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Self-Employed Taxpayer Gets Break By Hiring Children

If you are self-employed and you want to hire your children, is there any age limit to the children that you hire? Is there a limit to how much you can pay them? Do you have to pay taxes on their income? S.T., Indianapolis There is no upper or lower limit to the ages of the children you hire to help you in your business'However, hiring an infant to help with the bookkeeping is probably a bit of a stretch'Assuming the child is able to perform the job for which he is hired, you can pay the child and take a deduction for the wages.

IRS Warns Y2K Woes Could Delay Refund Check

One day, Tax Commissioner Rossotti,While munching his favorite biscotti,Declared to his crew,I' ve got bad news for you:Our Y2K system is spotty!The evidence here on the tableSuggests our PCs are unstable.We may have to holdThe refunds, I'm told,We'll

IRS Allows Fourteen Days Of Rental Income To Be Tax-Free

My family owns a cottage in Wisconsin that we use for vacations in the summer time'This past summer, some friends wanted to use the cottage and they insisted on paying us for the time they spent there'Do we need to show this money on our tax return? And since I own this cottage with my brother and sisters, should we split the money evenly on all of our returns? L.L., Indianapolis

Pastor Owes Social Security Tax On Housing Aid

I do the treasurer job for a small church' Recently we called an interim pastor and voted to compensate him with a $100/week housing allowance'I know housing allowances are tax free for the clergy'The question is, do we need to deduct FICA from this amount? J.L., Indianapolis

Delay Marriage Penalty Tax By Putting Off Year-End Wedding

Planning a wedding? Have you considered the tax consequences of your impending actions? I realize it may be rather late to start thinking about postponing plans until after the first of the year, but even waiting until that apple drops on New Year's Eve (assuming, of course, that it doesn't have some sort of Y2K curse at its core that prevents it from actually making it to the ground) can end up saving you a bundle of cash.

Plates' Excise Tax, Not Auto's Sales Tax, Is Deductible Expense.

Is sales tax paid on the purchase of a new automobile deductible on either state or federal forms? RPK, Indianapolis Not really'Years ago the IRS allowed a deduction for automobile sales tax on the federal form, but that deduction was removed over a decade ago'Indiana doesn't allow any such deduction.

Tax Increase On Tap For Year 2000

We've all heard about the tax reductions that keep coming our way from our friends in Washington, in the form of greater exemptions, higher standard deductions, credits for children, credits for sending children to school, credits for sending yourself to school, credits for having a job where you don't earn very much money, and so on'I just want to point out that, while one hand of the government seems to be reaching out to taxpayers, the other hand is quietly slipping in our back pockets and taking back what is so generously being handed out.

Even In The Giving Season, Tax Rules Do Apply

While you're busy wrapping packages, tying bows, and thinking merry thoughts this week, here are some merry tax thoughts to go with those gifts you are giving and the ones you hope you receive. Giving business gifts

IRS Clear On Subject Of Severance Pay

My wife is about to be eliminated in her job because the job is being eliminated and she's going to receive a 9-month pay settlement'I'm under the impression that there is a certain kind of account that she can put these funds in and she can defer the taxes on them until they are withdrawn on an interest only basis'Is that a possibility? M'D., Indianapolis

Income Averaging Provision Now Available Only To Farmers

I recall several years ago when I had experienced an unusually high one-year taxable income, I was able to reduce my Federal income tax liability by averaging my income over a five-year period'Is the Income Averaging provision still available to taxpayers? G.L., Indianapolis

Much-Maligned IRS Aims To Be Nicer, More Helpful

IRS losing in government popularity contest A recent survey designed to gauge citizen satisfaction with various government agencies determined that the IRS is the least popular of all government agencies that were examined'Of 29 federal agencies examined, the IRS came in dead last in the popularity contest'This, of course, has to be startling news to the folks at the IRS who thought their campaign to become a kinder, gentler IRS was going to be successful in changing public opinion of the agency.In response to the results of this American Customer Satisf

IRS Is COLTS Biggest Fan

I was told I needed to turn my column in early this week so that the Star could spend the weekend focusing on the important news, that being the fact that the Y2K disaster and global warming have conspired to provide Indianapolis with what seems to be a winning football team'Not since Jack Trudeau gave new luster to the term 'sack'has there been so much interest in our local football heroes'And so it seems only fitting that I too devote extra space to a commentary on the success of the Colts.

New Tax Credits Will Make Tax Returns Fun

Last week, President Clinton unveiled a wish list of new tax credits that he would like to see enacted by Congress'Congress, in the form of Bill Archer, chairman of the House Ways and Means Committee (the group responsible for writing our “simple” tax laws), replied that since 2000 is an election year, there probably wouldn’t be any major tax legislation passed for a while'After all, we wouldn’t want any of our elected representatives voting on controversial tax laws in a year when their constituents are actually paying attention to what they are doing.

Mortgage Deduction Only Useful On Itemized Return

We received a mortgage interest statement showing that we paid $3,800 in 1999'It's just the two of us and we file with the TeleFile'My question is, do we have to file any forms and if so, what forms should we use?
Practice Management

Financial Services Help Available From Trusted Source

Public accounting firms looking for insider tips and advice for expanding their financial services offerings need look no further. Trusted accounting publisher, Strafford Publications has launched a new publication that will help CPAs diversifying into new financial services areas.The authoritative, monthly intelligence briefing offers proven, profitable strategies for its readers.

Tips for Selling to Women Business Owners

Gerry Myers, President of the Myers Group, a consulting firm specializing in women owned businesses, led a discussion in this week's AccountingWEB Workshop on tips for selling to women owned businesses.Some interesting ideas and trends that she provided about selling to women should be reviewed carefully:90% of all women will be responsible for managing their own finances at some point in their lives.Given their traditional investing and savings patterns, women retiring in the next 20 years

"Smile" - You're an Accountant!

If a smile can launch a thousand ships, then CPAs and accountants should get their sea legs ready to sail.According to a new survey of 1,400 chief financial officers, conducted by temporary staffing giant Accountemps, a "positive attitude" came as the most important trait a CPA can possess in the new century.Forty percent of participants ranked this trait as number one.
Community News

Results of CPA/Technology Partnerships

Yesterday, AccountingWeb broke a story about KPMG's alliance with Microsoft to provide consulting services on the Windows 2000 operating system, and recently, Deloitte Consulting followed suit with a technology venture involving Chase Manhattan Corporation.What are the inherent benefits in such a partnership, and why would CPA firms form such alliances?It's all about tapping the knowledge of experts who specialize in various technology arenas, according to industry experts.

What Areas Are Ripe For IRS Audits In Your Market?

Help us build a list of the specific audit areas that the IRS is targeting this year in your community. Chances are if it's happening in one part of the country, it will hit your part of the country soon.Scroll down the page to view other readers' input.Simply click on the "Add Comments" button below to offer your own insight.With your participation we can make this an extremely valuable list this tax season!

KPMG/Microsoft Partner for Win 2000 Rollout

It was announced today that KPMG and Microsoft will team up to provide consulting services and programs based on the Windows 2000 operating system. The new venture is called the "Microsoft Practice."The two giants have partnered before, and this time, KPMG will employ 500 new consultants over the next 18 months to offer a variety of services, including branding, marketing, Web design and other technology related activities.Microsoft plans to release Windows 2000 for use next week.


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