Georgia Man Busted For Selling “Tax Buster” Scams to Customers in 41 States

Bush to name tax reform panel – I’m still waiting for my invite.

Free Speech v. Tax Code

End Social Security

As I was afraid would happen, the new Simple Start version of QuickBooks has created more confusion among potential users, as with this email I received from a client who I had told would have to upgrade from Quicken to QuickBooks if she wants me to continue to prepare her tax returns for 2004.

Is Quick Books Quick Start OK, or do I specifically need Quick Books Basic? Is one easier, or are they the same thing? What’s easiest and fastest for you? A one word answer here is fine.

 As you can see, I didn’t know how to answer this in one word without creating more confusion.

The new Simple Start version of QuickBooks is a terrible waste of money.  I published a review of it on my blog a few months back: 
http://www.taxguru.net/2004/10/thumbs-down-for-qb-simple-start.html

Since posting that review, I have actually spoken with a number of QuickBooks employees who told me off the record that they agree that it is a crappy program and were over-ruled when they tried to prevent its production from inside their company. 

QuickBooks Basic costs almost the same and is a much better program.  You can also use the more powerful versions of QuickBooks (Pro and Premier) if you prefer; but they really aren’t worth the additional cost unless you’re going to be doing a lot of bookkeeping for several companies, as I do. For just keeping your own books, Basic will do everything you need for much less money than the other versions.

I hope this clears up any confusion.

Kerry

Colorado Smokers face 320 percent increase in state cigarette taxes on Jan. 1 – From 20 cents per pack to 84 cents.  Nicotine addicts continue to be popular targets for financial exploitation.

Market-based Social Security system would be less costly

2005 Ford Escape Sport Utility Vehicle Certified for Clean-Fuel Deduction – Someone was asking about this a few months back.

Tax Break Turns Into Big Business – I have heard of these facade easement donations; but haven’t handled any myself.  However, with as much work as I do with real estate, I wouldn’t be surprised to see some of these.

Reticent to Reform Social Security, Dan Rather & his fellow left wing journalists prefer Taxes to Stock Market – Allowing people any control over their own money just goes against the grain for those media folks who are so much smarter than we little people are.

Bush focuses on fixing Social Security

As I’ve mentioned on countless occasions, vehicle leasing is a huge rip-off, often representing an implicit interest rate of between 20% and 30%.  However, they are very popular; so these recent articles (courtesy of AutoBlog) are interesting.

Study: US auto makers shut out of top spots for best retained value in different vehicle categories.

Web links car lease swappers. Drivers looking to unload autos find those who want short-term deals.

Q:

I have been reading your blog and your site for some time now.  I am an accountant, but not a tax cpa.
 
My question is:
 
If I rehab house for future sale, I will probably be classified as a dealer.  I have 3 other partners providing capital and services.  Should I record those sales in a C, S, or an LLC that is classified as a partnership.  I will have some rental income as well form some of the properties, but the majority of the positive cash flow will  come from the sale of the rehabed residences.  Each sale will net 50-75 K with about four per year.
 
Any quick insites would be very helpful, but if you can’t thanks for your site and ideas.

A:

I hope my previous writings have made it clear that there is no such thing as a “one size fits all” for situations such as yours and the services of a tax pro to set up a customized game plan would be well worth the cost.

Having said that, I will share what I have seen work in many cases.

For profitable businesses owned by just one person or a married couple, a C corp usually makes the most sense.

For businesses that have multiple owners who are not married to each other, LLCs have been very effective for keeping everything straight for that specific business.  Each owner then has to decide wither to own his/her shares in the LLC in their own personal name or through a C corp that they own themselves.   There are a lot of benefits to using  layers of ownership, both in regard to taxes as well as liability.

Good luck.  This should give you a starting point when consulting with your own tax pro.

Kerry Kerstetter

Phony government grant scam

I sent the following to a client who was asking if I would have their 2003 tax returns finished by the 12/15/04 extended due date:

I am hoping to have your returns done by the 15th.  If not, I’ll file another extension.

I hope you’ve had a chance to catch the recent info on my blog about why it is so important to take our time to do the original returns as perfectly as possible.  IRS has started a policy of opening full blown audits on anyone who files an amended return requesting a refund.  This has changed my mind set that just getting a tax return in on time is fine because we then have three years to correct any mistakes.  With this new IRS policy, we really only have one chance to get it  right. 

One of the big reasons I have been running so far behind with 2003 tax returns is the fact that I have had to work on audits that started from very basic amended tax returns, and IRS decided to go on fishing expeditions into other years and issues that weren’t even part of the amended returns themselves.  I am doing my best to protect all of us from having any more of these occur.

Kerry

I also added the following to be printed on the cover letter that accompanies all 1040s I prepare.

Please review the enclosed tax returns closely and notify us if you find any significant errors before you send the returns in.  It is in all of our best interests to make sure the original tax returns we submit are as close to perfect as possible because IRS has recently started a policy of initiating full blown audits of any person who files an amended return requesting a refund.  This has changed the mind set that just getting a tax return in on time is fine because we then have three years to correct any mistakes.  With this new IRS policy, we really only have one chance to get it  right.