Author Topic: any accountants out there that i can ask a question?  (Read 189737 times)

Offline mahnishma

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Re: any accountants out there that i can ask a question?
« Reply #1515 on: February 24, 2018, 11:49:45 PM »
Can i deduct business cc annual fee as a business expense, if I've used it for Both personal and business?
Tia

Offline nucheiner

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Re: any accountants out there that i can ask a question?
« Reply #1516 on: February 25, 2018, 04:42:39 PM »
Regarding conducting business via an LLC, C-Corp or similar to lower one's personal income, in order to stay eligible for government programs, (and more importantly to avoid the reporting requirements for someone receiving services from multiple agencies).
(Obviously claiming business expenses to be personal is illegal, I am referring to using the biz as a "savings account")

Is this legal?
Is this ethical?

Without discussing details of any persons, was there anything learned from last yrs law enforcement welfare crackdown regarding this?

For many it's worth the double taxation to be eligible for 30k in programs.


Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #1517 on: February 25, 2018, 04:51:18 PM »
Regarding conducting business via an LLC, C-Corp or similar to lower one's personal income, in order to stay eligible for government programs, (and more importantly to avoid the reporting requirements for someone receiving services from multiple agencies).
(Obviously claiming business expenses to be personal is illegal, I am referring to using the biz as a "savings account")

Is this legal?
Is this ethical?

Without discussing details of any persons, was there anything learned from last yrs law enforcement welfare crackdown regarding this?

For many it's worth the double taxation to be eligible for 30k in programs.
LLC will only work if you elect to be taxed as a c corp
medicare and other programs are targeting c corps
To answer the legal and ethical questions allow me to quote Judge Learned Hand
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. public duty to pay more than the law demands."

and in Commissioner v. Newman
Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

Offline ExGingi

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Re: any accountants out there that i can ask a question?
« Reply #1518 on: February 25, 2018, 10:11:24 PM »
LLC will only work if you elect to be taxed as a c corp
medicare and other programs are targeting c corps
To answer the legal and ethical questions allow me to quote Judge Learned Hand
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. public duty to pay more than the law demands."

and in Commissioner v. Newman
Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.
I am assuming you meant to write Medicaid, as Medicare eligibility has nothing to do with finances (though Medicare premiums do depend on income).

As for Medicaid, since the enactment of ACA, there is no asset test for Medicaid in most cases, it is only MAGI that counts. So I'm not sure what could be "targeted" in the case of C-Corps. You either got the W-2 and/or 1099-DIV income or you didn't. If the net worth of the corporation grows, and you own 100% of the stock, and no dividend is paid, the value of that corporation shouldn't affect your Medicaid eligibility. Can't speak about other programs.

Thanks for those quotes about taxes. Those need to be taught in all grades K-12 and beyond. Maybe with some proper indoctrination, we might get this country on the right track.  ;)
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #1519 on: February 26, 2018, 11:26:35 AM »
I am assuming you meant to write Medicaid, as Medicare eligibility has nothing to do with finances (though Medicare premiums do depend on income).

As for Medicaid, since the enactment of ACA, there is no asset test for Medicaid in most cases, it is only MAGI that counts. So I'm not sure what could be "targeted" in the case of C-Corps. You either got the W-2 and/or 1099-DIV income or you didn't. If the net worth of the corporation grows, and you own 100% of the stock, and no dividend is paid, the value of that corporation shouldn't affect your Medicaid eligibility. Can't speak about other programs.

Thanks for those quotes about taxes. Those need to be taught in all grades K-12 and beyond. Maybe with some proper indoctrination, we might get this country on the right track.  ;)
Medicaid, your're right
https://www.app.com/story/news/local/ocean-county/2017/09/07/lakewood-fraud-arrests-spur-amnesty-program-medicaid-cheats/641473001/

Offline tzifanya54

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Re: any accountants out there that i can ask a question?
« Reply #1520 on: February 26, 2018, 11:36:02 AM »
Why are taxes on a bonus paycheck so much higher percentage wise than a regular paycheck? Is it because the system now thinks I am earning that much higher wages. In other words let's say I get $100 a paycheck and now I get a bonus for $500, does the system now think I am earning 5X what my previous income was and now will deduct based on a 5X multiple of my salary? If so will that be straightened out come year end?

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #1521 on: February 26, 2018, 11:45:44 AM »
Why are taxes on a bonus paycheck so much higher percentage wise than a regular paycheck? Is it because the system now thinks I am earning that much higher wages. In other words let's say I get $100 a paycheck and now I get a bonus for $500, does the system now think I am earning 5X what my previous income was and now will deduct based on a 5X multiple of my salary? If so will that be straightened out come year end?
Sounds off

Offline AtallD

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Re: any accountants out there that i can ask a question?
« Reply #1522 on: February 26, 2018, 11:52:51 AM »
Why are taxes on a bonus paycheck so much higher percentage wise than a regular paycheck? Is it because the system now thinks I am earning that much higher wages. In other words let's say I get $100 a paycheck and now I get a bonus for $500, does the system now think I am earning 5X what my previous income was and now will deduct based on a 5X multiple of my salary? If so will that be straightened out come year end?

Bonuses (i.e. supplemental income) are subject to higher withholdings (not to be confused with tax rates). The simplest method that most small businesses use to withhold on bonuses is the flat 25% method.

Offline henche

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Re: any accountants out there that i can ask a question?
« Reply #1523 on: February 26, 2018, 12:01:31 PM »
Why are taxes on a bonus paycheck so much higher percentage wise than a regular paycheck? Is it because the system now thinks I am earning that much higher wages. In other words let's say I get $100 a paycheck and now I get a bonus for $500, does the system now think I am earning 5X what my previous income was and now will deduct based on a 5X multiple of my salary? If so will that be straightened out come year end?

It's taxed at your marginal rate, not your average rate.

For example, the federal income tax rate is zero up to 24k (before getting to EITC etc). So if you make 24k, all they're withholding is FICA/FUTA.  Now you make an extra 2k--that will also have federal income tax.

Offline ExGingi

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Re: any accountants out there that i can ask a question?
« Reply #1524 on: February 26, 2018, 12:42:01 PM »
Bonuses (i.e. supplemental income) are subject to higher withholdings (not to be confused with tax rates). The simplest method that most small businesses use to withhold on bonuses is the flat 25% method.
Source?

My hunch is that it's a problem with the payroll system being used, or how the bonus is being entered, which might be annualizing the income.

I know of someone who qualified for SSI for a disabled child. However, the mother worked for a school that was often behind on the payroll. Every time the school played catchup, and gave a check (or multiple checks) that were supposed to be paid over an extended period of time, but were now all paid in one month (or one quarter) the SSA annualized the income, resulting in the SSI being withheld, demand for repayment etc. etc. The family didn't understand why this kept on happening, it was just a regular bothersome ritual for them to keep on going to the SSA. Until they came to me for help on another issue, and when I looked at this scenario, I realized what was going on, and suggested that they ask the school to make a special exception (it's ridiculous that this should be the case) and pay this teacher on the same schedule as the goyishe workers (who would never tolerate delayed payments), so that they don't face this hardship.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline AtallD

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Re: any accountants out there that i can ask a question?
« Reply #1525 on: February 26, 2018, 01:17:17 PM »
Source?


See section 7 of Circular E: https://www.irs.gov/pub/irs-pdf/p15.pdf 
flat % changed to 22% in 2018. Previously, this was 25%: https://www.irs.gov/pub/irs-prior/p15--2016.pdf

Offline Berenstein Bear

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Re: any accountants out there that i can ask a question?
« Reply #1526 on: February 26, 2018, 02:04:58 PM »
Do work bonuses need to be on the books legally? Is there anything wrong with requesting that my employer give me bonuses in another form? I like to be straight but not stupid.

Offline Menachem613

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Re: any accountants out there that i can ask a question?
« Reply #1527 on: February 26, 2018, 02:09:30 PM »
Do work bonuses need to be on the books legally? Is there anything wrong with requesting that my employer give me bonuses in another form? I like to be straight but not stupid.

Will you be paying tax on the bonus? I assume you will if you are indeed straight. Remember your parnasa was already set on RH.

Offline Berenstein Bear

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Re: any accountants out there that i can ask a question?
« Reply #1528 on: February 26, 2018, 02:22:09 PM »
That's part of my question.
Are bonuses taxable at any amount? If someone gives me gift cards, do I need to pay taxes on them? Does it make a difference if it's given by an employer?

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #1529 on: February 26, 2018, 02:26:19 PM »
Do work bonuses need to be on the books legally? Is there anything wrong with requesting that my employer give me bonuses in another form? I like to be straight but not stupid.
Yes you have to pay taxes and withholdings and so does the employer