Tax Filing For Self Employed
Question: What is the perfect type of Corporation tax-wise for a current self-employed?
I am currently working an Independent Contractor at an agency for my Art Direction services. This is my main source of income. Additionally, from time to time I do graphic and video work. Now I am considering diving into Event Production as a new opportunity has come to me.
My main goal is to maximize my tax deductions as last year I paid 30% off my income. I filed as self-employed. I know the answer is incorporating but not sure as to which type of Corporation will allow me to deduct the most (equipment, furniture, car, insurance, food, travel, hiring other independent contractors, etc – can’t think of any thing else). This is money that is currently getting out of my pocket – after taxes -. Any recommendation or past experiences?
Just a side note.
As an Independent Contractor my car expenses were only $ .44 cents per mile. Apparently, if incorporate more is deducted (car payment, gas, insurance oil change, etc).
Answer: You don’t have to be incorporated to deduct the cost of an auto used in your business. You have a choice to capitalize the auto and depreciate it over 5 yrs, add the cost of gas, oil changes. car washing, etc., or take the standard mileage rate. The deductions you’d have with a S corp are the same as you’d have with a sole proprietorship.
People usually form a corporation to protect their personal assets from law suit or if the corp goes bankrupt, it doesn’t take your personal assets down too.
If you was gonna incorporate,, /s corp would be the way to go, but not for tax reasons.
What some do is take a salary, then let the company profits flow through to them on a K1, and that profit is not subject to self employment tax, so there is a savings of 15.3% on that money. Also, a S corp can hold a board of directors meeting each year and deduct the cost of that meeting. Bot it’s not free to form the corp and if you don’t know about the tax forms, the savings is offset by cost of tax prep.(yes, it is a deduction)If you are the only partner in a LLC, the IRS considers you to be a sole proprietorship.
Attorney, three doctors, among six locals charged with failure to file state income returns
ALBANY – Six residents of the Mid-Hudson Valley have been charged by the state Department of Taxation and Finance with failure to file income tax returns. Three are doctors, one is an attorney, one is a licensed architect and one is a real estate professional.
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Tax Refund Offset
Question: What type of attorney should I meet with if my Tax Refund was offset erroneously?
The company that took the funds (without ever contacting me about any of it), refuses to give us back our money even though we proved it was not our debt. Help!
Answer: a company (private) CAN NOT take your tax refund with out a court judgement against you , and in most states a tax offset is still not going to happen unless it’s a government offset . for unpaid taxes,student loans or child support
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Irs Filing Status Rules
Question: Claiming foreign tax credits on a dual-status tax return?
Can a dual status person (a non-resident who then became a resident later in the year) claim foreign tax credits for the taxes he paid on his foreign-source income while he was a non-resident?
NB. it’s for a dual status person
IRS pub. 519 seems to suggest yes, but I’ll like to get another opinion please.
Pub. 519 says:
“As a dual-status alien, you generally can claim tax credits using the same rules that apply to resident aliens. There are certain restrictions that may apply. These restrictions are discussed here, along with a brief explanation of credits often claimed by individuals.Foreign tax credit.
If you have paid or are liable for the payment of income tax to a foreign country on income from foreign sources, you may be able to claim a credit for the foreign taxes.
If you claim the foreign tax credit, you generally must file Form 1116 with your income tax return. For more information, see the instructions for Form 1116 or get Pub. 514.”Thanks
Answer: Yes, this is correct.
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State Tax Refund Status Illinois
Question: Live in Illinois -how will status of economy effect tax refunds?
With all the financial disaray in the State of Illinois- can I expect to get my Tax Refund this year?
I work in the public school system and the comptroller is 90 days behind on our transportation reimbursement money. it is ALOT of money! What can we expect?
Answer: I do not know about Illinois but California is issuing IOU’s for tax refunds until they have the money.
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NEW YORK – Kira Marchenese works in online communications, and so she arrived on a business trip to New York earlier this week equipped with all the gadgets you might expect: personal smart phone, work smart phone, laptop, iPod touch.
Congratulations 44th President of the United States, our new Commander in Chief, BARACK OBAMA