We tell clients all the time that it is complicated and hopefully they can answer the questions correctly when they use boxed software or… ready for this… try to do it by hand! The earned income credit is extremely difficult to calculate. Eligibility & computation rules take up 8 pages in the 2012 Form 1040 instructions…. plus […]
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Business related meals and entertainment are deductible…. You cannot, however, deduct dues (including initiation fees) for membership in any club organized for pleasure, recreation or other social purposes. […]
Everyone pretty muich knows you can take two Married Filing Separate Returns and combine them to one Married Filing Joint return. GENERALLY this has a better tax effect for the family. But, can you take Married Filing Joint and split that return into two Married Filing Separate? The answer is YES… BUT it must be […]
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If a spouse had not owned a home within the past three years, could that spouse qualify as a first-time homebuyer for the credit even though the wife would not qualify? No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since the wife had ownership interest in a principal residence within the prior […]
If you gave money to a homeless person or anyone needing assistance, thank you but that is not a 501(c)(3) deductible charitable organization. Nice gesture but no deduction. […]
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Question: Are the amounts a taxpayer receives from a “reverse mortgage” taxable? Deductible? Answer: NO to both. Interest on a reverse mortgage loan added monthly to the outstanding loan balance as it accrues is neither taxable in a cash method lender’s gross income nor deductible by a cash method borrower at the time it is added. […]
There is a sales tax deduction for sales tax paid on major items such as cars, trucks, airplanes, (this includes leasing of the vehicle) motor homes, mobile or pre-fab homes… and improvements to your home (think bricks and mortar, not cosmetics, not large TV’s, not fans, not appliances).. best examples are tile floor, wood floor, […]
Driving from home to your first place of business (notice I did not say office) is not deductible. From home if you visit a client first, no deduction (first place of business) but to the next place of business (office or another client) is deductible. From your last place of business home (again, notice I […]
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How is the LLC operating income taxed? The tax side is way different… BAD. A single member LLC is a “disregarded” entity. Thus, the LLC would not do a separate tax return as would a corporation. The owner (now you know to say member) would account for the income exactly as a sole proprietor on a […]
