The Tax Questions Blog

Archive for September, 2008

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Question: taxes on lawsuit settlement award?

I am wondering if a portion of a personal injury settlement award are taxable. It is being paid as a lump sum. Part of the lump sum includes "future lost earnings". Is this part taxable and when do I need to pay it?
Judy, if that's the case, do I have to pay all the estimated taxes on it in the first quarter of the year in which I recieve it?

Answer: Settlements on personal injury lawsuits are not taxable. They can't tax money for future loss and pain & suffering that would be wrong! IRS isnt that mean now come on!!

Enjoy your money. Invest and spend wisely. Aka buy a house, stocks, bonds, saving accounts, CD's, mutual funds, and IRAs, even buy a peice of rental property.

Don't let it go to your head! Be wise!

Personal injury recoveries after Burke. (awards to female victims of discrimination are taxable): An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA's on December 1, 1992. The length of the article is 1568 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.From the supplier:...

Admiralty and Maritime Law: Admiralty and Maritime (Hornbook Series Student Edition) $50.00 This Hornbook provides an overview of the history and traditions underlying today’s admiralty and maritime law. Topics covered include the law of the sea, jurisdiction, maritime torts, seamen’s remedies, and workers’ compensation as it applies to the maritime setting. Addresses the carriage of goods, towage, charter parties, marine pollution, and marine insurance, including general average. ...

Federal Income Tax: Examples and Explanations (Examples & Explanations) $16.66 A favorite among law students and professors alike, the Examples & Explanations series is ideal for studying, reviewing and testing your understanding through application of hypothetical examples. Authored by leading professors with extensive classroom experience, Examples & Explanations titles offer hypothetical questions in the subject area, complemented by detailed explanations that ...

Some paths to education cost relief without raising the taxman’s ire

Beware of arrangements that promise deductions to fund your kids’ college tuition

Question: whether interest from RD in postoffice is taxable in the A/year 08-09.?

My Reccurring deposit in post office matured in Feb 2008. post office calculates interst on RD at the time of maturity only.Period of RD is 5 years. yearwise interest is not available.whether interest is taxable. If yes, to which extent and for how many years. Earlier interst income to the extent of Rs.12000 was exempt. Total amount of interst is Rs.20,269/-. Kindly advise me for the assessment year 2008-09

Answer: In previous years (before A/year 2007-08), there was sec.80L and the interest up to Rs.12,000 was exempt in that section. Now no more Sec.80L and the entire interest from post office and bank fd (Excluding PPF interest) is taxable.

Actually, the post office R.D a/c interest will be credited to your RD A/c every year. If you could have contacted them, then they could have told you how much interest added to your account each year.

Because you have not disclosed and shown the FD interest in previous years, you have to show the entire interest for this maturity year. This interest will be shown in "Income From Other Source" head. It will be added to your gross total income and you have to pay the tax as per slab rates applicable to you depending on your total income.

Using debt to leverage a taxable gift to a QPRT.(qualified personal residence trust): An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA's on October 1, 2008. The length of the article is 1399 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Using debt to leverage a taxab...

PassKey EA Review, Part 2: Businesses, IRS Enrolled Agent Exam Study Guide 2010-2011 Edition $57.00 THIS BOOK IS OUT-OF-PRINT...

The Tax Lady's Guide to Beating the IRS and Saving Big Bucks on Your Taxes: Learn How You can Pay Less Money to the IRS by Beating them at their Own Game $1.74 The United States Federal Tax Code is extremely lengthy and complicated. In some cases, it requires 250 pages of instruction for just one of its paragraphs. Add to that 8 billion pages of 480 different tax forms American taxpayers receive each year from IRS (enough paper to stretch around the earth 28 times) and it's no wonder so many people are intimidated and confused about their taxes. Enter Ro...

The annual Lump of Coal Awards, Part II

For the past 14 years, the Lump of Coal Awards have recognized managers, executives, firms, watchdogs and others for action, attitude, behavior or performance that is bumbling, offensive, disingenuous, reprehensible or just plain stupid.

Welcome to Communities without Boundaries CwoB 2008

How's that hope and change going for you now? Hello again; Back at the beginning of June 2009, I submitted an Article in Sooper Articles that The Economy is in the Tank and Here is Who's to Blame!, And we the people take Action!. Now I amazed at what has actually transpired sense.

America are you awake now? HELLO!

This may hit hard but forget about SOCIAL SECURITY INCOME, MEDICARE, MEDICADE, SOCIAL SECURITY DISABILITY, and any other Government

Program now or in the future that they're going to pass. Do your best to be independent instead of Government dependent. Learn how to become self employed, work from home, increase your tax deduction status as well as increase your income.

Go To...StJamesMarketing.net and learn how.

I never really imagined a Government take over of this magnitude yet, it's happening right in front of us at breakneck speed. How in the world have we digressed to such a state of dependency. Do what I did, instead of worrying what kind of disability income I could get after my injuries and giving up on the free market that made this country great so, I did this; GO TO... StJamesMarketing.net and it changed my life.

If you don't want this to be a socialist country as I do not, then you know what to do.

Become more aware of what is going on at your local, state and federal levels of government. Don't accept whatever they want to hand down as law just because you think that you can't do anything about it. Small Business made this country great,

Believe in your self and GO TO...StJamesMarketing.net

Talk to you soon.

Author:

James Hudgins

Your Letters: Thursday

• Strong policy needed• Legislators don't get it• Change in leadership

Question: I am trying to find out how much mortgage I can finance on a disability income. Pension, SS, and worker's comp

The only calculators I can find are one's that ask for "before tax" income. I only pay a small tax on my pension, the rest of my income is non-taxable. I make 4200.00 per month AFTER taxes. How can I find out how much house I can afford. My only monthly payments are my car, which is 550.00 per month. I have about 12,000.00 as down payment. Thank you

Answer: Well the income is good and if all you owe is a car payment then you are in good shape. If you are good about not having a lot of debit then figure about 1/4 th of your income for a house payment. I like to stay around 20% of my income, but It sounds like I have a little more debit than you, plus I'm not on a fixed income. What area do you live in? maybe I could be of some help And how big of a home are you looking for.

The rules of the sale: non-competition payments are now taxable as income. Make sure you take this into consideration when structuring a sale.(Tax Tips): An article from: CMA Management $5.95 This digital document is an article from CMA Management, published by Thomson Gale on October 1, 2004. The length of the article is 1012 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle: The rules of...

CFP Certification Exam Practice Question Workbook: 1,000 Comprehensive Practice Questions (3rd Edition) $22.14 *** UPDATED FOR 2013***CFP Certification Exam Practice Question Workbook provides 1,000 comprehensive practice questions to prepare you for the demanding 10-hour CFP Certification Exam. Master exam topics with intensive practice in the essential areas you'll find on the test. All questions are test-level difficulty and focused solely on helping you pass. Whether you're challenging the exam for the...

Noncompetition payments are taxable to donor of CRUT.(charitable remainder unitrust): An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA's on April 1, 2001. The length of the article is 912 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle:...

Ohio to Borrow as Part of $736 Million Debt Restructuring Plan

Jan. 5 (Bloomberg) -- Ohio is coming to market with as much as $280 million in tax-exempt bonds due beginning in 2013 as part of the state’s first plan to ease near-term costs by delaying principal payments on existing debt.

FREE HUGS Housemates 2008 Manila Philippines

In November 2009, the IRS began a new National Research Program Initiative (the Initiative): an industry wide detailed random audit of employment taxes for 6,000 employers during the course of the next three years. The purpose of the Initiative is dual fold: (1) assess systemic employment tax compliance; and (2) collect assessments from delinquent employers.

With diminishing tax revenues due to the depressed economy, the U.S. Treasury Department is stepping up efforts to decrease the tax gap between overall tax liabilities and taxes paid to the Internal Revenue Service. Auditing employment taxes is seen by the IRS as a necessary method of closing this tax gap. For tax year 2001 for example, the gross tax gap was estimated by the IRS at around $345 billion, with underreporting of employment taxes accounting for around 17% of the tax gap.

The IRS will audit businesses to ensure that Federal withholding taxes are deducted and paid over to the government from employees wages for Social Security and Medicare as well as Federal Unemployment taxes. An employer found to be in noncompliance could face stiff civil penalties and interest on unpaid taxes. These penalties could have a particularly severe impact on small business owners.

The IRS has prioritized four areas to focus their auditing efforts under the Initiative, including:

Worker Classification: i.e. whether an employer properly classifies an employee as an employee or independent contractor for tax purposes. Determining which depends on the behavioral, financial and type of relationship the company has with the person performing the work.

Employee Fringe Benefits: A fringe benefit is a form of pay for the performance of services. i.e. benefits such as insurance coverage, company car or child care, etc. that are provided by employers tax free to employees but not to independent contractors.

Reimbursed Business Expenses: e.g. reimbursement for taking a client to lunch, purchasing office supplies: which requires a written business expense plan. I.E. You must have paid or incurred expenses that are deductible while performing services as an employee. You must adequately account to your employer for these expenses within a reasonable time period, and you must return any excess reimbursement or allowance within a reasonable time period.

Compensation of Owners who are also employees of the company, whereby unpaid taxes may result in personal liability for the employer.

It has been reported that the IRS has already commenced with the process of selecting entities for audit of their employment taxes now that the employment tax audit Initiative has begun. Severe consequences wait for employers who are in noncompliance with the employment tax laws. Businesses are highly encouraged to make sure procedures are set to adhere to the applicable tax laws. Doing so can thwart much headache, and the loss of money and productive office time in the event of an audit.

For example, the Internal Revenue Code requires a written reimbursement plan in order to take advantage of the tax benefits of legitimate business expenses. Employers should consider consulting with experienced counsel in preparation for the Initiative and in the event of an audit of their employment taxes.

International Agency and Distribution Law [2009] - I $119.98 2009 RELEASE: "International Agency and Distribution Law", a three-volume set with more than 1,800 pages, examines countries in North and South America, Asia and the Pacific, the Middle East, and Europe and their laws affecting the sale of goods through use of local agents and distributors, addressing issues relating to distribution contracts, employment, tax liabilities, liability for the acts of...

INTERNATIONAL AGENCY AND DISTRIBUTION LAW [2008] Volume I $120.00 2008 RELEASE: "International Agency and Distribution Law", a three-volume set with more than 1,800 pages, examines countries in North and South America, Asia and the Pacific, the Middle East, and Europe and their laws affecting the sale of goods through use of local agents and distributors, addressing issues relating to distribution contracts, employment, tax liabilities, liability for the acts of...

Mergers and Acquisitions $160.43 The M&A market is expanding significantly year on year. Due to increasing globalisation, even the business of small to medium-sized companies transcends national borders. In the case of major M&A transactions, the parties involved must generally now comply with the legal systems of several different jurisdictions. This practical new title from the publishers of the International Law Office feature...

Manitowoc City Council OKs new finance plan

MANITOWOC The Manitowoc City Council authorized a financing plan Monday that would save $378,722.