Tax Information

The Tax Attic with Jerry Coon – October 8, 2009

October 8, 2009 // 0 Comments

Advantages of partnerships, C corporations There are a few things I would like to do before I ride off into the sunset—my bucket list of sorts. One of them is to drive a winged sprint car. I joke about that one maybe having to wait until my next life. But since I’m of the Reformed Church religious persuasion and we don’t fundamentally believe in reincarnation, the “next life” thing probably isn’t going to work. I don’t anticipate that my minister, Rick Tigchon, is going to preach a sermon on reincarnation being an option any time soon, either. It’s going to be done in this life or it won’t be done. The reason I bring this up is Berlin Raceway held its annual Open Wheel Night on Sept. 26. A number of classes, including midgets and late models, raced. But the main attraction for me was the winged sprint cars. I love watching those guys race. You can tell the fast ones from their motor sound. Once they hit wide open, which is about one second after they stomp on the pedal, the fast ones never let off all the way around the track. They use their brakes and the bank of the track to slow the car in the corners, but you can tell from the motor sound that the foot is in fuel injectors all of the time. One of the racers, Hank Lower, gives me hope that I will fulfill my dream of driving one of the sprint cars. Hank is an Indiana guy and he is 72 years old. Granted, he has been driving these cars most of his life, he is still competitively driving at age 72. He finished in the top ten in the feature event, which means he beat most of the kids in the race. Since I’m a whole lot younger than 72, there is plenty of time to get me strapped into a sprint car. I think I will go online tonight and see what’s available in the sprint car driving school arena. Maybe Hank gives lessons. I want to continue with my series on the various business entities available to a person who is starting a business. Multi-member LLCs file a Form 1065, Partnership Tax Return. […]

The Tax Attic with Jerry Coon – October 1, 2009

October 1, 2009 // 0 Comments

Two business entities available when starting a business   I believe it’s important to write an article or two about the various business entities that are available to a person starting a business. With the economy remaining in the doldrums, good and experienced employees are still losing jobs. Some of these people will start or buy a business, predominantly due to the fact that there are no available employee-type jobs. Some information about the various business entities available might be of use. The simplest form of business entity is called a sole proprietorship. A sole proprietor reports all of the income and expenses of the sole proprietorship on a Schedule C. This Schedule C becomes a part of the taxpayer’s Federal Form 1040. “Jerry’s Landscaping and Income Tax” would be an example of a sole proprietorship. This business registers its name at the county level and thereby protects that name. If Jerry’s Landscaping and Income Tax goes downtown Grand Rapids and registers that business name with the Kent County Clerk’s office, no one else would be able to confuse the public by operating a business in Kent County under that name. That doesn’t stop someone from operating a business in another county using that name, so the safe thing to do might be to also register the name in the surrounding counties. It doesn’t happen often, but it does happen, and those situations sometimes end up in the courts. The next less simple type of business entity is called a Limited Liability Corporation (LLC). As the name implies, an LLC can potentially remove liability issues from the taxpayer level and encapsulate those liability issues within the LCC. If done properly, potentially only the assets within the LLC are subject to liability claims. I say “potentially” because I’m not an attorney, but my conversations with attorneys have led me in that direction. LLC registration occurs at the State of Michigan level by filing an Articles of Organization form. This gives the taxpayer the right to re-name his business to Jerry’s Landscaping and Income Tax LLC. It also protects this name at the entire state level. No one in Michigan would be able to operate under that name. It wouldn’t stop someone in another state from using […]

The Tax Attic with Jerry Coon – September 10, 2009

September 10, 2009 // 0 Comments

Who qualifies for first-time home-buyer credit? The traditional ending of summer has occurred. The long Labor Day weekend has come and gone. The kids are back in school. High school, college and pro football games are here to stay for the next few months—that’s a good thing when it comes to Rockford football, a good thing when it comes to our in-state college football programs, but a questionable thing when it comes to Lions football. The baseball season, at long last, is in its last month and the Tigers are holding their own. The first day of baseball back in April seems like such a long time ago now. I do look forward to the playoffs. Perhaps Detroit will have a good-run playoff this year. They have just a good enough team with a few good pitchers and a few good hitters that I really wouldn’t want to play them in the first round of the playoffs. As the old sayings go, “Lightning can strike anywhere,” and “Even a blind squirrel finds an acorn once in a while.” They especially apply to a short playoff series. It’s not inconceivable that the Tigers could end up in the World Series. Many of my buddies are out practicing their bow-and-arrow skills in anticipation of deer-hunting season. It’s going to open soon and then, not long afterward, those of us who won’t or can’t shoot a bow get a chance to bag a whitetail buck with a little more firepower at our disposal than an arrow. In my case, that firepower is called a Remington 30.06 rifle, a Wing-master 12-guage shotgun equipped with a slug barrel, or a Thompson 50 caliber black powder gun. All of them have scopes, of course. Even though I did have Lasik surgery a few years ago, I still need all the help I can get to make the best shot. Night temperatures are falling into the 40-degree spectrum. Trees here and there are turning colors. Fall comes too quick for many people, and it did seem to come about halfway through August this year. That’s a little fast for even me. Something else that is coming up fast is the tax season. I know it’s only September, but in four short months, […]

The Tax Attic with Jerry Coon

September 3, 2009 // 0 Comments

Swiss banks give up names, information Recently, there has been much publicity that the U.S. government has worked out an agreement with a Swiss bank, UBS, wherein the bank will provide taxpayer identification and investment information to the Internal Revenue Service. We all know the old saying, “Never say never.” The saying definitely applies to this situation. Since the 1800s, the Swiss banks have steadfastly refused to provide any bank account information to any outside authority. They would never give up the names of their investors, let alone provide actual investment account figures. The Swiss even told Adolph Hitler to go jump in a lake. The Swiss banks have steadfastly relied upon Swiss law to not comply with any and all foreign government requests for investor information. Under Swiss law, tax fraud or actively misleading authorities is a crime. However, under their system, passive tax evasion or just failing to declare an asset is not a crime. If the foreign authority could prove the investor was involved in tax fraud or actively misleading authorities, they got their information. I have the feeling they didn’t have to provide much information. In 2002, the European Union began asking for information for investors who were not defined as criminals under Swiss law, and it was successful in some of its requests. Evidently, the Swiss did not and do not want to be known as an “uncooperative tax haven.” They have made quite a reputation as a tax haven but not an uncooperative one. Using the same logic as the European Union, the IRS sued UBS, asked for names, and also was successful. UBS agreed to pay $780 million in penalties and offered to turn over information on 250 U.S. investors. The IRS took the $780 million but sued for information on 52,000 investors. That figure was negotiated down to 4,450 names, presumably the top dogs. The IRS is giving those 4,450 U.S. citizens the chance to fess up on their own by filing missing tax returns or amending tax returns to include missing income. They are offering a type of limited amnesty for those who step forward. The penalties will be much less severe. Talk about being between a rock and a hard place. First, it’s not clear […]

The Tax Attic with Jerry Coon – August 6, 2009

August 6, 2009 // 0 Comments

  Should the government be in charge of our health care? I think it’s time that we discuss the new health care reform initiative that is working its way through Congress. Most of us will agree that our health care system has problems, and those problems have to be addressed. Most of us will agree also that our health care system really has no equal in the world when it comes to delivering health care to the public. If I have an immediate health problem, whether I have insurance or not, I can go to any one of a number of emergency rooms in the area and very quickly be well-taken-care-of. If I should require surgery, it’s scheduled and gets done. We don’t have the delays that our friends up in Canada encounter. The Canadians come south of the border to our Mayo Clinic or the Cleveland Clinic for diagnosis and/or surgeries when their system is out of money for the year. We also don’t have the end-of-life issues that some of our European friends encounter. It’s expensive, really expensive, to care for our elderly, but no government bureaucrat is presently making an end-of-life decision for us based on the economics of the situation. It’s hard for me to imagine that a government bureaucrat in Washington, who has written a set of guidelines, could decide that one of us is too old to have a surgery, too old for a certain procedure, or just too old to treat. That’s a little scary. However, we have several negatives in our present system. We have an inordinate amount of people who are not covered by insurance and the number of people who can’t afford to pay for any coverage seems to be rising daily. We have a system with costs that are spiraling upward at a rate faster than the cost of attending college. We have the baby boomers, a group of people who are all getting older at the same time. They are going to live longer than previous generations and are going to put stresses on the health care system that could be crushing. We are a country that is searching for a blue-ribbon solution that will take the best part of our present health […]

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