On Wednesday, September 1, because of the pending arrival of category 4 Hurricane Earl, President Obama declared North Carolina a state of emergency. What this declaration signifies is the authorization of the Department of Homeland Security and Federal Emergency Management Agency to coordinate all disaster relief efforts.
Now let’s take it a step further. While we all hope and pray that there is no serious damage and certainly no loss of life due to Earl, what happens tax-wise if the hurricane does hit and cause property damage? In the most recent past, there has been horrific property damage in Tennessee through massive flooding. In this case, President Obama declared certain counties of Tennessee a disaster area through the signing of the Tennessee Disaster Declaration. But what does this declaration mean for the citizens of those counties?
If a taxpayer lives in an area that was declared a disaster area by the President, then the taxpayer may elect to treat the loss as having occurred in the taxable year immediately preceding the taxable year in which the disaster actually occurred. The primary reasoning for this rule change is to provide immediate relief to disaster victims in the form of accelerated tax benefits.
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By Stephanie Weil
– September 2, 2010
On Tuesday, August 24, 2010, the National Association of Realtors stated that demand for single-family houses dropped to a 15 year low; additionally, Bloomberg reported that sales of existing houses decreased by a record 27%. In Asheville, NC, over the last 12 months home prices have depreciated by 0.5% and in June 2010, home sales totalled 40, a decrease of 66% from May 2010. However, if you have to sell your Asheville, NC home during these ever-changing times, then here are some pointers that can at least help you when it comes to decreasing your potential capital gains tax.
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Tagged with capital gain, home adjusted basis, home sales, publication 523.
By Stephanie Weil
– August 25, 2010
It is sorrowfully common knowledge these days that the economy is bad and finding a good-paying, stable job is like looking for the proverbial needle in the haystack. In fact, according to the US Department of Labor, Bureau of Labor Statistics, August 6, 2010 report, the unemployment rate at July 2010 was 9.5%.
While this unemployment rate is actually down from 10% in December 2009, that provides little comfort to those who really need a job. However, when the chips are down, some of us pick ourselves up and decide to make our own future by going into business for ourselves. We all have a talent, something we can do or create better than anyone else, and some of us combine that talent with our good business sense and we are on our way.
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Tagged with BLS, SBA, self employed, Starting New Business.
By Stephanie Weil
– August 6, 2010
Please read the official press release announcing the opening of my new offices.
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By Stephanie Weil
– July 15, 2010
In this second installment of my back to basics posts, we will discuss why and how an individual would pay estimated Federal income tax. In most cases, if you are a W-2 wage earner and you withhold a sufficient amount of federal tax, then you probably will never have to think about paying estimated tax. Even if you are a self-employed individual who is married to a W-2 wage earner and you file a joint return, you may not have to pay estimated federal income tax if the W-2 earner withholds enough and your net profit it not too high.
However, if you are a self-employed individual and file single or you file jointly and your spouse is also a self-employed individual, then you must at least consider paying estimated tax during tax planning. Keep in mind that if you are self-employed and you are the owner of a sole proprietorship or a single-member LLC (treated as a disregarded entity), or, if you are a partner in an S-Corp or a partnership, then you might be liable for paying estimated tax “as an individual“. This is because all of these types of entities are “pass-throughs” or, in other words, businesses whose net income passes through to the owner to be taxed at the owners’ marginal income tax rate.
If you are trying to think of reasons why someone would pay estimated tax, here are a couple. One reason for paying estimated tax is so that at the end of the year you are not hit with a very high tax bill that you may or may not have expected. Another reason is because the IRS says you have to and will assess you a penalty if you do not.
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Tagged with estimated tax, IRS, pass-through, self employed, W-2.
By Stephanie Weil
– July 14, 2010
Hello parents. Do you have a child who will have a summer job this year? If so, you (and your child) might want to be aware of some tax implications. Yes, not only will your child start to understand the importance of having a strong work ethic and doing an honest day’s work for an honest day’s pay, but they will learn how to pay and incur income taxes. Now that is quite the life lesson!
The IRS has come out with 6 tips for students. These helpful tips are described below.
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Tagged with newspaper route, summer job, tax.
By Stephanie Weil
– July 13, 2010
When choosing insurance coverage, we have choices. One of these choices are Health Savings Accounts, or HSAs. Increasingly, HSAs are becoming the more popular coverage selection given that they offer several financial and tax benefits to the policyholder.
This topic will cover HSAs only, and does not introduce or discuss Archer MSAs, FSAs, or HRAs.
What is an HSA?
A health savings account is a tax-exempt account that you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. In order to have an HSA, you must be an eligible individual.
To be an eligible individual and qualify for an HSA, a policyholder must meet the following requirements:
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By Stephanie Weil
– July 9, 2010
Very often we get so wrapped up in what we are doing right now, we can forget certain fundamentals that we may have learned a long time ago and are still important to our daily business, but because we do not use these pieces of knowledge everyday, they may have faded. Some of these fundamentals relate to basic elements of accounting such as payroll, general ledger accounting or individual taxation.
For my next several blogs, I will be tackling some of these more basic subjects; topics that are important to know and understand, but if not thought about regularly, tend to be forgotten.
For this first blog, we will go over the fundamentals of payroll tax. This topic will be discussed broadly, not including every nuance because that would lead to a very long blog. However, I will cover these payroll tax questions: What is it and why do we pay it? How is it calculated? How do we pay it? What are current credits?
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Tagged with FICA, HIRE credit, Payroll tax.
By Stephanie Weil
– July 6, 2010
Several of my Buncombe County business clients recently received a letter from the North Carolina Department of Revenue advising them of a July 1, 2010 increase in sales taxes. The good news is that for the Buncombe County business community, the 7.75% sales tax rate remains the same (for now).
The counties whose local sales tax rate is increasing an additional .25% to 8% are: Hertford, Lee, Randoph and Rowan.
The following couties also have a sales tax rate of 8.00%:
Alexander, Catawba, Cumberland, Haywood, Martin, Pitt, Sampson and Surry.
Mecklenburg county has a sales tax rate of 8.25%
The other 87 counties (including Buncombe) have a sales tax rate of 7.75%
Keep in mind that if your business is in Buncombe County and you make taxable sales there, your rate will stay the same. However, if you make a sale to a customer who lives in one the affected counties, you must be aware of the sales tax increase.
The key to remember with North Carolina sales tax law is that if the sale does not happen in your place of business, then you charge and pay the sales tax applicable to the county where the customer lives and where the goods were shipped.
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Tagged with July 1 2010 NC sales tax increase.
By Stephanie Weil
– July 5, 2010
You may remember the Bush tax cuts of 2001. They lowered individual tax rates and lowered tax rates on capital gains to either 0% or 15%. What could have been better? You can ask any number of ordinary citizens if they have benefited from this tax cut and, if they are invested at all in the stock market, they will have to say "Yes." At first, I remember hearing that this tax cut was only for the rich, but in actuality, taxpayers of all economic strata have most likely benefited. In fact, these advantageous rates have benefited people in partnerships and a great number of senior citizens who receive dividends in their portfolios.
The only trouble with the Economic Growth and Tax Relief Reconciliation Act of 2001? It was temporary: It is set to expire at the end of 2010.
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Tagged with 2011 Tax New Rates.
By Stephanie Weil
– June 20, 2010
