Got tax / finance questions? Ask here...

[Everglades W68]

I almost never do this for free, but I'll be glad to answer your tax or finance questions.

Taxes: My areas of knowledge are Federal, Florida, California and Texas. NYS/NYC - I worked with those and hate 'em.

Finance: Corps, LLCs, partnerships, individuals, accounting,auditing, etc.

[sac2165]

#1 Can I still donate a car to charity & deduct the full blue book value?

#2 If my house is old, from 1910, can I deduct all home improvements I make over a given year?

[Everglades W68]

# 1 - You can deduct the fair market value.

# 2 - No. I'm asuming the house is used for your primary residence, not as an investment. Home improvements increase the "basis" of a house, thereby lowering any potential gain upon sale. However, most gains from sale of your primary residence are no longer taxed, so keeping track of a house's basis is not as important as it used to be for most people.

Peoplewho own houses in historic districts/areas can get a significant tax deduction by donating an "historic preservation easement" to an appropriate historic/preservation group.

[Nicklz]

I notice you posted this after taxes were do. LOL [img]tongue.gif[/img] [img]tongue.gif[/img] [img]tongue.gif[/img]

[andrew.brandon]

Originally posted by Nicklz:
I notice you posted this after taxes were do. LOL [img]tongue.gif[/img] [img]tongue.gif[/img] [img]tongue.gif[/img]

I thought that too [img]graemlins/rofl.gif[/img]

[Nicklz]

I do still have a question though, if I'm self employeed and filed as a buisness. I billed the company I was working for x amount for daily rate, then for mileage/expenses also. They pay me with a single check, they aren't seperated into salary and expenses. Just both totals are on same check. Technically I am earning money off the mileage I drove in '04. So is it ok if I claim mileage as a buisness expense? and then write it off??

I also wrote of my laptop, car, new printer I bought last year, even the paper and ink jet cartridges. lol

[MTMike]

OK,

I don't fully understand how the 1/2 Self Employment Tax works.

I work full time, and have a side-line business, and this year is the first year I turned a big profit off the business. Before I start turning bigger profits (i.e. this years taxes next spring) and become self employed 100%, I'd like to know.

This year I let TurboTax do all the work, but I still didn't/don't understand the whole 1/2 Self Employment tax/Schedule SE part.

Any ideas?

[mike h]

OK, by fair market value, what does that mean? how do you determine 'fair market value'? one charity I called said that they auction the car and give me a reciept for how much it went for. my car doesn't run, so that would be pointless. are all charities like that?

[Everglades W68]

“If I'm self employeed and filed as a buisness. I billed the company I was working for x amount for daily rate, then for mileage/expenses also. They pay me with a single check, they aren't seperated into salary and expenses. Just both totals are on same check. Technically I am earning money off the mileage I drove in '04. So is it ok if I claim mileage as a buisness expense? and then write it off??”

First, look for whether the company included the mileage / expense amounts on the 1099 issued to you. For example, if they paid you $1000 fees and $127 in mileage expenses, was the 1099 issued to you for $1127? Judging by what you have written, the answer most likely is “yes.”

Therefore, you should show the full amount of cash paid to you as business income and your car mileage as a business expense.

“I notice you posted this after taxes were due.”

If you want advice during the busy season, it will cost you money. :D

“I don't fully understand how the 1/2 Self Employment Tax works”

Think of what happens to Social Security and Medicare taxes for the job you have as an employee. You pay, via payroll deduction, a total of 7.65% Medicare / Social Security taxes PLUS your employer pays an additional 7.65% - for a total of 15.3%. BUT, your employer gets to deduct the 7.65 % payroll taxes they paid on their income tax return as an ordinary and necessary business expense.

Now, for your self-employed business income, you have to pay Social Security and Medicare for the full 15.3% - there is no employer to directly fund the “hidden” 7.65%. Schedule SE gives the self –employed person a break from the full 15.3% to approximate (sort of) the break an employer gets by being able to deduct their 7.65% portion of the Social Security / Medicare taxes.

As you indicated, TurboTax does the calculation for you.


“OK, by fair market value, what does that mean?”

Fair market value is the amount of cash a third party would pay you for your car.

Charities have gotten in trouble with the IRS by giving inflated car values to donors. The IRS can revoke their charitable status for this issue.

[3.4 slow to go]

ok, as a Texas resident (heehee), how much will I have to make before I actually have to file state taxes there? or need to learn spanish???

[Dirty8-un-Dreds]

going to school in long beach. A few Q's:

What types of things can I write off, for instance the fridge we bought?

Maintenance to car (to and from school driving)

possibly some new car payments (cobaltss or sosltice...I wish hehe)

[Everglades W68]

Originally posted by 3.4 slow to go:
ok, as a Texas resident (heehee), how much will I have to make before I actually have to file state taxes there? or need to learn spanish???

If you are referring to personla income taxes, Texas does not have a personal income tax.

http://www.taxfoundation.org/individ...etaxrates.html

[Everglades W68]

Originally posted by Dirty8-un-Dreds:
going to school in long beach. A few Q's:

What types of things can I write off, for instance the fridge we bought?

Maintenance to car (to and from school driving)

possibly some new car payments (cobaltss or sosltice...I wish hehe)

None of the the above.

http://www.quicken.com/cms/viewers/article/taxes/54164

If you are attending college for a Master's degree, post bachelor's degreee, etc, in order to improve your skills for your current job, it sometimes is possible to be able to deduct education expenses. But it does not sound like you are in this situation.