The Tax Preparation Blog

Posts Tagged ‘federal’

Question: How do I calculate Federal taxes on the sale of raw land owned for 2 years.?

I purchased a raw land in Sep. 2005 only for the purpose of appreciation at $300K. And sold this land Sep. 2007 at the $310K. I have been deducted the property tax every year. I spent about $32K for the mortgage interest, and $4K for the mainenance. ( No improvement ) The maintenance was for HOA fee, irrigation fee, and Mowing & Spray. In this invetment, I got the appreication around $10K, and spent the $36K. My qustion is how to calculate basis and selling price in this situation.

Answer: On your 2005, 2006, and 2007 tax returns, you can deduct the interest on the loan for the land as investment interest. You can also deduct the property tax. Only the amounts paid are deductible in the year paid.

The other expenses are nondeductible. Land does not depreciate, so your basis is $300K. Report the sale on Schedule D, with the sales price of $310K. If you paid an agent a fee for the sale, you can subtract that amount from the sales price.

You will pay long-term capital gains tax on the difference between the sales price and the purchase price. With a gain of $10K, your tax is a maximum of $1,500.

However, you come out ahead because of your deductions which have reduced your taxable income.

Iowans toss ideas at Branstad: Raise gas tax, ax CPR lessons in schools

Governor-elect Terry Branstad visited northwest Iowa today to pump citizens for cost-saving ideas.

ICN 03/21/10 – Health Care and Tax Enforcement, Federal Reserve, National ID Card

Question: Will I get penalized come tax time in 2010?

At my job in 2009 my income was about 2400…my hobby this year I made about 33500 in which I made estimated taxes so far of about 3500. I do plan to make an estimated payment in January. I recently visited the irs.gov website and put my numbers in a withholding calculator. I don’t know if I’m doing it right because I have done it a total of 3 times and have gotten different things each time. However, each time it says I am underpaying…if you can help me please do. With the numbers I have given (oh by the way my job fed withholding is $119), do you think this is correct? I tried to get an accountant’s help back in April but they all ignored me. lol…HELLLLPPPP!!!!!!!!!!!!!!!

Answer: That ‘Hobby’ income must be reported as self-employment. You are going to owe a significant amount. Not only that, but if you have waited to make a payment in the fourth quarter, you may also have an underpayment penalty. Best to see a professional and find out how to lessen the mess you are in.

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TurboTax Estimated Taxes Quarterly Income Tax Filer Win/Mac $29.95 TurboTax Estimated Taxes is your complete estimated income tax solution, from figuring to filing. It helps eliminate tax-time surprises, penalties and fines…and minimizes under- and over-payments. Enjoy the relief, peace of mind and control that come from doing your quarterly estimated income taxes right: this online program guides you through estimated taxes, step-by-step, quarter-by-quarter…

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Crude estimates of NBA tax savings

This is where accounting meets alchemy. I theorized earlier today that NBA players and owners would be saving no small amount of money from the likely deal to sustain the Bush tax cuts. How much? There’s no great way to know, but TrueHoop reader Alex Arndt, a C.P.A. from North Carolina (and, he points out, a long suffering fan of the Hornets and then Bobcats) is a gamer, and engaged in some very …

New Federal Tax Breaks for 2010, 2011

Question: when amending a tax return does my refund still come to me even if i owe the irs?

I filed an amended return and i was told that my return would be mailed to me and i would send it back to the irs with a payment voucher is this true?

Answer: Sounds like you filed once and got a refund. IF that is the case then yes your refund will still be sent to you. You can actually deposit that refund and then once the amended form is filed simply pay the amount due. The faster you do this the smaller the penalty.

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Indictments allege tax-return fraud

share: digg facebook twitter The Internal Revenue Service has obtained indictments against a tax-protesting San Antonio couple, as well as a local tax preparer accused of skimming off the top of fraudulent tax returns. “It was further part of the conspiracy that (the Bernards) filed multiple tax returns and amended tax returns falsely stating that they received little or no taxable income at all …

Financialscape Inc., Lake Spivey, GA

Question: How much extra will this add to the return?

I just went to one of the tax calculators to get an estimate of our refund. Can someone help me figure out what more we can expect for these two items. IRA of 600.00 and installing energy efficient windows price of windows cost (not installed) was 1600. We do not have enough in deductions to itemize. Only around 7000 with mortgage interest, taxes and donations.if that makes any difference.

Figures are 76716. income federal 8073. Married filing joint
Yes the windows were installed back in November I just didnt add the installation charge since I did not think that counted. Installation was another 600.
Making work pay 800. what is that?

Answer: Did you install the windows yet? If they aren’t installed, you can’t take the credit yet.
If you did install the windows and they qualify for the credit, then the cost without installation is used for the credit.

As for taxes…
$76716 – 11400 – 7300 -600 = 57416 taxable income, 7779 tax. $480 windows, $800 making work pay, $8073 withholding, may $1574 in refund.

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J.K. Lasser’s Your Income Tax 2010: For Preparing Your 2009 Tax Return $10.00 America’s number one bestselling tax guide offers the best balance of thoroughness, organization, and usabilityFor over half a century, more than 39 million Americans have turned to J.K. Lasser for easy-to-follow, expert advice and guidance on planning and filing their taxes. Written by a team of tax specialists, J.K. Lasser’s Your Income Tax 2010 includes all the outstanding features that have ma…

TurboTax Deluxe Federal + e-File + State 2010 – [Old Version] $5.75 TurboTax Deluxe was designed to make it easy for you to get the biggest tax refund possible, checking for accuracy and uncovering 350+ deductions and credits. Includes free Federal Efile and TurboTax State for completing your state taxes. Everything you need to do your taxes with ease. Finds All Tax Deductions and Credits You Deserve to Get Your Biggest Refund Maximizes Your Tax Deductions …

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Ways to rejuvenate your charitable donations

Contributions are down significantly in the past two years, but giving is easier than ever

Tax Rebate Calculator 2010, 2011

Question: Hello. Will I get my refund?

Hello. Evidently I made a small mistake when filing my taxes. I didn’t realize it until after I had already electronically filed. It was on the sales tax portion. It resulted in a 130.00 difference in my favor. I called the IRS to ask them about amening the return and of course they told me that that isn’t possible until I receive word from them. The man that I talked to made it sound as if its possible they will still pay out the refund and it would be up to me to file and amendment and pay the overage. When I checked the e-file status it said that I should be receiving my refund by March 4th. Does this sound right? Or, is it more likely they will send me a notice asking to amend? I’m just trying to figure out how long it may be before I see my refund now? My fault =( Thank you so much for your help. Nicholette

Answer: You can amend now with a 1040X and at the bottom show that you want the addtl 130 refunded, or wait and see if the IRS caught your mistake for you and gives you the 130 back. Sometimes the IRS catches these little things, even if they are in your favor. Odds are not though.

The guy you talked to probably just meant you cant amend a return they haven’t even run through their system yet… but you can still send the form in now for sure.

Franchise Tax Board Opens Filing Season for State Taxes

SACRAMENTO, Calif.–(BUSINESS WIRE)–The Franchise Tax Board (FTB) today announced it is now accepting 2010 state tax returns. Also, FTB provides the following updates on law changes and filing services. “FTB’s website offers free tax filing services, help with account matters, and information about the federal Earned Income Tax Credit that can put thousands of dollars in families’ wallets …

Paxton Tax & Accounting, Snellville, GA