The Small Business Tax Help Blog

Archive for June, 2010

Question: My Employer botched my change of address so my Tax Withholding went to the wrong state can I fix this?

I changed addresses to a different state in Mid-June and my HR dept. failed to file the new W-4 I filled out, so they continued to withhold taxes to my prior state of residence. How do I get the 2nd half of my years taxes from the old state to the one I live in now so I can file corrected state returns?

Already the prior state wants income tax paid on the entire year’s earnings in addition to what was withheld (the new W4 HR didn’t file also changed my marital status), and it’s over a thousand in penalties! Obviously the new state IS owed taxes on my income from Mid-June but I’m not paying both. So:

1)With the change of address being so close to mid-year, should I divide the amount in half?

2) How do I get the money back from the old state and get it to the new state?

3) Would H&R Block be able to help as I can’t afford a Tax Attorney but I need to fix this legally.

Thanks SO MUCh for any advice!

Answer: It’s not a tax problem, but an HR problem.

Your employer is responsible for reissuing a corrected W2. And for paying taxes to the proper authority.

Technically, the employer does not FILE a W4, but only uses that information to withhold the proper taxes and remit them to the proper state jurisdiction.

Not sure how the prior state can want anything or assess penalties yet since tax returns aren’t due until April.

Talk to your HR department and threaten legal action if they do not correct the problem. You can also contact the appropriate government authority (EDD in California) who oversees payroll taxes, to report your employer.

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Question: Need help with collecting PAST DUE child support?

I have a Support order in place with the Georgia Department of Child Support Enforcement, however, my ex still does not pay. He is self employed and this year has paid half of what is owed ($4300 in arrears) CSE stated that he had to be 60 CONSECUTIVE days behind before they could do anything. What else can I do??? It is obvious that the state is too overloaded and understaffed to help me, I can’t afford a lawyer but my children NEED that money. Last year they intercepted his tax refund but held for 6 months incase his new wife needed to file injured spouse or he could come up with a reason they shouldnt send it to his kids! (just as a side note he and his new wife work together in their self-employment and he supports her 2 children)
Any help would be greatly appreciated

Answer: When an income tax check is intercepted, it is held in escrow for 6 months in all states. The new spouse is entitled to file paperwork to receive her/his share of the tax refund. That is just how the law works.

Unfortunately if they have protocol set for when they can inforce, it appears that you are under the enforcement offices mercy. Can you go in and talk to the caseworker or enforcement officer? When was the last time he paid? Is it possible to file a contempt charge against him for not following a court order?

Community Calendar

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Question: S corp started 28 yrs ago. I got it 3 yrs ago. Will start (book pub) in 2 yrs. Can I claim start-up expenses?

The business had published 1 book a year every year. Has not published in 4 years. New owner (me) has maintained S corp status, filed returns, (0 profit 0 expenses) but not published books yet. This year i wish to claim expenses for travel to trade shows and business equipment but I don’t know if I meet definition of start-up since co existed for 20 plus years. I expect to start selling product in 1-2 years. Sole proprieter, small biz, international book publisher.

Answer: I would say they were not start-up expenses.

That is not to say they are not deductible. They are normal business expenses that are incurred in the production of income. Even if the first year is mostly or all a loss, you file the return with the expense you incurred.

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Question: Need someone to answer about Income Tax?

I made 600 dollars this year, I am self-employed, am I entitled to the Earned Income Credit for my kids?

Answer: If the $600 is your only earned income, then you would be eligible for about $200 in EIC for two children. You would owe $85 in self-employment tax, no income tax, but you would get a small credit called “Making Work Pay.” The net result would be a refund of about $150.

I hope this helps.
Gary

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A guide to the local candidates in the June 8 primary election Traditionally, Good Times does not endorse candidates—but we can help you make informed decisions. We asked the candidates vying for a handful of key offices—County Board of Supervisors, the 17th Congressional District, and County Superior Court Judge—the same set of questions to help you get an idea of their platform and their plans …

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Question: Do I need a new Tax Registration?

I am currently employed and is setting up a new small business. Its registered as Single Propriety. I already have a TIN. I understand I can’t have two TINs so do I need to declare my current TIN and register this new business as another source of income. I am a bit confused fillinf out the Tax Application Form since its for Self employed and Mixed Income Individual and not the usual one I filled in the office. Thanks in advance.

Answer: Since you already have TIN, you don’t have to apply for a new one. But you have to register that new business of your together with you TIN.
And I think from it they will just add a digit to make it’s TIN a little unique than what you originally have.

I don’t really know much about taxes but I know one thing for sure, a Taxpayer is not allowed to have more than “ONE” TIN, that’s against the law.

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