The Small Business Tax Help Blog

Archive for February, 2009

BusinessWise brief: Dealing with unwanted gifts

This week, our experts offer tips on returning gifts without a receipt, picking a savings account and whether tips are subject to income tax.

Social Security, Medicare and Other Taxes

Question: Maryland Tax Withholding?

Hi, I live in Maryland. I am about to get married. I just wonder if there is a big difference in income Tax Withholding for single vs. married. Should I expect less Tax Withholding after changing my status to married? If so, by how many %? Is there a table somewhere to look up for this?

Answer: The MD withholding tables are in the link below. Click on your county, and you will see the withholding formulas for that location. The withholding rates are significantly higher for single taxpayers than for married taxpayers. As with the Federal tables, however, it may turn out that too little is taken out during the year if you both work and ask for withholding at the married rates.

Recovery: Making Work Pay - Married (ASL) - August 09

Keeping the taxman at bay

JUDGING by the numbers in the tax authority’s latest annual report (2008-2009), the taxman had indeed been busy auditing and collecting. Across the board, there were increases in the number of cases dealt with and the amounts collected from back taxes and penalties.

Offer in Compromise Effective Tax Administration

Question: Hobby business became a serious business… how far back can I go with claiming taxes, writing off, etc?

I have every single receipt for every expense for the past 5 years … how many years can I go back to claim these? I have never charged tax on my product, but I know that I would have to charge tax once I registered. Anyone know of a good small Business Tax program that I could do this myself?

P.S. This is for an Ontario, Canada small business.

Thanks!

Erin

Answer: Unless you qualify under the fairness provision to open the statute-barred years for reasons beyond your control, the normal period for taxpayers to correct the federal tax provisions, and obtain refunds for the resulting overpaid taxes, is three years -- the current year and the two previous years counting from the notice of assessment date of your 3rd last tax return.

It is important to note that the Canada Revenue Agency (CRA) is bound by the three-year Statute of Limitations in reassessing taxpayer's returns -- except if it suspects fraud, in which case it can reassess older returns.

Note also that expenses from a hobby is generally not deductible, and the expenses only become deductible if the hobby becomes a business with a reasonable expectation of profit in a particular year.

The tax programs sold at Futureshop or Staples should work OK for you.

BMO Financial Group Reports Solid Results for its Third Quarter, Earning $669 Million of Net Income

TORONTO, ONTARIO--(Marketwire - Aug. 24, 2010) - BMO Financial Group (TSX:BMO)(NYSE:BMO) and BMO Bank of Montreal - /

Question: How does the income limit work for the first time homeowner credit tax?

I know that you can receive up to $8,000 if you earn $75,000 or below, but is that $75,000 for 2008 or 2009? I am in sales and earned more than $75,000 this year, but I am assuming that I will barely skin $75,000 this year. Thanks for the help!
Also, if I bought this with my boyfriend, would we each be entitled to $8,000 or would it be split and/or pro-rated between us? Thanks!

Answer: It will be for 2009.

It is modified gross income so you will take your gross wages and subtract 401k contributions, health care premiums deducted from your check and any flexible spending contributions.

So if your gross earnings are $75,000 your modified gross income should be below that if you make any 401 k contributions or you pay for any of your health care premiums by having them deducted from your paycheck.

Buyers should know their 'musts' and 'wants'

"Ask the REALTOR" is a weekly column from the 3,500-member RealSource Association of Realtors, serving Northern New Jersey. Whether you're looking to buy, sell or rent or just have questions and need advice from a professional Realtor, send e-mail to realestatepr@northjersey.com.

Barbara Jordan Statue Unveiling Event