Thursday, May 8, 2008
Texas Franchise Tax Extension form
You may need an extension fi you cannot file your tax form. Now, you need to file the extension by June 15, 2008.
Single, no children
Single, No children.
1. Wages of $4,000 and AGI up to $10,000: Stimulus could be $300.
2. AGI of $12,000 and fed tax liab of $325; Stimulus could be $325.
3. AGI of $35,000 and fed tax liab of $600; Stimulus could be $600.
4. AGI of $80,000 and fed tax liab of $600; Stimulus could be reduced to $350.
1. Wages of $4,000 and AGI up to $10,000: Stimulus could be $300.
2. AGI of $12,000 and fed tax liab of $325; Stimulus could be $325.
3. AGI of $35,000 and fed tax liab of $600; Stimulus could be $600.
4. AGI of $80,000 and fed tax liab of $600; Stimulus could be reduced to $350.
Married, No children:
Married, No children:
1. Wages of $4,000 and AGI of $20,000, no or with federal tax liability. Stimulus of $600.
2. AGI of $25,000 and Fed tax liab of $750. Stimulus of $750.
3. AGI of $60,000 and fed tax liab of $1,200. Stimulus of $1,200
4. AGI of $160,000 and tax liab >$1,2000. Stimulus reduced to $700.
1. Wages of $4,000 and AGI of $20,000, no or with federal tax liability. Stimulus of $600.
2. AGI of $25,000 and Fed tax liab of $750. Stimulus of $750.
3. AGI of $60,000 and fed tax liab of $1,200. Stimulus of $1,200
4. AGI of $160,000 and tax liab >$1,2000. Stimulus reduced to $700.
Stimulus package-married with children
Married with children- list is not all inclusive:
1. MFJ with two children with AGI of $25,000: MFJ- $600; Children-$300/each. (not more than 2 children).
2. MFJ w/2 children with AGI of $35 K: Approx $1,670
3. MFJ w/2 children w/ AGI of $80K: Approx $1,800
4. MFJ w/2 children w/ AGO of $160K: Approx $1,300 (begin to phase out due to AGI to higher.)
1. MFJ with two children with AGI of $25,000: MFJ- $600; Children-$300/each. (not more than 2 children).
2. MFJ w/2 children with AGI of $35 K: Approx $1,670
3. MFJ w/2 children w/ AGI of $80K: Approx $1,800
4. MFJ w/2 children w/ AGO of $160K: Approx $1,300 (begin to phase out due to AGI to higher.)
Friday, May 2, 2008
Texas Franchise Tax
The NEW MARGIN TAX.
The Texas franchise tax is a privilege tax imposed on each corporation and limited liability company chartered/organized in Texas or doing business in Texas. (This is a new way of calculating the Texas Franchise Tax.)
Taxable entities: (domestic or foreign)
Corporations
Limited Liability Companies
Partnerships (General, Limited, and limited liability)
Business Trust
Professional Associations
Joint Ventures
Other legal entities with statutory liability protection
Non Taxable Entities
Sole proprietorships
General Partnerships (directly and wholly owned by natural persons)
Passive Entities
Estates
Escrow
REITs
Trust (non business trust)
Latest News:
The deadline for the extension has been extended to JUNE 15...from May 15, 2008 . Sounds like a big relief to TP.
Calculating the Tax
Most entities pay at the rate of 1/2% to 1%.. Retailers pay the 1/2% and wholesalers 1%.
They are three ways to calculate your tax liability; the..
Cost of Goods Sold Method
Compensation Method
Alternative Method
For the initial report, the net taxable capital rate is prorated over the initial period.
New forms and instructions for 2008 are here now.
Caution: Every reporting entity must report even if no tax is due.
The Texas franchise tax is a privilege tax imposed on each corporation and limited liability company chartered/organized in Texas or doing business in Texas. (This is a new way of calculating the Texas Franchise Tax.)
Taxable entities: (domestic or foreign)
Corporations
Limited Liability Companies
Partnerships (General, Limited, and limited liability)
Business Trust
Professional Associations
Joint Ventures
Other legal entities with statutory liability protection
Non Taxable Entities
Sole proprietorships
General Partnerships (directly and wholly owned by natural persons)
Passive Entities
Estates
Escrow
REITs
Trust (non business trust)
Latest News:
The deadline for the extension has been extended to JUNE 15...from May 15, 2008 . Sounds like a big relief to TP.
Calculating the Tax
Most entities pay at the rate of 1/2% to 1%.. Retailers pay the 1/2% and wholesalers 1%.
They are three ways to calculate your tax liability; the..
Cost of Goods Sold Method
Compensation Method
Alternative Method
For the initial report, the net taxable capital rate is prorated over the initial period.
New forms and instructions for 2008 are here now.
Caution: Every reporting entity must report even if no tax is due.
On Retirement
Penalty for early withdrawals from pension plans or IRAs prior to attain age 59 1/2. If you make withdrawal before attained the required age, you will be penalized 10% of the amount withdraw.
After tax IRA. If you have an after tax IRA, you need to keep track of your basis on the IRA by filing Form 8606. Why?. The IRS needs to know the after tax portion of your IRA, and so do you. You do not want to pay taxes a second time, Do you?
Rollover a 401K and/or a traditional IRA. Generally, do not result in a taxable transaction if is roller over within 60 days from the distribution date.
What is the date you should start receiving your minimum required distributions (MRD) payments after reaching 70 1/2? If you reach 70 1/2 in March 5, 2007 (or any date in 2007), you should begin making your 1st MRD by April 1, 2008 , and his/her second distribution by Dec. 31, 2007. VERY IMPORTANT. (Exceptions apply.)
Do you think you will celebrate your 82 birthday? Well, you may consider applying for SS benefits at age 65 instead. You could receive 25% more in SS benefits per year.
After tax IRA. If you have an after tax IRA, you need to keep track of your basis on the IRA by filing Form 8606. Why?. The IRS needs to know the after tax portion of your IRA, and so do you. You do not want to pay taxes a second time, Do you?
Rollover a 401K and/or a traditional IRA. Generally, do not result in a taxable transaction if is roller over within 60 days from the distribution date.
What is the date you should start receiving your minimum required distributions (MRD) payments after reaching 70 1/2? If you reach 70 1/2 in March 5, 2007 (or any date in 2007), you should begin making your 1st MRD by April 1, 2008 , and his/her second distribution by Dec. 31, 2007. VERY IMPORTANT. (Exceptions apply.)
Do you think you will celebrate your 82 birthday? Well, you may consider applying for SS benefits at age 65 instead. You could receive 25% more in SS benefits per year.
The Mortgage Forgivenss Debt Relief Act of 2007
This law exclude from income any debt forgiven or cancelled as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.
Usually, debt forgiven or cancelled by a lender must be included as income on your tax return and is taxable. This new law allows you to exclude certain cancelled debt on your principal residence from income.
Do you need to report it on your ax return? Yes. As a general rule, must taxable and non taxable items are reportable events, and this one is reportable.
What about debt on a second home, credit card or car loans? Yes, but not under this provision. This provision applies to your principal residence. The Provision can be used in 2007, 2008, and 2009.
Usually, debt forgiven or cancelled by a lender must be included as income on your tax return and is taxable. This new law allows you to exclude certain cancelled debt on your principal residence from income.
Do you need to report it on your ax return? Yes. As a general rule, must taxable and non taxable items are reportable events, and this one is reportable.
What about debt on a second home, credit card or car loans? Yes, but not under this provision. This provision applies to your principal residence. The Provision can be used in 2007, 2008, and 2009.
2008 Stimulus Payments Calendar
Some taxpayers (TP) will see payments in their bank accounts as early as April 28, 2008. (i.e., early filers.)
The first wave of payments will go to people who opted for direct deposit payment (deposit) on their 2007 income tax return and their tax return was already processed by the IRS.
The payment schedule is based on the taxpayer last two digits social security number;
00-20 May 2
21-75 May 9
76-99 May 16
All others are schedule to start on or after May 16 thru July 11, 2008, as follows:
00-09 May 16
10-18 May 23
19-25 May 30
26-38 June 6
39-51 June 13
52-63 June 20
64-75 June 27
76-87 July 4
88-99 July 11
Source: IRS
The first wave of payments will go to people who opted for direct deposit payment (deposit) on their 2007 income tax return and their tax return was already processed by the IRS.
The payment schedule is based on the taxpayer last two digits social security number;
00-20 May 2
21-75 May 9
76-99 May 16
All others are schedule to start on or after May 16 thru July 11, 2008, as follows:
00-09 May 16
10-18 May 23
19-25 May 30
26-38 June 6
39-51 June 13
52-63 June 20
64-75 June 27
76-87 July 4
88-99 July 11
Source: IRS
2008 Economic Stimulus Act- Business Provisions
This Act provide some incentive for businesses, among those you find;
50 Percent Special Depreciation deduction Allowance-to recover the cost of assets placed in service.
New depreciation limits on Business Vehicles-the maximum that can be taken for assets placed in service is $3,160 to $11,160.
Section 179 Expensing deduction was double from last year. -Business can expense up to $250,000 in assets placed in service in 2008.
These incentives are created to stimulate the economy.
50 Percent Special Depreciation deduction Allowance-to recover the cost of assets placed in service.
New depreciation limits on Business Vehicles-the maximum that can be taken for assets placed in service is $3,160 to $11,160.
Section 179 Expensing deduction was double from last year. -Business can expense up to $250,000 in assets placed in service in 2008.
These incentives are created to stimulate the economy.
IRS Stats Report for 2007
During the fiscal year ending September 30, 2007, the IRS collected approx $2.4 trillion in taxes (net of $295 million tax refunds) and processed around 235 million (3% more than last year) tax returns.
Of the 235 million tax return filed, 139 million of those were Individual tax returns. And, 79 million were filed electronically last year (i.e., 2006 tax returns).
Now, lets look at the days it will take for the IRS to send stimulus checks to households who filed electronically, using 2006 electronically filed numbers. (See page 2 for the IRS Calendar.)
It will take the IRS 14 days (May 2-16) to wire money to approximately 80 million taxpayers across multiple Banks accounts and regions and possible countries if they are living overseas.
That is amazing!
And, if I use the 2006 tax refunds of $295 millions as an example; approximately 21 million dollars a day will be wired out to TP. Now, that is impressive.
Another curious data is in the human resources area. Of the 92 thousand employees currently working now, 45 % work in the examination and collection department, and 28% of them work filing and providing account services (i.e., processing tax returns) to TP. So, the number of employees reviewing tax returns had increased since the advent of the E-file system.
Conclusion; things have change at the IRS and they will be changing once everybody E-file their tax returns.
Of the 235 million tax return filed, 139 million of those were Individual tax returns. And, 79 million were filed electronically last year (i.e., 2006 tax returns).
Now, lets look at the days it will take for the IRS to send stimulus checks to households who filed electronically, using 2006 electronically filed numbers. (See page 2 for the IRS Calendar.)
It will take the IRS 14 days (May 2-16) to wire money to approximately 80 million taxpayers across multiple Banks accounts and regions and possible countries if they are living overseas.
That is amazing!
And, if I use the 2006 tax refunds of $295 millions as an example; approximately 21 million dollars a day will be wired out to TP. Now, that is impressive.
Another curious data is in the human resources area. Of the 92 thousand employees currently working now, 45 % work in the examination and collection department, and 28% of them work filing and providing account services (i.e., processing tax returns) to TP. So, the number of employees reviewing tax returns had increased since the advent of the E-file system.
Conclusion; things have change at the IRS and they will be changing once everybody E-file their tax returns.
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