The Small Business Tax Help Blog

Archive for April, 2010

Question: Advice for starting a general partnership in TX. Selling merchandise from home.?

My potential business partner and I would like to start a general partnership. We would like to buy items wholesale and sell them from home, maybe eventually online or from a store in the future but for now just from home. What legal documents, licenses, or permits do we need? I’ve heard we need a resale liscense and an EIN. Or no EIN but a federal tax id number. Or just a resale license alone. Also read we need a business license. Just very confused. Any help would be greatly appreciated!

Answer: A general partnership does not provide any liability protection so I recommend that you avoid this type of organization.

So… in Texas you can form an LLC (limited Liability company) for $300 – go to Texas Secretary of State for forms and information.

Once you get your LLC setup, you need an EIN, employer Identification Number (federal tax id is the same thing). Go to IRS.gov and complete an SS-4 form.

Once your LLC is set up, the State of Texas will send you documents to establish a sales tax number. Having these things in place and you’re good to go.

Good Luck,
Dana B.
www.thebarfieldgroup.com

BizFilings Celebrates National Small Business Week by Offering New Businesses a Break

New Businesses Save up to $75 on Incorporation in May

Beat Hunger! (WP)

Question: Why do I have to give my SS# to get a TIN/EIN for my corporation?

Answer: Because the US government wants to be able to go back after you if there is a problem. Also to be sure you are a legitimate person.

Germany gives Lena a heroine’s welcome

WINNER:BERLIN EUROVISION winner Lena Meyer-Landruth was given a heroine’s welcome on her return home yesterday, giving Germany something to cheer about and a break from its mounting worries.

Burmese Song – A Mae Takhuh Taa Takhuh

Web Sales Tax Debate Flares Again

Would you prefer to save $40 a year in sales tax on purchases you made on the Web, or watch your house burn down when the fire department takes 30 minutes to get there?

Congressman Cohen emphasizess the tax cuts included in ARRA

Question: I received a letter from the i.r.s. today and it showed my amended changes. sayscheck in 2 weeks. is that true?

I added my son as an earned income credit. hes only three and one more dependent.It showed 2 credits for me and said the check will be at my house within two weeks. So I assume no more delays maybe. I live in california.

Answer: The IRS is a USA tax office, your in the United kingdom tax section.

Your best is to move this to the USA section as your more likely to get 1: more answers, and 2: relevant to the US laws.

Sorry I couldn’t help with your question!
Best of luck!

Wells Fargo earns $2.37 billion

By Christina Rexrode, The Charlotte Observer, N.C. Apr. 21–Wells Fargo earned $2.37 billion for common shareholders in the first quarter, beating analyst expectations and trumpeting that credit has “turned a corner.”

Maria Shriver – Stockton, CA – CUFF

Question: How do I show proof for federal energy tax credit?

I own a wood boiler that I put in service in 2009 that is eligible for $1500 federal energy efficiency tax credit. I installed the complete system myself and I am not in the hvac business what so ever. If I ever get audited, how do I show proof of it being placed in service if I installed it myself?

My understaning is the credit is for when placed in sevice, not when purchased, as it was bought earlier and have receipt of that.

Answer: First let me say that I don’t think you would qualify for the credit based on your installation since you did the job yourself and there was no ‘out-of-pocket’ costs of any significance for you to claim the credit against. That’s the Bad News; however the Good News is that the IRS allows the credit against the purchase and installation of qualified energy efficient property when the property is “placed in service”.

The IRS defines ‘placed in service’ as when the property is ready and available for use. It’s not when you purchase product, but the day installation is complete, and you are able to use your new product. So if you were able to heat the water during 2009 then that should qualify as being placed into service. Then you would simply take 30% of the cost of the wood boiler (up to the maximum limite of $1,500-) as a credit.

You do not need to attach anything to the return to prove the amount you are claiming; however I would advise you to do so if you were my client. It won’t stop you from receiving a ‘nasty-gram’ from the IRS asking for proof of the claim…but if you did receive a request you could respond to the examiner that the proof of the cost was attached to the return already. That would probably take care of the issue and cause the return to be accepted as filed.

You may wish to review the IRS take on the EEC. Click on the first link below to go to their website – which doesn’t provide an awful lot of information. A better site for review and research is the one maintained by EnergyStar. Click the second link for that site.

G’Luck…

Mike Womack, Sr. Partner
Zero Degrees Tax LLP
Moore, OK

FedEx Releases 2009 Citizenship Report, Unveils EarthSmart

MEMPHIS, Tenn.—-FedEx Corp. today extended its commitment to social responsibility by releasing its 2009 Citizenship Report and unveiled the next evolution of FedEx sustainability—EarthSmart.

Air Conditioning Energy Tax Credit