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If I Make No Money, Do I Still Have to File Taxes? and More Tax Q&A – Ask the Tax Pro 11/15/12

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On Thursdays, CPA and Vice President of Corporate Tax Network, Gary Milkwick and his team, answer tax questions for free on the LegalZoom Facebook Page. Did you miss the last Ask the Tax Pro? Don’t worry. We’ve got it all right here.

Jerry: If I show no income for the entire year, do I still need to file taxes, and or should my wife include me as a dependant?

Corporate Tax Network: Hi Jerry, For 2012, a married couple under age 65 would not need to file a tax return if their gross income was $19,500 or less. When you file jointly, each of you will claim your personal exemption.
If you had income taxes withheld from any payments, you may want to file to receive a refund on those taxes.

Jerry: I had no income taxes withheld from any payments, so I won’t get anything. My question is should my name even be included on the return or not. Is there a benefit or a loss to this? Also, next year, I will be living in a foreign country. Thanks!

Corporate Tax Network: Jerry, filing as married filing jointly is usually more beneficial tax wise than your spouse filing as married filing separately. Your deductions would be higher with MFJ, so it would be a tax benefit to file a joint return with your spouse even if you personally did not have any income.

Terry: Good Morning,
If you purchase a company that had an outstanding loan and you agreed to pay it off as part of the purchase, can’t you deduct this on your taxes or is it considered equity?

Corporate Tax Network: Hello Terry,

The total consideration you pay for a share of ownership in a company, which would include any debt, would be your equity in the company.

Robert: Can I use lunches as deductions when they are work related

Corporate Tax Network: Robert, I am assuming you are an employee of an unrelated employer. If you are away from your metropolitan area overnight on a trip that has a primarily business purpose, such as conducting affairs of your employer, then all of the meals incurred on the trip are 50% tax deductible provided that your employer does not reimburse you for those meals at either the actual cost or per diem. If you are within your metropolitan area or not on an overnight business trip, then the meals are only deductible if they are used to entertain a person that your employer has a business relationship with, such as a client or a potential client where the entertainment event such as lunch is expected to provide financial benefit to your employer and if your employer does not reimburse you for the cost of the meal. Even then, the deduction is limited to 50% of the cost, including tax and tip. For recordkeeping purposes you have to keep track of the names of people attending, the date, the name of the establishment and list the business purpose of the meal.

Christopher: How can I make sure my taxes are benefiting me?

Corporate Tax Network: Christopher, I would suggest to speak to your tax advisor to determine what tax reduction strategies would be available based on your unique tax situation.

Trish: I separated from my husband this yr and he owes student loans and child support. How can i file my taxes without the irs taking my refund.

Corporate Tax Network: Trish, if you have legally separated from your husband and your divorce gets finalized before the end of the year, you will not be filing your taxes jointly. Your filing status would either be Single or Head of Household if you have dependent children living with you. Your ex husband will have to file his own tax return separately from yours.

Catherine: I got married june 2012 my husband owes back child support for a child thats 4 years old before we even met can i file married but seperatley i dont want them taking my well earned tax refund for a kid ive never even met

Corporate Tax Network: Catherine, first of all congratulations on your marriage! Child support is usually regulated by the state, but in most cases the amount of child support to be paid depends on your husband’s income and the child mother’s income. It also gets adjusted if there are lifestyle changes. But your income should not come into play when the amount of child support is determined by the state, so how much you earn should not affect how much your husband has to pay and would not affect your potential tax refund. For further information regarding child support laws I would recommend speaking with an attorney.

LegalZoom: You may want to check out Free Joe tomorrow, Catherine. Legal Q&A: http://zoo.mn/bFreeJoe

Barbara: My husband’s mother’s (deceased) home and contents will be auctioned December 1, 2012. The home probably won’t close until next year. Will the new (whatever they are) estate taxes apply?

Corporate Tax Network: Hi Barbara, Your mother’s assets, at the fair market value, at her date of death, will be included in her estate. If she died recently, then you can use the auction price as the fair market value.
Keep in mind, for 2012, there are no estate taxes if the estate is under $5,120,000 and there will be no need to file an estate tax return. Double check to see if your mother’s state has it’s own estate tax filing requirements. However, many states follow the federal rules.

LegalZoom: That’s a wrap for today’s tax Q&A with Diana Shaginyan of Corporate Tax Network. The tax pros will be back next week to answer more of your questions. Join us then!

http://zoo.mn/AskTheTaxPro

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November 19th, 2012 at 5:41 am