Thanks to Mom on Dealz for sharing her series, Ask an Accountant!  Sharon is married to an experienced accountant.  Although tax season is over, tax questions arise year round.

Question:

I am considering taking an early withdrawal from the Rollover IRA account ($13k out). I recently had surgery and this is needed to clear bills, debt and get the budget back. I know I am looking at a 10% hit on the taxes next year for a penalty ($1,300), but what else am I looking at? How much else should I expect ?

Answer:

[Read more…]

Thanks to Mom on Dealz for sharing her series, Ask an Accountant!  Sharon is married to an experienced accountant.  Although tax season is over, tax questions arise year round.

Question:
I have two questions:

1. Can I claim the after school program my son is in? He is in Kindergarten and instead of paying for an after school sitter we are paying for an after school program at the school. Is that deductible?

2. Can we claim/deduct our moving expenses?

Answer:
[Read more…]

Thanks to Mom on Dealz for sharing her series, Ask an Accountant!  Sharon is married to an experienced accountant.  Although tax season is over, tax questions arise year round.

Question:
I am a blogger who works with various affiliate companies and vendors. Is it true that if one of them pays me less than $600 a year then I don’t have to claim that income?

Answer:
No, that is not true. You have to claim everything you make. However, if you earn less than $600 from a company, they do not have to send you a 1099.  Basically the company is not required to report it but you still should.

*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

Thanks to Mom on Dealz for sharing her series, Ask an Accountant!  Sharon is married to an experienced accountant.  Although tax season is over, tax questions arise year round.

Question:
I have an at home business that has started making me a small amount of income. Should I be paying estimated taxes on what I am making?

Answer:
You need to pay in at least 90% of your prior year tax through withholding and estimated payments by January 15th. If your income is expected to be the same as last year and more than $150k, then you need to pay in at least 100% of last year’s tax. If your income is higher than last year and greater than $150k you must pay in 110% of last year’s tax by January 15th. Now is an excellent time to discuss year end taxes with your accountant.

*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

Thanks to Mom on Dealz for sharing her series, Ask an Accountant!  Sharon is married to an experienced accountant.  Although tax season is over, tax questions arise year round.

Question:
I am a blogger and frequently attend conferences. I accept sponsorship from companies for these conferences. How would these sponsorships be taxed?

Answer:

The sponsorship would be recorded as ‘Other Income’ and the costs related to the conference would be an written off as an expense. If the amount of the sponsorship and the amount of the conference were equal, there would be no taxable profit from the transaction. If the sponsorship did not cover the total expenses of the trip, there would be a net loss on the transaction. If the sponsorship exceeded the expenses of the trip the difference would be ordinary income(profit) and included in the Net Profit of the business, thus taxed at the appropriate income tax rate

*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

Thanks to Mom on Dealz for sharing her series, Ask an Accountant!  Sharon is married to an experienced accountant.  Although tax season is over, tax questions arise year round.

Question:
I am in the process of registering the blog as a business and wanted to know if I am going to be able to claim all of the stuff I have already purchased for it from the time I started or if I cannot start claiming until it is registered.

Answer:
If you are operating the blog as a business and your intent in purchasing the items was to have a blog as a business than yes. You can claim items purchased as long as they are solely for the business.

*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org