JOSEPH S. HERSCOWICZ & ASSOCIATES
JOSEPHTAXPRO © IRS Representation & Resolution Services
FAQs
What do I do if I receive a notice
from the IRS about my taxes?
Don’t panic! the first thing to do is carefully read
the notice—to determine why it was sent, what the IRS
is requesting, and what they want you to do. It may be
nothing of importance; it may even be a notice in your favor.
After reading it you should bring it to our attention.
What is the difference between a C and an S
corporation?
A C Corporation and an S Corporation are exactly the same in
respect to liability protection. The difference is in how you
are taxed. A C Corporation has what is referred to as a
double taxation. First the corporation is taxed, and secondly
the dividends are taxed on the shareholders’ tax
returns. An S Corporation is not taxed at the corporate
level, only at the shareholder level. Most small businesses
are eligible to file as S corporations. But the appropriate
election must be made.
How do I find out about my
refund?
The best way is to use the Check Your Refund link from the
Resources pages of our website! To look up the status of your
federal or state refund, you will need your social security
number, filing status, and exact amount you’re
expecting back.
How long do I keep my records and tax
returns?
You should keep your records and tax returns for at least 3
years from the date the return was filed or the date the
return was required to be filed, whichever is later. It is
recommended that you keep these records longer if
possible.
If I donate my vehicle to charity, how much can I
deduct on my tax return?
In the past there were a lot of charities asking you to
donate your car, and there were a lot overinflated appraisals
of the fair market value for these vehicles. But recently the
IRS has gotten stricter on the way you determine the value of
your car. Now you must claim the actual amount the charity
received at an auction to sell the car, and the charity
should give you timely acknowledgment to claim the deduction.
If the vehicle is actually used by the charity instead of
sold at auction, then you may claim the vehicle's fair
market value.
What are the tax consequences of selling a
home?
If you sell your personal residence you can totally exclude
from income up to $250,000 of gain if you are single, or
$500,000 if married, regardless of your age at the time of
the sale—if during the 5 years before the sale you
owned the home and lived in it for a total of any 24 months.
The exclusion is not a one-time election; instead it is
available once every 2 years. Recent tax law has adversely
changed the handling of gains on the sale of a home if you
rented the property before you made it your personal
residence. Please contact our office if you believe this
situation will affect you.
If I buy a new home, can I deduct my moving
expenses?
If you move to a new home because of a new principal
workplace, you may be able to deduct your moving expenses. To
do so, you must meet the conditions for both the distance and
the time tests.
- The distance test is that your new principal workplace must be at least 50 miles farther from your old home than your old workplace.
-
You can claim this deduction even if you expect to work but
haven’t started working at the time you file your
return.
Expenses you can deduct are transportation and storage of
household goods and personal items and travel including
lodging from your old home to your new home. Expenses of
trips for house hunting are not deductible.
If your employer reimburses you for these expenses, your deduction may be limited. If you spent less than the reimbursement you will have to report a portion for income. Please do not hesitate to call us if you have any questions about these rules.