Taxes articles

Just image, you are a small manufacturing company, business has been good, but yesterday you received a call from a customer who wants 50,000 widgets in 45 days. The customer is a large account and if you turn the business down, he may never call you again.Problem: You need to hire more staff to meet the manufacturing needs of this customer. AND the customer said nothing about an advance payment. In fact he mentioned that he would be paying net... Read More

With the massive losses caused by Katrina, the economy of the Gulf Coast region is in extremely bad shape. Fortunately, there is a quirk in the tax code that can help you generate a large refund from your 2004 taxes.Apply Losses to 2004 TaxesWhen a large geographic area suffers a disaster, the President can declare it a federal disaster area. President Bush has made such a declaration for the Gulf Coast area.While you've probably heard such declarations occur over the... Read More

In the largest criminal tax case ever filed, KMPG has copped a plea to using fraudulent tax shelters to bilk the government out of 2.5 billion dollars. KMPG has agreed to pay a fine of $456 million dollars, but nine of its executives still are under indictment.Son of Boss Tax SheltersFrom 1996 to 2003, KMPG promoted a tax strategy known as the Son of Boss. This shelter was used to create phony tax losses that could be claimed by wealth... Read More

With gas prices at an all time high before Hurricane Katrina left her mark on our nation, most Americans were hoping that gas prices would settle down once summer passed. But gas prices have jumped as much as 80 cents a gallon across the country once Hurricane Katrina destroyed the Gulf Coast and impacted all of our lives.While Hurricane Katrina is a horrible tragedy, it's not just affecting the Big Easy. Hurricane Katrina will impact every single American that commutes... Read More

Whether helping the kids with a down payment on their first home, paying the premiums on a life insurance policy in an irrevocable trust, or moving appreciated assets to a younger generation, annual gifting will touch the lives of millions of Americans. But before the transfer is made, an investor should spend some time looking at the investment and the tax ramifications of the property to be passed.Much of the gifting itself will be done under the Annual Gift Tax... Read More

The Sarbanes-Oxley Act, also called the Public Company Accounting Reform and Investor Protection Act of 2002 was signed into law on July 30, 2002 by President Bush. In the aftermath of Enron, Arthur Andersen, Global Crossing, and WorldCom, SOX promises greater corporate accountability and transparency. Named after Senator Paul Sarbanes and Representative Michael G. Oxley, SOX focuses on the importance of ethical behavior in corporate governance-across the United States and now?overseas.All countries have government-required laws like Sarbanes Oxley. In the... Read More

Once a year Canadian taxpayers are required, by law, to file an income tax return in the prescribed form: $150(1).For individuals: $150(1)(d) ITA, they must do so by April 30 of the following year, provided that they owe any taxes or if they are served with a requirement to file: $150(2) ITA.There are other rules for corporations, trusts, partnerships and deceased individuals.If any taxpayer is required to file under $150 then they are also required to estimate the amount of... Read More

As an employer, you must pay employment taxes if you have employees. Fail to pay and the IRS will rain all over your parade.PenaltiesIf you have employees, you absolutely must deduct and withhold various taxes from the paychecks of your employees. Since you are deducting money from the employee's paycheck, you are handling their funds. This fact is very important to the IRS and it places great emphasis on any failure to deposit employment taxes.If you fail to pay employment... Read More

If your business has employees, you must pay employment taxes. The payment system can be a bit confusing, so this article discusses how to go about depositing employment taxes with the IRS.Depositing Employment TaxesTo pay employment taxes, you must deposit the money with the IRS. As is typical with tax situations, the payments are not actually made to the IRS. Instead, you must deposit the employment taxes with a federal depository. Moving the burden to the private sector, the IRS... Read More

As your business grows, you are going to need help. This help comes in the form of employees and independent contractors. What you can write-off is dependent upon how your helper is classified ? as an employee or independent contractor.Independent ContractorWhenever possible, you want to use independent contractors to assist you. Payments to independent contractors are completely deductible. You simply claim the deduction on your return. If you pay them more than $600 during the tax year, you also must... Read More

April 15th looms in front of most people every year like a big, full moon full influencing a tax based frenzy, but knowing where to find tax breaks for your home based business can make that frenzy a little less frantic and more beneficial to you and your home based business. Finding tax breaks for your home based business is not overly difficult, but make sure you discuss tax breaks for your home based business with the person doing your... Read More

Ever wish that, as a business owner, you knew exactly what would raise "red flags" at the IRS? Or how to make an IRS audit go as smoothly and painlessly as possible?If you're in the right type of business, you can get that information, directly from the IRS!Traditionally, IRS examiners have been responsible for auditing many types of businesses. An examiner might audit a grocery store one week and a construction company the next. A lot of the examiner's time... Read More

Six Urban Myths ? Taxation"I am proud to be paying taxes? I could be just as proud for half the money." ? Arthur GodfreyTemporary Taxation in Canada In 1917, the Income War Tax Act (7-8 George V, Chap. 28) introduced Canadians to a 'temporary' tax on corporate and personal income.After 88 years it's safe to say that the first myth of taxation is that Parliament considers taxation to be 'temporary.'Taxation Isn't Constitutional You've heard that it is against Canada's Constitution... Read More

Strategic planning throughout the year results in a minimal tax balance. The objective of planning your tax payables is not to prevent paying taxes, it is to pay no more than your fair share of taxes, and keep your money where it earns you the most.If you aren't aware of it yet, Uncle Sam pays no interest. If he deducts your tax payment monthly or quarterly, and takes more than his fair share, he doesn't give you anything back for... Read More

Managing a business small, medium or big requires you to pay your taxes, as well as your employees taxes. Managing a payroll can be an arduous and taxing job, no pun intended. There are laws that require us to pay taxes and everyone have to comply with that. But keeping up with the payroll can give many people sleepless nights. There are so many deductions needed to be done and they have to be exact to avoid confusion and complications... Read More

You're at your office, or home, and the doorbell rings ? it's the Canada Revenue Agency ("CRA").The first thing to do is find out why they've come. If it is an "inspection, audit or examination" of your books and records under §231.1 Income Tax Act ("ITA") then they have a right to be at your place of business, during business hours, to do these things.Just collect a copy of the business card of the officer and ask them to write... Read More

Employers often ask employees to designate the amount of tax withholdings for paychecks. Occasionally, employees will fail to withhold a sufficient amount in the eyes of the IRS. The IRS will then send a "lock-in" letter on the amount to be withheld. What's an employer to do?WithholdingsFour taxes must be withheld from employee paychecks ? Medicare, Social Security, Federal Income and State Income tax. The Medicare tax is set at roughly 1.5 percent of salary while social security is set... Read More

As teachers and students head back to school following a glorious summer, it's time to remind teachers to organize 2004 school expenses. Under a temporary tax code change, teachers can deduct certain school-related expenses from adjusted gross income.Educator Expense DeductionIf you work in the education field, you may be able to deduct up to $250 from your adjusted gross income for 2004 taxes. Unfortunately, the deduction is only applicable to 2004, but there is a reasonable possibility it will be... Read More

Let's assume that you would like to begin saving for your children's education fund. At the end of each year, for the next 8 years, you will contribute $2,000 into a Coverdell Education Savings Account (Education IRA), using your after-tax dollars. The money grows tax-free, and neither the contribution nor the interest is taxed when you make a withdrawal, as long as you use it for education purposes.By the end of 17 years, your Education IRA will have accumulated to... Read More

"What we've got here is a failure to communicate." --Strother Martin in Cool Hand Luke Statutory Law Governments pass laws, it's what they do. It is the job of others to interpret the laws that Parliament has made.Statutory Construction It is "presume[d] that the legislature avoids superfluous or meaningless words, that it does not pointlessly repeat itself or speak in vain. Every word in a statute is presumed to make sense and to have a specific role to... Read More