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Tax Preparation Questions
Individuals who have dealt with
preparation in any form have often encountered difficulties with that process. Uncertainties on when you can deduct tax preparation fees or how to get copies of past tax preparation fees often lead to questions like the ones answered below by the Experts.
If an individual is using tax preparation for their takes and filing jointly, after reporting their spouses W-2 and removing all the deductions for their refund was approximately $6800. Upon entering any 1099 Misc. incomes of 3,000, their refund went down to $844. Isn’t this well over the self-employment tax?
That amount would be over the percentage taxed for the self-employment tax. However, when adding your income to your spouse’s income more than one thing had occurred. First, you were taxed with the self-employment tax and second your total amount of income combined was also higher. The higher combined income increased the taxes against that income – taxing on his $6800 plus your $3000. You should try to account for all your expenses so that your taxable self-employment income can be reduced. Use a Schedule C for your expenses.
In the past as part of my tax preparation, I filed head of household, as I have full custody of my two younger children. I usually qualify for the earned income credit. What would be the ramifications if I married were married who has been incarcerated for the last 7 years?
Even if an individual gets married that may still qualify for head of household and
Earned Income Credit
(EIC) if they meet the Head of Household and EIC tests. If you get married you can file a separate return if your spouse had not lived in the home during the last 6 months of the tax year and you gave more than half the cost of the maintenance of the home. This home should be the primary home for the qualifying child for more than half of the tax year. You can also file as
married filing jointly
. A spouse is an automatic extra
as long as you were married as of Dec 31st of that tax year.
I want to start a tax preparation business. How does one do that?
Individuals that want to start their own business would need to first check with their Secretary of State at the State Capital and check if there are any registrations or licensing that may be required because every state is different.
Secondly individuals would need to get update training, if starting a tax preparation business, on the type of returns that you will be preparing. Many choose to work for another similar company for a year or more just to get the experience.
There are different professional tax preparation software’s available. You may want to test drive a few to see what works best for you and your purposes. Additionally you will need to decide on the type of service and the price of service that you will charge.
The location of where you would like to open your business is also very important. You will also need to prepare a business plan, marketing plan, and develop a budget.
I met with a Certified Public Accountant (CPA) that would like to charge me $240.00/hour for consultation. I own ten rentals. In our first meeting, I was told that I cannot deduct tax preparation fees from my taxes unless the preparation exceeds 2% of my income. When can I deduct tax preparation fees?
The amount of time that specifically relates to the rental properties on the Schedule E would be what you can deduct as far as tax preparation goes. Whichever tax professional that you use would need to calculate how much the fee would be for completing the Schedule E and any other forms that relate to the rentals.
How do I get a copy of my 1040 tax preparation for the year 2006?
Individuals that would like to get a copy of past years
can get them from the IRS. If an individual fills out
and submits a fee of $39, the IRS will send a copy of the tax return. If an individual fills out form 4506-T, the IRS will send a transcript of the tax return free of charge.
Gathering good information and understanding tax preparation can help when faced with tax preparation questions. Experts can help answer when you can deduct tax preparation fees or how to get a copy of your past tax preparation forms. Get the answers fast an affordably by asking an Expert.
Recent Preparation Questions
My husband and I left our primary residence in January of 2014,
My husband and I left our primary residence in January of 2014, and have been renting it below market value to a nice young couple. We bought the house in 1990. We haven't been able to locate many of the documents that Turbo Tax told us we need in order to claim the expenses associated with the house. Many people have told us that we could likely save money on our taxes if we did claim it. We filed for an extension until October. What would you suggest we do?
I have a business tax question experienced - I
I have a business tax question for someone experienced -
I am a small business owner leasing an office, and I also have a home office. I wish to buy a new home with much larger office space and walk away from renewing another lease, despite the small write-off I receive from it. Instead, I wish to find a way to write off part of the purchase of the new home as the new office (Please note, I do not have employees working in office - just myself). I do not know how to handle this in detail, and I need advice. I realize a home office needs to be separated from the rest of home (similar to what I already do today). I should note, I will plan to sell the old home rather than lease it because I do not see any tax benefit. (yes, the home is paid off). I need advise on how to write off the "purchase" of this new home office space to minimize taxes. In another desperate effort to minimize taxes, I will purchase a new business vehicle again (despite me not needing a 3rd vehicle) to minimize taxes - Not doing this will mean paying more taxes. Would it be prudent to purchase another home later and call it my office? I would need to take out a mortgage for this to happen. The first home I could pay cash, or take out a temporary loan, (at least until this existing home is sold). Do you have ideas, or suggestions for better way to handle this? At present, it appears I will be paying near $100k to fed in taxes if I do not find a way to handle this. Thank you
Noah and Joan Arc's Tax ReturnNoah and Joan Arc live with
Noah and Joan Arc's Tax Return
Noah and Joan Arc live with their family at 4342 Josie Jo, Santee, CA 92071.
Noah's SSN is###-##-####Joan's is 45687542
Both are in their mid-30s and enjoy good health and eyesight.
Noah owns and operates a pet store and Joan is a fire-firefighter for the city.
1. The Arcs have 2 children, a son named Billie Bob (SSN 598-01-245), who is 7 years old. A daughter name Mary Sue (SSN###-##-####, who is 4 years old.
The Arcs paid $2,800 to the roundup Day Care Center to take care of Mary Sue while they worked. Because Joan is a firefighter, she was home in the afternoon to care for Billie Bob after school.
2. For the current year, Joan's W-2 from the city fire department showed the following wages:
Federal Income tax withheld
State Income tax withheld
FICA tax withheld
Noah made some estimated federal income tax payments of $12,000 and estimated state income tax payments of $1,000 during the year.
3. Noah's pet store is located at***** Santee, Ca, 92071. The name of the store is "The Arc," and its taxpayer ID number is ***** The beginning inventories and ending inventories are both $10,000. The revenue and expenses for the year are as follows:
Cost of Sales
4. Noah and Joan paid the following amounts during the year (all by check):
Church donations (for which a written acknowledgement was received)
Real estate taxes on their home
Mortgage interest for purchase of home
Tax return preparation fees
Credit card interest
Automobile insurance premium
Uniforms for Joan
5. Noah likes to invest in the stock market. During the year he sold the following securities, none of which were qualified small business companies:
4,500 (Sale Price)
2,300 (Cost Price)
6,000 (Sale price)
5,000 (Cost price)
12,000 (Sale price)
1,600 (Cost price)
The expenses of sale are included in the cost basis. Noah has a long-term capital loss carryover from last year of $2,300.
6. During the year, Noah and Joan received the following qualifying dividends:
7. Noah and Joan own rental property located atXXXXX, San Diego, CA 92115.
The revenue and expenses for the year are as follows:
Depreciation (The house was acquired in 1990)
Although Noah and Joan do not believe their tax return will be unduly complicated, they do realize their limitations and come to you for assistance. You are to prepare their federal income tax return in good form, signing the return as the preparer. Do not complete a California state income tax return. Assume and other information (addresses, etc.) that you may need. The following forms and schedules are required, 2014 edition:
Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E, Schedule SE, Form 2441, Form 8949, Qualified Dividends and Capital Gain Tax Worksheet.
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