-----------------------------------------------------------------
*** Ask TaxMama Volume 7, Issue #290 January 7, 2004 ***
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
-----------------------------------------------------------------
Deadlines LOOMING - http://taxmama.com/taxcalendar.html
01.15.2005 4th Estimated Payment for 2004 Due
01.15.2005 Employers Make monthly Payroll tax deposit
01.31.2005 Send W-2s/1099s to recipients
01.31.2005 File Quarterly/Annual Payroll/Sales Tax Returns
-----------------------------------------------------------------
-----------------------------------------------------------------
VISIT OUR NEW JOBS PAGES http://taxmama.careerbank.com/
Check out the 2004 Salary Survey results to see where you stand.
-----------------------------------------------------------------
Dear Family,
Welcome back to TaxMama's world of taxes.
It's time to get back to work, after a wonderful break!
If you're in California, drop what you're doing and
and click here. NOW!
http://www.microsoftcalsettlement.com/
Saturday is the filing deadline to claim your part
of the Microsoft lawsuit settlement in California.
You can get up to $100, even without receipts.
The lawsuit is about Microsoft overcharging for their
products - read more about it here.
http://www.pcworld.com/news/article/0,aid,119140,00.asp
If you're not sure if you've already filed a claim, you
have three options -
1) search your files
2) call the claims administrator and listen to a really,
really, long message before getting a person, at
1-800-960-5660
or 3) Just fill out another claim form.
I called them and they said you won't be penalized if
you file a claim twice - they'll just eliminate the
duplicate claim. You don't need to dig up receipts.
Just fill in the claim form - and send it in.
Now that I've given you a hundred bucks...
how about sharing it? With the tsunami victims?
You'll find a link to donate to Red Cross via Amazon.
They have assured me that all monies raised will go
to the fund. Click here: http://taxmama.com/
Oh, more good news. Ask TaxMama is now being carried
by WomensWallStreet.com, along with some really
campy columns, like Ask Jane Dough(TM) and others.
http://www.womenswallstreet.com/
They're free to join - even if you're a guy. You'll
love the variety of information and support they provide.
Meanwhile, I'll be updating the tax calendar this week.
http://taxmama.com/taxcalendar.html
It still has information up through Janaury 31, 2005.
And if you're looking for quick, current tax news -
CBS.MarketWatch.com has will be adding daily news.
http://cbs.marketwatch.com/pf/taxes/default.asp?id=5&siteid=mktw
And my column is back on a weekly schedule.
No doubt, you've already made and broken many of your
new year's resolutions. So I won't bother you with that
right now. Let me wait until you feel properly guilty
about blowing it. Then, then, I'll strike with new
resolutions that you may be able to keep.
Best wishes,
Eva Rosenberg, EA
Your TaxMama is watching...out for you.
P.S. THE BOOK is out
http://www.taxmama.com/AskTaxMama/book/
P.S.S. Drop by TaxMama's Shopping pages
http://taxmama.com/resources/shopping.html
P.P.S. TaxMama is starting to schedule speaking/teaching
engagements for next year. (Calendar is filling up)
http://www.speakermatch.com/showcase/speakerinfo.asp?id=-667529472
P.P.S. If you're using spam blocker software, please add
taxmama.com to your approved list. I don't have time
to keep responding to each request for authentication.
I get hundreds.
**************************************************
To comment 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
**************************************************
ADDRESS CHANGES - Please, do NOT send them to me to do.
There is a link at the bottom of this issue. Please click
on it and you will be able to make updates and changes
yourself. And faster.
**************************************************
-------==========**********O**********==========-------
In 2003, Americans OVERPAID their taxes by more than $500 MILLION!
Play a simple, two minute game and learn what tax professionals call
"the most overlooked tax deduction in America." ItsDeductible will put
$300 to $1200 back in your pocket -- guaranteed -- or your money back.
http://1deg.net/ht/id1/taxmama/
-------==========**********O**********==========--------
To establish the basis of your donated vehicles -
Or to research price quotes and vehicle information
use
EDMUNDS .com
http://www.jdoqocy.com/click-241922-10364151
-------==========**********O**********==========--------
-----------------------------------------------------------------
Radio Tour
-----------------------------------------------------------------
Tune in to Mike Kavanagh at WSB Radio in Atlanta, and on CNN.
You'll be hearing tax tips starting in January.
http://wsbradio.com/about_us/moneymattersshow.html
http://wsbradio.com/features/2004_tax_tips.html
Coming soon - weekly radio show in the MoneyRoom...stay tuned
-----------------------------------------------------------------
New IRS Balance Due Notices
-----------------------------------------------------------------
The question came up last week.
http://www.taxmama.com/AskTaxMama/288/article1.html
IRS flatly turned us down. Nope. If you didn't keep track
of the rebates you got. Or you looked it up on the IRS
site and got the wrong amount, which you entered on your
tax return - and now you owe IRS penalties for underpaying
your taxes in 2003 - well, you're stuck with those penalties.
See...I told you those rebates would cost!
-------==========**********O**********==========-------
Tax-Free Rewards - Frequent Flier Miles
Visit Tim Winship's FrequentFlier.com to get lots of them
http://frequentflier.com/cgi-local/pl.cgi?sub
-------==========**********O**********==========
-----------------------------------------------------------------
Tsunami Soap Box (Feel free to skip this)
-----------------------------------------------------------------
Driving home from our holidays, we were stunned to learn
of the devasatation this tsunami caused in Southern Asia.
http://www.mapsofworld.com/world-news/clickable-south-asia-map.html
The human toll...well, it's just overwhelming.
Of course, the loss of homes, properties, towns,
livelihoods,...all gone.
And what do Americans do? We jump right in and send
help, money, supplies, rescue crew and equipment, and
dogs, even our citizens, to help out.
Then, Norwegian, Jan Egeland, undersecretary-general for
humanitarian affairs and emergency relief says we're
stingy.
How DARE he?!
Although America and Americans are under no obligation
to help out anywhere on the planet (HECK, that's what
the United Nations is supposed to be doing.), we are
generally the first ones to step up to the plate and
offer all kinds of assistance. Even before we're asked.
Excuse me - but how much help did Norway or the United
Nations provide to the U.S. when we faced a series of
devastating hurricanes on our eastern and southern
shores last year?
I didn't hear Jan Egeland asking anyone in the world
to help us? Which countries came to our aid to help
clean up, to provide housing and food for our victims?
Oh, and was our devasatation somewhat less than it
could have been because we have building codes and
standards to protect our country's residents from harm?
How many of the countries in the affected areas have
taken the time and responsibility to set up adequate
building codes and barriers to the kinds of disasters
they tend to have? Sure, that costs money and makes
the administrators of those regulations unpopular with
the people - but it does protect them from major harm.
Ironically, at the same time that Egeland so graciously
called us stingy - Six U.S. Air Force C-130 cargo planes,
loaded with relief supplies, were on standby in Japan
awaiting orders to fly to Thailand.
Egeland asked for $977 million in aid. Several countries
are stepping up to provide it - Australia, Germany, the
US....but do you see Norway on the list? Can't he get his
own country to contribute?
http://www.cnn.com/2005/WORLD/asiapcf/01/05/asia.tsunami/
I know, you want to help. Here are agencies you can
contact. Please, please, do NOT simply send money to
anyone sending you e-mails. Many of those are preying
on your generosity. YOU contact the organizations you
want to fund.
http://www.cnn.com/2004/WORLD/asiapcf/12/28/tsunami.aidsites/index.html
If you have direct contact with family and friends
there to whom you're sending money - that's wonderful
of you. At least you know the people who need it will
get it. But don't expect to get a donation for those
gifts.
[If you want to read a witty and clever commentary
on the subject, read Mark Steyn in the Washington Times
http://washingtontimes.com/commentary/msteyn.htm ]
================================================
Hey! Look at your teeth. Come on - get them cleaned.
http://www.qksrv.net/click-241922-8219039
=================================================
-----------------------------------------------------------------
Tax-Free Exchange
-----------------------------------------------------------------
From: San Jacinto, CA
Dear TaxMama,
Happy New Year!
My friends RAVE about your generous service to
all the perplexed taxpayers!!!
I have a rental house that I will be selling in '05
using a 1031 Exchange to purchase another rental house
which has a somewhat greater value.
I plan on renting the newly acquired property out for
at least 3 years, afterwhich I will be retiring and
would like to move into the property.
Would the IRS be OK with this or would I be in violation
of the 1031 Exchange Rules?
Gratefully,
:-)Beverly
<TaxMama Replies>
Hi Beverly,
I am SO glad you asked me about this.
If you wait 3 years, you shouldn't have any
problem with the 1031 exchange that you used to get the new property.
Since so many people try to do some variation on this,
IRS finally issued rules about one part of this issue.
The rules they issued relate to selling that house,
once you've converted it to a personal residence.
So, once you've turn it into your home, three years
after you bought it - you will have to live in it, as your
principal residence for at least 5 years to get the
benefit of not paying taxes on the gain when you sell it.
The personal residence exclusion ($250,000
for you, $500,000 for couples) is used for the profit you
make on the sale of this new home, when you sell it.
Remember, the profit will be based on your purchase
cost of the house you exchanged, plus your buying
and selling costs. So, your gain may be more than
you realize.
You'll also end up paying tax on any depreciation you
will have taken while it was a rental property.
But, if you plan to live in it long-term....worry about all
those things later.
Good luck with the exchange - and keep ALL the
escrow closing documents. ALSO, be sure to keep
all the purchase docs (and improvements) on the
house you're trading away.
Is this soooo much more than you wanted to know?
Sorry....each word leads to a new issue.
Best wishes,
Eva Rosenberg, MBA, EA
http://www.TaxMama.com
The BOOK is out!
Small Business Taxes Made Easy - read all about it!
http://www.taxmama.com/AskTaxMama/book/
----------------------------------------------------------------
Deduct Now, Pay Later
----------------------------------------------------------------
From: Trenton, NJ
Dear TaxMama,
If a small subchapter S company paid its employees' December
salaries on 12/31/04 and will pay payroll taxes on 1/15/05
(they are a monthy depositor), should these payments be
credited in 2004 or 2005 W-2s? (I want to credit it in 2004).
Thanks for your help,
Victoria
<TaxMama Replies>
Hi Victoria,
Thanks for the hint. I always try to give you
the answer you want.
Actually, one of the exceptions, when it comes to
cash basis taxpayers, is how you handle payroll and
sales taxes that are due in January.
Even though you haven't paid them yet, since the
expense is directly related to the payroll in the
previous year, you already owe that money to the
government.
So, yes, you may deduct the full expense due in
2004 (or the previous year).
Make sure not to deduct the amount you paid last
January for the 2003 payroll taxes.
Remember, you don't deduct the employee's portion
as taxes - only the part the employer pays.
(The employee's portion should already be included
in their total wages. )
A good way to make sure you're using the right amount is
to test your payroll tax expense using this formula:
Multiply your wages by the following amounts:
FICA 6.2 %
multiply all wages
up to Social Security
limits per employee
MEDICARE 1.45%
multiply all wages -
no limits per employee
FUTA* 0.8%
multiply up to
$6,000 wages per employee
SUTA* ??
Multiply your
state-assigned rate up to $6,000
wages per employee
Other ??
If your state
has other employer-paid taxes -
check for limits
(*note: FUTA/SUTA are federal and state unemployment taxes)
Chapter 9 of THE BOOK explains how to treat payroll and
payroll accounting.
http://www.taxmama.com/AskTaxMama/book/
Incidentally, this doesn't just apply to S-Corps.
It applies to all cash basis businesses.
I hope this doesn't make it more confusing.
Best wishes,
Eva Rosenberg, MBA, EA
----------------------------------------------------------------
Fed-State
----------------------------------------------------------------
From: Orem, UT
Dear TaxMama,
I was just courious if I had to fill out a
different form for state taxes than federal taxes?
I filled out a 1040ez for my federal and I heard
that you may need to fill out a tc40 for state,
but I was unsure.
Bill
<TaxMama Replies>
Uh Bill,
Are you familiar with the expression --- Duuuh!!!!!!!
Did you go to high school?
Did they teach you about the separation of
powers of the federal and state governments?
You ARE aware that each entity collects their own
taxes, yes?
So, go pick up a copy of your Utah, TC-40 from here:
http://tax.utah.gov/forms/current.html#income
In fact, they have a version that you can fill in online.
http://tax.utah.gov/forms/current/tc-40.pdf
Now if you use that version, please understand that you
still have to print it out and mail it in.
Looks like this is your first year. And you're taking
care of it early. I'm actually quite proud of you,
all kidding aside.
Next year, you'll know what to do.
Best wishes,
Eva Rosenberg, MBA, EA
http://www.TaxMama.com
----------------------------------------------------------------
Because We Care
----------------------------------------------------------------
Don't let yourself or your friend feel helpless.
Share the Power - SCHOLARSHIPS FOR SELF-DEFENSE TRAINING AVAILABLE
SHARE THE POWER:SELF DEFENSE TRAINING is gaining POWER!
visit Share The Power - http://www.sharethepower.com
==========
A.N.G.E.L.S. DAY
Helping Seniors keep their pets
http://angelsday.org/
Talk to Linda Baker for more information
(310) 680-0798 LBaker6343@aol.com
==========
The Jeremiah Society asks "Who Will Care for the Children?"
Today, many of these people outlive their parents. And therein
lies the problem. Once their loving caregivers are gone, who
will care for them? And will they be able to care for themselves?
The Jeremiah Society, is working to help enhance and enrich the
lives of developmentally disabled teens and adults in the Jewish
Community Please Call Rose Lacher, (714) 997-8193
http://www.jccoc.org/adults.html
-----------------------------------------------------------------
MONEY FUNNIES
-----------------------------------------------------------------
Left Brain - Right Brain
Take 10 seconds to try this - quite amazing!
This is one of the strangest things I have
ever encountered.
Left Brain - Right Brain
While sitting at your desk (or wherever else you
may be) lift your right foot off the floor and
make clockwise circles with it.
Now, while doing this, draw the number 6 in the air
with your right hand....ok do it..
Your foot will change direction and there's nothing
you can do about it.
* * * Way too weird!!!
My question is....who the heck ever tried doing this?
Someone has way too much time on their hands!
----
Courtesy of Norma Olinger in California
-----------------------------------------------------------------
IRS NEWS
-----------------------------------------------------------------
Sales Tax Publication Updated
IRS has already updated the new Publication 600 they just
issued two weeks ago. Several states sales tax tables were
revised - before the publication was actually sent out.
http://www.taxmama.com/AskTaxMama/288/irsnews.html
IRS Summmarizes 2004 Tax Law Changes for Individuals
http://www.irs.gov/newsroom/article/0,,id=133290,00.html
Need Free Tax Help - IRS Provides the Ways
A long page of contact information and resources
http://www.irs.gov/newsroom/article/0,,id=133019,00.html
All the Ways to Electronically Pay
IRS lists your options to pay your taxes
http://www.irs.gov/newsroom/article/0,,id=133133,00.html
---------------------------------------------------------------
E-Books and Workshops - all Yours - No Charge
-----------------------------------------------------------------
NEW! Fifty Easy Ways to Promote Your Website, By MERLE
http://www.websitetrafficplan.com/ebook.htm
This is one woman who's done well.
And she's not charging you a dime for
her years of experience.
---
New Year's Resolution Time - Budgets!
Money For Life, a novel about budgeting...
along with some interesting tools for you.
http://giftsurf.com/Specials/Money4Life.pdf
--
For more:
http://taxmama.com/workshops/
-------------------------
Not-So-Fr*e Books
-------------------------
http://taxmama.com/resources/shopbook.html
eBook - TaxMama's Secrets:
Ten Businesses to Start Online Without Spending One Thin Dime
hhttp://www.1automationwiz.com/app/aftrack.asp?afid77528
For more:
http://taxmama.com/resources/shopbook.html
-----------------------------------------------------------------
TaxMama On the WWW & Tooting Her Own Horn
http://taxmama.com/toots/index.html
TaxMama is teaching - in person and Online:
http://taxmama.com/toots/meettaxmama.html
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Critical Dates http://taxmama.com/taxcalendar.html
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Ask TaxMama is published by the good folks at http://taxmama.com
ISSN 15320790 © copyright, Eva Rosenberg, 1999 - 2004
TaxAnxiety Inc. P.O. Box 280549, Northridge, CA 91328
Written (e-mail) permission is required to copy or redistribute this
publication or to use it on your site. mailto:taxmama@taxmama.com
However, you are encouraged to forward an intact copy to all your
friends and invite them to subscribe!
-----------------------------------------------------------------
Legalese and Disclaimer http://taxmama.com/privacy/disclaim.html
-----------------------------------------------------------------
Got questions? http://taxmama.com/subscribe/askform.html
This publication is ONLY sent via voluntary subscription.
To Subscribe http://taxmama.com/subscribe/
To unsubscribe at any time, click on the link under this line.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~