Owner: Gina's Tax Blog URL:http://glgcpa.blogspot.com/ Join Date: Tue, 08 Aug 2006 11:21:09 -0500 Rating:1 Site Description: This blog provides general information about U.S. and Texas taxes by Gina L. Gwozdz, CPA. Gina is the owner of Gina's Tax Service. Her main goal is to help all her clients minimize their tax liability within the constraints of the law. Site statistics:Click here
Retirement Plans 2007-08-20 08:44:00 Charlie asks:
I have been contributing to a Roth IRA to the max amount and a little bit to a 401k. My employer also runs a profit sharing type plan that they contribute to. Now, the question is, am I also able to contribute to an SEP-IRA? I do contract work on the side and receive 1099s. For status I am single and my W2 income will be in the 60-70k range and my self employment will be about $10k.
Reporting Children's Income 2007-08-24 23:23:00 Renee asks:I opened an UGMA account for each of my children (13 years old and 10 years old) when they were born. Their accounts have appreciated over the years and my 13 year old's account is reaching $100,000. I've been using TurboTax to do my return and including their dividends, distribution, and interest on my own tax return. On my 2005 tax return this amount was over $10,000. I am paying roughly $1500 tax for that judging my effective tax rate was 28% in 2005.I'm about to start my 2006 tax return and I was wondering if I can begin to file a separate tax return for my 13 year old, or even my 10 year old? This would be their only source of income. I would assume that I could save some tax by doing that.Any advice?ReneeMy reply:You have never been required to report your child's income on your own return. You may make an election to report your children's income on your return, until they turn 18, if they do not have any earned income or Schedule D sales to report, but I r Read more:Reporting
, Children
, Income
Prepare Now to use your Old AMT Credits 2007-08-23 15:21:00 Unless Congress changes the law, 2007 may be your biggest tax refund yet.According to a little talked about provision in the Tax Relief and Healthcare Act of 2006, many taxpayers with AMT (Alternative Minimum Tax) credit carryforwards from 2003 or earlier, may be able to receive a refund for all or part of this credit.You must have incurred the AMT credit carryforward in 2003 or earlier and have not used it all, in order for the credit to potentially be refundable. If you have several AMT credit carryforwards and have used part of them, you need to use the FIFO (First-In, First-Out) method to determine if any of your current AMT credit carryforward is due to 2003 or earlier. Once you know how much of your AMT credit carryforward may be refundable you can calculate the tentative amount you will be refunded.The part of your AMT credit carryforward which is eligible for refund is quite generous. If the amount of your AMT credit carryforward that is eligible to be refunded is less than $ Read more:Credits
LLC owes IRS 2007-08-30 14:03:00 Sharon writes:Hi, we are closing down a small LLC of which my husband is CEO and I'm the bookkeeper. The LLC owes about $10,000 to the IRS. Another company is buying our company's assets and the transaction will net enough to pay the tax bill, but it is taking a LONG time to happen. The IRS wants its money and is about out of patience.We want to 1. pay the IRS bill with our personal credit card 2. get a new card with a 0% rate on balance transfers 3. transfer the balance 4. When the buyer finally gets its ducks in a row, our company sells the assets and gets paid 5. our company reimburses us our legitimate company-related expense, the $10,000.Is this legal? Are there pitfalls? The LLC also owes about $5,000 to the state; the asset sale should cover that, too.We have no room to bend rules here; there are three other soon-to-be former partners, and one is angry and would probably love an excuse to sue my husband for mishandling the company finances -- so we have to be Caesar's wife.
Minor Children Stock Sale 2007-09-23 14:58:00 Brandon asks:
I opened custodial stock accounts for each of my kids when they were born. If I sell some of the stocks that I bought do I need to file tax returns for each of my kids? Do I need to pay taxes on the gains (they should be around $15,000 each)? Someone told me that any gains from minor children do not need to be reported.
Thanks,
Brandon
My reply:
Hello Brandon. Yes, each of your
Read more:Minor
, Children
, Stock
Minister Housing Allowance 2007-09-22 17:15:00 I am a pastor and I'm looking into buying a home. I want to make sure the home I purchase does not have a fair rental value greater than what I'm receiving as a housing allowance. How do I know what this amount is?
My reply:
Your housing allowance is determined by negotiating that amount with your religious organization. You are allowed to exclude from Federal income tax the LESSER of the
Read more:Minister
, Housing
Clergy and Self-Employment Taxes 2007-09-19 21:47:00 This article is a general overview of clergy and their obligation to pay self-employment taxes in response to an anonymous reader. I strongly recommend that you discuss this article with your qualified tax professional.
If you are an ordained, commissioned or licensed member of a religious order or a christian science practitioner and you object, based on religious reasons, to receiving
Read more:Taxes
Rental Income and Expenses 2007-09-15 12:54:00 Tammy writes:
I've been renting out the lower section of my house. It has a separate entrance from the rest of the house and also its own sink. My renter has full kitchen privileges. I have been collecting 1/2 of my utility costs (TV/Internet, water, electricity), in a separate check, from the renter as well.
I have been treating her monthly rent as taxable income and the utility money as a
Read more:Rental
, Income
, Expenses
, Rental Income
Diabetes testing supplies are deductible 2007-09-09 06:35:00 Tony asks:
I pay for my own health insurance and that alone allows me to meet the 7.5% threshold for deducting medical expenses on my tax return. Now I find out that I'm pre-diabetic, so I've been testing my blood glucose a few times a week. I don't have a doctor's order or prescription. Insurance does not pay and I wouldn't meet the deductible even if it did. Cost of the monitor was minor but
Read more:Diabetes
, supplies
Avoid AMT at all costs? 2007-09-06 05:25:00 Bill writes:
I've had to pay AMT for the last two years. This year, I have an unusually large income. It seems to me that if I take this income all at once this year, I'll avoid AMT. I believe I'm calculating this correctly because while the deductions disallowed by the AMT have stayed the same in size, my taxable income has gone up. Therefore, the additional income is being taxed at the top tax
Read more:Avoid
Son pays rent 2007-09-04 09:38:00 Mark writes:
My son is no longer a full time student. He lives at home, and the deal is he pays us rent until he either moves out or goes back to school full time. My question is: how is this handled, tax-wise. I assume I declare the rental income, but are there other issues I have to be aware of? Never been a landlord before. Thanks for your help.
My reply:
Hello Mark!
If I were your advisor
Labor Day Carnival 2007-09-03 17:16:00 Why not click on over to Kay Bell's blog where she is hosting Tax Carnival
#22: A Labor Day Celebration.
LLC owes IRS 2007-08-30 14:03:00 Sharon writes:
Hi, we are closing down a small LLC of which my husband is CEO and I'm the bookkeeper. The LLC owes about $10,000 to the IRS. Another company is buying our company's assets and the transaction will net enough to pay the tax bill, but it is taking a LONG time to happen. The IRS wants its money and is about out of patience.
We want to 1. pay the IRS bill with our personal credit
Reporting Children's Income 2007-08-24 23:23:00 Renee asks:
I opened an UGMA account for each of my children (13 years old and 10 years old) when they were born. Their accounts have appreciated over the years and my 13 year old's account is reaching $100,000. I've been using TurboTax to do my return and including their dividends, distribution, and interest on my own tax return. On my 2005 tax return this amount was over $10,000. I am
Read more:Children
, Income
, Reporting
Prepare Now to use your Old AMT Credits 2007-08-23 15:21:00 Unless Congress changes the law, 2007 may be your biggest tax refund yet.
According to a little talked about provision in the Tax Relief and Healthcare Act of 2006, many taxpayers with AMT (Alternative Minimum Tax) credit carryforwards from 2003 or earlier, may be able to receive a refund for all or part of this credit.
You must have incurred the AMT credit carryforward in 2003 or earlier and
Read more:Credits
Retirement Plans 2007-08-20 08:44:00 Charlie asks:
I have been contributing to a Roth IRA to the max amount and a little bit to a 401k. My employer also runs a profit sharing type plan that they contribute to. Now, the question is, am I also able to contribute to an SEP-IRA? I do contract work on the side and receive 1099s. For status I am single and my W2 income will be in the 60-70k range and my self employment will be about $10k.
Investment Newsletters 2007-08-15 19:55:00 Craig asks:
I was told that my investment newsletter services tax-deductible, but I don't know where to put them on my tax return? Do I spread the cost over the investments I bought based on the news services' advice?
My reply:
The cost of your investment newsletters are considered a miscellaneous itemized deduction on Schedule A, subject to the 2% of Adjusted Gross Income (AGI) exclusion. The
Read more:Newsletters
Bankupt Estate 2007-08-15 11:41:00 Ruth asks:
My father died recently, and I'm trying to organize his financial affairs. I'm the only heir, and executor of his estate.
He had a lot of debt and very few assets, so there will not be enough money to pay everything. He has a small amount of money in a bank account, and that's it. No real estate, no investment accounts, his car wasn't paid off, and there are no other assets.
I will
Read more:Estate
Estimated Tax: Self-Employed 2007-08-12 13:03:00 Trina asks:
I'm self-employed with a highly variable income. Last year I made a little money in the first quarter and second quarter and then more in the 3rd quarter with significantly more in the last quarter of the year. I paid estimated taxes in each quarter based on the income I had and assuming a pretty high tax rate. At the end of the year I got hit with a penalty for not paying my
Read more:Estimated
, Employed
LLC taxes 2007-08-08 17:28:00 Reed asks:
I have a question about LLCs and federal taxes.
I know that if you create an LLC and don't file an 1120 (i.e. you don't pay yourself as a W2 employee of your own business), then whatever income you make in the LLC just flows through to your personal taxes.
What I don't know is how your taxes and deductions change when you do file an 1120. Do you end up with an extra level of federal
Estate and Gift Tax Liability 2007-08-02 07:00:00 Alice asks:
If someone has all their money in joint or POD/TOD bank accounts and dies, I know that the money is not subject to probate, but if estate taxes are due, how does the IRS get it? It seems to me that the IRS is entitled to get it even though the money passes directly, but I'm not sure of the mechanics, and would love an explanation.
I would also think that if there were other assets in
Read more:Estate
, Liability
Investment Related Questions 2007-08-01 08:19:00 Ben asks:
My question is regarding my subscription to investment newsletters and paid subscriptions to investment websites. Can I deduct that when i do taxes, if so what documentation will i need. I also have a sharebuilder account and pay a monthly fee for that. What about any losses i have incurred? Also, how would i go about getting the standard 30 for the spanish american war?
Ben
My reply:
Net Paycheck 2007-07-29 08:59:00 Eldon writes:
I graduated from college last May and have been trying to evaluate several job offers that I have. I'd like to estimate how much money I will be paying in taxes so that I can determine what my actual take home pay will be at each job, and so that I can also determine how much I'll be able to save, how much I can budget to spend on housing, etc. I'm having difficulty finding a
Read more:Paycheck
Tradiation Non-deductible IRA Contributions 2007-07-26 16:30:00 Dan asks:
I'm debating if I should start an IRA or not. The problem is that all contributions would not be deductible. As far as I understand this, it means that any capital gains sells would not be taxed until I was ready to withdraw.
My question is about withdrawing money from this account. Are the contributions I made post-tax taxed again upon withdrawal or only the earnings? It would make
Obtaining a Copy of a Prior Year Return 2007-07-21 06:33:00 The IRS has a special form for requesting a photocopy of a previously processed tax return and attachments. If you need to obtain a copy of a prior year return, complete Form 4506 , Request for Copy of Tax Return
, and mail it, along with an IRS processing fee of $39 for each tax period requested, to the IRS address listed on the form for your area. Unless the IRS has
Read more:Prior
Personal Residence 2007-07-20 05:55:00 Steve writes:
I co-own a house with my domestic partner. We live in California, but are not registered as domestic partners. The value of the property has dobuled since we purchased it, and it is now worth approximately $1M. All costs related to the house have been split 50/50 (down payment, mortgage, taxes, improvement projects, maintenance). We are both disciplined Quicken users so we can
Read more:Personal
, Residence
Avoid tax on 401(k)? 2007-07-18 12:34:00 Jake asks:
Assume at the age of 60 I retire to a country that does not have an income tax and other than the 401K account, I have no assets in the US. At age 65, as a non-US citizen, I liquidate my entire 401k account and transfer it to a bank in the new country. Do I pay any penalty / tax to the US gov't? It would seem that there must be some provision that prevents total tax avoidance in that
Read more:Avoid
W-2 and Self-Employment Taxes 2007-07-16 14:57:00 Trent asks:
Suppose I make about $100,000 in a salaried position where my employer pays 1/2 FICA. But then I also have a sole-proprietorship where I make about $100,000 and current pay "both halves" of FICA.
How do I work this into the FICA limit of ninety something thousand (for SS of course...no limit on medicare/caid)? Would I pay the roughly 15% up to the limit?
I am currently paying
Read more:Taxes
Gifting 2007-07-08 05:05:00 Ray wonders:
If I "gift" some shares of a mutual fund via a broker to broker transfer is this a taxable event (regular or AMT) for me?
My reply:
Hello Ray!
Since you have the word gift in quotes and you did not provide me with any more information, I will assume that you are speaking of a plain old-fashioned, "Here, I want you to have this" gift; however, if it's something else, then the
Reduce Your Property Taxes 2007-09-30 11:37:00 If reviewing your assessed value of your home is not a regular routine, given the current real estate trend, you may want to start making it one.
Property tax bills are generated by taking the assessed value of your home and multiplying that value by the tax rate for the area where your home is located. Your assessed value is suppose to come close to the fair market value of your home. If home
Read more:Taxes
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