A Week in Perspective
The Turbo Tax defense doesn’t work in Tax Court. No Gold at the End of the Rainbow – The Court also noted that they gave plenty of opportunities for the Aus to negotiate a settlement with the IRS, and/or to consult attorneys regarding their case. They didn’t until the Court was about to render its decision. Had they asked a tax professional or an attorney familiar with tax law about their case, they likely would have been advised to settle and they would be paying less than they’ll have to.
Disability Insurance Policy To Protect Your Most Important Asset – Your Income – Ask yourself this question. What is your most important and valuable asset? Think about it for a minute. Is it your house? Your savings or your 401(k) retirement plan? Your sports car or rare memorabilia? While all of these things are both important and valuable, none of them truly represent your MOST valuable asset
Don’t Get Taken! What Passive Income Really Means
Love And Money – Love and money don’t always go hand in hand. It can be the cause of countless arguments especially since most of us have different money styles. However, with a few guidelines to promote better money communication, money can become a source of joy within a relationship rather than a stress inducer.
I like this – My “Reverse” Black Friday
ANOTHER ONLINE DEBATE – It seems the announcement of THE SCHEDULE C LETTER has re-opened the online debate of “Should a Sole Proprietor Incorporate, or A One-Person LLC Elect To Be Taxed As A Corporation, For No Other Reason Than to Reduce the Chance of an IRS Audit?” –
The Answer is individually situational. Please see a lawyer then see you tax professional before making your choice.
Not Going To Happen – All over the tax blogs today has been coverage of the President’s Debt Reform Panel’s Tax Reform Panel options for cleaning up the American Tax Code. It looks well thought out and I intend to give it much more study over the next couple of days. But it doesn’t matter what the options suggest, it won’t happen.
Veterans Day 2010: Tax considerations for members of the military
Home Improvements That Qualify for Tax Deductions – Did you know that some home improvements may qualify for federal tax deductions or tax credits? Knowing which renovations and improvements are eligible for tax deductions can help you decide whether or not to make the improvements, and can help you correctly claim deductions or credits for these renovations when you file your taxes.
The One Thing to Drop from Your Budget Like a Hot Potato
Financial Loopholes to Take Advantage of Now – In 2001 Congress passed a massive tax reform bill called the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which provided tax cuts to all Americans, in all income levels, via a multitude of changes to the tax code. These tax benefits have come to be known as the Bush tax cuts.
Tax Relief FAQ: How Does the IRS Compute Penalties For Delinquent Tax Returns? – An important step in avoiding IRS tax trouble is to understand how the IRS approaches delinquent tax return penalties.
1099s – The Good, the Bad and the Ugly - Having a small business issue 1099s for these purchases starting in 2012 would be pointless:
- $852 of office supplies purchased from Staples
- $2,592 of airline tickets purchased directly from the airlines
- $1,300 of services from their CPA firm
Issuing a 1099 for $700 of services rendered by a web designer makes sense though and existing law already covers that.
Steve Jobs Is NOT Giving You Tax Advice (But If He Did…) – . . . , as marketing goes, it’s pretty darn clever. And despite whether you love Apple or not, you have to give them credit for consistently being above the curve on the marketing side. As a tax geek, I’m a little bit in love. Using the Tax Code as a marketing tactic is genius (so, hey Apple, call me).
How to Work a Job Fair – Before You Go to a Job Fair, It’s best to be prepared for a job or career fair. Before you go, prepare yourself to impress, and have an idea of what companies you want to talk to. As get ready to go, consider taking these actions:
So I Won a Free Trip to the Bahamas. Now, How do I Report It on my Tax Return? - “I will not be sent a Form 1099-MISC. So how should I account for this on my tax return?”
What are the odds of an Obama compromise on Bush rates? – Tax planners got all excited yesterday when top White House aide David Axelrod hinted to the Huffington Post website that the President might be ready to extend the 2010 tax rates for top earners. Absent new legislation, the top marginal rate will rise from 35% to 39.6% in 2011 — and higher when phase-outs are counted. But if the Axelrod statements are a trial balloon, the President isn’t ready to climb aboard just yet. CNN reports on comments he made in Seoul:
Lottery winnings, charitable donations and the tax collector – By now I’m sure you’ve heard about the Nova Scotia couple who hit the lottery and then gave away most of their $10.9 million (Canadian) winnings to charities.
Allen and Violet Large are generous, but they’re no fools. They kept nearly a million for themselves. The septuagenarians say they’ll use the money for emergencies and to buy more lottery tickets.
Good for them! And doubly good for them that Canadian tax law allows them to give away so much of their windfall.
Wash Sale Rule for Investment Losses – All investors experience losses, no matter how experienced or knowledgeable they are. The Internal Revenue Service (IRS) allows investors to deduct capital losses from investing gains in order to reduce your capital gains taxes. Under the IRS rules, short-term capital losses can be used to reduce short-term capital gains, which is extremely beneficial because short-term capital gains tax is equal to your ordinary income tax rate.
Roth Conversion Planning Ideas
5 Ways to Make Sure that a Partnership is a Good Idea for Your Business – Ask most business people their most horrendous business story, and it will almost always involve a partner.
Lucky Number 13: 13 Financial Changes for My 23rd Birthday – now that I’m one day away from being 23, I’ve realized it’s time to start being more financially responsible.
Reads From Last Week
I am back on the racks over at Alltop. Thank you everyone for helping get there.
What is it?
Alltop is sort of a “digital magazine rack of the Internet. To be clear, Alltop sites are starting points” the site provides categorized selections of links to blogs and other web resources that make it easy to scan a lot of information on a particular subject. For example the Taxes page lists many tax blogs with links to the most recent posts. Alltop is a valuable resource for anyone wanting to research, or just keep up on, well, stuff. If you have ever been to a real magazine rack you know.
Anyway, I am very excited to have been added once again. Very Exciting times. . .
THE REPORT ON TAX REFORM OPTIONS – In a meeting yesterday afternoon (Friday, August 27th) the President’s Economic Recovery Advisory Board (PERAB) released its report, summarized their concerns, and voted to send the report to President Obama for review.
Paul Volcker has the President’s ear on tax reform…but will he listen?
Obama tax reform panel report released
10 Year Treasury Bond at Lows.. What Does it Mean?
Another great source of collected blogs BlogRoll Beans from Cafétax
Let the Charitable Mud-Slinging Begin!
The Internet is the Best, and Worst, Thing That Happened to Tax Planning and Preparation – the Internet has a long memory – as in, forever. So, things posted in 2004 might have been true then, but no longer are true. But that doesn’t stop search engines from pulling old articles and others from posting the articles on their website in an attempt to boost Google search rankings.
My favorite news this week, What You Can Learn From Roni Deutch’s $34 Million Fraud Lawsuit.
Read more about Roni Deutch’s $34,000,000 Lawsuit:
Brown Seeks $34 Million from TV’s Tax Lady Roni Deutch: Official News Release
TV Tax Lady Roni Deutch Facing Legal Troubles
Tax Lady Roni Deutch Sued for “Heartless Scam”
Roni Deutch Sued by California AG
‘Tax Lady’ Accused of Unladylike Behavior
Unladylike Behavior or Election Year Politics?
California Sues Roni Deutch for “Heartless” Pennies on the Dollar Tax Scheme
Here’s what she had to say, Tax Lady: California lawsuit ‘election year politics’
The TaxProf has more.
The Internet, Virtual Meetings, and Taxation
Tax Relief for Innocent Spouses – You Must Act Swiftly to File Your Claim with the IRS – In recent tax relief news, the Seventh Circuit Court of Appeals ruled that the IRS can continue to apply the two-year deadline for taxpayers looking to file for “innocent spouse” relief. Basically, this treasury ruling upholds that taxpayers claiming innocent spouse tax relief must make their claims within 2 years of the IRS’s commencement of collection action.
What is meant by an “innocent spouse”?
Tax and the City: Philly Tax Takes on a Life of Its Own
A Tax on Blog Writing or on Blog Business?
Philadelphia Demands License Fee and Taxes from Bloggers
All in all, I’d rather not be in Philadelphia
Click here for more information on Alltop. Or go to their home page at Alltop.com to start checking out your favorite information.
Reads From Last Week
Last week was July 4th, a great day for this country. I asked two of my children if they knew what all the hubbub was all about and both gave a pretty clear “nope”. At first I blamed myself, then their mother back to myself then the school system then myself again. How could my children not know about our Independence? For many of us in the US, this means picnics and barbecues, fireworks and parades. I’d like to think that most people in this country know about this holiday, what it represents and why we celebrate it so. “In the middle of all of the pomp and circumstance, let’s not forget why we celebrate this day.” Please read Happy 4th of July! From the TAXGIRL.
and the truth is out, stop reading that email No Tax on Health Care Benefits for 2010 or 2011 or…
IS A PUZZLEMENT is a post describing an IRS situation of confusion. This is a great post because it shows just how confused the IRS can be and often is.
And the final piece of the list Midyear tax tip #10: Get organized. Well done. For a recap of all ten you can visit my post from last week.
The IRS Hitman points out that the system just isn’t what it should in his post Prison Inmates Con the IRS Out of $9 Million in Homebuyer Tax Credits.
One Job “Created,” Another Destroyed - “On a tour to view the results of this spending he spoke in front of employees of Smith Electric Vehicles in Kansas City, MO, and pointed out that “There is a thriving enterprise here instead of an empty, darkened warehouse.”"- Okay to get this you’d have to read the post, but hey The Presedent was here in the area.
IRS Patrol: IRS Requests Public Input on Expanded Information Reporting Requirementis a post from Stacie over at Stacies more Tax tips. If you’re wondering about expanded reporting requirements for Form 1099 recipients please read her post.
Must a Practitioner Audit a Client’s Financials? The IRS would think so?
Joe from the Taxupdate blog is out on vacation. summer reruns have been being posted if you have missed them be sure to go now and read them.
the writing on the wall: stock prices for H&R Block and competition oops, is it the CEO leaving or is it a trend that people may be realizing those companies for what hey are.
The thought that I was the only one who got those letters was a mistake. What letters check out This Year’s Spin from Our Taxing Times.
“A lot of people are really struggling with rising costs and shrinking pay checks. If you’re one of the people caught up in that struggle, here are the Top 10 Questions That Will Transform Your Finances.”
401k Roll-Overs and Conversion To Roth Accounts May Soon be Permitted if this is something your wanting then this is a read for you.
You already know the importance of tracking your budget, But what if your spouse doesn’t understand these things? Then check out How to Get Your Spouse On Your Financial Team.
Another look at midyear tax moves
“Yep, when it comes to tax planning, there’s no such thing as too much!”
The Cost of Inattention think about it, it has be done right the first time, yes?
I was really unsure if I wanted to start out with this or end with this so as you can see it ended up somewhere in-between. There is a great post about this blog over at The Tax University Blog. If you want another opinion or your trying to convince someone to read this blog please read IRS Tax Help Blog from Missouri “TaxGuy” Offers Resources for Tax Preparation and Personal Finances. It really is a great read. Thanks for the great post Michael.
A few more great reads from there.
- Business Tax Relief Tips: Correctly Classify Your Employees to Avoid IRS Tax Problems and Penalties
- Taxpayers Get What They Pay for When It Comes to Tax Relief Firms
And for even more The Tax University Blog has been added to the blog roll.
National Taxpayer Advocate Nina E. Olson released a report to Congress that identifies the issues the Taxpayer Advocate Service will focus on for Fiscal Year 2011. Here’s the highlight reel from the IRS Hitman National Taxpayer Advocate Mid-Year Report to Congress.
For more on the report please see NEW REPORT FROM THE NATIONAL TAXPAYER ADVOCATE from the Wondering Tax Pro.
IRS Goes High Tech For Recruits – The IRS has more than 100,000 full-time and seasonal employees across the country. It’s a number that may continue to grow as audits and collections matters increase. You can check out the IRS’ jobs website at www.jobs.irs.gov.
So, how much should we save? The Prudent Habit of Saving is a good post if this is a thought of yours.
Preparing for the Future: A Risk-Management Checklist is an interesting read from GetRichSlowly
I found this on my surfing and it has nothing to do much about taxes but it is great Mastery and the Average Factory Worker “I cannot think of one problem that can’t be solved by this solution: “Work more hours than the average factory worker.””
The Effect of Baby Boomer Retirements on the Stock Market is a good read from fivecentnickel.com.
Some Thoughts on DINKs (Dual Income, No Kids) from the simple dollar. Is a must read.
4 Changes To Make In This New Economy This is a new blog from my end of the world called Money Crashers.
“Early tax-advantaged saving coupled with the benefits of compounding make investing in a 529 plan a smart financial move.” Andy explains in his post How to Choose a 529 Plan And Save Now For Future College Costs – Prepaid vs. College Tax Savings Plan.
Congratulations to Joe over at Café tax. This is a great post So Why Are Babies Called a Tax Deduction. Where did you get that great baby picture?
The IRS Wants To Turn Your Independent Contractor Into An Employee is a post from the blog over at Diane Kennedy’s US Tax Aide blog. Another new place for me. There are some great post over there. Like:
- Little Known Trick to Turn a 50% Meal Deduction Into 100% Deduction
- When Is Your Travel a Tax Deduction?
- Just Cause The Feds Say So, Doesn’t Mean Your State Will Let You
And my two favorites so far:
In case you missed it, I have added Diane Kennedy’s US Tax Aide blog to my tax blog roll.
Flabbergasted Reputable Tax Service Company acting like an A-Hole is great, comment spammers beware.
Also, Staci has been running an interesting series “This is a multi-part series about a girl enticed into the indentured life of a door-to-door seller of magazine subscriptions. Her recount of industry practices and the resulting tax consequence is truly shocking.”
- Part One – How The Nightmare Started,
- Part Two – Life on the Road With Nick
- Part Three – Sex Drugs and Taxes – Nonexistent Commissions and Other Revelations
This is great, 10 Commandments [??] for CPA Practice and I’d have to guess Humorous.
7 stupid retirement myths exposed
I have often wondered the whereas and or the why-fors when a company picks a name well wisebread has posted How 16 Great Companies Picked Their Unique Names. Very interesting. And to think, I just used what I do and the letters of some of my children.
11 Reasons Your SMB Still Needs A Web Site I have run across this and it is a great post a must read if your small business is considering a website or not.
In closing this weeks reads, I want to throw out there to you my next thought in the blogging world. It has come to my attention that there are a lot of QuickBooks users out there. I have a client who is as smart as any business owner comes. He is very good at what he does, yet when it comes to accounting and QuickBooks he has issues like anyone else. I have been dealing with his One companies issues for a while now and have deemed from it that although there are hundreds of sites out there talking about QuickBooks I am considering my own.
The question I have for my readers, should I make it is going to be a blog, Should I make it a part of this site or should I just start another?
I have heard clients say that the best help they have found has been with video so they can follow along. Mine won’t have video, but rest assured there will be lots of pictures – and it will be starting with 2010 Version Not for Mac.
Please email and let me know what you think.
Hiring Family Members For your Business
Employing your Child – A reasonable salary paid to a child reduces the self-employment income and tax of the parents (business owners) by shifting income to the child.
If the business is unincorporated and the wages are paid to a child under age 18, he or she will not be subject to FICA – Social Security and Hospital Insurance (aka Medicare or HI) – taxes since employment for FICA tax purposes doesn’t include services performed by a child under the age of 18 while employed by a parent. accordingly, the child will not be required to pay the employee’s share of the FICA taxes and the business won’t have to pay its half either. In addition, by paying the child, and consequently reducing the business’s net income.
A similar but more liberal exemption applies for FUTA, which exempts from federal unemployment tax the earnings paid to a child under age 21 while employed by his or her parent. The FICA and FUTA exemptions also apply if a child is employed by a partnership consisting solely of his parents. However, the exemptions do not apply to businesses that are incorporated or a partnership that includes non-parent partners. However, there’s no extra cost to your business if you’re paying a child for work that you would pay someone else to do anyway.
- Retirement Plan Savings – Additional savings are possible if the child is paid more (or works part-time past the summer) and deposits the extra earnings into a traditional IRA. For 2010, the child can make a tax-deductible contribution of up to $5,000 to his or her own IRA. The business also may be able to provide the child with retirement plan benefits, depending on the type of plan it uses and its terms, the child’s age, and the number of hours worked. By combining the standard deduction ($5,700) and the maximum deductible IRA contribution ($5,000) for 2010, a child could earn $10,700 of wages and pay no income tax.
Hiring Your Spouse – Reasonable wages paid to a spouse entitles the employer-spouse to a business deduction. The wages are subject to FICA taxes, and the spouse may qualify for Social Security benefits to which he or she might not otherwise be entitled. In addition, the spouse may also be eligible to receive coverage under the business’ qualified retirement plan, and the employer-spouse may obtain a business deduction for health insurance premium payments made on behalf of the employed spouse. While maintaining the same family coverage, the business deductions could be increased by providing the spouse with family health insurance coverage as an employee.
If the spouse was unemployed (worked less than 40 hours) during the prior 60-day period, the employer will qualify for exemption from the employer’s 6.2% share of the Social Security payroll tax on the spouse’s wages for the remainder of 2010. If the spouse continues to work for an uninterrupted period of 52 weeks, the business would also be entitled to a retention credit of up to $1,000 in 2011. (Unemployed relatives such as children, siblings or parents whom you may hire are not qualified employees for this credit.)
Originally written for another blog. Edited here by Sandi and republished for your information.
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