Ask An Accountant- Deducting Food Cost For a Cooking Blog

Although tax season is over, tax questions arise year round. Momondealz is married to an experienced accountant and will be answering questions sent to him at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE
Question:
I own a cooking blog and blog about recipes and my family meals. Can I deduct the cost of the ingredients needed for the food shown on my site? [Read more...]

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ASk An Accountant – Deduct Attorney Fees

Although tax season is over, tax questions arise year round. Momondealz is married to an experienced accountant and will be answering questions sent to him at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE

Question:

I am a blogger who has recently set my site up to be a “business”. This required seeking advice from lawyers and an accountant. Can I deduct the fees I was charged for this advice?

Answer:

[Read more...]

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Ask An Accountant- Who Gets An Audit?


 GUEST POST FROM MOM ON DEALZ!

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE
Question:
My sister and law, brother in law and my husband all recently got letters from the IRS asking for all of this documentation from previous tax years. For my sister in law they are requesting information for 3 years, for my brother in law 2 years and for my family one year. We all get your taxes done by the same person. They are asking for copies of children’s birth certificates, marriage licenses, etc. How and why does the IRS determine to audit individuals?
Answer:
[Read more...]

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Ask An Accountant- Blogging For Profit

GUEST POST- MOM ON DEALZ

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE

Question:

When should a blogger start considering themselves a business for tax purposes? Is there certain criteria that, once hit, a blogger must start to consider their blog a business instead of a hobby?

Answer:

The blog is considered a business when there becomes a profit motive. Either way, business or hobby, the income needs to be reported. With this in mind, the hobby expenses are limited to the hobby income, meaning you can never take a hobby “loss”. A business can show a loss that may offset other income sources based on the way the business is structured.

*Please keep in mind this post is for informational purposes only and answers given are very general. Do not rely on this column for definite tax answers as many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

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Ask An Accountant- IRA Withdrawal Penalties

GUEST POST – MOM ON DEALZ!

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE

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...]

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Ask An Accountant- How Should I Claim DayCare Expenses?

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE
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...]

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Guest Post- Ask An Accountant- 9/9

Each week Mom On Dealz brings us a great question answered by her accountant hubby!

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”.

See previous questions and answers HERE

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?

[Read more...]

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Ask An Accountant- 9/2


 Here is a great Guess Post from Mom On Dealz!

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE

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.

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Ask An Accountant – 8/26

Each week Mom On Dealz brings us a answer to an accounting question! Here is this weeks Ask An Accountant!

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”. See previous questions and answers HERE.

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

Answer:

[Read more...]

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Ask An Accountant- 8/12

Although tax season is over, tax questions arise year round. Momondealz‘s husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”.

Question: My son is heading to college this year and I was wondering what exactly I can claim on my taxes next year as deductions (i.e. textbooks and other school supplies?

Answer:The following items are eligible for education credits/deduction:

  • Tuition Fees (student activity fees)
  • Course materials (including books, supplies & equipment)
  • Computer (if required as a condition of enrollment)
  • Sports equipment & expenses if they are part of a degree program

These amounts are reduced by scholarships, fellowships, grants, employer-provided assistance, or any other benefit. Depending on the situation (i.e. what year of school the expenses are for combined with filing status and the Adjusted Gross Income of the taxpayer will determine if the items will be treated as a deduction or a credit, and to what extent the credit applies. At AGI above $60k single and $100K married filing jointly, the credit is entirely “phased out”. *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.

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Ask An Accountant- 8/5

Each week Mom On Dealz brings you answers to your biggest accounting questions! Here is this weeks Q&A!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an Accountant”.
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.
[Read more...]

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Ask An Accountant- Claiming Donations Purchased With Coupons

Each week Mom On Dealz brings us a answer to a accounting question. This week she answers how to claim donations made with items that were purchased using coupons!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an accountant”.
Question:
I donate from my stockpile quite frequently. When claiming these deductions, do I deduct what I paid out of pocket or what the items would normally cost without coupons/sales?
Answer:
There are 2 schools of thinking for this question. One side says you do not get to deduct something you have not paid for (assuming the item is free after coupons). The other side is that you still get to deduct fair market value. Generally speaking, I agree you deduct fair market value. For example, on average, diapers are priced around $10. If you buy a pack of diapers but there is a sale, you have coupons, and you have store rewards (such as register rewards, etc) so your final price is less than $10, you can still deduct $10 since the value of the diapers did not change, despite how much you paid out of pocket.
*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.
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Ask An Accountant- 7/22


Each week Mom On Dealz brings us a great post, answering accounting questions!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at cjwtaxpro@gmail.com with the subject line “Ask an accountant”.
Question:
In 2010 I won an all expense paid trip as a prize for winning a contest. The company immediately asked for my social security number for the purposes of taxes. I expected I would be responsible for taxes on the value of the trip (I think it was $1,800.00.) In February of this year I contacted the company to see if they were sending me a 1099-Misc so I could file my taxes. They said they were going to send the form by the end of February, but I never received the forms. I needed my tax return funds, so I went ahead and filed my taxes without their information. If they claimed my trip on their taxes for 2010, is it likely that the IRS will see that I didn’t claim the trip and come after me tacking on interest?
[Read more...]

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Ask An Accountant – 7/15


Thanks to Momondealz for bringing us this post each week!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at momondeals@yahoo.com
Question:
I have been audited for medical expenses for 2008 (my husband became very ill) and have close to 300 individual expenses. If I copy every bill, check, explanation of benefits from the insurance company, flexible spending account reimbursement, credit card bill, prescription receipt, etc., I will be paying for and sending a 12 x 12 box. Will the IRS take scanned documents on CD or do you have another idea? Also, can I write off the time, postage, printer ink and paper to do this?
Answer:
Typically in an audit, your case should be at a regional level where you have been assigned an agent that should be within driving distance. If that is not the case then I recommend organizing the medical expenses in a 3 ring binder according to how they were listed on the tax return. Have a cover sheet that summarizes each medical expense category like this:
A. Prescrptions $_______
B. Doctors/Dentist $_______
and so on for each one listed on Schedule A. Then provide a stack of copied receipts and verification of payment and reference each page in the bottom right corner for each category A-1, A-2, B-1,B-2 . In an audit situation more is always better and typically if you inundate the agent with a ton of information they are not going to examine every piece of paper. Make it neat and easy to reference where you got the numbers for the tax return and you should be fine. The last thing you want to do is throw a bunch of documents in a box & send it to the agent. This will not work in your favor! Time is never deductible, and there is no deduction for paper, ink, or postage related to tax preparation.
*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.

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Ask An Accountant- 7/1

Thanks Sharon from Momondealz for this great post!
Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at momondeals@yahoo.com
Question:
What type of accounting software is the best when setting up my small business?
Answer:
The most widespread software for accounting is Quickbooks. I personally recommend the online version. There are several different options for the online version, so what version you need will vary depending on the business and it’s structure. It will allow you to track income, expenses, fixed assets, liabilities, loans, write checks, and payroll is available in some versions.
Right now Amazon has a sale going on with QuickBooks Online Simple Startwhere you can score this program for only $40-a 69% savings. This program is fine but please keep in mind with this version there is no support and accountants will not be able to access it on their own. If you would like the current version with more options and support, you will need to visit Intuit online here where they are offering a free trial.
*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

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