The Small Business Tax Help Blog

Archive for February, 2009

Question: I own a small business & worke for someone else now. What kind of tax return will I need to file for 2009?

So the details are I own a small business(ecommerce) which hasn’t made me any profits yet. I am still paying hosting fees for my site, internet & a land line all are in the business name. I am the sole proprietor, now I had to go back to work to make ends meet. What kind of taxes will I need to file for 2009? Are there any specific ways to get back something- anything so that my losses get cut down a bit. I’ve invested a year off work, savings and some credit card debt due to the not much profit making in my business.

Answer: You may be able to take a deduction for your start up cost on the new business which will result in a business loss and therefore offset your income from other sources. This is a little complex and may require a little help in doing so. It could be worth your effort to contact a tax professional.

Reno-area casinos to receive property tax reductions

The Atlantis and Peppermill will receive property tax reductions for the 2010-11 tax year based on lagging business, marking the first time that every major hotel-casino in Washoe County is being devalued.

Gov. Perry: Legislative Accomplishments Will Continue to Position Texas as an Economic Leader

STATES

OTHER STATES: Centre blames UP for surge in sugar price Ban on imported raws cited as the main reason. The Centre has blamed the current surge in domestic sugar prices on the Uttar Pradesh (UP) Government’s move to block entry of imported raws into …

Evelyn Fernandez at the Roni Deutch Tax Center Grand Opening

Christmas Friends has another successful season

Christmas Friends Inc. had another successful year thanks to a generous community that donated money and time. In its 24th year, the gift-giving program helped 171 children and 129 senior adults who met strict guidelines for need.

Q 5. Are any of my adoption expenses tax deductible?

Question: LLC incorporated in multiple states need multiple EIN numbers???

I opened a 2 member LLC in GA at the end of and got an EIN number. Part of our business is dealing with alot of real estate transactions. We are located on the GA/AL border and were told that in order to be able to do real estate work in AL, we had to register our business as a domestic LLC in AL and have an agent, which we complied with. Now my accountant is telling me that I need a second EIN number for my Alabama business since I registered as a domestic LLC. Is this correct? PLEASE HELP!! Thanks you!

Answer: Whoever advised you to register a second LLC in Alabama did not know what they were talking about. You could have registered in Alabama as a foreign LLC for $75 which would have allowed your Georgia LLC to operate there. A second LLC is essentially a second legal entity that probably will need an EIN.

If you want to make your life easier, scrap the Alabama LLC and register your Georgia one as a foreign LLC.

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Real estate fraud has become a common occurrence in our distressed economy. Last April, the FBI uncovered the largest mortgage fraud case ever prosecuted in Southern California. It involved an elaborate con which defrauded over 70 lenders for millions of dollars. Recently, we’ve seen the “foreclosure rescue” scams, “short sale facilitation” scams, and “loan modification” scams.

By far one of the coldest, most calculating deceptions, extending over 20 years and $67 billion was the Ponzi scheme orchestrated by Bernard Madoff. He showed no discrimination when selecting targets; his victims ranged from celebrities, wealthy financiers, to retirees and small investors. There was no sense of remorse on Madoff’s part, as he stripped many of their life savings, leaving a trail of betrayal and shattered lives.

Many of these victims sat in court, anxiously awaiting the outcome of his much publicized trial. Everyone was shocked when the judge pronounced the maximum sentence of 150 years. The judge may have considered a lesser ruling, but no one came forward with letters of reference in support of Madoff’s character or any good deeds he had done.

Now the victims have closure, and it appears the judge was setting an example to others by imposing such a harsh ruling. This case, however, is far from over. There are a number of unanswered questions that may spark investigations for years to come, as well as the moral questions raised by this crime.

Bernard’s fraud was based on a Ponzi or pyramid scheme where investors are promised larger than average payouts. The money is never invested, but payouts are made from the the deposits from new members. Layers of investors provide profits for the lower level members. This worked nicely attracting all levels of investors until the bottom started falling out of the market and large investment firms were going bankrupt. Nervous investors began withdrawing their funds at alarming rates. Madoff, realizing his scheme would be uncovered, confessed to his family that the business was all a sham, and turned himself into the authorities.

Apparently, no one knew of his deceit, and Madoff accepted total responsibility for 20 years of fraudulent investing practices.

Question Number One. How could anyone pull off this type of complex crime for so long, with no one’s help? Apparently, there was an accountant that has been charged, and an investment firm was also implicated, but other than those, Bernard Madoff, swears he was the lone gunman. In the next few months, watch for the name “Frank DiPascali” to appear in the news. he was Madoff’s Chief Deputy whose actual job description in the company was somewhat of a mystery. Rumor has it, he is under investigation and is willing to “sing like a canary” with regard to the entire operation, in exchange for reduced sentencing.

Question Number Two: Just how innocent are some of these victims anyway? For years, Madoff’s operation operated in a profit margin, securing double digit investment returns even during the recession when other companies were folding. Were the recipients of these positive returns concerned about where the money was coming from? Apparently, during questioning, DiPascali claimed that he modified investment statements for some clients to reflect losses to reduced their tax blow.

Question Number Three: So, now that it’s all said and done, where is the money? Bernard’s wife and kids are still living luxurious lifestyles, is it such as stretch to assume they are reaping the spoils?

Finally, Question Number Four: What’s up with the SEC? The Securities and Exchange Commission investigated Madoff’s business dealings on a few occasions, but always came up empty handed. Apparently he was a clever man, who covered his tracks well, but to completely outwit an SEC investigation – what’s up with that? We also understand that Bernard’s niece Shana Madoff, who was active on the Executive Committee of SIFMA’s Compliance & Legal Division, married an SEC compliance official not long after the investigation was concluded. Might as well keep it all in the family.

It Happened in 2009

Newsmaker of the Year Catalyst battles property taxes Catalyst Paper Corporation told the provincial government in early January that the amount of taxes it pays was unfair. It proposed moving to a consumption tax model and paying only for the services it uses, estimated to be about $1.5 million in each of the communities where it operates.

Information on Measures S and Y, for Artesia, California