The Tax Questions Blog

Archive for the ‘Taxable Income’ Category

Question: why do i have other non taxable income on my w2?

what could this mean? i havent worked for anyone other than a incorporated company

Answer: Other non taxable income, may be contributions to a 401k, health premiums or any other pretax deduction from your wages, this figure would not be included in Box 1 on your W2.
What box is this reported on? There should be a sheet on the back of the W2 or in addition to with an explaination of what each box of your W2 represents. This figure is not something that you would add on to your 1040 as income. If it is for a contribution to a 401k you might be eligible for the Retirement Credit, if it was for health care premiums, if you itemize your deductions this given you the total that you paid for the yr in health care premiums.
If you look and are still confused, call the Internal Revenue Service and they can help you by just getting a little bit more information from you.

Obama wants to repeal tax on company cell phones

Ever make a personal call on your company cell phone? Did you record the value of that call as taxable income, as required by law?

Commercial Loan Modification & Cost Segregation Part 7. (How to get $ money back from the IRS)

Question: Income from Ebay taxable?

Is income from Ebay taxable? I ask because many of the things that I am selling I can't recall how much I spent on them-I picked them up at thrift shops, used book stores, the Family Thrift Center on the Neponset River, Buck a Book, Family Dollar, Solstice Tree Shop, quarter bins, remainder tables, etc. So I could not probably concretely nail down how much I spent on them.

Answer: There is a lot of misinformation going on here. The first question to ask is do you have a seller's permit? If the answer is yes, you should already know the answer to your question, which is yes, you pay taxes on your net income for your business.

I suspect that you don't have a seller's permit. In that case, who is reporting the revenue that you make on eBay to the IRS? No one. Currently, eBay is not required to file any information to the IRS.

Technically, if you are making profits selling goods on eBay, you need to pay taxes on it. You also need to treat it like a business and choose what type of business entity you will be and take legitimate business deductions.

In practice, the IRS won't even notice any income you make on eBay. Unless you start earning substantial income from eBay, you are better off not even messing with it. Don't worry about being audited for this, because you won't. If you get audited by the IRS, then it is for a different reason and you have bigger problems than eBay sales.

You want to keep records of how much you are making. Not for the IRS, but to know if you are actually making any money. There is no point selling things on eBay for a loss!

Good Luck,
Bill
Visit http://www.newlifeauctions.com for more eBay tips.

Daw: Tax questions you were afraid to ask

Do you ever think of lightening your tax load with a few, ahem, omissions? Maybe you are thinking of accepting cash for a job. Leaving income off your tax return. Exaggerating writeoffs. You think others do it. Why not you?

Question: How much tax in dollars is due on a taxable income of $5,800?

If your taxable income is from $4,000-$7,499,your tax is 5% of any amount above $4,500.

Answer: Just check the tax tables in the back of the booklet for your tax form.

Walid Zafar: When The "Fellow Behind The Tree" Does Not Pay His Fair Share

On Tuesday, voters in Oregon overwhelmingly passed ballot initiatives approving modest tax increases on high-income earning individuals and businesses. Despite hyperbolic claims made by anti-tax...

Tax Forms & Deductions : How Do Tax Deductions Work?

Question: which state tax?

I live in SC but work at NC. NC withhold my state tax from wage. I also have some interest income from CDs, stock gain & lose, and the previous year state tax refund. Which portion of my income is taxable to NC and which is taxable to SC?

Answer: I'm not a NC expert but... I've worked in one state, lived in another for two years. You don't pay any taxes in NC, only in SC. Your company should have established that when you were hired. They should be taking out Federal and your home State (and local if applicable) taxes. You shouldn't owe NC a nickel.

Yen for an answer to budget woes

As lawmakers begin to huddle before the start of the next legislative session, the search for an answer to the budget short fall begins. With a cumulative deficit of nearly $1.4 billion over the two fiscal years of this biennium, lawmakers will have a Herculean task before them.

Choosing a Tax Preparer

Question: Can income earned from foreign embassies or consulates be treated as foreign income for tax purposes?

I have been working in a foreign embassy since 2007 and now that its time to file the taxes I am just wondering if my income can be treated as a foreign income(non-taxable) since i'm paid by a foreign government(for whose embassy i work). Also if it cannot be treated as a foreign income, where should i report it? I receive my salary by check, and since its an embassy they don't give me a W-2 or a 1099.

Answer: If you are a US citizen, you get to report it as a) income AND b) pay the payroll taxes. See below, copied from IRS.gov.

Information for U.S. Citizens
31) Are U.S. citizens employed by foreign governments in the United States considered to be self-employed for U.S. tax purposes?

No. U.S. citizens employed in the United States by a foreign government are employees of the foreign government; they are not self-employed.

However, for purposes of paying self-employment tax and getting Social Security coverage, they are treated as if they were self-employed.

32) How is the self-employment tax calculated?

You should compute your self-employment tax using Schedule SE. The embassy wages that you report on Form 1040, Line 7 should be carried to Schedule SE, Line 2. Follow the instructions on the form to compute the amount of SE tax that you owe.

SunAmerica Focused Alpha Growth Fund Announces Estimated Sources of Dividend Distributions

JERSEY CITY, N.J.----SunAmerica Focused Alpha Growth Fund, Inc. , a closed-end fund , today announced the estimated amounts of the sources of the Fund’s fourth quarterly dividend distribution of $0.05 per share of common stock declared on December 2, 2009 and payable on December 30, 2009 and the cumulative dividend distributions paid year to date.

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