The income tax thread...

[Owensdad]

Tax season is right around the corner.

If you have hypothetical/general questions with regard to income tax, property transactions, tax procedure, employment taxes, business and investment interests, gift and estate tax, this is the place to ask*.

*Major disclaimer: nothing in this thread is meant as tax advice within the meaning of Circular 230 and nothing in this thread is asserted to satisfy the "more likely than not" standard required to avoid certain civil penalties for non-compliance.

Your individual facts and circumstances are controlling as to how the tax laws will be applied to your specific situation and are, therefore, beyond the scope of this thread.

Mods: if this is not kosher relative to the TOS please delete. I mean only to help out fellow BARFers if I can.

 

[afm199]

What is the 'More likely than not" standard? :laughing

 

[Owensdad]

Good question. It's the standard that must be met to avoid penalities if the IRS challenges a position you maintain and the Service prevails.

It can be avoided by disclosing the position on Form 8275/8275 R (the R form is for disclosing a position that is contrary to a Treasury Regulation).

 

[mikev]

pfft. This thread isn't even needed. The tax code is easy.

Oh wait :|

 

[mercurial]

Can you clarify the position of the IRS on tax deductability of charitable donations to organizations that are based in foreign countries?

 

[SteelerFanatic]

Can you clarify the position of the IRS on tax deductability of charitable donations to organizations that are based in foreign countries?

No, you can't write of the money you send to hamas. :|

 

[mercurial]

I'm trying to figure out if you are trying to be cute or just obnoxious. This is the second off the wall remark in so many days you've made about my posts.

 

[SteelerFanatic]

I'm trying to figure out if you are trying to be cute or just obnoxious. This is the second off the wall remark in so many days you've made about my posts.

Well, don't take it personal, I don't often look at the poster as I do the content. Also, there is some truth that you can't write off donations to hamas, whether or not that was the basis of your question.

Not sure it was really an off-the-wall comment though... doesn't it truly answer the content of your question? You didn't list a specific international charity organization, but I listed a specific one you couldn't write-off donations too?

Was there some level of humor/sarcasm intended? Of course. No one expects you (or anyone on this forum) to be supporting hamas.

 

[Dandelion]

PM'd

 

[Owensdad]

PM'd

PM replied, you didn't mention your filing status so I showed the calc for single and just posted the number for married filing joint. I also made some assumptions that I included.

For everyone's information the max SEP contribution for 2008 is $46,000.



Mercurial: no US affiliate? That would make it easy. In general, you can make a deductible contribution of up to 50% of your AGI in any given year for most typs of orgs. You must itemize.

As for a pure foreign entity it's a great question. I need to look that one up. I may need you to PM some details about the organization.

 

[plumber]

Aren't the Section 179 deductions reverting back to lower levels?

 

[Owensdad]

Can you clarify the position of the IRS on tax deductability of charitable donations to organizations that are based in foreign countries?

The short answer is 'no'.

IRC §170(c)(2)(A) requires that the organization be created or organized in the United States and possessions, or under the laws of the United States and posessions.

Your best bet is to give to a US org that assists overseas orgs in the area you are interested in promoting.

 

[Owensdad]

Aren't the Section 179 deductions reverting back to lower levels?

Pretty much all of the Bush tax cuts "sunset" on 1/1/2011. Until then, most of the tax cuts get more generous because they were "phased in".

www.irs.gov snip:

2008 Changes
Increased Section 179 limits. The maximum section 179 deduction you can elect for qualified section 179 property you placed in service in tax years that begin in 2008, has increased to $250,000 ($285,000 for qualified enterprise zone property and qualified renewal community property). This limit is reduced by the amount by which the cost of section 179 property placed in service in the tax year exceeds $800,000. For qualified section 179 Gulf Opportunity (GO) Zone property placed in service in certain counties and parishes of the GO Zone, the maximum deduction is higher than the deduction for most section 179 property.

Not mentioned above is that an election to expense made under §179 cannot in any case create, or add, to a Net Operating Loss (NOL).

 

[plumber]

250k.......wow.....

 

[masameet]

Let's say a guy hasn't worked in several years and isn't earning money under the table either.

Why would the IRS insist he still file?

 

[Owensdad]

Let's say a guy hasn't worked in several years and isn't earning money under the table either.

Why would the IRS insist he still file?

If he has no income he is not required to file a return. He has to file a 2007 return to get a "stimulus" payment.

From www.irs.gov: You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive.

For example, a married couple both under age 65 generally is not required to file until their joint income reaches $17,500. However self-employed individuals generally must file a tax return if their net income from self employment was at least $400.

 

[Eric in Davis]

I'm single, no mortgage, and in the 28 % income tax bracket. How far should I bend over? :laughing

 

[Owensdad]

Unfortunately, as far as you can without hurting your back.:laughing :thumbup

 

[Abacinator]

I'm single, but cohabitate with a woman and together we have a 2 year old child. What credits/deductions are we eligible for?

 

[Owensdad]

I'm single, but cohabitate with a woman and together we have a 2 year old child. What credits/deductions are we eligible for?

Your child is an additional personal exemption ($3,400) for either you or the child's mother. You cannot "split" the exemption. Generally, whoever provides over 50% of the child's care claims the exemption.

You may also qualify for the child and dependent care credit. You must pay for daycare type arrangements so that you can work to claim the credit. You must have "earned" income. You must also file as Head of Household since you are not married.

For one child the maximum credit is $3,000. It cannot reduce your tax below zero (a nonrefundable credit) and it phases out as your AGI increases.