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Coverdell Education Savings Accounts

Published on: October 2, 2012 | Leave a comment

A Coverdell Education Savings Account (ESA) is an account created as an incentive to help parents and students save for education expenses. The total contributions for the beneficiary of this account cannot be more than $2,000 in any year, no matter how many accounts have been established. A beneficiary is someone who is under age [...]

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Research Credit

Published on: September 28, 2012 | 3 Comments

Research credit- when wages do not qualify? Based on a recent court decision, an s corporation claimed the research credit under Section 41 for wages paid to two of its shareholders, of whom one was the CEO and president of the company and the second one was a vice president. None of these shareholders had [...]

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Reporting of foreign bank account for US citizens

Published on: February 26, 2012 | 36 Comments

Each United States person is required to disclose any financial interest in foreign bank accounts on Form TD F 90-22.1, commonly referred to as FBAR, if the aggregate value of all accounts exceeds $10,000 at any time during the calendar year. Disclosure is mandatory with possible criminal and civil penalties for failure to report or [...]

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Payroll Tax Cut Extension

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Payroll Tax Cut Extension President Obama has signed the Middle Class Tax Relief and Job Creation Act of 2012, which extends to the end of the year the payroll tax cut for employees, continuing the reduction of their social security tax withholding from 6.2 percent to 4.2 percent of wages paid. The Act also repeals [...]

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Five tax benefits you need to know about:

Published on: | 71 Comments

There are five tax benefits that cannot be split on the tax return when unmarried couple is living together under one roof, dependency exemption, child tax credit, EIC, the child and dependent care credit and the head of household filing status. These benefits can be split only when the parents are separated under a divorce [...]

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Tips for 2011 tax year

Published on: January 25, 2012 | 220 Comments

Deduction, by a cash basis tax payer, of expense paid by check that was mailed on December 31 A payment by check is deductible when it is delivered to the payee or when it is placed in the mail, but only if the check is paid by the bank to the payee. [Rev. Rul. 80-335]. [...]

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Section 179 deduction for 2011 tax year

Published on: November 30, 2011 | 539 Comments

The deduction limit for tax year 2011, after the most recent Stimulus Act, is $500,000 while the total amount of equipment purchased not to exceed 2 million. Listed below are examples of equipment that qualifies for section 179 deduction, for the 2011 tax year, as long as it was purchased or leased and placed into [...]

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Employee Benefit Program: Circuit court overrules IRS’s attempt to deny taxpayers deduction

Published on: November 29, 2011 | 549 Comments

Here is court case. A husband and his wife operate a farm. The husband is the owner and the decision maker on the farm. Before 2001, the wife worked for her husband on the farm for 20 years without compensation. In 2001, the wife becomes an employee of the farm supervised by the husband. The [...]

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Basic Records for Your Tax Accountant to Prepare Your Return

Published on: October 11, 2011 | 501 Comments

Part I – Assembling Records Related to Income Payroll – Provide your W-2. Do you realize that employers make mistakes? It is not easy to save all of your pay stubs; however it can be to your advantage to reconcile your W-2 with paychecks stubs and make sure there are no mistakes on the W-2. [...]

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California Schedule EO (565/568) – Pass Through Entity Ownership

Published on: September 16, 2011 | 562 Comments

Beginning with the 2011 taxable year, partnerships and limited liability companies (LLC) will use the proposed California Schedule EO, Pass-Through Entity Ownership, for reporting pass-through entity ownership interests in entities that file federal Form 1065 or that are disregarded. According to the proposed Schedule EO the taxpayer asked to identify by name, Secretary of State [...]

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