What is the difference between a C and an S
A C Corporation and an S Corporation are exactly the same in respect to liability protection. The difference is in how you are taxed. A C Corporation has what is referred to as a double taxation. First the corporation is taxed, and secondly the dividends are taxed on the shareholders’ tax returns. An S Corporation is not taxed at the corporate level, only at the shareholder level. Most small businesses are eligible to file as S corporations. But the appropriate election must be made.
What do I do if I receive a notice from the IRS about my
Don’t panic! the first thing to do is carefully read the notice—to determine why it was sent, what the IRS is requesting, and what they want you to do. It may be nothing of importance; it may even be a notice in your favor. After reading it you should bring it to our attention.
What do I need to bring when I am having my taxes
Following is a list of the more common items you should bring if you have them.
- Wage statements (Form W-2)
- Pension or retirement income (Forms 1099-R)
- Dependents' Social Security numbers and dates of birth
- Last year's tax return
- Information on education expenses
- Information on the sales of stocks and/or bonds
- Self-employed business income and expenses
- Lottery and/or gambling winnings and losses
- State refund amount
- Social Security and/or unemployment income
- Income and expenses from rentals
- Record of purchase or sale of real estate
- Medical and dental expenses
- Real estate and personal property taxes
- Estimated taxes or foreign taxes paid
- Cash and non-cash charitable donations
- Mortgage or home equity loan interest paid (Form 1098)
- Unreimbursed employment-related expenses
- Job-related educational expenses
- Child care expenses and provider information And any other items that you think may be necessary for your taxes.
How do I find out about my refund?
The best way is to Check Your Refund is to click this link IRS Wheres My Refund! To look up the status of your federal or state refund, you will need your social security number, filing status, and exact amount you’re expecting back.
How long do I keep my records and tax
You should keep your records and tax returns for at least 3 years from the date the return was filed or the date the return was required to be filed, whichever is later. It is recommended that you keep these records longer if possible.
How long do I keep my records and tax
What is the child tax credit?
The child tax credit is a credit of $1000 per child from the IRS. In order to qualify the child must:
1. Be under 17 at the end of the tax year
2. Be a citizen of the United States
3. Be your child
4. Live with you for more than half the year
5. Not be treated as the qualifying child of someone else
What medical expenses are deductible?
A deduction is allowed only for expenses paid for the prevention or alleviation of a physical or mental defect or illness. Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body. Except for insulin, only prescription drugs are deductible. The cost of health insurance is deductible. You may also deduct the cost of traveling to and from the care provider. You can deduct only the part of your medical and dental expenses that exceeds 7.5% of your adjusted gross income.
What do I need to keep for my charitable contributions?
It depends. is your contribution cash or non-cash?
All contributions must be made to qualified charitable organizations.
I received tax statements from my employer or bank after I
filed my tax return. What should I do?
If we filed your return, bring the new tax documents to our office. We will determine if it is necessary for you to file an amended return.
I haven’t been filing my tax returns what should I
First, you must determine if you were required to file in the years you did not file. There are many different items that could figure into this—such as your filing status, your sources of income, whether you had any tax withheld, etc. This is a link to the IRS instructions for filing requirements for 2007: http://www.irs.gov/individuals/article/0,,id=96623,00.html. If you determine you should have filed, contact us and we can handle all of your prior year filings. It is very important that you do not just continue to not file. If you owe money the penalties for not filing are high. If you are owed a refund you will lose your claim to it 3 years after the due date of the return.
Is my social security taxable?
Usually if your income including social security benefits is less than $25,000 if single or $32,000 if married, your benefits are not taxable. If your income is higher than those limits, there are formulas to determine what percentage of your social security is taxable. Currently up to 85% of your social security may be taxable.
What are the differences between a Roth and a conventional
A traditional IRA lets you deduct contributions in the year you make them, and the distributions are included as income on your return when you withdraw from the IRA after reaching age 59½. A Roth IRA does not let you deduct the contributions, but you also do not report the distributions as income, no matter how much the Roth account has appreciated. With a Roth, you can exclude the income earned in the account from being taxed.
What are the tax consequences of selling a
If you sell your personal residence you can totally exclude from income up to $250,000 of gain if you are single, or $500,000 if married, regardless of your age at the time of the sale—if during the 5 years before the sale you owned the home and lived in it for a total of any 24 months. The exclusion is not a one-time election; instead it is available once every 2 years. Recent tax law has adversely changed the handling of gains on the sale of a home if you rented the property before you made it your personal residence. Please contact our office if you believe this situation will affect you.
Do I have to file a joint return with my spouse?
No, you can file either as married filing joint or married filing separate. If you file separately your taxes will most likely be higher. Many credits—such as earned income, education (Hope and lifetime learning), and child care—are not allowed when you file separately.
There are special circumstances where people who are married, but either do not want to or cannot file with their spouse, can file as Head of Household, which therefore entitles them to these credits and a lower tax bracket. In order to qualify as a Head of Household you must meet the following conditions:
§ You lived apart from your spouse for the last six months of the tax year. Temporary absences for special circumstances, such as for business, medical care, school, or military service, count as time lived in the home.
§ You filed a separate return from your spouse.
§ You paid over half the cost of keeping up your home for the year.
§ Your home was the main home of your child for over half of the year.
§ You can claim this child as your dependent.
If you do not meet all these conditions but are legally separated as of the last day of the year, you may also qualify to file as single.
How should I keep records for my business
Keep a log in your vehicle and record the purpose and mileage of each trip. You also need to record the odometer readings at the beginning and end of each year, as the IRS will ask you for total miles driven during the year. Keep your repair bills as these normally record odometer readings when the car is serviced.
Can I deduct expenses for a business run out of my home?
If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses you may be able to deduct for business use of your home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting, and repairs.
You can claim this deduction only if you use a part of your home regularly and exclusively:
Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.
I owe the IRS money. What are my
options? If you can afford to pay the amount you owe, it should
be paid. But many times that is not the case. If you
cannot afford to pay, you have several options.
Ignoring the IRS should not be one of them!
I owe the IRS money. What are my options?
If you can afford to pay the amount you owe, it should be paid. But many times that is not the case. If you cannot afford to pay, you have several options. Ignoring the IRS should not be one of them!
The first option is to enter into an installment agreement with the IRS. To do this you need to fill out Form 9465, Installment Agreement Request. This form is fairly easy to complete, but we strongly recommend that if you owe a substantial amount of money you work with us to secure your agreement.