Unanswered Tax Questions

Nonresident Tax Issues

Illinois Non resident correction notice

I had filed for IL state tax 2022, because my employer mistakenly deducted IL tax from my one paycheck mistakenly. And told me they cannot correct it I need to file tax, and now I have gotten correction notice saying its missing schedule NR which I remember I filed and have charged me in error considering me a IL resident which I was not for full year. My employer is not giving me any letter regarding this. IL tax deduction was shown in my W2 along with NC state tax that was deducted as I am NC resident. How shall I proceed to resolve this? I am being asked huge amount and interest is being charged on it which is all in error owing to Illinois gov.

Personal Taxes

I want to know how much I can make per year in MN being retired and taking social security and pension

Deductions and Write-Offs

Lease or Purchase EV Vehicle

Background: I’m deciding between 1) Purchasing a Tesla Y for approximately $57,000, $10,000 down, payment of $776.00 per month, 72-months, car weighs less than 6,000 lbs, 2) Lease a Audi Q4 Etron, $55,000 lease price, $10,000 down payment, $596.00/month, 3-year lease, car weighs less than 6,000 lbs. I file married with my spouse and our taxable income will be approximately $75,000 - $100,000. We are both realtors (independent contractors) and use the vehicle at least 70% of the time for business. Questions: 1) Which is would be a preferred option purchase or lease? 2) I know the Tesla Model Y will qualify for the $7,500 ev tax credit. Will I be able to qualify for this ev tax credit based upon filing as independent contractors and married couple? 2) IF I am to purchase the Model Y with a loan would I be able to depreciate $20,200 for tax year 2023, write off actual usage expenses (electricity charging fee, maintenance, repairs, insurance, etc), write off the interest paid and if there is any other applicable expenses I could write off (please list)? 3) IF leasing is the preferred option, I know the Audi Q5 Etron does NOT qualify for the $7500 tax credit. Would I be able write off the monthly payment of $596.00/month, actual expenses, would depreciation apply ($20,200 for tax year 2023), actual expenses (gas, maintenance, repairs, insurance, etc) 3) We will be purchasing or leasing either vehicle under our personal names (also our business names).

Miscellaneous

Payroll taxes

I noticed on my payslip that my employer(state university) is not taking state or federal taxes out. When I asked about it this is what I was told: The IRS charts change at the beginning of each year to allow for the standard deduction increase. For a biweekly employee, in 2021 the first 965 has no tax withholding, then for 965-1731 they withhold 10% on the income above 965. In 2022, the first 996 has no tax withholding and then 10% on the income above 996. You income is taxed after the pretax deductions are deducted and in 2022 the insurance premiums increased which made your taxable income lower". Is this correct, if so what should I change to make sure I don't have a huge bill when I file.

Small Business

Buying another similar business; I have a quick question about the structure.

I'm days away from purchasing another small business. I would like to retain it's name (good customer awareness). Should I try and keep it a separate business? My current plan is to dissolve the new business (SVPC), and add it's name as a DBA my current business (FoaF). Any advice on the structure of a purchase like this. Is there another, better way to structure it?

Personal Taxes

Reporting Requirement of Gifts above Annual Limit in case of non-spouse joint donors

I am a US Green Card holder in the US and currently hold a savings account with a bank in Singapore. The account is held jointly with my mother who is a ''Non-Resident Not a US Citizen''. In Feb 2022, I received a Wire Transfer amount of USD 25,000 in that Singapore account. I then transferred the sum of USD 25,000 from my Singapore joint account to my US Bank account in Chicago which is held in my name jointly with my father ( who is Non-Resident, not a US citizen). Subsequently, in the same year, I withdrew the money from the US Bank Account. Question: a) Given that I am a holder in both the remitting account (Singapore) and receiving account (USA), I believe I am both the donor and donee, and hence the wire transfer is not considered a gift. Is this assessment correct or b) If the wire transfer is considered a Gift, then am I required to file a Gift Tax Return (Form 709) and also include this amount in the Tax for 2022 given that the sum of USD 25,000 is greater than the Annual Limit of USD 16,000, Or c) Given that the transfer is happening from a joint account, the gift amount attributable to me is only half of USD 25,000 i.e. USD 12,500. Since my share of USD 12,500 is less than the Annual Limit of USD 16,000, there is no gift tax reporting liability on my side To clarify further, the aggregate amount of funds I received from Non-Resident Alien during the 2022 tax year is less than USD 100,000 so there is no requirement to report under Form 3520

Personal Taxes

1033: Involuntary Conversion

My questions are related to 26 USC 1033 for involuntary conversions. I looked but could not find an answer. I hope someone here can help. 1. To utilize section 1033(a)(1) and (b)(2) to defer a tax burden, does the property that is being compulsory or involuntarily converted have to reside within the USA? 2. Also, can the converted property still qualify under this section if the property is being converted by a foreign national government? To provide some context, I am an individual (not a business) who has a property within Hong Kong. Earlier this year, the city government of Hong Kong sent a notice to inform property owners within an area the government is purchasing back all the properties within the stated area for the purpose of tearing down the existing buildings and redeveloping the area. The notice further stated that if the owners within the designated areas did not agree to sell their properties back within a certain time, the government would forcibly purchase the property within the next year. I own a condo within this area and feel like this falls within the 1033 provision. After the sale I want to take the proceeds and purchase another property within the city, but I want to make sure that I am complying with all tax obligations. Within section 1033, there was no indication that the properties had to be within the USA nor indication that only conversions by the USA or other state/municipal governments would apply. Any information would be helpful.

Business Formation

Do I really need a DBA or Series LLC?

Hi, I have recently formed a Wyoming LLC for the purpose of starting multiple e-commerce stores with unique brand names. And I am planning to maintain separate business bank accounts for each e-commerce store. Can I legally run multiple e-commerce stores with unique brand and domains names totally different from my company legal name under single LLC company without legal issues? Or do I absolutely require a DBA for each store, or should I form a Series LLC? Kindly advise the best option for me.

Miscellaneous

No federal income tax removed from paycheck

I am filing my federal W4 married filing jointly at my new job. Since I have started, none of my paychecks have been having any federal income tax removed. I have looked at tax brackets and I see no reason why this would be. I am just trying to get this resolved and make sure come next tax season I will not be liable for a huge payment into my taxes. I have copies of my W4 and paystubs if needed. Thank you

Business Formation

Salary for Holding company and subsidiary

If I own a LLC taxed as S corp holding company, that wholly owns an LLC, but I do therapy services for the subsidiary. Which company would pay me? The subsidiary or Holding company that I need to have a salary for? If it's the Holding company, does the subsidiary pay the parent company for services provided?