Under the new health care bill – did you know that all real estate transactions are now subject to a 3.8% Sales Tax? We do need to note here that most sellers can exclude up to $250,000/$500,ooo in gains from this tax. The bulk of these new taxes don’t kick in until 2013.
This new law does contain a bunch of new taxes. The 3.8% tax applies to ALL investment income, including interest, dividents, and other capital gains, and even rents, royalties, and annuities. It might be a good idea to come in and talk to the tax man before all of these new taxes start kicking in.
Oh, you weren’t aware this was in the Healthcare bill? Guess what, you aren’t alone. There are more than a few congressmen that aren’t aware of it either. AND, there are a few other surprises lurking. ….Stay tuned.
Like the aftermath of Hurricane Katrina, oil spill victims are about to get kicked by the IRS while they are down.
According to a recent Associated Press report, payments by British Petroleum to oil spill victims will be taxed as regular income.
The same report quoted several Gulf Coast residents as saying that the money has been entirely spent to make house payments and keep food on the table. They are understandably angry that they will be billed by the IRS for what little help has arrived.
After Katrina, many New Orleans residents found that the shortage of carpenters made rebuilding their homes within arbitrary IRS time deadlines impossible.
To wait meant that insurance company payments would count as taxable income and a lot of people chose to rebuild in other cities where carpenters and homebuilders were not in such short supply. It hurt New Orleans and hurt our citizens.
This is a form reporting cancellation of debt. Let’s say that you stopped paying on one of your credit cards. The company may decide the debt is uncollectible and write it off. They can then send you a form 1099-C.
The amount of this written-off debt must then be reported on your tax return. This cancelled debt is “imputed” to you as income.
You will pay income tax on the amount reported on the form 1099-C. For example, you have a 1099-C for $10,000. If you are in a 25% income tax bracket, then this imputed income will cost you an additional $2,500 in income tax.
An Infowars.com post on August 14 explains that the US equities market has triggered a confirmed technical indicator known as the “Hindenburg Omen.” This omen, as you may have guessed, suggests that a stock market crash is on the way. This is the most feared indicator for Wall Street bulls. However, when the infamous omen starts showing itself two times in two days, that’s when things can get really scary.
Thursday, August 12, was indeed a Hindenburg Omen; 100% confirmed by technical analysts worldwide. News stories in English, French, German, Italian, and Portuguese have all proclaiming the arrival of the dreaded Omen. Suffice to say — it’s a big deal covered by every major financial outlet, and nobody in the industry doubts its significance.
Experts say this will probably happen within 40 days of the Omen taking place.
Well, it depends. The general rule on this is that you need to make a profit in 3 out of 5 consecutive years ending with the year in question, unless the IRS proves otherwise. There are several exceptions to this rule, such as some farming and livestock activities. There is a special election form that can be filed in order to allow you more time to show a profit.
Various other factors go into determining whether you are engaged in a legitimate business endeavor. These are things such as the amount of time devoted to the business, having a business plan, having a marketing plan, and your overall income relative to the scale of the business. Confused yet?
We have had clients over the years who have legitimately deducted golfing, fishing, and other things as business expense.
The Florida Department of Revenue is beginning to ramp up its collection and enforcement activities these days. They have changed their phone banks and forms to resemble those of the IRS, complete with the “Press 1 For English” phone prompt.
They will mail you a notice of audit. You can either represent yourself or have a professional represent you in the audit. They will then call you and schedule to meet at your place of business. They will be looking ways to generate more revenue for the state. The main issues seem to be workman’s comp insurance and unemployment tax (classifying employees as independent contractors).
As with all audits, make sure you know what and what not to reveal voluntarily. It might be worth paying a small fee to have a professional represent you.
Yes, sometimes. This is called an Offer In Compromise (OIC). Be careful with these late-night commercials making these outrageous claims. These companies typically charge several thousand dollars up front, then assign your account to an employee who is only authorized to discuss the account, but not represent you before the IRS.
Make sure anyone helping you with an OIC is authorized to represent you, such as an Enrolled Agent or attorney. This is a slow and complicated process. We often help clients with this sort of issue.
Depending on the amount of back taxes, your income, and your assets, you may be able to negotiate a very favorable settlement. This can be quite advantageous in certain cases.
