The Small Business Tax Help Blog

Archive for the ‘Business Taxes’ Category

Question: How do I calculate gas mileage for tax deduction? I work for a dog walking business but drive my own car.?

I work for a company where they provide me with clients and schedules and I go walk dogs.

A) Can I deduct this since I use my car to go to these places?

B) Do I calculate from my house to the houses I go to, and then back to my house since I do exactly that – drive from home to the dogs’ houses, and then back home?

Thank you!

Answer: Did you get 1099-Misc from your company and filing Schedule C like a self-employed person or do you get W-2?

If you are W-2 employee then unreimbursed job related expenses go on Schedule A.You have to do itemize deduction and exceed certain limit before you get any benefit from this deduction.

If you are a Schedule C filer, then every dollar for mileage reduces your taxable income.

In any case the standard mileage rate is 44.5 cents per mile.

Best wishes.

Phillips: Sales tax break doesn’t apply to all car buyers

Q: I understand we can deduct sales tax on any vehicle purchased in 2009 up to $40K. Before I begin figuring taxes, are Tennesseans able to also deduct this extra tax since we already can deduct “regular” sales tax? If not, can the auto sales tax be included elsewhere on our return? Finally, does this amount come off the adjusted income or the percentage tax rate under which we fall?

Tax Deduction Tips & Advice : How to Use Car Lease Payments as a Tax Deduction

Question: IRS Tax Disclosure form for Stated Income No Doc Loan?

I’m in escrow on a stated income product. I have given my monthly income, and documented my self employment with an “accountants letter” for 2-years per the Loan Officer’s request. Now I’m getting ready to sign Loan Docs in the escrow office. The escrow officer at my request described the forms we would be asked to sign, one of which is an “IRS FORM” that gives the Lender permission to check my income per tax returns for prior years. Due to all my deductions the income will not appear identical. Can they deny funding my loan based on what the IRS gives them? I thought this was supposed to be a “no doc” loan, but now I’m surprised w/this form and escrow is due to close any day now. Will this be a problem for me?

Answer: I think the form you're being asked to sign is one that gives a bank auditor permission to pull your tax returns if the lender gets audited. It's usually to show that the tax returns used to secure the loan were really what the IRS had also. Since you didn't show your returns, I wouldn't expect them to be pulled.

"Stated income" type loans, although probably over used to get people into houses that they cannot afford, are supposed to be within "reasonable range" for amount of income for your type of work.

White House touts stimulus job impact

The White House on Wednesday said a 787-billion-dollar economic stimulus plan had saved or created up to two million jobs, but that its impact on quarterly economic growth had slowed.

Tax Tip 6: What about your bank charges?

Question: Michigan partnership tax question?

I own a partnership in Michigan started in 2008. I want to file an extension to file my return. I found intructions about extensions on Michigan Form 4 but I wasn’t sure if I fell into the rules for the Michigan Business Tax or just the individual tax as a partnership is a flow through entity and does not usually pay Business Taxes. Do I get an automatic extension if I file a federal extension or do I have to file Form 4?
But do I get an automatic extension if I file a Form 7004 Extension to file Partnership return with the IRS? Or do I need to fill out Form 4 for my partnership to get the extension?

Answer: In general the partnership need to obtain its own extension for the Michigan Business Tax. If the partnership is liable for Michigan Business Tax, then an extension under the tax number of the partnership needs to be submitted, If the partnership is not liable for Michigan Business Tax, then no extension for the partnership is needed.

It is unlikely that you will file your personal return by April (if the partnership return is not completed by then) then you will need to file a federal extension for your personal individual taxes. The federally filed extension automatically applies to Michigan.

Finally, many towns in Michigan have a partnership tax return which is a variant of the 1065 form. These taxes are due typically April 30. An extension request may be needed for your town as well.%0

House Plans Vote on Modified Jobs Bill

The House will consider the Senate-passed "jobs" package on Thursday after deciding to amend the bill so it is fully offset in order to address the concerns of moderates in the Democratic Caucus.

Tax Extensions are Automatic

Vander Doelen: Balanced budget a miracle

A sea of red ink greets the eye when you cast one over Page 4 of the massive five-pound document entitled City of Windsor Budget 2010.

Employee Stock Options

Upon the exercise or disposition of an employee stock option, a Canadian resident employee is generally required to include in income an employment benefit.