Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 690 other subscribers
  • Blog Stats

    • 330,154 hits
  • Posts By Day

    November 2005
    M T W T F S S
     123456
    78910111213
    14151617181920
    21222324252627
    282930  
  • Subscribe

  • Special Pages

Archive for November, 2005

More Section 179 Questions

Posted by taxguru on November 23, 2005

Q:

Subject: Re: sec 179=100% vehicle deduction for 100% business use.

Dear Sir,

I read your free service in your web site and I heard about your good reputable name and appreciate if you can kindly advice me.
 
I recently become a realtor(self employed) and my income source is comission.Recently got a good comission for closing some properties.I plan to buy a car soley for my realtor business.I do have another car for my personal use.
 
Questions:-
 
If I buy a new car for $25,000 in dec 2005,can I deduct all the $25,000 under sec 179 or do I have to prorate the deduction since I purchase the car in dec 2005?
Must I pay all cash in order to deduct the 25,000 under sec 179?
Is there a specific type of vehicle that i need to buy before I am eligible for the full deduction of $25,000?
 
Can I buy the vehicle under my personal name since I am a realtor and my realtor comission received is under my name.?
 
Looking forward to experience your good advice.
Thank you very much
 
Regards,

A:

None of the info I post on any of our websites, nor emails such as this, are intended to replace the personal services of a competent tax pro, who can more accurately evaluate your personal situation.  Any good tax pro should be able to help you save many times more in taxes than his/her fees, as well as help you stay out of trouble with the tax authorities.

Any competent tax pro can easily answer the questions you raised. I have also previously discussed them at more length on my blog and main website.

The full Section 179 deduction is available regardless of when in the tax year the asset was acquired and placed into service.  The last week of the year is a very popular time for people to shop for SUVs and other heavy vehicles.

The Section 179 deduction is the same regardless of how the vehicle is financed.  You can claim the same amount whether you pay all cash or finance the entire price.

The $25,000 deduction is only available for SUVs or cars weighing more than 6,000 pounds.  Passenger vehicles weighing less than that are eligible for a lower Section 179 amount.  Trucks and utility vehicles over 6,000 pounds are eligible for up to $105,000 of Section 179 deduction.

If you are not incorporated, the name on the title of the vehicle isn’t relevant for tax deduction purposes.  I t can be either your own name or that of your unincorporated business.  What is critical is how it is being used, measured by miles driven.

I have a lot of info on Section 179 on my main website.

As I said, I have also covered all of these issues in much more detail on my blog.

Go there and do a search under 179 and you will find dozens of postings.

Again, don’t actually implement any tax motivated action until you have consulted with a tax pro who you actually pay for advice.  Free advice, even from me, is worth just that.

Good luck.

Kerry Kerstetter

Follow-Up:

Kerry Kerstetter,
Thank you very much for your excellent advice and links.
 
Have a blessed thanksgivings
 
 

Posted in 179 | Comments Off on More Section 179 Questions

More On Upgrading QuickBooks

Posted by taxguru on November 23, 2005

Q:

Subject: QB upgrade

Kerry,
 
We have to upgrade QB 2003 to keep payroll support.   Have you looked at 06?  Would you recommend 05 or 06 version?  Seems like I saw a blog but cannot remember what it said.  Thanks,

A:

I’ve only been using the new QB 2006 program in full for a little while.  After getting used to the new style interface that it has, it has been working reliably for me. 

I had lots of problems with the 2005 programs on my main computer; but I’m pretty sure those were due to conflicts with one or more of the several other versions of QB that I have installed on my main computer in order to be able to work with client files from older programs.  I never had those kinds of problems on any of the other computers where I installed the 2005 programs, but didn’t have a lot of earlier versions also installed.

Since Intuit officially abandons their programs every three years, it would be best for you to go ahead and get the 2006 program so that you will have another full three years before you are forced to upgrade again.

I will be posting comments and advice on working with the 2006 programs on my main website.

Good luck.  I hope this helps.

Kerry

 

Since we do require all of our business clients to have their info properly entered into any version of QuickBooks, I try to keep my info on how best to use QuickBooks as current as possible.  I have set up a special page with just my comments on the differences in the QuickBooks 2006 programs from earlier versions.

For users of Apple Macintosh computers, it seems that the powers that be at Intuit still don’t have any interest in having you use their QuickBooks programs.  Once again, the bundle of different versions of the 2006 program that we QuickBooks Pro Advisors were sent did not include a copy of the Mac version, while it did include several copies of the lame Simple Start program and the Point of Sale, which few people use, as well as a coupon for the Online program, which I have used for a client and still feel is vastly inferior to the desktop programs. As I have said on several occasions, Intuit could at least allow us to request a Mac program to help our clients that use that platform if they don’t want to automatically send it in the annual software update package.   

 

Posted in Uncategorized | Comments Off on More On Upgrading QuickBooks

Posted by taxguru on November 19, 2005

‘Shaman psychologist’ convicted of tax evasion, hiding her assets – No matter what anyone says, even voodoo chiefs have to file tax returns.  Of course, in its own way, the tax code is itself a form of voodoo.

 

Posted in Uncategorized | Comments Off on

Posted by taxguru on November 19, 2005

The 10 Wall Street Rules You Need To Break

 

Frenzel Criticizes Sunshine Law Governing Tax Panel – He would have preferred to have negotiations in secret.  That would be golden opportunity for huge corruption, which we already have plenty of.

 

House Passes IRS Funding Increase Raises for auditors?

 

Posted in Uncategorized | Comments Off on

Posted by taxguru on November 18, 2005

Posted in Uncategorized | Comments Off on

Posted by taxguru on November 18, 2005

Posted in Uncategorized | Comments Off on

How To Mislead With Numbers

Posted by taxguru on November 18, 2005

Posted in Uncategorized | Comments Off on How To Mislead With Numbers

Posted by taxguru on November 17, 2005

The Tax Reformers’ Tax Increase – A good look at the history of the insane AMT and how our clueless rulers in DC have allowed it to ensnare more and more people every year.  As long as the money for the imperial Federal government is considered to be more important than basic fairness, we shouldn’t hold our breath waiting for our rulers to do the right thing and scrap this monstrosity. 

 

Posted in Uncategorized | Comments Off on

Deja Vu All Over Again

Posted by taxguru on November 17, 2005

From Ohio CPA Dana Stahl:

Subject: Tax reform panel
 
Mr Guru – I spent this morning reviewing & organizing some of my files.  I came across a comment from your blog dated 1/10/05 concerning the President’s Tax Reform Panel.  Your comments were quite prophetic, indeed, as the Panel’s final product & recommendations (at least as I understand it) are nothing more than tinkering with the tax code around the edges, but no “real” reform.  That would involve scrapping the whole damned mess & starting over.  So, your skepticism was well-founded on how the Panel would not really change anything.
 
Dana Stahl, CPA
Sandusky, OH

 

My Reply:

Dana:

As I constantly have to remind people who get their hopes up each time a tax reform agenda is announced, we’ve been down this road countless times, with the same results.  A tax code as insanely packaged as we have can’t be fixed patchwork style without completely removing it and starting from scratch with something new.  We just continue to end up with different variations of Frankenstein monsters.

Kerry

 

Posted in Uncategorized | Comments Off on Deja Vu All Over Again

Posted by taxguru on November 16, 2005

The Feds bust another “corporate sole” scammer.

 

401(k) versus a Roth 401(k)

 

 

Posted in Uncategorized | Comments Off on