About Experts Sitemap - Group 50 - Page 55 2015-04-21

Tax Law (Questions About Taxes): Int'l Intern - Houseing, nonresident aliens, individual income tax
nonresident aliens, individual income tax, federal withholding: You did not ask about the intern s tax treatment of the rent. There are two issues here. For the first issue, the company can pay rent to the owners at fair market value. The owners will report this as rental income on their individual income tax returns....

Tax Law (Questions About Taxes): Investment trust property, self directed ira, property mortgage
self directed ira, property mortgage, accounting advice: Dear Greg, Welcome to All Experts, and thank you for your questions. You ve constructed an interesting financing. You realize, of course, that my answer constitutes neither legal nor accounting advice. Question #1. Generally speaking, federal tax...

Tax Law (Questions About Taxes): IRA, IRA Penalty
IRA Penalty: Dear Michael, Once you reach the age of 59 1/2 years old you may take whatever you want out of your IRA penalty free. You will include the IRA withdrawals as income subject to income tax, except if you had any basis in your IRA (nondeductible IRA contributions)....

Tax Law (Questions About Taxes): IRA, roth ira, tax consequences
roth ira, tax consequences, credit unions: Hi, Most banks, credit unions and other custodians of IRA s charge a fee when the account is terminated and it is often more than $30. Since it is a Roth IRA there should be no tax or penalties since you can remove your contributions to a Roth without...

Tax Law (Questions About Taxes): IRA beneficary, ira distribution, federal income tax
ira distribution, federal income tax, tax bracket: Crystal, Thank you for your question. 1)if we take it out in one lump sum how much will we owe in taxes? The IRA distribution will just be added along with your other income and whatever your taxable income is with that will be where your tax bracket...

Tax Law (Questions About Taxes): IRA distribution of non-deductible contributions, money market fund, ira distribution
money market fund, ira distribution, deductible contributions: Dave, Thank you for your question. 1)is it really necessary for me to get that money back in within 60 days to another IRA to avoid paying taxes? The law is very clear. In order to avoid having to pick up the amount as income , you need to rollover...

Tax Law (Questions About Taxes): IRREVOCABLE TRUST, versis, irrevocable trust
versis, irrevocable trust, state of arkansas: It really depends on the terms of the trust as to whether the gain is taxed to the trust, or to the beneficiaries. Without this information we cannot tell you how much you will pay. Taxes would have to be paid to Arkansas regardless. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): IRS tax lien over $100,000 on property, irs tax lien, federal tax lien
irs tax lien, federal tax lien, redemption period: Linda DaLuz, Thank you for your question. If the IRS takes the property to satisfy their tax lien, then they will seek to sell the property to satisfy the lien. The property needs to be free of debt. I would suggest that you contact IRS and see if you can...

Tax Law (Questions About Taxes): IRS Withdrawl for Land Purchase, ira withdrawls, renting a home
ira withdrawls, renting a home, irs: Eddy, Thanks for your question. No, you would not qualify. The rules for avoiding the 10% penalty state that you may withdraw up to $10,000 for the purchase of your first home. A lot is not a home and with not immediate plans to build, it does not...

Tax Law (Questions About Taxes): Issuing From 1099 from church, seminary school, household expenses
seminary school, household expenses, stancil: Helen, Thanks for your question. No, you do not need to issue two 1099 s. The amount that is for tuition is in the nature of a scholarship and not taxable. The additional support may or may not be taxable depending on the situation. Hope this helps....

Tax Law (Questions About Taxes): ITIN and SS, www irs gov, irs website
www irs gov, irs website, 1040x: Hi, Yes you could file an amended return to qualify for credits. The form you need is 1040X which is available along with instructions at the IRS website www.irs.gov. You could also request that a form and instructions be mailed to you by calling 1 800...

Tax Law (Questions About Taxes): illinois injured spouse form 8379, irs form 8379, injured spouse form
irs form 8379, injured spouse form, initial return: Randi, Thank you for your question. 1)I was then told that the only reason the IRS told me this was because that is the address on the tax account. Can you help me? The IRS form 8379 takes approx 14 weeks to process. Since the IRS claims that...

Tax Law (Questions About Taxes): Where should I incorporate?, form 1040 nr, incorporating in delaware
form 1040 nr, incorporating in delaware, alien 2: Aurelian, Thank you for your question. 1)My friends advise me to incorporate a LLC, but is it the best choice for me? An LLC allows you to operate as a partnership but exhibit the protections of a corporation. If you intend to bring on investors,...

Tax Law (Questions About Taxes): independent contractor, self employment income, income tax rates
self employment income, income tax rates, full time job: Thomas, Thank you for your question. 1)In terms of income tax rates, is the tax rate for my part time job based upon what my income is for my two jobs combined or are they separate. if your income from your full time job places you in the tax bracket...

Tax Law (Questions About Taxes): inheritance tax, inheritance tax, dividend income
inheritance tax, dividend income, accounting fees: Kristen, Thank you for your questions. 1)First, the estate taxed as a whole and then $200k distributed to both my husband and his aunt, with any remaining assets going to his uncle? Or is the inheritance $200k less taxes? Yes, your husband s grandfather...

Tax Law (Questions About Taxes): internship tax question., self employment tax, f1 visa
self employment tax, f1 visa, irs gov: Saahil: The company or individual who is paying you appears to be doing it all wrong. You are not an independent contractor. You do not have a business you are an employee. Contact your advisor at school an inform them of this situation. If you...

Tax Law (Questions About Taxes): internship tax question., f1 visa, non resident alien
f1 visa, non resident alien, form 1040 es: Saahil, Thanks for your question. If you make estimated payments, you would send them on Form 1040-ES on a quarterly basis on the 15th of April, June, September, and January. The amount would depend on your total income, there is a worksheet attached...

Tax Law (Questions About Taxes): investment loss through fraud, internal revenue service, illegal misconduct
internal revenue service, illegal misconduct, principle and interest: Rachelle, Thanks for your question. Most likely not. The requirements for Sec. 165 are pretty technical involving more detail than is appropriate in this volunteer forum. The IRS has issued Notice 2004-27 that pretty much says the deduction cannot...

Tax Law (Questions About Taxes): investment property foreclosed, investment property, fraud
investment property, fraud, involuntary conversion: Dear Debra, Welcome to All Experts, though I m certainly sorry for the reason that brought you here. Your question is worded well, but, absent details, I’ll need to confine my reply to general principles and made a few presumptions to help flesh out...

Tax Law (Questions About Taxes): jointly or individual filing, form 1040 instruction booklet, form 1040a
form 1040 instruction booklet, form 1040a, modified adjusted gross income: Judi, Thank you for your follow up question. 1)What is the computation that needs to be done if you make over 32,000 in total income? According to the IRS website: If you received income from other sources, your benefits will not be taxed...

Tax Law (Questions About Taxes): K-1, form 1120s, form 1065
form 1120s, form 1065, irs: Was the k-1 from a form 1120S or form 1065? if from a 1120S you are a shareholder of the corporation. If from a 1065 you are a partner. In form the IRS that you are neither a partner or a shareholder of the company. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): K-1 forms and amended 2007 tax forms, long term capital gain, 1041 form
long term capital gain, 1041 form, capital gains tax: No, the k-1 does not get filed with your amended 1040. You will need to file amended returns to reflect the k-1 information, and yes capital gains treatment should be reflected on the amended returns. Every one will need to file amended state returns reflecting...

Tax Law (Questions About Taxes): K-1 Profir Line, short term capital gain, section 1231 gain
short term capital gain, section 1231 gain, long term capital gain: Dear Wanda, The K-1 Form reports many types of gains/losses. It depends on which kind of income you refer to in your question. Investment Gains and losses are netted out on the K-1 by type and holding period,therefore, there could be several entries...

Tax Law (Questions About Taxes): LAND GIFT TAX QUESTION, paul dear, lifetime maximum
paul dear, lifetime maximum, dear paul: Dear Paul, Depending on what you did with the home from the date of your mother s death until now will effect how you report the sale. At the very least you should step up the basis of the home to its value on the day of your mother s. An appraisal...

Tax Law (Questions About Taxes): Land donation Disallowed, IRS, Delinquent Returns
IRS, Delinquent Returns, bank: They can disallow the land deduction based on the a final event clause. Also they can charge interest but if there was no foul play intended; such as your Uncle knowing he was going to get the land back, he can appeal as far as he needs to (mediation ought...

Tax Law (Questions About Taxes): Lending a church vehicle to a pastor that resigned, employer employee relationship, irs rate
employer employee relationship, irs rate, taxable compensation: Bobby, There are several approaches. Probably the simplest is the cents-per-mile method in which the value is the IRS rate (currently 58.5 cents per mile). This can be reduced by 5.5 cents if the employee (pastor) provides gasoline for the vehicle. ...

Tax Law (Questions About Taxes): Life Insurance Irrevocable Trust, state tax returns, life insurance policy
state tax returns, life insurance policy, orginal concept: Mark, The statute of limitations is 3 years from the due date or the date the return was filed. Since the returns have not been filed, the statute is open on all returns back to 1995. The 1099-R for the redemption of the policy is taxable in the year...

Tax Law (Questions About Taxes): LLC gone bad, irs form 1065, state attorney general
irs form 1065, state attorney general, tax situation: Christine, Thank you for your question. If the company paid you 49% for your interest in your LLC, and they issued you a 2007 K-1, they would have closed out your account and you would have to report any gain/loss on your interest. The return for...

Tax Law (Questions About Taxes): LLC, EIN NUMBER, james rogers, dear scott
james rogers, dear scott, tax identification number: Dear Scott, Welcome to All Experts, and thank you for your question. Even though you consider your two separate LLCs one enterprise, the short answer to your question is yes, you should get a separate tax identification number for each one. Scott, I...

Tax Law (Questions About Taxes): LLC income 'pass-through' implications, personal income tax, small business investment
personal income tax, small business investment, sole proprietorship: No, if you are the sole member of the holding company LLC, the income flows only to you. Best to form a partnership with the other party, with your LLC being one of the members. Alternatively, you might consider a trust with you and the other owner being...

Tax Law (Questions About Taxes): LLC loss, sole proprietorship, business losses
sole proprietorship, business losses, profit motive: Dear Melanie, Welcome to All Experts, and thank you for your question. Most start-up businesses lose money the first year or two, sometimes three years, so your circumstances are not unusual. When you say your profit is less than $400 to date and...

Tax Law (Questions About Taxes): LLC member taxes, checks, small business
checks, small business: Hi, As long as the business pays you a reasonable amount of compensation for the work you do, you can set the amount you are paid. For example, if people doing the work you do are normally compensated at $15 per hour in your area, you could not be paid...

Tax Law (Questions About Taxes): Can an LLC partner take a loss in his income tax?, business income loss, llc partner
business income loss, llc partner, general partner: June, Thank you for your question. 1). Can Mr. A deduct any loss of this $Y? If so, is that going to be 10% X $Y? Mr A would take the loss times his percent interest-10 percent as long as this is a trade or business activity and he materially participates...

Tax Law (Questions About Taxes): LLC (rental property) & personal income tax, personal income tax, irs gov
personal income tax, irs gov, irs publication: The salary is earned income and is in a different category than passive income. Passive losses can only offset passive income with the $25,000 as the only exception. This, of course, contains an AGI limitation. Publication 527 might be of some help. There...

Tax Law (Questions About Taxes): LLC Sales Tax, income tax form, personal income tax
income tax form, personal income tax, income tax return: Dear Eric, Thank you for your response and kind ratings. I m writing to follow-up with respect to one thing you said about handling high risk with either incorporation or liability insurance. It s important to keep in mind that incorporation of an LLC...

Tax Law (Questions About Taxes): LLC Tax Loss, james rogers, dear tom
james rogers, dear tom, deed of trust: Dear Tom, Welcome to All Experts, and thank you for your question. Since LLCs are generally taxed like partnerships, i.e., their net taxable income/(loss) is taxed at the individual owner s level, I don t believe you d be able to accomplish your goal....

Tax Law (Questions About Taxes): LLC taxes and questions, self employment tax, payroll company
self employment tax, payroll company, money tax: Hi Jim first determine how much capital will be needed for the enterprise and issue membership units in relation to capital then pay B the true value of services distribute the remaining gain or loss in the membership ratio amounts used by the business...

Tax Law (Questions About Taxes): Loan to S corp, irs web site, section 1244 stock
irs web site, section 1244 stock, small business corporation: Kevin, Thank you for your question. 1)Can I write off the loan I made to an S Corp, if the S corp is closing? When you close down the corporation, you may have a loss on the sale of the stock of the S Corp. This has to do with where the balance in...

Tax Law (Questions About Taxes): Lodging followup, irs website, work assignment
irs website, work assignment, looking for a new job: Kim, Thank you for your question. 1)Can rent,travel and related expenses I incur be deducted. According to the IRS website: In determining which is your main place of business, take into account the length of time you are normally required to spend...

Tax Law (Questions About Taxes): Lodging, irs web site, business premises
irs web site, business premises, apt rent: Tom, Thank you for your question. 1)Is any of the cost of the NY apt rent that is paid by the employer taxable to taxpayer as compensation? I would say no in your situation. This all has to do with the facts and circumstances guideline that the IRS...

Tax Law (Questions About Taxes): LTD, SS, 401k, home tax, 401ks, brain surgery
401ks, brain surgery, tax benefit: Hi, Taking a distribution from your 401k would be taxable income. It would not affect your SS. You can always itemize your deductions if it would give you a tax benefit. If you are permanently disabled there would be no penalty. I m not qualified to...

Tax Law (Questions About Taxes): life estate taxation, capital gains tax, time companion
capital gains tax, time companion, estate taxation: Dear Cynthia, Welcome to All Experts, and thank you for your question. I m not an expert on Oregon estate law, but I very much regret to say that I agree with the preparers who told you what, clearly, no one in your position would want to hear. You...

Tax Law (Questions About Taxes): life estates...capital gains and gifts, Sale of residence held in life estate before death of owner
Sale of residence held in life estate before death of owner: Theresa, Since your mother is still alive, the life estate is not a factor for tax purposes. A life estate does not vest unless she passes away. With this being the case, your mother could use the $250,000 capital gain exclusion for the sale of her principal...

Tax Law (Questions About Taxes): living on the road deduction, adjusted gross income, perdiem
adjusted gross income, perdiem, itemized deduction: Hi, If this is a temporary assignment expected to last less than 12 months (and actually lasts less than 12 months), you can deduct your travel and living expenses. If it s a permanent assignment, your expenses are non-deductible. If you qualify to deduct...

Tax Law (Questions About Taxes): llc and social security, sole proprietorship, sole proprietor
sole proprietorship, sole proprietor, stancil: Jeff, Thanks for your question. As a sole proprietor LLC you will be taxed on the entire earning of the LLC. You could elect to have the LLC taxed as a corporation and pay yourself a salary, but also having to pay corporate tax on the earnings. Hope...

Tax Law (Questions About Taxes): load to director, interest free loan, self employment taxes
interest free loan, self employment taxes, taxable compensation: Bryan, Thanks for your question. As a CPA and not an attorney, I am prohibited by law from addressing non-tax legal questions. However, i can give you the tax view of this situation. First, a loan of that amount must charge interest. Interest would...

Tax Law (Questions About Taxes): Marriage and financial aid for college, support test, financial aid
support test, financial aid: Dear Cassandra, Thank you for your question, which I believe combines two different systems of regulation, financial aid is beyond my expertise, but I would like to correct the fact that for tax purposes you may not be a dependent of your parents. ...

Tax Law (Questions About Taxes): Marriage and tax filing, tax filing, time students
tax filing, time students, best of luck: No, there are no issues there and if you don t work, then they can claim you. If you want a Mom to talk to, I m here kiddo. Just make it private and no one will know. I think you might need that more than a tax person right now. And even my kids (24...

Tax Law (Questions About Taxes): Marriage and tax filing, dependents, time student
dependents, time student, tax liability: Abida, Thanks for your question. First, if they claim you as dependents you cannot file a joint return which would likely increase the tax liability between the two of. It would also prohibit you from taking any education credits. Second, you would...

Tax Law (Questions About Taxes): MIA accountant during Tax deadline - please read for detail., cpa board, irs penalties
cpa board, irs penalties, tax deadline: Yes, you can call the state accountancy board and report her actions to them in the form of a complaint. You are still responsible for filing the taxes by the deadline, so seek another accountant. The accountant you hired to prepare your taxes is...

Tax Law (Questions About Taxes): Mileage, business mileage, adjusted gross income
business mileage, adjusted gross income, business miles: Hi, Since you are an employee you cannot claim business mileage from your home unless your employer requires you to maintain an office in your home. Any other expenses for which he does not reimburse you can be claimed as an itemized deduction on Schedule...

Tax Law (Questions About Taxes): Minister medical reinbursement taxable or nontaxable, medical reimbursements, assistant pastors
medical reimbursements, assistant pastors, payroll service: John, As far as the expenses are concerned, it does sound like an accountable plan to me. Just be sure that you don t give him any amounts that are left over at the end of the year. For example, if his allowance is $1,000 and he has spent $800 you can...

Tax Law (Questions About Taxes): Ministerial housing allowance, tax exempt organization, 1099misc
tax exempt organization, 1099misc, housing allowance: Tom, Thanks for your question. You would need to set up a tax exempt organization to receive the amounts and pay yourself a salary. Your board can establish an amount from that salary as housing allowance. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Missing A Work Expense Deduction?, irs web site, anchorage alaska
irs web site, anchorage alaska, work expense: Tom, Thank you for your follow up question. 1)This is why I wonder if I am allowed to deduct the cost of my parking a vehicle So lets see: You travel from your home to the airport and park your car Then you take a plane from Anchorage to Prudhoe...

Tax Law (Questions About Taxes): Missionary tax issues, irs publications, missionary status
irs publications, missionary status, b j worth: Michelle, Thanks for your question. I can t tell you how to find a person capable of preparing your taxes. Those of us who do minister s taxes don t have any established network or organization, it s primarily word of mouth. Several publications...

Tax Law (Questions About Taxes): Moving out of CA to WY, taxable income, two states
taxable income, two states, spending time: Hi Will once you establish a residence in WY only earnings in ca will be subject to CA taxes spending time with the children will not result in Ca taxable income unless they put a tax on changing diapers or talking them to the beach never underestimate...

Tax Law (Questions About Taxes): Moving expenses - replacement for broken items, adjusted gross income, form 4684
adjusted gross income, form 4684, moving expenses: You can use the casualty and theft loss form, 4684, and Schedule A to see if you have a deduction. But if the difference btwn the fair market value before and after the stolen items (you CANNOT use lost items) was less than 10% of your adjusted gross income...

Tax Law (Questions About Taxes): married filing seperately, self employment income, income tax credit
self employment income, income tax credit, wondering what type: Hi, Yes you can file separately but if you normally get the earned income tax credit, you would not qualify for it unless you file jointly. For your self employment income you will need Schedule C or C-EZ to report your income and expenses. Regards,...

Tax Law (Questions About Taxes): Getting married and taxes in Texas, home mortgage interest, tax implication
home mortgage interest, tax implication, dependant children: Hi, If you marry and file jointly, you can deduct home mortgage interest and real estate taxes on both homes as itemized deductions on Schedule A. If you later sell one of the homes and the owner owned and lived in the home as his/her main home for 2 years...

Tax Law (Questions About Taxes): mileage reimbursement, mileage reimbursement, time associate
mileage reimbursement, time associate, miles away from home: Robert, Thanks for your question. I presume this is a paid position. As such, the mileage between home and the church is considered commuting mileage and therefore taxable income to you and not deductible as a business expense. They can compensate you...

Tax Law (Questions About Taxes): monetary gifts and transfer of deed, stancil, monetary gifts
stancil, monetary gifts, taxable income: Nicole, Thanks for your question. These items are considered gifts and are not taxable income. However, since the amount is in excess of $12,000 he needs to file a gift tax return. Likely there will be no tax due, as there is a $1,000,000 lifetime...

Tax Law (Questions About Taxes): money gifts to relatives, lifetime gift, money gifts
lifetime gift, money gifts, gift taxes: Verne, Thank you for your question. You can gift up to $12,00 per calendar year without being subject gift tax . A married couple can make a gift of $24000 per calendar year without paying any gift taxes. If you have over these limits, there is a $1,000,000...

Tax Law (Questions About Taxes): monthly employee withholding, tax due date, stancil
tax due date, stancil, s corporation: Max, Thanks for your question. Yes, if you do not pay yourself a salary with withholding and a W-2, the IRS is likely to challenge it. If your withholding is sufficient to cover your tax liability, you do not need to make estimated payments. Hope...

Tax Law (Questions About Taxes): monthly salary, social security tax, income tax return
social security tax, income tax return, social security and medicare: Hello Ko, I will assume that you agreed to work for $1600 gross a month. Thereby you expect to earn $800 every pay day. When an employer pays you they must withhold Social security tax and a portion to cover both Federal and State income tax based on...

Tax Law (Questions About Taxes): mortgage interest deduction--income limitation?, mortgage interest deduction, www irs gov
mortgage interest deduction, www irs gov, first million: You are probably being phased out due to income limitations, not mortgage interest limits. IRS says that if your income is over a certain amount, your itemized deductions are limited. See Sch A instructions at www.irs.gov for more details. Helen,...

Tax Law (Questions About Taxes): mortgage tax, deductions, property tax
deductions, property tax, form 1040: Donald, I am not sure of what you mean by mortgage tax, but the basic answer to your question is that any taxes (including prepaid taxes) you pay are deductible on your Form 1040 Schedule A if you in fact Itemize. However this year you are allowed to deduct...

Tax Law (Questions About Taxes): Need help with 1099-MSC, www irs gov, tax business
www irs gov, tax business, msc: You must file. You need a Sch C and SE along with your 1040. You will owe taxes. If you use someone besides a store front chain, I m sure you can find someone to prepare your return. Or all the forms are available at www.irs.gov and you can give it...

Tax Law (Questions About Taxes): New baby, should the father and I get married?, child tax credit, head of household
child tax credit, head of household, tax position: Heidi, Thank you for your question. 1) I was wondering if it would benefit us to get married so that we will get an increase in our tax refund. I would not try to create problems between you and your other half, but as long as he owes child support,...

Tax Law (Questions About Taxes): NJ inheritance tax, irs form 1065, irs publication 225
irs form 1065, irs publication 225, irs form 1040: Dan, Thank you for your question. Congratulations on joining the farming business. 1)I am wondering what the tax implications would be and how soon we should expect to have to pay. IRS comes up with IRS Publication 225- Farmers Tax Guide. Keep...

Tax Law (Questions About Taxes): Non-filed Tax Returns, terminal cancer, stancil
terminal cancer, stancil, stimulus: Patricia, Thanks for your question. If their income level has been sufficiently low so they do not have to file, there is no penalty for not filing. They can file for the stimulus payment, but it must be done, as you say, by the fifteenth. Hope this...

Tax Law (Questions About Taxes): Do I need to file taxes?, social security and medicare, nutrition services
social security and medicare, nutrition services, earning income: Hi, You may need to file a tax return for this year since you are earning income. In January of next year you will receive a W2 from the hospital. It will tell you how much you earned and what they withheld for income tax, social security and medicare....

Tax Law (Questions About Taxes): nevada captial gaines tax divorce, washoe county nevada, smart move
washoe county nevada, smart move, joint tenancy: Hi, It sounds like a smart move if you can t afford to live there. Assuming that you will sell it within 3 years you will be able to exclude $250,000 of capital gain from taxation because you will have owned and lived in it as your main home for 2 years...

Tax Law (Questions About Taxes): new tax bracket problem due to early 401K withdrawal, self employment tax, higher tax bracket
self employment tax, higher tax bracket, 401k withdrawal: Hi, No, there isn t anything to be done about being in a higher tax bracket. The 20% was withheld for income tax and you ll include it with your other withholding. Your total income including the 401k withdrawal will be taxed at whatever rate your total...

Tax Law (Questions About Taxes): nonresident alient, escrow account, alient
escrow account, alient, 1040nr: Tatsiana, Thank you for your question. 1)When buying for 100% cash I assume that cash should be deposited on escrow account as well as in usual case? 1A)Is she allowed to buy home in USA? I do not see why not. Your friend should hire an attorney...

Tax Law (Questions About Taxes): OT mileage write off, irs web site, trip mileage
irs web site, trip mileage, work assignment: Patrick, Thank you for your question. 1)Can I write off the entire round-trip mileage driving to work for an overtime shift since this is not a normal scheduled work period? (RT mileage is approx 110 miles) According to the IRS web site: Travel...

Tax Law (Questions About Taxes): OTC stock gift, otc stock, stock gift
otc stock, stock gift, money cash: Bona, Thank you for your question. 1)For OTC stock as a gift, how will it be valued and if I don t have money(cash) to pay for gift tax how can I pay tax? If you gift a stock to someone and it is over $12000.00, then you have to file a gift tax return...

Tax Law (Questions About Taxes): Own Two Houses - Which one should I rent out?, tax consequences, capital gain
tax consequences, capital gain, depreciation: I can t tell you that. The projects are most likely capital projects and could not be written off, but would have to be added to the cost of the house and depreciated. You could deduct a loss of a rental unit in some cases. This point is somewhat complex,...

Tax Law (Questions About Taxes): Owner Financed - Claiming the interest, social security number, stancil
social security number, stancil, interest payments: Michelle, By owner-financed, I presume you mean seller-financed - the previous owner financed the mortgage and you make payments to him/her. Yes, the interest payments are deductible. Unless the seller gives you a 1098, you will need to show his name,...

Tax Law (Questions About Taxes): overseas tax eemption, us army corps, foreign earned income
us army corps, foreign earned income, earned income credit: Don, Thanks for your question. Federal civil service employees are prohibited from taking the Foreign Earned Income Credit. I have no idea why that is in the law, but it is there. Check IRS Publication 516. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): I owe the irs, irs tax levy, notice of levy
irs tax levy, notice of levy, tax debt: Michael, unfortunately this is perfectly legal. It s one of the ways the IRS collects on tax debt. Your bank has no say in the matter, they must comply with federal law. The only possible way that you could contest this is if you did not receive a notice of...

Tax Law (Questions About Taxes): owe past IRS taxes, now divorcing, irs taxes, tax liability
irs taxes, tax liability, ea: If the return was a joint return and taxes are due when the next year s return is filed, the IRS WILL take her refund as she is liable for the balance due. How to file? The only thing I can suggest is follow the worksheet for the W-4 form without knowing...

Tax Law (Questions About Taxes): My own business, federal purposes, s corp
federal purposes, s corp, stancil: Mary, A couple of issues. You many not want to do payroll, but if you have people whom you regularly employ, you should be giving them a W-2 rather than a 1099. You can complete a From SS-8 and send it to the IRS for a determination if they are W-2 employees...

Tax Law (Questions About Taxes): PAYMENT PRIOR TO DIVORCE SETTLEMENT, irs publication 504, family law attorney
irs publication 504, family law attorney, family lawyer: Jeff, Thank you for your follow- up question. 1)So am I out of luck? My family law attorney has had me continue to send my ex-wife the same money that she was living on prior to our divorce. I don t know why he would instruct you to do this without...

Tax Law (Questions About Taxes): Parsonage use by youth director, housing allowance, parsonage
housing allowance, parsonage, youth director: David, Thanks for your question. Any minister who is ordained, licensed, or commissioned by the church or the denomination is eligible to a housing allowance/parsonage. If he does not meet this criteria, the rental value of the parsonage would be taxable...

Tax Law (Questions About Taxes): Partnership Sale - Form 4797, power point presentation, umcrookston
power point presentation, umcrookston, partnership tax: Bill, Thank you for your questions. 1. Am I correct that land and building should be separated on 4797 and Line 7 should be 68,000? Some people do,some people do not, since the allocation between the land and building is arbitrary. Technically, the...

Tax Law (Questions About Taxes): Passive loss limitations with rental real estate, stancil, agi
stancil, agi, cpa: Pete, Thanks for your question. No, that is not true. The income from the LLC would pass to you as individuals, retaining its character. Therefore, it would still be a passive loss subject to the passive loss rules. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Pay taxes on monthly pension checks received, pension checks, personal exemptions
pension checks, personal exemptions, pension money: Hi, Depending upon the amount of his pension it may be taxable. If you file a joint return you are required to file a return if your joint income exceeds the total of your standard deduction and personal exemptions. For 2007 that amount was $10,700 (std...

Tax Law (Questions About Taxes): Paying income tax for contract employee, social security tax, fast food restaurant
social security tax, fast food restaurant, irs website: Dear Anwarul, I am sorry that I did not fully understand the situation. It appears that your employer has failed to consider you as an employee, there is no such thing as a contract employee who does not have social security and tax withholding taken from...

Tax Law (Questions About Taxes): Paying only personal income taxes instead of corporate income taxes, personal income taxes, corporate income taxes
personal income taxes, corporate income taxes, fraud issue: Jeremy, Thanks for your question. Probably not legal. You should pay yourself a reasonable salary including bonus. Paying out the entire profit, especially on an ongoing basis will cause the IRS determine that you have excessive salary and reclassify...

Tax Law (Questions About Taxes): Payment deemed as a gift or 1099 income, severance package, employment relationship
severance package, employment relationship, stancil: The issue is, would this amount be paid to you apart from the employment relationship? Likely not, given that these guys are controlling owners and actively involved in the operation of the business. Regardless of where the money comes from, or how it is...

Tax Law (Questions About Taxes): Pension, pension check, personal exemption
pension check, personal exemption, standard deduction: Hi, Your pension would be taxable if your total income exceeds your standard deduction and personal exemption. For a single filer the 2007 amounts were $5,350 plus $3,400, total $8,750. Income in excess of that would be taxable. Regards, Carol...

Tax Law (Questions About Taxes): Personal income tax, personal income tax, withholding allowances
personal income tax, withholding allowances, sosc: Maria, Thanks for your question. The FEDM and GSM1 are based on your level of income, frequency of pay, filing status, and the number of withholding allowances you claim. It would be impossible for me to give you a meaningful percentage. The MEDI...

Tax Law (Questions About Taxes): Pizza, Miles?, adjusted gross income, form 2106
adjusted gross income, form 2106, itemized deduction: Andrew, Thanks for your question. The mileage is deductible, but you must reduce the deduction by any reimbursement you get for mileage. The current rate is 58.5 cents a mile. You compute the deduction on Form 2106 and carry that amount to Schedule...

Tax Law (Questions About Taxes): Pregnant Dependent, fasfa, head of household
fasfa, head of household, raising a baby: Elisha, Thank you for your question. 1)Do I have to wait until the baby is born and claim her as a dependent? If the baby is born between now and the end of the year, you would get the deduction for 2008. if the baby is not born before the end of...

Tax Law (Questions About Taxes): Property Damage Reimbusement, paperwork burden, stancil
paperwork burden, stancil, personal vehicle: David, Thanks for your question. Since the payments are being made to compensate for damages, the amounts are not normally taxable income to the recipient and a W-9 is unnecessary and and added paperwork burden. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Provided Ministerial Housing and a 1099, self employment taxes, housing allowance
self employment taxes, housing allowance, stancil: Shannan, Thanks for your question. Two issue here. First, I presume that your husband is an ordained minister. If this is the case, the fair rental value of the house provided is subject to self-employment taxes but not income tax. If he is not ordained,...

Tax Law (Questions About Taxes): parents as dependants, michael gray cpa, social security income
michael gray cpa, social security income, dependency exemption: Yrish, Thank you for your question. I m sorry to hear about the health of your parents, The way the present law is written, unless you can claim them as dependents on your tax return, then any expenses you pay for a not deductible on your tax return. ...

Tax Law (Questions About Taxes): can partner take his share of LLC business loss, business income loss, business loss
business income loss, business loss, passive income: June, Thank you for your question. 1)Can he deduct any loss of this $30000 in his income tax? If so, is that going to be 10% X $30000? If the LLC has a loss and he has a 10 % interest in the LLC , then he can take losses of $3000. Whether the...

Tax Law (Questions About Taxes): payroll taxes, reconciliation report, 3 quarters
reconciliation report, 3 quarters, payroll taxes: Unless you have power of attorney on them, you will not be able to find out the status of their account with the state and federal government. The only way to make sure is their reconciliation report at the end of the year, and copies of their 941 s. ...

Tax Law (Questions About Taxes): pension, condolences, income tax
condolences, income tax: Hi, My condolences on your loss. It must be very difficult to cope with, especially since he was so young. You are correct that you are exempt from the 10% penalty but there will be income tax. If he died this year and you cash it in this year you...

Tax Law (Questions About Taxes): personal injury, punitive damages, medical reimbursement
punitive damages, medical reimbursement, foot area: Hi Jeff - Your answer depends on how the check is classified. If the check from your mother s attorney was written for medical reimbursement or for pain and suffering...it cannot be taxed. If it was written for loss of income or punitive damages,...

Tax Law (Questions About Taxes): proceeds from sale of property tax implications, capital gains tax, daughters name
capital gains tax, daughters name, lability: Hi, Even if they gift their share of the money to her, they will be liable for capital gains tax on their share of the gain on the sale. Also they would each need to file a gift tax return on the money they give to her. Most likely they would not have...

Tax Law (Questions About Taxes): property tax, property tax assessment, local county
property tax assessment, local county, property taxes: It should be settled on your closing statement. If you close after 10/15/08 and the property tax assessment date is 10/15/08 than you will probably not be allocated any of the property taxes, it depends on your local county assessor as to when taxes are due....

Tax Law (Questions About Taxes): Question on Sec.179, irs web site, truck chasis
irs web site, truck chasis, depreciation limits: Jon: The irs web site spells out what the irs will allow for depreciation. I do not have a list of vehicles by make or model that IRS will allow the higher deduction. But, It must meet the 6000 GVWR. That will be the information supplied by the manufactor....

Tax Law (Questions About Taxes): question on your answer, estate tax law, french guy
estate tax law, french guy, one million: Merci Thierry, Yes one million in a lifetime, which does not include the annual amount (12,000) in 2009 it will be (13,000)you can give away to as many people as you like without reporting the gift. When I say currently, I mean it does have the potential...

Tax Law (Questions About Taxes): question on filing for dependants, dependant, irs
dependant, irs, correspondence: Dear Ms. Washington, There is nothing he should be scared about. He can always file amended returns for Federal and State on which he can correct his dependency claim. Assuming you have the right to claim your daughter as dependent, and he will not cooperate,...

Tax Law (Questions About Taxes): Real Estate Loss, tax losses, rental deductions
tax losses, rental deductions, rental losses: Yes, and no. Yes, you will not be able to take a current year deduction for the passive income loss because your income level will phase you out. But the losses will be carried over until such time as enough positive income is generated by the property...

Tax Law (Questions About Taxes): Real Estate Taxes - Can we still appeal for reassessment?, property evaluation, extension period
property evaluation, extension period, real estate taxes: Sidhni: Your rate (value) is set until the next appraisal period. Every state has property evaluation set by law. This law affords the property owner to contest the appraisal in due coarse and provides by law the dates this can be done. However, if...

Tax Law (Questions About Taxes): Reimbursing an employee, mileage allowance, mileage reimbursement
mileage allowance, mileage reimbursement, employee meals: Hi Marshall under your description you would charge the mileage reimbursement as car expenses; no tax consequence to the employee As to the refreshment if the amounts as I take are small just charge to misc expense on the other hand if it is serious money...

Tax Law (Questions About Taxes): Relocated mid year, time resident, earnings
time resident, earnings, part time: Hi Edward You will need to file as Part time resident for CA and pay CA on your earnings there then you will need to file SC resident on all your income you will get a credit from SC for earnings subject to Ca tax the forms will take you through tha...

Tax Law (Questions About Taxes): Relocation PKG Taxes, relocation package, household goods
relocation package, household goods, stancil: Stephen, That s pretty much correct. The amounts paid to the movers should not be taxable income if your new job is 50 miles further than you had to travel to your old job. The part about you being put into a new tax bracket is slightly misguided. ...

Tax Law (Questions About Taxes): Rental of a home and IRS home exemption, rental period, stancil
rental period, stancil, principal residence: Jonathan, Thanks for your question. She would have to live in the house as her principal residence for 24 of the past 60 months to be able to exclude gain on the sale of her house. However, she will owe tax on the gain represented by depreciation...

Tax Law (Questions About Taxes): Rental property basis and tax questions, capital gains taxes, capital gains tax
capital gains taxes, capital gains tax, empty lot: Jim, Thanks for your question. 1. No. you cannot apply the sale price to reduce your basis. 2. You will need to allocate cost between the house and the land, then further between the land sold and not sold. You will owe tax on the profit. Unless you...

Tax Law (Questions About Taxes): Rental property expenses, irs office, oil bills
irs office, oil bills, rental expenses: Hi Darrin you are clear what is not clear is that if you have expenses that exceed income they are considered a loss that should be reported in the Schedule E rental loss line I think you should ask to see the taxpayers representative at the IRS office...

Tax Law (Questions About Taxes): Rental property expenses, oil bills, rental expenses
oil bills, rental expenses, mail: Dear Darrin, Welcome to All Experts, and thank you for your question. Yes, from your description, I think you should have included the $4,500 of oil bills in your rental income. I wonder if the IRS examiner thought your receiving cash for rent via the...

Tax Law (Questions About Taxes): Rental Schedule E-, burden of proof, real estate taxes
burden of proof, real estate taxes, principal residence: Harold, Thank you for your question. My question would be which is your principal residence? Home A vacant from May 2007- Dec 2007 rented from June 2008- now Home B rented from Nov 2007-Dec 2007 (no rent Nov & Dec?) rented...

Tax Law (Questions About Taxes): Renting an inherited property, property question, john thanks
property question, john thanks, adjusted basis: No, it is not quite accurate. Your losses only reduce your basis if the losses are not deductible. Also, you reduce your basis for depreciation allowed. Depreciation for non-residential rental property is 27.5 years on the building itself. If there...

Tax Law (Questions About Taxes): Reporting lottery winnings, lottery winner, lottery winnings
lottery winner, lottery winnings, cpa: You need to issue a 1099-misc to the winner stating the appraised value of the vehicle. Not what the donor claims as the value. You will need to record the donation and award on the books of the charity based on the independent appraised value of the vehicle....

Tax Law (Questions About Taxes): real estate, debt forgiveness, insurance payments
debt forgiveness, insurance payments, stancil: No, it is a personal residence, not a rental or investment property. You can only deduct interest and taxes. Turning it over to the bank will relieve the financial pressure but could wreck your credit. Depending on your situation, you might owe taxes...

Tax Law (Questions About Taxes): rental and LLC, rental property business, personal income tax
rental property business, personal income tax, sole proprietorship: Ervin, Thanks for your question. With an LLC you have the option to be taxed as a sole proprietorship on your 1040 or to treat the LLC as a corporation and pay corporate taxes. Yes, you pay tax on your profit regardless of what you do with the money....

Tax Law (Questions About Taxes): rental property, insurance maintenance, rental property
insurance maintenance, rental property, tax deduction: Shannon, Thanks for your question. With a rental you must file Schedule E as part of your 1040. On that form you report your rental income and take deductions for any costs of the rental, including interest, taxes, depreciation, insurance, maintenance,...

Tax Law (Questions About Taxes): rental property, mortgage interest, rental property
mortgage interest, rental property, depreciation: Mary, Thank you for your questions. 1)Yes 2)Yes 3)Yes Vacant Home, need to show advertising that you are trying to rent it 4)No. Schedule E 5)Yes, Yes for Depreciation also 6)No, You write it off (Amortize) the points over the life of the loan....

Tax Law (Questions About Taxes): rental property deduction, straight line depreciation, passive losses
straight line depreciation, passive losses, negative cash flow: Pat, Thank you for your follow up. If the 80,000 is from interest income, it is classified as portfolio income and not passive income. Therefore the loss of ($45,000 ) would be limited to a maximum loss of ($25000) and a suspended loss of ($20,000) not...

Tax Law (Questions About Taxes): reporting income, babysitting services, filing taxes
babysitting services, filing taxes, stancil: Gwendolynn, Thanks for your question. There is no minimum. All earned income must be reported and any rental income must be included on your return. However, the person paying these is not required to put it on their returns and is not required to...

Tax Law (Questions About Taxes): restricted giving to individual, unopened envelope, taxable compensation
unopened envelope, taxable compensation, hello john: Steve, Thanks for your question. Someone can give to an individual staff member. However, if given through the church it is not a deductible contribution, as it is earmarked for a specific individual. And, since it is given to an employee by the church,...

Tax Law (Questions About Taxes): retiree witholding, social security number, income taxes
social security number, income taxes, social security: Dear Manny, Normally when a U.S. citizen opens a bank account you are required to provide your social security number. If the bank does not have it on record they are required to withhold a portion of the earnings on that account. Perhaps this is the problem,but...

Tax Law (Questions About Taxes): retirement, social security benefits, stancil
social security benefits, stancil, cpa: Manuel, Thanks for your question. If his filing status is single, he can have up to $10,300 in income excluding social security benefits without having to file. If he is married filing joint, the income level is $19,800 if his wife is over 65. These...

Tax Law (Questions About Taxes): S-Corp membership, self employment tax, personal return
self employment tax, personal return, s corp: Jon, Thanks for your question. Doing this through another company is an unnecessary layer of organization. IT will eventually flow to your personal return regardless. Your investment in the company is just that - an investment. The amounts you receive...

Tax Law (Questions About Taxes): S-Corp small business question, loss incured, personal tax return
loss incured, personal tax return, s corp: Since their shares were never funded, they are subscribed but unissued shares. Depending on state law, they might be ignored, since no money was received for the shares. You will need an attorney in your state to give you an opinion on the status of those...

Tax Law (Questions About Taxes): S Corporation Shares question, dividend distributions, subchapter s corporation
dividend distributions, subchapter s corporation, forgotten stock: It really depends on whether the additional shares are voting shares. If voting shares, than the corporation should file an amended return/returns to reflect the change in ownership. If the shares are non-voting, than you have blown the S-election and...

Tax Law (Questions About Taxes): S corp taxes and individual filling jointly, dear emma, mortgage interest
dear emma, mortgage interest, s corp: Dear Emma, If you are not the owner of the home nor the person holding the mortgage you do not normally qualify to deduct the mortgage interest. Since you did not pay the mortgage directly and your parents lived with you it would be difficult to argue...

Tax Law (Questions About Taxes): Sale of daughter's house, state income tax, evidence to the contrary
state income tax, evidence to the contrary, settlement attorney: Allan, Thanks for your question. Unfortunately, you are on the hook for 2/3 of the profit earned on the house. Your daughter can exclude her portion of the gain as she owned and lived in the house for 24 of the past 60 months as her main home. You...

Tax Law (Questions About Taxes): Sale of Land, basis
basis: HI Kelly the easy part you use form 4797 as to allocating your cost to each parcel a common sense approach might be take the total FMV then figure your gain as if you had sold the whole farm so if you had a 40% gain on the whole you would back into...

Tax Law (Questions About Taxes): Sale/Lease of church property, unrelated business taxable income, exempt purpose
unrelated business taxable income, exempt purpose, treshold: Allan, Thanks for your question. The sale of the building would not be taxable income as you are not carrying on a business and it is related to the exempt purpose. If the music school is totally independent from the church the lease payments would...

Tax Law (Questions About Taxes): Sale of Primary Residences, dc property, answer change
dc property, answer change, maryland property: James, Thanks for your question. 1. If the Maryland house that you sold was in your wife s name only you could sell your house in DC and exclude up to $250,000 of gain. She would not be eligible to exclude any gain as she sold a house within two years...

Tax Law (Questions About Taxes): Sale of Realestate Property, realestate property, state income taxes
realestate property, state income taxes, taxable gain: Since you owned the home before her death, your basis is her basis. So if she paid $30,000 (plus improvements, etc) for the home, the profit to you all is $12K. That, divided by 5 is your taxable gain unless one of you lived in the home the last 2 out of...

Tax Law (Questions About Taxes): Sale of Residence, insurance proceeds, getting insurance
insurance proceeds, getting insurance, unforeseen circumstances: Hi, I would think that you could qualify to exclude at least a part of the gain because of unforeseen circumstances. Once everything is repaired and you sell it at a gain, go to an experienced tax professional to help you file your tax return. I think...

Tax Law (Questions About Taxes): Sale of vacant land, decedent, capital gain
decedent, capital gain, tax bracket: Hi, Her capital gain will be taxed at a maximum of 15%. Depending upon the amount of the gain and her tax bracket, all or a part of it could be taxed at 0%. To determine her gain she will need to know the fair market value of the land on the date of...

Tax Law (Questions About Taxes): Savings Bonds, savings bonds, ira investment
savings bonds, ira investment, stancil: Harry, Thanks for your question. If you qualify for an IRA investment, any amount you place into the IRA up to the limits will reduce your income, so it would be a dollar-for-dollar offset on your income. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Schedule C, home office expenses, form 8829
home office expenses, form 8829, home office deduction: Home office expenses are determined on Form 8829. To deduct a home office, you must have an area of the house that is exclusively and regularly used for business purposes. A portion of your mortgage interest and other housing expenses would be deductible...

Tax Law (Questions About Taxes): Schedule D, scenerio, line thanks
scenerio, line thanks, plan of attack: Hi, If you sell everything on the same day, I find it easiest to add the purchases together and report it on one line. But if you want to make 2 or more entries with the same sale date you could do that if it s easier for you. Obviously if you sell on...

Tax Law (Questions About Taxes): After School Care, www irs gov, parent household
www irs gov, parent household, form 2441: Yes, if the reasons are for the parent or parents are working (if a 2 parent household - both must be working or going to school or disabled) and the child is under 13 years of age. See form 2441 for more details, available at www.irs.gov. Helen, EA...

Tax Law (Questions About Taxes): Selling a Primary Res. turned Rental, long term capital gain, long term capital gains
long term capital gain, long term capital gains, long term capital gain rate: Hi, If you used the $13,000 for capital improvements rather than repairs and routine maintenance, add that to your cost basis. The down payment on another house isn t relevant. Even if you didn t take a deduction for depreciation the sale is treated...

Tax Law (Questions About Taxes): Severance Pay Taxes, severance pay, federal income tax
severance pay, federal income tax, types of taxes: Wanda, Severance pay can be taxed at a flat 25% or at your usual withholding rate depending on how your employer treats it. However, the 25% applies only to federal income tax - social security, medicare, and state taxes are additional. Hope this...

Tax Law (Questions About Taxes): Severance Pay Taxes, severance pay, department of labor
severance pay, department of labor, cpa: It makes no difference that you are no longer an employee, the severance is compensation deducted by them subject to FICA. If they fail to report it, it is their problem, not yours. Notify the IRS and state department of Labor of the situation. John Kirk,...

Tax Law (Questions About Taxes): Same Sex property sale, stancil, settlement agreement
stancil, settlement agreement, debi: Debi, If you have owned the house and lived in it as your main home for 24 of the past 60 months, you can exclude up to $250,000 of gain. Otherwise, you will pay tax on the gain. Gain is determined by subtracting your cost from the proceeds of the sale....

Tax Law (Questions About Taxes): Short Sale Vs Foreclosure Vs. Divorce, irs action, deficiency judgement
irs action, deficiency judgement, debt forgiveness: I can t recommend either way. There will still be a 1099 regardless of which route you take. As far as defending it in the courts, I see no reason for court action on this regardless of whether you pursue a short sale or go through foreclosure. All...

Tax Law (Questions About Taxes): Single Member LLC, sep ira, realistic possibility
sep ira, realistic possibility, courier company: He should simply withdraw funds and pay his bills out of his personal checking account. This is simply shown as a draw or withdrawal of profits or capital. For the leased equipment, it would be simplest for the LLC to assume the lease (informally, not...

Tax Law (Questions About Taxes): Sponsorships, sole proprietorship, stancil
sole proprietorship, stancil, schedule c: Jacob, Thanks for your question. Since the payments are being made by companies or organizations you do not need to prepare a 1099 or other document for the sponsor. However, it is taxable income to you and should be included on your Schedule C (assuming...

Tax Law (Questions About Taxes): SSN 1 time disbursement tax liability, irs publication 17, social security disability
irs publication 17, social security disability, social security benefits: Phillip, I presume you are referring to Social Security Disability Payments. Yes, the money is taxable. Depending on your income level, none, 50% or 85% of the social security benefits will be taxable. The calculation is too complex to go into here,...

Tax Law (Questions About Taxes): State SUI limits, taxable wages, income tax purposes
taxable wages, income tax purposes, taxable wage base: Lee: Depends on what the SUI limit is in the state he is working what has to be reported to that state. However, all wages paid to your employee is used to calculate SUI taxable wage limits. If you have an employee who lives and resides in California...

Tax Law (Questions About Taxes): State Withholding form, state withholding, technical answer
state withholding, technical answer, w4: Ravi, Thank you for your follow up question. 1)Is there any definitive law that states what you have said? Probably not. The technical answer would be that State form as filed with the employer is incomplete. I do not have any reference in that. ...

Tax Law (Questions About Taxes): Stock loss, stock loss, stock certificates
stock loss, stock certificates, state tax: Sam: Remember, if your investment is in a mutual fund, stock certificates, or a 401K fund and you have not sold the underlying securities you have not suffered a loss. When you complete the sale report on your tax return you will have a loss to off set...

Tax Law (Questions About Taxes): Stock Sale, capital improvements, s corp
capital improvements, s corp, 1120s: If his stock is sold for $100,000 the gain would be determined by the difference in the basis of the stock. His basis in the stock is computed by adding the original price of the stock ($1,000) the accumulated net income allocated to him, less any distributions...

Tax Law (Questions About Taxes): Subchapter S corp Medical Reimbursement, subchapter s corp, sole shareholder
subchapter s corp, sole shareholder, doctors visits: No. Some C-Corps have Cafe plans which allow you to pay your medical expenses pre-tax. There are no provisions for an S-corp to do this. Any money they give you or pay on your behalf is income. You are allowed to deduct medical expenses if it is more than...

Tax Law (Questions About Taxes): s-corp, s corp, homework
s corp, homework, academia: Leanna: Sorry, I do not understand your question. I believe concerns requires an essay for an answer. Since, in the world outside of academia, concern is not a valuation of the risk but the thought of a risk which may undermine the assets. Therefore,...

Tax Law (Questions About Taxes): s-corp shares, ownership shares, phantom stock
ownership shares, phantom stock, s corp: I assume you don t want to buy unissued stock from the company. It really is difficult to suggest a strategy without knowing the financial status of the owner who will be giving the shares to you either through sale or by gift. In either way you will need...

Tax Law (Questions About Taxes): sale car to my LLC, tax guidance, publication 463
tax guidance, publication 463, gas auto: Make sure that the title is transferred to the LLC. Also, you must allocate any personal use to you as as additional compensation through your W-2. If business use falls below 50% use, no deductions are allowed. See publication 463 John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): section 179, economic stimulus, laundry equipment
economic stimulus, laundry equipment, section 179: Tia: You would have less expense involved if he removed the old equipment before you install the new equipment. As soon as the IRS writes the new rules I will know if investment in laundry equipment will qualify as 179 deduction. My thoughts are, yes...

Tax Law (Questions About Taxes): To sell or not to sell, that is the question..., ira rollover, state income tax
ira rollover, state income tax, credit card debt: Deborah, Mr. McConnaughy could not answer your question, but I think I can help you. If you withdraw funds to pay off your credit card, you will owe a penalty of 10% of the amount withdrawn in addition to the regular income tax at (probably) 15%. In...

Tax Law (Questions About Taxes): setting up a c corp and transferring assets, c corp
c corp: Hi Charles First I believe that going into a C corp is a mistake in your situation Cs are taxed at a higher rate than individuals and losses are not deductible. If you need liability protection consider an LLC or Sub S corp. As to the value of equipment transfers...

Tax Law (Questions About Taxes): share holder legal rights to profits, articles of incorporation, share holder
articles of incorporation, share holder, s corp: It depends on whether the distribution will make the corporation illiquid. Some states require that a shareholder cannot compel the Corporation to become illiquid by making distributions. That is a matter for an attorney in your state to address. If liquidity...

Tax Law (Questions About Taxes): short sale and 1099, Cancellation of debt on short sale
Cancellation of debt on short sale: Kim, The lenders are required to send either 1099-C when a debt is cancelled. The new tax law does not change that requirement. The new law allows you to exclude the cancellation of debt from income on your tax return assuming certain criteria. Among...

Tax Law (Questions About Taxes): short sale and 1099 reporting, debt cancellation, stancil
debt cancellation, stancil, home improvements: Diane, Thanks for your question. The 1099 will be issued with the selling price and the amount of the debt. You cannot write off improvements. If you lived in the house for 24 of the past 60 months as your main home and owned for for 24 of the past...

Tax Law (Questions About Taxes): short saleor BK, government rules, fresh start
government rules, fresh start, exclusions: Dear Lynette, I am unable to comment on Bankruptcy and whether or not it is better for you then owing taxes on forgiven debt. There are exclusions now in effect for home owners who default making the cancelled debt tax free for US income tax, but your...

Tax Law (Questions About Taxes): side job tax, irs web site, federal withholding tax
irs web site, federal withholding tax, self employment tax: Dear Toniann, Welcome to All Experts, and thank you for your question. Initially at least, I recommend you report income and expenses pertaining to your side job on federal Schedule C and, if your state of residence has a state income tax, your state...

Tax Law (Questions About Taxes): spouse's child support garnishments and disabled dependant child, form 8379, injured spouse
form 8379, injured spouse, refundable credits: Dear Rebecca, One of the requirements to claim injured spouse is that you had reportable income and payments reported on a joint return. If you are in a community property state you could claim half the income and payments if all income was produced...

Tax Law (Questions About Taxes): stock joint accounts, joint accounts, tax implications
joint accounts, tax implications, dividends: Hi, Assuming that you file a joint return you would simply report dividends, gains and losses on your joint return. If you normally file separately, you would each report your income separately. Generally it s better to file jointly. Regards, Carol...

Tax Law (Questions About Taxes): TAX ON PER-DIEM / MEALS AND INCIDENTALS, u s company, time tim
u s company, time tim, stancil: Tim, Thanks for your question. If you assignment is for more than 12 months or for an indefinite period of time, any per diem amounts you receive are taxable income. This would make it retroactive to Jan 1. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): TAXES, self employment income, self employment tax
self employment income, self employment tax, social security and medicare: Hi, When you file your tax return you will report your income and expenses on Schedule C (or C-EZ). In addition to income tax you will pay self-employment tax (social security and medicare) on your net self-employment income (gross income less expenses)....

Tax Law (Questions About Taxes): Taking on an investor in an LLC, passive investor, partnership share
passive investor, partnership share, equity stake: James, Thank you for your follow-up question. James, 1)Question is then, if I add him as a member with an equity stake, are there implications tax wise? Would I have to change to a partnership? An LLC is, in effect, a partnership with the corporate...

Tax Law (Questions About Taxes): Tax, marginal tax rate, traditional ira
marginal tax rate, traditional ira, marginal rate: If you currently have income of $100,000, then approximately $28,000 would be taxed at your current marginal rate of 25%. Another $65,000 or so would be taxed at 28%, with the remainder at 33%. These numbers are not precise as I do not have the bracket amounts...

Tax Law (Questions About Taxes): Tax Deduction on Prior Purchases??, section 179 deduction, income tax returns
section 179 deduction, income tax returns, state income tax returns: Dear Todd, Welcome to All Experts, and thank you for your question. Welcome the world of business ownership. The short answer to your question is yes, if your bike and its accessories are used 100% for your new business, you can deduct their cost as...

Tax Law (Questions About Taxes): Tax Deduction on Prior Purchases??, bike training, section 179
bike training, section 179, tax deduction: Todd, Thank you for your question. 1)Am I able to write off the bike and accessories since I will be using them in the training and I bought them this year?? This all has to do with how you treat the expenditure. There are a couple of ways to...

Tax Law (Questions About Taxes): Tax filing Question, medical retirement, divorce agreement
medical retirement, divorce agreement, retirement benefits: Ann, Thanks for your question. Filing status is determined by your marital status as of December 31. Therefore, your options in 2009 if you are married are married filing joint, or married filing separate. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Tax Liability, federal withholding taxes, fed tax
federal withholding taxes, fed tax, tax liability: You can claim exempt from Federal withholding if you had no tax liability last year, and expect no liability this year. Assuming that you supply over half of your support this year, you can claim exemption from federal withholding taxes. You are not exempt...

Tax Law (Questions About Taxes): Tax Liiability on Historical Property, property expert, liability actions
property expert, liability actions, question response: I really can t answer that, that is something the town council should have discussed in the purchase offer. My feeling was to just pay less for the services that the town is already rendering to the village. Sort of like paying yourself for services you...

Tax Law (Questions About Taxes): Tax law for a business, sole proprieter, selling stocks
sole proprieter, selling stocks, stock transactions: Eric, Thanks for your question. It is possible to own such a business, but the IRS would scrutinize it quite closely to be sure that you are indeed, a trader, and not an investor. This requires regular, numerous, almost daily stock transactions. The...

Tax Law (Questions About Taxes): Tax lien, irs issues, property in canada
irs issues, property in canada, reciprocal relationship: Don - Sorry about the delay in the answer of your question, I have been ill the last few days. When the IRS issues a lien, they issue it on the person rather than the actual property. That being the case, the lien would be placed on your name. Now...

Tax Law (Questions About Taxes): Tax loss Question, interest dividends, capital losses
interest dividends, capital losses, retirement account: Nicholas, Thank you for your question. If you are referring to capital losses, you can offset capital losses against capital gains and you can only carry up to ($3000) against ordinary income, interest, dividends. First you need to determine if you qualify:...

Tax Law (Questions About Taxes): Tax Provisions due to Expire at end of 2007, irs publication 17, personal tax credits
irs publication 17, personal tax credits, economic stabilization act: Robert, Thank you for your question. 1)Has Congress extended the seven tax provisions listed on page 2 of IRS Publication 17 ? Below are the provisions in the new Emergency Economic Stabilization Act Extensions of Various Income Tax Provisions...

Tax Law (Questions About Taxes): Tax questions, refundable tax credit, sales tax deduction
refundable tax credit, sales tax deduction, federal estimates: Jacque, Thank you for your question. 1)How can I write all these off on my taxes when I don t make much to begin with. Will I end up getting money back? Lets talk about this small in home business. Does it show net income or loss after deductions?...

Tax Law (Questions About Taxes): Tax Ramifications of a short sale, tax ramifications, long term capital gain
tax ramifications, long term capital gain, pres bush: You are correct, the law only applies to your principal residence, you have income on the amount forgiven. You also have a long term capital gain for the difference in the sale of the property and its tax basis ($1). It would had been better for her to have...

Tax Law (Questions About Taxes): Tax on sale of rental property, zero rate, taxable gain
zero rate, taxable gain, marginal rate: Jeff, Thanks for your question. First, it is likely that your taxable gain exceeds $1,000. If it was depreciable property you need to reduce your cost basis be any depreciation allowed. For example, if it originally cost $50,000 and you have taken...

Tax Law (Questions About Taxes): Tax on shares or warrants given for working, warrant price, pat answer
warrant price, pat answer, exercise price: You have taxable income at the time the warrant is exercised to the extent that the fair value of the stock exceeds the amount paid for the stock. For example: if you buy 100 share at a warrant price of $5.00 per share when the fair value of those shares...

Tax Law (Questions About Taxes): Tax shelter a portion of severance?, traditional ira, roth ira
traditional ira, roth ira, retirement plan: You can contribute to an IRA or a ROTH IRA. HOWEVER, for a traditional IRA, you may or may not be deduct your contribution as you have been covered under a retirement plan in the current year. If you can wait to get the pay in 2009, and do not work for anyone...

Tax Law (Questions About Taxes): Tax treatment related to sale of private company stock, underpayment penalty, quarterly payments
underpayment penalty, quarterly payments, cash transaction: Chris, Thanks for your question. You can make an estimated payment now. When you complete your tax return indicate on the 2210 that the income was not received evenly throughout the year, and you should avoid the penalty if you paid in enough. Hope...

Tax Law (Questions About Taxes): Tax withholding, paystub, 1099 misc
paystub, 1099 misc, mileage: Yes he does. He also needs to understand what his filing responsibilities will be. Go to: http://irsos.com/Independent%20Contractor.htm for information on this. If you want to see if he SHOULD be a contractor - got to: http://irsos.com/1099-Misc.htm...

Tax Law (Questions About Taxes): Taxation Question, self employment tax, business losses
self employment tax, business losses, course business: Brittney, Thanks for your question. If your businesses have not generated a profit, you will have no tax liability from them. You would only be taxed on your income from your job. Of course, business losses are deductible so that will reduce your liability....

Tax Law (Questions About Taxes): Taxed on sign-on bonus, and now paying back sign on bonus. How do I get the taxed monet back?, irs publication 17, bonus check
irs publication 17, bonus check, bonus money: Chiraq, Thanks for your question. What you have is a refund of a previously taxed amount. There are two ways to handle this, one of which is rather complex to describe in this forum. If you will consult IRS Publication 17, page 85 under Repayments...

Tax Law (Questions About Taxes): Taxes, capital losses, duane wilson
capital losses, duane wilson, tax question: Duane, Thanks for your question. Capital losses are deductible on your state taxes as well. However, you should know that you can only deduct (state and federal) $3,000 more in losses than you have gains. So if you have $20,000 in losses with no gains,...

Tax Law (Questions About Taxes): Taxes, income tax liability, state income tax
income tax liability, state income tax, federal income tax: Mr. SOLLETI: If you work in one state and live in another state your taxes will be higher. Since, you will owe income tax in both states plus federal income tax. Until, I have your information ready to put on a 1040 and the state income tax return its...

Tax Law (Questions About Taxes): Taxes on Pension, lump sum payment, personal income tax
lump sum payment, personal income tax, stay at home mom: Hi, In addition to ordinary income tax you will have to pay a 10% penalty for early distribution. Plus if your state has a personal income tax you can add that tax. You can set up an IRA at any financial institution and roll the money into that. Start...

Tax Law (Questions About Taxes): Taxes on Social Security Disability Income, social security disability, social security disability income
social security disability, social security disability income, medical disability: I can t pinpoint an answer as the real answer needs all the info from your tax return, but I can tell you that the maximum taxable amount of your SS is 85%, so if his income, your combined other income and half your SS income is over $34,000 (and it is), you...

Tax Law (Questions About Taxes): Taxes on sale of Easement rights., easement rights, cascade mountains
easement rights, cascade mountains, long term capital gains: Bill, Thanks for your question. Based on the information that I have at my disposal, it indicates that if the property relating to the easement is a capital asset, the income from the easement is a capital gain (loss). You might find some help in IRS...

Tax Law (Questions About Taxes): "No Taxes Withheld", estimated tax payments, irs website
estimated tax payments, irs website, irs gov: Dear Dai, As a self employed contractor you need to keep track of your income and expenses. If you find that you are making a profit through out the year and expect to owe more than $1000, you should make quarterly estimated tax payments directly to the...

Tax Law (Questions About Taxes): Taxes to be withheld, self employment tax, child day care
self employment tax, child day care, withholding allowances: Barbara, Thanks for your question. Yes, taxes should be withheld - Federal income, state income, and social security/medicare. The rate for the income taxes will vary depending on her level of income and the number of withholding allowances she claims....

Tax Law (Questions About Taxes): Timeshare abandonment, abandonment, dear mr
abandonment, dear mr, cpa: Karen, Thanks for your question. If the form you received is a 1099-A you are not financially liable for the debt, but the amount is considered canceled debt. This is reported as other income on line 21 of the 1040. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Timeshare deduction, joyce joyce, stancil
joyce joyce, stancil, hi john: Joyce, Thanks for your question. Probably not. To the extent that the timeshare was personal use it is not deductible. To the extent it was rental use, that portion of the expenses would be deductible. Since it was never rented, it would be hard to...

Tax Law (Questions About Taxes): Traditional IRA and capital gains tax, fund additions, long term capital gains
fund additions, long term capital gains, ira funds: Ernest, Thanks for your question. Since the funds were in an IRA, they are not taxed at the capital gain rate. The entire amount of the withdrawal is taxed as ordinary income unless you had some non-deductible contributions. The rollover amount is...

Tax Law (Questions About Taxes): Transfer of my deceased mother's home, relief distribution, deceased mother
relief distribution, deceased mother, joint tenant: Dawn, if the return is not filed by October 15, she will not get the rebate. As for the rest, you can just gift him the house, he would get Mom s date of death value and you will not have tax to pay unless you have already gifted out a million dollars....

Tax Law (Questions About Taxes): Transfer of property, retirement annuity, residential rental property
retirement annuity, residential rental property, stepped up basis: Jeff, There is no stepped up basis as it is a gift. It is not a good idea to transfer the primary residence, as the kids get the cost as basis and they get no exclusion on the sale of the primary residence (unless they move into the house). This factor...

Tax Law (Questions About Taxes): Trust disbursement, income tax consequences, successor trustee
income tax consequences, successor trustee, stancil: Chris, Thanks for your question. Based on your description, there should be no taxes involved since the trust shows losses. They would only have to pay income taxes if the trust had income that was passed on to them. With no income, there are no income...

Tax Law (Questions About Taxes): tax amendment following a divorce, innocent spouse relief, irs form 4506
innocent spouse relief, irs form 4506, innocent spouse form: Chris, Thank you for your question. 1) What do I need to do to protect myself from legal action if my ex did not pay the state? There is a form you should be able to file, depending on the state you live in. It is the innocent spouse form. Let me...

Tax Law (Questions About Taxes): tax due after death of wisconsin resident, inheritance tax, gross estate
inheritance tax, gross estate, wisconsin resident: Sophie, Thank you for your question. 1)Is there an inheritance tax due? Wisconsin does not have an Inheritance Tax however they do have limited estate taxes based on the Federal Estate Taxes In the state of Wisconsin there is an estate tax return...

Tax Law (Questions About Taxes): tax exemptions, ssdi, tax exemptions
ssdi, tax exemptions, insurance policy: Chris, If you are collecting on an annuity, It all depends on what the documents you signed calls for. I need more information about what kind annuity it is. This also has to do with what form you get from the provider at the end of the year. You may be...

Tax Law (Questions About Taxes): tax on gift stock, merill lynch, stocks and bonds
merill lynch, stocks and bonds, form 709: Dear Thierry, J ai dit je pourais repondre en francais mais ca fait longue temps depuis j ai ecrit en Francais donc vous lisez anglais mur que j ecrit en Francais. Vous pourrez m ecrit mail jpachuilo a lglcpa point com. A gift over $12,000 must be reported...

Tax Law (Questions About Taxes): tax question regarding a home, nonprofit agency, tax question
nonprofit agency, tax question, business property: Dear Leticia, My condolences for your loss. From your information, I assume that you inherited the building, depending on the use of the building there are different ways to report homes vs business property, however your cost in the property is the...

Tax Law (Questions About Taxes): tax return, form 1040nr, w7 form
form 1040nr, w7 form, dependent visa: Mr. Dixit: I am not knowledgeable of the United States Visa Program. I have never filed a tax return for a resident alien. I do not know the difference between the holder of a H1 or a J1 visa. But, I do know taxes and the United States Tax Law. All...

Tax Law (Questions About Taxes): how much taxes, www irs gov, state of maryland
www irs gov, state of maryland, circular e: Dear Donna, It is somewhat difficult to understand your situation but I will assume that you are self employed,otherwise your employer would withhold all of those taxes you mentioned in your question. You can go on line and consult (Circular E) Employer...

Tax Law (Questions About Taxes): how much would i get back from taxes., qualifying relative
qualifying relative: Daniel, Unfortunately you can t claim your girlfriend as a dependent because she fails the qualifying relative test given that she lived with you only 9 months of the year. Considering only the other information you gave me, you can file as head of household...

Tax Law (Questions About Taxes): taxes, business portion, form 2106
business portion, form 2106, itemized deduction: James, Thank you for your question. You cannot buy a car and write it off. If you use the car for business purposes you can write off the cost of running it , ie, the business portion of the actual costs plus depreciation of the business portion...

Tax Law (Questions About Taxes): taxes on a lufe estate, joe thanks, stancil
joe thanks, stancil, life estate: Joe, Thanks for your question. You will owe income tax on the gain from the sale of the house. Your gain is the excess of the sale proceeds over the fair market value as of date of death. If there is a loss, it would be deductible. This is reported...

Tax Law (Questions About Taxes): taxes and marriage, tax resolution, resolution program
tax resolution, resolution program, federal taxes: David, Sorry about the delay in response, I have not been well this weekend. To answer your question, technically the debt does not become yours. But once you start filing jointly, in some cases you CAN be held responsible. For instance if they are...

Tax Law (Questions About Taxes): taxes from paycheck, tax braket, cheryl thanks
tax braket, cheryl thanks, stancil: Cheryl, Thanks for your question. The more you work, the more money you take home. The tax bracket is marginal, meaning that only that income within the bracket is taxed at that rate. For example if the 10% bracket tops off at $15,650, taxable income...

Tax Law (Questions About Taxes): Back taxes pd this year., form 1040 schedule c, self employment tax
form 1040 schedule c, self employment tax, self employment income: Pam, Thank you for your question. 1)Can he deduct the payments this year? As a schedule C filer, you get to deduct the employers share of Fica and Medicare for an employee as payroll tax expense in the year incurred, unless he is a cash basis taxpayer...

Tax Law (Questions About Taxes): taxes on sale of vacant land, income tax return, stancil
income tax return, stancil, fixed income: Racheal, Thanks for your question. Your grandmother s basis in the property is the fair market value as of date of death. If she sold the property to your mother for more than the basis she will owe taxes on the gain. If she sold it for less than...

Tax Law (Questions About Taxes): back taxes for students, colorado department of revenue, state income tax
colorado department of revenue, state income tax, w2s: Jim, Thanks for your question. I don t know how diligent the Colorado Department of Revenue is in their enforcement, but you may not be able to overcome their arguments. Even though they were students in Florida and worked there, since you claimed...

Tax Law (Questions About Taxes): one-time capital gains house sale exemption, gain sales, dads name
gain sales, dads name, time capital: Steve, Thank you for your follow up question. Sales Price $700,000 Commission ($40,000) Adjusted SP $660,000 Cost basis 1/2 share of House (Fathers tax basis( $175,000 (This assumes your dads FMV $350,000 (Whole House)...

Tax Law (Questions About Taxes): one-time capital gains house sale exemption, mom and dad, time capital
mom and dad, time capital, follow ups: Mom is in good shape. Her basis is 85K and half of Dad s is 350K. So that gives her $435K. New tax law says that if she sells within 2 years of Dad s death, she gets $500K in exclusion. So if she sells for less than $935K, she will not owe any federal...

Tax Law (Questions About Taxes): tolls, contract worker, tollroad
contract worker, tollroad, schedule c: Hi, Since you are a contract worker you report your income and expenses on Schedule C. If you work out of your home you can deduct your mileage and tolls as well as other expenses. If you go to your employer s office first you can t deduct the mileage...

Tax Law (Questions About Taxes): transferring CD's, sick mom, tax fraud
sick mom, tax fraud, major trouble: One can gift up to 12K a year and not file a gift tax return. You, as Mom s POA, gifted $100K so a gift tax return is required by law. You will not owe taxes, but must file the form. I have to mention medicaid, as some folks will try and shelter money...

Tax Law (Questions About Taxes): UBI, james rogers, limited partnerships
james rogers, limited partnerships, supplementary statement: Dear Chuck, Welcome to All Experts. Thank you for your very good question. The short answer to your question is yes, most K-1s I ve seen for my clients have an amount in line 1 but nothing in line 20 showing code V for UBI. Your payor may be unaware...

Tax Law (Questions About Taxes): Vacant Land Sale, higher tax bracket, capital gain tax
higher tax bracket, capital gain tax, maximum rate: Hi, While they did not pay for it they do have a basis in the land which is deducted from the selling price to arrive at their gain. Their basis is the fair market value on the date of death of the decedent. Once they ve determined their gain they...

Tax Law (Questions About Taxes): Vacation/Business trip, school math teacher, middle school math
school math teacher, middle school math, educational differences: Sorry, Jim, but I don t see a business purpose at all for your trip. Educator trips have not been allowed to be written off for over 10 years. And helping your son really has no volunteer aspects as he is not a qualified charity. Helen, EA in P...

Tax Law (Questions About Taxes): Vehicle expenses for a business, sec 179, vehicle expenses
sec 179, vehicle expenses, stancil: Laurel, Thanks for your question. What you are referring to is a Sec. 179 deduction. There are limits on the amount of Sec 179 that can be taken for a vehicle. It is likely that your 2004 return was incorrectly prepared. However, for 2008 thate...

Tax Law (Questions About Taxes): Volunteer expenses (firefighter / EMT), pressure measuring device, oxygen tanks
pressure measuring device, oxygen tanks, volunteer expenses: Sean, Thank you for your question. Charitable mileage for 2008 is 14 cents per mile as you stated, Equipment purchased would be either written off as an expense or capitalized and written off over its useful life. You can write equipment off directly...

Tax Law (Questions About Taxes): vehicle tax deduction, farming purposes, james rogers
farming purposes, james rogers, section 179: Dear Dara, Welcome to All Experts, and thank you for your question. No, the business asset you purchase and properly expense via Section 179 does NOT need to be brand new but, as you said, new to you. Yes, you can purchase the (used) 2005 truck and...

Tax Law (Questions About Taxes): W9 Versus 1099, irs form 1099, social security number
irs form 1099, social security number, form 1040: Lou, Thank you for your question. 1)What is a W9 and why was nt a 1099 used instead. Do I owe taxes on the contest? A W-9 is a Federal form required by the payee of the contest so at the end of the year they can issue an IRS form 1099 They ask for...

Tax Law (Questions About Taxes): Working and living taxing state, city of brook park, silver spring md
city of brook park, silver spring md, brook park: Gretchen Thank you for your question. 1)Which state and city should my company be with holding taxes for? Usually the employer will withheld from the state that you work in. When you worked in Ohio, they withheld in Brook Park and Ohio If you...

Tax Law (Questions About Taxes): Working for a Non-Profit Theatre, self employment tax, irs office
self employment tax, irs office, unemployment office: Michael: She is an employee. If the not for profit corporation is a 501(c)(3) the organization my be exempt from unemployment reporting in your state, I am not sure. She needs to contact the local uemployment office for clarification and to report the...

Tax Law (Questions About Taxes): Wrongful termination lawsuit, wrongful termination lawsuit, blended rate
wrongful termination lawsuit, blended rate, fed rate: Dorothy, Thank you for your question. 1) I am trying to find out what the taxes would be to know how much to ask for. The Fed rate is a blended rate- figure 25 to 35 percent The State rate can range from 3 percent to 8 percent Keep in mind ,...

Tax Law (Questions About Taxes): w-4 allowances, irs gov, state income tax
irs gov, state income tax, enough money: Dear Matt, You appear to have incorrectly filled in the W-4 there is no such amount over the number of exemptions you site. If your withholding does not cover the minimum tax due to the government they will become concerned that you are not setting aside...

Tax Law (Questions About Taxes): w-4 forms, jennifer thanks, stancil
jennifer thanks, stancil, two states: I can t say if you will owe at the end of the year or not. It depends on the relative tax rates between the two states plus any income you may have in your home state that is not taxable in the other state. If you would rather pay now, have some withheld...

Tax Law (Questions About Taxes): Zero tax rate on Capital gain, income tax bracket, short term capital gain
income tax bracket, short term capital gain, long term capital gain: Hi, You won t be able to claim the 0% tax rate on all of the gain remaining after your exclusion if your total income including your capital gain puts you in a tax bracket higher than 15%. Your total income will include the part of the gain which you cannot...

Tax Law (Questions About Taxes): 1065 & LLC, partnership return, sole proprietor
partnership return, sole proprietor, schedule c: Hi, If there are 2 members in the LLC you would need to file a partnership return unless you prefer to be taxed as a corporation. Usually a partnership return is chosen. Only single member LLC s file as a sole proprietor (Schedule C). Regards, Carol...

Tax Law (Questions About Taxes): 1099, form 1099 misc, irs form 1099 misc
form 1099 misc, irs form 1099 misc, form 1040 schedule c: Louise, Thank you for your question. 1)How do you handle a situation where a person has worked part of the year as an employee paid through payroll but then the circumstances change (same job but company change) so you need to become 1099 employee?...

Tax Law (Questions About Taxes): 1099, independent contractor status, self employment tax
independent contractor status, self employment tax, automobile expenses: Dear Louise, Thanks for the follow-up. It sounds as though your working at home is very temporary. Based on your description of the circumstances, I think you do qualify as an independent contractor. Just so you know...the company s funds available...

Tax Law (Questions About Taxes): 1099 and account for, form 1099 misc, james rogers
form 1099 misc, james rogers, apartment rent: Dear Ric, Welcome to All Experts, and thank you for your questions. You should give the officer a Form 1099-MISC on which you would enter the fair market value of the apartment rent---the amount you would have received had you rented it on the open market....

Tax Law (Questions About Taxes): 1099 on Deed in Lieu, tax responsibilities, john thanks
tax responsibilities, john thanks, deed in lieu: John, Thanks for your question. Yes you will owe tax on the amount of forgiven debt. The Mortgage Forgiveness Protection Act only applies to your primary residence and for acquisition debt of that residence. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): 1099-misc for non-employee travel reimb?, student paper contests, self employment tax
student paper contests, self employment tax, travel reimbursements: Marie, Thank you for your follow up question. 1)Also, would it make a difference if we reimbursed the travel expenses to the chapter instead of the student? Lets see, the 501c3 wants to reimburse the chapter for the expenses of the student to travel...

Tax Law (Questions About Taxes): 1099 percentage pay, pay stubs, contract issue
pay stubs, contract issue, wage and hour law: Frank: You report what you have been paid. As and independent contractor your are outside the wage and hour law because you have your own business. I know that you may feel as thought you are not being paid your fair share since the company you are contracting...

Tax Law (Questions About Taxes): 1099 Questions, irs employees, form 2106
irs employees, form 2106, straight commission: Tally, Thank you for your question. 1)How does this work with the IRS? I hope they are still keeping them as W-2. If not, you may have a problem here. It may also sound like the employees will have to account for their own expenses on Form 2106. ...

Tax Law (Questions About Taxes): From 1099 and Start-up Medical Practice Loan Forgiveness, loan forgiveness, physician recruitment
loan forgiveness, physician recruitment, double taxation: Hi Doctor this seems to be a complicated arrangement but if you are running a practice and paying expenses they should give you a 1099 for misc income which you would pick up on your tax return as business income (shedule C ) against it you would deduct the...

Tax Law (Questions About Taxes): 2 jobs, income tax liability, state income taxes
income tax liability, state income taxes, state income tax: Unless he claims exempt on his W-4 which legally he is probably not entitled to to do so, the withholding charts will indicate that an amount must be withheld for federal income tax. Most likely the same will be true for state income tax as well. Since...

Tax Law (Questions About Taxes): 2008 v. 2009 rates on gain on sale of land, purchase money mortgage, capital loss carryover
purchase money mortgage, capital loss carryover, social security income: Hi, The capital gains rates will increase in 2009 unless Congress changes the law. Most likely if they change the law the rates will go up even higher. You can use your capital loss carryover to offset the gain so you might be better off to call the...

Tax Law (Questions About Taxes): 401(K) beneficiary, beneficiary ira, lump sum tax
beneficiary ira, lump sum tax, distribution plan: Hi, You ll need to ask the custodian about rolling it over to a beneficiary IRA. If they are able to do that you will need to start taking distributions the year after his death. There is a table that the IRS has to determine, based on your age, what...

Tax Law (Questions About Taxes): 401K hardship, hardship withdrawal, home thanks
hardship withdrawal, home thanks, dependants: John, Thank you for your question. 1). Is the tax just regular income tax? Yes. It just gets added to your income. 2)so will I get a percentage of the 20-30 % tax, or will I lose the whole amount? If you have taxes taken out on the distribution,...

Tax Law (Questions About Taxes): 401K WITHDRAWAL EXCEPTIONS, retirement account, last job
retirement account, last job, hubby: Just don t do it. You will pay income tax and a 10% penalty, so that will about blow the money from retirement account and you will also not have anything to retire with. There is no exclusion to the tax and penalty available to you. Helen, EA in P...

Tax Law (Questions About Taxes): 401K withdrawl, nosedive, mortgage interest
nosedive, mortgage interest, merrit: Hi, I m not a financial advisor so I can t advise you in that regard. I, too, have seen my 401k take a nosedive but I m hoping for a recovery in time. Personally I wouldn t want to pay tax and penalties by taking a distribution to pay off a mortgage....

Tax Law (Questions About Taxes): 401k inheritance, individual retirement account, columnist block
individual retirement account, columnist block, form 4972: Mitzi, Thank you for your question. Sorry about the passing of your mom. 1)My mother died leaving a 401k to me, what are the tax consequences if I take it, can I roll it over to my own IRA and what it time frame If you take the money, they will...

Tax Law (Questions About Taxes): 673 tax form, physical presence test, federal income tax
physical presence test, federal income tax, tax form: Steven, Thank you for your follow up question. 1) E)For 2007 you would have a prorated deduction of 210 days that fall in the 2007 year. (June 4, 2007- April 29, 2008) F)For 2008 you would have a prorated deduction of 247 days that fall in the...

Tax Law (Questions About Taxes): $7,500 First-time Home Buyer Tax Credit, time home buyer, first time home buyer
time home buyer, first time home buyer, credit question: Just by co-signing the mortgage does not put you on the deed. At least it should not. And as long as you are not on the deed, she will be eligible for this credit/loan. Remember, it is paid back over 15 years or as long as she owns the home, whichever...

Tax Law (Questions About Taxes): $7,500 Tax Credit for First Time Home Buyer, time home buyer, first time home buyer
time home buyer, first time home buyer, tax time: Gregg, Thank you for your question. 1)My question is: If I buy the house in Jan 2009, can if be claimed at the April tax time for 2008? When would I get the money from the credit? You get the money only after you claim the credit on either your...

Tax Law (Questions About Taxes): $7500 Tax Credit First Time Homebuyer, settlement date, principal residence
settlement date, principal residence, building a home: Matthew, Thank you for your question. 1)should I wait until after I close to file my taxes? If you meet the qualifications as a first time homebuyer, then you qualify for the credit. Here is a question and answer about the date issue: ...

Tax Law (Questions About Taxes): 941 S-Corp Question, settlement, trust fund taxes
settlement, trust fund taxes, offer in compromise: You can wait and see if they do not assert the penalty. Not likely, but possible. If the do, you can get in an installment agreement to pay it off over five years or less. As far as settling, not likely unless you can demonstrate that your net assets plus...

Tax Law (Questions About Taxes): Additional withholding for a married couple, payroll departments, payroll department
payroll departments, payroll department, james rogers: Dear Kelley, Welcome to All Experts, and thank you for your question. Generally speaking, if you complete all the pertinent lines of your W-4, including other withholding from a spouse, withholding from a prior job, etc., the allowances and extra withholding,...

Tax Law (Questions About Taxes): Adoption Tax Credit, adoption tax credit, adjusted gross income
adoption tax credit, adjusted gross income, adoption credit: The credit is allowed only for the year in which the expenses were incurred. I doubt that there is any investment strategy that you can get in that would make any difference in only a month. Consult with a registered financial advisor for available investments...

Tax Law (Questions About Taxes): Is aid from my church taxable?, james rogers, wonderful church
james rogers, wonderful church, handicapped children: Dear John, Welcome to All Experts, and thank you for your question. What a wonderful church! If you are not employed by the church or otherwise expected to perform services in exchange for the use of the van, then this appears to be a nontaxable benevolence...

Tax Law (Questions About Taxes): alimony, stancil, alimony
stancil, alimony, child support: Gary, The laws specifically state that any amount that is alimony must be stated as alimony and paid in cash (or on behalf of the ex spouse). Since you had an option, the IRS does not consider this alimony, therefore not deductible. Hope this helps....

Tax Law (Questions About Taxes): amended filing, head of household, stancil
head of household, stancil, irs: Stephanie, If you were married as of December 31, you cannot file single or head of household. Your only choices are married filing joint or married filing separate. You say your spouse filed married head of household. There is no such filing status....

Tax Law (Questions About Taxes): Benevolant Account, self employment income, self employment tax
self employment income, self employment tax, social security and medicare: Hi, Income received as an independent contractor is reported on Schedule C (or C-EZ). You can also deduct any expenses you had to earn that income on Schedule C. Driving back and forth to work is not a deductible expense. You will be subject to self...

Tax Law (Questions About Taxes): Best Tax advantages, income tax preparation, business debts
income tax preparation, business debts, james rogers: Dear Richard, Welcome to All Experts, and thank you for your question. I recommend the LLC form of business organization for the venture you described. Included with that recommendation would be a carefully-thought out, comprehensive Management Agreement...

Tax Law (Questions About Taxes): Business, Increased taxes, new taxes
Increased taxes, new taxes, business: Glena, This question was transferred to the AllExperts Question pool. Obviously it is very open ended, so it may have gone beyond the scope of who ever you sent it too. Allow me to answer. The discussion of increasing federal taxes revolve around personal...

Tax Law (Questions About Taxes): Business Vehicle Deduction, IRS, Delinquent Returns
IRS, Delinquent Returns, bank: Gary, Why not? I assume you bought it for cash since you didn t say differently. If you financed it, the interest (not the payment is deductible). Also, you have to use 4562 depreciation schedule (you cannot write off the vehicle all in one year). Ja...

Tax Law (Questions About Taxes): babysitting, form 1040 schedule c, self employment taxes
form 1040 schedule c, self employment taxes, daycare: Ronda, Thank you for your question. 1) how much can you make before you must turn it in the pay was 70.00 a week? You have to report each dollar earned on Form 1040 Schedule C. You will not be subject to self employment taxes under $400. As...

Tax Law (Questions About Taxes): babysittng and schedule H, cash wages, household employee
cash wages, household employee, james rogers: Dear Mark, Welcome to All Experts, and thank you for your question. Neither you nor your mother must file Schedule H. Based on your circumstances, I believe your mother would have to include the wages you pay her in her gross income. Mark, I hope...

Tax Law (Questions About Taxes): business expensing, ac system, air conditioner
ac system, air conditioner, length of time: Hi, In a business you can expense many items - tools, machinery, cars, computers, etc. But you can t expense a new roof: it is depreciated over the same length of time as the building. If the air conditioner is a window unit that is not part of the heating...

Tax Law (Questions About Taxes): C corp loss, how to take business losses in a c-corp, richard fritzler
how to take business losses in a c-corp, richard fritzler: I realize that the strip mall accounting dogma always pushes everything to the personal tax return, and that business loses being pushed to the personal level seems to somehow be good tax management. I also understand that under that assumption you are...

Tax Law (Questions About Taxes): California Tax question, state tax returns, california address
state tax returns, california address, federal returns: Hi Dipti what possessed you especially CA the Feds will inform CA you will be subject to the Ca non resident tax so be prepared to explain and pay furtunately you will be able to offset most of CA against NJ For Now file a change of address with the...

Tax Law (Questions About Taxes): Capital Gain, state inheritance taxes, federal estate tax return
state inheritance taxes, federal estate tax return, james rogers: Dear Cindy, Welcome to All Experts, and thank you for your question. I m sorry to learn of your mother s death. Given the facts you presented, your mother s estate did not require a federal estate tax return, and no federal estate tax is due. Although...

Tax Law (Questions About Taxes): Capital Gain Loss deduction, capital losses, total of 3000
capital losses, total of 3000, capital gain: Hi, If you file separately you can each use $1,500 of capital losses to offset other income. Any unused capital losses can be carried forward to next year and used to offset capital gains and up to $3,000 of other income. If any loss remains after next...

Tax Law (Questions About Taxes): Capital Gains on House Sale, capital gains on house sale, lock stock and barrel
capital gains on house sale, lock stock and barrel, capital gains tax: The answer is not going to make me popular, but they have until the end of this month to sell to exclude the gain. They made the new house their residence. One of them can move back in and live there until sold. That is really their only option. And...

Tax Law (Questions About Taxes): Capital gains deduction on rental property, irs web site, publication 523
irs web site, publication 523, form 4797: Armeen, Thank you for your question. 1)Once the current tenants leave, can I live in it for 2 years and take the capital gain deduction of $500K for married couple? Yes As per the IRS web site: If, during the 5-year period ending on the date of sale,...

Tax Law (Questions About Taxes): Capital gains on inheritance, capital gains taxes, capital gains tax
capital gains taxes, capital gains tax, unit apartment: If you use the value at DOD ($900,000)you would have a gain of $100,000. If revalue the estate at May does the taxable estate exceed $2,000,000? If it does, than the excess may be taxed from 18-20%. It maybe more advantageous to take the alternative value...

Tax Law (Questions About Taxes): CGT on Investment Property with no US income, capital gains, taxable income
capital gains, taxable income, cgt: You can elect to capitalize the interest and taxes to add to the basis. HOWEVER, you then cannot deduct them on your Sch E and may have taxable income at that point. Also, remember that the exclusion for foreign income does not start until you are out of...

Tax Law (Questions About Taxes): Claiming a Child, tax law changes, claiming dependents
tax law changes, claiming dependents, dependency exemption: Gregory, Thank you for your question. 1)With the new tax laws for claiming dependents does she have the right to allow her parents to claim my son or do I? I don t know yet if there are any tax law changes that would effect the dependency exemption....

Tax Law (Questions About Taxes): Claiming a rental property, mortgage interest, rental property
mortgage interest, rental property, living expenses: No. In order to claim it as a rental property you must charge him fair market value rent. You get to claim him as a dependent and you also can claim the mortgage interest and taxes on your Schedule A. That is the extent of what you can claim. Helen,...

Tax Law (Questions About Taxes): Clarification on minimum taxable income, self employment tax, social security and medicare
self employment tax, social security and medicare, personal exemption: Hi, The minimum income for a single person from an income tax standpoint would be the total of your standard deduction and your personal exemption ($5,350 plus $3,400 for 2007 - slightly higher for 2008). If your income is that or less you would not have...

Tax Law (Questions About Taxes): Clergy Housing, income tax purposes, toaster ovens
income tax purposes, toaster ovens, housing allowance: Dear Andy, Welcome back. NO! That s not what I meant, and I m sorry if I didn t make that clear. A pastor s housing allowance can be focused ONLY on the ONE house that is his/her primary residence, i.e. where the pastor actually lives. If the church...

Tax Law (Questions About Taxes): c corp loss, c corp, s corp
c corp, s corp, business loss: Mary, Thank you for the question. 1)Could we possibly dissolve the company and somehow take the c corp loss from 2006 as an ordinary business loss on the taxpayer s 2008 Form 1040? What generated the losses? Was the corporation holding real estate?...

Tax Law (Questions About Taxes): c-corp medical premium deduction, life insurance premiums, full time job
life insurance premiums, full time job, c corp: No, the corporation does not own the asset and cannot depreciate it. You pay taxes at regular income tax rates on recaptured depreciation. Yes property taxes have already been taken as a deduction by you personally, so the corporation can t take them again....

Tax Law (Questions About Taxes): cancellation of accounts receivable, cash basis, bad debt
cash basis, bad debt, cpa: No, since he is on the cash basis, the debt was never income and therefor is not considered a business bad debt. Since the collection of the debt would result in ordinary income to the extent of any collection, it would not be classified as non-business bad...

Tax Law (Questions About Taxes): capital gain tax, retirement checks, capital gain tax
retirement checks, capital gain tax, capital gains tax: Rudy, You can exclude gain on your principal residence, which is defined as where you reside most of the time. However, if challenged by the IRS you will have to prove it is your main home. With car registration, tax filing, voter registration at the...

Tax Law (Questions About Taxes): capitol gains on Vanguard Health Care, health care fund, capitol gains
health care fund, capitol gains, share gain: The fund has paid the gain, so no, there is nothing you can really do. But long term gains are taxed at 0% so you will save a little there. The down side is a portion of your SS is going to be taxable. Dawn, just remember that if you are paying taxes,...

Tax Law (Questions About Taxes): car as a gift to retiring pastor, honda odyssey, james rogers
honda odyssey, james rogers, retirement gift: Dear Mike, Welcome to All Experts, and thank you for your question. Yes, the church can give one of its vehicles to a retiring pastor. If it is done as a bonus, then it is taxable income to the pastor. In that case, the fair market value of the vehicle...

Tax Law (Questions About Taxes): car title transfer, car title, dmv
car title, dmv, cheap car: Hi, If she can sign to transfer the title to you and your wife, she need not put it in her name first. It depends upon the state and how the car is titled. The DMV doesn t care about how much is gifted. A $1 sale would work fine except that they wouldn...

Tax Law (Questions About Taxes): change of llc from three 3 to one foreign corporation member, Foreign owners, withholding
Foreign owners, withholding, llc: LLC s are pass through entities and as such are always on a calendar fiscal. Tax Pitfalls? Oh yeahhhh. All of the profit will be subject to a 30% withholdings in the US. The LLC is not a good business entity to operate a business. It is disregarded...

Tax Law (Questions About Taxes): child support, child support, irs
child support, irs: Zenia - Fortunately for you Zenia, Child Support is NOT taxable. The person paying the child support cannot deduct it from their taxes, and thus the person receiving it does not have to REPORT it. So, enjoy your $50,000 Dollars Zenia, I hope...

Tax Law (Questions About Taxes): What to claim, cell phone bills, social security and medicare
cell phone bills, social security and medicare, phone expenses: Dear April, Welcome to All Experts, and thank you for your question. The short answer is yes, you certainly are able to claim the business portion of your cell phone expenses. If you re an independent contractor, you will report your income and qualifying...

Tax Law (Questions About Taxes): claiming corp. owner as employee, how to do it, , corporate and tax reqirements., payroll for owner
payroll for owner: Hi Fred I do not get the point is the corporation making money ? if so you would be treated as any other employee get Circular E at the IRS site at www.irs.ustreas.gov PS you might consider to elect to be an S corp it might be better suited for your...

Tax Law (Questions About Taxes): claiming equipment on taxes, sec 179, steel cutter
sec 179, steel cutter, custom steel: Michael, You can take depreciation on the machine, writing it off over a period of time. If your business shows a profit, you can take a Sec 179 deduction instead of depreciation. This allows you to deduct the entire cost in the first year. Hope this...

Tax Law (Questions About Taxes): claiming mortgage intrest, itemized deduction, real estate taxes
itemized deduction, real estate taxes, mortgage payments: Hi, If you are not obligated to pay the mortgage payments you cannot take an itemized deduction for mortgage interest and real estate taxes. Perhaps you could be added to the loan so that you can take advantage of the deductions. Regards, Carol...

Tax Law (Questions About Taxes): commercial property capital gains taxes, federal tax rate, state levies
federal tax rate, state levies, long term capital gain: Dear Jeffrey, Welcome to All Experts, and thank you for your question. Your cost basis is $1, so your long-term capital gain would be $999,999 less any expenses of sale and capital improvements you made during your ownership. I believe the federal tax...

Tax Law (Questions About Taxes): Am I considered an employee?, interior design company, subcontractor
interior design company, subcontractor, melanie: Melanie: You are an employee. There is no tax law against an LLC having employees. In fact an LLC can not operate without employees. The members are employees but are not reported since they are owners. I do not know how you should file your earnings...

Tax Law (Questions About Taxes): contractor settlement, form 1099 misc, irs form 1099 misc
form 1099 misc, irs form 1099 misc, irs form 1099: Jo, Thank you for your question. 1)how do we make sure that the IRS is aware of exactly how much that settlement was for? There is no specific form to show settlements. You should basically report it on IRS form 1099- Misc. It is up to the to builder...

Tax Law (Questions About Taxes): copy of tax return, form 4506, tax return
form 4506, tax return, irs: If you prepared it yourself, then the only place to get a copy is from the IRS. If you had someone prepare it, you can get a copy from them. A transcript is free, it takes about 3 weeks. A copy will cost you about $57, and you need to use form 4506....

Tax Law (Questions About Taxes): corp to corp for mmllc, s corp, 1099 misc
s corp, 1099 misc, file taxes: You have to follow the terms of the LLC agreement as far as distributions to members are concerned. The individual members pay the income tax, not the corporation, based on their prorata share of the income on a quarterly basis. Do not understand your last...

Tax Law (Questions About Taxes): Daycare Costs, dependent care credit, taxpayer identification number
dependent care credit, taxpayer identification number, social security number: Hi, There is a tax credit called the Child and Dependent Care credit. You can deduct a portion of the daycare costs depending upon the amount of your income. The percentages range from 20% to 50%. You will need the care providers name, address and taxpayer...

Tax Law (Questions About Taxes): Daycare costs, adjusted gross income, income increases
adjusted gross income, income increases, stancil: Phil, If you can claim the child as a dependent you get a credit of 20 to 35% of the first $3,000 in day care costs paid if the amount was paid in order to enable the parents to work. The credit percentage is lower are your adjusted gross income increases....

Tax Law (Questions About Taxes): Deducting cost of home remodeling, irs gov, home improvements
irs gov, home improvements, business office: Keith: You may only deduct the sales tax paid on the remodeling of you home. Improvements become part of the cost of your home . Improvements adds to the value of the home, so in theory, when you at some point put your house up for sale, it will have...

Tax Law (Questions About Taxes): Deducting home mortgage interest, home mortgage interest, jennifer thanks
home mortgage interest, jennifer thanks, quitclaim deed: Jennifer, Thanks for your question. In order to deduct mortgage interest you must be legally liable for the debt and must make the payments. Ownership of the house is not an issue for this purpose. Under the circumstances you are probably ok for this...

Tax Law (Questions About Taxes): Deductions, publication 526, charity work
publication 526, charity work, two trees: Brandi, Thank you for your question. 1)would like to know if I can deduct the transportation cost of moving the trees to the location since the city would not do so? Publication 526 says that if you donate taxidermy property, you cannot deduct transportation...

Tax Law (Questions About Taxes): Dependants, irs web site, adult jail
irs web site, adult jail, principal residence: Marie, Thank you for your question. According to the IRS web site: In general, to be a taxpayer’s qualifying child, a person must satisfy four tests: * Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster...

Tax Law (Questions About Taxes): Dependent Care Credit/Flex Spending, flex spending account, dependent care credit
flex spending account, dependent care credit: Tracy, Thank you for your question. 1) If I will pay more than that in 2009 for 1 child, can I also claim the dependent care CREDIT on expenses for anything over $5000? The $5000.00 credit is taken off the top. If you do not have this plan, then the...

Tax Law (Questions About Taxes): Dependent care Flex spending accounts, flex spending accounts, dependent care fsa
flex spending accounts, dependent care fsa, dependant care: Laura, Thank you for your question. 1)Can both my husband and I participate in our employer s dependent care FSA and each contribute the $5000 max? Or can we only use $5000 per household? IRS regulations allow up to $5,000.00 per calendar year...

Tax Law (Questions About Taxes): Dependent Educational Benefits, human resources department, tuition remission
human resources department, tuition remission, obscure reason: Dear Patrick, Welcome to All Experts, and thank you for your question. I work in a university, too, and those tuition remission and tuition exchange benefits have always been—and continue to be—excluded from gross income (i.e., not included on one’s...

Tax Law (Questions About Taxes): Dependent Getting Married, irs letter, letter states
irs letter, letter states, tax statements: If your daughter and her husband had enough income to have taxable income, you should not have claimed her. She was correct in filing with her husband. If they did not have taxable income, then they need to amend so you can claim her. Helen, EA in...

Tax Law (Questions About Taxes): Didn't file taxes for 5 years, back fence, offer in compromise
back fence, offer in compromise, state income tax: Dear J, Welcome to All Experts, and thank you for your questions. Clearly, you have several serious problems requiring simultaneous actions. Since you’re already represented by a CPA and an attorney, I don’t want to get in their way, so I’ll present...

Tax Law (Questions About Taxes): Per Diem, middle tennessee area, irs guidelines
middle tennessee area, irs guidelines, mileage rate: Evan: If no travel and overnight stay is involved it is wages not per diem. If the employees are using their on personal vehicle for the furtherance of the landscaping business other than driving to a worksite inorder to be at work the employer can pay...

Tax Law (Questions About Taxes): Per Diem, personal income tax, income tax return
personal income tax, income tax return, government allowance: William, Thank you for your question. Is this taxable? and is there a period of time that you can t receive per diem and not have to claim it as income? If you are working out of town and this is for a short term, less than year assignment, you can...

Tax Law (Questions About Taxes): Per Diem employees, irs guidelines, pharmacy tech
irs guidelines, pharmacy tech, expense money: Pam: In accounting the term is creative . Usually a workers who works something other than full time is a part-time employee. Over the years because of the high cost of workman s compensation insurance, SUTA, matching social security, FICA, and other...

Tax Law (Questions About Taxes): Per Diem and taxable income, james rogers, internal revenue code
james rogers, internal revenue code, self employment taxes: Dear Iris, Welcome to All Experts, and thank you for your question. The adage that comes to my mind when I read your circumstances is this: If it sounds too good to be true, it probably is. First of all, in almost all circumstances, there is no...

Tax Law (Questions About Taxes): Direct rollover, traditional ira, roth ira
traditional ira, roth ira, direct rollover: Your questions are beyond the scope of my expertise without looking at the plan of the 403(b). 1. A larger contribution can be made to a 403(b) plan than to a traditional IRA. You can self direct an IRA, while the 403(b) is generally managed by a plan...

Tax Law (Questions About Taxes): Distribution of Real Estate in Revocable Trust, capital gains tax, sole possession
capital gains tax, sole possession, consequenses: Your sisters have made a gift to you of their share of the house, which would require a gift tax return to be filed if in excess of $13,000 per sister. No, gift tax will be paid unless their portion exceeds $1,000,000. The basis of the house is stepped...

Tax Law (Questions About Taxes): Donations, stipulation, income taxes
stipulation, income taxes, cpa: It has to go to a recognized charity that is exempt from income taxes under sec 501(c)(3). Which is the school district in your case, just have her make a stipulation that the donated equipment is to go to you. John Kirk, CPA www.johnkirkcpa.com ...

Tax Law (Questions About Taxes): per-diem, irs form 3903, moving expenses irs
irs form 3903, moving expenses irs, irs website: Josie, Thank you for your question. 1)How do I know what tax deductions I can claim ? If you moved , then you need to test if you qualify for moving expenses IRS Form 3903. Is the consulting job on a W-2 or a 1099? If you have a job which is...

Tax Law (Questions About Taxes): per diem, army project, lockheed martin
army project, lockheed martin, military members: Darren: Since they are providing you meals an lodging they would be in their right to not pay per diem. Per Diem is not a right it is an allowance that employers can pay employees for expenses without the employee filing expense reports. However, the...

Tax Law (Questions About Taxes): per diem break, fellow contractors, perdiem
fellow contractors, perdiem, contract position: Keith, Thank you for your question. 1)I need to find what the minimum number of days I need to take off in a row to meet the requirements of a per diem break to avoid this additional taxation. The only thing I can think of is the requirement for...

Tax Law (Questions About Taxes): per diem and taxation, barnum and bailey circus, barnum and bailey
barnum and bailey circus, barnum and bailey, lighting technician: Patrick, Unfortunately, it is legal and proper. Since you do not have a tax home you are considered an itinerant. This means that your travel expenses are not deductible and any payment for them (such as a per diem) is taxable income. Hope this helps....

Tax Law (Questions About Taxes): disability income, guardian insurance company, massachusetts income tax
guardian insurance company, massachusetts income tax, income tax return: Dear Karyl, Welcome to All Experts, and thank you for your question. Let me preface my answer with the fact that my CPA license is not in Massachusetts. However, to respond to your question, I went to the MA Department of Revenue Web site and reviewed...

Tax Law (Questions About Taxes): divorce & claiming children as dependents, sole physical custody, divorce decree
sole physical custody, divorce decree, legal bills: Jennifer, you basically gave the kids away to him. Granted that you can take it back, but it will cost you money in legal bills, etc. The IRS supercedes the decree, yes, but then you are against the decree and he can fight that. I would suggest...

Tax Law (Questions About Taxes): Educational Expenses as Itemized deductions, lifetime learning credit, temporary absence
lifetime learning credit, temporary absence, itemized deduction: Cidalia, Thank you for your question. 1) Is there any thing that you can advise me to do? According to the IRS website: You may be able to deduct work–related educational expenses paid during the year as an itemized deduction on Form 1040, Schedule...

Tax Law (Questions About Taxes): Efficiently accessing equity in in-law's apartment, mortgage interest deduction, gifted property
mortgage interest deduction, gifted property, condo apartment: Michael, Thank you for your follow-up question. 1) Can I ask you to elaborate a bit here on what you re suggesting? I am suggesting that your in-laws transfer the asset into an LLC or partnership, whichever they want. 2)Where is the $52,000 figure...

Tax Law (Questions About Taxes): Erroneous gift tax, james rogers, form 709
james rogers, form 709, detailed explanation: Dear Chuck, Welcome to All Experts, and thank you for your question. If the transaction was unwound, then, yes, I believe a submission should be made to the IRS seeking a refund. It would probably be easiest to file a new Form 709 along with a detailed...

Tax Law (Questions About Taxes): ESOP Cash-Out, tax exposure, retirement plan
tax exposure, retirement plan, esop: If not rolled over into another retirement plan the proceeds less your cost in acquiring that stock is considered ordinary income and subject to the 10% penalty. You may need the services of a tax advisor to determine your tax exposure. John Kirk, CPA...

Tax Law (Questions About Taxes): Estate, principle residence, james rogers
principle residence, james rogers, decedent: Dear Michelle, Welcome to All Experts, and thank you for your question. I ll limit my answer to federal estate tax concepts and law. Generally speaking, a decedent s estate tax return must be filed and the tax paid within 9 months of the date of death....

Tax Law (Questions About Taxes): Estate and Inheirintance Taxe Questions, inheritance tax, federal estate tax
inheritance tax, federal estate tax, inheritances: Hi, My condolences on your loss. Whether or not there is Federal estate tax depends upon the size of the estate. Since your grandmother has a living trust I assume that she has an attorney to take care of the estate part. Beneficiaries of cash and...

Tax Law (Questions About Taxes): Estate tax issues, type of ira, ira funds
type of ira, ira funds, traditional ira: Since it is a traditional and we can assume that none of the contributions were non deductible, all the proceeds are taxable to the estate. Because the IRA left everything to the estate, and not the beneficiaries, the estate pays the tax, and the beneficiaries...

Tax Law (Questions About Taxes): Ex-Husband Lives in My House He pays the mortgage Is that Income for tax Purposes?, divorce agreement, first mortgage
divorce agreement, first mortgage, real estate taxes: Jessica, Thank you for your question. 1)do I have to claim his payments on the first mortgage as income. My question is does the divorce agreement stipulate separate maintenance payments or alimony ? Does the agreement specify anything concerning...

Tax Law (Questions About Taxes): The e-mail reply to my question was blank, mail reply, desirable property
mail reply, desirable property, marginal rate: Sarah, I don t know who you originally addressed your question to, but I can give you somewhat of an answer. Since you will not own the property for more than 12 months, you will owe tax as ordinary income at your marginal rate which can go as high as...

Tax Law (Questions About Taxes): elderly tax deductions, irs pub, adjusted gross income
irs pub, adjusted gross income, recipient organizations: Hi, If she donates the items to a 50% charitable organization (hospitals, schools, churches, community organizations, etc.), she can deduct 50% of her adjusted gross income. Any unused portion can be carried forward to next year. Be sure that she gets statements...

Tax Law (Questions About Taxes): employee & independent contractor, income tax rates, effective tax rates
income tax rates, effective tax rates, congress results: The answer depends on your expected income in future years and future income tax rates. You are always better off by taking the income tax hit during a period of lower taxes. What the future may hold is anyone s guess, but historically a Democratic Administration...

Tax Law (Questions About Taxes): expat income reporting, irs publication 54, www irs gov
irs publication 54, www irs gov, oregon cpa: Dear Dan, Welcome to All Experts, and thank you for your questions. I respectfully disagree with the Oregon CPA s advice. Following is a link to chapter 1 of the 2007 edition of IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad:...

Tax Law (Questions About Taxes): expired option, personal expense, purchase option
personal expense, purchase option, option price: Josh, Thank you for your question. 1)Is there any way I can take a deduction for the money I paid for the purchase option? Leasing a house you live in with an option to buy, is a personal expense, not deductible. If you leased a property to rent (to...

Tax Law (Questions About Taxes): FEderal ID request and Personal Taxes, Liability of filing for Tax ID, richard fritzler
Liability of filing for Tax ID, richard fritzler, tax lien: There seems to be two questions here. First, as a treasurer of a non-profit, you would not get a tax ID. The Non-profit gets a tax ID. You can be the one that files the ss-4 form to apply for a tax id, regardless your personal tax payer status. The Non-Profit...

Tax Law (Questions About Taxes): FILING STATUS AND DEPENDENTS, head of household, birth child
head of household, birth child, income tax credit: Hi, You can claim your fiance and his daughter as dependents if it is not in violation of local law for you to claim your fiance. For example, in Tennessee and some other states cohabitation is against the law so you could not claim your fiancee. As far...

Tax Law (Questions About Taxes): File tax returns - no SSN, ssn, mismatch
ssn, mismatch, tax returns: Your return is due 04/15/2009, if you do not have your SS# you put applied For in the box for the ID # and attach a statement as to why you have not received your number. Furnish as much information as possible including copies of your i-102. John Kirk,...

Tax Law (Questions About Taxes): Filing Income taxes, self employment tax, self employment income
self employment tax, self employment income, filing income taxes: Hi, Yes, $600 is enough to require you to file and pay self employment tax (social security and medicare). The calculation for self employment tax is net self employment income X .9235 X .153. You will report your income (and expenses if you had any)...

Tax Law (Questions About Taxes): Filing Taxes, filing taxes, estimated taxes
filing taxes, estimated taxes, previous life: Tiffany, Thank you for your question. 1)My question is should I file this year or can I wait to file in 2010? You should file your return because if you owe money , you can arrange to make monthly payments on your balance due. You will still owe penalties,...

Tax Law (Questions About Taxes): Filing Taxes, unemployment office, filing taxes
unemployment office, filing taxes, unemployment benefits: Jacob, Thank you for your question. 1)Will I receive my W-2 Form from them? Yes, Just make sure that they have your current address on file. If you do not receive your W-2 by the end of Jan 2009, call the place and if you do not get anywhere contact...

Tax Law (Questions About Taxes): Filing taxes Married VS Single, james rogers, disability income
james rogers, disability income, filing taxes: Dear Lisa, Welcome to All Experts. Marital status for tax-filing purposes is determined by whether or not you re married on December 31st. If you re married on December 31, the federal filing choices you have are married filing jointly and married...

Tax Law (Questions About Taxes): Foreign earned income, self employment income, income tax form
self employment income, income tax form, federal income tax form: Elaine, Thank you for your question. 1)Question: Is this Grant considered foreign earned income, or is it considered self-employment income? The Grant arrived after I filed my 2007 Federal Income Tax form and I don´t know how to report it on 1040X....

Tax Law (Questions About Taxes): Form 3115 and Rev. Proc. 96-31 - amending returns, irs form 3115, form 1040x
irs form 3115, form 1040x, life assets: Sonia, Thank you for your follow up questions. 1)Would I be considered a small business and therefore be expected to pay self-employment tax? If you are putting the rental on form 1040 schedule E , by definition rentals are passive activities not...

Tax Law (Questions About Taxes): FSA Distributions for Terminated Employees, fsa plan, fsa contributions
fsa plan, fsa contributions, health insurance coverage: Dear Belinda, Welcome to All Experts, and thank you for your very good question. My best recommendation would be to examine the FSA Plan and ask this question of the plan s administrator or trustee. I m somewhat surprised that a terminated employee...

Tax Law (Questions About Taxes): 401K WITHDRAWAL EXCEPTIONS, rollover ira, money
Tax Law (Questions About Taxes): 401K WITHDRAWAL EXCEPTIONS, rollover ira, money

Tax Law (Questions About Taxes): form 1099 filing requirements for Condo Assoc, 1099s, accounting software
Tax Law (Questions About Taxes): form 1099 filing requirements for Condo Assoc, 1099s, accounting software, management company

Tax Law (Questions About Taxes): Self Employed, sole proprietor, personal assets
Tax Law (Questions About Taxes): Self Employed, sole proprietor, personal assets, business operation

Tax Law (Questions About Taxes): Social Security reduction based on increased income, retirement age, old mother
Tax Law (Questions About Taxes): Social Security reduction based on increased income, retirement age, old mother, ss

Tax Law (Questions About Taxes): state tax lien
Tax Law (Questions About Taxes): state tax lien

Tax Law (Questions About Taxes): Tax on Prize Winning, car boat
Tax Law (Questions About Taxes): Tax on Prize Winning, car boat

Tax Law (Questions About Taxes): federal income tax exclusion, irs publication 54, maximum exclusion
irs publication 54, maximum exclusion, federal income tax: Depends on how long you are in a foreign country. You must establish residence in a foreign country. The amount of exclusion you can use is prorated over the number of days actually in residence in the foreign country. For 2008, the maximum exclusion is...

Tax Law (Questions About Taxes): federal tax, standard deduction, federal tax
standard deduction, federal tax, whole time: Txm. Thank you for your question. 1)Can I claim him as a dependent for this year while filing my tax returns for 2008? You cannot claim your husband as a dependent on your return. You can either file as married filing joint or married filing separately....

Tax Law (Questions About Taxes): form 1099 filing requirements for Condo Assoc, condominium association, 1099 forms
condominium association, 1099 forms, touchy issue: Gary, Thank you for your question. As a past President of my Condominium Association, I know a little about them. More than I would like to know. 1)Are we required to file 1099 forms with the IRS as well as issue to various vendors/handymen with whom...

Tax Law (Questions About Taxes): form 709 GST tax, estate tax exemption, federal estate tax return
estate tax exemption, federal estate tax return, gst tax: Frank, Thank you for your question. 1)how can form 709 benefit us? Estate tax planning can get very involved. I suggest you review this with other tax professionals. Its like getting your financial picture reviewed by different folk . I see...

Tax Law (Questions About Taxes): Gift tax questions, cumulative lifetime, lifetime gifts
cumulative lifetime, lifetime gifts, gift taxes: Gift taxes are assessed only on the donor. An individual can gift upto $13,000 per individual per tax year without filing a gift tax return. Unless the individual has an estate greater than $2,000,000 and cumulative lifetime gifts in excess of $1,000,000,...

Tax Law (Questions About Taxes): Gifting Money, Estate, inheritance
Estate, inheritance, property: Yes, and if you were so inclined you could gift me $11,000. But. . . why all the gifting? Is it to reduce your estate? Which was historically the reason gifting was common. In 2010 Congress is set to eliminate the estate tax entirely, which would...

Tax Law (Questions About Taxes): Gross Receipts Tax, gross receipts tax, state of new mexico taxation
gross receipts tax, state of new mexico taxation, new mexico taxation and revenue department: Dear Heidi, Welcome to All Experts, and thank you for your questions. Your father may well be correct, Heidi. Take a look at the following, copied and pasted from the State of New Mexico Taxation and Revenue Department: Taxes in New Mexico are on...

Tax Law (Questions About Taxes): gift tax, progressive tax, tax exclusion
progressive tax, tax exclusion, tax question: Terry, Thank you for your follow-up question. 1)if we were to give a married couple money does that mean we could give them 52,000. per year (13,000. to each of them from each of us) with no gift tax return? Yes, You are absolutely correct. Hope...

Tax Law (Questions About Taxes): HOH and Adult Child, head of household, adult daughter
head of household, adult daughter, federal income tax: Terry, Thank you for your question. 1)I m writing to make sure I can claim Head of Household on my taxes this year A person who supports and maintains, in one household, one or more people who are closely related to him by blood, marriage or adoption....

Tax Law (Questions About Taxes): Home Improvement/Itemized Deduction, IRS problems, bank levies
IRS problems, bank levies, wage garnishments: Home improvements only increase your value when you sell and under present law it is unlikely you will pay capital gains when you sell. So the increase in tax and interest gives you no recourse. If you pay these, you can fight the penalty due to bad advice...

Tax Law (Questions About Taxes): Homeowners Association Taxes, Richard Fritzler, do i have to file a tax return?
Richard Fritzler, do i have to file a tax return?: Addendum: When I suggested that the HOA might deplete it s reserves on improvements, I would not suggest that YOU make those purchases. You see, the personal liability comes when someone chooses to make payments for things other than taxes when taxes should...

Tax Law (Questions About Taxes): HSA Excess Contribution, hdhp, excess contribution
hdhp, excess contribution, medical payments: Patrick, Thank you for your question. 1)Can I simply withdraw the amount since it was funded with post tax dollars and I have not filed tax returns yet and avoid any penalties? The account had a $15 setup fee and I ve accrued $13.50 in interest since...

Tax Law (Questions About Taxes): house credit, james rogers, dear james
james rogers, dear james, cash basis: Dear James, Welcome to All Experts, and thank you for your question. If you re a cash basis taxpayer, which is most likely the case, then you can avail yourself of the credit only in the tax year in which you actually purchase (i.e., settle on) the house...

Tax Law (Questions About Taxes): house credit, stancil, home purchases
stancil, home purchases, magi: James, Yes, the law allows taxpayers to choose ( elect ) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be...

Tax Law (Questions About Taxes): Income For Babysitting, self employment tax, flexible spending account
self employment tax, flexible spending account, mileage expense: Dear Jing, Welcome to All Experts, and thank you for your question. Your mother should prepare a Schedule C on which she should report the $4,200 income, and she can deduct ALL the permitted expenses pertaining to her babysitting work for you. Her automobile...

Tax Law (Questions About Taxes): Income Tax on Lawsuit, IRS, Delinquent Returns
IRS, Delinquent Returns, bank: Joy, I am not so you should talk to your Attorney s tax advisor but you are only taxed on what you receive and it is my assumption that the suit should state what per cent goes to lost wages and only that portion is taxable. However, if any of the medical...

Tax Law (Questions About Taxes): Income tax question, north dakota web, income tax purposes
north dakota web, income tax purposes, reciprocity agreements: David, Thank you for your question. 1)If you income is earned in North Dakota, then you have to file as a non resident of North Dakota. According to the North Dakota web sits: Q: How do I determine if I am a nonresident of North Dakota? A: For...

Tax Law (Questions About Taxes): Income tax question, case michigan, michigan tax
case michigan, michigan tax, home position: Erin, Thank you for your question. 1)How does this work? Am I breaking any laws paying taxes in one state and living in another? The way the law works is that you report all income to the state where you are domiciled. In this case Michigan. You then...

Tax Law (Questions About Taxes): Incorrect filing, waitress, irs
waitress, irs: Hi, You sister was advised incorrectly. Tips are required to be reported as income. She can file an amended return to claim the tips and pay the tax and penalties due. That probably won t help her with purchasing a home but at least she won t have to...

Tax Law (Questions About Taxes): Independent Contractor, self employment taxes, independant contractor
self employment taxes, independant contractor, estimated taxes: First of all, your employer can t just change you to an independant contractor without significant changes to your job duties and responsibilities. What his is doing is probably illegal and you should contact your state s labor department. Secondly the...

Tax Law (Questions About Taxes): Independent Contractor, IRS, Delinquent Returns
IRS, Delinquent Returns, bank: Office supplies and large office related purchases are deductible. If they are large items like a big computer, than you need to research depreciation. See IRS.gov (search) depreciation. Otherwise use office supplies for most of these deductions. You can...

Tax Law (Questions About Taxes): Inheritance Tax Deductibility, form 1040 instructions, irs web site
form 1040 instructions, irs web site, ira owner: Robert, Thank you for your question. 1)Can I deduct this expense on my federal return? No. According to the IRS web site: Taxes and fees you cannot deduct on Schedule A include Federal income taxes, social security taxes, stamp taxes, or transfer...

Tax Law (Questions About Taxes): Inheriting a lien on property you already own, sole beneficiary, cancellation of debt
sole beneficiary, cancellation of debt, debt forgiveness: No, the debt is offset within her estate and you would receive the difference as you own the property. Of course she should be paying you rent on the property during the remainder of her lifetime. When she dies, assuming her only asset is the note receivable...

Tax Law (Questions About Taxes): IRA cash out, tax bracket, crystal ball
tax bracket, crystal ball, right time: Catherine my opinion is that you need to know how much risk you can stand at this point I am not as pessimistic as you I believe the majority of losses have happened and by selling out now you give up on recovery and if you do this in stages you may be able...

Tax Law (Questions About Taxes): IRA purchasing mortgage., mortgage facts, james rogers
mortgage facts, james rogers, mortgage holder: Dear Steve, Welcome to All Experts, and thank you for your question. The U.S. Master Tax Guide says, Although IRAs may hold almost any investment, they are generally prohibited from investing in collectibles .... The source goes on to caution the...

Tax Law (Questions About Taxes): IRA and Revocable Trust, beneficiary ira, rollover ira
beneficiary ira, rollover ira, ira rollover: Hi, Actually since the children are beneficiaries of the trust, you can leave the IRA in the trust and when you pass away the IRA can be set up as a beneficiary IRA in each of the childrens names. My stepdaughter had the same situation and that s how...

Tax Law (Questions About Taxes): IRA and revocable trust, rollover ira, ira rollover
rollover ira, ira rollover, revocable trust: Anthony, There are two options with income taxes for trusts. The trust may pay the tax and pass the proceeds on to the beneficiaries tax free. Alternatively, the trust may pass the gains to the beneficiaries pre-tax and let the beneficiaries pay the tax....

Tax Law (Questions About Taxes): IRS and Estate, life insurance proceeds, irs tax forms
life insurance proceeds, irs tax forms, 1099r: Cathy, Thanks for your question. You don t pay taxes on anything inherited, only what you earn above the value as of date of death. Life insurance proceeds are not taxable, but the interest earned on them is. However, you seem to indicate that...

Tax Law (Questions About Taxes): IRS tax penalty for deductions, irs tax penalty, determination letter
irs tax penalty, determination letter, underpayment: There are a number of penalties that they could assess you with, such as: Failure to pay Tax due after tax determination letter is sent (.5%/month) Frivolous return Penalty ($5,000) Accuracy - related penalty ( 20% of tax liability) Penalty for...

Tax Law (Questions About Taxes): ISO exercise for stock in a private company -- on W2?, payroll tax withholding, stock certificates
payroll tax withholding, stock certificates, exercise price: 1. Is there any grounds for using the October valuation in determining the taxable liability, since I did not have the stock certificates until then and hence was unable to sell the shares? No, you are required to use the FMV @ exercise date. 2. If the...

Tax Law (Questions About Taxes): Itemized deductions, irs web site, employee business expenses
irs web site, employee business expenses, lawful deductions: Dear Diane, Welcome to All Experts, and thank you for your question. The short answer is absolutely not. You are free to take---or omit---as many legitimate deductions as you re entitled to take, and you re completely free to pick and choose which ones....

Tax Law (Questions About Taxes): income tax withholding, gross earnings, federal taxes
gross earnings, federal taxes, state taxes: Angela, Thank you for your question. 1)shouldn t they still take out taxes? If you have a semi-monthly paycheck of $420.00, they will not withhold any federal taxes. Depending on your state, this may also be true. They still have to take out $26.04...

Tax Law (Questions About Taxes): No income taxes (student mom), child tax credits, child tax credit
child tax credits, child tax credit, head of household: File a return as unmarried head of household, since you have no earned income you will not qualify for the Earned Income Credit. The Child Tax Credit, however, does apply. The only filing requirement you have is for the student loan documentation. John...

Tax Law (Questions About Taxes): investment losses, Investments, IRS
Investments, IRS, wage: SCOTT, You have no taxable loss to take on your IRA even if you move it trustee to trustee and that s because an IRA is a pretax item. You never paid taxes on it, hence no loss. Probably stay the course is better if your under 55 but, you could move your...

Tax Law (Questions About Taxes): irs penalty?, irs penalty, variable annuity
irs penalty, variable annuity, estimated tax payment: Jan: If the annuity was a qualified plan and you are over 59 1/2 you will owe no penalty. If its not a qualified plan you will not have to worry about the penalty regardless of your age. However, you will owe income tax on the money you take out until...

Tax Law (Questions About Taxes): Large tax credit for donation to charity, IRS, Delinquent Returns
IRS, Delinquent Returns, bank: Kathy, You would be allowed fair-market value as a non-cash charitable tax deduction (not a credit.) You would need to give up your standard deduction for itemized deductions and a Schedule A, along with a special form and appraisal of the home (which...

Tax Law (Questions About Taxes): Late filing, social security numbers, honest mistake
social security numbers, honest mistake, confirmation number: Eran, Thank you for your follow up question. 1)Will we surely get it next year? and if not, is my accountant responsible for my loss of $1,200? When your tax is computed for 2008, if your liability is $1200.00 or more, I have been informed that if...

Tax Law (Questions About Taxes): LIEN, federal tax lien, business debts
federal tax lien, business debts, food franchise: Showing the IRS this paperwork will do no good. Contracts that shift tax liabilities do not bind the IRS. For example, a divorce court judge can make one spouse liable for jointly filed taxes but is does not cause the IRS to release the other party. The...

Tax Law (Questions About Taxes): LLC, self employment tax, social security and medicare
self employment tax, social security and medicare, social security withholding: Dear Monica, Welcome to All Experts, and thank you for your question. The circumstances you described clearly make you an employee of the LLC in question, which is the best for your tax purposes. You may be part-time and not need fringe benefits, but...

Tax Law (Questions About Taxes): LLC - deductiblity of life insurance, life insurance policy, flood cert
life insurance policy, flood cert, splitting hairs: Dear David, Thanks for your follow-up. I believe the closing costs for the mortgage on your portion of the family vacation home would increase your portion of the cost basis in the family vacation home. Those costs follow the secured property, and you...

Tax Law (Questions About Taxes): LLC Tax and Out of State Member, new york llc, llc tax
new york llc, llc tax, richard fritzler: I m going to assume that you have allowed the LLC to be taxed as a pass through entity, which is the default for the LLC. If that is the case, filing the LLC in Wyoming provides no tax advantage; since the LLC pays no tax. All of the tax liability must...

Tax Law (Questions About Taxes): LLC taxation for owners in name only, LLC, liability
LLC, liability, tax: The 2553 form is a Sub-S Election which does define it as a passthrough entity. They would be required to pay all the taxes on all the profit. You could in theory have filed to have it taxed as a real corporation, which would have retained the tax liability...

Tax Law (Questions About Taxes): life estate income, renting in california, state income taxes
renting in california, state income taxes, james rogers: Dear Carole, Welcome to All Experts, and thank you for your question. I presume from your question that your mother is the one entitled to the life tenancy, that she is not living in the house and is renting it to a third party. If I m reading the facts...

Tax Law (Questions About Taxes): loss against gains, annuity company, variable annuity
annuity company, variable annuity, retirement income: Jan: You may wont to reconsider surrendering the annuity in toto. Have you asked the annuity company if they will annuitize the annuity. In other words can they offer you a level payout for a 20 or 30 year period of time. For instance my cash is actually...

Tax Law (Questions About Taxes): Married living in two states, state tax
state tax: Hi John not that I know of, you can own a second home anywhere without subjecting you to their state taxes an the FED second home mortgage interest allows you the deduction your wife s income will subject you guys to the non resident income tax on the...

Tax Law (Questions About Taxes): Medical Expenses, decedent ira, adjusted gross income
decedent ira, adjusted gross income, disability payments: Dear Philip, Welcome to All Experts, and thank you for your question. I was very sorry to read of your heart attack and hope you have recovered completely. For tax year 2008, if you itemize your deductions, you can deduct medical expenses to the extent...

Tax Law (Questions About Taxes): Medical Expenses, sales tax deduction, decedent ira
sales tax deduction, decedent ira, dividend income: Philip. Thank you for your question. 1)Will I have a tax burden on the money I take out of the IRA to pay the medical bills? If you take out the $30,000 you will have to pick that up as income. The medical expenses of $30,000 will be deductible...

Tax Law (Questions About Taxes): Medical Questions, irs web site, open heart surgery
irs web site, open heart surgery, memphis tn area: Larry, I m glad that every thing worked out for you. I guess I will make a note that NY Presbyterian is the place to get this type of work done. I think my dad has his work done at St Francis Hosp on Long Island. Good luck to you. If you need any further...

Tax Law (Questions About Taxes): Mother in law assisting with new home buy, income tax implications, annual gift tax exclusion
income tax implications, annual gift tax exclusion, gift tax exclusion: Dear Paul, Welcome to All Experts, and thank you for your questions. Question #1. If your mother-in-law gives you and your wife $150,000, she will need to file a federal gift tax return. The law permits individuals to give as much as $12,000 per...

Tax Law (Questions About Taxes): a mess, IRS, Delinquent Returns
IRS, Delinquent Returns, bank: Pam, The IRS does not believe in debtor s prison for a 2 year delinquency. Prison is mostly for fraud. They have been known to do so in several years of flagrancy or using a constitutional excuse such as with some celebrities ( google my name and see...

Tax Law (Questions About Taxes): milage deduction, self employment income, self employment tax
self employment income, self employment tax, www irs gov: Hi, The quarterly payments are due 4/15, 6/15, 9/15 and 1/15 of the following year. If you make equal payments they are considered as being paid evenly throughout the year. But if he prefers to pay everything at once, that is fine with the IRS. It sounds...

Tax Law (Questions About Taxes): mileage reimbursement, irs publication 535, irs web site
irs publication 535, irs web site, state tax return: Dear Alexis, Welcome to All Experts, and thank you for your question. On your federal income tax return, the short answer to your question is YES, you can deduct the unreimbursed mileage expenses pertaining to your job IF you itemize your deductions....

Tax Law (Questions About Taxes): mmllc/ partnership, self employment taxes, s corp
self employment taxes, s corp, invoices: Yes, however this would subject you to self-employment taxes. whereas in a s-corp they would be considered only as income to the corporation taxed to the shareholders. Not really sure wait you are trying to accomplish. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): mobile home sale, mobile home, buying a home
mobile home, buying a home, money: Hi, A mobile home would be treated the same as a site built home if you owned and lived in it for 2 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...

Tax Law (Questions About Taxes): New York resident working in Las Vegas, state income tax, state return
state income tax, state return, stancil: Michael, As a resident of NYS you are liable for taxes on all you income, regardless of source. They will grant you a credit for taxes paid to other states, but since NV has no income tax, you can t get any credit. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Non Resident in CA, california income tax, rick welcome
california income tax, rick welcome, james rogers: Dear Rick, Welcome to All Experts, and thank you for your question. The short answer to your question is yes, you will be required to pay nonresident income tax to CA during your tenure there. If you maintain your WV house as your tax domicile (voter...

Tax Law (Questions About Taxes): NYS Corporation, nys
nys: Hi Marilyn I took this question from the question pool so timeliness is not current As to the items they are all taxed as ordinary income by NYS ( if you live in NYC the S income is taxed at the corporate level so you would not have it taxed by the...

Tax Law (Questions About Taxes): nanny tax, dependent care credit, salary
dependent care credit, salary: Hi, You can use the child and dependent care credit to deduct a portion of your nanny s salary and the additional taxes you pay. The percentage you can deduct is a minimum of 20% and can be as high as 35% depending upon your income. The maximum expenses...

Tax Law (Questions About Taxes): new york state taxes, ny simple
ny simple: HI Francine Ney York has an easy form you can fill it out with little difficulty they will answer any question if you go to their office they will do all but sing it for your mother just do it you do not need a prepare s help if you cant or want to d0 give...

Tax Law (Questions About Taxes): Office deductions, home office
home office: If the new property is utilized strictly, and only, as a business property then you would be able to write off all expenses incurred as a result of it s business use. This would not be any different than if you had purchased a property that was intended for...

Tax Law (Questions About Taxes): Overdue Tuition, stancil, deductible contributions
stancil, deductible contributions, charitable organization: Robert, Thanks for your question. Unfortunately you can t. For their contributions to be deductible it would have to be to a qualified charitable organization. The IRS will not approve a charitable organization that is set up to benefit only one person....

Tax Law (Questions About Taxes): Owner Finance Payment Taxed, sale of a business, richard fritzler
sale of a business, richard fritzler: Why? because you are using that money to make an investment. Investments are done with After Tax dollars. You could deduct the finance interest, except the seller is charging no interest. You are right, the owner is also paying taxes on the income. ...

Tax Law (Questions About Taxes): Ownership of Rental Property, rental properties, tax
rental properties, tax, Richard Fritzler: Because you own it jointly, you are already a general partnership by default. If you go with this default determination you will be required to file a partnership return and then credit the distribution of the partnership to each of you based upon your partnership...

Tax Law (Questions About Taxes): owe unemployment, income tax refund, federal income tax refund
income tax refund, federal income tax refund, federal income tax: Shannon: Unemployment laws have been in place since about 1934. If someone files for unemployment for any reason other than lack of work issues may arise that requires a hearing. The employee as well as the employer will get their day before a law judge...

Tax Law (Questions About Taxes): PAYING TAXES, income tax return, state income tax
income tax return, state income tax, james rogers: Dear Elisha, Welcome to All Experts, and thank you for your question. You pay state income tax in your home state, your tax domicile, which sounds like New Jersey for you. You may have to pay a wage or earned income tax in the New York community where...

Tax Law (Questions About Taxes): Partnership SEP IRA, self employment tax, sep ira
self employment tax, sep ira, partnership income: You also may be maxed out for your husband as well if he has contributed the maximum through his 401k. You need to compute the earned income per individual to see if they have sufficient income to make a contribution. Any excess contribution can be carried...

Tax Law (Questions About Taxes): Partnership Taxes, tax paperwork, group benefit
tax paperwork, group benefit, investment club: Hi Ali it depends on each members individual situation if the member has LT capital gains the loss would offset income taxed at 15% Otherwise the member can deduct losses up to $3000 from ordinary income As an estimate for the group benefit I would use...

Tax Law (Questions About Taxes): Passive versus active landlord, property trades, management duties
property trades, management duties, stancil: Thang, In order for the activity to be considered non-passive you must meet two requirements: 1. More than half of all professional services you perform during the year are in the real property trades in which you materially participated. In other words,...

Tax Law (Questions About Taxes): Payroll for LLC owners, self employment tax, self employment income
self employment tax, self employment income, payroll checks: A partner that receives a guaranteed salary payment is not regarded as an employee of the partnership for purposes of income or employment tax withholding. The guaranteed salary is included in self employment income for purposes of the self-employment tax....

Tax Law (Questions About Taxes): Is Pension from Divorce Taxable?, irs form 1099, alimony
irs form 1099, alimony, legal documents: Lee, Thank you for your question. 1)am to receive a small part ($260 monthly) of pension from my former husband Yes this is taxable to you. You should receive paperwork from the provider, such as an IRS form 1099. 2)he ll also pay ($100 monthly)...

Tax Law (Questions About Taxes): Physical presence exemption, physical presence, exeption
physical presence, exeption, contract term: Bobby, Thank you for your question. 1)For the second year of the exemption does it start again at March 4th or can I have it start after my end of contract R&R? You need to cover the 330 full days during any twelve month period in a row. So from March...

Tax Law (Questions About Taxes): Proving Head of Household Status, head of household status, credit card statements
head of household status, credit card statements, james rogers: Dear L.W., To prove your rent, use your lease. It should have at least an initial monthly rent amount, and you have the canceled checks for 6 months. Since you re still there, you can state that the amounts were the same regardless of receipt. Credit...

Tax Law (Questions About Taxes): back pension paid to ex, IRS problems, bank levies
IRS problems, bank levies, wage garnishments: If it is a payment of previously withheld taxes, than you can incur a loss and it is taxable to her. However, as I said before I am not sure (deductible or taxable where). I assume you may treat it as similar to an alimony cost (see IRS.gov Search Alimony....

Tax Law (Questions About Taxes): personal question, dependency exemption, stancil
dependency exemption, stancil, personal question: Kristi, Thanks for your question. Normally the custodial parent has the right to the dependency exemption. This can be overriden by a court order or agreement between the parents. There is no inherent right to claim the children every other year. ...

Tax Law (Questions About Taxes): personal tax liability with an LLC, james rogers, dear al
james rogers, dear al, good fortune: Dear Al, Welcome to All Experts, and thank you for your question. It s certainly strange that you ve received a collection agency s bill for back (sales) taxes on an LLC that had no sales (or any other) activity. The only thing that comes to mind is...

Tax Law (Questions About Taxes): promissory note default and IRS, IRS problems, bank levies
IRS problems, bank levies, wage garnishments: Susan, As to garnishing your income of $1,000 a month and failing on your Offer in compromise,? it sounds like you need representation. It also sounds like a tough story but if it is any consolation to you, you can take $3,000 a year of a business...

Tax Law (Questions About Taxes): Real estate agent with tax question, irs web site, form 1099 misc
irs web site, form 1099 misc, real estate salesperson: Dear Sydney, Normally, you should make an estimated payment in the right time frame. However, if during 2008 you ve paid into the IRS via withholding at least what your 2007 tax liability was, you shouldn t have an underpayment penalty for 2008. This...

Tax Law (Questions About Taxes): Real estate property tax question, constructive receipt, government approvals
constructive receipt, government approvals, stancil: Arthur, My preference would be for them to pay you, then you pay the tax. This gives you assurance that the amount has, indeed, been paid. From a tax standpoint, though, either way would work. I would be sure and report the income and deduct the...

Tax Law (Questions About Taxes): Residency Requirements, girlfriend lives, stancil
girlfriend lives, stancil, residency requirements: Bill, The issue is not whether you intend to return there or not, the issue is where do you spend your time? From a tax standpoint your primary residence is where you live the most. The other issue is Where do you earn your money? Regardless of your...

Tax Law (Questions About Taxes): Retained earning for a townhouse association, condominium association, david answer
condominium association, david answer, heat power: David, Thank you for your follow-up question. IRS Ruling 70-604 seems to be the talk of the town. Large associations seem to be falling into this revenue ruling. I have done some research and found the following: Refer to web page: http://www.caimichigan.org/articles/AvoidingAudits.htm...

Tax Law (Questions About Taxes): ROTH Recharacterization 2008, Convert and reconvert
Convert and reconvert: Jerome, Thank you for your question. 1)When it comes to tax time for the year 2008 do I need to claim anything or is it just like I never converted my money? According to IRS: Reconversions You cannot convert and reconvert an amount during...

Tax Law (Questions About Taxes): Roth Conversion, contributory ira, irs website
contributory ira, irs website, website conversions: Jonah, Thank you for your question. 11)Is there a benefit of combining the Traditional IRA with the Non-Ded Trad IRA before doing the conversion? According to the IRS website: Conversions You can convert a traditional IRA to a Roth IRA. The...

Tax Law (Questions About Taxes): Roth Early withdrawl for Home Purchase, 401k withdrawals, first time homebuyer
401k withdrawals, first time homebuyer, ira money: It is much cleaner to come to the closing table with the IRA money or a strong agreement with Jenny s dad signed by you both that he is just advancing you the 10K. The only tax that would be due is tax on the appreciation of the ROTH as it is an early...

Tax Law (Questions About Taxes): Roth Early withdrawl for Home Purchase, time home buyer, first time home buyer
time home buyer, first time home buyer, traditional ira: Jonathan, Since you have not held the Roth for 5 years, your withdrawal of contributions will not be subject to tax, but you will owe regular income tax on withdrawals of any earnings. Since you qualify as a first-time home buyer, you can avoid the 10%...

Tax Law (Questions About Taxes): real estate, federal tax rate, loser
federal tax rate, loser, ea: It depends on your basis (what you paid for the property). If you owned it longer than a year, the max federal tax rate is 15%. The only thing you may be able to do to reduce taxes at this point (the time to really ask was BEFORE the sale) is to sell some...

Tax Law (Questions About Taxes): receiving payment from child care FSA, self employment income, self employment tax
self employment income, self employment tax, social security and medicare: Hi, If you are paid for working you need to report your income whether or not is comes via the FSA. If your employer does not withhold taxes you would be considered self employed and report your income and expenses on Schedule C. Your net self employment...

Tax Law (Questions About Taxes): relationship violating local law, saratoga springs ny, irs gov
saratoga springs ny, irs gov, unmarried adults: Jennifer, In some communities, there is a law prohibiting unmarried adults of the opposite sex from living together. That is the most common relationship that is prohibited. The law does not necessarily need to be enforced, but if it is on the books, the...

Tax Law (Questions About Taxes): rental deductions, realtor license, self employment taxes
realtor license, self employment taxes, management duties: Thang, Thank you for your question. 1) I do all the screening, repairs, and management duties so why am I not considered an active landlord. Is there anyway to get around this like getting a realtor license and working on the weekends or forming an...

Tax Law (Questions About Taxes): rental property and LLC, sole proprietorship, stancil
sole proprietorship, stancil, mortgage payment: Ervin, Thanks for your question. You pay tax on your profit, not your gross income. You can deduct costs of the units including the interest on the mortgage and depreciation, but not the mortgage payment itself. As an LLC you can elect to treat the...

Tax Law (Questions About Taxes): reportable income, gas lease, cash basis
gas lease, cash basis, form 1040: John, Thank you for your question How do I report this on my taxes? What options do I have? You have two options: 1) You can report the income on line 21 of form 1040 Other Income. You are a cash basis taxpayer, You report it as income in the...

Tax Law (Questions About Taxes): roth conversion with trad ira that has some cost basis, roth conversion, adjusted gross income
roth conversion, adjusted gross income, traditional ira: The conversion amount is not used to calculate your income for conversion, so you are okay there. The gain on the IRA does not matter, only the converted amount. And yes, if you owe over $1,000, you may have penalties due to underpayment. Helen, EA in...

Tax Law (Questions About Taxes): S-Corp Sale - Capital Gains Tax, richard fritzler
richard fritzler: I know you would like it to be a long term gain, taxed at a lower rate, but. . . You could always have the LLC file amended tax returns, showing that you were responsible for 25% of the income, pay taxes, penalites and interest, have the potential for...

Tax Law (Questions About Taxes): S-Corp Sale - Capital Gains Tax, predecessor company, james rogers
predecessor company, james rogers, capital gains tax: Dear Gianfranco, Welcome to All Experts, and thanks for your questions. If your ownership remained in the enterprise that underwent a name change, the owner of the S-corp. should have issue you new shares in the new name after 2004. Similarly, if you...

Tax Law (Questions About Taxes): S Corp Tax question, who is my dad, s corp
who is my dad, s corp, share holder: Joe: It is my opinion that, Unless there are unusual circumstances, the officers and share holders are not personally liable for the debt of the corporation. The one problem I see is you are the treasurer of the corporation and as treasurer you would be...

Tax Law (Questions About Taxes): S-Corporation, professional preparer, form 7004
professional preparer, form 7004, mobile marine: Your s-corporation files a 1120-s return on or before 03/15/09 for year s ending December 31, 2008. A six month extension is available by filing form 7004. The s-corporation issues the shareholder (your Husband) a schedule K which shows where on the 1040...

Tax Law (Questions About Taxes): S Corporation Owner Compensation, IRS problems, bank levies
IRS problems, bank levies, wage garnishments: Natalie, No it is not okay. You are avoiding Social Security. However, a Sub-S Corps. allows you to do this if you pay yourself a reasonable salary for the hours you spend (say at least $10.00-12.00 an hour) depending on what industry you are in....

Tax Law (Questions About Taxes): S corp distributions, annual gift tax exclusion, gift tax exclusion
annual gift tax exclusion, gift tax exclusion, subchapter s corporation: Dear Clem, Welcome to All Experts, and thank you for your question. Generally speaking, shareholders of a Subchapter S corporation receive dividends based on their respective number of shares. The government doesn t care about the distribution as long...

Tax Law (Questions About Taxes): Salary vs. Guaranteed Payments, payroll tax withholding, self employment tax
payroll tax withholding, self employment tax, decision criteria: Salary paid to a partner is considered a guaranteed payment which is excluded from income and payroll tax withholding, but is subject to self employment tax. You would record those salaries the same as guaranteed payments. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): Savings Bond tax, savings bonds, savings bond
savings bonds, savings bond, cashes: Ray, Thank you for your question. 1)When a person cashes in savings bonds do they have to report interest to IRS even if the interest is only $1 or $2. As a practical matter, I would not report small amounts. If they accumulate in a year to over $10,...

Tax Law (Questions About Taxes): SEP IRA for partnership, self employment income, project management training
self employment income, project management training, academic advisement: Dear Mary, Welcome back. You understood perfectly well. The assessment of funding limit, the funding itself and the tax accounting for an IRA-SEP are all borne by the taxpayer, not the company. Aside from the fact that these are INDIVIDUAL retirement...

Tax Law (Questions About Taxes): Self Employed, self employment tax, www irs gov
self employment tax, www irs gov, social security and medicare: Hi, Yes, you should make quarterly estimated payments to cover the self employment tax (social security and medicare) and income tax. You will need form 1040ES which you can obtain from the IRS. Their website is www.irs.gov where you can download and...

Tax Law (Questions About Taxes): Senior Selling Home, california taxes, depressed market
california taxes, depressed market, large travel: Hi, What is is or was worth and how much is owed on it are irrelevant. To determine gain you deduct the cost basis from the selling price. The basis of the house is what they spent to build and improve it. The basis of the land is the fair market value...

Tax Law (Questions About Taxes): Social Security reduction based on increased income, social security administration, social security benefits
social security administration, social security benefits, conservation easement: Dear Virginia, Welcome to All Experts, and thank you for your question. You must have begun to take Social Security before your full retirement age. During the period between the onset of your SS and your full retirement age, you forfeit $1 of benefits...

Tax Law (Questions About Taxes): Stimulus check taxable?, james rogers, stimulus
james rogers, stimulus, tax software: Dear Armeen, Welcome to All Experts, and thank you for your question. I don t believe the stimulus payment is taxable income, but it MAY play a part in whatever refund to which you may be entitled on your 2008 return. I say that, because, several years...

Tax Law (Questions About Taxes): Student Tax, time college student, hope scholarship
time college student, hope scholarship, lifetime learning: Autumn, As a student you do not get a larger exemption. Since you are a dependent, you cannot take a dependency exemption. You can take the standard deduction, however. Since you are a dependent, you cannot take the lifetime learning or hope scholarship...

Tax Law (Questions About Taxes): s corp in delaware, Delaware Corp, tax savings
Delaware Corp, tax savings, buy an address: Your friend failed. You can certainly file a corporation anywhere, you can even rent space in any state. what he failed to resolve is the fact that he is operating in New York. What he actually accomplished was to take on the added task to file taxes...

Tax Law (Questions About Taxes): s corp and taxes, S-corp, S corp
S-corp, S corp, Sub-S: My name is Richard Fritzler, another expert on All Experts and your question was forwarded to the Pool , a place where unanswered questions go. Allow me to give you the answer. The S-corp is a pass through entity, it pays no federal tax. It normally...

Tax Law (Questions About Taxes): sale of land in 2008, long term capital gains, capital gains tax
long term capital gains, capital gains tax, tax brackets: Hi, I think I already answered this question but perhaps you didn t receive the answer so here it is again. You will pay long term capital gains tax on your gain at a maximum rate of 15%. If you are in the 10% or 15% tax brackets there is a 0% capital...

Tax Law (Questions About Taxes): self employed, employed health insurance, health insurance premiums
employed health insurance, health insurance premiums, paid health insurance: Hi, You can claim the self employed health insurance adjustment to income only if you file schedule C. You can include your health insurance premiums as an itemized deduction on Schedule A but only to the extent your medical expenses exceed 7.5% of your...

Tax Law (Questions About Taxes): settlement, 1099 filing, form 1040es, federal income tax
form 1040es, federal income tax, standard deduction: Hi, With your spouse s income somewhere in the $50 s, part of your taxable income would be taxed at 25%, but not very much of it. You re correct that you will be filing a federal income tax return reporting your 1099 income. There is no such thing as...

Tax Law (Questions About Taxes): short sale and 1099, irs publication 908, www irs gov
irs publication 908, www irs gov, cancellation of debt: Dana, check out form 982 at www.irs.gov. Tax Attributes are things you get tax reductions for, such as net operating loss and the carryovers, capital loss carryforwards, things that will reduce your taxes in a year or even yearly. Those you lose when insolvency...

Tax Law (Questions About Taxes): sign on money from gas lease company, profit club, lease company
profit club, lease company, 990s: It is not just taking the money out. The club would have to report the release of the money to the guys so that they pay tax on it. The club is responsible for all taxes on the profit and that includes profit that it used for improvements. Please...

Tax Law (Questions About Taxes): sole member LLC: adding member or transfering ownership in NJ, richard fritzler
richard fritzler: The Grunt working for the state of New Jersey is mistaken. Your son can own an interest in an LLC. He might be restricted from being the Manager, but he can be an owner. You can still give him a membership certificate. Until he is 18, he might not be successful...

Tax Law (Questions About Taxes): state income tax, human resources dept, state income tax
human resources dept, state income tax, state of nebraska: Dear Jesse, Most state do require income taxes be paid for work done in their state, You should have your Human Resources Dept. check on the state of Nebraska for tax withholding and then have your company withhold the appropriate amount if any. JPachuil...

Tax Law (Questions About Taxes): state tax lien, irs tax lien, state tax lien
irs tax lien, state tax lien, small fortune: William: I am sure that Georgia has a standard procedure whereby they have notified you by mail each set in the process of getting a judgement for the owed state tax. I am also sure that they can garnishee your wages for the taxes owed. You should contact...

Tax Law (Questions About Taxes): step up valuation upon death of spouse, tax law changes, james rogers
tax law changes, james rogers, basis 100: Dear Joel, Welcome back. The sell-vs.-wait decision is difficult in times of uncertainty, especially from one tax year to the next. I believe income tax rates are going to rise substantially in 2009. Congress is also looking for more ways to tax the...

Tax Law (Questions About Taxes): student taxes, starting a new job, exempt status
starting a new job, exempt status, tax liability: Kelly. Thank you for your question. 1)How much can she earn before having to pay taxes? As a dependent on your tax return, she can earn up to $5450 before she is subject to income taxes. 2)What are the qualifications for exempt status? A)...

Tax Law (Questions About Taxes): TAX, federal tax filing, income tax return
federal tax filing, income tax return, chapter 7 bankruptcy: Dear Al, Welcome to All Experts, and thank you for your question. I m sorry to learn of your separation and chapter 7 bankruptcy filing. Your federal tax filing status is determined by whether or not you re married on December 31st. If you and your...

Tax Law (Questions About Taxes): TAX CONSEQUENCES OF OBTAINING LOAN FOR S CORP, james rogers, tax consequences
james rogers, tax consequences, s corp: Dear Carlos, Welcome to All Experts, and thank you for your question. No, you do NOT need to distribute the cash in the savings account to you and your wife as shareholders. The cash was derived from financing activities, not earned revenue. I hope...

Tax Law (Questions About Taxes): Tax consequences of foreclosure and similar transactions, 30 year fixed mortgage, fha secured loan
30 year fixed mortgage, fha secured loan, mortgage foreclosure: Hi, If she sells it, since she owned and lived in the home for 2 years during the 5 years preceding the date of sale, she would be able to exclude $250,000 gain. From what you wrote it doesn t seem that she will be selling it at a gain. There is also...

Tax Law (Questions About Taxes): Tax filing laws, unpaid balances, tax penalties
unpaid balances, tax penalties, unearned income: AH, Thank you for your question. 1)Someone told me that you have up to two years to file my taxes after being a full time student. Is that true or can you provide me with the tax laws as far as college students. Two years is not correct You can file...

Tax Law (Questions About Taxes): Tax form 673, physical presence test, form 673
physical presence test, form 673, working in iraq: Steven, Thank you for your follow -up question. 1)My question is on tax form 673, I would check Physical presence test box, next area would be Iraq, year would be 2009, and part of year Jan 01, 2009 ending Dec 31, 2009, is this right. A)Just make...

Tax Law (Questions About Taxes): Tax form 673, physical presence test, form 673
physical presence test, form 673, residence test: Steve, Thank you for your question. 1)once I finish my contract on 6/4/09 I would have stayed out of the US each 12 month period 330 days, can I claim the exemption or is it calendar year not a 12 month period. If so can I amend my 2007 filed taxes...

Tax Law (Questions About Taxes): Tax ID number, federal tax id, federal tax id number
federal tax id, federal tax id number, tax id number: Hi, As far as the IRS is concerned an individual does t need an EIN number unless you are an employer. You can report your income and expenses using just your social security number. If the company insists, it won t hurt you to get an EIN and it doesn...

Tax Law (Questions About Taxes): Tax on income from investment, income tax rates, stock holder
income tax rates, stock holder, s corp: If it is an investment and you are not a stock holder, the income stream would be taxed at ordinary income tax rates because the payments represent a return on the investment. How much is considered interest and principal will depend on the contract that...

Tax Law (Questions About Taxes): Tax issue...., annual gift tax exclusion, gift tax exclusion
annual gift tax exclusion, gift tax exclusion, first house: Dear Jolyn, Welcome to All Experts, and thank you for your questions. First, let s review your grandparents situation. If they own their house together and sell it to you (or anyone else), they will be able to exclude as much as $500,000 of their capital...

Tax Law (Questions About Taxes): Tax on Prize Winning, federal tax return, income tax purposes
federal tax return, income tax purposes, social security number: Dear Randy, Welcome to All Experts, and thank you for your question. Congratulations on your sweepstakes winnings! That s great news. If you don t normally file a federal tax return, then it s likely that, if the winnings push you over the filing threshold,...

Tax Law (Questions About Taxes): Tax on primary home turned rental then primary home again!, income tax purposes, passive losses
income tax purposes, passive losses, federal income tax: Dear Larry, Welcome to All Experts---and welcome home from China. Thanks for your question. Even though you were out of the country as an ex-pat during your China assignment, it sounds to me as though your primary residence remained in North Carolina....

Tax Law (Questions About Taxes): Tax on sell of my house, social security benefits, max tax
social security benefits, max tax, additional income: Martha, Thank you for your question. 1how much tax will I have to pay on the $160,000, not including the upgrades that we did? The max tax on the 160,000 will be 15 percent. The most they can tax your social security benefits will be up to 85...

Tax Law (Questions About Taxes): Tax Write Off for Education from LLC in AZ, personal tax return, scholarship possibilities
personal tax return, scholarship possibilities, personal income tax: Dear Adrian, Welcome to All Experts, and thank you for your questions. First, let me congratulate you. It s not often that someone in high school has the foresight to consider tax implications or opportunities of a desired course of action. Your...

Tax Law (Questions About Taxes): Tax write off - home generator, economic stabilization act, casualty losses
economic stabilization act, casualty losses, casualty loss: Steven, Thank you for your follow up question. I would say that if you had this installed after the crisis had ended, the question would be, was this as a result of Hurricane Ike? I would say the casualty loss, if taken, and was questioned by IRS, would...

Tax Law (Questions About Taxes): Taxable Per Diem, per diem, payed
per diem, payed, additional income: Llew: If you receive per diem you must keep all the receipts of your expenditures. When you file your 1040 you must file a 2106 form listing your per diem received and the expenses paid and the difference is either additional income or loss that you put...

Tax Law (Questions About Taxes): Taxes, social security and medicare, james rogers
social security and medicare, james rogers, security cap: Dear Ruben, Welcome to All Experts, and thank you for your question. If you re getting two extra paychecks per year, it sounds like you re being paid bi-weekly (26 times per year). From EACH paycheck, you should have payroll taxes (social security...

Tax Law (Questions About Taxes): Taxes on investment, tax ramifications, equity stake
tax ramifications, equity stake, investment question: Hi Jon I would have a loan with a reasonable interest rate and an option to buy stock in the future ( if the business gets profitable ) at some amount say $ 10 per each percentage but remember that a change of more than 49.9 ownership in any one year terminates...

Tax Law (Questions About Taxes): Taxes owed on Unemployment Compensation, unemployment compensation, marginal rate
unemployment compensation, marginal rate, stancil: Annette, Carol could not handle your question, but I can give you some guidance. You will owe income tax on the net amount, $4,200. It would be taxed at your marginal rate which depends on your total taxable income. This can vary from 10 to 35%. Hope...

Tax Law (Questions About Taxes): Taxes on sale of inherited house w/ mortg, real estate commissions, mortgage payoff
real estate commissions, mortgage payoff, cost basis: Hi, Each individual will have to include his/her share of the gain (if any) on his/her tax return. The cost basis in the property is the fair market value on the date of death. The gain is arrived at by deducting the cost basis from the adjusted selling...

Tax Law (Questions About Taxes): TREATMENT OF PROFITS, return of capital, loan account
return of capital, loan account, moneys: Unless the small company is a Real corporation, you have effectively loaned money to yourself and the profit is still profit. The business could use the money to pay back the loan, but it cannot deduct the payment of principle, that amount is taxable,...

Tax Law (Questions About Taxes): TREATMENT OF PROFITS, irs gov, allowable expenses
irs gov, allowable expenses, return of capital: Joseph: If it is a loan you must pay interest to yourself. You must calculate reasonable interest rate and set it up as though it was a loan from a bank. However, do not get repayment of a loan or return of capital mixed with the company earning a profit...

Tax Law (Questions About Taxes): Trading as a partnership, day trading, which entity is best
day trading, which entity is best, Richard fritzler: Taxes only apply if you are profitable? Do you intend to be profitable? Partnerships of all kinds, LLC s, S-corps, are all taxed at the individual tax rates, which means no tax advantage. Real Corporations pay their own taxes at much more favorable...

Tax Law (Questions About Taxes): Traditional IRA Rollover to Roth in 2010, traditional ira withdrawals, traditional ira contribution
traditional ira withdrawals, traditional ira contribution, traditional ira account: Hi, Mandatory distributions are required when you reach age 70 1/2. You can take a distribution by April of the year following the year when you turn 70 1/2 but you will also have to take a distribution for that year by the end of the year so you would...

Tax Law (Questions About Taxes): Transportation worker per diems, airline workers, transportation rate
airline workers, transportation rate, diems: Harold, For airline workers, here are MIE rates and the percentages can be deducted by year: MIE RATES 2005 - $41 (1/1/05 to 9/30/05) & $46 (10/1/05 to 12/31/05) 2006 through 2009 - $52 PERCENTAGES 2005 - 70% 2006 - 75% 2007 - 75% 2008 - 80%...

Tax Law (Questions About Taxes): Traveling for Training, irs gov, irs rules
irs gov, irs rules, travel rules: Mr. Taylor: That is also IRS rules regarding travel. There could be a reason for you to report to you work station and then travel to the training location. As always, when it involves travel the IRS has specific rules that must be followed. I suggest...

Tax Law (Questions About Taxes): Treatment of Foreign Income & Dividends, self employment income, self employment tax
self employment income, self employment tax, social security tax: 1. Report as other income 2. Not considered self employment income, and not subject to social security 3. They are not qualifying dividends, nor are they considered passive activities, but are considered investment activities to which investment losses...

Tax Law (Questions About Taxes): Trust Distribution, stocks and bonds, turbo tax
stocks and bonds, turbo tax, living trust: The trust ended on date of death, until the estate is distributed you will need to file a fiduciary return (1041) from date of death until the end of the year. You will not be able to file a 1041 through turbo-tax, so the services of a CPA or attorney are...

Tax Law (Questions About Taxes): tax, dependent child, stimulus
dependent child, stimulus, money: Susei, Thank you for your question. 1)I have not worked this year, but I have a 7 month baby, can I file tax and if i get money back can it be deposited to an international bank account? If you have not worked this year, then you will not qualify...

Tax Law (Questions About Taxes): tax on bonds, taxable gain, face value
taxable gain, face value, grandmother: It depends on whether the stock was converted at the stock s value at the time, and how much your grandmother paid for the stock. Bonds are paid off on maturity at face value, and you have no taxable gain or loss. But in your situation the bonds have your...

Tax Law (Questions About Taxes): tax on commercial property, Basis of property transferred by gift
Basis of property transferred by gift: Linda, If the property was deeded to the son in 1980, it doesn t matter when the either of the parents died. When the property was deeded it was considered a gift for tax purposes. This was not an inheritance. Since this was a gift, the son s cost...

Tax Law (Questions About Taxes): tax credit and dependant inheritance, interest free loan, case income
interest free loan, case income, school expenses: Samone, The money taken out of the 529 plan is not subject to tax unless the funds were not used to pay qualified education expenses. If this is the case, income tax would be assessed only on the earning from the plan. You cannot file an amended 2008...

Tax Law (Questions About Taxes): tax exemption, www irs gov, time college student
www irs gov, time college student, irs chief: Leslie, Assuming that you assigned the exemption to your ex for all future years, the IRS has ruled that you can only revoke the Form 8332 if your ex agrees not to take the exemption. This link is to an IRS Chief Counsel Memo stating such a position....