About Experts Sitemap - Group 50 - Page 55 2014-12-16

Tax Law (Questions About Taxes): IRA funds to pay medical insurance premiums, medical insurance premiums, health insurance premiums
medical insurance premiums, health insurance premiums, ira funds: James, Thanks for your question. Distribution from an IRA to an unemployed individual to pay for health insurance after leaving a job if the individual has received unemployment compensation for 12 consecutive weeks is an exception to the 10% penalty....

Tax Law (Questions About Taxes): LLC or Corp, federal tax id, www irs gov
federal tax id, www irs gov, legal formalities: Karl, Thanks for your question. First, you should know that any business entity you select is not retroactive. Anything you have done to this point is simply a sole proprietorship, filing a Schedule C as a part of your 1040. An LLC is the simpler...

Tax Law (Questions About Taxes): Mortgage Debt Forgiveness, cancellation of debt, debt forgiveness
cancellation of debt, debt forgiveness, mortgage debt: Michael, Thanks for your question. Unfortunately, for you, the law was written so that when it became a rental unit, it was no longer classified as a primary residence. The ability to exclude the COD income is contingent on it being your primary residence....

Tax Law (Questions About Taxes): musical instrument sale, return thanks, stancil
return thanks, stancil, original cost: David, The cost of repairs cannot be added to your cost. Actually, if you depreciated the cost of the instrument or if you expensed it outright, you have an reduced basis in the instrument. For example, if you expensed it, your basis is now zero, so...

Tax Law (Questions About Taxes): Non-profit donations, moose international, profit donations
moose international, profit donations, fraternal organization: Debbie, Thanks for your question. First, you can only deduct an item in the year in which it was paid. Thus, you can deduct the contribution in 2011, if it is deductible. You can file an amended return for that year. Second, Moose International...

Tax Law (Questions About Taxes): non-resident alien spouse filing question, alien spouse, stancil
alien spouse, stancil, guatamala: Bill, Unless she agrees to have her income treated as taxable in the U. S., he must file as single. If she has a TIN and agrees to subject her income to U. S. taxation, they can file a joint return. This is actually pretty basic information. Hope this...

Tax Law (Questions About Taxes): Overpaid wages - repaid in subsequent year, but don't itemize, 1040x, wages
1040x, wages, tax return: Mike: In this situation the employer must give you a corrected w-2 for the year of 2012 or make an adjustment to the 2013 w-2. Since you were over paid in 2012 its my opinion that the adjustment must be made for 2012. In that case you would file a 1040X....

Tax Law (Questions About Taxes): Owe back taxes from the year 2001, back taxes, IRS
back taxes, IRS, old taxes: The bad news is that the $6,000 will have grown quite a bit. But the good news is that the balance may be written off soon. The IRS has ten years from the date of assessment to collect the tax. Assuming that the liability was assessed in 2002 or 2003, it may...

Tax Law (Questions About Taxes): part year residency, self employment income, self employment tax
self employment income, self employment tax, longtime residents: Jeanette, Thanks for your question. It s not quite that simple. You will file as a part-year resident in both states. Earned income (such as your SE income) attaches to the state where it was earned. So, in you case you need to allocate it between the...

Tax Law (Questions About Taxes): Question..., insurmountable obstacle, sole proprietor
insurmountable obstacle, sole proprietor, dbas: Yes, you can file new names for your LLC to operate under. Those would be DBA (Doing Business As) or Fictitious Name Filings. The recording of DBAs are handled at the county level. But let s take that a step further. You use the word separate . A DBA is...

Tax Law (Questions About Taxes): reduced maxiumum exclusion, 1099c, maximum exclusion
1099c, maximum exclusion, principal residence: Christine, Thanks for your question. You do not meet the exclusion criteria, as the house was not occupied by your as your main home for 24 of the previous 60 months prior to sale. Since is it not a principal residence, it does qualify as business property....

Tax Law (Questions About Taxes): sale of dad's condo, critical element, elderly father
critical element, elderly father, stancil: Lynda, Thanks for your question. Some clarifications. First, you do have basis in the condo. Your basis is a transferred basis from him. In other words whatever basis (cost) he had in the condo transferred to you. Second, the critical element...

Tax Law (Questions About Taxes): Self-Employed Health Insurance Deduction, employed health insurance, self employed health insurance
employed health insurance, self employed health insurance, self employed health insurance deduction: The health insurance deduction is not limited to the self employed. Your wife may be able to reduce your taxes by a portion of the premiums that she has paid in. The Health insurance deduction is simply an extension of the itemized deductions. This...

Tax Law (Questions About Taxes): Self Employment for monir child, legal formalities, sole proprietorship
legal formalities, sole proprietorship, sewing projects: Amanda, Thanks for your question. She can file her taxes as a Schedule C sole proprietorship which doesn t require any legal formalities. The Schedule C will be a part of her 1040 and she will also need to include a Schedule SE for the self-employment...

Tax Law (Questions About Taxes): SMLLC, checkout counter, unexpected expense
checkout counter, unexpected expense, specific home: While many promoters of the LLC claim liability protection. . . It s in the name isn t it? The courts have not necessarily given in to the hype. The serial LLC is just the latest attempt, another stab at the apple so to speak, for liability protection...

Tax Law (Questions About Taxes): Spouses filing residency in two different states, sctax org, duty army
sctax org, duty army, tuition credits: Stanley, Thanks for your question. The answer is a qualified Yes. You can file that way, but it is somewhat complex and available only under certain circumstances. This link is to the NC rules for filing status. http://www.dor.state.nc.us/taxes/individual/status.html...

Tax Law (Questions About Taxes): Stcok transfer tax consequences, timely reply, private shares
timely reply, private shares, tax consequences: No. That would be illegal as the transfer is being made in consideration services rendered. Due to the amount involved, if the IRS picked up on it, you (and he) could be liable for a substantial understatement of tax liability. This penalty can be up to...

Tax Law (Questions About Taxes): tax deductions, adjusted gross income, irs rules
adjusted gross income, irs rules, itemized deduction: Ron, Thanks for your question. If the damage that you were responsible for qualified as a casualty under IRS rules, you could deduct it as an itemized deduction. However, the loss must first be reduced by $100, then reduced by 10% of your adjusted gross...

Tax Law (Questions About Taxes): Tax Status of Disability Benefits, medical insurance premiums, 3rd party insurance
medical insurance premiums, 3rd party insurance, long term disability benefits: Frank: It is but at this moment I can not locate which pamphlet it is. Usually when taxed an un taxed money is involved in any situation with the IRS the un taxed money used is reported first before any after taxed money is used. When it come to disability...

Tax Law (Questions About Taxes): Tax woes, tax woes, military retirement
tax woes, military retirement, adult daughter: Yes, if he filed without your knowledge or consent, he had committed fraud, regardless of when it occurred. You could file a return claiming what you have a right to claim. Even though he claimed it, if he did not have the right to do so, you are still...

Tax Law (Questions About Taxes): taxation, form 4868, stancil
form 4868, stancil, irs: Peter, Thanks for your question. Filing a federal extension will cover you for Maryland. You get a refund. When you file your return show your payment, along with any W-2 or other withholding. The only penalties are if you owe and do not pay the...

Tax Law (Questions About Taxes): Taxation on the dividends of a LLC in Delaware, taxation of dividends, income tax rates
taxation of dividends, income tax rates, personal holding company: Erik, Thanks for your question. The income would be taxed at ordinary income tax rates, which depend on the level of your income. A single member LLC is taxed as a sole proprietorship unless you elect tax treatment as a corporation. These rates vary...

Tax Law (Questions About Taxes): Using IRA to pay for medical expenses and premiums, medical insurance premiums, ira funds
medical insurance premiums, ira funds, adjusted gross income: Thanks for your question. You can withdraw from your IRA to pay for any medical expense that would be deductible on Schedule A. However, only the amount withdrawn that exceeds 7.5% of your adjusted gross income can be excepted from the penalty. On line...

Tax Law (Questions About Taxes): Vacant Land Sale Tax, cancellation of debt, gross proceeds
cancellation of debt, gross proceeds, stancil: Mary, Thanks for your question. Your cost basis is somewhat complex. If you paid tax on the cancellation of debt income, your basis is $68,900. If you excluded the cancellation of debt income on your return, you must reduce your basis by the amount...

Tax Law (Questions About Taxes): Write-off, necessary business expense, irs office
necessary business expense, irs office, vacation rental property: I want you to succeed. I appreciate that you have given direction to your plan. You see an opportunity and want to take it. But Scott, you have to execute perfectly. Tax application is a grey area. Everyone has what they believe to be hard and fast lines that...

Tax Law (Questions About Taxes): Church Daycares, daycares, tax question
daycares, tax question, health department: Your tax question is too broad for me to give a specific answer. But generally if the daycare is operated by the church. It would have the same exclusions as the church. However, if the daycare is ran by an individual at the church building it would not...

Tax Law (Questions About Taxes): dependent qualification, time college student, including college
time college student, including college, time student: How would they (IRS) know is not the legal threshold that you want to rely upon, is it? Actually upon second thought, The fact she is away at college allows you to take her as resident of your home - as long as she is considered full time student....

Tax Law (Questions About Taxes): emplyment and self-employment SS taxes, self employment tax, www irs gov
self employment tax, www irs gov, medicare portion: Todd, Thanks for your question. You will only need to pay the Medicare portion of the self-employment tax. However, depending on your filing status, you may be liable for the .9% additional Medicare tax. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Questions-and-Answers-for-the-Additional-Medicare-Tax...

Tax Law (Questions About Taxes): Estate tax apportionment, texas probate code, applicable state law
texas probate code, applicable state law, residuary estate: Estate tax is an expense of administration If the estate is taxable, then by all means the tax prep person (you!) should have done this!!! Taxable estates are not for beginners. Generally wont change net distributable unless there are specific cash...

Tax Law (Questions About Taxes): Expatriate Purchasing Vacation Home in US, income tax purposes, individual income tax
income tax purposes, individual income tax, dwelling place: Dear Nathan, Purchase of vacation home in Montana will not trigger residency. Having a primary residency indeed will weaken your position. The rules for residency requirements in Montana are unambiguous: You are a resident of Montana for individual...

Tax Law (Questions About Taxes): Hunt Club Tax Exemption, irs income tax, www irs gov
irs income tax, www irs gov, homework section: Do you ask about exemption for a club for the IRS income tax regulations? which it would seem as though you are not making income (charging fees or other costs or services for running the club - so there is no real income tax issue here). from what i see......

Tax Law (Questions About Taxes): international money transfer to US, international money transfer, friend in russia
international money transfer, friend in russia, tax accountant: no tax, but the bank is correct - they would report it but you can explain it away as the repayment of a loan - especially if you have documentation to this effect. Did you report and pay tax on interest in the interim? do you have any paperwork to...

Tax Law (Questions About Taxes): large deposits from abroad, friend in russia, tax accountant
friend in russia, tax accountant, plausible explanation: Dear Alla, Foreign bank transfer will be reported by the bank and you have to be able to explain the source of funds - if IRS asked. Return of the loan is a plausible explanation - however, the loan has to be documented and you must have a promissory...

Tax Law (Questions About Taxes): Loss on Sale of Vacation Rental Property, irs publication 17, www irs gov
irs publication 17, www irs gov, vacation rental property: Penny, Thanks for your question. Your tax accountant is correct. This is a link to IRS Publication 17 dealing with that topic. http://www.irs.gov/publications/p17/ch14.html#en_US_2012_publink1000172296 Hope this helps. John Stancil, CPA...

Tax Law (Questions About Taxes): MA Resident but Live Overseas, living in vietnam, resident cards
living in vietnam, resident cards, state residency: Dear Heather, State residency issues is the most complicated area of expat returns - albeit the federal part can hardly be considered simple. You are not required to file MA tax return (see http://www.taxesforexpats.com/expat-tax-advice/state-residency-rules.html...

Tax Law (Questions About Taxes): Paying tax on money raised through crowdfunding, R&D, Crowd Funding
R&D, Crowd Funding, Funding: Dear Eddie, Thank you for such a relevant and timely question, and best of luck on your development of your device. In answering your question we have to understand what is considered income in the eyes of the Internal Revenue Code (IRC). The IRC does...

Tax Law (Questions About Taxes): Quarterly Estimated Tax Payments, estimated tax payments, irs publication
estimated tax payments, irs publication, self employment taxes: June 15 is the timeframe... You project the earnings ytd and send in the tax on or before the 15th Then in sept, do it again. And again at jan 15, 2014... If income grows (or shrinks) you will naturally annualized income each quarter Self leveling...

Tax Law (Questions About Taxes): Sale of Home, Cost Basis, l 113, principal residence
l 113, principal residence, cost basis: you can exclude up to 250k of gain. so unless you paid next to nothing for it.. and add to the inherited value.. you are in the clear. irc 121 is the exclusion section - note you have two years to get the full 500k (250 each) exclusion for your wife...

Tax Law (Questions About Taxes): Sch C NOL, citations, assumption
citations, assumption, losses: The key(ES) Are two year carry back and ejection to carry forward or back and not just to 2011... P Hi Your assumption (2011) is wrong Before you totally F it up, give me half your fee and I will do it right for you and send u the return done...

Tax Law (Questions About Taxes): Sole proprietor, sole proprietor, tax compliance
sole proprietor, tax compliance, compliance requirements: Dear Pat, You are mixing two contradicting concepts: Sole proprietor and foreign company. Sole proprietor is unrelated to any company. If you are a shareholder (perhaps a single shareholder) in a foreign company you can avoid paying SECA taxes if company...

Tax Law (Questions About Taxes): SUB S CORP, DIVORCE TRANSFER, DISTRIBUTIONS, MORE, financial affidavit, income tax returns
financial affidavit, income tax returns, sworn affidavit: I advise you to (quickly, immediately, and sooner) go hire a good local cpa or someone with a head on their shoulders ad your new accountant does not sound like a winner.. I would make sure they know about innocent spouse law and how to approach the amended...

Tax Law (Questions About Taxes): Tax on Business, business purpose, business trip
business purpose, business trip, tax deduction: Are you already in the business of real estate professional? No deduction unless you are And then trip has to be primarily for research. Can t have too much fun while you are there. But it sounds like a fun adventure that you want to layer In a...

Tax Law (Questions About Taxes): tax forms required, federal tax form, federal tax forms
federal tax form, federal tax forms, income tax return: Tom, Thanks for your question. Any income that is received to the estate should be reported on Form 1041, and a NY estate income tax return. If there was income to her prior to her death, that should be reported on her 1040 and corresponding state return....

Tax Law (Questions About Taxes): tax laws, finance courses, law expert
finance courses, law expert, public finance: I graduated first in my class with a 4.0 gpa, took a MS in tax and extra post graduate public policy and public finance courses and have been a cpa preparing taxes for over 20 years with well more than the required 40 hours annually of CPE is how I do (sic)...

Tax Law (Questions About Taxes): Tax on sale of a co-op apt. in NYC, qust, taxable estate
qust, taxable estate, executor: Bigger picture. How much is Mom s estate going to be? Roughly? Taxable estate or not? Generally, adding you only guarantees that you don t get a step up in basis on 1/2 of any increase in value from now till her death. I don t think I would...

Tax Law (Questions About Taxes): Taxes on sale of gifted land, inheritance taxes, mark thanks
inheritance taxes, mark thanks, stancil: Mark, Thanks for your question. You will owe tax at the capital gain rate on the excess of the sale price (minus selling expenses) over your parents cost basis. What you do with the proceeds does not have any effect on its taxability. The gift will...

Tax Law (Questions About Taxes): Unemployment and 1099 in California, unemployment checks, stancil
unemployment checks, stancil, freelance job: Nay, Thanks for your question. He can t be penalized but his employer can get into trouble with the IRS for misclassifying him as a contractor when he is indeed an employer. Since he is self-employed he no longer qualifies for unemployment. If he...

Tax Law (Questions About Taxes): 1099 and taxpayer identification numbers, taxpayer identification numbers, solicitation letter
taxpayer identification numbers, solicitation letter, social security numbers: Dear Kristina, You were supposed to take tax ID numbers from the contractors before you hired them. Aside from the need to deduct those expenses, you were required to do so to prevent hiring illegal immigrants with no right to work in the U.S. Now you...

Tax Law (Questions About Taxes): 2011 return being audited, payment voucher, letter answer
payment voucher, letter answer, running the risk: I would give them a listing of the expenses by category: office supplies, meals, etc. than total them up. Show the expenses you did take and those you did not deduct. Don t send the a picture of the receipts, its not that serious, yet. It is highly likely...

Tax Law (Questions About Taxes): 2nd home for family member, irs purposes, personal residence
irs purposes, personal residence, necessary expenses: Whether or not it is a personal residence or a rental, the property taxes and interest are deductible. the 14 day personal use limitation allows you to rent your primary residence to someone else for any amount of rent and not have to account for that...

Tax Law (Questions About Taxes): 401K, stancil, smartmoney
stancil, smartmoney, taxable income: Susan, Thanks for your question. Most likely your 401(k) is taxable income, so you should file a return if you are above the threshold for filing. That threshold depends on your filing status and the year that you are making reference to. http://www.smartmoney.com/taxes/income/in-some-cases-you-dont-need-to-file-a-tax-return-20713/...

Tax Law (Questions About Taxes): Canadian working in California, state disability insurance, state income tax
state disability insurance, state income tax, working in the usa: Ricky: I have plenty on Americans working abroad. However, In my tax practice in 40 years I have never filed a tax return for a Canadian working in the USA. We have several Tax Deferred programs but in order benefit from them you must be a citizen or...

Tax Law (Questions About Taxes): Cash in stocks, 25th wedding anniversary, stancil
25th wedding anniversary, stancil, capital gain: Mike, Thanks for your question. That depends on your basis in the stock. You will pay tax, at capital gain rates on the excess of your proceeds minus your basis. Since the stocks were inherited, your basis is the fair market value as of date of death....

Tax Law (Questions About Taxes): Church charging rent, irs requirement, irs audit
irs requirement, irs audit, 501 c3: Shantel: The rent income is the same as the collection plate on Sunday. Its not PROFIT until expenses are deducted from the income (rent + collection plate) - expenses = profit or loss. Anyway I am sure you file a 990C information return at the end of...

Tax Law (Questions About Taxes): Church Preschool, tax id number, limit liability
tax id number, limit liability, stancil: Tasha, Thanks for your question. Since you have chosen not to use the church tax ID number, you are separate from them and must establish your own 501(c)(3) exemption. I would suggest that you consult an attorney about limiting your liability through...

Tax Law (Questions About Taxes): Estate Tax, executrix of an estate, estate interest
executrix of an estate, estate interest, stancil: Linda, Thanks for your question. The loss on the sale of the house is fully reported on line 4 of page 1 of the 1041 in the year of sale. The full loss is not included on line 1 of the K-1, but on line 4a as a negative amount. Each beneficiary then...

Tax Law (Questions About Taxes): Foreign earned income, irs issues, oil rig
irs issues, oil rig, foreign earned income: Jay, Thanks for your question. Unfortunately, the IRS is correct. In order to qualify for the foreign earned income you must reside or have a physical presence in a foreign country for 330 days in a 12 month period. When you are working on the oil...

Tax Law (Questions About Taxes): Ga tax and 401K, personal income tax, georgia taxes
personal income tax, georgia taxes, retirement income: Anita, Thanks for your question. The 401(k) will be taxed in your state of residence at the time of withdrawal. As you probably know, Florida has no personal income tax. In Georgia, you can exclude up to $35,000 of retirement income from state tax...

Tax Law (Questions About Taxes): HOA - Applying for EIN, quarterly estimates, letter of resignation
quarterly estimates, letter of resignation, assessment payments: Each year the responsible party is declared on the tax return. As you migrate out of the position and someone else takes control the IRS will be notified at least at the filing of the tax return and possible at that the filing of the quarterly estimates. ...

Tax Law (Questions About Taxes): Job Seeking Expenses (tax), irs auditor, allowable deduction
irs auditor, allowable deduction, seminar event: Chris: Yes you may take one or the other but not both on the same trip. When using mileage as a deduction you MUST/SHALL keep a yearly log of all your miles driven including the miles that are not a deduction. The lunch/entertainment expenses only half...

Tax Law (Questions About Taxes): New HOA: Applying for EIN, necessary paperwork, occupancy level
necessary paperwork, occupancy level, responsible party: Jeremy: A corporation must have a physical address and it must have a telephone number of a person that IRS can contact who has legal authority to make decisions for the corporation. That is a decision that the corporation should make when it has a meeting...

Tax Law (Questions About Taxes): Personal Taxes, self employment income, self employment tax
self employment income, self employment tax, minimum threshold: Sharon, Thanks for your question. It depends on your filing status, age, and the nature of your income. If you are under 65 and single, you don t have to file if your income is under $9,750. However, if your income is self-employment income you must...

Tax Law (Questions About Taxes): phantom tax cost basis, cost basis, shares trade
cost basis, shares trade, adjusted basis: Your cost basis in the stock is equal to your purchase price if purchased with cash, or the adjusted basis of the asset that you exchanged for the stock. You exchanged a patent for stock. What was your basis in the patent? If you had purchased the patent,...

Tax Law (Questions About Taxes): Redfin rebate?, merriam webster dictionary, real estate commissions
merriam webster dictionary, real estate commissions, deductible expense: Maggie: I have not a clue. Until I read your e-mail I thought redfin was a breed of tuna. If the buyer is getting a portion of the cash he/she paid as the down payment on a real estate transaction it may not be income. Since the net result of his cash...

Tax Law (Questions About Taxes): reporting income from oil pipeline easement, irs info, 1099misc
irs info, 1099misc, oil pipeline: Charles, Thanks for your question. The damages are not taxable income, but the amount must be used to reduce the basis in your property. The 1099S amount is taxable income. You would allocate basis from the entire property to this and pay tax (at capital...

Tax Law (Questions About Taxes): selling stocks, Stocks, Basis
Stocks, Basis, Estate: Dear Mike, I am sorry for your loss, below is the answer to your question. First we have to determine the nature of the gain or loss that you will sustain when you will sell the stocks. 1-In general a taxpayer who inherits property is considered...

Tax Law (Questions About Taxes): Shutting down llc, personal tax return, llc report
personal tax return, llc report, arizona llc: Is your LLC a pass through entity? Most are. Do you realize that the debt, when deemed Bad Debt by the lender, will be attributed to the LLC and therefore to you as income, and taxable? If you close the LLC then the debt goes directly to you, if you...

Tax Law (Questions About Taxes): Spouses residents of different states, illinois state income tax, income tax return
illinois state income tax, income tax return, nonresident returns: Steve, Thanks for your question. For Illinois, if you file a joint federal return and one spouse is a full-year Illinois resident while the other is a part-year resident or a nonresident (e.g., military personnel), you may choose to file “married filing...

Tax Law (Questions About Taxes): Tax break on not claimed dependent?, income tax purposes, dependency exemption
income tax purposes, dependency exemption, t claim: Stephanie, Thanks for your question. You can t. In order to take the education credits, you must be able to take a dependency exemption on your taxes. You can make a gift of the tuition to your child but gifts are not deductible for income tax...

Tax Law (Questions About Taxes): Tax Free Meals, employee meals, regional utility
employee meals, regional utility, contractor association: Lisa, Thanks for your question. Meals that are purchased as a part of a conference are non-taxable to the employee when reimbursed or paid for on behalf of the employee. Meals consumed as a part of trade show participation are also non-taxable to...

Tax Law (Questions About Taxes): Tax Returns for Condominium HOA, tax period, unincorporated association
tax period, unincorporated association, do the right thing: Accrual is normally the method used to attribute income to future expenses. Accrual allows you to foresee and prepare for future expenses in the current years tax calculations. For example, the streets within the association have a projected life of...

Tax Law (Questions About Taxes): Taxes, S-corp, Election
S-corp, Election, 2553: Dear Carlos, A Sub-Chapter S-Corporation is a federal election done after form a regular C-Corporation. You will have certain time limit to make the election (form 2553) were all the shareholders have to consent to the S-Corp election. Since you have...

Tax Law (Questions About Taxes): Taxes on Contest Winnings, irs gov, irs agent
irs gov, irs agent, contest winnings: Any payment of any kind for services can be attributed as income and taxable. If I was a car salesman and the owner paid me in cars, the FMV, fair market value of the cars would be attributable to me as income. Winning a game show is taxable. In the...

Tax Law (Questions About Taxes): unearned income-code v, 83b election, unearned income
83b election, unearned income, 12a: wow. what part of the following was unclear? and to not be a 10 for knowledge, I would have to be wrong, which I am not.. so what is up with that? you simply dont like the answer? they are not earned in earlier periods (unless you made an...

Tax Law (Questions About Taxes): Benevolence question, needy person, stancil
needy person, stancil, benevolence: M, Thanks for your question. The funds are not taxable income to the recipient. I would add tha if funds are given to the church designated for that individual and not to the general budget or the benevolence fund, the contributions are not deductible...

Tax Law (Questions About Taxes): capital gains taxes, capital gains tax exemption, income tax bracket
capital gains tax exemption, income tax bracket, capital gain tax: David, Thanks for your question. I hate to be the bearer of bad news, but precious metals are classified by the IRS as collectibles. This means that they are not subject to the usual capital gain treatment, but are subjected to a 28% collectibles capital...

Tax Law (Questions About Taxes): church tax law - 501 C(3), property tax exemption, c organization
property tax exemption, c organization, parsonage: church may purchase land. no problem there. church may rent house to pastor. no problem there. if church rent at below fmv, then pastor has income, but he might be able to avoid recognition of income for the imputed gain by using parsonage exemption....

Tax Law (Questions About Taxes): Company vehicle - personal use, income tax rate, s corp
income tax rate, s corp, typical work: they are exempt. the easiest (and fairest and legal, too) method to pick up income for personal use is to take the $1.5 per trip x 2 x 5 x 50 weeks is 750 of income PER YEAR x the roughly 25% income tax rate is a cost of like $200 per year of real economic...

Tax Law (Questions About Taxes): Per Diem question..., california state tax, gross pay
california state tax, gross pay, staffing agency: Hi Sorry for delay - vaca and I forgot to set out if office She is much better off having a portion of her pay marked as per diem and excluding it versus taking gross pay and deducting meal and travel costs 2% threshold on schedule a deductions and standard...

Tax Law (Questions About Taxes): Donations to the US Government, morale welfare and recreation, indian tribal government
morale welfare and recreation, indian tribal government, us air force: Bruce, Thanks for your question. It probably is deductible similar to a contribution to a 501(c)(3) organization. The IRS states that contributions made to the United States or any state, the District of Columbia, a U.S. possession (including Puerto...

Tax Law (Questions About Taxes): Estate Stock Sale Reporting, income tax return, income tax return form
income tax return, income tax return form, successor trustees: Nicholas, Thanks for your question. If the stock is sold by the trust, it would be reported on the trust income tax return (Form 1041). There will be a stepped up basis of FMV as of date of death. It would be best to then have the tax (if any) paid...

Tax Law (Questions About Taxes): estimated tax payments and a past balance due, irs estimated tax payments, irs estimated tax
irs estimated tax payments, irs estimated tax, estimated tax payments: Kristina, Thanks for your question. In theory, the payments will be applied to your 2013 taxes if you submit the estimated payments on a properly completed 1040-ES for 2013. One can never guarantee what the IRS will do, however. Most likely, they will...

Tax Law (Questions About Taxes): Income tax deductions, income tax deductions, social security and medicare
income tax deductions, social security and medicare, federal income tax: Your calculations are correct, Half of more goes to taxes. Did you calculate in Social Security and Medicare? That is an additional 7.65% of the first $106,800, and 1.45% of everything else. And your employer has to pay an additional matching amount. Sadly,...

Tax Law (Questions About Taxes): Inherrited IRA Question, private letter rulings, state tax exemption
private letter rulings, state tax exemption, ira distributions: Tim, Thanks for your question. Probably not. There was a private letter ruling in 2005 in Illinois on this issue and the State ruled that the exemption is available for inherited IRA s. Therefore, this is most likely the law that applies. However,...

Tax Law (Questions About Taxes): Innocent spouse rule applies??, innocent spouse rule, irs representation
innocent spouse rule, irs representation, divorce decree: you should be safe.. what does the divorce decree say about old taxes and the house equity. ? are you still in the house? he moved out? divorce is now final? what does lien say as to years in issue. ? this is not something to leave to a free chat...

Tax Law (Questions About Taxes): IRS LETTER, irs letter, form 1098
irs letter, form 1098, stancil: Carol, Thanks for your question. I presume the document was a CP-2000 from the IRS. Initially you need to respond to the letter, explaining the situation. Don t go into the detail about how you used to claim it, just state something to the effect that...

Tax Law (Questions About Taxes): paying my accountant, tax preparer, business practice
tax preparer, business practice, small claims: Very little is standard when it comes to business. But there are many things that are reasonable. If the tax preparer filed the return and then was not paid, he would have little recourse other than litigation trying to collect. And the cost of litigation...

Tax Law (Questions About Taxes): paying caregiver/employee taxes, irs web site, household employees
irs web site, household employees, eftps: Andrea, Thanks for your question. You can make quarterly payments by going to www.eftps.gov and enroll to make those payments. You can report the taxes on Schedule H as a part of your 1040. This schedule is to report earnings paid to household employees....

Tax Law (Questions About Taxes): Property in Dissolved Subchapter S Corporation, orange county california, income tax returns
orange county california, income tax returns, lawyer check: theoretically, by closing the corporation, you did indeed transfer assets to the shareholder(s)... filing a quitclaim is likely the only way to get the title clear. as long as you have not had any issues since the corp closed which would impact the clear...

Tax Law (Questions About Taxes): Real Estate upon Death, tax burdens, stancil
tax burdens, stancil, fmv: Josephine, You can use Zillow as an estimate of the FMV. I would suggest talking to another Realtor. Most would be willing to give you an estimate of the FMV - it doesn t have to be a full market analysis, just an expert opinion. Hope this helps. ...

Tax Law (Questions About Taxes): is tuition deductible?, mental health discipline, licensed clinical social worker
mental health discipline, licensed clinical social worker, clinical social worker: Jackie, The key is does the additional education qualify you for a new job? It does not matter that you do not intend to work in that field, but only use it for improving your new job skills. For example, as a CPA in the tax area, I would be greatly...

Tax Law (Questions About Taxes): 1099-B and 1099-R, irs document, distribution boxes
irs document, distribution boxes, e trade: Chris, Thanks for your question. In cashing out the IRA you should only have received a 1099-R, which is a distribution from a qualified retirement account. A 1099-B is used for the sale of securities. You should check with e-trade and definitely...

Tax Law (Questions About Taxes): 401k retirement, 401k distribution, 401k withdrawal
401k distribution, 401k withdrawal, 401k tax: Your 401k withdrawals may be fully or partially taxable. If all contributions to the 401k were made pre-tax, then your distribution will be fully taxable. If you contributed some after-tax dollars to your 401k, then you have what is known as cost basis (i.e....

Tax Law (Questions About Taxes): Charitable Contribution of $5,000+, electric wheelchair, miscellaneous itemized deductions
electric wheelchair, miscellaneous itemized deductions, party transaction: Lisa, Got me there. In other cases, where insurance payments are made for a loss on an items, the payments reduce the basis. So that would argue for a basis of $1,000. But I am not certain of this, as I can find nothing that deals with the specific issue....

Tax Law (Questions About Taxes): DCG&T IRA Beneficiary, ira beneficiary, tax consequences
ira beneficiary, tax consequences, stancil: Alex, Thanks for your question. Since it is an IRA inherited from a spouse, she can: 1. Treat it as her own by designating herself as the account owner. This will not change the name of the account. 2. Treat is as her own by rolling it over to her...

Tax Law (Questions About Taxes): EIN, industry classification system, american industry classification
industry classification system, american industry classification, employer identification number: There is a difference between and EIN and a NAICS code (Employer Identification Number, North American Industry Classification System) formerly known as an SIC (Standardized Industry Classification). When you applied for an EIN, you registered your business...

Tax Law (Questions About Taxes): filing exempt, accurate answer, ugly thing
accurate answer, ugly thing, spending habits: It all comes down to actual numbers. If you use the IRS standard dependents, all year there is usually a small refund. Some people spend time to do the actual calculations so that they do break even, but that is a complex calculation not just rounding...

Tax Law (Questions About Taxes): Form 8863, lifetime learning credit, american opportunity
lifetime learning credit, american opportunity, bachelors degree: Larry, thanks for your question. Unfortunately, that is all inclusive. Once you have completed four years of college, you are no longer eligible for the AOTC. You may be eligible for the lifetime learning credit, however. Not as good as the AOTC, but...

Tax Law (Questions About Taxes): husband/wife LLC, self employment tax, sole proprietor
self employment tax, sole proprietor, partnership return: The type of business is not a determinant as to business structure. The key determinant that most people fail to consider is Profit . Is the business profitable? Will it be profitable? If the answer is no then any choice will work just fine. If they...

Tax Law (Questions About Taxes): Income as Business income; Section 179, business tax deductions, home business tax deductions
business tax deductions, home business tax deductions, home business tax: Your business income is calculated on schedule C, attached to your 1040 personal tax return. Your salary or wage that you receive from your employer is NOT calculated on your schedule C. Having not read that book I can t direct you to where the miscommunication...

Tax Law (Questions About Taxes): IRA conversion to ROTH IRA tax, medical expense deduction, ira conversion
medical expense deduction, ira conversion, roth conversion: Stephanie, Thanks for your question. You don t state if you have any unemployment compensation, which is taxable income. I presume that you are filing single. Your income and deductions, based on what you have said are as follows: Interest income...

Tax Law (Questions About Taxes): IRA withdrawal, ira withdrawals, ira withdrawal
ira withdrawals, ira withdrawal, traditional ira: Dean, Thanks for your question. The number is hard to pin down because at that level 50% or none of your SS is taxable. However, you would not have any SS taxed and your marginal bracket would be 15% if you had $24,178 in withdrawals. Above that...

Tax Law (Questions About Taxes): LLC, ground slopes, personal return
ground slopes, personal return, tax consequences: When their mother passed away, the basis of the property was set at FMV (Fair Market Value) the only true way to find the Fair market Value is to put it on the market and sell it, at arms length, to the highest bidder. The IRS can t argue an arms length...

Tax Law (Questions About Taxes): M&EI for self-employed family singing group, irs publication 17, expense deduction
irs publication 17, expense deduction, stancil: Tim, Thanks for your question. The M&IE would be allowable for all member of the group if they qualify. You state that they travel full time. One of the requirements for deducting travel expenses is that you be away from your tax home. The rate can...

Tax Law (Questions About Taxes): mileage, standard mileage rate, stancil
standard mileage rate, stancil, overnight travel: Lynn, Thanks for your question. If he has no tax home, he is considered an itinerant. If this is the case, he cannot deduct any travel expenses, including mileage. You tax home is usually the entire city or general area in which his business or work...

Tax Law (Questions About Taxes): mortgage question, loan forgiveness, mortgage question
loan forgiveness, mortgage question, federal gov: Sue, Thanks for your question. Yes, you will owe taxes on the amount of loan forgiveness. This will be reported on Form 982. If you are insolvent, it may cause at least some of the debt to be non-taxable. Also, since it is a rental you must report...

Tax Law (Questions About Taxes): Question about casualty loss of inventory..., casualty loss, replacement hardware
casualty loss, replacement hardware, stancil: Kris, Thanks for your question. Assuming the equipment is now useless, you can deduct your basis in the equipment. That would be trade in allowance that you gave the buyer - assuming that you booked the sale at full price. In other words, assume...

Tax Law (Questions About Taxes): rental properties, stancil, concrete work
stancil, concrete work, tax form: Sue, Thanks for your question. The only possibility is that you would need to provide a 1099-MISC to any one performing services for which you paid $600 or more and they do not have their own company (Corporation, Partnership, or LLC). Hope this helps....

Tax Law (Questions About Taxes): retirement account rollover, long term investment, roth ira
long term investment, roth ira, taxable benefit: If you are and always will be an employee, then I can t (nobody can) give you a great solution as an . Here are the base facts: 1. That tax differed retirement plans provide no net taxable benefit in most cases. (The math only works if you assume...

Tax Law (Questions About Taxes): roth ira, roth ira, stancil
roth ira, stancil, cpa: Angel, Thanks for your question. You would have to open a separate account in her name. Since you are over age 55 you can contribute $6500 as can she if she is over that age. Additionally, I am sure you know and it is not a problem, but you one of...

Tax Law (Questions About Taxes): Sale of Church Property, tennessee church, outreach center
tennessee church, outreach center, exempt purpose: Gary, Thanks for your question. You will not owe any taxes on the sale. You are not in the real estate business, the property was purchased for use in your exempt purpose, and you have decided that you are not going to use it for that purpose. ...

Tax Law (Questions About Taxes): sdi, disability payments, eitc
disability payments, eitc, income tax credit: Nancy: It could effect your receipt of EITC. That will not be known until you receive your W2 at the end of the year. I am not from California and do not study California law. Some disability payments are not reported as income and some are depending...

Tax Law (Questions About Taxes): Tax liability for relinquishing of LPR status, fawaz, dear mr
fawaz, dear mr, green card: Dear Fawaz, In order to relinquish Green Card, you need to have 5 years of tax returns completed before you submit form 8854. You should also present FBAR reports for the preceding 6 years. You have to file 2011 and 2012 tax returns, pay tax due and...

Tax Law (Questions About Taxes): Business Structure Formation
I think everyone from accountants, lawyers, Brothers-in-law, neighbors, have recommendations. Unqualified, absolute, one-size-fits-all recommendations. So if you have asked this question of someone and they gave you an answer, let s consider that unqualified....

Tax Law (Questions About Taxes): Car allowance, irs mileage rate, company car allowance
irs mileage rate, company car allowance, writing resolutions: Have you documented all of this? that the employees have agreed? that the policy is set in writing? Resolutions, agreements, etc. If that is the case then it is completely valid. Reimbursements to employees cannot exceed government limits, or if they do,...

Tax Law (Questions About Taxes): contribution?, organization travel, travel meals
organization travel, travel meals, restaurant meals: Jo, Thanks for your question. The cost of the trip is a deductible contribution but you must have a letter from the sponsoring organization stating that you were an authorized participant in the trip and that you did make the trip, representing the organization....

Tax Law (Questions About Taxes): death stock cost basis, stock cost basis, rights of survivorship
stock cost basis, rights of survivorship, brokerage account: term has nothing to do with it. could have been 20 years or three weeks ago. you (son) get half when dad did the jtwros. son gets HALF basis as he just did the reverse - gifted to dad. (ouch!) half of everything is dod. reason to fix while...

Tax Law (Questions About Taxes): Deductions for conference host
This is a good example of why you need to manage your own tax issues. The CPA s that say that only 50% of meals are deductible are correct. http://www.irs.gov/publications/p535/ch11.html But your situation doesn t fit squarely into the bucket regarding...

Tax Law (Questions About Taxes): Deemed revenue or deemed gifts?, ownership percentages, s corp
ownership percentages, s corp, vacation location: there really is no provision for additional capital without additional shares in an s corp. it should be structured as a loan. but at the end of the day, there really is no business purpose either... I would think the IRS would actually disallow all losses...

Tax Law (Questions About Taxes): employer paid retirement plan, roth ira, retirement plan
roth ira, retirement plan, 401k plan: taxed when you take it out or receive it. you cannot (generally) roll it into a Roth -- but if you do, it would still be taxable upon the rollover/conversion and then grow tax free and distributed to you tax free in the future. ask employer when you...

Tax Law (Questions About Taxes): Foreign Corporation paying US contractor IRS Question, tax obligations, freelancer
tax obligations, freelancer, irs: no. none. as long as you (and your company) don t come to the usa and do stuff/perform services or have assets and or employees. what is the freelancer doing ? what type of services? how much control do you exercise over them? are they in the business of...

Tax Law (Questions About Taxes): foreign sourced income, student loan interest deduction, capital loss carryover
student loan interest deduction, capital loss carryover, student loan interest: Shone: Yes under some circumstances you can file the foreign tax credit amount on schedule A. Please read the instructions for form 1116 before using Schedule A to understand the do s and do not s. Yes you use 1040 to report your foreign wages and...

Tax Law (Questions About Taxes): Form 1116
Assumes you actually have a cap loss from 2011? Prior loss does not affect current 1116 Pro rata stu loan is apparently a valid deduc on 3b. But I have never seen it down Are u a USA citizen? Or green card? Foreign wages go on line 7 How long...

Tax Law (Questions About Taxes): gift taxes, annual exclusion, donee
annual exclusion, donee, stancil: Yudi, Thanks for your question. If it exceeds the exclusion amount for gifts you would have to pay gift tax on the transfer. There are two types of exclusions. First, is an annual exclusion of $14,000 per donee. If it is less than this amount no tax...

Tax Law (Questions About Taxes): gifts/follow-up, ohio state income taxes, income tax deduction
ohio state income taxes, income tax deduction, operative number: You can give up to $14,000 in gifts to an unlimited number of persons each year and it will be excluded. For this purpose the total of gifts to a particular person is the operative number. For example, you could give $14,000 to 100 different people and...

Tax Law (Questions About Taxes): Hiring a CPA, irs enrolled agent, certified public accountant
irs enrolled agent, certified public accountant, business tax returns: Whether you hire a certified public accountant (CPA) or an enrolled agent (EA) to help you with your tax needs depends on your specific situation. Certified Public Accountants’ (CPA), who are state licensed, specialize in accounting and may or may not choose...

Tax Law (Questions About Taxes): Income guarantee forgiveness, income guarantee, principal portion
income guarantee, principal portion, report interest: Good morning Are you a recruiting agency? or the actual employer? Do you charge (and report) interest? How much and how long is the loan? How often have you done this? for how many doctors? Where (state) are you located? What do you...

Tax Law (Questions About Taxes): IRA Distribution no beneficary, deceased return, final return
deceased return, final return: Hi Fawn, My condolences on your loss. The personal representative is responsible for filing any final individual income tax return(s) and the estate tax return of the decedent when due. A personal representative of an estate is an executor (executrix),...

Tax Law (Questions About Taxes): IRA rollovers, ira rollovers, roth 401k
ira rollovers, roth 401k, roth ira: your 401k was not post tax. it is pre tax dollars (yes, a roth 401k was avaialble recently, but if you worked there very long it is unlikely that it was roth and not regular). did you have any employer stock in the plans? as i said in other reply....

Tax Law (Questions About Taxes): NYC and Tax Questions, income tax withholding, ny state taxes
income tax withholding, ny state taxes, interest dividends: Mike, Thanks for your question. NYC does have a state income tax, or payroll tax. I don t know the rate but it applies to all earnings within the state. You will be subject to income tax to the states of NY and PA. As a PA resident, you will get...

Tax Law (Questions About Taxes): Overseas tax, physical presence test, earned income exclusion
physical presence test, earned income exclusion, foreign earned income exclusion: Hi Mostafa, since you will continue to reside overseas, you will continue to be eligible for the foreign earned income exclusion as long as you qualify under either the bona fide resident or physical presence test. The move of your spouse and kids has no impact...

Tax Law (Questions About Taxes): Questions on Rental Property, cancellation of debt, personal residence
cancellation of debt, personal residence, s gross: Kendra, Thanks for your question. 1. It is a rental property from the first day it is rented. However, you do not lose the exclusion of gain until you have not lived in it for 24 of the prior 60 months as your main home. The item here that often trips...

Tax Law (Questions About Taxes): Re-issue of EE & I Bonds, annual exclusion, current liability
annual exclusion, current liability, steve thanks: Steve, Thanks for your question. Actually the annual exclusion amount is now $14,000. The gift will not create a current liability for you. When you redeem the bonds, you will pay tax on the increase in value from their basis. Alternatively, you...

Tax Law (Questions About Taxes): resident and non resident, double taxation, state return
double taxation, state return, stancil: Diego, Thanks for your question. You owe tax to CT because you are a resident of that state. As a CT resident you are subject to tax on all your earnings regardless of source. You will file a CT resident return. Since you had earnings in NY, you...

Tax Law (Questions About Taxes): S-Corp Salary, s corp, ethical approach
s corp, ethical approach, stancil: Kimberly, Thanks for your question. You could refile for 2012. You could treat it as all being paid on 12/31 so you would only need to file one 941. That is the most ethical approach. If the company did not have a large amount of earnings in 2012,...

Tax Law (Questions About Taxes): shareholder distribution to deceased?, income tax return, income tax return form
income tax return, income tax return form, 1041 instructions: Guest, You are correct on the first three items. The box 16 item does not go on the return, it is informational for a reduction in basis in the S Corp due to distributions received. The box in line 17 goes on Form 4952 line 5. This is a 1040 Form,...

Tax Law (Questions About Taxes): Stock tender proceeds
The proceeds is income, but there is no separate capital gains tax. Sales of investments held more than 12 months are taxed at the preferred capital gain rate. You will pay tax, on the gain only. That tax will be at the capital gain rate if you owned it more...

Tax Law (Questions About Taxes): Student loan repayment and tax obligation, public benefit corporation, student loan repayment
public benefit corporation, student loan repayment, eligible educational institution: Brian, Thanks for your question. It depends. If the lender is a qualified lender, which includes the following: 1. The United States, or an instrumentality thereof. 2. A state, territory, or possession of the United States, or the District of...

Tax Law (Questions About Taxes): Tax Costs for Employer, minimum franchise tax, payroll taxes
minimum franchise tax, payroll taxes, tax partners: It is universally accepted that having employees in a State is one of the criteria for Doing Business . As in: if a corporation is doing business within a state it is obligated to comply with the rules of that state including pay taxes in that state. There...

Tax Law (Questions About Taxes): Taxes for Independent Contractor, free efile, state software
free efile, state software, stancil: Donna, Thanks for your question. You can file your tax return online, but you will need software in order to prepare the return. Programs such as TaxACT (wwww.taxact.com) have free programs and free efile. However, if you are subject to state taxes,...

Tax Law (Questions About Taxes): Trust Taxes, trust assets, stancil
trust assets, stancil, time of death: Christian, Thanks for your question. The basis of inherited property is the fair market value as of date of death. That is the value you should use. Assuming that the trust assets remained in his name and you inherited the trust assets. Hope this...

Tax Law (Questions About Taxes): 1099R
Sam, Thanks for your question. The original broker has to report the transfer via a 1099-R. If it was done correctly, the code in box 7 the 1099-R should be a code G which is a direct rollover. If this is not the code, the form was completed improperly...

Tax Law (Questions About Taxes): Over $200K
Bob, Thanks for your question. No, when you make a non-deductible contribution to your IRA, you should complete Form 8606 as a part of your return every year, whether a contribution is made or not. When you start making withdrawals, your account...

Tax Law (Questions About Taxes): 401K after 70 1/2
moron. give me a zero. I didnt answer anything. without understanding your other income and living situation, no comprehensive answer would be accurate. so, i again say - how the hell do u pay for your living on a few hundred dollars? just social security?...

Tax Law (Questions About Taxes): You may not be able to help, but...
Kayla, Thanks for your question. The amount likely increased because they added the accrued interest to the amount owed. You will probably not get any notice, merely a notice that the amount of your refund has been adjusted. However, if your loan...

Tax Law (Questions About Taxes): Attitude
If you want to DIY, you should have been able to look up what I looked up even if it took 10 min instead of two And if you have rental income you have coin to hire if you can t DIY And... If you have one error, there are 99#•% surely more lurking...

Tax Law (Questions About Taxes): Can my boyfriends mom claim our son
Ciera: You and your boyfriend can not file a joint tax return. You must file your own tax return and your boyfriend must file his own tax return you CAN NOT file a Joint return. But neither you, your boyfriend, nor your mother can claim the child as a...

Tax Law (Questions About Taxes): Capital loss carry over limit?
Frank, Thanks for your question. The loss carries forward indefinitely until it is used up or the taxpayer dies. You apply the loss to capital gains +$3,000 each year. So in your example you take $3,000 loss in 2012, $3,000 loss in 2013, and use...

Tax Law (Questions About Taxes): Charitable contributions paid to an individual
Lillie, Thanks for your question. You are correct in that the gifts would not be deductible for the donor. Any gift tax would be paid by the donor, but one can give up to $14,000 per year to an unlimited number on individuals. There are no income tax...

Tax Law (Questions About Taxes): Commision Checks
Kenneth, Thanks for your question. The employer is wrong. I broached this subject with an IRS agent once with the question, Would there every be a circumstance where someone would legitimately be an employee receiving a W-2 and also a 1099-MISC. ...

Tax Law (Questions About Taxes): Corporate Ownership
i am patrick medusa... not william you dont file a new 2553... you dont need to assign a par value (that usually only has an issue with the secretary of state for your home state. not an IRS tax issue. essentially, you have to sell him his pro rata...

Tax Law (Questions About Taxes): Depreciation for Water Heater in Residential Rental
hi michael if you have a residential home... means you have a few extra dollars to pay a cpa to do your taxes... I only charge $500 a return. depending upon where you live, you could even do better at HR Block. I am serious. I wonder what else you...

Tax Law (Questions About Taxes): Disability code 3 on 1099-R
Carolyn, Thanks for your question. There is no disability code for the 1099-B, as the reason for such a code is to enable you to avoid the 10% penalty for early withdrawal. You will need to have Publix reissue the 1099-R for a disability exception code....

Tax Law (Questions About Taxes): Estate taxes - Gift Taxes - Intestate
I am in VA a few days a week.if you bed help let me know (my home is in CT) I am happy to meet if close to NOVA. CALLS IF DOWN AT THE SHORE We can (easialy) get you where you want to be Also, the Ira will cause income tax inclusion on your 1040 ...

Tax Law (Questions About Taxes): Estimated Income Tax
Winnie, Thanks for your question. When your income changes from year to year, as in your case, you can adjust the amount of estimated payments you are making to conform to your current level of income and estimated taxes. Hope this helps. John...

Tax Law (Questions About Taxes): Estimated Taxes and Self-Employment
David, It may or may not increase your EIC. That is a number that is difficult to predict without more detailed information about your tax situation. There is a point where it maxes out and additional income reduce the EIC. It depends on the number (if...

Tax Law (Questions About Taxes): Farm selling
Ms. Lynch: When your mother inherited the property from your father she received it at one value. When she gave it to your brothers and sisters the value of the property for income tax purposes should have been stepped up to the current market value. ...

Tax Law (Questions About Taxes): How do I file?
Emily, Thanks for your question. Technically, you were an employee and should receive a W-2. But companies often pay interns with a 1099-MISC because they are uninformed or they know there is little likelihood of the IRS catching the erroneous filing....

Tax Law (Questions About Taxes): Filing married
Ed, Thanks for your question. They cannot file as married unless they are married or reside in a state that recognizes common law marriages and they comply with the state laws. Texas is one of those states, calling it an informal marriage. Under...

Tax Law (Questions About Taxes): Form 709
sort of like speeding. no harm no foul if the tree falls and nobody notices. the law is that you need to file a return. true, no tax due if you dont. but i cant advise you to skip it but likely 99.99999% never any damage. in the 1 million th chance...

Tax Law (Questions About Taxes): Fractional reserve Lending
Wake up Juan. Splash water on your face and listen... In your examples, you made a 500 deposit into the bank and they will pay you a pittance of interest and send you a 1099 detailing the amount paid. Period You report that income on schedule b and...

Tax Law (Questions About Taxes): Gift tax?
Your gain would be taxable income at the capital gain rate, based on what you have told me, some of it would be eligible for the zero rate. The remainder would be at the 15% rate. Also, I did not mention that the tax would be on the sale price unless...

Tax Law (Questions About Taxes): home office deduction
Joe, Thanks for your question. The storage areas are not office space, so I would simply put them on as depreciable assets - Storage shed or Storage area. Assign the shed its actual cost or an allocated cost as part of the basis of the house if it was...

Tax Law (Questions About Taxes): income tax
Mike, Thanks for your question. No, if your income level exceeds the minimum for filing you must file regardless of any amount owed or refund due. This amount varies depending on your age, filing status, and dependency status, so I can t tell you that...

Tax Law (Questions About Taxes): interest paid on contract for deed
Phil, Thanks for your question. Since you are not in the business of lending you do not have to issue a 1098. Just give him a statement that includes your name, address, and SSN along with the amount of interest paid during the year. The IRS will...

Tax Law (Questions About Taxes): LLC member and Futa calculation
Abby: For both the state (SUTA) and federal (FUTA) the income of the members of the LLC are excluded (not exempt) from being put on either reporting form. A member is not a paid employee but rather an investor able to receive a return on investment. At...

Tax Law (Questions About Taxes): LLC tax question
Joseph, Thanks for your question. If you have made the election to have the LLC taxed as a partnership or S Corp, the profit is passed to the owners and they pay tax on their share of the profits regardless of how much they took out of the business....

Tax Law (Questions About Taxes): Long Term Disability Payments
generally, if you paid for the premium with after tax dollars then the receipts are not taxable, if you paid for it with pre tax dollars (or the employer paid) then it is taxable. sounds like employer paid the premiums and you received replacement income...

Tax Law (Questions About Taxes): Military Retirement and Taxes
you are taxed on all income where you are a resident. if you are working in arizona, and have done for a little while, you are likely now an arizona resident. you can return to texas and then be a texas resident, but in the meantime, you are an arizona...

Tax Law (Questions About Taxes): oversea employee tax
If you are able to exclude the maximum amount of the foreign earned income exclusion, you will have no tax liability. If you can t use the exclusion, you liability depends on your marital status, filing status, itemized deductions (if any) and any dependency...

Tax Law (Questions About Taxes): overseas work, military contractors, foreign earned income exclusion
military contractors, foreign earned income exclusion: Hi Greg, you would likely qualify for the foreign earned income exclusion under the physical presence test. Since your likely qualification period (assuming less than 35 days in the US during the 365 days qualification period) will include only part of 2013,...

Tax Law (Questions About Taxes): Personal income tax
a. if you did not pay for their care and they did not live with you 185 days, she gets the kids and child tax credits and also the right to claim head of household (with commensurate lower rates). period. this is the case - REGARDLESS OF THE AGREEMENT....

Tax Law (Questions About Taxes): property taxes
Depending upon local rules You do owe tax when you buy it I the property (home) not land Likely also owe the land owner for the portion of tax you owe If you own it you owe tax What am I missing - it seems pretty simple. Even if the seller is...

Tax Law (Questions About Taxes): Question About Rules Governing Who Can Claim a Dependent
John, Thanks for your question. If you provide over half the support and the child lived in your household for over half the year (while he was born), you can claim the child as a dependent. The fact that it is not your wife s child is not an issue...

Tax Law (Questions About Taxes): refund for FICA tax on severance pay
If you will look at a 1040X, you will see a box for making an explanation of the changes you are making. File your regular return, then file the amendment at least a month after you file the original. Otherwise the IRS may get the X form first, and get confused....

Tax Law (Questions About Taxes): Rental property
Form 4797. (Sale of biz property) Amount received less amount if basis. (The lower !!! Of what you have into the property basis less depreciation. Or or or fair market basis when you converted from personal to rental (lower of, I did mention?) ...

Tax Law (Questions About Taxes): Sale of home with multiple owners
Charlotte, Since the house was a gift to the children, the value as of the date of the gift is not relevant. The children s basis will be a transferred basis from the parents. But at that point you only owned 20% each as your parents still had an ownership...

Tax Law (Questions About Taxes): sale of rental property
A You need a better lawyer B It should be a 2014 adjustment unless you knew of it and were reasonably certain of the expense at end of 2013 Reasonably complicated area of law - much more at play - recapture of depreciation, did you make an overall...

Tax Law (Questions About Taxes): scorp disolve
When a business is terminated, the IRS requires notification so that they can deactivate the Tax ID number. If the business starts anew, the IRS will reactivate the number. Chances are that nothing will occur if you don t deactiviate the number. But...

Tax Law (Questions About Taxes): self-employment tax
Lee, Thanks for your question. First, any income must be reported regardless of amount. So, yes you need to report it. Second, you do not need to worry about the self-employment tax as your profit is under $400. Any profit less than that amount...

Tax Law (Questions About Taxes): SEP IRA for LLC
Yes, in both cases. Nothing will appear on the 1065 in regard to the SEP, it will basically be a SEP for a self-employed person, so each partner is on his own as to how much to fund. You can contribute the lesser of 52,000 or 20% of net SE income after one-half...

Tax Law (Questions About Taxes): Social Security Benefits and Claiming and Dependent
It still might be more advantageous financially for mom to take Have to compare with and without for both Also need to confirm mom can claim based upon her relative other inputs. Which if he only gets 10k in income - house value etc should cover it...

Tax Law (Questions About Taxes): Out of state dependent student
Kendra, Thanks for your question. They don t need to do anything special, just claim you as a dependent. Since your earnings were under $500, the only reason you would need to file would be to get any income taxes that were withheld. If you do file,...

Tax Law (Questions About Taxes): Tax filing
Dear Golnar, Thank you for your inquiry. We would gladly handle your U.S. tax reporting needs and will provide you with tax advice most suitable to your situation. If you would like to engage our services, you should sign up as a new client at the Sign...

Tax Law (Questions About Taxes): tax help
Ask, but you probably won t receive. As I stated in my previous answer to you, many companies use a 1099 because they can get away with it. It you wanted to pursue it, Complete a SS-8 Form and send it to the IRS. They will make a determination as to...

Tax Law (Questions About Taxes): Tax for IRA early withdrawl.
Heon, Thanks for your question. Since you withdrew the $5,000 before the end of the year of the contribution, it is as if it did not happen. No penalty, and obviously no deduction. To get a deduction you would have to contribute new money. You...

Tax Law (Questions About Taxes): Tax Question on Church Purchasing a Car for the Pastor
Tammy, Thanks for your question. The car is considered compensation to the pastor, even if it is a gift to both he and his wife. She received it because of the position held by her husband. The cost of the car is reported in box 1 of the W-2, along...

Tax Law (Questions About Taxes): Tax on rental income for mon residents
Jeff, Thanks for your question. Basically you report the rental income in CA on a CA non-resident return. Report everything on your MN return. MN will give you a credit for tax paid to CA, but you will have to show it on your MN return. Hope this...

Tax Law (Questions About Taxes): Taxes Filing
Ang, Thanks for your question. If that is your only income you do not need to file. However, if you received unemployment benefits, those are taxable and you may need to file. Also, if any income tax was withheld, you may want to file to get those...

Tax Law (Questions About Taxes): Taxes On Royalties for Gifted Land to Church
Tammy, Thanks for your question. First things first, the royalties are NOT taxable income. A not-for-profit organization is subject to tax on it unrelated business income. In order to be subject to that tax, three requirements must be met: 1. It...

Tax Law (Questions About Taxes): Working in different states
Brian, Thanks for your question. You can have the withholding changed, but you will have to file an AZ return. You will have to file in SC as a full year resident, reporting all your income to SC. You can take a credit on the SC return for taxes...

Tax Law (Questions About Taxes): 401k
no you cant do a super stuff 401k if they dont offer. you can do a roth or regular ira. just for jollies. do you have employer (ex) stock in the 401k? with increased value over basis? if so, I just earned my 6pack of beer :) send new question...

Tax Law (Questions About Taxes): 401k and taxes
Lou, Thanks for your question. Unfortunately, a 401(k) is always tied to your employer and you can only make contribution to the plan as an employer. As an employee, your options for a retirement plan are limited to a traditional or Roth IRA, with a...

Tax Law (Questions About Taxes): amendment and form 982
James, Thanks for your question. If you included the 982 with your original return, I do not understand why the IRS did not accept it, unless the form was not completed properly. First, if the CPA did not know what a Form 982 was, I would find another...

Tax Law (Questions About Taxes): Capital gains tax
Tim, Thanks for your question. First, her basis in the house depends on whether or not she was a co-owner when your father was alive. If this is the case, her basis is 1/2 of the original cost plus 1/2 of the fair market value at the time of his death....

Tax Law (Questions About Taxes): Contractor state taxes
Susan, Thanks for your question. The employer is not correct, but it is not likely you will convince them otherwise. However, you can file a Form NC-4 EZ. On line 3, check that you are exempt from NC withholding because you expect no tax liability....

Tax Law (Questions About Taxes): Distributions
Kenneth, You might want to structure the whole thing as an investment club.http://www.sec.gov/investor/pubs/invclub.htm IRS Publication 550 has some information on Investment Clubs.http://www.irs.gov/publications/p550/ch01.html#en_US_2013_publink100010157...

Tax Law (Questions About Taxes): Filing back-taxes
Dear Tuan, You are a strong candidate for filing through the Streamlined Foreign Offshore Procedure (aka amnesty program). You can find the program details at http://www.taxesforexpats.com/services/new-irs-program-delinquent-taxes.html. I would not...

Tax Law (Questions About Taxes): Final Form 1065 return
Jeff, Thanks for your question. I presume that you are still utilizing the same EIN number. You don t have a taxable transaction, as he did not sell his interest in the business. It is still the same LLC,the only change that occurred is that it is now...

Tax Law (Questions About Taxes): foreign retirement package
Eric, Thanks for your question. You would report that on line 16, just as you would with a domestic pension plan. However, you need to consult a tax advisor (CPA or enrolled agent) about how much of it is taxable in the US. This is dependent on what...

Tax Law (Questions About Taxes): Inheritance Tax Question
Ally, Thanks for your question. Not unless the amount transferred was in excess of $5,340,000. The Federal government does not have an inheritance tax, but does have an estate tax. No tax is due unless the value of the estate exceeds $5,340,000. ...

Tax Law (Questions About Taxes): Multiple W-2 forms from the same employer
David, Thanks for your question. Even though they are owned by the same person/organization, each of company or EIN is independent of the other for these purposes. Therefore you will get a separate W-2 for each company, reflecting your status with that...

Tax Law (Questions About Taxes): NJ-NY income taxes
Dear Chaim, You have to file NY resident return and report income derived from NJ. NY residents pay tax based on NY income source (which is not the case) and also based on residency (this is your case). You also file NJ non-resident return and reconcile...

Tax Law (Questions About Taxes): NQ 457 Plans held in a Rabbi Trust
no form 5500 (not a 1041 either) see for the short story. long is in the code and regs of 457. http://www.irs.gov/Retirement-Plans/Non-Governmental-457(b)-Deferred-Compensation-Plans 5 for politeness... Should I have said, please? Mother...

Tax Law (Questions About Taxes): Real estate gifts
Donna, Thanks for your question. I would find another accountant. When a gift is given, it must be without any strings. Your agreement for her to gift it back to you in eight years renders the original gift void. If she is the sole owner, the tax...

Tax Law (Questions About Taxes): REITs
this depends. upon what is in the reit. you go from captive reit (bank moves the branches to a reit and pays rent to an essentially tax free entity and then reports divided income back to bank at less than 100% inclusion. same for franchise restauarnts...

Tax Law (Questions About Taxes): rental property
Rob, Thanks for your question. Yes, you must report the income on Schedule E. You can also deduct expenses of the condo, including the interest on the loan, but not the full mortgage payment. You must also deduct depreciation based on the lower of your...

Tax Law (Questions About Taxes): Tax Lien.
Dennis, Thanks for your question. 1. Social security cannot do anything about it, you will have to contact the IRS. 2. Call or fax the IRS, preferably call. Use a stateside number if necessary. 3. File a return for 2004 and petition for a refund...

Tax Law (Questions About Taxes): Taxable..???
Alex, Thanks for your question. Yes, it is taxable, but you may not have a gain. When you inherited his portion of the business, your basis in the business is the fair market value of his portion of the business as of the date of death. If you sell...

Tax Law (Questions About Taxes): Taxable ???
first of all, sorry for your loss! not if you structure it properly how much? where do you live? what sort of business? what was the business? do you know if it was corporate, partnership? llc, s corp? did dad just pass (you need to do...

Tax Law (Questions About Taxes): taxable income offered to an employee
Jim, Thanks for your question. It can be legal. You cannot force them to go on Medicare instead of the company plan, and you need to be aware of the rules that prohibit you from discriminating between employees in the provision of health care. You may...

Tax Law (Questions About Taxes): Unforeseen Circumstances Exclusion from Gain
I agree with all that you say. However, the nonspecific event I was referring to was the circumstances surrounding the disposition of the sale - the fact that it took place so long after the flood. I still think you have a good case and will likely prevail....

Tax Law (Questions About Taxes): 2013 taxes.oil gas royalties
Linda, Thanks for your question. If you have zero taxable income, the only thing I can think of is that it calculated (incorrectly) self-employment tax on the royalties. If you reported those on Schedule E, it should not have done so. Hope this helps....

Tax Law (Questions About Taxes): cash donation to NPO
The problem with that is two-fold. One, it would have to be a non-interest bearing note and you could not compel them to pay the interest. Second, depending on the amount of the note, the IRS could impute interest. When this happens they make you pay tax on...

Tax Law (Questions About Taxes): classification
for book or tax ? book it is unearned revenue. then reverse it when you spend the money. for tax, assuming you meet the thresholds and timing etc. (complicated) you dont report income either. but that sure sounds like a homework question. isnt...

Tax Law (Questions About Taxes): eminent domain
Les, Thanks for your question. If you purchase replacement property that costs at least as much as you received Within two years, you do not pay any tax on the involuntary conversion. If you don t, you report it on Schedule D and form 4797. Hope...

Tax Law (Questions About Taxes): Filing Late/Amending Tax Returns
15th day of the year after close is original due, add extension of 6 months and it was originally due oct 15, 2012. IF you had any payments paid in, they are lost after 3 years (refund opportunity goes away). but you could have carried back the loss...

Tax Law (Questions About Taxes): Hell, I have a questions.....
buying something is not a taxable event (usually). SELLING it (presumably at a profit) is, however. The IRS cares little (if any) about activity a company in the middle east... but they care much about what you do with the product you buy and...

Tax Law (Questions About Taxes): Hello, I have questions about....
Hello Jack, If you buy products for personal use from the foreign company you don t have to pay tax on purchases. Neither the foreign company must pay tax to IRS for export of goods (although they may have tariff payments, which is the foreign trade issue,...

Tax Law (Questions About Taxes): insurance/filing separate
Health insurance won t affect your return. Do the kids stay with you more than half the year? Who pays costs of the house? Do you own it? What about prop tax and mortgage interest? Are you both on the mortgage? Do you have an agreement yet about...

Tax Law (Questions About Taxes): Moving expense deduction
Eric, Thanks for your question. No moving expenses are deductible. First, you did not leave your old job, but merely took a leave of absence. Second, you maintained your FL residence as evidenced by keeping your Florida driver s license and similar...

Tax Law (Questions About Taxes): Rules for Determining Geography
The vehicle does not have to be registered where the corporation is located. However, if the corporation is not located in SC, or doing minimal business in South Carolina, it is a suspicious situation. It is not a matter of tracking business use, but personal...

Tax Law (Questions About Taxes): sales tax
Hi The point is hopefully you report the net income (cash received less costs) bbut I d have to know your state to know if selling postal bags is subject to tax.what state are you in? Do you make brand new straps or fix existing bags? Is the us postal...

Tax Law (Questions About Taxes): tax
the contract work for engineers is where you have possible exposure (not to sound too much like a lawyer) but can t you fix that with either insurance or via risk shifting to the engineers? I have cpa insurance and an llc, but my real risk is when I...

Tax Law (Questions About Taxes): tax, llc, tax
llc, tax, Schedule C: Hi Al, as far as a tax advantage of an LLC for an internet business, are you considering other entity types. If you are a single-owner LLC, the LLC is treated by default from a tax perspective as a sole proprietorship in which reporting would be done on Schedule...

Tax Law (Questions About Taxes): tax law - ACA
David, Thanks for your question. Since the withdrawal is not taxable you would be committing fraud by reporting it as taxable in order to receive a tax benefit (I.e. The subsidy). The IRS would likely investigate the inclusion of income from an annuity...

Tax Law (Questions About Taxes): taxes
Al, Thanks for your question. The IRS treats LLC s as disregarded entities, meaning you elect how to file. For tax purposes you would file as a corporation, S corp, partnership, or sole proprietor. Your choice. So the short answer is that there are...

Tax Law (Questions About Taxes): Cost Basis of Limited Partnership Shares
Lee, Thanks for your question. The answer depends on a number of factors, based on what is reflected on the K-1, as well as any distributions that were received. The nature of the situation would not give rise to answering this question fully without...

Tax Law (Questions About Taxes): Per Diem and changing Tax Home
If the length of the project exceeds 12 months the per diem is taxable and the travel expenses are not deductible. IF 12 months or less the per diem is taxable, but the expenses are deductible as miscellaneous itemized deductions on Schedule A. Hope this...

Tax Law (Questions About Taxes): tax question homework problem
I ve answered this one before: Since this is an LLC, it is disregarded for tax purposes. So the four are just partners, and WE four LLC files a general partnership return 1065. The 1065 attributes all the profits (and much of the expenses to the individuals...

Tax Law (Questions About Taxes): 1099 Other Income
Pam, Thanks for your question. That is most properly recorded as a box 7 item. I would treat it as Schedule C income, subject to SE tax. The IRS states in the instructions that if it is trade or business income it goes on Schedule C, if it is recurring,...

Tax Law (Questions About Taxes): 1231 or 1244 loss from S Corp sale
Rachel, As you state it, it would be a 1244 loss if you meet the criteria. 1231 is for the sale of assets and you stated that you sold shares, making it a securities transaction. The carryforward amount would be reflected on Schedule D. Negative AGI...

Tax Law (Questions About Taxes): Amended return - error didn't affect taxes owed
Joan, Thanks for your question. Just to be on the safe side, I would file an amended return, attaching a correct Schedule D. In the explanation on the 1040X simply state that the loss carryover was incorrectly stated and the amended return does not...

Tax Law (Questions About Taxes): aoc
Laura, Thanks for your question. FAFSA is only an application that makes you eligible for financial assistance for your college costs. If you receive a scholarship you cannot use those amounts to claim the AOTC. If you borrow money and pay for your...

Tax Law (Questions About Taxes): Basis on Rollover to a Roth IRA
Shirley, Thanks for your question. Tax basis is the amount of your contributions that you have paid tax one. In a typical 401(k) or traditional IRA your contributions are not taxed, so the amount of contributions are your basis. In your case, the taxable...

Tax Law (Questions About Taxes): Bequeathment
the point being more appropriately, didnt you pay tax on the income and dividends over the last few years? Just report the income on your return and figure out the net and give it to brother to settle the account. and get a waiver when you pay him. things...

Tax Law (Questions About Taxes): Bequeathment
James, Thanks for your question. On Form 8949, just show your brother s half as a negative amount on a separate line, and call it co-owner s share. Your basis in the fund is the fair market value as of date of death. Profit or loss is determined...

Tax Law (Questions About Taxes): Called Municipal Bonds
Martin, Thanks for your question. Assuming that the bonds are not tax free bonds, you can take the gain and the loss on each respective bond. If one or both is a tax free bond, you have a taxable gain but a non-deductible loss, as the case may be....

Tax Law (Questions About Taxes): capital gains
Marie, Thanks for your question. First, your basis is NOT the value upon completion, but your cost - the cost of materials, etc. You cannot include the value of your husband s labor in your cost basis. The only thing I can tell you in this regard is...

Tax Law (Questions About Taxes): Capital Gains
Tehany, Thanks for your question. Report the sale, with proceeds and cost, on Form 8949, then transfer the information to Schedule D. The points paid on refinancing are amortized over the life of the loan. For example, if it is a 30 year loan (360...

Tax Law (Questions About Taxes): carrying losses over and over on rental property
Frank, Thanks for your question. Technically, there is no limit. Obviously, continued losses year after year might prompt an IRS investigation into the validity of your deductions, but as long as you are charging rent at fair market value and can justify...

Tax Law (Questions About Taxes): Carryover
Dave, The ordering rules state that you first deduct the current year s contributions, then apply any carryover. So, in the sceanario you give you would lose the 10K that is a part of the carryforward. About the only thing you could do would be do defer...

Tax Law (Questions About Taxes): Carryover of Unused Foreign Taxes
Shone, Thanks for your question. You have correctly stated the treatment of the carryforward. However, you should be aware that if you claimed the credit directly on Form 1040 or Form 1040-NR without filing Form 1116, you cannot carry back or carry...

Tax Law (Questions About Taxes): Charitable Contributions
No, the 30% is a secondary limit. You take your allowable 30% contributions and add them to your 50% contributions to get the overall limitation. With an AGI if 100k, you could deduct the 30K capital asset plus up to 20K in cash or non capital property....

Tax Law (Questions About Taxes): charitable donations
If you transfer it to a relative, it would have to be for value. You could not transfer a $10,000 asset for something worth $1,000, for example. Any difference in the value of the exchange between related parties would be treated as a gift. An outright...

Tax Law (Questions About Taxes): claiming children
Melissa, Thanks for your question. In filing head of household, you are claiming that you provide over half the cost of keeping up a household. Your children are living with you in that household. This, along with the support that you provide the children,...

Tax Law (Questions About Taxes): Claiming my wife for 2012
The additional or reduced amounts for box 4 and 6, respectively. The $250 is a per month calculation. So, if in a given month you earned $200 you would only add $50 to the amount. If that same month your wife earned $300 you would use that number and...

Tax Law (Questions About Taxes): Commission tax
the amount withheld should not have exceeded 25% for fed tax. I would ask payroll for a detailed calculation as to how it was calculated. Also, if this was 2014 pay, you could have them adjust it or next month s as well. if it was 2013 pay, you should...

Tax Law (Questions About Taxes): dependency exemption for student
Peggy, Thanks for your question. The law provides that they must have been a full time student during some part of any five calendar months during the year. It does not state that classes must have begun, as long as she is enrolled. Hope this helps....

Tax Law (Questions About Taxes): Dependent
OJ, Thanks for your question. No, that is not correct. The $3,950 (went up this year) income limitation only applies when someone is qualifying as a dependent under the qualifying relative criteria. Since your son is a full time student under the age...

Tax Law (Questions About Taxes): Division of 1099c
Royce, Thanks for your question. As a CPA and not an attorney, I can t tell you the best legal way to divide the debt, but I can guide you through the tax part. Per the IRS, if the deed does not specify percentages of ownership, it is presumed...

Tax Law (Questions About Taxes): Error on Schedule B, Fincen Form 114, Form 114
Fincen Form 114, Form 114, Schedule B: Hi Mark, if this is your 2013 return all you need to do is simply mail in a second original return. By sending in a second original return prior to the tax due date of April 15, 2014, your replacement return will replace the efiled return. An amended return...

Tax Law (Questions About Taxes): do i have to file this ?
Jeremy, Thanks for your question. Yes, you will need to report that on Schedule C of your 1040. If the net profit shown is $400 or more you will also need to complete Schedule SE for the self-employment tax. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): How to File
R Thanks for your question. There is no tax reason to file other than jointly. Assuming that your business is s sole proprietorship, file a Schedule C with your joint return. If it is a partnership or corporation, file a separate return for the business....

Tax Law (Questions About Taxes): File jointly even if only married for 9 days in 2013?
Bernie, Thanks for your question. Your filing status is determined by your marital status as of December 31. Since you were married on that date, you can file married filing separately, or married filing jointly. Usually, it is advantageous to file...

Tax Law (Questions About Taxes): File tax returns in 3 states?
Bernie, Thanks for your question. His LA filing will be as a non-resident. He should file a GA return as a part year resident, reporting the income he earned (in LA) as a Georgia resident. He will also need to file as NY part-year resident for the...

Tax Law (Questions About Taxes): filing a personal loan
you dont need to do anything with the loan... the IRS does not care what mom did with the cash. if you have brother or sisters, you might want to document the loan so they dont accuse you of defrauding mom, but if is just you and everyone knows what she...

Tax Law (Questions About Taxes): filing status
Dear sd, You can file married jointly, however it would require taking a number of steps: see http://www.taxesforexpats.com/expat-tax-advice/foreign-spouse.html. Your question about form W4 is unclear; therefore I cannot answer. Anyway, you cannot...

Tax Law (Questions About Taxes): Final 1120-S return
Robert, Thanks for your question. Two factors involved here. First, the property should be treated as a liquidating distribution to the shareholder. The distribution will be at fair market value, so the corporation should report the distributions...

Tax Law (Questions About Taxes): Foreign income
Mo, You don t give dates, but I imagine that she will not have any federal tax liability. The proration I mentioned is gives the maximum exclusion. Assuming that she was in Japan for 355 days in 2013, her maximum exclusion would be 333/365 x 97600 =94,672....

Tax Law (Questions About Taxes): Which Form 4797, 8949 and Schedule D and 982?
I apologize. I misstated earlier. Since it is considered business property, you complete Part II of the 4797 and do not use 8949 or Schedule D. I don t know where my mind was. I think it because I need to eat lunch. You can take the entire loss as...

Tax Law (Questions About Taxes): Fraud and Lien
Lori, Thanks for your question. I would most definitely contact the office of taxpayer advocate. If fraud has been committed against him, there is no way that he should have been set up with a payment plan. In these situations, just going in to the...

Tax Law (Questions About Taxes): gift of equity
If done in the same year, the combined total appears to me that you have exceeded (albeit barely) the 56k that you can be given without requiring filing. No tax is due, but legally, form IS required to file You can t get around the annual limit by...

Tax Law (Questions About Taxes): Income taxes and quit claim
Douglas, Thanks for your question. No, the loss must be allocated based on the ownership interests. You don t mention the use made of the house. If it was a personal use residence, the loss is not deductible. If it was a rental, you must reduce...

Tax Law (Questions About Taxes): Independent Contractor Question
Jessica: Yes, your boyfriend could get into trouble. It only depends if the IRS either audits your boyfriends return or your uncle s return. You do realize that your boyfriends must file his own return and you must file your own return. You can not...

Tax Law (Questions About Taxes): how long should keep tax returns?
Lee, Thanks for your question. The IRS can audit a return for three years from the date filed or due date, whichever is later. So, for most people, that means that 2010 is still an active return until April 15 since it was due April 15, 2011. Beyond...

Tax Law (Questions About Taxes): LTD settlement benefits
Carol, Thanks for your question. The portion of the long term disability payments that came from the part the employer paid are taxable income. It would be the full amount before attorney fees. The portion that you paid is not taxable. Since some...

Tax Law (Questions About Taxes): Medicare & Supplement Insurance Premiums
I couldn t tell you a dollar amount for the threshold. I presume you are 65 or over. That means that you can only deduct medical expenses that exceed 7.5% of your adjusted gross income. For example, if your AGI (line 37 of page 1 of the 1040) is $30,000,...

Tax Law (Questions About Taxes): mortgage interest deduction
Hi Ian. I am in CT happy to do your returns... this is just chat among friends, not an engagement letter to represent you. But short story long, either of your stated options are legal and correct. and yes, you would take the remainder on schedule...

Tax Law (Questions About Taxes): mutual fund cost
you dont say what you paid for the 100 shares accumulated but yes, the purchase price plus dividends reivnested is your new total basis. call the brokerage fund and ask for an analysis/calculation of their determination. i agree that if you paid...

Tax Law (Questions About Taxes): MW507
Kay: If the MW 507 does for the Maryland Tax calculation as the W-4 does for the Federal Tax calculation. Then yes you can claim yourself as an exemption for future tax payment deducted from you gross pay at work. It would not effect your dad s 2013 tax...

Tax Law (Questions About Taxes): Payments on business loan
Scott, Thanks for your question. You can t deduct the payment amount, but you can deduct the interest portion of each payment. The principle is not an expense because you did not report the loan proceeds as income. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Personal Income Taxes
Dawn, Firefighters have a number of tax deductions not generally available to other taxpayers. The basic local telephone service costs of the first telephone line in your residence are not deductible. However, toll calls from that line are deductible...

Tax Law (Questions About Taxes): Property for rent not ready yet... lots of expenses
Richard, Thanks for your question. Since this is basically a rehab to prepare it for rental the expenses you have incurred should be capitalized, added to basis, and depreciated. Any items that might be expense can only be deducted in the year paid....

Tax Law (Questions About Taxes): Purchasing a condo for son
Paul, Thanks for your question. Actually you are somewhat behind on the exemption amounts. The annual exclusion is now $14,000. If you are married and you son is married you can utilize gift splitting with you giving him 28k and it can be treated as...

Tax Law (Questions About Taxes): Regarding IRS K1
Danny, Thanks for your question. It depends on how you are owning this house and if it is rental property or your residence. If it is your residence, there is no way a K-1 should be issued. If it is a rental, a K-1 is required if it is being held...

Tax Law (Questions About Taxes): Renting below fair rent / taxes
Margie, Thanks for your question. In a rental not-for profit, income is reported on line 21 of the 1040. The expenses (up to the amount of income reported)are deductible on Schedule A in a specified order. First, would be the otherwise deductible...

Tax Law (Questions About Taxes): Reporting Inherited home sale
Unless the trust document specifically states that all properties in the trust automatically transfer upon your death (a highly unusual provision) the property remains in the trust until actually transferred out by an act of the trustee. As long as the property...

Tax Law (Questions About Taxes): Sale of Main home with leased farm land
David, Thanks for your question. Since the land was used as rental, it must be separated from the residence. You would divide the sale price utilizing fair market value. The basis should be divided based on the purchase price - divided by FMV at the...

Tax Law (Questions About Taxes): Sale of Sch C
George, Thanks for your question. First, you cannot sell a Schedule C business, so you are merely selling the assets of the business. And, since you are selling business assets, you need to complete Form 4797. This may or may not involved the inclusion...

Tax Law (Questions About Taxes): Soc Sec Disability - Followup
No, you are not correct. The pension may have had taxes withheld, but it (along with the withheld taxes) is still reportable on your 1040. The pension is taxable income that is fully included in the calculation to determine the taxability of your social...

Tax Law (Questions About Taxes): Soc Sec Disability - taxable ?
Gary, Thanks for your question. Social security disability is subject to the same taxation rules as regular social security income. There are three levels - 85% of the benefits will be taxed, 50% of the benefits will be taxed, or none of the benefits...

Tax Law (Questions About Taxes): Special Depreciation for Rental property
Tehany, Thanks for your question. You must report your share on your return. It has to do with the at-risk rules. In other words, if he is not 100% at risk for loss of the property, he can t deduct 100% of the losses. Since you are a co-owner, he cannot...

Tax Law (Questions About Taxes): Splitting rental income
Not only will you want to depreciate but you will lose basis even if you don t take it. (Depreciation reduces basis for amount taken or allowed but not taken... If you went 5 years and then sold the equipment, you would have zero basis (and bigger gain) but...

Tax Law (Questions About Taxes): tax returns
Hi Nikki, as long as you qualify to claim your children as dependents. Yes, you can do so even if filing separately. However, if filing separately, you would be automatically disqualified for many credits that you may otherwise qualify for if filing jointly...

Tax Law (Questions About Taxes): Tax treatment of compensation for tree removed from easement
Maureen, Thanks for your question. What you actually received was a payment for damage to your property, which is not taxable. I would suggest that you enter it on line 21 of the 1040 as the software is telling you. But in addition, I would make a...

Tax Law (Questions About Taxes): taxes
Maria, Thanks for your question. There are three types of taxes that may be of concern. There is a federal estate tax, which would be paid by the estate out of the trust if there were any taxes involved. Most likely there are none, as there is a...

Tax Law (Questions About Taxes): Truck Driver - Per Diem - Overnight Only?
Melissa, Thanks for your question. You are correct. If the individual is not away from his/her tax home overnight, the per diem rates do not apply and are not deductible. Another place in the 463 states your lodging and meals if your business trip...

Tax Law (Questions About Taxes): Unreimbursed employee expense
Gary, Thanks for your question. That is correct. Compute your unreimbursed expenses and enter them on Form 2106. Carry that amount to line 21 of Schedule A. You will only be able to deduct those expenses that exceed 2% of your adjusted gross income....

Tax Law (Questions About Taxes): W-9 or W-4
w9 means then intend to pay him on 1099 (which is likely wrong). see form S8 (ssss as in sam eight). That means they wont take out tax or pay fica. nor pay unemployment for when they fire him after he complains to labor board :) son could do...

Tax Law (Questions About Taxes): W-9 or W-4
Bill: It appears that the employer wants to report your son as an independent contractor not as an employee. Its that simple, he wants to pay as little taxes as he can possibly get away with paying. You know and I know that if you son works in his store...

Tax Law (Questions About Taxes): W2
Yes You could also try to fly a plane without practice If you want, get a copy of the 1040x instructions and form from irs.gov. and see if you can manage You can also make an appointment at your local irs office If your income is low enough,...

Tax Law (Questions About Taxes): W2 Box 12a Item "P"
Dear Suruj, H&R Block did half of the job. With code P used on W2 they were supposed to file form 3903 (Moving Expenses) and exclude $4995 reported as conditional income on W2. Without form 3903 amount under code P is not substantiated as qualified...

Tax Law (Questions About Taxes): w4 allowances
Scott, Thanks for your question. At one time that was the case, the employer had to send the IRS any W-4 claiming 10 or more withholding allowances, but that requirement no longer holds. You can raise it to whatever you choose. Also make sure you are...

Tax Law (Questions About Taxes): 1120 S
In a word, no. No you can t protect the 1120 S sharholders from future and past IRS judgements by throwing it all on the full corporation because the tax liability happened in the past and we can t erase the past. Could you petition the bankruptcy...

Tax Law (Questions About Taxes): 2013 Education expenses
I was less than complete with my answer and a reader pointed that out. I said the scholarship would be attributed to your child as income and it would be taxed. However there are offsets that are available and your accounting software or accountant should...

Tax Law (Questions About Taxes): Amend prior tax year
no you can not amend to change from joint to separate but that is not necessarily a bad thing. you are both jointly and severally liable for any tax changes (that means the irs can take all the money from EITHER of you REGARDLESS of any divorce decrees....

Tax Law (Questions About Taxes): C corp info
Well, Our perspective is a little different. The phrase our office is: Deductions are not GOOD, deductions only make bad things less bad. But, many have been convinced by their accountant to load up on deductions so they can reduce their taxes....

Tax Law (Questions About Taxes): Double 1099 Form - one from a Company & another from CC Merchant Svcs provider
You can contact them. You can ask them to reissue. But, looking at accounting in general. Expenses/outgo are all listed on the books together. They are not separated by method of payment. Probably the accountant, completed all the 1099s and did so automatically....

Tax Law (Questions About Taxes): employer education assistance & taxation
Kerry: The employer can set his own rules but his rules can not exceed the IRS rules. It appears that the employer decided that the cost of your education will be included in you gross income for the year and you will pay taxes on the income. The employer...

Tax Law (Questions About Taxes): Employer won;t release w-2 forms
Russell: I personally would contact the IRS and file a complaint and also I would try to get an attorney to subpoena the W-2 thru some legal action. Its important to have the W-2 s to file your tax return. I am not an attorney and I am not giving you...

Tax Law (Questions About Taxes): filing and tax debt, back tax returns, late tax return
back tax returns, late tax return: Mike, My recommendation and the requirement from the IRS to get started with any resolution would be to file your late returns. Once the returns prepared (and filed), your situation can be assessed to determine what your options are for any outstanding...

Tax Law (Questions About Taxes): Filing taxes after incarceration and a long lapse in filing
Sue: It is my opinon that he should go to the IRS office an clear up any past due tax he may owe. Then you will know if you should marry him. If he doesn t corrected it now and you do get married to him it could cause you a lot of grief if not a tax debt...

Tax Law (Questions About Taxes): form 2555, foreign tax credit, foreign earned income exclusion
foreign tax credit, foreign earned income exclusion: Hi Kurt, income over the exclusion amount is considered taxable income. However, if you have paid any income taxes in China, it is possible that a portion of the U.S. tax may be offset by claiming the foreign tax credit. Below is an article that I have written...

Tax Law (Questions About Taxes): Grain gift/sale
Amy: The person who gave you the gift are the one who must pay the gift tax on the gift. You will not be taxed for receiving the gift. That is the federal tax. I do not know about the Iowa state tax. I have never studied Iowa state tax. Joh...

Tax Law (Questions About Taxes): Inequitable distributions from an LLC
Bad debt is something entirely different. Bad debt is a write-off of an uncollectable loan. Distributions is not a loan. I commiserate with you, that you trusted without knowing the facts. You got snookered, are you going to let that happen this year?...

Tax Law (Questions About Taxes): IRA Missed Distribution
i asked you three questions.... you need to reply to them to get a complete (and accurate) answer. First figure out the reason. Did broker screw up? That speaks to if she can get out of penalty What was the rmd amount? How much...

Tax Law (Questions About Taxes): Irrevocable Living Trust Grantor income reporting
Report the financial institution as the payer. The EIN for the trust is just an extension of the grantor, like any pass-through/Sole Proprietor (you can get a separate EIN for a SoleProp). Naming the Trust would just cycle it back to the Grantor. Not...

Tax Law (Questions About Taxes): Lawsuit settlement distribution to an estate
Anita, Thanks for your question. Since the money was paid the the estate, you should file an estate tax return Form 1041. Each beneficiary should receive a Form K-1 from the estate. You may elect to have the estate pay the tax, or the tax withholding...

Tax Law (Questions About Taxes): Lawsuit settlement to an estate
It is likely that taxes should not have been withheld, no tax is due and the lawyers screwed it up. And it (settlement) is not taxable to you and beneficiaries. A. How much? B. What for? C. How much fee did lawyers take? Make a new question and direct...

Tax Law (Questions About Taxes): LLC question.
do we need to file business tax? Yes, whether you pay any tax or not your business needs to memorialize your cash flow. Without a tax return the IRS could create their own and ignore all of your reasonable deductions. do we need a cpa? No, you need...

Tax Law (Questions About Taxes): Manufacturer or Retailer
There is no difference on rates at federal level Make 100 and uncle Obama will tax it. He does not care how you made it. Retail or manufacturing Maybe Texas has a special state rule. But that is the franchise tax. I think Less familiar with Texas...

Tax Law (Questions About Taxes): married and 2 homes to sell
Vicky: I would use the 2013 tax return to see how it would have effected your return this year an the will give you an idea how it would effect your taxes next year. Remember it the net of the sale after the original purchase price plus the selling cost...

Tax Law (Questions About Taxes): NJ tax
10/40=.25=25% credit If your tax in NJ is 100 and tax in state x is 30, you can only offset your NJ tax by 25. If your tax in state x is 20, you only get a 20 cr we sit in NJ Lesser of not actual tax paid. Essentially it is rate arbitrage. If you...

Tax Law (Questions About Taxes): repayment of wages $800
Ken: Have you contacted the company to determine which W-2 they will be correcting for the error. One of the w-2 s has an error. They must correct one or the other. Either the 2011 or the 2013. I do not believe that you should absorb the cost of your...

Tax Law (Questions About Taxes): S-Corp intracacies
The bigger questions are: Will you continue to do IT Consulting? Will you continue to do it in your existing S-Corp? Before we jump to a conclusion we should know the foundation upon which assumptions are based. The claim is: The S-Corp can provide...

Tax Law (Questions About Taxes): S corp taxes
Gerald, Thanks for your question. It appears that you sold the assets of the business but not the business itself, meaning you still own the Corporation itself. For 2012, you should report on the corporate return the sale of the assets, showing any...

Tax Law (Questions About Taxes): Sale Of Assets Of S Corp
Let s try to eliminate confusion. While the status of a S-Corp as separate from the owner, is debatable, let s just say it is separate from you the stockholder. Did the S-Corp sell its assets? or; Did you sell your stock? Those weren t your assets. Those...

Tax Law (Questions About Taxes): Schedule D
Brittany: You only report the shares you sell the per share purchase price and the per share selling price. The difference between the purchase price and the selling price is either a profit or a loss. The share you still hold is not part of the equation...

Tax Law (Questions About Taxes): Schedule E Rental Income
John: Since you rent it out and also stay in at times it is an investment property. You can file I believe a Schedual E income/loss on rental property should be used. The commission received could be lumped in with the rental sales to off set your expenses....

Tax Law (Questions About Taxes): tax filing for family trust
Before we cover the tax implications of your intended path. . . A trust is separation of the aspects of ownership. The grantor places an asset into a trust and effectively divides the ownership between separate parties, there is the beneficial interest...

Tax Law (Questions About Taxes): tax law
No income tax to yiu. He might have an issue but I would bet he has not given away more than the $1m life exemption. So no gift tax to him. But form is required (irs709). Are you married? He could give you and your spouse each 12.5 and no form is required....

Tax Law (Questions About Taxes): Texas Notice of Tax/Fee Due
Ta: Contact the Texas department that sent the notice and plead your stupidity and lack of knowledge. That is you only hope. Its not the sales but the failure to file the reporting forms as required by law. There is a consequence to the FAILURE to file....

Tax Law (Questions About Taxes): Unemployment and Foreign Income
Mr. Ashish: During the years since 2002 thru 2013 did you receive payments from your fathers company? If so was the payments as a draw once or twice a year or as a weekly draw that an officer of a corporation would receive. If its like return on investment...

Tax Law (Questions About Taxes): USA tax on foreign income investments, PFIC
PFIC: Hi Frank, did you file income tax returns for the years in question? To answer your question, at a minimum US tax would be do on the growth, but it sounds like a good possibility that as a foreign mutual fund invested in an overseas brokerage account that...

Tax Law (Questions About Taxes): Volunteer firefighter stipend
H: This is the latest information on the status of a fire fighter as determined by the IRS. Since 1991 all local, state, and federal workers of any type are employees. I know for decades that local not for profit (non profit) districts set up by local...

Tax Law (Questions About Taxes): 2013 Self Employed?
She already has a tax id number. She CAN collect more tax ID numbers, but for what reason? What were thinking a new tax id number would do for her? The 2013 tax year is done. There is nothing that will change for that year. Even if you got a new tax...

Tax Law (Questions About Taxes): Corp returns & Schd C
For the Business: It would make sense to start again nice and fresh. At least any problems from the 2012 and 2013 wouldn t directly affect the business. For him: There is no crystal ball. From your explanation I am unclear. Was all the business attributed...

Tax Law (Questions About Taxes): Green Card Renew Fee
That depends. 1. It could depend on if you accept the answer s answer is final and true. 2. It could depend on your conviction. You might claim it but when questioned you might give up and say it was wrong. 3. It could depend on who you ask. But really...

Tax Law (Questions About Taxes): inheritance
Carol, An inheritance is not subject to income tax. However, if the property inherited is sold for more than its fair market value as of the date of death, you will owe taxes on the gain (if less, you can deduct the loss). The rate would depend on your...

Tax Law (Questions About Taxes): Investment and Employment in the same organization
I imagine you were hoping for a clear cut, absolute answer that you could just check off and expect it would never have to be addressed again. But life is more complicated than that. If the loan is properly documented then it will remain a loan. From...

Tax Law (Questions About Taxes): IRS & CA-FTB, tax relief, tax resolution
tax relief, tax resolution, tax help: John: Assuming you qualify for an Offer In Compromise settlement due to your limited income, and no equity in asset value, your recommended source of assistance with this would be the IRS Low Income Tax Clinics, and for FTB the Taxpayer Rights Advocate....

Tax Law (Questions About Taxes): Misson Work
Sara: IRS Publication 526 prohibits contributions to individuals. You cannot deduct contributions to specific individuals, including the following. -- Contributions to individuals who are needy or worthy. This includes contributions to a qualified organization...

Tax Law (Questions About Taxes): Offsetting Capital Gains
Capital gains cannot be offset by business losses. I would reconsider. Buying into a less than stellar property, just to postpone the cap gains tax, may not be prudent. You are only postponing the tax. What happens next time? what happens when you...

Tax Law (Questions About Taxes): when to pay taxes
That is one specific difference between cash accounting or accrual accounting. In an accrual based accounting, you would have declared the income at the time you invoiced. But I doubt you are on an accrual accounting method. In a cash accounting, you book...

Tax Law (Questions About Taxes): Real Estate S-Corp/LLC
We can only make these decisions in the light of the purpose for the change. They were a C-Corp. Did anyone ask why they were a C-Corp? What purpose did the client imagine the C-corp would fulfill? You wanted to change it to an S-Corp? Why? What benefit...

Tax Law (Questions About Taxes): S-corp expense deduction
Item 5: the 2553 form is the Sub-S election. If that has not been filed it is not an S-Corp. Not that that directly impinges on the question, but it does have a big impact on the tax effect going forward. From my Perspective, that would be a good thing....

Tax Law (Questions About Taxes): Schedule C
Ms. Kreisel: If I understand the question. Can a sole proprietor rent tools from himself? The answer is no. The sole proprietor can depreciate the tools he place into service to perform his work but he/she can not rent it from him/her self. Joh...

Tax Law (Questions About Taxes): Sole Proprietor
Hello first time filer, and welcome to world of business and commerce. You are getting a crash course that many may never have. If you had been an employee growing up, you probably wouldn t have learned exactly how taxes affected you, because withholding...

Tax Law (Questions About Taxes): Withholdings
Why do you want more back at the end of the year? Since the only thing you get back is any excess that you paid in during the year? That is absolute drivel from your accountants. Now, some people don t have the self control to balance up their account with...

Tax Law (Questions About Taxes): Capital gain in non profit
Les, Thanks for your question. The sale is not subject to UBT, as they are not in the business of selling vehicles and the vehicle is part of their exempt purpose. Incidentally, it is not a capital gain. Hope this helps. John Stancil, CPA...

Tax Law (Questions About Taxes): Capital Gains on Primary Residences, sale of home, residence gain exclusion
sale of home, residence gain exclusion, sale of foreign home: Hi Marilyn, as a US citizen, you are a subject to taxation on worldwide income (including the sale of your home in the UK). The US is one of only two countries worldwide with a citizen-based tax regime in that US citizens are taxed on their worldwide income...

Tax Law (Questions About Taxes): contributing to SEP
No, but don t take it too hard, That type of retirement planning provides no net benefit. All calculations to show a perceived benefit from traditional retirement planning must assume a significantly lower income at retirement. The tax deferred retirement...

Tax Law (Questions About Taxes): Correlation between # of employees and Corporate Income
Each program creates it s own effect and they will be different. There is no correlation between number of employees and taxable profit, big or small. Large employee pools or single person businesses, vacillate in profitability. Some may go from large...

Tax Law (Questions About Taxes): Cost or other basis
Steve, Thanks for your question. Your cost basis includes your original purchase price of the shares plus the purchase price of the addition shares purchased with the dividends. #2 above. You paid taxes on the dividends, so you will only pay tax now...

Tax Law (Questions About Taxes): COUPONS FORM IT-2105
Ken, Thanks for your question. You aren t being penalized for anything. Based on your 2013 taxes, the program anticipates you need to make estimated payments for 2014. They are merely taxes paid in advance and if you don t anticipate owing, the payments...

Tax Law (Questions About Taxes): What is this CPA doing?
If you were hoping that I could give you a credible and useful answer to your question, then I am sorry I cannot. I cannot, in just a few sentenced, explain the entirety of the problems that exist. Your CPA is too busy, and when they are going to be...

Tax Law (Questions About Taxes): Home Office Deduction - New House
Since it is a sole proprietorship, you can t rent it to yourself. Just deduct the costs associated with the house on schedule C as though it was owned by the business. Keep very good documentation regarding its 100% business use. For example, you can t sleep...

Tax Law (Questions About Taxes): LLC tax reporting via Turbo Tax
TT can create multiple iterations of the forms necessary to record multiple businesses. But. . . I d like to take your question a little further, because there is more to see if we change our vantage point. You are retired. On a pension or just Social...

Tax Law (Questions About Taxes): personal income taxes
Eliza, Thanks for your question. Unfortunately, you can t defer the taxes unless you place the money in a qualified retirement plan. As an invididual, this would most likely be an IRA, but the limits are only $6,500 per year. The other alternative...

Tax Law (Questions About Taxes): Reporting wrongful classification of employee/independent contractor
Kelli, Thanks for your question. If you are the employee involved, you can complete a Form SS-8 and submit it to the IRS for a determination of your status. Otherwise, you would complete Form 3949-A and submit it to the IRS. Addresses for both forms...

Tax Law (Questions About Taxes): SEP
I am pretty sure not if you did not extend your return. Did you? April 15 on the button you should have been able to make a deposit. Who refused it? Can you document that? If you can document refusal, you could make argument it was made in principle...

Tax Law (Questions About Taxes): tax
Since this is an LLC, it is disregarded for tax purposes. So the four are just partners, and WE four LLC files a general partnership return 1065. The 1065 attributes all the profits (and much of the expenses to the individuals for them to attempt to deduct...

Tax Law (Questions About Taxes): Tax filing when Spouse is resident in different state?
Joe, Thanks for your question. Yes, you will be able to file a joint federal return. The only complication will be in filing state returns. In the first year, you would have to file as a part-year resident in each state while your wife would file as...

Tax Law (Questions About Taxes): truck driver
Hi James, it would be impossible to say if your friend had an accurate return and non-fraudulent return prepared. However, if the tax place is backed up with truckers all getting large refunds, it is likely too good to be true. Often, the IRS catches up with...

Tax Law (Questions About Taxes): 2008 tax issues
You need to hire a cpa with experience in this area. If you can prove 2008 was filed before 3 years late (you don t say when it was actually filed) then they do owe you a refund from 2008 if a refund was due. If yiu just now filed your 2008 you are not...

Tax Law (Questions About Taxes): 401k inheritance
Carol, Thanks for your question. You will have to pay Federal income tax on withdrawals from the 401(k). State laws vary, in some states, it would not be taxable. Pennsylvania does subject withdrawals to taxation. If you are inheriting the 401(k)...

Tax Law (Questions About Taxes): capital gains deductibility of condo reserves?
Margaret, Thanks for your question. The monthly fees that are for capital improvements and not maintenance can be added to the cost basis of your unit, thus reducing your gain. The same for any assessments. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Per Diem
John, Thanks for your question. The amounts spent on a client or potential client are deductible in addition to the per diem amounts. However, only 50% would be deductible as a miscellaneous itemized deduction on Schedule A. The deductible amount is...

Tax Law (Questions About Taxes): Individual purchasing property for a nonprofit
Michelle, Thanks for your question. Sort of. If he donates the building to you within 12 months of purchasing it, he will get a charitable deduction for the fair market value or his basis, whichever is less. If he holds it for more than 12 months,...

Tax Law (Questions About Taxes): Moving deduction
Susan, Thanks for your question. Yes, you can take the deduction for the additional moving expenses. Be certain and keep your receipts, as it is possible the IRS will make an inquiry regarding the deduction. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Re: Receiving equities as a gift
Howard, Thanks for your question. As you have worded it,neither is the best option. The only tax implications are income tax. Under the first option, he is transferring the securities to you prior to death, making it a gift. Your cost basis would...

Tax Law (Questions About Taxes): Roth IRA Conversion
generally, you could convert close to or at tax free if you have no income -- but for the fact that you have 42k, which will cause you to be taxed on that full amount (depending upon deductions and credits - including possible college credits) you could convert...

Tax Law (Questions About Taxes): Roth IRA Conversion
Christian, Thanks for your question. I presume you are single since you did not mention it. Since I do not have full information and this is a volunteer forum, I cannot calculate your tax liability as stated in my instructions. If you rolled it...

Tax Law (Questions About Taxes): S-Corp Asset Sale
Jeff, Thanks for your question. You state that it is an asset sale. If this is truly the case, he will continue to own 100% of the stock of the company indefinitely. He s not selling the stock, he is selling the assets. He will continue to file...

Tax Law (Questions About Taxes): Tax Filing, tax preparer, tax return
tax preparer, tax return, amend taxes: First, I am sorry and appalled to hear of such an experience with a tax professional. Standards that all tax preparers must adhere to or lose their license prohibit conduct such as this. As for what to do about it, you should secure the services of a...

Tax Law (Questions About Taxes): Tax filings for a Booster Club that is not tax exempt
Randi, Thanks for your question. I assume that the organization is not a corporation. In that case your organization is considered an unincorporated association. Under IRS rules and regulations, it would be considered a partnership for tax purposes...

Tax Law (Questions About Taxes): tax on gift of equity
Dan, Thanks for your question. There are a couple of issues here, but there should not be any tax effects. It gets a little complex, however. In regard to the 1099, just show that amount as income and deduct your cost as an expense or sale of inventory....

Tax Law (Questions About Taxes): Taxing of Subsistence
Sean, Thanks for your question. The rule states that if you are on an assignment that is of indefinite duration or is expected to last more than 12 months, any travel expenses are not deductible. Likewise, any payment for such expenses from your employer...

Tax Law (Questions About Taxes): 1099
Francis, Thanks for your question. Probably not too bad. The penalty against the company varies from $30 to $100 per form ($500,000 maximum per year), depending on how long past the deadline the company issues the form. If a company intentionally disregards...

Tax Law (Questions About Taxes): Charitable Contributions - Mutual Funds
Dave, Thanks for your question. In donating the mutual fund shares to a qualified charitable organization, you can take a deduction for the fair market value of the contribution, but you are limited to 30% of your AGI, as it is capital gain property....

Tax Law (Questions About Taxes): charitable donations - can no longer itemize
THeo, Thanks for your question. You must deduct the charitable contributions in the year the donation was made. However, many people in your situation bunch their contributions. Give nothing in one year, then double the next. To facilitate that,...

Tax Law (Questions About Taxes): Church giving pastor a van can it be considered income
If the church gives it to an employee or the family member of an employee,it is taxable income. I realize you may not consider the pastor an employee, but under IRS rules he is performing services for the church, so the van would be taxable compensation....

Tax Law (Questions About Taxes): Estate Taxes
Robert, Thanks for your question. Your cost basis is the fair market value as of date of death. The tax can be paid by the estate or the beneficiaries. It results in less tax if the beneficiaries pay the tax. Hope this helps. John Stancil, CPA...

Tax Law (Questions About Taxes): IRA/Roth IRA distributions
Jeff, Thanks for your question. 1. That is correct. 2. That is also correct, assuming that you only withdraw contributions. 3. If you withdraw more than $10,000, you will not pay tax on the withdrawal up to the amount of your contributions. And the...

Tax Law (Questions About Taxes): Living in SC but working in NC
Beth, Thanks for your question. Not really a big deal, once you get the hang of it. You will have to file in SC, reporting all your income, regardless of in which state it originated. So, if you you work in NC but live in SC, that income is taxable...

Tax Law (Questions About Taxes): Nanny taxes
Stephen, Thanks for your question. 1. You should report her earnings and related expenses on Schedule C. You will calculate the self-employment taxes on Schedule SE. 2. Determine her estimated profit for the quarter and figure the amount of tax...

Tax Law (Questions About Taxes): Selling a rental home
Linda, Thanks for your question. It depends on its use at the time it was sold. If it was still a rental property, use Form 4797. You would then transfer the gain to Form 8949/Schedule D. Don t forget to use the adjusted basis in determining the...

Tax Law (Questions About Taxes): Substantiating a non-cash charitable donation
Andrew, Thanks for your question. The way it works in practice is that you attach a detailed listing to the receipt provided by the organization - 12 men s dress shirts, 3 handbags, etc. you don t need to include the receipt or listing with your return,...

Tax Law (Questions About Taxes): Taxes for Sole Proprietor
Tina, Thanks for your question. As a sole proprietor you would file a Schedule C with your 1040. If you have a home office, use Form 8829 to calculate that deduction; depreciation goes on Form 4562. All of these flow into the Schedule C. You would also...

Tax Law (Questions About Taxes): Who to 1099?
Employee who gets paid still receives a paycheck no? Let s say. Two employees - onr used all pto and one still has Vaca Normally one with no pto could take sept one off with no pay and employee with pto takes off sept to and still gets paid one day pay....

Tax Law (Questions About Taxes): CCarryover Strategy and Tax Consequences
Dave, Thanks for your question. Couple of issues. If the contribution of the stock occurs after your death, it would not be deductible on your 1040, but on the Estate return or the Estate income Tax return. You cannot will the property to your daughter...

Tax Law (Questions About Taxes): CHurch helping others
Gary, Thanks for your question. The money is considered a gift, and therefore the church does not have any reporting responsibilities - no 1099 or other document. It is not taxable income to the recipients. However, I would add that there is one...

Tax Law (Questions About Taxes): Condo Assoc and Forms 1099
Lisa, Thanks for your question. First, you do not have to issue a 1099 for services performed if the one providing the services is a business. In other words, if I have John s Painting Co. and you hire me to paint the exterior of the condo units, you...

Tax Law (Questions About Taxes): Cost basis
sorry. i have been busy and forgot about this.. did you file ? (if you need, file an amended to fix if you dont do the following) you can deduct all current expenses in year incurred. the only thing you cant take is depreciation until the property is _available_...

Tax Law (Questions About Taxes): deferred salary c corp
Depends in part on how structured. But generally yiu do pay fica on money going in and no w2 wages till it comes out Usually company gets deduction when employee picks up income. But it is possible to have different matching periods (employer deduction...

Tax Law (Questions About Taxes): early withrawal from roth IRA
Jordan, Thanks for your question. After the end of the year, you will get some 1099-R forms from the trustee for your IRA accounts. Simply input the information from those forms and it should handle everything correctly. You may have to manually make...

Tax Law (Questions About Taxes): Tax advice on sale of second home
Tax Law (Questions About Taxes): Tax advice on sale of second home

Tax Law (Questions About Taxes): Gift tax form 709
If you make the gift in 2014, the return for 2014 musts be filed between January 1, and April 15, 2015. Filing a gift tax return would only create an audit situation for the gift tax return. In a situation where no tax was due, there is very little likelihood...

Tax Law (Questions About Taxes): Health Ins for Partners
Dear Kelly, Payment for health insurance premium is not considered guaranteed payment. It is reported as other deductions on Sch K-1 under code M. These amounts can be deducted on line 29 of form 1040 even if you do not itemize your deductions. Each...

Tax Law (Questions About Taxes): Hiring a lawyer when I sell my house
Richard, Thanks for your question. A good CPA or Enrolled Agent should be able to handle your tax situation, regardless of where they are located. Since you are a resident of VA and the house is located in NY, you will have to report the sale as a NY...

Tax Law (Questions About Taxes): Loan repayment taxation
Frances, Thanks for your question. I assume you are selling the house to your friend for your cost. If this is the case, the only income your would have to report and pay taxes on is the interest income your friend pay you. You should file a lien on...

Tax Law (Questions About Taxes): Married, but living in separate states
Jennifer, Assuming that he has not left you with no intent to live with you, you may file a joint return. You also have the option to file married, separate, but this filing status normally results in a higher joint tax liability. If he has not been...

Tax Law (Questions About Taxes): Non-deductible IRA/Form 8606
Kate, Thanks for your question. 1. You could convert the amount to a Roth. I, personally, am a big fan of Roth accounts, so it is something I would definitely recommend. The income limitations were removed. Before 2010, there was a $100,000 income...

Tax Law (Questions About Taxes): Roth Withdrawls for Education Tax Treatment
Depends if new or existing (longer than 5 years) ira. Also. If that is only value in accounta. Pretty sure yiu can also revert it before return is filed. Not positive as this is not material and not my area of specialty.check with your broker or visit/call...

Tax Law (Questions About Taxes): solar power tax credit
Mike, Thanks for your question. As you probably know, the credit is 30% of the cost of the residential solar panel system without a dollar limitation. At this point, it is certain that you can carry an remaining credit to 2016. However, the IRS has...

Tax Law (Questions About Taxes): tax
hi sorry for delay. send me a new inquiry with the PRIVATE box marked. i will send you a name or two. I used to work in Frederick a lot and have a good friend in Potomac (even though I live in CT). I am also willing (able) to work remotely.. ...

Tax Law (Questions About Taxes): Tax advice on sale of second home
You don t believe me fo you??? Have you Google barker yet? The reason I told you to look up a google result is that people who own property in New York are deemed to be NEW YORK RESIDENTS and MUST PAY NEW YORK RESIDENT TAX - EVEN IF THEY LIVE IN...

Tax Law (Questions About Taxes): 60 day rule regarding IRA withdrawal
yes, you have it right. you can take out x $ on day one and as long as you put x dollars back into an IRA (not necessarily the same ira) you do not pay tax on the distribution - even if that 60 day window crosses over a calendar year (withdraw on dec one...

Tax Law (Questions About Taxes): C Corporation non-filing
Hi Bill, I would recommend filing both federal and state returns for your C corp as the statute of limitations remains opened indefinitely and it s a possibility that you can be assessed tax on the gross revenue of your company (without factoring in expenses)....

Tax Law (Questions About Taxes): Capital gains taxes
Alex, Thanks for your question. You would owe taxes on the gain to the extent your marginal tax bracket exceeded 15%. For a single person, the 15% bracket starts at 36,900 of taxable income. After the standard deduction and personal exemption, that...

Tax Law (Questions About Taxes): capital loss rollover question
Mike, Thanks for your question. Each year you can apply the loss carryforward to any capital gains in that year, plus $3,000. The $3,000 should be applied even if you can t use it in that particular year. This will carryforward until used up and expires...

Tax Law (Questions About Taxes): Church
Peggy, Thanks for your question. If you are looking at IRS Publication 1828, you probably see the IRS list of 14 factors that are characteristic of a church, distinct legal existence and ordained clergy being two of these factors. A church does not...

Tax Law (Questions About Taxes): depreciation
Sennie, Thanks for your question. It would be more simple if you depreciated then individually. That way, if an asset was retired, lost, or whatever before the end of its depreciable life, you would have much less effort trying to determine the book...

Tax Law (Questions About Taxes): federal tax form schedule C
i am in ct... so we are not far. that is good. :) but short story long... you can deduct all expenses related to what you are doing. but if you buy (or make) equipment, it has to be depreciated over time (usually 3,5, or 7 years). you can deduct all...

Tax Law (Questions About Taxes): Moving Deduction
Jerry, Thanks for your question. The shipping crate, as well as the cost of shipping your dog, is deductible. However, the rabies titer is not deductible. About 1998, the IRS severely restricted what s is deductible. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): net capital loss
no.. that is the deal with IRA... you get to avoid cap gain and income until withdrawl, but you dont get to realize cap losses... few special rules on stuff like employer stock held (Net unrealized appreciation) could get you to at least even basis not...

Tax Law (Questions About Taxes): Personal vs Business miles reporting
one easy way if you are not an officer or other owner or partner.. is the commuting method - you can just take a fixed number per day. the fixed amount is $3. per day this is the least expensive way 250 days (5 days a week x 50 weeks) x $3 is...

Tax Law (Questions About Taxes): Regarding income tax
Vijay, Thanks for your question. Upon your death, whoever inherits the mutual funds will get a stepped- up basis of fair market value as of the date of death. The loss carry forward terminates on your death. The capital gains will also disappear with...

Tax Law (Questions About Taxes): Rental Property Capitial Gain
reasonably complicated calculation, but you could possibly cleanse all the gains if you live in a property 2 of the last five as your principal residence (code sec 121) but the basis and such carries over with some of the rental taint.. now (used to be you...

Tax Law (Questions About Taxes): Reporting Tax on Stocks Purchase/Sales
Shelley, Thanks for your question. Yes, that is correct. However, the IRS will now allow you to attach the broker s conforming statement to your return and enter the summary amounts on Form 8949, transferred to Schedule D. If you are e-filing, your...

Tax Law (Questions About Taxes): stock sales
Mona, Thanks for your question. Technically, you should have taken the losses when the stocks became worthless. If that happened in the last three years (which does not appear to be the case) you can file an amended return for that year. If you did...

Tax Law (Questions About Taxes): Tax advice
Lawrence, Thanks for your question. Judgments and awards for physical injury are not taxable, you do not need to report them on your return at all. However, you cannot take a deduction for any of the medical expenses that you paid. Hope this helps....

Tax Law (Questions About Taxes): Tutoring Business and 1099
You are deallng with a situation in which practice and the law differ. You are correct, the law says you must issue him a 1099, but very few people do, in this situation. If the LLC is not taxed as a corporation, the law states you should issue a 1099....

Tax Law (Questions About Taxes): My 22 years old daughter is..., irs filing, dependency exemption
irs filing, dependency exemption, personal exemption: Nadia, Thanks for your question. If she claims her personal exemption, you cannot take a credit for her education expenses. However, she may take the credit for the expenses you paid. May I suggest an alternative. If you claim the dependency exemption...

Tax Law (Questions About Taxes): 2nd Apartment - Home office, unincorporated business tax, apartments in new york
unincorporated business tax, apartments in new york, personal assets: Robert it could be considered a second residence but if you do remove personal items and use the CO-op FOR BUSINESS ONLY YOU ARE OK with the expenses( no need for self serving leases) In NYC you would be subject to the unincorporated business tax any way...

Tax Law (Questions About Taxes): 2nd Home, insurance repairs, maintenance utilities
insurance repairs, maintenance utilities, real estate taxes: Hi Bill, Yes you can deduct mortgage interest on 2 homes (but not 3), if your acquisition debt is not more than $1,000,000. If you rent the home you can still deduct mortgage interest but you report it on Schedule E rather than Schedule A. Schedule...

Tax Law (Questions About Taxes): 401 account withdrawal, individual tax rates, ira account
individual tax rates, ira account, 401 k plan: Barry, I d love to answer your question, but it s impossible to answer without knowing more details. Taxes are computed on graduated rates based on your filing status and taxable income after deductions and exemptions. Are you single or married? How...

Tax Law (Questions About Taxes): 401 Hardship Withdraw, withdrawels, hardship withdrawal
withdrawels, hardship withdrawal, 401k plans: You will be taxed on the full amount of any withdrawn funds PLUS you will be subject to an early withdrawel penalty of 10% additional tax. An exception to the penalty for your first home purchase is for IRA withdrawels of up to 10000 only and 401K plans do...

Tax Law (Questions About Taxes): 401 Ks what to do, income tax purposes, tax withholding
income tax purposes, tax withholding, lost in space: Hi, The 20% is not a penalty. Rather it is the percentage required to be withheld for income tax purposes. When you file your return it is treated just the same as withholding from your wages. Your income tax is determined by your total income and deductions...

Tax Law (Questions About Taxes): 401 (k) contribution, school loan, amount of money
school loan, amount of money, paycheck: Erika, there is no real number and it all varies by taxpayer. All I can tell you is if your employer matches, you really should contribute the maximum they match. For example, they match 50% of your first 6% you put it, you would be foolish to not put...

Tax Law (Questions About Taxes): 401(k) in divorce, divorce decree, settlement agreement
divorce decree, settlement agreement, 401 k: Hi, If the 401(k) is not included in the divorce decree your ex is not entitled to any of it. However she could go to court to ask for a share. I don t know whether or not the court would award her half of it. If I were you I would try to make an agreement...

Tax Law (Questions About Taxes): 401(k) to IRA rollover with after-tax portion, rollover ira, ira account
rollover ira, ira account, distribution checks: You can cash the after tax check and do what you want with it, tax free. If you roll it into an IRA, then later into a ROTH, you will pay tax on the conversion as you must take ALL your IRA account balances into play when you do a conversion. Helen, EA...

Tax Law (Questions About Taxes): 401(k) rollover, medical expenditures, traditional ira
medical expenditures, traditional ira, money to start a business: Yana, Thanks for your question. Yes, you will be subject to the 10% penalty. Exceptions to the penalty are for payment of college expenses, costs associated with a first time home purchase, or certain medical expenditures. These are exceptions to the...

Tax Law (Questions About Taxes): 401(k) withdrawal, part II, credit card debt, honest answer
credit card debt, honest answer, borrowing money: Brian, up to 50% can easily be lost if the money throws you into a higher bracket and especially if it causes phase-outs of credits, exemptions, etc. Only you know the answer to what this will cost you. You need to do a dummy return and see what the bottom...

Tax Law (Questions About Taxes): 401(k) withdrawals and taxes, mass laws, smart idea
mass laws, smart idea, lump sum: If you were older than 55 when you left that employer, federally you will just pay tax on it. If you were not or are not 59.5 now, you can stand to lose up to 50% of your money in taxes and penalty. I don t know your bracket, but this money is added to your...

Tax Law (Questions About Taxes): Are 401(k) withdrawls subject to state income taxes, state income taxes, john thanks
state income taxes, john thanks, withdrawls: John, Thanks for your question. It depends on what state you reside in. States treat this differently. You would be taxed in the state of residence, rather than where you worked. I do not know the laws of Wisconsin, so I can t help you there. ...

Tax Law (Questions About Taxes): 401(k), form 5329, tax consequences
form 5329, tax consequences, paying taxes: He will get a 1099-R showing the early distribution. Normally only 20% is withheld, so the 40% throws me a little. Anyway, the total distribution will go on his return, the withholding will be added to any other withholding and he will use the rules from...

Tax Law (Questions About Taxes): 401 Loan Deferment with Job Change, early withdrawal penalty, w9 form
early withdrawal penalty, w9 form, loan deferment: Yes In essence it is all your reponsibility If you want the Company to pay for you make sure you tell them you want the 20% withheld PS the penalty is a lot of money can you figure out a way to pay back after all in the end if you pay back you save taxes...

Tax Law (Questions About Taxes): 401 Loan/withdraw and taxes, tax bite, downpayment
tax bite, downpayment, current position: Hi, The early distribution would be added to your other income and taxed at whatever rate your total income less deductions and exemptions dictates. But in adddition to income tax there is a 10% penalty for early withdrawal. Also your state may tax the...

Tax Law (Questions About Taxes): 401 loan, payments, and death, ira account, financial adviser
ira account, financial adviser, 1099r: Marcia, Thanks for your question. Sorry, but an unpaid loan from a qualified retirement plan such as a 401(k)is considered a distribution. This situation occurs when an employee leaves the company, or dies. Hope this helps, sorry I can t give you...

Tax Law (Questions About Taxes): 401K age 57 withdrawal, irs levy, alternate payee
irs levy, alternate payee, ira plan: Mark, Thanks for your question. The execptions to paying the penalty for early withdrawal from a 401k plan are for reasons attributable to disability, for allowable medical expenses, to an alternate payee under a qualified domestic relations order, or...

Tax Law (Questions About Taxes): 401K Cash out, stancil, state taxes
stancil, state taxes, taxable income: Martin, Thanks for your question. You will pay a penalty of 10 percent of the amount withdrawn in addition to the income taxes. The Federal tax would be between 10 and 35% depending on your total taxable income. You would also have state taxes if your...

Tax Law (Questions About Taxes): 401K cash out, high yield savings account, high yield savings
high yield savings account, high yield savings, ira contribution: Lisa, Thanks for your question. In theory, that is a good plan. You have researched the issue and come up with the correct answers. However, I am always reluctant to advise people to tap into their retirement plans prematurely. Frequently, I find...

Tax Law (Questions About Taxes): 401K cash out, cash flow situation, income tax liability
cash flow situation, income tax liability, full time work: Ray, Thanks for your question. If you withdrew the funds, you would be subject to a penalty of 10% of the amount withdrawn in addition to income taxes. Federal income taxes would vary depending on your total income, but would most likely be in the 15-25%...

Tax Law (Questions About Taxes): 401K cashout, credit cards debt, 401k plan
credit cards debt, 401k plan, credit card debt: No you cannot take a loan against your IRA. Since you only have 10K in the plan, and $2,000 - $5,000 will be taken up in taxes, it will not eliminate your credit card debt. My recommendation is not to cash it out - the tax cost is just too high. John...

Tax Law (Questions About Taxes): 401K contribution, salary employees, 401k plan
salary employees, 401k plan, excess contribution: Hai, Thanks for your question. In all probability, your employer will account for this in your W-2 for 2004. However, I would check with your HR department to determine if this is the case. If this is not what is to occur, I would ask them how...

Tax Law (Questions About Taxes): 401K Distribution, alternate payee, federal income tax
alternate payee, federal income tax, 1099r: Hi, First of all you will get a 1099R which shows the total distribution and the Federal Tax withheld but it will be a while before that comes. On lines 15a and 15b you put $10,000 (the total taxable distribution). On line 64 you put $2,000 (the Federal...

Tax Law (Questions About Taxes): 401K disbursement, hardship withdrawals, irs code
hardship withdrawals, irs code, hardship withdrawal: Christine, The IRS code that governs 401k plans provides for hardship withdrawals only if: (1) the withdrawal is due to an immediate and heavy financial need; (2) the withdrawal must be necessary to satisfy that need (i.e. you have no other funds or way...

Tax Law (Questions About Taxes): 401K distribution, retirement product, financial advice
retirement product, financial advice, income tax: Hi Eddie, I m not qualified to give you financial advice but I can tell you about the tax treatment if you take a distribution from your 401(k). First you will pay ordinary income tax on the distribution and in addition you will pay a 10% penalty for...

Tax Law (Questions About Taxes): 401K distribution, irs law, dear frank
irs law, dear frank, tax planner: Dear Frank, As the IRS law stands right now 2004, transferring your 401k to an annuity and not another actual retirement plan like an IRA, will cause you to may tax on the entire amount you withdraw from your 401k... But who knows what will happen to...

Tax Law (Questions About Taxes): 401K Early Withdrawl Exceptions - 1st time home buyer, 401k early withdrawl, first time homebuyer
401k early withdrawl, first time homebuyer, time home buyer: First of all, unless this is an IRA, there is no out on the penalty. You cannot take the money out of a 401K and exclude the penalty. Since your wife is a first time homebuyer, you can exclude (FROM PENALTY ONLY) up to 10K. I don t know how old your son...

Tax Law (Questions About Taxes): 401K early withdrawal penalty, form 1099r, early withdrawal penalty
form 1099r, early withdrawal penalty, tax time: Hi Deb, The 20% withheld from your 401(k) distribution will be treated as withholding just as the taxes withheld from your wages. There is no form you need to complete. The 20% isn t a penalty. Next year you ll receive a Form 1099R which will show the...

Tax Law (Questions About Taxes): 401K early withdrawl for a new home, time home buyer, first time home buyer
time home buyer, first time home buyer, turbo tax: Jennifer You can twithdraw funds to purchase a home however if your plan allows it you could have borrowed against your 401k talk to your administrator if the plan allows that Unfourtunately i think you are stuck with the tax and penalty sorry!! ...

Tax Law (Questions About Taxes): 401K hardship withdrawal and penalties, private mortgage insurance, pmi requirement
private mortgage insurance, pmi requirement, tax monies: Andy, Unfortunately, there are no exceptions to the 10% penalty or the income tax when taking a hardship withdrawal from your 401(k) to purchase a primary residence. It probably won t matter which state you are residing in when the withdrawal occurs. ...

Tax Law (Questions About Taxes): 401K -> IRA rollover (Disablility), long term disability, ira rollover
long term disability, ira rollover, stancil: David, Thanks for your question. You can avoid the 10% penalty, as you are disabled and can make withdrawals not subject to the penalty. Just be sure the trustee knows that and codes your 1099 to indicate a withdrawal with a valid exception. You...

Tax Law (Questions About Taxes): 401K-PENSION DISTRIBUTION, tax deductible ira, higher tax bracket
tax deductible ira, higher tax bracket, retirement distribution: Hi, I, too, am over 60 and always looking for a way to avoid the higher tax bracket that adding a retirement distribution to other income creates. If you have earned income you might look at a tax deductible IRA contribution. Or if some of your other...

Tax Law (Questions About Taxes): 401K Restriction, legal recourse, retirement fund
legal recourse, retirement fund, true tax: I believe they meant to say that you would be subject to additional penalties if you withdraw for any reason other than those listed. You really need to consider if this withdrawl is a good idea, it will cost you dearly; in the short term, you ll pay huge...

Tax Law (Questions About Taxes): 401K Rollover - State Withholding, direct rollover, stancil
direct rollover, stancil, tax contributions: Andrew, Thanks for your question. I am not familiar with the state tax system in MA, but any state I know anything about follows the federal rules on this. If there is a concern, you can check with the financial institution to which you are rolling...

Tax Law (Questions About Taxes): 401K retirement disbursement, taxable portion, jane jane
taxable portion, jane jane, stancil: Jane, Thanks for your question. Most likely, yes. Normally funds are placed into a 401(k) or similar qualified retirement plan with dollars that are not taxed. If this is the case in your situation, the entire amount of your disbursements will be taxable....

Tax Law (Questions About Taxes): 401K roll over, ira withdrawal, time home buyer
ira withdrawal, time home buyer, traditional ira: Wendy, Thanks for your question. There are two routes you may take. First, you can leave the funds in a 401(k). By doing so, this permits you to take out a loan against the amount in the fund. However, most companies have a policy that prohibits loans...

Tax Law (Questions About Taxes): 401K rollover to LLC, state income taxes, opening a restaurant
state income taxes, opening a restaurant, stancil: Buck, Thanks for your question. Yes, it is possible. However, you will have to pay income tax at your regular rate, plus a penalty of 10% of the amount withdrawn. Depending on the state in which you live, there may also be state income taxes on the...

Tax Law (Questions About Taxes): 401K tax and penalty, retirement money, business venture
retirement money, business venture, tax bracket: Actually, if you are 55 and separated from service, you can draw your 401K without penalty. Penalty is 10% and taxes are whatever your tax bracket will be with the money added in. Then you also have state issues and you may lose up to 50% of your retirement...

Tax Law (Questions About Taxes): 401K taxation on withdrawals, home mortgage, withdrawals
home mortgage, withdrawals, tax rate: There really is no best way. Any money taken out of your 401K (unless you have previously taxed money in it) will be taxed at your income rate or greater - depending how much money you are taking out and what your tax rate is now. And if you are under 59.5...

Tax Law (Questions About Taxes): 401K taxes, installment agreement, stancil
installment agreement, stancil, unpaid balance: Mike, Sorry, but those taxes and penalties are due. You might be able to work out an installment agreement with the IRS, but they charge $105 to enter into the agreement and interest on the unpaid balance. Above all, though go ahead and file. John...

Tax Law (Questions About Taxes): 401K WITHDRAWAL, early withdrawal penalty, tax man
early withdrawal penalty, tax man, 24 years: Dear Leonard, The quit your job is a COMPANY rule and not a federal law.... You WILL have to claim this $150,000.00 as INCOME and early withdrawal penalty if under the age of 59 1/2 is 10% of that figure which would be $15,000.00 PLUS the income taxes...

Tax Law (Questions About Taxes): 401K WITHDRAWL, worst case scenario, federal income taxes
worst case scenario, federal income taxes, state income tax: Leonard, Thanks for your question. The 10% penalty is correct. As for the other, it is hard to say. It depends on your filing status and any dependents and itemized deductions you may have plus other income. Also, the progressive tax rates make it...

Tax Law (Questions About Taxes): 401K Withdrawal to start a business, sole proprietorship, business start up costs
sole proprietorship, business start up costs, startup expenses: Tom, Thanks for your question. Start up costs must be amortized over a period of 15 years. You can only take a current deduction for the first $5,000 of start up costs, and then only when the total is under $50,000. Also, a loan is not a tax deduction....

Tax Law (Questions About Taxes): 401K Withdrawal, income tax return, stancil
income tax return, stancil, irs: Tami, Thanks for your question. There is a place on the 1040 to do this, but it would need to be on the 2004 return. Since they have sent you a notice it would consuse the issue endlessly if you put it on your return. Enclose a copy of the notice with...

Tax Law (Questions About Taxes): 401K withdrawal, 401k withdrawals, ira owner
401k withdrawals, ira owner, charitable gifts: Phil, Thanks for your question. Your information is not quite correct. There is a limited opportunity (2006 and 2007) during which you may make a distribution from your IRA to a charitable organization. The distribution must be a direct transfer to...

Tax Law (Questions About Taxes): 401K, staying at home, tax implications
staying at home, tax implications, tax time: Hi, The 10% penalty isn t taken off the top by the fund manager. What they withhold is added to your other withholdings and deducted from your total tax liability (which includes ordinary income tax and the 10% penalty). I don t mean to split hairs but...

Tax Law (Questions About Taxes): 401k, stancil, plan administrator
stancil, plan administrator, cpa: Eileen, Thanks for your question. Since this is a premature withdrawal, you would be subject to a penalty as well as income tax on the amount withdrawn. How this is done varies, you need to contact your plan administrator to make the withdrawal. ...

Tax Law (Questions About Taxes): 401k, stancil, paying taxes
stancil, paying taxes, withdrawals: Rosemary, Thanks for your question. You do not pay tax on the gains from the 401(k) until you start withdrawals. Since the contributions are pre-tax, normally the entire amount withdrawn is taxable. The 401(k) is not a part of your tax return until...

Tax Law (Questions About Taxes): 401k, state income tax, federal income tax
state income tax, federal income tax, stancil: Tao, Thanks for your question. You can withdraw the proceeds from your 401(k), but the price will be steep. You will pay a penalty of 10% of the amount withdrawn plus federal income tax. That rate varies between 10 and 35 percent depending on your...

Tax Law (Questions About Taxes): 401k, small construction company, 401k plan
small construction company, 401k plan, fuston: Ms. Fuston: If your husband is earning $8.00 per hour (8.00 X 40 Hrs = $320.00) and they are going to take 323.00. What is his take home pay? Anyway I do not know what his union contract calls for but generally one can opt out of any plan. You will...

Tax Law (Questions About Taxes): 401k cash out, time home buyer, first time home buyer
time home buyer, first time home buyer, installment note: Mike, Can you borrow from your 401(k) plan? Most 401(k) plans have provisions to borrow up to half your account balance. If you still are a participant in the 401(k) plan, I m not sure if you will be allowed to withdraw the balance while still in the...

Tax Law (Questions About Taxes): 401k cash out to buy a home, irs gov, 401k plan
irs gov, 401k plan, publication 590: Dear Anthony, I know that you would not have to pay the 10% penalty for early withdrawal IF this was an IRA, but not really sure about 401k plans and no time right now to look it up for you..... However, you can go to www.irs.gov and download Publication...

Tax Law (Questions About Taxes): 401k cash out for home, ira custodian, 401k withdrawal
ira custodian, 401k withdrawal, legal restriction: Justin, Thanks for your question. It doesn t quite work that way. When you withdraw the funds from your 401k, your employer will withhold 20% for income tax. This is just like withholding from your pay check. When you file your taxes next year,...

Tax Law (Questions About Taxes): 401k cash out to a home, bearer of bad news, time home buyer
bearer of bad news, time home buyer, first time home buyer: Hi Anthony, There is no way to avoid taxation on the 401(k)distribution. In addition there is a 10% penalty on early distributions before you are age 59 1/2. There are exceptions to the penalty (but not the tax) however the $10,000 first time home buyer...

Tax Law (Questions About Taxes): 401k cash out, periodic payments, medical expenses
periodic payments, medical expenses, agi: Hi, If you take an early distribution from your 401(k)you will be subject to the 10% penalty unless you meet one of the exceptions. They are: 1. Distribution is part of a scheduled series of substantially equal periodic payments made over the life...

Tax Law (Questions About Taxes): 401k that I cashed out how will it hurt me, federal income taxes, stancil
federal income taxes, stancil, federal taxes: Tonya, Thanks for your question. You will have to pay state and federal income taxes on the amount withdrawn. The amount depends on your total income, but probably will be in the range of 15-25% for federal and 5% for state. In addition, you will...

Tax Law (Questions About Taxes): 401k and disability, social security benefits, form 5329
social security benefits, form 5329, disability benefits: Yes, you can. Just know that depending on your income, withdrawals from her retirement plans could make her SS taxable or more taxable. She will get a 1099-R from the trustee. If the code in box 7 is not a 1, you need no extra forms. If it is a 1, you...

Tax Law (Questions About Taxes): 401k disbursement rollover, tax prep software, 401k disbursement
tax prep software, 401k disbursement, reason code: Hi Kitty, I haven t used Turbo Tax so I can t tell you how to get it to show the rollover unless you can use a disbursement reason code of G. Do they have an 800 number or an email address for assistance with their product? It seems a shame to revert...

Tax Law (Questions About Taxes): 401k distribution, minimum distributions, investment choices
minimum distributions, investment choices, household income: Hi, Yes, he should rollover the 401(k) to an IRA and take distributions when needed. He should first decide where he wants it and then have the preeent custodian transfer it directly to the new place. There are many places to choose from and even more...

Tax Law (Questions About Taxes): 401k distribution and divorce, 401k retirement plan, 401k distributions
401k retirement plan, 401k distributions, personal payment: Alan, Thanks for your question. Unfortunately, you are probably studk with the penalty and taxes. Rather than taking the distribution, you should have assigned a portion of the 401(k) to her, and let her make the withdrawal. John Stancil, CP...

Tax Law (Questions About Taxes): 401k distribution limit, www irs gov, form 4952
www irs gov, form 4952, tax consequences: Jim, I can only answer federally, I don t know CA law. You can take out as much as you want. However, the more you take out, the more taxes you will pay. And if you are getting social security, the more you take out, the more SS that may be taxable....

Tax Law (Questions About Taxes): 401k distribution for down payment of new home, 401k retirement plan, home fha
401k retirement plan, home fha, ira plan: Hi Kelly, The key words on your 401(k) contributions are pre-tax contributions . What that means is that nothing within your 401(k) has been taxed so everything that comes out of it is taxable. There is also a 10% penalty for early distributions...

Tax Law (Questions About Taxes): 401k distribution, income tax liability, ohio state income tax
income tax liability, ohio state income tax, state income tax: Hi Ron, You combine the $17,000 with your other taxable income and pay income tax at whatever rate your total income dictates. The amount they withheld from your distribution is treated as withholding just like the federal income tax withheld from your...

Tax Law (Questions About Taxes): 401k distributions, 401k distributions, stancil
401k distributions, stancil, iras: Larina, Thanks for your question. You can withdraw up to $10,000 one-time only to help with the cost of buying your first home. Unfortunately this only applies to IRAs, it is not applicable to a 401(k) plan. You would be subject to tax and penalty...

Tax Law (Questions About Taxes): 401k in a divorce, head of household, qdro
head of household, qdro, oregon resident: Nikki, Thanks for your question. Making a down payment on the house will not affect the taxability of the distribution. It would still be subject to tax. Of course, if your income, including the distribution, is low enough there would be no tax. ...

Tax Law (Questions About Taxes): 401k Early Withdrawal:Quarterly TAX payment, form 1040es, personal income tax
form 1040es, personal income tax, quarterly estimated taxes: Hi, You are expected to pay your income tax as you go so it s important to make estimated payments in the same quarter as your income is received. If you wait until January 08 you might have an underpayment penalty. However keeping the securities might...

Tax Law (Questions About Taxes): 401k early withdrawal, personal income tax, first time buyer
personal income tax, first time buyer, partial withdrawal: Hi, You can take a maximum $10,000 distribution from an IRA for the purchase of a first home and not pay a penalty. But that exception doesn t apply to 401(k) s. Assuming you re single and use the standard deduction, your income tax on $360,000 would...

Tax Law (Questions About Taxes): 401k early withdrawal, abbott labs, strict budget
abbott labs, strict budget, excessive debt: Lambert, Thanks for your question. If there is any other way to do it, I would not withdraw the funds. You will pay a penalty of 10 of the amount withdrawn in addition to regular income tax probably between 25 and 33 percent depending on your total...

Tax Law (Questions About Taxes): 401k and educational expenses, early withdrawal penalty, irs auditor
early withdrawal penalty, irs auditor, 401k funds: You got bad advice Mike. A 401K is a 401K is a 401K. And they cannot be used for educational expenses without penalty. And the form you use to report this on is very specific in that it says IRA only. The auditor is correct and unless you have something...

Tax Law (Questions About Taxes): 401k AND first-time home buyer, time home buyer, first time home buyer
time home buyer, first time home buyer, stancil: Brad, Thanks for your question. There is no provision for withdrawals from a 401(k) without penalty for a first-time home buyer. You may withdraw up to $10,000 from an IRA to assist in the purchase of your first home, but this rule does not apply...

Tax Law (Questions About Taxes): 401k hardship, income tax withholding, federal income tax withholding
income tax withholding, federal income tax withholding, www irs gov: Tim, Adoption expenses are not considered a hardship for the purposes of getting a withdrawal from your 401(k) plan. Can you borrow from your plan? Many plans allow participants to borrow up to 50% of the vested balance in the plan. Something to consider...

Tax Law (Questions About Taxes): 401k hardship, income tax return, hardship withdrawal
income tax return, hardship withdrawal, free withdrawal: Sharon, Thanks for your question. Unfortunately, your situation does not qualify for a penalty-free withdrawal from your 401(k) plan. Any amount you withdraw would be subject to tax and a penalty for premature withdrawal. You would have to apply...

Tax Law (Questions About Taxes): 401k and income taxes, state income tax, tax consequences
state income tax, tax consequences, stancil: Rod, Thanks for your question. The best option, theoretically, is to contact the trustee of the 401(k) and repay the loan. You could do this by borrowing the necessary amount from a bank. If this is not feasible, the next option would be to contact...

Tax Law (Questions About Taxes): 401k and Medical Insurance, company cafeteria, cafeteria plan
company cafeteria, cafeteria plan, pay stub: no because they are not included in taxable on your w2 first if they were withheld undr a company cafeteria plan No for the same reason as abovelook at your pay stub or ask human resources else only if your expenses were in excess of 7% of income ...

Tax Law (Questions About Taxes): 401k Penalty, penalty money, form 9465
penalty money, form 9465, installment agreement: Steve, Thanks for your question. About the only thing you could do would be to enter into an installment agreement with the IRS. To do thisneed to complete Form 9465 and sent it into the IRS. They will respond, informing you of their acceptance or...

Tax Law (Questions About Taxes): 401k payout, income tax return, 401k loan
income tax return, 401k loan, stancil: Beth, Thanks for your question. Unfortunately, as you probably already know, the disability must be permanent in order to avoid the penalty for early withdrawal. There is an exception to the penalty for the payment of medical expenses in excess...

Tax Law (Questions About Taxes): 401k penalty, form 5329, taxable portion
form 5329, taxable portion, pension income: Vincent, Thanks for your question. You will report this as pension income on line 16a and the taxable portion on 16b of the 1040. In addition you will calculate the penalty on Form 5329 and carry that forward to line 60 of the 1040. The penalty is...

Tax Law (Questions About Taxes): 401k and Roth IRA's, roth ira, stancil
roth ira, stancil, tax advantage: Scott, Thanks for your question. Yes, you may contribute to both the 401(k) and the Roth IRA, subject to limits on both. I can t predict the future, but the amount you can contribute to a Roth is fairly low (higher than it used to be) so you may want...

Tax Law (Questions About Taxes): 401k rollover to IRA distribution, ira distribution, taxable portion
ira distribution, taxable portion, tax contributions: Hi, Any taxable amount, including earnings on the non-taxable portion, will be taxed as ordinary income. The non-taxable portion will be a percentage of whatever distribution you take. For example if the total account value is $100,000 and the after-tax...

Tax Law (Questions About Taxes): 401k & State Taxes, federal taxation, source income
federal taxation, source income, state taxes: Hi, Since the 401(k) is NC source income, NC would be the recipient of the tax. I don t know whether or not they have a penalty for an early distribution. If you also have SC source income you would need to file a SC return as well. Regards, Carol...

Tax Law (Questions About Taxes): 401k vs additional withholding, withholding tax, paycheck
withholding tax, paycheck, ea: Maybe both Jim, it would be impossible for me to tell you which is better without knowing a lot more about you. If you want more retirement (and your employer matches) the 401K increase would be the way to go, but depending on your income, etc, you may...

Tax Law (Questions About Taxes): 401k W-4, www irs gov, 401k contribution
www irs gov, 401k contribution, studying accounting: Federally, each exemption you claim on a W-4 is worth about $2500, so if you are putting away $3300, you would be fine taking that exemption. I have no idea about NY taxes, so I can t help you there. Another way to figure your withholding is to do...

Tax Law (Questions About Taxes): 401k withdraw, fed gov, hardship withdrawal
fed gov, hardship withdrawal, 401 k plans: Hi, If the plan allows you can take an early distribution from the plan which would be subject to tax and a 10% penalty for early withdrawal. Many 401(k) plans do not allow you to withdraw money while you are still with the same employer. The reason there...

Tax Law (Questions About Taxes): 401k withdrawal, credit card convenience, tsp
credit card convenience, tsp, thrift savings: You will never recapture the income you will lose if you cash the money out. But if you do option one, you will pay ordinary tax at your tax bracket plus a 10% penalty. Option 2 will have you paying finance charges. You need to decide which is better...

Tax Law (Questions About Taxes): 401k withdrawal due to company buyout, federal gov, marginal rate
federal gov, marginal rate, stancil: Jameson, There is no time limit for withdrawing the funds. However, if you do not roll them over into another qualified plan, you will be subject to income tax at your marginal rate and a penalty of 10% of the amount withdrawn. Hope this helps. ...