The Tax Questions Blog

Archive for November, 2010

Question: When are quarterly taxes due - on or by Jan 15?

Does it need to be postmarked by Jan 15 or does it need to arrive to the IRS by Jan 15? Also, what happens if I just skip this payment and pay in April instead? Will I be penalized? And does anyone know how much? I have paid 100% of last year's taxes and generate over $1000 of self employed income if that makes a difference. Thanks.

Answer: It has to ARRIVE by January 15. The postmark thing is only for mailing a return, not a quarterly payment.

If you skip the payment and pay in April, you may owe a penalty for underpaying, if you owe at least $1000. But since you have paid in over 100% of last year's taxes, that should exempt you from the penalty.

Another exemption to paying the Jan 15 installment is if you file your 2008 tax return and pay the balance by January 31 (actually Feb 2 this year).

Bookkeeping Is Vital to the Success of Small Businesses

Accurate bookkeeping is important for all companies; however, solid bookkeeping is especially crucial for small business. This is true for daily operations, annual tax time and everything in between.

Health Care: Tanning Excise Tax-First Quarterly Payment Due Nov. 1

Question: taxable income / tax stuff...?

i am going to make up a hypothetical situation. Let's say someone's AGI is $100,000 , their taxable income is $60,000 , and their federal tax is $8,000.
Is taxable income the same as household income?
and does this mean that total US tax is $40,000 ?
so what exactly is taxable income?

Answer: Not even close.

Household income is the total gross income (taxable and non-taxable) of all members of the household whether they are related or not and regardless of how they file their tax returns.

Someone with an AGI of $100k and taxable income of $60k has $40k in exemptions and deductions combined. Their tax is $8,000 as stated.

Consumer Money Resource Bills.com Helps Resolve 2010 Year-End Tax Planning Confusion With Simple Strategies

SAN MATEO, CA--(Marketwire - 11/30/10) - Despite recent assurances that Congress will reach a resolution on tax cuts, there remains much uncertainty regarding large parts of the 2010 tax code. Consumer money resource Bills.com today advised individuals to begin preparing for the extension of tax cuts but to hold off on definitive action for as long as possible this year. Many political and ...

Bankruptcy Update Part V - The Trouble with Short Sales

Question: Is lost wage benefit payment from an auto insurance taxable income?

Auto insurance settlements are not taxable, what about a lost wage benefit settlement? Would that be taxable?

Answer: Yes, the part of the payment that's for lost wages is taxable.

New Laws Effective January 1, 2010

The following legislation will take effect beginning Jan. 1, 2010.

Question: What would it take to make cuts in government spending to rid us of the national debt?

You know that feeling get when you pay off a major bill and now you have extra money to spend that won't send you into further debt? What would it take to get our elected officials to spend our money that way?

Social Security won't be able to meet its obligations soon. The national debt is at $8,644,121,120,053.27 today. Federal spending is $2.47 trillion, but out income is only $2.2 trillion. Doesn't that seem ridiculous?

The prescription drug program is supposed to cost about $750B over ten years. We spent that much in INTEREST on the debt in the last two years alone! Just think, with no debt, we could outright afford this program, or we could not tax people and let them use the money as they see fit.

How do we act on the debt? Do we spend less? Tax more? Continue to spiral into more debt; debt that is owned by foreign governments that could strategically "attack" us by refusing to finance our runaway spending.

Should we fix this problem and if so, how?

Answer: i am going to suggest something here. ok. if there were a president / us government that went to the us. peoples. told them, we are going to eliminate the national debt. it is going to take sacrifice from everyone to do it. and when the debt is not there. we will have more money to use for everything everyone wants. the plan will take X- # of years to finish. and this is how we are going to do it.
we are going to cut all programs across the board X %. we are going to tax everyone a little more, with a clause that says this tax will be eliminated after the debt is paid.
And all governmental employees will temporarily take a reduction in pay / benefits / and ammondities.
once the debt has been satisfied, we will return to the full pay / benefits / and taxes can be reduced again.
there are problems with my plan. like i have not found integrity in the white house / our government for a long time.
and many folks will be down right angry.
but to pay off our national debt, it might be worth making some angry. to satisfy our long term goals and health financially in this country.
forget politics
lets do what is right, what is best for our financial future.
in the long run, it will pay off for everyone and we can be more secure financially. which will help any nation to prosper.

Despite the end of the recession, financial future is less than stimulating

Economic experts agree that the recession is over, but they differ on opinion as to what lies in the future. The recession was recently declared over by the National Bureau of Economic Research.

Government Spends Like Rosie O'Donnell at the Bakery...

Question: bank account a taxable gift?

A friend and I had a joint bank account reporting under my SSN. However, I did not contribute any funds to the account. He wanted to put me on the account to avoid going over the FDIC insurance limit at his bank. Is it considered a taxable gift to me under IRS rules?

Answer: Something is not right with this picture. Why didn't he just open a second account in another bank? As of the IRS there is no gift tax for the recipient of a gift. If the amount is over $12,000 there may be estate tax issues for your friend. Now, should the IRS get real imaginative they might just say that this "arrangement" is illegal and therefore taxable to you as ill-gotten gain. Depending on the state that you live in or the account is in there could be a state tax issue. All of that said I think that your "friend" is hiding this money from somebody and you are the "cookie jar". Good luck.

CPAs year-end tax-savings tips

The Queens/Brooklyn Chapter of the New York State Society of Certified Public Accountants (NYSSCPA) recommends these Year-end Tax Tips for consumers:

"IRS Gift Tax" Laws with Marco Nickelson [IRS Gift Tax]