The Tax Questions Blog

Archive for June, 2010

Question: How do the following make it easy to make $-efficiently? 529 Plans, 401k, Unified Tax Free...?

1)Zero Coupon bonds: taxable & tax-free
2)UGMA’S United Gift to Minor’s Act
3)529 Plans
4)Unified Tax Credit
5)ira trad -roth
6)401k
7)Index Funds
8)ETF’S

Answer: In 401k, 529 plans and IRAs you do not need to worry about ta efficiency because the taxes are deferred until they are withdrawn(or never for 529).

AllianceBernstein L.P. Announces Extension of 529 College Savings Plan Relationship with Rhode Island

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City working to facilitate development

n the last couple years, the effort to improve Rhinelander's downtown has gained steam, and the city is now taking another concrete step toward rebuilding the city's center.

Question: Taxation from repaid loans to a Subchapter S corporation?

I'm looking over some accounts for an S Corp. The way the company is set up right now, the founders have put their money into the company, but they're treating it like a long-term loan; keeping track of the money invested and the interest it's earning, with the intent of repaying those loans as the business becomes profitable.
However, we're unclear on the consequences of these paybacks. Is an individual responsible for income tax on these funds? The company president is of the opinion that it shouldn't, since the profits and losses of an S Corp flow directly to the shareholders, so he's essentially just transferring money from himself to himself. But none of us are tax experts.
Any advice on how we can best withdraw money from this company as it becomes successful? If it's important, we're incorporated in New York.

Answer: The Articles of Incorporation should address this issue. It sounds like there is going to be a "preferred distribution" when cash is available. This is acceptable and is classified as a distribution. Distribution by a Sub S to it's shareholders (to the extent of earnings and profits) is not taxed to the shareholders. They have basically been taxed it when the income flowed through to the shareholders on the K-1.

How A Jobs-Creating, Loophole-Closing Tax Bill Does Little Of Either

The least Congress could do is to call this annual rite what it is: Continuing tax loopholes, not cl

Cindy McCain Refuses to Release Her Tax Returns... Ever

Question: Are medical benefits paid to volunteers taxable income under the IRS Code?

If a rural fire department that has volunteers, not paid employees, decides to provide the volunteers paid health insurance, or other non-salary benefits, are these taxable income? And, do they trigger workers compensation issues in Idaho?

Answer: Dear OD: The employer(fire dept) will be able to tell you. If they are not up to speed look at the IRS "Taxable Fringe Benefits Guide".

This pub explains how fringe benefits work and which are taxable which are deferred and which ones are exempt. Most health insurance plans paid for by the employer (if you are a volunteer, you are considered an employee for this determination) are tax exempt. The same applies to "de mininimis benefits" such as coffee at the firehouse.

This advice was prepared based on our understanding of the tax laws 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

Incidence of tax under exemption system regressive in Indian context

Modern approach to taxation of health and education.

Alex Jones Tv {Sunday Edition} 3/8: Pelosi "Buy a $15000 Policy or Go to Jail"

Question: Why don't more people judge economic models based on RESULTS?

Living conditions in capitalist countries almost always exceed those in socialist countries with similar other attributes.

Living conditions generally improve noticeably when a country's economy is made freer (taxes and/or regulation reduced).

Almost every boom can be traced either to a monetary influx - which later on reverses itself - or to an implementation of market policies.

The sole basis for turning back to more state control is that although almost everyone, outside of government workers and a handful of people in protected industries, is undeniably better off than he used to be, the benefits don't flow equally to everyone - that is, I'm measurably better off than I used to be, my kids will be a lot better off than they otherwise would be, but darn it, I'm only twice as rich as I was and T. Boone Pickens is 20 times richer than he was, so I'd rather be poorer if that's what it takes to see T. Boone suffer.

When are we going to drop this pathology?

Answer: You've got it right....now how do we protect and spread it?! Macroeconomics isn't a required humanities course!

Try "The Philosophy and Economics of Market Socialism: A Critical Study" by N. Scott Arnold.

Why The 'Livable Cities' Rankings Are Wrong

Urban centers aren't about public safety and homogeneity, but clashing cultures, economic growth and the maddening crowd.

Co-op bank posts a pre-tax profit of 3.7 billion shillings