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Tax Law (Questions About Taxes)/Questions Answered by Expert WILLIAM D MCCONNAUGHY, CPA

Subject	Date Asked
Fees for Tax prep	1/22/2012
Q: For the past several years, my wife and I have had our returns prepared by a local tax service. WE ... A: In order to answer your question I would need more information from you. First, what state and ...
extension for filing	9/14/2011
Q: I filed an extension to file federal taxes due to financial hardships and illness of my son. I just ... A: The final deadline for filing your 2010 tax return is October 15, 2011, which since it is a Saturday ...
Divorce-income tax	10/8/2010
Q: My husband and I are going through a divorce. We lived together through March 2010. I have been ... A: Your best option is to file a return separate from that of your soon to be ex-husband. You will ...
Late Taxes	8/19/2010
Q: Vanessa, I've been working at a small business for a little less than two years now (We currently ... A: You should be worried; very worried, and rightfully so. Failure to pay over withheld payroll taxes ...
CP 2000 Form	8/12/2010
Q: William. I hope you can help me with this. I have tried two other experts and not hit the right ... A: As you infer, perhaps a thorough review of all possible deductions that could have been claimed for ...
IRS Bill	5/27/2010
Q: McConnaughy, I want to thank you in advance for your help with all experts. I turn here ... A: Given the relatively small amount owing, you could write to them and ask for what they call a ...
Non-payment of tax liabilities	4/11/2010
Q: I know of a small business owner who is at least 2 quarters behind on paying payroll taxes, ... A: The amount of time that passes before the government takes action on delinquent taxpayers varies ...
income tax fraud	2/21/2010
Q: I tried filing this year but IRS told me i owe money for a tax return in 2007, filed in my name ... A: You should take this matter to the IRS Taxpayer Advocate program, and tell them your story. Request ...
Liens	1/31/2010
Q: Brief history. When i was 15 My father decided to what i thought make horse racing fun.Put a couple ... A: Follow the instructions on the letter you got about disputing the amount due. Tell them your story ...
Form 433-F	12/29/2009
Q: We are requesting payment installments for 2007 taxes. The IRS sent us Form 433-F but everything I ... A: You are not required to complete and present this form to the IRS if you ask for a streamlined ...
Back taxes -- options?	11/17/2009
Q: ...This is a state tax question, but general information on how best to proceed would be helpful. ... A: You should get a certified copy of your tax return from IRS and utilize it to properly prepare your ...
tax lien	7/29/2009
Q: I recently went out of business because of past do business taxes with the irs. My final invoice to ... A: If your final invoice to your client is not being paid by them to you because they received a Notice ...
Lost Tax Return	7/22/2009
Q: I filed my normal tax return for 2004 in March, 2004 which I was due a refund on, however since I ... A: You are going to need to provide proof of mailing the tax return, such as a certified mail receipt. ...
irs lien and innocent spouse	6/23/2009
Q: My husband's business owes back payroll taxes and IRS has put a lien on our house and hold on his ... A: You will not need to file for innocent spouse relief because IRS has not (apparently) assessed the ...
Record Retention	6/13/2009
Q: How long much I keep records of medical practice? A: For tax purposes you must keep your records a minimum of at least three years. Plus, for those ...
IRS audit on checking accounts	6/3/2009
Q: We are being audited and we have a business checking account and a personal checking account. IRS ... A: Any competent, experienced IRS auditor will know not to count the transfers twice as taxable income. ...
Income Tax	5/31/2009
Q: I have been a private tutor for local students around our university. Although I tutored for extra ... A: Yes, you should report this compensation as self-employed income on an IRS Schedule C. Keep in mind ...
subcontracting	3/9/2009
Q: I am thinking about starting my own business in Chicago. Can you give me some kind of idea as to ... A: You should save approximately twenty five to thirty three percent of your net profit from this ...
Tax Fraud	2/15/2009
Q: I have a friend who has claimed 2 kids as dependents on her tax return that are not her's and I know ... A: Your friend is committing a serious crime. And even worse, she is likely to be caught and punished. ...
disability	2/10/2009
Q: I did not work at all in 2008. The only money I received was from SSI. They sent me a SSA-1099 ... A: Since that was your only income you have no filing requirement. That is why you can not find any ...
public tax lien and starting new corp.	1/30/2009
Q: I am a chiropractor with $40,000 in back taxes. Is there any type of corporation that I can create ... A: The short answer is no...you can not establish a corporation solely for the purpose of avoiding an ...
What should I do?	1/28/2009
Q: My Husband decided to help his cousin and do some welding in his spare time for her. They own a ... A: Since these funds were received for services rendered they must be reported as Other ...
Does this constitute income?	1/11/2009
Q: My wife is taking care of her mother in her mother's home in Arizona. An accountant is in control ... A: These deposits in the name of your wife will not constitute income, as they are being expended ...
Office deductions	11/14/2008
Q: I am a consultant (sole proprietorship) whose home office is now too small for all my ... A: If the new property is utilized strictly, and only, as a business property then you would be able to ...
Claiming Non-taxable Settlement money for injuries...	10/25/2008
Q: I would like to start by thanking you in advance for your time & consideration. What are the the ... A: The tax laws are that settlement money received for personal injury is not taxable, and would not ...
Real Estate Loss	10/22/2008
Q: I recently got married. Prior to getting married my wife and I each owned our own condos. After we ... A: Yes, and no. Yes, you will not be able to take a current year deduction for the passive income ...
Payment Plan Appeal	9/10/2008
Q: I applied (and I used an attorney that did not really helped) for a payment plan with the IRS. The ... A: Yes, you should notify IRS of the funds the state of NY is going to take from you. This will reduce ...
Mistake on 2006 Tax Return - I owe the IRS	8/29/2008
Q: I graduated college in December 2005. After searching high and low for a job, I decided to sell ... A: The answer to your question is MAYBE. I say maybe because you state that you sold insurance as a ...
independent contractor	8/23/2008
Q: My son got a job with a company that told him they will pay him as an independent contractor. We ... A: How much money should he put away for taxes? To be safe, a big, round number should be about thirty ...
Do I have to pay estimated taxes	8/14/2008
Q: I am about to start a job as a contract employee. I have never worked as a contract employee, so I ... A: With the changes indicated in the facts you stated, calculating the estimated taxes that may be due ...
taxes	8/10/2008
Q: do i need to claim money inherited to taxes A: No, the inheritance of a principle sum of money is not reportable by you as income subject to ...
Income Tax / W4 , etc	8/7/2008
Q: For the past 10 years my family and I have lived in Richmond, VA. Recently I have accepted a job ... A: Assuming that the work in Ohio will not be permanent, and that you plan to continue living ...
can a motorcycle be a business tax write off	8/3/2008
Q: can a motorcycle be a business tax write off,if you use it as transportation to go measure up a job A: Yes, to the extent that any tangible piece of property is put into use for the production of income ...
contest winnings = income?	7/30/2008
Q: I am a stay-at-home-Dad and I have been winning some money lately by entering online logo design ... A: Yes, you need to claim this as income. The fact that the payers are foreign companies does not make ...
Dependants	7/28/2008
Q: I have a 19yr old daughter starting her second year of collage. I have been told by our accountant ... A: Then you need to get an explanation from the accountant as to why they are telling you that you can ...
Dependants	7/27/2008
Q: I have a 19yr old daughter starting her second year of collage. I have been told by our accountant ... A: Did the accountant give you a reason why? Did your daughter already claim herself on a tax return ...
claiming spouse as a dependant	7/27/2008
Q: My husband is disabled and receives Social Security disabilty monthly payments as well bi-weekly ... A: Sure...since he apparently is not already claiming himself at a job of his own you should be OK with ...
Work at home	7/26/2008
Q: I'm trying to get a work-at-home-job and found processathome.com where you process rebates on line. ... A: You will definitely want to get a professional tax preparer to help you report everything to your ...
federal seizure of social secuirty benefits	7/25/2008
Q: Is there a limit as to how much of a person's social security benefits can be seized to pay tax or ... A: The limit for levy of benefits is 15%, each time your benefit check is paid out to you, until the ...
Renting primary residence	7/14/2008
Q: My family and I recently relocated to California. We owned a home in NY since 2005 and are ... A: My answer was contingent on you eventually selling the property within a year, or two at the most. ...
Where Do I Start?	7/13/2008
Q: William- It's a mess. I haven't paid taxes in over 7 years and am now facing an IRS lien of $28k. ... A: Criteria to look for would be to know WHO is going to be personally working your case. Name? ...
Real Estate Business Loss	7/13/2008
Q: I am retired and in a position to get a real estate license. Will that help me with a $200,000 loss ... A: IRS Publication 17 would be a good place to start reading. It will probably refer to another ...
Real Estate Business Loss	7/12/2008
Q: I am retired and in a position to get a real estate license. Will that help me with a $200,000 loss ... A: In order to convert the loss on this property from a nondeductible personal loss on the sale of a ...

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WILLIAM D MCCONNAUGHY, CPA

Top Expert on this page

Expertise

Federal income tax questions.

Experience

Former IRS Revenue Agent. Former Enrolled Agent. Self-employed Certified Public Accountant since 1990.

Education/Credentials
Bachelor's Degree Accounting Major San Francisco State University Master's Degree Taxation Golden Gate University

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