About Experts Sitemap - Group 51 - Page 3 2015-08-25

Tax Law (Questions About Taxes): Transferring personal property to business., self employment tax, personal tax return
self employment tax, personal tax return, sole proprietorship: Absolutely you can contribute it to the corporation. There are tax implication. You can retain it personally and have the corporation consign and sell it for you. There are tax implications. You can abandon it as scrap right now and the corporation can acquire...

Tax Law (Questions About Taxes): taking care of mother, social security and medicare, federal income tax
social security and medicare, federal income tax, tax time: Hi, She can pay you with a W2 and withhold social security and medicare and pay her share of social security and medicare by filing a Schedule H with her tax return. She can also withhold Federal Income Tax if you want her to do that. Regards, Carol...

Tax Law (Questions About Taxes): tax fraud in undesignated offerings?, legal ramifications, tax fraud
legal ramifications, tax fraud, stancil: If the church is holding a special offering for a specific purpose - evangelist, parsonage renovation, whatever, contributions to that fund are tax deductible. What is not deductible is a situation where a member gives an amount designated to the church...

Tax Law (Questions About Taxes): tax implications, party transaction, stancil
party transaction, stancil, tax implications: Iadora, Thanks for your question. The loss on the sale is not deductible for two reasons, either one of which would cause the loss to be not deductible. First, the house is considered a personal-use asset and you cannot deduct losses on personal-use...

Tax Law (Questions About Taxes): tax implications of partnership loan interest, personal tax return, investment interest expense
personal tax return, investment interest expense, deductible expense: Steven, What type of entity is the business? If it is a Schedule C then no. If the business is a partnership, then only the interest would be allow as an allocation to the other partners. On your return the interest may be considered as a pass thru...

Tax Law (Questions About Taxes): tax implications of partnership loan interest, pro rata share, interest question
pro rata share, interest question, deductible expense: Think of it this way... If he loaned the money to a non affiliated entity, he would pick up all the interest income from the money he made from them - so it make sense he recognizes the income for making the loan to the related partnership. and... ...

Tax Law (Questions About Taxes): tax implications of partnership loan interest, irs rules, interest question
irs rules, interest question, deductible expense: Hi Steven if the partner contributes capital then the partnership agreement would have to be followed relating to partner s draws also watch out for the IRS rules regarding implied interest, ie, if the partner borowed the funds and is taking an interest deduction...

Tax Law (Questions About Taxes): taxes on a class action lawsuit settlement, settlements, lawsuits
settlements, lawsuits: Lori, Compensatory Generally speaking, most people view the term compensatory to mean nontaxable. However, as the above examples reflect, determinations of the taxability of lawsuit awards cannot always be made simply by referring to the terminology...

Tax Law (Questions About Taxes): taxes on stipends, form 1099 misc, income tax return
form 1099 misc, income tax return, random distributions: kudos for your work. First... instead of offering a stipend, create an accountable plan and then you get clean clear deductions and they dont have to pick up any of that income. second, if you exceed $600 for nonaccountable plan payments (random distributions...

Tax Law (Questions About Taxes): taxes on stock, stancil, capital gain
stancil, capital gain, taxable income: Sylvia, Thanks for your question. If you have owned the stock for more than 12 months, it will be taxed at the favorable capital gain rate. That rate is zero or 15% on the profit (not the sale price) depending on your filing status and taxable income...

Tax Law (Questions About Taxes): taxi driver taxes, irs forms, independant driver
irs forms, independant driver, self employment taxes: Tony, Thanks for your question. It sounds as if your records are pretty good. I would advise you to keep any receipts or canceled checks to support what is in the book. You will report your income and expenses on Schedule C. You will also need Schedule...

Tax Law (Questions About Taxes): taxing ira withdrawals, ira withdrawals, tax liability
ira withdrawals, tax liability, income taxes: Michael, If you are over 59 1/2 , you can start to take distributions from your IRA without a penalty of 10 percent. The distributions would be subject to income taxes. You probably will not be able to spread the tax liability over 3 years. There is no...

Tax Law (Questions About Taxes): is term insurance a writeoff for a business?, sole proprietorship, wholesale operation
sole proprietorship, wholesale operation, dave thanks: Dave, Thanks for your question. The life insurance is not deductible if it is on you and your wife. It it is for employees, you can take a deduction. If using a Schedule C , the donated materials are deducted on line 36 as materials withdrawn for...

Tax Law (Questions About Taxes): Unemployment, unemployment rules, market crash
unemployment rules, market crash, unemployment benefits: GiGi: I am sorry but your bother has taken himself out of the ability of drawing unemployment. Unemployment rules are very straightfoward. You must have earned wages in 3 of the 4 quarters that are in the base period. Currently the base period is 3rd...

Tax Law (Questions About Taxes): Unemployment benefits, unemployment eligibility, louisiana drivers
unemployment eligibility, louisiana drivers, federal adjusted gross income: JS: I can not answer that question. You may owe taxes in both states. You will need to look at a tax return and determine the answer. I do not live in either state and have never filed a return for some one from those states. Each state have different...

Tax Law (Questions About Taxes): Unemployment / part-time S-Corp income, full time job, collecting unemployment
full time job, collecting unemployment, unemployment check: Steven, If your goal to avoid issues, I would report income as the EDD requests. However, I do not think that S-Corp income has a bearing on your unemployment since no UI taxes are paid on S-Corp income. You should check with EDD about this to confirm....

Tax Law (Questions About Taxes): Unemployment tax law, adjusted gross income, unemployment tax
adjusted gross income, unemployment tax, writing resume: Pat, Thanks for your question. Only to the extent it is used for your job search. You would have to depreciate it, based on the cost and the percent of time it is used for that purpose. It would be a miscellaneous itemized deduction. You can deduct...

Tax Law (Questions About Taxes): Use of Company assigned vehicle, Employee personal use of company vehicle
Employee personal use of company vehicle: Your personal use of the vehicle is a taxable benefit that you receive. Your commute for example is a personal use, even though you are on call. There are no exclusions for this. It appears your company is correctly handling your personal use of the vehicle....

Tax Law (Questions About Taxes): a variable annuity that is taxed as ordinary income, variable annuity, capital losses
variable annuity, capital losses, stancil: Sandra, The annuity is ordinary income, as you have observed. You cannot use passive or capital losses to offset this type of income (other than up to $3,000 of capital loss). You are pretty much stuck paying the taxes, no way to offset the gain. Hope...

Tax Law (Questions About Taxes): W-2, lancaster ca, 2s
lancaster ca, 2s, severance: Hi James, You won t get it until January. Employers can only generate W-2s after the payroll year has ended. Even if you did get it earlier, you could file your 2009 tax return until January 1, 2010 anyway. Bruce W. Tyler, EA Lancaster, CA....

Tax Law (Questions About Taxes): Withdrawal from Rollover IRA, rollover ira, financial hardships
rollover ira, financial hardships, paying taxes: Shirley: Unless you are 591/2 years old or older and the reason you need the money does not qualify as a hardship as defined by the IRS your withdrawal will be penalized and you will pay the higher tax rate of 35%. You will not have to pay interest unless...

Tax Law (Questions About Taxes): Withholding Allowance Form (Claiming Extra Dependents), withholding allowance, income bracket
withholding allowance, income bracket, lancaster ca: Bryce, Sure, go ahead. If your GF is going to make about 12K and assuming there are no children, her tax liability will be around $250-$300. Just make sure enough is withheld from her check so the withholding at year end equals about this much. ...

Tax Law (Questions About Taxes): Working tax exempt overseas, but not for the entire 330 days, physical presence test, earned income exclusion
physical presence test, earned income exclusion, foreign earned income exclusion: Ronald, Thanks for your question. That is correct. In order to meet the physical presence test you must be physically present in a foreign country for 330 days in a 12-month period. If you don t meet this test you cannot take the foreign earned income...

Tax Law (Questions About Taxes): w-4, lancaster ca, department of revenue
lancaster ca, department of revenue, google: Amy, I would contact your state department of labor (or it s equivalent). If you do not know who that is, call the Department of Revenue for your state and ask them. A Google sewacrh should yield results for you. Take care, Bruce W. Tyler, EA...

Tax Law (Questions About Taxes): w4 wiithholding, medusa, ramifications
medusa, ramifications, stubs: a. set aside a bunch of money for april 15 next year. b. complete a new w4 and submit it to employer. enter some number (projected tax due/number of pay periods left in the year - dont forget to adjust for next year and do it again). c.if you submit...

Tax Law (Questions About Taxes): back wage insurance award settlement, back wages, medicare tax
back wages, medicare tax, 1099 misc: Donna, Normally you will receive 2 forms - the back wages will be on a W-2 (yes, the employer will pay their half of the FICA/Medicare), and a 1099-MISC showing the damages portion. Look at the 1099-MISC carefully though - oftentimes the figure is...

Tax Law (Questions About Taxes): 1033 Involuntary Conversion, spoiled brats, care dentistry
spoiled brats, care dentistry, involuntary conversion: ok.. I am in awe. very cool actions. and you are obviated from my push to get people to do chartible good instead of buy more play stations for already spoiled brats :) that said, the debt only plays a part if you have used it for basis calculations and...

Tax Law (Questions About Taxes): 1099-Misc Non-Employee income, self employment tax, ira deduction
self employment tax, ira deduction, medicare tax: Thanks for the clarification. I still think that it cannot be treated as Schedule C income, since it is having FICA and Medicare taxes withheld, along with income tax. I would add that if you do include it on a Schedule C, it would have to be a second...

Tax Law (Questions About Taxes): 1099 and NYS unemployment, unemployment claims, 51 states
unemployment claims, 51 states, unemployment benefits: Ms. Klein: I assume that you have not file unemployment tax reports on your wages/earning. I also assume that you have reported your wages/earnings for city/state/ and federal income tax purposes. With that said, the contract does not state where your...

Tax Law (Questions About Taxes): 1099C
The question is DO you have income in the current year that you need to report with or without the 1099. NOT if they will actually send you a 1099. Forgivness of debt occurs when they can no longer recover the debt and the year in which this occurs, you...

Tax Law (Questions About Taxes): 2-member LLC for rental property, Partnership Contribution of Encumbered Property
Partnership Contribution of Encumbered Property: I will assume that the property title is held in the name of the LLC already. I will also assume that you bought the property in your name originally to match the loan documents. Therefore, you contributed property to the LLC that was encumbered. I will...

Tax Law (Questions About Taxes): 2007 1099B*, double taxation, back taxes
double taxation, back taxes, tax money: Jim: It is possible that the account made $5,000.00 in profit and the profit was over looked by the manager. If it were me, I would be contacting the manager and the IRS and determine exactly what they are having a problem with not being reported. ...

Tax Law (Questions About Taxes): The 330 full day requirements for Foreign Earned Income form 673, foreign earned income, earned income credit
foreign earned income, earned income credit, american expat: Paul, If you are out of the country for less than 330 days in a 12 month period, you do not qualify for the foreign earned income credit. You may, however, qualify under the bona fide resident rule. You state you are an expat, so you may qualify. Basically,...

Tax Law (Questions About Taxes): 401K, state income tax, federal income tax
state income tax, federal income tax, time homebuyer: Hi, If you withdraw money from a 401(k) you will pay ordinary income tax, at whatever rate your total income, deductions and exemptions dictate. If your state has a state income tax, you will pay that in addition to Federal income tax. If you qualify...

Tax Law (Questions About Taxes): 401K with drawl befor tax hike, time value of money, bush tax cut
time value of money, bush tax cut, roth conversion: is not that simple. how much other income do you have. how much do you have qualifed assets (401k and ira). how healthy are you? family history for longevity? yes, most expect high rate income tax to go up, but if you only take out $30 or 40k per year,...

Tax Law (Questions About Taxes): 401K early withdraw, 401k account, divorce settlement
401k account, divorce settlement, divorce decree: Dana, Thanks for your question. You will have no tax consequences. The withdrawal is taxable income to your husband. Assuming the withdrawal is included in the divorce decree, he will owe tax, at regular rates, on the withdrawal, but there will be...

Tax Law (Questions About Taxes): 401K withdrawals, 401k withdrawals, social security tax
401k withdrawals, social security tax, social security and medicare: Hi Denise, 401K withdrawals are considered ordinary income subject to federal income tax not subject to the 10 percent penalty if the distributions are taken once you reach 59 1/2. They are not subject to social security and medicare. The social security...

Tax Law (Questions About Taxes): 401k, irs levy, alternate payee
irs levy, alternate payee, traditional ira: Hi, In order to avoid tax you have to roll the 401(k) to a Traditional IRA or another employer s qualified plan. There are exceptions to the penalty. They are (1) distribution made to an employee who has attained age 55 and separated from service;...

Tax Law (Questions About Taxes): $8000 First-time home buyer credit, first time homebuyer, time home buyer
first time homebuyer, time home buyer, first time home buyer: Yakov, As long as you are a first time homebuyer, and you meet the income requirements, then you can qualify and file the IRS form and claim the credit. The only hitch is that you need to be considered a first time home buyer: Must be the “main home”...

Tax Law (Questions About Taxes): Adoption tax credit, adoption tax credit, adoption credit
adoption tax credit, adoption credit, resident alien: Michael, Thanks for your question. You are correct, you cannot take the adoption credit until the adoption is finalized, so that appears to be your 2010 return for you. You are just going to have to wait. Since the adoption is not finalized, and he...

Tax Law (Questions About Taxes): "Article of Agreement" question, please!, cake business, first house
cake business, first house, snag: Tammy, Thanks for your question. First, receiving payments in cash and not reporting it is fraud. Second, she would not owe taxes on the entire purchase price, just on her gain from the sale. Gain is the excess of the sale price over her basis (cost)...

Tax Law (Questions About Taxes): attending 2 different schools, irs purposes, time status
irs purposes, time status, medusa: yes. what is the requirement for full time status? what is her class load? you might need to notify one school (main one?) that she is taking courses elsewhere... but on a much larger scale, why bother with the old school grade. unless the new school transferred...

Tax Law (Questions About Taxes): Bad Loan Loss, www irs gov, deposit monies
www irs gov, deposit monies, private question: not every situation is the same... and there are many other factors which go into a return. one whitewash answer for you is an inferior way of looking at the world - let alone for your friends or associates. sometimes it is best not to change your own...

Tax Law (Questions About Taxes): Beneficiaries K-1 Reporting, state tax exemption, u s savings bonds
state tax exemption, u s savings bonds, cash proceeds: not a simple answer to a complicated question. various scenarios are possible all with very different implications/ramifications. IRS 454 is the key provision here. estate elect (note that requires action) to report on final 1040 - lower rates almost...

Tax Law (Questions About Taxes): Boyfriend/Foodstamps, taxation of food stamps
taxation of food stamps: Food stamps are not taxable and will not affect your income taxes. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any...

Tax Law (Questions About Taxes): Business Start up, cpa president, business advisory services
cpa president, business advisory services, mary kay: Hi Diana, In order to keep track of your income and expenses it would probably be easiest to buy an accounting software, such as Quickbooks, which is approximately $200. You should record all your sales and expenses in that software. Unfortunately...

Tax Law (Questions About Taxes): Business Travel Expenses, business travel expenses, sole propietor
business travel expenses, sole propietor, apartment rent: Anita, Thanks for your question. If the work for this particular business is for more than 12 months or is for an indefinite period of time, the expenses are not deductible. If the work is for less than 12 months, you can deduct the apartment rent...

Tax Law (Questions About Taxes): Business Travel Expenses, business travel expenses, sole propietor
business travel expenses, sole propietor, apartment rent: Hi Anita sorry for the delay in answering if this location is less than 50 miles from your home it would not qualify as a temporary residence Also be sure the lease is for a short period of time as if you spend more than 183 days there it will be...

Tax Law (Questions About Taxes): business v. commuting mileage & related expenses, business mileage, mgmt services
business mileage, mgmt services, overnite: Hi Steve the rule is that any travel over 50 miles is not considered commuting if the travel is under 50 miles the first and last trip are comuting also any over night stay on your trips would be deductible as well as your meals if you stay overnit...

Tax Law (Questions About Taxes): How does buy-out price affect property-tax value?, property tax purposes, federal tax return
property tax purposes, federal tax return, mortgage purposes: Hi Susan, Excellent questions! First, I am going to assume you live in a state where property taxes are based on the assessed value of the home. a) The property taxes are based on the assessed value of the home so the $50,000 buyout will not affect...

Tax Law (Questions About Taxes): Ca Rental property to Primary Residence, www irs gov, irs publication
www irs gov, irs publication, publication 523: general rule is 2 out of last five with intermittent absenses not deducted. but remember there is recapture of previous depreciation and new rules for splitting if you own two homes at the same time (assume they recently sold their old main home? from...

Tax Law (Questions About Taxes): Capital Gains on Warranty Deeded House, Transfer of intrest in real property with a retained life estate.
Transfer of intrest in real property with a retained life estate.: You are right as far as the transfer of legal title goes. Actual conveyance of legal title to the remainderman does not occur until the holder of the life interest dies. When your father transfer his residence to you with a retention of a life estate in...

Tax Law (Questions About Taxes): Capital gains on gold coins, gold coins, irs website
gold coins, irs website, capital losses: Brendan: If the argument is good the IRS could allow coins to be treated as an investment. It all depends on how they were acquired. If they were acquired for their value as an old coin rather than their value as gold or silver then you would be correct....

Tax Law (Questions About Taxes): Capital gains tax on land sale, cass county mo, capital gains tax rates
cass county mo, capital gains tax rates, long term capital gain: Hi, The sale will be taxed as a long term capital gain at a maximum rate of 15% (at least until Congress changes the capital gains tax rates). To calculate your gain you deduct your purchase price from your selling price. You can deduct costs of the...

Tax Law (Questions About Taxes): Capital loss carry-over..., capital loss carryover, real estate capital gains
capital loss carryover, real estate capital gains, relevant paperwork: Sylvain, First of all, if you sold your first house and had a loss, you were probably not entitled to the capital loss. So I would suggest you either amend your prior returns or just forget using the capital loss carryover. If you do sell the second...

Tax Law (Questions About Taxes): Capital or revenue receipts, revenue receipts, irs section
revenue receipts, irs section, gross income: the world is not that black and white, but since you seem hellbent on one single answer, the first place to start is in the US code - IRS section 61(a): Except as otherwise provided in this subtitle, gross income means all income from whatever source derived...

Tax Law (Questions About Taxes): Charitable Contribution, stancil, needy family
stancil, needy family, car need: Sorry, I saw that part, and failed to answer it. I had about 6 questions come in at the same time and I was trying to get them all done before I needed to sign off. The car does not need to be titled in the name of the church. John Stancil, CP...

Tax Law (Questions About Taxes): Charitable Donations, www irs gov, stock losses
www irs gov, stock losses, irs rules: be very careful to document and get perfect receipts. and dont gouge the prices. note the irs rules require the clothign to be in good shape (see pub 526 for rules). http://www.irs.gov/publications/p526/ar02.html the limitation for charitable donations...

Tax Law (Questions About Taxes): Child-care FSA, day care provider, child care provider
day care provider, child care provider, taxpayer id: Laura, Thanks for your question. You must provide the taxpayer ID for the child care provider or you cannot deduct those costs. If you do not claim reimbursement for the full $5,000 you lose the amount not reimbursed. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Church tax question, unrelated business income, property tax exemption
unrelated business income, property tax exemption, stancil: Gordon, Thanks for your question. The sale and subsequent collection of interest from the pastor would not subject the church to any income tax. Renting the property to a not-for-profit organization would not subject the church to income if their...

Tax Law (Questions About Taxes): Claiming Dependent after Divorce
this is really a decree and legal matter not tax. to get a dependency exemption, you need to pay half, and some med and braces does not likely make it to half. and if you did take the second child, he woudl surely take her too - resulting in a discrepancy...

Tax Law (Questions About Taxes): Claiming losses for winnings, www irs gov, irs publication
www irs gov, irs publication, lancaster ca: Sonnie, I am not aware of this issue. I researched a number of sites and could noy come across anything that matches what you stated. Here is a link to the IRS publication: http://www.irs.gov/publications/p529/ar02.html#en_US_publink100027013 ...

Tax Law (Questions About Taxes): Classic Cars, honest belief, bad fish
honest belief, bad fish, comr: mmmm... first read section 183 - hobby loss rules. snipet of pertinent quotes below: For the expenses to be deductible under IRC §§ 162 or 212, the taxpayer must engage in or carry on an activity to which the expenses relate with an actual and honest...

Tax Law (Questions About Taxes): Company Car, payroll check, wheel chair
payroll check, wheel chair, stancil: Ken, Thanks for your question. Yes, the personal use of the company car will be taxable income to you. However, the amount of income is based on personal use vs. company use, so if you don t use the car much, there will not be much income to you. At...

Tax Law (Questions About Taxes): Condo Association Common Property, new jersey turnpike authority, new jersey turnpike
new jersey turnpike authority, new jersey turnpike, settlement proceeds: JoAnn, Thanks for your question. Normally, unless the association distributed the proceeds to the owners, it should be the liability of the association. The tax would be on the gain, not the sale price, so the association would have to provide each of...

Tax Law (Questions About Taxes): Contracted Labor, denise thanks, own marketing
denise thanks, own marketing, stancil: Denise, Thanks for your question. That is pretty much a federal questions, although states may have different rules when it comes to unemployment taxes. I would refer you to Form SS-8 which can be used to determine their status. You can review the...

Tax Law (Questions About Taxes): Corporate Donations, kidney pancreas transplant, donee organization
kidney pancreas transplant, donee organization, corporate donations: if the recipient donee organization is a 501c3, a corporation can deduct what amounts to essentially 10% of income, with any overage carried forward. a profitable corp can deduct a huge amount. a not profitable corporation can deduct even nothing. they...

Tax Law (Questions About Taxes): Corporate Owned Life Insurance Proceeds, Corporate Life Insurance Proceeds Journal Entry
Corporate Life Insurance Proceeds Journal Entry: Under Internal Revenue Code Section 101, Proceeds of life insurance contracts payable by reason of death are specifically excluded from income. The journal entry when you receive the proceeds from the policy on the books of the LLC are as follows: ...

Tax Law (Questions About Taxes): california taxes, california property taxes, california taxes
california property taxes, california taxes, medusa: no clue. live as far from calif as i can pretty sure they do have a homestead exepmtion and they assess upon transfer, so you could live in a house next door to exact same home who lived there for 40 years and they pay a fraction of what you pay. but that...

Tax Law (Questions About Taxes): cap gain on land sale, marginal tax bracket, long term capital gain
marginal tax bracket, long term capital gain, tax implication: Diane, Thanks for your question. Actually you do not pay tax on the gain. Since the selling price was $1 it is considered a gift and your parents basis transferred to you. Your gain is the difference in your basis and the selling price (minus costs...

Tax Law (Questions About Taxes): change in basis, Basis of Property
Basis of Property: Hi Anna, I am not sure what the fair market value from 2003 is being used for with regard to your basis, unless you inherited the property. If you did inherit the property in 2003, then your starting basis would be the fair market value at the date of...

Tax Law (Questions About Taxes): are chargebacks tax deductable?, schedule c, medusa
schedule c, medusa, w2: if netted out and all you get is the 1000 and the full 2000 is not included in your w2, then you are alreay whole with no deduction available. no? if you still included the original whole amount with the 1k as a reduction from your net pay, yes - you would...

Tax Law (Questions About Taxes): charitable deductions, charitable deductions, charitable organization
charitable deductions, charitable organization, medusa: you are such a lazy piece of $hit... you should be banished from being a cpa. good luck with that exam! and of course, the question is trying to teach you a basic concept - one which you have failed to grasp. Go back and read the homework again; it is...

Tax Law (Questions About Taxes): charitable donations, irs tax deduction, www irs gov
irs tax deduction, www irs gov, left hand corner: I respectfullt disagree with your assessment that if you make a donation to Red Cross and your employer only gives prizes to those who contribute then the original donation has a quid pro quo attached to it and the whole thing is tainted. I would not sign...

Tax Law (Questions About Taxes): claiming a loss, interest on the loan, stancil
interest on the loan, stancil, personal residence: Valerie, Thanks for your question. If the house was a personal residence, the loss or the interest is not deductible. If it was a rental or business property, the loss would be deductible, as would the interest. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): claiming real estate losses on taxes, mortgage company, investment capital
mortgage company, investment capital, perfect world: to your last point and only question - no. well, maybe. but that said, there are always several issues... did they foreclose while she owned it? or after she passed (did they take title to it? - which seems unlikely if they gave it back to you ...

Tax Law (Questions About Taxes): college tution, college tution, dependency exemption
college tution, dependency exemption, school expenses: Brenda, Thanks for your question. You cannot claim him as a dependent as he does not live with you. In addition, if he has $3,650 or more in gross income you could not claim him. Since you cannot take a dependency exemption for him, you cannot deduct...

Tax Law (Questions About Taxes): comm. chargebacks, itemized deduction, money
itemized deduction, money: Hi, If the income and the charge back occur in the same year, it would not be deductible. If the income occurs in one year and the charge back in the following year, it would be deductible as an itemized deduction on Schedule A. Regards, Carol...

Tax Law (Questions About Taxes): contract work tax filing, self employment tax, form 1040 es
self employment tax, form 1040 es, accepting a job: Brenda, Below is my original answer. Please ignore the 4 after January. Sorry for any confusion. Thanks for your question. You will need to file Schedule C with your 1040 to report your income and business expenses. You will also need to complete...

Tax Law (Questions About Taxes): Dependants that have children, divorce decree, head of household
divorce decree, head of household, child baby: is there a decree/agreement from the father/mother divorce? does she get child suuport from the childs father? is it claimed or cash? is it court ordered? what else did she pay for? child of mother has no bearing on the father...

Tax Law (Questions About Taxes): Dependency Exemptions, delinquent child support, federal tax refund
delinquent child support, federal tax refund, child support payments: Kim, If she waives her right to the exemption , then the court is the only one who can reverse the decision.This may be a legal issue. It is usually determined by an agreement between both parties and most likely entered into the court records for enforcemnt...

Tax Law (Questions About Taxes): Dependent, plain vanilla, dependency exemption
plain vanilla, dependency exemption, divorce decree: yes you can. if you provided 50.000001 % of her support. assuming no divorce decree awarding dependency exemption to ex. or soemthing like that. but plain vanilla answer is yes. all you ahve to prove is more then half of her support. housing and health...

Tax Law (Questions About Taxes): Dependent Care Claims, self employment income, self employment tax
self employment income, self employment tax, self employment taxes: Hi Julie, I m not sure what you mean by sign off on their dependent care forms - could you help me with that please? All income from child care services, no matter how small the amount is to be reported. Ordinary and necessary expenses required t...

Tax Law (Questions About Taxes): Dependent care expenses, dependent care expenses, day care provider
dependent care expenses, day care provider, downside risk: as it has a whole slew of what ifs.... but that said, here goes a general discussion that is not tax advice. a. you should only put what you think you will actually incur with reasonable certainty in covered expenses. IF you dont spend it, you lose...

Tax Law (Questions About Taxes): Dependent care expenses, dependent care expenses, child care expenses
dependent care expenses, child care expenses, federal tax credit: She must have a positive income to claim the child care expenses (while actively looking for work she is deemed to make $250 a month for this credit). If you use your FSA and your dependent care is less than what you put into the FSA, you do pay tax on...

Tax Law (Questions About Taxes): Dependent question, child care tax credit, additional child tax credit
child care tax credit, additional child tax credit, child tax credit: Hi, If you didn t earn enough money to file a tax return you would get no benefit from claiming any or all of them. To get the child tax credit you have to have a tax liability. If your son would qualify as your child and you had earned income you could...

Tax Law (Questions About Taxes): Dependents claimed twice, decree states, divorce decree
decree states, divorce decree, jane child: Hi, Since the children lived with Jane, Joe could claim their dependency but not claim them for Earned Income Tax Credit purposes. Since you and Jane are married you would be able to claim the children based on your AGI and since she is the custodial...

Tax Law (Questions About Taxes): Disability Income and FICA Tax, disability insurance company, disability income
disability insurance company, disability income, stancil: I can t speak for the insurance company, but my wife is on disability, I have done numerous returns that included disability income and none of them have ever paid FICA tax. I don t have a citation for you, but FICA is levied on earned income, disability...

Tax Law (Questions About Taxes): Distribution into HSA from roth IRA, Roth IRA to Fund HSA
Roth IRA to Fund HSA: You can do a direct roll over from a Roth IRA to an HSA account, but it does not make sense. You are taking money that you have already paid taxes on (that is now tax free forever), that is in an excellent retirement vehicle, to put it in an HSA. You don...

Tax Law (Questions About Taxes): default on a promissory note note tax deduction, sound strategy, promissory note
sound strategy, promissory note, separate ways: send a NEW private question and I ll provide email off line. First, I would send him notice to demand the AR (and to the person who owes it too!) assumes you have closed the LLC already? final return is required. no need to refile a re-do if this...

Tax Law (Questions About Taxes): dependent for tax purpose, medical premiums, tyler lancaster
medical premiums, tyler lancaster, head of household filing status: Amy, If your boyfriend did not earn over $3650 in 2009 and you provided over 50% of his support, you can generally claim him as a dependent. This does not permit you to the Head of Household filing status however. Here is a link for the other tests: ...

Tax Law (Questions About Taxes): deprec., mileage deduction, mileage rate
mileage deduction, mileage rate, truck insurance: Harold, Depreciation is accounted for in the mileage rate - can t take both the SMR and depreciation. BUT, you can take interest you paid on the vehicle (to the extent used for business) plus the annual registration (also the business pct) Bruce W....

Tax Law (Questions About Taxes): designated funds, irs pub 526, irs regulations
irs pub 526, irs regulations, missions committee: Stephen: If the church is the umbrella overseeing different projects (programs) and all the entities report back to the church, then, all the money donated to the church that flows to the different projects would be deductible to the donor. If the different...

Tax Law (Questions About Taxes): Education Credit/Deduction, american opportunity, scholarship money
american opportunity, scholarship money, necessary books: Mike, The American Opportunity Credit allows you to add not only the tuition but also necessary books required. If the total exceed the grants, you cannot claim either the credit or the deduction since you never had any out of pocket expense Bruce...

Tax Law (Questions About Taxes): Education Credit/Deduction, qualified education expenses, scholarship money
qualified education expenses, scholarship money, american opportunity: Mike, Thanks for your question. You did not incur any qualified education expenses and cannot take the credit or the deduction. Both of these require that you have qualified education expenses - since she got a scholarship, you have nothing to deduct...

Tax Law (Questions About Taxes): Effectively connected income in USA, taxable wages, company realises
taxable wages, company realises, indian customers: Amitabh, Since the statute of limitations does not begin until the return is filed, they are required to file for all past years. Filing for the last three (for example) could trigger an investigation into prior years. The delinquent tax will be subject...

Tax Law (Questions About Taxes): Employer Mileage Reimbursement, irs publication, mileage reimbursement
irs publication, mileage reimbursement, tax memo: Short on Validation??? what did you want, a free tax memo that you could take to your boss? I dont think that is the point here. I asked for additional information below - see - I am not sure what you mean... AND the what is the loan question... ...

Tax Law (Questions About Taxes): Estate Tax, statue of limitations, 6 years
statue of limitations, 6 years, estate tax returns: Nicole: All records of an estate are filed with the court that had jurisdiction over your mothers estate. Those records will be the only records that remain. The federal statue of limitations 6 years has passed and those (tax) records are not now available....

Tax Law (Questions About Taxes): estate 1040, Stock losses for estate
Stock losses for estate: Hi John, Unfortunately, you cannot carryback stock capital losses. You can only carry these forward. If any of the deductions resulted in a net operating loss, you can carry this back. It doesn t sound like you have an NOL Carryback though. Any individual...

Tax Law (Questions About Taxes): estate sale of real estae, Capital Losses of Trust
Capital Losses of Trust: Unfortunately, you cannot distribute a capital loss on a trust tax return. So it never makes it to the K-1. Capital gains and losses, while subject to the same preferential rates as on personal tax returns, are generally allocated to principal and the trust...

Tax Law (Questions About Taxes): estate tax on currency gains, usa citizen, worldwide income
usa citizen, worldwide income, usa return: no. but you do have to pay income taxes on the interest or capital gains on the accounts (in canada, then credit for foreign taxes paid on your usa return assuming you are either a usa citizen or resident (either case you are taxed on your worldwide income...

Tax Law (Questions About Taxes): Federal Housing Tax Credit, yr balloon, balloon loan
yr balloon, balloon loan, mortgage deed: I have never heard of a title or deed to a home being called a land contract. if you bought the property (as opposed to having it deeded to be as my principal residence ) then it would appear as though you qualify. how about a mortgage deed? quit claim...

Tax Law (Questions About Taxes): Federal Tax on Federal CSRS pension living abroad, service retirement system, civil service retirement
service retirement system, civil service retirement, civil service retirement system: Ray, Thanks for your question. As a U. S. citizen you are subject to tax on your worldwide income, regardless of residence. I cannot provide citations in this forum as it would be too time consuming since this is a volunteer activity. Hope this helps....

Tax Law (Questions About Taxes): Filing Insolvent, purchase money loan, non recourse loans
purchase money loan, non recourse loans, cancellation of debt: Jeanine, Have an attorney review the loan docs on the rental to make sure the loan is non-recourse. Sometimes, if investment property, it can be a recourse loan (a purchase money loan is never recourse on a personal residence in CA). Regarding the primary...

Tax Law (Questions About Taxes): Filing requirement, articles of incorporation, initial return
articles of incorporation, initial return, zero return: Since there is no income and no expense and you have not filed a previous return, this is likely below their radar. Since there is no tax involved, you can either file a zero return, or skip filing the 2007 return and file 2008 as the initial return. Tell...

Tax Law (Questions About Taxes): Filing taxes, offer in compromise, liening
offer in compromise, liening, proof of income: Maria, If he does not file and has income to report, then the IRS can treat him as a non filer and file on his behalf based upon information he has. If they compute a tax owed, then he will owe tax , penalty and interest. They can then follow a process...

Tax Law (Questions About Taxes): Filing taxes in Indiana and in a pending divorce., cpa tax business, business advisory services
cpa tax business, business advisory services, divorce agreement: Dear Brenda, This is something you have to discuss with your divorce attorney. Usually your attorney will negotiate the treatment of the tax return and will put it into your divorce agreement. Best regards, Alexandra Shainskaya, CPA Tax & Business...

Tax Law (Questions About Taxes): Filing taxes in Indiana and in a pending divorce., disability check, filing taxes
disability check, filing taxes, alimony: you can file under status married filing separately usually does not provide quite the same outcome as married filing joint, but he has no claim to your refund (under tax rules, divorce could provide him with alimony if he is disabled - and or lazy)....

Tax Law (Questions About Taxes): Filing taxes in Indiana and in a pending divorce., disability check, filing taxes
disability check, filing taxes, stancil: Brenda, Thanks for your question. No, he does not have a right to half the taxes. You do not have to file a joint return. If he has not lived in your household at any time during the last six months of the year, you are considered unmarried for tax...

Tax Law (Questions About Taxes): First Time Home Buyer, time home buyer, first time home buyer
time home buyer, first time home buyer, time homebuyer: Sorry, since you bought it from your parents you are not eligible for the first time homebuyer s credit. The law specifically says you cannot buy from your parents. If you have already applied for the credit, you need to return it. Helen, EA in P...

Tax Law (Questions About Taxes): Flight/Career training., mr schnabel, lifetime learning credit
mr schnabel, lifetime learning credit, plane rental: Michael, i would say that if these are minimum requirements required to be in aviation, then I would say no. This would be minimum standards required. If you would consider this an a further on of your education, you could look into to see if it would...

Tax Law (Questions About Taxes): Form 2106, grasping at straws, mileage rate
grasping at straws, mileage rate, form 2106: 99% of the time, using the allowable per mile reimbursement is more advantagous. all you have to do is multiply miles driven for work x rate less reimbursement from employer and voila. there is your 2106 deduction which if you got paid from work i would assume...

Tax Law (Questions About Taxes): Freelance and Deductions, irs publication 463, home publication
irs publication 463, home publication, apt rental: Steve, Thanks for your question. If you maintain your CA apartment, your tax home would remain CA and your NY housing, food, and travel would be deductible. If you do not maintain the apartment in CA, you will be considered to have changed your tax...

Tax Law (Questions About Taxes): Full -Time Student and Employed Full Time, federal withholdings, form 8863
federal withholdings, form 8863, time student: Jim, Sorry that is not true. If you claim your tuition on IRS form 8863, you will be able offset some of the tax credits against your tax. If you have taxes taken out on the wages you will have a refund. The amount cannot be determined without knowing...

Tax Law (Questions About Taxes): 2-member LLC for rental property, sole proprietors, lccs
Tax Law (Questions About Taxes): 2-member LLC for rental property, sole proprietors, lccs, schedule c

Tax Law (Questions About Taxes): Corporate Owned Life Insurance Proceeds, corporate taxes, medusa
Tax Law (Questions About Taxes): Corporate Owned Life Insurance Proceeds, corporate taxes, medusa

Tax Law (Questions About Taxes): form 4797, medusa
Tax Law (Questions About Taxes): form 4797, medusa

Tax Law (Questions About Taxes): Should I file "1" or "0", withholding allowances, valid answer
withholding allowances, valid answer, owing money: Jessica, Thanks for your question. There is a worksheet that accompanies the Form W-4 that you can use to help you determine the number of withholding allowances you should take. I cannot give you a specific number to claim, as there are too many...

Tax Law (Questions About Taxes): fileing taxes, fileing taxes, legal functions
fileing taxes, legal functions, rachel rachel: Rachel: The administrator of his estate is the only person who can file a return on a decease person. I can answer the legal issue. I do know that a person who dies has an estate it may not have any assets and the only person who can perform legal functions...

Tax Law (Questions About Taxes): filing with dependent after divorce, burden of proof, joint custody
burden of proof, joint custody, custodial parent: Nicole, If your agreement with your x is silent as to the exemption and deduction, then you should claim him. He needs to obtain a release from the custodial parent, which by all accounts is you since your daughter is in your household. File before he files...

Tax Law (Questions About Taxes): filing tax return and independency, applying to colleges, hope scholarship
applying to colleges, hope scholarship, form 8863: Jewel, If you support yourself and live alone, then you can file yourself and not allow your brother in law to claim you. Would it be beneficial to you, it depends. If you are a full time senior in highs school, if you earned any money from retail and...

Tax Law (Questions About Taxes): first time home buyer credit eligiblty, cpa tax business, social security disability
cpa tax business, social security disability, business advisory services: Dear Stephen, Yes, the first time homebuyer credit is refundable which means that even if you had little or no tax liability you are eligible. Yes, you can file a 2008 return to get the refund, of if you prefer you can wait until the 2009 return. ...

Tax Law (Questions About Taxes): first time home owner credit, first time home owner, engagement letter
first time home owner, engagement letter, general discussion: yes. i would believe so. no reason not to. even if he owned a home previously. unless you have some other disqualifying attributes (then, a former home in last 3 years was disqualifying). but simple marriage does not disqualify. wonders why you dont add...

Tax Law (Questions About Taxes): first time homebuyers tax credit, first time buyer, nick nick
first time buyer, nick nick, time homebuyers: Nick, Help me here some -- you said you lived in the home since 2006 but bought it in 2008 -- is that correct? Were you renting it prior to that? By the way, the 5 year rule you are mentioning is for homeowners that have lived in their current home for...

Tax Law (Questions About Taxes): forcloser, personal property tax, sance
personal property tax, sance, forclosure: Garbor: I do not know the answer to that question. I do not know a good deal of information that you know and have access to that I do not have access to or knowledge of that would be decisive to answer your question. You may have to pay income tax on...

Tax Law (Questions About Taxes): form 4797, section 1245 property, road truck drivers
section 1245 property, road truck drivers, section 1231: seriously now. did you read the instructions? twice? long and short of what is mumbo jumbo tax law way below, says you report the gain on part III of 4797. All the sale price over your basis (zero, by your own admission) is reported as gain - line...

Tax Law (Questions About Taxes): GE tax, partnership tax, department of taxation
partnership tax, department of taxation, state department of taxation: Gary: Each state receives electronic feeds from the IRS on certain lines of individual, corporate, and partnership tax returns. The information the states receives can be used by the states to verify the information they receive from the tax payer is correct....

Tax Law (Questions About Taxes): Gift Money, money question, gift money
money question, gift money, stancil: If it is not earned income, it is not eligible for the EIC. Earned income is the only income that is eligible for the EIC. If the stipend is a scholarship, it is not taxable to the extent the amount received covers your tuition and fees. Any additional...

Tax Law (Questions About Taxes): Gift Taxes, inheritance tax, annual exclusion
inheritance tax, annual exclusion, gift taxes: Until your daughter removed the money from the CD it was not considered a gift. So it is now a gift and if over the $13K, you must file a gift tax return. As for your Dad, I really can t go there without research and I don t do that probono. Helen,...

Tax Law (Questions About Taxes): Gift Taxes on large gifts, Gift Taxes
Gift Taxes: Every individual can give anyone $13,000 free of gift tax per year. Every individual is also given a lifetime exclusion of $1,000,000 for any gifts they want to make over and above this amount. Once the $1,000,000 limit is exceeded, then the individual is...

Tax Law (Questions About Taxes): Gifting a 1031 property, property question, annual exclusion
property question, annual exclusion, taxable gifts: The $13,000 is an annual exclusion and can be given to an unlimited number of individuals. It is was is referred to as a non-taxable gift. The $1,000,000 is your personal exemption for taxable gifts over your lifetime. It includes any gifts that exceed...

Tax Law (Questions About Taxes): gift, capital gains exclusion, stancil
capital gains exclusion, stancil, capital gain: Nancy, Thanks for your question. Since the house is a gift, your basis will be their basis in the house. In other words, what they paid for it originally is the transferred cost to you. If you sell it you will owe tax at the excess of the sale price...

Tax Law (Questions About Taxes): gift tax, form 709, stancil
form 709, stancil, bob bob: Bob, Thanks for your question. She will need to file a gift tax return, Form 709, but no tax should be due as there is a $1,000,000 lifetime exemption in addition to the annual $13,000 per person exemption. You will not owe any tax on the gift, it...

Tax Law (Questions About Taxes): gift taxes, stancil, gift taxes
stancil, gift taxes, bob bob: Bob, Thanks for your question. Just give it and file a gift tax return. Unless it has previously been used up you have a lifetime exemption of $1,000,000 for gifts. Since it exceeds the annual exemption of $13,000 a return should be filed but not tax...

Tax Law (Questions About Taxes): gifting money, Gifting Strategy
Gifting Strategy: First, the family member is entitled to an annual gift tax exclusion of $13,000 per year per person. Next, they are entitled to a lifetime gift tax exclusion of $1,000,000. Over and above these amounts, gift tax is due. There are many strategies to leverage...

Tax Law (Questions About Taxes): Help With Refund Eligibility, eligibility question, valid excuse
eligibility question, valid excuse, personal return: You can sue him in a civil suit if you think you were done wrong. But no matter what, you have lost that refund and unless he pays it to you, you are out the money. I will not nor can I speak of his fees, but if you want a referral for a tax professional,...

Tax Law (Questions About Taxes): Hidden Tax implications for the Traveling Physical Therapist, richard logan, self employment taxes
richard logan, self employment taxes, stancil: Richard, Thanks for your question. Several issues raise their ugly head here. First, I don t know how your prospective employer worded what he told you, but the income is not tax exempt. It may be that he is treating you as an independent contractor,...

Tax Law (Questions About Taxes): Home Business Tax Question, home business tax, internet service account
home business tax, internet service account, whole slew: corner of is suspect. the area is supposed to be for constant and exclusive use. technically if you can or do use the area for personal use, it cant be allocated for hte biz portion. Taking square foot of a partial room is verrrrry shaky and if you were my...

Tax Law (Questions About Taxes): Home Daycare Taxes, sec 179, home daycare
sec 179, home daycare, fixed asset: Kellen, I would list them as miscel expenses. I would list them as toys for children . They would be a direct expense. Not a cost of sale. If you are spending under $25 per toy, I would consider them ordinary operating expenses. If you start spending more,...

Tax Law (Questions About Taxes): Homebuyers tax credit, fact pattern, 7 months
fact pattern, 7 months, medusa: no. a. until the bill is signed (expected this weekend or monday) it is not yet law anyway, but my reading of the bill is that it is not retroactive for home ALREADY purchased. from your fact pattern as submitted, you already purchased the house and while...

Tax Law (Questions About Taxes): Hope credit, opportunity tax credit, lifetime learning credit
opportunity tax credit, lifetime learning credit, hope credit: Cara, Thanks for your question. The Hope Credit was only for two years, but was changed to the American Opportunity Tax Credit and expanded to 4-years. So you are not eligible for that. However, you are eligible for the Lifetime Learning Credit or...

Tax Law (Questions About Taxes): House Fire taxes, stancil, insurance agency
stancil, insurance agency, fmv: Lisa, Thanks for your question. You will need to reconstruct a list of what you lost in the fire and determine the FMV and cost of each item. Approximations to the value or cost will be fine. Since it was all lost in the fire, it cannot be proven...

Tax Law (Questions About Taxes): head of household questions, head of household, mother works
head of household, mother works, can i claim head of household: Hi, 1. No mom cannot file as head of household unless she has a dependent who lived with her all year. 2. No you cannot file as head of household because the girlfriend is not a dependent and did not live with you all year. Regards, Carol...

Tax Law (Questions About Taxes): health insurance, plan health insurance, medical expense
plan health insurance, medical expense, gross income: convince employer to sign you up under a plan for employees. how many have insurance? small company where no ohter employees have insurance? the boss is owner and does not want you on his plan? health insurance for a standard employee is just a medical...

Tax Law (Questions About Taxes): home purchase, stancil, buying a new home
stancil, buying a new home, living expenses: Harv, Thanks for your question. You need to evaluate the return on your investment as compared to the interest rate you would be paying on the mortgage. Assuming you are in the 25% bracket, a 6% rate on the mortgage would equate to a 4.5% after tax...

Tax Law (Questions About Taxes): Improper 401K rollover, IRA Distribution
IRA Distribution: This is treated as an excess contribution to an IRA. Tell your administrator that you made an excess contribution and need to have the $30,000 distributed to you as such. The administrator should then issue a 1099 to you for the distribution. If this was...

Tax Law (Questions About Taxes): INHERITED ANNITY, stancil, annuity
stancil, annuity, income taxes: Kim, Thanks for your question. It does not matter what you do with the money, you must pay taxes on it. Giving it away would have no effect. If you have not already accepted the inheritance, you may decline it. However, you cannot designate what...

Tax Law (Questions About Taxes): Incentive checks, bonus check, dollar bonus
bonus check, dollar bonus, marginal rate: tax rates are a sliding scale. marginal rate means the next dollar earned. average is the total amount of tax over the amount earned (tax/agi) average has to be lower then the marginal by mathematical necessity. so, lets assume you are right at the...

Tax Law (Questions About Taxes): Income received from signing a gas lease, gas royalties, royalty income
gas royalties, royalty income, form 1040 es: Shelly, Thanks for your question. Gas royalties are considered passive income and must be reported on Schedule E. If the amount of royalties you receive is large enough that it would create a liability for you when you file your 1040, you should make...

Tax Law (Questions About Taxes): Income tax claim for newly wed, professional cpa, head of household
professional cpa, head of household, tax benefit: yes. marriage is determined as of 12.31.09 at midnite where you are a resident (some people have gotten tripped up with new year s eve marriages west coast, when residential in east coast - would not legally count as a marriage at 12.31.. if married just before...

Tax Law (Questions About Taxes): Income taxes for co-owned rental property, stancil, rental property
stancil, rental property, income taxes: Lincoln, Thanks for your question. Since it is not a partnership or an LLC, it is simply a joint venture. Each of you reports half the revenue and half the expenses on Schedule E of your 1040. Since the property is in Colorado, you will need to file...

Tax Law (Questions About Taxes): Inherited Stock Basis, stock basis, closing stock
stock basis, closing stock, stancil: Lionel, Thanks for your question. It is the weighted average of the high and low for the trading day preceding death and the first trading day after death. In other words take the average for Friday and the average for Monday. Since Monday was two...

Tax Law (Questions About Taxes): IRA-BDA 2009 Distribution, mandatory ira distributions, www irs gov
mandatory ira distributions, www irs gov, irs publication: the temporary suspension of rmd applies to inherited accounts too. see irs publication 590 http://www.irs.gov/pub/irs-pdf/p590.pdf Waiver of RMD for 2009. You are not required to take an RMD for 2009. But check with your custodian and tax preparer...

Tax Law (Questions About Taxes): IRS 105b, medical premiums, head of household
medical premiums, head of household, zero return: you can take him as a dependent. he should file a zero return claiming zero and you can claim (assuming you provide 50% of his support, etc which apparently you do - shelter food, and medical all count). dependent does not have to be child (can be parent,...

Tax Law (Questions About Taxes): IRS Audit, audit of schedule C
audit of schedule C: If the family business was filed as a schedule C on your form 1040, and was not a separate business entity, then the auditor has a right to request the personal checks as they are part of the same return. They may be trying to see if you commingled funds....

Tax Law (Questions About Taxes): IRS auditing my milage log, odometer readings, business miles
odometer readings, business miles, lancaster ca: Contact your prior employer to see if they have any information on the customers in those cities. Other than that, reconstruct the best you can. I am sure you remember some of the customers in those towns, especially if you visited them often. Bruce W....

Tax Law (Questions About Taxes): independent contractor in Iraq, earned income exclusion, self employment tax
earned income exclusion, self employment tax, foreign earned income exclusion: Jenny, Maybe. Since he has had a physical presence in a foreign country for 330 days in a 12 month period, he is eligible for the foreign earned income credit. This will allow him to exclude up to $91,400 of earned income in 2009 from tax. If you have...

Tax Law (Questions About Taxes): inheritance tax, Appraisal of Estate Assets
Appraisal of Estate Assets: You need to use a qualified and experienced appraiser. Look at the appraisal as your insurance policy to establish the value. If the appraiser is not qualified, it can be more easily challenged by the IRS. Just because they have a license does not always...

Tax Law (Questions About Taxes): inheritance tax, state inheritance tax, inheritance taxes
state inheritance tax, inheritance taxes, mark thanks: Mark, Thanks for your question. Inheritances are not taxable income, so you do not report them on your 1040. With the amount you mention, it is unlikely that any estate taxes will be due. The only possible tax is a state inheritance tax, depending...

Tax Law (Questions About Taxes): inherited foreign cash, signature authority, canadian citizen
signature authority, canadian citizen, home expenses: Paul, Thanks for your question. If it occurs after the death of your father, it would be considered an inheritance. However, it would be good to have something in writing. The inheritance would not be taxable, but as you mention, there would be some...

Tax Law (Questions About Taxes): inherited moneymarket, cpa tax business, business advisory services
cpa tax business, business advisory services, correct recommendation: Dear Dennis, If this is an account that has no special tax treatments (e.g. IRA, 401K, and others) then the income would have been taxed either when inherited or when earned (for example if there are earnings after the inheritance occurred). Just removing...

Tax Law (Questions About Taxes): installment contract pmts deductible, installment contract, investment interest
installment contract, investment interest, stancil: Dominic, Thanks for your question. It depends on the use of the property. If it is personal use property the interest is not deductible. If it is investment property, it may be deducted as investment interest, assuming you have investment income to...

Tax Law (Questions About Taxes): international money transfer, international money transfer, form 3520
international money transfer, form 3520, parents name: Alp, Thanks for your question. 1. The money is not taxable, assuming it was not earned income while you were a U. S. citizen or resident. 2.A transfer of that amount will automatically be reported by the receiving financial institution. 3. If the...

Tax Law (Questions About Taxes): K-1 (1065), assets liabilities, stancil
assets liabilities, stancil, management llc: Jeff, Thanks for your question. The cash account is an asset. The capital balance is the amount invested in the company by the owners. Back to day one of accounting: Assets - Liabilities = Owner s Capital Hope this helps. John Stancil,CP...

Tax Law (Questions About Taxes): K-1 and Double taxes?, stancil, withdrawals
stancil, withdrawals, tax purposes: Robert, Thanks for your question. I presume that the LLC is being treated for tax purposes as a partnership. In this type of organization, you are taxed on the income and withdrawals are tax free. So you will not be taxed again on the previously taxed...

Tax Law (Questions About Taxes): in-kind charitable donations, kind donations, leather sofa
kind donations, leather sofa, charitable donations: There is NO limit per amount to deduct. the goods have to be in good or better condition and the pricing/amount deducted reasonable. If I took all my worldly goods to the local salvation army, I could deduct $100 for the antique oak dining roopm chair, $200...

Tax Law (Questions About Taxes): loan to shareholders s corp, interest accrual, slush fund
interest accrual, slush fund, capital infusion: still need to know how much. what were the aaa accounts, was it pro rata between all shareholders? what did you do with it? just cancel it? was the receivable from the shareholder(s?) distributed to the other share holders (ie the old debtor now owes the same...

Tax Law (Questions About Taxes): MISC 1099, 1099 forms, backup withholding
1099 forms, backup withholding, medusa: as you work for a law firm, you realize this is not legal advice, but yes. you do need to report most payments - especially for services - corps and inventory (does not apply to lawfirm) are exempt. as are wages. so, that said, my mantra is 1099 EVERYONE...

Tax Law (Questions About Taxes): Mileage/Auto reimbursement, standard mileage rate, standard mileage allowance
standard mileage rate, standard mileage allowance, irs rate: Michelle, If the amount paid by the company is less than the miles driven multiplied by the IRS rate then the amount is non-taxable. It has to be the business miles, then you are correct. It usually can be an estimate. Make sure it is reasonable. Usually...

Tax Law (Questions About Taxes): Mileage taxed without 1099 form, mileage reports, irs rate
mileage reports, irs rate, mileage reimbursement: Jim, Thanks for your question. The form itself would not help, as the IRS has a copy already. If you submitted mileage reports and were reimbursed at the IRS rate or lower, the mileage reimbursement is not taxable and a 1099 should not have been issued....

Tax Law (Questions About Taxes): Monetary gifts received by Widow, Taxation of Gifts to Recipient
Taxation of Gifts to Recipient: This would be treated as a gift for tax purposes. Gifts are not taxable to the recipient. Therefore, this is not taxable to the family. Since the Donor is a church which is a tax exempt entity, there are no tax consequences to the church either. I wish...

Tax Law (Questions About Taxes): Mortgage Deduction after Divorce, mortgage deduction, ptax
mortgage deduction, ptax, divorce decree: yes. more then standard. but still wasting 1650 value of standard. gains would require you to be resident 2 of 5 years. assumign you owned a while. you get the last 2 years. ownership. need to sell before 3 years. some exemptions if you are actively...

Tax Law (Questions About Taxes): married filing separate, child care credit, witheld
child care credit, witheld, stancil: James, Thanks for your question. If you file separately, you cannot be held liable for what is on her return. Filing separately denies you a number of tax benefits - you cannot take the child care credit, earned income credit, or education credits....

Tax Law (Questions About Taxes): meals/entertainment deductibility, business purpose, irs
business purpose, irs, clue: wrong. 1. meals are not 100% deductible overnight or not. 2. depends upon purpose and nature of the other people - if business related, then they are included and you can deduct HALF. if family or not related to business purpose. no deduction. 3. no...

Tax Law (Questions About Taxes): Any money owed after 8 yrs of not living and working in the U.S., living in jamaica, usa tax
living in jamaica, usa tax, awaiting surgery: cant speak to jamaican law, but you would not owe usa tax on an inheritance so go for it. plus, I have yet to hear of a 110% tax (where you would owe more then you receive - so it would be pretty hard to not be better off after then you are now, even if...

Tax Law (Questions About Taxes): New Landlord -- Renting Our House, sole proprietorship, new landlord
sole proprietorship, new landlord, new endeavor: Debbie, The only reason to set up your rental as an LLC would be for the liability protection. Depending on the state you live in, there could be extra fees for having the LLC and the LLC will not give you any tax advantages. Get good insurance and...

Tax Law (Questions About Taxes): New S-Corporation Filing, s corporation, personal account
s corporation, personal account, personal statement: Trevor, 1-can I use those losses to save having to pay taxes on my other income earned personally this year? Yes you can as long as you have tax basis. the money you advanced for your corporation should qualify. 2-Also, how do I handle the money I paid...

Tax Law (Questions About Taxes): NOL Sec 382 divorce, section 383, Corporate NOL's
section 383, Corporate NOL's: The triggering event under Section 383 is an ownership change . An ownership change requires two components 1) an owner shift involving a 5% shareholder, or 2) an equity structure shift . Certain transactions cannot give rise to an owner shift: This...

Tax Law (Questions About Taxes): Non-Resident Income Taxes in NC, state taxes, medusa
state taxes, medusa, income taxes: you file where you are a resident and where you earned income. so - if you are a resident in NC. you will pay tax on ALL your income - FL included. and then not have to file a fl return for the fl income part. if you are a resident of FL, you will...

Tax Law (Questions About Taxes): non california resident rental property withholding tax, commercial propety, residential property managers
commercial propety, residential property managers, residential property owners: Lynell, Here is an article that addresses your concerns. This will apply on 2010 for residential property owners. The CAA persuaded the FTB to delay implementation of the withholding obligations on residential property managers until 2010. The FTB will...

Tax Law (Questions About Taxes): Offer in Compromise, small business owner, offer in compromise
small business owner, offer in compromise, stancil: At this point, incorporation or adding another owner would not help, as any such action would be construed as an evasive action to attempt to deny IRS access to the assets. Since the are his at the time the deficiency was assessed, the IRS will have access...

Tax Law (Questions About Taxes): Officer Compensation, payroll tax return, cash distributions
payroll tax return, cash distributions, payroll taxes: Hi Shelly, We all make errors - if we didn t we would not be human. I am confused about a few things -- 1.I am not sure what you mean by compensated herself without paying taxes on the compensation . Do you mean she took cash distributions? If so,...

Tax Law (Questions About Taxes): overseas tax exemptions, physical presence, income exclusion
physical presence, income exclusion, time jeff: Jeff, Thanks for your question. You must have a physical presence in a foreign country for 330 days in a 12-month period to qualify for any of the exclusion amount, which is $91,400 for 2009. This can span a two-calendar-year period. If you meet this...

Tax Law (Questions About Taxes): Payroll tax liability for C-Corp that's filing bankruptcy, Trust Fund Recovery Penalty
Trust Fund Recovery Penalty: I assume that you are paying the Trust Fund Recovery Penalty that is assessed to responsible parties of the corporation. This is not deductible by you personally. The theory is that the corporation already took a deduction for this tax, but did not pay it....

Tax Law (Questions About Taxes): Pell Grant - FinAid ..., Payment of outstanding taxes
Payment of outstanding taxes: For this dollar amount, you should should just pay the amount due. It will continue to accrue interest and penalties until you do, and you do not want to risk any questions on your application. Best of luck with your application, and good luck in school....

Tax Law (Questions About Taxes): Perdiem tax, mark thanks, stancil
mark thanks, stancil, hurrican: Mark, Thanks for your question. If the assignment is for an indefinite period, or is expected to last more than a year, any per diem amount received is taxable from day one. In addition, no travel or living expenses are deductible. When the assignment...

Tax Law (Questions About Taxes): Physical presences test and lodging, meal exclusions, irs publication 54, foreign earned income
irs publication 54, foreign earned income, christmas at home: Ric, According to the IRS Publication 54: Foreign earned income does not include the following amounts. * The value of meals and lodging that you exclude from your income because it was furnished for the convenience of your employer....

Tax Law (Questions About Taxes): Property inheritance with huge tax increase, town hall steps, property inheritance
town hall steps, property inheritance, little old lady: did you see my points? any comments or follow up? curious to know where this is (rules on reassessment on transfer vary widely - was I correct with calif/florida/mass assumption?) also, you really should consider the other points mentioned. email private...

Tax Law (Questions About Taxes): Property Taxes, tax exempt status, 501c3 status
tax exempt status, 501c3 status, ubit: NRJ, Thanks for your question. Churches are exempt from property taxes on their land and church buildings. UBIT is for income, you are not generating any income from the description you have given me. This whole thing has nothing to do with your tax...

Tax Law (Questions About Taxes): Will my parents have to pay taxes on a house they rent to me?, marginal rate, stancil
marginal rate, stancil, taxable income: Sue, Thanks for your question. Since they are paying the mortgage and charging you rent, they will have to report the rent as taxable income. Since it is a rental not for profit, it is reported on line 21 of the 1040, other income. The tax would be...

Tax Law (Questions About Taxes): Is paying someone's medical bills a taxable gift?, Taxable Gifts
Taxable Gifts: The recipient of a gift does not have to pay taxes on the gift, so the money you give to your friend as a gift for medical expenses will not cause them to receive a taxable gift. Medicare is not a means tested program and the gift would not be income. Medicaid...

Tax Law (Questions About Taxes): payroll tax withdrawal, Payment of Payroll Taxes
Payment of Payroll Taxes: This is a sign of a company in trouble. It is also a sign of the times, unfortunately. Your employer withholds taxes and other benefits from your paycheck and holds them in trust until they are paid. Often, when a company is in trouble they will dip into...

Tax Law (Questions About Taxes): personal tax
Carrie: Generally your home write off is mortgage interest and property tax. Medical would be anything that is order by a doctor and is medically necessary usually consist of what ever the doctor orders that a patient needs. Volunteer work usually the...

Tax Law (Questions About Taxes): preschool employee fringe benefit, fringe benefit, free benefit
fringe benefit, free benefit, stancil: Jeanne, Thanks for your question. Yes, it comes under the no-additional cost rule, meaning it doesn t cost the school any significant amount of money to have the student enrolled, so the tuition is not taxable income. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): preschool tuition remission, eligible educational institution, www irs gov
eligible educational institution, www irs gov, tuition remission: tax free MEdusa see below: http://www.irs.gov/publications/p970/ch01.html Education Below the Graduate Level If you receive a tuition reduction for education below the graduate level (including primary, secondary, or high school), it...

Tax Law (Questions About Taxes): Qualifying Child, irs representative, dependency exemption
irs representative, dependency exemption, part time job: Jeff, Thanks for your question. The IRS representative is incorrect. If she meets the requirements for a qualifying child, you can take a dependency exemption for her even if she is married. The disqualifying factor is if she files jointly (for reasons...

Tax Law (Questions About Taxes): Question regarding IRA distribution and gifting, lifetime limit, ira accounts
lifetime limit, ira accounts, ira distribution: Angelina, Thanks for your question. Any withdrawal, regardless of what he does with the money is subject to income tax. He can give you up to $13,000 per year without any gift tax consequences. Any gift in excess of that amount is considered a...

Tax Law (Questions About Taxes): Re-filing Income Tax, half a million, stancil
half a million, stancil, tax preparer: Janet, Thanks for your question. You can file an amended return, changing your status from married filing separately to married filing jointly. Usually, filing jointly results in a lower combined tax liability. If you file a joint return you will...

Tax Law (Questions About Taxes): Rental to Primary Residence, rental period, maximum rate
rental period, maximum rate, rental property: Hi, You have to live in your main home 2 years during the 5 years preceding the date of sale to exclude gain. However you can t exclude the gain that is attributable to depreciation taken during the rental period (even if you didn t actually take a depreciation...

Tax Law (Questions About Taxes): Rental Property LLCs what tax forms to use?, residential apartment buildings, irs agent
residential apartment buildings, irs agent, sole proprietorship: Schedule K of Form 1065 is a part of the 1065. It is the summary of all K-1 s that are issued. If you have 3 LLC s you need three returns, one for each, placing the name and ein of the partnership (LLC) on the and K-1s. The 1065 is the partnership return....

Tax Law (Questions About Taxes): Repayment of Relocation expenses, relocation expense, relocation expenses
relocation expense, relocation expenses, sanjay: Sanjay: Originally you were paid additional money by the company by the way of a relocation expense. The company paid for the relocation and you paid the income due on the amount of money paid by the company. That occurred in a different year. Now the...

Tax Law (Questions About Taxes): Reside & Work two different states, quarterly estimated taxes, stancil
quarterly estimated taxes, stancil, paycheck: Dustin, Thanks for your question. Since you live in GA, you owe GA taxes regardless. It appears that you have no CA connection so would not owe CA taxes. You can have your employer withhold no CA taxes, but they may not be willing to withhold GA -...

Tax Law (Questions About Taxes): Residence state, income tax implications, irs rules
income tax implications, irs rules, payroll records: Jim, Thanks for your question. That is correct. Under IRS rules, if your assignment lasts for more than 12 months, you are considered to have a new tax home. This means that your living expenses in the DC area are not deductible. Regardless of your...

Tax Law (Questions About Taxes): Retail Tax...double tax?, resale license, salon owner
resale license, salon owner, taxing authority: You must charge tax to the end user. You need to check with your state s taxing authority and find out if you can either get a resale license or take a credit on the taxes paid by you already. Your CPA is way wrong in telling you NOT to charge sales tax....

Tax Law (Questions About Taxes): Revocable Trust, Estate Tax and Gifting
Estate Tax and Gifting: Hi Steve, The basis of the assets they inherit in the trust, and not part of the IRA will have a basis equal to the Fair Market Value of the assets at the date of death, unless the estate elected the alternate valuation date 6 months after the date of death....

Tax Law (Questions About Taxes): Roof deduction??, mortgage payments, investment dollars
mortgage payments, investment dollars, stancil: Joanne, Thanks for your question. The cost of repairs and replacing the roof is not deductible at all. This is a personal use asset, so you cannot deduct or depreciate repairs and improvements. Since you are renting the house for the mortgage payments...

Tax Law (Questions About Taxes): re: House fire in Oregon 2009, income tax liability, adjusted gross income
income tax liability, adjusted gross income, form 4684: Justin, Thanks for your question and sorry for your loss. You can deduct the loss as a casualty and theft loss on Schedule A. You will need to complete Form 4684 and transfer the deductible amount to Schedule A. If you don t itemize, you will...

Tax Law (Questions About Taxes): real property tax, working in china, rule states
working in china, rule states, personal residence: Jane, If you meet the 2 out of 5 rule then you can exclude $250,000. That rule states that if you owed and lived in a home as your personal residence for any 2 of the last 5 years, you can exclude $250K. Here s a link to the code: http://tinyurl.com/yccgncg...

Tax Law (Questions About Taxes): real property transfer, stancil, cpa
stancil, cpa, relatives: Ben, Thanks for your question. Unless you are talking about a very large transfer, there should not be any tax. There is a $13,000 per person annual exemption. Beyond that each donor has a $1,000,000 lifetime exemption. If you use part of the lifetime...

Tax Law (Questions About Taxes): Can I refuse to be listed on my husbands tax return, federal tax lien, stay at home mom
federal tax lien, stay at home mom, state question: Jean, Since you live in a community property state, you will responsible for 50% of the income from his business + 50% of any other taxable income (you also get to claim 50% of any mortgage interest and property taxes). Bruce W. Tyler, Inc. Lancaster,...

Tax Law (Questions About Taxes): reimbursing mileage, irs tax deduction, mileage reimbursement
irs tax deduction, mileage reimbursement, reimbursement rules: sorry. you can deduct only those miles beyond your principal place of employment. in your scenario, no miles would be reimbursed as you never go beyond that farthest point which is the primary location. However, it is not unreasonable to argue that the...

Tax Law (Questions About Taxes): rental income
rental income is shown on IRS schedule e and should be aggregated by property.. ie individual building. assuming you have more then one property (maybe in more then one state - trying to read into your questions)... not getting into passive losses and...

Tax Law (Questions About Taxes): Am I required to file?, excess deductions, social security number
excess deductions, social security number, inheritance tax: Hi Krista, In viewing the K-1, you do not need to sweat this - you don t owe any taxes - the amounts are too small. The K-1s are for 2 different tax years. The one you attached here is the Final K-1 and the tax year (normally 12 months) is called a short...

Tax Law (Questions About Taxes): rollover ira, social security administration, rollover ira
social security administration, rollover ira, retirement funds: Hi, I don t know whether or not you have to use all your funds before you can get government aid because that is not an income tax issue. You need to ask the Social Security Administration about that. Since you are disabled you would not have to pay...

Tax Law (Questions About Taxes): rollover ira, rollover ira, retirement funds
rollover ira, retirement funds, government aid: i can not speak to the requirement for you to drain your retirement funds. check with social security? with respect to the qualified plan withdrawls, IRC 72(t) provides an expemption from the 10% penalty (still included in income!) for disability. ...

Tax Law (Questions About Taxes): rule 330, physical presence test, stancil
physical presence test, stancil, cpa: Bill, Thanks for your question. The 330-day physical presence test does not require that you be working the entire time, but that you have a physical presence in a foreign country for 330 days in a 12 month period. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Sale of inherited foreign property, form 3520, taiwan government
form 3520, taiwan government, property appreciation: Hou, Thanks for your question. No you cannot treat the entire amount as an inheritance and avoid taxation. You must report the sale, calculating your gain as the difference in the basis (FMV at the date of his death) and the proceeds from the sale....

Tax Law (Questions About Taxes): Sale of Personal Home Turned Rental, principal residence, cash basis
principal residence, cash basis, renter: Troy, Alot of this has to do with intent and what actually happened. If you converted your home to rental, you probably could have a small rental loss. You could consider it a rental from July 2008 to the date of sale. This just seems like it would be...

Tax Law (Questions About Taxes): Sale of Second Home, buffalo ny area, snow storms
buffalo ny area, snow storms, installment basis: Paul, Sorry, but the gain must be reported in the year of sale. The only exception would be if you sold it on the installment basis. Then you could report the gain in proportion to when the payments were received. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Schedule C, www irs gov, schedule c
www irs gov, schedule c, lancaster ca: Beverly, Remember that SE tax has nothing to do with ordinary income tax. You will owe SE tax on the net business income from your Schedule C (assuming your W-2 wages plus net Sch C income is under $106,800). To qualify for a home office, see the...

Tax Law (Questions About Taxes): SEP IRA Contribution, SEP IRA Contributions
SEP IRA Contributions: Hi Mike, You only need one SEP IRA. All of your activities will be combined to determine your contribution limits on a year by year basis. When you hire employees, they will have to be included in the SEP plan based on the anti-discrimination rules. ...

Tax Law (Questions About Taxes): Self Employment taxes, SE Tax
SE Tax: Hi Steven, Net earnings from self-employment include net income derived from a trade or business plus an individual s distributive share of net income or loss from any trade or business carried on by a partnership of which the individual is a member. Under...

Tax Law (Questions About Taxes): Selling and buying a home, Sale of Principal Residence
Sale of Principal Residence: Hi Courtney, It is not a problem at all to sell your current home in 2009, and buy the next one in 2010. The one you sell in 2009 has a gain exclusion of $250,000 if you are single, or $500,000 if you are married. You have to have lived in the home for...

Tax Law (Questions About Taxes): Selling home, stancil, capital gains
stancil, capital gains, new job: Scott, Thanks for your question. It does not matter what you do with the proceeds, it does not affect the taxability of your profits. Up until 1986, you could do that, but the current law on the sale of your home repealed that part. Hope this helps....

Tax Law (Questions About Taxes): Severence Taxes
Steve, Thanks for your question. Assuming you itemize your deductions, you can make some charitable contributions to lower your income. The problem with this approach to tax reduction, however, is that for every dollar you deduct, you only get a 10-35...

Tax Law (Questions About Taxes): Short Sale Investment Property, stancil, deed in lieu
stancil, deed in lieu, mortgage broker: Angela, Thanks for your question. Since it is an investment property, the only exemption you could receive would be if you were bankrupt or insolvent. It really doesn t make much (if any) difference between a short sale and a deed in lieu. Either...

Tax Law (Questions About Taxes): Out of State Job, valid assumption, state job
valid assumption, state job, stancil: Richard, If you are going back to your old home and the current job is expected to last less than 12 months, you can deduct your expenses in your new location. However, if the new job is permanent, or lasts more than 12 months, you have a new tax home...

Tax Law (Questions About Taxes): Stock Capital Lost & Stock Option Gain, exercise stock options, 83b election
exercise stock options, 83b election, stock brokerage: generally, the gains on stock options is ordinary income. did you make an 83b election (if you have not heard of you 99% surely did not make). can you trade or transfer those employee options? for example, can i pay you x dollars? most companies dont allow...

Tax Law (Questions About Taxes): Stock merger treatment, stock merger, stancil
stock merger, stancil, cpa: Greg, Thanks for your question. You will have a carryover basis in the new stock. In other words, your basis in the new stock will be the basis you now have. So any gain will be recognized when you sell the stock. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): s-corp liabilty?, state unemployment tax, taxable wages
state unemployment tax, taxable wages, contract employee: Mr. Allen: I have seen this situation many time before. Now your federal 940 and your state unemployment tax returns do not match in total wages and or taxable wages. In order for you to receive your state taxable wage credit on your 940 you must correct...

Tax Law (Questions About Taxes): short sale, non recourse loan, cancellation of debt
non recourse loan, cancellation of debt, lancaster ca: Connie, Once the property is sold, there are 2 transactions. The first is the sale of the property which will result in a loss. The second is the possible cancellation of debt income. If the loan for the property has never been refinanced, it is possible...

Tax Law (Questions About Taxes): step-up basis after spouse dies, stancil, cost basis
stancil, cost basis, property tax: Marilyn, Thanks for your question. You don t want to use property tax papers as those frequently do not reflect the true fair market value. An appraisal is preferred but not required. A letter from a Realtor expressing his or her opinion of the value...

Tax Law (Questions About Taxes): TANF and taxes, entertainment transportation, tanf
entertainment transportation, tanf, food clothing: Hi, Calculate how much the girls cost you. Include the fair rental value of their rooms, food, clothing, medical care, entertainment, transportation and any other necessities. Then compare the total for the two to what you receive. I expect that you...

Tax Law (Questions About Taxes): TAX free debt, foreign earned income, earned income credit
foreign earned income, earned income credit, stancil: Nathan, Thanks for your question. You could file a return for those years. However, the IRS is not obligated to issue a refund for a return that is over three years so you may or may not be able to get anything back. I would suggest working with a...

Tax Law (Questions About Taxes): Tax benefits of mortgage on investment property or principal home, investment mortgage, property mortgage
investment mortgage, property mortgage, stancil: Julie, Thanks for your question. Regardless of how you treat the mortgage, you must allocate the interest between your residence and the investment property. If the mortgage does not have a security lien on your residence, the interest relating to...

Tax Law (Questions About Taxes): Tax/Employment Question, independent contractor status, www irs gov
independent contractor status, www irs gov, estimated tax payments: Cameron, Reclassification to employee *WILL* save you tax due to the self-employment tax issue. When you are an independent you will pay 15.3% of your net income as S/E tax. As an employee, you will only pay 7.65% (your employer pays the other half). ...

Tax Law (Questions About Taxes): Tax exemption while working overseas, fide residence test, physical presence test
fide residence test, physical presence test, irs publication 54: Brenda, The other test is the bona fide residence test. Under this test, you must be a bona fide resident of the country in question, with all the factors that go into establishing a permanent residence - voter registration, driver s licenses, and the...

Tax Law (Questions About Taxes): Tax ID for deceased and Trust transfers, taxpayer id number, revocable trusts
taxpayer id number, revocable trusts, saving accounts: Patti, Thanks for your question. You need to get a taxpayer ID number for the estate and for the trusts. Transferring the homes into the names of the beneficiaries is a legal matter. As a CPA and not an attorney, I am prohibited by law from answers...

Tax Law (Questions About Taxes): Tax Issue, financial disclosure statement, confidential consultation
financial disclosure statement, confidential consultation, legal challenges: Avi, Just because you owe over $25,000 does not mean that you cannot have a payment plan. Generally, the IRS wants to file a lien if you owe over $25,000. The Service will request that you complete a financial disclosure statement if you owe this size...

Tax Law (Questions About Taxes): Tax Liability, loan investment, personal family
loan investment, personal family, chat board: depends upon how you (and they) set it (your loan, investment and subsequently the business itself). key is how you will recognize (if you realize at some point in the future) gains/income - annual pay out, exit strategy/future sale, etc. interest income...

Tax Law (Questions About Taxes): Tax preparation, tax software programs, h r block
tax software programs, h r block, peace of mind: Hi, First of all, if you were charged a penalty because of something H&R Block did wrong, they will pay that penalty. The tax software programs are safe enough provided that you give them the correct information. You are asked questions about your income,...

Tax Law (Questions About Taxes): Tax Question from Transferring Grant Deed, grant deed, corporate context
grant deed, corporate context, deed transfer: first. define silent partner. any documentation at all ? including the $15k original investment?? sounds like ethat is nothing more then a 15k personal loan to you. did he report ANTYING for the 4 years (interest?) etc. also, assumes you did a schedule...

Tax Law (Questions About Taxes): Tax Responsibilty
Hi Denver as long as you do not spend more than 182 days in CA you will be taxed as a CA non-resident only on CA earnings however if you are trapped by the warm weather and spend more than 182 days in CA you will be considered a resident and all your earnings...

Tax Law (Questions About Taxes): Tax on Trust Distribution, trust documents, irrevocable trust
trust documents, irrevocable trust, stancil: Colleen, Thanks for your question. Based on what you have said, the property was a gift to you. Therefore, your basis in the original basis from her. Any proceeds of the sale above your basis would be subject to tax at the capital gain rate. The...

Tax Law (Questions About Taxes): Taxable compensation, gift certs, taxable compensation
gift certs, taxable compensation, bonus cash: yup. And to make it more exciting, it is subject to 1099 requirements. w-9 is necessary too. Income to recipient (and deductible by corporation) at the fmv of the coupon/gift certs. Corporation could further ameloriate the situation by offering...

Tax Law (Questions About Taxes): Taxes, state income tax, stancil
state income tax, stancil, hi john: Matt, Thanks for your question. You will need to file in New Mexico as a non resident, paying tax on the income you earn in that state. All states tax income earned in the state regardless of your state of residence. I realize that Texas has no...

Tax Law (Questions About Taxes): Taxes owed on estate disbursment, reverse mortgage, lancaster ca
reverse mortgage, lancaster ca, several factors: Alan, Is the home still in the name of the estate? If so, the estate may have to pay tax on the sale of the home depending on several factors. If the home has transferred title to the 3 of you, the only tax that would be owed would be if the home sold...

Tax Law (Questions About Taxes): Taxes on Severance Pay, Severance Pay Withholding
Severance Pay Withholding: Severance pay is taxed as regular income. However, you can adjust your W-4 prior to the payout to lower the withholding. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information...

Tax Law (Questions About Taxes): Trust money from foreign country, retirement assets, working in the usa
retirement assets, working in the usa, worldwide income: simple rule is yes. sort of. depends upon the nature of the trust and the rules and the character of the income coming out of it. general rule #1, as a resident, you pay us tax on your worldwide income - so if you get income from the trust, then yes,...

Tax Law (Questions About Taxes): tax, california employment development, federal tax return
california employment development, federal tax return, california employment development department: read your homework and stop trying to take the fuc ing easy way out. and you want to do taxes or be an accountant? piece of crap. lazy! MEdusa that is sooo pathetic it makes me want to puke. I wish I could figure out who your teacher is and what college...

Tax Law (Questions About Taxes): tax breaks as legal guardian, www irs gov, head of household
www irs gov, head of household, legal guardian: Scott, For 2009, you will be out of luck. However, for 2010, you can most likely claim the kids as dependents. Here is a link regarding the claiming of dependents that are not related to you: http://www.irs.gov/publications/p501/ar02.html#en_US_publink100041829...

Tax Law (Questions About Taxes): tax consequence, tax consequences, stancil
tax consequences, stancil, donee: Dottie, Thanks for your question. None for you. He will need to file a gift tax return, but there will likely be no tax due, as there is a $13,000 annual exemption per donee plus a $1,000,000 lifetime exemption. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): tax laws, Married Filing Separately
Married Filing Separately: To see how married filing separately will affect you, you can prepare your return this way and married filing jointly to see the difference. Your tax preparer, if they use modern tax software, can easily do this. Usually, filing as married filing separately...

Tax Law (Questions About Taxes): tax liabilty, oregon state taxes, rich thanks
oregon state taxes, rich thanks, stancil: Rich, Thanks for your question. If the money is earned in OR, you owe state taxes on it. Since that s where you are working, my answer would be yes. File as a non resident/part year resident. CA will give you a credit for tax paid to OR. Hope...

Tax Law (Questions About Taxes): tax on sale of vacant property, capital gains tax, tax accountant
capital gains tax, tax accountant, property question: Stephanie, If you filed separately in 2006 you are not liable for any misstatements on the return or the tax debt. However, if you file jointly in any subsequent year, the refund can be taken to satisfy a past tax debt unless you have filed as an injured...

Tax Law (Questions About Taxes): tax treatment of services that may include housing, apartment building, stancil
apartment building, stancil, independent contractor: Ken, Thanks for your question. First off, under the arrangement you have outlined, he would not be an independent contractor, but an employee. Since he is providing management services and is required to live on premises, any attempt to classify him...

Tax Law (Questions About Taxes): taxable in come, cpa tax business, social security benefits
cpa tax business, social security benefits, business advisory services: Dear Marcos, This is a complicated question and the answers depend on the very specific circumstances that you are in. Social security benefits are taxable up to 85% (but might be less or not at all) depending on your total income, private disability benefits...

Tax Law (Questions About Taxes): taxable income after receiving social security, www irs gov, ss office
www irs gov, ss office, minimal wage: go to the link previously provided (and then READ IT, please). the threshold depends upon your status (married, single, hoh, etc) and is a sliding amount - the worksheet is 19 lines. not a simple yes/no black/white answer. plus, the tax is NOT 50% (you...

Tax Law (Questions About Taxes): Back taxes.., state of denial, extravagant lifestyle
state of denial, extravagant lifestyle, hand to mouth: The fact that the taxes have already been assessed means that he cannot lay low if he has a bank account or has regular customers who send him 1099 s. They will begin to levy everything eventually. If he is really hand-to-mouth and is not living an extravagant...

Tax Law (Questions About Taxes): taxes on insurance settlement, private question, insurance settlement
private question, insurance settlement, chatboard: I am very sorry for your loss. It depends upon how the settlement is structured. but generally yes you will. a. this is way more important and valuable then to rely upon advice on a free chatboard and b. the ramifications could have significant impact....

Tax Law (Questions About Taxes): Back taxes -- options?, late tax filing, filing tax late
late tax filing, filing tax late: You should get a certified copy of your tax return from IRS and utilize it to properly prepare your delinquent state tax return. Once that delinquent return is filed the state will make adjustments to your account indicating what you correctly owe. With...

Tax Law (Questions About Taxes): no taxes taken out of paycheck, form 1040 es, self employment taxes
form 1040 es, self employment taxes, stancil: Yolanda, Thanks for your question. You will have to make quarterly estimated payments on Form 1040-ES. These are due the 15th of April, June, September, and January. You will need to include an estimate for income as well as self-employment taxes....

Tax Law (Questions About Taxes): Understanding of Per Diem vs Employee, california labor law, federal tax return
california labor law, federal tax return, mandatory meetings: Becky, OK, I may have misunderstood here. I understood your question to be concerning reimbursement of travel expenses, not the time. In re-reading the question I do see that you clearly mentioned travel *time* not travel *expenses* - my mistake (that was...

Tax Law (Questions About Taxes): Unreimbursed employees expenses, unreimbursed expenses, pocket expenses
unreimbursed expenses, pocket expenses, response one: Rolando, A court case does not come to mind but you won;t need that. The IRS will look at your bank statements to see if there are any obvious deposits other than your paychecks. If there are, be ready to explain what those are (IRS will call them income...

Tax Law (Questions About Taxes): Unreimbursed employees expenses
Even if you were still employed by this employer or could contact him, he would not have any records of your expenses. At best, all he could provide would be to verify that you did travel during that time - and most employers do not have that evidence on...

Tax Law (Questions About Taxes): VA - Part Resident - Notice for tax return filing, incometax return, state incometax
incometax return, state incometax, income tax preparer: Jay, Thanks for your question. Because you were a resident of VA for part of the year and had earnings while living there, you are liable for VA income tax on those earnings. MD will give you a credit for taxes paid to VA, so you need to file an amended...

Tax Law (Questions About Taxes): Vehicle Compensation, state tax commissioner, fighting city hall
state tax commissioner, fighting city hall, taxable wages: my guess is they are trying to allocate some personal use to you, but that makes zero sense. I would think that fighting city hall (or state hall as the case may be) is probably fruitless, but I would send the manager/supervisor of your division a letter...

Tax Law (Questions About Taxes): Vehicle for nonprofit 501c3, community service projects, personal umbrella
community service projects, personal umbrella, charity drive: probably more advantageous for you to buy it and get reimbursed under an accountable plan (does it really cost 5c per mile to drive your car?) reimbursement as an employee (assumes you draw pay) is a higher rate then if you just drive for charity (drive...

Tax Law (Questions About Taxes): 10 yr income averaging, lump sum distributions, retirement fund
lump sum distributions, retirement fund, stancil: I apologize. There is a 10-year income averaging provision for lump sum distributions from retirement plans for those born before Jan 1, 1936. This is a rather obscure portion of the law, as very few people qualify for it, due to the restrictions. John...

Tax Law (Questions About Taxes): 1033 Involuntary Conversion, spoiled brats, care dentistry
spoiled brats, care dentistry, involuntary conversion: ok.. I am in awe. very cool actions. and you are obviated from my push to get people to do chartible good instead of buy more play stations for already spoiled brats :) that said, the debt only plays a part if you have used it for basis calculations and...

Tax Law (Questions About Taxes): 1041, nonresident alien, fein number
nonresident alien, fein number, separate entities: First of all, I m sorry for your loss. Hopefully we can get this figured out for you. It sounds like you may have two separate entities here (besides the individual returns.) Depending on how the trust is set up, it may be an entity separate from the...

Tax Law (Questions About Taxes): 1099-C From When I Was Single..., stay at home mom, debt cancellation
stay at home mom, debt cancellation, financial decisions: Katie, Thanks for your question. Debts while single don t just go away when you get married, they carry forward. In order to avoid paying tax on the debt cancellation, you must be insolvent just prior to the debt cancellation. You would take the fair...

Tax Law (Questions About Taxes): 1099 misc, Prize winnings reported on 1099-MISC
Prize winnings reported on 1099-MISC: Tom, Amounts reported on Form 1099-MISC generally can not offset capital gains or losses on Schedule D. Prize winnings are not capital transactions and are taxed as ordinary income. This kind of income is properly reported as Other Income on Line 21...

Tax Law (Questions About Taxes): 2 Tax Questions, stay at home dad, dependency claims
stay at home dad, dependency claims, qualified education expenses: Eric, If the financial aid does not require you to perform services and if it is for tuition and other qualified education expenses it is not taxable. If the kids lived in her household for the entire year, provided over half their support, and their...

Tax Law (Questions About Taxes): 2009 New car tax credit, best regard, car question
best regard, car question, credit question: David, The deduction is for the sales tax paid on the purchase of a new (not used)vehicle. You do not have to trade in your old one. The amount of the deduction is equal to the sales tax paid on the first $49,500 of cost of the vehicle. Hope this helps....

Tax Law (Questions About Taxes): 330 day FIE, physical presence test, country hope
physical presence test, country hope, stancil: N, Thanks for your question. It is a physical presence test - you must be physically present in a foreign country for 330 days. Time on the plane, etc. does not count. Incidentally, the IRS is so strict on this that time spent in Antarctica does not...

Tax Law (Questions About Taxes): 401K, marginal rate, stancil
marginal rate, stancil, tax penalty: Jackie, You will owe tax and penalty on the withdrawal, assuming you are not at least 59 1/2 years of age. Tax would be at your marginal rate (10-35%) and the penalty is 10%. You also may be liable for state taxes depending on where you live. Hope...

Tax Law (Questions About Taxes): Advance IRA conversion question, ira conversion, traditional ira
ira conversion, traditional ira, roth ira: Sean: Money put into a tax deferred account is now protected from tax reporting while it acclumates interest or dividends until it is removed from the protected account. I did not understand your logic on your question. When you set up an account...

Tax Law (Questions About Taxes): Amended form, irs gov, jackson hewitt
irs gov, jackson hewitt, 1040x form: Ms. Pinkney: It will be impossible for me to walk you through the 1040X so that you can correct your 2008 return. It may assist you to go to irs.gov and review the 1040X instructions. Otherwise, it probably in the long run to go back to your tax preparer...

Tax Law (Questions About Taxes): Amending Filed Return Status to Final Return
Amy Woo, I would file a form 1120X and state that the return filed was your final return and that the box was not check, in error. Attach a copy of page one of the Form 1120 make it copy and indicate on the top showing it is the final return also showing...

Tax Law (Questions About Taxes): Bad Debt - loan to mom?, us postal service, retirement fund
us postal service, retirement fund, debt questions: Serena, Thanks for your question. Since it is a related-party transaction, it is unlikely that you could take a deduction for the bad debt. In order to take the deduction, you need to demonstrate that there was a legitimate debt, usually evidence by...

Tax Law (Questions About Taxes): Business Income, deductions available for loan
deductions available for loan: Hi Julie, The money you borrow is not taxable, and remains that way so long as you pay it back. The money you earn to pay back the loan is taxable income. However, the interest and fees you pay on the loan will be a deduction, just not the principal....

Tax Law (Questions About Taxes): Business Travel Tax write offs, dear art, business funds
dear art, business funds, rental expenses: Dear Art, While on business travel overnight (outside the limits of your city) you can deduct meals, lodging, travel expenses (plane tickets, car rental, taxi, etc). Just be careful that the place you travel to extensively does not become your tax home....

Tax Law (Questions About Taxes): business tax, irs section, sole proprietor
irs section, sole proprietor, individual tax return: this is not specific legal/tax advice, but yes, i would file for the loss this year. you were in biz trying to make money (look up hobby loss rules under irs section 195). as long as you were really making an effort, keeping good books and records and the...

Tax Law (Questions About Taxes): C-Corp, sole proprietorship, c corp
sole proprietorship, c corp, double taxation: Wayne, Thanks for your question. Any business can deduct reasonable and normal expenses of doing business, whether it is a corporation, LLC, partnership, or sole proprietorship. As a single-member LLC you have the option to be taxed as a sole proprietorship...

Tax Law (Questions About Taxes): C Corp - Salary, dividends, IRA's, cpa tax business, sep ira
cpa tax business, sep ira, business advisory services: Dear Bob, The salary that you should take for your work in the Corporations is a market rate salary, or one that would be deemed fair if you were just an employee. If you pay yourself less than the market rate, you are at risk for having the IRS re-classify...

Tax Law (Questions About Taxes): CA bonus withholdings, bonus check, pay stubs
bonus check, pay stubs, payroll taxes: This is not just a California issue, but also a Federal one. Yes, they are required to withhold tax as well as pay payroll taxes on ALL monies paid to employees. The only exceptions are very small de minimus fringe benefits (usually anything under $25...

Tax Law (Questions About Taxes): CA short sale/ capital gains, taxation of short sale
taxation of short sale: Hi Georgia, There is no capital gains tax on the short pay of the loan. The tax you have to worry about is the income from debt relief, which is the difference between the amount owed on the loans and the amount the lender actually got paid. This is taxable...

Tax Law (Questions About Taxes): Capital gain tax on foreign real estate investment, capital gain tax, citizen zero
capital gain tax, citizen zero, real estate investment: Cindy, Thanks for your question. I presume that, by foreigner, you mean a non-resident alien. The rate is the same as for a U. S. citizen, zero or 15% if long term, 10 - 35 percent if held for less than 12 months. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Capitalizing Interest and Taxes on Rental Property, circular 230 disclaimer, construction period
circular 230 disclaimer, construction period, governmental agency: No, you cannot capitalize interest and property taxes unless the property is under construction. Once the construction period ends, the interest and taxes must be current deductions. Any individual seeking legal advice for their own situation should retain...

Tax Law (Questions About Taxes): Certificate of Deposit, Taxation of Gift
Taxation of Gift: Hi Maria, There would be no tax ramifications to the recipient of the gift (your husband). He would get the money tax free. This assumes that the money is not in an IRA. Any individual seeking legal advice for their own situation should retain their...

Tax Law (Questions About Taxes): Child Care Tax Credit, child care tax credit, valid ssn
child care tax credit, valid ssn, social security number: Shimpy, Thanks for your question. All you need to do is to pay her by check so you have a record of the amount you paid her. You will also need her social security number and address to put on the Form 2441. She is responsible for her own taxes. ...

Tax Law (Questions About Taxes): Child gifting, eligable, stancil
eligable, stancil, days of the year: Richard, Thanks for your question. Each of you can give up to $C13,000 per year to an unlimited number of persons and not have to file or pay gift tax. So each of you can give up to $26,000 to one or more persons. It must be a completed gift, so...

Tax Law (Questions About Taxes): Childcare taxes, Unpaid Tuition Payments
Unpaid Tuition Payments: Hi Shawn, You can deduct all the expenses that you incurred for the services rendered for the child as usual. That will be your loss. You cannot claim any other losses or donations if the parents were not able to pay. This assumes you are a cash basis...

Tax Law (Questions About Taxes): Church Donation Letter/Receipt, church donation, donation letter
church donation, donation letter, stancil: Chris, Thanks for your question. Yes, the church must indicate the amount of deductible contributions in the letter. In order for the donor to fully understand, it is a good idea to show the non-deductible portion, but indicate it as non-deductible....

Tax Law (Questions About Taxes): Can I Claim 19 year old Daughter?, resident alien, fall session
resident alien, fall session, time student: If she was a full-time student for 5 full months or more, then you can claim her under the qualifying child rules. If not, then you may be able to claim her under the qualifying relative rules. You can claim her under these rules if: 1. She made less than...

Tax Law (Questions About Taxes): Claiming a Child, dependency exemption, stancil
dependency exemption, stancil, cpa: Erica, The criteria for a dependency exemption are: 1. The child must have lived in your household for over half the year. 2. You must provide over half the support. If he meets these criteria, he can claim the dependency exemption and child credit....

Tax Law (Questions About Taxes): Claiming a Dependent, www irs gov, divorce decree
www irs gov, divorce decree, form 8332: Jerry, You are bound to follow the divorce decree unless your ex-wife signs IRS Form 8332 (http://www.irs.gov/pub/irs-pdf/f8332.pdf). This form is used to release the exemption from one parent to another. The alternative is going back to court and getting...

Tax Law (Questions About Taxes): Claiming taxes on a property, property question, stancil
property question, stancil, question thanks: There are no deductible taxes on a mortgage. If you own the property you can deduct the property taxes you pay. In order to deduct the interest on the mortgage you must make the payments and be legally liable for the payments. Merely holding title to...

Tax Law (Questions About Taxes): Clergy-Expense Account, salary package, current church
salary package, current church, expense account: Alan, Thanks for your question. That is not a tax matter, but simply a matter between you and the church. There may be some legal issues involved, but as a CPA and not an attorney, I am prohibited by law from answering non-tax legal questions. However,...

Tax Law (Questions About Taxes): COST BASIS ON GM BANKRUPT STOCK, dividend reinvestment plan, gm stock
dividend reinvestment plan, gm stock, bankrupt stock: Charles, Your cost basis is your cost of the original shares purchased plus the amount of dividends that was reinvested in the stock. It is deductible on Schedule D as a capital loss. Your loss can be used to offset any capital gains you may have. ...

Tax Law (Questions About Taxes): Company Travel, adjusted gross income, miscellaneous itemized deductions
adjusted gross income, miscellaneous itemized deductions, stancil: Gary, Thanks for your question. The $50 per month is taxable income and should be included on your W-2. Any travel expenses you incur that are job-related can be deducted as miscellaneous itemized deductions on Schedule A. You can only deduct those...

Tax Law (Questions About Taxes): Cost basis of corporate bonds, Basis of Bonds
Basis of Bonds: The amount you paid for the bonds would be your cost basis when you sell them. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific...

Tax Law (Questions About Taxes): calculating basis of personal residence following legal separation, capital improvements, personal residence
capital improvements, personal residence, legal separation: It s actually neither of those things. Since you bought out your ex-husband s equity, you now own all of the basis. Think about it this way: if you were to sell the home, you get all of the sales price. None goes to him. He s effectively sold his half...

Tax Law (Questions About Taxes): california capital gains tax on rental property, capital gains tax, california capital
capital gains tax, california capital, rental property: Judy: I do not know enough about your individual situation to give an answer. I do not know how long you have owned the property. I do not know how much of the property has been depreciated. I do not know if you are the manager of the rental property...

Tax Law (Questions About Taxes): capital gains on gifted property that is subsequently sold within family, gifted property, capital gains tax
gifted property, capital gains tax, sibiling: depends upon what the value of the property was when parents gifted... price to build does not matter when the value now is less - if the valuation/apprasial is good and from reputable aprasier and will submit copy with return IF needed... then you are...

Tax Law (Questions About Taxes): caregiver status, caregiver status
caregiver status: This depends on your state law as to whether you are an employee or an independent contractor. Since this is the only job you will have, in most instances you have more characteristics of an employee. In that case you will need to withhold payroll taxes...

Tax Law (Questions About Taxes): church 1099, stancil, taxable income
stancil, taxable income, irs: Lora, Thanks for your question. None. It is not taxable income to them and you are not required to report it to the IRS in any fashion - as long as they performed no services in return for the assistance. Hope this helps. John Stancil, CPA ...

Tax Law (Questions About Taxes): claiming childcare, self employment income, self employment tax
self employment income, self employment tax, food receipts: Hi, The things you mentioned would do it. You will be reporting your income and expenses on Schedule C and you will pay self employment tax (social security and medicare) on your net self employment income as well as income tax. Regards, Carol...

Tax Law (Questions About Taxes): claiming children, Dependency Deduction
Dependency Deduction: Hi Julie, My first question would be why they are changing what they originally decided. If you qualify for the deduction, then you need to state your case and keep the deduction. If you were the custodial parent and provided over half the support, you...

Tax Law (Questions About Taxes): claiming medical deductions in same year as receiving a settlement, personal injury suit, www irs gov
personal injury suit, www irs gov, irs website: Maria, The Internal Revenue Service recognizes that receiving a settlement award (amount) from a personal injury suit may create new tax issues for some individuals. The following information is provided to assist recipients of cash settlements. The...

Tax Law (Questions About Taxes): clergy correction, paperwork nightmare, stancil
paperwork nightmare, stancil, undue hardship: Renee, Thanks for your question. You will have to file a Form 941C to correct the previously submitted information. Do not attempt to correct it in 2010 for 2009, that will create a paperwork nightmare. Show the correct amounts and the changes as instructed....

Tax Law (Questions About Taxes): cost basis/capital gains/loss, basis capital, split basis
basis capital, split basis, john thanks: Gary, When the title was transferred in 1982, it constituted a gift to A and B. Their basis is a transferred basis, so each of the three owners had a basis of $16,667. In 2001 when the B was removed from the deed, that constituted another gift, back...

Tax Law (Questions About Taxes): Deductions, insurance expense, gas expenses
insurance expense, gas expenses, car oil: Frederick: You can do however you choose. But, you must use the mileage of the car to determine the percentage of car use business and car use personal. The IRS will not allow you to deduct 100 percent of the expenses. YOU MUST COMPLETE A MILEAGE USE...

Tax Law (Questions About Taxes): Deductions for Multiple Houses, stancil, interest deduction
stancil, interest deduction, mortgage interest: Carl, Thanks for your question. You can deduct the taxes on all three homes, but the Code only allows for you to deduct interest on two residences. They are very specific in stating that is is a total of two residences for the year, not two at a time....

Tax Law (Questions About Taxes): Dependant Tax, custodial rights, income tax credit
custodial rights, income tax credit, dependents: Michelle: You can file married filing separate return. However, if you have no income then you have nothing to report. Therefore, you will not be able to claim earned income tax credit. However, your estrange husband and you can file joint and get to...

Tax Law (Questions About Taxes): Dependents, line 6c, ss number
line 6c, ss number, turbotax: Dan, Thanks for your question. If you provided over half his support and if his total income was less than $3,650 (social security does not count) you can claim him as a dependent. All you need to do is enter his name, relationship to you, and SS number...

Tax Law (Questions About Taxes): Per Diem, split rate, person returns
split rate, person returns, stancil: Amanda, Thanks for your question. No. The IRS considers that a continuation of the same assignment, and all per diem amounts are taxable. If you are commuting the 200 miles, it is taxable anyway. I don t know exactly what you mean by a split rate...

Tax Law (Questions About Taxes): Directly paying a medical supplier, Gift of Medial Expenses
Gift of Medial Expenses: Hi Mark, In addition to the annual exclusion for gift taxes there is an unlimited exclusion for amounts paid on behalf of a donee that are paid directly to health care providers for medical services on behalf of the donee. Allowable medical expenses include...

Tax Law (Questions About Taxes): Dividing house proceeds over 2 years, gross profit percentage, installment method
gross profit percentage, installment method, taxable gain: Lester, Thanks for your question. If at least one payment is to be received in a year after the year of sale, you can use the installment method. You would need to determine at the time of sale what your gross profit percentage is and apply that percentage...

Tax Law (Questions About Taxes): Donations, irs form 8283, thrift shop value
irs form 8283, thrift shop value, burden of proof: Debbie. If you file form 8283, all you provide is a description of items, when purchased, when donated. Fair Market Value and thrift value. You choose the FMV as your deduction. The only time you provide appraisals if for pieces of Arts or Collectibles....

Tax Law (Questions About Taxes): Dual tax, john thanks, stancil
john thanks, stancil, state tax: John, Thanks for your question. Depending on the circumstances, either way could be correct. As residents of KS, you are both liable for tax in KS on all your income. However, KS will give you a credit for tax paid to other states. Since the money...

Tax Law (Questions About Taxes): deductibility of health ins prems for self employed, employed health insurance, health insurance premiums
employed health insurance, health insurance premiums, form 1040 instruction booklet: I presumed that your single-member LLC is being taxed as an individual and not as a corporation. If you are electing to have the business taxed as a C Corporation, you are correct. However, if you have made the election to have the business taxed as a...

Tax Law (Questions About Taxes): defined contribution plan distribution, defined contribution plan, financial meltdown
defined contribution plan, financial meltdown, lump sum distribution: Hi, Whether or not you can take a distribution while still working there is up to the plan. Once you leave your employment there should be no waiting period other than enough time to process the distribution. Taking it over 2 years would help with the...

Tax Law (Questions About Taxes): delinquent tax, company cpa, phone appointment
company cpa, phone appointment, delinquent tax: It is very likely that you do not owe the money. The trick is in convincing the IRS that you don t. The specifics depend on the facts and circumstances of the case so I cannot detail it for you. These cases really require professional help. However, it is...

Tax Law (Questions About Taxes): Per diem, diem rate changes, federal taxes
diem rate changes, federal taxes, irs: Merry: I do not know how you can have a 7.25 taxable rate and a 4.25 per diem rate. Per diem is the amount allowable by the IRS to charge for over nite stay in a certain city. The per diem rate changes depending on what city your staying in on a given...

Tax Law (Questions About Taxes): per diem, dot hours of service, tax materials
dot hours of service, tax materials, hours of service rules: Josh, Thanks for your question. You can deduct the excess of the allowed amount over the $25 per diem that you are receiving. As far as your other question is concerned, I am offering you my opinion. I do not see any specific guidance in the tax...

Tax Law (Questions About Taxes): donations to church, charitable contribution deduction, anonymous gift
charitable contribution deduction, anonymous gift, stancil: Gordon, Thanks for your question. The church can do that. The IRS is only concerned with designated contributions in which the donor attempts to take a deduction for the contribution. They do not permit you a charitable contribution deduction but they...

Tax Law (Questions About Taxes): Elderly parent paying for care, zoe baird, federal tax forms
zoe baird, federal tax forms, tim geithner: document all to hell and hope. income to son/child. is subject to nanny tax (ever hear of Tim Geithner or Zoe Baird?) dependent to parent exemption not worth much unless he has high income. parent could pay rent. not subject to SE tax, but still...

Tax Law (Questions About Taxes): Employee vs Independent contractor, circular 230 disclaimer, income tax returns
circular 230 disclaimer, income tax returns, independent contractor: Hi Sharron, You have filed your tax returns and paid your taxes. This should have no tax affect on you personally. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information...

Tax Law (Questions About Taxes): Employer Gift or Cash Advance?, laptop computer, monies
laptop computer, monies, cash advance: Ryan: The money given (advanced) by your employer would be to offset future wages earned. This what your employer reported to the IRS. You spent the money and you purchased the gas therefore taxes will have to be paid on the income. John ...

Tax Law (Questions About Taxes): Employer Mileage Reimbursement, irs publication, mileage reimbursement
irs publication, mileage reimbursement, tax memo: Short on Validation??? what did you want, a free tax memo that you could take to your boss? I dont think that is the point here. I asked for additional information below - see - I am not sure what you mean... AND the what is the loan question... ...

Tax Law (Questions About Taxes): Estate distribution K-1?, Form 1041 for Estate
Form 1041 for Estate: Hi J.J., The attorney is preparing a Trust tax return for the estate (Form 1041). If you are a beneficiary of the estate you will receive a Form K-1 from the Form 1041. This would require your social security number. You would not be responsible for...

Tax Law (Questions About Taxes): Estate Tax - Form 706, SCIN's
SCIN's: Hi Alfredo: Your analysis is how the U.S. Tax Court originally ruled. However, the Eighth Circuit disagreed: It noted that Sec. 691(a)(5)(A)(iii) unambiguously provides that cancellation of an installment obligation occurring at death is a transfer...

Tax Law (Questions About Taxes): Estimated Tax Calendar & Payment, sole proprietorship, tax calendar
sole proprietorship, tax calendar, calendar dates: Paul, Estimated tax payments are scheduled 4 times a year. You can pay earlier if you choose to. 1- Yes 2-Yes, it would not be timely though since they should have been made June 15, Sept 15, Jan 15,2010. 3- you could get a small penalty, depending...

Tax Law (Questions About Taxes): Exempt, stancil, statute of limitations
stancil, statute of limitations, tax liability: MGreen, Thanks for your question. Filing exempt is what you do for withholding purposes. You can file a W-4 as exempt if you had no tax liability in the prior year and you do not expect any in the current year. If you have income above a certain level...

Tax Law (Questions About Taxes): Exempt Status, exempt status, tax liability
exempt status, tax liability, tax refund: David, Not necessarily. If you have say a W-2 with withholdings and you receive all your withholdings back in the form of a refund, then you have no tax liability. You could have an income tax and receive a refund, but still have a tax liability...

Tax Law (Questions About Taxes): Expenses on S Corporation Return, Presentation of Expenses on S Corp Return
Presentation of Expenses on S Corp Return: Hi Mary, Your CPA is correct. If the expenses are reclassified to another part of the return, the net tax effect will be zero. Putting the expenses in cost of sales is not necessarily incorrect. You are in the business of renting limousine services and...

Tax Law (Questions About Taxes): estate tax, cost basis, executor
cost basis, executor, best of luck: That s not true. The depreciation affected HIS cost basis, not yours. To simplify it a little, when someone dies, any property in their estate gets a step-up in basis to the fair market value at the date of their death. That s the basic rule. So unless...

Tax Law (Questions About Taxes): Family Loan - Property Purchase, stancil, step mother
stancil, step mother, goverment: Marlena, Thanks for your question. If a loan is made with no interest included, the amount of interest not paid is imputed to the loan. It is treated as though you paid the interest, they pay tax on it. Since you did not pay it, it is considered a gift...

Tax Law (Questions About Taxes): Fathers property sale, long term capital gain, stancil
long term capital gain, stancil, cost basis: Charles, Thanks for your question. It is partially a taxable event. When you father put you and your sister on the title, that constituted a gift. Your cost basis in the gift is 1/3 of his basis, or his purchase price. When he died, you inherited...

Tax Law (Questions About Taxes): Federal Tax Treatment of Financial Aid, federal pell grant, scholarship payments
federal pell grant, scholarship payments, christmas carole: Hi, It would apply to any type of grant or scholarship. Loans are not subject to income tax. Educational expenses paid by loans (tuition and fees) can be used to claim the Hope or Lifetime Learning Credits or the Tuition and Fees deduction. This is...

Tax Law (Questions About Taxes): Federal Tax Treatment of Financial Aid, federal pell grant, scholarship payments
federal pell grant, scholarship payments, scholarship amounts: Shirley, Thanks for your question. Loans are not income and are not taxable. The Pell and Competitiveness Grants are not taxable to the extent used for qualified education expenses, so your statement applies to these. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Filing past tax returns, irs collections, delinquent returns
irs collections, delinquent returns, sorry for your loss: I am sorry for your loss. You can file separately and avoid liability or you can file jointly. You simply sign his name and then /deceased %26 the date . You may not need to file that far back. You may want to consult a tax professional with experience...

Tax Law (Questions About Taxes): Filing status, non resident alien, immigration status
non resident alien, immigration status, head of household: Gesille, Thanks for your question. You filing status is dependent on his immigration status. If he is a non-resident alien, you cannot file a joint return with him, and must file a single or head of household (if you qualify). Otherwise, you should...

Tax Law (Questions About Taxes): Filing Taxes, self employment tax, self employment income
self employment tax, self employment income, income tax rate: Hi, It sounds as though you will receive a 1099MISC for your income. If that is so you will report your income as self employment income which is subject to self employment tax (social security and medicare) as well as income tax. You will be able to...

Tax Law (Questions About Taxes): Foreign income and Mortgage, home mortgage interest, foreign earned income
home mortgage interest, foreign earned income, earned income credit: The deduction for mortgage interest is not a refundable credit, so the deduction would reduce your tax liability, but not below zero. The reason for the credit is the presumption that you pay taxes in the country in which the money was earned, so you are...

Tax Law (Questions About Taxes): Foreign student loan, aviation universities, currency conversion
aviation universities, currency conversion, swedish crowns: Anders, Thanks for your question. If the loan was obtained, and the proceeds used, to pay qualified tuition expenses to a qualified educational institution, the interest is deductible. You would need to determine the conversion rate on the date each...

Tax Law (Questions About Taxes): Forfeited Deposit on Real Property, dramatic decline, fact patterns
dramatic decline, fact patterns, fact pattern: Mark, Thanks for your question. The forfeited deposit is treated as ordinary income. Expenses associated with the forfeiture are deductible against it, but not improvements, or ordinary expenses associated with the property (such as taxes, interest,...

Tax Law (Questions About Taxes): Form 433-F, irs tax relief, irs payment plan
irs tax relief, irs payment plan: You are not required to complete and present this form to the IRS if you ask for a streamlined installment agreement. You may simply ask to pay your balance due over a sixty month period of time, and IRS will then set you up on that payment plan without the...

Tax Law (Questions About Taxes): Form W-4 Deductions, irs money, child tax credit
irs money, child tax credit, dependency exemption: JP, Thanks for your question. You are correct in your interpretation. You can claim one for the dependency exemption and one for the child tax credit. However, I would advise you that you are likely to end up paying if you claim those two plus one...

Tax Law (Questions About Taxes): Capitalizing Interest and Taxes on Rental Property, irs pub 551, uniform capitalization rules
Tax Law (Questions About Taxes): Capitalizing Interest and Taxes on Rental Property, irs pub 551, uniform capitalization rules, carrying charges

Tax Law (Questions About Taxes): Gift Card Bonus and taxes, social security and medicare, medicare tax
Tax Law (Questions About Taxes): Gift Card Bonus and taxes, social security and medicare, medicare tax, medicare

Tax Law (Questions About Taxes): fica taxes on disability, disability claim, disability benefits
disability claim, disability benefits, retirement age: Sammy, Thanks for your question. Disability benefits are not subject to FICA taxes. When the disabled person reaches full retirement age, the SS disability benefits become regular retirement benefits and the amount does not change. Hope this helps....

Tax Law (Questions About Taxes): Which do I file in?, stancil, wa wa
stancil, wa wa, future years: Daniel, Thanks for your question. You will have to file in Idaho as a part-year resident reporting all you income earned in ID. You will have to file in WA as a part-year resident reporting all income earned while a resident of WA. WA will give you...

Tax Law (Questions About Taxes): fileing taxes, fileing taxes, legal functions
fileing taxes, legal functions, rachel rachel: Rachel: The administrator of his estate is the only person who can file a return on a decease person. I can answer the legal issue. I do know that a person who dies has an estate it may not have any assets and the only person who can perform legal functions...

Tax Law (Questions About Taxes): foreign income exclusion, earned income exclusion, foreign earned income exclusion
earned income exclusion, foreign earned income exclusion, foreign earned income: Mark, Thanks for your question. The issue is not you intent to return, but your status while overseas. When on sabbatical, it is for a limited period (usually less than a year) and you will return to the U. S. In this situation, you are not earning...

Tax Law (Questions About Taxes): What forms do I need to file for the 2009 tax year?, form 1120 s, salary level
form 1120 s, salary level, s corp: Not with a corporation. Since it is legally a separate entity you are an employee and must pay yourself a salary, etc. If you don t the IRS will come after you (sooner or later). BAsically, the amount of tax paper work is the same. I previously mentioned...

Tax Law (Questions About Taxes): fradulent claim for dependents, www irs gov, advocate article
www irs gov, advocate article, taxpayer advocate: Allie, This is a criminal matter since your husband signed your name to the return. First, contact the taxpayer advocate in your state. Here is a link: http://www.irs.gov/advocate/article/0,,id=97402,00.html The TA will advise you on what to do....

Tax Law (Questions About Taxes): Gift Card Bonus and taxes, Gift cards to employees
Gift cards to employees: Hi Laura, A distribution of a gift certificate or gift card to an employee that is readily convertible to cash must be included in the employees income. Therefore, I think that including the value of the card in your income was proper. It is a deduction...

Tax Law (Questions About Taxes): Gift Tax, Annual and lifetime gift exclusions
Annual and lifetime gift exclusions: Hi Heidi, The $13,000 per year annual exclusion is separate and apart from the $1,000,000 life time exclusion. She gets the life time exclusion in addition to the $13,000 per year per person annual exclusion. The lifetime exclusion is only used after...

Tax Law (Questions About Taxes): Gift Tax and Capital Gains, Capital gain on Gift
Capital gain on Gift: To determine the value of the land at the date of death, you can get an appraisal or a letter stating the opinion of value from your Realtor. If your basis exceeds the amount you actually sell the property for, then your are right and there is no gain from...

Tax Law (Questions About Taxes): Gifting a Car to my brother, tax deductible items, stancil
tax deductible items, stancil, gift tax return: Martin, Thanks for your question. Gifts are not tax deductible items and cannot be used as a deduction on your 1040. Since the value of the gift is under $13,000 you do not have to file a gift tax return. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Gifting money, Available Exclusions for Gifts
Available Exclusions for Gifts: Hi Cletis: Your mother can give you up to $13,000 per year as a gift without having to file any documents. This is the amount of the annual gift exclusion. Just make sure you do the first gift on or before December 31 to qualify for this year. If she...

Tax Law (Questions About Taxes): Give Sole Proprietorship to Spouse, sole proprietorship company, cpa tax
sole proprietorship company, cpa tax, ssa benefits: Dear Robert, I m not sure that I understand your questions correctly, but yes you can give unlimited gifts to your spouce without tax consequences. I don t know what is cheaper, insince through the business or through your job, you ll have to do...

Tax Law (Questions About Taxes): GM Stock, historical stock prices, gm stock
historical stock prices, gm stock, stock splits: Maryann, Thanks for your question. The original cost is what you paid for the stock. An internet search would only give you the price range for that period of time. Historical stock prices for that period of time can be found. You would need to adjust...

Tax Law (Questions About Taxes): gambling tax laws, professional gambler, stock sales
professional gambler, stock sales, standard deduction: Russell: Its a fair bet that the IRS intends for all amateurs to lose out on a profit or to disallow most losses to offset other income. With that said, most Americans believe that the income tax as structured is unfair and I am one that have seen anything...

Tax Law (Questions About Taxes): gambling tax laws, adjusted gross income, professional gambler
adjusted gross income, professional gambler, stock sales: Russell, There are many laws regarding taxes that seem inequitable - this is one of them. Another would be the sale of personal property such as a car. If you sell it for more than you bought it for, you report the profit, if it is a loss, no loss allowed....

Tax Law (Questions About Taxes): gambling tax laws, mr schnabel, professional gambler
mr schnabel, professional gambler, professional gamblers: Russell, You make a good argument. Unfortunately, the IRS considers these type of losses as personal losses and addressed only through itemized deductions. Not many folk choose to label themselves as professional gamblers and report their activity as...

Tax Law (Questions About Taxes): gift money from lottery, gift tax liability, one million dollars
gift tax liability, one million dollars, gift money: Janelle, You do not have any tax liability on the funds received as it is considered a gift and gifts are not subject to income tax. Your donor may have a gift tax liability, however. You do not need an attorney to manage your funds, I would suggest...

Tax Law (Questions About Taxes): gift tax, Taxation of a Gift
Taxation of a Gift: Hi Joseph, First you have to consider whether their is any tax due from the sale of the house. Take the sales price that relates to dad s portion, and deduct the tax basis and expenses of selling (commission and closing costs). The tax basis is the Fair...

Tax Law (Questions About Taxes): HELLO, Who claims the dependents
Who claims the dependents: Steve, It depends on the number of nights the kids spend with you versus their mother during the tax year. Which ever parent has the greater number of nights gets to claim the children as dependents. Neil Johnson The Tax Dude® www.thetaxdude.com ...

Tax Law (Questions About Taxes): Head of Household, sole physical custody, head of household
sole physical custody, head of household, question thanks: I m not sure what program you re using to file your taxes, but it sounds like it s just being stubborn. You may want to just file by hand. On the form 1040, you ll check box 4 for HOH, then write his name on the little line next to it. You ll notice it...

Tax Law (Questions About Taxes): Head of Household, eligible dependents, head of household
eligible dependents, head of household, food stamps: Bill, No, you do not qualify as head of household since your eligible dependents did not live with you in your household for more than half the year. Additionally, you did not pay more than half the cost of keeping up a home for the year. Hope this...

Tax Law (Questions About Taxes): Health Tax Breaks?, high deductible health plan, adjusted gross income
high deductible health plan, adjusted gross income, sole proprietor: Hi, You can itemize your medical expenses on Schedule A. They re deductible to the extent they exceed 7.5% of your adjusted gross income. If you re a single member LLC you can purchase medical in and take that as an adjustment to income assuming you...

Tax Law (Questions About Taxes): Home Health Nurse taxes, home health nurse, circular 230 disclaimer
home health nurse, circular 230 disclaimer, form 2106 instructions: Hi Bill, 1. You can take the mileage on the car on form 2106 of form 1040, but you will have to deduct the amount of your employer reimbursement for the gas. 2. You can deduct ordinary and necessary expenses for your employment on form 2106 of form...

Tax Law (Questions About Taxes): Housing Allowance, ministry conferences, housing allowance
ministry conferences, housing allowance, itinerant ministry: Doug, Thanks for your question. Assuming that you are performing ministerial duties through the not-for-profit, it can pay you a housing allowance. The housing allowance must be designated in advance by a governing body of the organization, most likely...

Tax Law (Questions About Taxes): hello, Deduction by non custodial parents
Deduction by non custodial parents: A non custodial parent can deduct their dependents if the custodial spouse agrees and completes Form 8332. If she doesn t provide this form, you will not be able to take the deduction. The Aunt should not take the deduction if she does not qualify otherwise....

Tax Law (Questions About Taxes): home energy tax credit, energy tax credit, stancil
energy tax credit, stancil, home energy: David, Thanks for your question. In order to take the credit, the property must be installed and paid for. If you wait until 2010 to install it you would take the credit for that year. Be certain that you get a copy of the manufacturers certification...

Tax Law (Questions About Taxes): home owners taxes, stancil, back taxes
stancil, back taxes, irs: Shenita, Thanks for your question. She can pay the taxes. When a situation is allowed to go this far with the IRS, the only way out is to pay the taxes or lose the home. Sorry I don t have a better answer, but that s how it is with the IRS. John...

Tax Law (Questions About Taxes): home sale, stancil, temporary work
stancil, temporary work, orly: Orly, If they owned the house for 24 of the past 60 months and lived in it as their main home for 24 of the past 60 months, it qualifies for exclusion of gain on the sale. They must meet both criteria in order to qualify. Time away for vacation or...

Tax Law (Questions About Taxes): Income tax, ny state taxes, new york state taxes
ny state taxes, new york state taxes, new york state tax: Nuru, Thanks for your question. If you work in NYC you will owe state and city income taxes regardless of where you live. You would file as a non-resident. This tax would only be on your NY income. You will also owe taxes to NJ, your state of residence,...

Tax Law (Questions About Taxes): Income tax filing for a non-exempt Farmers Market, income tax filing, farmers market
income tax filing, farmers market, expert guidance: Beth, You are probably not in trouble, but likely headed that way. A charter as a non-profit corporation is a state matter. In order to be tax exempt you need to file Form 1023 with the IRS in order to obtain your exempt status. Proper handling of...

Tax Law (Questions About Taxes): Income tax on tax deferred accounts after death, income tax obligations, retirement vehicle
income tax obligations, retirement vehicle, roth ira: Douglas, All of the retirement accounts you mention would be taxable to your heirs in the same manner they are taxable to you. Obviously, the Roth is not a tax deferred retirement vehicle as it is tax exempt, and would remain so to your heirs. It would...

Tax Law (Questions About Taxes): Income taxes, personal income taxes, sba loans
personal income taxes, sba loans, sba loan: John, For the taxes to be included in the bankruptcy, they need to be at least 3 years old, that is, it must be at least 3 years from the original due date of the return. If the return was filed late, then the date would be the *later* of 3 years from...

Tax Law (Questions About Taxes): Inheritance, Taxation of Estate
Taxation of Estate: Hi Ann, Sorry to hear about your loss. You do not have to claim your inheritances on your income tax returns. It is not income. You do not have to file an estate tax return (Form 706), if you do not have a taxable estate (exceeds $3,500,000). You do...

Tax Law (Questions About Taxes): Inheritance/estate tax, inheritance issues, inheritance taxes
inheritance issues, inheritance taxes, information john: Bill, Thanks for your question. That depend on a number of factors: 1. The amount of her estate. 2. When she dies. 3. Hers and your state of residence. For 2010, the federal estate tax is repealed. It will come back in 2011, but at this point...

Tax Law (Questions About Taxes): Inheritance Tax, Taxes on Sale of Inherited Home
Taxes on Sale of Inherited Home: Hi Valerie, Sorry to hear about your loss. When your mom died the house s basis stepped up to the fair market value at the date your mom died (October). When you sell the house, take the sales price less the basis, and less any commissions and closing...

Tax Law (Questions About Taxes): Interim Pastor Taxes, interim pastors, pulpit supply
interim pastors, pulpit supply, ok tax: Sherry, Thanks for your question. There are two items of concern here. First, does he have a home office? If he qualifies for a home office, then any travel away from the office is deductible travel. Second, does he meet the criteria as self-employed?...

Tax Law (Questions About Taxes): International out-wire/Gift tax, cindy cindy, form 709
cindy cindy, form 709, annual exclusion: Cindy, Thanks for your question. It is considered a gift. There is an annual exclusion of $13,000 per donee. If the amount is less than this, you do not have to file a gift tax return. If the amount exceeds this level, a return should be filed, Form...

Tax Law (Questions About Taxes): Invested in a company and it went out, pennies on the dollar, investment stock
pennies on the dollar, investment stock, stancil: Roger, The loss is deductible on Schedule D. It is a capital loss and you are limited to deducting #3,000 per year of loss in excess of any capital gains you may have. Regardless of the nature of the investment - stock, bonds, loan it is still treated...

Tax Law (Questions About Taxes): IRA, thrift savings plan, modified adjusted gross income
thrift savings plan, modified adjusted gross income, ira deduction: Gary, Thanks for your question. You are not your wife. She is covered by a retirement plan at work, you are not. This makes you eligible for a deductible IRA contribution if you file jointly and your combined modified adjusted gross income is under...

Tax Law (Questions About Taxes): IRA Early Withdrawals, ira early withdrawals, ira account
ira early withdrawals, ira account, ira accounts: Tom, You can only take one IRA a year and put it back in 60 days. The 60 day rule only applies to the first distribution in order to avoid a 10% penalty. If you want to take the IRA in 2009 and then in 2010 take out another IRA in 2010 and use that...

Tax Law (Questions About Taxes): IRA & fed income tax owed, ira account, form 1040 es
ira account, form 1040 es, stancil: Ang, Thanks for your question. You would pay the tax on your 1040 when you file it. However, depending on the amount you owe, you may need to make estimated payments on Form 1040-ES on the 15th of April, June, September, or January (as needed). Hope...

Tax Law (Questions About Taxes): IRA gift tax, Annual Gift Exclusion
Annual Gift Exclusion: You can give up to $13,000 each year to anyone without any gift taxes. This is not a deduction from your income taxes, and will not lower your income taxes due. Any individual seeking legal advice for their own situation should retain their own legal counsel...

Tax Law (Questions About Taxes): IRA TAX BASIS, roth conversion, roth ira
roth conversion, roth ira, marginal rate: David, Thanks for your question. If you have not made any non-deductible contributions to the IRA since 2001, the basis indicated on that return is still your basis and can be used in a Roth conversion. The conversion will be taxed at your marginal...

Tax Law (Questions About Taxes): IRA Tax Question, cpa tax business, employer retirement plan
cpa tax business, employer retirement plan, thrift savings plan: Dear Gary, For 2009 you might still be considered as covered, since you didn t retire until the middle of the year. When you receive your W-2 this year, there is a box on the W-2 that indicates whether or not you were covered by an employer retirement...

Tax Law (Questions About Taxes): IRS full time student criteria, irs requirement, student criteria
irs requirement, student criteria, stancil: Daniel, Thanks for your question. The IRS requirement is that he be enrolled as a full-time student based on the criteria set forth by the school in which he is enrolled. He doesn t have to pass the classes to be considered full time. Hope this helps....

Tax Law (Questions About Taxes): IRS Lien, liability for spouse action prior to marriage, business tax returns, irs lien
business tax returns, irs lien, unpaid payroll taxes: Terry, If you file married separate, you will not be responsible for any taxes your spouse owes for the years you file separately. You can file jointly and the IRS still has no rights to your separate property BUT they will take any refunds that are...

Tax Law (Questions About Taxes): income tax joint or not?, Filing Status
Filing Status: Hi Manny, As a married man you have two choices in filing. The first is Married filing separately and the other is married filing jointly. If you file married filing separately, then your wife would have to file the same way. It is usually better to...

Tax Law (Questions About Taxes): incorrect vesting percentage for 401k distribution, ira account, plan document
ira account, plan document, usaa: You only owe them money if you spent it. If you haven t cashed out the IRA, then the excess is just sitting in that account, and you ll need to contact USAA and explain the situation. They will then explain how the process will work and may ask for whatever...

Tax Law (Questions About Taxes): independent contractor, form 540nr, franchise tax board
form 540nr, franchise tax board, state income tax: Hi Donald- You won t need to pay CA state income tax on any income earned in WA, so don t worry about that. You will, however, have to pay CA income tax on any income earned in CA. For that, you ll file a Form 540NR and if you haven t made any estimated...

Tax Law (Questions About Taxes): inheritance money, circular 230 disclaimer, inheritance tax
circular 230 disclaimer, inheritance tax, governmental agency: The money you receive should be tax free. The estate is responsible for paying the estate taxes. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in...

Tax Law (Questions About Taxes): injured spouse, refund anticipation loan, form 8379
refund anticipation loan, form 8379, injured spouse: Ashley, Thanks for your question. If you file as an injured spouse you would file Form 8379 with your return. This form may be e-filed with your return, so it should not delay processing of the return. If it is properly handled the return should not...

Tax Law (Questions About Taxes): no job,can i still file for earned income on 2 children, foodstamps, childsupport
foodstamps, childsupport, unearned income: Susan. If you do not have unearned income and not earned income, you probably would not be entitled to tax credits. To get a tax credit for kids in a family, the maximum was two. I understand that the number will increase to three. I will be in a seminar...

Tax Law (Questions About Taxes): Lawsuit fees, Settlement costs and Legal Fees
Settlement costs and Legal Fees: Hi Jennifer, I would have reported the sale of the house on schedule D as an investment. I can see why you put it on Schedule C, but unless you are a dealer in buying and selling homes Schedule D is the proper place to report the sell. This was a transaction...

Tax Law (Questions About Taxes): Legal Fees, Start up costs of failed business
Start up costs of failed business: Hi Joann Yes. Since you never started the business you can deduct the start up expenses of the business that are disposed of completely as a loss under Code Section 165, or a casualty loss from a trade or business. Any individual seeking legal advice...

Tax Law (Questions About Taxes): Life Insurance proceeds, annual gift tax exclusion, gift tax exclusion
annual gift tax exclusion, gift tax exclusion, 401k plan: Susan, Thanks for your question. Life insurance proceeds are not taxable and the amount is under the limit for the annual gift tax exclusion (when divided three ways), so there are no tax concerns if you give her the proceeds. Hope this helps. ...

Tax Law (Questions About Taxes): LLC Corporate Tax, tutoring company, corporate taxes
tutoring company, corporate taxes, sec of state: llc is not a corporation. so you dont pay corporate taxes ever. unless you check the box and elect to be taxed as a corporation which you would almost surely never do and it would be pretty much malpractice for me to suggest you do. assumes you own the...

Tax Law (Questions About Taxes): LLC owned and operated by spouses, husband and wife, LLC
husband and wife, LLC, single member: It all seems a lot more complicated than it is. Even so, your best bet is to hire a CPA to help you with your taxes every year (they can also help you with any questions that may, and will, pop up throughout the year in regards to the LLC.) That being...

Tax Law (Questions About Taxes): Loan Loss, Personal Loan Loss
Personal Loan Loss: Hi Kimberly, Yes, you can claim this loss in 2009 since the loan loss occurred in that year. You claim this loss on Schedule D of Form 1040 as a short term capital loss. Put the amount of the loan in the column for the cost/basis, and put zero in the...

Tax Law (Questions About Taxes): Lottery winnings, Taxation of lottery winnings
Taxation of lottery winnings: In California lottery winning are not taxable by the state, but they are taxable for federal tax purposes. General tax and financial planning is in order when this much money is won. You should consult with a tax attorney to discuss the specifics. Any...

Tax Law (Questions About Taxes): Lottery winnings from Cdn gifted to US resident, Tax on Gifts
Tax on Gifts: Yes, that is correct. You should also check with Canadian counsel to determine what the ramifications are to your parents, if any, in Canada. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response...

Tax Law (Questions About Taxes): LP, full time job, state lp
full time job, state lp, jane jane: Jane, Thanks for your question. I presume that your mean a limited partnership when you state LP. If this is the case, you are taxed on your share of the profits without regard to withdrawals. The LP should give you (and the other partners) a K-1 at...

Tax Law (Questions About Taxes): LT cap gains, long term capital gains, 0%
long term capital gains, 0%, 15%: Good afternoon, Mr. Irwin. Let me do my best to help you. When I use examples, I m just going to go with 2008 amounts- they won t change much. The entire capital gain is not, unfortunately, tax-free. What happens is this: you subtract out of your gain...

Tax Law (Questions About Taxes): LTD and oasdi taxes, ltd benefits, stancil
ltd benefits, stancil, happy new year: Michelle, Thanks for your question. If you pay the premiums the benefits are not subject to income tax. LTD benefits are not earned income and are not subject to those other taxes regardless of who paid the premiums. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Lump-sum payment in exchange for not working, lump sum payment, employment contract
lump sum payment, employment contract, wages: Emily: It is not wages. It you selling your right to an employment contract. Its more like an investment or a return on an investment. Therefore it is not subject to FICA. However, I have never addressed this issue before and will have to research it...

Tax Law (Questions About Taxes): Can lawsuit losses or attorney fees be deducted from federal taxes?, annuity investment, federal tax purposes
annuity investment, federal tax purposes, personal lawsuit: When you relinquished control of the property should be considered the sale date . The value agreed upon in the settlement agreement should be used. I am assuming that they just have not recorded the transaction yet. There is sometimes a delay in this...

Tax Law (Questions About Taxes): life insurance money, tax form 1099r, irs tax form
tax form 1099r, irs tax form, life insurance money: Angela, Thanks for your question. I m not clear on what happened. Based on your description, she withdrew the money prior to her death. If this is the case, then her estate will receive a 1099R as indicated in the letter and it will be reported on...

Tax Law (Questions About Taxes): llc startup deduction, startup costs, stancil
startup costs, stancil, minimum time: Craig, The startup costs must be amortized over a 180-month period (not 60 months). You do have an option of expensing up to $5,000 in the first year in addition to normal amortization. Amortization must begin the month the business began. I would forgo...

Tax Law (Questions About Taxes): lost track of cost basis, wash sale rule, etrade
wash sale rule, etrade, micheletti: Mr. Micheletti: When you make a sale you will need to account for the cost to determine your gain or loss on the transaction. How can you wash-sale if you do not know the basis of you cost. I believe you must research your purchase to determine what you...

Tax Law (Questions About Taxes): lottery winnings, lottery winnings, miscellaneous itemized deductions
lottery winnings, miscellaneous itemized deductions, itemized deduction: Jerry, Gambling losses can be deducted as an itemized deduction on Schedule A under miscellaneous itemized deductions not subject to the 2% limitation. You can only deduct losses up to the amount of gambling winnings and must be able to prove the losses....

Tax Law (Questions About Taxes): Medical deductions, medical insurance premiums, adjusted gross income
medical insurance premiums, adjusted gross income, medical deductions: Tony, You can deduct the cost of your medical insurance premiums if they are not deducted from your pay check on a pre-tax basis. Most companies take it on a pre-tax basis, so you should check to see. Fees paid to a licensed medical person or facility...

Tax Law (Questions About Taxes): Mileage Reimbursement, mileage reimbursement, business miles
mileage reimbursement, business miles, employee expenses: Yes. The difference will go on your Schedule A, line 21- unreimbursed employee expenses. Describe it as unreimbursed portion of .55/mile business miles or something like that so they know that a portion WAS reimbursed, it just wasn t the entire amount...

Tax Law (Questions About Taxes): Military tax filing, return states, filing taxes
return states, filing taxes, state return: Alex, Thanks for your question. You can file a federal joint return. New Hampshire only taxes dividend and interest income, so she may not need to file a state return. States vary in how they treat situations where spouses are residents of different...

Tax Law (Questions About Taxes): Minister's Housing Allowance, housing allowance, stancil
housing allowance, stancil, relevant factor: I stated that it is excluded from his taxable income. That mean that it is not taxable. It does not further reduce his income. If his total income from the church, including housing allowance is $10,000 and his housing allowance is $3,000, he pays tax...

Tax Law (Questions About Taxes): Misc 1099-Expense Reimbursement, expense reimbursements, janet janet
expense reimbursements, janet janet, stancil: Janet, Thanks for your question. The company is not reporting it correctly. This is what is known as a non-accountable plan, and any allowances given him are taxable income that should be included on his W-2. Since this should be included on the W-2,...

Tax Law (Questions About Taxes): Misc Income, lump sum payment, starting salary
lump sum payment, starting salary, stancil: Charles, Thanks for your question. It is taxable income. It s treatment would depend on how the law firm handles it. It most likely will be reported to her on a 1099-Misc with an amount in box 3. If this is the case, report it on line 21 of the 1040...

Tax Law (Questions About Taxes): Money received as a missionary from a church, missionary status, tax exempt organization
missionary status, tax exempt organization, stancil: Phil, Thanks for your question. Yes, that is taxable income. I would advise you to form a tax-exempt organization to receive contributions and pay yourself a salary. This would allow individuals to give tax-deductible contributions to your mission...

Tax Law (Questions About Taxes): mileage question, mileage reimbursement, healthcare corp
mileage reimbursement, healthcare corp, stancil: Susan, Thanks for your question. Commuting mileage is not deductible. If reimbursed, it is taxable. Commuting includes the first trip of the day from your home to your first stop and your last trip of the day from your location to home. Any mileage...

Tax Law (Questions About Taxes): mileage reimbursement, mileage reimbursement, salary employees
mileage reimbursement, salary employees, adjusted gross income: Jamey, Thanks for your question. The per diem amount is taxable income. You can deduct your mileage on Schedule A as a miscellaneous itemized deduction. However you can only deduct the portion that exceeds 2% of your adjusted gross income and you must...

Tax Law (Questions About Taxes): mileage write-offs 2009, employee business expenses, business mileage
employee business expenses, business mileage, adjusted gross income: Hi, You didn t say whether or not your employer reimburses you for mileage. If you are reimbursed you can deduct the difference between your reimbursement and your actual mileage at 50 cents per mile. If you are not reimbursed you can deduct the total...

Tax Law (Questions About Taxes): minister allowance, accountability plan, retirement allowance
accountability plan, retirement allowance, medical allowance: Lori, No. If the church gave him those allowances, since it is a non-accountable plan his taxable income would include all but the housing allowance, or $25,000. With a non accountable plan, the money is taxed anyway and the amounts are deductible....

Tax Law (Questions About Taxes): mortages and per diem, stancil, per diem
stancil, per diem, reimbursements: Gina, Thanks for your question. Per diem amounts are not considered income. As a rule they are reimbursements for expenses incurred. If your employer has a non-accountable plan, the per diem amounts are taxable income and should be included on your...

Tax Law (Questions About Taxes): mortgage--prinicipal forgiveness--impact on taxes?, loan forgiveness, cornell law
loan forgiveness, cornell law, prinicipal: this is not tax advice as you have a relatively expensive case - but that said, if you are insolvent when you get the loan forgiven (debt relief) you are exempt from recognizing the gain you have just realized (two key words in tax law)., you will realize...

Tax Law (Questions About Taxes): New York Tax, Living in New Jersey and working in New York City
Living in New Jersey and working in New York City: Nuru, Anyone who works in New York State and New York City will be required to pay taxes on the income earned within those borders to those jurisdictions. If you were to live in New Jersey, you would also be subject to New Jersey income tax on those same...

Tax Law (Questions About Taxes): Non-filing of corporate taxes, franchise tax board, tax id number
franchise tax board, tax id number, ca franchise tax: memo to tax payer... states are VERY poor now. especialy land of AAARnold.... so, I would pay the tax to the franchise board. fess up and move forward. why let it go. it wont go away. that is almost a guarantee. YOu want to worry about it recurring years...

Tax Law (Questions About Taxes): Non-Resident Property Tax, Residency of Military Personnel in CA
Residency of Military Personnel in CA: Hi Ryan, Thank-you for your service. Military personnel are subject to special treatment with respect to residency in California. Out of state military personnel serving at posts of duty in California are treated as non-residents unless California...

Tax Law (Questions About Taxes): NYS DMV Auto Gift, friend need, stancil
friend need, stancil, car 15: Jean, Thanks for your question. Gifts are not taxable income, so you do not have to report it on your taxes. Since its value is under $13,000 your donor does not need to file a gift tax return or otherwise report it. Hope this helps. John Stancil,...

Tax Law (Questions About Taxes): Partial Property Transfer from Parent to Child with some cash exchange, Gift from parent to child
Gift from parent to child: Hi Paul, Yes, this can be done. The difference between the FMV of the interest and the cash paid is a gift by the parents to the child. Each parent can give $13,000 each to the child as part of their annual gift exclusion. The rest will require the filing...

Tax Law (Questions About Taxes): Personal Use of Company Vehicles, stancil, company vehicles
stancil, company vehicles, work location: Gary, Thanks for your question. Being on call does not have any effect on the commuter miles for tax purposes. There is nothing authoritative as it is not mentioned in the code. U. S. Master Tax Guide 2010, paragraph 945 mentions only one exception...

Tax Law (Questions About Taxes): personal loan to LLC and LLC expenses on personal credit card, personal credit card, llc interest
personal credit card, llc interest, form 1065: Marcos, The LLC simply has an account payable, which is reduced when you are reimbursed. The expenses paid by you are deductible on the 1065 as expenses, but the loan repayment is not a tax issue. To avoid complications you should pay the credit card...

Tax Law (Questions About Taxes): personal taxes, form 1040 es, pension check
form 1040 es, pension check, stancil: Larry, Thanks for your question. Since you have received the money, you can t do anything to limit the taxability of the funds. You can make an estimated payment on Form 1040-ES to limit the amount you will owe when you file your 1040. You can...

Tax Law (Questions About Taxes): Quick Question, tax sale properties, tax certificates
tax sale properties, tax certificates, ok tax: Skyler: I have not a clue. I have never heard of this individual and have not read his material. Therefore, I can not give you an informed answer. I do know that in my state you can purchase property at a tax sale hold it three years. That sometimes...

Tax Law (Questions About Taxes): Quick Question, port charlotte florida, william j mccorkle
port charlotte florida, william j mccorkle, tax auction: generally this sort of SCHEME is that you buy foreclosed property at town held or run tax auction. you get to eitehr keep the property or the owner has to redeem it back from you with interest (sometimes up to 18%) at the amount you paid, plus fees. each...

Tax Law (Questions About Taxes): Quitclaim or sell?, distant family members, circular 230 disclaimer
distant family members, circular 230 disclaimer, pocket expense: She should put these lots in a trust and the two close friends can be beneficiaries. Then they will receive a step up in tax basis to fair market value at the date of her death. The attorney that prepares this should do an independent review to determine...

Tax Law (Questions About Taxes): Real Estate Commission Tax deductable?, deduction of Real Estate Commission
deduction of Real Estate Commission: Hi Pauline, When you sell the home the net capital gain is determined by deducting the basis in the property and the commission and closing costs from the sales price. So yes the commission is deductible. A commission paid to a non-licensed person is...

Tax Law (Questions About Taxes): Real Estate Commission Tax deductable?, Commissions paid to realtors
Commissions paid to realtors: Pauline, Commissions paid to realtors are not tax deductible. It does not matter whether the realtor is licensed or not. These costs are however added to the cost basis of the property sold. This is relevant in determining the capital gain or loss on...

Tax Law (Questions About Taxes): Real Estate Commission Tax deductable?, real estate commission, stancil
real estate commission, stancil, personal residence: Pauline, Thanks for your question. I presume you are talking about your personal residence and not an investment or rental property. The commission is a reduction of your proceeds, reducing your profit. If the sale is taxable, you can use the commission...

Tax Law (Questions About Taxes): Receiving a sponsorship, circular 230 disclaimer, athletic scholarships
circular 230 disclaimer, athletic scholarships, qualified institution: In that case the exclusion does not apply and this would be taxable income. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific...

Tax Law (Questions About Taxes): Rental Property LLC, sole proprietorship, self employment taxes
sole proprietorship, self employment taxes, stancil: Cathy, I presume that you are a one-member LLC. If this is the case you simply report the results on Schedule E of you 1040. It is not subject to SE taxes. An LLC is always a disregarded entity, as the IRS does not recognize it as a separate entity...

Tax Law (Questions About Taxes): Renting vs. Selling an inherited home, 30 year mortgage, sister and brother
30 year mortgage, sister and brother, tight spot: I think your ideas about the situation are by far the more reasonable. The tight spot results from the fact that it s your sister you re disagreeing with. If they want to rent the house out and are willing to buy you out of it to do so, you should just...

Tax Law (Questions About Taxes): Renting vs. selling an inherited home, 30 year mortgage, sister and brother
30 year mortgage, sister and brother, elementary school district: Ms. McGreevy: It is your inheritances to do as you see fit. If your sister and husband wants to buy you out then that is their choice not yours. I can not see anything wrong with you trying to use the inheritance to reduce your own debt load. Joh...

Tax Law (Questions About Taxes): No reportable income, reportable income, adjusted gross income
reportable income, adjusted gross income, tax liabilities: Hi, You report your rental income and expenses on Schedule E. Be sure to take a deduction for depreciation since if you ever sell the property they will treat it as though you had taken a deduction for depreciation even if you didn t actually take it....

Tax Law (Questions About Taxes): not reporting a, nissan z roadster, form 709
nissan z roadster, form 709, verbal agreement: The IRS cannot read your minds, so they must go by the objective evidence. The objective evidence indicates that you gave him a vehicle - therefore it is a gift whether you intended to do so or not. There is nothing in writing that indicates otherwise. ...

Tax Law (Questions About Taxes): Am I required to file?, Taxation of Inheritance
Taxation of Inheritance: The inheritance you received is not considered income. If you have no other income, you are not required to file a federal income tax return. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response...

Tax Law (Questions About Taxes): rollover from annuity to ira then withdrawl from ira charges, traditional ira, marginal rate
traditional ira, marginal rate, stancil: Dave, When you withdraw the funds, you will be subject to income tax on the amount withdrawn at your marginal rate. This can be between 10 and 35% and is determined by your taxable income and filing status. In addition, since you are temporarily disabled...

Tax Law (Questions About Taxes): S/E taxes, lllc, hot coffee
lllc, hot coffee, nevada company: that is the whole point. you can have a single member llc! no general required (this is not legal advice) but you can set up llc by the dozen online with a delaware or nevada company for under $250... my lawyer charges the same and includes the state filing....

Tax Law (Questions About Taxes): Sale of C Corp Stock, section 1244 stock, stock section
section 1244 stock, stock section, capital losses: Mark, You have to report the loss as a capital loss and short term or long term depending on the holding period. You may have an ordinary loss, if the stock is registered as small business stock( Section 1244 stock. Capital losses offset Capital...

Tax Law (Questions About Taxes): Sale of house, Loss on Second Home
Loss on Second Home: The sale of a second home which has a loss is not deductible. This would be a personal loss. Since there is no gain it does not have to be reported on your tax return. Keep all your documents to document this position in case the IRS ever looks at the transaction....

Tax Law (Questions About Taxes): Self Employed Health Premium Deduction, health insurance premiums, health premium
health insurance premiums, health premium, dave thanks: Dave, Thanks for your question. As you are not eligible to participate in a plan subsidized by your or your wife s employer, you are eligible for the deduction on page 1 of the 1040. I would add, however, that the determination is on a monthly basis....

Tax Law (Questions About Taxes): Self Employment taxes, self employment tax, limited liability company
self employment tax, limited liability company, www irs gov: why does one partner take a draw ? ostensibly for salary? does he work more then the others? if he did not fund the original partnership equity, then he is going negative in capital? or does the entity make income? there are no distributions for tax on...

Tax Law (Questions About Taxes): Self Employment taxes, circular 230 disclaimer, llc interest
circular 230 disclaimer, llc interest, self employment taxes: Someone has to be the manager. Limited partner is a term exclusive to limited partnerships. In an LLC you are either a member or managing member. A limited partnership also must have a general partner. Any individual seeking legal advice for their own...

Tax Law (Questions About Taxes): Self-employed Health Ins Deduction, Deduction for Self-employed Health Insurance
Deduction for Self-employed Health Insurance: Your payments for health insurance are deductible as they are for any self-employed person. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature...

Tax Law (Questions About Taxes): Self employment taxes, cash profits, self employment taxes
cash profits, self employment taxes, limited partners: Steven, The way you laid it out, I would say that the members most likely would be limited partners. I still think that someone should be a general partner since there must be a contract between the LLC and the 3rd party to handle the affairs of the LLC...

Tax Law (Questions About Taxes): Selling 1/2 interest in property, cambridge md, happy holidays
cambridge md, happy holidays, cost basis: Hi Brian- Your side issue got cut off, so I m not sure what you re asking there, but I ll answer your other questions in order: 1. Correct, as long as you re correct in that they each have equal interests. 2. Correct. 3. Correct. Sales Proceeds-Basis=...

Tax Law (Questions About Taxes): Selling my house in less than two years, maximum exclusion, stancil
maximum exclusion, stancil, tax purposes: Dwayne, Thanks for your question. Since the sale of the house occurred due to a change in the location of your employment, you are eligible for a reduced maximum exclusion. You lived in the house as your main home for approximately 18 months, so you...

Tax Law (Questions About Taxes): Selling real estate to a related parrty, principle residence, current market value
principle residence, current market value, parrty: Kristy, Thanks for your question. The problem is that, legally, the shareholder and the corporation are two different entities. Any sale significantly below market value would be income to the shareholder. Hope this helps. John Stancil, CP...

Tax Law (Questions About Taxes): Settlement Chck, settlement check, federal purposes
settlement check, federal purposes, pain and suffering: Edward, I cannot speak for New Jersey, however, settlements with regard to pain and suffering are taxable for Federal purposes. I assume the settlement went first to her estate and was then distributed to the children. If this is the case, it is possible...

Tax Law (Questions About Taxes): Settlement of Severance Pay, severance package, unlawful discrimination
severance package, unlawful discrimination, self employment taxes: Eric, Not an easy question to answer since I do not know the rest of her tax situation. The employer is likely to pay her at least part of this settlement via W-2 - have you asked them? Normally in these cases, 50% of the settlement is W-2, 50%...

Tax Law (Questions About Taxes): Signing name to deed of house, jennifer thanks, canadian citizen
jennifer thanks, canadian citizen, jennifer jennifer: Jennifer, Thanks for your question. If your parents are included on the deed, when you sell the house, only your portion of the ownership is eligible for the exclusion of gain from the sale of your primary residence. The gain on their portion of the...

Tax Law (Questions About Taxes): Social Security Card after marriage, social security card, social security number
social security card, social security number, 1099s: No, it won t matter. Just make sure you use the name on your social security card when filing. Beyond that, any forms given to you to assist in filing (like 1099s or W-2s) will be under your taxpayer ID- your social security number- regardless of what name...

Tax Law (Questions About Taxes): Social Security Tax, social security tax, foreign earned income
social security tax, foreign earned income, earned income credit: Allen, Thanks for your question. The foreign earned income credit/exclusion applies only to federal income taxes. It does not apply to some state income taxes and does not apply to social security/Medicare. So what you have heard is true. I have...

Tax Law (Questions About Taxes): Sole Proprietor Question, sole proprietor business, separate legal entity
sole proprietor business, separate legal entity, sole proprietorship: RB, Thanks for your question. Since the sole proprietorship is not a separate legal entity, it must be titled in your name (in most states), but you can deduct the costs of the vehicle if it is used for business. If not 100% for business the costs must...

Tax Law (Questions About Taxes): Sole Proprietorship: Taxable income, sole proprietorship, sole proprietor
sole proprietorship, sole proprietor, filing taxes: Hi, You report the $10 as income. Then you deduct the fee as one of your business expenses. If you produce the product you have to figure your cost of goods sold. Since you are a sole proprietor you will use Schedule C to report your income and expenses....

Tax Law (Questions About Taxes): On SSI and working, cpa tax business, business advisory services
cpa tax business, business advisory services, contract labor: Dear Karen, Yes, you are required to pay taxes on all earnings if they are not specifically exempted. For the annual tax return, you would report your earnings as an independent contractor on Schedule C of Form 1040. Generally, to avoid penalties, you...

Tax Law (Questions About Taxes): State Taxes, california franchise, real estate rentals
california franchise, real estate rentals, state taxes: Dorothy, If you declare your residence in Arizona, you vote in Arizona, live there and register your vehicle there, then you can be a resident of Arizona. You will still have to file a California Franchise return as a non resident and see if you can claim...

Tax Law (Questions About Taxes): State Withholding, state tax credit, state withholding
state tax credit, state withholding, state return: yes. your company should take out tax for the jurisdiction in which you are working. allocation by days or hours is good. when you file in your resident state, you will owe tax on all your earnings. and then file in the state you also worked (non resident...

Tax Law (Questions About Taxes): Stock Cost Basis, Basis of Gift Received
Basis of Gift Received: Hi Michael Your basis in the stock is amount that you originally paid for it in 1998. When your grandmother signed it over to you, it was a gift which receives a carryover basis, or the original purchase price. Any individual seeking legal advice...

Tax Law (Questions About Taxes): Stock option loss more than $3000, kai kai, capital losses
kai kai, capital losses, return thanks: Kai, Thanks for your question. Not normally. Usually these losses are capital losses subject to the $3,000 limitation. If you are a dealer and the securities are your inventory they can be treated as ordinary losses and deducted currently. However,...

Tax Law (Questions About Taxes): Student Loans and S Corp Deductions, repayment of student loans, student loan payments
repayment of student loans, student loan payments, sole shareholder: Bryon, Congratulations on your son passing the bar! The student loan itself is never deductible. The tuition and fees may be deductible on his 1040 for 2008 if he qualifies. It depends on when the bank paid his tuition to the school. The interest...

Tax Law (Questions About Taxes): SUV Depreciation, section 179 depreciation, depreciation deductions
section 179 depreciation, depreciation deductions, vechical: see page 18 - far right column, with respect to buy in 2009 and placed in service in 2010. http://www.irs.gov/pub/irs-pdf/p463.pdf calculations for the 179 expense limit are also calculated in this chapter. MEdusa that is the way I read the...

Tax Law (Questions About Taxes): Subcontractor Taxes, work from home job, self employment taxes
work from home job, self employment taxes, hr rep: Leanne, The government would not withhold anything, you would have to make estimted payments. You would file Schedule C as a part of your 1040 and pay tax on the profit. Probably 10-15% at that level of income. You would also have to file a Schedule...

Tax Law (Questions About Taxes): sale of home, home in louisiana, stancil
home in louisiana, stancil, buying a new home: Lynn, Thanks for your question. You are thinking of the old law, which went out in 1986. Under current law a couple filing jointly may exclude up to $500,000 of gain on the sale of their primary residence if they have lived in it as their main home...

Tax Law (Questions About Taxes): self employed 401k, sep ira, simple ira
sep ira, simple ira, sole proprietor: Venky, Thanks for your question. You can have a 401(k) plan in your business but you must give the employees an opportunity to participate. However, it will no longer be a solo 401(k) and will be more complex. I suggest you consult a qualified retirement...

Tax Law (Questions About Taxes): self employed minor, self employment tax, self employment taxes
self employment tax, self employment taxes, minor question: If she is only performing this work for one family, then it changes things. If this is, indeed, the case, then not only does she not have to pay SE tax, but neither does her employer , since she s under 18 (and, I presume, a student.) Good catch- the...

Tax Law (Questions About Taxes): short sale write-off, debt forgiveness, debt cancellation
debt forgiveness, debt cancellation, investment loss: The difference in the sale price and what you owe the bank is income, not a write off. You can, however, deduct the loss on the sale (or pay tax on the gain). In the case of a debt cancellation, this gets a little complicated. First you need to determine...

Tax Law (Questions About Taxes): step up basis, estate lawyer, qtip
estate lawyer, qtip, family trust: i am not qualified to answer this - but pretty sure it is not stepped up at first death. if material, you shoudl be discussing this with an estate lawyer not asking for free advice on a joke of a chat board. serious - how much is it worth to you? duh. call...

Tax Law (Questions About Taxes): stocks and taxes, long term capital gain, capital gains tax
long term capital gain, capital gains tax, happy new year: Hi, When you sell it you will pay capital gains tax on the difference between what you sell if for and what you paid for it. If you hold it more than one year, it will be a long term capital gain. If you hold it one year or less, it will be a short term...

Tax Law (Questions About Taxes): student status-HOH-a child, head of household, time student
head of household, time student, august 31st: Sharry: The one who claims the child can also claim head of household. Usually, its the mother unless a court as otherwise ordered. You both my be able to qualify as full time student. With you tax return will be a questionnaire to complete to make...

Tax Law (Questions About Taxes): TAX, personal residense gain exclusion
personal residense gain exclusion: Hi Doug, Sales of personal capital assets are reported on Schedule D of form 1040. However,if you qualify for the homeowner exclusion (Code Section 121(b)) and it completely eliminates your gain, you do not have to report the sale on your tax return at...

Tax Law (Questions About Taxes): Tax Deductions, tax deductions for truck drivers, self employeed
tax deductions for truck drivers, self employeed, irs pub: there is not a list for much in the tax world. the law is IRC 162 - ordinary and necessary which means you can deduct the over road permit as a truck driver but I cant as a cpa. it also depends upon how you report your income (as an employee of a...

Tax Law (Questions About Taxes): Tax Deductions for a Physical Therapist doing 1099 work, Choice of Business Entity
Choice of Business Entity: Hi Mary, First, I wouldn t form an entity for this activity until it makes at least $100,000 per year. I just do not see the cost of the entity justifying the benefits until then. So start off operating as a sole proprietorship. Second, you can write...

Tax Law (Questions About Taxes): Tax Deductions for a Physical Therapist doing 1099 work, sole proprietorship, work question
sole proprietorship, work question, forming an llc: LLC s and S Corps are what are know as pass through entities, meaning they don t pay tax, but the earnings are passed through to the owners with the tax to be paid on their 1040 s. The amount of deductions you may take does not depend on the form of organization...

Tax Law (Questions About Taxes): Tax deductions for travel as consultant, rv repairs, wiring harnesses
rv repairs, wiring harnesses, current market value: Kathy, Thanks for your question. You can deduct mileage for the business miles, or you can take actual expenses, pro-rated for the business percentage of use. If you take actual expenses you should take depreciation. The campground fees are deductible...

Tax Law (Questions About Taxes): Tax on IRA payout to estate, ira payout, circular 230 disclaimer
ira payout, circular 230 disclaimer, income tax purposes: If the IRA owner didn t name a beneficiary or named his estate as beneficiary (as in your case), there is little room for distribution planning. If the IRA owner dies before the required beginning date (for distributions), the balance will be distributed...

Tax Law (Questions About Taxes): Tax from Money Use to Purchase home, taxation of stretch IRA on lump sum distribution
taxation of stretch IRA on lump sum distribution: Hi Chris, If you are paying tax on this money, then it must have come from an IRA that is being stretched. Otherwise the money you are receiving should be tax free. If you take the entire lump sum, it will be taxable in the year of distribution. If you...

Tax Law (Questions About Taxes): Tax preparer, blank copy, stancil
blank copy, stancil, number 73: You should contact the preparer. From your description, it appears that the return was submitted via efile. The XXX are there on the printed return to maintain confidentiality of your information. You cannot submit a subsequent e-file to correct any information....

Tax Law (Questions About Taxes): Tax on property sale, widow pension, maximum rate
widow pension, maximum rate, tax bracket: Hi, Her gain attributable to depreciation taken (or which could have been taken even if she didn t actually take a deduction for depreciation) will be taxed at a maximum rate of 25%. The remaining gain will be taxed at a maximum rate of 15%. I don t know...

Tax Law (Questions About Taxes): Tax Refund, income tax returns, divorce situation
income tax returns, divorce situation, stancil: Nick, Thanks for your question. Probably nothing you can do. The IRS does not pay refunds more than three years old. However, if you can prove you filed the returns, you may be able to convince them to pay the refunds. Same for the state. Hope...