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NEW BUSINESS LICENSES: Week of November 15, 2010

NEW BUSINESS LICENSES: Week of November 15, 2010

Wanda Viera Stresses Strong Client Relations for Income Tax Verification Industry

Question: Tax Question for my freelance job. Thanks?

Hi, I live in California and I have been doing some freelance work besides my full time day job, the freelance work I do generates about $3000 worth of extra income per month.
A couple friends of mine have been telling me the possibilites of putting some expenses as tax deductions for the income I get from freelancing. Expenses such as computer purchase, car lease payments, cell phone bills…etc
Can anyone give me an estimate on how much % of the expense are deductable for some of the items I mentioned?
Such as if I buy a $3000 laptop, how much of that would go into tax deduction?
thanks so much for helping

Answer: For your freelance work you will complete schedule C (Form 1040) where you can deduct your business expenses. This includes car mileage/car lease payments and phone bill based on percentage of business use.

The computer/laptop is capital expense. Normally you take depreciation for capital expense. However, if you use such goods for more than 50% for business you can deduct full amount under section 179 deduction. The business use must continue for five years.

For completing your tax return you should use software and do it yourself or use a tax preparer. Software will guide you about section 179 deduction.

Community Calendar

Submissions for Community Calendar are required 14 days preceding the date of publication. Send to: Niles Managing Editor, Pioneer Press, 3701 W. Lake Ave., Glenview IL 60026. Information may be faxed to (847) 486-7495 or e-mailed to mbottari@pioneerlocal.com.

Steve Poizner Speaks With Fortune Magazine’s Tech Talk

Question: Penalties regarding the error I made a schedule C error on my 2008 tax return?

I am currently in the process of amending my 2008 tax return, my tax preparer mentioned that I had a business loss of $10,800 from a business that I never owned. She was basically a crooked tax preparer that wanted to skim money from the government. I did not catch the error until much later. And now I am going to have return the refund that I received, plus the money that I owe from the 2008 return.

However, my real question is will I be penalized for fraud or for filing my income taxes late, due to the amendment? What are the penalties (i.e. 6651) that I will fall under for amending my taxes? Is it possible that I could get the penalities abated?

Answer: The bottom line answer to your questions is MAYBE. Sorry, that’s probably not what you were looking for.

If you will now take the time to actually READ that fine print right above where the signature line is on a federal tax return you will notice it says something to the effect that YOU have examined the return that YOU are signing and that YOU are filing and that it is true and correct to the best of YOUR knowledge. In short…it is YOUR return so it is YOUR responsibility to ensure that it is correct.

NOW….having said that….the number one ‘Safe Harbor’ for avoiding penalties (and their related interes) is that you “relied on the advice of a tax professional”. So as long as your ‘crooked tax preparer’ was in the business of Preparing Tax Returns and you can prove that you paid him/her for the return preparation then you meet the requirements…and should qualify to avoid the penalties.

BTW, the late filing penalty applies to the original return filed – not the 1040-X. So as long as the original return was timely filed you shouldn’t be subject to the Failure To File (FTF) penalty. However, if the 1040-X reveals that you actually owed tax instead of a refund then the Failure To Pay (FTP) penalty will apply from the due date of the original return through the date it is paid. Click on the first link below to pull up an Adobe file copy of IRS Notice 433 – Interest and Penalty Information. Now scroll down past all the percentages. Just below the paragraph that talks about ‘For (C) Corporations…’ the next paragraph starts to address the FTF and FTP penalties. Now scroll down near the bottom of page 2 to read how to appeal the penalties. You might also want to peruse Notice 1215 regarding going to Appeals. Click the second link for this notice. This notice mentions Form 12009, click the third link for a copy.

Many tax professionals belong to the National Association of Tax Professionals [NATP]. NATP maintains a zip-code searchable database of it’s members. Click the fourth link and enter your zip code and a radius you wish to search within to pull up a listing of reputable tax pro’s in your area. Note that these tax pro’s may, or may not, be the level that the Appeals Office would require.

G’Luck…

Mike Womack, Sr. Partner
Zero Degrees Tax LLP
Moore, OK

Proposed Colo. tax-and-debt measures lose badly

DENVER (AP) — Colorado voters on Tuesday soundly rejected three restrictive tax-and-debt ballot measures that analysts warned would spell economic gloom in the state for decades.

Theft By Deception 7of9 – Deciphering The Federal Income Tax

Benefits of development evenly distributed now- Prime Minister

Speaker Chamal Rajapaksa presided yesterday when Parliament met at 9.30 am. After the presentation of papers and oral questions the House took up the Committee Stage debate of the Appropriation Bill 2011.

OCanada 10000 miles from Coast to Coast

Question: FASFA question,i have divorced parents,and not living with either?

Problem:
I live with my uncle any my parents are divorced. my mom still claims me on her tax return but i don’t live with her.when i apply for fasfa i want to only put my dad and step moms information, will that be a problem? also my mom lives in the same state as i do and my dad lives in Canada so will it be a problem when i submit his income statements? are there any special rules/regulations if your parents live outside of the U.S. and also how do i know who has “custody over me” i think its both because there are not regulations i follow or anything
thanks, i need answers please

Answer: Which parent you report is very clear after you read the instructions on the fafsa. Notice it doesn’t ask who claims you on their tax form or what country they live in or who has custody.

What if you are a dependent student, but your parents are divorced or separated?

• You report information about the parent you lived with for the greater amount of time during the 12 months preceding the date you file your FAFSA application.

• If you didn’t live with either parent, or if you lived with each parent an equal amount of time, then use information about the parent who provided the greater amount of financial support during the 12 months prior to the date you file your FAFSA application.

• If you didn’t receive any parental financial support during that time, you must report information about the parent who most recently provided the greater amount of parental support.

Do I report stepparents’ information?
Your stepparent’s financial information is required on the FAFSA:
• If the parent you received financial support from was a single parent who is now married, or
• If the parent you received financial support from was divorced or widowed but has remarried.

Travelers Reports Third Quarter 2010 Net Income per Diluted Share and Operating Income per Diluted Share of $2.11 and …

The Travelers Companies, Inc. today reported net income of $1.005 billion, or $2.11 per diluted share, for the quarter ended September 30, 2010, compared to $935 million, or $1.65 per diluted share, for the quarter ended September 30, 2009.

Voluntary-Disclosure-Canada.com (Tax Amnesty Debt Penalty Unflied Unpaid Unreported Income)