Tax Resources

S Corp Taxes

Q: If I change to an S corp half way through the year do I still benefit or is it best to convert to an S corp at the beginning of the year?

 

A: “I can’t tell from your question if you’re thinking about electing S corp taxes for your existing business entity or possibly for a new entity, so I’ll address both. Actually, when you convert to an S Corporation the election is made effective for the entire tax year. To benefit from S corp taxes, you must elect in a timely manner.  The S Corporation election is actually due by the 15th day of the third month of your tax year. So if your … Read more →

Tax Guide

Federal Tax Brackets 2012

Tax rates, in other words the percentage of income you pay in taxes, vary depending on the sources of your income and the total amount of income you earn. The system was originally designed to be regressive, ensuring that the very rich would pay a higher percentage of their income in taxes than the very poor. The second reason was to encourage certain types of economic activity such as investment and home ownership.

Key concepts underlying federal tax brackets 2012 are “taxable income” and “tax bracket”.

Taxable Income

Your taxable income is based on your net income, that is your gross income minus deductions and exemptions. Gross income includes your salary, tips, gambling profits, … Read more →

Standard Mileage Rate or Actual Expenses?

Standard Mileage Rate Question:

“I am doing a long term contract out of state 6 month. Car rental was to much, so I purchased a vehicle. Can I use the section 179 deduction how much of the vehicle purchase price can I deduct, and how much of my millage can I write off and are they different things. I pretty much drive the car to and from my apartment and work, to go eat or to the movies, or anything I would use my car at home for.”

Answer:

Certified Tax Coach, Eric Levenhagen, CPA CTC

Deducting the cost of your car and deducting mileage are two different options you have when taking vehicle … Read more →

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