Phoenix Arizona CPA | Arizona Tax Accountant | Arizona Income Tax

“Oh My God”, cries out my fifteen year old daughter. “Oh My God Is Right”, replies her brilliant and handsome father. This is an example of two people saying the very same thing, but for entirely different reasons. I can’t help but wonder when I read other income tax and business articles if the writer has the same understanding of purpose that I hold so very dear. When we go into business, the idea is to make money by fulfilling a dream. If we are not in pursuit of profit, we are not in pursuit of a dream, and we don’t have deductions against taxable income. This my friends is how we play the game and I am about to explain what running a business is all about. Let me assure you that economic benefit is first, followed by the art of practicing income tax to enhance our return on investment. Read the rest of this entry »

Some Head of Household rules can make your head spin. People often get confused when trying to figure out if they qualify for the preferable “head of household classification”.

Unmarried persons who provide a home  for Qualifying person(s) may file as head of household. This classification entitles the person to a lower rate than single individuals or married individuals filing separate. They also get a higher standard deduction. So when you qualify for this you want to make sure this is the “type” of taxpayer you check off on page 1 of form 1040. The I.R.S. recently reported on their website the following: Read the rest of this entry »

Every year I always get asked at least a dozen times the same thing…”Who must file an income tax return?” The answer is almost always the same…”you!”. But, there are a few who are not required to file, the I.R.S. recently responded with this response.

2.1 Filing Requirements/Status/Dependents/Exemptions: Filing Requirements
How much does a student have to make before he or she has to file an income tax return?
If you are an unmarried dependent, you must file a tax return if your earned and/or unearned income exceeds certain limits. To find these limits refer to Filing Requirements for Dependents in Publication 501, Exemption, Standard Deduction and Filing Information. If part of your earned income is from tips, see Tax Topic 402, Tips. Read the rest of this entry »

Business software, in general, stands for any such software that can be used for commercial purpose by a commercial establishment. Modern business requirements demand speedy and accurate accounting. But that by itself is not enough, as there are a number of small and large business establishments working all over and many of them may not be able to afford the additional cost of hiring accounting professionals.

Besides, larger business houses need a greater work force of accounting professionals to handle the large amount of transactions carried out by the establishment. Either way it means additional costs and high time consumption. Business accounting softwares tend to work faster and more accurately on one hand and lighten company’s financial burden on the other. Read the rest of this entry »

IRS audits can be stressful, time consuming and, in some cases, expensive.  This article provides an overview of how to approach an IRS audit.

The first step is always to gather information.  Taxpayers should start by locating their tax returns for the tax year being audited and the tax year prior and subsequent to the tax year being audited.  Taxpayers should then look for documentation to support any tax deduction or tax credit that they claimed on these tax returns.

Particular attention should be paid to expenses listed on Schedules E (for investment property) and C (for small businesses) and items listed on Schedule A (assuming that the taxpayer opted not to itemize their deductions).  Mileage expenses, charitable gifts, contract labor, cost of goods sold, and other unusually large items will draw the IRS auditor’s scrutiny. Read the rest of this entry »

Congress knows that a very large majority of Americans want a vastly simplified tax code.

Congress also knows that much of its power would be removed by simplifying the tax code to its fullest extent.

Millions of Americans want a flat tax and millions of others want a consumption tax of some kind. Collectively, we citizens know, that what we have now, is almost criminal. Read the rest of this entry »

Each year millions of Americans give a gift to other individuals that they know.  Gifts can be considered anything from a new vehicle to a trip to a piece of land.  A gift tax is a tax that is imposed when an individual gives away a certain amount of gifts that are considered valuable.

According the Internal Revenue Service (IRS) a individual who gives a gift or a combination of gifts to one person that is valued at over eleven thousand dollars must pay a gift tax.  The Internal Revenue Service (IRS) does not require that the individual who received the gift pays the gift tax.  The only individual who is responsible for reporting and paying the gift tax is the person who gave the gift away.  A gift is when something is given away at no cost.  The Internal Revenue Service (IRS) defines a gift as something that is given away with out receiving anything of similar value in return.  Gifts that are recognized by the government include property and money. Read the rest of this entry »

Unfortunately, there is no flat cutoff. The IRS says the answer depends on what information the records contain and the kind of transaction involved.

It supplements this vague guideline with a cryptic warning: Keep supporting records for “as long as they are important for the federal tax law.” Translated from governmentalese, this means you should save receipts, canceled checks, and whatever else might help support income, deductions, exemptions, credits, exclusions, deferrals and other items on your return, at least until the expiration of the statute of limitations for an audit or for you to file a refund claim, Read the rest of this entry »

According to the Internal Revenue Service (IRS) an Estate Tax is a tax that is imposed on your right to transfer your property and belongings after your death.  The individual who is in charge of handing and filing an Estate Tax return is often the estate representative.  An estate representative can be an family attorney or a family member who was declared the executor of a state in a will.  When dealing with an Estate Tax there are number of things that an individual or family must do when preparing to deal with the Internal Revenue Service (IRS). Read the rest of this entry »

There are three types of tax that you will be responsible for when you start your eBay business.  They are 1) sales and use tax, 2) payroll tax and 3) income tax.

Sales and use tax - Just about every state, and many cities and other local authorities, imposes a sales tax on items sold.  Each state has different rules, so it’s important to find out the rules in your state and city.  As a seller, you are responsible for collecting and remitting the proper sales tax to the state you live in.  You are also responsible for preparing and submitting a report detailing the amount of your sales and the sales tax collected. Read the rest of this entry »