If you have a corporation (or an LLC), you can elect S Corporation status by filing a form with the IRS. You have to obtain approval form the IRS before you can file taxes as an S Corporation. Fill out and file IRS Form 2553, Election by a Small Business Corporation or use a service to file the form for you.
Not all corporations can obtain S Corporation status, so check the regulations.
Your income will be subject to the self-employment tax of 15.3% on net earnings.
For tax deduction purposes you still need to document the contribution to deduct it, so check your phone bill to see if the text message indicates the date, the charity’s name and the amount.
If it does, that should suffice to meet the written documentation standard. If it doesn’t show all three items, you’ll need to contact the charity to get the needed paperwork.
You can request a free transcript of your return by snail mail using Form 4506T or 4506T-EZ. A transcript lists all transactions related to your return for that year, including payments and any adjustments.
The request can also be made by phone or on the IRS website. Transcripts are usually available for up to 10 years of returns.
If you want an actual copy of your tax return, use Form 4506. There is a fee for each year requested.
Copies are usually available for the current year and the previous six filing years. But this is not guaranteed, so keeping a copy of all your own returns is the safest way to insure you have them if needed.
It is used in the calculation of the cost of inventory items when a product sale is made.
When calculating the inventory costs for an item sold, FIFO uses the costs of the oldest available inventory to calculate the gross profit or loss on a sale.
It’s a very complicated subject, but in a nutshell it’s effectively a minimum tax that hits certain higher and middle income tax payers.
Basically these taxpayers (and you may be one of them) have to calculate their income tax two ways to satisfy the IRS. If the alternative (AMT) calculation is lower than the regular calculation, you’re in the clear. If it’s more, you’re stuck with the higher tax.
Originally, the idea was to make certain that high income tax payers paid their fair share of taxes. Unfortunately, over time it’s begun to hit a much larger group of people than was originally intended.
Definitely consult your tax professional about this if you think it might affect you as you may need to increase your tax withholding to accommodate it.
If you do your own taxes, the IRS has an AMT calculator on its website to help you figure out your tax liability yourself. If you are using tax preparation software, it should be able to handle the calculation for you.
This is known as a loss carryforward. In some instances, losses can also be carried “back” but the rules are complex so consult a tax advisor as to how to make use of this tax benefit.
There can be exceptions to this depending on the type of business you are running, so check with your accountant or on the IRS website before filing your taxes.
If you are a corporation (or an LLC), you can elect S Corporation status by filing a form with the IRS.
You have to obtain approval from the IRS before filing taxes as a Sub S.
Use IRS Form 2553, Election by a Small Business Corporation.
Not all corporations can obtain S Corporation status, so check the regulations.
A tax deduction lowers your net taxable income, so it can shrink the total amount of taxes you owe. But deductions can be subject to various limitations which can impact how much value they have in overall tax reduction.
The difference between your basis in the asset & your net sales revenue typically equals your capital gain, although “basis” calculations can be quite complex.
Capital Gains are taxed at different tax rates than regular income such as wages.
For tax purposes, long term capital gains & short term capital gains are also subject to different tax rates.
Used predominantly in Europe, it is considered a “consumption” tax. At each stage of manufacture, a tax is levied (“added”) to the cost of the item based on the materials or value added in the manufacturing step.
VAT taxes may also be collected at the point of final sale.
However your ability to deduct the loss against current income is restricted by your “basis” and your “risk of loss” in the business.
It’s a complicated set of rules, so consult a tax advisor to be sure you are eligible to take the deduction or review the regulations on the IRS site.
It is known as a “resale number” because businesses use it to prove they are not subject to sales tax on their raw materials or goods purchased for resale.
However, businesses are subject to paying sales tax on goods or services they use & which are not part of an item that will be resold. It is important to understand the distinction in order to use a resale certificate correctly.
Usually, sales tax is collected only on finished goods or on professional or other services provided. But sales tax laws are administered on the state and local level, so they vary widely among states, cities, counties or towns.
Regulations, tax rates, services & products subject to sales tax differ from location to location. It is important to understand when & how you are required to collect sales tax, especially if you are an online retailer.
Getting appropriate tax and legal advice on this issue is very important as business owners can, in some circumstances, be held personally liable for unpaid sales taxes.
So it your property is assessed at $100,000 and you qualify for a $25,000 tax exemption, you will be taxed on $75,000 of value instead of $100,000.
Exemptions are not automatic, you usually need to apply for them.
States and localities have many different type of exemption categories, depending on your location.
Some of the typical exemptions are based on homestead, age, veteran status or disability reasons.
Check with your tax assessor’s office to see what exemptions are available and how to apply for them.
Two words: Tax Planning.
Now is the time to take a hard look at your business and personal financial results for the year so far. Profits, losses, contributions to tax advantaged accounts, salary and bonus decisions all need to be made before December 31st.
And that planning shouldn’t be done in a rush as you approach New Year’s Eve. This is particularly important this year since Congress is not at all clear about the changes that will be in effect January 1st.
So review your tax information and see if there are moves you should be making now because those same moves may cost you more if you wait until next year.
Under the rules, up to $500,000 of the cost can be written off in the first year, rather than taking depreciation expense over 3, 5, 7 or more years. This accelerates the tax benefit of making the capital purchase.
Check with you accountant as this is effective for 2017, but the rules may be subject to change in the future.
This tax is usually, but not always, paid by the Seller. Generally, the tax is calculated as a percentage of the gross sales price of the property.
The tax is usually collected and paid at Closing. It can apply to sales of both residential and commercial property and may be tax deductible.
The Millage Rate is multiplied by the Assessed Property Value (which often differs from the market value) to calculate the annual real estate tax amount due.
Real Estate Taxes rates are generally referred to by the Millage Rate. So when you hear people talking about the Real Estate Tax Rate, they are referring to the Millage Rate.
The Millage Rate is the amount charged per $1,000 in property value.
The calculation is:
Assessed Property Value divided by 1,000 multiplied by the millage rate
Here’s a sample calculation for a home valued at $100,000 with a Millage Rate of $4.50:
$100,000 /1,000 = 100
100 x $4.50 = $450 in tax
Millage Rates are set for each new budget year & the current rate can be found on the tax assessor’s website or by calling the tax assessor’s office.
Full payment is required to be made before the due date for the tax return. Failure to do so will result in interest and penalties.
One way to do this is to make estimated tax payments during the course of the year. For individuals, these payments are usually made on April 15th, June 15th, September 15th of the current tax year & January 15th of the following calendar year.
Dates sometimes vary if the day falls on a holiday or weekend, so check the IRS website to confirm the dates each year.
1. Deductions through payroll withholding.
2. Send a check the IRS with a paper form.
3. Use the EFTPS system to pay from a bank account.
4. Use the IRS Direct Pay system & pay directly from your bank account.
5. Use a credit card (there are fees charged for this option).
Additional options, include wire transfers & setting up a payment agreement if you can’t pay in full. More details about making tax payments are available on the IRS website.
The content on this site is provided for educational and informational purposes only. It is not intended nor provided as financial or legal advice.