Tax Guru – Ker$tetter Letter

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Archive for April 7th, 2010

Top Ten Thoughts That Go Through Every Accountant’s Mind On April 15th

Posted by taxguru on April 7, 2010

From the Late Show Archives, 4/7/10

10. “If I see one more tax return, i’m gonna jam a #2 pencil through my eye”

9. “I think my calculator is talking to me”

8.
“If I screw up, they go to jail, not me”

7.
“Why didn’t I become something exciting like a claims adjuster?”

6.
“Should I wear the navy blue suit or the navy blue suit?”

5.
“Get through today and then a 364-day weekend”

4.
“Who knew the bright-eyed little boy I once was would grow into such a bitter man with a soul crushing job”

3.
“Time to fake my death and move to the Cayman Islands”

2.
“Why did I waste time doing a stupid Top Ten at Letterman?”

1.
“This would be a lot easier if I was sober”

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TaxMan from Beatles tribute show…

Posted by taxguru on April 7, 2010

I recently came across this torrent of a Beatles tribute concert called A Walk Down Abbey Road, featuring Jack Bruce, Christopher Cross, Mark Farner, Todd Rundgren, Alan Parsons, Godfrey Townsend, Steve Murphy, John Beck.

This was part of a tour around the country in 2001 and 2002. In this particular show on 7/21/02, they played George Harrison’s TaxMan.
The full show is in the FLAC format and is 813 mb.
To save time and space, I created this MP3 version of just the TaxMan track, which is only 2.2 mb in size.

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S Corp Accounting

Posted by taxguru on April 7, 2010

Q:

Subject: S-Corp

Hi Kerry,
I just read your webpage on S-Corp vs C-Corp and was hoping you could help me with one problem I am having at work. I work for 2 partners, one owns 90% of the business & the other 10%. Each files a 1040 with their perspective S-Corp net profit. My question is if the they only distribute lets say 400K of a 600K taxable net profit and the remainder is in the bank account as operating capital, then when would they be able to distribute the remaining 200K they are being taxed for? Also is there an account I should open to keep track of there proportionate taxable income they are not receiving? Thanks for your help.

A:

Accounting for an S corp’s equity accounts is essentially the same as it is for a partnership. There should be a Capital account for each shareholder to keep a running tally of his/her capital contributions, capital withdrawals (aka Dividends), as well as annual shares of the net income or loss. This will enable you to see the amount of each owner’s equity that can be taken out tax free.

You should have the professional tax advisor who prepares the 1120S assist you in setting up your QuickBooks or other formal accounting system to be in sync with the tax returns.

Good luck. I hope this helps.

Kerry Kerstetter

Follow-Up:

Thanks for your help Kerry I do appreciate it.



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