About Experts Sitemap - Group 50 - Page 55 2014-10-21

Tax Law (Questions About Taxes): Self Employed Single LLC .... Social Security Tax, self employment income, self employment tax
self employment income, self employment tax, social security tax: Hi, When you do your tax return you will have income tax and self employment tax and a total of the two. The amount you have withheld at your job is deducted from the total tax to determine if you have a refund or a balance due. The self employment tax...

Tax Law (Questions About Taxes): Self Employed, www irs gov, itemized deduction
www irs gov, itemized deduction, business profit: Dear Demetra, Your PERSON medical out of pocket can NOT go on the Business Profit and Loss.... This is a personal deduction and IF you have enough other things to itemize then this goes with those on the 1040-schedule-A.... There is a book/publication...

Tax Law (Questions About Taxes): Self Employeed Deductions, financial services business, david answer
financial services business, david answer, phone food: You may deduct the periodicals and journals to research the performance of the investments which you offer. Licensing fees are deductible as is your continuing education costs. If you travel from your office to visit investors, the mileage may be a deduction...

Tax Law (Questions About Taxes): Self-Employment, form 1040 schedule c, sole proprietor business
form 1040 schedule c, sole proprietor business, glenda jones: Dear Glenda, Since this friend is working for you as a sub-contractor and YOU/YOUR BUSINESS is actually paying him, then your business will have to issue him a 1099-MISC form and report what he has made.... This way you can also take the deduction from...

Tax Law (Questions About Taxes): Self-Employment, sole proprietor business, glenda jones
sole proprietor business, glenda jones, social security and medicare: If he takes that all as personal income, these are the taxes that must be paid; Income tax, social security, medicare, workers comp, unemployment, and state and local taxes. The question is who will pay it. If he is an employee, you will pay all of the...

Tax Law (Questions About Taxes): Self-Employment, self employment tax, self employment income
self employment tax, self employment income, form 1040es: Hi Glenda, If he is self employed he will report his income and expenses on 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. He calculates the self employment...

Tax Law (Questions About Taxes): Self Employment Tax, self employment tax, notarial act
self employment tax, notarial act, hr block: for self employment tax your income is the amount you received less expenses remember half of your self employment tax is deductable I have no idea as to your state rules but for Federal tax your income is taxable including travel charged to your client...

Tax Law (Questions About Taxes): Self Employment Tax, self employment tax, irs gov
self employment tax, irs gov, jury duty: Dear Debi, Jury duty income is NOT self employmnet taxable, and you can go to www.irs.gov and download publication #17 and go to the chapter on OTHER INCOME or look at the back index for JURY DUTY INCOME and this will tell you how to handle it.... thank...

Tax Law (Questions About Taxes): Self-Employment Tax, self employment tax, form 1040 schedule c
self employment tax, form 1040 schedule c, dear ron: Dear Ron, The IRS has addressed it in a way... The IRs says ALL income is taxable.... Therefore, this is income and this person was in the BUSINESS of selling OLD personal items for a PROFIT and therefore, he/she must complete form 1040-schedule-C and...

Tax Law (Questions About Taxes): Self Employment tax, self employment tax, bottom line profit
self employment tax, bottom line profit, emloyment: Hi Debbie The self employment tax only refers to Federal Income as far as Alabma is concerned what ever the bottom line is is consider Alabama oridinary income when you do your federal tax be sure that you take a deduction for the half of the se emloyment...

Tax Law (Questions About Taxes): Self Employment, internet home businesses, spending money
internet home businesses, spending money, self employment: Dear Judy, You would be safe in declaring a loss for 2003.... However, if your intent is to MAKE money it is a business.... Unfortunately after 2 years of trying and spending money you nine chances out of ten don t have to spend, maybe it is time to stop...

Tax Law (Questions About Taxes): Self-employed, form 1040 schedule c, self employment income
form 1040 schedule c, self employment income, self employment tax: Hi, You will report your self employment income and expenses on Schedule C and then put your net self employment income on Form 1040. Also you will be subject to self employment tax (social security and medicare) on your net self employment income as well...

Tax Law (Questions About Taxes): Self-employed medical premium deduction, medical insurance policy, supplemental medical insurance
medical insurance policy, supplemental medical insurance, group plan: Dear Neal, This is NOT a deduction on your self-employment 1040-schedule-C as a direct expense.... You can figure the 90% of the premiums, just like anyone else who is self-employed on the front of the 1040, but it is NOT a direct expense on the schedule-C......

Tax Law (Questions About Taxes): Self employed taxes, www irs gov, self employed taxes
www irs gov, self employed taxes, self employment taxes: Dear Brian, You will have NO tax break for 2004 and maybe not even 2005 unless you actually START you business AND start producing INCOME .... However, you need to keep every receipt and keep a LOG of everything you have purchased in 2004 and in 2005 etc...

Tax Law (Questions About Taxes): Self-employed ?, irs web site, form 1040 schedule c
irs web site, form 1040 schedule c, form 1040 schedule se: Dear Valentino, You will need to file the following forms for your wages/self-employment: form 1040, form 1040-schedule-C..... Along with these forms you may also need to file form 1040-schedule-SE, form 4563 (depreciation for depreciable assets), form...

Tax Law (Questions About Taxes): Self-employment income, self employment income, self employment tax
self employment income, self employment tax, federal tax purposes: Mark, Thanks for your question. That could be self-employment income, reported on Schedule C. However, the person may be considered an employee, subject to withholding and receipt of a W-2 rather than a 1099. This would depend on a number of factors,...

Tax Law (Questions About Taxes): Self-employment tax on babysitting, self employment tax, self employment taxes
self employment tax, self employment taxes, fed state: Melissa, Thanks for your question. You will report your earnings on Schedule C, where you can also deduct any expenses incurrred in performance of your duties (if any). You will pay self-employment taxes at 15.3% of the profit. This is reported on...

Tax Law (Questions About Taxes): Sell of Insurance Agency, income tax rates, sole proprietor
income tax rates, sole proprietor, tangible assets: The capital gain would apply to the tangibles, but as you point out that is diminimus. The recurring income off the policy would be passive income. Accelerating the income does not convert that to a capital gain. The residuals on the policies are still...

Tax Law (Questions About Taxes): Sell of primary residence and capital gains, long term capital gain, attic space
long term capital gain, attic space, long term capital: Hi, If you have owned and lived in the home 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 $250,000 gain ($500,000 if married filing jointly). ...

Tax Law (Questions About Taxes): Sell rental property, dear ivan, personal residence
dear ivan, personal residence, residential contractor: Gary You have not provided enough information for me to give you an answer. Your depreciation recovery is based on depreciation taken or allowed if you would provide a schedule on a yearly basis showing your original cost and cost of improvements I might...

Tax Law (Questions About Taxes): Sell of right of way, income tax return, sewage lines
income tax return, sewage lines, capital improvements: You will report this as a sale on Schedule D. Prorate the adjusted basis(purchase price + capital improvements, etc) of the property. Example: 10 acres with adjusted basis of 100000. Sold rights to 1 acre for 10000. Report sale of 1 acre with basis of...

Tax Law (Questions About Taxes): Selling 2 homes, capital gains tax, stancil
capital gains tax, stancil, home 1: Mekela, Thanks for your question. Assuming you lived in the home you sold most of the time, you qualify for the exclusion of $250,000 of gain ($500,000 married filing jointly). Under the law, you can only exclude gain once every two years. You will...

Tax Law (Questions About Taxes): Selling and Buying a House, capital improvements, capital gain
capital improvements, capital gain, buying a house: It does not matter what you bought You have a capital gain However if the house was your primary residence for 24 months prior to selling you have a 250,000 exclusion of the Gain (if you are married filing jointly the exclusion is 500,000) based on...

Tax Law (Questions About Taxes): Selling in another country, income tax return, currency translation
income tax return, currency translation, international auction: Agnes, As far as documentation, you do not need to keep any more documentation than you would for a domestic sale. Keeping a printout of every transaction sounds good, but if you get very large, this becomes burdensome. However, some record should be maintained....

Tax Law (Questions About Taxes): Selling of Home & Gaiins, irs documents, contractual issues
irs documents, contractual issues, home in indiana: Doesn t matter about rolled over gain into the KS house, the new laws did away with the rollover gain provisions. If the employer does not have an IN location that he works at, then he probably does not meet the change in employment criteria. If I understand...

Tax Law (Questions About Taxes): Selling One of Our Homes - Not Primary Residence, york pa, capital gains
york pa, capital gains, 8 years: Maureen, your age has nothing to do with anything. If you sell it, you will pay taxes on the gain. Thankfully, they will be long term (for IRS) but PA will want its 3.07% (assuming sale this year). There is no exclusion for you. Helen, EA in York P...

Tax Law (Questions About Taxes): Selling a House, stancil, capital gain
stancil, capital gain, cpa: Malik, Thanks for your question. If the house has been your primary residence for 24 of the past 60 months and you have owned it for 24 of the past 60 months, you can exclude up to $250,000 ($500,000 married filing joint) of gain from the sale. Any...

Tax Law (Questions About Taxes): Selling my home, time home buyer, unforseen circumstances
time home buyer, unforseen circumstances, first time home buyer: Cornell, Thanks for your question. Yes, the gain will be fully taxable. To exclude gain, you must pass the ownership and use tests. This requrires that you own the home and have lived in it as your main home for 24 of the past 60 months. If you...

Tax Law (Questions About Taxes): Selling of home before 2 yrs., dear jill, decission
dear jill, decission, building a home: Dear Jill, This is a personal decission and I can t tell you what to do in this case.... You know that if you sell before the 24 months (2years) that you will owe tax on the gain of the sale of the house... Therefore, if you wait for the total 2 year period,...

Tax Law (Questions About Taxes): Selling my home, time home buyer, first time home buyer
time home buyer, first time home buyer, unforeseen circumstances: Now we are getting somewhere! :) Since there are unforeseen circumstances, you can prorate the exclusion on the sale of your home. How much did you pay for it and how much are you selling it for? And are you the only owner? And when did you close...

Tax Law (Questions About Taxes): Selling a home, long term capital gain, inheritance taxes
long term capital gain, inheritance taxes, inheritance tax: Let s make some assumptions here, toss in your own numbers. Date of death value of the home was $300,000, so each sibling has a basis of $100,000. If sis buys the home for $200,000 (buying each sibling out for their basis), it is basically a wash sale, no...

Tax Law (Questions About Taxes): Selling a home - Capital Gains Exemption, irs publication 17, capital gains exemption
irs publication 17, capital gains exemption, capital gains tax: Marc, Thanks for your question. If she occupied the house as her main home for 24 of the past 60 months, it qualifies for the exemption of up to $250,000 gain upon sale of the residence. IRS Publication 17 has a discussion of this issue. Hope this...

Tax Law (Questions About Taxes): Selling home and relocating, stancil, bible college
stancil, bible college, capital gain: Karen, Thanks for your question. Since you have occupied the house as your main home for more than 24 of the past 60 months, you can exclued up to $500,000 in gain. You do not have to purchase a replacement house to get the exclusion. It is only...

Tax Law (Questions About Taxes): Selling of home, selling your home, closing costs
selling your home, closing costs, money: Hi Steve, The closing costs you pay would reduce your selling price which would be advantageous if you are required to report your gain rather than exclude it. Otherwise there is no advantage. You are simply selling your home for less money. Regards,...

Tax Law (Questions About Taxes): Selling two homes in one year, www irs gov, capital gains tax
www irs gov, capital gains tax, keser: Pub 523 available at www.irs.gov for free download has more details for you under the section married persons . You are eligible to exclude up to 250000 of your gain on the sale of your home. He is eligible to exclude up to 250000 of gain on the sale...

Tax Law (Questions About Taxes): Selling two homes in the same year, irs publication 17, capital gains tax
irs publication 17, capital gains tax, keser: Jane, Thanks for your question. You can exclude the gain on both sales. Actually, there are 2 exceptions that allow this. 1. You cannot exclude gain on the sale of your home if, during the 2 year period ending on the date of sale, you sold another...

Tax Law (Questions About Taxes): Selling a house., long term capital gain, long term capital gain rate
long term capital gain, long term capital gain rate, stancil: Landon, In order to exclude gain on the sale of your primary residence you must have lived in and owned the house for 24 of the past 60 months. If you do not meet this criteria, you must pay tax on the gain. The gain would be taxed at the long-term capital...

Tax Law (Questions About Taxes): Selling house before 2 years due to divorce, irs publication 523, unforeseen circumstance
irs publication 523, unforeseen circumstance, capital gains tax: Jason, IRS Publication 523 defines an unforeseen circumstance as the occurrence of an event that you could not reasonably have anticipated before buying and occupying your main home. Divorce is one of the unforeseen circumstance discussed in that publication....

Tax Law (Questions About Taxes): Selling your house and Buying new one, new homestead, capital gains taxes
new homestead, capital gains taxes, texas thanks: Hi Jeffery, If you made a gain on the sale of your home, you could have capital gains taxes to pay. But 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 have not excluded gain on another...

Tax Law (Questions About Taxes): Selling your house and Buying new one, money recieved, stancil
money recieved, stancil, principal residence: Jeffery, Thanks for your question. Rolling the gain into the purchase of a new home is old law and no longer applies. Current law allows you to exclude up to $250,000 of gain on the sale of your prinicpal residence ($500,000 if married filing jointly)...

Tax Law (Questions About Taxes): Selling a house/Gains, home in louisiana, stancil
home in louisiana, stancil, lousiana: Shelly, Thanks for your question. First, if you qualify, you do not have to reinvest the proceeds in a new home. You may exclude up to $250,000 profit ($500,000 married filing jointly) from the sale of your primary residence if you have owned and...

Tax Law (Questions About Taxes): Selling my house, tax treaties, double taxation
tax treaties, double taxation, domiciles: The US and many other countries have tax treaties (including Mexico) where you will get credit in the US for taxes that you paid in Mexico. It is not a double tax, but does ensure that you will pay the highest tax between the two countries. It also ensures...

Tax Law (Questions About Taxes): Selling two houses in one tax year, tax implication, capital gains tax
tax implication, capital gains tax, keser: Dear Jane, You can NOT avoid capital gains tax at all... On the first house that was sold you can take the exemption which for married, it would be the first $250k that would be exempt.... As for selling the second home in the same year, you WILL have to...

Tax Law (Questions About Taxes): Selling inherited farm land, real estate professionals, stancil
real estate professionals, stancil, tax valuation: Cathy, Thanks for your question. The value of the land at any point in time is a matter of informed opinion. Whatever value you place on the land must be justified by facts - appraisal, opinion of real estate professionals, tax valuation, comparable...

Tax Law (Questions About Taxes): Selling inherited land amount to trading?, taxable profit, developing company
taxable profit, developing company, stancil: David, Thanks for your question. When you inherited the land, your basis became the fair market value as of the date of death. When you sold it, you taxable profit is the excess of the sale proceeds over your basis. It is taxable at capital gain...

Tax Law (Questions About Taxes): Selling Land, long term capital gain, lifetime learning credit
long term capital gain, lifetime learning credit, home improvements: Hi Alan, Since you have held the land for more than one year, the gain will be taxed as a long term capital gain - maximum 15%. Although there is no direct offset for college tuition you could take a tuition and fees adjustment to income or the Lifetime...

Tax Law (Questions About Taxes): Selling Minor's Mutual Funds, money market fund, true money
money market fund, true money, tax advice: Thank you for not listening to the man at the bank and please, do everyone a favor and ask him NOT to give tax advice anymore. If this is a true money market fund (plain old savings account, no stock or mutual funds), then you have been paying tax on...

Tax Law (Questions About Taxes): Selling Multiple Homes, irs gov, tax ramifications
irs gov, tax ramifications, publication 523: Dear Jim, I can t go into great details here because there is not enough room, but you will NOT owe anything on your primary residence because you can take the exclussion of $500,000.00 (married people filing a joint return.).... However, on the rental...

Tax Law (Questions About Taxes): Selling personal Residence, long term capital gain, capital gains tax
long term capital gain, capital gains tax, capital improvements: Hi John, In case you were thinking that you could defer taxation on the gain on the sale of your home by investing in a more expensive home, that law was changed several years ago. If you owned and lived in your old home as your main home for 2 years...

Tax Law (Questions About Taxes): Selling a personal residence - capital gains, irs law, irs gov
irs law, irs gov, capital gains tax: Dear Stratton Alt, The OLD irs law stated that if you bought another house within 2 years of the sale of the old house, you owed no capital gains.... However, the NEW irs law now requires that LIVE in the house you are selling as your MAIN HOME for at least...

Tax Law (Questions About Taxes): Selling of property that is used just for pleasure., 1031 like kind exchange, straight forward answer
1031 like kind exchange, straight forward answer, stancil: Heather, Thanks for your question. You would owe tax, at capital gain rates, on your profit. Profit is measured by subtracting your cost (basis) from the proceeds of the sale. If you wish to buy other property, you may be able to structure a 1031...

Tax Law (Questions About Taxes): Selling property, capital gains tax rate, capitol gains taxes
capital gains tax rate, capitol gains taxes, long term capital gains tax rate: Hi, If you have owned and lived in the home as your main home for 2 years during the 5 years preceeding the date of sale and have not exlucded 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): Selling Recently (gifted?) House, short term capital gain, capital gains rate
short term capital gain, capital gains rate, long term capital gains: Tony, Thanks for your question. I wish you had contacted me prior to your father giving you the house. Based on what occurred, you receive his original basis in the house and his holding period. So you will pay income tax at the long term capital gains...

Tax Law (Questions About Taxes): Selling Rental Properties, principle residence, existing mortgage
principle residence, existing mortgage, question thanks: Hi Doug Interest is deductible if it is on your personal residence or a second home. When you gift the property to her it is not your personal residence or a second home. She would have to live in it for 2 years after her acquisition to qualify for...

Tax Law (Questions About Taxes): Selling Rental Property at a loss, mike thanks, stancil
mike thanks, stancil, rental property: Mike, Thanks for your question. Actually you will probably be showing a gain. You must reduce your basis in the house by the depreciation allowed or allowable. Any gain up to the amount of depreciation is taxed at ordinary income rates. Hope this...

Tax Law (Questions About Taxes): Selling real estate property, left hand column, double whammy
left hand column, double whammy, irs gov: Dear Karen, I really can t answer your questions with specific numbers etc, because you did not give me enough information.... However, YES, you WILL owe additional taxes on BOTH the stocks and the home sale.... Since I do not know the BASIS in either...

Tax Law (Questions About Taxes): Selling a rental property, capital gain taxes, t claim
capital gain taxes, t claim, depreciation: Hi, You can exclude gain on the sale if you have owned and lived in the home 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. The 2 years need not be the last 2...

Tax Law (Questions About Taxes): Selling Stock for Loan, home mortgage loan, stancil
home mortgage loan, stancil, income taxes: Tom, Thanks for your question. Sorry to say there are no options. If he sells the stock, he must pay the taxes on the gain. What he does with the proceeds of the sale do not affect the taxability of the sale. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Selling of Stocks, gross proceeds, option costs
gross proceeds, option costs, term gain: Hi Loretta, You report the sale of stocks on Schedule D. You will need the date acquired, cost, date sold and selling price. The difference between the selling price and your cost/basis is your gain/loss. If the stock was held one year or less it is...

Tax Law (Questions About Taxes): Selling a shared house from a life estate, capital gains tax, kind exchange
capital gains tax, kind exchange, exchange agent: How was the house handled relating to the Estate tax return? to your second question if you and your spouse file a joint tax return you are entitled to $500,000 exemption if you sell your principal residence same as to your sister li( the technicalities...

Tax Law (Questions About Taxes): Selling sole proprietorship, irs law, sole proprietorship
irs law, sole proprietorship, corporate shell: As far as I know, there is no legal way around paying the 30 tax on the sale. Bottom line, you have a sale, you pay taxes on the gain. It may be possible to structure the sale in such a way to lessen the tax burden, but this would involve tax planning...

Tax Law (Questions About Taxes): Selling to state: Capital gains tax?, income tax rate, widening project
income tax rate, widening project, stancil: Michael, Thanks for your question. A couple of issues here. First, there are no written exceptions to the 24 of the last 60 month rule. Due to the circumstances, you could exclude the gain and appeal to the IRS, explaining the circumstances. It would...

Tax Law (Questions About Taxes): Selling stock given to me by a grandparent, long term capital gain, taxable gain
long term capital gain, taxable gain, maximum tax: Hi, When you receive stock as a gift your basis is not what it was worth when it was given to you. Your basis is the basis of the person who gave it to you. Assuming that your grandfather purchased the stock, his basis was what he paid for it. So your...

Tax Law (Questions About Taxes): Selling stocks, selling stocks, fifo
selling stocks, fifo, abc: Hi, If you want specific shares sold you could tell your broker that you want the shares you bought on a particular date sold. If an identifying number is assigned to each purchase and included on your statement you could use that number for identification....

Tax Law (Questions About Taxes): Selling/Transferring Assets in a Trust?, trust income, adult children
trust income, adult children, undivided interest: The sale of an undivided interest in a trust is treated the same way as the sale of any capital asset. You are taxed at Capital Gains rates depending on the duration of time you have held the interest in the trust. The gain is calculated as the difference...

Tax Law (Questions About Taxes): Selling vacant land, irs publication, publication 523
irs publication, publication 523, 1099s: Hi Chris, I agree that you can exclude the gain on both properties. If your gain on both is less than $250,000 ($500,000 if married filing jointly) you don t report the sale at all. Maintain your records in case the IRS should ask any questions particularly...

Tax Law (Questions About Taxes): Sellng Land, 1031 like kind exchange, stancil
1031 like kind exchange, stancil, three pieces: Jeremy, Thanks for your question. You are referring to a 1031 Like-kind exchange. In order to do one of these in the simplest scenario, is to trade your property to someone else. Of course, this is usually difficult to pull off. To make it easier,...

Tax Law (Questions About Taxes): Sep IRA, time college student, sep ira
time college student, sep ira, withdrawals: You don t, at least not for 99% of the items you mentioned. Except for tuition, all other withdrawals will be subject to penalty (and if the SEP is younger than 2 years of age, that penalty is 25%). If the SEP is older than 2 years of age, that penalty is...

Tax Law (Questions About Taxes): Separation/Divorce and 2005 state tax refund, state tax refund, state refund
state tax refund, state refund, red flags: Pam, Thanks for your question. The only flag that would be raised would be that the IRS would see on one return that the amount included in income as a state refund was not the amount on the 1099. However, I doubt that that issue alone would create...

Tax Law (Questions About Taxes): Separation/Divorce - who can claim dependent?, divorce terms, custodial parent
divorce terms, custodial parent, insurances: Hi, From everything you told me you are the custodial parent as far as income tax is concerned. The IRS will ask for information and determine who is entitled to his exemption in accordance with their tiebreaker rules. Since he lived with you more than...

Tax Law (Questions About Taxes): Separation and Mortgage Interest Tax Deductions, mortgage interest deductions, interest tax
mortgage interest deductions, interest tax, legal separation: In order to deduct the interest you must be obligated on the note, it must be secured by the residences and you must make the payments. It seems as if this will be the case. Therefore, unless the indebtedness exceeds $1,000,000, you may deduct all of the mortgage...

Tax Law (Questions About Taxes): Separation and taxes, dependent care credit, ira deduction
dependent care credit, ira deduction, higher hope: Edward, Thanks for your question. Since you have not been separated for the last six months of the year, you are still considered married for tax purposes. This means you must file married, either joint or separately. You can divide the dependency...

Tax Law (Questions About Taxes): Seperation and Taxes, legal seperation, social security number
legal seperation, social security number, dependency exemption: Barbara, Thanks for your question. 1. If he cannot file a joint return, his only alternative is to file married, separate. He can claim the child. 2. She could, but there is no benefit to her if she has no income. 3. If she files a return and...

Tax Law (Questions About Taxes): Series LLC, secretary of state of delaware, separate entities
secretary of state of delaware, separate entities, state of delaware: The state does not care what you do with the corporation, you are not required to notify them of how you are doing your business. I am not familiar with the term series of the LLC if you mean division ; then you need do nothing. If you want to completely...

Tax Law (Questions About Taxes): Setting up Corp, or LLC on personal property, estate tax changes, business entity selection
estate tax changes, business entity selection, advantange: Allow me to divide your question into two parts. First--Your question focuses on a very important point that seems to be lost in all of the hoopla regarding estate tax changes. Right now, if you do nothing, the estate process will transfer the house to...

Tax Law (Questions About Taxes): Setting up IP asset on the books of early stage company, interested investors, issue stock
interested investors, issue stock, intangible value: You would record the amounts spent as start up expense and issue stock as paid in capital for the same amount For tax purposes you would start writing of the Start up expense over 60 months sttaring wit the date of the first actual sale of the software....

Tax Law (Questions About Taxes): Settlement $, reportable income, punitive damages
reportable income, punitive damages, medical payments: Lisa, Thanks for your question. If the settlement was for physical injuries or medical payments, it is not taxable. If the settlement was for damage to your car or other property, it is not taxable. If it is for any other reason, including punitive...

Tax Law (Questions About Taxes): Settlement, back wages, sole proprietor
back wages, sole proprietor, emotional distress: Dear Robin, You will have to call the IRS at 1-800-829-1040 to get the answer since this is really a legal issue involing reporting this money and the IRS will have to tell you how to report it.... I do know that the emotional distress can NOT be reported...

Tax Law (Questions About Taxes): Severance Pay & Maximum Refund, adjusted gross income, severance pay
adjusted gross income, severance pay, income tax credit: Serverence pay is taxable income. We all work hard for our money and you got lucky to get some extra. This is plain old ordinary money and you get to pay plain old ordinary tax on it. If the withheld money is more than your tax bracket, you will get...

Tax Law (Questions About Taxes): Severance pay, exact procedure, itemized deduction
exact procedure, itemized deduction, stancil: Jeff, I am not certain what response you refer to. Most likely it was a situation where the employee had to repay a portion of a bonus. In this case the amount repaid can be taken as miscellaneous itemized deduction if $3,000 or less. If above $3,000...

Tax Law (Questions About Taxes): SHORT SALE AND 1099's, form 1099, tax return
form 1099, tax return, discretion: Dawn, The lender will report the difference between the amount owed on the mortgage and the amount received at closing. This difference reported on Form 1099-C will need to be reported as income on your tax return for the year of the short sale. Regards,...

Tax Law (Questions About Taxes): Shareholder on S Corp, stock book, s corp
stock book, s corp, s corporation: You do have a stok register? return your husbands share and cacel them attach to stock book stub then isue X number of shares to Hubby and issue Y number of shares to you if you want to be real formal have your Husband sign a document to transfer Y...

Tax Law (Questions About Taxes): Short Run Stock Gains, form 1040es, irs 1
form 1040es, irs 1, underpayment penalty: Hi, You are expected to pay your Federal income tax as you receive the income. If you will owe more than $1,000 when you file your return you could be subject to an underpayment penalty unless you meet one of the safe harbors. If you have paid in 90%...

Tax Law (Questions About Taxes): Short Sale, credit card debt, stancil
credit card debt, stancil, t pay: Dan, Thanks for your question. You are talking about insolvency. You know your assets are greater than your debts when to total the Fair Market Value of your assets and they are more than the total of your debts. You are insolvent when your debts exceed...

Tax Law (Questions About Taxes): Short Sale of Home, filing bankruptcy, mortgage co
filing bankruptcy, mortgage co, technical answer: Gena, Thanks for your question. You are considered insolvent if your liabilites (debts) exceed your assets (what you own). Your gain or loss on the sale is determined by subtracting your cost from the proceeds of the sale (what the house sold for...

Tax Law (Questions About Taxes): Short Sale Taxes, mortgage holder, house sale
mortgage holder, house sale, taxable income: Hi, As your CPA said, if the mortgage holder isn t able to get their money out of the house sale, you will have taxable income. It s called forgiveness of debt. It s possible they would work with you and allow you to pay it off over time so it wouldn...

Tax Law (Questions About Taxes): Short Sale vs Foreclosre, tax ramifications, personal residence
tax ramifications, personal residence, credit reporting agencies: Lois, From a tax reporting standpoint, there is no difference between a short sale and a foreclosure. In either case, you will have reportable taxable income for the difference between the debt owed to the lender and the amount they receive in the foreclosure...

Tax Law (Questions About Taxes): Short sale/Forclosure tax liability, tax period, foreclose
tax period, foreclose, tax liability: Hi, If the debt is discharged in bankruptcy you would not have to pay tax on it. But if it not within the bankruptcy it would be taxable income unless you can show that you are insolvent. Insolvent is when your debts exceed your assets. Regards, Carol...

Tax Law (Questions About Taxes): Short term investment property, short term capital gain, short term capital gains
short term capital gain, short term capital gains, short term investment: James, Unfortunately, the value of your labor can not be added to the cost basis of the property. There are also no tax breaks for refinancing the property. When you refinance a property and take cash out for personal expenses, the additional debt can...

Tax Law (Questions About Taxes): Short year Depreciaton, www irs gov, irs website
www irs gov, irs website, depreciation: Short year depreciation is when an asset is brought into service the first year at less than a full 12 months. For example, under MACRs (Modified Adjusted Cost Recovery), the IRS will only allow $18,000 of depreciation for the first 4 years for an automobile....

Tax Law (Questions About Taxes): SIGNING BONUS, volunteer forum, company gain
volunteer forum, company gain, stancil: Vic, Thanks for your question. If you pay back the bonus in 2007, it s receipt will not show as income. You should only pay back the net amount, as the company can file amended 941 s to get the taxes returned. If you wait until 2008, you will have...

Tax Law (Questions About Taxes): SIGNING BONUS REPAYMENT, company gain, 25k
company gain, 25k, vic: Hi Vic the main question here is the taxes withheld you would pay back the NET and they would reverse the taxes paid on your behalf so you would not be out of pocket also the company would save their portion of their social security paymnet obligation. ...

Tax Law (Questions About Taxes): SIGNING BONUS REPAYMENT, company gain, must be a way
company gain, must be a way, 25k: Mr. Pizzitola: That is out side my field of expertise. But I know there must be a way to recover the tax you have paid should you have to pay back the whole $25,000.00. On the basis you were never paid wages since you were required to pay it back. ...

Tax Law (Questions About Taxes): SIGNING BONUS REPAYMENT, payroll tax filings, company gain
payroll tax filings, company gain, e mail: Vic, You should draft a letter to your employer that you will not be able to fulfill the terms of your employment agreement and returning your signing bonus. You should deliver the letter and the net pay received to your employer before the end of year....

Tax Law (Questions About Taxes): SIMPLE IRA Lump Distribution, ira lump, lump sum distribution
ira lump, lump sum distribution, simple ira: Hi, You needed a form 8606 only if your husband s contributions were after-tax. If his contributions were before-tax he has no basis in the IRA and any distributions are fully taxable. If you aren t sure whether they were before-tax or after-tax look...

Tax Law (Questions About Taxes): Signing bonus, form 843, bonus 2
form 843, bonus 2, stancil: Brian, Thanks for your question. You are entitled to a deduction or credit on your taxes for the amount of wages repaid, so you won t be taxed twice. You should not be paying the company social security or medicare taxes as they can file Form 843 to...

Tax Law (Questions About Taxes): Simple Tax Question, interest dividends, california return
interest dividends, california return, steve thanks: Steve, Thanks for your question. You will have to file a California return as a non-resident or part-year resident. You may have to file an Arizona return if you have any Arizona based income, such as interest, dividends, rental income, Schedule C business....

Tax Law (Questions About Taxes): Simple Tax Question, state tax forms, state tax return
state tax forms, state tax return, tax question: Dear Steve, If you lived and worked in CA for the entire year of 2004, you will file a CA state tax return for 2004.... Since you are living in AZ and still working in CA. you will have to file BOTH CA and AZ tax returns in 2005 and if you do not work in...

Tax Law (Questions About Taxes): Single or Joint?, stancil, case basis
stancil, case basis, tax liability: Janie, Thanks for your question. Actually, you do not have the choice of filing single. Your choices are to file married, filing jointly or married, filing separate. In most cases, a joint return results in a lower overall tax bill, but this is something...

Tax Law (Questions About Taxes): Single/Married Filing Status, injured spouse, tax refund
injured spouse, tax refund, letter stating that: Dear Carrie, You nor your husband can file SINGLE.... You and your husband CAN however, file married filing Seperate... However, BOTH of you will pay more in taxes, have less deductions etc..... I stongly suggest that you TELL your husband asap , so...

Tax Law (Questions About Taxes): Single Member LLC In NY, individual tax return, state return
individual tax return, state return, sole member: Chris, Thanks for your question. If the LLC conducts business in NY, you need to file a NY non resident (individual0 return for that state. You can then take a credit on your PA return for taxes paid to NY. If the LLC does no business in NY, you do...

Tax Law (Questions About Taxes): Single or married filing separately?, married filing separately, head of household
married filing separately, head of household, stancil: Natalie, Thanks for your question. Your filing status is determined by your marital status as of December 31. Since you were not married as of that date, you do not file married for 2006. You would file single or head of household (if you qualify)....

Tax Law (Questions About Taxes): Single member LLC can elect S-Corp Status?, self employment taxes, s corp
self employment taxes, s corp, payroll taxes: No, an LLC cannot elect to be taxed as a Sub-S. It can elect to be taxed as a real corporation. Real corporations pay their own taxes at a much lower rate. Let s take a step outside the box for a moment. You are struggling to reduce a portion of the...

Tax Law (Questions About Taxes): Single member LLC vs "S"Corp, personal tax rate, health premiums
personal tax rate, health premiums, payroll provider: The IRS has been very clear that the LLC will not provide any tax benefit. They have designated the LLC as a Disregarded Entity for tax purposes. It is correct that you personally will have to take the benefit as income and try to deduct it personally....

Tax Law (Questions About Taxes): Single person LLC in Nevada, foreign entity in NJ, file taxes, tax benefit
file taxes, tax benefit, liability protection: if you spent $38,000, made 10,000 you are operating at a loss and will owe no taxes for the LLC income. If earned $10,000, started with $20,000 and wrote $38,000 in checks, you either are over drawn at the bank or have been creating your own dollars. ...

Tax Law (Questions About Taxes): Single Woman - what should I claim?, www irs gov, withholding tables
www irs gov, withholding tables, stancil: Trisha, Thanks for your question. The difference between the two would depend upon what level of income you are talking about. IRS Curcular E is a set of withholding tables that would help you make that determination. This document is available at...

Tax Law (Questions About Taxes): Single w-4 exceptions, adjusted gross income, personal exemption
adjusted gross income, personal exemption, standard deduction: Hi Jennifer, From what you wrote your total income for the year will be about $37,000. Since you didn t say how much your medical bills will be, I ll use the standard deduction of $5150 and your personal exemption of $3300. Your taxable income will be...

Tax Law (Questions About Taxes): Slae of residence and depreciation, professional tax preparer, depreciation allowance
professional tax preparer, depreciation allowance, business property: Hi Michael, You aren t missing anything on the taxation of the depreciation taken over the years. However if you actually sold the rental property at a loss you would have a deductible long-term capital loss. You can t exclude any gain because it wasn...

Tax Law (Questions About Taxes): SMALL HOME BUSINESS, self employment tax, prime target
self employment tax, prime target, machine quilting: Douglas, Thanks for your question. Having losses for 3 consecutive years would not necessarily make you a prime candidate for audit. The amount of dollars involved is a determining factor. If she only lost a couple of hundred dollars, for example,...

Tax Law (Questions About Taxes): Small Business, computer costs, fees web
computer costs, fees web, car expenses: Billi, I can t fully answer your question, as a complete answer would take more time than is appropriate in this forum. However, I can give you some guidelines. You will need to keep receipts of any business expenditure you make, including costs of...

Tax Law (Questions About Taxes): Small Business Assets, irs rules, business assets
irs rules, business assets, life interest: Elisa, Thanks for your question. Several issues here. First, you can never expense the payments. In any case you capitalize the asset and depreciate it over its useful life. Interest expense on the payments are deductible. If the vehicle is owned...

Tax Law (Questions About Taxes): Small Business Partnership, part time jobs, medicare tax
part time jobs, medicare tax, irs web: You may be able to take advantage of a special rule for spouses who are partners in a business. You may elect to use Schedule C to report total income and expenses of the business. The spouse who has contributed the most (money or time) to the business will...

Tax Law (Questions About Taxes): Small Business Sales, business brokerage firm, small business sales
business brokerage firm, small business sales, consequenses: Michael, Thanks for your question. Simply providing a list of the equipment is not an issue. As a part of the sale, the buyer and seller should agree on how the selling price is allocated - equipment, land, building, inventory, goodwill. The breakdown...

Tax Law (Questions About Taxes): Small Business Startup Tax Information, limited liability company, small business startup
limited liability company, small business startup, getting a tax id number: Trinity, You probably should have incorporated before starting your business. Internet businesses seem to have higher incidents of fraud and you really should be protected. It s not too late or incorporate or form a limited liability company. Along with...

Tax Law (Questions About Taxes): Small Business Tax, self employment tax, casualty losses
self employment tax, casualty losses, sole proprietorship: Dear Jessica, YES, it is possible to do all these forms and come out with -0- profit or loss.... YES, you must file ALL of the forms you have prepared (schedule-C, 8829 etc) with your 2003 tax return 1040 and on line 12 business income you will put -0-........

Tax Law (Questions About Taxes): Small Business Taxes, self employment tax, www irs gov
self employment tax, www irs gov, small business taxes: Tax payments are paid quarterly. For your federal responsibility, Self Employment tax and Withholding, you can make that payment through your bank. http://www.irs.gov/businesses/small/content/0,,id=98942,00.html This webpage should have most of the detailed...

Tax Law (Questions About Taxes): Small Business Taxes, full time job, sole proprietorship
full time job, sole proprietorship, small business taxes: Hi Susan, I haven t used any of the off-the-shelf tax prep systems but everything I ve heard about Turbo Tax and Tax Cut leads me to believe that they could handle everything you mentioned (assuming that your small business is a sole proprietorship). I...

Tax Law (Questions About Taxes): Small Business Write Offs, self employment tax, business write offs
self employment tax, business write offs, small business write offs: When I say not 100% there are two things that apply. First there are no deductions against Self employment tax. and second the only thing you get from the Government is a credit for the value of the tax on the purchase. So if you make $10,000 in your...

Tax Law (Questions About Taxes): Small Business, medicare payments, c corp
medicare payments, c corp, conventional wisdom: You are the subject of the primary debate regarding sub-s vs C corp . Conventional wisdom is: if you go into business to lose money, do it as a sub-s so you can take the personal deduction. Our recommendation is: if you go into business to lose money...

Tax Law (Questions About Taxes): Small business deductions, small business deductions, medical insurance policy
small business deductions, medical insurance policy, health insurance policy: The expenses paid for his injury are deductible on Schedule A as a medical expenses as is the medical insurance policy. You may benefit from applying the medical insurance policy payment as an adjustment on Page 1 of Form 1040 instead of Schedule A IF there...

Tax Law (Questions About Taxes): Small business--sole proprietor?, fictitious business name, sole proprietor
fictitious business name, sole proprietor, santa clarita ca: Let me address liability second. If you are going into business to make a profit, corporations pay far lower taxes. You will retain more of your profit if you incorporate. That is true for any business. However, until you are making a profit, taxes don...

Tax Law (Questions About Taxes): Small business, project mgr, stancil
project mgr, stancil, accrual basis: Rod, Thanks for your question. If you are a cash basis taxpayer and expect a lower level of income next year, it would probably benefit you to defer the income until next year. If, however, you operate on the accrual basis, the income is earned...

Tax Law (Questions About Taxes): Soc Sec Taxes, self employment tax, social security system
self employment tax, social security system, annual salary: If he is receiving a 1099-misc, he is considered self-employed. Whether he is or not is another question. He should be reporting the income and related expenses on a Schedule C. He also should be completing a Schedule SE which is an attachment to the return...

Tax Law (Questions About Taxes): Social Security, lobbyist groups, independant contractor
lobbyist groups, independant contractor, state representatives: Unfortunately the bill that would have allowed this feature has not yet been signed into law. In fact it has been permanently tabled as nonfunctional in it s present form. Contact your state representatives and congressmen as well as any lobbyist groups...

Tax Law (Questions About Taxes): Social Security, personal income tax, independant contractor
personal income tax, independant contractor, voluntary plan: Allow me to clear a few points. You have already lost everything you have put in. Social Security is not a savings plan, everything you have contributed is paid to already retired persons. Many people claim that Social Security will not be arround when...

Tax Law (Questions About Taxes): Social Security, independant contractor, mortgage company
independant contractor, mortgage company, general partner: Dear Todd, Unfortunately, unless the Congress and Senate pass a law that does not require people to pay s.s. and medicare, you WILL continue to have to pay it... That is the LAW.... However, it does not keep you from investing in a private retirement...

Tax Law (Questions About Taxes): Social Security, social security and medicare, independant contractor
social security and medicare, independant contractor, mortgage company: Hi Todd, Sorry but there is no way for you to opt out of paying social security and medicare taxes. There has been talk about privatizing at least a portion of social security taxes so individuals could make their own investments but don t look for it...

Tax Law (Questions About Taxes): Social Security, retirement programs, independant contractor
retirement programs, independant contractor, stancil: Todd, You did not pose a question, I presume you are wanting to know if there is a way to avoid social security taxes. Unfortunately not. Certain government jobs are excluded by statute, as they have other provisions for retirement programs. Ministers...

Tax Law (Questions About Taxes): Social Security, 1099 forms, exact figures
1099 forms, exact figures, ssa: Dear K Cooper, You do not have to declare this money on your income tax return.... You simply declare you income like wages, interest etc.... SInce I do not know the exact figures of the s.s. checks and your income, this is the only help I can give you......

Tax Law (Questions About Taxes): Social Security, ssd, gross income
ssd, gross income, dependents: Dear Lynn, Your husband should have gotten a 1099 form from the IRS in January.... On that form it will tell his gross ssd paid to him in 2005 in box 5.... On that form is also a an example for that tell you IF any of his ssd will be taxable... If you...

Tax Law (Questions About Taxes): Social Security Benefits..., self employment tax, self employment income
self employment tax, self employment income, social security benefits: Hi, You report your self employment income and expenses on Schedule C or C-EZ. You calculate your self employment tax on Schedule SE. These are filed with your Form 1040 along with your other income and, assuming you file jointly, with your husband s...

Tax Law (Questions About Taxes): Social Security Benefits, payment stubs, social security benefits
payment stubs, social security benefits, irs: As long as there has been SS withholding on your W-2, you are going to be fine. You will get credit for the money. You may wish to call the IRS at 1-800-829-1040 to inform them of your employers error. And also get an earnings statement from SSA (www.ssa.gov)...

Tax Law (Questions About Taxes): Social Security benefits as income, social security benefits, 1040 ez
social security benefits, 1040 ez, form 1040: Dear Diane, THis all depends on your filing status (married or single etc) and how much EARNED and UNEARNED income you had all together..... On the form that s.s. sent to you there is a worksheet telling you how you can figure if your s.s. in taxable...

Tax Law (Questions About Taxes): Social Security Entitlement, security retirement benefits, social security retirement
security retirement benefits, social security retirement, security entitlement: Susie, You can not transfer Social Security retirement benefits from parent to child. Your benefits will be based on your individual work history. If you were under age 18 (age 19, if full time student), you could have qualified for survivor benefits...

Tax Law (Questions About Taxes): Social Security Entitlement, social security website, social security benefits
social security website, social security benefits, social security money: Hi Susan. I m no expert on Social Security, but this is what I found on the Federal government s social security website: http://www.ssa.gov/ww&os2.htm It says that the only times children are entitled to social security benefits is if they are: 1)Unmarried...

Tax Law (Questions About Taxes): Social Security and Filing Taxes, social security benefits, filing taxes
social security benefits, filing taxes, personal exemption: Hi, Whether or not you are over 65 you have to file a tax return if your income exceeds the total of your standard deduction and your personal exemption. Assuming you are single and over 65 for 2007 your standard deduction is $6,650 and your personal...

Tax Law (Questions About Taxes): Social Security Income Benefits, social security income, adjusted gross income
social security income, adjusted gross income, itemized deduction: Hi, Assuming that your son is your dependent, you can include his medical expenses with yours. Medical expenses are an itemized deduction on Schedule A and are deductible to the extent they exceed 7.5% of your adjusted gross income. Regards, Carol...

Tax Law (Questions About Taxes): Social Security Income, social security income, social security benefits
social security income, social security benefits, interest dividends: Hi Judy, Whatever your age, up to 85% of your Social Security may be taxable depending on your total income. To determine if any of your SS is taxable, you add one-half of your SS plus all other income (interest, dividends, wages, tax-free income, etc.);...

Tax Law (Questions About Taxes): Social Security Lump Sum Payment, lump sum payment, soc sec
lump sum payment, soc sec, ssdi: Hi, You may need to pay taxes on up to 85% of your SSDI depending on the amount and the amount of your other income. With a lump sum there are two ways of determining tax liability if any. I suggest you take it to a tax professional since it is fairly...

Tax Law (Questions About Taxes): Social Security and Medicare, income tax rates, social security and medicare
income tax rates, social security and medicare, medicare tax: The portion of the income that is considered self employment or wages(form 1099 or w-2) will be subject to ss and medicare tax. You must actively participate. The portion of the income that is merely a return on your invested money with no participation...

Tax Law (Questions About Taxes): Social Security payments taxed?, social security benefits, social security payments
social security benefits, social security payments, retirement age: Bobbi, Thanks for your question. No, you cannot do that. If you don t need the money, why not delay starting your SS payments? If you do so, your monthly payments will increase the longer you wait to start. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Social Security/Sale of Land, social security income, state tax rate
social security income, state tax rate, worst case scenario: Debra, The worst case scenario is your will be your parents will need to file a tax return and report your mother s capital gain on the sale of the land. Determining the capital gain may be tricky. Did you mother and her sisters inherit the property directly...

Tax Law (Questions About Taxes): Social Security Taxation, social security taxation, instruction booklets
social security taxation, instruction booklets, 1040a: Hi, There s a worksheet to determine how much of your SS is taxable. It isn t as simple as 50% of a certain AGI or 85% of a higher AGI. The maximum amount that can be taxed is 85%. It depends upon your other income plus half of your social security....

Tax Law (Questions About Taxes): Social Security tax, self employment income, social security tax
self employment income, social security tax, self employment taxes: Ron, Thanks for your question. Rental income is a Schedule E item, not eligible or subject to social security. The IRS does not treat this as a business unlewss you are a professional. If you have eligible self-employment income, you would report...

Tax Law (Questions About Taxes): Social Security vs. Social Security Disability, social security disability, income tax purposes
social security disability, income tax purposes, social security: Hi Mark, Yes, regular Social Security and Social Security Disability are handled in exactly the same way for income tax purposes. Up to 85% can be subject to income tax depending upon the amount of your other income. SSI is a separate program and is not...

Tax Law (Questions About Taxes): Social Security--Windfall Elimination Provision, windfall elimination provision, social security administration
windfall elimination provision, social security administration, social security windfall: Hi Jack, Your question should be directed to the Social Security Administration since it is not administered by the IRS. You can visit their web site at www.ssa.gov and search for WEP to get general information about it but if you call them at 1 800 772-1213...

Tax Law (Questions About Taxes): Social Security, self employment tax, subchapter s corporation
self employment tax, subchapter s corporation, independant contractor: Todd you have no choice However you may want to transfer your bussiness to a Subchapter S corporation as earnings of an S corp are not subject to the self employment tax you should consult you CPA or Atty for setting up the S corp By the way you...

Tax Law (Questions About Taxes): Social security deduction from employer, social security deduction, social security and medicare
social security deduction, social security and medicare, soc sec: Hi, In your situation you do have to pay social security and medicare on your earnings. It is possible to opt out of social security but you have to work for an organization that has also opted out. For example, some church or church controlled organizations...

Tax Law (Questions About Taxes): Social security income, social security income, income tax return
social security income, income tax return, federal income tax return: Hi Lucille, You don t have to report rental income to social security but you must report it as income on your Federal income tax return. You use Schedule E to report the income and expenses. Your net rental income is added to your other income and could...

Tax Law (Questions About Taxes): Sociual security taxes, social security benefits, inexperience
social security benefits, inexperience, seperately: Glad I can help you save on your tax bill. Your daughter s ss benefits will not be reported on your return at all. Make sure that you paid more of her total support than she paid from the ss benefits if she is claimed as your dependent. I am not following...

Tax Law (Questions About Taxes): Software expenses, irs rules, depreciation expense
irs rules, depreciation expense, sole proprietor: If you buy off the shelf software you can expense as software expense under other expenses. Howeber the equipment you purchase need to be capitalized and written off you may want to look up the IRS rules for for depreciation Also take a look at schedule...

Tax Law (Questions About Taxes): Software or help in filing income taxes, irs free file, filing income taxes
irs free file, filing income taxes, irs website: Hi, Once a few years ago I used Tax Cut and found it acceptable. I ve never used Turbo Tax but it has a good reputation. Both products are backed by large companies and have been around for several years so they re probably both good. The IRS doesn...

Tax Law (Questions About Taxes): Sold 2 homes in 24 months, csi team, unforeseen circumstances
csi team, unforeseen circumstances, good night sleep: The two year rule is just that. You cannot sell a home and exclude less than every two years. The exclusion is only for ownership of less than 24 months, not the 2 year time frame. It is either amend or pay the taxes on this sale, sorry. Helen, EA...

Tax Law (Questions About Taxes): Sold home, long term capital gains, settlement charges
long term capital gains, settlement charges, window pane: Anthony: Yes you may deduct any repairs you made in order for the house to sell. However, you may not deduct any improvements you made. For instance a new roof or new floor(ing) are not deductible. Fixing a leaking facet or repaired a shingle on the...

Tax Law (Questions About Taxes): Sold a house in 2004, unforseen circumstances, head of household
unforseen circumstances, head of household, final construction: You will not list the sale on your tax return at all if you owned and lived in the old home for 24 months during the 60 months prior to the sale and your capital gain is less than 250000. You may be eligible for a portion of the 250000 exclusion if the...

Tax Law (Questions About Taxes): Sold the house in Missouri, stancil, tim tim
stancil, tim tim, capital gain: Tim, Thanks for your question. You will have to pay tax (at capital gain rates) on the full gain. Most likely Missouri will tax the sale also, meaning you need to file a non-resident return. As a resident of California, you will include it in your...

Tax Law (Questions About Taxes): Sold house, long term capital gain, itemized deductions
long term capital gain, itemized deductions, long term capital: Hi James, You can deduct interest and property taxes as itemized deductions on Schedule A. The closing costs you can deduct from the selling price in calculating your gain (if any). You didn t mention whether or not you had a gain on the sale. If you...

Tax Law (Questions About Taxes): Sold Rental Property, rough numbers, taxcut software
rough numbers, taxcut software, depr: Becky, Your issue is with the tax program. Obviously, you are not holding your tongue right when you this. ;-). There may ba a box you haven t checked or something like that. It is so easy to overlook something that makes it work right sometimes. Based...

Tax Law (Questions About Taxes): Sold stock, can I write off loss?, capital losses, penny stock
capital losses, penny stock, d line: Hi Kevin, Yes that s correct. The $1800 not used to offset your capital gain on Schedule D is carried to your 1040 (line 13 in 2004, could be a different line # on 2005 form) and is entered in parentheses (1800.00) to indicate it is deducted from your...

Tax Law (Questions About Taxes): Sole Propietership, self employment tax, petroleum tankers
self employment tax, petroleum tankers, fleet manager: For last year it would cause a lot of paper work to consider her an employee Give her a Misc Income 1099 and have her file a 1040C she will need to pay a self employment tax if you reimburse her for one half you will be doing the right thing for her.or better...

Tax Law (Questions About Taxes): Sole Proprieter Taxes, sole proprietership, sole proprieter
sole proprietership, sole proprieter, irs audit: Well, you have options. The expedient option would be to issue a 1099 to each independent contractor. However, if the independent contractor fails to pay his taxes, and he can be deemed a common law employee and you would be liable for all the back...

Tax Law (Questions About Taxes): Sole Proprietor looking at incorporating in Texas, texas franchise tax, corporate franchise tax
texas franchise tax, corporate franchise tax, state comptrollers office: Leo I think the 300K is wrong it should be $3,000 but of course you are right if you pay yourself a salary to equal the profit the corporation would not have taxable income .and of course your assets would qualify your C corp to file a simple no tax due...

Tax Law (Questions About Taxes): Sole Proprietor Paying a family member to do work, deductible business expenses, self employment tax
deductible business expenses, self employment tax, federal tax rate: Beyond the value of the feudal apprenticeship system? (Where one works for years to learn the craft of the master without pay.) Option 1: You could just setup a payroll system and pay him hourly. that would mean that about 50-70% of the dollars that your...

Tax Law (Questions About Taxes): Sole Proprietor, dependent care tax credit, daycare facilities
dependent care tax credit, daycare facilities, home daycare: Hi Oscar, Yes sole proprietors are expected to keep records of their income and expenses. A simple journal would do fine along with receipts for expenses. Estimates are not acceptable since there s no proof to offer. Go back through bank statements to...

Tax Law (Questions About Taxes): Sole Proprietorship Income, social security check, social security tax
social security check, social security tax, jerry dear: Dear Jerry, As far as I know, working does NOT reduce your social security check as far as the amount that you will get.. However, if you and your wife have a combined income of more than $32,000.00 filing a joint return, then some of your social security...

Tax Law (Questions About Taxes): Sole Proprietorship Revunue Posting Question, cash basis of accounting, sole proprietorship
cash basis of accounting, sole proprietorship, sole proprietor: OK CASH IT IMMEDIATELY! Since you are on the cash basis of accounting you should pick up the income in 2004 no matter what is date of the check If you are in bussines you write your expenses (say supplies in the year you buy them) if you put in work...

Tax Law (Questions About Taxes): Sole Proprietorship Tax Questions., sole proprietorship, insurance producers
sole proprietorship, insurance producers, stancil: Joseph, Thanks for your question. The additional investment would not be deductible, but any expenses incurred could be deducted. However, with no revenues, that would be an IRS flag. So you need to be able to demonstrate that it is a viable, ongoing...

Tax Law (Questions About Taxes): Sole Proprietorship, sole proprietorship, sole proprietors
sole proprietorship, sole proprietors, inventory warehouse: Hi Pam. You re correct that you do not need to set up payroll as such. Because it is a sole proprietorship, payments from your business to you are a non-taxable event. (As far as the IRS is concerned, it s the same as moving money from a personal checking...

Tax Law (Questions About Taxes): Sole proprieter, irs publication 15 circular e, irs publication 15
irs publication 15 circular e, irs publication 15, circular e employers tax guide: In short; ALL OF THEM. State and local rules and rates vary, so I will point you to your local business license department that can give you all the details for that. As far as Federal, you will need to familiarize yourself with the IRS publication 15 circular...

Tax Law (Questions About Taxes): Sole proprietor, standard mileage rates, sole proprietorship
standard mileage rates, sole proprietorship, sole proprietor: At least you did remember it. I remember riding in them! :) If you don t take the standard cents per mile, you can take the business use of your vehicle. So if you have a log (and that is very high on IRS lists, seeing that log) that shows you drove the...

Tax Law (Questions About Taxes): Sole proprietorships and profits, graphic design business, sole proprietorships
graphic design business, sole proprietorships, sole proprietorship: Dear Ray, This is not necessarily true, but the IRS may and could treat this as a HOBBY instead of a small business and this could start limiting what you could take as expenses against the other income you would have to report.... This could and would...

Tax Law (Questions About Taxes): South Dakota S-Corporation Stockholder Rights, stock purchase agreement, pro rata basis
stock purchase agreement, pro rata basis, majority shareholder: Mike, Thanks for your question. Distributions are supposed to be made on a pro-rata basis - that is, if you own 10% of the stock, you get 10% of the income. If you own 50% of the stock, you get 50% of the income. This is the legal side, where you pay...

Tax Law (Questions About Taxes): Special Depreciation Allowance-Leased Property, bonus depreciation, income tax rates
bonus depreciation, income tax rates, depreciation allowance: A storage unit complex is not farm buildings, even if it stores farm equipment. It is a commercial building. Not that a building of similar components placed on a farm could not be called a farm building. Since you are putting the building zoned as commercial,...

Tax Law (Questions About Taxes): Even Split Between "Ordinary & "Qualified Dividends on 1099s, employee stock ownership, mutual savings banks
employee stock ownership, mutual savings banks, mutual insurance companies: Hi, Since you have more than met the required holding period, it may be that some of the securities themselves are not qualified. The reduced tax rates do not apply to dividends received from: - credit unions - mutual insurance companies - farmer s...

Tax Law (Questions About Taxes): Spousal Ira contribution, maximum tax deduction, spousal ira
maximum tax deduction, spousal ira, ira contribution: Gerald, Thanks for your question. I don t see a breakeven point. You are probably in the 25% bracket, so for every dollar you contribute to the IRA, you reduce your tax liability by 25 cents. If your taxable income drops below $59,400, the benefit...

Tax Law (Questions About Taxes): Spouse already claimed as dependent, block mail, stancil
block mail, stancil, h r block: Michael, Probably not an audit, just an inquiry. If the same SS is claimed on more than one return, both parties will get a letter from the IRS, instructing them to amend their return if they are not entitled to the exemption. If one does so, that is...

Tax Law (Questions About Taxes): Spouse Dependant, head of household, form 1040x
head of household, form 1040x, stancil: When you are married you can file a joint return even if you have no income. If you are married you cannot file as head of household or as single. That is probably where the problem arose. You can file an amended return for last year by filing Form...

Tax Law (Questions About Taxes): One Spouse Employed by the Other, self employment tax, hair stylist
self employment tax, hair stylist, employment liability: William, Thanks for your question. Yes, it is legal. No, I don t see that is will reduce your tax liability. It reduces her profit thereby reducing the amount of income she makes, plus it reduces her self-employment tax liability since her income...

Tax Law (Questions About Taxes): Spouse Filing taxes separate, irs audit, head of household
irs audit, head of household, filing taxes: Carmen, Thanks for your question. You cannot be audited for filing separate returns. However, you cannot file as head of household. This will likely trigger an audit. You must each file married filing separately. I suggest you immediately file amended...

Tax Law (Questions About Taxes): Spouse Inheritance Tax, inheritance taxes, inheritance tax
inheritance taxes, inheritance tax, stancil: Evan, Thanks for your question. Lack of a will does not mean your assets go to the government - it means that your estate is distributed based upon state law. It will go to your relatives based upon the laws of your state of residence. If the estate...

Tax Law (Questions About Taxes): Spouse Maint., stancil, alimony
stancil, alimony, due date: Don, Thanks for your question. You can only deduct alimony in the year in which it was actually paid. You can file amended returns for up to 3 years from the due date of the return, or the date it was filed whichever is later. Hope this helps. ...

Tax Law (Questions About Taxes): Spouse Obligation, proprietor company, sole proprietor
proprietor company, sole proprietor, joint accounts: John, Thanks for your question. 1. No statute of limitation on collections, although there is a 6-year limitation on assessments. 2. Limited income would not allow one to avoid payments, particularly if there are assets. 3. Yes, they can attach...

Tax Law (Questions About Taxes): Spouse not in the U.S., usa embassey, tax id number
usa embassey, tax id number, necessary paper work: Dear Ramez, Your SPOUSE is the one that has to apply for the Tax ID number, not you.... She also MUST sign the tax return if you are filing JOINT.... Call the IRS at 1-800-829-1040 and they will tell you everything you need to know and how to do this.......

Tax Law (Questions About Taxes): Spouse, 2003 tax forms, christmas eve
2003 tax forms, christmas eve, deceased wife: Dear Leon, You will fill out the 2003 tax forms just like you always did.... You report her income and yours, etc... When it comes to signing the return, you sign your name on the first line, then sign her name on the line she would normally sign and...

Tax Law (Questions About Taxes): Spouses resident in separate states, federal tax return, john dee
federal tax return, john dee, state return: Dee: If he has moved to New York and does not intend on moving back to Georgia then you will file married but seperate federal tax return. If he has no income then he will not file a state return. But you will and it will only be for GA. John...

Tax Law (Questions About Taxes): SS-8 Determination letter, social security and medicare, medicare tax
social security and medicare, medicare tax, social secuirty: Ms. Mascarenas: Will not know until you file your amended return. Yes your husband will be liable for his part of the social secuirty and medicare tax. Since you have filed a schedule c and also a self employment return you may have paid in enought...

Tax Law (Questions About Taxes): SS benefits and taxes, social security benefits, disability benefits
social security benefits, disability benefits, recieving: Hi, Yes, you have to include her social security benefits on your return. Up to 85% of those benefits could be taxable depending on the amount of your other income. If half of her social security plus all of your other income exceeds $32,000, then some...

Tax Law (Questions About Taxes): SS Death Benefits, social security number, survivor benefits
social security number, survivor benefits, death benefits: Hi, Normally the death benefits are in the child s social security number even though they are sent to a parent. That means the parent doesn t report them as income. The child would not need to file a return unless she has other income that would be taxable,...

Tax Law (Questions About Taxes): SS Disability Lump Sum Payment, lump sum payment, disability eligibility
lump sum payment, disability eligibility, family incomes: Hi, Yes you interpret it correctly. She has to report the money received regardless of what she did with it. Had she given you more than $11,000, she would be required to file a Gift Tax form. Since it is less than that neither she nor you have to report...

Tax Law (Questions About Taxes): SS Disability lump sum payment, lump sum payment, disability eligibility
lump sum payment, disability eligibility, family incomes: Dear Kathleen, If your daughter and her husband s income from ALL income including the $6500.00 is $32,000.00 or more, then there is a possibility that a PART of the s.s. income will be taxable... Exactly what part can not be determined until the end of...

Tax Law (Questions About Taxes): SS Disablility Income, social security disability, social security disability income
social security disability, social security disability income, 1040 instructions: Dear Kim, S.S. Disability is NORMALLY NOT taxable.... However, there is a worksheet that will help you determine IF the s.s. disability or s.s. regular is taxable.... EVERYTHING totally depends on TOTAL income... If a person is single and their total...

Tax Law (Questions About Taxes): SS disability and pmt from employer lterm disability, short term disability, lump sum payment
short term disability, lump sum payment, irs letter: Hi, I don t quite understand just exactly what the problem is. My advice to you is to take the IRS letter and all other paperwork pertaining to your and your wife s situation to an experienced tax preparer. I know they will charge you a fee but it could...

Tax Law (Questions About Taxes): SS tax deduction on paycheck, social security and medicare, irs office
social security and medicare, irs office, social security and medicare withholding: Dixie: I am sorry if I missed that question. The answer is simple it is illegal for an employer to require the employee to pay both parts of the Social Security and medicare withholding and tax. Contact your local IRS office and report the employer....

Tax Law (Questions About Taxes): SSD tax, social security retirement, social security disability
social security retirement, social security disability, denise thanks: Denise, Thanks for your question. Social Security Disability payments are taxable just like regular social security retirement payments. What this means is that none of it may be taxable, 50% may be taxable, or 85% of it may be taxable. The taxable...

Tax Law (Questions About Taxes): SSDI, 1099MISC, LLC, work at home job, 1099misc
work at home job, 1099misc, tax id number: If you set up a S-Corp the income and distributions are considered investment income and not earned income. You will need to check with SS about how much income you can have before it starts to reduce your benefit. The at home business can be included in...

Tax Law (Questions About Taxes): SSI income, ssi income, earned income
ssi income, earned income, taxable income: Hi Roger, The room and board he pays is not taxable income to you. You can claim him as a dependent only if you provide more than half of his total support. That means you would have to provide something more than $600 per month to claim him. His $800...

Tax Law (Questions About Taxes): STATUS AND DEPENDANT, head of household, sister in law
head of household, sister in law, good reason: Dear Jean, You have not really given me any good reason here as to why you think you can claim your sister-in-law s daughter.... Since she is your sister-in-law I have to assume that she is married to your brother and therefore, he and she would be filing...

Tax Law (Questions About Taxes): Staff Entertainment, cheryl thanks, stancil
cheryl thanks, stancil, cpa: Cheryl, Thanks for your question. If done on a regular basis, the value of the employer provided meals/etc would be taxable. If it is done periodically at a workshop or as some sort of recognition, they would not be taxable to the employee. Hope...

Tax Law (Questions About Taxes): Staffing agency switch from w2 to 1099?, www irs gov, irs penalties
www irs gov, irs penalties, payroll audit: Claude, Working for temporary staffing agency does not make you an independent contractor. Seems to me if you are being paid directly by the agency, you are employee of the agency. If you are being paid directly by the company being staffed, you are that...

Tax Law (Questions About Taxes): Standard Mileage...when does it end?, case thanks, stancil
case thanks, stancil, personal vehicle: Janice, Thanks for your question. Normally, the drive from his last stop to home is considered commuting. However if the last stop is outside the area of his tax home, the mileage would be deductible. Your tax home is city or general area where...

Tax Law (Questions About Taxes): Standard Mileage Rate, standard mileage rate, irs website
standard mileage rate, irs website, business mileage: The standard mileage rate would apply only on the occasional use of vehicle. If the corporation occasionally used your personal vehicle, then they would pay you the mileage rate, or if the corporation owns and depreciates the vehicle, they would have to attribute...

Tax Law (Questions About Taxes): Standard Tax Reduction, standard deduction, personal exemptions
standard deduction, personal exemptions, personal exemption: Frans, Thanks for your question. Actually, the standard deduction is $10,300 for 2006 and is indexed for inflation, so it increases every year. In addition you are each entitled to a personal exemption currently at $3,300 each. If filing US income...

Tax Law (Questions About Taxes): Start Up Expenses, footwear company, prototype design
footwear company, prototype design, john thanks: It doesn t matter when the expenses are incurred. The $5,000 limit begins in the year the business begins operations. For a retailer that date is the day you offer your merchandise to the general public. For a manufacturer it is the day production begins....

Tax Law (Questions About Taxes): Start-up expense and taxes, s corp, wether
s corp, wether, cpa: Hi Hursh Thanks for the question It depends on wether you made an election on the first return under code Sec 195(b) to deduct upto $5,000 of such expenses. If no election was made then those costs should be capitalized and amortized over 15 years....

Tax Law (Questions About Taxes): Start up LLC, server setup fees, internet connection fees
server setup fees, internet connection fees, business bank account: Your start up period ends when you open your doors to the public and make your first sale. If you are on the cash basis and you paid for one year in advance you can deduct the whole payment however if you paid for two years you need to prorate by month...

Tax Law (Questions About Taxes): Starting a business- What Type?, marginal tax rate, cider producers
marginal tax rate, cider producers, sole proprieterships: Eric, Thanks for your question. There are a signifcant number of tax-related variables that would determine the best form of organization for you - your marginal tax rate, the level of earning anticipated from the business, just to name a couple. ...

Tax Law (Questions About Taxes): Starting an LLC to avoid self-employment taxes, sole proprietor, self employment taxes
sole proprietor, self employment taxes, income subject: Self-employment taxes are 15.3%. Your accountant must be adding the rest to cover income taxes. There can be some tax benefit to an LLC, but primarily as an alternative to a partnership/corporate form of organization. There is little tax benefit for a sole...

Tax Law (Questions About Taxes): Starting an LLC to avoid self-employment taxes, texas franchise tax, self employment taxes
texas franchise tax, self employment taxes, best bet: you need to determine if you perform your services in Texas or CA in TX your best bet is to receive a salary as Texas does not have an Income tax . In Texas an LLC will cost you the same tax as a corp or more as the Texas Franchise tax applies. As to CA...

Tax Law (Questions About Taxes): Starting an LLC in one State, business in another..., state business, management llc
state business, management llc, tax implications: Since you are going to use your home as you need to file papers in IL ( do not forget you might have a deductable home office if you qualify for it see www.irs.ustreas.gov HOME OFFICE you will also need to register as a foreign LLC in WI the implications...

Tax Law (Questions About Taxes): Starting new Corp (*S or C??), qualified dividends, sole proprietorship
qualified dividends, sole proprietorship, self employment taxes: CS, Thanks for your question. There would be few tax advantages of an LLC or S Corp over a sole proprietorship, as you would be taxed on the income regardless of any distributions you took. There could be a reduction in the self-employment taxes however....

Tax Law (Questions About Taxes): Starting a small business, asset protection plan, starting a small business
asset protection plan, starting a small business, s corp: Yes asset protection should be a very real concern for you. But there is no One-Size-Fits-All asset protection plan. It is dependent upon your specifics. Call me. As to your 60/40 Sub-S, I d need to know your goals and desires to give you specifics on...

Tax Law (Questions About Taxes): Starting sole proprietorship web design business in MS, self employment tax, web design business
self employment tax, web design business, estimated tax payments: Hi Shere. Congratulations on your decision to start your own business! Now that you re a business owner, there are several tax topics you ll need to become familiar with. Don t worry though, most of them are pretty straight-forward. All of the expenses...

Tax Law (Questions About Taxes): State Business Tax Climate Index, individual income taxes, climate index
individual income taxes, climate index, tax climate: Hi Alex Thanks for the question. The index you referred to is an overall ranking of the best tax rates applied to businesses in terms of Corporate and Individual Income Taxes and Sales Taxes, Franchise fees and occupational licenses. In other words...

Tax Law (Questions About Taxes): State/Federal/Fica tax on Disability Income, long term disability, disability income
long term disability, disability income, fica tax: Bill, Disability income is NOT subject to FICA. It is subject to income tax if your employer pays the premium for the disability insurance. If you pay the premium, the disability income is not taxable to you. If the employer pays a portion, the percentage...

Tax Law (Questions About Taxes): State and federal taxes for sole proprietorship, sole proprietorship, w2s
sole proprietorship, w2s, state return: Hi, You will need to file a state return with both states. On the Federal you combine the taxes paid to each state for your Federal itemized deductions. I haven t used Turbo Tax so I m not sure how you enter the information. In the program I use I enter...

Tax Law (Questions About Taxes): Out of State Home Sale, personal tax return, maryland resident
personal tax return, maryland resident, stepped up basis: Lisa I see that you got posted to the Answer pool. Allow me to answer this for you. Federally, if your Grandmothers estate was handled correctly the Fair Market Value of the home would have been declared and your mother and her siblings would have received...

Tax Law (Questions About Taxes): State Income Tax, income tax form, virginia residency
income tax form, virginia residency, employment wages: Vanessa, Thanks for your question. You will need to file Kentucky Form 740-NP, the non-resident, part-year resident form. You will also need to file a Virginia part-year resident form. Report Kentucky income on the KY form and Virginia income on the...

Tax Law (Questions About Taxes): Out of State Income, stancil, cpa
stancil, cpa, income tax: Dennis, Thanks for your question. Since your residence is Kentucky, you are subject to tax on all your income, wherever earned. If your legal residence is Tennessee, you are not subject to Kentucky taxes on your Tennessee income. Hope this helps....

Tax Law (Questions About Taxes): State income Tax Withholding, state income tax, stancil
state income tax, stancil, permanent residence: Laovue, Thanks for your question. You will owe state tax for the state in which you have declared as your domicile. Apparently you are listing CA as your state of permanent residence. Therefore, you will be liable for CA state taxes. Hope this helps....

Tax Law (Questions About Taxes): State income tax, adjusted gross income, state income tax
adjusted gross income, state income tax, reciprocal agreements: Hi Sasha, The way it usually works on state returns is that it starts with your adjusted gross income on your Federal return and then taxes you for the state based on the portion of your income earned in that state. Some states have reciprocal agreements...

Tax Law (Questions About Taxes): State income tax, adjusted gross income, state income tax
adjusted gross income, state income tax, nys tax return: Brian all I can say is ouch!! however remember that what you would pay RI will result in a lower NY tax . did youu claim credit on your prior NYS tax return for you RI income? if not you can still ammend the point is one state taketh the other giveth...

Tax Law (Questions About Taxes): State income tax for LLC, self employment income, state income taxes
self employment income, state income taxes, state income tax: Hi, Residents of IL are required to file a state return if they are required to file a Federal return. Since your income will be self employment income, you are required to file a Federal return so you will have to file a state return as well. Good...

Tax Law (Questions About Taxes): State income tax, state income taxes, paychecks company
state income taxes, paychecks company, working in oregon: The address of the w-2 is of no importance. The address of the hangar is his work state(OR). The fact that FL is the company home address will have no effect on your returns. He will file a return as a nonresident with OR if box 15 of his w-2 shows OR....

Tax Law (Questions About Taxes): State income taxes, state income taxes, paychecks company
state income taxes, paychecks company, working in oregon: Where the check comes from is not a big factor. The important point is what is considered his work base. I cannot answer that for you. I would suggest that you contact the HR department at his place of employment. A local CPA would be familiar with how...

Tax Law (Questions About Taxes): State income taxes, state income taxes, paychecks company
state income taxes, paychecks company, moving to vancouver: Hi, If you never lived in Oregon and your husband s company is not in Oregon you wouldn t file an Oregon tax return. From your original letter I thought perhaps you had lived in Oregon because you said that you were moving to Vancouver but didn t say where...

Tax Law (Questions About Taxes): State Personal Income Tax, personal income tax, tax fraud
personal income tax, tax fraud, poker player: Dear Kevin, NO.... That would be FRAUD.... I said you have to LIVE in one state, have a drivers license and MAIN HOME where you receive your mail in that state and then that state becomes your tax state ..... You can NOT do what you are talking about...

Tax Law (Questions About Taxes): State of residence, state residency, stancil
state residency, stancil, personal reasons: Richard, Thanks for your question. Yes, it is possible to have separate state residency for husband and wife. You don t state, but it is implied that your wife is not working, so you have no South Carolina income. If this is the case, you file as a...

Tax Law (Questions About Taxes): State residency and federal home sale exclusion, irs publication 523, florida homestead exemption
irs publication 523, florida homestead exemption, deferred pensions: hi Peter you certainly have a lot on the plate lets start with 2 facts the maximum tax savings on the sale of a principal residence amounts to 37500 if single or 75000 if filing a joint return you have 36 months to sell your property after it was no longer...

Tax Law (Questions About Taxes): State residency, personal income taxes, fide resident
personal income taxes, fide resident, state residency: Mike, Thanks for your question. Each state has different laws about residency, so you would have to check to see. Of concern would be the state you moved from. If you moved back too quickly, they could maintain that you never were a bona fide resident...

Tax Law (Questions About Taxes): State retirement and IRS, state retirement plan, retirement tax
state retirement plan, retirement tax, retirement money: Hi Karen, The IRS can collect money owed from IRAs but I don t know about state retirement. If you are making your payments on a timely basis they aren t likely to take other assets but if you have a tax refund they will take that. I would ask the administrator...

Tax Law (Questions About Taxes): State Sales Tax Due on Liquidated Inventory, taxpayer id number, dear ivan
taxpayer id number, dear ivan, texas sales tax: Hi Ruth some times rules are unfair but they are enforced I must tell you I am not an expert on sales taxes However I would like you to think and see if this is possible what would happen if you sold your inventory for a nominal price and then...

Tax Law (Questions About Taxes): State Sales Tax smartbox, indiana customers, state sales tax
indiana customers, state sales tax, business presence: Well I do not know their situation but I do know that Indiana ha a use tax for purchases that are not for resale so be careful to keep good records . also you may need to charge a sales tax to your Indiana customers also sometimes a physical location...

Tax Law (Questions About Taxes): State Tax Attributes, tax nexus, corporate income taxes
tax nexus, corporate income taxes, physical presence: Liz, The definition of a tax attribute is a characteristic or factor that could result in taxable income, deduction or credit. As it relates to State Tax Attributes , it really depends on the context of what you are reading. Taking a guess at a state...

Tax Law (Questions About Taxes): State Tax Laws Filings, map of the usa, ustreas
map of the usa, ustreas, state tax laws: go to www.irs.ustreas.gov this is the federal site it has a link to the states a map of the USA will come up click to the appropiate state and search for forms or bussiness forms you will find nyc as a separate state or link from NYS ...

Tax Law (Questions About Taxes): State Tax refund, irs pub 525, state tax deduction
irs pub 525, state tax deduction, state tax refund: Andy, you received a tax benefit in 2005 when you paid less tax by taking your state tax deduction. So you have to repay that in 2006 since you got a state refund. It is not taxed twice, only once. Since you cannot itemize in 2006, you get the benefit...

Tax Law (Questions About Taxes): State Tax refunds, irs pub 525, state tax refunds
irs pub 525, state tax refunds, income tax return: Andy: This appears to be a question from a school book since the the relationship between income and tax paid is not realistic. However, I will explain once the theory of state income tax and federal income tax. You get to deduct from federal income...

Tax Law (Questions About Taxes): State Tax, stancil, w2
stancil, w2, state tax: Robin, Thanks for your question. You should contact the company, requesting a corrected W-2 with withholding for AL. If they will not correct it, you can file a NM non resident return. Also file an AL return, taking credit for the tax paid to NM....

Tax Law (Questions About Taxes): State Taxes, double taxation, state taxes
double taxation, state taxes, wages: You should contact your employer for a corrected w-2. Your wages should be listed as earned in DC. You will need to file a return with MD as a nonresident to get a refund of tax paid there. If your employer insists that your w-2 is correct, you...

Tax Law (Questions About Taxes): State Taxes, ohio state taxes, taxex
ohio state taxes, taxex, stancil: Carla, Thanks for your question. I am not sure by who you mean when you say they make him pay into KY taxes. There are agreements between Ohio and Kentucky that result in not paying income taxes to two states. Most likely, he is responsible for Ohio...

Tax Law (Questions About Taxes): State Taxes, airline pilot, state taxation
airline pilot, state taxation, case thanks: EGP, I previously hit the button saying this was outside my area, but I did have a thought or two to share with you. The usual principal in state taxation is that you pay taxes in the state in which they are earned. So the problem is determining where...

Tax Law (Questions About Taxes): State Taxes / Commercial Property, capitol gains taxes, federal capitol
capitol gains taxes, federal capitol, joe thanks: Joe, Thanks for your question. First, he is not liable for tax in both states. If he had to pay Illinois tax, he could get a credit on his Wisconsin taxes for that payment. Illinois states that a non-resident is taxable on income from a business...

Tax Law (Questions About Taxes): State Taxes / Internship, indiana state taxes, federal tax return
indiana state taxes, federal tax return, maryland taxes: Dear Christina, I do NOT know what the instructions are for either Maryland or Indiana state taxes... THerefore, you are going to have to download the part-year tax forms for BOTH states and the INSTRUCTIONS and this will tell you how and what to include...

Tax Law (Questions About Taxes): State Taxes, ok state, state taxes
ok state, state taxes, paychecks: This is not correct unless he is working in TX as a temporary assignment when he normally works in OK. He should request an amended w-2 if he had no income in OK. He will need to file a return as a nonresident with OK to get a refund of tax withheld there...

Tax Law (Questions About Taxes): State tax refund confusion, state tax refunds, state tax refund
state tax refunds, state tax refund, estimated tax payments: Hi, If she made the estimated payments for 2005 in 2006 but couldn t report them on her 2005 return, then they weren t for 2005. I assumed she made a 4th qtr estimated payment in January of 2006 to be applied to 2005. If that isn t the case then the $2,000...

Tax Law (Questions About Taxes): State tax requirements, west chester pa, return answer
west chester pa, return answer, carraba: Ah, West Chester huh? Know anyone wanting to hire a very professional young lady graduating from WCU in May in communications? Or do you eat at (belong to in the case of the country club) Pine Oaks or Carraba s? Daughter is a waitress at both. :) Now,...

Tax Law (Questions About Taxes): State tax on signing Bonus, stancil, state tax laws
stancil, state tax laws, new job: Alex, Thanks for your question. I am not familiar with the state tax laws in New York, but I doubt if you would be successful in getting the taxes back. Normally, earnings are taxable in the state earned. Even though you did not perform any services...

Tax Law (Questions About Taxes): State taxes piad to two states, kentucky state taxes, indiana return
kentucky state taxes, indiana return, state income taxes: Ed, Thanks for your question. Because you job is in KY, you will pay taxes on those earnings, filing a From 740-NP as a non-resident. You will also file an Indiana return reporting all your income, including the KY earnings. However, you will receive...

Tax Law (Questions About Taxes): State taxes to another state other than were I live, state of mississippi, state taxes
state of mississippi, state taxes, resident income tax: Yes also you may have a credit if you pay Tn resident Income tax (I am not familiar with Tn individual taxes ) also you are aware that documented gambling losses to the extent of gains are deductable( maybe also expenses conected with the activity?)...

Tax Law (Questions About Taxes): State taxes, state returns, stancil
state returns, stancil, california tax: Michael, Thanks for your question. And thank you for serving in the military. I am not familiar with the California tax code, but my guess would be that owning the house does not affect your Alaksan status. You and your wife would file separate state...

Tax Law (Questions About Taxes): State unemployment tax for S Corp., state unemployment tax, tax law changes
state unemployment tax, tax law changes, workman comp: Heather: Officers of corporations are the first employees of a corporation. Therefore, distributions to the officers are wages. Creative accounting sometimes classifies these payments as dividends, owners draw, distributions, and many other special names...

Tax Law (Questions About Taxes): Two States Taxation, taxable earnings, employer plans
taxable earnings, employer plans, w2: HI Shanna yes I believe something could be wrong lets try to figure this out Do you do any work in SC ?and approximately how much do you earn per week do you participate in any pension plans or makes? or other employer plans? Do not despear we will...

Tax Law (Questions About Taxes): StateTax law filing for second home mortgage in another state, state of mississippi, state of louisiana
state of mississippi, state of louisiana, itemized deduction: Cathy, Thanks for your question. Since you are not considered a resident of LA, you have no income there, and do not file an LA return. Simply deduct the interest and taxes on your Federal and MS returns. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Statute of limitations?, state tax return, statute of limitation
state tax return, statute of limitation, stancil: K, Thanks for your question. First, the federal statute of limitation is 3 years from the due date of the return or when it was filed, whichever is later. Since he did not file a return the time for the statute of limitations has not begun. I presume...

Tax Law (Questions About Taxes): Statutory Taxes, state withholding taxes, disability compensation
state withholding taxes, disability compensation, unemployment tax: HI Patsy all taxes are by statue as I never heard of voluntary taxes so don t let the term statutory taxes scare you. What I would suggest you become familiar with the Federal circular E at www.irs.ustreas.gov this publication refers mostly to withholding...

Tax Law (Questions About Taxes): Step Up Basis-continued, annual exclusion, taxable gifts
annual exclusion, taxable gifts, return thanks: Bryce, Thanks for your question. If the house were inherited by the daughter you are correct, she would get a basis of FMV as of date of death. The child could deed the house back to the parent, but this would create a gift tax situation. There...

Tax Law (Questions About Taxes): Step Up Basis, formal appraisal, going back in time
formal appraisal, going back in time, current date: Any costs in preparing the house for sale would be treated as a reduction of your proceeds if you treat it as investment property. In essence, they add to your basis. Taxes would be deducted on Schedule A. Closing costs would be a reduction of proceeds...

Tax Law (Questions About Taxes): Step-child Dependency Status, dependency status, step daughter
dependency status, step daughter, stancil: Robert, Thanks for your question. A step-daughter can be a qualifying child for dependency purposes. You are correct in that she needs to live with you for more than half the year. That would not allow you to take the exemption. Sorry I can t bring...

Tax Law (Questions About Taxes): Stepped up basis on assets from Irrevocable Trust, irrevocable trusts, trust facts
irrevocable trusts, trust facts, medical emergencies: John, There are no additional step-ups on the basis of the assets held in an irrevocable trust. Technically trusts do not have a life, therefore they can not die. You might need to review the documents setting up theses trusts because its very unusual...

Tax Law (Questions About Taxes): Stepped up basis on trusts, revocable trusts, revocable trust
revocable trusts, revocable trust, irrevocable trust: Lindsay, When securities are transferred to an irrevocable trust, the basis remains the same as the grantor s. There would be no step up upon your father s death. The rules are different with a revocable trust. In a revocable trust, your father has...

Tax Law (Questions About Taxes): Stipend Tax Question, sep ira contribution, self employment tax
sep ira contribution, self employment tax, unreimbursed business expenses: Sherri, Under these circumstances, yes you would be considered self-employed. First, you would report your 1099-MISC as gross income on Schedule C. Schedule C is the form self-employed individuals report their income and expenses. You will be able to...

Tax Law (Questions About Taxes): Stipend, medical assistance company, legal ramifications
medical assistance company, legal ramifications, yearly salary: David, If your employer provides you with a computer, car and housing it s still taxable compensation to you. It s no different than if they paid you cash and you purchased these things directly. Your employer gets the same deduction for employee compensation,...

Tax Law (Questions About Taxes): Stock, cancer expense insurance, cancer insurance
cancer expense insurance, cancer insurance, payroll deduction: Danny, If the stock your employer gives you is not taxed, your basis is the $50 cost. If that is subject to income tax and included on your W-2, your basis is $57. Yes, the cancer insurance is deductible as a medical expense on Schedule A. Hope this...

Tax Law (Questions About Taxes): Stock, irs, losses
irs, losses, stock: Hi Reta, You re correct that you only pay tax on the gain but if you didn t report the sale on Schedule D, the IRS only knows the amount of the sale. What you paid for the stock is not reported to them. You have to do that on Schedule D. You need to...

Tax Law (Questions About Taxes): Stock Bankruptcy, capital losses, stancil
capital losses, stancil, company stock: BJ, Thanks for your question. You can treat the loss on the bankruptcy as a capital loss. Since you held the stocks over 12 months, it will be a long term loss. You do not have to sell the shares (who would buy them?) but treat it as a sale on Schedule...

Tax Law (Questions About Taxes): Stock Basis, stock basis, stock value
stock basis, stock value, stock split: Hi Vince, Yes, your basis in inherited stock is the fair market value on the date of his death. The stock split does not affect your basis. You simply have more shares at a lower cost per share but the total $ remain the same. You need to know the...

Tax Law (Questions About Taxes): Stock Basis, stock basis, delema
stock basis, delema, cpa: Dear Jerry, There is nothing that says you can t use as many 1040-schedule-D sheets that is needed to list EVERY purchase and every sale, including DAY purchases and DAY sales... Your broker needs to send you everything you need and even if it take 25 sheets...

Tax Law (Questions About Taxes): Stock basis, homework question, biblical scripture
homework question, biblical scripture, homework questions: I am sorry you thought the answer flippant. It was, however, a standard answer written by AllExperts for handling questions believed to be homework questions. I did not provide the answer. You must understand that I get a significant number of questions...

Tax Law (Questions About Taxes): Stock: Capital Gain Question, dividend reinvestment program, quarterly dividend
dividend reinvestment program, quarterly dividend, federal income taxes: Hi Todd, Your basis is what you originally paid plus what you paid for the shares you purchase with the dividend each quarter. As an example let us say you purchased 100 shares for $100 per share for a total of $10,000. Then let s say your first dividend...

Tax Law (Questions About Taxes): Stock contribution to a ROTH IRA, ira contributions, roth ira
ira contributions, roth ira, traditional ira: Geo, Thanks for your question. You cannot contribute the stock to your IRA. Contributions to an IRA (other than rollovers) are restricted to cash contributions only. You would have to sell the stock and contribute the proceeds to your IRA. This applies...

Tax Law (Questions About Taxes): Stock/Entity Questions, personal income tax, federal income taxes
personal income tax, federal income taxes, capital gains tax: Hi Eric Yes, take advantage of the individual capital gains as described in my previous answer. There are other options available to you, but without knowing your particular tax situation it would be difficult to recommend another solution. Please subscribe...

Tax Law (Questions About Taxes): Stock expenses, profitable trades, term stock
profitable trades, term stock, standard deduction: it becomes part of schedule A expenses deductible only they exceed 2% OF agi ALSO YOU MAY FIND that the standard deduction my give you a larger deduction You could consider bunching two years expensed into one for example you can buy a 2 year subscription...

Tax Law (Questions About Taxes): Stock Losses in a Roth IRA, stock losses, roth iras
stock losses, roth iras, roth ira: Hi, Losses within an IRA are not deductible. But if she withdraws the funds from all of her Roth IRAs and the amounts distributed are less than her unrecovered basis, the loss is deducted as a miscellaneous itemized deduction, subject to the 2% of AGI...

Tax Law (Questions About Taxes): Stock Losses, stock losses, stancil
stock losses, stancil, stock advisor: Ben, Thanks for your question. Sounds like you have been listening to my stock advisor! Seriously, if the stock is entirely worthless, you can take it as a loss on Schedule D. The loss is the amount of your investment. For tax purposes it is considered...

Tax Law (Questions About Taxes): Stock losses and gains, stock losses, jim dear
stock losses, jim dear, tax return: Dear Jim, If you file a tax return as SINGLE, then you can claim up to $1500.00 worth of losses for 2004 and carry-forward the balance of the loss to 2005 and use it when you file your 2005 return and if still filing SINGLE and don t use up all your 2005...

Tax Law (Questions About Taxes): Stock option tax, nonresident taxpayers, income tax return
nonresident taxpayers, income tax return, internal revenue service: Jiaeyo, The withholding was on the gross proceeds of the stock sale and not on the capital gain. U.S. tax law requires income taxes to be withheld at the source for stock sales of nonresident taxpayers. In order to claim a refund on the taxes withheld,...

Tax Law (Questions About Taxes): Stock pension and my W-2, tax adviser, stancil
tax adviser, stancil, stock option: Alayna, Thanks for your question. If it was included in your wages it is most likely a taxable stock option. In that case, there is nothing you can do about it. The only advice I have is to check with your employer s HR department and ascertain that...

Tax Law (Questions About Taxes): Stock Sale, employee stock purchase, stock price data
employee stock purchase, stock price data, stock purchase plan: Harold, Thanks for your question. Ideally, you should have a record of all your purchases. If you did not keep such a record, it is possible the company has maintained one. Check with your HR department to see. If this does not yield any answers,...

Tax Law (Questions About Taxes): Stock Sale, employee stock purchase, maximum rate
employee stock purchase, maximum rate, different times: Hi Harold, You need to add up all the individual purchases to arrive at your cost. Hopefully you have kept the records that were provided at the time. I know this is a major pain since I have to do it every year for clients with employee stock purchase...

Tax Law (Questions About Taxes): Stock sale/Capital Gains, capital gains tax rates, long term capital gains
capital gains tax rates, long term capital gains, capital gains tax: Hi David, If you sell it now it will be taxed as ordinary income on next year s tax return: the tax rate would depend on your total income. If you wait until you have held it over a year, it will be taxed at long term capital gains tax rates (maximum 15%)....

Tax Law (Questions About Taxes): Stock sales, long term capital gain, capital gain tax
long term capital gain, capital gain tax, company stocks: Hi Lina, The tax you pay on the sale of stocks is based on the gain and the holding period. For example if you paid $1,000 for stock X and sold it for $4,000, your gain is $3,000. If you held it for more than 1 year it would be a long term capital gain...

Tax Law (Questions About Taxes): Stock-Tax loss, statue of limitations, deposit money
statue of limitations, deposit money, stock market: I am not sure if the statue of limitations applies to anything that occurred before December 31,2002, I believe it does. But you have until April 15, 2007 !!( so you need to hurry)to Amend the the 2003 return to show your 2003 losses for carry forward to...

Tax Law (Questions About Taxes): Stock Wash Sale Rules, stock purchase plan, capital losses
stock purchase plan, capital losses, company stock: Hi, You have the wash sale rules exactly right but you may not be able to write off the entire loss on your 2004 return. Your capital losses first offset your capital gains then if any loss remains you can claim up to $3,000 of loss against other income....

Tax Law (Questions About Taxes): Stock write-offs, bob bob, personal questions
bob bob, personal questions, ea: Bob, you are limited to 3K in losses over gains yearly. Short term gains and losses are netted, then long term gains and losses are netted. Your other questions would be personal and this forum does not allow for personal questions, only general questions....

Tax Law (Questions About Taxes): Stock, www irs gov, base stocks
www irs gov, base stocks, waban: Dear Milton, You can take a deduction for Home Base stocks if you sell them or can prove they are WORTHLESS if they can not be sold.... See the instructions for the 1040-schedule-D and you can get those instructions and the form at www.irs.gov thank you,...

Tax Law (Questions About Taxes): Stocks, Capital Gains, and Tax Brackets, capital gains tax rate, income tax rates
capital gains tax rate, income tax rates, short term capital gains: Hi, Long term capital gains (stocks held more than one year) are taxed at a maximum of 15%. The percentage could be as low as 5% depending upon your tax bracket. Short term capital gains (stocks held one year or less) are taxed at ordinary income tax...

Tax Law (Questions About Taxes): Stocks sold, form 1040e, form 1040 schedule e
form 1040e, form 1040 schedule e, form 1040 schedule d: Dear Ralph, You must file form 1040.... The sale of stock will go on form 1040-schedule-D on the appropriate line and then you follow the instructions per each line and it will tell you what line on the 1040 to report the gain or loss... You do NOT use...

Tax Law (Questions About Taxes): Storage Writeoff?, home office deduction, utility trailer
home office deduction, utility trailer, tools equipment: Cliff, Sorry, there is no deduction for parking your utility trailer at your residence. The same would be true for parking your work truck at home. If you did rent a storage lot or facility for your trailer or other business use equipment, the rent...

Tax Law (Questions About Taxes): Student Exemption, irs gov, test rule
irs gov, test rule, point test: Dear Kevin, His mother would not be able to claim him if he makes more than $3000.00 in 2004 because she definately can not have paid more than 50% of his support inorder for her to claim him as a dependent.... Therefore, he will file his own tax return...

Tax Law (Questions About Taxes): Student Husband, part time job, stancil
part time job, stancil, recieve: Jessica, Thanks for your question. I could not say for certain without examining your tax return, but most likely it would work to your disadvantage. His eligiblilty for aid would most likely include your income. In addition, there are certain tax...

Tax Law (Questions About Taxes): Student Income and Roth IRA Reporting, time college student, roth ira
time college student, roth ira, self employment taxes: Bill, Thanks for your question. She needs to file a Schedule C with her 1040, indicating the baby sitting earnings there. Calculate the self-employment taxes on Schedule SE. She does not need to report anything for the Roth IRA. However, she is...

Tax Law (Questions About Taxes): Student Loan Interest, student loan interest, student loans
student loan interest, student loans, previous years: Dear Peter, You can go back and file an amended return for 2002, 2001 and 2000 if you do so before April 15th 2004.... You can file amended return even after that, but you will NOT get any refund if you had any coming to you.... Even 2000 would be iffy........

Tax Law (Questions About Taxes): Student Loans, principal balance, student debt
principal balance, student debt, student loans: Dear Dan, If you have been declaired legally insolvent usually the 1st step to bandrupcty, the on line 21 other income you will write on the dotted line 1099-C then the amount, then write insolvent and in the box write -0- Bear in mind that it can NOT...

Tax Law (Questions About Taxes): Student/Low income taxation, income taxation, bank interest
income taxation, bank interest, federal taxes: While one is never exempt from taxes, federally, you would owe no taxes on your income (if this is all your income - no bank interest, etc or if you are not married). FICA is always going to be held out from your check. And you need to check your state law...

Tax Law (Questions About Taxes): Student loan interst deduction, irs website, resident alien
irs website, resident alien, canadian taxes: Melissa, Thanks for your question. I cannot find anything in my material that states that the interest must be paid to a US financial institution. Based on this, I would advise that you could take the deduction. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Student loans & Taxes, cost of living expenses, lifetime learning
cost of living expenses, lifetime learning, 1040a: Hi, The student loans are not accounted for on your tax return. When you start paying them back you will be able to take a deduction for the interest paid (unless, of course, Congress changes the law between now and then). The amounts you spend on tuition...

Tax Law (Questions About Taxes): Student needs help with tax preparation, irs laws, irs gov
irs laws, irs gov, 1098 form: Dear Sheila, I simply do not have enough information here to specifically answer your questions..... The college you attend should automatically send you the 1098 form and if you have not received it by the 31st of January you need to contact the college.......

Tax Law (Questions About Taxes): Student Tax Return, standard mileage deduction, self employment tax
standard mileage deduction, self employment tax, working with autistic children: Yes she needs to file a schedule C which results on $400 of income tax and $1700 of self employment tax so any expenses she had will reduce the self emploement by an effective 7.50 per hundred of expense. Even if she is reimbursed for the auto use...

Tax Law (Questions About Taxes): Student Tax Return, standard mileage deduction, working with autistic children
standard mileage deduction, working with autistic children, psychology graduates: Don, Thanks for your question. Being a student has nothing to do with it. She is self-employed, she needs to complete and file a Schedule C with her 1040. She will also need to complete Schedule SE for the self-employment taxes. She has two options...

Tax Law (Questions About Taxes): SUV Depreciation, chevy suburban, depreciation expense
chevy suburban, depreciation expense, sec 179: Hi Joseph if you do not receive cash but use the old car as a trade in all that happens that allowed depreciation and sec 179 reduces the basis of the new car you get the depreciation expense you would be entitled on the old car for the whole year and no...

Tax Law (Questions About Taxes): SUV Depreciation, section 179 deduction, tax free exchange
section 179 deduction, tax free exchange, chevy suburban: Joseph, I found your question in the pool. I m not sure that Ivan answered your question or not. If you trade in your old SUV for a new SUV, you have a tax free like kind exchange. Your basis for depreciation for the new SUV is $6,000 ($54,000 less $48,000)....

Tax Law (Questions About Taxes): SUV Depreciation, section 179 deduction, tax free exchange
section 179 deduction, tax free exchange, chevy suburban: Joseph, I found your question in the pool. I m not sure that Mike answered your question or not. If you trade in your old SUV for a new SUV, you have a tax free like kind exchange. Your basis for depreciation for the new SUV is $6,000 ($54,000 less $48,000)....

Tax Law (Questions About Taxes): SUV Depreciation -- Follow up, new wheels, life span
new wheels, life span, tax basis: Joseph YES since you are only depreciating the amount of cash paid even though the value if the new SUV is higher there is nothing to recapture.( however if you were to sell the new SUV rather than trade it you would have a reportable gain all that is happening...

Tax Law (Questions About Taxes): SUV Depreciation, standard mileage rate, employee business expenses
standard mileage rate, employee business expenses, adjusted gross income: Hi, You can either claim actual expenses, including depreciation, or you can use the standard mileage rate of 48.5 cents per mile. The standard mileage rate includes depreciation. Either way you need the total miles on the vehicle as well as the business...

Tax Law (Questions About Taxes): SUV tax exemption, section 179 deduction, h2 hummer
section 179 deduction, h2 hummer, dear christine: Dear Christine, First of all I do not know what EXEMPTION you are talking about... Secondly, you can only take a PORTION of the cost of ANY vehicle you purchase that is related to the BUSINESS USE of that vehicle... Therefore, if you use this H2 Hummer...

Tax Law (Questions About Taxes): Sub Chapter S Income, self employment tax, subchapter s corporation
self employment tax, subchapter s corporation, personal return: The difference between a Sub-S and a real corporation is; How it is taxed. You actually started with a real corporation then filed the 4352 sub-s election. You can attempt to undo that election for next year, but not this past year. The Sub-S issues you...

Tax Law (Questions About Taxes): Sub Contractor, real estate commissions, statutory employees
real estate commissions, statutory employees, wholesale orders: Maria: If the sales people will be selling your products and will be paid a salary plus commission or exclusively by commission they will be your employees. Your state law is probably the same as my state that only insurance and real estate commissions...

Tax Law (Questions About Taxes): Sub chapter S, debtor in possession, government payroll
debtor in possession, government payroll, excise taxes: Hi Kelly FIRST MAKE A CASH CALL FROM YOUR PARTNER AND HAVE HIM PUT IN SOME $$$ IF HE BALKS take the check book away from your partner tell him he is great at getting new business and dealing with customers so you will take over all the financial tasks...

Tax Law (Questions About Taxes): Sub contractor and 1099 form, social security disabilty, social security disability
social security disabilty, social security disability, false sense of security: Tony: I do not understand your question. If you have a business and are contracting with another contractor I am sure there are some types of insurance you must have to limit the liability of the contractor. Most of the cities, counties, and states...

Tax Law (Questions About Taxes): Sub S Corp - Taxpayer sells his interest, income losses, stock basis
income losses, stock basis, stock sales: Bill, You should be receiving a final K-1 from the S-Corporation reflecting any pass through income, losses and deductions during your period of ownership for the year. You will also need to report the disposition of the stock on Schedule D. Schedule...

Tax Law (Questions About Taxes): Sub S Corp, income tax liability, personal income tax
income tax liability, personal income tax, business losses: Your idea of pushing the tax liability on the payment made to pay the taxes would reduce the taxes this year but would add it onto next year. There is no requirement federal or otherwise to make payments at any particular date. As to payroll taxes, as long...

Tax Law (Questions About Taxes): Sub-S Distributions for Estimated Taxes, franchise tax board, cash distributions
franchise tax board, cash distributions, paul thanks: Paul, Thanks for your question. With an S Corp, owners are taxed on the profits, regardless of any distributions. Therefore, distributions are tax free. Therefore, it does not matter why the distribution is made. The corporation could send in a tax...

Tax Law (Questions About Taxes): Sub S Salary vs dividend, fica tax, return of capital
fica tax, return of capital, business expansion: no there is no penalty for holding back the cash as far as the money you pay yourself it is not a dividend but a return of capital. it makes no diference as you are taxed on the salary and the rest of the profit is also taxed as ordinary income however if...

Tax Law (Questions About Taxes): Sub S, selling shares, potential liability
selling shares, potential liability, tax advantage: Although the minutiae of process is different, the ultimate affect is about the same. The more important issues are for the buyer, purchasing assets only avoids any potential liability for past acts of the business. this can be huge. Richard Fritzler...

Tax Law (Questions About Taxes): Subchapter S corp, subchapter s corp, tax consultant
subchapter s corp, tax consultant, tax act: After marriage I would insist in filing Married filing separately status even though it would cost more until he gets his tax act together. As to the past the tax man would have no claim against you unless you hold property jointly if you live in a community...

Tax Law (Questions About Taxes): Subchapter S Shares, subchapter s corp, concept thanks
subchapter s corp, concept thanks, treasury stock: Bobby it is six of one or half a dozen of the other. Money that is withdrawn from an S corp is not taxed what is taxed to the stockholders is the income reported on the S corp form 1120S It would be the same result if the corp buys back the stock provided...

Tax Law (Questions About Taxes): Subchapter S tax question, health insurance costs, subchapter s corporation
health insurance costs, subchapter s corporation, fringe benefits: Sue, Thanks for your question. As a more-than-2%-owner of an S Corp, you cannot reveive tax free fringe benefits from the corporation. You can, however, take a deduction on line 29 of page 1 of the 1040 for your health insurance costs. Hope this...

Tax Law (Questions About Taxes): Subcontract Labor Taxation, personal tax return, issuing 1099s
personal tax return, issuing 1099s, labor taxation: Amy, There is nothing that prohibits you from issuing 1099s to corporations. The instructions for 1099s state you are not required to do so. The IRS generally doesn t provide their rational for their requirements. I contend the issuing of 1099s have...

Tax Law (Questions About Taxes): Subcontractor - W2 paid, self employment tax, www irs gov
self employment tax, www irs gov, car mileage: Dear Dave, Since you are an employee for the company that you work for (received form W-2 and not a 1099-MISC) and if you went to these clients from your work first, then you can use the mileage (not lease) as an unreimbursed employee expense (see form 2106...

Tax Law (Questions About Taxes): Summer Internship Rent Deduction?, ny state tax, business expense
ny state tax, business expense, employment income: You have no deductions for rent, travel or anything else. And you will file to all states, PA, IL and NY. PA will get all your income taxed to it (and the local taxes too) and IL and NY will prorate your income to what was earned in those states. Helen,...

Tax Law (Questions About Taxes): Summer job, boyfriend lives, stancil
boyfriend lives, stancil, getting a job: Kayla, Thanks for your question. There is nothing to prevent you from working in CA. You would pay Federal taxes, of course. Additionally, you would owe CA taxes since the money was earned in that state. You would have to file as a non-resident. Additionally,...

Tax Law (Questions About Taxes): Sun S Corps and rental real estate, social security tax, social security and medicare
social security tax, social security and medicare, payroll taxes: There is no limit as to how much income a Sub-S can receive, however there are many many limitation on how much a sub-s can write off or save you in taxes. If you are successful in your sub-s you will realize a diminishing tax advantage, since the Sub-S...

Tax Law (Questions About Taxes): Supplimental Income??, supplimental income, federal tax status
supplimental income, federal tax status, unilateral move: Kevin, Thanks for your question. Whatever they have done is a unilateral move by your company. There is no change in the tax code in this area, to my knowledge. There is no universal definition of supplemental income - it is however your company chooses...

Tax Law (Questions About Taxes): s-corp, food allowance, clothing allowance
food allowance, clothing allowance, s corp: Hi Todd the IRS defines business expenses as ordinary, reasonable and necessary for the business,so food and clothing do not qualify as business expenses if you use a portion of your house solely to conduct business you may have a deduction, see www.irs.ustreas.gov...

Tax Law (Questions About Taxes): s-corp, www irs gov, irs website
www irs gov, irs website, starting my own business: To file a real corporation you need to contact the Secretary of State in your state, they will have a form that you can file to incorporate . Then if you want to completely hobble it so that it provides you almost no tax advantage, you can file a 2553...

Tax Law (Questions About Taxes): s corp, personal tax rates, s corp
personal tax rates, s corp, stock holders: I hesitantly say yes, it is possible to do so. Assuming the $4 million is debt free assets. The lender probably has a due on sale clause and the right to disallow any transfer of title if it is not paid off in full. But why, were you hoping for a liability...

Tax Law (Questions About Taxes): s corp, marginal tax rate, subchapter s corporation
marginal tax rate, subchapter s corporation, qualified dividend: Russ, Distributions from S corporations come first from the entity s Accumulated Adjustments Account (AAA). The AAA is a cumulative total of undistributed net income items generated by the Subchapter S corporation. With a Subchapter S corporation, corporate...

Tax Law (Questions About Taxes): s-corp asset sale, tax implication, sec 179
tax implication, sec 179, stepped up basis: Hi John Thanks for the follow up. It absolutely matters how the sales price is divided up from a tax perspective. You have depreciation recapture and capital gains to consider. Sec 179 recapture. Any covenants that need to be analyzed and the tax implication...

Tax Law (Questions About Taxes): what is the differance between an s & c corp?, personal tax rates, payroll taxes
personal tax rates, payroll taxes, c corp: An S-Corp pays no tax. A C-Corporation pays taxes. An S-Corp attributes all the tax liability to the individual owners and they have to pay their personal tax rates on all the money the business made. This is a much higher tax than the tax rate the C-Corporation...

Tax Law (Questions About Taxes): s-corp dissolution, subchapter s corp, form 966
subchapter s corp, form 966, specific s: I don t think so but the form seems to be simple enough and you have not distributed property other than cash so it seems to have no purpose but file it anyway! PS Another way to terminate an S Corp is to issue a share of different stock...

Tax Law (Questions About Taxes): s corp distributions, social security and medicare, s corp
social security and medicare, s corp, stancil: David, Thanks for your questiaon. You can certainly increase the amount withheld from your check. However, there are a couple of issues here. If you include a distribution as a part of your pay check it may subject that distribution to social security...

Tax Law (Questions About Taxes): s-corp distributions, full time job, sole proprietor
full time job, sole proprietor, comparison sake: This is a textbook example of how a sub-S doesn t do you any good. q1: The minimum compensation is not just a percentage, it is also a reasonable salary for the job that is done. How much would you have to pay someone else to do the job you do. I m gonna...

Tax Law (Questions About Taxes): s-corp quarterly taxes, s corp, stancil
s corp, stancil, bank accounts: Shaun, Thanks for your question. Since you have no employees and have not commenced business at this point, you do not need to file a 941. However, once you have employees, you should file quarterly even if you do not have any payroll for a particular...

Tax Law (Questions About Taxes): s corp real estate, s corp, capital gain
s corp, capital gain, cpa: The gain is a capital gain if the S-corp is not a dealer in real estate. You also need to watch out for built-in gains from property that was contributed into the S-Corp in exchage for stock. How was the real estate acquired by the S-Corp? If the S-Corp...

Tax Law (Questions About Taxes): s corp tax, income tax liability, personal income tax
income tax liability, personal income tax, s corp: Lee, Thanks for your question. A corporation or partnership must file a return for every year it is in existence even if there was no profit or activity. Failure to file can result in a penalty. In addition, if there was a gain for that one month,...

Tax Law (Questions About Taxes): s-corp taxes, hair stylist, s corp
hair stylist, s corp, personal return: Shelly, Thanks for your question. The order in which you file the returns does not matter. However, you will have to prepare your corporation return first so you will know how much profit and loss from the corporation to include on your personal return....

Tax Law (Questions About Taxes): s corp vs llc, double taxation, s corp
double taxation, s corp, c corp: Clem, Thanks for your question. An S Corp can distribute the profits in whatever fashion the owners argee. However, all distributions of ordinary income, whether designated as salary or not, are subject to FICA/Medicare taxes. To minimize FICA,...

Tax Law (Questions About Taxes): s corp vs llc, partnership return, payroll taxes
partnership return, payroll taxes, unemployment tax: First, your accountant is in error. The LLc is considered a disregarded entity by the IRS. The IRS has no tax return for a LLC, you would be filing a general partnership return. There are other problems with your accountants plan. the Sub-S will at best...

Tax Law (Questions About Taxes): s corp wages, s corp, stancil
s corp, stancil, grey area: Tony, I don t remember the specifics of the question you reference, but this really is somewhat of a grey area. If the corporation is not profitable or only marginally so, there is no question about the wage requirement - no money to pay wages. As it...

Tax Law (Questions About Taxes): s-corp, s corp, lasses
s corp, lasses, s corporation: You won t have to issue a new 2553. When the Corporation files is 1120S you will declare the owners and their percentage and the length of time they have been owners. From there you will be able to apportion any profits or lasses and attribute them to the...

Tax Law (Questions About Taxes): s corporation, internal revenue service, rules of professional conduct
internal revenue service, rules of professional conduct, sole shareholder: Hi Sam: In some states if the officers of the Corporation are given benefits (Health, Life Insurance and Retirement)that exclude the other employees, those plans are deemed non-qualifying and lose their tax benefit. If, for instance, you are paying for...

Tax Law (Questions About Taxes): s-corps and payroll, self employment income, self employment taxes
self employment income, self employment taxes, q corp: My suggestion would be for you two to form a new Scorp or LLC and distribute the profits directly to the Individuals as to eliminate the complications Just remember to file estimated taxes quarterly for the income not subject to withholding If you go the...

Tax Law (Questions About Taxes): salary, safe bet, betting man
safe bet, betting man, tax question: Employment for CPA s will never be lacking. With the passage of the Sarbanes-Oxley act, coupled with other factors in our econonmy, the demand for CPA s will certainly not decrease. To it it big in any profession will require dedication and passion beyond...

Tax Law (Questions About Taxes): salary taxes, form 1040 schedule c, clergy tax
form 1040 schedule c, clergy tax, irs gov: Dear Billy, You will have to file form 1040-schedule-C and you will have to pay s.s. and medicare taxes.... I suggest strongly that you go to www.irs.gov and download publication 517 which will explain the s.s. and medicare tax and a lot of other information...

Tax Law (Questions About Taxes): salary taxes, self employment income, income tax purposes
self employment income, income tax purposes, social security and medicare: Hi Billy, An ordained, commissioned or licensed minister is subject to dual-status rules for reporting income. Compensation for performance of religious duties is treated as employee wages for income tax purposes, and as self-employment income for SE tax...

Tax Law (Questions About Taxes): salary taxes, thanks in advance, ppr
thanks in advance, ppr, federal tax: Hopefully,you are getting a W-2, if not, check with your PPR committee and find out why not. And you can have federal tax withheld if you want it (and state too). Allowances, such as housing, are only taxable for SE purposes, but remember, you must also...

Tax Law (Questions About Taxes): salary taxes, self employment tax, social security and medicare
self employment tax, social security and medicare, b j worth: Billy, Thanks for your question. You are responsible for federal income taxes, state income taxes if your states has them, and self-employment (social security and medicare) taxes. You can have the church designate a given amount as housing allowance....

Tax Law (Questions About Taxes): salary taxes, irs gov, medicare tax
irs gov, medicare tax, clergy members: This tax will be due when your file your tax return each year by april 15. The estimated payments will be similar to tax withheld from an employer as it will be placed in your ss# account just like tax withholdings until the return is filed. I recommend...

Tax Law (Questions About Taxes): salary taxes, unpaid payroll taxes, sole proprietor
unpaid payroll taxes, sole proprietor, business deductions: From your explanation, you are being paid as an independent contractor (1099). You will be responsible for Income taxes (Both State and Federal) and payroll taxes (social security, medicare, workers comp, unemployment, and possibly other state taxes). As...

Tax Law (Questions About Taxes): salary and wages, calendar basis, personal money
calendar basis, personal money, vacation pay: I m not clear, you as an individual almost always must file taxes on a calendar basis, not a fiscal basis. And accrued wages/bonus is not a deduction it is income. Are you saying that you personally have accrued bonuses, and that your business will be paying...

Tax Law (Questions About Taxes): sale of assets, stancil, capital gain
stancil, capital gain, depreciation: Tom. Thanks for your question. The amount of gain that is a recapture of previously taken depreciation would be ordinary gain. Anything in excess of that would be a capital gain. The capital gain portion can be spread out if you are receiving payment...

Tax Law (Questions About Taxes): sale of business, capital gain tax, sole proprietorship
capital gain tax, sole proprietorship, c corp: Hi Leo Thanks for the question. Based on the information provided we cannot figure your capital gain tax as we do not know if it is a s-corp or c-corp or sole-proprietorship. We would also need to know what tax bracket you are in to determine what capital...

Tax Law (Questions About Taxes): sale of business, lifetime learning credit, form 8863
lifetime learning credit, form 8863, installment basis: Christi, A 1099-MISC can go in any number of places depending on which boxes are completed on the form. If it is non-employee compensation, it usually goes on Schedule C. You may be eligible for the Hope Credit or the Lifetime Learning Credit, Form...

Tax Law (Questions About Taxes): sale of comm. property, lawyer fees, part time job
lawyer fees, part time job, land contract: Hi Barb, You need the price you paid for the property originally, the price at which you sold it, how much you actually received, how much you have reported as a capital gain, how much (if any) interest you received as payments were made and, of course,...

Tax Law (Questions About Taxes): sale of condo, long term capital gain, capital improvements
long term capital gain, capital improvements, special assessments: Hi, Yes, the special assessments can be added to your basis along with most of the closing costs. If any of the closing costs were for real estate taxes, insurance, or pertained to the acquisition of a loan, they are not included. If you owned and lived...

Tax Law (Questions About Taxes): sale of deceased parent's home (in childrens name), capital gains tax, deceased parent
capital gains tax, deceased parent, capital improvements: A life estate would be in place if your father gifted the property to you but your mother was allowed to live there as long as she wished before you could sell it. Many people do not understand this term. The lesser of the adjusted cost basis of your...

Tax Law (Questions About Taxes): sale of easement, state tax forms, short term capital gain
state tax forms, short term capital gain, capital gains tax: When you reduce the basis, it means that your gain is larger when you sell the rest of the property. However, if it is your main home and you qualify for the exclusion, it should not be an issue unless your gain exceeds the exclusion amount. If you set...

Tax Law (Questions About Taxes): sale of easement, foot strip, land developer
foot strip, land developer, stancil: Fred, Thanks for your question. Technically, it is taxable. However, you can allocate an amount of basis (cost)to the property being sold that is equal to the proceeds from the sale. In most cases, this can be justified amd you have no gain or loss...

Tax Law (Questions About Taxes): sale of finace's home, time scott, personal residence
time scott, personal residence, future thanks: Congrats on the wedding. Since she is selling in 2005, the sale is reportable on your 2005 return. However, if her gain is less than $250,000 and she lived in and used the home as her personal residence for 2 out of the last 5 years and had no business use,...

Tax Law (Questions About Taxes): sale of a foreign mutual funds, stock brokerage, brokerage account
stock brokerage, brokerage account, gain thanks: Gseigel, Thanks for your question. Yes, you must pay tax on foreign currency gains. There are a couple of ways to handle this, they can be treated separate from the transaction itself as interest income or as a part of the transaction and a capital...

Tax Law (Questions About Taxes): sale of gift, capital improvements, stancil
capital improvements, stancil, cost basis: Sandy, Thanks for your question. You are correct, this is reported as a capital gain. It will be taxed at 5% if you are in the 15% or lower tax bracket; 15% if your tax bracket is higher than 15%. You will pay tax on the gain. The gain is determined...

Tax Law (Questions About Taxes): sale of gift, capital gain, sibling
capital gain, sibling, capital gains: Your husband s basis (or cost)in the land is exactly the same as his parents basis is. So if they bought the land for $500 and on the day it was gifted to him it was worth $5,000; his basis is the $500. What it was worth on the day of the gift has nothing...

Tax Law (Questions About Taxes): sale of home, stancil, cpa
stancil, cpa, extent: Bonnie, Thanks for your question. Yes, that is true to an extent. If you have owned and lived in the house for 24 of the past 60 months as your main home you can exclude up to $250,000 ($500,000 married filing jointly) from tax. You do not need to...

Tax Law (Questions About Taxes): sale of home, federal tax return, long term capital gain
federal tax return, long term capital gain, mortgage deduction: Doris, The idea of gifting the your ownership in the home is clever. Honestly, it may be a bit flawed and it really depends on the facts and circumstances related to the ownership of property. I think gifting the property before the sale and not allowing...

Tax Law (Questions About Taxes): sale of home after 28 yrs, capital gains tax rate, long term capital gains tax rate
capital gains tax rate, long term capital gains tax rate, long term capital gains: Hi, Since you refer to it as a summer home I assume that it wasn t her main home. She needs to include it on her tax return and pay long term capital gains tax on the gain. You said that she paid $40,000 for it so that would be her basis. Deduct any...

Tax Law (Questions About Taxes): sale of home and property, current market value, sisters names
current market value, sisters names, original costs: Randy, Thank you for your question. There will be no 1099 issued. I wish you had contacted me 3 years ago. If your father had maintained sole ownership of the house, you would have inherited it at fair market value and had to pay little or no tax...

Tax Law (Questions About Taxes): sale of home, unforeseen circumstance, bitter divorce
unforeseen circumstance, bitter divorce, unforseen circumstances: I teach that class at H&R Block and the preparer is wrong. The allowable exception which will give her a reduced exclusion amount is limited to a move for job or health reasons. Unforseen circumstances will not qualify. Please advise the couple to contact...

Tax Law (Questions About Taxes): sale of a house, www irs gov, form 1040 schedule d
www irs gov, form 1040 schedule d, publication 523: Dear Lori, You will have to show the sale on form 1040-schedule-D and the only items that you can ADD to the cost basis of the home would be the roof or any other IMPROVEMENTS that you did to the house before selling it... Plus you can add to the COST BASIS...

Tax Law (Questions About Taxes): sale of my house, payed, profits
payed, profits, money: Hi, 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 have not excluded gain on another main home within 2 years, you can exclude $250,000 of gain ($500,000 if married filing jointly). From...

Tax Law (Questions About Taxes): sale of house, irs pub 523, question parents
irs pub 523, question parents, significant improvements: Dear John, I am now getting totally confused and it seems you are too since there are so many dates in play now.... I strongly suggest that get together all your paper work from 1952 purchase, 1986 life estate, and 2002 when you say the life estate was...

Tax Law (Questions About Taxes): sale of a house, marginal tax bracket, estimated tax payment
marginal tax bracket, estimated tax payment, retirement account: Harry, That might pose a little problem since the house was sold in the 3rd quarter. But go ahead and do what you have suggested, it is the best route to take at this point in time. If they come back to you for a penalty, tell them that the income...

Tax Law (Questions About Taxes): sale of house and closing cost deduction, escrow fees, realtor fees
escrow fees, realtor fees, special circumstances: Hi Robert, The $10,000 would be a sales expense as are realtor fees and escrow fees. The rule for exclusion of gain is as follows: If you have owned and lived in your home as your main home for 2 years during the 5 years preceeding the date of sale...

Tax Law (Questions About Taxes): sale of house inherited, income tax return, capital gains taxes
income tax return, capital gains taxes, trailer parks: Autumn, The taxable amount from sale of your mother s house will be your share of the difference between the sales price and the property s fair market value at time your mother died. The gain will also be reduced by the sales expenses, such as commissions....

Tax Law (Questions About Taxes): sale of house purchased and remodeled, self employment taxes, truck expenses
self employment taxes, truck expenses, stancil: Greg, Thanks for your question. A number of factors would come into play here, but from what you have described, it would be a business, reported on Schedule C. Since you are remodeling the homes, my interpretation would be that it is more of a business...

Tax Law (Questions About Taxes): sale of house, capital gains tax, assited living
capital gains tax, assited living, state income tax: Hi, If you own and live in your home as your main home for 2 years during the 5 years preceeding the date of sale and have not excluded gain from another main home within 2 years, you can exclude $250,000 of gain ($500,000 if married filing jointly). You...

Tax Law (Questions About Taxes): sale of investment home, realtor fee, capital losses
realtor fee, capital losses, tax prep: Hi, It s true that as an investor you can use only $3,000 of capital losses to offset other income. But you can carry the unused loss forward to the next year when you can use it to offset capital gains and up to $3,000 of other income. This process can...

Tax Law (Questions About Taxes): sale of land previously received as gift, max tax, gift deed
max tax, gift deed, closing costs: Unless you know what the relative paid for the land, your basis is zero. If the relative is still alive, you need to ask what the land was purchased as or what their basis was. If the relative is not alive, you need to try and do some research as to...

Tax Law (Questions About Taxes): sale of land and reinvest in 2nd home, state of montana, stancil
state of montana, stancil, time resident: Daniel, Thanks for your question. When you sell the land, you will owe taxes on the gain, regardless of what you do with the proceeds. By holding the property for more than 12 months (not just 12 months but more than) you would qualify for taxation...

Tax Law (Questions About Taxes): sale of main home, irs web site, irs pub
irs web site, irs pub, irs gov: Hi Marcia, Yes, divorce or legal separation is one of the safe harbor exceptions to qualify for a reduced exclusion. The amount you can exclude is determined by completion of a worksheet found in IRS Pub 523. You can request a copy of the Pub be mailed...

Tax Law (Questions About Taxes): sale of nonprimary residence, promissary note, local realtor
promissary note, local realtor, auctioner: Virginia, Your friend/lawyer is correct about your basis being $175,000. I can certainly appreciate your uneasiness with having this large capital loss. It seems the realtor valuation was pretty generous. I might suggest paying for an actual appraisal...

Tax Law (Questions About Taxes): sale of personal home, capitol gain tax, capital gains tax
capitol gain tax, capital gains tax, capital improvements: Hi Linda, Capital gain is basically the difference between the adjusted selling price and the cost basis. What you owe on the property is not taken into account in calculating your gain. The capital gains tax is a maximum of 15% and could be only 5% depending...

Tax Law (Questions About Taxes): sale of personal property, long term capital gain, long term capital
long term capital gain, long term capital, tax implications: Hi Candy, Unless you lived in the home as your main home for 2 years during the 5 years preceeding the date of sale, you cannot exclude any gain on the sale. You will report a capital gain. If you have owned the home for more than a year it will be a...

Tax Law (Questions About Taxes): sale of personal residence, personal residence, grace period
personal residence, grace period, proceeds: Hi, It no longer matters whether or not you invest in another home. That law was changed several years ago. The new law is if you own and live in your home as your main home for 2 years during the 5 years preceeding the date of sale and have not excluded...

Tax Law (Questions About Taxes): sale of personal residence, short term capital gain, long term capital gain
short term capital gain, long term capital gain, capital gains taxes: Hi Melissa, You re correct that you must have lived in the house for 2 years but you also must have owned the house for 2 years before you can exclude gain on the sale. What you do with the money is no longer a factor. That law changed several years ago....

Tax Law (Questions About Taxes): sale of primary home, capital improvements, principal interest
capital improvements, principal interest, money: Hi, I m a little confused. You say you first rented the house and then you said your built the house. The current law regarding the sale of your main home is that if you owned and lived in the home as your main home for 2 years during the 5 years preceding...

Tax Law (Questions About Taxes): sale of primary home, earliest convenience, h r block
earliest convenience, h r block, itemized deductions: Dear Michael, The key here is that this house was your MAIN PRIMARY home whether you rented out 1 bedroom or 1/2 of the house to someone else and that you LIVED in this home for 2 of the past 5 years.... You may have to follow some of the instructions in...

Tax Law (Questions About Taxes): sale of primary residence, meenan, stancil
meenan, stancil, federal taxes: Anita, Thanks for your question. The regs state that you cannot exclude a gain on a house sold during the 2-year period ending on the date of the sale. What that means is that for the two year period prior to the sale of the second home, you cannot...

Tax Law (Questions About Taxes): sale of primary residence, stancil, itemized deductions
stancil, itemized deductions, capital gain: Michael, Thanks for your question. You can only exclude capital gain on the portion of the house that was used as your main home. I would presume that 1/2 of the entire building was your main home, therefore only half the gain would be excludable. ...

Tax Law (Questions About Taxes): sale of two principal residences within 1 year, irs rules, rising interest rates
irs rules, rising interest rates, principal residences: Dave, Thanks for your question. Actually it is a pretty cut-and-dried situation. Since you lived in the Bellingham house for 24 of the past 60 months as your principal residence, you can exclude the gain on that home. However, you must pay tax on the...

Tax Law (Questions About Taxes): sale of property, tax liabilities, marginal rate
tax liabilities, marginal rate, stancil: Christine, Thanks for your question. They must occupy the home as their main residence for 24 of the 60 months preceeding the sale. They can exclude up to $250,000 ($500,000 married filing jointly) of gain from the sale. Any gain above that will be...

Tax Law (Questions About Taxes): sale of property - tax, unforeseen circumstances, tax obligations
unforeseen circumstances, tax obligations, depreciation: Gary, there is no rollover provision allowed. So if you sell your current home before the 2 years are up and don t meet any of the exceptions, (work related or unforeseen circumstances), you will pay 15% tax on the entire gain. If you sell house 1 before...

Tax Law (Questions About Taxes): sale of property - tax, last question, depreciation
last question, depreciation, property tax: Hi, (A)The 2 years need not be continuous as long as you owned and lived in it as your main home and have not excluded gain on another main home within 2 years. Which also answers (B). You report your rental income and expenses on Schedule E. One of...

Tax Law (Questions About Taxes): sale of property - tax, question property, home hope
question property, home hope, stancil: Gary, Thanks for your question. Property A will still qualify as your primary residence since you occupied it as such for 24 of the past 60 months. However, since it has been used as a rental you will have to pay tax on the lesser of the amount of gain...

Tax Law (Questions About Taxes): sale of property - tax, irs gov, publication 523
irs gov, publication 523, last question: Dear Gary, The answer to this question is TOO LONG and too complicated to answer here.... Please go to www.irs.gov and download Publication #523 and this will tell you everything you need to know NOW and for the future is you sell property (B)..... thank...

Tax Law (Questions About Taxes): sale of property - tax, stancil, principal residence
stancil, principal residence, tax obligations: Gary, Thanks for your question. Since you have lived in the house for 24 of the past 60 months, it qualifies as your principal residence, so you can exclude up to $250,000 of gain ($500K if married filing jointly). What you do with the proceeds of the...

Tax Law (Questions About Taxes): sale of property & taxes, maximum tax rate, long term capital gain
maximum tax rate, long term capital gain, relevant paperwork: Hi Janet, Your gain on the sale of property is determined by deducting your adjusted basis from your adjusted selling price. Since you held the property more than one year the gain would be taxed as a long term capital gain - maximum tax rate 15%. Generally...

Tax Law (Questions About Taxes): sale of property, tax free zone, principle residence
tax free zone, principle residence, stancil: Penny, Thanks for your question. Based on your wording, I am not quite clear if you sold the entire building or one unit. If you sold the unit in which you live, it would qualify as your principle residence and you would not owe taxes on the gain....

Tax Law (Questions About Taxes): the sale then purchase of property, janet janet, stancil
janet janet, stancil, cost basis: Janet, Thanks for your question. You are correct, this is not a trade. You report the sale of the wetlands deducting your cost basis from the proceeds to determine your gain. This is taxed as an ordinary gain, not capital. However if you have a loss,...

Tax Law (Questions About Taxes): sale of real estate, installment sales, principal payments
installment sales, principal payments, owner financing: Gerry, Owner financed installment sales are a great way to spread out the income tax on a capital gain while maintaining a stream of income. You will recognize some of the capital gain with the down payment, the remaining gain will be recognized as you...

Tax Law (Questions About Taxes): To sale or rent, relocating.., mortgage agreement, t claim
mortgage agreement, t claim, occupancy requirements: Hi, You get a tax benefit when you claim depreciation so when you sell that property you pay back some of that benefit. It s called Unrecaptured Section 1250 gain. I would go ahead with renting the property. If you have a loss on the rental, which...

Tax Law (Questions About Taxes): sale of rental dwelling, sl depreciation, irs instructions
sl depreciation, irs instructions, rental dwelling: Hi Tom, Section 1250 : - Refers to gains from real lproperty - For a commercial building depreciated under the prescribed ACRS percentages, the total depreciation is recaptured as ordinary income. - For a residential building depreciated under the prescribed...

Tax Law (Questions About Taxes): sale of rental property, long term capital gain, form 4797
long term capital gain, form 4797, city of cleveland: Hi John, Perhaps the 28% is withholding rather than the tax you will actually pay. Normally when you sell a rental property, you report the sale on Form 4797. If you depreciated the property using regular MACRS (27.5 year), the part of the gain attributable...

Tax Law (Questions About Taxes): sale of rental property, capital gains taxes, stancil
capital gains taxes, stancil, depreciation: Normally depreciation is not taken on vacant land, so that should not be an issue. If you have depreciated the property, that reduces your basis, increasing your gain. Any gain represented by depreciation is taxed at ordinary rates. John Stancil, CP...

Tax Law (Questions About Taxes): sale of rental property, accurate answer, cost basis
accurate answer, cost basis, tax professional: Toni, plain language? hehe Seriously there are numerous sites. www.fairmark.com and www.misc-taxes-moderated are two good asking question sites. What goes into this place? Everything that has been done to it. If your gain is $400K, you can figure...

Tax Law (Questions About Taxes): sale of rental property, t claim, capital improvements
t claim, capital improvements, realators: Hi, Your basis is the cost plus any capital improvements less depreciation taken or which could have been taken while it was a rental. The realtor s commission is an expense of the sale along with most of the other fees they charged you such as title fees,...

Tax Law (Questions About Taxes): sale of rental property (capital gains), straight line depreciation, adjusted gross income
straight line depreciation, adjusted gross income, maximum rate: Hi Mark, The 28% rate is just for collectibles or section 1202 stock so you won t pay that rate on any of your gain. You will pay a maximum rate of 25% on the portion of the gain attributable to straight line depreciation (this is called unrecaptured...

Tax Law (Questions About Taxes): sale of rental property to son, capital gains tax, cost basis
capital gains tax, cost basis, paying taxes: If you are going to receive $65,000 then the accountants are correct in claiming that you got $65k. If however you will not receive the extra 15k and that it will be paid directly to the contruction company out of escrow, then it would not be your money. ...

Tax Law (Questions About Taxes): sale of rental property, capital gains tax, contrator
capital gains tax, contrator, 250k: Dear David, You must have OWNED the property and lived in it as your MAIN home for 2 out of 5 years.... Therefore, you would not qualify for the exclusion of $250k and would have to file the sale on the 1040-schedule-D and claim any gain.... thank you,...

Tax Law (Questions About Taxes): sale of residence, joint tenants with right of survivorship, right of survivorship
joint tenants with right of survivorship, right of survivorship, stepped up basis: Larry, Thanks for your question. in 1994, your mother-in-law and the two daughters had an equal basis - 1/3 of the original Basis (purchase price + capital improvements). This transfer was considered a gift and basis is transferred. When she died,...

Tax Law (Questions About Taxes): sale of residence, tax court case, leasehold interest
tax court case, leasehold interest, personal residence: Following up to my previous response: Contrary to my earlier position, I have concluded the sale of these rights would receive capital gains treatment. There is a 1996 Tax Court case, Stotis v. Commissioner that addresses this issue. The Tax Court ruled...

Tax Law (Questions About Taxes): sale of residence-rental property, tax exclusion, maximum rate
tax exclusion, maximum rate, rental property: Hi Dixon, Yes you can. However the portion of the gain that is attributable to depreciation allowed (or allowable even if you didn t actually claim the depreciation) while it was a rental will be taxed at a special 25% maximum rate. This is referred to...

Tax Law (Questions About Taxes): sale of residence, conventional mortgage, stancil
conventional mortgage, stancil, bad debt: Greg, Thanks for your question. That would be considered a non-business bad debt, deductible as a short-term capital loss on Schedule D. Unfortunately, unless they have other capital gains, they are limited to deducting $3,000 of it per year. Hope...

Tax Law (Questions About Taxes): sale of stock, long term capital gains, stancil
long term capital gains, stancil, long term capital: Jean, Thanks for your question. You will have to pay income tax on the gain from the sale. If a loss, you may deduct it. Your gain or loss is the proceeds from the sale minus the fair market value as of the date of death of the person from whom you inherited...

Tax Law (Questions About Taxes): sale of stock - personal income taxes, personal income taxes, jones group
personal income taxes, jones group, cost basis: If she cannot come up with a basis (and that would be her mother s basis) then the IRS is more than willing to take zero as her basis and tax her on the entire gain. You may wish to find a stockbroker that might help her find the basis (try Edward Jones...

Tax Law (Questions About Taxes): sale of stock, short term capital gains, long term capital gains
short term capital gains, long term capital gains, tax bracket: Schedule D will compute the tax for you. Use the tax amount from Schedule D rather than the tax tables when entering an amount on the TAX line of Form 1040. Short term capital gains are taxed at your ordinary tax bracket rate which varies from 10% to 33%....

Tax Law (Questions About Taxes): sale of vacant land used by resident, long term capital gains, sewer lines
long term capital gains, sewer lines, long term capital: Cynthia: Yes you must report the sale but you get to reduce the amount received by the cost of getting the lines moved and the purchase price of the land that was taken. The difference will be considered long term capital gains you will calculate tax on...

Tax Law (Questions About Taxes): sale of vacant land, town of pelham, pelham manor
town of pelham, pelham manor, vacant property: Hi Arlene, Gains or losses on the sale of investment property are reported on Schedule D on line 8 (property held one year or longer). The basis of gift property sold at a gain is the donor s basis. The basis of gift property sold as a loss is the lesser...

Tax Law (Questions About Taxes): sales of land, cost basis, stancil
cost basis, stancil, cpa: Samantha, Thanks for your question. You will pay tax based on the difference in your sale proceeds and your cost basis. You do not need to know what it was worth in 1990, you need to know what your grandfather paid for the land. With a gift, you assume...

Tax Law (Questions About Taxes): sales tax, small business owner, stancil
small business owner, stancil, tax liability: Melanie, Thanks for your question. I don t that it makes much difference. However, if she is the business owner, the tax liability would fall on her. The proposal she has suggested would seem to set you up as a business owner, requiring you to get a...

Tax Law (Questions About Taxes): sales tax, sales tax deduction, income tax deduction
sales tax deduction, income tax deduction, personal income tax: Hi, It was true for 2005 and, if congress extends that provision of the tax law, it will be true for 2006 as well. It seems that they will extend it so hang on to your receipts in case they do. You don t have to save all your receipts. The IRS has...

Tax Law (Questions About Taxes): sales tax, dell computer, sales tax
dell computer, sales tax, doing business: Jason if you purchased it personally in NC and had it shipped from the store to you in AZ the NC store would not charge a tax (you wold still be subject to the use tax in AZ) on the other hand if you purchased by mail from NC from a vendor doing business...

Tax Law (Questions About Taxes): sales tax calculation, stancil, approximation
stancil, approximation, sales taxes: Greg, Thanks for your question. In most states, the sales tax should be listed separately. If not, the assumption is that there is none. To clarify the issue, you should contact your vendor. An amount can be approximated by dividing the amount paid...

Tax Law (Questions About Taxes): sales tax & capital gains from home sale, real estate commissions, long term capital gain
real estate commissions, long term capital gain, social security number: Hi Si, 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 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): sales tax, corp. tax, foreclose, irs
foreclose, irs, sales tax department: You can be held personally liable, since you were a signor on the account, or since you were an officer of the corporation, or because you were the owner. Any of these would be cause to hold you personally liable. Can you negotiate a settlement? Well, the...

Tax Law (Questions About Taxes): sales tax deduction, sales tax deduction, home building materials
sales tax deduction, home building materials, state sales tax: Hi, You can claim an itemized deduction either for state income tax or state sales tax, whichever is higher. In calculating the sales tax deduction you can add the sales tax paid on home building materials to the amount from the tables based on your income....

Tax Law (Questions About Taxes): sales tax liability?, stancil, private party
stancil, private party, tax liability: Valerie, Thanks for your question. You will need to pay use tax in the state in which you will register the boat. Use tax is simply sales tax that is collected on an out of state sale. Most likely you will have to pay the tax in order to register...

Tax Law (Questions About Taxes): sales tax, u s postal service, senior citizen
u s postal service, senior citizen, stancil: Dick, Thanks for your question. Not usually. However, as a business that involes sales, you are normally required by the state to get a sales tax number and to report your total sales - tax exempt sales. For you at this time, that would mean zero taxable...

Tax Law (Questions About Taxes): salesman expenses, www irs gov, irs website
www irs gov, irs website, golf balls: You can expense Actual Business Expenses . Meals are limited to 50% (that would be the other guys meals, not your own). Gifts have to be diminimus (of no real value) or you have to issue a 1099 to the recipient. Would that just make your potential client...

Tax Law (Questions About Taxes): How Do I save tax, 401k plan, h4 visa
401k plan, h4 visa, 401k plans: Hi Annie Thanks for the question You are always better off to itemize your deductions if they exceed the standard deduction of $10,700 for 2007. Neither an IRA or a 401k plan will reduce your taxes Hope this answers your question John Kirk,...

Tax Law (Questions About Taxes): savings bond interest, savings bonds, bond interest
savings bonds, bond interest, stancil: Patricia, Thanks for your question. She should file an amended return, including the interest. She will be charged interest on the additional tax. Possibly a penalty of up to 25% of the amount due, but you can probably get this waived by asking, especially...

Tax Law (Questions About Taxes): could this go on a sch. C or do I have to file a partnership return, irs tax laws, sole proprietor
irs tax laws, sole proprietor, cash checks: AS in most things, cheapest is usually far more costly in the end. Your lowest startup commitment would be as a general partnership. File a DBA or fictitious firm name with your county, name both of you on the form, and you are a partnership. This will...

Tax Law (Questions About Taxes): sch k-1 ira, personal tax return, cutrona
personal tax return, cutrona, ira: Ms. Cutrona: Is one K-1 for his distrubition of income from the partnership. I am confused if the partnership is putting money into an IRA for him why they sent him an extra K-1 form. I do not have a clue. You should as the accountant who prepared the...

Tax Law (Questions About Taxes): schedule C or D?, sole proprietor, schedule c
sole proprietor, schedule c, info thanks: Dear Daniela, YES, my answer is the same no matter WHO you use to build the house.... This venture is pure and simple an INVESTMENT for RESALE and you will use the 1040-schedule-D and you will pay capital gains on the resale..... Thank you, kare...

Tax Law (Questions About Taxes): schedule C- gross income, gross receipts, schedule c
gross receipts, schedule c, gross income: Hi, You can either include the sales tax in gross receipts and deduct it or omit it from gross receipts. I prefer to include the sales tax and then show a deduction under miscellaneous labeled sales tax. I wouldn t put it in the taxes and licenses section....

Tax Law (Questions About Taxes): schedule c deductions and payroll, irs gov, sole proprietorship
irs gov, sole proprietorship, payroll check: Dear AJ, If your mother is going to run this business as a sole-proprietorship, then she can NOT draw a payroll check.... She can take DRAWS since any NET PROFIT each month is considered HERS..... It is the net profit from the business that she will be...

Tax Law (Questions About Taxes): schedule c, professional classes, photo work
professional classes, photo work, business loans: You will mark that she IS at risk if she has any business loans which she will become personally liable to pay if her business ends. You will mark that she IS NOT at risk if she has any loans which are guaranteed by another person(or business) if she...

Tax Law (Questions About Taxes): schedule D Dividends, d line, stancil
d line, stancil, capital gains: Dale, Thanks for your question. Sorry, but I don t calculate forms any more, since I use a software program for tax preparation. The capital gains calculation is one that is extremely complicated. All I can say is that I know the software I use handles...

Tax Law (Questions About Taxes): schedule d long term or short term, stancil, stock bond
stancil, stock bond, cost basis: Kyle, Thanks for your question. It will be a long term gain. Your cost basis would be the price your grandfather paid for it when he purchased it. Since you probably cannot determine the exact purchase price, you need to try and determine approximately...

Tax Law (Questions About Taxes): schedule d, 1099b, capitol gains
1099b, capitol gains, scedule: Your basis starts at $100 and is added to each time you put money in it or the dividends reinvest. However, since it is a mutual fund, you can ask your broker for an average cost and take that. Just remember, you must do that for any shares you sell of this...

Tax Law (Questions About Taxes): scorp, s corp, corporate asset
s corp, corporate asset, client gifts: Brian, Your client could take a S-Corp distribution of property in lieu of cash. This would convert the properties from a corporate asset to a personal asset. The now personal asset properties can be contributed to the new S-Corp at fair market value....

Tax Law (Questions About Taxes): sec 179 deductions, sec 179, accountant
sec 179, accountant, profits: No should never be a good enough answer from your CPA. If they are unwilling to explain it so that you fully understand it, your accountant is not doing you any favors. Any asset that is depreciated, and then sold for more than its depreciated value is...

Tax Law (Questions About Taxes): second home sale, realtor commissions, long term capital gain
realtor commissions, long term capital gain, insurance check: Hi, Well that explains why I have never seen the spam guard although I have seen them on other sites. The expenses of buying the property add to your basis. But anything related to obtaining a mortgage or insurance or property taxes do not. Regards,...

Tax Law (Questions About Taxes): second home sale, long term capital gain, exchange rule
long term capital gain, exchange rule, vacation residence: The 1031 exchange rule does not apply to your personal residence(or vacation residence). It applies only to business property or investment property. You will report the sale and be taxed on any long term capital gain without any exclusion amount available...

Tax Law (Questions About Taxes): second home tax rules, private question, section 1031
private question, section 1031, stancil: Here is the answer I sent on 11/7: Thanks for your question. If you sell a home that is not your primary residence, you will owe taxes on the gain only, not the entire proceeds. Reinvesting the proceeds in another house do not affect the taxes. In...

Tax Law (Questions About Taxes): section 179, section 179 deduction, bonus depreciation
section 179 deduction, bonus depreciation, cost basis: You may be eligible to deduct up to the higher of 100000 or your profit in your business of the cost of certain personal use business use properties. You may not exceed your cost basis by any method(Section 179, special 30%/50% bonus depreciation or regular...

Tax Law (Questions About Taxes): "self employed", school girl outfit, naughty school girl outfit
school girl outfit, naughty school girl outfit, plaid skirt: Dana, you probably are considered self employed. Your expenses are limited to anything that is not normal street wear. For example - a sequinned gown is not street wear. The naughty school girl outfit (plaid skirt, white shirt, bobby socks and shoes)...

Tax Law (Questions About Taxes): self employed-1099 a sub contractor, www irs gov, 1099 misc
www irs gov, 1099 misc, h r block: Dear Denise, ALl of the forms at www.irs.gov are in PDF and need Acrobat downloaded inorder to print.... A CPA is a Certified Public Account but just about any bookkeeping firm except places like H & R Block will carry the W-9 s... You need to get these...

Tax Law (Questions About Taxes): self-employed babysitter, grocery receipts, irs publications
grocery receipts, irs publications, self employment taxes: Amber, Thanks for your question. If you owe taxes when you file by April 15, you will be assessed a penalty for not paying your estimated taxes on a timely basis. You can deduct any costs associated with earning the income - toys, food, cleaning supplies,...

Tax Law (Questions About Taxes): self employed childcare provider, self employment tax, child care credit
self employment tax, child care credit, childcare expenses: with your child care credit you should not have any payment on your earnings except for the self employment tax ( equivalent to social security) of which normally your employer should pay half or all when they file their 1040 form H Your travel is considered...

Tax Law (Questions About Taxes): self employed contract work per diem, recordkeeping requirements, independent contract
recordkeeping requirements, independent contract, s corp: Laura, It s fine to use per diem payments as long as you follow two rules. 1. The per diem payments are not used to provide tax exempt income to your husband. 2. The per diem payments are made for days your husband is out of town to cover lodging...

Tax Law (Questions About Taxes): self-employed health insurance deduction, employed health insurance, self employed health insurance
employed health insurance, self employed health insurance, medical deduction: Dear Dave, Normally, any employee has the right to cover their entire family (including spouse) when health insurance is offered through an employer... So therefore, if you are eligible for coverage and so is you wife and family, then you are BOTH considered...

Tax Law (Questions About Taxes): self employed, vehicle expenses, insurance office
vehicle expenses, insurance office, stancil: Chad, Thanks for your question. I would hesitate to give you a list because I would surely omit something and probably include a lot of useless information. However, some general guidelines might be of benefit to you. You can deduct any expenses...

Tax Law (Questions About Taxes): self-employeed or not?, self employeed, educational position
self employeed, educational position, educational positions: Elizabeth: That was my first impression. Yes these are not true working position but a way to reward hard working intelligent theorist for a period of time or until they are picked up by a University for a teaching position. However, these positions...

Tax Law (Questions About Taxes): self employeed income tax, self employment taxes, trevor trevor
self employment taxes, trevor trevor, stancil: Trevor, Thanks for your question. You would need to set aside 15.3% of your net for self-employment taxes. The amount for income tax would vary depending on the total level of your income. It could be a low as 10% or as high as 35%. 15% or so would...

Tax Law (Questions About Taxes): self employeed, self employeed, stancil
self employeed, stancil, proprietorship: Brenda, Thanks for your question. There would not be any point in paying yourself, as you would then have to report that pay as income, pay social security taxes, unemployment taxes, and file all the forms. In addition, to do so, you would have to set...

Tax Law (Questions About Taxes): self employment, self employment taxes, stancil
self employment taxes, stancil, business income: Andrea, Thanks for your question. The business income and expenses are reported on Schedule C. If he made a profit, the self-employment taxes are reported on Schedule SE. Both are a part of your 1040. The above presumes that the business is not...

Tax Law (Questions About Taxes): self-employment tax, self employment tax, self employment income
self employment tax, self employment income, pension distributions: Hi, Unearned income such as you mentioned is not subject to self employment tax. Did she receive a 1099MISC with income in box 7 (nonemployee compensation) for any income in 2004? That is usually self employment income but in her case it must have been...

Tax Law (Questions About Taxes): self-employment tax, self employment tax, franchise taxes
self employment tax, franchise taxes, s corp: I would like to add to my pervious answer that any deductions you get on a sub S are also available to you as an individual the only reason to go to the trouble and franchise taxes is legal liability protection if you need it . Since I am not an attorney...

Tax Law (Questions About Taxes): self employment tax, self employment tax, self employment taxes
self employment tax, self employment taxes, compensation subject: Valerie, Thanks for your question. First, yes if they pay you in gift cards instead of cash that is taxable compensation, subject to income a self-employment taxes. Secondly, I would point out to you that the school appears to be in violation of the...

Tax Law (Questions About Taxes): i have self employment , &..., self employment income, sole proprietor
self employment income, sole proprietor, head of household: My answer to you is find a tax professional you can work with. That way you know you are getting everything you can. You have back taxes, you have self employment income, you may or may not have a child living with you (if you do not, you are NOT head...

Tax Law (Questions About Taxes): self employmentt, thanksgiving turkey, amount of money
thanksgiving turkey, amount of money, draws: I m not sure I understand your question, but if your 1099 is equal to the amount of money you received working for this company, be it draws, commissions or a Thanksgiving turkey, you have no expenses that I can see. Perhaps if you restate your question?...

Tax Law (Questions About Taxes): Is self-paid medical insurance (COBRA) deductible., adjusted gross income, itemized deduction
adjusted gross income, itemized deduction, stancil: Nelson, Thanks for your question. Medical insurance is deductible as an itemized deduction on Schedule A. Unfortuntaely, this means you must itemize and that your medical expenses must exceed 7.5% of your adjusted gross income before you get any deduction....

Tax Law (Questions About Taxes): sell of 30 acres of vacation ptoperty in Texas, income tax bracket, long term capital gain
income tax bracket, long term capital gain, capital gain tax: Brent, Thanks for your question. Your basis is your purchase price plus capital improvements. According to your numbers, that would be $50,000. If your sale price is $120,000 you will have a $70,000 capital gain (minus costs of the sale). The payoff...

Tax Law (Questions About Taxes): sell of acreage and home, irs laws, irs gov
irs laws, irs gov, deceased parents: Dear Bob, IF you live in this house as your MAIN home for at least 2 of the last 5 years as of the date of the sale of this house/land, then based on the current IRS laws there is a exemption on the gain of $500,000.00 (married filing joint) and $240,000.00...

Tax Law (Questions About Taxes): sell real estate, installment sales, principal payments
installment sales, principal payments, owner financing: Gerald, Owner financed installment sales are a great way to spread out the income tax on a capital gain while maintaining a stream of income. You will recognize some of the capital gain with the down payment, the remaining gain will be recognized as you...

Tax Law (Questions About Taxes): sell or rent condo now and sell in a couple years, realtor fees, necessary evil
realtor fees, necessary evil, depreciation: You only have to live in it for 2 out of the last five years to get the $250,000 exemption. If you convert it to a commercial property so that oyu can take a little depreciation, you will have to recapture that when you sell, and it is likely that you pay...

Tax Law (Questions About Taxes): selling 2 homes and purchased 1 home, huntington wv, louisville ky
huntington wv, louisville ky, grandchildren: If each of you meet the time and ownership tests, you can exclude up to $250K of the gain on each house. The time and ownership test is you must have owned the home for 2 out of 5 years and it must be that person s primary residence for that time frame....

Tax Law (Questions About Taxes): selling a business, short term capital gain, covered call
short term capital gain, covered call, term gain: Gina this is an interesting question. I racked my brain trying to come up with an answer that would make this into a long term gain!! Unfourtunately the correct answer is that this is like writing a covered call that expired worthless and therefore it...

Tax Law (Questions About Taxes): selling and buying a house, personal property tax, income tax forms
personal property tax, income tax forms, realtor commissions: Hi Rena, First you need to determine the amount of your gain or loss on the sale of your mother s house. Your basis in the house is its fair market value on the date of your mother s death. You then deduct the basis from the adjusted selling price...

Tax Law (Questions About Taxes): selling a condo below market value, jennifer thanks, jennifer jennifer
jennifer thanks, jennifer jennifer, stancil: Jennifer, Thanks for your question. As far as income taxes are concerned this is a non-issue. Since it is your personal residence, any gain or loss on the sale is not a tax issue. However, since you are selling it considerably below market value...

Tax Law (Questions About Taxes): selling condo primary/rental after 3 yrs, capital gain taxes, stancil
capital gain taxes, stancil, rental period: Alex, Thanks for your question. The rule is that you must have owned and lived in the property as your main home for 2 of the past 5 years. You do not have to have owned it for 5 years. However, you will be subject to tax (at ordinary income rates)...

Tax Law (Questions About Taxes): selling farm land, estate tax exemption, grandaughters
estate tax exemption, grandaughters, land question: If he sold the land for $100, there would be no income tax, but the difference in the selling price and the fair market value would be considered a gift to them, possibly triggering a gift tax. This would also transfer his basis to them, creating a large...

Tax Law (Questions About Taxes): I am selling a former residential..., irs gov, principal place of residence
irs gov, principal place of residence, residential rental property: You will only be eligible to deduct specific closing costs. The cost for the Grant Program and it s fee is not deductible and is actually considered a gift to the buyer unless it is REQUIRED by your local/state real estate board. Go to www.irs.gov and...

Tax Law (Questions About Taxes): selling gift property, irs publication 544, irs publication 523
irs publication 544, irs publication 523, www irs gov: Hi Richard. In order to be able to exclude the gain, you would have to have owned the home for 2 years. There is a possible exception through which you still may be able to qualify for a partial exclusion. To use the exception the home must have been sold...

Tax Law (Questions About Taxes): selling our home, realtor commissions, norhtern michigan
realtor commissions, norhtern michigan, capital improvements: Hi, To calculate your gain you deduct your adjusted basis from your adjusted selling price. Your adjusted basis is what you paid for it plus capital improvements. In your situation the capital improvements would be the cost of the home. Your adjusted...

Tax Law (Questions About Taxes): selling home, time melissa, dad lives
time melissa, dad lives, tidings: Hello Melissa, To begin with the law has changed on the exclusion of gain on the sale of your main home. Anyone can exclude $250,000 gain ($500,000 if married filing jointly) if they own and lived in their home as their main home for 2 years during the...

Tax Law (Questions About Taxes): selling home tax, party transaction, taxable gain
party transaction, taxable gain, stancil: Kim, Thanks for your question. The important issue here is you basis in the house. You don t say, but I assume you inherited it from your grandmother. In this case, your basis is the fair market value at the date of death. Subtract basis from the...

Tax Law (Questions About Taxes): selling a home, stancil, capital gain
stancil, capital gain, construction work: Eva, Thanks for your question. Paying cash for the lost and doing your own construction work do not matter. You will have to pay taxes on the gain. Since you apparently did not have the house over 12 months, the gains will be taxed at ordinary, rather...

Tax Law (Questions About Taxes): selling house, income tax purposes, federal purposes
income tax purposes, federal purposes, best bet: Pat: I believe you meet the test and you can exempt the capital gains from income tax purposes. You need to contact a local CPA to walk you thru the excluding this sale. I believe this will be your best bet to save you from paying income tax where you...

Tax Law (Questions About Taxes): selling house, personal loss, power of attorney
personal loss, power of attorney, grandmother: Hi, I would reimburse them in accordance with their contribution. Perhaps the deed doesn t specify percentage of ownership but presumably you have paperwork showing how much each put in. Since there is no gain, there is no income tax issue. If there...

Tax Law (Questions About Taxes): selling my house, income tax provision, tax numbers
income tax provision, tax numbers, real estate tax: Jill, In theory, you could sell half the duplex without selling the other. There is no income tax provision preventing you from doing this. You should look into splitting the title in two separate titles and get two real estate tax numbers. This is...

Tax Law (Questions About Taxes): selling a house, short term capital gain, tax exemption
short term capital gain, tax exemption, income taxes: Hi, There is no longer a provision in the law to defer taxation of gain by investing in another home. That was replaced by the exclusion of gain that your wife is using on the sale of her home. If you have held the new house less than one year, your...

Tax Law (Questions About Taxes): selling house and capital gain tax, capital gain tax, computing capital
capital gain tax, computing capital, first time buyers: You can use the interest amount of the payments as a Schedule E deduction, not the entire amount of the payments. Since the house was bought and sold in the same year, you don t take depreciation on it. Doesn t matter though, since the result would be...

Tax Law (Questions About Taxes): selling house income, gross sale price, gross proceeds
gross sale price, gross proceeds, mortgage payoff: Hi, I would report the sale on Schedule D with $180,000 selling price and $180,000 basis. The house was not your primary residence so you couldn t exclude the gain but you wrote that you have proof that you received nothing. Keep that proof in case...

Tax Law (Questions About Taxes): selling my house, capital gain tax rate, capital gains tax rates
capital gain tax rate, capital gains tax rates, long term capital gain tax rate: Hi, The maximum long term capital gain tax rate is 15%. On $311,000 that would be $46,650. But when you add that large gain to your other income you would probably have some Alternative Minimum Tax and your deductions and exemptions would be limited so...

Tax Law (Questions About Taxes): selling Inherited land & taxes, capital losses, land taxes
capital losses, land taxes, stancil: Julie, Thanks for your question. Your cost basis is the fair market value on the date of death. Since you state that value was $75,000 per lot, if you sell them for $25,000 you have a $50,000 long term capital loss. However, you can deduct capital...

Tax Law (Questions About Taxes): selling inherited property, personal tax return, college savings plan
personal tax return, college savings plan, anythin: Dear Kim, I assume that this is all in an estate and that the estate is handling the sale and will be filing a tax return showing the sale and a 1041-K-1 to each of the beneficiaries.... Yes, you WILL have to show the sale on your personal tax return...

Tax Law (Questions About Taxes): selling a lot, long term capital gain, federal purposes
long term capital gain, federal purposes, exchange option: Wilson, Honestly the only options are to sell the lot and pay the tax, or do what is called a 1031 exchange. Selling the lot will result in a long term capital gain which is taxed at maximum 15% for federal purposes. You will need to pay PA income tax...

Tax Law (Questions About Taxes): selling off a lot, state income tax, federal income tax
state income tax, federal income tax, cost basis: Jane, Did you inherit the lot from your parents? If not, the fair market value for cost basis purposes isn t relevant. I would consider splitting this transaction into two parts (the vacation home and the lot). Your purchase price for the lot would...

Tax Law (Questions About Taxes): selling my main residence, capitol gains tax, real estate commissions
capitol gains tax, real estate commissions, capital gains tax: Hi David, Investing your gain in another home used to be a way to defer capital gains tax on the sale of your main home. That is no longer the law. The new law allows you to exclude $250,000 ($500,000 if married filing jointly) of gain on the sale of...

Tax Law (Questions About Taxes): selling mutual funds, vanguard account, income taxes
vanguard account, income taxes, mutual fund: First of all, the quickest way to lose a friend is to have them invest for you. Just a very large BEWARE! If you take money out of the mutual fund, you will pay taxes on the gains, period, end of discussion, there is no way around it. Helen, EA in P...

Tax Law (Questions About Taxes): I am selling online, taxs, ebay
taxs, ebay, schedule c: Sale of your own personal items at a loss are not considered income. The loss is not a deduction. Sale of items purchased or obtained for resale are to have the sales price reported in full and any expenses deducted(usually on Schedule C). Use Schedule...

Tax Law (Questions About Taxes): selling of property/ tax questions, long term capital gain, t claim
long term capital gain, t claim, gain maximum: Hi, Assuming you have owned it more than one year, gain on the sale will be taxed as a long term capital gain (maximum 15%). However the amount of gain attributable to depreciation allowed or allowable when it was rented will be taxed as Unrecaptured Section...

Tax Law (Questions About Taxes): selling property..about taxes, cost basis, net profit
cost basis, net profit, receipts: Dear James, You can add to the $1000 the improvements you made (must have receipts to prove improvements and can NOT take anything for YOUR labor) and this will become your cost basis in this land... Your profit or loss from the sale will be SALE PRICE...

Tax Law (Questions About Taxes): selling real estate investment, real estate investment, form 4797
real estate investment, form 4797, capital gain: Since it was a rental property since 2002, you MUST claim the depreciation allowed by law for 2002 and 2003 , so first thing I would suggest is going back and amending old tax returns. Well, actually, you don t have do claim it, but you must pay tax on it...

Tax Law (Questions About Taxes): selling rental at a loss, how much tax benefit, stancil, personal residence
stancil, personal residence, tax benefit: There is no hard and fast rule, if they determine that you rented it only for a short time in order to be able to take the loss they would deny the loss. You can deduct costs incurred while the unit was held for rent, but not rented. You must have been...

Tax Law (Questions About Taxes): selling a second house, income tax return, long term capital gain
income tax return, long term capital gain, death arthur: Arthur, I think you should be filing a tax return. The title company which handled the closing will surely issue a 1099 reporting the $39,000 gross proceeds. Without filing a tax return, the IRS will assume you have $39,000 of income. Since this is not...

Tax Law (Questions About Taxes): selling stock, capital gain tax rate, long term capital gain tax rate
capital gain tax rate, long term capital gain tax rate, long term capital gain: Hi, Perhaps Scottrade can help you determine what you paid or Fedex. Or perhaps you paid nothing since it was in a profit sharing plan. The maximum long term capital gain tax rate is 15% but before you pay that on the entire sale price try to find out...

Tax Law (Questions About Taxes): selling stock or gifting it, wal mart stock, tax ramifications
wal mart stock, tax ramifications, wal mart: Gifting it to the kids is a good idea, but you have a few things to remember. Number one and foremost - it will be theirs and if they want to buy a new CD player with it, they can. You cannot put strings on it. Using it for education is what we all want...

Tax Law (Questions About Taxes): selling my stock., capital gain, tax liability
capital gain, tax liability, splits: Dino, Thanks for your question. If you sell the stock, you would owe tax at the capital gain rates. These rates are 5 or 15% depending on your level of income and filing status. Reinvesting the stocks does not affect the tax liability. Hope...

Tax Law (Questions About Taxes): selling a sub s corp, income tax rates, daycare
income tax rates, daycare, capitol gains: Most people look forward to long term cap gain taxes, since they are lower than other types of income tax. If you want to postpone Cap Gain Taxes, you could do a 1031 exchange, by declaring upto 3 properties within the next 45 days, and consumating the...