Q:

Subject: Glossary Terms

 

I think you have to add :

 

C- company

 

S company

 

what does it mean?

 

Thanks

A:

Those terms aren’t used.

You probably mean C and S corporations, which are explained here.

Kerry Kerstetter

 

Q:

Subject: tax question – child care

 

Hello,

 

If possible, could you please answer the following question for me regarding paying someone for child care…

I would like to employ my Mom to take care of our future child; one benefit I saw from this I can maximize my employer’s child care spending account to $5000, which is tax deductible.  I am in a higher tax bracket and my Mom is in a lower tax bracket. What IRS relatated items would I have to do to pay someone for services, ie: would I have to get a tax number, or pay into Social Security for her, or pay into worker’s compensation, would I have to set up a company, etc

 

Thank you very much,

A:

The best thing would probably be if your mother set up her own child care business that could be paid for watching your kid, as well as others.  There are many different ways in which that business can be structured (sole proprietorship, C or S corporation); so your mother will need to consult with her personal professional tax advisor to determine the best strategy for her unique situation.  

Kerry Kerstetter

 

Q:

Subject: Exchange Question

Are there any special rules that pertain to a person who is not allowed to live in what they want to be their primary residence because they are required to rent government housing as part of the job.

We took a new job which does not have government housing, which means we have to buy a primary residence at the new location  with the money obtained from the sale of our house we were not allowed to live in.

there will be a profit from the house sale but all of it will be needed to purchase a house in the new location.

Seems that there should be some kind of exception as military people probably often fall into this category.

A:

There are some special rules for people in the military and Foreign Services, as mentioned here in IRS Publication 523.

You really need to work one on one with an experienced professional tax advisor to see if any of this applies to your unique situation.

Good luck.

Kerry Kerstetter

 

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