Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for March, 2007

Working With an Accountant

Posted by taxguru on March 31, 2007

I just finished listening to this seven and a half minute long MP3 podcast from QuickBooks on the importance of  small business owners working with a professional accountant from day one, as well as some good tips on selecting the right one to work with. 

I am going to add a link to this podcast on my page dealing with selecting a tax advisor.

List of all QuickBooks small business podcasts

 

Posted in Uncategorized | Comments Off on Working With an Accountant

Typical tax client?

Posted by taxguru on March 31, 2007

The bane of all tax prep offices, the shoebox clients.

Posted in Uncategorized | Comments Off on Typical tax client?

Ponzi schemes are only legal when run by our rulers…

Posted by taxguru on March 31, 2007

Posted in Uncategorized | Comments Off on Ponzi schemes are only legal when run by our rulers…

TaxMan Song

Posted by taxguru on March 30, 2007

Q:

Subject: Nickel Creek “Taxman”

 Hello Sir,

   Though I have never met you I have a tiny favor to ask of you. My dad saw an episode of “Austin City Limits” where Nickel Creek covered the song Taxman, and he loved it. That was back in 2002 and he has searched for a copy of it ever since, only to find nothing. However, I recently stumbled into your post and actually gasped in amazement, after five years of searching I finally found a copy. It couldn’t have come at a better time since my dad’s birthday is coming up. So I ask of you sir, please, please, please could you send me a copy of that song?

Thank you for your time,

   ( I am only 14 so please disregard any non formal mistakes in my letter. )

A:

That blog post includes a link to download the mp3 file of the song.

If you do search on my blog, you will find dozens of other versions of the TaxMan song by several other artists, with links for downloading.

I hope this helps you prepare for your dad’s birthday.

Kerry Kerstetter

 

Go Daddy Domain Names

 

 

Posted in Uncategorized | Comments Off on TaxMan Song

QB File Migration Is One Way

Posted by taxguru on March 30, 2007

Q:

Subject: Quicken versus Quick Books
 
KMK:
 
I liked your comparison of Quicken vs QB on the webpage http://www.taxguru.org/qb/qbvsquicken.htm as I am considering that exact question now for a non-profit (daycare) company.  I have been doing books for a church on Quicken for a number of years and have found it satisfactory but I admit that I may not know what I’m missing.
 
I have a question about QB that maybe you can answer for me.  Can QB exchange files with an earlier edition of QB?  I know that the 2002 version of Quicken that I am available with will not do a “Save to an earlier version of Quicken.”
 
Thanks for your time,

 

A:

QB data files have always been the same as Quicken’s.  You can roll them forward to a newer version of the program, but can’t roll them backwards to an older version.  Thus, you need to be careful of upgrading data files, because you can’t go back after you’ve moved forward.

I hope this helps.

Good luck.

Kerry Kerstetter

 

The best book on QuickBooks Premier Editions

 

Posted in QB | Comments Off on QB File Migration Is One Way

The Insane AMT

Posted by taxguru on March 30, 2007

Q:

Subject: Suggestion

Hi there,
 
I have a site suggestion for your tax blog.  I’m currently promoting my “AMT” article. If you’d like to exchange links I’ll be happy to add your link to my resource page.   I’m sure this will prove beneficial for both of us considering traffic, etc.
 
Thank you much,
Robert Valentine

A:

Robert:

Thanks for sharing your article on the AMT.  If you’ve read my blog, you should know that this insane tax is one of my top pet peeves and I appreciate any effort such as yours to further educate people on its stupidity.  The fact that its thresholds aren’t adjusted annually for inflation like most other tax items, is just one indication of how far removed it is from reality and how incompetent our rulers in DC are at addressing this problem. 

I will be posting this on my blog, which should generate more visits to your site.

Thanks again for writing.

Kerry Kerstetter

 

Follow-Up:

Thanks, Kerry. I couldn’t agree more…If you’d like to write back with your linking info i.e. desired title, description and linking URL. I’ll be more than happy to link to your great resource. Hopefully I can give you some traffic as well.
 
Thanks again,
Rob

 

TaxCoach Software: Are you giving your clients what they really want?

Posted in Uncategorized | Comments Off on The Insane AMT

Climate change from the Dims?

Posted by taxguru on March 30, 2007

Posted in Uncategorized | Comments Off on Climate change from the Dims?

Shock & Awe

Posted by taxguru on March 29, 2007

Posted in Uncategorized | Comments Off on Shock & Awe

Gifting Limits

Posted by taxguru on March 29, 2007

Q:

Subject: Money for Car
 
Kerry, We have a grandson turning 16 next month and we want to help him get a car. Is there any way to give his Dad the money we want to spend and get a tax deduction? We do not want any ownership in the car but we have committed to help our son with the purchase of this car. We plan to give $12,000.00 as a gift to make this happen. I believe you told me at one time the limit was $10,000.00. If I have my facts correct we would have to make two gifts, one to our son and the other to his wife. If I have made myself clear please reply if not maybe we should talk.
Thanks for your help,

A:

It must have been a while since we last discussed the tax rules regarding gifting because the annual tax free limit hasn’t been $10,000 for several years now.  It was increased to $11,000 a number of years ago, and is now at $12,000.

I have some basic info on Gift Taxes on my website.  

Basically, you and your wife can each gift your son, grandson, or anyone, up to $12,000 during each calendar year without having to file any gift tax returns or use up any of your one million dollar per person lifetime gifting exclusion. 

However, the way gifts work for income tax purposes is that they are not considered taxable income to the recipient, nor are they deductible by the giver on his/her income tax return.  In taxes, there has to be a sort of balance between deductions and income.  In other words, the only way for you to claim an income tax deduction would be for your grandson to claim the same amount as taxable income.  If the recipient isn’t willing to pick it up as taxable income, the giver can’t claim an income tax deduction.

The Gift Tax is actually part of the Estate (aka Inheritance, aka Death) Tax system because one of its main benefits is to reduce the size of a person’s estate, ideally bringing it down below the tax free threshold.

One other clarification of a common misconception surrounding gifts of this nature.  They can only come from humans and be given to humans. Corporations and other artificial entities are not subject to estate or gift taxes, so they can’t make the kind of large gifts you are contemplating.  Thus, any gifts would have to be made from your personal accounts and not out of your corporation.

I hope this isn’t too confusing.  Let us know if you would like to set up a phone appointment to discuss this in more detail or explore other options.

Kerry

 

Go Daddy Domain Names

 

Posted in Uncategorized | Comments Off on Gifting Limits

Tax sympathy from our rulers?

Posted by taxguru on March 28, 2007


(Click on image for full size)

Posted in Uncategorized | Comments Off on Tax sympathy from our rulers?