Democrats May Eliminate IRS’s Use of Collection Agencies – An uncharacteristically taxpayer-friendly move for the Dems.

Home-Office Deductions Have a Steep Price Tag – What is often more important than the amount of the actual home office deduction is the fact that establishing one’s home as the primary business location allows otherwise nondeductible commuting miles to qualify as fully deductible business miles.  I have frequently seen this extra mileage deduction be huge compared to the home office deduction itself. 

Putting Your Mortgage in Reverse To Supplement Retirement Funds – Real estate equity is just as valuable for retirement living as is cash in the bank.  This is frequently overlooked when evaluating how much people have “saved” for their retirement years.

Firms outsource CPA tasks to keep up with high demand

Timing Your RMDs and Saving Taxes With NUA

Woman Arrested for Not-so-Realistic Counterfeit Money – Wow.  Tripped up by an eagle eyed clerk who knew that money is actually printed on both sides.  (Thanks to reader Vincent Lyon for passing this along.)

Pain at the Pump Easing, So Why Am I Still Paying Surcharges? – Just as with “temporary taxes,” fuel surcharges may take a while to disappear.

Even though few clients do it, I’ve always advised that they keep track of their actual vehicle expenses so that we can compare those with what we come up with via the IRS’s standard rate method. Since the IRS standard rate has to apply to pretty much every kind of vehicle regardless of the number of miles driven per year, it can’t possibly be an accurate representation for everyone.

I came across this interesting little chart of per mile vehicle costs in the most recent TaxCoach report, which they assembled from AAA data.

401(k) fees can chomp a hole in your savings – From USA Today.

Bush to Dems: “Read My Lips, No New Taxes” – Here we go again. That worked out so well for Bush 41 in 1992. (This is obviously a parody from Scott Ott; but his satires have frequently come true.)

Courtesy of FreakingNews

It’s been a while since I’ve come across a new version of George Harrison’s classic TaxMan song.

I just stumbled across this one by Tony Levin:

TaxManTonyLevin.mp3

It’s from the new heavy metal Beatles tribute album.

http://rcm.amazon.com/e/cm?t=taxfreeexchacorp&o=1&p=8&l=as1&asins=B000ICMF58&fc1=000000&IS2=1&lt1=_blank&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr

IRS has officially acknowledged the accuracy of the 2007 tax brackets, standard deductions and personal exemptions which CCH calculated almost two months ago – for those folks who don’t trust the numbers until IRS blesses them.

The weak link in the reliability of all retirement plans has always been the unknown variable of exactly how long the money has to last.

(Click on image for full size)

Some interesting items in the November FTB Newsletter:

Real estate withholding law changes for 2007

Disclosure of list of corporations under audit – Whoops! So much for confidentiality.

Q:

Subject: Completing a Form 4797

 

Dear KMK:

 

Sold a business as a sole proprietor.  Asset allocation (Form 8594) goes as follows:  Class IV Assets:  $5500 (stock in trade) ; Class V Assets (Equipment)  $8400; Class VI/VII Assets (Goodwill and non-compete) $ 146,100.  Where do these numbers appear on Form 4797? ( and if they _all_ don’t appear, then the numbers on 4797 won’t “foot” to the total selling price.  Is this OK??)

 

Thanks

A:

If you check over the Q&A posts on my blog, you will see that I do not give people instructions on how to prepare their own tax return schedules, especially for something as complicated as the sale of a business. 

You should have been working with a professional tax advisor while your business was in operation and most definitely need to have one prepare the 1040 for the year of the business sale.  It is not as straight forward as you seem to believe.  Each component of the sales price needs to be reported in a special way, not all of them on the 4797. 

If you don’t already know of a good tax pro to work with, you should check out my tips on how to select the right tax preparer for you. 

Unfortunately, we don’t have anyone specific to whom we could refer you. I did recently post some names and links for some like-minded tax pros around the country. 

I wish I could be of more assistance; and I wish you the best of luck.  

Kerry Kerstetter