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Can I deduct losses on my income tax return?

Losses are deductible up to the amount of “adjusted basis”. However, individuals cannot deduct losses unless they are either: (1) incurred in a trade or business, (2) incurred in a transaction entered into for profit, (3) arising from fire, storm, shipwreck or other casualty, or (4) from theft. Deductible losses do not include losses from the sale of capital assets, like stocks and other investment securities. Those are capital losses to which special rules apply

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What is an offer in compromise (OIC)?

For tax years before 2006, you must be in full compliance will all filing and payment requirements before completing an application for OIC. This means that you must have had filed your returns on time and if any taxes were owed in the past, payments were made on time.

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What are the tax consequences of an early withdrawal from a Simple IRA?

A SIMPLE IRA, also known as a “Savings Incentive Match Plan for Employees” is most common among small employers who have less than 100 employees. When Congress created SIMPLE IRAs, it intentionally imposed harsh penalties on early withdrawals because this type of retirement plan is specifically designed to force lower wage workers to save for retirement. Unlike other retirement plans, loans against the value of a SIMPLE IRA are not permitted.

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Are members of an LLC required to pay estimated tax and self-employment taxes on their share?

A single member LLC is viewed under the same conditions as a sole proprietorship for the purposes of taxes. LLC’s with two or more members are viewed as a partnership. As with any business, the business owner does not withhold employment taxes from his earnings to account for employment taxes. Because of this, LLC members must pay self-employment taxes. Silent members are not considered self-employed by the company, so they owe no self-employment taxes, regardless of owning a share. However, silent members are responsible for paying income taxes on any share distributions that they do receive from the company.

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