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Tax Audits
Tax audit refers to the examination and verification of returns and other relevant tax documents submitted by a legal entity or an individual to the state’s tax agency. The audit is usually conducted by a certified public accountant.
1,102 Questions
Do you pay tax on your first year of self employment?
Yes, you will have to pay taxes on your self employment the first year you are in business, provided of course that you make a net profit under the method of accounting that you choose to use.
If you have a net profit, you will have to at least pay the self-employment (social security) tax due. You may also have to pay income tax on the net profit. This will depend on the amount of taxable income that have, less any allowable credits.
You would be well advised to tally up your income and expenses now to see where you stand so far this year on your tax liability for 2008.
What is the tax on a 17000 cash deposit?
Income of $17,000 is added to your other sources of income on your tax return. On its own $17,000 is in the 15 percent tax bracket. But that's without subtracting any adjustments, exemptions, or deductions that you might be eligible to claim.
Form 8300 is Report of Cash Payments Over $10,000 Received in a Trade or Business. You're required to file Form 8300 if you received a cash payment of over $10,000 as part of your trade or business.
Form 4789 is Currency Transaction Report. The financial institution is required to file Form 4789 to report any transaction (deposit, withdrawal, transfer, etc.) in currency of more than $10,000.
How do you prepare profit and loss statement?
How to Prepare a Profit & Loss StatementA profit and loss statement measures a company's sales and expenses during a specified period of time. The purpose of a profit and loss statement is to total all sources of revenue and subtract all expenses related to the revenue. It shows a company's financial progress during the time period being examined.
Instructions
Things You'll Need:· Net sales info
· Cost of goods sold info
· Selling and administrative expenses info
· Other income and other expense info
1. Step 1
Enter your company's name in the header of the statement. In addition, add the period the profit and loss statement will reflect.
2. Step 2
Enter data for net sales. The company's net sales are the total sales during the time period being analyzed minus any allowances for returns and trade discounts. The amount allowed for returns will vary depending on what type of business you are running. Calculate the cost of goods sold. The company's cost of goods sold is also called the cost of sales. If you are a retailer or a wholesaler, it is the total price paid for the products sold during the accounting period. To calculate the cost of goods sold you will use the following calculation below and record the data:Beginning inventory + Inventory purchased during the period− Inventory on hand at the end of the period________________________________________ Inventory used for product the time period
3. Step 3
Fill in the cost of sales for your company. Once net sales and cost of goods sold are entered on the P & L statement, it is possible to compute the gross margin for the accounting period. Gross margin is also referred to as gross profit. Net Sales − Cost of Goods Sold = Gross Margin
4. Step 4
Calculate the gross margin using selling and administrative expenses. Selling expenses are expenses incurred directly and indirectly in making sales. They are the expenses of order taking and order fulfilling. General and administrative expenses are operating expenses not directly associated with the sale of goods. They are also called "overhead" expenses.
5. Step 5
Enter total selling, administrative, and general expenses.
6. Step 6
Enter the net operating profit. To calculate it, use the following formula: Net Operating profit + (other Income − other expenses) = net profit before income taxes
7. Step 7
Enter any other income or other expense for your business on the worksheet and calculate the net profit before income taxes. Net profit is calculated by subtracting what you estimate is owed for state and federal income taxes from net profit before income taxes. Net Profit before income taxes − income taxes = net profit
8. Step 8
Record net profit after income tax.Net profit before taxes-provision for income tax= net profit after income tax
How much does a partner at big four accounting firm earn?
Roughly $400,000 a year, plus bonuses. It takes about 15 years to become a partner though, and apparently it's INCREDIBLY stressful (and there's some politics and corruption involved).
The pay is NICE though
hi there
to my idea assesable income is every single income that come from the main or normal activity of the company! Just say a computer company, the assesable income are the sell of the computer, spare part as well as software.
Good luck
Dear Taxpayer, I'll try to answer your question based on what I understand it to be although the phrasing is somewhat vague. If you have a bank account that pays interest, (as many banks have) then you have interest income that will need to be reported on your tax return whether you are filing for the current year or for past years. A bank reports interest income on form 1099-INT, one copy goes to you and the other to the IRS. If you don't have a copy of the 1099-INT for the year in question then you can contact the bank and request one for your records. If the bank is either closed or non-responsive, I'd suggest that you contact the IRS and request a copy of your wage and income transcript for that year. Within 30 days you'll receive a copy of your income information for the year in question. If your account is not an interest-bearing account then you don't pay "additional" taxes on the monies. If you received these funds from your employment, then it gets reported to the IRS on your W2, if its from Self-Employment, then it gets reported on a 1099 or from self-reporting. Regardless of whether you keep the money on a bank account or under your mattress you pay taxes when you get paid, if you then put the money on the bank, you'd only be taxed on the interest received. Should you have additional questions make sure to consult a tax professional. Good luck. www.irs101.blogspot.com
What is the difference between allowance and perquisites?
Allowance are being mentioned in section 10 wheras perquisites in section 17(2) of Income Tax Act, 1961.
How long to keep tax records for business?
You should keep your business records for a minimum of three years for federal income tax purposes. Records retention for state tax agencies varies, but three years would also be a minimum for these tax authorities as well.
Note that your records having to do with any depreciable capital assets should be kept until at least three years after the assets are disposed of.
Also, any records having to do with tax carryover items should be kept for at three years after the carryover is used up.
How long to keep deceased parents papers such as tax returns?
Some papers are more or less permanent, such as titles to property. Tax returns: I'd say seven years. Papers that are duplicated in the public records: it doesn't really matter, because you can always obtain copies from the public records.
Deferred tax is an accounting concept, meaning a future tax liability or asset, resulting from temporary differences between book (accounting) value of assets and liabilities and their tax value, or timing differences between the recognition of gains and losses in financial statements and their recognition in a tax computation
Badges of trade are the circumstances in which a trade can take place. This is important in accounting because of the differences in taxation with non-trade transactions.
How long does a bank keep checking savings records?
A bank is required to keep checking and savings records at least 5 years. This applies to personal and business accounts.
Pay As You Earn Method used by most people who have a single job to pay personal income tax liability each time they are actually paid.
Would a sudden addition of a large sum of money to one's bank account trigger an IRS audit?
No, not automatically. The IRS is not notified each and every time a person or company's bank account receives a larger than usual deposit.
However, personnel at banks have been known to manually make referrals to the IRS or other law enforcement agencies when they suspect a depositor has made a deposit of funds secured through unlawful means.
Does TurboTax do all federal state AND local taxes?
Yes, TurboTax has the capabilities of doing both federal and state income taxes. If you choose the free version for the federal taxes you will have to pay a fee to complete the state taxes.
How long do you need to keep income tax papers?
For most items of income and expense, three years is the normal rule.
However, for any item, such as depreciation on assets which can be claimed in excess of the normal three years, you will want to keep your papers for as long as you are claiming the asset.
Papers relating to your cost, or cost basis, in capital assets should be kept forever and handed down to whoever will inherit these assets from you.
What payroll tax is paid entirely by the employer?
The federal unemployment tax is paid entirely by the employer, being reported annually on a Form 940 filed no later than January 31st.
How many years do you have to keep records?
Depends entirely on the type of records, the business you're in and the State (which may or may not have something to say about things). As a ROUGH guess, try this: * FInancial -- 8 years * Health records 6 years required, more is better. * Property and dwellings -- indefinite. * A/R -- for the length of the business contract. * Govt. Contracts -- contract will specify.
How much is a person taxed if they withdraw their pension fund early before retirement age?
If you withdraw your pension fund before age 59 1/2, you might be taxed an additional 10 percent tax on early distribution of these funds. If applicable, the 10 percent tax is reported on line 58 of Form 1040.
You also must file Form 5329 (Additional Taxes on Qualified Plans and Other Tax-Favored Accounts) if either of the following apply. One, your distribution is taxable, and Box 7-Distribution Code(s) doesn't show Code 1 (Early distribution, no known exception, in most cases under age 59 1/2). Two, an exception applies but Box 7-Distribution Code(s) doesn't show any of these codes: 2 (Early distribution, exception applies, under age 59 1/2), 3 (Disability), or 4 (Death).
Do you incur penalties when you file an amended tax return?
The filing of an amended return does not automatically trigger the assessment of penalties by the IRS.
What could trigger penalties would be having a balance due, the amount of the balance due, and the reason(s) for that balance due.
What is the tax index number for capital gains in India?
Tax index number is the technique used to find out the current moneytary value of a capital asset so as to find out the difference between the sale proceeds and the value thus found out by applying the index for the purpose of charging tax on the difference. For this purpose 1981 is taken as the base year and it has been assigned an index no of 100, which is calculated on the basis of wholesale price index and the level of inflation in the economy.
