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Monday, February 1, 2010
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18 comments:
Where do I list a shareholder loan on my 1120S return.I am the shareholder and owner the loan is interest free and was not paid back at all in 2009.
Thanks, JJ
Jean, you disclose this information on form 1120S page 5.
Page 5? My 1120S only has 4 pages after that its different forms.Help?
Jean, disclose it on page 4
I have questions about irrevocable trusts and special needs trusts. This is regarding a settlement from a lawsuit against my son's school district. It's a long story but there was a lump sum for relocation/damages awarded to me. My attorney says that she "thinks" I have to have it in an irrevocable trust. She has suggested that I put her in charge of it, but I don't know enough about any of this to make a decision. All I can find is that I can't have a family member as the trustee. Some pertinent background info: I am a single mother on permanent disability, I receive SSDI and Medicare. I also receive SSI and a low income subsidy on my Medicare through Medi-Cal. My son was just approved for federal SSI for his disability. I contacted Social Security. They said my benefits are not "needs based" and as such are not affected by the settlement. The only thing that may be affected is the low-income subsidy and SSI. However my son's benefits can be affected by the settlement because it counts as income for me. I have concerns about some of the decisions my attorney has made in our case and do not feel entirely comfortable having her in charge of the settlement. I need to know what my options are. Thank you.
Hi! I have a question regarded credit cards and credit score. My credit score is in the mid 700's right now and I really would like to keep it that way. I have about 5 open credit cards right now and all have a balance of zero. I would like to close about 3 of these for security purposes. Will this lower my credit score?
Thank you!
SCENARIO: RECEIVED A LETTER FROM THE IRS STATING IF I FILED MY CHILDREN I WOULD BE FINED ETC. SINGLE PARENT DID NOT HAVE SS #S FOR THEM AT THE TIME, DUE TO I WAS NOT LISTED AS THE FATHER. THAT WAS 22 YEARS AGO. HAVE NOT FILED TAXES SINCE. PAID TAXES JUST HAVENT FILED. WHAT KIND OF SITUATION AM I IN ?
I live in Missouri, I have sold a boat and I am buying a replacement boat. I have a couple of questions. First, am I able to reduce my sales tax by deducting the sale price of the first boat from the purchase price of the second? Second, is there any way to take advantage of the first time home buyer's tax break when buying a boat? Thanks.
In a self employment business, is it more beneficial to set up dividends or owners withdrawals and how do we report these.
Rental Property Question:
I have a C Corp and would like to rent out my 2nd home to my C Corp. From what I have read this seems possible. Can you tell me what I would need to do this, and is this a smart thing to do?
So far I have gathered a sample lease agreement, and all my mortgage info. Income vs. Expenses, do I fill out a 1040 (Schedule E) at the end of the year for rental income, as far as expenses can I write off (interest, depreciation, utilities, maintenance, interest on 2nd mortgage)?
Thanks.
I have a hobby that I am considering turning in to a business, in addition to my regular full time job. I know that as a hobby status I can only deduct my expenses up to the level of my income from the hobby. But if I make it a business with all the appropriate licenses, DBA's etc, my understanding is that I can deduct all my expenses. As long as I can prove that it is a business with intent to make a profit, and actually do show a profit 2 out of 5 years (or was it 3?) then I'll be ok.
So, here's the scenerio, according to that understanding. Over the next 5 years I plan to spend $15000 on my hobby, and will probably make about $5000 over that same period. Obviously I'm doing it because I enjoy it, not just to make money. So if I spread those expenses and income over the 5 years I would report the $1000 income and deduct $1000 for expenses.
But if I make it a business and stack all my expensed up in the first year or 2 as startup costs, then I can deduct the full $15000 from my taxes, thus lowering my taxable income (from my real job) and saving me around $5000 or so on my taxes for those 2 years. I then would show a little profit for the next 3 years, enough to make the IRS happy that it is a real business, but not enough to significantly increase my taxes in those years.
Am I thinking through this correctly? Basically by making it a business and stacking my expenses up front I will essentially be spending less on my hobby over the 5 year period, because I am spending the dollars pre-tax.
If I am way off please straiten me out, thanks.
- bob
Bob, thanks for submitting your question to us. In theory, what you have thought makes sense. However, we recommend that you consult a tax practitioner as there are many specifics that pertain to your personal finances and taxes that we cannot discuss on this blog.
Best of Luck,
Web Tax Office Team
I have a SEP IRA through my employer. We just transitioned to a 401K this month. Instead of rolling my SEP IRA into my 401K, I've been contemplating cashing it out (~$35K)and paying off family debt obligations (credit card, car loans). My understanding is that the withdrawal *may* only be subject to simple tax (10%) when time time comes to file my 2010 return. I haven't calculated capital gains/losses, but according to my statements over the past 3 years total income earned on this SEP IRA is less than $600. Am I overlooking something?
Questions Regarding Payroll Taxes:
My employer refuses to be out-of- pocket his portion of payroll taxes (social, med, and modified business tax); thus, he deducts his portion of payroll taxes from my gross. Is this legal? And if so, can I 1099 him for receiving the income? Thanks!
This a question on civil law in Massachusetts. I have a court judgment against a home improvement contractor for approximately $16,000. I can recover $10,000 from the Massachusetts Guaranty Fund, can I deduct the difference ($6,000) on my tax return? He has failed to pay any monies.
Question on American Opportunities tax credit. I learned from a friend a means of taking the credit even though my sons scholarship was roughly equal to the qualified expenses on his 1098T. It seems if the scholarships are unrestricted that you can "designate" that they be used for unqualified - and thus taxable school expenses. While this increases the dependant childs taxable income, it reduces the scholarship monies that must be subtracted off the qualified amount and may allow the parent to take the AO college expense credit up to $2500 for 2009 and 2010. It almost seems to good to be true but there is an example on IRS publication 970 which shows exactly such a case on page 11.
While I am fairly certain I can claim the credit in this manner for 2010, my question is can I go back and get the credit for 2009 by filing an amended return for both my son and myself. While my son had earned income of $4400 in 2009 and would have to pay additional tax and penaltied on the additioanl $4000 of income, this should be more than offest by the credit I would receive at a 25% income bracket. Would love to get some feedback on this - thanks!
Good evening,
I am an entrepreneur thinking of possibly incorporating offshore. I am considering this for a couple of reasons. First, offshore incorporation seems to offer the greatest protection, particularly against lawsuits. Also, it is my understanding that by incorporating offshore I would save from paying taxes on the company's worldwide income, and only have to pay taxes on U.S derived income. Since my two partners and I would be considered U.S Shareholders however (each owning over 10%, but less than 50%), would we each then have to pay taxes on our shares? Or would we only pay taxes on the dividends received?
If you are not familiar with international tax laws, can you please refer us to a similar online site or someone in Fort Lauderdale FL who provides services at reasonable rates.
Thanks in advanced.
Kind Regards,
Susan
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