The Tax Preparation Blog

Archive for June, 2009

Question: Having trouble filing taxes online!!!?

I am trying to file my friends taxes online using taxslayer.com. When it asks for her economic stimulus amount from last year she does not know that information and it has to be the exact amount or the irs will reject it. So the site then gives an option to find out how much she received by entering her SS#, filing status for 2007, and the number of exemptions for 2007. Im putting in the right information for that and ever other combination that it could possibly be (Example: SS#,single, exemptions 2. and then i’ll try head of house hold, exemptions 2. and so on and so on) and its telling me that the info is wrong. I just did this for my boyfriend and everything went fine. anyway I need to find out the exact amount of her stimulus payment from last year. How do I do that? Thanks!

Answer: she needs to give you a copy of her 1040 from last year, that’s the only way you know for sure what she put.

5 Small Businesses Tax Tips for 2010 from DebtGuru.com

Start preparing for next year’s tax season now to make it much easier for tax time. Find many more tips on the Debt Guru blog at http://www.debtguru.com/finances/top-twelve-tax-tips-for-small-businesses.

Tax Troubles? Make Your IRS Payments with some Help

Due to financial crisis, many homeowners have been struggling to make the payments of their monthly mortgages. They are almost at the edge of losing their homes. To overcome the situation, Obama government has launched a great plan to lower down the burden of homeowners’ monthly mortgage payments.

According to this mortgage rescue plan Obama government has targeted about 9 million homeowners who are in deep crisis. Under this plan, mortgage giants Fannie Mae and Freddie Mac will provide the refinance facility to 4 to 5 million homeowners. And, the rest 3 to 4 million homeowners who are unable to pay their monthly installments will get incentives that will reduce the monthly payments.

However, there are millions of borrowers who are in the crisis and have difficulty in paying monthly payments. But all of them do not qualify and hence are not eligible to avail the facility provided by this plan. If these people meet the following criteria, they are eligible for Obama rescue plan:

- Your home should be primary residence.

- The amount you have loaned on your first mortgage should be equivalent or less than $729,750.

- You must have genuine problem in paying your mortgage amount. (Normally, it could happen due to rise in your mortgage amount or abrupt reduction in your income or possibly both).

- You should have gotten your current mortgage before January 1, 2009.

If you full-fill the above requirements then you will get the following facility:

- Reduction in interest rate (merely 2%).

- Flexibility to extend the loan term up to 40 years.

In extreme conditions, when the homeowner is really bankrupted then this plan provides additional advantage i.e. forbears a part of the principal amount until loan is paid off.

However, under this plan your lender cannot lower your mortgage payments more than 31% of a borrower’s pre tax monthly income.

Year in review

The new year arrived last January on icy roads. According to Virginia State Police, more than 100 wrecks in Washington, Smyth and Wythe counties as a cold mist fell and froze on area roadways.

IRS Payment Plan or Installment Agreement

Question: Self employed tax preparers in California?

If you have a regular job and do taxes on the side (CTEC certified w/ CTEC ID#) from home. What kind of information do you place at the bottom of a clients tax return as a tax preparer. Do I place my CTEC ID# or my SSN? What is EIN?

Answer: Your CTEC # is only for tracking tax education credits for various certification purposes, and you would never put that on a prepared tax form.

An EIN is an employer identification number used to identify a business entity. You probably wouldn’t need one if you are just a sole proprietor preparing returns from your home office.

As far as what to place at the bottom of finished returns: you CAN use your SSN, but it is very unwise to be giving that out. The alternative is found right in the field you are referring to: “Preparer’s SSN or PTIN.” A PTIN is a Preparer Tax Identification Number from the IRS, and you would put that at the bottom of the 1040 instead.

You can request a PTIN using form W-7P, or you can apply online. The last link below is for the IRS e-services website; you can register for a username and apply for a PTIN there. Good luck!!

Small-business advice: Finding investors

Also: What’s the difference between a bookkeeper, a tax preparer and a CPA? Dear Karen: I’m looking for venture capital funding for a distressed real estate business. Any suggestions?

Tax Preparer Sacramento CA Better Tax Preparers

Question: I have a canadian income tax questions?

Does anyone know how many years you can go back to claim medical prescription costs for Income Tax In Canada. I have never claimed my out of pocket expenses on my taxes. I have health insurance which covers 80% but the 20% I pay out of pocket and I am only now finding out that those expenses could be claimed. How far back can I go?

Answer: You may file the medical claim if the payment is within 3 prior years from the earliest date of the notice of assessment to you, i.e., the normal reassessment period for an individual. Claiming beyond the 3 years requires you to have an excuse, i.e., circumstances beyond your control, for example, you were on a extended sick leave, natural disaster had misplaced your medical records, etc. Another opportunity to claim for a tax return beyond the 3 yrs is that the taxable income for that prior yr is NIL, and you have not requested a “loss determination” from the CRA for that tax return.

Note also that for your “unclaimed” 20% medical expenses in 2007, you medical expenses must total more than $1,926, or 3% of your net income, whichever is less.

Crimes of the decade: Passion, greed, paranoia

(Editor’s note: This is part of a Daily Inter Lake series tracing major stories from the past decade.)

James White Makes A Pledge During Therapy

Question: Did Bush’s tax CUTS lead to an INCREASE IN REVENUES PAID TO THE GOVERNMENT? Why does Obama want to raise taxes?

Read this:

http://online.wsj.com/article/SB114670305012743294.html?mod=opinion&ojcontent=otep

What explains this surge in tax revenues, especially at the high end of the income scale? The main factor at play here is the robust economic expansion, which has led to real income gains for most tax filers. Higher incomes mean higher tax payments.

In other words, because it enocouraged economic growth i.e. everyone getting richer) there was more income tax being paid back to the governemnt, albeit at a lower rate!!!

In other words, if you make the “goose that lays the golden egg” healthier you can get more gold from them!!!!

Why does OBAMA insist his socialistic tax policies are better because of “fairness”. What good is “fairness” if it leads to bigger deficits?

Answer: Tax cuts over the last 7 years has lead to a decrease in 1040 sourced taxes and a substantial increase in 1120 and 941 source taxes. The Treasury Department tracks them seperately by form number.

1120 is the form corporations report on
–increase of $350 billion from 2000 to 2006

941 is the form you use to report social security taxes
–increase of $300 billion from 2000 to 2006

1040 is the form you all know
–decrease of $100 billion from 2000 to 2003
–increase of $100 billion from 2003 to 2006
–net affect was zero for personal income taxes at lower rates

Reason: more people working produces 941 increase
Reason: more people working produces 1040 recovery

On February 23, 1950, The Commercial and Financial Chronicle

published an article from Ludwig von Mises with the above title. In it the author concentrated on the threat of inflation as the greatest danger to pension rights.

Income Tax on Futures Income…MUST SEE! E-mini ES Futures Trading, Gold Euro Futures