Tax Guru – Ker$tetter Letter

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Archive for October 6th, 2007

Section 179 not safe for do it yourselfers…

Posted by taxguru on October 6, 2007

Q:

Subject: please help

can you give me he formula on how to figure the 179 tax deduction of a 6,000 lb suv

let’s say that I purchase this year (2007) a new H2 for $70,000 dollars

can you walk me thru the total deduction?

any help would be great – thank you

A:

The amount of your Section 179 deduction will depend on the business usage of the vehicle based on miles driven, as well as your qualifying earned income.  This kind of calculation is not something that can or should be done on your own. 

If you seriously need to know the tax benefits before you buy your new H2, you should have your personal professional tax advisor crunch the numbers for you.

If you don’t have a personal professional tax advisor, you need to get one ASAP.  Any business making enough money to afford a vehicles as expensive as that H2 is in serious trouble if you are trying to handle all of the tax and financial matters on your own.

Good luck.

Kerry Kerstetter

 

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

 

Posted in 179 | Comments Off on Section 179 not safe for do it yourselfers…

2008 Taxes On Dividends

Posted by taxguru on October 6, 2007

Q:

Subject: ’08 tax rate scheds

Thanks for info on the new bracket breaks.  I have one comment on your page.  I believe dividend income that would otherwise be in the 10-15% brackets (pre-JGTRRA) is taxed at 0% (just like LTCG) not 5%.  That’s what the CBO says, but please let me know if the 5% on dividends is new information (for instance, I may have stale information).

A:

While that CCH article I quoted on the new inflation adjusted tax rate schedules didn’t specifically mention the rate for qualified dividends, you are correct that they receive the same Zero tax rate as do long term capital gains for people in the lowest tax brackets.  In fact, here is how QuickFinder Online describes it:

“Tax on qualified dividends is the same rate as long-term capital gains for dividends received after 2002 and before 2011 (5% for taxpayers in the 10% and 15% tax brackets, and 15% for taxpayers in the 25% and above tax brackets). A zero percent rate applies to taxpayers in the 10% and 15% brackets for 2008 – 2010.”

I will add this info to the 2008 tax rate page on my website.

I appreciate your bringing this item to my attention.

Kerry Kerstetter

 

 

Posted in CapGains | Comments Off on 2008 Taxes On Dividends