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*** Ask TaxMama Volume 7, Issue #293 January 28, 2005 ***

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Deadlines LOOMING - http://taxmama.com/taxcalendar.html

01.31.2005    Send W-2s/1099s to recipients  01.31.2005    File Quarterly/Annual Payroll/Sales Tax Returns 

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Dear Family,

We're going to be testing out a new newsletter system, so please have patience with us. I do hope you like it!

Still a couple of days left to finish preparing your 1099s, payroll and sales tax returns. Get on with it.

And if you're feeling frustrating trying to get the ID numbers from people and need to punch something, here... punch this - or hug it when you're feeling grand! http://www.cafepress.com/taxmama.17095842 [use coupon code CPNEWPRODS to get $4 off until 02/04/05]

And since there are so many natural disasters happening all over the country these days, please consider backing up your precious computer data. It may be wise to have it off-site (away from your home or office). Consider putting your back-ups into a bank safe-deposit box - they are relatively safe from magnetic interference and weather. Or using a professional back-up service. Here are some to consider: http://www.taxmama.com/Insider/backups.html

Speaking of disasters.

For the last couple of days, the top story on Google News was the train crash in Glendale (Los Angeles County). http://abcnews.go.com/US/wireStory?id=444780

My assistant's brother-in-law travels that route, so she called to see if he was all right. That day, he had taken a later train. But he had a story to tell.

His friend always takes that particular train. Wednesday, his friend was really stressed because he just couldn't find a parking spot in the Park & Ride lot until the very last minute. He missed the train by mere seconds. Talk about luck!

My sympathies to the families of all who didn't make it or got badly hurt. But on the other hand...

May all your inconveniences and misfortunes turn out to have silver linings, too.

Best wishes,

Eva Rosenberg, EA Your TaxMama is watching...out for you.

P.S. THE BOOK is out http://www.taxmama.com/AskTaxMama/book/

P.S.S. Drop by TaxMama's Shopping pages http://taxmama.com/resources/shopping.html

P.P.S. TaxMama is starting to schedule speaking/teaching engagements for next year. (Calendar is filling up) http://www.speakermatch.com/showcase/speakerinfo.asp?id=-667529472

P.P.S. If you're using spam blocker software, please add taxmama.com to your approved list. I don't have time to keep responding to each request for authentication. I get hundreds.

----------------------------------------------------------------- Radio Tour ----------------------------------------------------------------- Jim Blasingame - the Small Business Advocate. If you missed this week's show, you can find it in the archives - and stick around, there are at lot of other interesting interviews there, too. http://www.smallbusinessadvocate.com/cgi-bin/archives.cgi

Listen to the Mike Show Tuesday at 7:30 p.m. Eastern time http://www.inchargeradio.com/guests/default.aspx

Tune in to Mike Kavanagh at WSB Radio in Atlanta, and on CNN. http://wsbradio.com/about_us/moneymattersshow.html http://wsbradio.com/features/2004_tax_tips.html

Coming soon - weekly radio show in the MoneyRoom...stay tuned

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Tsunami Relief & The Red Cross http://taxmama.blogspot.com/

---------------------------------------------------------------- Investing Tip & eBay ----------------------------------------------------------------

Have you been seeing eBay's price plunge in the past week since they announced their earnings and price increases? Do you really think the company is going downhill? Give me a break. In fact, the stock is about to split 2 for 1 for shareholders of record on January 31, 2005. (Check this out) http://www.theonlineinvestor.com/split_center.phtml

This is a great time to buy the stock - when the price is down, and about it's about to split - for the 4th time since 1999.  (I managened snag a few shares this week.) 

You might want to talk to your financial advisor about considering buying stocks before they split. They're not all great values - especially since they tend to be priced at the top of their price cycle.

But some companies, if you look at their products, marketplace, etc. may turn out to be amazing values. We talked about this several years ago. And I bought stock in Immunocor [BLUD] at the time. 

Since then, about 2002, it has split 3 or 4 times. As a result, it has gone up in value about 600%.

I think I bought two others at the time, but they didn't do nearly as well. (I can't remember what they are, but I no longer have those stocks.)

But even if they had gone down 50% - assuming you spent the same amount of money on each - let's say $1,000 each - the investment would have been $3,000. Today that investment would be worth - $8,000 (BLUD of $1,000 + $6,000 growth + the two stocks at $2,000 worth half = 1+6+1 = 8)

Think about it....but research the companies before you invest.

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From: Miami, FL

Hi Tax Mama! 

I am very frustrated with the Florida Dept. of Unemployment Compensation.  I need to know if something qualifies as "Gross Wages subject to State Unemployment Tax as per the Quarterly Form UCT-6. 

I need to know if health insurance benefits for a 50% Shareholder of an S-Corp are considered "Wages" in Florida for the SUTA. 

The health insurance benefits are not part of any cafeteria, FSA or HSA plan.  There is no option to receive cash in lieu of the benefit.

When I called, they could not find anything in the statutes.  I looked at the statues myself and could not find anything definitive.  I know this differs from state to state.  I also know that it's considered Wages for Payroll Taxes (not withholding) and FUTA. 

They told me I should write the state for a legal opinion! I know you can get to the bottom of this. 

Thanks, Susie.

Hi Susie,

What a useless response from the state!

And you really have time to get a decision in time to file your payroll tax returns? Besides, yours isn't the only S-corporation in Florida where the owner gets health insurance. Or, perhaps it is?

Look, if you treat those expenses as wages, you'll simply increase the owner's total payroll for SUTA purposes. So, if the owner has to go out and collect disability, s/he will get a higher benefit.

On the other hand, SUTA wages are only the first $7.000 of wages anyway. So, most likely, the owner has already been paid more than that.

Does this help with the decision?

Best wishes,

Eva Rosenberg, MBA, EA

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From: Chicago, IL

Dear TaxMama,

I used to add my boyfriend to my tax statement as a dependent, because he worked a few under the table jobs. 

But this year I forgot to add him. What should he do now? Just not do anything? Or should I try and re-do my tax statments that have already been mailed. 

Any suggestions would be very helpful.

Thanks.

Jenny

Dear Jenny

How can I say this gently?

What you two have been doing is illegal.

You are committing a felony by helping your boyfriend commit tax fraud. This is serious. Stop it.

If he doesn't want to report his income, you shouldn't be getting involved, or helping him. Stay out of it.

Never, ever again include him on your tax return as a dependent.  He doesn't qualify.

He's making enough money to file a tax return. Let him file it.

You're very fortunate that you left him off this year. Keep it that way.

And if you're planning to build a future with him...? And perhaps have children...? And tie your finances to his...?

Get him to come clean NOW, while he's not in all that much trouble. The longer he keeps this up, the more he'll owe. And that's likely to cause you a lot of financial and emotional headaches over the years.

Get him to a good local tax professional who knows how to handle the problems that arise when someone hasn't reported his income for years.

If he won't clean up his act? Keep your finances very strictly separated.

Good luck!

Best wishes,

Eva Rosenberg, MBA, EA

http://www.TaxMama.com

---------------------------------------------------------------- Because We Care ----------------------------------------------------------------

Don't let yourself or your friend feel helpless. Share the Power - SCHOLARSHIPS FOR SELF-DEFENSE TRAINING AVAILABLE SHARE THE POWER:SELF DEFENSE TRAINING is gaining POWER!  visit Share The Power - http://www.sharethepower.com

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A.N.G.E.L.S. DAY

Helping Seniors keep their pets http://angelsday.org/ Talk to Linda Baker for more information (310) 680-0798 LBaker6343@aol.com

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The Jeremiah Society asks "Who Will Care for the Children?"

Today, many of these people outlive their parents. And therein lies the problem. Once their loving caregivers are gone, who will care for them? And will they be able to care for themselves?

The Jeremiah Society, is working to help enhance and enrich the lives of developmentally disabled teens and adults in the Jewish Community Please Call Rose Lacher, (714) 997-8193

http://www.jccoc.org/adults.html

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Only in Wyoming

Regarding the year 2004, a senior at UW was overheard saying that when the end of the world comes, I hope to be in Wyoming. When asked why, he said that everything happens here 20 years later than the rest of the civilized world.

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A Wyoming state trooper pulled over a pickup on I-80. The trooper asked,"Got any ID?" The driver replied, "Bout whut?"

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A group of Wyoming friends went deer hunting and paired off in twos for the day. That night, one of the hunters returned alone, staggering under the weight of a massive eight point buck. "Where's Ray?" the others asked. "Ray had a stroke of some kind. He's back up the trail a couple of miles," replied the successful hunter. "You left Ray laying out there and carried the deer back?" they inquired. "A tough call," nodded the hunter. "But I figured no one is going to steal Ray."

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Courtesy of Jim Banks, EA in Montana http://www.fastax-ea-exam.com/

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Courtesy of IRS

IRS Offers Forms and Publications Online

The IRS Web site at www.irs.gov offers taxpayers an alternative to fighting the weather, traffic, and lines to get the forms and information they need to complete their tax return accurately. The IRS Web site is available 24 hours a day, 7 days a week.

The link to "Forms and Publications" is on the left hand side of the IRS Web site front page.  Taxpayers can also copy addresses directly to their browser and save it as a favorite for easy future reference.

IRS Forms and Publications Main Page:      http://www.irs.gov/formspubs/index.html

IRS Forms and Instructions:      http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

IRS Publications: http://www.irs.gov/formspubs/lists/0,,id=97819,00.html

Taxpayers can also download forms, instructions and publications to their computer, or they can simply  browse the many online items.

Both the forms and instructions and the publications web pages contain links to current and prior year IRS forms, instructions, publications and notices.  The "Forms and Publications" main page http://www.irs.gov/formspubs/index.html is easy to use and has links to:

· Forms and instructions, arranged by number,  publication date or topic · Publications and notices, again, arranged by  publication number, date or topic · Information on the latest changes to forms  and publications · Prior year forms and publications · A list of accessible tax forms, publications,  and "talking" tax forms · Information about extension of time to file  a tax return · Information about downloading and printing  information off of the IRS web pages · How to order 2004 tax products on CD-ROM · How to order specific tax packages · How to order forms and publication for  delivery via the U.S. Mail · Information about outlets that provide tax  forms publications, information and assistance.