f13.net

Previously, I justed used H&R Block Online to file. I would get a decent refund, and have to pay about $45 for using their site.

But this past year, I made almost nothing. I was working about 12 hours per week, and only worked for about half the year.

I'm just wondering if there is a minimum amount a person has to make in order to be obligated to file taxes. If I was going to use HR Block again (which I am not, Zonelabs has given me a free solution), the bill would eat my entire return.

Up here you still have to file, but if you make that little it only takes five minutes to do the whole form, since you are mostly just adding up zeros.

1040EZ is really easy.

And, if you've filed before, I think you always have to file. If you make under 15k or somewhere around there (hopefully you made more than that) then you can be exempt from taxes, but you still have to file.

www.taxslayer.com is only $9.95 and it files both federal and state as long as your gross is under $50,000.  If Zonelabs does them both for free then just do that.  Also, depending on your age and a couple other considerations you might qualify for the earned income tax credit.  That means the gov gives you some extra living expenses money.  In that case, the smaller e-file sites probably won't work.

Once you're no longer a dependent or you're forced to file for making too much money despite dependent status, you're pretty much stuck filing even if it's to say you didn't earn anything (which can get you very funny looks from your local auditor...tax officials seem to go with the "guilty until repeatedly proven innocent, and probably still guilty even then" outlook)

$8200 is the '06 cut-off for single filers.  If you made less than that, you're entitled to a full refund of witholdings anyway.

If you are owed money you do not have to file.

Edit:  I should restate that.  There is no penalty for not filing if you are owed money.  That's not the same as not having to file.

Great, so I'll get about $200 back, if that.


I think I grossed something like $2300 this past year. But at least now I am getting bunches more, and working 40 hrs a week until I decide on Grad school or USAF.

I'm pretty sure I speak for everyone when I say the USAF would do you some good but you seem to be more coast guard material.

You're certainly one to talk.

You're certainly one to miss the point. As for myself, I couldn't pass the fucking entrance exam for the police academy. And I'd never claim otherwise.

So why rag on anyone else then....?

...  How long have you been here?

Hey now, my original post wasn't ragging. It was simply my observation from the content of Strazos' posts, particularly in the politics forum.

Oh, in that case, a "ba-ZING" is in order.

There is this neat thing called e-file.  If you go to the IRS (http://www.irs.gov) site, they link to several services that will let you file online for free if you meet their income requirements.

(I used TaxAct.com, Standard not Delux, which let me itemize and it was still free. Don't use Mozilla if you go there though, it switched me to Delux without me selecting it, so I had to do the whole thing over again. :x)

We got a bit of a suprise this year.  First year the wife made decent money... first year Uncle Sam gets to bend us over.  Woot!  Go, go, gadget married status.

I have an accounting degree and I use TurboTax.com's online functions. If you're filing 1040EZ with one source of income it's 9.95 and a breeze. That's not including applicable state returns though.

Better yet I use the Deluxe version because I have investment income that it can pull directly from my online Fidelity account so I never have to enter in anything. I had two W2's, investment income, and a state return, and I was done with my taxes in 45 minutes. They efile for you for free, and they deposit your refunds in your bank account if you want with no annoying wait time on checks.

I seriously can't pimp that place enough for what it does. My entire family uses it now.

If you are using the 1040EZ, just fill it out yourself.  It's designed for retards so you will be hard-pressed to screw it up.  I'd even fill out the 1040 myself if I wasn't itemizing.  Or lazy.

I used taxact.com this year, cheap and easy.  The IRS didn't accept my AGI from last year for some reason for the electronic signature, so I still had to mail in paper.

Correct me if I'm wrong - but you should file your taxes every year, especially in years where you've made little.  Calculating your return in later years while involve an average of taxes from several previous years, and so it's worth your while to let them know when you didn't make much.

I'm 20 now, and I'm kicking myself that I didn't start doing my taxes at 18, even though I've got basically nothing to report.

Taxes are like cigarettes.  If you don't start, you don't have to quit.

A return is determined year-by-year with no influence from previous returns.  (There are a few exceptions, but the majority of people will not have these.)  However fluctuating returns are a potential flag for auditing, especially if there is a large decrease in income.  The IRS wants to know why you are cheating them/slacking off.

Still, it is not a bad idea for those of college age to do returns.  It gives them a chance to learn about the system when they are not worried about itemizing, the marrige penalty, or any other intricacies.  Once those do come up they at least have a little experience so they do not get completely flustered.

For 2005:

- A single individual (who can take their own exemption) who is a CITIZEN or RESIDENT who makes more than $8,200 must file a tax return.

If you make under that amount,  you can choose to file or not to file.  If you have withholdings you want to get refunded,  you may want to file.

- A single individual who is claimed on someone else's tax return has different limitations.  They must file if:

  A. Has over $800 in unearned income.

  B. Has over $5,000 in earned income.

  C. A combination of the above.

(Reference:  US 2006 Master Tax Guide)

Honestly,  if you have a fair amount of itemized deductions or adjustments to income,  GO GET YOURSELF A PUBLIC ACCOUNTANT/CPA.

We stay abreast of new changes and benefits in the tax law,  and can many times help you out.  Example:  Child tax credits, dependent care credits, NYS retirement credits, STAR calculation and/or financial aid calc, tax planning through retirement accounts, tax planning for your personal business, and the 1,000 other last minute or temporary credits available to you.

For example?  Energy efficency credits.  In 2005,  you get tax credits for installling or using a variety of "energy efficent" items,  like new windows.  Right now, the credits expire in 2006.

****Get a quote ahead of time!  Feel free to shop around,  and if they give you "we charge by billable time" get an average out of them.****

I especially recommend it for people like angry.bob and Commander Slack,  who are running their own businesses and filing a Schedule C.

Let's not forget any Hurricane Katrina donations, including housing displaced people, gets some special attention this year.  Why didn't I use a human being this year?  Nothing fancy on the Sched A and TEH LAZIES.

I miss teletax.

I miss telenet.

I miss telearena.

I had a quip, but it felt too dirty to post.

I love NY. The fed form took me maybe 15 minutes, and that's with a few new kinds of income this year.

An hour and a half later, I decided to give up on NYS taxes for the night and bash shit in Oblivion.

You can't just attach your w-2. You have to copy that information onto another form and attach THAT to the NYS short form. Then they ask you to e-file next year so they can save paper. Huh?

Internet tax. After three pages, they make it clear I can pay $20 to absolve all transactions under $1000/ea over the internet. Not so bad. But making me read three pages before they say "or just go by this chart"? Blah.

My favorite was some esoteric deduction (on the short form, no less). Since I had some new income types, I was reading things pretty carefully. Then they blew my mind. There is a category for income due to returned stolen property from Nazis. I shit you not. On the SHORT FORM. That's when I said "Oh, FFS" and gave up for the night.

I wish they could seperate NYC and NYS, too.

Ok, I feel better. And: telegraph, telephone, telewoman.

Thank you for reminding me why I am happy we have a sales tax but no income tax in Texas.

Maybe you can start a campaign for tax reform: "Doing my taxes makes me long for Oblivion!"

I miss... uh, my old board nick.


Write "What's the difference between Jews and pizza?" in the deduction box.

I'm at a loss for the difference ?

Is it anything to do with stuffed crust ?

I'm guessing it's got something to do with the saying "Hot from the oven."  But I don't really want to know.

Just spent three days doing the taxes for a trust I am involved with. No program for it so I did it all by hand digging through the instructions and regs. Good god this system sucks. Took me quite a while to figure a lot of this stuff out and I'm a frigging trusts/estates attorney.  I think it is all a conspiracy to keep CPAs flush with argyle socks and sweater vests. Get to do my personal taxes later this week and have a sneaky suspicion I am going to get slaughtered.

We need to get this passed through as quickly as possible (http://www.amazon.com/gp/product/0060875410/sr=8-1/qid=1144554450/ref=pd_bbs_1/102-5422848-5800139?%5Fencoding=UTF8)

Meh. I'm not big on regressive taxation that discourages consumption (the life blood of our economy since we don't actually make anything any more).  I've heard that Europeans revile their VAT so I don't know why we would want to go in that direction.  Additionally, the law of unintended consequences would probably mean approximately 463 loopholes or dodges would spring up.  You could simplify the tax code by 1) reducing exemptions/credits/deductions and 2) writing the damn instructions in English.

The current tax code is 10 times the size of the King James Bible.  "Reducing" something that size would quickly become a lesson in futility.  We're pretty much at the point where we need to tear the bitch down and start over.

I also don't think this would be either regressive or really cut down on consumption.  For one thing, you'd start the year with the federal government sending everyone a check right off the bat.  You'd get more for dependents, but other than that everyone essentially gets the same amount.  After that we're talking an across the board 23% sales tax, and that'd be the end of it.  For most people they'd be taxed far, far less than they currently are.  And truth be told, I wouldn't be heart broken if this did have a slight drag effect on consumption; it'd incentivize saving, something which we aren't doing at all in this country.

This is  untrue. A 23% tax on all purchases would be a HUGE tax increase on at least 50% of the American public (and probably more) as they don't pay much (if any) income tax so their taxes are limited to existing sales, FICA and (maybe) property tax. No way that gets up to 23% of their total spending.  Those with lower incomes spend almost all of their income, thereby making it not only a large tax increase but also regressive to boot.  Add onto this that now everything now costs 1/4 more and you will have reduced consumption and immediate inflation (until wages catch up, if they do).   To have any shot of it not being a complete disaster, you would have to exempt large classes of "necessities" which just creates the same classification problems we have under the current system.

It's quite a horrible idea really.

You could easily cut down the code by eliminating large swaths of exemptions/credits/deductions and adjusting rates accordingly.  They are too entrenched (and popular in some cases) so it isn't realistic, but it is a better idea than fucking over those who can afford it the least.

Aw, come on, I love the 'let them eat cake' flat tax plans of libertarian economists!

Right on.

A VAT or Sales Tax of this magnitude would be immensely more regressive for the lower classes,  especially those with children.  In the current system,  most households with income below $40k actually have close to a zero,  or even a negative, tax rate because of the Earned Income Credit. 

As an example,  one of our paraprofessionals is a single mother of two.  She earns a reasonable wage for her education and skills.  She has had a zero tax liability for years,  and in fact received more money from the Earned Income Credit then she paid in payroll taxes.

There's also the fact that any sales tax sufficiently large enough to fund the government will immediately become avoided by most business.  Hell, enough of them skip out of paying Payroll Taxes by paying under the table.  I'd guess from my experience in the field that a fairly significant portion of sales and sales tax is already underreported.  (Have a few retail clients in big shit for this.  A few more I'm almost positive underreport sales and sales tax.

That means,  to effectively enforce a VAT/Sales Tax at these levels,  you'd need a large and oppresive government agency to enforce the regulations, run stings, etc.

1.  Flat tax plans, depending on the setup,  would be no more regressive then the current tax scheme.  See my calculations and analysis on page two and three of this thread:  http://forums.f13.net/index.php?topic=5004.35

2.  The US is already getting a flat tax plan.  Alternative Minimum Tax is slowly phasing in for an increasing number of taxpayers,  and will become a major issue in 10 years for most of the middle class.

You keep your dirty caveman hands off my sweater vests!

You can keep your vests as along as you get rid of deemed allocation rules for generation skipping transfer taxes!

The wife and I are getting absolutely raped to death on taxes this year.

The reason is that self-employed people, even freelancers, are considered the exact same as businesses, despite having about 1% of the advantages and not being able to buy fucking health insurance for any sort of reasonable sum.

I'd say the IRS could lick my balls, but they'd just take that as permission to cut them off and lick them whenever they wanted to.

On a non-tax related note related to being self-employed, my wife and I recently made a property purchase.  It was made slightly more difficult because even though my wife owns & runs a business employing 30-odd people full & part time, the mortgage companies view her as being "self-employed" and therefore somehow more of a risk.  I questioned the semantics of "owner/CEO" vs "self-employed" and just got blank stares.

On the other hand, since I work for her occasionally and I'm not directly named on the ownership papers (never mind that under Idaho law I'm actually jointly vested in her 51% of the company) I could claim employee status, and would not have the same issue if I were to apply under that basis.

My head, she spins...

You may not be referring to this, but you can deduct your health insurance premiums on your Schedule C.

A sales tax has no inflation impact. Yes, the final price is higher due to the tax, but this is not an inflation effect.

Also, reducing consumption in favor of savings is a wash as far as economic growth goes:

Income = Consumption + Savings
Consumption = Income - Savings
Savings = Income - Consumption

It doesn't matter what side of the equation gets taxed as far as econmic growth calculations are concerned. Economies driven by an excess of Consumption (US) or Savings (Japan) can both be robust. The goal should be to find an optimal balance. The US system encourages consumption because earnings are taxed twice: wages then investment income.

Today I can buy an apple for $1.06 (of which 1 dollar goes to the store and 6 cents goes to taxes).  After this proposal is passed, the apple now costs $1.23 to purchase.  The relative value of my money to the purchased product has devalued. How is that not inflation? 


/not an economist so actually asking


Since you are only taxed on the gain realized from investment, the money is not taxed twice. Your wages are taxed when you receive them and, if invested, becomes the amount of basis you have in the investment which isn't taxed if you liquidate the investment.

The term inflation ignores taxes. It is just a definitional thing. Taxation does not affect purchasing power. It is a wealth allocation tool within a society. That said, taxation in practice reduces what one can afford with a given sum of money so I saw what you were saying. I just had a diction disagreement.


Holding cash is an investment with a negative return due to inflation. Therefore, if one is not going to at least attempt to invest unspent wages/income to overcome the negative effect of inflation, then one might as well spend the money (consumption) right now. Any effort to save that generates a positive return no matter how small, results in taxation eventually. So, yes, my use of the term "double taxation" was incorrect in an attempt to be simplistic. But that does not change the fact that one can spend income today or invest it and be taxed again tomorrow.

This is probably too political for me to reply to, but I am pro-flat-tax, if only because of the "fairness" factor... plus I come from a large mass of white trash.

Being self-employed (by IRS definition) is a big mistake.  They add an extra "just because" amount to your taxes.  If I were to go contract again, I'd form a Delaware corp right off.  I don't really know if that would be better but it could hardly be worse, and given my personal beliefs about taxation it makes sense to form a corp anyway.

So you say it is fair to tax the already too poor to sustain themselves even more?  I don't get it.

What would that benefit us? Serious question, I really just don't know.

Did you read the link you quoted?  You know,  mathematical proof that a fair tax regime would be no more regressive then the current tax scheme (depending on setup)?

Hmm....  if folks are interested,  I'll post some general info on self-employment, Fica/Med burdens, and tax organization/planning for personal/small business once I get home from the office.

I read it, but there is a lot more to it than just some numbers.  Margalis explained it all.  It just wouldn't work in America because too many people want too many different things to not be taxed.

Edit:  My bad about the name.

This was explained by the banker poorly.

The major problem for a loan to the controler/owner of a business when the majority is owned/controlled by a single or small group of individuals is risk.  The owner/operator can assume a note or loan on a business and funnel the money directly to themselves as a "debt financed distribution".  If the business is set up as an LLC or S-Corp, this can be done directly.  As a C-Corp, as a loan to shareholder.  These business organizations are set up to offer limited liability to the owners of stock.

Basically, withdraw the funds,  fold up the business, leave the bank holding the bag on a worthless loan to a defunct entity, the shareholder/owner is in the clear.  This is why most banks require large loans to small businesses to be secured by the shareholder/owner directly,  or collateralized by valuable property.

Also,  large loans to shareholder or continuing debit balances in capital accounts are big red flags.

Business organization 101:

If you're operating your own business, small scale, there are a couple of good options:

- Limited Liability Companies (LLC,  recognized in many but not all states)

Basically,  you file a regular Schedule C if a sole proprietorship or a partnership return if more than one member.  You report all income from the LLC as "self-employment income" subject to SE.  The LLC provides the same liability protection as a Corporation, though. 

No double taxation. Money can be taken directly from the business as draws.

Many times the way to go for small business.

- S-Corporation

A corporation that filed an S election.  Basically, an S-corporation works the same as an LLC.  Limited liability,  can take money out as distributions without being taxed, etc.  At high income levels,  it is taxed on it's net income.  Not a concern for small businesses,  since they usually don't hit the limitation.

If you take a reasonable salary,  you can get away with not claiming the additional net income from the S-Corp as self-employment income. 

Example:  Your business makes a profit of $80,000 a year.  Take a salary of $40k,  which is Fica/Medicare taxed and an expense.  The remaining amount (around $40k, less employer portion of Fica/Med) you can flow through as income on investment or somesuch and not claim it as self-employment.  Dodges SE tax.

If you don't take a salary,  all of it is going to be SE taxable just like a LLC.

- C-Corps are not recommended for small businesses.  The only way to get money out of them is to either:  pay yourself a salary,  or pay a dividend.  In the dividend case, you're getting taxed twice.  In the salary case,  you fluctuate your salary too much and the IRS is going to come down on for evading paying the dividend penalties.

Also,  any losses stay in the C-Corp.  In the case of the LLC or S-Corp,  any business losses flow through to your personal income tax return to offset individual taxes.

C-Corps have huge problems in getting assets out, as well.  Never, never, never put real estate/buildings in a C-corp, if you can help it.  Fucking impossible to get them out without getting yourself taxed on it.

It pretty much doesn't matter at this point where you incorporate, either.  Delaware used to be the standby since they were so lenient on filings/minimum taxes,  but most states are pretty similar.  You get taxed in a state if you have nexus there (business location, essentially) to the extent that you do business in the state. 

Cept for some states that are trying to push gross receipts taxes.

-Professional Corporation (PC)

Basically, a C-Corp.  It's designated as an org for professionals (attorneys, doctors, CPAs, etc.).  The major differences are all income taxed at one high rate (35%),  a higher limitation on using the cash method of accounting (10 million vs 5 million), and the IRS will let you get away with conforming shareholder/officer salaries to net Corporate income.
________________________________

Seriously though,  if you're running a substantial business through a Schedule C,  consider meeting with a tax professional to do some tax planning.  At the very least,  they can set you up a decent business org for your purposes,  and probably a SEP/Simple IRA that really shine for sole proprietorships.

And that all makes sense, except the purchase in question was personally financed and not done through the company..so although the company will actually be leasing the real estate from us for its use, we (and not the corporation) are the title holders and are financially responsible for the mortgage.

I think perhaps they weren't clear on what was going on, and it may have been the case that they were thinking what you described.  Regardless, we cleared the financing on the basis of using the property as a rental so it's all good, just confusing :)

Am I Margulas?

It's quite possible for a flat tax to work, especially since different people mean "flat tax" in totally different ways.

What is 100% clear is that "everyone in the US pays X%" would NEVER EVER work for a large variety of reasons - it's stupid in about 10 different ways. Unfortunately this is what the most outspoken of "flat tax" proponents are proponents of.

The basics of our tax system today, varying rates based on income, is great. The problem is all the crap on top of that basic idea. I don't take any deductions or do anything special on my taxes, they take me literally 20 minutes to complete. I make X amount of money so I pay Y%.

Zomg, I hate taxes.

Just finished my return last night. I have an extra $50 a week taken out on top of claiming 0, while my wife also claims 0. We got a grand total of $79 back. The IRS punishes people who report gambling winnings accurately- it is total and complete bullshit. I have to total every winning session and claim that as income, and then they 'generously' allow me to deduct losses up to the amount of winnings.

No wonder so many people omit that kind of stuff from their returns.

Having formerly practiced law in this area, my general advice is to have a separate holding company for the property with insurance coverage for slip and falls.  Lease the property to the operating company for a high "fair market" rental rate.  The operating company gets to deduct the high expense caused by the greedy landowner.  This reduces the operating company's overall tax hit.  The operating company should be an LLC/S Corp as outlined above and pass on the tax savings to the shareholders.  The holding company uses the rental income to pay property taxes and umbrella insurance coverage.  The holding company depreciates the property to reduce the taxable income also.  The holding company, also  an LLC/S Corp, then pass through the income to the shareholders of that entity.  The shareholders of all of the various entities, usually the same group of people, then get multiple sources of income with the lowest taxes possible on their personal income tax return.  They then apply all of the individual deductions and credits to lower the individual tax rate.

The bill is in the mail.   :evil:

You are awesome, Naz. Slimy, but awesome.

I'm a crazy flat-taxer libertarian. I don't feel it punishes people who make a lot more money nearly as much as the current system punishes those who don't. Hell, I'd make anything under $20k/household untaxeable, at the least. Try living on that, especially with kids. Try living on minimum wage.

Taxing the hell out of the rich means they might not be able to afford the second HMMV or house on the other coast. Taxing the hell out of the poor means the kids don't get presents and they eat ramen. That's fucked up imo.

Oh, and no tax breaks for non-wage incomes, all money made on transactions, interest, etc, is taxed out the wazoo. But I won't get into my more socialist stuff like no profiteering on basics like food and shelter...

A flat tax that was implemented would soon turn into a mess of deductions because new technology, earth saving techniques, retirement plans, etc... would arrive.  Basically, a flat tax would turn into a mess of crap just like the current code is.  The only difference would be you wouldn't go look at a table at the end.  If the table part is what is really messing people up, then HELL YEAH FLAT TAX.

You also mentioned the fact that congress needs to pass law to feel good inside.  Basically, flat tax or progressive, there will be a mess of deductions no matter what.  Good news is the death tax is phasing out, so if you have rich parents you don't like help them out a little.....  just kidding.

I don't expect you to, and that is why I don't post my political views.  Nothing was ever gained from a political discussion, especially one that I participate in.  Let's just say that I agree with you that the deductions are the problem.  I have been both poor and middle-class (what is the current definition of "rich" and "poor" anyway?), so I do have some practical experience with my viewpoint.

A mathematical discussion, I can do that.  I think this was already covered, though.  A mathematical or financial reason for a flat tax - any sort where you pay a fixed percentage, no exceptions or deductions - that I have been thinking about lately is that you don't give the IRS money that you could be using yourself.  Rather than withholding some amount more than what you will end up owing, you should know how much you are supposed to pay up front and ideally you would have more money since you wouldn't have to wait until sometime next year to see it.  If you are supposed to pay 15%, you have 15% withheld and that is that.  The extra bit that you used to withhold and get back much later is yours to use as you see fit: you can either invest it, put it in a savings account, or spend it on hookers.  The point is that letting the government use your money for months, interest free, is retarded no matter how you slice it.  I guarantee that they are making more money with it, and you sure as fuck aren't getting any of it.

Heh...  not bad,  and pretty standard operating procedure.  It helps spread the liability around, such that you won't be hung out to dry if one of the orgs runs into legal issues (lawsuit, Workers Comp problem,  income or sales tax issue, etc).

Problems:

When you are lessor and lessee,  and the lessee is your business, you can't dodge out of paying SE Tax by funneling from your self-employed business to your rental company as rental income.  Maybe you can get away with a reasonable income from your rental entity,  but too much and you'll get slapped by the IRS.

Since all the various sources of income flow through to page 2 of the Sch. E,  the total income from all the operations should remain largely the same.  It will all flow through to the same box on the front of your 1040,  and shouldn't affect what tax rate you're in.

Well. Just did my personal taxes. You know it is bad when you don't want to do themto the point that you procrastinate by cleaning out your gutters (which is what I did this afternoon).

Wasn't as bad as I thought it would be thanks to a combination of a large charitable deduction and not making any money this year.  :-P

If I wasn't self-employed I wouldn't have paid any taxes this year at all.  Fucking FICA.

Ah well. Time to sit back and wait for the audit.

I'd just like to know what sadist designed the Alternative Minimum Tax worksheet.  That thing was more complex than the entire 1040EZ, and all it told me at the end was that it didn't apply to me at all.  /sadf

No, it is definitely not to avoid self employment tax.  However, if you add a few more individual shareholders in each entity with stock purchase agreements and maybe an LLC where the general partner is another entity created exclusively for that purpose, you can usually add enough complexity to the issue that, eventually, when the holding company owns more than one piece of property for example, the self employment tax becomes a non issue.

Remember, if the operating company is having trouble initially in paying its bills, there is nothing wrong with the holding company agreeing to forbear collection of rental income until the operating company is flush.  No documentation should be required to perform this transaction as long as the corporate formalities are observed. 

Nothing in that list was revolutionary.  You and I have seen much more complex organizational structures in practice.  It was more for the non-lawyers and non-CPA's to see that you might actually need to pay for some expert advice as some of the experts are actually worth way more than you pay them.  All of this presumes that you hire both an attorney and a CPA.  Any entity that is planning for actual success over the long term needs to refer to competent professionals and not to Tax for Dummies or Corporations for Dummies. 

I have done my own taxes ever since my father in law's trust fund was fully distributed about 10 years ago.  My personal situation is fairly simple.  When you add complexity, add an expert before hand. 

We got slammed by the AMT last year. This year we escaped it largely because we paid down our mortgage aggressively in early 2005 so our mortgage deduction was much lower. Regardless, we owed more than last year even though gross income (not AGI) was largely unchanged.

Anyone who gets a refund is fucking retarded, I will agree with that.  That is why I have made sure my parents and I have not for a long time.  You can't really blame all that on the tax code though, that is just people be dumb as hell and not understanding personal finance.

Hey, I let our lawyer and accountant deal with most of that kind of stuff, especially the taxes--those went out of my league the moment my wife incorporated. 

We weren't even planning on getting into major property purchases; the company really doesn't need to own property at all and doesn't even have sufficient established credit to buy that much real estate.  This just worked out better for us--we get another house effectively paid for on the company dime (rent = payments, all we pay is tax on the income)--and the only one who's cranky is her partner, who had wanted the purchase to drive up the value of his shares.  However, considering that my wife somehow let him have those shares without him ever investing *any* money in the company (don't ask me, I dunno), I'm not exactly falling over myself to hand him money now :)

Very good point about working in other shareholders, that I hadn't thought of.  A reasonable way to transfer assets from one generation to the next is to gift small amounts of stock (value below annual gift tax limits) a little at time.  The giftee still gets a stepup in basis at the death of the parent.

My response wasn't meant to be critical.  As I see,  you know your stuff.   :wink:

The discussion for me is interesting because I often run into the difference between how an attorney and an accountant looks at operations and organization. 

Johnny, the gifting of the shares to transfer assets is what I recommend when setting up a family limited partnership.  It is a great method to avoid generation skipping taxes and, with a well written stock purchase agreement, prevents the future ex spouses from "stealing" the family fortune. 

Assuming that the corporation is closely held, there is not much basis that will attach to no par stock if records are kept properly. 

The best part of being in private practice was designing structures to solve problems and knowing how to pierce the opponent's structures to get to the heart of the issue.  The worst part:  non-paying customers.  :x

We had a rash of accountant designed LLC's in Texas in the last few years.  It was very interesting to see the sometimes dramatic differences between the professions and the sometimes complete lack of public knowledge of the existence of legitimate disagreements between the groups. 

The best way to explain the difference is to tell a story from the first day of Torts class in law school.  After explaining an interesting fact pattern, the professor announces, "Everyone take out a blank sheet of paper and write down everything bad that could happen."  IMO, that is why attorney's minds are warped forever.   :-D

TurboTax is my new best friend.  I just redid my taxes last night with it and came out $1000 ahead because it found deductions I'd missed.  Woohoo!

Don't forget to deduct those bunny ears as a business expense.

And the boob job.

Don't hate me because I'm beautiful.