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Looking for some advice on what type of business to setup

Looking for some advice on what type of business to setup based on my situation.JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: So I am a software engineer currently with a contract working for an overseas company. I need to setup some entity to receive the money from that work.... Also I want to work on other freelance software projects under the same entity. Thirdly I want to release software that I write as a cloud based service application, preferably within the same entity. This application would have very little income for the first year or so.JA: Is there anything else important you think the Accountant should know?Customer: Only thing is that I also own a company in the UK that actually holds the contract with another company in the UK, I plan to bill my company in the UK from my US entity for the work done.

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

11,032 satisfied customers
I would like to open a Self Employed 401K. I have 2 main

I would like to open a Self Employed 401K. I have 2 main sources of income - a medical practice with no pension plan and an about $13,OOO that I have earned from consultant practice outside the main medical practice. The main medical practice is a partnership of corporations and I am the sole employee and president of one of the 6 corporations that constitute the medical practice. I have a Roth IRA to which I no longer contribute.Can I establish a SEP IRA based on the earned income of $13,000 outside the main medical practice? The main medical practice has 15 employees who work for the partnership. There is no pension plan.I am now taking minimum required distribution from my Roth IRA as I am over 70. I am working full time.My understanding is that with an SEP 401k I could make a tax deductible contribution both as employee and employer, potentially more than $18000 and thus not pay tax on the earnings this year, deferring tax until the minimum required distribution.Is this correct? that I can form the SEP IRA and make a contribution that will enable the tax on the entire income to be deferred?

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TaxWhisperer

Principal

Masters Science Taxation

770 satisfied customers
I have a simple question about a formulation that has been

I have a simple question about a formulation that has been used to calculate my pension payment. The formulation/calculation is bogus.The formula is [ 1.7% X 8(b) ] / 121.7% (.017) is the company's pension multiplying factor to calculate a monthly pension amount.8(b) is the Accumulated Pay for my 10.2493 years of employment with Chevron - $161,312.73The result of multiplying these two figures = $2,742.316 ($2,743.32)The company then divided $2,743.32 by 12 (which they said they had to do to get a monthly amount) = $228.527 ($228.53)The order of multiplying the amounts masks the false reasoning. If the multiplication of the factor is done last, the calculation is obviously revealed to be bogus. Proof of this statement follows:10.2493 YEARS DIVIDED BY 12 ACTUALLY IS 0.854 OF ONE YEAR (NOT ONE MONTH).The company has acknowledged on the calculation sheet that my "Highest Average Earnings" ("HAE) is $2,031.21 per month.They have also acknowledged my 10.2493 years of service.The formula for figuring a pension amount is the "HAE" for a month X the years of employment X the factor!That would be $2,031.21 X 10.2493 X .017 = $353.91

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

11,032 satisfied customers
Looking again at Bob's Fruit's and Fruit Washing, Inc. Bob's

Looking again at Bob's Fruit's and Fruit Washing, Inc. Bob's Fruit's (100% owned by Bob) contracts with Fruit Washing, Inc. (where Bob is also an employee but maintains no ownership) to wash their fruits for them. The two companies have a service agreement. Does this have any implications on the 401k/Profit share (OR a Defined Benefit Plan) at Bob's Fruits?

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

11,032 satisfied customers
Can My son claim me as dependent? I live with him and he

Can My son claim me as dependent? I live with him and he pays close to 100% of my expenses.I made around $45,000 in capital gains in year 2016. I have $60,000 in capital losses from previous years.I received a lump sum from my pension plan for around $46,000 this week. I will rollover the entire amount into an IRA. Should I rollover this week or wait to do it in 2017? Or does it matter since I have 60 days? I believe to be claimed as dependent I should have earned less than $4,000.What line # on form 1040 is my income that should not exceed $4,000?Somewhere on form 1040 I should say the money was rolled over and I will be claimed as an dependent.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

21,570 satisfied customers
Can I borrow/use funds from my ERISA pension plan? I need to

Can I borrow/use funds from my ERISA pension plan? I need to close on a home purchase and mortgage not complete yet. I need the funds for 2-3 months. What are the rules on this? Can I use the funds as for a real estate investment.

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bkb1956

Enrolled Agent, Paralegal

6,454 satisfied customers
If you pull money 401k/IRA purchase of a home or college

If you pull money for a 401k/IRA for the purchase of a home or college tuition, is it tax exempt?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

21,570 satisfied customers
I work part-time,as a dentist-employee, dentist,

I work part-time,as a dentist-employee, for a dentist, Steve, and we talked recently about taxes for last year and he told me he gross $1.5 million and owed $96K in taxes. He fully funded the pension plan, which is set up as 401Ks, but if he funded his profit sharing plan, he could only write off 30%. I hope I got this right. What else could he have done, or can do, now to reduce the tax burden? Could it ever be reduced to zero? He did not buy any expensive equipment for write-offs during 2015.His CPA was pretty sick for most of last year, and no one else at the firm checked how Steve was doing. A separate bookkeeping office did the monthly reports, etc. What are your thoughts and suggestions?

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Megan C

Master's Degree

30,026 satisfied customers
If a US citizen earns employment income in Canada, Is CPP be

If a US citizen earns employment income in Canada, Is CPP be recognized as foreign tax credit as well?Someone says pub514 says it can't,Pension, unemployment, and disability fund payments. A foreign tax imposed on an individual to pay for retirement, oldage,death, survivor, unemployment, illness, or disability benefits, or for similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual.No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. For more information about these agreements, see Publication 54.Someone says treaty paragraph 7 article XXIV overrides pub514, so it can be claimed as FTC on form 1116:Which is correct?If the person also has passive income, should CPP be prorated together with income tax between general income and passive income, or all CPP should be fully allocated to foreign tax paid for general income?Thanks,

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Rakhi Vasavada

Financial / Legal Advisor

Bachelor's Degree

4,188 satisfied customers
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