The Tax Preparation Blog

Posts Tagged ‘calculation’

Question: If I received a tenant’s January 2009 monthly payment on 12/31/2008. Is that income for 2008 or 2009?

Does rent payment received for tax reasons go by the month that it is due (January 2009) or the date that the rent was received (12/31/08)? The contract is for rents to be due on the 1st of the month.

Answer: It depends on your accounting method. If you use cash accounting and you deposit the check 12/31, it’s 2008. If you use cash accounting and deposit it 1/1, it’s 2009. If you use accrual accounting, it’s 2008.

easyhome Ltd. Reports 2009 Fourth Quarter and Annual Results

MISSISSAUGA, ONTARIO–(Marketwire – March 9, 2010) – easyhome Ltd. (TSX:EH), Canada’s largest merchandise leasing company, today announced its unaudited results for the fourth quarter and full year ended December 31, 2009. F

Obama Budget – An “Unsustainable Course” – Deficit Spending, Taxing, Borrowing, Bankruptcy

Question: How can I calculate point of diminishing returns for overtime net pay after federal taxes?

How can I calculate point of diminishing returns for overtime net pay?

Workers earn a base pay of $26.55 per hour for a 40 week. Some workers work as much overtime as they can get, others only work 10 of overtime or less. The reason has caused a debate over the point of diminishing returns for working over time due to the amount of taxes that is taken out of the pay check after 10 hour. Basically it seems that the ratio between net pay and hours worked starts to drop after 10 hours. This is due to tax brackets, and the tax brackets are based on the IRS formW4 exemtions claimed.

So how do I get the numbers for the tax brackets based on all combinations of exempts, so that I can make calculations for point of diminishing return? I want to be able to graph hours worked and net pay after taxes.

Gross pay is ease to figure
40 hours x 26.55 x 1.0= $1062 (no overtime gross)
45 hours x 26.55 x 1.5= $1792 (5 hours of overtime gross)

how do i apply the federal tax withholdings?

Answer: I can understand that if, within a pay period, you work enough overtime hours, your withholding might be at a higher rate than if you hadn’t worked as much or any overtime. However, one point you seem to miss is that your tax liability (what you ultimately owe before withholding is accounted for) is only determined on an annual basis. I have yet to see a situation occur where the more a person works (on an hourly basis with overtime), he takes home less. The withholding can never amount to 100% of the additional income for that extra hour worked, unless you request unusually large specific dollar amounts to be withheld via a temporary Form W-4 filed with your employer. It is true that the more a person earns annually (and even within a pay period), the higher his top marginal tax bracket will be. However, the higher tax rate only applies to the last dollars earned–never to all the dollars earned as one moves through the rate schedule brackets.

Publication 15 contains the Federal income tax withholding tables for 2007. Using a spreadsheet program and these tables, you should be able construct the example you desire. The Wage Bracket method tables already have withholding levels for various withholding allowances up to 10, and the instructions on page 35 show you how to handle those over 10. For the Percentage tables the look-up amounts already have withholding allowances deducted from earnings (each one is a certain dollar amount depending on filing status). This seems to be a project that would take some effort. If it were me, I’d realize that the more hours I work the more net pay I take home (even if the extra dollars have a higher rate of tax withheld from them). Your real goal should be to gauge your withholding so that you don’t owe a lot at the end of the year, and don’t provide the IRS with an interest-free loan by having too much withheld.

Here’s the link for Publication 15. Your state should have similar tables available online.

http://www.irs.gov/pub/irs-pdf/p15.pdf

Accident Blocks Route 17 in Logan

Route 17 was blocked for a short time Tuesday after an accident.

Home based tax prep by a CPA

Question: what will be my tax liability if my income is Rs. 4.5 Lac/annum+ Rs. 50,000 from interest on FD.?

note: I invest Rs.1.5Lac/annum through a 15 years ULIP plan.
Plz show the calculation.

Answer: Treating you as male and age less then 65 years (AY:09-10)

4,50,000 is the annual income
0,50,000 is the bank fd interest
———–
5,00,000 is the total income
1,00,000 Less: ULIP. (Maximum deduction restricted to 1 lakh only)
———–
4,00,000 is the taxable income
=======

00,000 Tax on the first 1.5 lakhs (Tax free for male <65 years)
15,000 Tax on 1.5 lakhs @10% between 1.5 lakhs to 3 lakhs)
20,000 Tax on 1 lakh @20% between 3 lakhs to 4 lakhs)
----------
40,000 is the tax
01,200 is education cess @3% on Rs.40,000
---------
41,200 is the net tax payable
======

Spansion Inc. Reports Third Quarter 2009 Results

SUNNYVALE, Calif., Dec. 31 /PRNewswire-FirstCall/ — Spansion Inc. today announced operating results for its quarter and nine months ended September 27, 2009. Spansion reported third quarter of 2009 n…

Tax Withholding Calculator | Liberty Tax Service

Many people are striving to make 2010 a successful one and accounting and bookkeeping is one room where there is always a need for an expert. Hence, anyone even without an accounting degree could earn some units and do a job either home-based or office-based. This would be a great way to augment your family’s income and to have a fulfilling career at home.If you want to start a small business, knowledge in bookkeeping would also be very helpful. An entrepreneur should not also know the marketing side of the business but should also have the knowledge and skills in numbers. This would give him the idea on where to cut fat on unwanted investments, expenses and where to give full blast on earning potentials of the business. Luckily, the internet is a useful resource in earning your basic bookkeeping course.

Moreover, there are various bookkeeping courses blog to read and understand the vocabulary to familiarize your self first before plunging in the hot water. It would be a good start to have the bookkeeper basics in you. It’s a good chance to be able to do learning right at the comfort of your home and at the tip of your fingers. And if things are a bit shady there are resources to provide basic bookkeeping help as well. I am sure you would find it nice to be able to earn bookkeeping certification that would jumpstart a huge change in your life and would open the gate for a good career in 2010.

If one is creative, determined and resourceful starting 2010 would be bliss. No more dreaming in vain, no more hoping against hope because as the New Year unfolds we are all given a fair share of blessings, we just have to act now and nurture it. Let’s not be left behind because the world is a competitive world for the strongest and the survivor. It has no room for the meek and wary. Get up and search the internet for different online courses you could start and enrich yourself. Who knows a simple browsing of basic bookkeeping courses could land you a great income opportunity in 2010!

YOUR Tax Dollars Lost in Space?

TAX WEEK: In Day 4 of our series, we take a look at how much you’re contributing to proposed gov’t programs • NEW CALCULATORS: NASA Program | C-17 Planes • MORE: Defense | TARP | Stimulus | Fannie/Freddie • It’s All Your Money: Who’s Picking Up the Tab?

Recovery: Making Work Pay – General – June 09

With just a click of the mouse, shoppers can buy nearly any product online. E-commerce enables customers to shop at thousand of online stores and pay for their purchase without leaving the comfort of home. But Online Shoppers need to take some precautions for safe and secure shopping.

Old financial wisdom is new again in 2010

New year, new decade, old advice.