12. February 2010 by admin.

According to Publication 17, “A scholarship received by a child who is a full-time student is not taken into account in determining whether or not the child provided more than half of his or her own support.”  

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7. February 2010 by admin.

2009 Standard Mileage rates for the use of a car (includes Pickups, Vans and Panel Trucks):

• 55 cents per mile for business miles driven (decreases to 50 cents per mile in 2010)
• 24.0 cents per mile driven for medical or moving purposes (decreases to 16.5 in 2010)
• 14 cents per mile driven in service of charitable organizations (same in 2010)

Runzheimer International conducts an annual study of fixed and variable expenses to operate a vehicle.  Please note the Business Mileage Deduction may not be used if a vehicle has been depreciated using MACRS or depreciated using  §179.

Posted in International Taxation, Sub S Corporations, LLC's, Income Tax | No Comments »

5. February 2010 by admin.

That depends on the AMOUNT of income AND the TYPE of income.  Filing is not required if all of your income is from W2 Wages, Interest, Dividends and Other Miscellaneous Inocme (excluding Social Security) AND if the total income is less than the Standard Deduction plus personal exemptions.

2009 example:A Single person’s standard deduction is $5,700.  Add a personal exemption of $3,650.  Total $9,350.  That means on the first $9,350 of income there is no Income Tax liability and NO filing requirement.  If the taxpayer is 65 or older, or blind add another $1,400 to the standard deduction for a total of $10,750.

But it’s not really that simple.  Let’s assume this single person’s only source of income was $1,000 of self employment income.  The Income Tax is zero BUT the return must be filed due to Self Employment Tax liability on Self Employment Income of $400 or greater!

Suppose the person’s self employment income is $200 and that’s all.  Sounds like no filing requirement.  The self employment income bottom line may be only $200, but let’s say the business of the self employed person generated $1,000,000 in sales with enough expenses to generate only a $200 profit. 

YES, there is a filing requirement!  Think about it.. a million dollars passing through a self employed person’s hand should be accounted for.  

Posted in Income Tax, General | No Comments »

5. February 2010 by admin.

Cost Segregation is a VERY BENEFICIAL tax angle used by real estate owners to ACCELERATE DEPRECIATION deductions.

In the past it was primarily used by large accounting firms and larger clients.  The ability for smaller building owners to utilize these techniques is now becoming popular.

It takes an engineering study and an accounting firm that understands the issues.

Generally here is how it works…..

An engineering study is completed to identify components in a buiding that can be depreciated over 5, 7 and 15 years instead of 39 years for commercial property and 27.5 for residential property.

We then prepare what is called an ACCOUNTING CHANGE and the prior year(s) of lower depreciation are now adjusted in one year!

This is alot of paperwork but it is often worth it.  You are welcome to contact us if you have questions www.USATaxHelp.com

Posted in International Taxation, Sub S Corporations, LLC's, Income Tax | 1 Comment »

4. February 2010 by admin.

No.  They are considered cosmetic.  But what if they are implanted in conjunction with a deductible procedure?

Tax Court Case O’Donnabhain (2010), 134 TC No. 4 The Tax Court has held that an individual could deduct as a medical care expense under Code Sec. 213 amounts paid for hormone therapy and sex reassignment surgery that were incurred in connection with a condition known as gender identity disorder, which the Tax Court found to be a disease. However, it found that breast augmentation surgery that the individual also had in connection with the disorder was cosmetic surgery and amounts paid for it were not deductible under Code Sec. 213(d)(9).

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