About Experts Sitemap - Group 50 - Page 55 2015-03-24

Tax Law (Questions About Taxes): OFF the Books, self employment taxes, stancil
self employment taxes, stancil, independent contractor: Steve, Yes, you need to file amended return for all years in which the off the books income was received. Report the earnings on Schedule C and compute your self-employment taxes on Schedule SE. You can also file and SS-8 form to get a determination...

Tax Law (Questions About Taxes): Buying house tax issues, negative cash flow, property improvements
negative cash flow, property improvements, several thousand dollars: Pam, Thank you for your question. 1)What issues will this present for her income taxes, etc. If she has to sell one asset to buy another asset, how much return does she want on her investment? On the loss she will take , will it be tax deductible?...

Tax Law (Questions About Taxes): beneficiary choice for an IRA, minimum distribution rules, lump sum distribution
minimum distribution rules, lump sum distribution, minimum distributions: The IRA stays the same, just change the beneficiary to the Trust. The children are than the beneficiaries of the IRA and the Required Minimum Distribution rules determine how much is required to be distributed to each beneficiary based on the youngest child...

Tax Law (Questions About Taxes): business cell phone deduction, seperate accounts, business expense
seperate accounts, business expense, business lines: Your cell phone company can answer that question for you, but designating the business lines will work if you have documentation as to which lines are what (i.e. your business cards and invoices list each number). It would be easier accounting wise to have...

Tax Law (Questions About Taxes): Capital Gains on Real Estate, capital gains on real estate, capital gains tax
capital gains on real estate, capital gains tax, t claim: Hi, All of that would work but you could not exclude all the gain on the rental unit even if it is $500,000 or less. One of your rental expenses is depreciation. When you sell the rental home you have to recapture the depreciation allowed or allowable...

Tax Law (Questions About Taxes): Capital Gains Tax, capital gain taxes, capital gains tax
capital gain taxes, capital gains tax, stancil: Jan, Thanks for your question. Your basis in the inheritance is the fair market value as of date of death. If you sell the mutual funds for an amount in excess of this, the excess is subject to tax at capital gain rates, either zero or 15% depending...

Tax Law (Questions About Taxes): Capital Gains Tax, income tax rates, long term capital gain
income tax rates, long term capital gain, money market fund: Hi, If you sell the investments within your account you will be taxed on the gain over what you paid for the investment vehicles (stock or mutual funds for example). If you held the investment vehicles for more than one year the gain will be taxed as a...

Tax Law (Questions About Taxes): Car donations of deceased title holder, social security number, personal return
social security number, personal return, car donations: Barbara, Thanks for your question. You should use the estate ID or your SSN. If you use the estate ID, the donation will be passed on to the beneficiaries. If you use yours, you can take a direct deduction, by passing the estate. Hope this helps....

Tax Law (Questions About Taxes): Change of Business Type, legal standpoint, operating a restaurant
legal standpoint, operating a restaurant, articles of incorporation: Jeff, Thanks for your question. He will not need a new EIN if he continues the same corporation. From a tax standpoint, he could utilize the same corporation. However, the articles of incorporation and state law should be consulted to see if it...

Tax Law (Questions About Taxes): Church provided material and gifts, clergy tax, school bible
clergy tax, school bible, tangible benefit: Kenneth, Thanks for your question. The key here is whether there is a pro-quid-pro. In other words, if everyone in the group gets the materials regardless of contributions made to the church, there is no pro-quid-pro and there is no benefit being received...

Tax Law (Questions About Taxes): Church Tax Deductible, irs problem, irs problems
irs problem, irs problems, lanquage: Actually the problem is that if the funds are designated as entertainment, there could be an allegation that the contribution was a payment to see the entertainment, hence a direct benefit was received and the contribution would not be fully deductible. ...

Tax Law (Questions About Taxes): Claiming Independent, dependency exemption, independency
dependency exemption, independency, stancil: Sarah, Thanks for your question. First, there is really no such category as claiming independent. Your dependency exemption is claimed by your or by someone else. Your parents have the right to claim you if they provide over half your support. They...

Tax Law (Questions About Taxes): Claiming mileage/fuel, adjusted gross income, business expense
adjusted gross income, business expense, exceed 2: Hi, Driving back and forth to work is commuting and the mileage is not deductible. If you use your car for business once you arrive at work you could deduct mileage as an unreimbursed employee business expense on Schedule A to the extent the expenses exceed...

Tax Law (Questions About Taxes): Clergy Tax Reporting, clergy tax, financial blessing
clergy tax, financial blessing, pastors: Anyone can give anyone a gift, nothing is taxable (a gift tax return is due if the gift(s) exceed a combined total of $12,000 a year) but if you are giving someone money for doing something, then they have to claim that money as income. Does that help...

Tax Law (Questions About Taxes): Condo sale tax treatment (multi-owner), ownership percentages, capital improvements
ownership percentages, capital improvements, john thanks: The result is the same but you should only reflect your 2/3 share, indicating a sale price of $200,000 minus 2/3 of the basis and closing costs. The capital improvements are increases to your basis and are not shown separately. You might say your son s...

Tax Law (Questions About Taxes): Contractor Per Diem, contract job, temp position
contract job, temp position, 2mo: There are a number of factors that determine your place of business. For your temp job, if you are a contract employee, you should list your permanent address as your place of business. You will not need to do anything, other than set up a sole proprietorship...

Tax Law (Questions About Taxes): CPA role, regional value, itemization
regional value, itemization, tax filings: All CPAs charge by the hour worked on projects. The amount billed per hour is a matter of regional value, have the CPA furnish you with an itemization of charges and hours spent per charge to determine his hourly rate. Then compare with other CPAs in the...

Tax Law (Questions About Taxes): capital gains, stancil, capital gains
stancil, capital gains, cpa: Tina, Thanks for your question. Anyone who receives a part of the proceeds will report the sale on Schedule D of their 1040. You will be taxed on your share of the gain. The gain is the proceeds of the sale minus your basis. Your basis is the fair...

Tax Law (Questions About Taxes): capital gains tax, mr schnabel, capital gains tax
mr schnabel, capital gains tax, deed in lieu of foreclosure: Richard, Thank you for your follow up. I try to help if I can. Tax laws can get tricky. I appreciate your kind words. Given what you have laid out, it appears that either way would create capitals gains. 1)Situation one would create a capital gain...

Tax Law (Questions About Taxes): capital gains tax in california, long term capital gain, capital gains tax
long term capital gain, capital gains tax, long term capital gain rate: Hi Jamie Ca taxes any gains as ordinary income so it would aprox 6 to 7% As far as the federal Tax if he holds the property for more than one year he would be taxed at the long term capital gain rate of 15%(this may change in 2009) if he held the property...

Tax Law (Questions About Taxes): charitable contributions, irs web site, donating cars
irs web site, donating cars, tax benefit: Frank, Thank you for your question. 1)what is the largest amount of charitable contributions you can deduct on Schedule A and is it conditional You can contribute Up to 50 % of your AGI (Form 1040 Line 37) per year. Any unused amount will be carried...

Tax Law (Questions About Taxes): child care, child care expenses, social security number
child care expenses, social security number, federal income tax: Hi, As far as Federal income tax is concerned, it doesn t matter whether or not she is registered. There may be state or local regulations regarding registration. To claim a deduction for child care expenses you need her name, address and social security...

Tax Law (Questions About Taxes): claiming child as dependent, father of my daughter, form 8332
father of my daughter, form 8332, custodial father: Sorry, Rather than the 8332, just have him sign a statement to the effect that he relinquishes the right to the exemption. You don t have to attach it to the return, just keep it on file. Even if you don t get the signed document, you can still claim...

Tax Law (Questions About Taxes): claiming spouse as a dependant, starting a new job, withholding allowances
starting a new job, withholding allowances, w2 forms: Sure...since he apparently is not already claiming himself at a job of his own you should be OK with this. The only caveat being that one needs to consider the overall tax picture when calculating the withholding allowances to be claimed on your Form W-4....

Tax Law (Questions About Taxes): commission splits, opening a salon, salon and spa
opening a salon, salon and spa, rules and regulation: Yolo, Thanks for your question. As independent contractors, you do not withhold anything from their earnings, but must issue a 1099-MISC at the end of the year. Form SS-8 is a listing of the factors to be considered in determining if a person is an...

Tax Law (Questions About Taxes): contest winnings = income?, irs publication 17, stay at home dad
irs publication 17, stay at home dad, irs website: Yes, you need to claim this as income. The fact that the payers are foreign companies does not make any difference. You should refer to IRS Publication 17 for further information if you care to. You can download it from the IRS website at irs.gov ...

Tax Law (Questions About Taxes): contest winnings = income?, stay at home dad, compliance system
stay at home dad, compliance system, contest winnings: Wayne, Thank you for your follow up question. Just because you think its a hobby, should not be your basis to not report this income. The law is very clear on this. Like I said before,income taxes are a voluntary compliance system. If you feel that no...

Tax Law (Questions About Taxes): contractor, social security and medicare, filing taxes
social security and medicare, filing taxes, john thanks: John, Thanks for your question. A 1040 is required. You will have to file a return at the end of the year, reporting your income on Schedule C and calculating your social security/Medicare on Schedule SE. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Deed in Lieu of Foreclosure on Investment Property, construction loan lenders, deed in lieu of foreclosure
construction loan lenders, deed in lieu of foreclosure, contruction loan: You have a $5000 investment. If you get $2000, for example, as a settlement, you have essentially sold the property for $2000 and you have a loss on the sale of your investment. Your basis is $5,000, your proceeds are the smaller of your canceled debt or...

Tax Law (Questions About Taxes): Dependants, fasfa, fellow worker
fasfa, fellow worker, college kids: Then you need to get an explanation from the accountant as to why they are telling you that you can not claim her. It seems to me that you meeting the dependency tests...ask the accountant what dependency test they believe you are not meeting in being able...

Tax Law (Questions About Taxes): Dependents, withholding allowance, stancil
withholding allowance, stancil, dependents: Kevin, Thanks for your question. No, it is not legal. It is illegal to claim more withholding allowance than you are entitled to. In addition, the IRS is supposed to be notified whenever someone submits a W-4 with 10 or more allowances claimed. ...

Tax Law (Questions About Taxes): Per Diem being taxed, pier diem, independant contractor
pier diem, independant contractor, burden of proof: Kimberly, Thank you for your question. If you were an independent contractor and they paid you on a 1099, you should have taken deductions on your schedule C for your pier diem expenses. It would either be a wash( they reported income that equaled...

Tax Law (Questions About Taxes): Divorce and Retirement plan options, retirement plan options, retirement portfolio
retirement plan options, retirement portfolio, retirement fund: Hi, If he takes out his entire retirement fund he would pay income tax on the distribution as well as a 10% penalty since he is not yet 59 1/2. He might be able to borrow from his retirement plan or perhaps you two could work out a payment plan so that...

Tax Law (Questions About Taxes): Donations, irs form 1098c, depreciation
irs form 1098c, depreciation, stella: Stella, Thank you for your question . 1)if we donate it to an employee can we write it off in our taxes? Your corporation can sell it to an employee for a $1 and take it as a write off only at what the corporation paid for the vehicle less the...

Tax Law (Questions About Taxes): deductibility of expense item for a s-corp, form 1120s, equity account
form 1120s, equity account, partner john: Has the other business filed its final return? If not, amend the 1065 and show the equipment as a distribution to the partner. If a final return has been filed and the books are closed, the debit is a charge to the shareholder s equity account. You have...

Tax Law (Questions About Taxes): default on promissory note, irs publication, stancil
irs publication, stancil, promissory note: Mark, You can deduct the entire amount of the note, assuming you will collect nothing on it. It is reported as a non-business bad debt on Schedule D as a short-term capital loss. Page 101 of IRS Publication lists the details of information that must be...

Tax Law (Questions About Taxes): delayed quid pro quo, financial supporters, stancil
financial supporters, stancil, campers: Kenneth, Thanks for your question. Unless the parents gave money specifically designated for their children, it would remain deductible. In other words, they contributed $100 toward the camp fund that went to all campers, and not to their children specifically....

Tax Law (Questions About Taxes): dependent room mate deductions?, income tax liability, room mate
income tax liability, room mate, stancil: Hans, You can take his as a dependent if all of the following conditions are met: 1. You provide over half his support. 2. His gross income is under $3,450 (2008). 3. He resided with you for the entire year. His past tax liability should not affect...

Tax Law (Questions About Taxes): dependents, child tax credit, dependent exemption
child tax credit, dependent exemption, dependency exemption: Vikki, Thanks for your question. If you took the educational credit for your son, you MUST have taken the dependency exemption. You are entitled to this even though he is over 18 if he is a full time student and you provided over half his support. ...

Tax Law (Questions About Taxes): depreciating an apartment in an owner-occupied 2-family house, bedroom apartment, rental apartment
bedroom apartment, rental apartment, real estate taxes: Jane, Thank you for your question. 1) Do I deduct half since there are 2 apartments in the building, or can I deduct more since I live in the smaller 5-room/2-bedroom apartment and I rent out the larger 7-room/4-bedroom apartment? If the sizes can...

Tax Law (Questions About Taxes): per diem, drive trucks, form 2106
drive trucks, form 2106, wife drive: John, Thank you for your question. I checked my previous answer and I m not sure if you got a chance to read it. John, Thank you for your follow-up. I guess that means that you and your wife drive trucks. Per diem is a method whereby the IRS had...

Tax Law (Questions About Taxes): per diem, stancil, indefinite period
stancil, indefinite period, taxable income: Lisa, Thanks for your question. If you assignment is for more than 12 months or for an indefinite period, your per diem amounts are taxable income and your travel expenses are not deductible. If you are on a genuinely new assignment, not a continuation...

Tax Law (Questions About Taxes): per diem, incidental expenses, independent contractor
incidental expenses, independent contractor, subcontractor: Mike, Thank you for your question. As an independent contractor, per diem becomes subject to taxation once your employer pays you more than what the standard allowance is. You report your income from a from 1099 and can then take deductions to offset...

Tax Law (Questions About Taxes): per diem, irs gov, hi john
irs gov, hi john, 12 months: Mr. Richard: Per diem is a way to pay an employee when he travels for the employer. There is no clear cut rule other than the IRS has established a table listing what the allowable per diem expenses are for 50 of the largest citifies across the country....

Tax Law (Questions About Taxes): disability and early distribution, fidelity investments, hi fidelity
fidelity investments, hi fidelity, disability status: Hi, Fidelity will send you a 1099R for the distributions and they should code it correctly so that you won t be assessed a penalty. If they don t you can file a form 5329 using code 03 to show that you are totally and permanently disabled and thus not...

Tax Law (Questions About Taxes): disability related tax questions, disability payment, federal disability
disability payment, federal disability, economic stimulus: Lynn, Thanks for your question. If the disability and the SSDI are taxable income to you, they are included in the maximum income limitation. Otherwise, they are not. I do not know what you mean by the stipend? check. If you are referring to the...

Tax Law (Questions About Taxes): disability ss, social security disability, social security check
social security disability, social security check, wii: Hi, Up to 85% of your social security disability could be taxable depending upon the amount of your and your husband s other income. But if you were to file married filing separately, automatically 85% of your disability would be taxable even if you had...

Tax Law (Questions About Taxes): Early IRA Withdrawal, ira withdrawal, rollover ira
ira withdrawal, rollover ira, maximum contribution: Dale, You cannot contribute to an IRA unless you have earned income, which you do not appear to have. If the funds are placed in an IRA withing 60 days of withdrawal, it is not income and there is no penalty. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Employer Identification number ie. EIN#, www irs gov, employer identification number
www irs gov, employer identification number, denise thanks: Denise, Thanks for your question. Yes, since you are changing the form of your organization from (in legal terms) an unincorporated association to a corporation you will need a new EIN. These can now be obtained online at http://www.irs.gov/businesses/small/article/0,,id=102767,00.html...

Tax Law (Questions About Taxes): Employer Paid Student Loans, tuition reimbursement plan, joe thanks
tuition reimbursement plan, joe thanks, stancil: Joe, Thanks for your question. If you employer has a tuition reimbursement plan, up to $5,250 of tuition reimbursement will not be income to you. If the payments covered costs of room and board, they would be income to you. If it is income, it is subject...

Tax Law (Questions About Taxes): Employment status, w2 tax form, irs website
w2 tax form, irs website, bank routing number: Elizabeth: You are an employee not an independent contractor. It is apparent that the employer is considering you to be an independent contractor when in fact you are a part-time employee. You know that if at this moment you contest this issue you probably...

Tax Law (Questions About Taxes): Estate Taxation, long term capital gain, long term capital gains
long term capital gain, long term capital gains, long term capital gains rates: Kevin, Thanks for your question. That is correct. You (or the estate) will owe tax at long term capital gain rates on the increase in value from the date of death. In today s market, the price may decrease, that would be a deductible loss. Hope...

Tax Law (Questions About Taxes): ebay earnings, irs form 8829, form 1040 schedule c
irs form 8829, form 1040 schedule c, self employment tax: L, Thank you for your follow up question. 1)Is there a minimum amount of money earned before reporting is necessary, (ie. we make less than $600 in ebay earnings annually) or is any amount taxable income? Technically, you have to report all earnings...

Tax Law (Questions About Taxes): emminent domain, right of way payment with retained ownership, livingston parish louisiana, capital gain tax
livingston parish louisiana, capital gain tax, tax liabilities: Allen, Thanks for your question. Yes, as you are selling property rights, the sales is taxable, at capital gain rates. You may be able to allocate some basis to the sale, as this definitely lowers the value of your property. Hope this helps. John...

Tax Law (Questions About Taxes): employee of SMLLC, irs circular e, state income taxes
irs circular e, state income taxes, state unemployment: Keith, Thanks for your question. If you daughter is under 18 and doing legitimate work, you do not have to pay SS/Medicare for her. You will need to file quarterly Form 941 to report your income tax and SS/Medicare withholdings and payments. Depending...

Tax Law (Questions About Taxes): energy efficient siding: Fed tax deduction?, energy tax credit, insulation value
energy tax credit, insulation value, energy improvements: Hi, Siding is specifically excluded for an energy tax credit although insulation is included. The maximum tax credit is $500 so it probably wouldn t go very far in covering the cost even if it were included. I don t know what IA might have to offer....

Tax Law (Questions About Taxes): Federal and NC state tax for contract labor, form 1040 schedule c, self employment tax
form 1040 schedule c, self employment tax, estimated tax payments: Linda, Thank you for your follow up question. 1)I m still not sure when to pay my self employment taxes. I assume this is federal only? You will make estimated tax payments to the US Treasury for the portion of the federal income tax plus the self...

Tax Law (Questions About Taxes): FILING STATUS, IRS, tax problems
IRS, tax problems, tax levies or liens: if you have a qualifying child, you can extend the joint filing (I think only one year). However, if it is just you, you ll have to go with single. However, if there is a dependent, you may file in 2009+ as Head of Household. FILING STATUS Joint...

Tax Law (Questions About Taxes): Filing A Return, citizenship and immigration services, united states citizenship and immigration services
citizenship and immigration services, united states citizenship and immigration services, private web site: Diana, If someone filed your return on your behalf , they still need to get your signature for either the paper copy or the e file. If they did not, then most likely it was not filed. 1)Is there a site that you know of where I can check this, or do I...

Tax Law (Questions About Taxes): Filing a tax return for an LLC, self employment taxes, s corp
self employment taxes, s corp, s corporation: An LLC is not a corporation, so it cannot be a S-Corp. The partnership form is the correct one. There are more advantages in a S-corp than in a partnership, primarily in the savings of self employment taxes. The LLC should have been incorporated ...

Tax Law (Questions About Taxes): Filling status, tax bracket, new job
tax bracket, new job, ea: You are going to be hitting the high 20% tax bracket, so for this year, I would suggest she file her W-4 as -0- just to see what is going to happen for you. Then after you do the 2008 return, you can adjust up or down depending on the refund and how much...

Tax Law (Questions About Taxes): FLLC and The Primary Residence Exclusion, fllc, membership documents
fllc, membership documents, personal return: If the FLLC s members are only the husband and wife, the LLC is a disregarded entity, and the exclusion would apply. If the LLC has more than the husband and wife as members, the LLC is the owner of the property, and you should have transferred title to...

Tax Law (Questions About Taxes): FOREIGN PERSON - LLC!, usa tax, state secretary
usa tax, state secretary, ares: Mr. Ares: First you have to apply to some state, secretary of state, to see if you can register an LLC as a non-resident alien. If you are doing the work from Argentina, then you may not have any legal contact with the USA an therefore have no USA tax...

Tax Law (Questions About Taxes): Foreign exchange students, foreign exchange students, stancil
foreign exchange students, stancil, charitable contributions: Carol, Thanks for your question. If the student 1)lives in your home under a written agreement between you and a qualified organization as a part of a program to provide educational opportunities for the student, 2) is not related to you, and 3)is a...

Tax Law (Questions About Taxes): Which Form to Use for Home Office Utility Deductions?, form 8829, form 2106
form 8829, form 2106, home office deduction: Hi Jeannie if your husband is using a portion of the home to transact business you have more deductions from his business income than utilities including depreciation but please read the instructions to form 8829 to be sure you have a home-office deduction...

Tax Law (Questions About Taxes): Forming a business, New business
New business: Hi Tracy good luck for your new business . You do need to obtain the certificate to collect the sales tax the sales tax people usually include a booklet that has many good ideas for a new business You need to remember that operating in NYC you will be...

Tax Law (Questions About Taxes): Full time college student and taxes, state tax rates, time college student
state tax rates, time college student, fulltime college student: Hi, The parents of full time students can claim their children as dependents unless the student pays more than half of his/her own support. Also the parents can get a tax credit for tuition paid for their dependent child. The student dependent can file...

Tax Law (Questions About Taxes): 401K payout, paycheck, tax return
Tax Law (Questions About Taxes): 401K payout, paycheck, tax return, exceptions

Tax Law (Questions About Taxes): inheritance tax, ira
Tax Law (Questions About Taxes): inheritance tax, ira

Tax Law (Questions About Taxes): Military Retirement, social security number, 1099r
Tax Law (Questions About Taxes): Military Retirement, social security number, 1099r, tax case

Tax Law (Questions About Taxes): SEP IRA, traditional ira contribution, sep ira contribution
Tax Law (Questions About Taxes): SEP IRA, traditional ira contribution, sep ira contribution, modified adjusted gross income

Tax Law (Questions About Taxes): Selling Primary Residence/Capital Gains, unforeseen circumstance, poor health
Tax Law (Questions About Taxes): Selling Primary Residence/Capital Gains, unforeseen circumstance, poor health

Tax Law (Questions About Taxes): family employee for SMLLC, workman comp, federal unemployment
workman comp, federal unemployment, payroll taxes: Keith: First LLC s have no family, but, the member may have a family. Therefore, LLC s have no family employment. If the member has hired his/her family members as employees then the LLC should report the employees as other employees are reported no special...

Tax Law (Questions About Taxes): farm equipement, deductible business expenses, adjusted gross income
deductible business expenses, adjusted gross income, farm equipement: Hi, If you are paid as an employee you could deduct depreciation on the farm equipment as an Unreimbursed Employee Business expense on Schedule A to the extent the expenses exceed 2% of your adjusted gross income. If you are paid as an independent contractor...

Tax Law (Questions About Taxes): federal seizure of social secuirty benefits, IRS levy Social Security benefits, levy social security benefits
IRS levy Social Security benefits, levy social security benefits, irs levy: The limit for levy of benefits is 15%, each time your benefit check is paid out to you, until the underlying debt is paid off. The levy can be lifted if you can prove financial hardship as a result of the levy, or if you otherwise make arrangements to...

Tax Law (Questions About Taxes): federal taxes due?, self employment income, self employment tax
self employment income, self employment tax, www irs gov: Hi, Assuming that you are a sole proprietor, you will report your business income and expenses on Schedule C. Your net self employment income is subject to self employment tax (social security and medicare). The calculation is net self employment income...

Tax Law (Questions About Taxes): filing exempt, tax privileges, criminal fraud
tax privileges, criminal fraud, fraudulent act: Lester, Thanks for your question. First, full time students do not have any special tax privileges. They owe taxes on their income just like anyone else. Frequently, their income is low enough that they do not owe taxes, but that is due to their income...

Tax Law (Questions About Taxes): My foreclosed House and Taxes, living quarters, mortgage company
living quarters, mortgage company: Bianca, Thank you for your question. If they foreclosed on your property, then they took back the property to cover the mortgage liability. If there were taxes owed on the property before they took it, then you are liable for the taxes and they will try...

Tax Law (Questions About Taxes): foreign travel per diem, maximum lodging rate, italy bari
maximum lodging rate, italy bari, italy pisa: Thomas, Thank you for your question. If you go to The US Dept of State web site. Select your country and the listing will appear. You are looking for M& IE (Meals and Incidental expenses). http://aoprals.state.gov/web920/per_diem.asp They publish...

Tax Law (Questions About Taxes): form ss-8, payroll taxes, stancil
payroll taxes, stancil, irs: Joy, Thanks for your question. If you submit the SS-8, it is likely that the IRS will contact the employer, especially if the determination is that you husband is an employee. After all, what is the purpose of completing the form if no action is taken...

Tax Law (Questions About Taxes): Gift Tax, separate checks, mother in law
separate checks, mother in law, gift tax return: Harris, I hope you had a good July 4th. Thank you for your question. Your mother in law can gift you and your wife $12000 per year without being required to file a gift tax return. I would suggest that separate checks should be written or at least...

Tax Law (Questions About Taxes): Gift Tax, promisory note, stancil
promisory note, stancil, law suit: Kristi, I misread a portion of your question and need to amend my answer. If you defaulted he would have a deduction in the amount of the default, and you would have income equal to that amount. The remained of my original answer is correct. Hope...

Tax Law (Questions About Taxes): Gift Tax, separate checks, joint checking
separate checks, joint checking, mark thanks: Mark, Thanks for your question. No, its about that simple. The key point is that the payments must be made to you and your wife - either jointly or separately. As donors they can elect gift splitting, so technically all of the funds could come from...

Tax Law (Questions About Taxes): Gift Tax--Form 709, irs web site, tax form 709
irs web site, tax form 709, form 706: Tony, Thank you for your follow up question. You should just get your dad to write a letter clarifying that the gift is $12000 each. The extra $500 each is a loan, which is interest free. No filing of a form 709 is required. then at the end of 2008, your...

Tax Law (Questions About Taxes): Gift Taxes, stationary store, gift taxes
stationary store, gift taxes, mother in law: David, Thank you for your question. 1)My question is if there is a standard form that should be filled out or will a letter saying the gift is being made sufficient? I would say something like this: The date of the letter should be the date of...

Tax Law (Questions About Taxes): Gifted house, personal residence, term gain
personal residence, term gain, capital gains: It depends on the basis of the property on how much tax will need to be paid. The basis is determined by the cost of the property acquired from your mother. Unless the property is used as your personal residence for the 24 month period, you do not...

Tax Law (Questions About Taxes): Gifting, point answer, stancil
point answer, stancil, john thanks: That is walking a pretty fine line. The reality of it is that you would be placing the money in the individual account, not the account belonging to the spouse. Technically, you are giving the funds to the child, regardless of any intent. John Stancil,...

Tax Law (Questions About Taxes): Gifting to my children, principal reduction, imputed interest
principal reduction, imputed interest, grown kids: Ben, Thanks for your question. Since the loan is above $10,000 the IRS will impute interest to the loan. What this would mean is that the IRS would assign a rate to the loan based on the current federal rates. They would presume that you charged that...

Tax Law (Questions About Taxes): Is gift tax due on 3rd party loan payoff?, estate tax exemption, irs rules
estate tax exemption, irs rules, loan payoff: Mickey, Thanks for your question. Because you are not liable on the debt, your paying off the mortgage would be considered a gift. If the amount is more than $24,000 ($12,000 each for you and your wife) it would be a taxable gift and a gift tax return...

Tax Law (Questions About Taxes): gift taxes / trust, grantor trust, income tax return
grantor trust, income tax return, income tax return form: Ann, Thanks for your question. This is not a gift situation, so you do not have to worry about gift taxes. The transfers for his benefit are not taxable income. You will have to pay tax on the income earned by the trust assets. Most likely this...

Tax Law (Questions About Taxes): giving up timeshare for tax deduction?, stancil, maintenance fee
stancil, maintenance fee, taxable income: Katia, Thanks for your question. No, letting go of your time share will not create a deduction and may create taxable income for you. If, as a result of the abandonment, you have any canceled debt, that debt will be taxable income to you. Hope this...

Tax Law (Questions About Taxes): Head of household, head of household, stancil
head of household, stancil, can i claim head of household: Robert, You can file head of household if you provide over half the cost of maintaining a household and your son lived with you for more than half the year. State laws vary, but generally you can take the same exemptions for state as you do for federal....

Tax Law (Questions About Taxes): Home Sale, home in louisiana, capital gains tax
home in louisiana, capital gains tax, stancil: Oran, Thanks for your question. Since you only lived in it part time, I must assume it was not your primary residence. Therefore, you must pay tax, at capital gain rates on the gain. Paying off another home or purchasing another rental will not help....

Tax Law (Questions About Taxes): head of household, head of household, dependency exemption
head of household, dependency exemption, stancil: Yes, you can appeal it to the IRS. There are two approaches you can take. One is to file, claiming the dependency exemption. The IRS will then send both of you a letter, informing you that the @@N has been claimed on two different returns and instructing...

Tax Law (Questions About Taxes): head of household, head of household, state exemptions
head of household, state exemptions, court decree: Hi Robert the Head of household designation goes to the one that provides the residence to the kids if each of you provide a residence to one of the kids the IRS has a tie breaking rule that gets rather complicated to go into unless necessary in which...

Tax Law (Questions About Taxes): health care premium, section 125 cafeteria plan, health care premium
section 125 cafeteria plan, health care premium, protion: Teresa: Any premiums paid by the employer is considered an expense against income. If a formal plan is in place, such as a section 125 (cafeteria) Plan, an employee can us pretax dollars to pay their premiums. Otherwise, the premiums are paid with after...

Tax Law (Questions About Taxes): health insurance for employees, employee benefit plan, state of new mexico
employee benefit plan, state of new mexico, dependents: Hi Keith yes you can set up a cafeteria employee benefit plan ,under 105HRA, for your employees ,In this case your wife There is a company called Base that for an annual fee of $199 will set up the plan and more importantly will administer...

Tax Law (Questions About Taxes): hire employee, unincorporated business, s corp
unincorporated business, s corp, stancil: Ervin, Thanks for your question. He is subject to social security/medicare. The exception you are referring to applies to parents hiring their own children in an unincorporated business. Likewise, he is not exempt from withholding for income taxes...

Tax Law (Questions About Taxes): house as a gift, irs gov, ramifications
irs gov, ramifications, dad: Panfila: I do not know the circumstances, but, you should go to www.irs.gov and read up on gifts. After your reading of gifts, if you have additional questions please ask me. There are some many factors that it would take me hours to ponder all of the...

Tax Law (Questions About Taxes): husband/ taxes, stancil, months of the year
stancil, months of the year, tax information: Patricia, Thanks for your question. You can t find out any of his tax information. The IRS is extremely secretive in this regard. However, if he did not live in your household at any time during the last six months of the year, you are considered...

Tax Law (Questions About Taxes): Inheritance, stocks and bonds, cash values
stocks and bonds, cash values, stancil: Carol, Thanks for your question. Your cost basis is deductible from the proceeds of the sale to determine your taxable income. Cost basis is the fair market value as of date of death. Any sales that occurred are reported in the year of sale. Hope...

Tax Law (Questions About Taxes): Inheritance Taxes, inheritance taxes, virginia tax
inheritance taxes, virginia tax, stancil: Terri, Thanks for your question. You will need to report the gain on the sale of the house on your income tax. Gain is the difference between the sales price minus costs of the sale minus your basis. Your basis is the fair market value as of date of...

Tax Law (Questions About Taxes): Injured spouse deductions allotment, injured spouse form, employee business expenses
injured spouse form, employee business expenses, debt question: If you itemize your deductions, enter each of your separate deductions, such as employee business expenses or those specifically related to one or the other of you. Allocate other deductions as you determine. You can split mortgage interest and real estate...

Tax Law (Questions About Taxes): Integrated Auxiliaries, accounting books, budgeting system
accounting books, budgeting system, ministry leaders: Kenneth, Thanks for your question. From a tax standpoint: 1. Yes. 2. Not required. 3. Yes. 4. Yes. 5. Yes. However, there is nothing to prevent the church from setting policies along this line as to what is and is not permissible. In all 5 questions...

Tax Law (Questions About Taxes): Intercepts, injured spouse form, irs
injured spouse form, irs, fms: The FMS tells the IRS what to withhold. FMS told the IRS to take whatever it was that was taken from the refund. You can try and file an injured spouse claim, but it will probably take the entire 6 months that way also. Your only real sure bet is to...

Tax Law (Questions About Taxes): Interstate Unemployment, unemployment benefits, 5 months
unemployment benefits, 5 months, new opportunities: Scott: More than likely your unemployment benefits are calculated on your employment in Ohio and it may be governed by the Ohio. If that is not the case then yes your benefits would stay as they are now, until the next quarter change which will be the...

Tax Law (Questions About Taxes): IRA beneficiary question, ira beneficiary, bennies
ira beneficiary, bennies, tax professional: They cannot roll your IRA into theirs. However, they can move it to an IRA that stands alone. As to whether it should be your trust or your kids that are the bennies is a question I cannot answer, I don t know enough about you. Your tax professional...

Tax Law (Questions About Taxes): IRA DISTRIBUTION, income tax purposes, ira money
income tax purposes, ira money, ira distribution: Hi, Any money you take out of your IRA will be subject to income tax and, if you are under 59 1/2, a 10% penalty for early withdrawal. You can use the money to start a business but there is no way to avoid income tax or the penalty. If your business...

Tax Law (Questions About Taxes): IRS form 8283 and appraisal, irs form 8283, stancil
irs form 8283, stancil, charitable donation: Pamela, Thanks for your question. The appraiser does not need to be ASA certified, but he must perform appraisal services on a regular basis, hold himself out to the public to do appraisals, and be qualified to make appraisals of the type of property...

Tax Law (Questions About Taxes): independent contractor, income tax liability, federal income taxes
income tax liability, federal income taxes, federal income tax: Earning level is their total income. If their income is $5,000 they will have no federal income tax liability and will not need to file. State laws vary and they may need to file. Yes they are subject to SS/Medicare for even $1 of earnings. John Stancil,...

Tax Law (Questions About Taxes): inheritance tax, ira balance, inheritance tax
ira balance, inheritance tax, family trust: Noris: All inheritance tax will be paid by the estate. In some rare cases, inherited money may be required reported on supporting forms of some capital gains or other transaction, that could reduce a tax deduction or other tax reducing benefit. However,...

Tax Law (Questions About Taxes): interest paid on undeveloped land, 263a, undeveloped land
263a, undeveloped land, sewer water: Emma, Thank you for your question. Usually when you have undeveloped land , it all has to do with what you plan on doing with it. If you want to build a home on it, you may consider capitalizing the interest (IRC 263A), whereby the interest is carried...

Tax Law (Questions About Taxes): investment income & expenses, mortgage insurance premiums, loan origination fees
mortgage insurance premiums, loan origination fees, investment interest expense: Sandi, Thank you for your question. Investment expenses can be identified as investment interest expenses or investment expenses. Mortgage interest-this is an itemized deduction (if your principal residence or second home) Real Estate taxes-this...

Tax Law (Questions About Taxes): two jobs, payroll taxes, second job
payroll taxes, second job, first job: You can have withholding at your second job if you want. Use the form W-4. If you do not, you may owe at the end of the year. What you should do is take your 2007 return, add in $5,000 of income and see what the tax will be. If the withholding from the...

Tax Law (Questions About Taxes): two jobs, payroll taxes, second job
payroll taxes, second job, standard deduction: That is correct. SS and Medicare are due for any earnings. Your $5,000 adds to your $20,000 for a total of $25,000 in earnings. That amount is not less than the standard deduction. You get one standard deduction, not one for each job. John Stancil,...

Tax Law (Questions About Taxes): K-1 question, tax preference, personal return
tax preference, personal return, new partner: If she was a partner in 2007, she is entitled to a K-1 or a some statement showing her share of income and expense items, as well as tax preference items, so that she can complete her personal return. It is not at all uncommon for partnerships to issue these...

Tax Law (Questions About Taxes): How much my kid will pay?, espp, stancil
espp, stancil, gift tax return: Emily, Thanks for your question. I am not sure what you mean by does the amount still restricted under $12,000, but I think I can answer your question. The gift will be valued at fair market value as of the date of the gift. If it is in excess...

Tax Law (Questions About Taxes): Life Insurance Tax, quick deed, insurance money
quick deed, insurance money, insurance tax: It all depends on what her will says. If she died without one the laws of the state where she lived dictate the succession of the property. You will need the assistance of an attorney in her state to give you an opinion on the distribution of the property....

Tax Law (Questions About Taxes): LLC for securites and investment management, margin interest deduction, short term capital gains
margin interest deduction, short term capital gains, capital gains taxes: A single member LLC is a disregarded entity and all income is shown on schedule C, so no advance there for taxes. No matter where the LLC is formed, in operating in another state, the LLC is required to follow the rules of that state. John Kirk, CPA...

Tax Law (Questions About Taxes): LTCG Carryover, standard deduction, taxable income
standard deduction, taxable income, ea: You still have to show the carryover on Sch D with your 2008 return, but if you don t need any of it, you will carry it all over to 2009 and beyond. If you use do have some income in 2008, you only reduce the carryover by the amount needed. Helen, EA...

Tax Law (Questions About Taxes): land, land speculation, holding period
land speculation, holding period, bend oregon: When you received the gift, you also received the holding period. So if the person that gave them to you had them over a year, you are deemed to have owned them for over a year. HOWEVER, your basis is NOT 85,000 each, it is whatever the person paid for them...

Tax Law (Questions About Taxes): land, capital gains rate, long term capital gains
capital gains rate, long term capital gains, land speculation: Hi, You don t need to report receiving the lots on your tax return. When you sell them you will need to know your cost basis. Since your received them as a gift your cost basis would be whatever the donor paid for them. Assuming you sell them at a...

Tax Law (Questions About Taxes): land, capital gains rate, land speculation
capital gains rate, land speculation, taxable gain: Debbie, Thanks for your question. You don t state why the lots were deeded to you, I presume they were given as a gift. If this is the case, your cost basis in the lots is the prior cost basis from the donor. When you sell, your taxable gain will be...

Tax Law (Questions About Taxes): land, land speculation, depreciable asset
land speculation, depreciable asset, cost basis: Debbie. Thank you for your questions. 1)Do I need to record them in any way on my taxes? Land is not a depreciable asset. If you intend to build on it, you should keep track of how much money you spend. Did you cancel debt in exchange for the...

Tax Law (Questions About Taxes): land, bush tax cuts, land speculation
bush tax cuts, land speculation, capital asset: Hi Debbie I do not understand quick deeded please explain and give a reason land is capital asset taxed as any other capital asset so if held for more than one year it qualifies for the LTC gains tax ,however this break is schedule to expire Jan 1,2009...

Tax Law (Questions About Taxes): Are we liable for deceased Fathers taxes, Back taxes, deceased taxes
Back taxes, deceased taxes, foreclosures: Julee, This is my opinion only but it had come up once or twice. You should probably call IRS and ask them to explain their position on holding an heir responsible and then write me back. The best number (while there may be a hold) is: 1-800-828-1040....

Tax Law (Questions About Taxes): Married filing separately for expat with foreign spouse?, foreign spouse, form 1116
foreign spouse, form 1116, worldwide income: Amy, Thank you for you question. 1) My question for 2008 is: would our taxes be lower if we file jointly or if we file Married Filing Separately? Filing jointly usually will get a better result. 2) It seems as if he d be double taxed on his...

Tax Law (Questions About Taxes): MBA Tuition, self employment tax, unreimbursed business expenses
self employment tax, unreimbursed business expenses, mba tuition: Sam, Thank you for your question. 1) What is the best way for me to receive this payment for tax purposes? Are there any expenses associated with the $70,000 you will collect? Will there be a 1099 issued to you or are taxes taken out? If a 1099 will...

Tax Law (Questions About Taxes): MFS - amending later, loan payment amounts, student loan repayment
loan payment amounts, student loan repayment, loan forgiveness: You can amend to MFJ anytime within the 3 year window of amending the returns. HOWEVER, I m not sure if what you are planning on doing is going to be looked at as committing fraud for the repayment legislation. And I can t help you with that aspect of...

Tax Law (Questions About Taxes): Mileage, unreimbursed business expenses, business miles
unreimbursed business expenses, business miles, form 2106: Robert, Thank you for your question. You can take unreimbursed business expenses using form 2106 , which gets transferred to itemized deductions, under miscel subject to a 2% adjustment of your total income (AGI). You would report the business miles...

Tax Law (Questions About Taxes): Mileage Reimbursement, employee business expenses, irs rate
employee business expenses, irs rate, adjusted gross income: Hi, They aren t required to reimburse you for your mileage at all. Since they reimburse you at less than the Federal rate, you can claim the difference as unreimbursed employee business expenses. It is reported as an itemized deduction on Schedule A to...

Tax Law (Questions About Taxes): Military Retirement, tax court decision, examed
tax court decision, examed, military retirement: Hi, Since you have a tax court decision that supports your claim that this is alimony, it sounds right to me. Persist in your claim with the IRS and, if necessary, go to tax court yourself. You might want to consider hiring a professional (Enrolled Agent...

Tax Law (Questions About Taxes): Mortgage interest, steve thanks, stancil
steve thanks, stancil, mortgage interest: Steve, Thanks for your question. She cannot take half the interest as she did not make the payments. Being legally liable is only one of two tests to take the deduction - the second one being you must make the payments. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): medical deduction for pool, adjusted gross income, irs audit
adjusted gross income, irs audit, medical deduction: Angela, Thanks for your question. The pool is deductible if she has a letter from her doctor prescribing a pool for medical reasons. However, the full cost of the pool will not be deductible. You can deduct the excess of the pool cost over the...

Tax Law (Questions About Taxes): mom's house, capital gain taxes, annual exclusion
capital gain taxes, annual exclusion, question thanks: Original basis is her purchase price in the 60 s. Capital gain taxes are zero for those in the 15% or lower bracket, 15% for all others. As I stated earlier the annual gift exclusion is $12,000 per recipient. Hope this helps. John Stancil, CPA ...

Tax Law (Questions About Taxes): moving from one state to another mid year, state income tax, form 3903
state income tax, form 3903, watertown new york: Michelle, Thank you for your follow up question. 1)so are you saying only those 2 months of income that I earn would be subject to state income tax and if so how much. I work from home my company is based in Dallas so how does that play into...

Tax Law (Questions About Taxes): Needing form to ammend a tax return, irs office, irs gov
irs office, irs gov, back taxes: Vicky, An amendment can be done on an 1040-X . It is available on IRS.Gov or at your local IRS office if you do not use the Internet. The 1099-S or 1099-A or even the amended return can probably wait until IRS sends you a notice about this. Also, if...

Tax Law (Questions About Taxes): Non business Bad Debt-Home Improvement, home improvement question, poor workmanship
home improvement question, poor workmanship, stancil: You do not have to actually spend the $40K, an estimate of the cost to finish would be sufficient to establish the amount you have been injured, for tax purposes. The 20K would most likely not be deductible. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): need to know how to do taxes, self employment tax, self employment income
self employment tax, self employment income, social security and medicare: Hi, You will report your income and expenses on Schedule C. Your net self employment income will be subject to self employment tax (social security and medicare) as well as income tax. The calculation for self employment tax is net self employment income...

Tax Law (Questions About Taxes): Offer/Compromise when disabled, offer in compromise, medical mystery
offer in compromise, medical mystery, home equity loan: Mary, I feel for you, but you can t expect not to pay taxes even with illnesses, etc. Since you have equity in your home, the IRS will expect to be paid. You are not uncollectable and you do not qualify for an offer in compromise due to this equity so...

Tax Law (Questions About Taxes): Overseas Tax Exempt, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: Sean, The foreign earned income exclusion will be prorated, but in order to receive it at all you must meet the 330 day requirement. For example, suppose you are in a foreign country for 200 days in 2007, on the 130th day in 2008 you will have met the...

Tax Law (Questions About Taxes): Owner financing tax rate. Mineral lease bonus tax rate., capital gains tax rate, realtor fees
capital gains tax rate, realtor fees, form 6252: Hi Ning you have an instalment sale reportable on form 6252 unless you elect to report the whole profit this year,( this may be something for you to consider as it appears that the capital gains tax rate may be higher in the future your call ) the interest...

Tax Law (Questions About Taxes): Parentally abducted children, abducted children, sole custody
abducted children, sole custody, stancil: Bill, Unfortunately not. Since the child was abducted by a relative, they are not considered by the IRS as kidnapped. They did not live with you, and presumably you did not provide over half their support, so you do not have a claim to dependency. ...

Tax Law (Questions About Taxes): Partnership w-2, partnership tax return, self employment taxes
partnership tax return, self employment taxes, partnership agreement: don, Thanks for your question. No, that is not allowed by the IRS. As a partner, you cannot be an employee. You receive a K-1 at the end of the year and pay self-employment taxes on your share of the earnings. You would have to received a guaranteed...

Tax Law (Questions About Taxes): Pay tuition from IRA, ira account, interest on the loan
ira account, interest on the loan, third choice: Diana, Thank you for your questions. 1)How do you know the money count as principle or gain if you are only taking out part of it? The vendor will usually carry the records to distinguish between what was contributed by the taxpayer in form of premiums...

Tax Law (Questions About Taxes): Personal mileage on a company car, irs rules, irs regulations
irs rules, irs regulations, company cars: There is no definition of local for tax purposes. Any miles you drive after your commute from your residence to your place of business as deductible at $.585 per mile. The company s policy on reimbursement is their own policy and not dictated by IRS regulations....

Tax Law (Questions About Taxes): Personal miles/company truck, days in a year, vacation time
days in a year, vacation time, additional income: Steve, Thank you for your question. Your employer is correct. That is why most people first go their office and then count from there and from the last visit to home is the back end. This is what the IRS refer to as your commute There is the commuting...

Tax Law (Questions About Taxes): Physical Presence Test, physical presence test, fide residence test
physical presence test, fide residence test, form 2555: Samuel, Thank you for your follow up. 1)so I can exclude the full 85700. Is this correct? Correct. 2008 had a leap year, so Feb was 29 days. So you are working with 333 days for the period 1/1-11/28. They just want to establish that you were...

Tax Law (Questions About Taxes): PRI-States-tax, payroll department, state income tax
payroll department, state income tax, california ca: Andrew: Could you please re-ask your question clarifying the meaning of PRI-TAX and CA? As I understand your question, if you work and live in California (ca), then your employer should with-hold your state income tax and remit that to the state for...

Tax Law (Questions About Taxes): Primary residence as a rental, hoa dues, mortgage home equity
hoa dues, mortgage home equity, ny suburbs: Matt, Thanks for your question. First, to my knowledge, there is no official status primary residence with intention of returning. If the rental is not for profit, you report your rental income as other income on line 21 of the 1040. You can then...

Tax Law (Questions About Taxes): payroll or not?, self employment income, self employment tax
self employment income, self employment tax, social security and medicare: Hi, Because your employer is not paying half of your social security and medicare, you are paying it all in addition to income tax. So you would end up paying more in total taxes. Not knowing what you do it s difficult to suggest an expense you might...

Tax Law (Questions About Taxes): pipeline easement, legal relationship, ag land
legal relationship, ag land, income subject: Tim, Thank you for your question. I found something that happens to farmers. See below: If you receive a specified sum or an amount fixed without regard to the quantity produced and sold from the deposit and you retain no economic interest in the...

Tax Law (Questions About Taxes): Real Estate Business Loss, irs publication 17, irs audit
irs publication 17, irs audit, personal beach: IRS Publication 17 would be a good place to start reading. It will probably refer to another related publication as well. I would suggest professional preparation of your tax returns with this matter in mind, to 1.) ensure the transaction gets reported...

Tax Law (Questions About Taxes): Reimbursement checking account for gas, irs rate, adjusted gross income
irs rate, adjusted gross income, mileage rate: Cheryle, Thanks for your question. Such a system is legal, but not very smart. This type of plan is known as a non-accountable plan. Under these plans, reimbursements are taxable income but you can deduct the mileage - if you itemize. So in your case...

Tax Law (Questions About Taxes): Rental Expenses, IRS Taxes, property taxes
IRS Taxes, property taxes, home tax lien: Yes you can. As long as you utilize the Schedule E as explained (properly), losses can be taken up to $25,000.00 per year. After that it is more tricky and you have to capitalize them in the sale itself. Also, I need to tell you that once you make this a...

Tax Law (Questions About Taxes): Renting primary residence, question thanks, personal residence
question thanks, personal residence, mortgage interest: My answer was contingent on you eventually selling the property within a year, or two at the most. If you rent the property longer than a year or two, the IRS may take the position that you have converted the property to an income producing asset, a rental...

Tax Law (Questions About Taxes): How To Report Lease Option Down Payment, irs web site, form 1040nr
irs web site, form 1040nr, lease option: David, Thank you for you question. 1)How do I report the down payment income on my taxes for a sale that hasn t yet happened? If the sale did not take place yet, then it is a deposit to be applied. Since they have an option to buy, then they have...

Tax Law (Questions About Taxes): Resellers tax, retail sales operation, drop ship
retail sales operation, drop ship, tax forms: Ms. Capitanachi: If you have all your tax forms in order to operate a retail sales operation then you may not owe any sales tax until the item is sold. Should you not have your forms in order you will owe sales tax when you purchase and your customers...

Tax Law (Questions About Taxes): Return to Job market as a Private Contractor, form 1040 schedule c, self employment tax
form 1040 schedule c, self employment tax, form 1040 schedule se: Robert, Thank you for your question. 1)My question is how do I file for Social Security, Federal,State Taxes and Employment withholdings during the year. As a self employed individual, you will be filing a form 1040 Schedule C and Form 1040 Schedule...

Tax Law (Questions About Taxes): rental property losses, property tax payments, full time job
property tax payments, full time job, property losses: Hi, When you deduct your expenses they include mortgage interest and property taxes as well as other expenses including insurance and depreciation. You don t deduct the mortgage payment itself since that includes something toward the principle, Regards,...

Tax Law (Questions About Taxes): How to report to investors in an LLC, promissory note, interest income
promissory note, interest income, net profit: It depends on how they are investing in the LLC, if not as members than they are loaning the LLC money payable in interest which is not dependant on earnings. They should be given a 1099=int based on the interest paid to them, evidenced by a promissory note....

Tax Law (Questions About Taxes): How to report a rollover, irs letter, 1099b
irs letter, 1099b, retirement plan: Hi, I think I would have reported it as a rollover but, as you said, the paperwork doesn t support that entry. However, as long as the client has paperwork showing that the proceeds were in fact rolled over to the new employer s plan, it shouldn t be a...

Tax Law (Questions About Taxes): resident alien mutual funds, resident aliens, worldwide income
resident aliens, worldwide income, stancil: Claudia, Thanks for your question. Citizens and resident aliens are subject to tax on all their worldwide income. You will be liable for tax on the gain from the sale of the mutual funds. If there is a loss, it will be deductible. This is reported...

Tax Law (Questions About Taxes): S-Corporation and 1099-C, personal tax return, foreclosure status
personal tax return, foreclosure status, mortgage holder: The taxes cannot be avoided. The fact that the business is insolvent has no bearing in this case. It would have been better if the s-corp election was broken, than the tax would be on the corporation and not you personally. Then the Corporation could declare...

Tax Law (Questions About Taxes): S-Corporation and 1099-C, Taxes, Tax problems
Taxes, Tax problems, tax advantaged: If it falls outside of the exceptions I explained, it can be claimed as a dividend on your personal return (via a K-1 for Sub-S Owners). However, this only exempts you from including it as a wage subject to Social security. Dividends are still taxed as ordinary...

Tax Law (Questions About Taxes): S- corp and legal fees, google shares, tax publication
google shares, tax publication, s corp: File it as a legal expense on the S-corp return. The offset is an additional capital amount equal to the expenses you paid on behalf of the corporation. Then pass through the legal expenses through your K-1 from the s-corp. That way they are not miscellaneous...

Tax Law (Questions About Taxes): S-corp VS C- Corp, capital gain tax, engineer job
capital gain tax, engineer job, s corp: An S-corp s earnings are distributed to the shareholders. Any distributions from the S-corp are tax free to the extend of the shareholder s capital account. Any excess distribution over the shareholder s capital account is a capital gain. Typically shareholder...

Tax Law (Questions About Taxes): Sale of Church building, stancil, mike thanks
stancil, mike thanks, charitable contributions: Mike, Although the law is somewhat hazy, as a church you do not need to file a 1023 to be tax exempt. However, it is a good idea to do so. The contributions are deductible regardless of your 501(c)(3) status. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Sale of property, tithes and offerings, short term capital gain
tithes and offerings, short term capital gain, capital improvements: Hi, You will owe taxes on the gain (if any) on the sale of your home. First you need to calculate your cost basis. This is what you paid for the home plus capital improvements less the money you received from the insurance company. If you spent money...

Tax Law (Questions About Taxes): Sale of rental property, capitol gain tax, property question
capitol gain tax, property question, personal residence: This home does not qualify for any exclusion. Therefore, you will owe tax on the sale (and it can be ordinary and capital - depending on the method of depreciation and other items) and it is also taxable to both PA and the state it is in (I m assuming DE...

Tax Law (Questions About Taxes): SCORP Taxes on Initial Startup, income tax liability, initial investors
income tax liability, initial investors, father to a son: You told me that the initial investors put it $500 each for a 50% total interest. You are selling another 25% for $1,500,000. That is not an equal investment. Again, no income tax liability is incurred by the corporation or shareholders for the investment...

Tax Law (Questions About Taxes): SEP IRA, roth ira contribution, irs web site
roth ira contribution, irs web site, sep ira contribution: Yvonne, Thank you for your question. 1)Can the corp contribute to a SEP IRA for him even he has already put $4000 into his personal IRA in March. Can he have both SEP IRA and personal IRA? A Roth IRA yes. A traditional IRA no. A simplified employee...

Tax Law (Questions About Taxes): SEP for SMLLC, income tax purposes, sep retirement account
income tax purposes, sep retirement account, schedule c: Hi, A single member LLC is not recognized as an entity for income tax purposes. The income and expenses are reported on Schedule C. You can have a SEP retirement account. If you have a separate checking account for the LLC write a check from it. Regards,...

Tax Law (Questions About Taxes): SEP for SMLLC, sep retirement account, sole proprietorship
sep retirement account, sole proprietorship, tax id number: Keith, Thanks for your question. The IRS does not recognize LLC s as a distinct form of business organization. As a single member LLC with no tax ID number, they treat you as a sole proprietorship. As such you may contribute to a SEP-IRA. Funding...

Tax Law (Questions About Taxes): Section 179 for 2008, economic stimulus, sec 179
economic stimulus, sec 179, section 179: Evan, Airplanes will qualify for Sec. 179, in full, if it is property used in your trade or business, is not used outside the United States, and was not purchased from a related party. The Economic Stimulus Act of 2008 increased the maximum 179 deduction...

Tax Law (Questions About Taxes): Selling a home, Taxes, IRS
Taxes, IRS, Delinquent Returns: Under present law (and I emphasize present ), will probably not change in 2009 at the earliest, you do not have to reinvest your. The key is if your profit is under 250K and you have lived in it 2 out of the last 5 years, their is no recognizable gain...

Tax Law (Questions About Taxes): Selling Primary Residence/Capital Gains, capital gains tax, unforeseen circumstances
capital gains tax, unforeseen circumstances, health employment: Hi, If you sell before 2 years have elapsed, you could have a reduced exclusion if your move was for reasons of health, employment or certain unforeseen circumstances. Otherwise you would pay capital gains tax on the entire gain. Regards, Carol...

Tax Law (Questions About Taxes): Selling personal primary residence to my corporation, professional services company, realtor fees
professional services company, realtor fees, current market value: You cannot sell the house to the corp at anything above the fair value of the property on date of acquisition. The excess over the price paid would be considered a dividend to you, and create a second class of stock since the other shareholders do not receive...

Tax Law (Questions About Taxes): Separated Tax Filing, own business, tax rate
own business, tax rate, irs: Jack, Thank you for your question. Just a note, why did she not incorporate if the business was making so much money? This way the debt stays with the corporation and she would not be liable personally. Yes, by filing married filing separately, your...

Tax Law (Questions About Taxes): Seperated parents and taxes, federal college grants, fafsa form
federal college grants, fafsa form, income tax purposes: Debra: This is not separated parents in a legal sense, it is a child born out of wedlock. A parent can claim a child as a dependent, when that parent pays more than 50% of the child expenses and the child lives with the parent more than 50% of the time...

Tax Law (Questions About Taxes): Severance Pay Taxes, income tax withholding, severance pay
income tax withholding, severance pay, stancil: Rhonda, Most likely. The severance pay is subject to income tax withholding as well as social security/medicare. The employer has the option of using regular withholding rates or a flat 25% of the amount of pay. From your description, it sounds as if...

Tax Law (Questions About Taxes): Short Sale Tax consequences, business failure, clothing bank
business failure, clothing bank, land acquisition: Debbie, Thanks for your question. You will receive a 1099. If, however, you are insolvent you can file Form 982 to avoid taxation on the forgiven debt to the extent of your insolvency. If you are not insolvent or some of the forgiven debt is taxable,...

Tax Law (Questions About Taxes): Social Security, social security tax, social security benefits
social security tax, social security benefits, social security and medicare: Hi, The law requires that employees and their employers pay social security and medicare tax even though an employee is already receiving social security benefits. But the good news is that these additional payments can increase your social security benefits....

Tax Law (Questions About Taxes): SSI, dependency exemption, stancil
dependency exemption, stancil, eic: Kristen, The income you mention is not earned income, therefore you are not eligible for the EIC. The IRS will not disclose the information regarding your daughter taking the dependency exemption. You could alert them to the fact that she may be doing...

Tax Law (Questions About Taxes): Where Do I Start?, Taxes, IRS
Taxes, IRS, Delinquent Returns: Adam, Actually where you start is to check my website and give me a call but I don t know if I can simply answer a question that way? IRS taxes can be put off especially if you have no means to pay at all. Preparing your taxes is not excusable but won...

Tax Law (Questions About Taxes): Where Do I Start?, irs lien, better business bureau
irs lien, better business bureau, red flags: Criteria to look for would be to know WHO is going to be personally working your case. Name? Credentials? Experience? Kind of company? One that specializes in tax collection resolution services. Red flags? Not in business very long. Negative Better...

Tax Law (Questions About Taxes): Stimulus Offset, irs web site, defaulted student loans
irs web site, defaulted student loans, financial management service: Angela, Thank you for your question. On your 2007 return, did they give your husband back his share of the refund? As to the economic stimulus payment, this had never been done before, so if they would like another form 8379, can you just send them another...

Tax Law (Questions About Taxes): Stimulus package rebate taxation, probate proceeding, stimulus package
probate proceeding, stimulus package, oversite: The payment should be included in her estate and estate tax should have been paid on the proceeds. Whether you file an amended 706 is up to you, we cannot advise you. If the 706 was prepared by a CPA or Attorney, they should file the amended return for you...

Tax Law (Questions About Taxes): Student exempt situation, justin age, son justin
justin age, son justin, local taxes: PA is a flat tax state and if your son is working here, he will pay taxes here. The tax rate is 3.07% for the state (and there is no exemption as long as he is your dependent) and the local taxes range from 0% to 4.25% (in Philly). Helen, EA in P...

Tax Law (Questions About Taxes): s corp and car expenses, business checking account, business credit card
business checking account, business credit card, s corp: Your S-corp should have an accountable plan and you should submit an expense report and the S should reimburse you for the plan. And of course you have a log book showing the business expense....this is a VERY hot spot for the IRS right now. Helen, EA...

Tax Law (Questions About Taxes): s corp and car expenses, business checking account, business credit card
business checking account, business credit card, car expenses: Jose, Thanks for your question. What you are doing is not correct. You cannot deduct expenses and take standard mileage. If the expenses are paid in full, you have taxable income for the personal usage portion. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): s corp income reported, snap on tool, fraud division
snap on tool, fraud division, minor daughter: Hard evidence would be any documentation that can show that transactions were not recorded, or non deductible expenses were recorded as deductible expenses to avoid taxes. If you know of other bank accounts he has to which he deposits funds and does not...

Tax Law (Questions About Taxes): salary vs. bonus, from employer perspective, supplemental wages, social security and medicare
supplemental wages, social security and medicare, bonus payments: That is correct. SS and Medicare are due from the employer and the employee as with regular wages. The flat rate method is simpler for the employer and frequently results in less withholding if the employee is in a higher pay range. John Stancil, CP...

Tax Law (Questions About Taxes): sale of 1/2 of house to spouse, property settlement agreement, tax basis
property settlement agreement, tax basis: Scott, Thank you for your question. 1)Can I sell my 1/2 share in the house to her now, use my $250K exclusion and cause her to have a higher basis? You are absolutely correct when you state the if you deed her your share she will only get 1/2 of...

Tax Law (Questions About Taxes): self employed healt insurance, health insurance premiums, self employment taxes
health insurance premiums, self employment taxes, income subject: Health insurance premiums are deducted on line 29 of form 1040, and not on schedule C. Yes, this increases the income subject to self employment taxes. The deduction is the lesser of the premiums paid or the earned income of the taxpayer. John Kirk,...

Tax Law (Questions About Taxes): selfemp, social security benefits, wages
social security benefits, wages, social security: Grace, Thank you for your question. 1)if you go selfemp and you pay selfemp taxes does this help you when you retire or do you need to do something else to be able to get social sectary As a self employed person, you have to pay your share plus the...

Tax Law (Questions About Taxes): seller, Tax or IRS Problem, Credit
Tax or IRS Problem, Credit, Title: Larry, The 1098 s are no problem but one should do a thorough investigation on the tax history of this account and a survey and title search. You must get a deed to this property. Are you paying off the mortgage company? Any furter questions, just ask?...

Tax Law (Questions About Taxes): selling stock, tax implication, tax consequences
tax implication, tax consequences, maximum rate: Hi, Under current law, she can give $12,000 (cash, stock or property) to any number of individuals in a year without having to file a gift tax return. The recipients of gifts have no tax consequences. From the recipients standpoint, if she gives them...

Tax Law (Questions About Taxes): severance pay taxes, federal tax rate, severance pay
federal tax rate, severance pay, state income taxes: Alan, Thanks for your question. Unless your supplemental pay (bonuses, commissions, and severance pay) for the year exceeds $1,000,000 the IRS has two methods of withholding. The first is known as the aggregate method, in which the severance pay is...

Tax Law (Questions About Taxes): short sale of 1st home refide, loss mitigation, payoff debt
loss mitigation, payoff debt, approximate figures: Jay, Since you refinanced and took some cash out, you will have to report as income the excess of what is owed over the sale price. You can complete Form 982 to see if you are eligible to have any of the forgiven debt excluded. Hope this helps. John...

Tax Law (Questions About Taxes): Which situation would cause less to be paid in tax?, adjustable rate mortgage, capital gains tax
adjustable rate mortgage, capital gains tax, run on sentence: The kids cannot be given a gift of equity. However, dad will have to file a gift tax return, BUT not pay gift tax unless he has already given 1 million in gifts. I have no idea what his taxable gain would be, it depends on the depreciation allowed or...

Tax Law (Questions About Taxes): social security, foreign earned income, taxable social security
foreign earned income, taxable social security, social security widows benefits: Lisa, Thank you for your question. Since your only source of income is $1400 per month, you will not have to pay taxes on this amount. You can exclude up to $25000 of total income before your social security becomes taxable. You would still have to file....

Tax Law (Questions About Taxes): state income tax, federal tax form 1040, tax form 1040
federal tax form 1040, tax form 1040, federal tax form: Sandi: Maryland has an agreement with DC that employers will withhold state income tax and forward. This usual and normal with employers in states that have state income tax. It does not effect the filing of Federal Tax Form 1040 not the same taxing authority....

Tax Law (Questions About Taxes): state residency and taxes, florida residence, state residency
florida residence, state residency, reciprocal agreement: Linda, Thanks for your question. For tax purposes you will be considered residents of Virginia.There is a reciprocal agreement between DC and Virginia, so you will not owe taxes to both jurisdictions. As far as vehicle and driver s licenses, those...

Tax Law (Questions About Taxes): TAX - FOREIGN?, income tax return, non resident alien
income tax return, non resident alien, form 1065: Ignacio, Thank you for your question. You can incorporate in any State of the United States. If you do business in New Jersey, you will just have to file a tax return to report that income to New Jersey. You also may be required to file a New Jersey Non...

Tax Law (Questions About Taxes): TAXES LLC, stancil, state taxes
stancil, state taxes, incomes: Ignacio, Thanks for your question. The IRS is not concerned with identifying the source of the income, just that you report it. You can set up your LLC in whatever state you desire (simplest if you do your state of residence), you will pay state taxes...

Tax Law (Questions About Taxes): Taking partnership buyout, marginal tax bracket, stancil
marginal tax bracket, stancil, capital asset: Kathy, Thanks for your question. Most likely the gain would be taxed at capital gain rates, which current are zero or 15% depending on your marginal tax bracket. If it is not structured so that it is treated as a sale of a capital asset, it would be...

Tax Law (Questions About Taxes): Tax Deduction???, stancil, tax deduction
stancil, tax deduction, cpa: Todd, Thanks for your question. Just putting your company name on the trailer will not make it a tax deduction. The trailer is tax deductible only to the extent it is used in the business. If it is used 50% in the business, 50% of it is deductible....

Tax Law (Questions About Taxes): Tax Deduction - Behavior Therapy ADHD, irs publication 17, volunteer forum
irs publication 17, volunteer forum, stancil: David, Thanks for your question. If the therapy is classified as medical treatment, it is deductible. Since this is a volunteer forum, it would be too time consuming for me to cite code or precise sources. The information is contained in IRS Publication...

Tax Law (Questions About Taxes): Tax on HOA Gas Royaties, unrelated business income, gas royalty
unrelated business income, gas royalty, bonus check: David, Thanks for your question. If the amount is less than $1,000 a year, it is not a problem. If the amount is $1,000 or more you may have unrelated business income. There are three criteria that would make these funds taxable 1) A trade or business,...

Tax Law (Questions About Taxes): Tax on Housing, summary plan description, reply thanks
summary plan description, reply thanks, taxable benefit: Sec 119 is applicable, why your employer is considering a portion to be included as compensation may be related to the exception for inadequate rental. The institution is including the excess of the rental value over the rent paid as additional compensation...

Tax Law (Questions About Taxes): Tax on retirment, social security disability, standard deduction for 2007
social security disability, standard deduction for 2007, private plan: Hi, By disability, do you mean social security disability or a private plan? If it s a private plan and your employer paid the premiums for it, it would be taxable to you. If you paid the premiums, it would not be taxable to you. If it s social security...

Tax Law (Questions About Taxes): Tax on Shipping & Handeling, tupperware party, tax on freight
tupperware party, tax on freight, labor expenses: Jeff, Sales taxes are state taxes, and each state is free to pass laws taxing whatever they choose to tax. Some have chosen to tax shipping and handling. Others don t. It s that simple - we may not like what they have chosen to tax, but that s the power...

Tax Law (Questions About Taxes): Tax on a Structured Settlement, TAX PROBLEMS, IRS PROBLEMS
TAX PROBLEMS, IRS PROBLEMS, CREDIT: Hi, We need to determine if your original annuity or structured settlement is a taxable annuity; thereby, pre-tax before you receive it? In other words has any tax ever been paid on it and was it given as a taxable settlement. If it was then the settlement...

Tax Law (Questions About Taxes): Tax Withholding, tax withholding, biweekly
tax withholding, biweekly, paycheck: Ryan, Thank you for your question. 1)Is this income considered luxury or do they just withhold more and tax the same amount? They probably withhold more figuring that this amount will bring you in a higher bracket. Basically withholding is...

Tax Law (Questions About Taxes): Taxation of retirement funds, minimum distribution requirements, progressive income tax
minimum distribution requirements, progressive income tax, certificates of deposits: Ugur, Thank you for your follow up question. 1)Which date would be important for physical presence ?? Entry to the USA or taking employment there ?? According to the IRS From 1040 NR instructions: You would be in a dual status year. Most dual...

Tax Law (Questions About Taxes): Taxation of year end bonus to recipient, year end bonus, contract labor
year end bonus, contract labor, construction firm: Beverly: The bonus should be reported on the W-2 along his other wages. The bonus is wages not contract labor or non employee compensation. For some reason some accountants think or assume that bosuns are not wages. However, wages are pay from what ever...

Tax Law (Questions About Taxes): Taxes, life insurance proceeds, qualified retirement plans
life insurance proceeds, qualified retirement plans, retirement money: Cherry, Thanks for your question. As a rule the value of inherited property is not taxable. However, if the property increase in value and you sell it, you would owe taxes on the gain from its value as of date of death. Annuities and qualified retirement...

Tax Law (Questions About Taxes): Taxes on Inheritance, real numbers, three ways
real numbers, three ways, inheritance: If you did not sell it to a relative or closely related party, and the date of death value was 280K and the family got 200K, you do have a deductible loss of $2,400, but you need to have real numbers and you cannot have lived in the home for 2 out of the last...

Tax Law (Questions About Taxes): Taxes on income overseas, but living in the U.S., income tax exemption, kingdom of saudi arabia
income tax exemption, kingdom of saudi arabia, tax regime: Glenn: Under first impression I do not believe that it will effect the exemption rules. You have to admit that is a lucrative deal to work in an area where everyone dreams about. If I lean anything different I will post a follow up to you. Joh...

Tax Law (Questions About Taxes): Taxes on paying for yard work?, irs publication 926, cash wages
irs publication 926, cash wages, household employee: Wendy, Thank you for your question. 1)Do we have to pay taxes on what we pay him? Technically, yes you have a household employee. As a practical matter, people usually don t. 2)I ve heard somewhere that anything under $5000/year would not require...

Tax Law (Questions About Taxes): Taxes on Sale of Property- California, principal residence, fmv
principal residence, fmv, living trust: Hi Suzanne then the exemption remains at 250k However from your question I have no idea how much would be you father s gain but here is an idea remember if the house was owned jointly when your mother died the basis on one half of the house was increased...

Tax Law (Questions About Taxes): Trading stock and taxes, irs publication 17, irs publications
irs publication 17, irs publications, volunteer forum: Tony, Thanks for your question. When you trade your stock for another stock, a deemed sale has taken place and the gain or loss on the transaction must be determined and reported on Schedule D of your 1040. Your sale price is the value of the securities...

Tax Law (Questions About Taxes): Traditional IRA premature withdrawal to buy first home, ira cd, ira funds
ira cd, ira funds, 1st time home buyers: Yes, 1st time home buyers are allowed to receive a distribution from their IRA s for the purchase of their 1st home. However the amount of the distribution is limited to $10,000. And the closing cost and downpayment must exceed the amount distributed. ...

Tax Law (Questions About Taxes): Transfer Inheritance Tax, estate tax purposes, inheritance tax
estate tax purposes, inheritance tax, executrix: Assuming that you and your siblings are the only beneficiaries of her estate, putting the title in the name on the heirs divides the gain up. The amount of gain realized will be the excess of the sales price over the value for estate tax purposes, which should...

Tax Law (Questions About Taxes): Travel deductions, capital expenditures, play time
capital expenditures, play time, capital expenditure: The three weeks you spent remodeling counts as personal use, even though you had no play time . As such in order for the expenses to be eligible for deduction the property must be rented out during 2008 for more than 211 days for the expenses to be fully...

Tax Law (Questions About Taxes): Treasury Stock, treasury stock, stancil
treasury stock, stancil, s corporation: Jeff, Thanks for your question. It really doesn t matter what they do with the treasury stock. It is stock that the company has repurchased from shareholders at some point in the past. They can sell it to themselves to increase the amount of capital...

Tax Law (Questions About Taxes): tax break for geothermal heat, geothermal heating and cooling system, geothermal heating and cooling
geothermal heating and cooling system, geothermal heating and cooling, geothermal heat pump: Hi, There is an energy credit that might give you a tax credit if you purchase this system. A qualified geothermal heat pump would give you a maximum tax credit of $300. Obviously this would not substantially reduce your expenditure but if you want to...

Tax Law (Questions About Taxes): tax consequences of transferring house as gift or sell to sister, capital gain taxes, tax consequences
capital gain taxes, tax consequences, taxable estate: The tax consequences depend on you and your sister s tax bracket, and whether you have a taxable estate. The best thing to do if you have lived in the house for two years out of the last 5 years, is to sell the house to her at the current market rate. You...

Tax Law (Questions About Taxes): tax id number - EIN, self employment income, self employment tax
self employment income, self employment tax, federal tax id: Hi, From a Federal tax standpoint you don t need a tax id number unless you employ others. Also there is no fee to file a Federal tax return or to get a Federal tax id number. I don t know what your local or state requirements are so you need to check that...

Tax Law (Questions About Taxes): tax laws, 1099, desk computer, computer phone
desk computer, computer phone, fax supplies: Avraham, Thank you for your question. Your employer should know better, If he paid you on a W-2 and you filled out a W-4, he is responsible to take out taxes on the commissions. You cannot be a W-2 and a 1099 in the same year. He should be held responsible....

Tax Law (Questions About Taxes): tax question, minimum distribution requirements, capital gains rate
minimum distribution requirements, capital gains rate, long term capital gains: Doug, Thank you for your question. 1)I m interested in how I am going to be taxed when I am old and gray. Is this capital gains tax or considered income?? When you reach 59 1/2 you must start taking out money from your 401K. IRS refers to as ...

Tax Law (Questions About Taxes): taxable income, irs publication 17, security retirement benefits
irs publication 17, security retirement benefits, social security retirement: IRS Publication 17 contains that information. It is available online at www.irs.gov. Also on that site you can click on individuals and it will show a link that says do you have to file a Federal Income Tax Return. Both of those should give you your...

Tax Law (Questions About Taxes): taxed too much money on military severance pay, military severance pay, federal withholdings
military severance pay, federal withholdings, mail: Ronald, Thank you for your question. By law, unless the military has their own set of rules, if they deposit money directly in your account, in the form of a direct deposit, then they are required to provide a receipt . This is usually done in the mail,...

Tax Law (Questions About Taxes): taxes, federal income taxes, withholding allowances
federal income taxes, withholding allowances, stancil: Jay, Thanks for your question. Yes. The law requires 7.65 be withheld for social security/medicare. The additional would be state and federal income taxes, based on your earnings level and the number of withholding allowances you claim. Hope this...

Tax Law (Questions About Taxes): taxes, stancil, claim deed
stancil, claim deed, viewpoint: Shawn, Thanks for your question. You can pay the individual in any form of payment that he will accept. From your viewpoint, the transfer of title will be treated as a sale in the amount of the debt and you will report the gain or loss on Schedule...

Tax Law (Questions About Taxes): taxes owed, Taxes, IRS
Taxes, IRS, Delinquent Returns: Response: 1999 is barred by IRS and in most cases, 2000 and even 2001 now,also. Get a good IRS defense CPA; like myself, to get the records, than estimate (reconstruct) expenses and get the filing over with. Then, depending on the outcome you might be...

Tax Law (Questions About Taxes): taxing part time employees under the age of 18., irs web site, summer basketball camps
irs web site, summer basketball camps, irs gov: Craig: Yes you need to take out and report the kids. Since they are being reported as dependents on their parents tax returns, their wages will be required to be reported and the tax rate will probably be 15%. But do check the IRS web site (www.irs.gov)...

Tax Law (Questions About Taxes): transfer tax, income tax consequences, stancil
income tax consequences, stancil, tax question: Again, this is a bad move. When the property is given to you, you get her basis. If you inherit the property, you will inherit it a fair market value as of date of death. This can be a significant tax difference. It seems to me that you are taking a...

Tax Law (Questions About Taxes): travel to donate, safari hunt, orphange
safari hunt, orphange, difficult point: Dan, Thanks for your question. The primary purpose of the trip must be for the charitable purposes. The portion of the trip that is for charity may be deducted. If less than half the trip is personal, you cannot deduct the travel costs to South Africa....

Tax Law (Questions About Taxes): traveling therapist, therapist question, stancil
therapist question, stancil, gray area: Like I said earlier this is a gray area. It is likely that the IRS would make a determination that your tax home is Phoenix, regardless of the fact that you are working for a different agency and school district. However, they may allow it. The intent...

Tax Law (Questions About Taxes): trouble with the irs, fraud penalties, criminal fraud
fraud penalties, criminal fraud, stancil: Melanie, Thanks for your question. You cannot claim exempt unless you have no tax liability for the prior year and do not anticipate one for the current year. To claim exempt when you are not is fraud. Penalties can be substantial (up to $100,000 and...

Tax Law (Questions About Taxes): U.S. taxes when working for the U.N, physical presence test, earned income exclusion
physical presence test, earned income exclusion, foreign earned income exclusion: Albert, Thanks for your question. As a U. S. citizen you are liable for income taxes on all your worldwide income, so the earnings would be taxable. However, there is a foreign earned income exclusion that excludes up to $85,700 from taxation when you...

Tax Law (Questions About Taxes): Unemployement Benefits, severance package, unemployement benefits
severance package, unemployement benefits, unemployment benefits: Ms. Johnson: The employer can claim anything he wants to claim. However, stick to your guns. The employer terminated your job, moved it to another city, and offered you less money. How can he now truthfully claim that you quite. I believe you have...

Tax Law (Questions About Taxes): unclaimed depreciation, equipment purchases, depreciation
equipment purchases, depreciation, cpa: You cannot claim depreciation generated in prior years on a future return, they must be claimed in the year generated. The depreciation for each year is claimed on the return for each year, not in 2005. If the depreciation causes a loss in 2005, you have...

Tax Law (Questions About Taxes): unemployment qualifications, unemployment benefit, new york state
unemployment benefit, new york state, denial: Anthony: You do have the right to contest New York denial of unemployment benefit. You may have been terminated with cause, and started drawing a pension from the company, but, this does not prevent you from contesting your termination. This everyones...

Tax Law (Questions About Taxes): unreimbursed expenses from employer bankruptcy, standard mileage allowance, form 2106
standard mileage allowance, form 2106, business miles: Rebecca, Thank you for your question. He should use Form 2106 to claim business expenses. There you can either 1)Claim the business use of actual expenses plus business depreciation plus tolls and parking less what he was reimbursed from his employer....

Tax Law (Questions About Taxes): untaxed income, form 1040 es, self employment taxes
form 1040 es, self employment taxes, quarterly payments: Jessica, Thanks for your question. All of his under the table earnings are taxable. He will need to report this income on Schedule C, and calculate the self-employment taxes on Schedule SE. In order to avoid paying a large sum in April, and to...

Tax Law (Questions About Taxes): vacation payout, irs law, cindy hall
irs law, cindy hall, irs regulations: Cindy, Thanks for your question. As a matter of fact, there is such a law. IRS regulations require that the employer use one of two methods for supplemental income payments. Your payment falls under that category. Method one, which they used, simply...

Tax Law (Questions About Taxes): Withdraw money from IRA, tiaa account, ira account
tiaa account, ira account, traditional ira: Diana, Thank you for your questions. 1. Does he need to pay the Federal Income Tax for the money that he plans to take out even he is not a US resident anymore? Yes, If he is has income earned in the US then he has to report his income from his retirement....

Tax Law (Questions About Taxes): Withdrawing from social security, social security tax, church synod
social security tax, church synod, employer id number: Erica, Thanks for your question. The employer ID number you need is the one for your employer. The commissioning body is the church body - individual church, synod, denomination, etc. that licensed or commissioned you. In addition, the Form 4361...

Tax Law (Questions About Taxes): Work at home, professional tax preparer, social security tax
professional tax preparer, social security tax, income tax return: You will definitely want to get a professional tax preparer to help you report everything to your maximum benefit from this activity. It will require a Schedule C Profit/Loss from a Business , and related forms. Form 8829, Home Office , and a Form 4562...

Tax Law (Questions About Taxes): Write off work tools., adjusted gross income, miscellaneous itemized deductions
adjusted gross income, miscellaneous itemized deductions, work tools: Jacob, Thanks for your question. Yes, you can deduct the cost of the tools. Unfortunately, it may not benefit you. They are deductible as Miscellaneous Itemized Deductions, so first, you must itemize your deductions. Secondly, you can only deduct...

Tax Law (Questions About Taxes): withholdings, vacation checks, bonus checks
vacation checks, bonus checks, stancil: Sandra, Thanks for your question. First, claiming exempt is legal only if you did not have a tax liability in the prior tax year and do not anticipate one in the current year. To claim exempt and not meet these conditions is illegal. The employer is...

Tax Law (Questions About Taxes): working and living different states, self employed vs employee
self employed vs employee: Hi Tom there are different rules for employees and different rules for the self employed individual running a business Tom If you spend more than 183 days in any state you are considered a resident of that state so your employer is correct in any...

Tax Law (Questions About Taxes): x-Wife to "Assume" Rental Proprty, rental proprty, stancil
rental proprty, stancil, claim deed: Ken, Thanks for your question. You have a basis in the house and you are basically selling it for your share of the amount owed on the house. Therefore you will have to reflect the gain or loss on the sale on Schedule D. Hope this helps. John...

Tax Law (Questions About Taxes): 1099, butt end, independent contractor
butt end, independent contractor, place of business: Martha: It appears your employer wants to consider you to be an independent contractor and not an employee. Do you work at the employers place of business? Do you perform the work under the control/supervision of the employer? If I had more information...

Tax Law (Questions About Taxes): 1099, state unemployment, payroll taxes
state unemployment, payroll taxes, proper determination: Your husband has been classified incorrectly and he will not only owe income tax, he will owe 15.3% of his income for social security taxes. So figure maybe 30-40% of his income going to taxes. The employer is not paying workers comp, unemployment or his...

Tax Law (Questions About Taxes): 1099 consultant tax questions, standard mileage allowance, irs website
standard mileage allowance, irs website, publication 1542: Sonya, Thank you for your question. 1)What is the maximum that I can write off The answer is that there is no maximum. You take off what you spend. If you want to estimate how much it is, you can do that. As a practical rule. I would figure...

Tax Law (Questions About Taxes): 1099 employee/employer, social security and medicare, medicare tax
social security and medicare, medicare tax, federal unemployment: Catheren: She is your domestic employee. You will be required to withhold income, social security, and medicare tax from her wages. You will also be required to pay the employers part of the Social Security and Medicare Tax. Also, will be required to...

Tax Law (Questions About Taxes): 1099 misc, income tax liability, income tax purposes
income tax liability, income tax purposes, steel toed boots: Sergio, There is no 1099 tax rate, it is the same for all ordinary income. You will need to determine how much you estimate you will make, subtract any deductible expenses. You cannot deduct gas if it is for commuting to the job. Same thing for food....

Tax Law (Questions About Taxes): 1099 Tax form and liability, 1040es, federal taxes
1040es, federal taxes, tax time: Adena: You will need to file 1040ES which will determine your tax liability for this year. For the state tax you will need to contact the State of Illinois for their form to correctly calculate your tax liability for this year. You will be filling...

Tax Law (Questions About Taxes): 1099 Tax form and liability, self employment tax, 1040es
self employment tax, 1040es, standard deduction: Jamie, Thank you for your question. 1)Will you please tell me how I can figure out what percentage of my pay should go towards my State and Federal taxes? The formula is you pay an income tax and you pay a self employment tax. For Federal, you...

Tax Law (Questions About Taxes): 1099 or W-2, self employment income, self employment tax
self employment income, self employment tax, employee business expenses: Hi, As a W2 employee you can deduct unreimbursed employee business expenses as an itemized deduction to the extent they exceed 2% of your adjusted gross income. Your employer pays half of your social security and medicare and you pay the other half. ...

Tax Law (Questions About Taxes): 1099 and working for non profit, unemployment checks, part time
unemployment checks, part time: Al: I am so sorry, but, once the act has already been done there is nothing she can do to undo the situation. If she truthfully answers the questions it will effect her unemployment. Just because its a not for profit or she only works part-time or occasionally...

Tax Law (Questions About Taxes): 1099c and small business, cash accounting, paying on time
cash accounting, paying on time, mike thanks: Mike, Thanks for your question. ci Certainly. Even though you are a cash basis taxpayer and have not reported the income, it is owed to you and you are within your rights to forgive the debt and issue a 1099-C. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): 1099misc from casino promotional winnings, irs web site, free drawings
irs web site, free drawings, tax deductible donation: Sheryll, Thank you for your follow-up question. 1)What is fair market value---only retail? Fair market value is what someone figures is the value that the market would determine for goods or services. It is usually up to the market who sets this...

Tax Law (Questions About Taxes): 2 JOBS/SAME EMPLOYER ; F-T; INDEPENDENT CONTRACTOR, cleaning rags, necessary supplies
cleaning rags, necessary supplies, typical problem: Pam: The typical problem with the typical response. I have a worker who is working for me as an employee (W-2) and as a contractor (1099). However, when one research tax law one will discover that its almost impossible for a person to receive both a...

Tax Law (Questions About Taxes): Is 22 too old to get CPA certification?, accounting courses, john thanks
accounting courses, john thanks, cpa exam: John, Thanks for your question. Not at all. There are a number of people who enter the profession in their mid-to-late twenties and beyond. Dollar wise, you will be behind your peer, but isn t that worth it to be doing what you enjoy? Hope this...

Tax Law (Questions About Taxes): 401(k) early withdrawal, john hancock, form 5329
john hancock, form 5329, interest on the loan: Loretta, Thank you for your question. 1)Can they do that? Yes, they are just following the law. Usually if you start to draw out money , and you are under 59 1/2, then you are subject to a 10% penalty imposed by IRS on Federal form 5329 , when you...

Tax Law (Questions About Taxes): 401k Early Withdrawal, personal income tax, 401k funds
personal income tax, 401k funds, federal income tax: Hi, If you take an early distribution from your 401(k) you will pay income tax at whatever rate your total income and deductions dictate plus a 10% early distribution penalty. The 20% is not a fee. It is withholding of Federal income tax. Also if you...

Tax Law (Questions About Taxes): 401k hardship withdrawl, mileage book, map quest
mileage book, map quest, 401k plan: Janet: I know it is rough. I feel for you and your situation. Hardship cases for withdrawal of 401K money are difficult. The IRS really do not want you to withdraw that money. However, if you do but do not follow the rules set up by the IRS and your...

Tax Law (Questions About Taxes): 401k withdrawl, irs web site, 401k distributions
irs web site, 401k distributions, irs individual taxpayer identification number: Rajini, Thank you for your questions. First of all, are you a US Citizen living abroad? 1) It depends on your age. If you are subject to 10% penalty, then you give up a usually 1/3 in taxes and penalties. 2) No just federal tax. 3) There is...

Tax Law (Questions About Taxes): 457b Plan, self directed 401k, impending retirement
self directed 401k, impending retirement, taking possession: It would be extremely difficult to find a trustee that would perform the kind of services you are requiring. A governmental 457b plan can only be rolled over to a 401k or another 457b plan. You would need to find a trustee that would allow you to invest...

Tax Law (Questions About Taxes): Acquiring a tax id and forming a partnership as minors, irs gov, legal minors
irs gov, legal minors, forming a partnership: You can not form a partnership because you are both minors, However you can create a Trust with yourselves as beneficiaries. An Adult must be the trustee, but you will be able to do business and have a tax ID. Go to IRS.gov to apply for and get a Tax ID...

Tax Law (Questions About Taxes): Allowable mileage deductions - cost of being Self Employed, company thanks, stancil
company thanks, stancil, hair dresser: Rick, Thanks for your question. Since she works only one location, that would be considered her primary place of business and travel to it would not be deductible, even if she is self-employed. The tax cost is 7.65%, which is the employer s share of...

Tax Law (Questions About Taxes): Annuity, annuity rollover, annuity company
annuity rollover, annuity company, traditional ira: Sorry I misunderstood. An annuity can be a traditional IRA if it is set up that way at the beginning. However, as you point out, the company must be one that accepts rollovers. If you merely place it in a traditional IRA without the annuity feature...

Tax Law (Questions About Taxes): Audited due to business expenses, employee business expenses, mileage info
employee business expenses, mileage info, income tax return: Deborah, Likely the information will be sufficient. But with the IRS, one can never be certain. If you explain you are no longer with the company, and relate to them the efforts you have made to obtain a copy of the reimbursement policy, that will help...

Tax Law (Questions About Taxes): amended tax returns, stancil, stimulus
stancil, stimulus, workload: Don, Thanks for your question. The IRS is moving extremely slow on processing of amended returns due to the workload from the stimulus payments. You can call 800 829-1040 and try to determine the status of your return, although don t be surprised if...

Tax Law (Questions About Taxes): capgains if home held for 21 months, involuntary conversion, multiple births
involuntary conversion, multiple births, maximum exclusion: If you are in a bracket lower than 25% your capital gain rate is zero for 2008. However, depending on the amount of capital gain, it could bump you into the 25% bracket, so it needs to be included on your return. Hope this clears it up. John Stancil,...

Tax Law (Questions About Taxes): Beneficiary Money, federal purposes, marginal rate
federal purposes, marginal rate, stancil: Michelle, Thanks for your question. It cannot be counted as a gift, as it is an inheritance. Your father did not pay taxes on this amount, so you must pay the taxes as the beneficiary. You will receive a 1099-R indicating the amount of withdrawal,...

Tax Law (Questions About Taxes): Business in OR, Work in TX, sole proprietorship, state income taxes
sole proprietorship, state income taxes, sole proprietor: Hi, Reregister the business in Texas so that in future years you won t have to worry about Oregon. I don t know what that entails but it should be fairly simple since you re a sole proprietor and could simply stop running the business if you chose. ...

Tax Law (Questions About Taxes): balance sheet and taxes, accrual method, s corp
accrual method, s corp, balance sheet: Julie Thank you for your question. 1)how do i reconcile my balance sheet to balance at this point. my income and expenses are correct. A)Check the retained earnings and accumulated adjustments account. There could be a pass thru deduction that has...

Tax Law (Questions About Taxes): business expense, www irs gov, mileage log
www irs gov, mileage log, mileage reimbursement: There is a publication at www.irs.gov specifically for clergy. Just go to www.irs.gov then forms and publications and do a search for clergy. Also look at publication 463 and form 2106. Remember if you can be reimbursed but do not accept the reimbursement,...

Tax Law (Questions About Taxes): business expense as a pastor, irs rate, individual tax return
irs rate, individual tax return, adjusted gross income: Abay, Thanks for your question. You can deduct mileage at the IRS rate as a miscellaneous itemized deduction. However, you can ony deduct miscellaneous itemized deductions that exceed 2% of your adjusted gross income. You cannot deduct commuting...

Tax Law (Questions About Taxes): business loss, sole proprietorship, business loss
sole proprietorship, business loss, stancil: Larry, Thanks for your question. No. You may be able to deduct the loss on Schedule C if it is a sole proprietorship, Schedule E if it was a partnership, or Schedule D if it was a corporation but you will not get a refund of your loss. The deduction...

Tax Law (Questions About Taxes): CA tax if living and working in Nevada, state income tax, california income
state income tax, california income, tax purpose: Megan: You may owe taxes in both states. My state does not have state income tax, therefore, I have delved into state income tax. Generally, if you work for a company and you travel to a state that has income tax, that part of your income that is earned...

Tax Law (Questions About Taxes): Capital Gains, irs website, maximum exclusion
irs website, maximum exclusion, 250k: Kristi, Thank you for your question. 1) Is there a time limit when the $500,000 tax free capital gains ends and she will only be eligible for the $250k? According to the IRS website: Special rules for joint returns. You can exclude up to $500,000...

Tax Law (Questions About Taxes): Capital Gains Tax, capital gains tax, worldwide income
capital gains tax, worldwide income, stancil: Gaurav, Thanks for your question. Yes, you would owe tax, at capital gains rates on your gain. As a U. S. citizen you are subject to tax on your worldwide income. Your gain is the difference in the proceeds of the sale minus the cost when originally...

Tax Law (Questions About Taxes): Capital Gains Taxes, capital gain taxes, capital gains taxes
capital gain taxes, capital gains taxes, flat zero: Drew, If you sell the house, you owe the taxes regardless of what you do with the proceeds. There is no provision for avoiding taxation by reinvesting the money. Capital gain taxes are a flat zero or 15%. Short of making less profit there is not much...

Tax Law (Questions About Taxes): Capital gains on home that sold, capital gains, little bit
capital gains, little bit, money: Hi, You no longer have to reinvest the gain on the sale of your main home to defer taxes on the gain. If you owned and lived in the home as your main home for 2 years during the 5 years preceding the date of sale and have not excluded gain on another main...

Tax Law (Questions About Taxes): Capital gains tax, capital gains tax, long term investment
capital gains tax, long term investment, stancil: Mary, Those are the federal limits for the sale of your principal residence when you have owned the house and lived in it for 24 of the past 60 months. Otherwise there is no exclusion. Most states do not have a capital gain rate, but tax the gain...

Tax Law (Questions About Taxes): Capitol Gains ( Wash Sale), long term investment, capitol gains
long term investment, capitol gains, dunton: Hi, As I understand from what you wrote, you no longer have any shares of the stock. That being the case you will be able to claim your losses as long as you don t buy any more shares within 30 days of the last sale. It isn t true that people under...

Tax Law (Questions About Taxes): Car Allowance, irs mileage rate, current irs mileage rate
irs mileage rate, current irs mileage rate, unreimbursed business expenses: He must return any of the advance that is not used. This keeps it as an accountable plan - not taxable and not deductible. It is a type of expense account. Technically an allowance is an amount paid for a certain purpose and is not to be repaid. An advance...

Tax Law (Questions About Taxes): Caregiver taxes, self employment income, self employment tax
self employment income, self employment tax, social security and medicare: Hi, Since you are self employed you will report your income and expenses on Schedule C. In addition to income tax you will be subject to self employment tax (social security and medicare). The calculation is net self employment income X .9235 X .153....

Tax Law (Questions About Taxes): CD Beneficiary, state income taxes, retirement money
state income taxes, retirement money, executor of the estate: Rob. Thank you for your question. 1)but what is going to happen to me tax-wise? I am in KY. Your grandmother s estate will pay taxes on these assets, if any. You may have to pay Federal and State income taxes on any earnings of the CD s after...

Tax Law (Questions About Taxes): Changing from sole proprietor to llc, sole proprietorship, sole proprietor
sole proprietorship, sole proprietor, forming an llc: Karen, Thank you for your follow up question. Since a single member LLC operates like a sole proprietorship, You would have a draw account and a capital contributed account. I would set up two accounts, one for the LLC and maintain one personal account....

Tax Law (Questions About Taxes): Child support, adjusted gross income, dependency exemption
adjusted gross income, dependency exemption, employeer: The exemption determination is predicated on several factors such as custody, support and adjusted gross income of each parent. The parent that meets those requirements is entitled to the dependency exemption. If, for example, the father provides over...

Tax Law (Questions About Taxes): Church reimbursement policy, tax exempt organization, texas sales tax
tax exempt organization, texas sales tax, federal income tax: Kenneth, Thanks for your question. From a federal income tax view, that will not create a problem. I am unfamiliar with Texas law and I am not an attorney, so I could not give you a definite answer. However, companies and other organizations certainly...

Tax Law (Questions About Taxes): Claim for unreported income, cancellation of debt, form 1099
cancellation of debt, form 1099, additional income: John, Thank you for the additional information. The 1099-C should have been picked up on her 2006 return. If it wasn t and there is money left over from the estate, then the return should be amended to reflect this additional income and the estate should...

Tax Law (Questions About Taxes): Claiming 3 allownces, irs web site, withholding tables
irs web site, withholding tables, t claim: Several years ago, in a misguided effort to stimulate the economy the withholding tables were changed. As a result, if you claim the number the form indicates you can have, you will end up owing. I did not explain that fully in my first answer. If you...

Tax Law (Questions About Taxes): Claiming Depreciation on a rented building, straight line depreciation, leasehold improvements
straight line depreciation, leasehold improvements, macrs: Raquel, Thanks for your question. Those costs can be depreciated. They would come under the category of leasehold improvements. They can be depreciated over a 39 year period at straight line depreciation. Equipment is a separate category, depreciable...

Tax Law (Questions About Taxes): Claiming Theft on Taxes, irs definition, adjusted gross income
irs definition, adjusted gross income, theft losses: Nate, Thanks for your question. Theft, under the IRS definition, is A theft is the taking and removing of property or money with the intent to deprive the owner of it. If this is the case, you appear to have a deductible theft loss. Unfortunately,...

Tax Law (Questions About Taxes): Commission Tax, federal withholding tax, retail department store
federal withholding tax, retail department store, exact answers: Susan: It s the federal withholding tax. It is added to your income tax paid in totals for the year. If you over pay your income tax during the year. You will get the excess paid back to you at the end of the year in the form of a refund. Joh...

Tax Law (Questions About Taxes): Commute Mileage, mileage
mileage: Kevin, Thank you for your question. 1)If I do not go to the office first how do I calculate my work mileage, and commute mileage. Your commute mileage would be calculated as the distance from your home to your first stop and the distance from your...

Tax Law (Questions About Taxes): Continuation of my question on Stock Inheritance, capital gains taxes, insurance bills
capital gains taxes, insurance bills, retirement savings: Helen, I do not have yoru original question. However, I will take a stab at it. You will have to pay tax, at capital gain rates on the sale of the stock. It does not matter what you do with the proceeds. If your mother inherited the stock from your...

Tax Law (Questions About Taxes): Contract Employee, Quarterly Taxes, federal income taxes, self employment taxes
federal income taxes, self employment taxes, quarterly payments: Lisa, Thanks for your question. You do not have to pay Texas income tax. You would still be liable for federal income taxes as well as federal self-employment taxes. The quarterly payments are to be made based upon when the income is received,...

Tax Law (Questions About Taxes): Contributions to Church audit, valid proof, check numbers
valid proof, check numbers, stancil: Sorry. I apologize for not giving you a complete answer. For the car, you must simply have a record showing the mileage, location, and purpose of the trip including the organization for which the trip was taken. It can be something as simple as a listing...

Tax Law (Questions About Taxes): Corporate gift tax to my son, gift
gift: Hi First corporations are not individuals and can t give gifts having said that unless you elected to have your LLC taxed as a corporation, single member llc are not a separate tax entity from the individual member. So all goes as your gift. In addition...

Tax Law (Questions About Taxes): c-corp conversion to s-corp tax year question, depreciation method, depreciation methods
depreciation method, depreciation methods, 1120 form: Hi Roger I did some casual research and it is not helpfull but then again there are numerous IRBs on the subject of changing depreciation methods but as I said I can t see it but you might want to have a CPA or attorney do more research it is your money....

Tax Law (Questions About Taxes): california estate tax, sole beneficiary, california estate
sole beneficiary, california estate, stancil: Wendy, Thanks for your question. If the inheritance is not cash, you will have to pay tax on the gain on the sale of the assets. Your basis is the fair market value as of date of death. You would pay income tax on any sale proceeds in excess of that...

Tax Law (Questions About Taxes): capital gain??, capital gains tax, unforeseen circumstances
capital gains tax, unforeseen circumstances, health employment: Hi, The two year period is the time you owned and lived in it as your main home. If you move prior to 2 years, you might be able to have a reduced exclusion if your move was for health, employment or certain unforeseen circumstances. Otherwise you will...

Tax Law (Questions About Taxes): capital gain, s corp
s corp: Yvonne the two are not necessarily related your property sale is a separate event than the liquidation of the S corp ( the basis of the S need to take into account various factors complicated by the property transactions. you are by looking into looking...

Tax Law (Questions About Taxes): capital gain tax, capital gain taxes, short term capital gain
capital gain taxes, short term capital gain, capital gain tax: Hi, Yes, they would have to pay short term capital gain taxes if they have a gain. To determine whether or not they have a gain, they should deduct their basis in the property from their adjusted selling price. The adjusted selling price is the gross...

Tax Law (Questions About Taxes): capital gains, 250k, grandparents
250k, grandparents, grandmother: Hi, In a word, yes. Assuming it was everyone s main home and they lived in it 2 years during the 5 years preceding the sale, your grandparents can exclude $500,000 of their share of the gain and your mother can exclude $250,000 of her share of the gain....

Tax Law (Questions About Taxes): capital gains, capital gains tax, ownership percentage
capital gains tax, ownership percentage, stancil: You can live in the house as your primary residence for 24 months, or you can remove your name from the title. This may involve filing a gift tax return if the value of your share exceeds $24,000. However, there is a lifetime $1,000,000 exemption, so no...

Tax Law (Questions About Taxes): capital gains for elderly, income component, capital gains
income component, capital gains, capital gain: Sheila, Thank you for the question. 1)Will they have to pay capital gains ?: Since this is considered rental property and they have not met the 2 out of 5 yr rule, they will be subject to capital gains if there is a profit. Any depreciation would...

Tax Law (Questions About Taxes): capital gains on spec home, capital gains taxes, capital gains tax
capital gains taxes, capital gains tax, form 6252: Joe, Thank you for your question. 1)What is our best options to avoid unnecessary capital gains taxes? If you are thinking capital gains tax, you are thinking of selling it. I would suggest that you keep track of how much you paid the for 40 acres...

Tax Law (Questions About Taxes): capital gains tax, higher tax bracket, capital gains tax
higher tax bracket, capital gains tax, fiance: Hi, If you owned and lived in the home as your main home for 2 years during the 5 years preceding the date of sale and have not excluded gain on another main home within 2 years, you can exclude $250,000 gain on the sale. If your fiance meets the above...

Tax Law (Questions About Taxes): capital gains tax, capital gains tax, deed mortgage
capital gains tax, deed mortgage, claim deed: The mortgage has nothing to do with anything, so you don t have to worry on that aspect. Selling your portion for $10 is still a gift, and it is a gift as long as you don t sell for a good market price. So you will still have to file a gift tax return....

Tax Law (Questions About Taxes): capital gains tax, capital gains tax rate, social security income
capital gains tax rate, social security income, capital gains tax: Marcus, Not quite. Earned income is not the issue, taxable income is what is important here. As I recall, you stated that he had some social security income. With a gain on the sale of the land, it is likely that some of that would be taxed. Also,...

Tax Law (Questions About Taxes): capital gains taxes, capital gains taxes, capital gains tax
capital gains taxes, capital gains tax, stock part: Frankj. Thank you for your question. 1)I am assuming that no immediate capital gains tax is due on either the 25 or the 7.5 principle portions of the purchase price are actually paid out to me. Is that correct? That sounds right to me. If...

Tax Law (Questions About Taxes): car taxes, car taxes, stancil
car taxes, stancil, gift tax return: Brittany, She will need to file a gift tax return. However, there will likely be no gift tax as there is a $12,000 annual exemption per person and a lifetime $1,000,000 gift exemption. You will not owe any income tax, but it is likely that you will...

Tax Law (Questions About Taxes): changing filing status, head of household, financial aide
head of household, financial aide, stancil: Kim, Presuming you are married, you are not eligible to file as head of household. Your filing status can only be married filing joint or married filing separately. You will need to file an amended return either separate or joint. Hope this helps....

Tax Law (Questions About Taxes): child credit, additional child tax credit, child tax credit
additional child tax credit, child tax credit, refundable credit: Lisa, Thanks for your question. The child tax credit is not a refundable credit so it would not be applicable there. The additional child tax credit is for those with more than two children or who cannot fully utilize the child tax credit. Although...

Tax Law (Questions About Taxes): childcare provider, federal estimate, home result
federal estimate, home result, baby supplies: Shaina, Thank you for your question. 1)what do i need to do to make sure that i am paying the correct income taxes? The way the taxes work is that you are self employed. Any earnings less expenses (cell phone, baby supplies, office at home ) result...

Tax Law (Questions About Taxes): childcare, social security and medicare, federal income taxes
social security and medicare, federal income taxes, child tax credit: Connie, Since she is coming to your home, you may need to provide social security and medicare for your provider and withhold those taxes plus federal income taxes. And provide a W-2 at the end of the year. The maximum amount of child care that can...

Tax Law (Questions About Taxes): claiming dependants, head of houshold, starting a new job
head of houshold, starting a new job, ea: If your spouse is not a working spouse, and you don t have a lot of untaxed income, you are probably okay claiming married and 2 for your withholding. However, without knowing a lot more about you, like seeing your last year s return, and that is beyond...

Tax Law (Questions About Taxes): contract employee, how to pay taxes, gasoline costs, self employment taxes
gasoline costs, self employment taxes, form 1040 es: Kristi, Thanks for your question. You will make estimated payments with Form 1040-ES on the 15th of April, June, September, and January. There is a worksheet that accompanies this form that will help you determine how much to deposit. You will be responsible...

Tax Law (Questions About Taxes): copyright sales, income tax return, return thanks
income tax return, return thanks, yearly income: The sale of the copyright would be considered ordinary income and would be taxed at regular tax rates depending on your other income. Assuming no other income you would pay at a 33% rate for federal plus your states tax rate. You should confer with a...

Tax Law (Questions About Taxes): DBA and/or Corp., reportable income, irs
reportable income, irs, dba: No problems with the IRS as no reportable income. However, the state has probably already suspended your corporation for not filing an annual report. As far as the DBA, the IRS will not have any interest in the enterprise as it has no income or losses,...

Tax Law (Questions About Taxes): DE and NJ/PA State Taxes, pa state taxes, delaware state
pa state taxes, delaware state, mark thanks: Mark, Thanks for your question. Your employees will owe DE tax since that is where the money is earned. They will also owe tax to their state of residence. However, their state of residence will grant them a credit for the tax paid to DE. Your responsibility...

Tax Law (Questions About Taxes): Debt Forgiveness Act, irs web site, debt forgiveness
irs web site, debt forgiveness, principal residence: Candice, Thank you for your follow up question. 1)We lived there for 2 years but we have rented it out the past year? One of the tests is that you used this property as your principal residence for at least 2 out the past 5 years up to the date...

Tax Law (Questions About Taxes): Deducting Living Expenses, adjusted gross income, david answer
adjusted gross income, david answer, miscellaneous itemized deductions: All meals while out of town are deductible regardless of when consumed or where purchased. Airfare can be deducted. If the assignment is indefinite or expected to last more than a year, the IRS position is that your tax home is your the location of your...

Tax Law (Questions About Taxes): Delinquent taxes, IRS Problems, Bank lien
IRS Problems, Bank lien, Wage levy: Your plan 2 might work but you will have to have a long talk (and be on hold) with IRS. However, such approach does not sound like it would hurt you. As to your question one, the reason you got a computer generated letter is it probably a cross in the...

Tax Law (Questions About Taxes): Per Diem, irs website, irs gov
irs website, irs gov, mr schnabel: Luis, Thank you for your follow up question. It sounds like they maybe paying you in excess of what the governement allows. If there is excess paid and you do not pay this back, then they are required to add this to your W-2. Below is the Revenue...

Tax Law (Questions About Taxes): Per Diem Taxes, Taxes, IRS Problems
Taxes, IRS Problems, Bank lien: Per diem is not really taxable nor deductible (your company deducts it) if in an accountable plan. If you are self-employed, you can show it as a reimbursement -Other income-and under Travel only as a Conus of $65-70 per day, away from home or actual under...

Tax Law (Questions About Taxes): Per DiemHow long may i be paid per diem?, wes wesley, undetermined period
wes wesley, undetermined period, contracting company: Wesley, Thank you for your question. 1)How long may I be paid this per diem? One of my colleague s say this and I agree: Under the tax code, an assignment that is less than one year is considered temporary. If it exceeds a year, the presumption...

Tax Law (Questions About Taxes): Divorce settlement and taxes, divorce settlement, divorce decree
divorce settlement, divorce decree, cash settlement: Hi M please have a professional advice you as to your options to rollover the money to an IRA else the proceeds will be taxable as ordinary income and if you are not yet 59and 1/2 years of age there would be a 10% penalty also PS if money changed hands...

Tax Law (Questions About Taxes): Draws with out with taxes., necessary tax returns, self employment tax
necessary tax returns, self employment tax, social security and medicare: Hi, When you file a partnership return, net partnership income is passed to each of the partners via a K1. The income is subject to self employment tax (social security and medicare) as well as income tax. If there is a loss it is deducted from your other...

Tax Law (Questions About Taxes): Duductions, irs mileage rate, irs guideline
irs mileage rate, irs guideline, mail package: Nichole, Thanks for your question. You can deduct the percentage of the cell phone that is business use. You must keep a record of use so you can prove to the IRS the business portion. Since you are being reimbursed at the IRS mileage rate, you cannot...

Tax Law (Questions About Taxes): How to deduct passive rental property losses from SE tax., rental losses, property losses
rental losses, property losses, active real estate: The ONLY reason to be a RE pro is so that your losses are not limited. That is all. NEVER does a rental (unless you are in the business of renting ladders, etc) go on a Sch C. It ALWAYS goes on Sch E. Rental losses are passive by nature, but qualifying...

Tax Law (Questions About Taxes): deductions, irs guideline, stancil
irs guideline, stancil, business expense: The IRS guideline is that you must make a profit 3 out of 5 years. However, that presumption can be overcome by facts and circumstances which include a number of factors such as conducting the activity in a business-like manner, it being your primary source...

Tax Law (Questions About Taxes): deductions, sole proprietorship, measurement period
sole proprietorship, measurement period, business expense: Sir, Thank you for your question. 1)How many years after you start your small business (a sole proprietorship) does the IRS give you to make money before they decide your business is not really for-profit and you cannot deduct for business expense?...

Tax Law (Questions About Taxes): dependent tax deduction, irs rules, tax deduction
irs rules, tax deduction, december 29: Adrian: If the child is in college and you are the only means of support. Age 24 is the absolute last year that you can claim the person as a dependent. You can only claim the child on your previous year tax return. That is you file in 2010 the tax return...

Tax Law (Questions About Taxes): per diem and taxes, feds
feds: Hi Pat first the maximum per diem is set at the rate the Feds pay to their employees that are entitled to it for example in AZ is $ 242/per day Per diem if it meets the rules is not taxable unless you calculate that your expenses were less than...

Tax Law (Questions About Taxes): distribution from trust, heirs, cpa
heirs, cpa, trustee: Possibly, depending on your mother s will. When your mother dies, the trust is to end, any income generated by the trust after her death is distributed to the heirs, so you are taked on the post death income before the trust is disolved. There is no tax...

Tax Law (Questions About Taxes): Early withdrawal from my 401(k), california state taxes, payroll calculator
california state taxes, payroll calculator, payroll calculations: Loretta, Thank you for your question. 1)My next question is if the 20 percentt axes are taken AFTER the 10arly withdrawal fee is taken out? The 10 is not a fee. The 10 percent is a penalty that the IRS charges for early withdrawal on retirement...

Tax Law (Questions About Taxes): Earned Time Off Payout, earned time, state withholding
earned time, state withholding, eto: Shirley, Thank you for your question. 1)My question is if I raise my withholding at state and fed levels, say to 10(from 4), will it lower the tax rate on my payout? If you take 10 deductions instead of 4 deduction. they will take out less in Federal...

Tax Law (Questions About Taxes): Error filing, receipt of additional stimulus, stancil, stimulus
stancil, stimulus, tax return: Erick, Thanks for your question. Hard to say. The IRS has not been without error in dealing with the stimulus payments. Unless you file an amended return, they probably will not pick up on it. However, if you don t get it, you can take the $300...

Tax Law (Questions About Taxes): early gift inheritance, tax consequences, stancil
tax consequences, stancil, taxable income: Frank, Thanks for your question. There is no such thing as a future inheritance from a tax standpoint. It would simply be a gift. You can give it to her. There is a $12,000 annual exemption per person, so you and your wife could give her $24,000...

Tax Law (Questions About Taxes): earned income for minors, 1040ez instructions, irs gov
1040ez instructions, irs gov, stancil: Jeff, Thanks for your question. About the easiest way to do it is to complete a mock 1040EZ and see what their tax liability is. You can go to a website such as www.taxact.com. The return will be a 2007, but it will give you a close estimate. Alternatively,...

Tax Law (Questions About Taxes): employee travel expenses, employee travel expenses, medical sales rep
employee travel expenses, medical sales rep, form 2106: Hi Thomas if your employer does not reimburse you use form 2106 to deduct 2)if the distance on a overnite stay is more than 50 miles from your home the travel it is deductible On the other days you mileage is deductible except the round trip to your...

Tax Law (Questions About Taxes): employer failed to deduct federal income tax, federal income taxes, volunteer forum
federal income taxes, volunteer forum, federal income tax: Kathy, Thanks for your question. The employer is responsible for withholding federal income taxes according to your instructions via the W-4. His failure to do so, however, does not make him liable for your tax obligation. He can be cited for this...

Tax Law (Questions About Taxes): estate vs irs, marginal tax bracket, stancil
marginal tax bracket, stancil, capital gain: Rhonda, Thanks for your question. Your basis in the sale of their home is the fair market value as of date of death. If you sell it for more than that amount, you will owe tax on the gain. If you sell it for less than that amount, you have a deductible...

Tax Law (Questions About Taxes): FEDERAL HOUSING TAX CREDIT, economic recovery act, credit question
economic recovery act, credit question, lien holder: Joan, Thank you for your follow up question. No, I did not know that the mobile home was invented in Mobil, Alabama. That news to me. I did know that the homes have no wheels, or else they would be like those traveling trailers (winnebagos) Thank you...

Tax Law (Questions About Taxes): FEDERAL HOUSING TAX CREDIT, refundable credit, stancil
refundable credit, stancil, wa state: Joan, Thanks for your question. If he and his wife has had no ownership interest in a house for the past three years, and their income is under %150,000 they qualify for a credit of 10% of the purchase price. It is a refundable credit, meaning that if...

Tax Law (Questions About Taxes): FEDERAL TAX, ca sdi, pay stub
ca sdi, pay stub, tax deductions: Toni, Thank you for your question. 1)COULD YOU PLEASE EXPLAIN TO ME WHAT IS A FEDERAL TAXABLE W IS.? WHAT IS THE W ? IS THAT WAGE OR WITHHOLDING ? If I were to take a guess,this does not seem like a deduction. It appears like information...

Tax Law (Questions About Taxes): Federal EIN Number Not Going to Be Used Yet..., federal ein number, business code
federal ein number, business code, articles of organization: Edward, Thank you for your question. Is this business a corporation with stock being issued or a partnership? 1)Because of this am I required to file any additional business tax forms even though the business hasn t started yet? Yes. If you applied...

Tax Law (Questions About Taxes): File final 1041 before it is due?, social security number, fiduciary tax
social security number, fiduciary tax, filing taxes: The check should be deposited into the estate, what you have is income in respect to a decedent which is included on the 1041. Any taxes that were withheld are deductible expenses on the 1041. You don t need to wait till next year to file, close the...

Tax Law (Questions About Taxes): Filing Tax Return for Multiple Years, advantange, irs
advantange, irs, tax returns: Hi, Send them all at once but in separate envelopes. You can file the current year at the same time and, if possible, file it electronically. Get them done as soon as possible to reduce penalties and interest if you have a balance due. It will take a...

Tax Law (Questions About Taxes): FL & NY residency?, ny state taxes, nys taxes
ny state taxes, nys taxes, federal returns: Hi Jan your legal residence is NY working in NY there is no way to avoid NY state taxes and remember if you sell the NY house at a later date the issue of principal residence comes into play the 500k exemption from capital gains is on sale of the principal...

Tax Law (Questions About Taxes): Form 982, additional income, gross income
additional income, gross income, irs: Hi Aastro I hope that the IRS sent you instructions for the form This form is for information only. if the forgiven debt was not under bankruptcy you need to show on this form how much was not reported (on line 2 how much was excluded from gross income...

Tax Law (Questions About Taxes): Corporate gift tax to my son, annual exclusion, lifetime
Tax Law (Questions About Taxes): Corporate gift tax to my son, annual exclusion, lifetime, mistake

Tax Law (Questions About Taxes): FL & NY residency?, statutory requirements, bank accounts
Tax Law (Questions About Taxes): FL & NY residency?, statutory requirements, bank accounts, domicile

Tax Law (Questions About Taxes): pipeline damages/income/property taxes, form 1099, oil and gas company
Tax Law (Questions About Taxes): pipeline damages/income/property taxes, form 1099, oil and gas company, easement

Tax Law (Questions About Taxes): SEP IRA, creditor protection, ira money
Tax Law (Questions About Taxes): SEP IRA, creditor protection, ira money, ira funds

Tax Law (Questions About Taxes): Taxes paid on retirement rollover, interest reduction, account balance
Tax Law (Questions About Taxes): Taxes paid on retirement rollover, interest reduction, account balance, irs

Tax Law (Questions About Taxes): Taxing intern stipends, indian tribal government, irs code
Tax Law (Questions About Taxes): Taxing intern stipends, indian tribal government, irs code, government law

Tax Law (Questions About Taxes): Unearned income, retirement plan distribution, qualified domestic relations order
Tax Law (Questions About Taxes): Unearned income, retirement plan distribution, qualified domestic relations order, qualified domestic relations

Tax Law (Questions About Taxes): How far back can they state revenue dept go, state attorney general, state finance
state attorney general, state finance, finance department: Richard, Thank you for your question. 1) Can they really do this if I can t find proof of payment? Most states can only go back as far as three years from the due date of the return , plus extensions or the date it was filed, which ever is later....

Tax Law (Questions About Taxes): federal income tax liablity on sale of an estate property, valid estimate, property question
valid estimate, property question, brother lives: No, that is not correct. Your basis is the fair market value - the appraised value - of the house as of date of death and not when you sell it. Lacking a formal appraisal, you will need to get a valid estimate of its value as of date of death. John...

Tax Law (Questions About Taxes): forming a 501c3, national denomination, 501c3 organization
national denomination, 501c3 organization, affordable housing program: Your church may already have a tax exemption, if you are a member of a national denomination. In which case you have a blanket exemption from the mother church. If you are not associated with a national denomination, your church may already have a tax...

Tax Law (Questions About Taxes): Gambling/gaming taxes, irs form 1099, itemized deductions
irs form 1099, itemized deductions, gambling gaming: Rich, Thank you for your question. 1)If i continue to win at the site i have been successful what is the limit where i have to claim?In other words does losing 700 wipe out the 500 I have won and I m back to ground zero again? You can take losses...

Tax Law (Questions About Taxes): Gift tax, adult sons, school loans
adult sons, school loans, birthday holiday: You can gift him 12K a year (which includes all gifts, including birthday, holiday, just because). After that, you can gift up to a million dollars before you pay gift tax, but you must file a gift tax return. You cannot assume his loan. Helen, EA in...

Tax Law (Questions About Taxes): gas allowance for the pastor, mileage logs, claim mileage
mileage logs, claim mileage, irs rate: Just to clear up a point, a gas allowance is simply a flat amount paid the pastor each month without any proof of mileage given to the church. He cannot under any circumstances deduct or receive payment for mileage to and from the church, that is considered...

Tax Law (Questions About Taxes): gift tax help, income tax return, household income
income tax return, household income, personal check: John the gift is totally tax free to you as to your grandmother she will need to file a gift tax return for gift the but is most likely the form will be for information only as she has many exceptions available before the tax kicks in Sounds you Grandma...

Tax Law (Questions About Taxes): Head of household, irs web site, head of household status
irs web site, head of household status, head of household: Kevin, Thank you for your question. 1) If we had all of our money going into a joint account for 10 months, could she possibly prove she paid the expenses alone when in reality we both paid them? To file head of Household, the IRS web site says:...

Tax Law (Questions About Taxes): House fire insurance claim, jennifer thanks, insurance claim
jennifer thanks, insurance claim, stancil: Jennifer, Thanks for your question. No, the insurance company determined that the cost of repairing the damage was $30,000 or that was the decrease in the value of you house. What you do with the money does not matter, it would not be taxed. Hope...

Tax Law (Questions About Taxes): House sale taxable??, deed transfer, joint tenants
deed transfer, joint tenants, house sale: It depends on your state law and how the property was transferred. Once those facts are known, we can determine the tax effect on you. Did your father transferred the property into trust, or did he add your names as joint tenants with him, or did he...

Tax Law (Questions About Taxes): house sell, tax consequences, stancil
tax consequences, stancil, cost basis: Herbie, Thanks for your question. You will have to pay tax on the gain, at capital gain rates. Your gain is determined by subtracting the cost basis from the proceeds of the sale. Your cost basis is the fair market value as of date of death of your...

Tax Law (Questions About Taxes): housing stipends, adjusted gross income, itemized deduction
adjusted gross income, itemized deduction, expense deduction: Jean, Thanks for your question Actually the full amount is taxable and you take a miscellaneous itemized deduction for the actual expenses. Unfortunately, you can only deduct those expenses that exceed 2% of your adjusted gross income. If you don t...

Tax Law (Questions About Taxes): Income Tax, social security number, step sister
social security number, step sister, stock price: Hi, Since you inherited the stocks and sold them immediately there would be little or no gain on the sale. Your basis in the stock is the fair market value on the date of your mother s death. Presumably the stock price did not fluctuate much after that...

Tax Law (Questions About Taxes): Income Tax Filing, head of household, standard deduction
head of household, standard deduction, fiance: Hi, If you file jointly, your standard deduction will be higher than that for head of household and any children of his claimed will be exemptions on your joint return. If your joint income is not too high you would be eligible for earned income credit....

Tax Law (Questions About Taxes): Income Tax / W4 , etc, Nonresident tax withholdings, temporary job assignments
Nonresident tax withholdings, temporary job assignments: Assuming that the work in Ohio will not be permanent, and that you plan to continue living permanently in Virginia, you should keep your Virginia address on file with your employer. Likewise, use the VA address on the Form W-4, and the Ohio IT-4. When it...

Tax Law (Questions About Taxes): Income Taxes, state income tax, federal income tax
state income tax, federal income tax, commission checks: Hi, So the difference is 10%. If the taxes taken include social security, medicare, Federal income tax and state income tax, that would seem about right. But again, ask them what method they are using to determine Federal and state withholding. Regards,...

Tax Law (Questions About Taxes): Income tax question, irs form 982, cancellation of debt
irs form 982, cancellation of debt, form 5329: Kevin, Thank you for your question. 1)I heard somewhere that if the early distribution was to avoid foreclosure, we do not have to pay the additional 10% tax. Is this true? I see nothing in the code or the act that can avoid the 10% penalty on early...

Tax Law (Questions About Taxes): Inheritance/income tax for US citizen, German legal resident alien, german income tax, inheritance taxes
german income tax, inheritance taxes, bavaria germany: Joby, Thanks for your question. As a U. S. citizen you are subject to tax on your worldwide income regardless of residency. You will owe income tax on the IRA s and on any gain from the sale of the house. This would be reported on your 1040. Estate...

Tax Law (Questions About Taxes): Investment Interest for a church 501(3) status, unrelated business income, exempt from backup withholding
unrelated business income, exempt from backup withholding, federal income tax: I would first contact the investment companies, requesting the withheld amounts be paid to you. This would be the simplest approach, and the companies should cooperate since they are in the wrong. Failing that, file a 990-T for the refund. Hope this...

Tax Law (Questions About Taxes): Investment Property Sale - Capital Gain, irs form 4684, gil gil
irs form 4684, gil gil, capital gains tax: Gil, Thank you for your question. 1)The property has appreciated. If I sell it, would I have to pay a capital gains tax? Yes. you will have some of that capital gain be subject to recapture as ordinary income. Any depreciation you took on the property...

Tax Law (Questions About Taxes): Investment Property Sale w/Lein, capital gains tax, stancil
capital gains tax, stancil, lien holder: The tax responsibility is split in accordance with the ownership interests. Generally this is based on the amount of investment each has in the property. If the house went into foreclosure, you would likely have income from the forgiveness of debt. ...

Tax Law (Questions About Taxes): IRA, steve thanks, stancil
steve thanks, stancil, rental property: Steve, Thanks for your question. It is possible, but not very feasible. The property would have to be purchased by the IRA, you cannot contribute non-cash property to an IRA. You cannot manage the property, you would need a trustee to do that....

Tax Law (Questions About Taxes): IRA beneficiary designation, ira beneficiary, beneficiary designation
ira beneficiary, beneficiary designation, social security number: Hi, Depending upon the custodian of your grandmother s IRA, you may not need a Social Security Number. I know I don t have to provide one for some of my IRAs. If her custodian requires that you have one, you could apply for an ITIN as a substitute. I...

Tax Law (Questions About Taxes): IRA Withdrawal for dental work, ira withdrawal, adjusted gross income
ira withdrawal, adjusted gross income, dental work: Gabriel, Thanks for your question. She would end up paying some tax, as she can only deduct medical expenses that exceed 7.5% of her adjusted gross income, and she must have enough total deductions to itemize. If she does not currently itemize, it is...

Tax Law (Questions About Taxes): IRA Withdrawal for dental work, social security benefits, ira withdrawal
social security benefits, ira withdrawal, adjusted gross income: Hi, Since her income is relatively small it should work out ok for her. A small amount of her social security may be taxable but her itemized deductions will more than offset that. Be sure to look for all the medical expenses that she pays including medical...

Tax Law (Questions About Taxes): IRA withdrawl and taxes, indiana state government, ira distributions
indiana state government, ira distributions, indiana taxes: John, Thank you for your question. 1)Can you tell me what percentage the Federal Government will take? You can start to tax distributions from your IRA starting at age 59 1/2 without being subject to a 10% penalty. IRA distributions are taxed...

Tax Law (Questions About Taxes): IRS Form CP2000, disability insurance benefits, security disability insurance
disability insurance benefits, security disability insurance, social security disability insurance benefits: Wayne, Thanks for your question. First, you should verify that the income the IRS is listing for you is taxable to you. Based on your total income for that year, it may not be taxable. Secondly, if the IRS determines that collection in full is not...

Tax Law (Questions About Taxes): IRS and S-corps, irs regulations, unemployment payments
irs regulations, unemployment payments, unemployment tax: Larry: As an officer of a corporation, including an S Corporation, you are an employee and are required to be reported as an employee. That is the way the IRS wants all officer to be classified. As an employee you are entitled to all the benefits you...

Tax Law (Questions About Taxes): independent contractor, independent contractor, estimated taxes
independent contractor, estimated taxes: How much money should he put away for taxes? To be safe, a big, round number should be about thirty three percent (one third) of the gross funds received. One dollar out of every three received. This is to cover federal and state income taxes, plus social...

Tax Law (Questions About Taxes): inheritance tax, inheritance taxes, inheritance tax
inheritance taxes, inheritance tax, capital gains tax: Bobby, Thanks for your question. Inheritance taxes are strictly state taxes, and Michigan does not have one so you have no liability there. When you sell the house you will owe income tax at capital gain rates on the gain. Your gain is the excess...

Tax Law (Questions About Taxes): two jobs, part time jobs, federal income tax
part time jobs, federal income tax, sorry for the confusion: Standard deduction for 2008 is $5,450. Some earlier information I saw said $5,400. So at $5,450 you would owe no federal income tax. States have different standard deduction amounts that are usually lower than the federal. Sorry for the confusion. John...

Tax Law (Questions About Taxes): L:easing church property to private business, unrelated business income, tax exempt status
unrelated business income, tax exempt status, lease change: Ann, Thanks for your question. The lease does not change the tax status of either organization, but it may require some tax reporting. If the amount involved exceeds $1,000 per year, you have unrelated business income, which may be taxable. This...

Tax Law (Questions About Taxes): Late tax filings, stancil, legal trouble
stancil, legal trouble, tax filings: Michael, Thanks for your question. If you don t file, you can be penalized for failure to file a return. If they deem it intentional, it can be considered criminal failure to file, resulting in a jail term. If you file your returns and do not owe...

Tax Law (Questions About Taxes): LIFE INSURANCE TAXES, life insurance policy, getting a loan
life insurance policy, getting a loan, interest on the loan: Carolyn, Thank you for your follow up. 1)And i was thinking about getting a loan it sounds like that my divided would pay on it Do you know how a loan work on life insurance I am thinking about that You can borrow against your cash value. There...

Tax Law (Questions About Taxes): Living in NY, Working in VA, irs rules, employment expenses
irs rules, employment expenses, teaching job: HI Laurie all your earnings in VA will be subject to the VA non resident tax your employer will withhold this. But you will need to file the VA non resident tax return. Then you will need to file a NY resident Tax Return (as you will be spending more than...

Tax Law (Questions About Taxes): LLC, limited liability corporation, sole proprietorship
limited liability corporation, sole proprietorship, employer identification number: As a single member LLC, you are considered a disregarded entity unless you chose to be taxed as a regular corporation (by filing a form 8832). Since you are a LLC you already have limited liability. The question you need to ask yourself is do you want...

Tax Law (Questions About Taxes): LLC, form 1040 schedule c, limited liability company
form 1040 schedule c, limited liability company, tax id number: Stephanie, 1)If a husband and wife co-own an LLC, do they need a separate tax ID number for the LLC? I can see the confusion. Technically a husband and wife can operate an unincorporated business and elect not to file a partnership return. Then the income...

Tax Law (Questions About Taxes): LLC tax liability for undistributed earnings, undistributed earnings, divorce decree
undistributed earnings, divorce decree, tax withholding: Was there any settlement of your ownership of the LLC in the decree. If so, you have already received moneys for the taxes on the income reportable to you. If on the other hand your settlement exchanged your ownership for an indemnity against any liabilities...

Tax Law (Questions About Taxes): LLC vs S-corp in Texas, health insurance plan, income tax purposes
health insurance plan, income tax purposes, franchise fees: Hi Al first as a professional you need to consider the best way to set up your practice to protect you from personal liability. Tax -wise in Texas an LLC pays somewhat higher franchise fees than an S corp but this is so immaterial that it should not be...

Tax Law (Questions About Taxes): Loan, interest free loans, interest on the loan
interest free loans, interest on the loan, interest income: Jay, Thank you for your question. 1)I am now worried how this is going to affect my tax return and how this loan itself is going to be taxed. You borrowed money from your credit card and deposited it into your bank account? This will not effect your...

Tax Law (Questions About Taxes): LP with Corporate General Partner, commodity futures trading, self employment tax
commodity futures trading, self employment tax, self employement: Don why not trade as an individual and eliminate the complications? by the way trading profits are not subject to the self employment tax but salaries and management fees are. If you need liability protection you can elect sub S status for next year provided...

Tax Law (Questions About Taxes): land sale, stancil, capital gain
stancil, capital gain, cost basis: Connie, Thanks for your question. Unfortunately, there are no tax breaks due to age. I rpesume they have owned it for more than 12 months. They will have to pay tax, at capital gain rates on the gain. The gain is determined by subtracting their...

Tax Law (Questions About Taxes): loan from relatives, irs web site, resident aliens
irs web site, resident aliens, nonresident alien: Thomas, Thank you for your follow-up question. 1)They live in Taiwan and don t come to US so I don t think are have to file 1040NR. They would be considered as non resident aliens. According to the IRS web site: If you are a nonresident alien,...

Tax Law (Questions About Taxes): How long may I be paid per diem?, wes wesley, stancil
wes wesley, stancil, contracting company: Wesley, Thanks for your question. You can be paid a per diem as long as your company will do so. However, if your assignment is for an indefinite period or longer than one year, all of the per diem amounts are taxable income to you. Hope this helps....

Tax Law (Questions About Taxes): lump-sum social security benefits, irs pub 915, social security benefit
irs pub 915, social security benefit, social security benefits: Hi, Yes you have to include the 2003 portion. But there is a way to minimize the tax you will pay. It s called a lump sum election. You will need copies of your tax returns for each year. In a nutshell you recalculate the taxable portion of the lump...

Tax Law (Questions About Taxes): Married Income taxes, child care credit, child tax credit
child care credit, child tax credit, state income tax: Nicole, Thanks for your question. That varies from state to state, and I am not familiar with the VA laws to give you an answer. However, you might re-think not filing a joint return. If you do the calculations, you are likely to find that separate...

Tax Law (Questions About Taxes): Medical Insurance Premium Deduction, health insurance premiums, payroll taxes
health insurance premiums, payroll taxes, sole employee: Hi Mark a suggestion get a nominal salary that could justify employee benefits to you the other gentlemen can get a management fee to account for yoour salary beanies and payroll taxes you will need a CPA to do your taxes so consult with the CPAnow...

Tax Law (Questions About Taxes): Mileage Reimbursement, irs publication 463, irs rate
irs publication 463, irs rate, trip mileage: It is not quite true that the work day begins at the office. For purposes of our discussion, the work day begins at the first stop of the day, which could be the office, or it could be a client. It also ends at the last stop of the day. Anything in between...

Tax Law (Questions About Taxes): Mileage Reimbursement, IRS, Delinquent Returns
IRS, Delinquent Returns, levies: I WOULD SUGGEST A WRITTEN POLICY IN CONFORMITY WITH A STANDARD PRACTICE. I WOULD SUGGEST THAT THE FIRST PLACE THE WORKER GOES IS THE COMMUTE AND EVERYWHERE ELSE IS BUSINESS AND IF THEY GO TO THE OFFICE, THAN THE RETURN TRIP IS A COMMUTE. THIS IS MY OPINION...

Tax Law (Questions About Taxes): Mileage Reimbursement, irs rate, mileage reimbursement
irs rate, mileage reimbursement, reimbursement program: Lynn, Thanks for your question. No you are not required by law to submit for reimbursement to your employer, but it would not be a good move as it would end up costing you more in the long run. You tax savings would be much less than the amount of reimbursement....

Tax Law (Questions About Taxes): Mileage Reimbursement for Church Organization, business mileage rate, mileage reimbursement
business mileage rate, mileage reimbursement, current gas prices: Jill, Thanks for your question. You do not have to issue a 1099 for mileage reimbursement. You can reimburse them at 20 cents a mile with no problems even though the rate is only 14 cents. You re ok as long as you don t reimburse them in excess of...

Tax Law (Questions About Taxes): Mileage Reimbursemt, irs mileage rate, recruiter account
irs mileage rate, recruiter account, adjusted gross income: Hi, They aren t required to pay you a specific amount or anything at all. Any expenses you pay over what they pay you are deductible as an itemized deduction on Schedule A to the extent that the expenses exceed 2% of your adjusted gross income. The...

Tax Law (Questions About Taxes): Miliage for a minister individual tax, e mail address, individual income taxes
e mail address, individual income taxes, self employment taxes: Aaron, Please send me another message via all experts. However, mark the question as private. If you feel comfortable doing so, include your e-mail address. I do not want to disclose some of the details of what I have to say for everyone to view. ...

Tax Law (Questions About Taxes): Minimum taxable income, federal tax return, income dividends
federal tax return, income dividends, unearned income: Daniel, Thanks for your follow up question. 1) Is this correct? Yes Keep in mind you need to include all income in that $5450. If you have any unearned income (dividends, interest from banks) that will change the picture. Next year your parents...

Tax Law (Questions About Taxes): Ministerial-Form 4361, social welfare programs, self employment tax
social welfare programs, self employment tax, religious opposition: Helen, Thanks for your question. Opposition to accepting public insurance benefits simply means that the person is opposed, on religious grounds, to social welfare programs such as social security. It would mean his opposition to accepting SS, Medicare,...

Tax Law (Questions About Taxes): Ministerial Tithe, self employment tax, dual status
self employment tax, dual status, business expense: Danielle, Thanks for your question. As the situation stands, it is a charitable contribution, deductible on Schedule A. It would be a stretch to include it as employee business expense, I know no precedent for that. A minister who is pastor of a...

Tax Law (Questions About Taxes): Missionary Taxes, physical presence test, ti 86
physical presence test, ti 86, stancil: Wendy, Thanks for your question. If the missionaries are U. S. citizens or residents, the income is taxable to them, and subject to social security/Medicare. However, if they meet the physical presence test by being physically present in a foreign...

Tax Law (Questions About Taxes): Mistake on 2006 Tax Return - I owe the IRS, tax bill, amend tax return
tax bill, amend tax return: The answer to your question is MAYBE. I say maybe because you state that you sold insurance as a self-employed person, and received a Form 1099 reporting your income from this source. However, you say nothing about the expenses you incurred generating...

Tax Law (Questions About Taxes): Moving Expenses, distance test, moving expenses
distance test, moving expenses, moving expense: Ann, Thanks for your question. Yes on both counts. The employer may deduct the amounts paid as moving expense. If the employee does not qualify to deduct moving expenses, it is taxable income to him/her. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): max income?, personal exemption, standard deduction
personal exemption, standard deduction, disability: Hi, For 2008 your income can be as high as the total of your standard deduction and your personal exemption without having to file a return. Your standard deduction is $5,450 + $1,350 = $6,800. Your personal exemption is $3,500 for a total of $10,300....

Tax Law (Questions About Taxes): minister's tax levy, declaring bankruptcy, tax levy
declaring bankruptcy, tax levy, bankruptcy attorney: Mark, Mike didn t answer your question, so I thought I would give you a thought or two. First, off, with not filing and a debt of that amount he could have been charged with criminal failure file which would have been much more serious. Unfortunately,...

Tax Law (Questions About Taxes): minister vehicle expense or mileage, claim mileage, adjusted gross income
claim mileage, adjusted gross income, desinated: Yogi, If the minister is not reimbursed by the church under an accountable plan, he can deduct mileage as a miscellaneous itemized deduction on Schedule A. He can only deduct the expenses that exceed 2% of his adjusted gross income and he must itemized...

Tax Law (Questions About Taxes): can a motorcycle be a business tax write off, tangible piece, experience and education
tangible piece, experience and education, personal purposes: Yes, to the extent that any tangible piece of property is put into use for the production of income it would qualify as a business tax write off. However, if this asset is also being used for personal purposes then an allocation would have to be made on...

Tax Law (Questions About Taxes): Newly Married, higher tax bracket, head of household
higher tax bracket, head of household, bread winner: Kristin. Thank you for your follow up question. Since I prepare income tax returns myself, I would recommend you used a tax preparer. Turbo tax is only as good a the person who keys in the information. H & R block is only as good as the preparer who sits...

Tax Law (Questions About Taxes): NOL / c-corp converted to s-corp + LLC, corp earnings, c corp
corp earnings, c corp, s corp: Yes, but converting to a S-Corp will not allow you to take advantage of the NOL. The NOL is captured and held to be used against C-corp earnings and profits. The only way they can be utilized is to pass them along after an acquisition, in which case you...

Tax Law (Questions About Taxes): Non resident alien tax, divorce settlement, downpayment
divorce settlement, downpayment, tax return: Maria, Thank you for your question. If part of your divorce settlement included a payment of $109,000, then that is just a split of assets, which is is not taxable. If he then uses the $109,000 as a down payment to purchase property. If the property...

Tax Law (Questions About Taxes): do i need to file?, state income taxes, federal income tax
state income taxes, federal income tax, part time job: No, I did not say that. I said the SS is not taxable, so you can earn up to $5,450 and not be subject to federal income tax. Unless you file exempt your employer is required to withhold taxes depending on your earnings during the pay period. Since you...

Tax Law (Questions About Taxes): non-profit 1099, unrelated business income, unrelated business income tax
unrelated business income, unrelated business income tax, business income tax: Bob, Thanks for your question. A NFP can receive a 1099 and it will not void the non-profit status. However, you will be considered to be carrying on a business and will have to file a From 990-T and pay tax on the gain. This is referred to as UBIT...

Tax Law (Questions About Taxes): OIC, age health, seeking employment
age health, seeking employment, living expenses: If you are currently not employed, the IRS will look at the last three years of income, typically giving a little more weight to the most recent year you were fully employed. They will factor in such things as age, health and a change in the market for your...

Tax Law (Questions About Taxes): Ordinary Income and Net Income, taxable income, net income
taxable income, net income, 35k: Not necessarially, The net income per books is often different than taxable income which is reported to you on schedule k-1. On form 1120S there is a reconciliation on page 4 that compares net income per books to net taxable income. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): Overseas Bank Account, worldwide income, stancil
worldwide income, stancil, cpa: Gaurav, Thanks for your question. No, that is not true, exactly. You do not have to report your banks accounts on your return, other than to check the box on Schedule B that asks if you have a foreign bank account. As a U. S. citizen you are subject...

Tax Law (Questions About Taxes): Overseas Tax Exemption, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: Blair, Thanks for your question. Not so. The foreign earned income exclusion is at 87,600 for 2008. To qualify you must be a bona fide resident of a foreign country or be physically present in a foreign country for 330 days in a 12 month period. ...

Tax Law (Questions About Taxes): Overseas tax exemption, physical presence test, earned income exclusion
physical presence test, earned income exclusion, foreign earned income exclusion: Andrew, Thanks for your question. She cannot obtain the exemption until she meets the 330 day physical presence test, which she will probably meet sometime in June, 2009. The should file an extension by April 15, then file the return when the test is...

Tax Law (Questions About Taxes): Owner Financing and taxes??, gross profit percentage, amortization tables
gross profit percentage, amortization tables, installment basis: Debbie, Thanks for your question. You can report the sale on the installment basis. Each payment received will consist of three components - interest on the mortgage, recapture of your cost basis, and profit. Utilizing amortization tables, you determine...

Tax Law (Questions About Taxes): offhsore employee, physical presence, tax amounts
physical presence, tax amounts, stancil: Mike, There are no other exceptions to this. Even if you met the time requirements you would likely not qualify. First, you do not necessarily get all your taxes back. If you qualify, you can exclude up to $87,600 of earnead income in 2008 from income...

Tax Law (Questions About Taxes): overseas taxes, contract worker, physical presence
contract worker, physical presence, stancil: Mara, Thanks for your question. If he has a physical presence in a foreign country for 330 days in a 12 month period he is eligible for the exclusion. If he does not meet that criteria, the income is fully taxable. If he is not physically present...

Tax Law (Questions About Taxes): owed back income tax, tax accountant, letter campaign
tax accountant, letter campaign, s corp: Robert, Thank you for your question. 1)I have a s corp business can they attach my business accounts for a personal debt? If you are signer on the business account, then I would say yes. They must go through a process first. They work on a letter...

Tax Law (Questions About Taxes): Personal use of company vehicle, business miles, company car
business miles, company car, first trip: Your first trip from home to where ever is commuting (personal) and not deductible unless you have a qualified office in home. If you think you do, you want to read the Soliman case (or Solimen). If you do not have an office in home, you would be much better...

Tax Law (Questions About Taxes): Personal use of company vehicle, cincinnati metro area, business mileage
cincinnati metro area, business mileage, business miles: I know this sounds like I am splitting hairs, but the IRS considers the one-week assignment as a temporary job assignment and allows the mileage deduction. Going to an arbitration in you home town from home is a part of your regular job and considered commuting....

Tax Law (Questions About Taxes): Personal use of company vehicle, irs web site, realistic expectation
irs web site, realistic expectation, business miles: Pamela, Thank you for your question. 1) How do I determine personal use? Round trip from your home to your office and back. Any use of the vehicle after work hours. 2)Can I count the entire mileage to and from the arbitration as business miles?...

Tax Law (Questions About Taxes): Physical Presence Test, physical presence test, earned income exclusion
physical presence test, earned income exclusion, foreign earned income exclusion: Matt, You have either mistyped your information or you have a serious misunderstanding about how the foreign earned income exclusion works. You report your taxes on a calandar year basis Jan 1 - Dec 31. Based on what you state, you should have taken...

Tax Law (Questions About Taxes): Possible Spousal relief?, innocent spouse relief, ohio state taxes
innocent spouse relief, ohio state taxes, filing ohio state taxes: Lisa, Thanks for your question. When you file a joint return you are fully liable for any tax, interest, and penalty on the return. However, if the following conditions are met, you may be granted innocent spouse relief under federal law: 1. The...

Tax Law (Questions About Taxes): Possibly under the table, form 1040 schedule c, irs form 1040
form 1040 schedule c, irs form 1040, estimated tax payments: Michael, Thank you for your question. 1)How does she claim this and are the monies traceable? If no forms were signed, she is probably being treated as a subcontractor or a partner in the company and is responsible to report what she earned. If she...

Tax Law (Questions About Taxes): Primary placement spouse claiming all children, irs form 8332, 6 years
irs form 8332, 6 years, molly: Molly, Thank you for your question. 1) Is this true.........that I am able legally to claim both children? New law? I am unaware of this. There still is what is referred to as the custodial and non custodial spouse. An IRS form 8332 has to be filed,...

Tax Law (Questions About Taxes): Profit and Loss Split, operating agreements, stancil
operating agreements, stancil, operating agreement: Scott, Thanks for your question. You can distribute the profits and losses as you wish but there are two pitfalls to avoid. You should distribute losses the same as profits. Secondly, if you do not distribute them in accordance with the operating...

Tax Law (Questions About Taxes): Property sale overseas, long term capital gain, long term capital gain rate
long term capital gain, long term capital gain rate, dual citizenship: Anna, US citizens and residents are subject to tax on their worldwide income. The long term capital gain rate is 15% unless you are in a tax bracket of 15% or less. Then it is zero. It it is not long term capital gain property, it is taxed at your marginal...

Tax Law (Questions About Taxes): Property Tax, irs web site, tax regs
irs web site, tax regs, personal residence: Larry, Thank you for your question. 1)Will the sale of the house and acreage all be tax exempt under Income tax regs 1.121? According to the IRS web site: Farm Sale Selling a farm involves disposing of both business and non-business property....

Tax Law (Questions About Taxes): Property Taxes/Bankruptsy, debt forgiveness, bankruptcy proceedings
debt forgiveness, bankruptcy proceedings, mortgage holder: No bother. If you are filing bankruptcy, all your debts need to be included. Normally, bankruptcy allows you to keep your home. According to my understanding, then, the HELOC should be included in the filing, and you are not likely to lose the house....

Tax Law (Questions About Taxes): Proving Insolvency for Short Sale, supreme court case, google search
supreme court case, google search, bankruptcy estate: Liza, Thank you for your question. If you are preparing a net worth statement, you list all your assets on one side (positive- Fair Market Value) and all your liabilities on the other side ( negatives). The difference is your net worth. Whether someone...

Tax Law (Questions About Taxes): paper route, bigie, paper route
bigie, paper route, kelly kelly: Kelly: 30 miles a day equals to about $15.00 a day deduction in mileage off the earnings. You will need to keep up with your mileage on a calendar or something documenting the total mileage you drive each day the miles you drive while delivering the paper....

Tax Law (Questions About Taxes): parents deeded house to me and brother, nursing home care, medical costs
nursing home care, medical costs, initial investment: While it is your home (you own it) so does your brother and your husband. You don t need a tax person, you need an attorney to straighten out this mess. You can force a sale, but your brother needs to allow it, or you can only sell your portion of the...

Tax Law (Questions About Taxes): Do I have to pay estimated taxes, estimated tax payments, self employed taxes
estimated tax payments, self employed taxes: With the changes indicated in the facts you stated, calculating the estimated taxes that may be due is going to be more complicated than usual for you. I suggest that a proforma tax return be prepared for 2008...taking into account all of the exemptions,...

Tax Law (Questions About Taxes): Will i have to pay in tax time?, form 8863, educational tax
form 8863, educational tax, maximum credit: Your sister is not correct in that you will need to pay approximately $2,000 for 2008 taxes. There is no student exemption from taxes. What she is probably referring to is the educational tax credit that has a maximum credit of $2,000 depending on your tuition...

Tax Law (Questions About Taxes): paying to much for having my acccountant doing my taxes?, stancil, tax situation
stancil, tax situation, old baby: Hernando, Thanks for your question. Based on your description of your tax situation, $750 does not sound unreasonable. There are several programs available if you want to prepare your own taxes. TaxACT is the one I use and recommend. TurboTax and...

Tax Law (Questions About Taxes): personal car used for business, stancil, personal car
stancil, personal car, standard deduction: Mac, Thanks for your question. You would file a Schedule C to report the income and expenses. You cold deduct mileage at the standard rate (currently 58.5 cents per mile). This covers gas, maintenance, depreciation, etc. In addition you could deduct...

Tax Law (Questions About Taxes): personal income tax for missionary, fide residence test, physical presence test
fide residence test, physical presence test, bible study fellowship international: Tyler, Thanks for your question. To meet the requirements you must fulfill either the physical presence test or the bona fide residence test. The bona fide residence test requires that you be a bona fide resident of a foreign country for an uninterrupted...

Tax Law (Questions About Taxes): pipeline damages/income/property taxes, irs web site, cash basis versus accrual basis
irs web site, cash basis versus accrual basis, pipeline companies: Jack , Thank you for your follow up information. If they gave you a 1099 for only the $100 s of dollars, they probably thought that the other amounts were not taxable and probably used to reduce your cost basis on your property. I can understand your...

Tax Law (Questions About Taxes): precentage of taxes per job, personal tax return, federal corporations
personal tax return, federal corporations, payroll checks: Stephanie, Thank you for your question. 1)I would like to know what percent per job should I withhold for taxes or when I am bidding/figuring jobs what should I figure for tax purposes. If you have a corporation, you need to figure the tax rates for...

Tax Law (Questions About Taxes): proper accounting for startup costs for LLC?, startup costs, formal organization
startup costs, formal organization, capital contributions: Any start up cost paid by the members before the formal organization of the LLC should be booked as loans from the members. These should be paid back with interest. Record these costs as Organizational Expenses. If it is a single member LLC, record them...

Tax Law (Questions About Taxes): Quick Deed Transfer Tax Liability, quick deed transfer, gift tax exclusion
quick deed transfer, gift tax exclusion, tax consultant: Hi, The gift tax exclusion is $1 million. The estate tax exclusion is $2 million for decedents dying in 2006-2008. Estate tax is repealed in 2010. Gift tax is not repealed. Congress may very well make changes in the near future. Regards, Carol...

Tax Law (Questions About Taxes): question, additional child tax credit, child tax credit
additional child tax credit, child tax credit, disability benefits: Hi, You didn t say whether or not you and her father are married so I ll assume you are not. Unless the disability benefits provide more than half of her support one of you can claim her. If you have earned income it might benefit you more than her father...

Tax Law (Questions About Taxes): Real Estate Investment Loss, intents and purposes, partnership return
intents and purposes, partnership return, capital losses: Your loss is a capital loss, and as such is used to offset capital gains. Any loss not offset is deductible to a limit of $3,000 per year provided that the taxpayer has ordinary income in excess of $3,000. I am afraid you are stuck with writing off $3...

Tax Law (Questions About Taxes): Real Estate Purchase from family member, real estate lawyer, philadelphia row
real estate lawyer, philadelphia row, real estate transactions: John, I see nothing wrong with your plans. You will have a low basis for the home ($10k plus taxes paid plus improvements), so if you sell at the current prices you will have tax to pay. If you are renting it out to Mother, you will want to be careful...

Tax Law (Questions About Taxes): Regarding per diem, apartment address, tn visa
apartment address, tn visa, side apartment: The address thing - sure. The perdiem, as long as the job is less than a year (not in reality, but truly), his perdiem is not taxed. HOWEVER, the second the job is found to go a year or more (and if it is the first day he is on it that you find out the...

Tax Law (Questions About Taxes): Reguarding the rules on claiming dependants, time college student, lucius
time college student, lucius, incompetence: Lucius, Thank you for your question. That s a good one. Unfortunately, the IRS has not addressed this prickly issue. I would suggest that you file first electronically before your mother files her return. If you are under 24 and a full time college...

Tax Law (Questions About Taxes): Reimbursement Policy, texas sales tax, incured
texas sales tax, incured, reimbursement policy: Hi Kenneth Normally churches can apply for a tax exemption for purchases made for the benefit of the church and paid fro church funds. Purchases made by individuals even if doing church business normally are not exempt from the sales tax. for example it the...

Tax Law (Questions About Taxes): Rent and taxes., time mike, orthodontist
time mike, orthodontist, additional income: Mike, Thank you for your question. 1) My folks would like to charge me less rent for the place, but they fear that the decrease in income for the property will result in them having to pay taxes on the difference between what they re actually getting...

Tax Law (Questions About Taxes): Rental income, cash basis, rental property
cash basis, rental property, proof: Roger, Thank you for your question. 1)Can I deduct the lost rent as a loss on my taxes? No. Unfortunately, you are a cash basis taxpayer. If you are unable to rent the unit, you just have to write it off as experience. I have a rental also. When I...

Tax Law (Questions About Taxes): Rental Property - Mid year, form 1040 schedule e, form 8829
form 1040 schedule e, form 8829, prospective tenants: Jodi, Thank you for your question. 1) I m wondering if I can claim the property as a rental property for this year on my taxes? Yes. You would have a proration of the mortgage interest and the real estate taxes. Part to Schedule A and Part Form 1040...

Tax Law (Questions About Taxes): Residence tax, income tax withholding, state income tax
income tax withholding, state income tax, nebraska state: Vijay: I can not answer your question directly. However, if you work in one state and live in another state and they both have state income tax you will owe income tax in both states. If Iowa and Nebraska have agreements on income tax withholding between...

Tax Law (Questions About Taxes): Residency, california income tax, mexico thanks
california income tax, mexico thanks, mexico property: Tom: All you need to do is declare Mexico as you residency. However, you will give up the right to vote. If you earned the income in California that is funding your retirement they will still get a bite out of your retirement. Also, if you draw Social...

Tax Law (Questions About Taxes): Residency Requirements, federal pensions, wifes name
federal pensions, wifes name, federal purposes: Matthew, Thank you for your question. If you put the house in your wife s name, then it becomes her property. Once you establish residency in Tennessee, you are a residence in Tennessee. According to the State Of Tennessee, elements of determining residency...

Tax Law (Questions About Taxes): RMD / Various Savings, cd iras, minimum distributions
cd iras, minimum distributions, quarterly statement: Christine, Thanks for your question. RMD s must be made from all qualified retirement plans. If it is not, distributions are not required. Your quarterly statement should indicate IRA in the name of the account. Making withdrawals prior to age...

Tax Law (Questions About Taxes): Roll 401K $ to IRA for first time home buyer, retirement money, teacher retirement
retirement money, teacher retirement, time home buyer: J It is my recommendation to leave the retirement money in place. Never use it to purchase a house or for anything. That said, you can borrow some of your money out of a 401k to purchase a home only if the plan will allow you to do so. Your plan may...

Tax Law (Questions About Taxes): real estate capital gains tax, real estate capital gains, real estate capital gains tax
real estate capital gains, real estate capital gains tax, capital gains tax: Lisa, Thanks for your question. I presume your father files as single. Reinvesting the proceeds in another property will have no effect on the taxes. Assuming this is his main home, he can exclude up to $250,000 in gain from the sale of the house....

Tax Law (Questions About Taxes): real estate cost basis, cost basis, depreciation
cost basis, depreciation, irs: Hi, If you filed joint returns reporting the rentals in the past, you can get a copy of prior year tax returns from the IRS (they do charge). The returns would show what depreciation was taken on the rentals. With a couple of years returns showing depreciation...

Tax Law (Questions About Taxes): as a real estate professional, how do I deduct passive rental losses?, irs instructions, rental losses
irs instructions, rental losses, property losses: Charlie, Thank you for your question. 1)If I qualify, where and how do I deduct my rental property losses to avoid the SE tax on my active real estate income (from part time remodeling contracts)? Complete Schedule E line 43. You also need to attach...

Tax Law (Questions About Taxes): realestate capital gains, capital gains taxes, capital gains tax
capital gains taxes, capital gains tax, unnecessary capital: Until the election, the maximum rate for capital gains is 15%. We have no idea what will happen to the rates after the election. If you use it for a rental or B&B, I strongly suggest seeing your tax professional to see what it will do for your personal...

Tax Law (Questions About Taxes): receiving beneficiary funds from out of the country, wealth management firm, worldwide income
wealth management firm, worldwide income, consequenses: There is no tax consequenses in transferring the money into the USA. Leaving the money in the off-shore account doesn t relieve you of taxation on the income earned on the account because you are subject to your worldwide income. You may also have estate...

Tax Law (Questions About Taxes): reinvesting capital gain (profit), sole proprietor, capital gains tax
sole proprietor, capital gains tax, gain profit: Hi, The only way to defer paying capital gains tax on the sale of a business asset is to do a like kind exchange - also known as a 1031 exchange. Since you ve already purchased the replacement property you wouldn t be able to do that. Find yourself an...

Tax Law (Questions About Taxes): renting out v.s selling in a slow real estate market, property tax deduction, principle residence
property tax deduction, principle residence, investment guidance: Brian, Thanks for your question. I can t give you any investment guidance as I am not really familiar with the real estate market in Indiana. I can tell you from personal experience that having a long-distance rental unit is not a piece of cake. Having...

Tax Law (Questions About Taxes): S Corp, s corp, stancil
s corp, stancil, hi john: Ken Thanks for yoru question. Not a very good idea. First, there is the cost and effort involved in setting up a new corporation and set of books, etc. every two years. Second, it would probably increase your likelihood of an audit, as the formation...

Tax Law (Questions About Taxes): S-Corp calculation of basis, s corp, stancil
s corp, stancil, capital gain: Michael, You are sort of correct, but it helps to look at the bigger picture. A shareholder s basis is increased by his/her share of the profits - ordinary income, capital gain, whatever the source. The basis is decreased by losses. Again, from whatever...

Tax Law (Questions About Taxes): S-Corp & Distributions, s corp, time business
s corp, time business, similar services: Distributions are not a deduction from income, so they are not taxable to you unless you exceed the capital balance in your account. What is ordinary and necessary would be what you would pay in the market for similar services from a third party. Have...

Tax Law (Questions About Taxes): SALES TAX, use tax
use tax: Hi Brian not off hand However being practical since use taxes are considered part of purchases and business interest expenses are deductible you should not have a problem deducting them as business expense you can look up both items at www.irs.ustreas.gov...

Tax Law (Questions About Taxes): SAVING TAXES ON WITHDRAWAL FROM IRA, roth ira, mobey
roth ira, mobey, medical reason: Norma: If you are 59.5 years of age or older and have a medical reason you maybe able to withdraw some of your IRA. However, before I give a definitive answer I need to know more of your situation. The medical necessity for getting another house and not...

Tax Law (Questions About Taxes): Sale of Business including Goodwill, leasehold improvements, form 4797
leasehold improvements, form 4797, share your knowledge: Anthony, Thanks for your question. The goodwill is considered Sec 197 property and the sale will be reported on Form 4797 in Part I if held more than 12 months because the gain in excess of amortization is a 1231 gain. Even though he did not take...

Tax Law (Questions About Taxes): Sale of Church building, stancil, mike thanks
stancil, mike thanks, charitable contributions: Mike, Although the law is somewhat hazy, as a church you do not need to file a 1023 to be tax exempt. However, it is a good idea to do so. The contributions are deductible regardless of your 501(c)(3) status. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Sale of a home/ Tax question, irs form 1040es, estimated tax payment
irs form 1040es, estimated tax payment, real estate taxes: Andy, Thank you for your question. If you bought it for $10,500 and sold it for $50,000 , and you held it less then a year, then you have a $34,500 gain to be reported onIRS Form 4797 Part 11 1250 Property. You can also deduct from the gain any legal...

Tax Law (Questions About Taxes): Sale of house, capital gains tax, executor of the will
capital gains tax, executor of the will, stancil: Josseph,cil Thanks for your question. Probably not. Your cost basis is the fair market value as of date of death. If you sell it for more than that amount, you will owe tax on the gain. If less, you can take a deductible loss. Hope this helps....