Joe starts Barco, a new dog food company. Someone tells him he should incorporate to avoid liability. So, he does that under the laws of his state in January. He makes a profit the first year of $100,000. At that point, he goes to his accountant and says, “gee, you should have been a subchapter S corporation. You could have saved $15,000 in taxes”. “How do I do that?” Joe asks. You had to file a Form 2553 within 75 days of when you started your business with the IRS. I can see if I can get relief for that, but, I’m not certain its going to work. Had he filed that one simple form he would have saved $15,000 that first year and been able to plan other things as well. This is Mistake Number 1 of start-up businesses.
Tag Archives: tax
Bonus News. Virginia Tax Amnesty
Please be aware that Virginia has an amnesty program for unpaid income taxes which expires December 5, 2009. If you are delinquent with Virginia and have not gotten any notice, give them a call. You will need to have filed all unfiled returns to take advantage of this program. 50% of all interest is forgiven and all penalties. Now is the time to act.
About 2010
As we have passed the half way point of 2009 and head into 2010 without an estate tax bill, its time for a macabre look at “what if nothing happens in Congress this year”. As you may or may not know, there is a one year tax holiday for estates of people dying in 2010. That means if you die in 2010 your estate owes no estate taxes no matter how rich you are. The key is that you have to die in 2010 and only that year. No dying at 11:59 p.m. on December 31 2009, and no dying at 12:00:01 a.m. on January 1, 2011. No gift giving, no cheating. If you’re worth over $1 Million it means a lot if nothing changes in the tax law because in the year 2011, as the law is currently written the Government will tax 45% of everything you own when you die that is over $1 Million (including homes, farms, small businesses, etc.). So with that in mind enjoy the mayhem of 2010. This will be a serial blog in the perils of Pauline style. We will leave you hanging from day to day as stories develop.
NOW YOU SEE HIM, NOW YOU DON’T.
August 2010.
Laura Holden was the Medical Examiner for Northern Virginia. She was a comely blonde with an IQ in the stratosphere. She got her medical degree from Georgetown and did her pathology residency in the medical examiner=s office in Cook County, Illinois. She had clearly earned her stripes. She still remembers the day when the freezers gave out during a record July heat spell when bodies were piling up in the morgue in Chicago. It was a tough week on the old nostrils.
Laura walked into the morgue. She pulled on her non-latex surgical gloves over her finely manicured hands. She had several autopsies ahead of her, but this one was a real stumper. The body was badly decomposed. Identifying the body was not hard. It was industrialist Sidney Frome who had disappeared from his home last winter. His children had called in a missing person report. His family willingly provided dental records to her. Their primary concern was unusual, that she fix a time of death. Bodies told a lot. But after 8 months or so, in the woods, with vermin, bugs, birds, and the elements it was a difficult if not impossible task. She turned on her tape recorder. “Body found, legal time of death, August 9, 2010 at 8:48 a.m..”