The Tax Questions Blog

Question: Whether benefit of deduction u/s 80GG is not available for pension income which is taxable under u/s 15?

I retired from Government service in April,2007. In April,2007 salary including house rent allowance for March and April,07 were received. House rent allowance is not received for the remaining months of 07-08FY along with the monthly pension. Is it possible to claim deduction u/s 80GG from the pension income credited to my bank a/c during 07-08 FY particularly when pension is taxable under the head salary?

Answer: pension is taxed under the head 'Salary Income'. You can claim for the rent actually paid by you, subject to other conditions specified in section 80GG. If you, or your spouse, or the HUF to which you belong, should not own a house. Also the rent paid should be in excess of 10% of your total income, for an accommodation occupied by you for the purpose of your own residence. You should also file a declaration to that effect in Form 10BA.

The GEO Group Inc. Reports Operating Results (10-Q)

By 10qk. The GEO Group Inc. ( GEO ) filed Quarterly Report for the period ended 2010-07-04. Read more » »

Question: What is an appropriate pay rate increase for 1099 work vs. being a W-2 employee?

For example, if I was making $50/hour as a W-2 employee should I be asking for $60/hour as a 1099? $70?

I know I'll be hit with another 7.5% in self-employment taxes, but what's appropriate for the other added expenses (bookkeeping, billing, etc.)

Answer: Obviously, it will depend on your specific circumstances, but I would start with at least 25% more. As a contractor, you will have to pay 7.65% more for Social Security and Medicare. In addition, the employer saves on unemployment taxes which aren't paid for contractors. Furthermore, you also have less job security than even an at-will employee.

If you setup your own consulting company, you will gain a lot of flexibility to provide your own benefits to your employees (you) that may be worth it. However, setting up a company and benefits adds additional administrative costs including your own time.

A big issue to consider is whether you are actually a contractor under the tax law as opposed to an employee. Employers will often want to classify a person as a contractor simply to avoid employment taxes, but the IRS has specific rules that define when a person is a contractor or an employee. Even if you would prefer one status versus another, the tax code trumps your preference. You will probably need to consult a tax professional on this issue.

IRS’s biggest sins against taxpayers in 2009

Nina E. Olson, “National Taxpayer Advocate” with the Internal Revenue Service, presented her annual report to Congress this week, which could well be titled “20 Things I Hate About You.”

Pay News Network: Paycheck Education, Paycard Survey, 1099-Misc., NPW Survey Winner

Question: Is it true that the IRS only makes 1 weekly deposit for refunds which is supposed to take place on Friday?

I was supposed to get my refund on the 30th, but now the site is saying the 10th. My refund has always been deposited in my account on the day I was initially given except this year.

Answer: IRS doesn't do it at all. It notifies the Treasury Dept Bureau of Accounts who makes the deposits on its schedule.

The IRS wants to help you -- and it's free

Uncle Sam wants you… to save money and time when preparing your federal taxes. For the seventh consecutive year, the Internal Revenue Service is offering its Traditional Free File, an online program that provides free tax preparation software and free electronic filing to individuals or couples with an adjusted gross income of less than $57,000 a year.

Tax Tips: Split Refunds-Savings Bonds - January 2010

Question: GST / BAS Questions -- need advice from Tax Agents and experienced Accoutants. thanks?

Case 1) eg. 69K is the purch price of luxury car (including custom duty and dealer delivery cost).
what is the creditable amount for value of luxury car?
what's the taxable supply amount of luxury car?
how much is the capital purchase amount (when putting in BAS)?
how much is private use amount (when put in BAS)

is creditable amount based on business use %? is creditable amt $69K * 70%?

if yes, the amount will be $48300 which is less then $57009...does it mean no luxuray car tax in this situation?

Case 2) is prepaid mobile phone sim card treated as a type of voucher.if yes, then the supply of a voucher is not taxable? if it's not taxable, do we treat it as GST free, or input taxed?

Case 3) Life insurance - it's billed to the company. life insurance is for the cover of a person (must be), it looks like relating to private use.....but one of the textbook I read treats it as input taxed.

Case 4) is council rates under residential rent expense GST free or input taxed

Answer: Woah there, that's a lot questions and the answers would be incredibly long and variable. I'd answer them for $250 an hour, if you want haha
If you're asking all these questions for your own circumstances and tax purposes then you really need to fork out some $ to see a tax professional to answer them for you - it's costly when you get things wrong.

If, on the other hand, you're asking all these questions (Case 1? Case 2?) to help you with your homework for uni then it would be a better idea to study up so you can work out the answers for yourself and remember and understand the principles to help you when you do your exams... and for when you yourself are asked these questions in real life.
Good luck!

The Little Elm Journal looks back at the penultimate year of the first decade of the 21st century

The Little Elm Town Council began 2009 with hearing final recommendations from the Citizens Bond Committee for 2009-2014. The committee recommended almost a $19 million bond package to fund 11 projects. The first project includes a $6 million police facility and a $2.6 million fire facility.

368 VAN EMBURGH AVE RIDGEWOOD

Question: Do you have to pay taxes on downloadable goods?

Do you have to pay income tax on items that are non taxable? Or do you have to pay income tax on items that are non taxable and taxable?

For ex. downloadable software, sold and delivered stricktly through the internet.

Answer: Not that I am aware of.

DeMarrais: Consumer friendly Social Security

Bureaucrats and government agencies are easy targets for criticism, but it is often unfair, as I have seen in dealings with the Social Security Administration.