About Experts Sitemap - Group 50 - Page 55 2015-02-24

Tax Law (Questions About Taxes): mileage, home health nurse, adjusted gross income
home health nurse, adjusted gross income, form 2106: Susan, Thanks for your question. Calculate your mileage and subtract the reimbursement on Form 2106. Any deductible amount then carries over to Schedule A as a miscellaneous itemized deduction. You can deduct any amount that exceeds 2% of your adjusted...

Tax Law (Questions About Taxes): ministerial housing allowance limitations, irs publication 517, michael chitwood
irs publication 517, michael chitwood, clergy tax: Paul, Thanks for your question. As far as I know, there is no Publication 317. The only restrictions on housing allowances are found in Publication 517. It is the smallest of 1)The amount actually used to provide a home. 2) The amount officially...

Tax Law (Questions About Taxes): mortgage loss as a tax deduction, skiped, mortgage payments
skiped, mortgage payments, mortgage interest: You cannot deduct rent paid to yourself. You may have a loss due to the mortgage interest, but that would be it. If this is in audit, you will definitely have a problem with the logic you are using, please see a tax professional in your area. Helen, EA...

Tax Law (Questions About Taxes): mortgage and prop tax deductions, head of household, tax accountant
head of household, tax accountant, title loan: Teresa: If you are married neither can claim head of household filing separate returns. If you were single (divorced) if two children are involved each of you can claim one child and head of household. You can take a deduction for those items that you...

Tax Law (Questions About Taxes): multiple w-2 forms, standard deduction, itemized deductions
standard deduction, itemized deductions, withholding tax: Hi, I don t know where you are entering the W2 s but your taxable income is your total income less your standard deduction (or itemized deductions) less your exemption (or exemptions). Then you look up the tax on your taxable income. If the tax is more...

Tax Law (Questions About Taxes): New House or Car Deduction, state sales tax, state income tax
state sales tax, state income tax, interest points: Hi, The deductions for a home are mortgage interest, points and real estate taxes in the year paid. There are no deductions for a new car. The state sales tax you pay on a car can be deducted if you chose to deduct sales tax rather than state income tax....

Tax Law (Questions About Taxes): New SSN and amending previous tax returns, social security number, stancil
social security number, stancil, ssn: Joey, Thanks for your question. Most likely not. I presume that for 2006 and 07 she was a non-resident alien. If you are married to a non resident alien, you must generally file as single unless she elects to have all her income taxes as a US citizen...

Tax Law (Questions About Taxes): New York State/City tax for part time residents, income tax liability, stancil
income tax liability, stancil, time residents: Jim, Thanks for your question. She needs to file as a part-year resident, as that accurately reflects her status. I am not sure about the penalizing part, but it is likely to work out if you file the proper return. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): I need help finding out about taxes., self employment tax, independent agent
self employment tax, independent agent, quarterly income: Hi Lana your income tax depends on many factors not described in your question you would need to figure what income taxes would be due on your earnings. But whatever you calculate to be you quarterly income tax payment you would need to add 15% of your...

Tax Law (Questions About Taxes): non-resident state taxes, ftb ca gov, franchise tax board
ftb ca gov, franchise tax board, james rogers: Dear Cynthia, Welcome to All Experts, and thank you for your question. When you receive your W-2 from your WA employer, check to see if there s any reference to CA in the state box. I suspect there won t be, but your employer may make the 1/12 allocation...

Tax Law (Questions About Taxes): Option Trading Gains and Losses on 1099-B, employee stock options, trading stock options
employee stock options, trading stock options, option trades: HB, Thanks for your question. The 1099-B only shows the proceeds from the sale of securities. Options are a type of security that should be reported on that form. The form does not, however, include your basis in the securities sold. Hope this helps....

Tax Law (Questions About Taxes): Other home in Maryland, mortgage interest, agi
mortgage interest, agi, depreciation: Thomas, Thanks for your question. If you are not renting it at fair rental value, as I suspect, you have a rental not for profit. Your rental income is reported on line 21 and your mortgage interest and taxes on Schedule A as itemized deductions. ...

Tax Law (Questions About Taxes): Overseas Contractor, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: Lisa, Thanks for your question. Unless he is in the military, it is my understanding that hazard duty pay is taxable along with the up lift. However, it may be excluded under the foreign earned income exclusion. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Overseas Contractor, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: William, Thanks for your question. I am not sure what you mean by the contractor tax laws, but if you are physically present in a foreign country for 330 days in a 12 month period you are eligible for the foreign earned income exclusion. Under...

Tax Law (Questions About Taxes): Partial Roof Replacement on Rental Property, rental property, depreciation
rental property, depreciation, deterioration: Carol, Thank you for your question. 1)We are claiming our property as a depreciation, but is the current roof replacement considered as depreciation or as a repair? And if so, is it added to the basis of the rental property or is it separate as a depreciation?...

Tax Law (Questions About Taxes): Partnership question on tractor, farm partnership, business deduction
farm partnership, business deduction, true thanks: What you have is an implied lease between you and your dad to the farm partnership. The farm partnership does not own the tractor, You and your father as a partnership are leasing the tractor. No business deduction is available if no lease payments are made,...

Tax Law (Questions About Taxes): On Payment Plan, installment agreement, tax return
installment agreement, tax return, money: There is nothing to do on your tax return this year regarding payments made under your installment agreement. If you are due a refund on this year s taxes, it will be applied to your 2006 liability and your payment plan will continue unless the refund pays...

Tax Law (Questions About Taxes): Physical Presence, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: Jeremy, Thanks for your question. The amount of the foreign earned income exclusion for 2009 is $91,400. State laws vary, so I could not advise you on that. To my knowledge, hazard pay for contractors is taxable. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Post 1984 Decree & 8332, internal revenue service, form 8453
internal revenue service, form 8453, divorce decree: James, Thanks for your question. It states that you can attach pages from the decree or the 8332, and I don t know how you would e-file and attach those pages. However, you can e-file and submit Form 8453 with the 8332 (or other documents) by mail...

Tax Law (Questions About Taxes): Premature Distribution from Roth IRA, roth ira, form 5329
roth ira, form 5329, stancil: Melissa, That is the correct form. You will not have to pay the penalty if the account is over 5 years old. Withdrawals are first from contributions, then earnings. If any earnings are withdrawn, they are subject to tax. Hope this helps. John...

Tax Law (Questions About Taxes): partnership, self employment tax, income tax purposes
self employment tax, income tax purposes, income tax return: Dear Linda, Welcome to All Experts, and thank you for your question. If you had an accountant prepare your Forms K-1 (which is analogous to a Form W-2 from an employer), didn t he or she also prepare the partnership s federal Form 1065? That s the tax...

Tax Law (Questions About Taxes): Does paying child support = to claiming as dependent on taxes?, dependent claim, dependency exemption
dependent claim, dependency exemption, custodial parent: Daniel, Thanks for your question. No. As a matter of fact, the opposite is true. The custodial parent is presumed to be the one who has the right to the dependency exemption unless there is a court order or signed document giving you the right to the...

Tax Law (Questions About Taxes): paying taxes for odd jobs, form 1040 schedule c, irs form 1040
form 1040 schedule c, irs form 1040, self employment tax: Debbie, Thank you for your question. You do not have to pay income taxes as long as your income does not reach $5450 plus $3500 or $8950 as long as you are not a dependent of another or else the number is $5450. This is for a single person with no dependents...

Tax Law (Questions About Taxes): Who pays Tax - Babysitter or me?, dependent care credit, ss number
dependent care credit, ss number, stancil: Jo, Thanks for your question. Ultimately, she is responsible for the taxes. Since she is not regularly employed she needs to report her earnings on Schedule C of the 1040. A 1099 is not necessary in this case, but she needs to give you her SS number...

Tax Law (Questions About Taxes): personal taxes, michigan taxes, state returns
michigan taxes, state returns, stancil: Jenna, Thanks for your question. You will need to file an AZ non-resident form paying tax on your AZ earnings. You will also need to file a MI resident return, reporting all your income. MI will give you a credit for taxes paid to AZ. Hope this helps....

Tax Law (Questions About Taxes): personal taxes, spouse lives, federal returns
spouse lives, federal returns, state returns: Ada, Thanks for your question. For Georgia you must file a joint return and indicate non-resident on box 3 and use Schedule 3 on page 4 of the GA 500 form. For NY, you may file a joint return or you may file married filing separate. Hope this helps....

Tax Law (Questions About Taxes): Not for profit rental, stancil, future thanks
stancil, future thanks, depreciation: Mirna, Thanks for your question. You can (and should) deduct your expenses including depreciation, as the IRS will reduce the basis for depreciation allowed whether you take it or not. The amount of interest, taxes, and other expenses cannot exceed...

Tax Law (Questions About Taxes): does property held jointly need to be filed together?, withholding allowances, stancil
withholding allowances, stancil, time hope: Angela, Thanks for your question. You can each file a Schedule E, showing your share of the revenue and expense. Your W-2 does not reflect your withholding allowances and marital status. This is on the W-4. You can change the W-4 with your employer...

Tax Law (Questions About Taxes): Quakertown Earned Income Tax, berkheimer, statute of limitations
berkheimer, statute of limitations, york pa: If you live in a county/township for any part of a year, you owe the local taxes for that portion. I don t know your county s statute of limitations, you will have to find that out, but usually a non-filed return has no statute. If statute is still running...

Tax Law (Questions About Taxes): Qualified Transportation Benefits, www irs gov, internal revenue code
www irs gov, internal revenue code, vanpool: Geri, This is allowed through Sec. 132 of the Internal Revenue Code. It allows up to $120 per month for this type of transportation. The employer can provide this tax free, or as a pre-tax benefit up to the allowed amount. It is referred to as a qualified...

Tax Law (Questions About Taxes): Question about an Inheritance, old mother, inheritance
old mother, inheritance, cpa: If the property is sold within 6 months of the date of death, there is no gain or loss recognized on her return. The sale is reported on schedule D, but the cost and proceeds numbers are the same resulting in no gain or loss. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): quarterly estimates & lifetime learning credit, income tax liability, lifetime learning credit
income tax liability, lifetime learning credit, quarterly estimates: Travis, You are confusing two issues. Talk with you accountant, he should be able to explain it, especially if I miss my guess below. The lifetime learning credit reduces your tax liability. It is not a refundable credit, so you can only use it to reduce...

Tax Law (Questions About Taxes): question about deceased parent, income tax return, denise thanks
income tax return, denise thanks, dependency exemption: Denise, Thanks for your question. If her gross income was less than $3,500 and you provided over half her support you can take a dependency exemption for her. SS does not count as income for this purpose. If she had no income, you do not need to...

Tax Law (Questions About Taxes): RE: 1099-MISC, irs letter, pipeline company
irs letter, pipeline company, form 4684: First of all, you should not have paid taxes on the easement and you do not owe taxes on this money either. Both payments reduce your basis in the property that was damaged/taken. You should amend your return to show the income in and out (on line 21)...

Tax Law (Questions About Taxes): RENTAL PROPERTY, sale of home
sale of home: Hi Steve, In order to exclude a portion of the gain on sale of a primary home you have to meet the ownership and use tests. This means that during the five-year period prior to the date of sale, you must have owned the home for at least two years and lived...

Tax Law (Questions About Taxes): Re: Inaccurate 1099, return receipt, regulating system
return receipt, regulating system, 1099 misc: Elaine, Thank you for your question. I read you story and find that the representative that you spoke to was not helpful. I would suggest at this point that you write a letter to the company and put them on record that their numbers are incorrect...

Tax Law (Questions About Taxes): Re-payment of unearned vacation pay, irs form 843, contract negotiations
irs form 843, contract negotiations, check stub: Ed, Thank you for your question. 1)However I m not sure how to account for this. If in 2007, they paid you for vacation time , you had the use of the money and was paid taxes on it. In 2008, they paid you the back pay and there was probably an...

Tax Law (Questions About Taxes): RealEstate Gifts, quick claim deed, richard colton
quick claim deed, richard colton, helena mt: Richard, Thanks for your question. A quit claim deed is a sale, so she must normally report any gain or loss on the sale. However, since it was to a related party, the loss wold not be deductible, but would be considered her gift to her siblings. ...

Tax Law (Questions About Taxes): Rental Depreciation, term implications, cost basis
term implications, cost basis, tax benefit: Randy, Thank you for your question. 1)1. Do I have to depreciate the property? Yes, Once you start renting out a property, you need to depreciate the property. If you do not, then whether you depreciated or not, you will have to adjust your cost basis...

Tax Law (Questions About Taxes): Rental depreciation, personal room, stancil
personal room, stancil, new tv: Nathaniel, Thanks for your question. Yes, you can depreciate those items as well as the cost of the house. Use a reasonable percentage based upon the amount of property they have access to. Probably somewhere in the range of 2/3. Hope this helps....

Tax Law (Questions About Taxes): Rental Property, irs form 4684, insurance recovery
irs form 4684, insurance recovery, necessary repair: Jim. Thank you for your question. 1)Can I expense the loss of the pool on Schedule E? No. I believe this may be a casualty loss. You would report this loss on IRS form 4684. If the pool just needed repairs and was under $500 , as a practical matter...

Tax Law (Questions About Taxes): Rental Property, 1098 form, repair expenses
1098 form, repair expenses, mortgage payment: Hi Shirley I am afraid NO I think what you have here is a gift to your friend however you friend is required to file schedule E and if she actively manages the property she may be able to deduct a loss: To quote from the IRS site relating to rental...

Tax Law (Questions About Taxes): Rental Property Mortgage That Remains After Sale of Property, cash advance fees, irs agent
cash advance fees, irs agent, rental condominium: We have discussed your situation at some length, and we do not have a consensus of opinion. If you no longer have any passive income to offset the interest paid, it is personal debt and not deductible. However, since you are still liable on the business...

Tax Law (Questions About Taxes): Reporting Dependant's Schedule K-1, social security number, tax id number
social security number, tax id number, form 1041: That can t be right. According to what you said, the Trust itself issued the K-1 to the beneficiaries. It cannot issue a K-1 to itself. The trust TIN will be on the document but the beneficiary s tax ID number should also be on the document. John Stancil,...

Tax Law (Questions About Taxes): Residency and taxes, new mexico state, new mexico state taxes
new mexico state, new mexico state taxes, new mexico state income tax: Don: I am sure! As a resident of either state you have to pay state income tax regardless of where you earn the wages. Therefore, if you work and live in the same state you will only pay state income tax to one state. You can change your residency by...

Tax Law (Questions About Taxes): Retirement, SS base, IRA distribution, ira distribution, stancil
ira distribution, stancil, cpa: Hardie, Thanks for your question. Depending on your level of income zero, 50% or 85% of your SS earnings will be subject to tax. Your wife s SS is included in the formula. Publication 17 from the IRS has a table to complete to see how much is taxed....

Tax Law (Questions About Taxes): Roth IRA and taxes, roth ira, distribution boxes
roth ira, distribution boxes, 1040x: Rafi, Thank you for your question. IF you prepare your 1040X, the numbers as originally filed and as adjusted should be the same. You will just indicate that there was a Roth IRS distribution made and subsequently taken out, earning no interest income....

Tax Law (Questions About Taxes): Royalties, oil royalties, wise plan
oil royalties, wise plan, stancil: Cindy, Thanks for your question. You don t state what type of royalties they are but most, if not all royalties, are taxed as ordinary income. This means it will be taxed at your marginal bracket which varies between 10 and 35% depending on your taxable...

Tax Law (Questions About Taxes): racing income, 1099 misc, stancil
1099 misc, stancil, schedule c: Travis, Thanks for your question. If it is a hobby, you should report it on line 21 as other income. However, since you have sponsorships, it seems to be more of a business and I would report it on Schedule C. This would allow you to deduct expenses....

Tax Law (Questions About Taxes): real estate agent deductions, fee expenses, stancil
fee expenses, stancil, real estate agent: Linda, Thanks for your question. It is difficult to justify deduction of expenses for four years without generating any revenue. If the IRS were to audit you, they would most likely disallow the deductions. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): real estate sale, irs web site, maximum exclusion
irs web site, maximum exclusion, real estate sale: Since the property was not used as a personal residence, you do not exclude any of the gain. Because the property was not used for business, none of the operating expenses as deductible. You can deduct the selling expenses (Closing fees, sales commission,...

Tax Law (Questions About Taxes): recording tuition with school, irs purposes, james rogers
irs purposes, james rogers, tax benefit: Dear Julie, Welcome to All Experts, and thank you for your question. If you have a canceled check dated in 2008, that should be sufficient verification for IRS purposes. If the school has cashed your check, SURELY they must recognize the fact that...

Tax Law (Questions About Taxes): refile 2007 taxes, ss office, early retirement
ss office, early retirement, taxable portion: You don t need anything to prove anything, just the checks on the repayment. You put the repayments on Sch A, misc deductions subject to 2% of AGI. And you can only recapture the taxable portion, so if you paid tax on $10K of the $13K, only $10K can be recaptured....

Tax Law (Questions About Taxes): I reimbursement considered "other compensation"?, schedule c, editorial assistant
schedule c, editorial assistant, first option: Hi Sharon, You have two options: 1. Report the reimbursed amount as income on Schedule C and also as an expense on Schedule C 2. Don t add the reimbursed amount to your income and don t report the expense on Schedule C For record-keeping purposes...

Tax Law (Questions About Taxes): rental property, adult son, title deed
adult son, title deed, management fee: Form a partnership or LLC with him and distribute the income the way you want, Have the son receive a management fee (or guaranteed payment) for managing the property. You need to talk to a tax advisor to determine how to set it up. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): rental property/ capital gains tax, capital gains tax, stancil
capital gains tax, stancil, claim deed: Chad, Thanks for your question. It does not matter what you did with the proceeds of the sale of the CA property - you will owe tax on the gain from the sale to both Federal and state. Since this is unreported income and likely fraud, there is no time...

Tax Law (Questions About Taxes): rental property deductions, hr block, stancil
hr block, stancil, mortgage interest: Michael, Thanks for your question. The mortgage interest for the rental must be deducted on Schedule E, along with any other expenses. The amount of your mortgage payment is not deductible, just the interest. You can also deduct the depreciation on...

Tax Law (Questions About Taxes): rental property sales, principle residence, rental purposes
principle residence, rental purposes, principal residence: There are two questions that come to my mind when I read your inquiry: 1. Were you and your husband also living in this house? There is a residency test in order to claim your daughter as a dependent (or Qualifying Child in tax terms), which states that...

Tax Law (Questions About Taxes): repaying tax debt, long term disability, short term disability
long term disability, short term disability, tax forgiveness: When you get the bill for the tax due, you can get an installment agreement to pay the balance. Based on a $3,000 liability, you could pay as little as $50 to $60 per month, but of course the faster you pay it back the better. There is no tax forgiveness...

Tax Law (Questions About Taxes): How to report 1099a, capital improvements, retirement accounts
capital improvements, retirement accounts, stancil: Not quite correct. You missed the part about capital losses in my previous answer. The loss on the sale is a capital loss. You are only allowed to deduct up to $3,000 in capital losses (after offsetting losses against capital gains) per year. Any unused...

Tax Law (Questions About Taxes): how to report loss?, passive losses, capital losses
passive losses, capital losses, stancil: Alex, Thanks for your question. First, to clarify a point, there are capital losses and passive losses, but not passive capital losses. You have a capital loss, reported on Schedule D of the 1040. You can offset the loss against capital gains, then...

Tax Law (Questions About Taxes): reporting a loss, capital gains and losses, long term capital gains
capital gains and losses, long term capital gains, itemized deduction: Frank, Thanks for your question. If the deposits were not FDIC insured and you can make no recovery, it can be reported on Schedule D. However, it might be better for you if you used an alternative approach that is allowed. Losses on non-federally...

Tax Law (Questions About Taxes): resident status, oregon resident, time resident
oregon resident, time resident, state return: Wendy, Thanks for your question. You must file as a part year resident in Oregon, California, and Michigan, reporting to each state the income earned in that state. Alternatively, if you are a legal Oregon resident, you must file as a non-resident in...

Tax Law (Questions About Taxes): retail clothing inventory for tax purposes, irs pubs, cash basis of accounting
irs pubs, cash basis of accounting, 1 million dollars: HI Lou as you know the amount of inventory at the end of the year reduces your cost of sales for that year at the same time it increases your cost for the next year If you had a loss last year and expect to have a profit you might be better off using...

Tax Law (Questions About Taxes): room rental tax deductions, renting a room, john thanks
renting a room, john thanks, stancil: John, Thanks for your question. 1. You just need to determine a percentage. If he has full access (and can use the other bedrooms), it would be 50%, or slightly less if your room is significantly larger. 2. Same percentage as in number 1. 3. Use...

Tax Law (Questions About Taxes): roth,iraeducational, irs form 5329, income tax return
irs form 5329, income tax return, qualified education expenses: Shelly, Thank you for your question. I would suggest that you wait until you receive the respective 1099R from the various lending institutions. He will probably be subject to the 10% penalty for early distribution. refer to IRS form 5329 for exceptions...

Tax Law (Questions About Taxes): S Corporation or Sole Propietorship?, sole proprietorship, florida unemployment
sole proprietorship, florida unemployment, executor of the estate: Your former business partner s estate is now a co-owner of the s-corp. So dissolving the corporation may not be as easy. The estate owners the former partners share of the assets. You cannot remove the partners name from the business as his estate takes...

Tax Law (Questions About Taxes): S-corp, property distributions, payroll checks
property distributions, payroll checks, cash distributions: Cash distributions are not deductible expenses against income. They are balance sheet adjustments only which effect the shareholders equity account. As such they are reported as a line 16 D transaction that affects the shareholders basis in the stock....

Tax Law (Questions About Taxes): Sale of Mother's Home, income tax form, federal income tax form
income tax form, federal income tax form, federal income tax: Since you sold the home for less than the date of death value and assuming you did not live in it, you have a long term capital loss reported on Sch D. The gift to your other sibling may be subject to gift tax if it is over 12K, but other then that, nothing...

Tax Law (Questions About Taxes): Sale of mother-in-laws house, taxable gain, stancil
taxable gain, stancil, personal residence: Wade, Thanks for your question. The unfortunate part of this is that they were listed as owners of the property, when it sold, a part of the gain was attributed to them. When they were listed on the title, it was a gift from their mother to them,...

Tax Law (Questions About Taxes): Sale of Property, lawyer fees, property question
lawyer fees, property question, fmv: I can t tell you that. Divide the take the total proceeds and divide that by the amount each one received. That that percentage and multiply that by the $7,000 basis. Subtract this number from the amount received for the taxable gain. John Stancil, CP...

Tax Law (Questions About Taxes): Sale of Property, property question, taxable gain
property question, taxable gain, true thanks: The inheritance is not subject to income tax. When you inherit property your basis is the fair market value as of date of death. When the property is sold, you owe income tax of the excess of the sale proceeds over the basis. John Stancil, CPA ...

Tax Law (Questions About Taxes): Sale of Property with Gift Equity, stancil, adjusted basis
stancil, adjusted basis, taxable income: Pam, Thanks for your question. Gifts are not taxable income, so they are not reported on either 1040. If you are married, you will not have to file a gift tax return, as the amount of the gift is below the annual threshold. If not, you will need to...

Tax Law (Questions About Taxes): Sale of rental property, insurance proceeds, capital improvements
insurance proceeds, capital improvements, cost basis: Jim, Thanks for your question. Your cost basis in the new property is the original cost plus capital improvements including the cost to rebuild minus depreciation allowed or allowable minus any insurance proceeds from the fire. Hope this helps. ...

Tax Law (Questions About Taxes): Sale of Stock, income tax form 1040, tax form 1040
income tax form 1040, tax form 1040, federal income tax form 1040: James, Assuming you held the stock over 12 months it is a long term capital gain/loss. Report this on part II of Schedule D. Your proceeds is the $1400 minus any commission paid. Your basis is what the stock cost you. The difference is your gain/loss....

Tax Law (Questions About Taxes): Sale of snall business, sole proprietorship, form 6252
sole proprietorship, form 6252, installment basis: John, Thanks for your question. I presume your business was a Schedule C sole proprietorship. As such it is considered the sale of the assets of the business. These are not capital assets, so the sale is reported on Form 4797. It sounds as if you...

Tax Law (Questions About Taxes): Savings interest, interest question, stancil
interest question, stancil, question thanks: Tax exempt has a precise meaning in the area of taxation. It means that the income is not subject to tax regardless of your income level. His income is not tax exempt. In his situation, as I stated, it is below the threshold for filing, so there will...

Tax Law (Questions About Taxes): Schedule D for 1065, condo units, stancil
condo units, stancil, schedule c: Susan, Thanks for your question. If they belong on Schedule D, they should be reported separately. It is a Schedule D item if this was basically a one time or occasional investment. However, since it was a spec home, if you are doing this routinely,...

Tax Law (Questions About Taxes): Schedule D Stock Sale, d stock, fifo method
d stock, fifo method, joe thanks: Joe, Thanks for your question. If you can specifically identify the shares that were sold you can do that. If you cannot, you must use the FIFO method, selling the oldest shares first. Based on what you have said, it appears that the specific shares...

Tax Law (Questions About Taxes): Section 179 Depreciation, section 179 depreciation, tangible personal property
section 179 depreciation, tangible personal property, sec 179: Rhenna, Thanks for your question. No, they cannot take Sec. 179. This section of the code is for business property, and rental property is specifically excluded. Additionally, a trailer is not classified as tangible personal property, so it is disallowed...

Tax Law (Questions About Taxes): Settlement from a car accident in the state of GA, medical expense deduction, car damage
medical expense deduction, car damage, pain and suffering: Celeste, Thank you for your question. 1)I am wondering if I have to claim this settlement as income on my federal taxes. if this money was reimbursement for medical expenses, then if you took the medical expense deduction on your tax return in a...

Tax Law (Questions About Taxes): Severance Pay IRS no tax update, heather heather, severance tax
heather heather, severance tax, severance pay: Heather, Thanks for your question. That document is from the British Board of Inland Revenue and applies to taxes in the United Kingdom. I am not familiar with their laws so I cannot advise you on the applicability of it. However, I can tell you...

Tax Law (Questions About Taxes): Severance pay taxes, severance package, severance pay
severance package, severance pay, tax percentage: Severance can be withheld at a higher rate for federal only (flat rate of btwn 25-28%). PA stays the same percentage as does your local. There is nothing you can do unless you are going to work at another job (or have a spouse that is working) and reduce...

Tax Law (Questions About Taxes): Signing Bonus Taxation, not on w-2 nor 1099, social security and medicare, payroll company
social security and medicare, payroll company, tricky situation: Hi Jason, This can be a tricky situation. Your signing bonus is in fact part of your wages, so you theoretically need to report it on line 7 of your 1040 (and it should have been reported on your W-2). However, in this case we don t know if your employers...

Tax Law (Questions About Taxes): Simple/Complex Trust Distribution of Corpus, personal tax return, mutual fund shares
personal tax return, mutual fund shares, trust document: Susan, Thanks for your question. The capital loss is what is know as a separately stated item on the K-1. Is it shown separately from the interest or other income that the trust realized during the year. Each individual can deduct up to $3,000 of...

Tax Law (Questions About Taxes): Small Business taxes and minors, social security and medicare, medicare tax
social security and medicare, medicare tax, small business taxes: Hi Suzanne, Which tax treatment is more beneficial depends on each minor s circumstances. Generally when you have employees (and use a W2) you pay half of their Social Security and Medicare tax whereas if they are independent consultants using a 1099 they...

Tax Law (Questions About Taxes): Sole Proprietor - tax write-off, mileage reimbursement, sole proprietor
mileage reimbursement, sole proprietor, childrens sports: Hi, Yes you can deduct expenses for your travel even if you did not get any business. No, you can t deduct any expenses for your childrens sports. The Federal rate for mileage is 50.5 for the first half of the year and 58.5 for the second half of...

Tax Law (Questions About Taxes): Spouse owes taxes, tax period, tax refunds
tax period, tax refunds, irs: They will not keep your refund if you did not file jointly. There is certainly no requirement that you file jointly, but the overall tax for the two of you will be less if you do - even if your refund is taken to pay his liability. Your spouse may want...

Tax Law (Questions About Taxes): State Residency, mark thanks, state residency
mark thanks, state residency, stancil: Mark, Thanks for your question. Laws in most states are such that if you move out of and back into a state during the year, you are considered a resident for the full year. You will have to file as such in OK, reporting all your income. You will...

Tax Law (Questions About Taxes): State tax, final result, state tax
final result, state tax: Hi Paul in VA you will need to file form 760 as single and your wife will need to file form 763 In MI your wife will file a Joint Return even if she is the only one that reports income in MI The final result should be that income is properly allocated...

Tax Law (Questions About Taxes): State Unemployment tax, state unemployment tax, unemployment tax act
state unemployment tax, unemployment tax act, federal unemployment tax: Nathan: No, you only report the employee to California NOT Virginia. John I do not understand, Nathan, If you have an employee living in California, working in California, that you reported the employee to Virgina for state unemployment. It does...

Tax Law (Questions About Taxes): Stock question, jp morgan chase, jp morgan
jp morgan chase, jp morgan, long term capital: Tom, Thanks for your question. No, you did not sell the WM stock, but received WAMUQ in its place. the WAMUQ will have the same basis as your WM stock. IF the WAMUQ becomes worthless and you receive no replacement stock, you can take a loss on the...

Tax Law (Questions About Taxes): Stock Sale, long term capital gain, espp
long term capital gain, espp, stancil: Kathy, Thanks for your question. If purchased the stock at $40, and it split twice, your cost basis is $10 per share (40 divided by 2 divided by 2), or a total of $200 for the 20 shares you sold. The difference in this and the selling price is your...

Tax Law (Questions About Taxes): Stocks awarded to me in divorce settlement, divorce settlement, charles schwab
divorce settlement, charles schwab, best bet: Jeri, Unfortunately, the information you have is not sufficient for the IRS. Lacking any valid information on the basis or any reasonable means to make an estimate, the IRS will assign the stocks a zero basis, meaning you pay tax on the entire sale proceeds....

Tax Law (Questions About Taxes): Stress Relief, www irs gov, html publication
www irs gov, html publication, publication 502: Nathan, Thank you for your question. 1)Does such a deduction exist? No, I believe someone is being funny. IRS would only allow it as a medical expense. Refer to the following links. http://www.irs.gov/taxtopics/tc502.html Publication 502. ...

Tax Law (Questions About Taxes): Student Filing, irs form 8863, private scholarship
irs form 8863, private scholarship, chris answer: Tom, Thank you for your follow up. If you used the money for personal expenses, then it would be subject to taxes. The question then would be where on the 1099 it shows? If it is listed an other income, then no. If it is listed as non comp then it will...

Tax Law (Questions About Taxes): sale of primary residence, depreciation deductions, capital improvements
depreciation deductions, capital improvements, stancil: That law did go into effect, as you state, but it would not cover your situation. Your 3/35 is not correct, as the period of rental use prior to January 1, 2009 does not count toward reducing the maximum exclusion. So if you move into it 1/1/09 and sell...

Tax Law (Questions About Taxes): selling home, buying home, avoiding taxes, cancellation of debt, capital losses
cancellation of debt, capital losses, principal residence: The property is not your principal residence, so no part of the gain is excludable. You can write off the expenses of cleaning the property for sale as rental expense, but the sale results in a capital loss which has a limit of $3,000 per year against regular...

Tax Law (Questions About Taxes): separated living in two states, stancil, state taxes
stancil, state taxes, two states: Angela, Thanks for your question. NY requires that you file separate returns. PA does not have a non-resident filing status, so you file jointly, including all your income and take a credit for tax paid to NY. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): seperation and taxes., minimal income, stancil
minimal income, stancil, custodial parent: Trisha, Thanks for your question. Since you did not live together during the last 6 months of the year, you are considered unmarried for tax purposes and can file without him. Since you have custody, you can claim the daughter. Hope this helps. ...

Tax Law (Questions About Taxes): short sale on investment property with 1099-C, loan cancellation, capital improvements
loan cancellation, capital improvements, separatly: Cancelled debt $100,000; Loan amount $125,000. $25,000 taxable loan cancellation income. Your basis is the purchase price adjusted for depreciation and capital improvements. As I said earlier your selling price is the lower of FMV or the amount of cancelled...

Tax Law (Questions About Taxes): short sale tax implications, new single family, forsyth georgia
new single family, forsyth georgia, tax implications: Hanh: When you sell you will have to recover the depreciation. I do not know that calcualtion will be until it sells and we know the amount the bank will forgive. If they require you to pay the difference you will not be require to pay tax on what is...

Tax Law (Questions About Taxes): silver coin sale, long term capital gain, silver coins
long term capital gain, silver coins, coin shop: Claudia, Thanks for your question. The sale is reported on Schedule D as a long term capital gain. Your cost basis is the fair market value as of the date of death. This basis can be subtracted from the proceeds of the sale to determine your taxable...

Tax Law (Questions About Taxes): small business line debt cancellation, capital loss carryover, irs instructions
capital loss carryover, irs instructions, nol carryover: Hi Ann 1D is for real estate it seem to me it is 1B the IRS instructions seem to be clear see below Use Part I of Form 982 to indicate why any amount received from the discharge of indebtedness should be excluded from gross income and the amount...

Tax Law (Questions About Taxes): social security, social security
social security: Hi Georgina, Yes, your parents still have to file a tax return, and the form that they should receive from the Social Security Administration is called the SSA-1099. If they haven t received it by now they should request it again. I do recommend that...

Tax Law (Questions About Taxes): sold home of deceased mother's, warranty deed, deceased mother
warranty deed, deceased mother, life estate: Unless Mom kept a life estate, your basis is her basis and you will pay tax on the gain. If IRS wanted to get picky - your basis is $1 and you pay on the entire sales price less the buck. Hopefully mother filed a gift tax return. If not, you need to do...

Tax Law (Questions About Taxes): sold land, cost basis, term gain
cost basis, term gain, beneficiary: Shannon, Thank you for your question . 1)Do we have to claim it on our taxes? Yes each beneficiary reports each share of proceeds and cost basis to arrive at short term or long term gain. The cost basis would be the fair market value of the land...

Tax Law (Questions About Taxes): sosial security tax, social security tax, self employment taxes
social security tax, self employment taxes, stancil: Belinda, Thanks for your question. You will report that income on Schedule C. If there were any expenses associated with the business you can deduct them there. You will also complete Schedule SE to compute your self-employment taxes (SS and medicare)...

Tax Law (Questions About Taxes): Which state to file a tax return, stancil, tax return
stancil, tax return, cpa: Shawna, Thanks for your question. You must file a 740NP, Kentucky Non-resident form, reporting the sale of the land. You must also include this on your Colorado return. However, CO will give you a credit for taxes paid to KY. Hope this helps. ...

Tax Law (Questions About Taxes): state tax, payroll checks, state tax
payroll checks, state tax, yolanda: Yolanda: I know it is an annoyance, however, you still owe the taxes. No, there is nothing you can do other than complain to your employer. I know how you feel, it is so frustrating, but I have found in life that people are not perfect. Joh...

Tax Law (Questions About Taxes): Tax Deduction on Timeshare, mel mel, stancil
mel mel, stancil, mortgage interest: Mel, Thanks for your question. If you use the timeshare for personal use, it is treated as a second home, with only the property taxes and mortgage interest being deductible. If you rent out the timeshare, it is considered rental property and is reported...

Tax Law (Questions About Taxes): Tax for dependent, dependency exemption, part time job
dependency exemption, part time job, john thanks: John, Thanks for your question. You can take a dependency exemption for her, and you should do that. She will not need to file a federal return, as her earning are below the minimum for filing. However, if she had any income tax withheld, she should...

Tax Law (Questions About Taxes): Tax for dependent, state income taxes, federal income taxes
state income taxes, federal income taxes, part time job: John, Thank you for your question. 1)Our question is, should we include her 2008 earnings to our taxes and put her on our 2008 taxes as a dependant? If you can get a tax benefit from her by using IRS form 8873 or IRS form 8917, depending on your level...

Tax Law (Questions About Taxes): Tax Fraud, tax fraud
tax fraud: Your friend is committing a serious crime. And even worse, she is likely to be caught and punished. Her punishment will most likely consist of civil penalties which will more than double the amounts she fraudulently collected. Although not as likely,...

Tax Law (Questions About Taxes): Tax Problem, irs web site, schedule a itemized deductions
irs web site, schedule a itemized deductions, www irs gov: Dear Cheryl, Welcome to All Experts, and thank you for your question. If you receive a W-2 and work from home in which you maintain an office for the convenience of your employer, then the person who advised you about your taxes is just plain wrong....

Tax Law (Questions About Taxes): Tax question, irs web site, standard mileage rate
irs web site, standard mileage rate, employee business expenses: Janet, Thanks for your question. Any expenses that he incurs on the road for which he is not reimbursed can be deducted as miscellaneous itemized deductions on Schedule A. There is an allowed per diem amount for meals (vaires by location), and the standard...

Tax Law (Questions About Taxes): Tax question, irs form 1099, forecloseure
irs form 1099, forecloseure, cancellation of debt: Randy, Thank you for your question. If you received an IRS form 1099-A. you need to complete IRS form 982 to see if you can cancel the debt. If it is your principal residence and you meet the requirements, then you should have no problems avoiding paying...

Tax Law (Questions About Taxes): Tax Ramification for IRA Withdrawl, ira money, tax ramifications
ira money, tax ramifications, roth ira: The tax is based on his total income for the year, and varies from 10 to 35%. He can file single if he did not live with his spouse at any time during the last 6 months of the year. In this case he is considered unmarried for tax purposes. Hope this...

Tax Law (Questions About Taxes): Taxes on foreclosure, debt cancellation, stancil
debt cancellation, stancil, insolvency: Chris, Thanks for your question. Since you only lived in the house for 20 months, you do not qualify for exclusion of any debt cancellation gain from taxation. You must have lived in it for 24 of the past 60 months. You will owe tax on the excess...

Tax Law (Questions About Taxes): Taxes on Lease option sales, lease option agreement, form 4797
lease option agreement, form 4797, option sales: Hi, Treat the $250 per month as an expense of the sale. You will have to report the sale of the rental house. The depreciation on the rental will have to be recaptured (even if you didn t actually claim depreciation). If you aren t familiar with form...

Tax Law (Questions About Taxes): Taxes In Multiple States, wife lives, telecommuter
wife lives, telecommuter, friday evening: You both appear to be AR residents for tax purposes, so would file an AR resident return. You would also file a Non Resident Louisiana return for income that is reported to LA on her W-2. For 2009 make sure they are only reporting wages in LA for the time...

Tax Law (Questions About Taxes): Taxes not paid by estate, probate judge, tax brackets
probate judge, tax brackets, estate executor: We don t see the action s of the executor as being abusive which would require replacing him as the executor by the Probate Judge. The executor is required to perform his duties for the benefit of all beneficiaries and for the welfare of the Estate. ...

Tax Law (Questions About Taxes): Taxes on Trust Property Sold, tax implication, revocable living trust
tax implication, revocable living trust, stepped up basis: The property receives a stepped up basis equal to the market value at date of death of the grantor. The property is held by the estate and if the sale is made within 6 months of the grantors death, there is no gain or loss. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): Theft write-off, adjusted gross income, deductible amount
adjusted gross income, deductible amount, stancil: Anastasia, Thanks for your question. That would qualify as a theft. In order to deduct it you first must itemize your deductions. If you don t itemize you cannot take the theft loss. To determine the deductible amount you must first reduce your...

Tax Law (Questions About Taxes): TN Resident in Kentucky, state income tax, englehardt
state income tax, englehardt, state of kentucky: Mr. Englehardt: That is my understanding. As you know, the Tennessee/Kentucky income tax issue has been much cussed and discussed ever since Kentucky instituted the state income tax. John The W-2 is a federal form not a state form although most states...

Tax Law (Questions About Taxes): Totally Confused!!!!!, debt cancellation, stancil
debt cancellation, stancil, mortgage company: William, Thanks for your question. If the amount of the debt exceeds the fair market value of the house, you will owe taxes on that difference. Both values should be on the 1099-A. This amount of debt cancellation should be shown on line 21 of the...

Tax Law (Questions About Taxes): Traditional IRA, required minimum distribution, traditional ira
required minimum distribution, traditional ira, federal income taxes: You did not make a RMD out of the other two IRAs, so the program is figuring the penalty for not taking a RMD out of the other two. Recent legislation has been made to not require you to take RMDs during this down turn in the economy. Make sure you have...

Tax Law (Questions About Taxes): Traditional IRA/Federal income tax, required minimum distribution, deductible ira
required minimum distribution, deductible ira, traditional ira: Ernest, Thank you for your question. 1)Please tell me why I have to report my remaining Traditional IRA value and why does the tax liability on these not occur as I redeem them It sounds like you are completing a form 8606 which takes into account...

Tax Law (Questions About Taxes): Traditional IRA/Federal income tax return, required minimum distribution, income tax return
required minimum distribution, income tax return, traditional ira: Hi, The $32,000 is much more than the required minimum distribution for 2008. I don t use turbo tax and don t know why it is asking for the remaining value of your IRA s. The system I use does not ask this and you need not report it on your tax return....

Tax Law (Questions About Taxes): Travel Expense paid by Company, relocation expense, relocation expenses
relocation expense, relocation expenses, pritam: Pritam: This is called a conundrum. You could have paid the relocation expenses yourself and saved about $1,000 on your income taxes for the year or you can allow your company to pay your relocation expenses and you pay an additional $1,000 in income taxes....

Tax Law (Questions About Taxes): Trust Type, trust documents, stancil
trust documents, stancil, cpa: Beth, Thanks for your question. Yes, the trust documents would the the source to determine that information. It is a simple trust if all the income is required to be distributed annually. Otherwise, it is a complex trust. Hope this helps. John...

Tax Law (Questions About Taxes): Tuition reimbursement - Total amount reimbursed $21000, tuition reimbursement tax, tax law questions
tuition reimbursement tax, tax law questions, allexperts: ASh, Thanks for your question. I have relatives in Phoenix, so I might take you up on that! Actually, the portion on which you paid taxes does not count as the company paying them. The rules for the education credits state to include expenses paid...

Tax Law (Questions About Taxes): taking a loss on rental property sales, irs rules, business loss
irs rules, business loss, futher: Linda: I believe in a couple of years. John Futher, IRS will not allow someone to rent a house for a month, sell it, and take a business loss. It is the intent of the transaction, is it truly to rent out the property to make a profit or to take a...

Tax Law (Questions About Taxes): tax, loss carryforward, stancil
loss carryforward, stancil, charitable contribution: George, Thanks for your question. Three years from the date of filing or due date, whichever is later unless there is something on the return that carries forward, such as a passive loss carryforward or charitable contribution carryforward. Then it...

Tax Law (Questions About Taxes): tax on cashed out stock, preparation specialist, stock sales
preparation specialist, stock sales, stock option: Glen, Thank you for your question. Usually when you deal with sales of stocks and stock options you need. Straight stock sales. List of stock names. 1-date purchased 2-Amount purchased -number of shares 3-total value paid, including commission...

Tax Law (Questions About Taxes): tax after divorce, legal ramifications, divorce decree
legal ramifications, divorce decree, final decree: Tammy, If you filed a joint return without his consent, you have violated the law. You could have filed married filing separate with no legal ramifications. If he did not live in your house at any time during the year, you could have filed single. ...

Tax Law (Questions About Taxes): tax liability for class action settlement, marginal rate, stancil
marginal rate, stancil, class action settlement: Mei, Thanks for your question. The money will be taxed as ordinary income at your marginal rate, which varies from 10 to 35% depending on your filing status and total income. Depending on how it was structured, you may owe tax on either amount. Not...

Tax Law (Questions About Taxes): tax options for mba, personal tax return, health insurance premiums
personal tax return, health insurance premiums, confusing tax: Dan, Thank you for your question. As a 20 percent shareholder, this expense would not be deductible by the corporation. It would become a pass through item for tax purposes and you would see if you can take it on your personal tax return. You can...

Tax Law (Questions About Taxes): tax question re insurance payment, technical implications, insurance payment
technical implications, insurance payment, noca: Hi Alina this question has technical implications had your parents sold the house any profit under $500,000 may have been tax exempt in this case please consult a paid tax professional who may be able to fully research this and save your parents money...

Tax Law (Questions About Taxes): tax return forgery, father of my daughter, s child
father of my daughter, s child, irs: He could not have filed a return with her, it would be illegal. (I mean, he could have done it, but it is an illegal return) She needs to file her own return properly and efile it or send it in. Then wait for a letter from the IRS and at that time, explain...

Tax Law (Questions About Taxes): tax on roommate income, mom and dad, itemized deduction
mom and dad, itemized deduction, friend move: Terri, Thanks for your question. If it is a rental not for profit, as you state, the income is taxable on line 21 of the 1040 as other income. If there are any expenses caused by the tenant they would be deductible as a miscellaneous itemized deduction...

Tax Law (Questions About Taxes): taxable amount not determined,, pension trust fund, 1099r
pension trust fund, 1099r, taxable portion: The taxable amount is based on the amount of contributions paid in for the pension. The amount that is taxable is based on the actuarial survival rate of the beneficiary. Because the pension does not have the information to calculate the taxable amount it...

Tax Law (Questions About Taxes): taxable income, flood plan, dependency exemption
flood plan, dependency exemption, wheel chair: James, The sale of the land is a taxable transaction. You will owe tax on the excess of the sale proceeds over your cost basis. If your daughter is totally and permanently disabled you can take a dependency exemption for her. Hope this helps. ...

Tax Law (Questions About Taxes): taxes, light vehicles, stancil
light vehicles, stancil, accurate info: Jo, Thanks for your question. In brief the details are as follows: * Deductions available to purchasers of new cars, light vehicles, RVs or motorcycles in 2009. * Deduct state and local taxes and any excise taxes charged on the purchase....

Tax Law (Questions About Taxes): taxes, accurate info, ustreas
accurate info, ustreas, car buyers: Hi Jo This is so new the best place would be the car Dealership then check it out at www.irs.ustreas.gov PS I would disagree about the Car dealer since it is their interest to know or you could ask your congresperson but my money would be that the...

Tax Law (Questions About Taxes): back taxes, stancil, letter states
stancil, letter states, irs: Sharon, Simply because the IRS is a bureaucracy and moves slowly at times. You say overpaid on your return. I think you may mean overpaid on your refund, meaning they refunded too much. The law allows them to charge interest for the entire time...

Tax Law (Questions About Taxes): taxes, www irs gov, irs website
www irs gov, irs website, accurate info: Hello Jo, The most accurate information can be found on the IRS website at www.irs.com. For stimulus as it relates to car buyers the link is http://www.irs.gov/newsroom/article/0,,id=204519,00.html. Alexandra Shainskaya, CPA www.taxbusinessadvisory.com...

Tax Law (Questions About Taxes): taxes, child care credit, domestic employment
child care credit, domestic employment, baby sitting services: Candace: If the babysitter came to your house to perform her services, you have domestic employment situation. You should have reported her as your domestic employee. However, on the other hand, if you carried your child to her for her baby sitting...

Tax Law (Questions About Taxes): taxes on paid internship, part time jobs, check stubs
part time jobs, check stubs, standard deduction: The $1000, is reported as other income on the tax return. Since you are claimed on your parents return, you will have a tax liability on the excess of your income $7,000 over your standard deduction $5750, or taxable income of $1250. John Kirk, CPA www.johnkirkcpa.com...

Tax Law (Questions About Taxes): taxes from short sale, cancellation of debt, stancil
cancellation of debt, stancil, adjusted basis: Darlene, You will have cancellation of debt income of $150,000 reported on line 21 of the 1040 as other income. You are considered to have sold the property for the amount of cancelled debt or the FMV whichever is lower. You subtract the adjusted basis...

Tax Law (Questions About Taxes): taxes on un-matured C D, tricky question, certificate of deposit
tricky question, certificate of deposit, cash basis: Lee, Thank you for your question. 1)Should a bank send a 1099 INT on an un-matured certificate of deposit? That is a tricky question. If interest is earned on the CD , but the CD has not matured, you should have interest to report for the year. ...

Tax Law (Questions About Taxes): theft by fraud, irs web site, schedule a itemized deductions
irs web site, schedule a itemized deductions, irs gov: Dear Terry, Welcome to All Experts, and thank you for your question. I was sorry to learn of your loss. To account for this theft on your 2008 taxes, begin with Form 4684. Following is the URL for the page on the IRS Web site where you should be able...

Tax Law (Questions About Taxes): towing service, standard mileage rate, passenger automobile
standard mileage rate, passenger automobile, higher hope: Grace, Thanks for your question. You have two choices - the standard mileage rate or actual expenses including depreciation. The standard mileage rate includes the estimated cost of gas, repairs, maintenance, depreciation, and the like so you cannot...

Tax Law (Questions About Taxes): how to treat my kids working for my rental prop, self employment taxes, rental prop
self employment taxes, rental prop, federal income tax: Loree, Thanks for your question. You must give them a W-2. However, they are not subject to SS/Medicare as they are your children (unless the organization is a corporation). You must withhold Federal income tax if the amount earned is sufficient. ...

Tax Law (Questions About Taxes): trust distribution taxable or non-taxable, grantor trust, family homestead
grantor trust, family homestead, third brother: When his mother died, the trust ended, and the assets of the trust are transferred into her estate. The estate liquifies the assets and the cash is distributed to her heirs according to her Will. No gain or loss is recognized on the sale of the property...

Tax Law (Questions About Taxes): Unemployment taxes, employment security commission, south carolina employment security commission
employment security commission, south carolina employment security commission, south carolina employment: Michael: If you file seperate returns neither one will be able to use head of household. If you file separate tax returns yes if u get a refund it will come to you and no your return will be used on her tax calculation. I would not know that until I completed...

Tax Law (Questions About Taxes): Unmarried couple, head of household, dependency exemption
head of household, dependency exemption, stancil: Linda, Thanks for your question. They cannot file married. If she lived with him the entire year and had less than $3,500 in gross income, he can take a dependency exemption for her. However, he cannot file as head of household. Hope this helps....

Tax Law (Questions About Taxes): Untruth on tax return., income tax form, nys income tax
income tax form, nys income tax, state return: Hi the IRS has nothing to do with it as your federal income does not depend in which state you reside you need to file a NYS income tax form there will be some penalty and interest you do not need a lawyer if you intend to pay what is due NY If...

Tax Law (Questions About Taxes): UTMA Liquidation, capital gains distributions, band trip
capital gains distributions, band trip, trip to hawaii: Kris, Thank you for your question. 1)How do I determine if there was a gain or not, and if there was a loss, can he take advantage of it? There may be deductible loss allowed. If you put in $5,000 into an account for the benefit of your son, then...

Tax Law (Questions About Taxes): unemployment benefits, unemployment benefits
unemployment benefits: Gorki: I need for you to give me more detail. I do not understand what LNI is? Did you receive a 1099 for the unemployment you received? Did you get a 1099 for the over paid benefits you paid back? If you provide more detail I maybe able to answer...

Tax Law (Questions About Taxes): unemployment in a non-resident state, delaware resident, unemployment claim
delaware resident, unemployment claim, unemployment benefits: Amanda: If during the year his only contact with Maryland is drawing unemployment claim he would have NO tax liability to Maryland. He may owe income tax in his resident state. It would be different because he had to have a presence in Maryland in oder...

Tax Law (Questions About Taxes): Vacation Rental--Schedule C?, stancil, schedule c
stancil, schedule c, magi: Alicia, Thanks for your question. No you cannot use this as a Schedule C item. It is not permitted and is almost certain to generate an audit. The disallowed loss is carried forward until it can be used or the property is totally disposed of. You...

Tax Law (Questions About Taxes): vehicle reimbursement, standard mileage rate, adjusted gross income
standard mileage rate, adjusted gross income, taxable compensation: Donna, Thanks for your question. First, the company erred in putting it on a 1099. It should have been included on his W-2. This is a non accountable plan. Under such a plan, any amounts given him as a flat amount are taxable income. His allowable...

Tax Law (Questions About Taxes): W2 forms, w2 late
w2 late: Your employer is required to send out your W2 by January 31 and you should receive it no later than February 15. You can report your employer to the IRS if they are not complying, the contact numbers are on the IRS website at www.irs.gov. Good luck! ...

Tax Law (Questions About Taxes): W2 & Self Employment Income From Same Employer, self employment income, leasing company
self employment income, leasing company, payroll tax: Rene, Thanks for your question. He is acting illegally, both in treating you in the past as a contractor and in telling you to report the $5,000 as he said. Your best bet is to file a Form SS-8 with the IRS. It will make a determination of your status...

Tax Law (Questions About Taxes): w2 house tax, form 1098, house tax
form 1098, house tax, stancil: Andrew, You don t get a W-2 for a house. I think you are probably referring to the interest paid statement Form 1098. You mother-in-law cannot deduct the interest because she is not legally liable for the debt. To deduct mortgage interest you must...

Tax Law (Questions About Taxes): whats considered full-time student for tax purposes, dependency exemption, stancil
dependency exemption, stancil, time student: Vanessa, Thanks for your question. If you are not full time student and are earning more than $3,500 a year, she is not entitled to take a dependency exemption for you. You are entitled to your own exemption. All I can say is tell her you are taking...

Tax Law (Questions About Taxes): wife's disability checks, social security disability, disability insurance
social security disability, disability insurance, paul thanks: Paul, Thanks for your question. It depends on several factors. Where do the disability checks come from? If it is social security disability, it is taxed the same way as regular SS benefits, meaning zero, 50% or 85% is taxed based on your income. ...

Tax Law (Questions About Taxes): withholding of clergy social security and medicare, social security tax, income tax purposes
social security tax, income tax purposes, social security and medicare: Michelle, Thanks for your question. The church should not withhold social security/medicare for its ministerial staff. By law, ordained or licensed ministers are self-employed for social security tax purposes and are employees for income tax purposes....

Tax Law (Questions About Taxes): how many years to keep, records, statute of limitations
records, statute of limitations: Hi Mary Jo, The tax code is pretty complicated and there are several deadlines that the IRS has. The statute of limitations to audit a return is generally 3 years, but is 6 years if there s a substantial omission of income. It is also indefinite in the...

Tax Law (Questions About Taxes): zero coupon tax exempt bond, redemption proceeds, bond redemption
redemption proceeds, bond redemption, redemption price: Technically it does not need to be reported. However, as I pointed out previously, all the IRS has is that you sold/redeemed a bond. It does not reflect your basis. If you don t report it the IRS will assume a zero basis and bill you for the taxes. You...

Tax Law (Questions About Taxes): 1040s w/schedule C issues CONTINUED, straight line depreciation, macrs tables
straight line depreciation, macrs tables, leasehold improvements: The rules on leasehold improvements are that you must capitalize them and depreciate them over a 15 year period. You can use the MACRS tables or straight line depreciation. Obviously, there is a real possibility that you will vacate the premises prior to...

Tax Law (Questions About Taxes): 1041 by pass trust question, irs web site, section 1244 stock
irs web site, section 1244 stock, small business corporation: William, It may be reaching,m but she may be able to avail herself as a shareholder of 1244 small business stock and get an ordinary loss out of the loan. You need to review this and see of it applies to her. According to the IRS web site: Losses...

Tax Law (Questions About Taxes): 1065 or sched. c?, future returns, stancil
future returns, stancil, schedule c: Randy, Thanks for your question. A single member LLC is not a partnership and should not be reported on the 1065. Since it makes no difference in the tax liability, I do not think it necessary to file amended returns. However, I would file it properly...

Tax Law (Questions About Taxes): 1098-t, irs form 8863, government tax forms
irs form 8863, government tax forms, 1098 t form: Ryan, Thank you for your question. Their explanation sounds silly. It is the law. They choose not to follow the requirements. If they are an accredited US based college then they are a part of the system and should comply with US laws. If the College...

Tax Law (Questions About Taxes): 1099-A & 1099-C, 1099a, 1099c
1099a, 1099c, stancil: Vicky, Thanks for your question. The excess of the canceled debt over the fair market value of the house is taxable income reported on line 21 of the 1040. You may qualify for a partial exception on the first house, since you refinanced it. The second...

Tax Law (Questions About Taxes): 1099 a and 1099 c, cancellation of debt, 1099c
cancellation of debt, 1099c, 1099a: Ann, Thanks for your question. If a 1099-C is not issued, the 1099-A must be reported. Technically, an A form is an abandonment of the property and can include forgiven debt, whereas the C is a straight debt cancellation. Both canceled debts should...

Tax Law (Questions About Taxes): 1099, jennifer thanks, stancil
jennifer thanks, stancil, schedule c: Jennifer, Thanks for your question. The only method for reporting those earnings is through a 1099. If you are the one who should have received the 1099, you should have a record of the amounts received and report them on your Schedule C anyway. ...

Tax Law (Questions About Taxes): 1099?, 1099 misc, stancil
1099 misc, stancil, contract labor: Aaron, Thanks for your question. If they paid you $600 or more, they should give you a 1099-MISC. However, regardless of the amount or if you received a 1099, you are legally obligated to report you the income and pay taxes in the year earned. You...

Tax Law (Questions About Taxes): 1099-A, mortgage lender, first mortgage
mortgage lender, first mortgage, stancil: Marty, Thanks for your question. The difference is not a loss. Your gain or loss would be the difference in the loan balance and what you paid for the house. However, assuming it would your primary residence the loss is not deductible. If you have...

Tax Law (Questions About Taxes): 1099, social security tax, irs schedule
social security tax, irs schedule, social security and medicare: K: Yes that is considered to be an independant contractor. Yes you will need to file a 1040ES each quarter reporting your income less expenses that you estimate you received and paying the proper income and social security tax. you rate will be more than...

Tax Law (Questions About Taxes): 1099, irs form 1099, property management company
irs form 1099, property management company, loan account: Peg, Thank you for your question. If the property owners pay you over $600 in s given year, then they would issue your LLC an IRS form 1099-MISCEL. If you pay yourself a management fee, that would be subject to SE tax. You cannot issue yourself a W-2...

Tax Law (Questions About Taxes): 1099, looking for a new job, workers comp
looking for a new job, workers comp, independent contractor: Your employer is screwing you royally. You will have to pay SE taxes and are not covered under workers comp or unemployment. He/She is getting away with a lot less tax. Please see a local tax professional and please also start looking for a new job....

Tax Law (Questions About Taxes): 1099-A, time jason, stancil
time jason, stancil, acquistion: Jason, Thanks for your question. The 1099-A is not just a notice it is a form that is reported on your return. I suggest you find a new CPA. You have canceled debt income of $80,000 based on your numbers. However, you may be eligible to exclude...

Tax Law (Questions About Taxes): 1099-B, wallenbrock, gross proceeds
wallenbrock, gross proceeds, ponzi scheme: Do you have any idea what percentage of the payout this is? I would come up with a ratio the best you can and use that times your initial investment, taking that as the cost on Sch D. Or you can take the entire $5K as cost, but the next check will...

Tax Law (Questions About Taxes): 1099-B large transactions, stancil, john thanks
stancil, john thanks, cost basis: You can break it down between the two. Cost basis would be the purchase price of the securities sold. The downside of this is that although I have given you the proper treatment, the IRS has a computer matching program that will not likely recognize...

Tax Law (Questions About Taxes): 1099-C and 1099-A, cancellation of debt, collectibles etc
cancellation of debt, collectibles etc, jewelry clothing: Tate, Thanks for your question. First, you did receive the $118K in income when you borrowed money and did not repay it. Second, if you are insolvent you can exclude gain on the cancellation of debt income up to the extent of your insolvency. To...

Tax Law (Questions About Taxes): 1099-C and Timeshare, debt cancelled
debt cancelled: Hi Doreen this can get pretty complicated I have exerted a secttion from the irs WWW.irs.ustreas.gov Topic 431 - Canceled Debt Ė Is it Taxable or Not? In general, if a debt for which you are personally liable is canceled or forgiven, other than as...

Tax Law (Questions About Taxes): 1099 INT, tax id number, volunteer forum
tax id number, volunteer forum, stancil: Chuck, The bank must send a single 1099-INT for each tax ID number. The criteria is not per account, but in total. Since this is a volunteer forum, I cannot take the time to cite code sections. Frequently an issue may require several citations. ...

Tax Law (Questions About Taxes): 1099-A for Investment property, form 4797, investment purposes
form 4797, investment purposes, fmv: Syed, Thanks for your question. Since it was an investment property you can take a loss on the sale of your property. Regardless of whether the lender issues a 1099 the difference between the FMV and the amount owed is taxable income, reported on...

Tax Law (Questions About Taxes): 1099-MISC, self employment income, self employed business
self employment income, self employed business, stancil: Govind, Thanks for your question. This must be entered on Schedule C. You are not the owner of the nursing home, but the owner of your business of providing services to the nursing home. I am not clear about what you mean in saying Will it treat...

Tax Law (Questions About Taxes): 1099-MISC as assistant soccer coach, self employment tax, soccer coach
self employment tax, soccer coach, professional coach: Alan, Thanks for your question. Say what your want, but with a 1099-MISC, non-employee compensation, you have a business and need to complete a Schedule C. File Schedule C with your 1040 and complete Schedule SE for the self employment tax. That s...

Tax Law (Questions About Taxes): 1099-MISC Confusion, self employment tax, time college student
self employment tax, time college student, www irs gov: Karen , You are on the right track. If you receive a stipend and it goes directly to the school then there is no tax effect. If the stipend goes directly to you and you use these funds for personal expenses then this income becomes other income on line...

Tax Law (Questions About Taxes): 1099 misc, irs form 1096, 1099 misc forms
irs form 1096, 1099 misc forms, irs 1096: Trudy, Thank you for your question. The IRS 1096 needs to be prepared and filed with IRS. This is referred to as the Annual Summary and Transmittal Of US Information returns. You should file the 1096 and related 1099-Misc forms with IRS. Refer to...

Tax Law (Questions About Taxes): 1099-misc for medical expense, special education program, higher tax bracket
special education program, higher tax bracket, income tax return: Stephen, Thanks for your question. The money is not taxable income. Leave it off your return. Unfortunately, the IRS may do a document matching and send you a bill for the amount. When they do, just respond, explaining the situation and that the...

Tax Law (Questions About Taxes): 1099-misc non-employee compensation, self employment taxes, self employed business
self employment taxes, self employed business, stancil: Kelly, Thanks for your question. Intent does not matter here. In the eyes of the IRS you have a business. Just show the income on Schedule C and deduct your mileage or other expenses associated with the income. You are also liable for Self-Employment...

Tax Law (Questions About Taxes): 1099 & Qual. Relative, employee wages, working under the table
employee wages, working under the table, 1099 misc: EM: When someone is 18 years of age or older it is difficult for them to be a dependent. It is even more difficult for them to be a dependent, even under 18 years of age, when they do not live with you for more than half of the year. Yes she will be...

Tax Law (Questions About Taxes): 1099 Question, transmittal form, return packet
transmittal form, return packet, form 1096: Becky, Thanks for your question. If she is doing clerical work for you, she probably should be receiving a W-2 from you as she meets the definition of an employee. Both 1099 s and W-2 s are to be reported to the IRS on the proper transmittal form...

Tax Law (Questions About Taxes): 1099 Tax Form, irs tax, canadian engineering
irs tax, canadian engineering, s corp: Mr. Turner: I am not sure since I do not know about Canadian tax laws what would be the best for you. It appears that the company you are working for wants you to set up an S corporation. If you set up an S Corporation in the USA this will involved...

Tax Law (Questions About Taxes): 1099 and taxes, s corp, prepayments
s corp, prepayments, federal taxes: Hi Lisa, Your accountant was probably talking about the fact that you can pay yourself a salary and only pay social security and medicaid taxes on that salary (rather than on all earnings up to $102,000). Yes, being an S corp would help with that problem....

Tax Law (Questions About Taxes): 1099 unfiled, moving expenses, unfiled
moving expenses, unfiled, unpaid taxes: Your employer needs to correct the 1099 to show it was paid back and issue you one for -0- or whatever the loan balance is. This is not handled correctly from the start and you may have to get a local professional involved if the employer will not correct...

Tax Law (Questions About Taxes): 1099A, chapter 7 bankruptcy, stancil
chapter 7 bankruptcy, stancil, cpa: Robert, Thanks for your question. You will owe tax on the excess of principal over the FMV. It is reported on line 21 of the 1040 as other income. Unless you are insolvent or in Chapter 7 bankruptcy, you have no options. Hope this helps. John...

Tax Law (Questions About Taxes): 1099a, irs form 4797, cancellation of debt
irs form 4797, cancellation of debt, fmv: Damon, Thank you for your question. If this is investment property, then you would had a mortgage and you had property with a cost basis. You would report the difference between the mortgage and the FMV of property and any difference would be further...

Tax Law (Questions About Taxes): 1099a, richard fritzler
richard fritzler: $3000 applies to personal capital losses, whether they were in the stock market, real estate, or any other capital investment. You can dollar for dollar write off long term losses against long term gains. And short term losses against short term gains....

Tax Law (Questions About Taxes): 1099C involving estate, life insurance policies, debt cancellation
life insurance policies, debt cancellation, credit card debt: Hi Peter unless the bank can point out an exception I think that you would be responsible for the tax below is the pertinent section from the IRS site. Can I exclude cancellation of credit card debt? In some cases, yes. Nonbusiness credit card debt...

Tax Law (Questions About Taxes): 1099R, ira distribution, morgan stanley
ira distribution, morgan stanley, money manager: Kory: When the money was moved from one account to another account it became a taxable occurrence. When this person s mother died they had the ability to leave the money in the account without it becoming a taxable occurrence. However, they moved it and...

Tax Law (Questions About Taxes): 1120 s corp, stock dividends, 1120s
stock dividends, 1120s, s corp: Shah: I can not answer that question the results are what they are. You must follow the rules as set forth by the IRS. An 1120S return is an information return not a tax return. All profits and losses are put on K and K-1 forms and pushed to each stockholder...

Tax Law (Questions About Taxes): 12 month job transfer = paying 1 mortgage and 1 temporary housing rent, townhouse rent, minimal utilities
townhouse rent, minimal utilities, specialty training: Sharyl: No not really. I am sure when you come back to Georgia you will be living in the home. If that occurs and you take a tax deduction for depreciation you will be required to recover it when you move back in. It would be my opinion to leave thirngs...

Tax Law (Questions About Taxes): 17 year old dependents earnings, federal tax return, income tax return
federal tax return, income tax return, federal income tax: Paul, Thank you for your question. 1)Do I have to claim my 17 year old son s $2009.61 in earnings for 2008 on my Federal Income Tax for 2008 No. If he wants to file, he would file as a dependent of another. He is not required to file an income tax...

Tax Law (Questions About Taxes): 2 residential sales in one year-capital gains, richardfritzler
richardfritzler: Yes. You are an example of why the rule was written the way it was. Obviously, the 2 out of last 5 years criteria leaves plenty of potential for taking the deduction on more than one property. And they did not make a specific one per year limitation. ...

Tax Law (Questions About Taxes): 2 schedule C's?, how to never be really successful. richard fritzler
how to never be really successful. richard fritzler: Are they profitable? If so, you should reconsider your plan. S-corps and LLCs are designed for failure. Why are all the most successful businesses NOT LLCs and S-corps? But yes you can fill out 2 schedule C s. They won t be separated for liability...

Tax Law (Questions About Taxes): 2008 tax question (please help), tax question, tax preparer
tax question, tax preparer, month and a half: I would sue him in local court. It will not cost a lot of money and the issue would be exposed. Tell him that you are going to sue him for the money, DO NOT tell him that you are turning him in, let him find out that out for himself. Helen, EA in P...

Tax Law (Questions About Taxes): 22 Year Old Grad-Who Claims Me?, adjusted gross income, phone food
adjusted gross income, phone food, car count: It is everything and if you give over 50%, you can claim yourself. You have to calculate imputed rent in your calculations, so if you would spend more then $4300 less your other expenses for rent.... I really think you are Mom s dependent. Helen,...

Tax Law (Questions About Taxes): 401K QDRO disbursment, early withdrawal penalty, form 5329
early withdrawal penalty, form 5329, stancil: Kim, Thanks for your question. A disbursement from a qualified retirement plan made to an ex-spouse as a result of a QDRO is subject to tax but not the 10% early withdrawal penalty. You would complete Form 5329 to waive the penalty. Hope this helps....

Tax Law (Questions About Taxes): 401k withdraw and business, withdrawel, stancil
withdrawel, stancil, plot of land: Lynn, Thanks for your question. The LLC is a separate entity from you as an individual. The 401(k) is yours, not the LLC s. Basically, what this means is that you can t incorporate the withdrawal into the LLC. On your 1040, you will have to pay...

Tax Law (Questions About Taxes): $8000 tax credit, time home buyer, first time home buyer
time home buyer, first time home buyer, steve thanks: Steve, Thanks for your question. I am not sure what you mean by Will this $8000 tax credit pertain to offsetting tax on interest income also? The credit is refundable, meaning that it is treated similar to withholding on your period pay check. Think...

Tax Law (Questions About Taxes): AFLAC Cancer Policy, cafeteria plan, cancer policy
cafeteria plan, cancer policy, check stub: Joe: It is my opinion that money paid from an insurance policy is not taxable. However, I have not personally dealt with your situation. It could be argued that you were refunded your premiums plus interest. If that s the argument the difference would...

Tax Law (Questions About Taxes): Amended W2, business return, stancil
business return, stancil, irs: Debbie, Thanks for your question. It should not be a problem. Most likely your employer has not yet filed the original W-2 with the IRS. They have until March 31 to do this. Probably the second one you received was treated as a replacement and not...

Tax Law (Questions About Taxes): How do I amend 2007 on Stock Taxes lost, stock sales, trading stocks
stock sales, trading stocks, form 1099: Kelley, I have done a lot of these amended returns whereby stock proceeds were reported to IRS and not reflected on the tax return. People do not always realize that IRS does not keep track of your stock costs and you need to complete a schedule D and...

Tax Law (Questions About Taxes): arkansas tax preparers, irs notices, taxpreparer
irs notices, taxpreparer, arkansas tax: Dear Leah, This situation has preparer malfeasance written all over it. I recommend that your friends retain a CPA licensed in their state to help them dig out from under this mess. It s VERY important to respond promptly to all IRS notices. IF it...

Tax Law (Questions About Taxes): Balloon loan to settle estate, balloon note, balloon loan
balloon note, balloon loan, coperation: Jane, Thanks for your question. You will be treated as having sold the stock to the estate (or whoever) for the amount of the note. Your income tax will be on the gain/loss. The gain or loss is determined by subtracting your basis from the selling...

Tax Law (Questions About Taxes): Best tax software for Net operating Loss, irs website, taxsoftware
irs website, taxsoftware, interactive input: Hi, By this year I assume you mean that you have an NOL for tax year 2008. You need a 1045 only for carrying the NOL back. If you don t want to carry it back, you don t need the form. Since you mentioned the form I assume that you want to carry it back....

Tax Law (Questions About Taxes): Buildout Costs, depreciation schedule, question section
depreciation schedule, question section, section 179: David, Thanks for your question. Section 179 is available only for certain business-related purchases of personal property, not real estate. The depreciation period is determined by the asset s classification, not its dollar amount. Hope this helps....

Tax Law (Questions About Taxes): Business Deductions for Tutoring, tutor students, internet fees
tutor students, internet fees, internet costs: Karen, Thanks for your question. Yes, you can deduct a portion of your internet fees for tutoring business. You cannot deduct for a home office as you do not use the area regularly and exclusively. Any expenses you incur, such as awards or favors...

Tax Law (Questions About Taxes): Business Expenses, business expenses, living expenses
business expenses, living expenses, taxable income: Hi, I remember answering your question but perhaps you didn t get the answer so I ll try it again. The comopany is correct. Since your assignment extended beyond a year, your travel and living expenses are not deductible. If a temporary assignment...

Tax Law (Questions About Taxes): benefits of donating a house to charity?, long term capital gain, stocks bonds
long term capital gain, stocks bonds, stamp collections: Roger, You would be donating appreciated property. You would donate and get a deduction based upon the lower of the cost basis or the fair market value, whichever is lower. Th would probably qualify as 30% capital gain property. According to IRS: ...

Tax Law (Questions About Taxes): C-Corp change of ownership and NOL, business, sale
business, sale, 382: (Edit: I did not address the application or non-application of section 382 to this question, that was brought to my attention by a diligent CPA in Illinois. I have expanded this answer to include information about section 382 at the end of the original answer.)...

Tax Law (Questions About Taxes): Capital Gains vs. Inv. Income Form 4952, form 4952, investment interest
form 4952, investment interest, investment income: You needed to make a written election on the original return. Since you did not, you cannot add the interest to the basis. You may be able to amend to use te 4952 form if you had qualified investment income in the past open years. Helen, EA in P...

Tax Law (Questions About Taxes): Capital gains, renting a home, taxable gain
renting a home, taxable gain, capital gains: You have a taxable gain and it is short term. You have to use her basis, which will be what she paid for it, LESS depreciation allowed or allowable. Please see a tax professional to help you calculate this. How you divide it is up to you. Helen, EA in...

Tax Law (Questions About Taxes): Capital gains on land in India, double taxation agreement, long term capital gain
double taxation agreement, long term capital gain, long term capital gain rate: KR, Thanks for your question. You will get a credit for the tax paid to India. The long term capital gain rate is currently 15% if your marginal bracket is more than 15%. If your marginal bracket is 15% or less the rate is zero. Hope this helps....

Tax Law (Questions About Taxes): Charitable contributions carryover, charity contributions, charitable contributions
charity contributions, charitable contributions: Atif: No you can only claim standard or itemize in the year of the contribution with no carryover to another year. Exception if the contribution is greater than your ability to use in a given year you can carry the excess to a future year. Joh...

Tax Law (Questions About Taxes): Charitable and Work Mileage Deducations, volunteer musicians, irs rate
volunteer musicians, irs rate, irs rules: Josh, Thanks for your question. Unfortunately, it is too time consuming for me to research and cite code sections and IRS rules and regulations in the volunteer forum. Often, the research would involve multiple cites and considerable time in research....

Tax Law (Questions About Taxes): Claiming Dependants, irs rule, wife lives
irs rule, wife lives, custodial parent: You are confusing 2 issues. Taxes and child support. The custodial parent is the one that either claims the children or allows the non-custodial parent to do so. And if her parents are supporting her and the children at this time, the parents can claim...

Tax Law (Questions About Taxes): Claiming Schedule E losses, form 8582, real estate taxes
form 8582, real estate taxes, fed tax: Chris, If the 10K loss is from rental, is it 100 percent rental? If not and you have mortgage interest and real estate taxes, you may be able to shift some deductions to itemized. Other then that, no. Real estate taxes are passive by definition and...

Tax Law (Questions About Taxes): Class Action Distribution, irs forms, advisory fees
irs forms, advisory fees, form 1040: Nancy, The $104,99 would be used on line 21 of 1040 (page 1) other income. If you have other advisory fees, you can used this amount to offset. The $8.24 would be interest income reportable on Schedule B which carries to the face of the return , form 1040...

Tax Law (Questions About Taxes): Class Action Settlement Tax Responsibility, american express financial advisors securities litigation, american express financial
american express financial advisors securities litigation, american express financial, american express financial advisors: Kathy, Thanks for your question. I hope they are not taxable, as I got several checks also, and frankly had forgotten about them. If they were taxable, I think we would have received a communication or tax document from Ameriprise. Even without that,...

Tax Law (Questions About Taxes): Clergy Tax Questions, clergy tax, self employment taxes
clergy tax, self employment taxes, housing allowance: Ryan, Thanks for your question. Yes, you have waited too long to file 4361 for an exemption. No exceptions. If your housing allowance is not helping, you are doing something wrong. It is subject to self-employment taxes, but not income tax. If you...

Tax Law (Questions About Taxes): Company Vehicle Use, current mileage rate, mileage log
current mileage rate, mileage log, deductible expense: Matt, You should report the personal mileage to the company and they should include it on your W-2. For 2008 the rate was 50.5 cents until July 1 when it went up to 58.5 cents. It is taxable income and not a deduction. I m not sure what they are trying...

Tax Law (Questions About Taxes): Consulting Income, sole proprietor, free money
sole proprietor, free money, irs: The IRS requires that you pay taxes on your entire income. While it may be compelling to imagine tax free money, the 1099 is not the only record of you receiving income. Keep in mind you deposited those checks. Obviously, being a successful consultant...

Tax Law (Questions About Taxes): Corporate Debt Personally Guaranteed, declaring bankruptcy, bankruptcy laws
declaring bankruptcy, bankruptcy laws, corporate debt: Hi, Yes it would be considered forgiven debt and would be taxable. As I understand bankruptcy laws what you owe the IRS could not be forgiven. But I m not an attorney so there may be exceptions to that of which I am unaware. You should check with an...

Tax Law (Questions About Taxes): Corporate Payroll Tax, who pays the tax, richard fritzler
who pays the tax, richard fritzler: From the IRS s perspective the business has always been yours. You would be required to pay taxes on all the money the business received during the time you were the owner. Now if the business did not receive some money, they being diverted to another account,...

Tax Law (Questions About Taxes): Corporate Tax Lien - Am I personally protected?, liable for taxes, richard fritzler
liable for taxes, richard fritzler: Tax collection is a dicey area. The IRS and the department of labor have actually held anyone that wrote checks on the business account personally liable. With the claim that that person chose to not pay the debt that was due and instead chose to pay someone...

Tax Law (Questions About Taxes): about c-corp and medical expenses, key man insurance, c corp
key man insurance, c corp, doctor bills: OK. So if we do this, can the corp directly pay the CEO s doctor bills, e.g. dentist, physician. I mean pay the bills, not paying for insurance. The corporation can commit to paying for 100% of all the medical expenses for ALL the employees and their dependents....

Tax Law (Questions About Taxes): calculating basis, stancil, cpa
stancil, cpa, 10 years: Jay, Thanks for your question. You would first need to allocate the original purchase price between land and the buildings on it, assigning a value at the time of purchase to each building. Your basis in the sold property would then be 13/35 of...

Tax Law (Questions About Taxes): capital gains in non-resident state, stancil, work thanks
stancil, work thanks, capital gains: Rachel, Thanks for your question. You will have to file a non-resident form in NC, reporting the gain on the sale of land. Include it on your SC return, but SC will give you a credit for taxes paid to NC Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): capital gains on real estate, capital gains on real estate, taxable gain
capital gains on real estate, taxable gain, stancil: Dottie, Thanks for your question. You will pay capital gains on the entire sale, but you have a mixed basis calculation. Your basis is your original $7,033 plus one-half of the fair market value of your mother s share at the time of her death. 1/3...

Tax Law (Questions About Taxes): capital gains tax on s corp, brokerage accounts, capital gains tax
brokerage accounts, capital gains tax, brokerage account: Since the S-corp is a passthrough entity and you pay all the taxes personally. . . no. If you asked me if there was an advantage of trading as a Real Corporation, I d say most definitely. Richard Fritzler http://www.owelesstax.com http://www.nevadacorporateservices.com...

Tax Law (Questions About Taxes): casualty gain, secondhand furniture, initial settlement
secondhand furniture, initial settlement, insurance settlement: You do not have to do the casualty form if you are totally reimbursed by your insurance. Basis is not replacement value, it is what was paid for the item so if you bought a couch second hand and paid $5 for it, that is your basis. FMV is what someone...

Tax Law (Questions About Taxes): back child support, stancil, child support
stancil, child support, credit loan: Debra, Although I cannot say for certain that they would or would not take the tax credit, they certainly have the right to do so. They can seize any refunds you have coming to you from the IRS to satisfy back child support. Hope this helps. John...

Tax Law (Questions About Taxes): claiming a dependant after being audited, irs scrutiny, tax lady
irs scrutiny, tax lady, claiming a dependant: Ruth, Thanks for your question. If he is entitled to the exemptions, he can take them. However, given his past record, he should expect close IRS scrutiny of anything he takes. As as aside, he really doesn t take an exemption for his wife. She takes...

Tax Law (Questions About Taxes): classes for volunteer work - deductible?, master gardener, volunteer work
master gardener, volunteer work, profit group: Georganne: If the classes offered are required for your volunteer work, then they are deductible as any other educational expense would be deductible. However, a tuition is not a gift. Mileage to the classes are not deductible either unless the tuition...

Tax Law (Questions About Taxes): commercial real estate tax question, lease
lease: HI anil where you said interest income I think you meant rental income as there is not a simple yes or no answer I have copied below the relevant section of publication 551 at www.irs.ustreas.gov Real Property If you buy real property, certain fees...

Tax Law (Questions About Taxes): commute mileage, stancil, mileage
stancil, mileage, cpa: Brian, Thanks for your question. The travel from home to your first stop of the day, and from your last stop of the day to home are both considered commuting mileage. So the entire 60 miles is a commute. Travel back to the office is deductible, however....

Tax Law (Questions About Taxes): court costs from a discrimination lawsuit lost during appeals, discrimination lawsuit, unlawful discrimination
discrimination lawsuit, unlawful discrimination, gross proceeds: John, Thanks for your question. Sorry, but the law does not allow deduction of attorney fees and court costs in an unsuccessful case. Of course the definition of success is the final verdict, after all appeals so you are left with a non-deductible expense....

Tax Law (Questions About Taxes): Daycare Business Taxes, Daycare, richard fritzler
Daycare, richard fritzler: The best way to afford the house is not going to be found in trying to craft your in home business use. To start; that $20,000 is still subject to self-employment tax of 15.3%, that is not reduced by any of your deductions including the in-home office....

Tax Law (Questions About Taxes): DBA, c corp, proper election
c corp, proper election, personal return: Pat, Thanks for your question. You will have to file an amended return, Form 1040X. You cannot file as a C Corp unless you are an actual chartered corporation. Additionally, as an LLC, you can file as a C Corp if you make the proper election to...

Tax Law (Questions About Taxes): Death Tax - Oklahoma, state inheritance tax, personal belongings
state inheritance tax, personal belongings, executor of the estate: Beverly, Thanks for your question. Likely not. As it currently stands, the estate tax has a $2,000,000 for 2009 and is scheduled to be eliminated January 1, 2010. However, it is scheduled to return the following year. Unless Congress takes actions,...

Tax Law (Questions About Taxes): Delinquent Tax Debt, delinquent tax debt, pennies on the dollar
delinquent tax debt, pennies on the dollar, statute of limitation: First of all, it does not sound like the taxes are correct. You can go back and amend them and fix the what sounds like a subcontractor error. There is no law that says you have to sign a waiver to continue statute, but you can bet the payment plan they...

Tax Law (Questions About Taxes): Dependency, free with money, fafsa
free with money, fafsa, abusive situation: Kate, Thanks for your question. If you file, claiming yourself, you cannot e-file. It will get rejected because your SS number has been claimed on his return. Filing a paper return, you will get a letter stating that your SS number has been claimed...

Tax Law (Questions About Taxes): Dependent Income, federal taxes, investment income
federal taxes, investment income, taxable income: If she has taxable income (over $5450 with no investment income) she must file. If she had federal taxes withheld, she would want to file to get money back. Under no circumstances does it go on your return. She files her own, not claiming herself as a dependent....

Tax Law (Questions About Taxes): Depreciation, home office deduction, richard fritzler
home office deduction, richard fritzler: The Remodel was all yours. The Business can t claim it as a business expense. And since you didn t state your wife s business was a Real corporation, I m going to assume it is not and therefore all the tax wrangling you were thinking you were going to do is...

Tax Law (Questions About Taxes): Depreciation Rates, rate of depreciation, depreciation rates
rate of depreciation, depreciation rates, depreciation schedule: Jahnavi: At www.irs.gov the irs has a depreciation schedule that you can use to depreciate the items you list. Since there are several issues involved in depreciation and how it can be used on your return you need to consult with a cpa to best use depreciation...

Tax Law (Questions About Taxes): Depreciation on semi-truck, depreciation schedule, stancil
depreciation schedule, stancil, semi truck: Zoryana, Thanks for your question. Three years is the allowed rate for that type of asset. If you had elected the alternative depreciation period at the beginning you could have depreciated it straight line over 4 years. You do not normally take...

Tax Law (Questions About Taxes): Determination of Worker Status, s corp, compensation agreement
s corp, compensation agreement, legal option: Bruce: Your employer is correct. Once you earned the income as an employee, it will always be an employee until the contract that sold the plan is exhausted. When the 5 years is up and you resell that plan you can be considered an independent contractor....

Tax Law (Questions About Taxes): Didn't get 1099 after short sale on house, irs laws, debt cancellation
irs laws, debt cancellation, form 4797: Joel, Thanks for your question. They are in violation of the IRS laws if they don t issue one. I would proceed and report the sale anyway - given that attitude, they are unlikely to comply unless forced by the IRS. Report the $100,000 gain from the...

Tax Law (Questions About Taxes): Direct Rollover of 403-B, income tax returns, rollover ira
income tax returns, rollover ira, direct rollover: Hi, If, after cashing the check, you put the money into the rollover IRA, just enter the information on the 1099R as a direct rollover. If you didn t put the money into the rollover IRA it is a taxable distribution and you should include it in your income....

Tax Law (Questions About Taxes): Direct Rollovers, direct rollovers, ira withdrawals
direct rollovers, ira withdrawals, taxable portion: Debra, Thanks for your question. Show all of your pension withdrawals, including rollovers on 16a. Show the taxable portion on 16b. Show all of your IRA withdrawals, including rollovers of 15a. Show the taxable portion, if any, on 15b. Hope this...

Tax Law (Questions About Taxes): Disabled spouse, agent orange, stancil
agent orange, stancil, tax break: Ella, As far a income taxes are concerned there is no such status. You may be referring to a local property issue. Although each state and city have different rules, generally you would apply at the office of tax collector for this tax break. Hope...

Tax Law (Questions About Taxes): Disposal of Investment property, income losses, gain thanks
income losses, gain thanks, property question: David: If it is true investment property and you had a business then you should be using a schedule D to report the income and losses on your business investment therefore the 1099 C should be some how incorporated in the income and expenses of the investment....

Tax Law (Questions About Taxes): Donations from rental of reception hall, profit entity, charitable deduction
profit entity, charitable deduction, reception hall: Hi, Your rental would not qualify as a charitable deduction. You did use the hall so there was benefit to you. Had you simply given them $250, it would qualify as a deductible contribution and they would have given you a statement supporting your deduction....

Tax Law (Questions About Taxes): Donor and recipient gift tax, income tax bracket, annual exclusion
income tax bracket, annual exclusion, stancil: Sylvia, Thanks for your question. The limit for the annual exclusion is now $13,000. In addition, there is a lifetime exemption of $1,000,000 so it is likely you would owe no gift tax. Gifts are not income, so your daughter would not have any tax...

Tax Law (Questions About Taxes): debt cancellation, debt cancellation, stancil
debt cancellation, stancil, insolvency: Barbara, Thanks for your question. Yes, they are reported on your return as other income on line 21 of the 1040. The excess of principal owed over the fair market value is taxed. If you qualify for an exception, complete Form 982. Exceptions include...

Tax Law (Questions About Taxes): deductability of loss on sale of a rental property, joe thanks, capital improvements
joe thanks, capital improvements, adjusted basis: Joe, Thanks for your question. You will be able to deduct the difference in the sales proceeds and your adjusted basis. Your adjusted basis is the purchase price minus any depreciation allowed or allowable plus any capital improvements (those that have...

Tax Law (Questions About Taxes): deed in lieu of foreclosure, deed in lieu of foreclosure, marginal rate
deed in lieu of foreclosure, marginal rate, stancil: Ervin, Thanks for your question. Based on that information, you would owe no taxes on the foreclosure. If the FMV was less than what was owed you would be taxed on the difference at your marginal rate (10-35%) unless you meet one of the many exceptions....

Tax Law (Questions About Taxes): per deim, deim, paying taxes
deim, paying taxes, 12 months: Hi, A temporary assignment is one that is expected to last and actually lasts 12 months or less. The time between temporary assignments should be at least 6 weeks. If it is less than that it would no longer be considered temporary and the per diem would...

Tax Law (Questions About Taxes): delinquent taxes and OIC, student loan payment, delinquent taxes
student loan payment, delinquent taxes, forbearance: (1) You can include the student loan payment on the 433-A, however, if you try to get into an agreement with the IRS before you actually begin making payments, whoever you are dealing with may require additional proof, such as a letter verifying your agreement...

Tax Law (Questions About Taxes): dependent, dependency exemption, stancil
dependency exemption, stancil, s gross: As I stated in my previous answer, if he is a full time student under age 24 there is no limit to the amount of income he can get and still be your dependent. If he is 24 or over or not a full time student, his gross income must be under $3,500 for you...

Tax Law (Questions About Taxes): dependent minor tax exempt?, company benefit, wishful thinkin
company benefit, wishful thinkin, stressor: Nick, Thanks for your question. Your age has nothing to do with your tax liability. Just because you are a minor or student does not make you tax exempt, so subject to a special rate. If your income is less than $5,450 you do not need to file, other...

Tax Law (Questions About Taxes): dependent minor tax exempt?, company benefit, stressor
company benefit, stressor, wishful thinking: Dependents and minors are NOT exempt to file returns. If your mother supported you over 50%, she has the right to claim you. Your losses mean nothing to the IRS and the $400 or some you earned is taxable income, but your income is low enough that you...

Tax Law (Questions About Taxes): Is per diem taxable, richardfritzler
richardfritzler: The per diem is intended to be a reimbursement of expense. . . without having to keep all the receipts. You don t have to pay taxes on justifiable business expenses. You don t have to pay taxes on Per Diems. Richard Fritzler http://www.owelesstax.com ...

Tax Law (Questions About Taxes): Per diem for truck driver, form 2106, miles from my home
form 2106, miles from my home, 2106 form: Gary: If your employer provides you per diem then you can accept them and file a 2106 form using those rates. However, as an over the road truck driver you can use your actual receipts for your expenses on the 2106 form for your out of town expenses while...

Tax Law (Questions About Taxes): divorced parents and dependants, divorce papers, snail mail
divorce papers, snail mail, full custody: If you are the custodial parent and you did not sign an 8332 allowing him to claim them, YOU claim them. You may have to snail mail your return, but you will get the proper refund. In the fall you will get a letter that asks you if you should have claimed...

Tax Law (Questions About Taxes): donate property vs take loss, tax benefit, capital gains
tax benefit, capital gains, boom: Hi, If you sell at a loss you can deduct only $3,000 of that loss against other income unless you have capital gains to offset. If you donate the property your deduction could be limited depending upon the amount of your other income but most likely you...

Tax Law (Questions About Taxes): Education, irs form 8863, irs form 1098
irs form 8863, irs form 1098, form 1098 t: Brandy, I believe the form you have is IRS form 1098-T . Your preparer will use this information to produce an income tax credit on IRS form 8863. If you are not a dependent on your patents tax return, you can see if you can benefit from it or if your...

Tax Law (Questions About Taxes): Education credits, northcentral university, 8863 form
northcentral university, 8863 form, 1098 t form: Ryan, Unfortunately, someone may have given you bad information. The credits are not available unless the school is eligible to participate in a student aid program administered by the Department of Education. It sounds as if Northcentral does not qualify....

Tax Law (Questions About Taxes): Education: Itemized Deduction vs Tuition Credit, employee business expenses, irs publications
employee business expenses, irs publications, volunteer forum: Paul, Thanks for your question. You cite Form 8817. I think you mean 8863. If the courses do not qualify you for a new job they are deductible as employee business expenses. Yes, it could be a red flag, but if you can defend the deduction,...

Tax Law (Questions About Taxes): Educationl Tax Deduction, stancil, tax consultant
stancil, tax consultant, three daughters: James, Thanks for your question. Unfortunately, your tax consultant is correct. The phase out for the Hope and Learning Credits ends at $116,000 and the tuition and fees deductions phases out above $160.000 Not that it does you any good now, that...

Tax Law (Questions About Taxes): EE Savings Bond Exclusion/Hope Credit, hr block tax cut, hr block tax
hr block tax cut, hr block tax, 8863 form: Tina, Thank you for your question. 1) When you redeemed your bonds and got $1016.32, the interest portion was $616.32 and the difference was the face value of the bonds or $400.00. If you bought the bonds for $425.00 , then you may have purchased the...

Tax Law (Questions About Taxes): EMBA and tax, employer education, richard fritzler
employer education, richard fritzler: As your research has shown, Congress has coninued to modify the rues so that individuals have no tax beneficial way to get an education without the government providing it. Up until 2 years ago we had a way to provide a business funded scholarship, but...

Tax Law (Questions About Taxes): Employer Tuition Reimbursement Payments, tuition assistance program, employer tuition
tuition assistance program, employer tuition, educational credits: Lyndsey: If the employer pays the money to you, it is not a fringe benefit. However, if the employer pays it to your school for you, then that is different. But, it does prevent you from using the educational credits on your own personal return, unless...

Tax Law (Questions About Taxes): Equipment purchase, higher tax bracket, volunteer forum
higher tax bracket, volunteer forum, tangible personal property: D, Thanks for your question. I presume this is equipment to be used in a business. Normally, you would have to depreciate it, but you may qualify to expense it under Sec 179. Tangible personal property used in a business is qualifying property. There...

Tax Law (Questions About Taxes): ESPP Tax Entry, form 4852, turbo tax
form 4852, turbo tax, turbotax: Jan, Thanks for your question. You can complete Form 4852 which is a Substitute W-2 and submit it with your return. I do not use Turbo Tax, so I can t walk you through the steps on how to enter those items. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Estate Tax Return, life insurance policy, dividend income
life insurance policy, dividend income, stancil: Chuck, It is non-taxable income so it is not included on the return. I don t think this applies to you but if you have other income requiring you to file you must indicate you have non-taxable income and reduce your deductions by an allocation of those...

Tax Law (Questions About Taxes): Estate tax question, income tax return, ground contamination
income tax return, ground contamination, tax implication: Eric, Thanks for your question. If the estate has income greater than $600 a Form 1041, Estate Income Tax return must be filed. This is different from an Estate Tax Return, Form 706. The estate can elect to pay the tax, or it can pass the tax on...

Tax Law (Questions About Taxes): Estimated Tax Payments, estimated tax payments, discretionary bonus
estimated tax payments, discretionary bonus, connecticut tax: GK, Thanks for your question. You don t have to base it on last year s income. Base it on what you expect to earn in the current year. As your income situation changes, you can adjust future payments up or down, depending on what occurs. Hope this...

Tax Law (Questions About Taxes): Estimating Past Home Improvement Costs, catch phrase, improvement costs
catch phrase, improvement costs, value of my home: Bob, Thanks for your question. No, you cannot simply add an annual amount to your basis. All increases in basis must be documented. Assuming it has been your principal residence for 24 of the past 60 months, you can exclude up to $250,000 ($500,000...

Tax Law (Questions About Taxes): went Exempt on my W4 accidently.., www irs gov, form 9465
www irs gov, form 9465, installment agreement: Pappu, Thanks for your question. You can apply to the IRS for an installment agreement. This is done by completing Form 9465. There is a fee of $105 if they approve the agreement. This can be reduced to $52 if you agree to electronic funds withdrawal....

Tax Law (Questions About Taxes): Expense Write Off Question..., car
car: Hi Chin likewise I hope this finds you well if you use your car for business you may be able to deduct expenses including depreciation I suggest that you get form 4562 at www.irs.ustreas.gov and fill it out now as you will need to do when you file schedule...

Tax Law (Questions About Taxes): early withdrawal 401k, deferred income, taxable income
deferred income, taxable income, irs: Rick, If you are under 59 1/2 and do not meet any exception listed on IRS form 5329 then you are subject to 1/3 of taxes and penalties. As a 401K distribution, you deferred income and never paid taxes on this money before, therefore when you take this...

Tax Law (Questions About Taxes): education loans, qualified education expenses, education loans
qualified education expenses, education loans, stancil: William, Thanks for your question. Qualified education expenses for Form 8863 include tuition and fees paid to the school, along with books and related equipment required for the course and purchased through the school. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): estate taxes, tax deductible items, pg e
tax deductible items, pg e, deceased person: Irwin: It is not an estate until she passed. Therefore, the bills should be paid and reported accordingly. John Mr. Irwin: I do not understand your question and your follow up response. I provided the answer. There is noting to accrue. When...

Tax Law (Questions About Taxes): Federal Income Tax amount, income tax withholding, payroll industry
income tax withholding, payroll industry, federal income tax: Joy: The employees are required to fill out a W-9 and sign it. What every they put on the form is what you go by for calculating their income tax. If they fill it out incorrectly it is the employees problem not yours. Please do not coach them on how...

Tax Law (Questions About Taxes): Federal & State filing status, federal tax return, state of south carolina
federal tax return, state of south carolina, state of indiana: Thomas: You would file a federal tax return jointly and a state of Indiana and state of South Carolina. Since, she has no earnings in South Carolina, I do not see the need to be alarmed? It will not cost you anymore tax than you have already paid. ...

Tax Law (Questions About Taxes): Federal Tax Withholding, withholding allowances, stancil
withholding allowances, stancil, federal taxes: Diana, Thanks for your question. It all depends on your filing status, the number of withholding allowances you claim, and your income level. You can complete the worksheet that accompanies Form W-4 to see how much you should have taken out. If...

Tax Law (Questions About Taxes): Federal Taxing of Inherited Mineral Rights, gas royalties, royalty payments
gas royalties, royalty payments, federal income tax: Sure. This is taxed to you just as it would have been taxed to your mother. You are now the owner and get all the income and expenses anyone is entitled to get. You just got your portion by inheritance, not out and out purchase. It is still treated the...

Tax Law (Questions About Taxes): Federal tax, income tax return, spouse coverage
income tax return, spouse coverage, innocent spouse: Cindy, Thanks for your question. The other party would only be liable for your past taxes if they filed a joint return with your for the year in question. If they did not file jointly with you in a prior year, they would have no liability for those...

Tax Law (Questions About Taxes): Federal taxes on 2009 distribution, federal income taxes, federal income tax
federal income taxes, federal income tax, marginal rate: Mindy, Thanks for your question. The withdrawal will be taxed as ordinary income at his marginal rate. There are not special exceptions on this income. Filing when single and over 65 is not required unless his gross income exceeds $10,300. Hope...

Tax Law (Questions About Taxes): Filing Married but Seperate, child care credit, child tax credit
child care credit, child tax credit, odd exception: Shannon, If you put him down a a non homeowner, you will have filed a false return. The interest should be divided between you in a reasonable manner based on who paid and who was liable. You don t say this, but if you itemize, he must also itemize...

Tax Law (Questions About Taxes): First Time Homebuyer Credit, interest free loan, disaster areas
interest free loan, disaster areas, time home buyer: Hi Angel right from the IRS site www.IRS.ustreas.gov First-Time Homebuyer Credit Those who bought a main home recently or are considering buying one may qualify for the first-time homebuyer credit. Normally, a taxpayer qualifies if she didnít own a...

Tax Law (Questions About Taxes): First time Home Buyer Tax Credit, stimulus package, time home buyer
stimulus package, time home buyer, first time home buyer: Howard, Thanks for your question. No, you do not qualify. The law specifies that a first time home buyer is someone who has not had an ownership interest in a principal residence for the past three years. Your ownership of a mobile home is a principal...

Tax Law (Questions About Taxes): Foreign Earned Inc Exclusion, physical presence test, foreign earned income
physical presence test, foreign earned income, maximum exclusion: Mark, Thanks for your question. There are two things you can do. First, as you suggest, you can file now, then file an amended return after you have qualified. The second alternative is to file an extension, then file your original return after the...

Tax Law (Questions About Taxes): Foreign Exclusion Pay, physical presence test, foreign earned income
physical presence test, foreign earned income, housing allowance: Dan, Thanks for your question. You must wait to file until you have met the 330 day physical presence test - 330 days in any 12 month period. You will then pro-rate the amount of the foreign earned income exemption based on the number of days in 2008...

Tax Law (Questions About Taxes): Foreign Income Exclusion, irs 2555, income exclusion
irs 2555, income exclusion, stancil: Shawn, Thanks for your question. Probably not. In order to be eligible for the exclusion, you must have been physically present in a foreign country for 330 days in a rolling 12 month period. It does not sound like you meet the criteria. If you...

Tax Law (Questions About Taxes): Foreign Travel - Per Diem, federal per diem, mark thanks
federal per diem, mark thanks, stancil: Mark, Thanks for your question. You can use a per diem for meals. The IRS does not allow a per diem for lodging in any circumstance. You can deduct actual lodging. The federal per diem for lodging is the amount the federal government will reimburse...

Tax Law (Questions About Taxes): Form 1041, form 1041, partial distribution
form 1041, partial distribution, backup withholding: Paula, I would say that you need to complete the form using tax software to see how it flows. The income will be reported on the face of the return. You get to offset expenses of the estate , which includes the exemption of $600. Since all the income was...

Tax Law (Questions About Taxes): Form 1041 Schedule K-1, class action lawsuit, form 1041
class action lawsuit, form 1041, interest payment: They are not breaking the law. As long as they get the K-1 out by the due date of the return or extensions, they are okay. You could have figured you were getting it, you should have contacted them about it or waited, so you will have to amend your return....

Tax Law (Questions About Taxes): Form 1099a, 1099c, mortgage home equity
1099c, mortgage home equity, taxable income: Hi, Since the FMV is higher than the balance of principal, you would not include it as taxable income. Yes I would expect that you would receive a form on the 2nd mortgage as well. You might want to ask about that before you file your tax return. Regards,...

Tax Law (Questions About Taxes): Form 8332, irs form 8332, irs 8332
irs form 8332, irs 8332, custodial parent: Robert, This year it is a requirement. In the past it was a requirement, but not totally reinforced. If you are the non custodial parent, then you need to get a release from the custodial parent with IRS 8332 that she will allow you to take her. In...

Tax Law (Questions About Taxes): FSA Forfeitures, fsa plan, flexible spending account
fsa plan, flexible spending account, irs publication: Chuck, Thanks for your question. Sorry, but you cannot take the unused FSA as a loss. It has been my observation that there are a number of plans that go either way, so if it s any consolation, you are not alone. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Fulltime Grad Sudent, school fulltime, absolute zero
school fulltime, absolute zero, mortgage interest: You are already a zero for taxes. Imagine that taxes are heat, and you don t have any. That is known as absolute zero . It don t get no colder than that. Richard Fritzler http://www.owelesstax.com http://www.nevadacorporateservices.com phone 800 590-6612...

Tax Law (Questions About Taxes): AFLAC Cancer Policy
Tax Law (Questions About Taxes): AFLAC Cancer Policy

Tax Law (Questions About Taxes): Best tax software for Net operating Loss, income stock, stock sales
Tax Law (Questions About Taxes): Best tax software for Net operating Loss, income stock, stock sales, form 1040

Tax Law (Questions About Taxes): benefits of donating a house to charity?, royal carribbean, charity church
Tax Law (Questions About Taxes): benefits of donating a house to charity?, royal carribbean, charity church, donation receipt

Tax Law (Questions About Taxes): Form 8332, form 8332, divorce decree
Tax Law (Questions About Taxes): Form 8332, form 8332, divorce decree, relevant portion

Tax Law (Questions About Taxes): first time homebuyer credit, time home buyer, first time home buyer
Tax Law (Questions About Taxes): first time homebuyer credit, time home buyer, first time home buyer, buyer credit

Tax Law (Questions About Taxes): Real Estate Commission Rebate, buyer clients, cost basis
Tax Law (Questions About Taxes): Real Estate Commission Rebate, buyer clients, cost basis, self employment tax

Tax Law (Questions About Taxes): When to file a Form 1041, irs rules, form 1041
irs rules, form 1041, james rogers: Dear James, Welcome to All Experts, and thank you for your question. First, I was sorry to read of your mother s death. Second, as long as none of the beneficiaries of your mother s estate is a nonresident alien, you re correct that you do not need...

Tax Law (Questions About Taxes): filing, head of household
head of household: Debbie: You and your husband can only file join return either married file joint returns or married filing seperate returns. If you file joint return you do get to choose head of house hold. However, if you choose married filing seperate returns neither...

Tax Law (Questions About Taxes): how do I find a preparer with experience in delinquent tax returns?, google search, jk harris
google search, jk harris, fraud suit: Well, I have to tell you that I have a conflict of interest here since delinquent taxes and collections is all I do. Furthermore, I am probably as good as can be found. That warning in mind, here are a few guidelines. (1) Location is not that important....

Tax Law (Questions About Taxes): first time homebuyer credit, refundable tax credit, economic recovery act
refundable tax credit, economic recovery act, internal revenue service: Hi Clint there is no a lot of literature on this I have copied what I found on the IRS site www.irs.ustreas.gov as to how to interpret first time home buyer read below Also I have included information that seems to fit your situation if you file separately...

Tax Law (Questions About Taxes): first time rental of primary home, joe thanks, stancil
joe thanks, stancil, joe joe: Joe, Thanks for your question. 1. Your placed in service date is the date it was available for rent. 2. There is a disadvantage to classifying it as a rental not for profit, as the is reported on line 21 and your deductions up to the amount of income...

Tax Law (Questions About Taxes): foreign earned income exclusion(FEIE), foreign earned income exclusion, living and working in england
foreign earned income exclusion, living and working in england, form 673: Rob, Thanks for your question. You are mixing more than one issue here. The fact they take withholding on your earnings has no effect on your ability to take the foreign earned income exclusion. You ll just get a bigger refund. Secondly, you are...

Tax Law (Questions About Taxes): foreign income but not U.S. citizen or permanent resident, long term capital gains, social security number
long term capital gains, social security number, worldwide income: Yvette, Thanks for your question. You have two options. If you husband elects to be treated as a resident or citizen for tax purposes you can file a joint return. He will need a social security number (or ITIN) and will include all his worldwide income...

Tax Law (Questions About Taxes): form 673 tax question, form 673, overseas job
form 673, overseas job, income exclusion: Dan, Thank you for your question. Judging from what you are saying, you are claiming the foreign income exclusion whereby a certain amount is not subject to taxes while you work overseas. It also appears that that you may have earned some money while...

Tax Law (Questions About Taxes): What forms to use for gifted house, form 4562, joe thanks
form 4562, joe thanks, taxable gain: Your attorney is way out of date. As I said earlier the over-55 exemption was repealed in 1986. You must live in the house for at least 5 years or the deferred gain from the 1031 would be taxable. These are two totally different issue relating to the...

Tax Law (Questions About Taxes): Gift or Income?, self employment income, social security and medicare
self employment income, social security and medicare, state income taxes: I realize that your husband is not self-employed, but it the company does not treat this as wages, the income is treated as self-employment income. Form 8919 would force the hand of the employer. However, in your situation, a Form SS-8 would need to be...

Tax Law (Questions About Taxes): Gift Tax, form 709, apartment in new york
form 709, apartment in new york, government thanks: Pat: You as the recipient of the gift do not report it. Only the person who gives the gift is required to report it. There is no magic percentage that is owed. A person must file the proper forms and calculate as the form request at the completion of...

Tax Law (Questions About Taxes): Gift vs Loan, loan question, stable market
loan question, stable market, stancil: No, that s not what I said. I said that if it is given with any strings, such as the expectation that it will be repaid, it cannot be considered a gift under IRS rules. I would add that you may be confusing the gift tax with the estate tax. There is currently...

Tax Law (Questions About Taxes): gift report, income tax return, federal income tax return
income tax return, federal income tax return, james rogers: Dear Ken, I saw your question in the pool and am writing to answer it. If the $80,000 is a bona fide gift from your father-in-law, it is not income and should not be reported as such on your federal income tax return. With that said, you d be wise...

Tax Law (Questions About Taxes): gift taxes, gift taxes, jaycee
gift taxes, jaycee, estate tax deduction: Jaycee, You and your wife can do a split gift of $26,000 per year. The difference between the $130,000 and the $93,000 would be $37,000. You would report the $26,000 as a gift in the year and the difference of $1000 could be considered part the uniform...

Tax Law (Questions About Taxes): I was gifted a Beneficiary's IRA, ira trustee, ira account
ira trustee, ira account, step dad: As I stated, the amount was only withholding. You calculate and report the penalty on your 1040. But show the withholding also. Only one 10% penalty. Yes you will pay tax at your marginal rate, which is between 10 and 35% depending on your filing status...

Tax Law (Questions About Taxes): gifting cash, gift
gift: HI David the tax is your responsibility you need to file a gift tax return instead of leaving the amount open you would be better off using the lifetime exemption and annual exemption amount doing over a period of years would maximize the gift tax exemption...

Tax Law (Questions About Taxes): gifting cash, tax experience, tax implications
tax experience, tax implications, gift tax return: Dave, Thank you for your question. You can gift up to $12,000 per year for your son. If you are married , both you and your spouse can jointly gift up to $24,000 per year. Any amount over that amount in they year would be applied against your unified...

Tax Law (Questions About Taxes): Health Insurance Tax Credit, adjusted gross income, insurance tax
adjusted gross income, insurance tax, s corp: Not as an LLC. Not as a Partnership of any kind. Not as a S-corp. You can personally, deduct all of the medical expenses that exceed 7.5% of your adjusted gross income, but if you are in the top 98% of Americans, then this deduction does not apply to...

Tax Law (Questions About Taxes): "Hobby Income" and Schedule C, faculty sabbaticals, book royalties
faculty sabbaticals, book royalties, royalty income: Rick, Thanks for your question. If yo apply them to Schedule A one year, and Schedule C the next, you run the risk of the IRS determining that they are employee business expenses not Schedule C items, resulting in a denial of the Schedule C deductions....

Tax Law (Questions About Taxes): How to handle different businesses under the umbrella of a 'C' corporation?, franchise fee, c corporation
franchise fee, c corporation, existing company: Hi you could make the new business a division but i fail to understand why are you operating as a C corp most taxpayers would find a Sub S corp more suited to their needs and as to the new business it might be simpler to keep it separate from the...

Tax Law (Questions About Taxes): How to handle two primary residences, home office expenses, tax prep software
home office expenses, tax prep software, home office deduction: Hi, When you use the home office deduction you have to put in an area that is used regularly and exclusively for business as well as the area of the entire home. I would assume that the proportions are different for each home so that a different portion...

Tax Law (Questions About Taxes): hold up at IRS, letter in the mail, taxpayer advocate
letter in the mail, taxpayer advocate, stancil: Krystie, Thanks for your question. You say you have two income tax papers filed on you - I assume you mean that two returns were filed. One joint, and the other you filed as separate. Filing again will only complicate matters. I would suggest...

Tax Law (Questions About Taxes): two home offices, home owners insurance, mortgage interests
home owners insurance, mortgage interests, proper proportion: Junior, Thanks for your question. Normally, with one office, you would enter those items as indirect expenses and the program would reduce the amount from Schedule A and include the proper amount on your Form 8829. However, with 2 offices, you will...

Tax Law (Questions About Taxes): Income Tax on Retirement Distribution, retirement distribution, retirement payments
retirement distribution, retirement payments, early retirement: William, Assuming that the retirement plan was a qualified plan, the entire amount would be taxed at ordinary income rates. Depending on your filing status and other income this would be between 25 and 35%. Unless you want the entire sum now, you might...

Tax Law (Questions About Taxes): Individual tax return - property taxes, county property taxes, individual tax return
county property taxes, individual tax return, stancil: Jorge, Thanks for your question. Yes you can deduct those taxes as itemized deductions on Schedule A. If you don t itemize you can deduct up to $500 ($1,000 married filing joint) as an addition to your standard deduction. Hope this helps. John...

Tax Law (Questions About Taxes): Inheritance Tax, state inheritance taxes, inheritance tax
state inheritance taxes, inheritance tax, types of taxes: Leonardo, Thanks for your question. You are mixing three different types of taxes. First is the Federal estate tax. given the size of his estate, there should be no liability there. Second is state inheritance taxes. These are taxes on inherited...

Tax Law (Questions About Taxes): Inherited a home, hot water heater, electric water
hot water heater, electric water, furnace: The utilities are personal and not deductible. Your share of the taxes go on your Sch A unless you elected to capitalize them. The sale of the home goes on Sch D and it appears, when all is said and done, you will have a deductible loss. Helen,EA in...

Tax Law (Questions About Taxes): Inherited propety, depreciation, Living Trust, passive activity losses, personal income tax forms
passive activity losses, personal income tax forms, income tax form: 1. Not a part of the estate, but it is estate income reported on Form 1041. 2. Correct. 3. Correct. Taxes can be paid by the estate or by the beneficiary. This would be indicated on the K-1 your Mom gets. Losses should be passed to her. The property would...

Tax Law (Questions About Taxes): Inheriting property in a foreign country, worldwide income, stepchildren
worldwide income, stepchildren, tax liability: Owning property is not a taxable event. Having an interest in a bank account overseas is reportable on IRS form 90.22. If the sell the property, you need to report the gain as worldwide income. You may be liable to Ireland for taxes and then can...

Tax Law (Questions About Taxes): Insolvency, time james, stancil
time james, stancil, insolvency: James, Thanks for your question. Apparently the actual date the transaction was completed was in 2009, therefore it must be reported on your 2009 taxes. Insolvency is determined just prior to the transfer of the house and includes any and all assets...

Tax Law (Questions About Taxes): IRA question, non deductible ira, ira account
non deductible ira, ira account, form 8606: Since she was eligible for the plan at work, she cannot deduct an IRA on her own. She is able to contribute as a non-deductible IRA (see form 8606). If you take money out of an IRA before age 59.5, penalties apply. See form 5329 for the rules on that....

Tax Law (Questions About Taxes): IRA/Roth IRA, adjusted gross income, roth ira
adjusted gross income, roth ira, tax situation: Any funds not rolled into the ROTH, including those to pay the taxes, are NOT eligible for conversion and must be taxed. As to what I would recommend, I have no knowledge of your personal tax situation and I can t recommend anything. Helen, EA in PA...

Tax Law (Questions About Taxes): IRAs, nondeductible ira, form 8606
nondeductible ira, form 8606, rmd: No, you need to go back and amend the past years return. You will not get any refund from 2004 and back, that money is lost forever. But you will from 2005 (as long as you file it by 4/15) and up and then your basis is correct. Helen, EA in P...

Tax Law (Questions About Taxes): IRS Filing Status, irs filing status, head of household status
irs filing status, head of household status, tax filing status: Emiko, Since the children live with you, you can claim head of household status, but not the dependent deduction. You can only benefit from the tax filing status. You list the child s name and social security number. You just told me that you cannot...

Tax Law (Questions About Taxes): IRS Form 8332, irs form 8332, bill increases
irs form 8332, bill increases, stancil: Robert, If it wasn t contested in the past, it should not be an issue for those years. For the current year, the negative effect is that your tax bill increases/refund decreases. You and your ex wife will just have to work it out. Hope this helps....

Tax Law (Questions About Taxes): IRS Made an error on my checking account number and states they can not fix it?, irs database, irs offices
irs database, irs offices, turbo tax: You re dealing with the IRS. I do not know how to get that straight for any additional monies they should be sending you for the current year. This would take the intervention of someone familiar with dealing with IRS internal procedures - a CPA who works...

Tax Law (Questions About Taxes): IRS Tax Lien on My Property, irs tax lien, back taxes
irs tax lien, back taxes, business property: First of all, even if the lien had attached to the property, the IRS would not take the property. They would just take proceeds of a sale up to the amount of the lien. In your case however, if the property was transferred prior to the lien attaching,...

Tax Law (Questions About Taxes): Itemized Deduction vs Tuition Credit, lifetime learning credit, tuition expense
lifetime learning credit, tuition expense, graduate tax: Hi, If your employer requires you to take the courses they would be an unreimbursed employee business expense. If your employer doesn t require you to take the courses, you should use either the tuition and fees deduction or the lifetime learning credit....

Tax Law (Questions About Taxes): income cap for sale of mutual funds, denise thanks, capital losses
denise thanks, capital losses, income cap: Denise, Thanks for your question. There are no income phase outs on the deductiblity of capital losses. However, you can use the loss to offset any capital gains you may have. If any loss remains after offsetting them against the gains you may deduct...

Tax Law (Questions About Taxes): income from casual or occasional work, computer repair work, self employment taxes
computer repair work, self employment taxes, occasional work: Dan, Thanks for your question. That income should be reported on Schedule C, and the self-employment taxes on Schedule SE. In addition to reporting the income on Schedule C, he can deduct any expenses incurred in earning the income. Hope this helps....

Tax Law (Questions About Taxes): inheired money / annunity investment, annuity payments, tax liability
annuity payments, tax liability, withdrawals: Hi Frances Annuity payments normally carry some capital returm but mostly consist of taxable income you need to look over the 1099 to see if the issuer has determined what portion is taxable if not stated on the 1099 you may have to contact the issuer...

Tax Law (Questions About Taxes): inherited house, stancil, 3 ways
stancil, 3 ways, siblings: Lee, Thanks for your question. None of the above. First, you need to determine the gain or loss on the house. Subtract your basis from the proceeds of the sale. Basis is the fair market value as of date of death. Each of the three will report one-third...

Tax Law (Questions About Taxes): insolvency, jewelry clothing, retirement plans
jewelry clothing, retirement plans, stancil: Troy, Thanks for your question. To determine insolvency total the fair market value of everything you own - houses, cars, retirement plans, jewelry, clothing, furniture, investments, etc. Then total up everything you owe. If what you owe is greater...

Tax Law (Questions About Taxes): joint return as a dependant, irs office, back taxes
irs office, back taxes, enna: Hi Enna when you signed the joint return you assumed responsibility howevr the IRS has rules relating to Inocent Spouses depending on circumstances you may qualify for some relief please discuss this with the tapayer s advocate at your local IRS offic...

Tax Law (Questions About Taxes): K-1 Distibutions S Corp., fritzler
fritzler: Yes, you are obligated to pay the taxes on the profit that was Attributed to you. Keep in mind the S-corp pays no tax it attributed the tax liability to the owners. S-corps aren t good for a lot of reasons, and the confusion factor on tax liabilities...

Tax Law (Questions About Taxes): K-1 and Schedule C, home office expenses, car mileage
home office expenses, car mileage, form 2106: Hi Eric you got it right the investment income goes through schedule E The guaranteed payment goes on schedule C as to the expenses you will need to fil in form 2106 for the transportation as to the home office deduction I have my doubts but you might...

Tax Law (Questions About Taxes): K-1s, LLC w Multiple Partners, band practices, business entry
band practices, business entry, stancil: Michael, Thanks for your question. You enter each K-1 that you receive separately. Otherwise the IRS will not be able to identify the entry and send you a bill for omitting it. Mileage incurred in the performance of the business activity, other than...

Tax Law (Questions About Taxes): Land Sale, legal heir, descendant
legal heir, descendant, siblings: When Dad died, your mother inherited it. And you inherited her portion. So your value is the date of death of your mother. That is what you will base your gain or loss on. Do you have any idea what it was worth on Mother s death and what your portion...

Tax Law (Questions About Taxes): Land Sale, long term capital gain, inheritance tax
long term capital gain, inheritance tax, transfer deed: James, Thanks for your question. Likely there will be little or no income tax. Since it was inherited your basis is the fair market value as of date of death. Any proceeds above the basis it taxable. It is a long term capital gain reported on Schedule...

Tax Law (Questions About Taxes): LLC, interest free loan, mortgage interest
interest free loan, mortgage interest, interest on the loan: Ken, Thanks for your question. First, an interest-free loan will not fly with the IRS. If you wish to treat it as a loan to the LLC, you should have the LLC pay interest on the loan at least equal to what you are paying the mortgage company. Show the...

Tax Law (Questions About Taxes): LLC 1065 for 2007 not filed, closing business, no profit
closing business, no profit, richard fritzler: There are no penalties if there are no taxes due. Filing a tax return allows you to document those losses. So you could file the 2007 and memorialize a larger amount of deduction, but there is a whole mine field of issues that come from that strategy, like...

Tax Law (Questions About Taxes): LLC 1065 filing, How to not use an LLC, richard fritzler
How to not use an LLC, richard fritzler: Are you the partner that is not on the deed? if so, you have nothing and have simply been giving aid to the others. No the LLC cannot deduct the mortgage interest. Just like a renter can t even though most of the rental payment goes to pay the mortgage....

Tax Law (Questions About Taxes): LLC K-1 for 2007, 2008, delaware llc, stancil
delaware llc, stancil, thousand dollars: Ravi, Thanks for your question. Since there is no additional tax involved there should not be any penalties for late filing. The members can file amended returns for 2007,but cannot take it on the 2008 or 09 returns. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): LLC Loan, recourse loan, turbotax
recourse loan, turbotax, rate of interest: Erica, Thank you for your question. Is his father buying out his interest in the LLC? If he is just loaning him money then there should be a rate of interest and terms of the loan. If the loan interest is to be deductible, then it should be secured by...

Tax Law (Questions About Taxes): LLC and salaries, how to get a home mortgage as a sole proprietor, richard fritzler
how to get a home mortgage as a sole proprietor, richard fritzler: The rules have become tighter on home mortgages. while your mortgage person is on the right track, the LLC will not be a suitable solution. The LLC is a disregarded entity for tax purposes, you would be filing taxes just as you are now, as a schedule C attachment...

Tax Law (Questions About Taxes): LLC Tax Return, tax adviser, minimum taxes
tax adviser, minimum taxes, distribution contract: Hi Paul this could get complex so I must tell you that there are legal issues to be considered . I am not an attorney I am not be able to give you legal advice. Taxwise if you are in CA or most states you would have been required to file franchise minimum...

Tax Law (Questions About Taxes): LLC Taxation, personal income taxes, form 1065
personal income taxes, form 1065, stancil: Nick, Thanks for your question. Although it is inexpensive, the Tax Cut Home and Business is not the greatest program around. If you prepare a 1065, you will prepare K-1 s for each of you. You will have to manually enter the information from the K-1...

Tax Law (Questions About Taxes): LLC tax question, state counterpart, carol welcome
state counterpart, carol welcome, federal partnership: Dear Carol, Welcome to All Experts, and thank you for your questions. If your husband formed a single-entity LLC (i.e., with him as the sole owner), he should be able to use Schedule C rather than the more involved, separate Form 1065, the federal partnership...

Tax Law (Questions About Taxes): Long Distance marriage and tax implications, real estate taxes, mortgage interest
real estate taxes, mortgage interest, tax implications: Hi, Assuming that your position is not a temporary assignment, there are no expenses you can deduct relative to your commuting between DC and KY. If you were to buy a place in DC you could deduct mortgage interest and real estate taxes on both homes. ...

Tax Law (Questions About Taxes): law school tuition deduction, law school tuition, patent apps
law school tuition, patent apps, united states patent and trademark office: James, Thanks for your question. No, you cannot deduct your law school costs. It does qualify you for a new trade or business whether you ever pursue that or not. The IRS has ruled specifically in such situations. You are eligible, however, for...

Tax Law (Questions About Taxes): loan on manufactured home, trust assets, stancil
trust assets, stancil, taking your time: Diane, Thanks for your question. The loan must be repaid out of the trust assets. If one or both of your chooses to do so, they may take possession of the home subject to the liability, meaning you agree to pay the debt. Hope this helps. John...

Tax Law (Questions About Taxes): Married Filing Separate Returns, stancil, cpa
stancil, cpa, proportion: Gerald, Thanks for your question. Any income in the name of the spouse should be reported by that spouse. Any joint income can be allocated in a reasonable manner - usually equally or in proportion to other income. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Married in Mexico Filing Single, interest credit cards, fha mip
interest credit cards, fha mip, high interest credit cards: Greg, Thanks for your question. Hate to burst your bubble but a marriage performed in Mexico is valid in the United States. Therefore you do not have the option of filing as single. Your only legal options are married filing separate or married filing...

Tax Law (Questions About Taxes): MILEAGE REIMBURSEMENT, full time job, tina tina
full time job, tina tina, mileage reimbursement: Tina, Thanks for your question. Since there is no salary involved, he cannot deduct mileage as an employee business expense. However, he can take it as a charitable contribution at 19 cents per mile prior to July 1 and 27 cents July 1 to the end of...

Tax Law (Questions About Taxes): Mileage Reimbursement, Personal Mileage, Richard Fritzler
Personal Mileage, Richard Fritzler: The IRS is very clear that mileage from home to office and office to home are personal miles, and cannot be deducted as business expenses. HOWEVER. . . that has nothing to do with a contract. It just means they aren t deductible. If your agreement required...

Tax Law (Questions About Taxes): MLP 2008 K-1, specifically Amerigas, tax deferred investments, mlps
tax deferred investments, mlps, positive cash flow: Hi Howard Specifically I have no knowledge of APU you could consult your broker. BUT in this day an age it still is nice to have a business that can produce positive cash flow, normally that is what the prospectuses promise . if you are looking for losses...

Tax Law (Questions About Taxes): Monhtly deducation determination, irs web site, irs gov
irs web site, irs gov, withholding allowances: Damian, Thanks for your question. That sounds about right, depending on your filing status and the number of withholding allowances you are claiming. You can go to the IRS web site, www.irs.gov and search for Publication 15 otherwise known as Circular...

Tax Law (Questions About Taxes): Mortgage Interest, stancil, tax benefit
stancil, tax benefit, mortgage interest: Scott, Thanks for your question. Interest on a second home is treated the same as your primary residence, subject to the limitations of $1,000,000 acquisition debt and $100,000 of home equity debt. Deductiblity of interest on investment property is...

Tax Law (Questions About Taxes): married seperate/single/or head of household?, head of household, earned income
head of household, earned income, w4: Brenda, Thanks for your question. Unless you have a qualifying relative who lives with you and you can claim as a dependent, your only choice is to file single. With just an earned income, there aren t many options to reduce your tax liability. Hope...

Tax Law (Questions About Taxes): minor child of school age/taxes, irs rules, custody papers
irs rules, custody papers, custodial parent: Amy: When I child turns 18 and is no longer under the protection of a court order, then, we must revert to IRS rules on dependency. In order for a parent to claim a child the child must live with that parent one day over half a year. That is extrapolated,...

Tax Law (Questions About Taxes): NC taxpayer deceased, social security disability, hartford insurance
social security disability, hartford insurance, stancil: Lacy, Thanks for your question. If the W-2 is all her income, she is under the filing threshold and you do nothing. Otherwise, file a return, and include the W-2 on it. This assumes the W-2 is properly issued. If there is a question, contact Hartford...

Tax Law (Questions About Taxes): New Small Business Tax???, self employment income, self employment tax
self employment income, self employment tax, sole proprietorship: Hi, You must pay taxes on all the money you earned last year whether as a hobby or as a business. Hobby income is reported as miscellaneous income. Hobby expenses up to the amount of hobby income are deductible as an itemized deduction on Schedule A....

Tax Law (Questions About Taxes): New Stimulius tax break, stancil, federal tax
stancil, federal tax, tax break: Lynne, Thanks for your question. You are very perceptive. The withholding rates have been decreased, but not the tax rates. Therefore, you will owe more at the end of the year. You can complete a new W-4 with your employer. What is recommend is...

Tax Law (Questions About Taxes): Non-Resident taxes, social security number, 1040nr
social security number, 1040nr, worldwide income: Alex, If you filed a 1040, then you made an election to be treated as a resident. All your worldwide income would be subject to tax. You can always amend your return if you want to be a 1040NR. You usually have up to three years. You did nothing wrong...

Tax Law (Questions About Taxes): Non-Resident taxes, student visa, stancil
student visa, stancil, tax return: Alex, Thanks for your question. You will need to file amended returns for those years. The procedure for this with 14040NR is not straightforward, you may want to obtain some outside help in order to complete the task. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): NYC Tax on S-Corps, html business, s corp
html business, s corp, nys taxes: Hi Sean Welcome to the big Tax Apple unfourtunately you are right but remember NYC also has a tax(UBT)( smaller rate) on all business conducted in the city you may consider changing to an LLC that comes up with NYS taxes other than deducting deducting...

Tax Law (Questions About Taxes): name and SS, social security card, ss card
social security card, ss card, stancil: Ervin, Thanks for your question. Yes, that could create problems in the future since your name does not match what is shown on your SS card. You should notify the SS administration. You should also check to see if all your earnings have been credited...

Tax Law (Questions About Taxes): Do I need to file estimated taxes for a DBA?, estimated taxes, profit 100
estimated taxes, profit 100, quarterly payment: You have two ways to calculate your quarterly payment. You can take 1/4th of last years profit. . . $100, or you cna do an actual estimate for the current year. If you are sure that at the end of the year you will not be profitable you would not need to file...

Tax Law (Questions About Taxes): Overseas taxes, fide residence test, physical presence test
fide residence test, physical presence test, earned income exclusion: Fred, Thanks for your question. No, in order to exclude income under the foreign earned income exclusion, you must meet the physical presence test or the bona fide residence test. 120 days will not qualify you for any exclusion. Hope this helps. ...

Tax Law (Questions About Taxes): How to offset unrimbursed expenses when actively involved in LLC?, IRS audit, richard fritzler
IRS audit, richard fritzler: An amendment Could increase your likelihood of an audit. It Does extend the statute of limitations for the IRS to choose to review your tax return. They have 3 years from Either the due date of the tax return OR the date of last filing, whichever is...

Tax Law (Questions About Taxes): ohio state tax, ohio state tax, septemeber
ohio state tax, septemeber, state return: Rahul: If you have changed your state of residency from New Jersey to Ohio you will file Ohio tax return from the time you moved there until the end of the year. For the rest of the year you may need to file one for New Jersey with no income for those...

Tax Law (Questions About Taxes): owed taxes, www irs gov, form 9465
www irs gov, form 9465, installment agreement: James, Thanks for your question. Yes, you can arrange with the IRS for installment payments. You can complete Form 9465 or complete an online installment agreement at www.irs.gov. However, the IRS will charge a $105 fee for the agreement ($52 if...

Tax Law (Questions About Taxes): Part-year residency and state taxes., schedule nr, working in oregon
schedule nr, working in oregon, deductible amount: Teri, Thanks for your question. You are missing something. I am not highly familiar with the MI part year resident form so I can t give you line numbers or anything like that, but it should only include your MI income. You will not be able to deduct...

Tax Law (Questions About Taxes): Partnership expenses, home office expenses, personal income tax
home office expenses, personal income tax, income tax return: Yonka, Thanks for your question. You cannot deduct those expenses on the 1065. However, since the partnership is 100% owned by spouses, you can elect to file the partnership as two separate Schedule C s - one for each of you. You could then file a...

Tax Law (Questions About Taxes): Personal business startup, amortization expense, partnership return
amortization expense, partnership return, stancil: Scott, Thanks for your question. As an LLC owned only by spouses you can file a 1065 partnership return for the business, or file two separate Schedule C s. The expenses you have incurred to this point would fall into three classifications: 1. Organization...

Tax Law (Questions About Taxes): Can Personal Tax Debt affect my Corporation, personal litigation, debt issue
personal litigation, debt issue, bar fight: It could Reach over to your ownership of the corporation. The IRS could foreclose on your stock. If you and your partner are equal, which most people erroneously choose, then the IRS and your partner would have to agree on how to compensate the IRS. If they...

Tax Law (Questions About Taxes): Personal tax, social security income, james rogers
social security income, james rogers, 1040a: Dear Roger, I m very sorry that your brother-in-law died. If your sister has only $100 of Social Security income, she won t have to file a tax return. There is a comma between the dollar sign and 100 in your question which makes me wonder if you didn...

Tax Law (Questions About Taxes): Pet-Sitting Income, self employment tax, stancil
self employment tax, stancil, schedule c: Janet, Thanks for your question. Yes, that is taxable income. You should report it on Schedule C, where you can also deduct any expenses incurred in earning the money. If your net earnings are $400 or more you should complete Schedule SE for the self-employment...

Tax Law (Questions About Taxes): Post-doc income, stancil, post doc
stancil, post doc, cpa: Pat, Thanks for your question. You don t state it, but I presume the income is in the nature of a scholarship or fellowship. If this is the case you do not need the substitute W-2, but simply enter the amount on line 7 of the 1040. To the left of the...

Tax Law (Questions About Taxes): Primary Residence and Required Occupancy, volunteer forum, federal job
volunteer forum, federal job, stancil: Julie, Thanks for your question. No. In order for it to be your primary residence it must be where you spend most of your time. Your primary residence is your rental housing. Sorry I can t cit a source, as that would require more time than I can...

Tax Law (Questions About Taxes): Is Principal Deductible in an LLC, additional principal payment, depreciation allowance
additional principal payment, depreciation allowance, principal loan: Naveen, Thanks for your question. Payments on the principal loan amount are never deductible regardless of the form of business organization. You deduct interest on the loan plus a depreciation allowance. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Proceeds - charity auction, irs form 8283, charity auction
irs form 8283, charity auction, business vehicle: Bill, If you receive the $2,000 from the sale at the auction. you can choose to consider it as a capital gain. You would pick up the cost basis from whomever gave you the gift. Their cost basis would become your cost basis. You would only pick this up...

Tax Law (Questions About Taxes): do I have to pay estimated taxes, estimated taxes, turbotax
estimated taxes, turbotax, tax situation: Debra, Thank you for your question. The estimate set up is what they refer to as a protective estimate. The rule is either you cover last years tax or you pay in what you estimate your tax liability will be in 2009 with in 90 percent in order to avoid...

Tax Law (Questions About Taxes): penalty abatement, penalty abatement, payroll taxes
penalty abatement, payroll taxes, would like your opinion: There is just not enough information here to give you an answer. Penalty abatement are based on facts and circumstances and viewed under the prism of reasonable cause . I would need to know all details to give you a good answer. This is not the forum for...

Tax Law (Questions About Taxes): profit from rental property, buying a property, rental property
buying a property, rental property, tax planning: Sorry, but no. Had you exchanged the ME property for the TX property, you could have gotten out tax free. But since you took the money (touched it), you must pay tax on the profit. Also, since the TX house is less than the ME house, you could not have deferred...

Tax Law (Questions About Taxes): Question about filing as a married couple, head of household, married couples
head of household, married couples, educational expenses: Hi, If you are married you can claim educational expenses paid by either of you. If you aren t married he could not claim your educational expenses unless he could claim you as a dependent. Generally it works out better to file a joint return but not...

Tax Law (Questions About Taxes): Question on where to take tax deduction, residential rental property, federal income taxes
residential rental property, federal income taxes, mortgage question: You previously indicated the mortgages were in your name, not the corporation. You need to deduct that interest on your return. However, since it applies to the corporation, you should be collecting interest from the corporation for the amounts you have...

Tax Law (Questions About Taxes): qualified primary residence for taxation, john thanks, stancil
john thanks, stancil, clothing jewelry: Kim, You should not be relying on attorneys so much for tax advice. The Mortgage Forgiveness Debt Relief Act of 2007 made a specific exception, defining primary residence the same as the Sec 121 law that allows taxpayers to exclude gain on the sale of...

Tax Law (Questions About Taxes): qualified tution related expenses, form 1098t, stancil
form 1098t, stancil, education credit: Darnell, Thanks for your question. The 1098-T amounts are not taxable. The amount on 12a depends on the explanatory code that is include alongside the amount. There are well over two dozen codes and more than one relate to education, so I could not...

Tax Law (Questions About Taxes): RE; 1099 for partnership, false 1099, richard fritzler
false 1099, richard fritzler: I am as lazy as the next guy, but . . . They are asking you to issue 1099 s to people that you did not pay. Even if it was just a laziness doing a partnership return is too much work issue; There would be no continuity of transactions. But, you issue...

Tax Law (Questions About Taxes): Real Estate Commission Rebate, irs letter, commission rebate
irs letter, commission rebate, correct description: Patricia: That may be true the agent is rebating some of your money back to you. However, in the income and expense world, when the agent receives their commission along with that commission is also a 1099 reporting the full commission to the IRS. At...

Tax Law (Questions About Taxes): Redemption vs Dividends Distribution, fed state, stancil
fed state, stancil, capital gain: James, Thanks for your question. With a redemption, you are treated as selling the shares, so you will pay tax on the gain (proceeds minus basis). If held for more than 12 months it is given capital gain treatment. With dividends the entire amount...

Tax Law (Questions About Taxes): How Will Refund Be Applied?, james rogers, back taxes
james rogers, back taxes, can of worms: Dear Megan, It s likely the IRS will hold onto your 2008 refund until you file your 200 return. If you were my client and were reasonably sure you are, in fact, entitled to a refund for 2008, I d recommend you file an extension for that year. Then,...

Tax Law (Questions About Taxes): Rent to own of your Residence ?, stancil, lease purchase
stancil, lease purchase, turbotax: Karen, Thanks for your question. No you do not have a business. The income and expense from the rental is recorded on Schedule E. Remodeling expense would be treated as an expense or depreciated over its allowable life depending on the dollar amount...

Tax Law (Questions About Taxes): Rental income received by property manager, maintenance charges, stancil
maintenance charges, stancil, management fee: Abe, Thanks for your question. She is your agent, and she received the funds in 2008 so they are deductible in that years. Likewise for the expenses. Actions taken by your agent are considered to be actions taken by you, when they are taken. Hope...

Tax Law (Questions About Taxes): Rental loss creates negative AGI, taxable interest income, student loan interest deduction
taxable interest income, student loan interest deduction, student loan interest: Hi Lauren your tax return for this year will serve as your future carryover basis remember you loss will be used against future rental profits I see no reason to do a schedule A if the standard deduction is larger however either way carryover losses only...

Tax Law (Questions About Taxes): Rental Property?, miscellaneous itemized deductions, t claim
miscellaneous itemized deductions, t claim, john thanks: John, Thanks for your question. Your CPA filed that improperly. Actually, what you have is what the IRS calls a rental not for profit. You report the rental income from your mother on line 21 of the 1040 as other income. You can deduct the mortgage...

Tax Law (Questions About Taxes): Rental Property Basis, capital improvements, sev
capital improvements, sev, rental property: Hi, If you have no way to prove the $40,000 in improvements, you will have to use the original purchase price. Even if you don t have receipts for the capital improvements, the evidence of, for example, a newer roof or a newer furnace or addition of a...

Tax Law (Questions About Taxes): Rental Property Deductions, tax software program, ford f250
tax software program, ford f250, capital improvements: Clint, Thanks for your question. As far as the truck is concerned, you can take a depreciation deduction, but it must be pro-rated between personal and business/rental use. Since it was a major renovation, probably all of what you did is a capital...

Tax Law (Questions About Taxes): Rental Property - Opinion Requested, renting a home, stancil
renting a home, stancil, charitable contribution: Nathan, Thanks for your question. It sounds to me as if you have a rental not for profit since there is apparently no fixed amount of rent or regular payments. The rental income in these situations is reported on line 21 as other income. Expenses...

Tax Law (Questions About Taxes): Renting a home, business deduction, renting a home
business deduction, renting a home, lease payment: He s going through a lot of cycles of action that net nothing. If the company leases the house from him, he takes the lease payment as personal income and pays taxes on it. If he does not, it increases teh profit in the company which is given to him and he...

Tax Law (Questions About Taxes): Repayment of Moving Expenses, moving expense, moving expenses
moving expense, moving expenses, wages: Claire: She earned the wages, therefore they are required to report the wages. I know it does not seem fair but what she paid to her employer for reimbursement of moving expense is post tax calculation not pre-tax calculation. Her W-2 is correct. Joh...

Tax Law (Questions About Taxes): How To Report Investment Loss, irs form 6781, irs form 1040
irs form 6781, irs form 1040, irs form 1040 schedule b: John, Thank you for your question. 1)If you invested $50,000 and withdrew $50,000 then you did not lose any of your investment , only lost interest income. The interest is reportable on IRS form 1040 Schedule B. 2) If you put $50,000 in your brothers...

Tax Law (Questions About Taxes): Residential Rental Tax Deductions, irs publication 527, irs publication 527 residential rental property
irs publication 527, irs publication 527 residential rental property, income tax return: Hi Jim, Your first assumption is correct: you would carry the passing loss forward to following years. The 15-days refers to renting your house for less than 15 days while using it as a home the rest of the time (which you and your wife did not do). ...

Tax Law (Questions About Taxes): Residential Rental Tax Deductions, irs publication 527, irs publication 527 residential rental property
irs publication 527, irs publication 527 residential rental property, irs form 8582: Jim, Thank you for your question. 1)can we deduct the rental expenses on our federal income tax return? Yes, if you attempted to rent it and was unsuccessful, you can claim all operating expenses. 2)since we had no rental income, we would then...

Tax Law (Questions About Taxes): Residential Rental Tax Deductions, irs publication 527, irs publication 527 residential rental property
irs publication 527, irs publication 527 residential rental property, income tax return: Jim, Thanks for your question. The page 3 reference is to situations where you have a second home, such as a beach cottage that you may rent out as well as occupy. You are not occupying the house at all at present, so it does not apply to you. Go...

Tax Law (Questions About Taxes): Restricted Stock Sale - Taxes, stock awards, restricted stock
stock awards, restricted stock, stancil: Susan, Thanks for your question. Yes, you do need to report that. If you don t the IRS will pick up on the sale price and bill you for taxes based on the sale price and assigning a zero basis to the shares. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): RMD from brokage account, account question, personal account
account question, personal account, ira: No, the date acquired is the day you took it out of your IRA. I misunderstood your question. You and the IRA are different entities and the purchase date does not carry over to you. It is the same as if you went to your broker and bought the stock....

Tax Law (Questions About Taxes): recently seperated, head of household status, social security number
head of household status, social security number, head of household: David, If you file and try to claim the child you and your wife will receive a letter and you and her will have to prove that each is entitled to the child as a tax deduction. Whomever the child lives with will get the deduction, most likely. As a...

Tax Law (Questions About Taxes): relocation expenses paid back, irs publication 17, relocation expenses
irs publication 17, relocation expenses, form 3903: Vicki, Thanks for your question. That is a refundable amount and is not handled exactly either way you suggest. If it was $3,000 or less, it would be a miscellaneous itemized deduction on Schedule A NOT SUBJECT TO the 2% limitation. If it was over...

Tax Law (Questions About Taxes): rent/travel business write off, locum tenens physician, apartment rent
locum tenens physician, apartment rent, hospital employment: The answer is no, once the assignment goes a year or is expected to go a year, there is NO deduction for travel and lodging. Taking employment would make it expected. BTW - if you stay with the agency, but the assignment is expected to last a year, that...

Tax Law (Questions About Taxes): rental question, mortgage interest, stancil
mortgage interest, stancil, real estate tax: Dianne, Thanks for your question. Your daughter can deduct 1/3 of the mortgage interest. The property taxes cannot be deducted by her unless she pays them, so you could deduct the 1/3 on Schedule A. You can deduct the other 2/3 on Schedule E, along...

Tax Law (Questions About Taxes): roth ira excess contribution, roth ira contribution, excess roth ira contribution
roth ira contribution, excess roth ira contribution, excess contribution: Kadie, As long as you do not withdraw the excess contribution, you will owe the 6% tax every year. Changing your filing status in future years does not change the fact you have an excess contribution in 2008. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): S-Corp termination of Sheareholder Interest, corp earnings, s corp
corp earnings, s corp, tax return: Skro, I would just show that you purchased them back for $1. Their share of S corp earnings/loss would be adjusted for the amount of days they held the stock. Your % would increase and their % would decrease at the end of the year to 0. This...

Tax Law (Questions About Taxes): S-Corporation, s-corp, Richard Fritzler
s-corp, Richard Fritzler: You used $10 million of income in your example, and only $1 million of payroll. which would leave $9 million left as passive distribution. If you took 5 million each as earned income or 1/2 million earned and 4.5 passive the net difference is only, 1.45% or...

Tax Law (Questions About Taxes): S corp taxation, s corp, personal funds
s corp, personal funds, business structure: Yes the S-Corp can distribute the money to you. There is no additional tax, since you have already paid the tax. The S-corp is a pass through entity. It passes the tax liability to you and it can pass the money to you. Just write a check to yourself. Being...

Tax Law (Questions About Taxes): Sale of a business, business assets, stancil
business assets, stancil, business loss: Stan, Thanks for your question. No you cannot take a loss for the goodwill from your business. Since you sold assets, you recognize the gain or loss on the sale of those assets. The business at this point had no goodwill since it was no longer in existence....

Tax Law (Questions About Taxes): Sale of inherited house, irs publications, irs agents
irs publications, irs agents, real estate broker: I am basing my answer on 30+ years of tax preparation in which the loss was allowed every time. Multiple cites means multiple code sections. I am sorry, but since this is a volunteer forum, I cannot take the time to research and quote the code sections....

Tax Law (Questions About Taxes): Schedule C vs 1120S, s corp, liability protection
s corp, liability protection, tax advantage: As an S-corp you are REQUIRED to file the 1120-s, the 1120-s will attribute soe things to you personally that can require that you also file a schedule C. The 1120-S is not optional. Because you are filing an 1120-s there can be a nominal tax advantage;...

Tax Law (Questions About Taxes): Schedule C vs 1120S, corporate charter, unincorporated business
corporate charter, unincorporated business, stancil: Dave, If you have a corporate charter, you do not have the option of filing a Schedule C. A schedule C can be filed for a one-owner unincorporated business, a single-member LLC who elects that treatment, or a partnership in which the only partners are...

Tax Law (Questions About Taxes): Schedule D Tax Loss Division - Divorce in Process, irs document, adequate mechanism
irs document, adequate mechanism, john thanks: Alex, This is one of the situations where the IRS does not have a adequate mechanism for addressing the problem. Allowing her to take half of them is a solution, the IRS may or may not pay attention to the note. This, however, is the path I would suggest....

Tax Law (Questions About Taxes): Schedule K-1, marketable security, return of capital
marketable security, return of capital, business income: Jonathan, Thank you for your question. If the loss is passive, then it first needs to be reported on IRS form 8582 to determine is there is a limitation as to being deductible. Then it would appear on page 2 of schedule E under partnership. If you...

Tax Law (Questions About Taxes): Selection of Tax year for estate, ira income, stancil
ira income, stancil, executors: John, You can select the tax year for the estate, but it must end on the last day of any month within a year of death. The longest tax year you can select would be ending Jan. 31, 2010. Each year stands on its own, so the income would be reported in...

Tax Law (Questions About Taxes): Self-Employed W-2 question..., c client, stancil
c client, stancil, c line: Chase, Thanks for your question. A Schedule C owner CANNOT pay himself a salary and report it on a W-2. His compensation is the earnings from the business. It must be reversed and not taken as a Schedule C deduction. If you are preparing taxes professionally,...

Tax Law (Questions About Taxes): Self-employed Health Insurance Deduction, employed health insurance, self employed health insurance
employed health insurance, self employed health insurance, cafeteria plan: Gary, Thanks for your question. The rules state that the insurance must be established by the business or (in the case of a sole proprietor) in the name of the taxpayer. This would disallow you to take the deduction. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Seller financing, investment interest expense, margin account
investment interest expense, margin account, seller financing: Joseph, If you sold the home, then the debt should have gone away. If not then you agreed to continue paying since the proceeds were not enough to cover the mortgage. I would say that the interest you collect from the note assumed is reportable interest...

Tax Law (Questions About Taxes): Selling land, long term capital gain, divorce settlement
long term capital gain, divorce settlement, stancil: Delmar, Thanks for your question. The sale of the land would be subject to income tax - at the preferred capital gain rate. You would pay tax on the gain. To determine gain subtract your basis from the proceeds of the sale. Basis is a transferred...

Tax Law (Questions About Taxes): Severance Pay and FICA, severance payments, severance package
severance payments, severance package, severance pay: Jeremy, Thanks for your question. Your company is WRONG! Severance pay is pay that is given as a result of past service and should be included on your W-2. In addition, they are required by law to withhold the FICA taxes and to pay their half. Since...

Tax Law (Questions About Taxes): Short Sale Tax Laws for 2008, bankruptcy chapter 11, help shari
bankruptcy chapter 11, help shari, stancil: Shari, Thanks for your question. The law only applies to your principal residence, there is no exclusion for rental units. The long-standing exception of bankruptcy (Chapter 11) and insolvency still apply to all canceled debt, however. Also, as...

Tax Law (Questions About Taxes): Short Sale and taxes, chapter 13 bankruptcy, john thanks
chapter 13 bankruptcy, john thanks, investment land: Tony, Thanks for your question. The bankruptcy did not cancel your debt so it cannot be included in the bankruptcy for tax purposes. To prove insolvency you must list the fair market value of your assets - everything you own including pension plans,...

Tax Law (Questions About Taxes): Signing W-9, tax id number, part time job
tax id number, part time job, stancil: Chrisie, Thanks for your question. Maybe not the best of business practices, but it is just a request for a tax ID number. That number has to be obtained by the contractor in order to properly issue a 1099. However, if he was an employee rather than...

Tax Law (Questions About Taxes): Simple versus complex trusts, personal tax returns, stancil
personal tax returns, stancil, trust document: To call it a complex trust requires that the trust documents be changed, as it specifies that it is simple. And the fact remains it was a simple trust during that period of time. Changing it to a complex trust would not be retroactive. Amending past returns...

Tax Law (Questions About Taxes): Single Entity LLC Interest Expense, home mortgage interest, cash out mortgage
home mortgage interest, cash out mortgage, estate interest: I understand your intent, and I understand your question, and the answers to your questions is YES. However. . . 1. You will be hard pressed to find a lender that will lend on your existing home right now; and, All you are doing is shifting taxes....

Tax Law (Questions About Taxes): Social Security Taxes, social security tax, religious opposition
social security tax, religious opposition, tax accountant: Ron, Thanks for your question. You can stop paying s.s. taxes when you stop having earned income. Ministers have the choice to opt out of social security but the irrevocable election must be made by the due date of the second year in which you had...

Tax Law (Questions About Taxes): SS Tax working for a foriegn company (UAE), social security tax, irs rules
social security tax, irs rules, stancil: Lee, Thanks for your question. You don t state if you are a U. S. resident, I assume that you are. The IRS rules state that if you are a resident of the U. S. and have employment from a company outside the U.S., you are subject to social security...

Tax Law (Questions About Taxes): SSDI and Childcare, self employment tax, ssdi benefits
self employment tax, ssdi benefits, nanny tax: Crystal, Thanks for your question. You file an amended return Form 1040X, reporting the income on Schedule C. You can deduct any expenses you may have incurred in earning the money. This will reduce your taxes if you have expenses. You will also need...

Tax Law (Questions About Taxes): SSDI & Tax Dependent, medical appointments, mortgage payment
medical appointments, mortgage payment, tax preparer: Hi, If you provide more than half of her support you can claim her. Her support includes the fair rental value of her share of the home (not a portion of your mortgage payment) as well as food, utilities, transportation, clothing, entertainment and medical...

Tax Law (Questions About Taxes): CAN I STILL DO A 2004 TAX RETURN, 1040a form, extenuating circumstances
1040a form, extenuating circumstances, stancil: Ron, Thanks for your question. The IRS is not obligated to issue a refund that is filed for more than three years after the due date. This date would have been April 15, 2008. However, they will sometimes issue refunds, especially in extenuating...

Tax Law (Questions About Taxes): State residency, deloite touche, collecting unemployment
deloite touche, collecting unemployment, residency question: Mike: You are a resident of some state. There is no such citizen who is a non resident of a state. Usually you are the resident of the state that you are legally registered to vote. If you were not a resident of a state you could not draw unemployment...

Tax Law (Questions About Taxes): State Tax, state tax return, hotel expenses
state tax return, hotel expenses, state taxes: Hi Naveen for state tax return you are a NC RESIDENT by spending more than one year you are now NC resident and are no longer on a temporary assignment so the Per Diem becomes taxable income at both the Federal and state my suggestion to you is discuss...

Tax Law (Questions About Taxes): State Taxes, arizona department of revenue, james rogers
arizona department of revenue, james rogers, retirement funds: Dear Tom, If you spend 90% of your time in AZ, it sounds as though that is your tax domicile. Other indicators include where you have your driver s license and are registered to vote. In this case, you should file an AZ resident return. I don t know...

Tax Law (Questions About Taxes): Out of State Taxes, connecticut department of revenue, reciprocity agreements
connecticut department of revenue, reciprocity agreements, state income taxes: Dear Rick, Generally speaking, you pay state income taxes in the state in which you live (your tax domicile). If the state where you work taxes income earned there, you should be able to take on your home state s tax return a credit for taxes paid to another...

Tax Law (Questions About Taxes): State tax deductions, richardfritzler, llc or corporation? Nevada or Not?
richardfritzler, llc or corporation? Nevada or Not?: To adequately explain, I m going to have to dissect your question. Please don t think I m trying to twist anything. You ve made some statements that can be true, but we can t make the logical leaps that you have made and stay on firm ground. First, let...

Tax Law (Questions About Taxes): State back tax problem, tax warrant, federal returns
tax warrant, federal returns, statue of limitations: Hi Sam I doubt that you could get the information that far back and your explanation would get complicated However and I am not an attorney so I can not give you legal advice but I think that in this case the statue of limitations would apply if NY made...

Tax Law (Questions About Taxes): Employing family members, federal unemployment tax, irs rule
federal unemployment tax, irs rule, sole proprietorship: Of course it is expenses on Schedule C - it is a business expense. The only limits are that the family member must be paid a reasonable rate for work actually performed. You have a problem. A sole proprietorship is, by definition, one person. If you...

Tax Law (Questions About Taxes): Sub S general questions..., COBRA, Richard fritzler
COBRA, Richard fritzler: Of the $75k how much of that do you need to cover: Personal rent, groceries, utilities and vehicle costs? If there is more than that. that is where the taxes start to play in. I m going to grab $40k as a starting number that you need as part of total family...

Tax Law (Questions About Taxes): s corp income, s corp, accrual method
s corp, accrual method, accrual basis: HI Cassie you purchased an asset so any money you get is not considered income eventually you may even have a write off as I doubt you will be able to collect all of it.Since you have accounts receivable you must use the accrual basis PS I do not understand...

Tax Law (Questions About Taxes): sale of land, poconos, mother in law
poconos, mother in law, mother and father: Your MILs basis is one half of what his sister paid for the property and one half the date of death value of your FIL. Subtract your sales price from that and that will give you your gain or loss. If a gain, you will have to file a PA return. Helen,...

Tax Law (Questions About Taxes): sale of rental property, hurricane katrina, buyowner
hurricane katrina, buyowner, rental property: Judy, Thank you for your question. I do not understand your term buyowner . If you rented your place to a tenant with an option to buy, then I understand. Either way, if you have rental property and you sell the property for less then it cost, less...

Tax Law (Questions About Taxes): school, child care expenses, irs instructions
child care expenses, irs instructions, form 2441: If the care for the child is just for watching the child and not education then it can be considered child care expenses reportable on IRS form 2441. Child care expenses do not include the cost of schooling for a child in kindergarten or above, according to...

Tax Law (Questions About Taxes): section 179, section 179 deduction, side job
section 179 deduction, side job, purchasing equipment: Hi Karen unless you have other business income a section 179 deduction would be of no use to you so you are better off with the required depreciation The three of five years is not exactly correct if your motive is to make a profit you may have more...

Tax Law (Questions About Taxes): Are securities that are inherited taxable under Federal Law?, gross proceeds, cost basis
gross proceeds, cost basis, federal tax: Corrine, The IRS is reporting the gross proceeds you received. They do not know your cost basis on the stocks you sold. The cost basis would reduce any gain you would report to IRS. You are entitled to the Fair Market Value of the securities sold as...

Tax Law (Questions About Taxes): selling family home from trust, stancil, tax experts
stancil, tax experts, tax advice: Joannne, Thanks for your question. What your friend was referring to is that if you lived in the house for 24 of the previous 60 months you could exclude gain on the sale. However, you may be in a better situation. Your basis in the house is the...

Tax Law (Questions About Taxes): short sale taxes, time lisa, mortgage companies
time lisa, mortgage companies, pmt: Lisa: If the bank forgave money owed on the mortgage he/she could owe income tax on the forgiven money. IRS requires in some cases for the borrower to treat the forgiven money as income for tax purposes. Mortgage companies are not in the business of providing...

Tax Law (Questions About Taxes): small business: personal loan, personal funds, repayment terms
personal funds, repayment terms, dear mr: Miguel, Thanks for your question. The loss is probably deductible. How to deduct it, however, depends on a number of factors. What was the legal form of the organization? Was the loan made to preserve your investment or to protect your employment?...

Tax Law (Questions About Taxes): How to split deductions when married but filling separately, james rogers, property tax deductions
james rogers, property tax deductions, domestic disputes: Dear Glen, Generally speaking, the married filing separately filing status is the worst in terms of tax obligation per dollar of income. The IRS doesn t care which of you takes the deductions as long as no more than the total amount of each deduction...

Tax Law (Questions About Taxes): My spouse is a non-resident living in his country, non resident alien, head of household
non resident alien, head of household, stancil: Kallee, Thanks for your question. If your spouse is a non-resident alien, you must file as single or head of household (if you qualify). However, you can choose to treat your spouse as a resident and file jointly. This would require him to get a SS...

Tax Law (Questions About Taxes): Which state? State tax question, state income tax, boise id
state income tax, boise id, income subject: Tara: As always you must pay income in the location that you earn wages/income subject to income tax. If your state (has a state income tax) of residence is not the state in which you earned the income you will be subject to state income tax in that state...

Tax Law (Questions About Taxes): state tax, income tax form, state income tax form
income tax form, state income tax form, time in pennsylvania: Hi Scott as a PA resident all your income is subject to PA income tax However as to your earnings in MA you would need to file MA non resident, if your earnings are more than the MA minimum (if you pay anything to MA you would get to deduct from your...

Tax Law (Questions About Taxes): state tax filing, owing money, eaton
owing money, eaton, state tax: Stan, I would say that since you live in IN, then you report all income to IN. You would file a return for OH taxing her income earned in Eaton , OH. Any taxes computed in OH would then be treated as a tax paid to another state on your IN return . This...

Tax Law (Questions About Taxes): state taxes on profit shearing, unemployment compensation, state of kentucky
unemployment compensation, state of kentucky, qualified retirement plan: Stanly, Thanks for your question. Unemployment compensation is taxable in Kentucky. Profit sharing that is not a part of a qualified retirement plan is taxable. If it is structured as a qualified retirement plan, up to $41,110 is not taxable. ...

Tax Law (Questions About Taxes): stock transactions, stock transactions, stancil
stock transactions, stancil, brief description: Don, Thanks for your question. A wash sale occurs when you sell stock and purchase replacement stock within 30 days before or after the purchase. Based on your brief description, I do not believe this has occurred, but I cannot be certain without more...

Tax Law (Questions About Taxes): subcontracting, self-employed taxes
self-employed taxes: You should save approximately twenty five to thirty three percent of your net profit from this business to cover your federal and state income taxes, PLUS the so-called Self-Employment (SE) tax that will be due in lieu of the the Social Security taxes that...

Tax Law (Questions About Taxes): subcontracting laws, federal income tax, subcontractor
federal income tax, subcontractor, bookkeeping: Pam: I need more information. All business are subject to Federal Income Tax laws, the forms required to be filed depends on your bookkeeping records handling of income and expenses. Type of organization, corporation, partnership, or LLC further defines...