Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for September 27th, 2009

You can’t trust government financial predictions…

Posted by taxguru on September 27, 2009

How many people would willingly invest everything they own with someone who has a lengthy track record of being 100% wrong on every single prediction?  Any sane investor would stay miles away from anyone with such a history.  However, that’s the case with anyone who believes a single financial fact touted by our rulers in DC.  

Job losses, early retirements hurt Social Security – This is just one more reminder that, whenever our rulers in DC predict the costs and finances of a government program, they are off by huge magnitudes. The naive way to look at this fact would be to assume that they just made honest miscalculations.  The more realistic assessment is that they lied through their teeth in order to sell the programs, knowing full well that nothing could be done to them when the truth became clear. 

That is exactly what we are facing today.  Every single one of the cost figures being used in the current fight to socialize health care is being intentionally understated so as to con gullible people into accepting it.  By the time the truth emerges that the actual costs are hundreds of times more than promised, just as with Social Security and Medicare, the politicians responsible for selling the programs will be long gone and the people too dependent on it to ever go back.

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Section 179 & Losses

Posted by taxguru on September 27, 2009

Q:

Subject:  Sec 179 depreciation.

Hello, just found you on the web and had a question regarding this tax law.  If our business takes a loss the first year (this year) can we still use this for the over 6,000 lb. commercial truck we purchased this year also?

Please let me know and thanks.


A:

Section 179 is very explicit on the fact that it cannot be used to cause or increase a net loss for the year.

The first year bonus depreciation doesn’t have that restriction, so it can be used to generate a net loss for the year.

Your own personal professional tax advisor should be able to properly handle the appropriate depreciation deductions for all of the capital assets for your business.  Do not attempt to do this on your own.

Good luck.

Kerry Kerstetter

 

Netflix, Inc.

 

Posted in Uncategorized | Comments Off on Section 179 & Losses

Bleeding Off Income

Posted by taxguru on September 27, 2009

Q:

Subject:  C Corp Question

Good Morning,

I am looking at forming a C Corp, based on your advice online. One thing I do not understand is how one bleeds off income at the end of the personal tax year (12/31) back to the corporation, to limit personal exposure to income tax. Can you explain that a little bit for me?  Also, if (as I anticipate to do) I form the C corp, are you available as a CPA for my company? And if so, at what cost?

Thanks for the information.

A:

The easiest way to bleed off income from your 1040 is to pay your corp for “Business Services” or “Management Services” and deduct it on the same schedule(s) where you are reporting your income (C, E, or F).

If all of your income is from a W-2, you will need to deduct the Services on Sch. A.

As you can see below, I am still not accepting new clients.

Good luck.  I hope this helps.

Kerry Kerstetter

 

TaxCoach Software: Finally! Plain-English Tax Planning That Builds Your Business!

 

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Five Seasons

Posted by taxguru on September 27, 2009

Family and friends of tax pros have long known that there are five seasons per year.

Posted in comix, TaxSeason | Comments Off on Five Seasons