Kevin Hagen
Born in Minnesota, USA in 1955; studied Business Administration - Accounting, graduating in 1977 and obtaining CPA license. Worked in corporate accounting environments, eventually becoming a technical translator while living in Chile. Married, one son.
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B.A. Business Administration - Accounting
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Can You Claim the Child and Dependent Care Credit on Your Tax Return If You Don’t Claim the Child as a Dependent?Under certain circumstances you may be able to claim the credit for child and dependent care expenses even if you cannot claim the child as a dependent. This could be the case if you are divorced or separated.
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Can You File Your Tax Return as Head of Household If You Maintain a Home Outside the U.S.?If you are a U.S. citizen or resident, you could qualify to file as head of household for a home outside the U.S. You may also qualify if you are a resident of Canada or Mexico. The head of household filing status is not available for nonresident aliens.
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Can You Claim an Exemption on Your Income Tax Return for a Dependent Who Lives Outside the U.S.?If a dependent outside the U.S. is a U.S. citizen or resident, or a resident of Canada or Mexico and you meet all the tests, you can claim an exemption. You generally could not claim dependents if you are a nonresident alien, but there are exceptions.
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Can You Claim a Tax Deduction for Uncollected Rent on a Rental Property?You cannot claim a tax deduction for uncollected rent if you are on the cash basis because you haven’t reported the rental income. If you are on the accrual basis you may be able to claim a bad debt deduction for the uncollectible rent.
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When Do You Claim Tax Deductible Expenses that You Pay by Credit Card or with a Loan?If you pay a tax deductible expense by credit card it is deductible in the year the charge is made, and not when the credit card bill is paid. If you qualify for a tax benefit for education you can claim expenses paid with the proceeds of a loan.
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New Reporting Requirements for Schedule C of Form 1040 for 2011 and BeyondSchedule C for 2011 includes a new line for receipts from merchant card and third party payments. This new reporting requirement is intended to increase compliance by businesses in reporting all their revenue.
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When Do You Have to File Separate Schedules C with Your Tax Return?If you operate more than one business as a sole proprietor, you have to file separate Schedules C if the businesses have different activity codes. You can allocate expenses including depreciation and expenses for business use of your home, if applicable.
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Can You Claim a Home Mortgage Interest Deduction If You Rent Out Your Home?If you rent out your home, your home mortgage interest is divided between an itemized deduction for personal use and a rent expense deduction for the rental use of the home. There are special rules for renting out a second home.
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Why File a Tax Return If You Started Up a Business and Had a Loss?When you start a business and have a loss, you should file a tax return to establish a net operating loss that you can apply against income in other years. There are also special tax deductions that you could take advantage of in your first year.
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Can You Deduct Expenses from One Year Against Income in the Following Year?If you are a cash basis taxpayer, expenses are only deductible in the year they are paid. But if you start a business, you can amortize start-up costs and recover costs of capital assets through depreciation, with special allowances the first year.
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Why File a Tax Return If Your Income is Below the Filing Requirements?Even if your income is below the filing requirements, you should file a return in order to obtain a refund of tax withheld, if you are self-employed, if you qualify for a refundable credit, or if you have sales of stock or other investments.
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Can You File Your Income Tax Return Based on Your Last Paycheck Stub for the Year?You need Form W-2 to file your federal, state and local income tax returns. Your final paycheck stub may not have all the information you need. The IRS will verify your tax return against the information on the W-2 your employer sends to the IRS.
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How Does a Single Member LLC File a Federal Income Tax Return?For federal income tax purposes, a single member LLC can elect to be treated as a corporation. Otherwise it will be treated as a disregarded entity, meaning that it would file federal income taxes as a sole proprietorship.
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Exclusion from Tax of Gain on the Sale of a Home Used Partly for BusinessYou can exclude the gain on the sale of your main home from tax if you owned and lived in the property as your main home at least 2 of the last 5 years. But if you rented out the home, or used a portion for business, you must recapture depreciation.
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Is There a Minimum Age for Filing a Federal Income Tax Return?There is no minimum age for filing a federal income tax return. The filing requirements are based on your income and filing status. If you can be claimed as a dependent by your parents or someone else, the filing requirements are different.
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Taxes when You Sell Equipment After Claiming a Section 179 DeductionWhen you purchase equipment for use in your business, you can write off the cost by electing the section 179 deduction. If you later sell or exchange the equipment you have to recapture the section 179 deduction by reducing your basis in the equipment.
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New IRS Form 8949, Sales and Other Dispositions of Capital Assets, for 2011The IRS introduced a new Form 8949 in 2011 for reporting capital gains and losses. Schedule D is revised to serve as a summary form. This coincides with the requirement for brokers to report the cost basis of stocks on Form 1099-B.
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Using Prior Year Capital Losses to Reduce Your Taxable Income This YearCapital losses can be carried forward and used to offset capital gains and other taxable income up to $3,000 in future years until the loss is used up. The loss must be carried forward year by year whether or not it is claimed.
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Can You Claim Someone Else’s Children as Dependents on Your Tax Return If You Provide More Than Half Their Support?There are two ways to claim an exemption for a dependent: as a qualifying child or a qualifying relative. There are various tests that must be met, but you may qualify to claim a dependent exemption for someone other than your own child.
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Tax Aspects of Keeping a Child Under Age 27 on Your Health InsuranceThe cost of health coverage for a child under age 27 is excluded from the parent’s taxable income. This includes the employer and employee-paid portions. If you are self-employed you can include the cost in your self-employed insurance deduction.
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Parents’ Responsibility for a Child’s Tax Return or Taxable IncomeIf your child has income, a tax return must be filed if the filing requirements are met. You may still be able to claim the child as a dependent. If the child cannot file a return, you are responsible for filing it, and may be liable for the tax.
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Who is Considered Married for U.S. Federal Income Tax Purposes?If you are considered married for federal income tax purposes you can file jointly and will generally pay less tax. The IRS has specific criteria to determine whether you are considered married, based on your particular circumstances.
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Who Can Claim Itemized Deductions After a Divorce or Legal Separation?Generally, each spouse can claim the itemized deductions he or she individually paid and half the deductions paid from a joint account. After the divorce or legal separation special rules apply, and certain payments may be considered alimony.
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Is Your Business in Oklahoma Required to Have Workers’ Compensation Insurance?Employers in Oklahoma are generally required to have workers’ compensation insurance, with some exceptions for sole proprietors, partners, and family members. You can contract coverage with a private insurance company or through CompSource Oklahoma.
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Tax Deduction for Travel and Transportation for Medical ReasonsIf you claim itemized deductions for medical expenses, you can include the cost of travel and transportation. The expenses of an accompanying person also qualify in certain cases. Certain medical conferences and medical expenses abroad can also qualify.
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Rule 72(t): Taking Early Distributions from an IRA or 401k Without the 10% Tax PenaltyIf you want to retire early or need to take money out of your 401k or IRA before you reach the required age, you may be able to avoid the 10% additional tax penalty by taking the money out in equal periodic payments according to IRS rules.
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Registration and Filing Requirements for Partnerships and LLCs in KentuckyLimited partnerships and limited liability partnerships in Kentucky must register with the Kentucky Secretary of State. A limited liability company must file articles of organization. Partnerships and LLCs must also file annual reports.
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Registration Requirements for Corporations in South CarolinaYou can register a domestic corporation with the South Carolina Secretary of State using the Business One Stop website. Foreign corporations conducting business in the state must obtain a certificate of authority.
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Can You Prepay Expenses at the End of the Year to Reduce Your Taxable Income?Certain prepayments can be deducted in the year they are paid if they cover a period of not more than 12 months. Sole proprietors and business owners could also claim a section 179 deduction for the cost of machinery, equipment, and certain other assets.
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Tax Deduction when You Lease a Vehicle for Your BusinessWhen you lease a vehicle you can claim a tax deduction for business use under either the standard mileage rate or actual cost method. You can deduct lease payments but may need to reduce your deduction by an inclusion amount based on the vehicle’s value.
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When Could Your Company Be Subject to the Personal Holding Company Tax?The personal holding company tax could apply to closely-held corporations in which five or fewer shareholders own more than 50% of the company’s stock and investment income is accumulated and not distributed to the shareholders.
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Registration and Reporting Requirements for Corporations in TennesseeYou can register a corporation in Tennessee by filing a charter of incorporation and paying the filing fee. Corporations must file annual reports and are subject to the Tennessee franchise tax and an excise tax of 6.5% of Tennessee taxable income.
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License Requirements for Starting a Business in Santa Fe, New MexicoTo start a business in Santa Fe you need to have inspections, obtain a certificate of occupancy and apply for a business license from the city. You also need a tax identification number (CRS number) from the New Mexico Taxation and Revenue Department.
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Registration and Reporting Requirements for Corporations in ArizonaYou can register a corporation in Arizona by filing articles of incorporation with the Arizona Corporation Commission and paying the filing fee. Corporations must file annual reports and are subject to the Arizona state income tax.
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Registration and Filing Requirements for Partnerships and LLCs in NevadaLimited partnerships and limited liability partnerships in Nevada must register with the Nevada Secretary of State. A limited liability company must file articles of organization. Annual lists of partners or officers and directors must also be filed.
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Collecting and Paying Sales Tax in IndianaIf you sell or rent items that are subject to sales tax in Indiana, you need to submit a Business Tax Application. The Indiana state sales tax rate is 7%. You can file and pay sales tax returns online.
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Registering to Collect and Pay Sales Tax in MississippiIf you sell products or provide services that are subject to sales tax in Mississippi you must obtain a sales tax permit from the Mississippi Department of Revenue. All sales of tangible personal property are subject to tax unless specifically exempt.
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Is Your Business in Oregon Required to Have Workers’ Compensation Insurance?Employers in Oregon are generally required to have workers’ compensation insurance, with some exceptions for sole proprietors, partners, and family members. You can contract coverage with a private insurance company or through the Assigned Risk Plan.
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When Could You Be Subject to the Accumulated Earnings Tax?The accumulated earnings tax could apply when a corporation accumulates earnings to avoid making taxable distributions to shareholders. The tax applies on accumulated earnings in excess of an amount considered reasonably necessary to meet business needs.
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Sustainable and Responsible Investment: Calvert InvestmentsCalvert Investments offers several mutual funds oriented toward sustainability and social responsibility. Investments must meet certain criteria and Calvert is actively involved in advocacy efforts to promote improvements.
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Workers’ Compensation Insurance Requirements for Your Business in KansasEmployers in Kansas are generally required to have workers’ compensation insurance, with some exceptions for agricultural businesses, sole proprietors, partners, and family members. You can contract coverage with a private insurance company.
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When Does a Form 1041 Tax Return for an Estate Have to Be Filed?After a taxpayer’s death the estate becomes a separate legal entity for tax purposes. Form 1041 is filed to report the income generated on the assets in the estate and to report the distributions of income to the beneficiaries.
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Registration and Filing Requirements for Partnerships and LLCs in MassachusettsLimited partnerships and limited liability partnerships in Massachusetts must register with the Secretary of the Commonwealth. A limited liability company must file a certificate of incorporation. Annual reports and state tax returns must also be filed.
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Do You Need Workers’ Compensation Insurance for Your Business in Michigan?Employers in Michigan are generally required to have workers’ compensation insurance, with some exceptions for small employers. You can contract coverage with a private insurance company or through the state workers’ compensation fund.
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Obtaining a Business License in New York CityTo start a business in New York City, you can use the NYC Business Express, which is a one-stop website to simplify the process. You can find the licensing and permit requirements for your particular type of business and can apply online.
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How to Register to Collect and Pay Sales Taxes in VermontIf you sell or rent items that are subject to sales tax in Vermont, you need to apply for a Vermont Business Tax Account. The Vermont state sales tax rate is 6% and there is a 1% local option. You can file and pay sales tax returns online.
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Registration and Reporting Requirements for Corporations in MissouriYou can register a corporation in Missouri by filing the articles of incorporation and paying the filing fee. Corporations are required to file annual reports and are subject to the Missouri franchise tax and the 6.25% state corporate income tax.
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Registration and Filing Requirements for Partnerships and LLCs in ArkansasLimited partnerships and limited liability partnerships in Arkansas must register with the Secretary of State. A limited liability company must file articles of organization. Annual reports must also be filed, and LLCs must pay an annual franchise tax.
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How to Register to Collect and Pay Gross Receipts Tax in New MexicoGenerally, all businesses that sell or lease products or provide services in New Mexico are subject to the gross receipts tax. You must first register with the New Mexico Taxation and Revenue Department to obtain a CRS number, and then file tax returns.
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What Licenses Do You Need to Start a Business in Atlanta, Georgia?To start a business in Atlanta, you file a New Business Tax Application, which must be renewed each year. Depending on the type of business, you may need other permits. You are subject to Atlanta business and occupation taxes on your gross receipts.
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Registration and Reporting Requirements for Corporations in IdahoYou can register a corporation in Idaho by filing the articles of incorporation and paying a filing fee of $100. Corporations are required to file annual reports and are subject to the 7.6% state corporate income tax rate on Idaho income.
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Owens Corning, Heritage Environmental Services and Earth911: Recycling ShinglesOwens Corning has alliances with Heritage Environmental Services and Earth911 to recycle asphalt shingles. Contractors have a cost-efficient alternative to taking the shingles to landfills, and homeowners can find contractors committed to recycling.
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When is Your Business in Maine Required to Have Workers' Compensation Insurance?Employers in Maine are generally required to have workers’ compensation insurance, with a few exceptions. You can contract coverage with a private insurance company or through MEMIC, the state workers’ compensation fund.
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Registration and Filing Requirements for Partnerships and LLCs in North DakotaLimited partnerships and limited liability partnerships in North Dakota have to register with the Secretary of State. A limited liability company must file articles of organization. There are also annual filing requirements.
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When is Your Business Required to Have Workers' Compensation Insurance in Iowa?If you have a business with employees in Iowa you are generally required to have workers’ compensation insurance. There are certain classifications of employees who do not have to be covered, but you could still choose to cover them.
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Safe Harbor: Incentives for Preserving Wildlife HabitatsSafe Harbor Agreements enable farmers, ranchers and other landowners to protect habitats for endangered species and other wildlife in return for assurances that they will not be subject to restrictions on how they use their land. -
How to Prove Your Right to Claim a Dependent on Your Tax Return If You Are AuditedIf you claim an exemption for a dependent on your tax return and someone else also claims the exemption, you may receive a notice from the IRS. If your return is audited, you would need to provide documentation showing that you meet the requirements.
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What Licenses Do You Need to Start a Business in Chicago, Illinois?To start a business in Chicago, you need a business license. First, you must register the legal entity with the state and apply for a state tax account number. There are various types of licenses, depending on the type of business. -
Registration and Filing Requirements for Partnerships and LLCs in CaliforniaRegistering a general partnership in California is optional. Limited partnerships, limited liability partnerships and limited liability companies are required to register. There are also minimum annual franchise tax requirements.
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When is Your Business Required to Have Workers' Compensation Insurance in New York?If you have a business with employees in New York, you are required to have workers’ compensation insurance. Employees are broadly defined for workers’ compensation purposes. You would generally not have to carry coverage for independent contractors.
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S Corporations and the Need to Pay Reasonable SalariesThe IRS requires an S corporation to pay a reasonable salary to shareholders who work in the company in order to collect employment taxes. Not paying a reasonable salary could result in an IRS audit. What is reasonable depends on various factors.
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How to Register to Collect and Pay Sales Taxes in ColoradoIf you sell items in Colorado that are subject to sales tax, you must apply for a sales tax license. There are also licenses for special events. Out-of-state vendors considered to be doing business in Colorado must also get a sales tax license.
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When Does Your Small Business Need to Get a Form W-9?You need to get a Form W-9 from payees, such as independent contractors and others, in order to be able to prepare the information returns that must be sent to the IRS at the end of the year, and to avoid the need for backup withholding.
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Registration and Reporting Requirements for Corporations in New JerseyYou can register a corporation in New Jersey online, paying a filing fee of $125. Corporations are required to file annual reports online, with an annual fee of $50. And corporations are subject to the New Jersey corporation business tax.
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How to Register a Partnership or LLC in NebraskaTo register a limited partnership or a limited liability company in Nebraska, you can use the one-stop business registration information center on the State of Nebraska government website to determine the specific forms you need to file.
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How to Get Set Up to Accept Credit Card Payments in Your Small BusinessTo get set up to accept credit cards in your business, you should determine how you want to process credit cards, for example in a retail store, by Internet, or cell phone. You will need a merchant account and there are various options available.
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How to Register to Collect and Pay Sales Taxes in IowaIf you have a business in Iowa that sells products or services subject to sales tax, you must register with the state for a retail sales tax permit to collect and pay sales tax. You can file sales tax returns and pay the tax electronically.
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Conservation Incentives for Farmers and Landowners in AlabamaThere are various conservation incentives offered by federal and state government agencies and private organizations for farmers and landowners in Alabama who want to help preserve and protect the land, natural resources and wildlife. -
Registering a Corporation in PennsylvaniaTo set up a corporation in Pennsylvania you should establish the name and check for availability, appoint at least one director, file articles of incorporation and a docketing statement, and publish your intent in two newspapers.
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How to Register to Collect and Pay Sales Taxes in New YorkIf you have a business in New York State that sells products or services subject to sales tax, you must register with the state for a Certificate of Authority to collect and pay sales tax. You can file sales tax returns and pay the tax electronically.
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How to Register a Partnership or LLC in TexasLimited partnerships and limited liability companies established in Texas must file a Certificate of Formation with the Texas Secretary of State. General partnerships are not required to file. You can file the Certificate of Formation online.
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What Licenses Do You Need to Start a Business in Salt Lake City, Utah?To start a business in Salt Lake City, you need to register with the State of Utah and apply for a business license to operate in the city. You can register with the State of Utah online, but you need to apply for the Salt Lake City license in person. -
What Are the IRS Requirements to Be a Tax Preparer?To be a paid tax return preparer you need a preparer tax identification number (PTIN) from the IRS. If you expect to file 11 or more tax returns you are required to file electronically. Annual continuing education courses will also be required.
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What Licenses Do You Need to Start a Business in Seattle, Washington?To start a business in the City of Seattle, you need a Washington State business license and a city business license. You may need additional licenses depending on the type of business. State and city license applications can be filed online. -
Do You Need Workers' Compensation Insurance for Your Small Business in California?If you have a small business with employees in California, you are required to have workers’ compensation insurance. You can contract a policy through a licensed insurance company or broker or through the California State Compensation Insurance Fund.
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Reporting and Tax Filing Requirements for Corporations in North CarolinaCorporations in North Carolina must file an annual report and file a franchise and corporate tax return. The corporate tax rate is 6.9%. The franchise tax depends on capital stock, retained earnings, and the value of tangible property in the state.
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Will Your Social Security Retirement Benefits Change If You Go Back to Work?If you start receiving Social Security retirement benefits and then decide to go back to work, your benefits could be affected, depending on how much you earn and whether you started receiving benefits before or after you reached full retirement age.
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A Spouse's Right to Pension Benefits If the Beneficiary Dies Before RetirementIf you are a surviving spouse, you are entitled to an annuity benefit if your spouse qualified for pension benefits provided by a former employer. The option to pay the survivor annuity can only be waived with your written consent.
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Pension Benefits Could Affect Your Unemployment BenefitsIf you are working while you receive pension benefits and are laid off, your unemployment benefits may be reduced by your pension benefits, generally depending on who contributed to the pension plan. You should check with your state unemployment agency.
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How to Claim Pension Benefits from a Former EmployerIf you worked for an employer that had a pension plan, you are eligible for benefits if you met the vesting requirements, regardless of how long ago you left the company. There are various sources you can use to track down the pension plan.
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Going Back to Work If You Are on Social Security DisabilityIf you receive social security disability benefits and want to go back to work, you can continue to receive benefits during a trial work period and for an extended three year period after that if your earnings are not more than a certain amount.
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Different Types of Dividends and Their Tax EffectsDifferent types of dividends and distributions from your investments in stocks and mutual funds can have different tax effects, such as ordinary income, capital gains treatment, or can affect your basis in the investment.
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Employment Taxes for Single Member LLCsIf you set up a single member LLC and are also the employee of the LLC, IRS regulations require you to report and pay employment taxes under the LLC’s name and employer ID number. But you could be personally liable for the employment taxes of the LLC.
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Determining the Cost Basis of Mutual Fund SharesFor tax purposes you can keep track of the cost basis of your mutual fund investments by specific identification of shares, or you can use an average method. Basis is affected by reinvested dividends, capital gain distributions, and returns of capital.
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How Can You Find the Cost of Stock Purchased a Long Time Ago?If you need to find the basis of stock purchased a long time ago or that you received as a gift or inheritance, you may need to do research on the Internet, contact the brokerage firm or the company itself.
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Do You Have to Pay U.S. Taxes If You Receive an Inheritance from Outside the Country?You are not subject to U.S. federal tax on inheritances you receive either in the U.S. or from abroad. Some states have inheritance taxes. You would be subject to U.S. income tax on income from the property if you are a U.S. citizen or resident.
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Tax Responsibilities when You Close a BusinessWhen you close a business you will have to make your final estimated tax payments, file your final income tax return, and if you have employees file your final payroll tax returns. You may also have state tax requirements, such as a sales tax return.
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When Would Your Business Need a Certificate of Good Standing or a Certificate of Tax Compliance?Your business may need a certificate of good standing in order to register to transact business in another state, to obtain a loan, to renew or reinstate business licenses, to enter into certain contracts and relationships, or to sell your business.
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Do You Pay State Income Tax Where You Live or Where You Work?You are generally subject to state income tax in your home state on your income from all sources. If you work in another state you may be taxed in that state also, but you can claim a credit. Some states have reciprocal agreements to avoid double taxes.
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Under What Conditions Do You Have to Repay the First Time Homebuyer's Tax Credit?The first time homebuyer credit for homes purchased in 2008 generally has to be repaid over 15 years. The credit for 2009 and early 2010 does not have to be repaid unless the home ceases to be your main home during a 36 month period.
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State and Local Taxes If You Retire in Rhode IslandRhode Island has a high state and local tax burden. State income tax rates are up to 5.99% effective in 2011. Property taxes as a percentage of median home value rank fifth in the country, but there are exemptions for seniors. The state sales tax is 7%. -
State and Local Taxes If You Retire in CaliforniaCalifornia has a relatively high state and local tax burden. State income tax rates are up to 9.55%. The state sales tax is 7.25% with additional local taxes. Property taxes as a percentage of median home value are lower than in many other states. -
Repaying Health Care Provided Through Medicaid from Your EstateStates can make claims against a Medicaid beneficiary's estate to recover the cost of certain health care costs covered by Medicaid, including care in a nursing home. There are protections for surviving spouses and children.
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How Does a Dependent Care Flexible Spending Account Work?If you incur dependent care expenses so you can work, and your employer offers a dependent care flexible spending account, you can save money on taxes by making pretax contributions to the account that are deducted from your paycheck.
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Tax and Other Considerations of a Caregiver AgreementAn agreement between an aging parent and an adult child or other family member to provide care services generates taxable income for the caregiver. The way payment for the services is structured can affect when the income is subject to tax.
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State and Local Taxes If You Retire in New JerseyNew Jersey has the highest state and local tax burden in the country. State income tax rates are up to 8.97%, with some retirement income exempt. Property taxes are high, but there are some benefits for qualifying seniors. -
Registering to Collect and Pay Sales Taxes in GeorgiaWhen you make sales in Georgia that are subject to state and local sales taxes, you need to register with the Georgia Department of Revenue. The Georgia Tax Center allows you to register your business, file and pay sales tax returns on line.
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Health Care Coverage If You Retire Outside the U.SMedicare only covers health care outside the U.S. in very limited cases, such as when a foreign hospital is closer than a U.S. hospital. You may be able to obtain government-sponsored health insurance in another country or a private insurance policy. -
How Much Can a Nonprofit Organization Pay Its Employees?Persons who work in a nonprofit organization can receive a salary and benefits just like in any other business. But the compensation must be reasonable on a comparative basis. The IRS can impose sanctions if it determines that compensation is excessive.
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Recovering Losses Limited by Passive Activity Rules when You Sell a Rental PropertyLosses on a rental property may be limited for tax purposes due to the passive activity loss limit rule. But you can carry forward the losses to subsequent years and can offset accumulated losses against the gain when you sell the property.
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IRS Gives More Flexibility in Claiming Innocent Spouse ReliefIn July, 2011, the IRS eliminated the two-year limit for requesting innocent spouse relief from liability for taxes, penalties and interest on a joint return. If you were unable to apply previously because the limit had expired, you can now reapply.
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IRS Filing Requirements to Maintain the Tax-Exempt Status of Your Nonprofit OrganizationTax-exempt organizations are required to file annual informational returns with the IRS. If you do not file for three consecutive years, your tax-exempt status is automatically revoked and you have to apply for reinstatement.
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Can You Claim a Tax Deduction for a Computer when You Work from Home?If you use a computer when you work from home, you may be able to claim a tax deduction for using the computer in your business, as an employee, or to manage your investments. The rules for claiming a deduction are different in each case. -
How to Form a Nonprofit 501(c)(3) Corporation in Washington StateTo set up a nonprofit 501(c)(3) corporation in Washington State, you need to file your articles of incorporation with the Corporations Division of the Washington Secretary of State. Then you can apply for federal and state tax exemptions.
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Reporting and Tax Filing Requirements for Corporations in FloridaCorporations in Florida must file an annual report online by May 1 of each year and pay a fee of $150. Annual minutes are not required. A Florida corporate income tax return must be filed annually, and it may be necessary to make estimated payments.
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When Do You Need an Employer Identification Number?You need an employer identification number when you hire employees, have certain benefit plans, file certain excise tax returns, and when you form a partnership, corporation, nonprofit organization, trust, estate, or other legal entities.
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State and Local Taxes If You Retire in North DakotaNorth Dakota has a state and local tax burden close to the national average. Most retirement income is subject to state income tax. Property taxes vary by location but are relatively high, with a homestead exemption for seniors with limited income. -
What is the Inside and Outside Basis of Your Interest in a Partnership?Contributing assets to a partnership is generally not a taxable event. The tax basis of the assets in the partnership is the same as the contributor's basis. Gain or loss would not be recognized until you sell or transfer your partnership interest.
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Registering to Collect and Pay Sales Taxes in OhioWhen you make retail sales, lease or rent personal property, or provide certain services in Ohio, you need to register your business with the state of Ohio and apply for a vendor's license to collect and remit sales tax.
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Do Public Assistance Benefits Affect Your Income Tax Return?Public assistance benefits such as food stamps and WIC assistance are not taxable. If you work you may qualify for the earned income credit, which can give you a refund. The credit will not affect your eligibility for most public assistance programs.
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Is Solar Energy Becoming Economically Competitive with Fossil Fuels?1366 Technologies, Inc. has developed an innovative way to manufacture silicon wafers for solar cells that could reduce production costs by up to 50 percent. The company has received private financing and federal government grants and a loan guarantee. -
State and Local Taxes If You Retire in MarylandMaryland has a state and local tax burden slightly higher than the national average. Social security is exempt from state income tax and you may qualify to exclude some other retirement income. There is property tax relief from assessment increases. -
LLCs and Protection from Personal Liability for Business DebtsSetting up your business as an LLC can protect you from being personally liable for business debts. But to maintain that protection you must operate your LLC as a separate entity and meet all the formal requirements.
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Do You Have to Pay Income Tax If You Receive a Court Award or Settlement for Damages?Compensatory damages for a personal injury are not subject to federal income tax. But other types of awards and settlements, including punitive damages, may be taxable. Taxability is based on what item the award or settlement replaces.
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Income Tax when You Sell an Interest in a PartnershipWhen you sell a partnership interest you normally have a capital gain or loss for the difference between the amount realized and your basis. But if the partnership has unrealized receivables or inventory, part of your gain may be taxed as ordinary income.
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Income Tax for Expats Who Retire in ChileFor your first three years in Chile you would only be subject to Chilean income tax on your Chilean source income. And pensions and retirement income from other countries are not considered taxable income in Chile. -
When Does Your Business Have to Pay Franchise Tax in Florida?Whether your business has to pay franchise tax in Florida depends on how your business is set up. Sole proprietorships and partnerships are not subject to the tax. The corporate tax rate in Florida is 5.5% of net income after a $5,000 exemption.
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Income Tax on the Sale of Gold and Other CollectiblesWhen you sell gold, works of art, antiques, or other collectible items, you pay a 28% tax on the gain on the sale if you have held the item more than one year. How you acquired the item determines your basis for calculating the gain. -
Federal Income Tax on PrizesPrizes are generally subject to federal income tax. If you receive property, the fair market value is taxable. In that case, you would have to come up with the cash from other sources to pay the income tax.
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Principle Power, Inc. Of Seattle: Combining Wind and Wave Energy on Floating PlatformsPrinciple Power Inc. of Seattle has developed a floating platform for deep water offshore wind turbines. The company is now developing a device called the WindWaveFloat that will combine wave energy generators with the wind turbines.
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Australia Plans to Set a Price on CarbonAustralia has plans to impose a carbon tax of A$23 per ton of carbon dioxide to take effect in 2012. The tax would increase each year until 2015 when a carbon emissions trade scheme similar to that in the European Union would be implemented. -
Severstal to Manufacture Advanced High Strength Steel and Create Jobs in Dearborn, MichiganSeverstal Dearborn is planning to modernize its steel plant and manufacture advanced high-strength, lighter weight steel for new fuel-efficient vehicles. The project is expected to create 2,500 construction jobs and over 260 permanent jobs in the plant. -
DuPont Danisco to Build Cellulosic Ethanol Plant in Nevada, IowaDuPont Danisco Cellulosic Ethanol LLC has acquired land in Nevada, Iowa to build a commercial-scale plant that will use corn cobs, stalks, and leaves as feedstock. Construction will take 12 to 18 months and production is planned to start up in 2013. -
POET LLC to Build Commercial-Scale Cellulosic Bio-Refinery in Emmetsburg, IowaPOET LLC, a leading producer of ethanol, is planning to build a cellulosic bio-refinery in Emmetsburg, Iowa. The refinery will use corncobs, leaves, husks, and stalks. The project is expected to create 200 construction jobs and 40 permanent jobs. -
Could You Be Liable for Unpaid Medical Bills of Your Deceased Spouse, Parent or Other Family Member?Generally, unpaid medical bills would be settled using the assets that pass to the decedent's estate. Exceptions could include medical costs for which you signed a guaranty. Surviving spouses in community property states could also be responsible.
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Property Tax Breaks in New MexicoNew Mexico homeowners can qualify for a $2,000 head of family exemption from property taxes. Veterans can claim a $4,000 exemption. Homeowners 65 or older or disabled with income below a certain amount can qualify for a property tax freeze.
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State and Local Tax Burden If You Retire in AlaskaAlaska has a very low state and local tax burden. There is no state income or sales tax. Several municipalities levy a local sales tax and some cities and boroughs levy a property tax. Homeowners age 65 or older qualify for a property tax exemption. -
Tax Effects of How You Leave Your Retirement Accounts to Your BeneficiariesHow you decide to leave your retirement accounts to your beneficiaries, whether to your estate, directly to beneficiaries, or in trust, can have significant consequences in terms of probate, creditors' claims, and tax-deferred growth of earnings.
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Property Tax Relief in Rhode IslandThere are property tax exemptions in Rhode Island for senior citizens, veterans, and other qualifying homeowners. The exemptions and amounts vary by town and city. There is a state-wide property tax credit if your household income is $30,000 or less. -
First Solar Inc. To Build 3 Solar Power Plants and Create Jobs in CaliforniaFirst Solar, Inc. is building three large solar power plants in California, with loan guarantees provided by the U.S. Department of Energy. The projects are expected to create about 1,400 jobs in California during peak construction. -
Tax Effect of Debt Cancelation in a BankruptcyWhen your debt is canceled in a bankruptcy, the amount of canceled debt may have to be applied against certain other tax benefits you have or could have in the future. This in effect postpones the tax on canceled debt instead of forgiving it entirely.
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Income Tax Deduction for Reforestation or Forestation of FarmlandIf you reforest part of your farmland, you may be able to deduct up to $10,000 of your reforestation costs the year you incur the costs. And you can amortize the balance over seven years. -
Your 401(k) Plan If Your Employer Goes BankruptIf your employer goes bankrupt you do not lose the money in your 401(k) plan, but you could be affected, depending on the type of bankruptcy, whether and how the plan is terminated, and what investments you have in your account.
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Who Can Claim the Mortgage Interest Tax Deduction when There Are Co-Owners?As a co-owner of a home, you can claim a tax deduction for the home mortgage interest you actually pay, provided you have an ownership interest in the property. You do not necessarily have to be directly liable on the mortgage loan.
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Will You Still Receive Your Pension If Your Former Employer Goes Bankrupt?When your employer goes bankrupt, your pension plan may continue since it is separate from the company's other assets. If the plan is terminated or underfunded, the Pension Benefits Guaranty Corporation covers pensions up to a certain maximum amount.
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Financing a Rental Property as an LLCWhen you want to purchase a residential property as an LLC, the mortgage lender may apply the same requirements as if you are individual co-owners. There are several aspects to consider regarding financing terms, liability, and title to the property.
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Tax Benefits of the Conservation Reserve Program for FarmersPayments received through a Conservation Reserve Program may qualify for total or partial exclusion from federal income tax if certain conditions are met. And the taxable portion of the payments can be excluded from self-employment tax. -
Property Tax Relief in New York StateIn June, 2011, legislation was passed in New York to cap increases in property taxes. There is relief from school property taxes through the STAR exemption. Exemptions are also available for qualifying senior citizens, veterans, and disabled persons. -
Tax Relief Measures for People in Disaster AreasIf you are affected by a natural disaster, you may qualify for relief from tax filing and payment deadlines. Qualified disaster payments may be excludible from income. And you may be able to claim a casualty loss for property damage or destruction. -
Payroll Taxes for Family Members Who Work in Your BusinessThe payroll tax rules regarding FICA tax and federal unemployment tax may be different for a spouse and children who work in a family business, depending on how the business is set up.
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Generating Electricity from Landfill Methane Gas in Miami, FloridaMiami-Dade County, Florida is using methane gas sequestered from a landfill to cogenerate electricity at a nearby wastewater treatment plant. In addition to its environmental benefits, the project is saving money and creating jobs.
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Tax Deduction for Damage from Corrosive DrywallIf you have had to make repairs to your home and/or household appliances due to damage from corrosive drywall, you can claim a casualty loss deduction on your federal income tax return. You have up to three years to claim a deduction for a prior year. -
Property Tax Exemptions in OregonThe homestead exemption in Oregon protects you from creditors. There are property tax exemptions for disabled veterans and their surviving spouses or partners. Your property taxes may be reduced if your property suffers storm damage. -
State and Local Taxes If You Retire in MassachusettsMassachusetts has a state and local tax burden slightly higher than the national average. Social security and certain pensions are exempt from the 5.3% state income tax. The circuit breaker credit can provide property tax relief. -
Granite Reliable Power Wind Farm to Create Jobs in Northern New HampshireGranite Reliable Power is developing a 99-megawatt wind farm in Coos County in northern New Hampshire. The project consists of 33 wind turbines and is expected to create about 200 construction jobs and provide enough energy to power about 20,000 homes. -
Casualty Loss for Tax Purposes If Your Property is Damaged or Destroyed in a Natural DisasterIf your property is damaged or destroyed as a result of a natural disaster, you may be able to claim a federal income tax deduction for the loss, less any insurance reimbursements or disaster assistance you receive. -
Resourceful Kansas Program Working Toward a Less Energy-Intensive, More Efficient EconomyVarious renewable energy systems have been installed in the Riley County, Kansas Public Works Department as part of the Resourceful Kansas Program, which aims to use the experience to encourage energy efficiency and sustainability throughout the region.
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Property Tax Exemptions in VirginiaMost counties and cities in Virginia offer property tax relief for homeowners who are 65 or older or disabled. The amount of the relief depends on household income and other assets. There is also a 100% exemption for disabled veterans starting in 2011. -
Income Tax on Puts and CallsThe federal income tax on put and call transactions depends on what you do with the option: sell the option itself, exercise the option to buy or sell the underlying stock, or let the option expire. -
When is a Husband and Wife Business a Partnership for Tax Purposes?A husband and wife business in which both spouses materially participate would generally be considered a partnership for federal income tax purposes. But you could qualify to file as a joint venture treated as a sole proprietorship.
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State and Local Taxes If You Retire in KansasKansas has a state and local tax burden just below the national average. Social security is exempt from state income tax and you may qualify to exclude some other retirement income. There is a homestead refund for qualifying seniors. -
When Are You Subject to Tax on Employee Stock Options?The taxability of an employee stock option depends on whether the option is statutory or non-statutory. You may be subject to tax on the fair market value of the option, or you may not be subject to tax until you sell the stock you purchase.
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Federal Income Tax when Your Small Business is a PartnershipA partnership is a pass-through entity for tax purposes. The partnership files an informational return and Schedules K-1 showing each partner's share of income and deductions. Then the partners report their shares on their own tax returns.
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Property Tax Exemptions in CaliforniaCalifornia homeowner's can claim a $7,000 reduction in the assessed value of their homes for property tax purposes. Veterans can qualify for special exemptions. Homeowners over age 55 can transfer their assessed value to a new residence. -
Are Insurance Proceeds Subject to Federal Income Tax?Some insurance proceeds are not subject to federal income tax. Others may not be subject to tax, but could have tax effects on your deductible expenses or on the basis of your property, depending on the type of insurance.
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State and Local Tax Burden If You Retire in DelawareDelaware has a state and local tax burden slightly lower than the national average. Certain retirement income is exempt from state income tax. Property taxes are low, with exemptions for qualifying seniors, and there is no state or local sales tax. -
Are Legal Fees Tax Deductible?Personal legal expenses are not deductible. But you can claim an itemized deduction for legal fees for obtaining tax advice or for producing or collecting income. Legal fees related to a business are fully deductible, except for start-up costs.
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Retirement Savings Options when You Are Self-EmployedWhen you are self-employed, you continue contributing to social security through the self-employment tax. You have various options to save for your retirement, including a traditional or Roth IRA and retirement accounts for your business.
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How Do You Value Assets Converted to Business Use for Tax Purposes?The IRS has specific rules for determining the basis of assets converted from personal to business use for purposes of calculating tax depreciation and for determining the gain or loss on an eventual sale.
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What U.S. Taxes Does a Contractor Working Outside the U.S. Have to Pay?If you are a contractor working outside the U.S., you may qualify to exclude foreign earned income from U.S. income tax. If you are an independent contractor you would be subject to the self-employment tax on all your net earnings.
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Can You Claim a Tax Deduction for Your Parent's Medical Expenses?If you meet the federal income tax tests to claim your parent as a dependent, you can claim an itemized deduction for all the medical expenses you pay for your parent.
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Can You Claim a Tax Deduction for Interest on a Home Equity Loan?Whether you can claim a tax deduction for home equity loan interest and how much you can deduct depends on how you use the loan proceeds, the value of your home, and the outstanding balance on your mortgage.
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Do You Get Credit for Social Security when You Work Outside the U.S.?If you work outside the U.S. you may be subject to the social security system in that country. If the country has a bilateral social security agreement with the U.S. you could receive credits to help you qualify U.S. social security benefits.
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Income Tax when You Sell Your BusinessWhen you sell your sole proprietorship business, you have to allocate the total sales price to each business asset. The IRS requires the residual method, in which you allocate the price among the assets in a certain order based on classes of assets.
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When Do You Have to Report Cash Transactions Over $10,000 to the IRS?If you receive cash of more than $10,000 in a transaction related to your trade or business, you have to report the transaction to the IRS on Form 8300. This requirement does not apply to personal transactions.
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Property Tax Exemptions in ConnecticutConnecticut homeowners who are 65 or older or who are totally disabled, regardless of age, can apply for a property tax exemption if their income is under a certain amount. Veterans can also qualify for property tax relief. -
How to Claim a Property Tax Refund in MinnesotaHomeowners and renters in Minnesota may be eligible to claim a property tax refund depending on their income and the amount of property taxes they paid, either directly or indirectly. You should file Form M1PR by August 15. -
Registering to Collect and Pay Sales Taxes for Your Small Business in FloridaWhen you start up a small business in Florida, you have to collect and remit sales tax on taxable transactions. You need to register for a sales tax certificate and a resale certificate. You can file sales tax returns and pay the tax electronically.
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Does Your Small Business in Florida Need Workers' Compensation Insurance?In Florida, you must have workers' compensation insurance if you have four or more full or part-time employees. If you are in the construction industry, insurance is required if you have one or more employees, including owners and partners.
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Unemployment Tax Obligations when Your Small Business Has EmployeesIf you pay wages in your small business, you are subject to federal and state unemployment taxes. Federal unemployment taxes are reported on Form 940 annually but may need to be paid during the year, depending on your tax liability.
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What Happens If a Former Employee of Your Small Business in Florida Files for Unemployment?The state unemployment tax rate you pay in Florida can vary depending on your employment record. A more stable employment record results in a reduced tax rate. You can respond to unemployment claims to establish the facts involved in the separation.
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How to Register a Partnership in FloridaThere are different forms, filing requirements, and fees for registering in Florida depending on the type of partnership. Other requirements include a certificate of use, business tax receipt, and registering for sales tax.
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How to Get a Commercial License for Your Small Business in Miami-Dade County FloridaTo start a small business in Miami-Dade County, you need a county local business tax receipt, and a city certificate of use and business tax receipt. Certain professionals and regulated businesses need to be registered with the State of Florida.
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How to Recover Income Tax Paid on Unemployment Benefits when You Have to Repay the BenefitsThere may be cases in which you have to pay back unemployment benefits you have received. How you recover the income tax paid on the benefits depends on the year you make the repayment.
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Should You Use Actual Expenses or the Standard Mileage Rate for a Tax Deduction for Business Use of Your Vehicle?Whether to use the standard mileage rate or actual expenses for tax purposes depends on your individual circumstances. In both cases you need to keep track of your mileage. The IRS imposes certain rules on which method can be used and when. -
What Are the Tax Consequences of Taking a Loan Against Your 401(k)?Interest you pay on a 401(k) loan is generally not deductible, unless the vested balance securing the loan is entirely from your employer's contributions. If you leave the company, you must repay the loan; otherwise the balance is taxed as a distribution.
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If You Telecommute from Outside New York, Are You Subject to New York State Income Tax?If you telecommute for an employer in New York, you could be subject to New York State income tax even if you live and work in another state, if you work from home for convenience rather than for the necessity of your employer. -
State and Local Taxes If You Retire in New HampshireNew Hampshire has a high per capita income and relatively high cost of living. Property taxes are high, with some relief for seniors, but the state's overall state and local tax burden is one of the lowest in the country.
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Property Tax Exemptions in NebraskaHomeowners age 65 or older in Nebraska can claim a homestead exemption if they have household income less than a certain amount. Certain disabled homeowners, veterans and surviving spouses of veterans can also qualify for a homestead exemption.
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When Does the Generation-Skipping Transfer Tax Apply?Gifts, or property transfers that skip generations, such as from grandparents to grandchildren, may be subject to the generation-skipping transfer tax. There is an annual exemption and also an overall exclusion, making most transfers tax-free.
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Potential Gift Tax Consequences of Adding a Family Member's Name to Your AccountsAdding a family member, other than your spouse, to your accounts could potentially have gift tax implications, depending on state law, how the account is set up and who makes contributions and withdrawals.
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Income Tax Considerations in Adding a Child's Name to Your HomeAdding a child's name to the deed on your home, or leaving the home to a child in your will have different income tax consequences. The basis of a home acquired by gift is the donor's basis, while the basis of an inherited home is the fair market value.
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In What Cases Can You File a Claim for a Tax Refund After the 3-Year Limit Has Expired?Normally you have 3 years from the date you filed your tax return or 2 years from the date you paid the taxes to file a claim for a refund. If you haven't filed, you have 3 years from the original due date. But there are some exceptions.
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Who Can File Their Tax Return Late Without a Penalty?In certain specific cases taxpayers have automatic extensions to file. Persons in disaster areas may receive temporary relief. All other taxpayers must show reasonable cause such as an incapacitating illness or erroneous advice from an IRS employee.
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Can You Claim a Tax Deduction for Moving Expenses when You Retire?Your expenses to move to where you plan to retire may be deductible if you, or your spouse, work full time at least for a certain period at your new location. There are special cases for persons returning to the U.S. to retire after working abroad.
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Deducting the Costs of Refinancing a Mortgage on Your Federal Income Tax ReturnWhen you refinance a mortgage loan, the points you can deduct on your federal income tax return depend on the type of refinancing and how you used the proceeds.
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How to Request an Installment Agreement to Pay Your Federal Income TaxesIf you owe $10,000 or less, are current on filing returns, and can pay the balance in 3 years, your request for an installment agreement cannot be denied. If you owe $25,000 or more, you have to provide information on your assets, income and expenses.
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Tax Exemptions for Dependents and Filing Status in Multigenerational HouseholdsIf you live in a multigenerational household you need to take into account your relationships, incomes, and relative support contributions, among other tests, to see who can claim what dependent exemptions and who may qualify to file as head of household.
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Taxation of Cancelation of Debt on a Second HomeThe cancellation of debt on the foreclosure of a second home would not qualify for mortgage debt relief and may be taxable. You could have ordinary income subject to tax if the debt canceled is more than the fair market value of the property. -
Can You Deduct Expenses Related to Renting a Property to a Family Member?The expenses you can deduct when you rent a property to a family member depend on whether you are renting the property for profit and if so, whether the family member uses the property as a home and pays a fair rental price.
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How Many Years Back Can the IRS Review Tax Returns?The IRS can generally review your tax returns for 3 years. But if you understated your income by more than 25% the period is 6 years. The period doesn't start until you file a return, so there is no limit for tax returns you haven't yet filed.
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Basis of Inherited Property for Tax PurposesThe basis of property you inherit is generally the fair market value at the date of the person's death. The estate representative may choose to use an alternate valuation date. There is a special use method for property in a family farm or business.
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Are Per Diems for Travel Expenses Taxable Income?Whether per diems are taxable and how you report per diems and expenses on your tax return depend on whether you are required to account for your actual expenses, whether you return any excess, and whether the per diem is more than the federal amount.
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Property Tax Exemptions in HawaiiHomeowners in Hawaii can claim a home exemption on their principal residence. The exemption amounts vary by county. There are special exemptions for homeowners with disabilities, and veterans with service-connected disabilities can be totally exempt. -
State and Local Taxes If You Retire in MontanaMontana's overall state and local tax burden is well below the national average. There is a state income tax with some retirement income exempt. Low-income homeowners and disabled veterans receive property tax breaks, and there is no state sales tax. -
State and Local Taxes If You Retire in IndianaIndiana has an overall state and local tax burden that is slightly lower than the national average. There is a flat rate state income tax with some deductions for retirement income, and a homestead deduction and other types of property tax relief. -
How to Make Estimated Federal Income Tax PaymentsIf your income is not subject to withholding, you may need to make estimated federal income tax payments during the year. You can pay by check, electronic funds withdrawal, debit or credit card, or using the Electronic Federal Tax Payment system.
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Avoiding Mistakes when You're Up Against the Deadline for Filing Your Tax ReturnEven when you're rushed to meet the deadline for filing your tax return, you should take the time to be sure your return is correct. Any errors could delay your refund or result in a notice from the IRS. Or you might miss deductions and credits.
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When Can the IRS Hold Your Tax Refund?The IRS can hold your refund if you owe back taxes or if you haven't filed a return for a prior year. Your refund can be offset against past-due child support, student loans, or other federal and state government obligations.
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Property Tax Exemptions in MassachusettsCertain homeowners in Massachusetts including seniors, blind persons, veterans, surviving spouses and minor children can qualify for property tax exemptions. The boards of assessors in cities and towns determine the exemption amounts and requirements.
