Archive for the ‘Avoiding Tax’ Category

Beat the Payroll Tax Penalty

Posted by John Ellsworth, Esq October 2nd, 2013

Beat the Payroll Tax Penalty – How It’s Done Payroll tax penalties, IRC §6656, can be devastating. A payroll penalty usually hits businesses that can least afford them, new business and businesses with weak cash flows. There are things businesses can do to reduce a payroll tax penalty. The first thing to consider is to [...]

3 Smart Year End Expenditures

Posted by John Ellsworth, Esq December 1st, 2012

While in the mode of holiday shopping, consider these 3 tax-smart purchases. Make Charitable Contributions Consider making charitable contributions before year-end both to obtain the maximum tax deduction and to fulfill any charitable programs or commitments you may have established for the year. Pay Tax-Deductible Expenses Consider paying tax-deductible expenses prior to year-end. Some common [...]

Business Tax Changes for 2012

Posted by John Ellsworth, Esq December 1st, 2012

Whether you file as a corporation or sole proprietor here’s what business owners need to know about tax changes in 2012. Standard Mileage Rates The standard mileage rate in 2012 is 55.5 cents per business mile driven, 23 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service [...]

Individuals’ Income Tax Changes for 2012

Posted by John Ellsworth, Esq December 1st, 2012

Here’s what individuals and families need to know about tax changes for 2012. From personal deductions to tax credits and educational expenses, many of the tax changes relating to individuals remain in effect through 2012 and are the result of tax provisions that were either modified or extended by the Tax Relief, Unemployment Insurance Reauthorization [...]

If You Were My Client…End of Year Tax Strategies

Posted by John Ellsworth, Esq November 23rd, 2012

Call your tax lawyer or CPA.  Why?  Because big federal tax changes that would kick in January 1 could boost your tax bill. As I write this and the so-called “fiscal cliff” looms, it’s anyone’s guess exactly what 2013 taxes will be. In less than two months the Bush tax cuts expire.  Congress must decide what [...]

How the IRS Locates You

Posted by John Ellsworth, Esq October 22nd, 2012

From time to time I’m asked just how the IRS goes about locating people who are in hiding and trying to avoid the payment of taxes. The answer to this question is given in the Internal Revenue Manual (IRM), which provides as follows: For domestic accounts, research of the following resources is required: Telephone directories [...]

How Do The Rich Pay So Little in Taxes?

Posted by John Ellsworth, Esq May 5th, 2009

Many people hear about the rich and marvel that the rich seldom pay taxes. “How do they do it?” you wonder about the rich. “How do they make scads of money and not pay tax?” Well, the answer can be summed up in one word, planning. The rich plan how their tax return is going [...]

Per Diem and Travel Expenses

Posted by John Ellsworth, Esq May 2nd, 2009

Was Today’s Lunch Deductible? Away From Home Expenses A deduction is allowed for ordinary and necessary traveling expenses incurred by a taxpayer while away from home in the conduct of a trade or business ( Code Sec. 162(a)(2); Reg. §1.162-2). This deductions always arise when we are defending individuals and businesses on their IRS tax [...]

Offset Education Costs

Posted by John Ellsworth, Esq April 23rd, 2009

Education tax credits can help offset the costs of higher education for yourself or a dependent. The Hope Credit and the Lifetime Learning Credit are two education credits available which may benefit you. You may be able to subtract them in full from your federal income tax, rather than just deducting from your taxable income, [...]

Beware the Payroll Tax Trap

Posted by John Ellsworth, Esq April 9th, 2009

This week (so far) has been about payroll taxes around our office. Clients come to us from all over the U.S. with payroll tax horror stories. So here are some ground rules and insights into the topic. First, using withheld payroll taxes for other purposes besides paying the tax can be a dangerous and very [...]