Serving the Louisville, Kentucky & Southern Indiana Area

BOURKE ACCOUNTING LLC

3415 Bardstown Road - Suite 305
Louisville, KY 40218
(502) 451-8773  Voice
(502) 454-4253  Fax

Accounting, Bookkeeping & Income Tax Services

Frequently Asked Questions - TAX

Businesses:
 
Q)  Should I incorporate my business?
A)  For most businesses we recommend either incorporating your business or forming a LLC (Limited Liability Company).
  

Q)  Do I have to be an attorney to incorporate or form a LLC?  
A)  No, not in most states.  Check with your state’s Secretary of State Office.  For help in Kentucky or Indiana, email me.  I can help you form one yourself:    tbourke3@bellsouth.net
 
 
Q)  Should I file a Subchapter S election?
A)  That one is a difficult question.  There are so many factors to consider in making this decision.  For this one, I recommend that you seek the advice of a professional to explore your options. 
 

Q)  What are the advantages of LLC vs. C Corporation, vs. S Corporation, vs. Partnership?
A)  I have analyzed the various forms and have the listed the advantages and disadvantages of each type of business entity. I have summarized them in an Excel spreadsheet.  Email me for a
FREE COPYtbourke3@bellsouth.net
 

Q)  Where can I get information on the new Health Care Tax Credit?

A)  Here is a great link to answer all of your questions: 

http://www.irs.gov/newsroom/article/0,,id=223666,00.html


Q)  I bought a new computer.  How many years should I depreciate it over?
A)  Computers, scanners and printers are all depreciated over 5 years.  However, IRS allows you to file a special election with your tax return to  expense the entire cost of that purchase in the year that you placed it  in service.  That election is made by listing it on IRS Form 4562 in Part I. 
 

Individuals:
 
Q)   Are there any tax changes that might affect me?
A)   There are quite a few changes that affect individuals.  New tax  credits, deductions & rules.  For information, check out this link:
http://www.irs.gov/individuals/index.html


Q)   Do I have to make estimated tax payments? 

A)   If you expect to owe the IRS anything more than a minimal amount, you will be penalized if you don't.  Check out the link below for the details:http://www.irs.gov/faqs/faq/0,,id=199807,00.html


Q)   Am I eligible for Earned Income Credit?

A)   Many low and moderate income earners are.  Check out this link to the IRS website:

http://www.irs.gov/individuals/article/0,,id=130102,00.html


Q)   I use my car for business.  Can I deduct any expenses?
A)  Yes.  It’s complicated, but you can deduct either the actual business portion of your automobile costs or take an optional mileage deduction for business miles driven.  The allowable IRS Rate is 51 cents for each mile that  you drove during the 1st half of 2011 and 55.5 cents for each business mile that you drove during the 2nd half of 2011.

The business mileage rate for 2012 remains at 55.5 cents.
 

Q)  I purchased vacant land for investment.  Can I deduct the interest and taxes that I pay?

A)  Yes.  The real estate taxes are deducted on Schedule A.  The interest that you pay to carry the investment is deduced on Schedule A, but it is limited to the amount of net investment income that you have.  Investment income consists of items like interest income, dividend income and net capital gain income.

To arrive at the "net", you must reduce your investment income by  investment expenses like accounting fees, brokerage firm fees and  subscription to investment publications and services.  If a building is located on the property it greatly complicates the situation and professional advice should be sought.
 

Q)  I've taken substantial losses in the stock market this year.  Can I deduct those losses?

A)  You don't have a tax loss unless you've sold the investment.  If you have sold the investments, the losses can be used to reduce any capital gains that you have, whether it is a capital gain on the sale of  stocks, bonds, mutual funds or even land.  You can use the entire loss  to the extent of the capital gains that you have, plus an additional
$3,000 towards your other taxable income, such as wages, interest,  dividends, etc..  Remaining unused losses can be carried over to future years indefinitely.

 
NEED BUSINESS TAX HELP?  HAVE A BUSINESS TAX QUESTION? 

EMAIL ME AT:  tbourke3@bellsouth.net