You are here:
- Home
- Real Estate
- Tax Planning: U.S.
- Tax Planning
Tax Planning/Questions Answered by Expert OWEN S. ARNOFF, EA
| Subject | Date Asked |
| Depreciation/Section 179 | 2/6/2012 |
| Q: I purchased tires for my business vehicle with an expected life of 3 years. I paid with credit card ... A: Tires would be considered normal repairs and maintenance and would thus be expensed directly on ... | |
| 401K for employed parents | 1/21/2012 |
| Q: Right now, I give 25K a year to help my parents and in-laws in this economy and this comes out of my ... A: Leonard - The short answer is "no" it doesn't make complete sense, unless they are really working ... | |
| Gifts to family members | 1/17/2012 |
| Q: My in laws want to give gifts to their children and grandchildren following the sale of an ... A: Lawrence - You are correct that the maximum is $13,000 to each. But that is the limit for each ... | |
| 1099 question | 1/16/2012 |
| Q: I took over a sole propietorship in July of this year. I have been paying the former owner 15% of ... A: Susan - You can't do this on your own. This venue doesn't allow for a complete explanation that ... | |
| 1099 question | 1/16/2012 |
| Q: I took over a sole propietorship in July of this year. I have been paying the former owner 15% of ... A: Susan - When you say "took over" what do you mean by that? Did you purchase the business? If so, ... | |
| tax on commissions | 1/11/2012 |
| Q: I work as a sales director collecting w2 as a base salary and will start to collect quarterly ... A: From what you describe you have a couple of possible ways you can handle this. 1) The S-Corp. This ... | |
| prepaying a medical bill to maximize the medical tax deduction | 12/23/2011 |
| Q: For the last month, I have been trying to do something that appears to be unheard of in the medical ... A: Wendy - It seems you're only talking about the bill. It is based on when the services are provided. ... | |
| windfall year tax avoidance | 12/4/2011 |
| Q: Owen, I am a salesguy whose average income is between $250,000 to $400,000 a year. I do not own ... A: John - There are a few strategies that I would suggest, but it would require quite a bit of ... | |
| taking capital loss deduction if loss>income | 12/2/2011 |
| Q: Suppose I have zero taxable income for 2011, and I have a capital loss (short-term) below $3000. 1. ... A: Reggie - In answer to your questions, 1 - No. whether you file or not, your loss is allowable only ... | |
| Special Assessment for Condo | 11/2/2011 |
| Q: On Jan. 18, 2010 you responded to a question about deducting a Special Assessment on a condo. I ... A: OK. Now that it is cleared up, there are several arguments that could be propounded. If you are ... | |
| Special Assessment for Condo | 11/2/2011 |
| Q: On Jan. 18, 2010 you responded to a question about deducting a Special Assessment on a condo. I ... A: Ted - If this is your primary residence, there is no deduction in the tax code for this. Therefore, ... | |
| IRA | 11/1/2011 |
| Q: Next year I will be required to start taking distributions from my tractional IRA> I made some non ... A: Jo - That is a fantastic question! I say that because most people believe that they can dispose of ... | |
| Can I Avoid Being Killed in Taxes? | 10/30/2011 |
| Q: Owen ... I'm in the fortunate position of having earned over $100,000 in 2011 (W2). Unfortunately, ... A: OK; that helps somewhat if you can 'control' how you get paid. Incorporating is a two-fold ... | |
| Can I Avoid Being Killed in Taxes? | 10/29/2011 |
| Q: Owen ... I'm in the fortunate position of having earned over $100,000 in 2011 (W2). Unfortunately, ... A: Jona - Let me try and ask a couple of additional questions so you can clarify some things for me. ... | |
| Trader's Tax | 10/23/2011 |
| Q: If my only income derives from trading stocks at home online for very short periods (holding stocks ... A: Alex - Although this article is from 18 years ago, much of it it still applies: ... | |
| Individual 401-K | 10/17/2011 |
| Q: My wife is self employed no employees she has a SEP IRA now. Can she also open a individual 401-K? ... A: David - You cannot maintain two retirement plans of this type. You cannot convert one plan to ... | |
| incorp tax planning | 10/15/2011 |
| Q: Can you direct me to a resource or two where a lay person like myself can learn more about small ... A: Vic - Small business tax planning is best done in person between yourself and a tax professional as ... | |
| LLC and SCorp tax | 9/28/2011 |
| Q: I work for an S-Corp that is currently leasing building space. We are growing and are looking at ... A: Michelle - That is a good strategy. Some of the tax advantages is that it will allow much more ... | |
| Stock loss deduction | 9/22/2011 |
| Q: Arnoff, I have a stock doing poorly. If I sold it can I deduct the loss against my regular income ... A: David - This is what's called a capital loss. If you sold the stock at a loss, you are limited to a ... | |
| C Corp | 9/22/2011 |
| Q: I own c corp company and also still work fulltime job for an employer. Can I claim by children's ... A: The short answer is "no" but there are ways you can be creative to pay your children for work they ... | |
| Can't pay my taxes | 9/20/2011 |
| Q: In 2010, I took $13,000 from my IRA account to live on since I lost my job. The taxes due are now ... A: Barbara - That sounds right, that you would be subject to the 10% penalty only, because you can have ... | |
| tax | 9/10/2011 |
| Q: I just sent you a question. I re-wrote number 2 to make it clearer. 1. I live in Maryland and drive ... A: In order to itemize, you need a total of $5700 in itemized deduction for Single or $11,400 for ... | |
| tax | 9/8/2011 |
| Q: I just sent you a question. I re-wrote number 2 to make it clearer. 1. I live in Maryland and drive ... A: Al - Regarding #1, if you are a W-2 employee and your employer has a policy for non-reimbursement of ... | |
| profit sharing and SSDI | 9/6/2011 |
| Q: My husband has an s-corp for his business. It is a small business. I have been ill the past year and ... A: Unfortunately, I could not provide you clear direction on what qualifies for SSDI as afar as income ... | |
| Capital Gains Tax | 8/27/2011 |
| Q: I was told that it is possible to reduce the capital gains tax by investing in aquaculture. Is this ... A: Michelle - I am not familiar with any way to reduce the capital gains tax in relation to this. The ... | |
| profit sharing | 6/30/2011 |
| Q: My friend will be getting his profit sharing check next week. He told me last night that they tax ... A: Ellen: Sorry for the delay in responding; I was moving my office this weekend... Anyway, that ... | |
| 1040 loss | 5/9/2011 |
| Q: let me thank you in advance for your time. I have a specific question. On the form 1040 it also says ... A: V - Your questions are not exactly clear to me. It sounds like you may need some professional help ... | |
| Limited Partnership Taxation | 5/3/2011 |
| Q: I have a few questions about Partnership Accounting. First, I understand that a Limited Partnership ... A: Bob - A partnership should keep all normal books of a business; G/L, A/P, A/R, etc. The ... | |
| small business loss due to injury | 3/29/2011 |
| Q: I started a sole proprietor business to do renovations and landscaping, purchased vehicles and ... A: It is not a hard-and-fast rule about the three years, although it is certainly possible the IRS ... | |
| taxes on nonqualified perferred annuity | 3/18/2011 |
| Q: A friend of mine has a grandmother who purchased a nonqualifying perferred annuity in 2007 at the ... A: Kim - If the annuity was purchased with after-tax dollars, there will be no taxable event on the ... | |
| Personal car for business use.... | 3/16/2011 |
| Q: Is there a guideline for the preferred language to be included in a simple agreement to allow the ... A: Emmett - To my knowledge, the IRS provides no guidance in this area. The best way to document that ... | |
| Include IRA Rollover in 2010, or 2011/2012? | 3/13/2011 |
| Q: I would like your opinion on the following: I have been mostly unemployed for close to three years. ... A: Edward - The best answer is always to pay the least amount of tax possible. If, over the course of ... | |
| Multiple (Very) Small Businesses | 3/7/2011 |
| Q: I have a very confusing tax situation. 1. I have restrung pearls for jewelry stores for the past ... A: Margaret - To me, it seems like you have one business. Therefore, I would include the income and ... | |
| gift tax | 3/2/2011 |
| Q: In the past I seem to recall a way to avoid paying gift tax on more than the annual 12000/ recipient ... A: Clem - First, the gift tax exclusion is $13,000. The only strategy to avoid the threshold for ... | |
| W-9 Form | 2/17/2011 |
| Q: Arnoff, I am about to sign a wind turbine contract for a piece of land in my name and that I have a ... A: David - The easiest and cleanest method is to have the contractor send you YOUR portion and send ... | |
| State taxes | 2/15/2011 |
| Q: My daughter lives and studies Baltimore, Maryland, since August 2010. She gets student loans for ... A: Paski - I am not an expert in the area of individual state taxes. However, does your daughter even ... | |
| Loan Loss | 2/14/2011 |
| Q: I owned an S corporation to which I had loaned money. The corporation went out of business. Can I ... A: Paula - If you claimed losses from the K-1 on your 1040(s) equal to the loans that you made, then ... | |
| Loan Loss | 2/12/2011 |
| Q: I owned an S corporation to which I had loaned money. The corporation went out of business. Can I ... A: Paula - There are a lot of factors at play here. The answer may depend on examining all the facts ... | |
| ownership transfer question | 2/7/2011 |
| Q: could you please let me know what needs to be done (in terms of tax filing) if my father (72 years ... A: Edward - There is no issue when it comes to deeding the house to you. The issue will come up when ... | |
| Homebuyer Credit | 2/7/2011 |
| Q: I believe I qualify for this Homebuyer Credit for Long-Time Residents as I lived in my house for 9 ... A: Frank - That is correct. You have to file with paper because you have to attach your closing ... | |
| $400 Confusion | 2/4/2011 |
| Q: I’m slightly confused. I know that the self-employment threshold for being required to file is when ... A: Dave - You're better off just filing the return as that will show IRS that you have no liability. ... | |
| $400 Confusion | 2/4/2011 |
| Q: I’m slightly confused. I know that the self-employment threshold for being required to file is when ... A: Dave - It's because of the Self-Employment Tax, not the income tax. The threshold for the SET is ... | |
| Homebuyer Credit | 2/2/2011 |
| Q: I believe I qualify for this Homebuyer Credit for Long-Time Residents as I lived in my house for 9 ... A: Frank - If you qualify, the form to fill out is 5405. The payback comes into play in two ... | |
| Dilemma | 2/1/2011 |
| Q: Ok, here’s my dilemma. Back in 2005, I was unemployed for that entire year (hard times). To make ... A: Dave - You have a number of issues converging here, but I will try my best to figure this out for ... | |
| depreciation on rental | 1/31/2011 |
| Q: I purchased a rental house for $45,000 last year but it was appraised at $90,000. Can I use the $90k ... A: Frank - No, you have to use your purchase price. It is irrelevant what the appraised value is. ... | |
| maximize returns | 1/29/2011 |
| Q: .i know that for 2010 you get tax credits for energy efficient things; we had a new energy efficient ... A: James: The energy credit for 2010 are different that the energy credits for 2011. Here is the ... | |
| How is early withdrawal from IRA figured if worked in 2 states | 1/26/2011 |
| Q: I am trying to run some numbers for my taxes and would like to know how would multiple withdrawals ... A: Dave - Thank you for the clarification. Although I am not an expert in state tax matters, you will ... | |
| How is early withdrawal from IRA figured if worked in 2 states | 1/25/2011 |
| Q: I am trying to run some numbers for my taxes and would like to know how would multiple withdrawals ... A: Dave - It goes by your "tax home." That is a fancy way of saying that, generally speaking, it ... | |
| DE Corporate Tax | 1/12/2011 |
| Q: I just opened a Corporation in DE middle-2010 and I have to file my first Tax Return. I reside in ... A: Sonya - You have a Federal filing obligation which you must complete. You probably also have some ... | |
| Follow up | 1/11/2011 |
| Q: Following up to your question, our home has been paid for and has no mortgage. The house however is ... A: Nicole - Well, I would say that if you live in the home as your primary residence and you paid the ... | |
| Property Taxes | 1/10/2011 |
| Q: I recently took out a loan for $10,000 to pay on my parents real estate taxes. I live at the ... A: Nicole - The answer is that it depends on who the beneficial owner of the property is. Are you on ... | |
| Mortgage Interest for Reitrees. | 1/1/2011 |
| Q: My grandmother took out a mortgage to consolidate my debt. She had a mortgage in place, so with the ... A: Shannon - In order for you to claim the mortgage interest deduction, it has to be either your ... | |
| disregarded entity election | 12/24/2010 |
| Q: I am thinking of establishing an IBC (International Business Company) in Belize for privacy to own ... A: Josh: Yes that is correct. But instead of filling out Form SS-4, you can go online and request it. ... | |
| Church or Charity | 12/24/2010 |
| Q: Over the years Have worked with the homeless and needy as a lay minister.I am now an ordained ... A: Mike - Though you would like to keep it simple, it may not be that easy. A sole proprietorship ... | |
| double tax for income in another state, and bank account in another state | 11/23/2010 |
| Q: I recently became in independent contractor. I was regularly getting my checks for work, and ... A: Chris - The issue is not with the expenses, per se; it is with the income and where you are doing ... | |
| Indeterminate basis | 11/20/2010 |
| Q: Mr Aranoff Suppose I have in my estate $100K in stock in Acme (Wiley Coyote's favorite supplier), ... A: Dave - It could be a contribution, but your contribution would be based on your basis, not the ... | |
| double tax for income in another state, and bank account in another state | 11/20/2010 |
| Q: I recently became in independent contractor. I was regularly getting my checks for work, and ... A: Chris - I am not an expert on state taxation issues, however, I will say that as you have already ... | |
| TAX ON INHERITANCE | 11/10/2010 |
| Q: My wife's parents, ages 73 and 85, are receiving shares in their sister-in-law-'s estate, from bank ... A: Bob- There is no inheritance tax on a federal level; there is an estate tax, which the estate pays, ... | |
| early withdrawal from ira | 11/2/2010 |
| Q: I may need to take out some money from my IRA - some for expenses and some for a down payment for ... A: Dave - The answer is - Form 5329, line 2. That is where you distinguish that part of your IRA ... | |
| Self employment tax questions | 10/22/2010 |
| Q: I have been writing some reviews online and I anticipate that soon I will have made more than $400, ... A: Kim - You have several issue that you have to deal with. You should go get a business license. ... | |
| Deprecation mandatory? | 10/20/2010 |
| Q: If we have a rental property is it MANDATORY that we claim deprecation on federal tax return? ... A: Yes, it would be recaptured, but technically, it would be regardless, because that's where "allowed ... | |
| Deprecation mandatory? | 10/19/2010 |
| Q: If we have a rental property is it MANDATORY that we claim deprecation on federal tax return? A: Lou - It depends on a number of factors, but it is to your advantage to do so, because if you are ... | |
| Multi-Member LLC to SMLLC | 10/19/2010 |
| Q: My husband currently owns an llc with a partner, we didn't file our 2009 taxes yet. However, his ... A: Brenda - The answer depends on the way you chose to be taxed when you first got your EIN. If you ... | |
| capital loss carryover | 10/10/2010 |
| Q: I have a capital loss carryover. Can that be used to offset my IRA distribution (I am taking the MDR ... A: Frank - Those are two different categories of income/losses. You can take a $3,000 loss each year ... | |
| taxes | 10/8/2010 |
| Q: MY dad will get a mortgage only in his name and put both of us on the deed. I will pay the mortgage ... A: Dee - You can take the deduction. It would be best if your father issued you a 1098 for the ... | |
| renting a room | 10/4/2010 |
| Q: I was thinking of getting a roommate for my condo (I own) and read an article to the effect that you ... A: Gina - If you are going to rent out a portion of your home, you can claim that percentage of use ... | |
| tax scenerio | 9/11/2010 |
| Q: Baby sister is living with employer. Employer is family member. Does employer file baby sitter as ... A: Victor - Unfortunately, you don't give me enough information. What is the relationship? Are you ... | |
| small business | 9/9/2010 |
| Q: my wife and i , have purchased and on going internet business in august, 2010. my question is we put ... A: Cole - A lot of your question depends on what you actually bought. If you bought a tangible item ... | |
| small business tax planning | 9/5/2010 |
| Q: My wife and I need advice on the best method to lower our taxes. My wife and I are Registered ... A: Here are my thoughts on the two subjects - 1. leasing autos, no, whatever you use the auto for ... | |
| expense accounts | 9/5/2010 |
| Q: My husband is a Owner/Operator of a tractor trailer and I am using Quicken Home & Business to ... A: Sandy - I am not an expert in Quicken, but diesel fuel & tolls would go under auto and truck ... | |
| small business tax planning | 9/4/2010 |
| Q: My wife and I need advice on the best method to lower our taxes. My wife and I are Registered ... A: Alex - One of the last strategies left for small business owners like yourselves is to incorporate ... | |
| mlm tax right offs | 8/31/2010 |
| Q: I have a new multi level marketing company (zrii) and i don't know how im going to do my tax's this ... A: Chris - Your question is very general, but I am going to direct you to read several web pages to ... | |
| Personal condo ownership to LLC or Partnership? | 8/26/2010 |
| Q: I currently co-own a rental condo with my brother and file the rental income separately based on our ... A: Regardless of whether you keep the money in the entity (bank account) or take it out, the net income ... | |
| Personal condo ownership to LLC or Partnership? | 8/26/2010 |
| Q: I currently co-own a rental condo with my brother and file the rental income separately based on our ... A: Eddie - Here are my answers: 1. There may be legal reasons to form an LLC. May not be a legal ... | |
| Tax on large gifts | 8/6/2010 |
| Q: If I am the recipient of a gift of over $13,000, am I required to pay taxes on this? Also, would it ... A: Leonardo - The GIVER of the gift MAY have to file a Gift Tax Return. The receiver of the funds ... | |
| tax question | 7/26/2010 |
| Q: My fiancee and I are looking to buy a house in the next several months together. We are also ... A: RL - You haven't given me all the information that I need to make a good recommendation, but I will ... | |
| 4o3k | 7/20/2010 |
| Q: I was released from Target on June 23 and I have $8,500 in 401K. I don't want to take it out now for ... A: Bacilla - I have never heard of a 403(k). There is something called a 403(b) which is basically ... | |
| Owner Investment | 7/19/2010 |
| Q: I have a small company and I use cash based accounting. When I put money into my business - owner ... A: Chi - I am going to assume that you are a sole proprietor for tax purposes and not an S-corp or ... | |
| Tax treatment of short sale dividend payments. | 7/14/2010 |
| Q: Please re-read question at URL ... A: Thomas - Sorry if my previous answer seemed confusing. According to the SEC, if the stock you ... | |
| Bankruptcy or not | 6/29/2010 |
| Q: Can we file bankruptcy on income we owe the IRS? We did a short sale on property in Las Vegas ... A: Linda - As you say, even if you had no gain, you may be responsible for the amount of the debt that ... | |
| Tax implications from short sale | 6/20/2010 |
| Q: I hope you can help me out. I got a job transfer to San Diego last year, but I still own property ... A: You will owe taxes at your ordinary tax rate on the difference between the amount you owe and sale ... | |
| Tax Planning | 5/26/2010 |
| Q: I will be separating from the military soon and I will be getting about $11,010 for separation pay. ... A: Katie - The amount of tax that you would pay is dependent upon your total income for the year, so ... | |
| accounting software choice | 5/22/2010 |
| Q: my husband is an over-the-road company truck driver. He will soon be an owner/operator because he ... A: Sandy - I am a big fan of QuickBooks. I started using it with the very first version in Dos back ... | |
| New house deductions? Credits? | 5/21/2010 |
| Q: We built a new house in 2009. I wonder if there are any tax credits or deductions for things like ... A: Lou - Most definitely there are a whole host of tax credits for energy efficient improvements. ... | |
| Gift Taxes | 4/28/2010 |
| Q: I just wanted to make sure computations correct: Borther & Sister each inherit 50% interest in ... A: The key is the basis. Here are some general guidelines: Property received as a gift and sold at a ... | |
| File Taxes with no income? | 2/22/2010 |
| Q: My question is about whether to file taxes this year for my LLC business which generated no income ... A: James: There is always a filing requirement regardless of income or expenses. If you are an LLC ... | |
| Making Work Pay Credit | 2/22/2010 |
| Q: I hope you can help me. I have already filed my Federal taxes for calendar year 2009 (1040). I ... A: Brian: The correct way to claim the Making Work Pay Credit is to fill out Schedule M. (See: ... | |
| profit sharing | 2/21/2010 |
| Q: I quit my job last year and am considering taking my profit sharing this year. Is the total amount ... A: Sandy: My original statement stands; if you were never taxed on the profit sharing plan, you will ... | |
| Form W-7 (ITIN) | 2/21/2010 |
| Q: I am a non resident alien (live outside the US) who is a partner in a US LLC. We’ve been told that ... A: Yes, that is a catch-22! I don't know the specific answer as to which should come first. But I do ... | |
| tax planning with 401k withdrawal | 2/20/2010 |
| Q: I would really appreciate your help. Here is the situation: Needed cash to payoff too much ... A: Pam & Dave: Two things I wasn't clear on...did you take the withdrawal and loans in 2009 or 2010? ... | |
| Form W-7 (ITIN) | 2/20/2010 |
| Q: I am a non resident alien (live outside the US) who is a partner in a US LLC. We’ve been told that ... A: Arl: Note this from the IRS web site (http://www.irs.gov/individuals/article/0,,id=96287,00.html): ... | |
| Refund from California withholding | 2/19/2010 |
| Q: Last year the state of California increased the withholding in our paychecks for a temporary loan ... A: I am not exactly sure what you are referring to; to the best of my knowledge, if your withholding ... | |
| Realtor Business Expense | 2/17/2010 |
| Q: my wife is a real estate agent and this past year she was overpaid a commission by her broker ... A: Cliff: The very BEST way would be to have the broker issue a CORRECTED 1099-MISC. If that option ... | |
| Worthless stock | 2/15/2010 |
| Q: Could you please tell me if Gm common stock and Delphi stock would be considered worthless stocks ... A: Doug: Ir would seem that if there was no market for the stock and the value was at or near zero, ... | |
| Sale of trust property | 2/13/2010 |
| Q: 1) My Dad died in 2004 and I inherited his house which was in a Revocable Trust and my Dad was the ... A: Jim: I need a little more information to give you some answers, but I'll try. You say the house ... | |
| taxes | 2/12/2010 |
| Q: My daughter is on my checking account with me and my older daughter. She has had a hard time finding ... A: Barbara: Only if you give her more than $13,000 in a year. If you are married, you and your ... | |
| Adult Foster Care | 2/11/2010 |
| Q: We are a licensed Adult Foster Care home. We have one resident living with us. With her there are 6 ... A: Deborah: Yes, the two businesses are similar enough to follow the rules for day care. As far as ... | |
| Adult Foster Care | 2/10/2010 |
| Q: We are a licensed Adult Foster Care home. We have one resident living with us. With her there are 6 ... A: Deborah: The use of the home would be covered on Form 8829, connected with Schedule C. As to ... | |
| Tax Implication | 2/3/2010 |
| Q: Owen- If a homeowner is short selling or foreclosing in the state of Arizona at some point during ... A: Figure the insolvency with both of you. You are filing jointly and you're in a CP state. I hope ... | |
| Federal payroll tax deduction | 2/2/2010 |
| Q: It was announced earlier in 2009 that people would notice more in the paychecks, and less federal ... A: Rita: Unfortunately, yes, it is the same. However, you should have a tax credit of either $400 or ... | |
| entering home re-finance expenses | 1/31/2010 |
| Q: Can you please advise as to where I enter home re-finance expense on my tax return docs. I own only ... A: Mark: Home refinance expenses are not written off, per se. You can write off interest and property ... | |
| TAX REFUND FROZEN CP 75 | 1/30/2010 |
| Q: I learned today that my tax refund that I efiled last week is frozen. I called and spoke to an IRS ... A: Yes, you will need to reconstruct your records and total it for the year. For a template, you can ... | |
| TAX REFUND FROZEN CP 75 | 1/30/2010 |
| Q: I learned today that my tax refund that I efiled last week is frozen. I called and spoke to an IRS ... A: Annie: It's always best to report your earnings and expenses accurately and honestly and to take ... | |
| Business purchase of a vehicle | 1/23/2010 |
| Q: Is there any tax benefit, credit, or deduction currently known of for a small business purchasing a ... A: Becky: There are tax benefits available for new vehicles in various forms depending upon what type ... | |
| Tax Treatment of Short-Sale Dividends? | 1/22/2010 |
| Q: if I were to sell a stock short and then have to pay out a dividend (to the owner of the stock), how ... A: Marshall: My understanding of a transaction like that you describe, a short sale, means that you ... | |
| S-Corporation? C-Corporation? | 1/21/2010 |
| Q: I am a Real Estate Agent and I was wondering if I should set up a S-Corp/C-Corp instead of having ... A: Michael: The problem is that you can not make your corporation retroactive. If you think that you ... | |
| Contribution | 1/20/2010 |
| Q: This doesn’t sound right, but can’t find any references stating this can’t be done. I want to ... A: I don't see where you would get the $1,000 deduction now. You would only get the $100 deduction ... | |
| Contribution | 1/20/2010 |
| Q: This doesn’t sound right, but can’t find any references stating this can’t be done. I want to ... A: George: Your question is quite interesting, but after analyzing it, I wonder why you would want to ... | |
| S-Corporation? C-Corporation? | 1/19/2010 |
| Q: I am a Real Estate Agent and I was wondering if I should set up a S-Corp/C-Corp instead of having ... A: Michael: You fall into the perfect category for being an S-Corp. I don't see a reason to switch to ... | |
| S-Corporation? C-Corporation? | 1/19/2010 |
| Q: I am a Real Estate Agent and I was wondering if I should set up a S-Corp/C-Corp instead of having ... A: Michael: This is right up my alley and my area of expertise! The answer depends on your situation. ... | |
| special condo assessment for renovation | 1/18/2010 |
| Q: each of the condo owners had to pay approximately $30,000 for a renovation of the condos due to ... A: Debbie: The short answer is "no," you can't deduct anything like that on your return. If this was ... | |
| W-4 | 1/18/2010 |
| Q: I have a question about my W-4 form as I am retiring in 3 months. Right now I make $54,000 a year ... A: Joe: My opinion will not trump the IRS calculator. To be safe, it is always good to choose ... | |
| W-4 | 1/18/2010 |
| Q: I have a question about my W-4 form as I am retiring in 3 months. Right now I make $54,000 a year ... A: Joe: I would try using this online IRS calculator to figure your withholding: ... | |
| overstatement of expenses and understatement of income | 1/12/2010 |
| Q: My CPA not only inflated deductions but also made up deductions and then chose to not report income ... A: Linda: I'm very sorry this has taken so long to answer. I actually wrote out the answer and ... | |
| Early withdrawal from annuity | 1/9/2010 |
| Q: I understand that you can withdraw up to 10,000 from your annuity if for first time home buy & not ... A: David: You can take an early withdrawal of up to $10,000 from most retirement plans for, among ... | |
| Tax Deductions for Wedding Costs | 1/7/2010 |
| Q: I got married over the summer. We paid the church $1200. We had the ceremony and reception there. ... A: Elizabeth: For cash contributions (not goods or property) you can deduct pretty much any amount ... | |
| 401K tax question | 1/7/2010 |
| Q: I 61 years old and have a 401K with a large company that I have been with since 1979. I presently ... A: Charles: Absolutely, you can roll over your 401(k) to a rollover IRA with any of the brokerage ... | |
| Withdrawing from Retirement plan for house down payment | 1/6/2010 |
| Q: Can you tell me if you think it is worthwhile to take an early withdrawal from my Retirement plan to ... A: David: Without knowing a bit more about your situation, it is difficult to determine what would be ... | |
| Tax Deductions for Wedding Costs | 1/6/2010 |
| Q: I got married over the summer. We paid the church $1200. We had the ceremony and reception there. ... A: Elizabeth: If you itemize on Schedule A, you are entitled to deduct your charitable contributions ... | |
| Depreciation | 12/30/2009 |
| Q: My boyfriend is an Owner/Operator who purchased a new truck in August of this year. In the past ... A: Tess: Unfortunately, you must go with the depreciation tables that the IRS sets for that type of ... | |
| exchanging properties | 12/14/2009 |
| Q: In 2005 my wife and I planned on selling a 2 family real estate investment we owned since 1977 and ... A: Steve: Unfortunately, the answer is no, there is no other way to avoiding or offsetting the capital ... | |
| Tax Refund on Home | 12/10/2009 |
| Q: I bought a $235K home back in Feb '09 and I am trying to estimate how much my tax refund will be ... A: Julian: So, I assume that you filed a 2008 amended return for the tax credit. OK. The only thing ... | |
| Tax Refund on Home | 12/10/2009 |
| Q: I bought a $235K home back in Feb '09 and I am trying to estimate how much my tax refund will be ... A: Julian: You haven't given me enough information. I don't know how much you have had withheld ... | |
| Equipment purchases before filing for sole proprietorship | 12/5/2009 |
| Q: My question is if I buy equipment such as computers before I officially register my business with ... A: John: Regarding equipment, that is considered deductible when it is "placed in service." So, if ... | |
| Schedule C Filing for Non-LLC | 11/29/2009 |
| Q: I am planning to formally register my new jewelry design business but I have not yet begun this ... A: Emily: Regarding your questions, if you have officially begun your business, you would file a ... | |
| Deductions when starting a new business | 11/22/2009 |
| Q: This year I have made some expenditures with the intent of starting a business where I will grow ... A: Angeline: Regarding your first paragraph, you are limited to $5,000 on start-up expenses, the rest ... | |
| filing status | 11/17/2009 |
| Q: i've been married for 25 years and my wife has never worked during that time. i['ve always filed my ... A: Flip: If you file as "Married, filing separately" you will lose half of your standard deduction and ... | |
| Tax on Investment Gains | 10/29/2009 |
| Q: Im looking to buy a computer in order to research and trade more easily. I recently set myself up ... A: In that case, Bill, you are limited in your deduction. Your deduction would come in on Schedule A ... | |
| Tax on Investment Gains | 10/29/2009 |
| Q: Im looking to buy a computer in order to research and trade more easily. I recently set myself up ... A: Bill: If you are in the business of trading (or your LP is in the business of trading) and it is a ... | |
| energy efficiency tax credit | 10/26/2009 |
| Q: I am currently having a new heating system installed in my home and hoped to take advantage of ... A: It's always good to check with a tax professional rather than someone who may or may not know the ... | |
| Father's Estate | 10/17/2009 |
| Q: New York State: Hi, I will be getting about $50,000 from my father's estate. I live in NY State. ... A: Shelley: You do not have a Federal taxable event when you inherit money. Any taxes would be paid ... | |
| Tax on selling a car | 10/16/2009 |
| Q: I am considering "trading down". I have a cash offer of $25,500 from carmax for my old car. I can ... A: Jo: You don't say whether this is a personal use vehicle or for business use. Since you didn't ... | |
| passive losses | 10/2/2009 |
| Q: I have taxable income (line43-1040) of $30,000 from wages only. I am a passive limited partner in a ... A: Rod: This is an excellent question. Here is the rule: As you have surmised, if you fully dispose ... | |
| Business Special Assessment | 9/25/2009 |
| Q: We own a small business and have received a special assessment for road improvements. I understand ... A: Debbie: You didn't say whether the assessment was for your home (maybe your business works out of ... | |
| Sold small business for a loss | 9/22/2009 |
| Q: In 2007 we bought 50% of a retail store for 120K. The business is structured as an LLC. In 2008 we ... A: Brian: I am assuming that you are being taxed as a partnership, but you may be taxed in another ... | |
| Company Structure | 9/21/2009 |
| Q: Owen, Many thanks for your time. Wish to clarify just a point that you seem to have misunderstood, ... A: Ryan: You're welcome. Hope it helped somewhat. Please be sure to fill out the rating survey. ... | |
| Business Structure | 9/20/2009 |
| Q: My wife (home maker) and I (retired corporate executive & professional engineer) are both Canadians. ... A: Ryan: It appears you have done quite a bit of research on the subject at hand. There are many ways ... | |
| donating used car vs. private sale | 9/18/2009 |
| Q: I live in Massachusetts and am wondering how I can best evaluate whether to sell my 96 Corolla (for ... A: Tom: I'm happy to answer this question for you. Take the cash because it is worth more to you. ... | |
| Avoid/Minimize Taxes on Cancelled Debt on Recourse Home Loan | 9/15/2009 |
| Q: I am going on a foreclosure and expected to finalize it by mid November since NOD has been filed ... A: Teatro: There are a few things at work here. First, is this your primary residence? If so, this ... | |
| amount of federal tax due | 9/1/2009 |
| Q: I am withdrawing 50,000 from my IRA to purchase a home I am 60yrs so no penalty applies other than ... A: Candice: I will give you an estimate based on 2008's tax rates (which are substantially similar to ... | |
| amount of federal tax due | 9/1/2009 |
| Q: I am withdrawing 50,000 from my IRA to purchase a home I am 60yrs so no penalty applies other than ... A: Candice: It is nearly impossible for me to give you a figure for what your taxes would be without a ... | |
| quarterly tax payments | 8/28/2009 |
| Q: I was a full-time employee of a company through Feb 2009, received only unemployment payments from ... A: Larry: There is no exemption for quarterly estimated payments, first year or otherwise, unless you ... | |
| 108(d)(3) determining insolvency | 8/27/2009 |
| Q: To avoid income on the cancellation of indebtedness, one exemption is where the tax payer is ... A: Steve: First, just to clarify, I'm not a CPA; I am an Enrolled Agent. Second, your original ... | |
| 108(d)(3) determining insolvency | 8/27/2009 |
| Q: To avoid income on the cancellation of indebtedness, one exemption is where the tax payer is ... A: Steve: One has to be careful in picking out specific points from a Tax Court case to support ... | |
| 108(d)(3) determining insolvency | 8/27/2009 |
| Q: To avoid income on the cancellation of indebtedness, one exemption is where the tax payer is ... A: Steve: Under Section 108 of Internal Revenue Code, 401(k)s and IRAs are included. For a helpful ... | |
| Capital gains/losses | 8/23/2009 |
| Q: In July a stock fund that I held for 12.5 months sold for a $20,000 loss. Is it true that only ... A: Linda: It is true that you are limited to a $3,000 maximum deduction for capital losses each year. ... | |
| Lease or finance electronics for business | 8/21/2009 |
| Q: I'm trying to figure out from a tax standpoint is it better to lease or finance electronics for my ... A: Jack: One of the factors to take into consideration would be what type of lease it is. There are a ... | |
| Day Trader tax calculation | 8/17/2009 |
| Q: I am a day trader with LLC this year. My question is when I file income tax (I usually file it by ... A: Jim: As a day trader, since you're looking for simplification, the best arrangement for you would ... | |
| tax rate schedule | 8/3/2009 |
| Q: What are tax rate schedules used for? Can they be used to give someone an idea of what their income ... A: No; taxable income is a figure with a lot of adjustments. In short, it is your total income from ... | |
| tax rate schedule | 8/2/2009 |
| Q: What are tax rate schedules used for? Can they be used to give someone an idea of what their income ... A: Danielle: As long as you know your TAXABLE income, tax rate schedules can, indeed, give you an idea ... | |
| social security | 7/27/2009 |
| Q: I am a babysitter, and I don't file taxes because I don't make enough money to... My clients were ... A: OK. If I understand you correctly, since your parents can claim you on their tax return, the people ... | |
| social security | 7/24/2009 |
| Q: I am a babysitter, and I don't file taxes because I don't make enough money to... My clients were ... A: Felicia: First off, I don't have enough information to properly answer your question. How old are ... | |
| Accountant's Responsibility? | 7/20/2009 |
| Q: I have been using a CPA for several years to do my 1040 and Schedule C. He seems to be competent ... A: Jon: This is a fantastic question! I would love to find hundreds of small business owners like ... | |
| EE Bonds | 7/14/2009 |
| Q: I have some EE bonds purchased in Feb of 1993 for my daughters college education. My eldest daughter ... A: Marshall: Answers below: a) Line 37 & 38 (1040 TY 2008) is your adjusted gross income (the line ... | |
| Federal taxes on my lottery win. | 7/11/2009 |
| Q: I won recently $1.5 million in a state lottery. 33.5% in taxes was taken out upfront(25% Fed & 8.5% ... A: Sheila: It would depend entirely on the amount on the 1099 that you receive which will govern your ... | |
| Barter child care in exchange for rent | 7/10/2009 |
| Q: I have a room in my home that I would like to offer to a college student. Instead of rent, I was ... A: Rachel: This sounds like a case of bartering. That being the case, you would likely have to count ... | |
| deductability of residential real estate tax | 6/27/2009 |
| Q: The surviving spouse is the beneficiary of a marital deduction trust which holds full title to the ... A: Nicholas: I think you're getting more into a legal question versus a tax question. Again, the ... | |
| deductability of residential real estate tax | 6/26/2009 |
| Q: The surviving spouse is the beneficiary of a marital deduction trust which holds full title to the ... A: There are many variables to this scenario. I would assume the following: 1) This is an irrevocable ... | |
| employee withholding allowances/moving expense | 6/19/2009 |
| Q: I moved to Arizona from Hawaii in April in order to get a job in this economy. The first 4 months ... A: Rosalie: The best thing you can do is to fill out the W-4 form as instructed and based on what you ... | |
| My Sole Proprietorship - Filing Taxes | 6/3/2009 |
| Q: I formed a sole proprietorship in the beginning of March 2009. I am based in New York City. It is an ... A: Joshua: When you are a sole proprietor, you file Schedule C with your regular tax filing (Form ... | |
| Taxes While Overseas | 6/2/2009 |
| Q: Good Afternoon, Thank you for making yourself available for advice. I'll be teaching English in ... A: Aneika: Yes, all worldwide income is taxable and you have the same filing obligations. I hope this ... | |
| Learning bookkeeping | 6/2/2009 |
| Q: I want to list myself as a professional stock trader next year, mainly to have more tax flexibility. ... A: John: Try this: http://www.accountingcoach.com/ Hope this helps! I hope this answers your ... | |
| state taxes after moving | 5/31/2009 |
| Q: We are planning to leave California on Sep 1, 2009 to live in Missouri. If we wait until we are ... A: George: It appears from your question that you will be a partial year resident in both states. I ... | |
| reporting S-Corp losses on personal return | 5/26/2009 |
| Q: My husband and I incorporated last year as an S-Corp for my husband's IT consulting services. Since ... A: Mina: Did you have any income or expenses in 2008 under the sole proprietorship (Schedule C)? If ... | |
| reporting S-Corp losses on personal return | 5/26/2009 |
| Q: My husband and I incorporated last year as an S-Corp for my husband's IT consulting services. Since ... A: Mina: The way income/losses from an S-corp is handled is through a K-1 form from the Form 1120S. ... | |
| How taxes are figured on stock trades | 5/26/2009 |
| Q: I recently started doing a little swing trading and I have a question. If I buy say 10 different ... A: Bill: To answer your question in the briefest and most understandable manner, any profits and ... | |
| Sole Propreitorship to LLC | 5/4/2009 |
| Q: I am in process of going from Sole proprietorship to LLC. I would like to know if I should wait ... A: I am not familiar with Indiana's laws on LLCs, but I do know that there are filing and tax ... | |
| Sole Propreitorship to LLC | 5/4/2009 |
| Q: I am in process of going from Sole proprietorship to LLC. I would like to know if I should wait ... A: Jennifer: There is no simple answer to your question because there are a lot of variables, such as ... | |
| transfer of mutual fund in a partnership | 4/27/2009 |
| Q: A partner in our partnership wants to redeem a portion of his partnership interest. Can we defer ... A: The answer depends on how the partner got his share of the partnership interest, including those ... | |
| ? IN RE: lottery winnings | 4/27/2009 |
| Q: I was looking through your previous answers and saw this question & answer:A friend and I won a ... A: If I understand your question correctly, the answer is that the winnings (earnings from Sch K-1) ... | |
| Our recent dialog on energy credits | 4/22/2009 |
| Q: Our local CPA tells me that the credits for a furnace and A/C in the house we are building are NOT ... A: Lou: The credits for furnace and AC is not valid for new construction, only replacement. It is ... | |
| Claiming on ebay | 4/22/2009 |
| Q: I am starting to sell items on eBay and am trying to figure out if I need to report that imcome to ... A: Jamie: Since you are not in business and if you are just getting rid of old items, the chances are ... | |
| 2009 energy tax credits | 4/20/2009 |
| Q: We are building a new home to be completed about July 1, 2009. Are we eligible for tax credits for ... A: Lou: As you can see from the reference below, there are certain requirements as you indicated: ... | |
| tax question on 2nd home | 4/20/2009 |
| Q: My wife and I are considering purchasing a vacation condo in Florida with my in-laws. My ... A: Dave: It would seem that the interest deduction for you is pretty straight-forward; it is ... | |
| 2009 energy tax credits | 4/17/2009 |
| Q: We are building a new home to be completed about July 1, 2009. Are we eligible for tax credits for ... A: Lou: Please note that these credits are for 2009 ONLY: 1. Energy efficiency improvements-10% of ... | |
| Tax Owed | 4/14/2009 |
| Q: Mike, I am 60 yrs old, disabled and would like to know how much taxes would I owe if I withdrew ... A: The answer depends on your total income in the year of the withdrawal. Since you are past 59 1/2, ... | |
| Construction Loan Interest/Selling of House | 3/27/2009 |
| Q: Can you please explain how an individual working as a sole proprietor would handle the following in ... A: The answer depends on what the purpose of the building of the house was. Since you didn't live in ... | |
| Taxes | 2/27/2009 |
| Q: Where can I get accurate info about the tax deduction for new car buyers under the stimulus bill? ... A: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/25/AR2009022503668.html?hpid=moreheadli ... | |
| Energy Tax Credit | 2/26/2009 |
| Q: My parents (who live in Indiana) purchased a new electric air handler in August 2008. Their A/C and ... A: Unfortunately, non-business energy property credits do not qualify in 2008, only 2006, 2007 & 2009. ... | |
| Stock losses/gains | 2/24/2009 |
| Q: For 2008 I had "net" short term losses on stocks in the amount of $15,000. I also had "net" long ... A: You are limited to a maximum of $3,000 in capital losses each year; that's why you're getting that ... | |
| solo Roth 401(k), TSP | 2/24/2009 |
| Q: I am in the military and have a small amount oif ndependent contractor income ($3400) and would like ... A: Julie: A thrift savings plan is a defined contribution plan and, as such, is subject to the same ... | |
| first time homeowner credit | 2/22/2009 |
| Q: My daughter and fiance bought a house in late March of 2008, they would love to take advantage of ... A: Jen: I was wondering what you mean by why THEY wouldn't pick January 1? Well, it is congress, ... | |
| Dependent status for 20 year old son | 2/21/2009 |
| Q: My son is 20 years old, and was a full time student for only 4 months in 2008. The rules are 5 ... A: Wes: Strict or not, the issue is a matter of honesty. If your son doesn't qualify, he doesn't ... | |
| Tax Preparation Fees | 2/21/2009 |
| Q: I just wanted to know what you think is a reasonable fee to pay for Business Tax and personal tax ... A: Jay: This is one of the all-time great questions that all tax professionals wrestle with. It helps ... | |
| rental income | 2/21/2009 |
| Q: I could really use your expert advice. During 2008 I rented my home out to a woman who stopped ... A: Sam: First, income is income and expenses are expenses. You don't claim the income unless and ... | |
| 1099 vs incorporating | 2/19/2009 |
| Q: My husband is a police officer and former special forces marine. Two or three times per year he is ... A: Anna: I'm glad to answer your question. Whether or not your husband incorporates, there is still ... | |
| Multiple businesses | 2/18/2009 |
| Q: Owen. My name's Pam. I'm a little confused about how to go about my taxes for '08. I work as an ... A: The Big Apple, eh? That's where I'm from...born in Washington Heights and raised in Riverdale in ... | |
| Turbo Tax | 2/18/2009 |
| Q: I am thinking about using Turbo Tax online to file my 2009 taxes. My wife is a teacher, w-2 ... A: I love questions like this, seriously. Software is NO SUBSTITUTE for a professional who knows the ... | |
| Multiple businesses | 2/18/2009 |
| Q: Owen. My name's Pam. I'm a little confused about how to go about my taxes for '08. I work as an ... A: You will need to be sure what you are so you can be sure...! If you are an independent contractor, ... | |
| Multiple businesses | 2/18/2009 |
| Q: Owen. My name's Pam. I'm a little confused about how to go about my taxes for '08. I work as an ... A: You raise a lot of issues here, Pam. First, are you REALLY an independent contractor where you work ... | |
| Small home business....quilting | 2/17/2009 |
| Q: My spouse has run a home business for 4 years from one room in our home devoted solely to quilting ... A: You can claim home expenses for the portion that is used exclusively for business. Depending on ... | |
| w2's for non profit (labor union) employees | 2/17/2009 |
| Q: I reported information for 15 members of our Labor Union to the SSA Online to create their w2's. ... A: Let me make sure I understand the main point - the person whom you issued a corrected W-2 to had no ... | |
| Amanded Joint Return | 2/16/2009 |
| Q: I have a question about amending a joint (married) tax return. My spouse wants to amend our 2007 ... A: First consider: are you sure it's not a proper deduction? Maybe you'd like me to evaluate that ... | |
| Taxation on lottery winnings | 2/16/2009 |
| Q: A friend and I won a handsome sum of money on a scratch off lottery ticket. We are contemplating ... A: A partnership is a pass-through entity and pays no tax (generally-speaking). Therefore, the ... | |
| Taxation on lottery winnings | 2/16/2009 |
| Q: A friend and I won a handsome sum of money on a scratch off lottery ticket. We are contemplating ... A: There's a few things I need to know before I can answer this question. First, how are the winnings ... | |
Tax Planning
OWEN S. ARNOFF, EA
Top Expert on this page
Expertise
As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. Members of the National Association of Enrolled Agents must complete a minimum of 90 hours of Continuing Professional Education in Taxation every three years. This puts us at a tremendous advantage when it comes to providing outstanding and up-to-date tax planning and advice. Although I am licensed to handle and do, in fact, work with Non-Profit Organization compliance (Form 990 series), Trust/Fiduciary Returns, and Estate & Gift Tax Returns, I prefer to concentrate on individuals and small business tax planning.
Experience
I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I currently own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 500 individuals and small business owners in California, Texas, and Arizona, assisting them in all aspects of their tax and financial well-being.
Organizations
National Association of Enrolled Agents, California Society of Enrolled Agents, National Society of Accountants, National Association of Tax Professionals,
National Society of Tax Professionals, American Institute of Professional Bookkeepers
Education/Credentials
Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (since 1999), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.
Past/Present Clients
http://www.betterbusinessventures.com/our_clients.html
©2012 About.com, a part of The New York Times Company. All rights reserved.