I own two rental properties & want to form an LLC. Is this enough homes to do this? They’re not worth but about 50k each. Is the IRS extremely picky when it comes to deducting part of your home to "manage" your business (in this case, an LLC)? I have a friend that works in sales, like me, and this friend does it every year (although, from a moral perspective, I think it’s wrong… they have a lot of personal belongings in their "office.") Any help is appreciated.

By what percentage will forming an LLC reduce my tax rate?

I know nothing about taxes, as my wife is an accountant (she thinks the idea of setting an area of our house as "office space" is a red flag to IRS).

Proposed taxes and increases.
1.25 percent tax on their property insurance to pay for firefighting in areas prone to wildfires. This tax would be imposed on every homeowner, even those who do not live in wildfire areas. This would be a 5 million tax increase.

Democrats want to create a new split-roll property tax on businesses, which would be a billion to billion tax increase. Businesses would pay higher taxes on offices, warehouses, and storefronts by either paying a higher tax rate, having their property assessed at a higher value, or having their property reassessed more often.

They have suggested reducing the child dependent tax credit, which would be a .4 billion tax increase on families with children and eliminating the senior citizen tax credit, which would be a 5 million tax increase. They have also suggested eliminating the homeowners mortgage interest deduction, which will affect every California homeowner.
Also a .80 cent tax on a 6pack of beer…a 25 cent tax on grcery bags.
This is just a few of the new taxs they want to cover the budget problem….they are also proposing a 1 percent tax on Ipod downloads.

I keep reading these comments here that claim that Obama will raise taxes on corporations, which will cause companies to shut down, and people to get laid off etc..

So here is a little information from someone who is quasi-literate in such affairs. First of all Obama is not talking about raising corporate taxes, which are very different from income tax. Obama wants to raise income tax (not corporate tax or capital gains tax) on families that make more than 250 thousand dollars a year. So your boss, who probably makes more than that, would want to get paid a little more so he can offset the higher tax that he would have to pay. The increase will come from the PRE-TAX profit of the company that you are working for. More a company pays in salaries the less it pays in tax as the salary, being an expense, is tax deductable. So in other words that tax that would otherwise be paid by the company is now paid by the individual (your boss). So why the whole drama? The answer is actually simple. Corporations have found a lot of loop holes in tax laws and they never pay the taxes that they are supposed to pay. The individuals on the other hand have to pay straight forward taxes based on W2s which some deductions.

So raising your boss’s tax rate is not going to effect your job or the health of the company you work for. Just the tax system will become better and more stream-lined.

I have tried to explain this as simply as possible. I know some of you are going to ask for sources, but you are no websites that will tell it to you in one paragraph. It is common sense if you want to understand it.

Budget..entitled, ironically, “A NEW ERA OF FISCAL RESPONSIBILITY

AOL News ^ | March 13, 2009, 8:02am |

Sen. Dave Gregg points out blow by blow the HYPOCRISY riddled through Obama’s Budget entitled ironically, “A New Era of Fiscal Responsibility.”

Gregg writes, “The argument that this budget doesn’t have tax increases is, I think, an Alice and Wonderland view of the budget.”

-Raising the tax rate from 35% to 42%, eliminating deductions on mortgages and on charitable deductions. Small businesses will be feel the burden the most.

-“Cutting the debt in half in four years is truly spurious, because you take the deficit and quadruple it, and then you cut it in half, that’s like taking four steps back and two steps forward. You’re not making any progress. You’re still going backwards.”

-Raising “a massive sales tax, a national sales tax on everybody’s electric bill, especially people in the Midwest and the Northeast. And what do you do with that revenue? You don’t use it to contain the size of government. You use it to expand government.

"There’s a representation that 80 percent of the first billion is going to go for your make-work-pay tax credit, but the next 20 percent goes to raise the size of the government.
And then on top of that you’re going to get another 0 billion potentially, and there’s no representation of that coming back to taxpayers."

"In fact, there’s specific language which makes it pretty clear that that’s going to be used as walking around money for various constituencies that are interested in spending it."

"They may be worthwhile constituencies, but it’s a heck of a tax burden to put on the American people.
And it represents a massive expansion in the size of government.
I guess that’s my big problem here."
ooops, I got Gregg’s first name wrong…. but I think you know about this man…. smile..
yet, its AOL… because the major news networks have been discredited as purveyers of lies..
HAM O BAM A
for the record: obama’s goons approached Gregg…… then lied to cover their behinds since obama can’t stand to loose….ego-centric

Due to some massive tax credits and deductions I was in the 10% tax bracket last year. Due to further investment in a business, I’m looking at the 10% bracket once again. If I withdrew 0K from an IRA rollover (it used to be a 401k, now it’s an IRA) what would I be hit with? 10% tax plus the 10% penalty or would I be hit with my tax rate at the time of accumulating the 401k (33% or so).

Thank you Yahoo Answer Community in advance!

As smokers we know that tobacco is bad for our health! But we are the ones that are penalized for it! We are the ones that have to pay more for our health insurance and high taxes on tobacco! Instead of more taxes on cigarettes and tobacco why not put taxes on grocery items or raise the alchohol taxes! It not fair to target 1 group! Grocery tax would target everybody and it would be a more fair approach! I live in Indiana where they just put a state wide ban on smoking in businesses and places of employment! They had already spent money on airtight rooms with separate ventilation units and sealed doors! Smokers have been persecuted for a long time! I think that smokers should be able to claim some kind of tax deduction for the extremely high tax rate on tobacco! I WOULD ONLY LIKE SMOKERS TO ANSWER THIS QUESTION! THANK YOU

Conservatives often point out that our corporate tax rates are the second highest in the world. However what they omit is the large amount of deductions and loopholes in the government, the IRS itself concludes that a quarter of corporations in the US don’t pay any corporate taxes at all. In effect even though the tax rate is lower in Ireland corporations pay more due to fewer deductions. Also European countries afford lower corporate tax rates by having MUCH higher taxes on income as well as employer funded entitlements. So are conservatives just misinformed that is it is cheaper to do business in Germany, or are they cherry picking the facts to starve the federal government yet again(by cleverly omitting the other taxes in Europe) and skirt the federal guidelines that are tied to the deductions?

Assume:
100k 1099 Income (consulting)
50k Salary paid to employee owner
25k in eligible deductions/write offs
Leaves 25k to be distributed to shareholders (me)
Do I get taxed on that 25k if I don’t take it out of the business? If I do take a distribution, what is the tax rate?

I am looking at renting to own a home so that I can open a home day care business. At least 80% of the home will be used for the daycare only. The home will cost 0k, with 00 a month rent. 00 of this monthly rent will be interest paid.

The deal is being set up so that I *will* be able to claim the interest as a deduction at the end of the year. I hope to make a total of k per year income, before taxes. I have two questions:

1. Is it correct that I can expect my tax rate to be 40% on my home business income?

2. With respect to the house, can I expect the tax deduction to offset any of the taxes that I pay on my income? What will this mean in actual savings?

Thank you!

Be honest. We are in the 28% bracket. After all was said and done, with very few deductions other than the standard ones, our final tax burden was right at 12% of our gross, not counting FICA. So, with everyone complaining about the tax rate on business and the rich, what do you think their final burden really is, with all the deductions they can take, real and imaginary?
What was yours? No one pays what the bracket says.