http://www.asktaxguru.com Ask TaxGuru a free online Tax help and support community, with helpful features such as Tax tips, Tax calendar, Tax calculators, free downloads, and resources en Fri, 20 Nov 2009 22:12:25 GMT vBulletin 60 http://www.asktaxguru.com/images/monkeybatter/misc/rss.jpg http://www.asktaxguru.com http://www.asktaxguru.com/2424-filing-receive-overpayment-past-income-tax-after.html Fri, 20 Nov 2009 19:20:03 GMT I am confused as to which form to use for this scenario. In FY 2007, corporation filed Form 1120 and paid $1286 in fed income tax (based on $8576 in taxable income). Subsequently, in 2008, received IRS approval for 501c3 status with effective date back in June 2006. So, I want to file to get the $1286 in income tax paid for FY 2007 back b/c now considered tax-exempt for FY 2007 based on effective date of 501c3 approval. I've looked at Form 1120x (Amended US Corp Income Tax Return), but can't figure out how to fill in the numbers to make it work - I simply want to state that we overpaid by $1286. Since we also should not have filed a 1120 in the first place as a 501c3 org, it seems like 1120x doesn't anticipate this scenario. An local IRS employee told us to use Form 843 (Claim for Refund), but in the instructions, 843 states to NOT use 843 to request a refund of income tax, which is essentially what I'm trying to do. We are made up of volunteers, so really want to avoid hiring an outside accountant for what should be a fairly straightforward request to IRS. Please help. ]]> Filing Requirements pt95 http://www.asktaxguru.com/2424-filing-receive-overpayment-past-income-tax-after.html http://www.asktaxguru.com/2423-retained-earnings.html Fri, 20 Nov 2009 16:12:26 GMT We are a small C corp with sales less then 4 million I have 2 questions

1. Are we able to use the "CASH" method for accounting for our corporate taxes

2. It has been advised to us to begin to set up a retained earnings account and deposit 5% of sales to this account for emergencys and small oppurtuities for future expansion.

Will we have to pay corporate taxes on this account or does the IRS allow us to keep a certain amount in the bank

We have not paid any dividends to date

Bob ]]> C-Corporation rdknight http://www.asktaxguru.com/2423-retained-earnings.html http://www.asktaxguru.com/2422-filing-non-profit-profit-federal-tax-return.html Thu, 19 Nov 2009 17:54:45 GMT A Condo Homeowners Association organized as a non-profit corporation in North Carolina chooses to file a For-Profit Federal Tax Return. The HOA operates on a Fund accounting basis with an operating fund and a capital fund. The HOA has net loss carryovers from prior years. What factors would favor filing a for-profit return? Other than avoiding the disclosure and public inspection requirements of Form 990, what are the advantages to the organization of choosing this form of tax return? Does it make any difference? The taxable income is interest. The annual financial statements are audited by a CPA. A Condo Homeowners Association organized as a non-profit corporation in North Carolina chooses to file a For-Profit Federal Tax Return. The HOA operates on a Fund accounting basis with an operating fund and a capital fund. The HOA has net loss carryovers from prior years. What factors would favor filing a for-profit return? Other than avoiding the disclosure and public inspection requirements of Form 990, what are the advantages to the organization of choosing this form of tax return? Does it make any difference? The taxable income is interest. The annual financial statements are audited by a CPA. ]]> Filing Requirements CondoHOA http://www.asktaxguru.com/2422-filing-non-profit-profit-federal-tax-return.html http://www.asktaxguru.com/2421-withholding-on-lottery-income.html Thu, 19 Nov 2009 16:11:24 GMT A tax-exempt organization won a large prize in a lottery. How do they avoid the automatic withholding of tax on their winnings? A tax-exempt organization won a large prize in a lottery. How do they avoid the automatic withholding of tax on their winnings? ]]> Income schachnera@hotmail.com http://www.asktaxguru.com/2421-withholding-on-lottery-income.html http://www.asktaxguru.com/2420-operate-part-time-llc-and-receive-unemployment.html Tue, 17 Nov 2009 05:06:42 GMT First, sorry for the long post, but I just want to be as clear as possible.

I am really confused about an unemployment benefits issue after talking with a friend and he has me freaked out. Here is the situation and maybe you can shed some light for me, and potentially others with a similar situation. But my friend has me thinking that I have potentially done something illegal and I have no idea what he is talking about, and need some advice.

From Mar 08 - Aug 08 I was unemployed. I left my employer, I was not fired. I left to try other things, but did not have a job lined up. I took a part time job (30 hours a week) in Aug 08. During that time I also had a sole proprietorship doing language tutoring on the side. In January 09, I dropped the sole proprietorship and started an LLC for the language tutoring just to protect me against any potential liability. I'm working a few hours a week with this LLC, but it's not generating much revenue.

At the end of Jan 09, the company that I work part time for (30 hours a week) lays off all staff because it shuts down the operation. I lose my part time job. In Feb 09, I naturally apply for unemployment because I was laid off due to no fault of my own. I have never applied for unemployment before, so I'm new to it. I give all accurate and truthful data on the application and on the phone interview ask a bunch of questions and make it clear to interviewer that I am constantly looking for part time work as a sole proprietor, and soon to be an approved LLC, as a tutor, but that I am still looking for full time work (which I definitely was: I was on career builder and even a paid membership to ladders.com). During the interview, I lay it out all on the table, make sure she knows that I was not laid off from my previous employer that I left in Mar 08, but that clearly I was laid off by the more recent part time employer in Jan 09. She approves my benefits, so I'm confidant that I did everything by the book. I start receiving unemployment stubs in the mail, and I am extremely diligent about reporting ALL earnings from the tutoring LLC on the form, and list MY LLC NAME and my own personal address under where you are supposed to put part time employer info, so its pretty clear that I am trying to find part time work through my LLC. Any money I do receive from unemployment is reduced by the amounts I report.

In September I stopped sending in the unemployment stubs and stop receiving unemployment because I decide to go full steam ahead on this language tutoring thing, and actually spend all of my time trying to develop it into a full time thing, and I stop looking for a full time job because I have had absolutely no luck at all.

I then talk to my friend and he says it was "illegal" to collect unemployment while also operating an LLC. I almost threw up. Did I do something wrong? Is what I did not legit? I reported all earnings, the interviewer got all correct information, and approved me. Am I still at fault for something? I'm totally confused and worried, and need advice. I don't want to get in any trouble, and I think the unemployment I received over those 8 or 9 months only amounted to probably like $7k or so because I was earning a decent amount from the LLC doing part time evening work, but other months I didn't earn a dime.

Any advice would be helpful. I'm extremely confused and worried and just want to do everything by the book. If I somehow did something wrong, I would be more than willing to pay back the unemployment I received to make things right, I have enough savings to cover it. SO CONFUSED RIGHT NOW! Sorry for the long post. ]]> Limited Liability Company LLCStartUpGuy http://www.asktaxguru.com/2420-operate-part-time-llc-and-receive-unemployment.html http://www.asktaxguru.com/2419-how-to-fill-out-self-employed-taxes.html Sat, 14 Nov 2009 10:34:55 GMT I live in Pennsylvania, USA and I like to start a little home business. First I'm in the process of trying to figure some things out before I jump in and sell my crafts. The one thing that no one can give me an answer to is how would I go about filling out taxes for being self employed. I tried Googling though I'm not getting much of an answer, though to be honest I've never been good with searching. ]]> Estimated Taxes Viviangpinto http://www.asktaxguru.com/2419-how-to-fill-out-self-employed-taxes.html http://www.asktaxguru.com/2418-amendments.html Sat, 14 Nov 2009 04:10:38 GMT When I filed this year my son had not received his disability he was approved today can I still amend my taxes this year? He lives at home and is our dependent but he had not received an award letter then? He is 20 yrs old When I filed this year my son had not received his disability he was approved today can I still amend my taxes this year? He lives at home and is our dependent but he had not received an award letter then? He is 20 yrs old ]]> Filing Requirements carhartwoman http://www.asktaxguru.com/2418-amendments.html http://www.asktaxguru.com/2417-partnership-llc-startup-costs-no-revenue-yet.html Fri, 13 Nov 2009 12:51:22 GMT Is it possible to deduct misc. startup expenses, organizational costs, and fixed asset depreciation for 2009 tax return if no revenue is expected until 2010? Will this be a red flag? Is it possible to deduct misc. startup expenses, organizational costs, and fixed asset depreciation for 2009 tax return if no revenue is expected until 2010? Will this be a red flag? ]]> Limited Liability Company mrmtax http://www.asktaxguru.com/2417-partnership-llc-startup-costs-no-revenue-yet.html http://www.asktaxguru.com/2416-how-long-do-i-have-to-file.html Thu, 12 Nov 2009 22:28:52 GMT Hello,
I live in Calif, and work as a contractor. I recently was sent a notice from the state that I needed to file my 2006 return. They then sent me a notice to pay where they figured out my deductions and such, and now they say I owe and need to pay. I thought I had 3 years to file! That leaves me until the end of the year, doesn't it? Any tips? I've been on hold for 30 or so minutes with their "help line". :confused: ]]> Income Revenue source http://www.asktaxguru.com/2416-how-long-do-i-have-to-file.html http://www.asktaxguru.com/2415-contractor-default-on-unsecured-loan-for-land.html Thu, 12 Nov 2009 16:14:39 GMT I owned a piece of vacant land as an investment. I recently sold it to a contractor/builder & former friend who's company issued me an unsecured Note (I know, stupid!) for the purchase price. The Note was to come due in one year or when he completed & sold the house he was building on the land. Along comes the meltdown of 2008/2009 and the contractor cannot meet his obligations. The house he's building on what used to be my lot is now being foreclosed upon. He has said he cannot meet his obligations and cannot pay me for the land. I filed a judgment against his company, however hold out NO hope of collecting. A couple of questions:

1. Is this a non-business bad debt or a business bad debt?
2. How much can I deduct as the loss?
a. Amount I originally paid for the land many years ago.
b. Amount land was sold to him for -- I have not paid tax on the gain from the sale as it was all this year.
3. Can I include the cost of filing the judgment in the basis/amount of the loss?

Thanks! ]]> Miscellaneous rleeann http://www.asktaxguru.com/2415-contractor-default-on-unsecured-loan-for-land.html