One of my friends fired her adult sitter of 4 years and asked my daughter to sit for her. She is making 0 a week over the summer, with a few weeks off for vacations. My friend did not claim the deduction over the past 4 years because her sitter refused to claim it as income (illegal and under the table, I know). My friend is willing to keep it under the table with my 15 YO, but if she can claim some of it ~ that would be great for her.
My question is how much does my daughter have to make before having to pay taxes. She purchases craft items, takes them bowling and to the movies… Does that count towards expenditures. Do you have to have a business license to do that? She will make appx. 00 this summer.
We will claim her on our taxes as a dependent. If I can help my friend out by reducing her taxable income, I will.
I just don’t know what to do.

My husband receives a car allowance with each pay period. He also receives reimbursement for gas and maintenance. But nothing for car insurance. Now it seems the car allowance is taxable income on our W-2 but our H& R Block Tax Provider says it is not being taxed. But when I look at his W2 it shows up on line 1. I’m a little confused??? Can we deduct any of the car allowance off? How do we know if we are getting the full amount in reimbursement compared to the .48 mile reimbursement. Is there a standard way to compare?
Also, is there a depreciation deduction if he is putting a lot of miles on his car for business.
Yes, he keeps a mileage log and records of gas and maintenance reimbursement.

Hi, help me please
Morgan and Maggie are married and have two dependent children. They also fully support Mary’s mother who lives with them and has no income. Their 2006 tax and other related information is as follows:
Total salaries 0,000
Bank account interest income 3,500
Municipal bond interest income 1,500
Value of employer provided medical insurance 3,500
Value of premiums for ,000 of group term life insurance provided by employer 0
Dividend income from ABC stock ,000
Loan from Morgan’s parents ,000
Gift from Morgan’s parents ,000
Gain from the sale of qualified small business stock held more than 5 years ,000
Total itemized deduction ,000
compute Morgan and Maggie’s taxable income

Okay. So I don’t believe that taxes should be raised for anybody. I actually believe that we should switch to a consumption tax. However, this notion that Democrats want to raise taxes on the rich is unfair is starting to bother me a little.

Our tax system allows for multiple deductions based on the depreciation of assets, interest payments on real property and charitable donations, etc. Just owning a house gives you a great deal of deductions.

Is it not logical to think that a person with the means to reduce their taxable income through deductions can potentially pay a smaller percentage of taxes in relation to that income?

Example: If my tax liability is ,000.00 and I have a total of ,000 in deductions, which lowers my liability and my amount due is now ,000. My ability to invest in businesses, buy property and other assets, allows me to use my capital to lower my liability. (Okay, these numbers don’t make a whole lot of since. I’m just trying to prove a point)

What are your thoughts? I’m not an economist so your opinions would be pretty cool.

He prefers the optional standard deduction. For the taxable year 2006, below are additional data:

Gross business income 1, 500, 000
Gross compensation income 600, 000
Itemized Deductions 500, 000
Premiums paid on health ins. 20, 000
Prizes won in a billiard tournament 100, 000

What is the taxable income?
What is the tax due?

I’m the sole shareholder of a corporation which operates a travel agency for business travelers. I want to donate computer equipment to a qualified charitable organization. I bought the equipment 2 years ago for ,000 and expensed the entire amount under section 179. The market value of the computers is ,000. If my corporation’s taxable income is sufficient for it to deduct up to ,000 in charitable corporations, how much tax deduction would I received for this donation? I know that IRS publication 544 gives the method for depreciation recapture for section 1245 assets, but the wording is kind of confusing. Can anyone help??? Thanks!!

The federal government’s biggest single source of revenue is from
foreign aid.
loans from banks.
big business.
individual income tax.
2. Someone’s total income minus certain deductions and personal exemptions is that individual’s
taxable income.
gross income.
withholding income.
depdendent tax.
3. When the government’s borrowing is greater than its income, it creates a
national debt.
government securities’ risk.
withholding situation.
national taxable income.

The owner of the company, is single and has no dependents. He uses the ,350 standard deduction in computing taxable income for 2007. The personal exemption amount for 2007 is ,400. This is his only source of income. Compute after-tax income if:

a. the company is a sole proprietorship, and the owner withdraws ,000 for living expenses during the year.

b. the company is a corporation, the owner is the sole shareholder, and the corporation pays out all of its after-tax income as a dividend to the owner.

c. the company is a corporation, the owner is the sole shareholder, and the corporation pays the owner a salary of ,950. This will increase the corporation’s business expenses to 9,950.

My wife and I are not eligible to use contributions to our Traditional IRAs as pre-tax deductions because we both have employer sponsored retirement plans. In the past year, my wife’s employer offerred a new Roth 401K which we changed her full contributions to so her entire 401K contribution is now after tax. Having said that, does that open the door to make tax deferred contributions once again to her Traditional IRA since only one of us has a pre-tax retirement qualified plan? Other than muni bonds or getting a business license, I’m pretty much out of methods to reduce my taxable income and am looking for any loopholes possible.

Hi!
I work as w-2 employee. But I got the job via a headhunter who needs me to pay him for referral. I have agreed to pay him provided I issue a 1099 to his company. When I issue him 1099 at the end of the year, will it be completely tax deductible? Or do I need to have a business set up to get a full deduction on the amount I will pay his company? Basically I want to make sure that the amount I am getting paid on my w-2 does not get reported as my taxable income as I will be paying him a percentage on it for referral.