Category: TurboTax

Cashing Out a Retirement Account

Cashing Out a Retirement Account

The Roth IRA is a great retirement investment vehicle along with a number of other federally available retirement plans such as traditional IRAs and SEPS. With the Roth IRA specifically, you pay taxes on the money invested prior to placing it into the account. Therefore when the money is withdrawn at retirement time, it can be done so tax free. This is the main advantage of the Roth IRA over other retirement plans. But don’t be tempted to cash out the retirement account during difficult financial times as that will result is penalties and … Read more at 2009 Taxes

Cashing Out a Retirement Account

The Roth IRA is a great retirement investment vehicle along with a number of other federally available retirement plans such as traditional IRAs and SEPS. With the Roth IRA specifically, you pay taxes on the money invested prior to placing it into the account. Therefore when the money is withdrawn at retirement time, it can be done so tax free. This is the main advantage of the Roth IRA over other retirement plans. But don’t be tempted to cash out the retirement account during difficult financial times as that will result is penalties and taxes that you should avoid.

Qualified distributions are the kind of retirement account distributions that you want to take. These withdrawals occur on accounts that have been open for more than six years when you turn 59 1/2 years of age. These withdrawals are penalty and tax free. Non-qualified withdrawals result in a 10% penalty on the funds cashed out along with the requirement of some income taxes. The good news is that only the investment income is taxable as you already paid taxes on the initial investment, therefore it is not taxed twice. If your account has not grown in value, all you owe is the penalty and no income taxes.

There are several hardship exemptions to the penalty and tax provisions of the law including disability, death, college expenses, medical expenses, unemployed health insurance premiums, and first time home buyers. When you fall into one of these categories you can ignore the penalties and the income taxes, withdrawal the money, and spend it specifically on the exempt item. Another exemption is a special annuity-type withdrawal where the money is cashed out equally over the life of the individual in consistent payments. Talk to a tax accountant to find out more about this special withdrawal scenario.

Types of Depreciation Schedules

Most people that are looking for a depreciation schedule are doing so for one of two reasons: (1) They need to keep track of depreciation for IRS purposes or (2) they need to keep track of depreciation for bookkeeping purposes (yes sadly, these two are often different from each other).

If you are looking for depreciation schedules for tax reporting purposes you really have two options (read Pub 946 and use spreadsheets or use income tax software). You can head over to the IRS’s website and read Pub 946. Pub 946 contains all the information about how your assets should be depreciated for tax-reporting purposes. If you are already a tax accountant, then you probably already know a large portion of what is included in Pub 946. That being said, it is a good place to go when you have any questions. In my opinion the most useful section is the one that contains the depreciation tables. These tables classify assets into groups and then indicate the useful life of an asset for tax reporting purposes.

With the information from Pub 946 and some spreadsheet skills, you could whip up an excellent depreciation schedule for your business. However, nowadays most corporate income tax software comes ready to handle MACRS and tax depreciation. If the software is good, it will already have the pertinent information from Pub 946 that you need. This method seems a lot easier and I would recommend it to anyone who doesn’t really have a desire to read everything on the IRS website and then create your own spreadsheet. There are some die-hards out there who may prefer this method.

Another type of depreciation schedule is one that is used for your financial statements. There are a lot of rules on how these numbers have to be similar or different than the tax reported numbers but we will not delve into that discussion here. Just know that sometimes the numbers reported on the financial statements for depreciation are sometimes different than the numbers reported for tax purposes. The reason for this is you have two different governing bodies (the IRS governs tax rules while the FASB governs financial statement rules). This can get quite messy and often companies have two different sets of books (one for financial reporting purposes and one for tax purposes).

You can find preformatted depreciation schedules in Excel. Simply click on file, new, and then search for depreciation schedules. These are not that programming intense and you could probably make one yourself.

Another option is to buy some depreciation software. There are companies out there that specialize in depreciation and using some of their software may not be a bad idea for companies of all sizes. Probably the main reason I would use depreciation software over just a normal spreadsheet is for control purposes. Spreadsheets are known to proliferate quickly and information is often incorrect, duplicated, or outdated. With software, all of your information will be in one location making it easier to protect, update, and control.

Whether you are looking for a tax related schedule or a bookkeeping depreciation schedule I sincerely hope you are closer to your goal than you were previously. Find out more about business accounting.

A Home Business Can Mean More In Taxes

A lot of people are trying to find ways to make moneyfrom home so that they can make ends meet. The poor economy has made it necessary to explore all your options. The Web is on every one’s thoughts as one of the simplest ways to accomplish that and it is undoubtedly the most effective way. An important question is though, have you ever ever thought-about what it might imply for your tax situation if you do become successful in generating a significant side income?

Most people who start out to make some additional money online only make small quantities by maybe going to one of many online surveys for money websites. They make $20 to $50 or much less and then call it a day because it is tedious and boring. But what if you are one of the rare people who doesn’t quit and goes on to make a lot more money online?

If you were to make make money in the thousands of dollars range, the first thing you should know is that you might owe Social Security tax. If you’re working for a corporation, they pay one half of the SS tax but when you are self employed, you will owe all 15.3% which is double what you’re paying now at your real job. This is the one big tax consequence that may people overlook when they are starting a home business.

There could also be other taxes, like state taxes, that you owe depending the place you live. Washington and Ohio have a B&O tax which will relieve you of another 1.5% of your gross proceeds. It doesn’t seem fair, but it is the law.

In the end, working from your own home is a great idea that many people would love to be able to accomplish. Nonetheless, few of them think about all of the little obstacles that will will happen when you are a sole proprietorship and work for yourself. It’s just like most things in life: there are good aspects and bad aspects to most everything you try.

Finding the Right Tax Attorney

Looking for a great tax relief attorney?  You can find more information at the ultimate resource for taxes, the Tax Attorneys Guide informational site.  Visit today to become more educated on tax law.

An attorney that specializes in tax law is called a tax relief attorney.  The job of this kind of attorney is usually to help customers navigate through complicated policies from various tax agencies like the IRS (Internal Revenue Service).  A tax attorney can provide a number of other services as well.  For example, they may mediate disputes in order to help individuals reduce tax debts or offer a payment plan that would work for them.

A tax relief attorney should be should be highly skilled and highly conscientious.  Because there are so many scandals in the tax world, it is important to pick an attorney who has high ethics and trustworthy business practices.  They should also be well trained and able to easily assist people who are having problems with taxes.  Usually a good amount of training is required for this so each tax attorney should be highly certified and recommended.

When looking for an attorney to help sort out your taxes, one of the first things you should check for is qualifications.  You should also be able to confirm that the attorney is in a good standing with the local community and law system.  Try to specifically ask about what training he/she went through and what additional training they have received in topics related to taxes.  Other things to inquire about are number of successful case, their case prognosis, and years of work experience. Accountants are a good way to get reviews on tax attorneys so you should ask the ones you know.  Family members and friends could also provide you with good recommendations with attorneys they have worked with in the past.

How to Generate Your Own Business Leads

If you’re like most home business owners, you’re interested in learning how to generate more customers. In order to gain more customers you need to first learn how to generate more home business leads.

Some of you may have spent hundreds of dollars in the past on Yellow Page advertising only to realize that the return on investment was not what you expected. Perhaps you’ve invested in even more expensive media outlets like radio and television only to reach the same results.

However, there are more tried and true methods to generating fresh leads. These methods are cheaper than other methods. The way to do this effectively is by understanding how the Internet works. The Internet allows someone to find you instead of the other way around.

With Internet marketing, you’re able to take your sales to a whole new level by having people find you. Business owners need to understand search engine optimization and how to position themselves effectively to succeed online. By using these platforms effectively, you’ll position yourself as an authority.

Your best lead is the one who actively find you. Think about it, if it were the other way around, you would need to convince prospects to buy. If a lead is looking for you, they are already in “buy” mode.

Some of you may have purchased leads in the past only to pay high fees. The decision to buy leads often comes at a time when a business owner has run out of other options. They feel like their lead stream has dried up and are looking for ways to grow.

The growth of the Internet has caused a large supply of lead providers on the web.  The misconception that others should find leads, limits the business owner’s ability to grow their business. However, there are negative sides to leads. Leads are rarely sold exclusively to you. By the time you receive them, they have probably been sold a few times to previous customers. This makes the probability of closing the sale diminish.

If you want to be ahead of the curve, you nee to understand how to generate your own leads. Take the time to learn about search engine optimization. Learn the steps to build effective websites that convert visitors into customers. It takes some time and financial expense, but the results are worth it. To succeed in home business, you need to stand apart from your competition. One of the best ways to do this is by having the customer come to you.

Benefits of TurboTax Online

TurboTax has been producing tax preparation software for PCs for over ten years. Over this period millions of copies of their programs have been sold in the US. This makes it the most popular tax software available today. In recent years they have added TurboTax Online to its many offerings.

With TurboTax online anyone can easily go online and file their taxes. There are no programs to download, CDs to install, or worries about protecting information. The site is updated frequently to current any new tax laws or changes.

The site offers many benefits to users to file the taxes … Read more at 2009 Taxes

TurboTax has been producing tax preparation software for PCs for over ten years. Over this period millions of copies of their programs have been sold in the US. This makes it the most popular tax software available today. In recent years they have added TurboTax Online to its many offerings.

With TurboTax online anyone can easily go online and file their taxes. There are no programs to download, CDs to install, or worries about protecting information. The site is updated frequently to current any new tax laws or changes.

The site offers many benefits to users to file the taxes correctly the first time. Their step by step process will walk you through all the questions that need to be answered. It contains built in tax calculations, updates to various life changes such as getting married or having a child, and provide free federal e-filing of your taxes. Should you need any assistance they offer live support from TurboTax experts. They will gladly help you with any tax questions you have.

An image of a compact disc – Pencil included for scale (Photo credit: Wikipedia)

It is also possible to file your state taxes online through TurboTax. However, they do charge a small fee for this service. It’s very reasonable and will save you time from having to prepare another return or even pay for a tax professional to prepare it for you.

With five different packages available on the site there is sure to be something that fits your needs. Whether you just need to take care of the families’ taxes, have a small home business, or need to take care of larger issues, everyone can find a version of their software on the site to fit their needs. The live support they offer can help you to determine what services you need. Be sure to ask any questions before you file your return to make sure it’s accurate and complete.

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