The Small Business Tax Help Blog

Archive for April, 2010

Question: Using HR Block’s tax estimator, when it asks for the amount of federal tax you’ve paid?

in 2008, should you type in the whole amount of federal taxes you’ve paid (social security, medicare, general withholding) or should you exclude the social security? It is making a big difference in the estimation of how much we should receive back. If we include the SS, it says we get back $5,000ish. If we don’t include it, it says we’ll get back $700ish.

Answer: Do not include SS, medicare, etc. Only direct income Tax Withholding by the Federal government should be put on that line (do not include state income tax).

The Dangers Of Value-Added Tax

The hidden nature of the VAT means it consistently moves higher–without taxpayers’ knowledge.

2009, 2010 Withholding Calculator Federal

Question: yes but that is not the real difference?

FOR AGI deductions reduce AGI, the importance of classification is because the AGI is used for establishing limits on certain deductions FROM AGI such as medical expenses, education expenses, property taxes, charitable contributions, and interest found in the itemized deductions. Generally, deductions FOR AGI are related to business expenses while, deductions FROM AGI are personal in nature.

Answer: Define AGI. FROM probably increases it and FOR is subtracted. AGI is what’s left.

Australia Provides Certainty For Business Transactions,

Australian Assistant Treasurer, Nick Sherry, has announced three actions that together will provide a greater degree of certainty in relation to the tax treatment of key business finance transactions.

Tax Forms & Deductions : Federal Income Tax Standard Deductions

Question: My hobby has turned into a small internet business-what are the legalities?

My “ebaying” has turned into a slightly profitible business. I have now moved my selling to an online “antique mall” w/ a store name. I still do not have a tax ID and have not been filing taxes. My husband seems to think that what I am doing is “a hobby” and I dont need to bother w/ the above. At what point do I have to begin doing this . I spoke w/someone once that told me, even if Im NOT making money (right now I break even) -he felt I should still be doing this (filing). Does anyone have a good website “for dummies” or advice on someone I speak to and get advise on how to -get tax ID, how to file, etc….I suppose I could just go and speak w/ an accountant…but I dont want to waste anyones time (or my money)…if I dont NEED to do it yet. I just figured, since I will be having a virtual “store front” that I need to be on the “up and up”.

Answer: You can call you state Department of revenue. Ask questions as though you are thinking about getting into this business. They will set you up with a Tax ID and help you file. We have one here in Ky and we file quarterly. Yesterday I called them and they helped me fill out my form. Even when you don’t make money you still need to file. It could be different in your state but I say better safe than sorry.Believe me, I’ve heard some real horror stories about people running online businesses and didn’t file. You don’t want to go down that road.

Stephanomics

Inflation rise: A surprise? Definitely. A problem? Possibly

Read Economics for Dummies book in Under 24 hours is it possible?

Question: Can the California Tax Board request Corporate business records for a Personal Return?

I am negotiating a repayment plan (433) with the Cal Franchise Tax Board. They are asking for my Corporate business info such as bank records, etc for my 2004 return that is a Personal Tax return. At the time I was not a corporation, but now I am (small prof. business).

Answer: They want to verify that the information you provide is accurate and that you aren’t hiding something.

Mind the Estate Tax Gap

For some time, people have been making morbid jokes about bumping off their rich relatives in 2010, a year that has no federal estate tax. The George W. Bush-era law that lowered the tax contained a one-year gap that Congress has never gotten around to fixing. The tax is set to return, at a 55% rate, on Jan. 1, 2011.

Tax Deduction Tips & Advice : How to Keep Vehicle Mileage Tax Records

Question: If the feds want me to file electronically why don’t they supply a way to do it?

I think is laughable that their is no way to file electronically supplied my the gov’t yet they want me to file electronically.

Seems to me there should be a simple way for me to send my taxes electronically; I mean every form has an Id number, and every box that has a value is numbered, so I should be able to simply send a 3 tupple list of form id, box number, value to the irs. why can’t I?

For example:
form; box; value;
1040; 7; 28000;
1040;8; 1400;
…

Now a lot of the forms might need box id numbers, like the socal security number box, etc; but that should be pretty simple.
I mean for free. I should be able to go to the irs website, download an HTML page, cgi form, etc, that generates the necessary output.

I should not have to pay a single dime to pay my taxes
Irs desire to have e-file:

http://accounting.pro2net.com/x60709.xml

but have a AGI limit on filing for free???

http://www.dunnconnect.com/articles/2008/02/01/news/news07.txt

what a crock.

Answer: The Federal and State governments have tried to make e-filing easier for taxpayers every year. Especially low-income filers. This is the first year I have ever e-filed!

Lake City Community Planner for March 10

McLeod Hospice is offering a volunteer training for those interested in serving hospice patients and families from 6-8 p.m. Thursday at McLeod Hospice House, at 1203 E. Cheves St. in Florence. McLeod Hospice serves Florence, Darlington, Marion, Dillon and Lee counties.

E-file and E-sign