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.
Read More »
...
- Page Views
- 4,018,911
- Content
- 1052
- Fans
- 52
- Contributor since
- 6/9/2005
Education/Experience
B.A. Business Administration - Accounting
Displaying Results 1 - 200 (of 1052) for All Content
Next »
-
Should Your Business Use Non-Compete Agreements?Non-compete agreements can be used to protect your business advantages, such as sensitive information, customer relations, and key personnel. In order to be enforceable, the agreement must be reasonable and not overly restrictive.
-
Tax Consequences of a Short Sale of Investment or Rental Property at a Loss with Cancellation of DebtWith a short sale of a rental property, you could have ordinary income for tax purposes for the cancellation of debt, depending on whether the debt is recourse or non-recourse, and a Section 1231 loss on the sale of the property.
-
Legal Requirements for an S CorporationS corporation status allows a corporation to pass through its income to its shareholders for federal income tax purposes. The corporation would be constituted according to state law and would have to comply with state reporting and other requirements.
-
As the Employer, Are You Liable for the Acts of Your Employees?Employers can be held liable for the acts of their employees if they occur within the scope of employment, and sometimes even outside the scope of employment if the employer is negligent in its hiring and employee retention practices.
-
Tax Effects of Buying and Selling Property Between Related PartiesSpecial federal income tax rules apply to recognizing gain or loss on property transfers between related parties. Generally, a loss would not be deductible, and a gain could be subject to tax as ordinary income instead of the capital gain rates.
-
Who Can Legally Bind Your Business to a Contract?The authority of a person to act on behalf of your business and to make legally binding commitments is based on the principal – agent relationship in agency law. Authority may be express, implied or apparent.
-
When Do You Have to Report Recoveries on Your Federal Income Tax Return?When you recover an amount for which you previously claimed a tax deduction or credit, all or part of the recovery may have to be included as income on your tax return. The amount to include in income depends on the tax benefit you previously received.
-
What Happens to Your Commercial Lease If Your Landlord is Having Financial Difficulties?If your landlord is having financial difficulties, goes into foreclosure or bankruptcy, your commercial lease could be affected. You should review your lease contract and agreements and take the necessary measures to protect your tenant rights.
-
Taxes on U.S. Savings Bond InterestInterest income on U.S. savings bonds can generally be reported for tax purposes each year or reported when the bond is redeemed. Interest may be excludible if bond proceeds are used to pay education expenses.
-
Do You Have to Include Your Child’s Income on Your Tax Return If You Claim the Child as a Dependent?If you can claim your child as a dependent, you do not have to include your child’s income in your tax return. Your child may have to file a return, depending on the amount and type of income.
-
What to Report on Your Tax Return If You Receive a Form 1099-A for a Rental PropertyIf you have a rental property that is foreclosed upon or that you abandon, you should receive a Form 1099-A. You would have to treat the foreclosure or abandonment as a sale with a gain or loss for tax purposes.
-
What to Do with a Form 1099-Q on Your Tax ReturnThe earnings reported on Form 1098-Q may be taxable if the distribution is more than qualified education expenses reduced by tax-free educational assistance and amounts used as the basis for claiming an education credit or deduction.
-
How to Report a Trade in of a Business Vehicle or Other Asset for Tax PurposesA trade-in of property in exchange for like-kind property would not be taxable. If cash is received in addition to the property there could be a recognized taxable gain. The basis in the property received depends on how the transaction is treated.
-
Income Tax on Settlements You Receive After Losing Your JobSettlement payments you receive after losing your job, such as a wrongful termination settlement, would generally be subject to federal income tax. How the amounts you receive are reported for tax purposes depends on the underlying claim.
-
PayPal ID Numbers and Their Income Tax EffectsPayPal needs your tax identification number in order to meet IRS regulations. If your gross payments for the year are over $20,000 or if you receive over 200 separate payments, you will receive a Form 1099-K.
-
Federal Income Tax and Self-Employment Tax on Income from an InternshipHow you report the income you receive from an internship for tax purposes depends on whether you are treated as an employee or an independent contractor. Certain expenses related to the internship may be deductible depending on the circumstances.
-
Can the IRS Regulate Tax Return Preparers or Not?A U.S. District Court has ruled that the IRS cannot require tax return preparers to register with the IRS, pass a competency test, or take continuing professional education courses. Preparers do need to have a Preparer Tax Identification Number.
-
Would Better Tax Enforcement Help Reduce the Deficit?Improved tax enforcement could help to reduce the tax gap - the difference between what taxpayers owe and what they pay on time. This could help in reducing the federal deficit, but would not offset the need for difficult decisions on taxes and spending.
-
When You Fix Up a House or Apartment and Then Rent it Out, Can You Deduct the Fix-up Expenses?The costs you incur in preparing a property to be rented out can be either deductible maintenance and repair expenses or capital expenditures that are recovered through depreciation. Your expenses prior to renting out the property can be deductible. -
Are State Tax Incentives for Hiring Effective in Creating Jobs?States are studying the effectiveness of their economic stimulation and job-creating incentives to determine whether the programs are producing the desired results, their cost, and how they can be made more effective.
-
Tax Benefits of Passing Income from Estate Assets to the BeneficiariesIncome generated by assets in an estate is taxable to either the estate or the beneficiaries. Due to higher rates and lower thresholds for an estate, it may be beneficial to pass through the income to be taxed at the individual beneficiaries’ tax rates.
-
Can You Claim Tax Exclusion of the Gain on the Sale of Land Next to Your Home?If you sell land adjacent to your main home you may be able to exclude the gain on the sale for tax purposes if you qualify for the exclusion when you sell your main home, which can be two years before or after you sell the land.
-
Can You Claim a Roommate as a Dependent on Your Tax Return?You could potentially claim a roommate unrelated to you as a dependent on your tax return if you meet all the requirements. The roommate must have lived with you all year and you must have provided over half your roommate’s support.
-
Simpler Option for Claiming a Home Office DeductionStarting with tax returns for 2013, filed in 2014, the IRS will allow a simpler way to claim a deduction for a home office, based on a standard rate of $5.00 per square foot, up to a maximum deduction of $1,500 for expenses related to the home.
-
Who Can Claim Tax Exempt on Form W-4?If you had no tax liability last year and expect to have no tax liability this year, you can claim exempt on Form W-4. If you can be claimed as a dependent, you may not be able to claim exemption depending on your income.
-
Tax Basis of a Home You Receive as Right of SurvivorshipWhen you acquire ownership of a home through right of survivorship, your basis for tax purposes depends on how you acquired your original share of ownership and the fair market value of the share in the home you acquire from the other owner.
-
Tax Options when You Receive Shares in a Startup Company as Compensation for Your ServicesWhen you receive restrictive shares in the company as compensation for your services, you have a tax option, the Section 83(b) election, which affects the income taxes you will pay. The election must be made within 30 days of receiving the stock.
-
Would Automatic Tax Return Preparation Be Possible?Automatic tax return preparation, based on information the tax authorities already have, is a reality in several countries. California has instituted a ReadyReturn system for state tax filing. Could a similar system be implemented by the IRS?
-
Tax Depreciation for a Vehicle You Purchase for Use in Your BusinessThere are maximum limits on the amount you can claim for tax depreciation each year for a passenger vehicle, or light truck, van or SUV used in your business. These limits include the section 179 deduction and bonus depreciation the first year.
-
Are Transportation Fringe Benefits Subject to Income Tax?Transportation fringe benefits you receive at work for commuting and parking are excludible from your taxable income up to a certain limit. Benefits in excess of the limit would be included in your taxable compensation.
-
Records Related to Your Home that You Should Keep for Income Tax PurposesYou should keep copies of all the documentation that supports your original basis in the home, which depends on how you acquired it, and documentation of adjustments that increase or decrease your basis while you own the home. -
Potential Tax Effects of Loans Between You and Your BusinessThe tax effects of loans between you and your business depend on how your business is structured and how the loan is documented and complied with. A loan from a corporation to a corporate officer could be considered taxable compensation.
-
How to Determine Your Basis in Your Principal Home for Tax PurposesIn order to determine the gain or loss on your home for tax purposes, you need to know the basis. The original basis depends on how you acquired the home. And while you own the home you may have adjustments that increase or decrease the basis.
-
Who Has to Pay the Net Investment Income Tax?Starting in 2013, you are subject to the 3.8 percent net investment income tax on certain types of investment income if you have modified adjusted gross income that exceeds the threshold amount based on your filing status.
-
Estimated Taxes for a Corporation with No EmployeesWhen you operate your business as a corporation, you may have to make estimated tax payments during the year. If you have no other employees, you may still need to consider yourself an employee and withhold, file and pay payroll taxes.
-
Form W-8BEN for Tax Withholding for Foreign Businesses with U.S. IncomeIf your business is outside the U.S. and you have income from the U.S., you generally have to file a Form W-8BEN for U.S. tax withholding purposes. When you file your annual tax return you report the tax withheld as a credit against your tax liability.
-
Reporting Rental Income for Tax Purposes for a Jointly Owned Rental PropertyCo-owners of a rental property do not necessarily constitute a partnership and can each report their share of rental income and expenses on Schedule E. But if substantial services are provided to tenants, a partnership return must be filed.
-
IRS Vehicle for Tax Reform SuggestionsWhile it continues to urge Congress to reform and simplify the tax code, the Taxpayer Advocate Service has set up a vehicle on the IRS website for individual taxpayers to make their own suggestions on tax reforms.
-
Recapturing Section 179 Deduction for Tax Purposes If You Close a BusinessIf you close a business, a portion of the section 179 deduction you claimed on any property you purchased and placed in service in the business may have to be recaptured as ordinary income.
-
What to Do If the IRS Levies Your Social Security BenefitsThe IRS can levy up to 15% of your Social Security retirement benefits to collect unpaid taxes. This could be due to an assessment the IRS made if you did not file a return. You can request audit reconsideration if you believe you do not owe the tax.
-
Tax Returns when You Change Your Business from a Sole Proprietorship to a Corporation, Partnership, or LLCWhen you convert a business from a sole proprietorship to a corporation, partnership or LLC, you have different tax filing obligations before and after the change. How you are compensated and your self-employment tax obligations may also change.
-
When Can the IRS File a Substitute for Return?If you do not file a federal income tax return, the IRS may send you a notice of proposed assessment based on the information it has on your income. You should respond to the notice and file a return to avoid the IRS filing a Substitute for Return.
-
How to Sell a Car with a Loan Balance OutstandingTo sell your car with a loan balance outstanding, you can pay off the loan first in order to obtain a lien release and the title, or make arrangements with the lender for you and the buyer to go together to settle the loan balance and transfer title.
-
Can You Claim a Tax Deduction for Gifts to Employees?Gifts that your business gives to employees may be tax deductible for the business and may or may not constitute taxable income to the employees, depending on the type and value of the gift.
-
Tax Implications of Switching from C Corporation to S CorporationBy switching to an S corporation, income from the business is passed through to the shareholders and the corporate tax can be avoided. But there are some significant potential tax issues that need to be analyzed before making the election.
-
When Are You Considered Insolvent for Tax Purposes?Normally, cancelled debt is considered taxable income, unless you were insolvent immediately before the debt cancellation. To determine insolvency, all your liabilities and the fair market value of all your assets are taken into account.
-
Considerations in Using a Quit Claim Deed to Transfer Title to Property to an LLCTransferring title to a property to an LLC through a quit claim deed involves several considerations, including the mortgage debt, potential income tax consequences, additional costs and liability issues.
-
Is Your Business Required to Register for Sales Tax in Virginia?If you make sales in Virginia that are subject to sales tax, you need to register with the Virginia Department of Taxation. You can file sales tax returns online. Out-of-state vendors are subject to sales tax if they have nexus in Virginia.
-
Can the Members of an LLC Pay Themselves Salaries or Do They Have to Take Distributions?How the members of a limited liability company (LLC) are compensated for their services and how they are taxed depends on whether it is a single-member or multi-member LLC, and how the LLC elects to be treated for tax purposes.
-
The Risks of Paying Personal Bills from a Business AccountIn addition to being a good bookkeeping practice, keeping business finances separate from personal finances is important for personal liability reasons and for tax purposes. This becomes especially important for LLCs and corporations.
-
How to Report the Amounts from Form 1099-DIV and 2439 on Your Tax ReturnIf you receive dividends, capital gain distributions or other distributions, you should receive Form 1099-DIV and possibly Form 2439. The amounts in the different boxes of these forms are reported in different parts of your tax return.
-
When Are You Considered a Resident of California for State Tax Purposes?Determining whether you are a California resident is important because it determines whether you will be subject to state income tax on all your income or only on your income from sources in California.
-
Tax Return when an LLC is TerminatedThe final tax return to be filed when an LLC is terminated depends on how the LLC has elected to be treated for tax purposes. A technical termination of an LLC could occur when 50% or more of capital and profits are transferred.
-
Married Couples Can Avoid Federal Gift Tax by Gift SplittingBy using gift splitting, a married couple can make gifts of up to double the individual exclusion amount without being subject to gift tax. Each spouse must generally file his or her own gift tax return to elect to split the gifts.
-
Expiration of Mortgage Debt Relief Act at the End of 2012The Mortgage Debt Relief Act is scheduled to expire at the end of 2012. If not extended, debt forgiven in foreclosures, mortgage debt restructuring, and short sales could be subject to federal income tax starting in 2013.
-
Tie-Breaking Rules when More Than One Person Could Claim a Child for Tax PurposesWhen a child could be claimed as a qualified child for tax purposes by more than one person, the IRS has tie-breaker rules to determine who can claim the child as a qualifying child and claim the corresponding tax benefits.
-
Farmers and Ranchers Affected by the Drought Get a Break from the IRSThe IRS has announced that farmers and ranchers affected by the drought will have an extension of the period to replace the livestock they were forced to sell because of the drought and postpone the gain on the sale.
-
Potential Tax Effects at the Fiscal CliffThe tax cuts that expire at the end of 2012 include the temporary payroll tax cut of 2%; the lower capital gains tax rates, and the higher child tax credit. Without Congressional action, overall tax rate increases would affect about 90% of Americans.
-
Claiming a Child Tax Credit for a Child Who Lived with You for Less Than 6 MonthsThere are cases in which you can claim the child tax credit even though the child did not live with you for more than 6 months. These include a child who was born or died during the year, temporary absences, and children of divorced or separated parents.
-
Do You Have to Pay the Tax Due on an IRS Notice If You File an Amended Return?If you receive an IRS notice indicating you owe additional tax and you disagree, you should contact the IRS to explain that you intend to file an amended return, if applicable, in order to have additional time before further collection actions are taken.
-
Required Minimum Distributions for Tax Purposes when You Have More Than One Retirement AccountIf you have more than one IRA you calculate the minimum distribution for each account but can withdraw the total required amount from one or more IRAs. For 401(k) plans, the required distribution must be taken separately from each account.
-
Tax Withholding on Commissions and BonusesIf you receive commissions or bonuses in addition to your regular pay, the amount of federal income tax withheld may be different based on the withholding rules. If too much tax is withheld you will recover it when you file your annual income tax return.
-
How is Your Income Taxed in the U.S. For the Year You Are Considered a Dual Status Taxpayer?During a year you are considered a dual-status taxpayer, the taxation of your income is different for the parts of the year you are a resident and nonresident. Certain restrictions may apply on your filing status, exemptions, deductions and credits.
-
Avoiding or Postponing Income Tax on the Proceeds of a Forced Sale by Eminent DomainIf you are forced to sell your property as a result of eminent domain, you may be able to exclude the gain if the property is your main home. Otherwise, you may qualify to postpone the gain if you use the compensation to purchase replacement property.
-
When Are You Considered a Dual-Status Alien for U.S. Tax Purposes?In a year in which you are a U.S. resident for part of the year and a nonresident for part of the year, you are considered a dual-status alien for U.S. federal income tax purposes and your income would be taxed differently for each period.
-
Do Unemployment Benefits Affect Your Social Security Benefits?According to the U.S. Social Security Administration, unemployment benefits do not affect your Social Security benefits. And in most states, Social Security benefits are not offset against your unemployment benefits.
-
Your Possible Tax Obligations If You Hire a BabysitterIf you expect to pay a babysitter a total of over $1,800 (for 2012) during the year, you may be responsible for federal employment taxes. Babysitters under age 18 are generally exempt from this requirement.
-
Airbnb: Renting Someone’s Apartment as an Alternative to a Hotel or HostelRenting someone’s apartment while you are travelling offers a unique and enriching experience with a taste of life in the area. Airbnb is a portal that connects hosts and guests, with payments through the website and the opportunity for mutual feedback.
-
U.S. Income Taxes If You Have a Non-Immigrant VisaNon-residents of the U.S. are generally subject to U.S. income tax on income from U.S. sources. You may be considered a resident for tax purposes if you meet the physical presence test, but holders of certain types of visas are exempt.
-
Should You Rent a Car on Your Trip to Europe?Although train transportation in Europe is excellent, renting a car offers flexibility and convenience. And despite the relatively high costs of gas, tolls, and parking, renting a car can be reasonable, especially if traveling in a family or group. -
Workers’ Compensation Insurance for Your Business in IllinoisAll employers in Illinois are generally required to have workers’ compensation insurance, with some exceptions for sole proprietors, partners, and agricultural businesses. You can contract coverage with a private insurance company.
-
Is a Permanent Resident of the U.S. Subject to U.S. Income Tax While Living Abroad?U.S. permanent residents are subject to U.S. income tax on their worldwide earnings, the same as U.S. citizens, and are eligible for the same tax benefits. Special forms must be filed in order to end your residency and obligation to file tax returns.
-
Tax and Mortgage Consequences of a Loan from a Family Member for a Down Payment on a HomeWhen you accept a loan or a gift from a family member for the down payment on a home, there may be income and gift tax consequences, depending on the amount. The mortgage lender will generally require a gift letter to document the source of the funds.
-
Income Taxes If You Rent Out a Property at Less Than Market ValueIf you rent out a property without intending to make a profit, the rental income is reported for tax purposes as other income and you can deduct expenses up to the amount of the rental income.
-
How Postponing Your Retirement Affects Your Social Security BenefitsPostponing your retirement increases your Social Security benefits by a percentage each month. If you were born in 1943 or later the annual increase is 8% for each year you delay receiving benefits. Once you reach age 70 there is no additional increase. -
Homeowner’s Exclusion from Income Tax on the Sale of a Home You InheritIf you inherit a home, you may qualify to exclude the gain on the sale of the home if you have met the use and ownership tests. Or the stepped up basis on a home you inherit may significantly reduce the gain for tax purposes.
-
Income Tax Consequences of Lump Sum Alimony PaymentsNoncash property settlements in a divorce or separation or not considered alimony. But lump sum cash payments may be alimony, with significant income tax effects. The divorce decree or separation agreement can indicate whether payments constitute alimony.
-
Can You Claim a Tax Benefit for Education If Someone Else Paid the Tuition?If you are a student and qualify for a tax benefit for education, you may be able to claim the benefit even if someone else paid the education expenses. This would depend on which benefit you claim and whether you can be claimed as a dependent.
-
What to Do on Your Tax Return If You Receive a Form 1099-SA when You Have an HSA or MSAThe distributions you receive from an HSA or MSA that you use to pay for qualified medical expenses are not taxable, but you must still report them on your tax return. Other distributions are taxable and may be subject to an additional 20% tax.
-
Can You Claim a Deduction for Home Mortgage Interest on a Home You Inherit?If you inherit a home that you live in as your main home and you are making the mortgage payments and are the equitable owner, you can qualify for the home mortgage interest deduction even if you are not on the mortgage.
-
First Solar: Creating Jobs in Hagerstown, Maryland and Contributing to Maryland’s Renewable Energy GoalFirst Solar Inc. is planning to develop a solar energy project in Hagerstown, Maryland that will create 125 construction jobs, generate enough solar energy to power 2,700 homes, and help meet Maryland’s renewable energy goals.
-
Tax on Lump Sum Social Security BenefitsIf you receive lump sum Social Security benefits, you could be subject to federal income tax on 50% or 85% of the benefits. But the IRS allows you to spread the tax over the years to which the benefits apply, which may reduce your overall tax.
-
First Solar Inc. To Develop a Solar Energy Project in Northern Chile at a Price Competitive with Diesel or Gas-Powered PlantsFirst Solar Inc., a U.S. company, is joining with Fundación Chile to develop a 1,000 MW solar project in the Atacama Desert in Northern Chile. The intent is to make solar energy cost-competitive with electricity generated by using diesel or natural gas.
-
Workers’ Compensation Insurance for Your Business in AlabamaIf your business in Alabama has more than four employees, you are required to have workers’ compensation insurance. You can purchase a policy through a licensed insurance agent or broker, through an assigned risk pool, or through group self-insurance.
-
Can You Deduct State Inheritance Taxes on Your Federal Tax Return?Several states levy an inheritance tax on the beneficiaries of an estate. You cannot claim a deduction on your federal tax return for the inheritance tax, but you can claim a deduction for estate tax on income in respect of a decedent that you receive.
-
When Do You Need a Sailing or Departure Permit from the IRS?If you have been in the U.S. but are not a U.S. citizen, you may need to get a sailing or departure permit from the IRS before you leave the country. To obtain a permit you need to go to an IRS office and provide the required documentation.
-
What Happens to Your Taxes when You Contribute More Than the Allowable Amount to an IRA?If you contribute more than the maximum allowable amount to an IRA, you are subject to a 6% additional tax. You could withdraw the excess amount before filing your return, or reduce your contributions to the IRA the following year.
-
Does Your Business Have to Collect and File Sales Tax in Maryland?If you make sales in Maryland that are subject to sales tax, you need to register with the Maryland Comptroller for a sales tax license. You can file sales tax returns online. Out-of-state vendors are subject to sales tax if they have nexus in Maryland.
-
Small Business Income Tax Credits in OhioThere are several tax credits available for small businesses in Ohio, for creating jobs, providing employment and training in enterprise zones, for selling biofuels, investing in ethanol plants, and for producing grapes in Ohio.
-
Are College Stipends Subject to Income Tax?Scholarships and fellowships are tax exempt if you are a candidate for a degree and use the money for tuition and qualified education expenses. Stipends for living expenses and compensation for teaching, research or other services are generally taxable.
-
Are Right of Way Payments You Receive Taxable?The tax consequences of an easement or right-of way on your property depend on whether the amount you receive is more or less than your basis in the property. Generally, you reduce the basis and any excess would be considered gain on a sale.
-
Can You Claim a Tax Deduction for Investigating a Business You Are Interested in Starting or Buying?How you treat your costs of investigating a business for tax purposes depends on whether you actually go into business. Another important criterion is whether your costs are for a general investigation or for starting or acquiring a specific business.
-
Small Business Tax Breaks in New MexicoThere are several tax credits available for small businesses in New Mexico, for creating jobs, making energy efficiency, conservation and sustainability improvements. The credits generally require certification from other government agencies.
-
Small Business Tax Deduction for New Jobs in MissouriIf you have a small business in Missouri and you create new jobs from 2011 to 2014, you can claim a $10,000 deduction for each new employee on your Missouri state income tax return when the new employee completes 52 weeks of work.
-
Determining Whether You Provide Over Half the Support in Order to Claim a Dependent Exemption on Your Tax ReturnTo determine whether you meet the support test for claiming a dependent on your tax return, you should calculate the person’s total support and then see if you contributed more than half. The IRS provides guidelines for calculating support.
-
Tax Filing Status If Your Spouse is Not a U.S. Citizen or ResidentIf your spouse is not a U.S. citizen or resident, you could choose to treat your spouse as a resident and file a joint return with lower rates, paying U.S. income tax on both your worldwide incomes. You may also qualify to file as head of household.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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. -
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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. -
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.