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*** Ask TaxMama Volume 5, Issue #221 August 8h, 2003 ***
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Deadlines Looming - http://taxmama.com/taxcalendar.html

August 15,2003 - Personal Tax Returns Due (1st extension ends)
September 15, 2003 Corporate Returns Due (no extensions)
Sales Tax Holidays - http://taxmama.com/resources/shopbook.html XXXX
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Dear Family,

We're getting down to the wire. The first extension on personal taxes
will end net Friday. One week left to finish - or give up and go for
the next extension.
http://www.taxmama.com/Articles-cur/filingextips.html

My goal this year was to finish EVERY tax return in my office by
August 15th. To have nothing more on extension at all.

Well, that's simply not going to happen. I was already behind before
the accident, and now I'm even 'behinder'. (Thank you Lewis Carroll.)

Most of another day precious day was consumed yesterday, as we went
out looking at new vehicles. Yet, we must, and we must have fun
while we're at it. Those salesmen will surely never forget us.
And there's one we won't forget. Have you ever met anyone real
shipwreck survivors? Well, this fellow had quite a tale to tell -
with laminated pages from the newspaper preserving his story.
But, that's another story, for another day.

I really want to thank ALL of you who've been calling and writing
about my sweet spouse. He's doing much better. A couple of days ago,
he actually left the house without me, for the first time in weeks.

And we are SOOOOOOOO grateful that our very capable Governor Gray
Davis finally signed the budget. Maybe they will start issuing
disability checks again. And money to hospitals, retirement facilities,
childrens' programs, and other places where people haven't been
getting their paychecks. (This always confuses me. Isn't
it the job of the state legistlature and governor to pass a budget
every year? And don't they know when it's due? At the same time
every year. So why can't California EVER get a budget passed in time?)

Got an opinion? Tell the world!
http://www.cafeshops.com/taxmama/142076

(Oh, you'll also find links to the current status of the candidate
filings and the election status.)

Been a loooong day. Time to take a break.

Have a wonderful weekend.

Eva Rosenberg, EA
Your TaxMama is watching...out for you.

P.S. Just starting to build the TaxMama library
http://taxmama.com/resources/shopbook.html

P.S.S. NEW!!!!! TaxMama's New, Improved GiftShop
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P.S.P.S. Doing your tax returns online?
http://taxmama.com/Articles/FilingOnline.html

**************************************************
To comments on any articles in this issue, please,
don't send me back the whole issue. Send a note to
mailto:taxmama@taxmama.com?subject=AskTaxMamaComment

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Selling on eBay
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From: Dallas, TX

Dear TaxMama,

I sold a bunch of old stuff on eBay this year - an old trumpet, music
and concert memorabilia, old clothes. Just cleaning out our closets,
but I was amazed at how much we've made so far!

Do we have to pay taxes on this income?

I've heard different things - the most common being that "garage sale"
profits don't need to be reported. Is this true?

Thanks for any advice you can give.

Melissa

Hi Melissa,

Isn't it wonderful how much you can earn without having people trampling
your lawn and sneaking peeks of your home?

Actually, we had a discussion about whether or not eBay income was reportable,
initiated by an instructor, who teaching her students about eBay.

Here's how it went:
http://www.taxmama.com/AskTaxMama/194/ebay.html

And a Tax Pro piped in
http://www.taxmama.com/AskTaxMama/195/ebay.html

So read on, and draw your own conclusions.

Best Wishes,

Eva Rosenberg

Learn how to sell on eBay or operate your own auction site in
TaxMama's Secrets - one of the 10 businesses http://secrets.taxmama.com/

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State Tax Goes to?
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From: Waltham, MA

Dear TaxMama,

We have an employee who is currently living and working in MA.
She is soon moving to florida and would like to continue to work
for our company out of our Florida office (still reporting to her
same manager in MA).

This was agreed to by management here.

My question is, should she still be taxed in MA because it was her
idea and her benefit to move to FL while continuing to work for us?

The company did not ask her to move, we simply allowed her to do so).

Thank you

Steve

Hi Steve,

That's a wonderful arrangement.

No, she wouldn't be taxed in MA.

You may want to check into the rules for Florida payrolls.
While they don't have income taxes, they do have unemployment
and/or disability, if I am not mistaken. No doubt there will also
be some workers comp requirement. So check to see if your carrier
will cover her there.
http://sun6.dms.state.fl.us/dor/businesses/newbusiness_startup.html

This may be an added bookkeeping burden for you. Not too much.
Perhaps you could work out some adjustment in her compensation.
Do NOT 'charge' her for the costs. That will come back and bite you.

She will be saving a fortune by not having to pay Massachussetts
taxes....or having to look for a new job...or being unemployed.

Incidentally, the working at home for your own convenience vs the
employers convenience primarily applies if the employer is within
driving distance and provides a working space on their premises.

In this case, she will be in another state entirely. So, she'll be
able to take advantage of office in home benefits and confusions
to her heart's content.

Good for you - making sensible flexible arrangements for a valuable
employee. It's saving you a fortune in recruiting and training
costs, too.

Best wishes

Eva Rosenberg, MBA, EA
Want LIVE Advice from TaxMama?
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-----------------------
My Kid's Too Old?
-----------------------

From: Heitt, Texas

Dear TaxMama,

I would like to know if I can hold my son as a dependant for another
year. I am not qualified for a tax rebate because he is too old.

I was wondering if in 2003 tax year I can maintain his dependancy.
His Birthdate is September 20, 1986.

Thank you.

Queenie

Hi Queenie,

If you supported your son and he lived with you, you
probably get to claim him.

Don't worry, there are different standards for dependents, in
general, than there are for the child credits. That money is
just to help you support young children.

So relax, you still get to be head of household. At least until
he gets out of college.

Oh sure, it's gets more complicated than that. But it probably
doesn't apply to you. Just to be sure, please feel free to do
a search of TaxMama.com for the words:

dependent
who gets
exemption

Best wishes

Eva Rosenberg, MBA, EA
You are invited to subscribe to these useful publications - FREE!
http://taxmama.com/subscribe/ Where taxes are fun!
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On Consignment
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From: Clarence Center, NY

Dear TaxMama,

I am in the process of opening a consignment shop.
Do I need to pay taxes on the total amount of sales
or just my revenue?

Thank you for your time, I greatly appreciate it!!!!

Thank you,

Peggy

Hi Peggy

You're going to have different kinds of taxes to deal with.

When it comes to sales taxes, yes, you will have to pay tax on
ALL the sales. So, you'll collect the sales taxes from customers
on your inventory and the items on consignment.

When it comes to City taxes, if any, you'll need to read their
rules. (Here in Los Angeles, we have to pay city business taxes
on our SALES, not our profits. Obnoxious! Even people with
losses have to pay a fortune.)

Do some wandering around the NY State tax site and see if you
can find any references to your city's rules.
http://www.tax.state.ny.us/Forms/

When it comes to IRS and State Income Taxes, you'll only pay tax
on your profits.

First, you'll start with ALL the sales.

Then, as Cost of Goods Sold, you'll deduct your inventory costs
and your payments for consignment merchandise. (See, you're really
buying inventory. You're just paying for it after you sell it,
instead of when you get it delivered.)

After deducting those costs, you get to deduct all your other
business expenses.

If you want some direction in all of this, there's a really good
book out by Jan Zobel, Minding Her Own Business:
The Self-Employed Woman's Guide to Taxes and Recordkeeping
http://www.amazon.com/exec/obidos/ASIN/1580622003/noref%3DmywishlistA/

It would be helpful if you had a good Tax Pro in your corner. If you
don't know of someone, and need one, I could ask my
Tax Pros to see who's in NY.

Best wishes

Eva Rosenberg, MBA, EA
You are invited to subscribe to these useful publications - FREE!
http://taxmama.com/subscribe/ Where taxes are fun!
http://www.helpdeskwebreview.com/ Ask us Anything!

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Because We Care
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This IS the time of year to remember seniors, pets and the less
privileged. If you have some money you're planning on donating,
please consider A.N.G.E.L.S. DAY and American Education.
Small donations are welcome - they add up!

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MONEY FUNNIES AND INSPIRATION
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All Wet

An old farmer in Georgia had owned a large farm for several years.
He had a large pond in the back, fixed up nice; picnic tables,
horseshoe courts, basketball court, etc. The pond was properly
shaped and fixed up for swimming when it was built.

One evening the old farmer decided to go down to the pond, as he
hadn't been there for a while, and look it over. As he neared the
pond, he heard voices shouting and laughing with glee. Coming closer,
he saw it was a bunch of young women skinny dipping in his pond.

He made the women aware of his presence and they all went to the
deep end of the pond.

One of the women shouted to him, "We're not coming out until you leave!"

The old man replied, "I didn't come down here to watch you ladies swim
naked or make you get out of the pond naked."

"I'm here to feed the alligator."

-----

Courtesy of Ziva Herzog

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IRS & OTHER TAX NEWS
-----------------------------------------------------------------

Courtesy of the National Association of Enrolled Agents - www.naea.org

NEW YORK CITY . . . NJSEA President Marty Stein, EA reports that the New
York City Department of Finance is offering an amnesty for New York City
business and excise taxes from October 20 through January 23, 2004.

Under the amnesty program, the Department of Finance will waive penalties
and reduce interest for qualifying taxpayers. The amnesty, which is
generally available for tax years or periods ending on or before
December 31, 2001, includes the General Corporation Tax, the
Unincorporated Business Tax, the Commercial Rent Tax and several other
taxes. The amnesty does not include real estate, personal income or
sales and use taxes.
For more information, go to: http://www.nyc.gov/html/dof/html/txamn.html.

VIRGINIA . . . NAEA member Jim Yule, EA reports: The State of Virginia is
holding a tax amnesty program commencing Sept 2nd and ending Nov 3rd.
Eligible clients who pay their tax liability in full for any prior taxes
(does not included 2002 returns) will have all penalties abated and 1/2
of the accrued interest. Check out www.vataxamnesty.com for details.

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ISSN 15320790 © copyright, Eva Rosenberg, 1999 - 2003
Written (e-mail) permission is required to copy or redistribute this
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