The Tax Preparation Blog

Archive for the ‘Tax Adjustments’ Category

Question: The Bush tax rebate will be $800 for singles making under 85k.Is this based on gross adjusted income?

Answer: Nothing has been signed. There is no rebate. It’s all talk from a president famous for his cheap words. Remember his “end of major conflict in Iraq” speech?! How many have died since then?

The last time he pulled this stunt it was an advance refund on the 2001 tax returns. Many folks had to pay it back when they filed their tax returns!

If you do get something, put it in the bank and let it sit until you file your 2008 return in 2009. You may need it then if your refund is less than the advance refund you received

Income limit lifted, opening Roth IRA conversions to all

Hillsborough resident Rick Smith likes the idea of converting a traditional Individual Retirement Account into a tax-free Roth IRA, but until this year, he and other higher-income taxpayers did not have that option. Now they do, thanks to a change in the tax code.

How to Complete and File a 1040A Tax Form : 1040A Adjusted Gross Income Tips

Question: CPA Exam; Errors?

2. Terry, Inc. is a calendar-year corporation whose financial statements for 2004 and 2005 included errors as follows:

2004- Ending Inventory: $15,000 overstated
2005- Ending Inventory: $5,000 understated

2004-Depreciation Expense: 12,500 overstated
2005- Depreciation Expense: $4,000 understated

Assume that purchases were recorded correctly and that no correcting entries were made at December 31, 2004 or at December 31, 2005. Ignoring income taxes, by how much should Terry’s retained earnings be retrospectively adjusted at January 1, 2006?

a.$135,000 increase
b.$3,500 decrease
c.$1,500 decrease
d.$1,000 decrease

Answer: Answer is: $13500 increase

Effect on income:
2005 – ($ 5000) understated
2004 – ($12500) understated
2005 – $ 4000 overstated
Total Effect: $13500 understated

Therefore, what we should do is to eliminate understatement by increasing the retained earnings by $13500.

It seems that it is not in the choices. You might have committed a typographical error.

China Valves Technology, Inc. Announces Fourth Quarter and Full Year 2009 Results

China Valves Technology, Inc. , a leading Chinese metal valve manufacturer, today announced its fourth quarter and full year financial results ended December 31, 2009.

Question: Is$50.000 combined income(wife and me)to apply for a $180.000 mortgage?

We are first time buyers and have excellent credit rating.
The problem is that as a transport self contractor I have a lot of tax credits and my income even being very good in numbers,once I apply the credits looks very little on my income tax papers.
I gross about 80.000 but after all my tax credits they become 20.000 of adjusted income on paper.
so my dilemma is if to show a higher income I have to forfeit about 40.000 in tax credits that I am entitled to and therefore pay an arm and a leg to the IRS or use my credits and with my combined joint income is enough to apply for the mortgage

Answer: They are going to take your word for it, that you earn 20k a year. After all, you aren’t a tax cheat are you? You will only qualify for a loan in the 50k range.

Do Stocks Provide a Sufficient Hedge Against Inflation?

By Inoculated Investor. Smart investors and markets commentators ranging from Warren Buffett to Marc Faber have recently argued that purchasing stocks is one of the best ways for people to protect their wealth from the ravages of inflation. The common refrain is that certain quality businesses with pricing power and durable competitive advantages are able to pass along input cost increases to …

Mortgage Rates, FHA Streamlines, and the FTHB Tax Credit

Question: What does this mean “Monthly income before taxes and adjustments per pay period?”?

I am filling out a car loan application for my bank online and it is asking for my gross salary. When I click on it this is the explanation it gives me “Monthly income before taxes and adjustments per pay period.” Is it asking for my gross monthly income or for my cross income for each pay period (which for me would be every week?)

Answer: That means”how much did you make before being raped by the govt.”

CBS 2 HD Has Your 2010 Income Tax Tips

Each year there are a number of changes to the tax code, most of which never affect the average taxpayer. But as you start to prepare your 2009 taxes, there are several new adjustments that can really save you big bucks this season.

Surviving an IRS Tax Audit : IRS Audit: Signing Off

Question: SOMEONE PLEASE ANSWER MY TAX QUESTION (state return in N.Y. state)?

i filed on 1/23/09 i recieved my federal. but i still did not recieve my state return. i claimed daycare on my state return (showing i pay for daycare). when i check the status of my return it tells me still processing. i think it is a delay on my return due to me claiming daycare? WHY IS THAT? because a coulpe people i know claim the same thing and theirs have’nt came back yet either. but another person i know did not claim child care, and she filed after me and her state return came back already. i recieve child care from dept. social service, but the hours they do not cover or when i do overtime i pay my my provider out of pocket and i provided his social security # when i filed. so will i still get my credit or would they make an adjustment to my return? please read my question carefully and try to answer the best you can thanks

Answer: Dear Lena: Sounds like you have done everything correctly. I would keep calling NY dept of revenue and talk to an agent, you may have other issues. Has anything changed i.e. children, credits, etc.?

This advice was prepared base on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor

THISDAY AWARD:Fifty Years and Still Standing…

Three days into the New Year, the euphoria is yet to peter out. Wishes for better things to come continue to pour in from all sides. While the air is laden with a whiff of festivities and expectations… Nigeria’s golden jubilee anniversary looms.

From L1 Visa to Green Card – Free Immigration Help