The Tax Preparation Blog

Archive for September, 2008

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Question: What type of professional should I seek in providing advice?

I live in California and I need advice regarding the following. My partner passed away this year and we shared a couple of things together. Bank account (checking) and a timeshare. He was still legally married. Who should file his 2007 taxes? What would happen if his taxes weren’t filed? Also, if the timeshare is sold, would the wife be entitled to any of the proceeds?

Answer: Consult a probate attorney. You will need legal advice and maybe legal assistance to sort out what is yours from what belongs to his wife.

You didn’t mention whether he had a will, or whether he or his wife were legally separated or had filed for divorce. Any of those could have an effect on things. California is a community property state, in which everything a man and wife own or owe is legally presumed to be equally the property of the other partner, and in which the property of the one who dies passes to the one who survives.

When someone dies, his bank accounts are normally frozen until the bank receives advice from the court or from the executor, or both. If you and he shared the bank account, his wife will have a claim against some or all of the funds in the account, since she was still his wife. If you claim that some of the money in the account was yours, it will be necessary for you to show records that establish what portion of the account should be credited to you.

It will be the responsibility of the executor of his estate to file his income tax returns for 2007, and if there is a refund, that will belong to his estate. If there is no executor, the probate court may appoint one or his wife will, by default, become the executor. If his tax return for 2007 is not filed, and he owed money to the IRS or to the California Franchise Tax Board (for those who do not live in California, the FTB is our state taxing agency), his wife will be responsible, since they were still legally married.

What happens to the timeshare depends upon who owned it prior to his demise. If you and he owned it as partners, then his wife will be entitled to his share. If the ownership is fuzzy, and not clearly defined, she might be able to get it all.

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Tax matters: Don’t forget to make the most of your tax-free gift allowance

THE festive season is over, meaning it’s time to start thinking about tax returns and about using up our annual tax –free gift allowances.

Tax Tips & Advice : How to Get Tax-Free Profit From Your Rental Home

Question: Where can i find a “accurate” income tax return calculator?

I have tried 3 different tax calculators online, and it get an estimated tax return of $6,000 to $7,000 and was wondering which one would be most accurate. A $1000 is a big margin, so i was wondering what a true estimate would be.

I used H&R Block Tax calculator, which gave me the return of around $7,000 and i used Taxbrain.com which gave me a return of around $6,000. I used a 3rd that i found on a seach engine which said i should get a refund somewhere in between. I thought all tax returns were the same, and i put in basically the same info in all 3 with the exception of h&r blocks, which asks how much stimulus rebate was.

So which one is most accurate? Does it matter who i file through to get a larger return?

Answer: I filed using Turbo Tax federal free online edition.

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Beat the January 31 tax deadline

The clock is ticking for the nine million people who have to file a self-assessment tax form each year.

Question: Prepare an income statement and balance sheet in good form.?

Sale Revenue $160,000
Accounts Receivable 12,000
Equipment 33,000
Accounts Payable 9,000
Salaries Expense 33,000
Inventory 15,000
Note Payable 14,000
Income Taxes Payable 3,000
Cash 24,000
Selling Expenses 25,000
Common Stock 38,000
Interest Income 2,000
Cost of Sales 74,000
Prepain Expenses 4,000
Income Tax Expense 6,000
Can you show me how to do this work. Thank you.

Answer: Income statement
Sale Revenue $160,000
Cost of Sales 74,000
Gross profit $86,000
less:
Operating expenses
Selling Expenses 25,000
Salaries Expense 33,000
Operating profit $28,000

Non-operating
Interest income 2,000
Profit before taxes $30,000
Income Tax Expense 6,000
Profit after taxes $24,000

Balance Sheet
Non-current assets-
Equipment 33,000
Current Assets-
Inventory 15,000
Accounts Receivable 12,000
Prepaid Expenses 4,000
Cash 24,000
Total assets $88,000

Liabilities & Owner’s Equity
Current liabilities-
Accounts Payable 9,000
Note Payable 14,000
Income Taxes Payable 3,000
Total liabs $26,000

Owners’ equity
Common Stock 38,000
Retained earnings $24,000
Total liabs & owners’ equity $88,000

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VSB Bancorp, Inc. Fourth Quarter 2009 and Full Year 2009 Results of Operations

STATEN ISLAND, NY–(Marketwire – January 13, 2010) – VSB Bancorp, Inc. ( NASDAQ : VSBN ) reported net income of $515,460 for the fourth quarter of 2009, a 14.2% decrease from the fourth quarter of 2008. The following unaudited figures were released today. Pre-tax income was $884,953 in the fourth quarter of 2009, compared to $972,481 for the fourth quarter of 2008, a decrease of $87,528, or 9.0 …

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