The Tax Preparation Blog

Archive for the ‘Tax Adjustments’ Category

Question: In WA, does the spouse need to claim child support on her taxable income?

Child resides with the parent receiving the child support in WA, who has the child more then 50% of the time. Father is not a resident of WA but Canada and did not claim payments on taxes. Payments were not court ordered, does anyone need to file the expenses/income for a tax adjustment?

Answer: The fact that you live in Washington is irrelevant. Child support is never taxable or claimable as a deduction. This is because the money is technically for the child, and parents supporting their child is not taxable.

This is different from alimony, where the money is for the ex spouse.

ACE Reports Fourth Quarter 2010 Net Income of $1 Billion, up 5%; Operating Income of $702 Million and Combined Ratio …

ACE Limited today reported net income for the quarter ended December 31, 2010, of $2.92 per share, compared with $2.81 per share for the same quarter last year. Income excluding net realized gains was $2.05 per share, compared with $2.01 per share for the same quarter last year.

Basic Explanation of W-4 tax Form : Deductions & Adjustments Worksheet: W-4 Tax Form

Find Quality Investments With ROIC

Return on invested capital , or ROIC, is arguably one of the most reliable performance metrics for spotting quality investments. But in spite of its importance, the metric doesn’t get the same level of interest and exposure as indicators like the P/E or ROE ratios.

Jesse Jackson confronted on Obama Hypocrisy & Carbon Tax

Question: I need URGENT help with Accounting…..PLEASE. Jouranl Entries and Trial Balance?

Oct. 1 Began business by making a deposit in a company bank account of $12,000, in exchange
for 1,200 shares of $10 par value common stock.

Oct. 1 Paid the premium on a one-year insurance policy, $1,200.

Oct. 1 Paid the current month’s rent, $1,040.

Oct. 3 Purchased repair equipment from Conklin Company, $4,400. The terms were $600 down and $200
per month for nineteen months. The first payment is due November 1.

Oct. 8 Purchased repair supplies from McKenna Company on credit, $390.

Oct. 12 Paid utility bill for October, $154.

Oct. 16 Cash bicycle repair revenue for the first half of October, $1,362.

Oct. 19 Made payment to McKenna Company, $200.

Adjusting entries:
a)1 mos insurance expired. b)Remaining inventory of repair supplies is $194 c)Estimated depreciation on repair equipment is $70 d)Estimated income taxes are $40

Answer: Oct 1
Cash $12,000 Dr
..Common Stock 12,000 Cr
….1,200 shares sold at $10 par value

Prepaid Insurance 1,200 Dr
..Cash1,200 Cr
….Premium payment for insurance coverage for the year

Rent Expense 1,040 Dr
..Cash Cr 1,040
….Rent for October

… etc.; remember that anything that DECREASES is a credit (CR) and anything that INCREASES is a debit (DR). So if you add cash, it’s a debit, and if you take away cash, it’s a credit. If you add to your expenses, it’s a debit. If you decrease the amount of an asset, it’s a credit.

Adjusting entries, Oct 31:
Insurance Expense 100 Dr
..Prepaid Insurance 100 Cr
….1 month insurance coverage

Here, you have an asset – something that you have paid for and is owed to your company (in this case, insurance coverage) which you are using up. The adjusting entry shows that you’ve ‘used’ one twelfth of your prepaid expense ($1200/12 = $100), so now it stops being an asset (something owed) and becomes an expense.

Property for Industry posts steady 1Q profit

April 19 (BusinessWire) – Property for Industry, which has a portfolio of 55 industrial properties, reported little-changed first-half profit as rentals rose and the company took one-time adjustments for a drop in the value of interest rate swaps.

An entrepreneur’s business plan is generally created to be reviewed by external funders. However, this should not be the first time that the plan is given a detailed review by a professional. Consultants and specialists are widely available and can offer valuable feedback which can save you from making embarrassing mistakes in full view of funders.

Specialists

Lawyers, accountants, and financial advisors can offer specific feedback on your business plan, as it pertains to their area of expertise. Make sure you seek specialists with experience working with startup businesses if you take this route. The upside of working with specialists to review the legal, financial, and tax aspects of your business plan is that they should have deep expertise on their topic. The downside is that you will need to speak to multiple specialists to cover all the bases and you will not have the benefit of one consultant who can give you an overall review of the strength of your current plan.

SCORE and SBDCs

SCORE (the Service Corps of Retired Executives) and SBDCs (Small Business Development Centers) are non-profit coaching and consultation services offering free services to entrepreneurs and small business owners. Both can give some initial advice and mentorship, but will not be able to devote a great deal of time to your plan as their mission is to offer basic consultations to many separate clients.

Business Plan Consultants

A business plan consultant can offer that overall review. This type of consultant specializes in creating business plans and helping entrepreneurs to develop their own. They have a very good idea of what funders want to see, and a general sense of the legal, tax, and financial issues that lawyers and accountants look at. A business plan consultant can offer an initial review and then refer you to a specialist with specific questions that are beyond their expertise. This can get you the best of both worlds in a sense – general advice on your strategy as well as deep expertise when you need it.

Senate-passed health reform bill faces tough negotiations with House

Physician organizations will be pushing for more changes in an effort to minimize future Medicare pay cuts.

Section 3: Michael Chen – College Financial Aid and College Tax Specialist

Question: What is the annual income I should write on the form I-864, Total income or adjusted gross income?

I’m self employed, and, in my tax return my total income is enough to be a sponsor, but after “self employed taxes”, my adjusted gross income falls a little behind the line. They ask to write my adjusted gross income for the last three yeas, I understand that, but I don’t know what to write on line 23 where they ask my “individual annual income”. Any help?
Thanks
Ok, just to be sure, so it’s not adjusted gross income?

Answer: Self-employment taxes are not a reduction from gross income to arrive at AGI. The instructions tell you to show your total earned income or retirement income for the year. That’s what you put down — total earned income, etc. Earned income is income from wages or self-employment. It does not include unearned income such as dividends, interest, capital gains, etc. Total income is always before any taxes, since eveyone’s tax situation is unique.

Analyzing Measure 66

Even though fewer than 3 percent of Oregon taxpayers would have to pay more, every Oregon voter will have the chance in a Jan. 26 statewide election to decide the fate of Measure 66.

What’s My Adjusted Gross Income (AGI) – E-File Explained