Posted by taxguru on November 20, 2008
Q:
Subject: C Corp fiscal tax year.
Hello Kerry,
I was interviewing an account for my taxes and he was telling me that the only choice for a C Corp fiscal year is either Oct. 1st or Jan. 1st. I could not find the info on the IRS web site and I knew you would know off the top of your head. Thanks for your time. I was wanting the July 1st to June 30th like you mention in some of your articles. Thanks for your time.
A:
A C corp can have a fiscal year ending at the end of any calendar month. I have some more info on fiscal years on my main website.
It looks like you need to find yourself a professional tax advisor who is a little more knowledgeable about such basic matters.
Consider yourself lucky that this person revealed his ignorance so early in your potential relationship.
Good luck.
Kerry Kerstetter
Posted in Uncategorized | Comments Off on Corp Fiscal Years
Posted by taxguru on November 20, 2008
Q:
Subject: 2008 section 179
We have a “C” corporation that has a fiscal year ending September 30th. If we purchase equipment between 10/01/08 and 12/31/08, can we still get the addition 179 expense deduction and bonus depreciation?
Regards,
A:
That specific provision is currently based on the calendar year of 2008, so any assets that you do place into service from 10/1/08 through 12/31/08 will qualify for that special bonus depreciation on the 1120 you file for the FYE 9/30/09.
Your professional tax preparer’s tax software should pick that up automatically. I know that my 2007 Lacerte software is automatically claiming the bonus depreciation on any asset that has a 2008 setup date.
There is also the possibility that the provision for the bonus depreciation will be extended for assets placed into service in 2009; but that will be up to our new rulers in 2009.
Good luck.
Kerry Kerstetter
Follow-Up:
Thank you very much .
Posted in 179 | Comments Off on 2008 Fixed Assets
Posted by taxguru on November 20, 2008
Since it is one of the largest potential deductions available on income tax returns, the Section 179 expensing election generates a lot of email from people who are confused about it. In the last few months, I have been receiving at least one each day, often from salespeople who are looking for ways to induce their customers to buy more products. These sales pitches often include a flyer or short article on the benefits of Section 179.
I am still plowing through a massive backlog of email, and I noticed one yesterday from a scientific equipment company promoting a free online seminar on December 2 presented by a CPA on what they call “Tax Code 179.” It appears to be open to anyone and aimed more for small business owners than for tax professionals. It doesn’t appear to qualify for CPE for tax pros; but it may still be useful for the newer ones.
I have no connection with any of the parties involved and don’t even know how I go on that particular mailing list. I am passing it along in the hope that some folks will check it out and not need to send me so many repetitive questions on the issues of Section 179. You can sign up for this webinar at Gerber Scientific Products’ website:
www.gspinc.com/taxcode179/
Posted in 179 | Comments Off on Section 179 Webinar
Posted by taxguru on November 17, 2008
Posted in comix, IRS | Comments Off on
Posted by taxguru on November 12, 2008
Posted in comix, TaxHikes | Comments Off on Bled taxes?
Posted by taxguru on November 12, 2008
Q:
Subject: any update on AMT for 2008?
Just trying to get a handle on what my liability will be. Last year we crept over the line and we subject to AMT for the first time. I suspect we will be again this year, but would like to get a better fix on how big it will be.
thx
A:
As part of the big bail-out bill that was passed last month, the AMT exemption amounts were increased for 2008 to:
$46,200 for people filing as Single or Head of Household
$69,960 for Married Filing Joint or Qualifying Widow
$34,975 for Married Filing Separate
As it stands now, these amounts will drop for 2009 to:
$33,750 for people filing as Single or Head of Household
$45,000 for Married Filing Joint or Qualifying Widow
$22,500 for Married Filing Separate
Whether those figures will be changed is completely up in the air now that we have an anti-success Socialist administration ready to take over control of the tax code next year.
You can download the complete 24+ page pdf summary of the latest tax bill from The TaxBook at:
www.thetaxbook.com/updates/thetaxauthority_update_service/pdf/bulletin/10-10-2008_update.pdf
Good luck. I hope this helps.
Kerry Kerstetter
Posted in AMT | Comments Off on 2008 AMT Exemptions
Posted by taxguru on November 12, 2008
Q:
Subject: Special Bonus Dep and Section 179
Hello:
I saw on your website that used vehicles qualify for section 179 deduction, but will a used vehicle qualify for the 50% special bonus depreciation allowed under the 2008 eco stimulus package…or does it have to be a new vehicle?
Thank you
A:
While Section 179 deductions have always been available for business equipment that had been previously owned by unrelated parties, one of the requirements for special first year bonus depreciation has always been that it was only available for the first user of that specific asset. So, a used vehicle will not qualify for the special bonus depreciation.
Your personal professional tax advisor should be able to give you more specific advice for your unique circumstances.
Good luck.
Kerry Kerstetter
Follow-Up:
Super. Great website. Thank you for your response and clarification. Best of luck to you!
Posted in 4562 | Comments Off on Bonus Depreciation – New or Used?
Posted by taxguru on November 9, 2008
Posted in comix, IRS | Comments Off on
Posted by taxguru on November 8, 2008
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Posted by taxguru on November 5, 2008
Taxes: A Fair Share for All – Jonah Goldberg looks at one of the idiotic oxymorons that I have always despised about the tax system in this country, the Progressive tax rate structure that is actually a counter-productive punishment and persecution of success. Considering that the root of “progressive” tax rates is 0Bambi’s spiritual mentor, Karl Marx, the chances of this going away any time soon are precisely zero. In fact, it will make the use of the income shifting and smoothing techniques I have been discussing for several decades even more worthwhile.
Posted in TaxHikes | Comments Off on
Tax Guru - Ker$tetter Letter 