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James Elliot Pratt

James Pratt’s Answers

208 total


  • Is there a way to reduce the CA franchise tax if my business is not operating or generating sales/income?

    Can I reduce the CA franchise tax or receive some kind of tax credit if my business isn't earning any income (and not even operating yet). I'm planning on registering as an LLC but if I don't sell anything, monetize, or generate any sales, is ther...

    James’s Answer

    If you choose to form an LLC you cannot avoid the minimum $800. If $800 is a crippling expense you may consider a sole proprietorship to avoid that tax, but you would lose any limited liability otherwise available under an appropriate business entity. You need to analyze any risks associated with your business an potential liability exposure. You may want to meet with a lawyer to be properly advised.

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  • How to answer an occupation for a none working spouse in Form 1040?

    Should the occupation for a none working spouse be left blank or filled something else? Thank you.

    James’s Answer

    If the individual is not employed, enter a descriptive title to explain the individual's status such as “Retired,” “Student,” “Homemaker,” or “Unemployed.”

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  • How to report tax

    Ibought a house at 25 yrs ago 75000 dollars now I sold it 99000 this years i retired and no income report to govenment for ten yrs . should I report income tax to gov this year and how many percent tax that I should pay . ...

    James’s Answer

    Assuming the house sold was your primary residence, you may be eligible for a capital gains exclusion, so you may have no tax liability on the transaction. However, you must file your taxes to be eligible to claim the exclusion. Failure to file your return could not only cause a disallowance of the exclusion of capital gains, but the IRS may also assert failure to file and possibly other penalties. You should file your tax return to avoid issue and meet with a tax advisor if you need assistance in filing.

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    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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  • Non married parents, who claims child on taxes

    11 mths child parents living separte households, never been married. Child custody still not settled. Both parents are living with thier parents for time being. One parent just recieved W-2"s and wondering what next step process.

    James’s Answer

    Federal law (not a child custody agreement) determines who may claim a dependency exemption. The claiming taxpayer must meet all the IRS "qualifying child" criteria. Generally speaking, whichever parent has had custody in their residence for at least 6 months and has paid more than half of the support of the child, has the right to claim. Otherwise, the non-custodial parent who has paid over half the support needs a Form 8332 signed by the custodial parent to claim the child.

    Please click “thumbs up” if you’ve found this helpful and/or informative.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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  • Income Tax Filing Status if Separated

    If my spouse and I have a Separation Agreement that states we separated on 27 Jun 2010 and we have lived completely seperate lives, in seperate homes where we each pay 100% of the bills, what are our income tax filing status options?

    James’s Answer

    Your options are to file as married filing separately or married filing jointly. It may be preferable to file as married filing separately to protect yourself from joint liability for any tax debts that may be incurred by your spouse during the past tax year. It may make sense for you spouse and you to meet with a tax advisor to ascertain the specifics and determine which is advantageous.

    Please click “thumbs up” if you’ve found this helpful and/or informative.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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  • My employer is asking me to show them my tax return is it illigal?

    They say they think I'm filing wrong and told me if I don't show them I could lose my job. Is this true?

    James’s Answer

    Tax returns are confidential in nature. However your employer has the right to request to inspect if, especially if relevant to your work, but it is up to you whether or not to share it.

    Please click “thumbs up” if you’ve found this helpful and/or informative.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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  • Can a debt collector take our tax refund?

    i just got married and we have two kids between us. My husband has a school loan that has gone to a debt collector. I know we have to file married on our tax return to get the eic. So can the debt collector take our tax refund?

    James’s Answer

    Note that your tax refund cannot be directly taken unless the United States Treasury receives a garnishment request from the I.R.S., the Department of Education, Social Security or a child support collection agency. Tax refunds can be intercepted for liabilities relating to child support, federal debts (such as federal student loans) and a few other types of debts. Depending upon the amounts involved, it may make more sense to file as "married filing separately" to protect any refund due to you. If you file as "married filing jointly", any refund owed you can be intercepted toward payment of your husband's student loans. You may also want to consider using separate bank accounts and not open any joint financial accounts.

    Please click “thumbs up” if you’ve found this helpful and/or informative.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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  • Can my daughters dad claim her if she lives with me and he only pays child support?

    my daughters daddy is going to claim our daughter even though i have called the IRS and they said he can't claim her because she lives with me. and they told me that my boyfriend now can claim her because he helps me take care of her and i was won...

    James’s Answer

    Unless your daughter's daddy has paid at least half of your daughter's living expenses and has a Form 8332 signed by you, your daughter's daddy's dependency exemption should be disallowed. However, its common for the first to file with the child's social security number to get the exemption, and only upon the IRS catching the second tax return claiming the child, will he be asked to refile, and both of you may have to provide proof of who is entitled to the exemption. Note that if he illegally claimed the exemption and refuses to refile/amend, the IRS may assert penalties and charges of fraud if appropriate.

    Please click “thumbs up” if you’ve found this helpful and/or informative.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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  • Can a pending irs audit delay my current tax refund?

    I am supposed to receive a tax refund this week. I have an appointment scheduled for an irs audit initiated by someone reporting me that was mad at me for a business dispute. Can the irs delay my refund pending an audit? Can I reschedule my aud...

    James’s Answer

    Generally speaking, unless the audit is for the same tax year you are expecting the refund from, there should not be a delay caused by an audit of another tax year.

    Please click “thumbs up” if you’ve found this helpful and/or informative.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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  • Can child support take my tax return, if my husband who im seperated from owes back pay for his own children, who arent even min

    i am married to a man who owes child support, but we are separated and he lives in another city, and the only reason i havent divorced him is because its too expensive. when i do my income taxes can child support take my tax return, even though h...

    James’s Answer

    Filing as married filing separately may help to protect any refund owed you from being intercepted. You may also want to close any joint financial accounts to prickles further protection.

    Please click “thumbs up” if you’ve found this helpful and/or informative.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

    IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U. S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

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