The Small Business Tax Help Blog

Archive for January, 2007

With the nation on the brink of economic collapse, Wall Street panic at an all time high, and hedge funds and financial institutions disintegrating, New York based Elliott Associates has parked an additional $1 billion into Ryan Kavanaugh’s Relativity Media which will finance a large slate of Universal Pictures’ films over the next few years.

And the question remains “why?” in today’s economic crisis as well as the recent pull out of billions of dollars in institutional capital from the studios.

No matter how bad things are in the world, people need to be entertained. And while the crowd mentality of panic in the U.S. financial markets exists, overseas, properly structured commercial films generate more revenues which add to bigger distributor buys with the Euro vs. USD.

Apart from Elliott Associates, other investors including billionaires,family offices from Wall Street to Silicon Valley to the Middle East to Russia have been parking their money into Hollywood

Larry Ellison Of Oracle, Paul Allen Of Microsoft, Steven Rales, Fred Smith of Federal Express, Norman Waitt, the Co-Founder of Gateway Computers, Jeff Skoll Of Ebay, Marc Turtletaub of The Money Store, Roger Marino Of EMC Corp, Sidney Kimmel Of Jones Apparel Group, Minnesota Twins owner Bill Pohlad; Real Estate Developers Tom Rosenberg and Bob Yari, and, financiers Sheikh Waleed Al Ibrahim, Michel Litvak, and Philip Anschutz are all behind the finance of a lot of films that range from box office hits to Academy Award winners.

While the glamour of the movie business may be appealing to most, at the end of the day, it is still an unknown business that many try to gamble on, and only a handful come out as winners. The real key is to minimize risk, maximize profits, and offer a steadier stream of revenues than what other alternative investments may offer such as real estate, oil & gas, commodities, hedge funds, or practically any other investment in today’s market.

Instead of dazzling investors with smoke and mirror Monte Carlo simulation models that offer various IRR’s and scenarios based on unpredictable film revenues streams,the key is to offer an absolute return on investment utilizing international and U.S. public tax incentives that in certain instances can guarantee 100% or more of invested capital prior to revenues by leveraging equity positions with non-recourse debt.

Investors who either want to take a 100% Federal deduction under Section 181 or “The American Jobs Creations Act” against their ordinary income, get an additional 20-40% in tradable and monetized state tax credits or cash rebates, have a hedge of revenues from a slate of films, as well as stimulating local and international economic development, and creating jobs, including for women and minorities.

Sound too good to be true?

Not too many other alternative investments can offer tax incentives, multiple exit strategies, the potential to guarantee 100% of capital, giving back to the American economy and labor, while being involved with the moviemaking process that would also add to the long line of recent film funds that have been structured with numerous hedge funds, private equity investors, corporate tax credit buyers, and institutions.

In today’s shaky financial markets, not too many businesses can be started that can have an almost predictable ROI prior to operations and profits.

Will new tax rules be boost for pros?

Ah, complexity! With a series of new federal tax credits available this year, some tax preparers see the potential for big business during tax

Ivory Homes – If I own a home, will I still benefit from the $8,000 federal tax credit?

Question: Does anyone know a lender or investor that can help me with a start up loan with no resources and bad credit?

I do have my business plan. I got help with it from a member of SCORE from the SBA. I am trying to build a restaurant. Yes it is new. A building has come up for sale that would work to become established. I do not have the money to invest of my own. I need either a 100% start up loan or a combination of loans. A private investor or even a co-signer for future pay on considered investment. I don’t how this could be done. I have some ideas but getting a lender to them is another story. If I could come up with some money, I might be able to get the owner to carry a portion. The building is on a 21,166 Sq. Ft. Paved corner lot. The building is a free standing 3,028 Sq Ft. Structure built in 1973. Yearly taxes are $5,315.00. It is anchored. Price $415,000.00. I am trying to get a $500,000.00 loan to remodel, equip, stock and get the place open with operating capital and a very small cushion to start making repayment. I do have experience in this as well as Management exp. from previous.

Answer: I think your time would be best earning money and repairing credit for now. Not bank is going to finance you 100%, and a personal investor is going to want some collateral. Put yourself you their shoes, would you invest in a company the owner has not stake in himself? Especially a risky small business like a restaraunt?

I am in the same position as you are, and I have about 40K left to go before I can launch. Instead of wasting time trying to start now, spend the next couple months working as hard as you can to gain capital to invest. Not only will you have money to invest, potential investors will take your initaitive into consideration as well.

Prepare, Click, Send: Tax Filing Season Kicks Off Today

SAN DIEGO----Tax filing season officially opens today as the Internal Revenue Service begins accepting electronically filed tax returns. If recent trends continue, 2010 will be a record year as more people use their home computers to prepare their tax returns and file them electronically.

Even Investment Losses Can Save You Money

Question: How to I report income (from a 1099 MISC form) on my 1040?

Essentially I have misc. income (classified) independent contractor from an odd job. The IRS website tells me to fill out a schedule 1040 C (or CEZ), then a Schedule SE for self employment tax, ok. I think I get that but the 1099MISC has only copies marked for state and recipient, how does the IRS know what I’m filing if there is nothing to attach to the 1040? Doesn’t all income have to have documentation? -This is not the same as a 1099R.

Answer: What the IRS told you, schedule C or C-EZ and schedule S is correct. You don't have to send in copies of the 1099-misc to them. They do already have the info from the person who sent it to you, and can refer to that if they need to check anything. They'll at some point match up the filed returns against the paperwork they already have, and send you a bill for additional taxes if you don't list the amount on your return.

Calendar

Submissions for "Community Calendar" are required two weeks preceding the date of publication. Send to: Mary Ann Bottari, Pioneer Press, 3701 W. Lake Ave., Glenview IL 60026; mbottari@pioneerlocal.com. Information may be faxed to (847) 486-7495.

Tips for Filing Taxes : How to Appeal an IRS Audit

Question: I have an opportunity to work as an independent consultant/contractor but have no idea how to do so legally. ?

I have never thought of doing this before, and have absolutely no idea what I am getting into (as far as legal & tax arrangements).

They want me to start in one week, so the time frame is short.

Do I need to create a business name? I am in IL, but I will be working in IN. Does this matter? Also, should I have them pay for my hotel room directly or would I be better off doing this myself and having them reimburse me for the stay? Is there a going rate for expense reimbursement (mileage, meal per diem, etc)

Answer: It would probably be wise to start off with getting a federal tax ID. You can fill out the application online and they will give you the ID after you fill out the forms. You will probably need one for filling out the paper work associated with the job.
Standard procedure for accommodations is to have them reimburse you but I would check with the company themselves. It varies company to company. Some pay upfront for accommodations and mileage, others will wait for you to bill them.
I don't think there's a going rate for reimbursement, I think it just depends on where you stay, how long you stay and how far you have to travel.
Here's a tip though, unless you are selling merchandise, do not get an Illinois Tax ID (I own a business in Illinois). This will mean that you have to pay taxes monthly for something that you are not doing. If you are not a retailer, do not get a state tax ID.
Get a contract written up by a lawyer or maybe a CPA (mine does things like this for me, but I don't know about others). Make sure it is legally notarized and covers all your bases about your liabilities and agreements with the company you're working for.
Contact a lawyer and get their opinion. It will cost you something up front but it could seriously save you in the end if something goes wrong.

PIAA hearing, audit put district in spotlight

Journal Register News Service Part two of two PHOENIXVILLE — School practices came under scrutiny in the Phoenixville Area district during 2009, both in an athletics program hearing process and a forensic audit.

WFL LOTSOLUTION

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