon bonds, payment bonds
zero coupon bonds, payment bonds, bad publicity: Vivian, Thanks for your question. I cannot answer the question, as I do not know the assumed interest rate attached to these bonds. You would need to discuss this with your broker. In selling the bonds, you would report the interest expense on...

Tax Law (Questions About Taxes): Tax treatment of Irrevocable trust, life insurance trust, irrevocable life insurance trust
life insurance trust, irrevocable life insurance trust, life insurance company: Alec, Thanks for your question. Yes, the proceeds from the sale of stock is taxable income, at capital gain rates if the stock was held for more than 12 months. The trust can pay the tax on the gain. Or, if the proceeds have been distributed to the...

Tax Law (Questions About Taxes): Tax Withholding, form ss4, employer identification number
form ss4, employer identification number, contractor status: If there is no written agreement between the worker and the artist establishing a contractor status, you have an employee. You should file amended 941 reports for the quarters in which payments were made. This will also require that the artist obtain an...

Tax Law (Questions About Taxes): Tax Withholdings, 1040 instructions, tax withholdings
1040 instructions, tax withholdings, tax table: yes get a tax table form the 1040 instructions and look up your current tax and what it would be at your new status or you could ask your HR to compute it out or give you the W4 worksheet. also remember any change is not permanent you can always change agai...

Tax Law (Questions About Taxes): Tax Write Off, charitable institutions, s child
charitable institutions, s child, dependent care: Hi, Sorry but there is no way for him to deduct the expense. But if he gives you the money rather than paying it directly to the child care facility, you can use the child and dependent care deduction and give him whatever it saves you in taxes. That...

Tax Law (Questions About Taxes): Tax Write- Offs for 2007, adjusted gross income, standard deduction
adjusted gross income, standard deduction, medical work: Stephanie, Thanks for your question. That is correct. You cannot take the standard deduction and itemize also. Additionally, you can only deduct medical expenses that exceed 7.5% of your adjusted gross income. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Tax Write-Off on a property purchased abroad, non immigrant visa, indian citizen
non immigrant visa, indian citizen, stancil: Rohit, Thanks for your question. A gift is not a tax deduction so there is no help there. You can deduct the interest on the mortgage of your home if you are legally liable for the debt. Also, you can only deduct interest on up to two homes. Hope...

Tax Law (Questions About Taxes): Tax on wife babysitting, self employment income, self employment tax
self employment income, self employment tax, income tax purposes: Hi Brian, Assuming the pediatrician is not withholding taxes from what he pays your wife, she will be subject to self employment tax (social security and medicare) as well as income tax. Self employment tax is 15.3 percent of her net self employment income...

Tax Law (Questions About Taxes): Tax on withdrawal from pension, home equity loan, retirement plan
home equity loan, retirement plan, pension plan: Hi, Personally I wouldn t touch a retirement plan. You would pay income tax on the money withdrawn, both Federal and state (if your state has an income tax). With a home equity loan you would pay interest but it may very well be less than 15% income tax....

Tax Law (Questions About Taxes): Tax withholding declaration on W-4 form, withholding allowances, stancil
withholding allowances, stancil, accrued interest: Steven, Thanks for your question. You can be subject to penalties and interest for having your taxes underwithheld. In addition, if you deliberately and knowlingly falsify your W-4 (by claiming more withholding allowances than you are allowed)in an...

Tax Law (Questions About Taxes): Tax witholdings, withholding allowances, stancil
withholding allowances, stancil, federal taxes: Debby, Thanks for your question. Without knowing the actual amount of your taxable income, it would be hard for me to tell you how much your tax liability would be. However, you may be claiming too many allowances. If you claim 2 on the retirement...

Tax Law (Questions About Taxes): Tax write offs and such, local community college, lifetime learning credit
local community college, lifetime learning credit, tax write offs: There is no way I can tell you what the difference will be in your tax return. There is simply not enough for me to work with and calculations are beyond the scope of this board. Look to the hope and lifetime learning credit for your tuition only. ...

Tax Law (Questions About Taxes): Tax write-offs, errors and omissions insurance, standard mileage rate
errors and omissions insurance, standard mileage rate, full time job: Hi, You can deduct your auto expenses for business use. You can use the business portion of actual expenses or the standard mileage rate (48.5 cents per mile for 2007). Either way you need to maintain a written record of business miles and you will also...

Tax Law (Questions About Taxes): Tax write offs, business mileage, automobile expenses
business mileage, automobile expenses, stancil: Craig, Thanks for your question. As a self employed person, you can treat your automobile expenses in one of two ways. You may take mileage at the prevailing rate allowed by the IRS for all business mileage or you may deduct actual expenses. If...

Tax Law (Questions About Taxes): Tax write off question, standard deduction, tax deduction
standard deduction, tax deduction, ivan: Hi Theresa A contribution to a charity would get written off as a deduction on Schedule A ( at market valuer)however you are most likely to have a higher tax deduction if you use the standard deduction and even then your tax write off would not benefit...

Tax Law (Questions About Taxes): Tax write off question, irs pub 526, cash donations
irs pub 526, cash donations, charitable contributions: Hi, The deduction for donated items is the lower of your basis (generally what you paid for it) or the fair market value on the date of the donation. If you re talking about valuables such as art work or jewelry, you would need to get an appraisal to substantiate...

Tax Law (Questions About Taxes): Tax write off question, irs gov, standard deduction
irs gov, standard deduction, tax bracket: If you can itemize (use Sch A) then for every $100 worth of deductions over the standard deduction is worth whatever your tax bracket is. For example, if you are in the 15% tax bracket and you exceed your standard deduction by $3,000, you would save $450...

Tax Law (Questions About Taxes): Tax write off question, form 8283, itemized deduction
form 8283, itemized deduction, stancil: Theresa, Thanks for your question. If you donate property to a qualified charitable organization (such as the Salvation Army), you can take a tax deduction for the fair market value of the goods donated. The organization will give you a receipt, indicating...

Tax Law (Questions About Taxes): Tax write off questions, employee business expenses, adjusted gross income
employee business expenses, adjusted gross income, itemized deduction: Hi, Unreimbursed employee business expenses are deductible as an itemized deduction on Schedule A to the extent they exceed 2% of your adjusted gross income. This would include the uniforms you mentioned. Teachers can deduct up to $250 of educator expenses...

Tax Law (Questions About Taxes): Tax write-off for time volunteered at Nursing Home, doctors and nurses, helping mom
doctors and nurses, helping mom, restorative therapy: Hello, Sorry no charitable contribution. If you paid more than half her support for 2005 then you might be able to claim a dependency exemption for her. Although this is gray area. If she is recognized by IRS as a dependent there might be tax credits...

Tax Law (Questions About Taxes): Tax write-off for Volunteer time at Nursing Home, doctors and nurses, helping mom
doctors and nurses, helping mom, restorative therapy: Your only compensation is a good feeling about helping your mother. Sorry to say but that is your only tax deduction also. Your time is of no value to the IRS, even if you were doing this for someone not related to you. Your mileage may be, IF you itemize...

Tax Law (Questions About Taxes): Back Tax writeoffs, tax writeoffs, capital improvements
tax writeoffs, capital improvements, taxable gain: Hi, No, there is no way to claim a deduction for the renovation expenses unless you are using it as a business property (i.e., renting it out). However keep all your receipts because if you decide to sell it, capital improvements are added to your basis...

Tax Law (Questions About Taxes): Tax Year?, social security tax, irs help
social security tax, irs help, tax debts: Andrew, Thanks for your question. The date for filing Form 4361 is the due date of the return in the 2nd year in which you have ministerial earnings. Since you first had such earnings in 2004, the exemption should have been filed by April 17, 2006....

Tax Law (Questions About Taxes): Tax year for "qualified education expenses", ira withdrawal, qualified education expenses
ira withdrawal, qualified education expenses, ira distribution: They are deductible in the year paid, so 2007. As for the additional IRA withdrawal, it looks like you want to pay the school loan off and that will result in that amount of IRA distribution to be penalized 10%. Paying off of loans is not an allowed exception...

Tax Law (Questions About Taxes): Tax, state tax returns, turbotax
state tax returns, turbotax, schedule c: Dear Takayuki, You can do it yourself if you are sure you know what you are doing and how to do it.... Also, you could take advantage of one of the online E-file services such as TurboTax and for a nominal fee (a lot less that a tax professional) you...

Tax Law (Questions About Taxes): Taxability of benevolence gifts, volunteer forum, paul thanks
volunteer forum, paul thanks, gift money: Paul, Thanks for your question. The IRS position is that anything you give an employee is not a gift, but taxable income (excepting certain items under $25 in value). All cash is considered compensation, as is making payment on behalf of the employee....

Tax Law (Questions About Taxes): Taxability of IRA Distribution to an Estate, ira trustee, ira distributions
ira trustee, ira distributions, ira assets: Don, Assuming the estate s assets were distributed to the beneficiaries within one year of your mother s death, the estate will not be paying the tax. Here is what needs to happen. First, you will need to file a final tax return for your mother. ...

Tax Law (Questions About Taxes): Taxability of IRA Distribution to an Estate, ira distribution, stancil
ira distribution, stancil, fifteenth day: Yes, there is a difference in the estate tax and the estate income tax. The latter is the 1041 and the estate is taxed on income from the estate. It is filed by the administrator of the estate. It is due the fifteenth day of the third month after the end...

Tax Law (Questions About Taxes): Taxable Benefits, taxable benefit, airline employee
taxable benefit, airline employee, jennifer thanks: No additional cost means that having them in your class does not cause you to incur additional cost. For example, if an airline employee is allowed to fly free on a space available basis, that seat was not being sold, so there is no cost to the airline to...

Tax Law (Questions About Taxes): Taxable Horse Racing Ticket, social security number, otb
social security number, otb, tax return: Hi, You can do whatever you like with the winnings but if the winnings are reported to the IRS under your social security number, you need to include it with your other income on your tax return. If they don t report it then you don t have to include it....

Tax Law (Questions About Taxes): Taxable Income on judgement, form 1040 schedule c, form 1099 misc
form 1040 schedule c, form 1099 misc, social security tax: Dear Larry, YES, they are reporting this correctly... Had they paid you when they owed you instead of you having to take them to court, it would have been reported to you then on form 1099-MISC since that is what most companies to with commission..... ...

Tax Law (Questions About Taxes): Taxable income from another country, minimum threshold, american citizen
minimum threshold, american citizen, stancil: Companies do not issue 1040 s. You should get a W-2 for the income. You did not state when he died, if he died in 2007, you will have to file a return if his income exceeded the minimum threshold for filing. A credit is a reduction of the taxes...

Tax Law (Questions About Taxes): Taxable income?, tax concern, stancil
tax concern, stancil, gift taxes: Sharrone, Thanks for your question. You are not subject to income tax on these transfers, but your family may be subject to gift taxes depending on the amount that is given. If the amounts are less than $12,000 per year, there is no gift tax concern....

Tax Law (Questions About Taxes): No Taxable Mileage rate, personal tax return, federal per diem
personal tax return, federal per diem, receipt time: James, Reimbursements to employees for business-related overnight lodging and meals can be handled under a cash-receipt-based accountable plan, a per-diem-based accountable plan (cash receipts not required), or a nonaccountable plan. A. Cash-receipt-based...

Tax Law (Questions About Taxes): Taxable withdrawal?, stancil, cost basis
stancil, cost basis, adult children: You have paid taxes on the dividends received from the mutual fund. You have not paid taxes on the gain in the price of the shares. That s what you would be taxed on if you sell the shares - the difference in your proceeds and your cost basis. Most likely...

Tax Law (Questions About Taxes): Taxable or Not?, case settlement, marginal rate
case settlement, marginal rate, stancil: Bonnie, Thanks for your question. It would be taxable as ordinary income at your marginal rate, which can vary from 10 to 35% depending on your total income level and filing status. I could not say for certain, but it sounds like it would not be...

Tax Law (Questions About Taxes): Taxation of Capital Gains in LLC taxed as Corp., irs regulations, sole proprietor
irs regulations, sole proprietor, trading stocks: The LLC is a Disregarded Entity for the IRS. They don t recognize it at all. If you are a single member LLC, by default you are a sole proprietor. Which is where you already are and is not where you wanted to go. So this is not a good tax plan. Your best...

Tax Law (Questions About Taxes): Taxation of dividends - sub S Corporation, irs enrolled agent, personal income tax
irs enrolled agent, personal income tax, cpa organization: Both of those answers are based upon correct information, but somewhere along the way there is some confusion. All of your income is subject to income tax . Earned income is also subject to Payroll taxes (social security, medicare, workers comp, unemployment)....

Tax Law (Questions About Taxes): Taxation of gambling winnings, gambling addiction, state of michigan
gambling addiction, state of michigan, period 2: Has he filed a tax return? If not, that should clear everything up (or most of it). If he has filed, he needs to see a tax professional to see if it was filed correctly. If it was - he owes the money and the only negligent person is himself. If it...

Tax Law (Questions About Taxes): Taxation on House Sales, stancil, house sales
stancil, house sales, principal residence: Shelley, Thanks for your question. You have heard incorrectly. Much of what you are telling me is fragments of old law. Current law allows you to exclude up to $250,000 ($500,000 if married filing jointly) of gain from the sale of your principal...

Tax Law (Questions About Taxes): Taxation on House Sales, unforeseen circumstances, house sales
unforeseen circumstances, house sales, taxation: Hi, Each thing you were told was once true but is no longer the law. Now you can exclude $250,000 gain ($500,000 if married filing jointly) on your main home if you owned and lived in it as your main home for 2 years during the 5 years preceeding the date...

Tax Law (Questions About Taxes): Taxation on Insurance Settlement, short term disability, personal injury protection
short term disability, personal injury protection, disability coverage: Kevin, Thanks for you question. The only part of what you have told me that is taxable is the pay from your short-term disability policy. This assumes that the employer paid those premiums. Payment for your injuries is not taxable. Hope this...

Tax Law (Questions About Taxes): Taxation on International Payroll, international payroll, national payroll
international payroll, national payroll, valid visa: Varma, Thanks for your question. If you have maintained your U. S. citizenship, you will owe taxes on your earnings. If you have renounced your U. S. citizenship, you will still owe taxes on any income (such as interest) that you receive from U. S....

Tax Law (Questions About Taxes): Taxation on the same income by two states?, professional tax preparer, income tax return
professional tax preparer, income tax return, federal adjusted gross income: Hi Aamir, I have never had occasion to file either a Delaware or a Maryland tax return. But the way it usually works is that you start off with your total income, calculate the tax on that and then it is prorated based on the amount earned in each state....

Tax Law (Questions About Taxes): Taxation (or lack thereof), paycheck stubs, social security and medicare
paycheck stubs, social security and medicare, business checking account: Jon: You should contact your local IRS Office and file a complaint against the employer. You should also file a complaint with your local State Taxing authority. I believe the employer is by law required to withhold income tax in addition to the other...

Tax Law (Questions About Taxes): Taxation on land sale, marginal tax bracket, real estate taxes
marginal tax bracket, real estate taxes, mike thanks: Mike, Thanks for your question. Your gain is determined by taking the proceeds of the sale and subtracting your cost basis. Interest and real estate taxes paid were deductible in the years in which they were paid, therefore not a part of your basis....

Tax Law (Questions About Taxes): Taxation for an NJ LLC, personal tax return, personal tax returns
personal tax return, personal tax returns, business cashflow: The minimum $500 tax is a State of NJ rule and I don t know if that applies to LLC s or not, so a quick call to your state tax department would give the absolute answer. Let s go with probably so. AS far as losses go; yes the losses are passed to you. AND...

Tax Law (Questions About Taxes): Taxation on rental income, stancil, rough guide
stancil, rough guide, cpa: Michelle, Thanks for your question. Your income from the rental activity would be taxed at regular rates which vary from 10 to 35 percent depending on your income level and filing status. Any expenses of the rental activity are deductible against...

Tax Law (Questions About Taxes): Taxation on Short Sale of a CA Home, capital gains tax, two and a half years
capital gains tax, two and a half years, mortgage balance: If you are insolvent (and that has nothing to do with your income - it means you are totally upside down when it comes to expenses over income) then the forgiven amount is not taxable. If you are solvent, the forgiven amount will be taxable. Please see...

Tax Law (Questions About Taxes): Taxation on Stock Dividends, qualified dividends, stock dividends
qualified dividends, stock dividends, dividend check: Nancy, Thanks for your question. You state stock dividends, but from your message, I presume you mean cash dividends. Stock dividends are dividends in additional shares of stock. At the federal level, qualified dividends are taxed at the capital...

Tax Law (Questions About Taxes): Taxation on sale of land, maximum tax rate, long term capital gain
maximum tax rate, long term capital gain, capital gains tax: Hi, First of all you need to determine how much you paid for the land not including the house. I know it s usually stated as a flat price when you buy a house. But the tax assessor may be able to help you separate the house from the land. Once you ve...

Tax Law (Questions About Taxes): Taxe payment on trip won, frequent flyer miles, federal income tax
frequent flyer miles, federal income tax, prize winnings: In certain and limited circumstances you have to pay airport duties and other special taxes in advance. For example, when you exercise frequent flyer miles, you have to pay the airline the airport taxes. That being said, researching the Bluegreen Corporation...

Tax Law (Questions About Taxes): Taxed Twice on my Paycheck, current checks, gross pay
current checks, gross pay, revolving fund: Kelly: As I understand your question. Your last months pay check was misplaced. The employer issued a replacement pay check. Both checks had the correct with holding with held from your gross pay. Now you have received the misplaced and your current...

Tax Law (Questions About Taxes): Taxes, wages, taxation
wages, taxation: Dear Cheryl, This depends on what the settlement was rewarded for.... Not enough information.... If it included or was for LOST WAGES, then YES, it is taxable on the part that was for LOST WAGES... Other rules apply for other types of settlements and...

Tax Law (Questions About Taxes): Taxes, real estate investor, tax loopholes
real estate investor, tax loopholes, investor tax: Dear Ihab, I would NEVER believe anything that says there is an IRS loophole.... The IRS has strict rules and laws and if you TRY to do loopholes, you will eventually get caught... However, this is a decision you will have to make... thank you, ...

Tax Law (Questions About Taxes): Taxes, bsed, best estimate
bsed, best estimate, w2: you have up to April 15 to file your return so if they are somewhat late live with it if you do not have the information by the filing date try to do your best estimate bsed on you pay stubbs and attach an explanation to the irs as to the reason your...

Tax Law (Questions About Taxes): Taxes, w9 form, sec number
w9 form, sec number, soc sec: as a contractor you are subject to back up withholding unless you sign a W9 form indcating that you have a valid soc sec number and you will make adequate estimated payments when you figure your estimated payments add aprox 8% to cover your self employmen...

Tax Law (Questions About Taxes): Taxes, estate taxation, federal income tax
estate taxation, federal income tax, stancil: Brison, Thanks for your question. The Federal tax law is entirely too complex and lengthy for all of it to be explained in one easy to read text. About the best book I know of is Prentice Hall s Federal Income Tax 2006. This book is published annually,...

Tax Law (Questions About Taxes): Taxes, unemployment benefits, point hope
unemployment benefits, point hope, stancil: Kamilah, Thanks for your question. When a joint return is filed, both parties are liable on the return. So the simple answer to your question is that he may be held liable for the taxes. However, the IRS will attempt to collect wherever they can - if...

Tax Law (Questions About Taxes): Taxes, marginal rate, eric eric
marginal rate, eric eric, stancil: Eric, Thanks for your question. Yes, that will reduce your refund, as the $1,350 will be subject to income tax at your marginal rate, which can be between 10 and 35% depending on how much taxable income you have. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Taxes, bad lawyer, child tax credit
bad lawyer, child tax credit, divorce decree: Dear Ginger, First of all you had NO LEGAL right to claim one of the two children and you did it anyway...Your ex-husband is NOT going to be stupid enough to give up his right to claim the son he was given the right to claim because it will cost him penalties...

Tax Law (Questions About Taxes): Taxes, income tax returns, federal income tax returns
income tax returns, federal income tax returns, home equity loan: Hi Will, Credit card interest and finance charges are not deductible. Home equity interest is deductible but has limitations. Home equity debt is limited to the lesser of the fair market value of the home minus total acquisition indebtedness on that home...

Tax Law (Questions About Taxes): Taxes, capital gains taxes, capital gains tax
capital gains taxes, capital gains tax, weird situation: Hi Teressa, If you own and live in a home as your main home for 2 years during the 5 years preceeding the date of sale and have not excluded gain on another main home within 2 years, you can exclude $250,000 gain ($500,000 if married filing jointly). The...

Tax Law (Questions About Taxes): Taxes, arangements, thak
arangements, thak, money in the bank: Dear Donald, I suggest that you file your tax returns NOW... If you have years where your ONLY income was social security, then there will be no need to file.... However, for years that you had earned income or investment income AND s.s. then you need to...

Tax Law (Questions About Taxes): Back Taxes, form 4506 t, previous years
form 4506 t, previous years, 8 years: Jennifer, I really can t tell you what will happen regarding an audit. I ve seen 10 years worth of returns not be audited and 10 years worth audited. He will not go to jail, but if he owes money, he will have interest and penalty added on. Just get...

Tax Law (Questions About Taxes): Taxes, social security and medicare, federal income tax
social security and medicare, federal income tax, exact percentage: Hi Phillip, Assuming you re paid as an employee rather than as an independent contractor, they take out 7.65% for social security and medicare. They will also withhold federal income tax based on how much you earn, your marital status and how many exemptions...

Tax Law (Questions About Taxes): Taxes, mr fixit, phone interview
mr fixit, phone interview, filers: No, SOME CPAs do taxes, others either do not or have not business doing them. Enrolled Agents all do taxes. You should make some calls and do a phone interview to see if the tax professional deals with non-filers and does collection work. These will...

Tax Law (Questions About Taxes): Taxes, retirement account, income taxes
retirement account, income taxes, ira: No. A contribution to an IRA is a compensated contractual event. you are compensated by avoiding the income taxes, and contractual because it is fully disclosed that if you participate, you agree to the terms that were disclosed, including penalties...

Tax Law (Questions About Taxes): Taxes, step dad, eic
step dad, eic, state taxes: I really doubt you have 50% or more of support to a baby on $4K of income. If Mom and Step Dad paid over 50% of the support of your little one, then they get to claim him. Honey, in reality, you don t qualify for much except whatever was what withheld...

Tax Law (Questions About Taxes): Taxes, starting my own business, elizabeth thanks
starting my own business, elizabeth thanks, stancil: Elizabeth, Thanks for your question. It depends on how much you owe. The penalties and interest, at this point are based on the amount of taxes owed. However, if you do not file soon, they could bring criminal charges which could result in significant...

Tax Law (Questions About Taxes): Taxes, www irs gov, information goto
www irs gov, information goto, business expenses: Hemant: Although it is not a good ideal to co-mingle personal funds with business fund you can submit the expenses as cash trans actions with the supporting documentation to document the expenses and business expenses. John for more information goto...

Tax Law (Questions About Taxes): Taxes, irs gov, inpression
irs gov, inpression, seperatley: Shirley: 1. No that is not true. It is 3 years. They may take most of the refund to pay the peantly for filing the return late. 2. No you may not. You will be file seperatley and the household deductions you would otherwise be entitiled to claim...

Tax Law (Questions About Taxes): Taxes, long term capital gain, capital gains taxes
long term capital gain, capital gains taxes, irs rules: Teressa: You can write the cost of renting the house, the interest you pay on the note, the property tax and any other related out of pocket expense you pay to rent the house. You may depreciate the building according to the IRS rules. The other side...

Tax Law (Questions About Taxes): Taxes, irs gov, agnew
irs gov, agnew, google: Mr. Agnew: There are plenty of tax law on the books requiring citizens to pay their taxes. That statement is an urban legend started many years ago. Many people have been put in jail protesting their right not to file and pay income taxes. All the...

Tax Law (Questions About Taxes): Taxes, form 1040 schedule c, form 1040es
form 1040 schedule c, form 1040es, form 1040 schedule se: Dear Bonnie, In your case you will have to file a tax return even if you only earn $1.00...... You will have to file forms 1040, 1040-schedule-C, 1040-schedule-SE, maybe form 4562, and you will have to file form 1040ES to pay your social security and medicare...

Tax Law (Questions About Taxes): Taxes, stancil, mortgage company
stancil, mortgage company, taxable income: Terri, Thanks for your question. They certainly can. They will issue you a 1099-A or 1099-C for the amount of forgiven debt. Forgiven debt is taxable income to you. You will report this on line 21 of your 1040. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Taxes, state tax returns, personal exemption
state tax returns, personal exemption, standard deduction: Hi, Sounds like she needs to file since her income is more than the total of her standard deduction and personal exemption. For 2006 her standard deduction was $5,150 and her personal exemption $3,300. It was slightly less than that for 2005 and will...

Tax Law (Questions About Taxes): Taxes, charitable deductions, performing artists
charitable deductions, performing artists, pocket expenses: Sarah, If you are not being paid for these concerts, you may have some charitable deductions for travel and out of pocket expenses. If you are being paid to perform at these concerts, then you are looking at a different set of circumstances. You would...

Tax Law (Questions About Taxes): Taxes, head of household, married person
head of household, married person, seperately: Hi Laila Thanks for the question. A married person can only file as head of household if they have a dependant child to whom they provide over half of the support, and did not live with their spouse at anytime during the tax year Hope this answers...

Tax Law (Questions About Taxes): Taxes, self employment tax, self employment income
self employment tax, self employment income, federal estimated tax payments: Pam, Tax is based on taxable income, not on gross income. Taxable income is gross income less deductions and exemptions. Since you are self-employed, you probably have some business related deductions for supplies, travel between customers, etc. These...

Tax Law (Questions About Taxes): Taxes, stancil, income taxes
stancil, income taxes, tax return: Roshni, Thanks for your question. Everyone who is employed must complete a W-4. If your earnings are sufficient (over $5300)you will have to file a tax return. Also, if any income taxes are withheld, you can file an get them back if you owe no taxes....

Tax Law (Questions About Taxes): Taxes, irs web site, business lisence
irs web site, business lisence, irs gov: Hi Yvonne Thanks for the question Yes you will need to have a Federal Employers ID Number. File form SS-4 (which can be found on the IRS web site www.irs.gov) You will also need a sellers ID number from Delaware and a business lisence in the city...

Tax Law (Questions About Taxes): Taxes, sole proprietor, stancil
sole proprietor, stancil, prohibitions: Cortez, Thanks for your question. Certainly. There are no prohibitions against changing your form of business. However, if you are not at risk for all your investment, then you would probably need to file as a partnership initially. Hope this helps....

Tax Law (Questions About Taxes): Taxes, bonus checks, state income tax
bonus checks, state income tax, odd jobs: You cannot file as single. You are married and in Texas, you live in a community property state so there are even worse laws. If you feel your taxes would be lower by filing married filing separately, please see a TX tax professional who knows those rules...

Tax Law (Questions About Taxes): Taxes, congratulations on your graduation, roomate
congratulations on your graduation, roomate, 5 months: Christine, Thanks for your question. There are two scenarios. Since you were a student for part of 5 months during the year, your parents are entitled to claim you on that basis assuming they paid over half your support for the year. However, since...

Tax Law (Questions About Taxes): Taxes, head of household, entertainment transportation
head of household, entertainment transportation, head of household filing status: Hi, If you provide more than half of her support, you can claim her. Her support includes fair rental value of her room(s) and food as well as clothing, entertainment, transportation and medical expenses. I suggest you sit down and determine her total...

Tax Law (Questions About Taxes): Taxes on 401k Cash out, credit card debt, federal income tax
credit card debt, federal income tax, 401k plans: Sharron, Technically, there isn t a 20% tax on premature distributions from 401(k) plans. The 20% figure you are hearing about is an amount required to be withheld for Federal income tax by the plan administrator. The distribution is considered taxable...

Tax Law (Questions About Taxes): Taxes, www irs gov, irs publications
www irs gov, irs publications, b j worth: Eric, Thanks for your question. You should make an estimated payment of your taxes as soon as possible. This will demonstrate good faith on your part and will minimize any penalties and interest. When you file your tax return, you will probably qualify...

Tax Law (Questions About Taxes): Taxes, self employment tax, form 1040es
self employment tax, form 1040es, business miles: Hi Don, That s a very nice start for the year. Congratulations! You report your earnings and pay estimated taxes quarterly on Form 1040ES which you can obtain from the IRS at 1 800 829-1040. The first quarterly estimate is due April 15, 2005, the second...

Tax Law (Questions About Taxes): Taxes, self employment tax, form 1040 schedule se
self employment tax, form 1040 schedule se, irs gov: Dear Don, NO! The IRS considers these commuting miles... The only mileage that you can deduct for business purposes are miles that you travel to show property, meet with prospective buyers etc.... Even then you must keep a daily log showing date, name...

Tax Law (Questions About Taxes): Taxes, form 1040es, self employment tax
form 1040es, self employment tax, www irs gov: Congrats on your first sale! You will file Sch C and SE with your tax return (those are found at www.irs.gov) Depending on your situation, you may have to make estimated payments. Find out if you do and how to do them by looking at the instructions regarding...

Tax Law (Questions About Taxes): Taxes, self employment tax, form 1040es
self employment tax, form 1040es, independent contractor: Unfortunately IRS requires that your estimates should equal 1/4 of any tax that will be due with your return for 2005 which won t even be required to be filed until 4/15/06. You may, instead, pay 100% of the tax(not refund or balance due) from your 2004...

Tax Law (Questions About Taxes): Taxes for Asset Sell of Our Business, franchise business, s corp
franchise business, s corp, s corporation: The IRS consistently holds that moneys used to pay of debt are considered income and subject to tax. Since you are a sub-S corporation all of the sale value and all of the tax liability will be passed to you, and you will personally pay taxes on the net....

Tax Law (Questions About Taxes): Taxes on alimony or divorce settlement, auto repair business, income tax form
auto repair business, income tax form, divorce settlements: Phil, Thanks for your question. I doubt if you will have any success with the IRS. As you have described it, the alimony sounds more like a divorce settlement which cannot be deducted. In addition, you state that your wife listed it as an itemized...

Tax Law (Questions About Taxes): Taxes on Bonuses, taxes on bonuses, stancil
taxes on bonuses, stancil, hr department: RaShane, Thanks for your question. With large bonuses, the withholding tends to be excessive. You might want to be certain that too much is being withheld. If the 40% includes social security, medicare, and state taxes, the withholding is probably about...

Tax Law (Questions About Taxes): Taxes and Budgets, effective tax rate, tax brackets
effective tax rate, tax brackets, financial changes: Hi, You can look at your most recent return and calculate the effective tax rate (your total tax liability divided by your taxable income). Right now there are six tax brackets: 10%, 15%, 25%, 28%, 33% and 35%. For a single person in 2006 the first $7,550...

Tax Law (Questions About Taxes): Taxes and Budgets, social security tax, financial changes
social security tax, financial changes, ballpark estimate: Chris it is answerable between the standard deduction and your personal exemption $5500+3300 your taxable income starts after $8800 after that you are taxed at 10% up to$7500 and 15% up to 30650 so if you earned $40,000 your tax would be about $4200 you would...

Tax Law (Questions About Taxes): Taxes For Civilian Contractors, tax rate schedules, foreign earned income exclusion
tax rate schedules, foreign earned income exclusion, earned income exclusion: Luke, You can exclude $82,400 of earned income while living abroad. There is some truth to the rumor. If you claim the foreign earned income exclusion, the non-excluded income is subjected to higher tax brackets than in years past. First, excluded...

Tax Law (Questions About Taxes): Taxes for Clergy, social security and medicare, state income tax
social security and medicare, state income tax, professional expenses: Dan, Thanks for your question. Without actually seeing the numbers, I cannot tell you if you are doing it correctly. However, if she has no taxable income (or negative) she simply does not pay any income tax. File, showing no tax due. I would add,...

Tax Law (Questions About Taxes): Taxes for Commission based salary, form 1040 es, stancil
form 1040 es, stancil, tax liability: Ivan, Thanks for your question. The IRS has a form 1040-ES that you use to make quarterly deposits of your estimated tax liability. These deposits are due April 15, June 15, Sept. 15, and Jan 15. Included with the 1040-ES is a worksheet that you can...

Tax Law (Questions About Taxes): Taxes for a Company - offsets related to Charities, south east australia, tax offsets
south east australia, tax offsets, recycling company: You are correct rules will be different in each locale. For the US, the deduction for charitable contributions is limited to 10% of net profit. The company can give more but won t be able to write it off. In the US the Charity will need to be registered...

Tax Law (Questions About Taxes): Taxes and Contractors, sole proprietors, tax questions
sole proprietors, tax questions, independent contractors: Hi Keith. If you do a job for $2,000 and pay a subcontractor $500, you will report $2,000 in income and a $500 deduction, netting $1,500 in taxable income. As to the question about withholding, as long as these are independent contractors (as opposed...

Tax Law (Questions About Taxes): Taxes on Credit Card payments, credit card payments, limit charges
credit card payments, limit charges, 1099 forms: Craig, Thanks for your question. It is all perfectly legal and logical. You did not have the money, but you were forgiven a debt you owed - you purchased merchandise, services, fees, and the like with your credit cards and did not have to pay full...

Tax Law (Questions About Taxes): Taxes for child care employee, payroll tax reports, www irs gov
payroll tax reports, www irs gov, quarterly payroll: Dear Stacie, You can do this one of two ways, but it is really up to the exact situation.... If this person is IN BUSINESS for herself as a nanny then you can pay her without taking out any taxes and then at the end of the year give her a 1099-MISC...

Tax Law (Questions About Taxes): Taxes on a child, line 6c, head of household
line 6c, head of household, divorce papers: Dear Kim, As long as that child lives with you and you are the custodial parent, you claim Head of Household every year even on the years you do not claim the child as a dependent.... See the instructions for line 6c on the 1040...... If your income qualifies,...

Tax Law (Questions About Taxes): Taxes for contract work, social security and medicare, federal income tax
social security and medicare, federal income tax, state income tax: Hi, Your employer should have had you complete a form W4 showing your marital status and exemptions. They use that to determine how much Federal income tax to withhold. If you aren t sure what you put on the form check with them to be sure it was completed...

Tax Law (Questions About Taxes): Taxes -- Deduction for student loans, lifetime learning credit, educational loans
lifetime learning credit, educational loans, stancil: Sandra, Thanks for your question. You have been misinformed. There is no deduction for student loans. You can take the deduction for tuition and fees or the Lifetime Learning Credit for qualified expenses paid, but no deduction for loans. Hope this...

Tax Law (Questions About Taxes): Taxes & Divorce, social security administration, divorce settlements
social security administration, divorce settlements, divorce settlement: Hi Larry, Normally divorce settlements are not taxable unless all or a portion is deemed to be alimony. The social security question should be asked of the Social Security Administration. The website is www.ssa.gov or she could look in her local phone...

Tax Law (Questions About Taxes): Taxes on a Divorce Settlement, irs code, divorce settlement
irs code, divorce settlement, ken ken: Ken, There is no IRS reporting requirement. The general rule under Section 1041 is that no gain or loss shall be recognized for property transferred to a spouse, or former spouse if incident to the divorce. The transfer is treated as a gift; the transferee...

Tax Law (Questions About Taxes): Taxes and Divorce, speedy reply, credis
speedy reply, credis, time claim: You are correct, you do not need to claim the personal exemption in order to get the EIC. However, the residency test is applied to the EIC, which states that the child must have lived with you more than half the year to qualify for the EIC. John Stanci...

Tax Law (Questions About Taxes): Taxes on damages, nasd arbitration, tax accountant
nasd arbitration, tax accountant, dear brian: Dear Brian, The answer is YES.... Since this is money that he would have had orginally for use and could have withdrawn it from his IRA at his discression then this $120K also becomes taxable.... He should talk to his lawyer and TAX accountant and pay...

Tax Law (Questions About Taxes): Taxes for deceased father who hasn't filed.., social security disability, deceased father
social security disability, deceased father, stancil: Angela, Thanks for your question. If the taxpayer is due a refund and files the return, he will not normally be penalized. However, if the social security was the only income he had, he was correct in not filing, as that is below the level for taxing...

Tax Law (Questions About Taxes): Taxes for deceased parent, wills office, deceased parent
wills office, deceased parent, tax professional: You need to contact local officials, be it a lawyer, a tax professional or someone at the register of wills office at the county office. You may even try the funeral director, they may have some papers for you to follow. Good luck, Helen, EA in P...

Tax Law (Questions About Taxes): Taxes deducted from paychecks, check answer, state taxes
check answer, state taxes, irs: Valeria: How do you know the increase in deductions is based on the new raise? Did you ask your employer why more money is being deducted from your check? Is it legal for an employer to deduct more money from an employee s check? Yes as long as the...

Tax Law (Questions About Taxes): Taxes/deductions for house flips, full time job, time occupation
full time job, time occupation, gain capital: Mary Beth, Thanks for your question. If you have owned the house for 12 months or less, you will be taxed at ordinary rates on the gain. Capital gain rates only apply if you have owned the property over 12 months. Additionally, if this is your full...

Tax Law (Questions About Taxes): Taxes on per diem, tax home, per diem, tdy
per diem, tdy, paying taxes: You have to look at intent. If you intend to go back to your site at any time within at least (to be safe) 6 months, the IRS is probably going to say you never intended to leave. The new site should be at least 50 miles away from the old site. Helen,...

Tax Law (Questions About Taxes): Taxes on disibility, social security disibility, ssa website
social security disibility, ssa website, what is fica and medicare: June, your disability will not have SS and Medicare taxes taken out, only federal taxes and probably CT taxes (I don t practice in CT, so I don t know the rules there if it will be taxable to them or not - you need to ask that part locally). You CAN have...

Tax Law (Questions About Taxes): Taxes due on Sale of Residence, kevin thomas, msgt
kevin thomas, msgt, income taxes: Hi Kevin, If you owned and lived in the home as your main home for 2 years during the 5 years preceeding the date of sale and you haven t excluded gain on another main home within 2 years, you can exclude $250,000 of gain ($500,000 if married filing jointly)....

Tax Law (Questions About Taxes): Taxes.Educational expenses, qualified education expenses, lifetime learning credit
qualified education expenses, lifetime learning credit, school expenses: Tony, Thanks for your question. You are eligible for the lifetime learning credit. This credit allows you a credit against your tax of 20% of qualified education expenses up to $10,000. This means you can get up to a $2,000 reduction in your taxes....

Tax Law (Questions About Taxes): Taxes with the Elderly and Disabled, social security check, stancil
social security check, stancil, conservatorship: Angelia, Thanks for your question. 1. Yes he does have to file, since his gross income exceeds the minimum for filing, even though he may owe no tax. 2. Since he is married, his filing choices are married filing jointly or married filing separate....

Tax Law (Questions About Taxes): Taxes and the elderly, social security checks, standard deduction for 2004
social security checks, standard deduction for 2004, personal exemption: Hi Shannon, Unfortunately you can t deduct the mortgage interest on her home. But are you sure you aren t providing more than half of her support and can t claim her as a dependent? Assuming your mother is single, her standard deduction for 2004 is...

Tax Law (Questions About Taxes): Taxes on executor's fees, executor fees, accountant fees
executor fees, accountant fees, sizable estate: Charles, Thanks for your question. The executor fees are taxable ordinary income, usually listed as other income on line 21 of your 1040. Those expenses are deductible from the value of the estate before calculating estate taxes. Hope this helps....

Tax Law (Questions About Taxes): Taxes on Foreign monies, stancil, point of origin
stancil, point of origin, rental property: Niki, Thanks for your question. A US citizen or resident is subject to tax on all his/her income regardless of the point of origin. Worded another way, if it was a taxable transaction in the US, the fact that the sale occurred in another country is...

Tax Law (Questions About Taxes): Taxes and family, www irs gov, minnsota
www irs gov, minnsota, happy at home: Matt, re your taxes - look at your W-2 form in the federal box. That is the only amount you will get back federally. And if you don t trust your mother, you can easily do your own taxes, all the forms and instructions are at www.irs.gov Re your insurance...

Tax Law (Questions About Taxes): Taxes have not been filed in years, www irs gov, home mortgage interest
www irs gov, home mortgage interest, state income taxes: Hi Sharon, You can get transcripts of your tax returns from the IRS but I believe you will have to specify which years. You can ask them when you last filed but don t be surprised if they can t tell you that. You ll need W2 s and any other income infomation,...

Tax Law (Questions About Taxes): Taxes on Gifts to parents/sister, stancil, tax benefit
stancil, tax benefit, what this means: I am not talking about any benefits. You do not get a tax benefit from a gift to an individual. However, when you make a gift to someone, that gift may be subject to the gift tax. If the amount of the gift exceeds $12,000 to one person in any one year,...

Tax Law (Questions About Taxes): Taxes on gifts, irs web site, federal tax return
irs web site, federal tax return, www irs gov: Dear Eileen, Each SPOUSE can give and I am sorry I do not know what that figure will be for 2006.... So if the you are married, and the figure is $11k then each of you can give her $11k..... Check the IRS web site at www.irs.gov and try form 706 or...

Tax Law (Questions About Taxes): Taxes on gifts and gains from Indian investments, capital gains rate, indian investments
capital gains rate, indian investments, stancil: Srinivas, Thanks for your question. The gifts are not considered income. However, the gains on the sale of the stock are reportable on your 1040. If you hold the stocks for more than 12 months, the gains are taxed at the preferred capital gains rate...

Tax Law (Questions About Taxes): Taxes on gifts, blue book value, stancil
blue book value, stancil, speedy response: Alexandra, I am not sure by what you mean the trust has four people listed on it. Are they beneficiaries, administrators, trustees? And what, if any, relationship do you have to them? What kind of trust is it? If the four people listed on the trust...

Tax Law (Questions About Taxes): Taxes on a home sale, tax implications, car loan
tax implications, car loan, money: Hi Paul, If you owned and lived in your home as your main home for 2 years during the 5 years preceeding the date of sale and you have not excluded gain on another main home within 2 years, you can exclude $250,000 of gain on the sale ($500,000 if married...

Tax Law (Questions About Taxes): Taxes on Inherited Home, family limited partnership, inheritance tax
family limited partnership, inheritance tax, kind efforts: Alison, If the estate is $2 million, there is no estate tax unless she has made prior taxable gifts during her lifetime. Inheritance taxes are based on the value of the property inherited, not the increase in value from the time of purchase. As far...

Tax Law (Questions About Taxes): Taxes on Inherited Stocks that are cashed in, stancil, state of kentucky
stancil, state of kentucky, cpa: Tashua, Thanks for your question. You will pay taxes on the gain which is determined by subtracting their value as of the date of death from your sales proceeds. The federal rate is 5 or 15% depending on your total income and Kentucky varies from...

Tax Law (Questions About Taxes): Taxes for Investment Property, www irs gov, form 4952
www irs gov, form 4952, form 8582: Dear Mike, The $6000 will NOT come into play until you see these properties.... This will added to the cost basis of the properties.... Since this is not really my expertiece, I am not sure if you will file 4952 or 8582, but I do know that if this is a...

Tax Law (Questions About Taxes): Taxes on IRA inheritance, beneficiary ira, ira owner
beneficiary ira, ira owner, credit card bills: Hi, When you set up a Traditional IRA you can make deductible or non-deductible contributions. If your father had made non-deductible contributions he would have paid no tax on those contributions when he took a distribution and so neither would you. ...