Do I Have to Pay Taxes on Contest Winnings? And More Free Tax ...

On Thursdays, CPA and Vice President of Corporate Tax Network, Gary Milkwick and his team, answer tax questions for free on the?LegalZoom Facebook Page. Did you miss the last?Ask the Tax Pro? Don?t worry. We?ve got it all right here.

Darrell: Mr. Wilkwick,What is the general rule for paying taxes on prizes you win in contests. For example,I won a piece of luggage this year with a retail value of $995,will I have to pay taxes on it?

Corporate Tax Network: Darrell, anything won in a contest is taxable as ordinary income. Since you didn?t earn it, you do not pay any employment taxes on it, such as Social Security and Medicare, but you do have to pay federal income tax on it, plus state and local taxes where applicable. All prizes won in contests are assigned a dollar value that represents the fair market value of the prize, including vacations won in shows like Wheel of Fortune. So the $995 luggage that you won will have to be included on your tax return as income and will be taxed at your ordinary tax rate.

You should have received a 1099-Misc form showing the amount of taxable prize winnings from the organization that awarded you the prize, and they will also report that information to the IRS. In turn, the IRS will know to expect to see this amount reported on your tax return. So the good news is that you won, the bad news is that you have to pay taxes on your winnings?

Lacey: My daughter and I live with my boyfriend. He is the Head of Household and makes the income. Her dad has no right to claim her on his taxes. Can my boyfriend claim her and myself on his?

Corporate Tax Network: Hello Lacey, your boyfriend will need to file as ?Single? since he does not live with a qualifying relative. However, if he is providing more than ? of your support and if you and / or your daughter do not make more than $3,800 each in gross income, he can claim each of you as dependents.

Kimberly: I am sole owner of a company in Texas (C Corp). Is it legal for me to take owner/shareholder dividends monthly instead of a salary as to keep my taxes lower? Dividends are paid at 15% I believe.

Corporate Tax Network: Kimberly, it is legal to take dividends instead of salary in a C Corp. However, a C Corp pays taxes on its profits and then you pay taxes on the dividends personally ? this situation is known as ?double taxation? because the profits of the corporation are taxed at the corporate AND personal level.

For this reason, many small business owners elect for their corporation to be taxed as an S Corp, which does not tax at all on owner distributions ? profits flow through from the S corporation to the individual, and the individual pays taxes personally on the income.

The type of corporation that would minimize total taxes paid for you and your business depends on many factors ? your personal tax rate and corporate tax rate (if you?re set up as a C Corp), the amount of profits generated by the business, your other sources of personal income, etc. I would suggest you to go through the details with a tax advisor to determine how to minimize your tax liability. Best of luck to you and your business!

Jeff: I have sent over a detailed explanation to the irs and was just denied. The problem is the mom who is being coerced by the step dad is not cooperative?.every year we engage in a back and forth who can claim her, they have always backed down. The status quo is I have been consistant
ly claiming her since birth. For 2010 however they ended up claiming her which set off red flags with the irs. They are going to be uncooperative filling out form 8332 as they don?t want to have repay the money back to the irs?as far as being the sole provider 50 % or greater. I would consider myself for 2010. I paid child support and all travel expenses?my daughter went to public school which was free?.what do you recommend? Does it sound like I am screwed? Also are audits random? Meaning now from this point forward I can never claim my daughter if step dad is claiming her? I claimed her for 2011 and haven?t been audited?lastly if I am screwed and have to pay the money back being that I am receiving unemployment would they garnish my unemployment checks??? Thanks again?you guys are really awesome?.

Corporate Tax Network: Hi Jeff, I am sorry to hear that the IRS denied your claim. I would suggest to contact the IRS directly (800-829-1040) and speak to an agent, who will explain why the claim was rejected in order for you to provide stronger evidence. This is a complicated situation, and I would advise you to hire a CPA, EA or a tax attorney to contact the IRS on your behalf, if possible.

If you and the mother / stepfather both claim the same dependent on your tax returns, an IRS notice will be automatically be triggered because the same person cannot be claimed as a dependent on 2 different tax returns. For each year, you would need to provide sufficient evidence to the IRS proving that you qualify to claim your daughter as a dependent if this point is being disputed by the other party.

In general, the second (last) person to file the tax return claiming the same dependent has the burden of proving that the first person who claimed the dependent did so incorrrectly; the way the IRS? system is set up, it automatically rejects the dependent on the second tax return.

If you decide not to challenge the decision made by the IRS, and cannot make a full payment of the taxes you owe, you may be able to set up an installment agreement. You can either contact the IRS directly or file Form 9465 ? Installment Agreement Request.

Shaun: When selling a service, as a small business in Florida and using personal taxes for filing, what would be a comfortable percentage to save per transaction in order to pay at tax time?

Corporate Tax Network: Shaun, it sounds like you?re saying that you?re running your business as a sole proprietorship, which is reported on Schedule C of your personal tax return. If that?s the case, you pay self-employment tax of 13.3% on your business profits of up to $110,100 for 2012. For 2013, that rate goes back up to 15.3% because the payroll tax holiday of 2% ends this year.

In addition to self-employment tax, you are also taxed at your normal personal income tax rate for the profits of your business (although you get a deduction for 1/2 of the self-employment tax paid) PLUS you have to pay state income tax. Since there are no state income taxes in Florida, that saves you a bit of money! Since I don?t know your personal tax situation, it?s tough to say exactly how much you should hold back for taxes, but hopefully this gives you enough information to make a rough estimate.

One other item to note is that if your Schedule C business is generating profits, in most cases the IRS wants you to make quarterly estimated tax payments. You can be penalized if you do not make these payments but meet the criteria for making them. Filing estimated tax payments is done by completing Form 1040-ES each quarter. See the following link for more information on quarterly estimated tax payments. http://www.irs.gov/pub/irs-pdf/f1040es.pdf

LegalZoom: More tax Q&A coming up next Thursday. In the meantime, check out our free legal Q&A tomorrow: http://zoo.mn/bFreeJoe

Sign up for the LegalZoom newsletter!


Related:

  1. Do Retirees Have to Pay Taxes? And More Free Tax Advice ? Ask the Tax Pro 9/20/12
  2. How Should My LLC Pay Taxes? And More Free Tax Advice ? Ask the Tax Pro 10/11/12
  3. Is a Single-Member LLC Taxed as a Corporation? And More Free Tax Advice ? Ask the Tax Pro 9/27/12
  4. How Do I Report the Sales Tax I?m Collecting? And More Free Tax Advice ? Ask the Tax Pros 10/18/12
  5. Can I Get a Tax Extension Past October 15? And More Free Tax Advice ? Ask The Tax Pro 10/4/12

Source: http://blog.legalzoom.com/taxes/do-i-have-to-pay-taxes-on-contest-winnings-and-more-free-tax-advice-ask-the-tax-pro-102512/

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Invoke Launches e-Filing Insurance, a Tactical Portal Solution for ...

Money Image

Paris, France, October 29, 2012 ?(PR.com)? A tactical ?push-button? solution for generating, validating and tracking Pillar 3 reports in XBRL format, the e-Filing Insurance declarative web portal allows regulated firms, particularly smaller entities, to leverage their existing IT architectures and to preserve their workflow and processes. With this full-web SaaS solution, end-users are instantly up-an-running using a simple Internet
browser. Furthermore, as no installation or training is required, the investment required is minimal.

?A smaller insurer with a limited number of business lines will clearly not adopt the same project strategy for managing the transition to Solvency II as a major international group, explains Antoine Bourdais, Director of the Banking, Insurance & XBRL Division at Invoke. Smaller firms, particularly those that only need to report a subset of the total number of regulatory tables, are looking for light solutions that will allow them to alleviate the XBRL pain?point of Pillar 3. There is a clear need for a no-nonsense tactical application that simply generates the required reports in the mandatory XBRL format without requiring firms to revolutionize their existing information system. Sensitive to market feedback, Invoke is launching e-Filing Insurance, a full-web SaaS portal solution that specifically caters to the needs of smaller regulated firms that are affected by the complex reporting obligations contained in the Solvency II Directive.?

e-Filing Insurance allows users to generate their Pillar 3 XBRL reports online using a straightforward 5-step process:

? Filing calendar management. The regulatory timetable allows users to track submissions and also defines each user?s work environment for each user.
? Online direct input. The regulatory reporting templates available in the portal environment can either be populated manually or via a direct import from Excel.
? Online validation. Regulator-imposed controls are checked online and in real-time using cutting-edge XBRL technology.
? Online electronic signature. Authorized users can electronically sign documents online.
? XBRL download feature. XBRL instance documents that are complete, valid and signed can beOnce the user account is activated by Invoke, the cloud-based e-Filing Insurance portal application is instantly up-and-running.

Pioneering and pragmatic, e-Filing Insurance offers measurable value-adds,
such as:

Straightforward set-up with no technical pre-requisites on end-user workstations

- Intuitive interface that requires minimal training

- Centralized and permanent access to regulatory submissions

- Reliable data validated in real-time

- Full control of the regulatory filing-calendar

- Guaranteed regulatory maintenance

?All Invoke reporting software is built around cutting-edge native XBRL technology, which allows us to demonstrate unparalleled reactivity and reduced lead-times when implementing regulatory upgrades. Simple configuration modifications, validated by functional experts, are all that is required for our software to be immediately updated. This flexibility allows us
to deliver upgrades to our clients in the space of a few days from the date of publication by a regulator of a new taxonomy version, which is an incredible asset in regard to Solvency II, as the regulatory framework will undoubtedly undergo a series of adjustments in the early phases of implementation.

Invoke?s native XBRL technology is the fruit of over ten years? Research & Development, with an in-house team dedicated to working with the XBRL standard. Invoke continues to reinvest approximately a third of the company?s annual turnover in R&D, in order to maintain its position as market-leader through ongoing innovation,? concludes Antoine Bourdais.

About Invoke

Founded in 2001, lnvoke develops specialized software for managing financial, tax and regulatory information. Well-established as a key player in the international regulatory reporting sphere, Invoke sets itself apart by driving the company?s technological lead through continuous innovation. The resulting software is unique and showcases the latest reading, editing, production and validation technologies for application to financial data in XBRL format.

Having specialized in regulatory reporting over a number of years, Invoke delivers cutting-edge solutions and is the partner of choice for international supervisory bodies (ACP, Deutsche Bundesbank, ?), for groups in the banking
sector falling under the scope of both local and European regulatory imperatives (Cr?dit Agricole, BPCE, Dexia, Danske Bank, ?), and for insurance companies concerned with Pillar 3 reporting within the framework of the Solvency 2 Directive.

Invoke is a founding member of the professional association, XBRL France, and is a direct member of the XBRL International consortium. Invoke?s growing client base is today comprised of over 1,800 groups and national supervisory authorities, both domestically in France and abroad.

For more information: www.invokesoftware.com

Contact Information:
INVOKE
Yasmine Tebaa
33 1 42 68 85 60
Contact via Email

http://www.invokesoftware.com

Click here to read the full story: Invoke Launches e-Filing Insurance, a Tactical Portal Solution for Generating Pillar 3 Regulatory Reports in XBRL for Solvency II

Press Release Distributed by PR.com

Source: http://money.rambergmedia.com/invoke-launches-e-filing-insurance-a-tactical-portal-solution-for-generating-pillar-3-regulatory-reports-in-xbrl-for-solvency-ii/

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'Frankenstorm' Full Moon: Hurricane Sandy's Impact Amplified by Lunar Event

The full moon of October may go unseen along the U.S. East Coast due to Hurricane Sandy, but its effect on the storm will be felt. The full moon's tidal effects on Earth will amplify the storm's already large waves, making them a bigger flooding danger than normal, NASA says.

"Very rough surf and high and dangerous waves are expected to be coupled with the full moon," NASA spokesman Rob Gutro explained in the agency's hurricane status report Sunday (Oct. 28). "The National Hurricane Center noted that the combination of a dangerous storm and the tide will cause normally dry areas near the coast to be flooded by rising waters."

The National Hurricane Center said that "Sandy [is] expected to bring life-threatening storm surge flooding to the Mid-Atlantic coast including Long Island Sound and New York Harbor, winds expected to be near hurricane force at landfall," according to Gutro's update.

Hurricane Sandy is currently a Category 1 hurricane with wind speeds of up to 75 mph (150 kph). It is moving northeast at about 14 mph (22 kph) and is merging with a cold front to create a single, more dangerous, super storm that measures nearly 2,000 miles across (3,218 kilometers), covering much of the eastern United States. Weather forecasters have dubbed the huge storm a so-called "Frankenstorm."

With the moon in its full phase, high tides on Earth will rise about 20 percent higher than normal. The full moon will add more power to the already intense storm surge of Hurricane Sandy, which is already expected to reach heights of 6 to 11 feet (1.8 to 3.3 meters) in parts of Long Island Sound and New York Harbor, Gutro wrote. [Hurricane Sandy Turns Into Frightful Storm (Video)]

The higher tides during a full moon occur because at this time the sun, Earth and moon line up with our planet in the center. The cosmic arrangement allows the gravitational pull of the sun and moon to reinforce one another, creating stronger tides on Earth. A similar effect occurs during the new moon, when the sun, moon and Earth line up with the moon in the center.

In fact, the tides during the full moon and new moon are also dubbed "spring tides," taking their name from the German word "springen" (to spring up)," SPACE.com's night sky observing columnist Joe Rao has explained.

Here are some storm surge estimates for parts of the U.S. East Coast, according to NASA and the National Hurricane Center:

  • South of Surf City, N.C., 1 to 3 feet;
  • North of Surf City, N.C. including Pamlico/Albemarle Sounds, 4 to 6 feet;
  • Southeastern Virginia and the DelMarVa (Delaware/Maryland/Virginia) peninsula including the lower Chesapeake Bay, 2 to 4 feet;
  • Upper and middle Chesapeake Bay, 1 to 2 feet;
  • Long Island Sound and Raritan Bay, including New York Harbor, 6 to 11 feet;
  • Elsewhere from Ocean City, Md., to the Conn./R.I. border, 4 to 8 feet;
  • Conn./R.I. border to the south shore of Cape Cod including Buzzards Bay, 3 to 5 feet.

NASA and the National Oceanic and Atmospheric Administration are keeping track of Hurricane Sandy with a fleet of satellites, some of which have provided amazing views of the storm from space.

You can follow SPACE.com Managing Editor Tariq Malik on Twitter?@tariqjmalik?and SPACE.com on Twitter?@Spacedotcom. We're also on?Facebook?&?Google+.

Copyright 2012 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: http://news.yahoo.com/frankenstorm-full-moon-hurricane-sandys-impact-amplified-lunar-123844934.html

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Scott Forstall, John Browett To Leave Apple As Ive, Cue, Mansfield And Federighi Take On New Roles

Scott ForstallApple has just announced that Scott Forstall will be leaving Apple as of early next year, ending his tenure as SVP of iOS Software. As part of the management change, Jony Ive, Bob Mansfield, Eddy Cue and Craig Federighi will take on new responsibilities. Forstall will remain on as an advisor to Tim Cook between now and next year, but appears to be departing the SVP role immediately.

Source: http://feedproxy.google.com/~r/Techcrunch/~3/a3xWCmo_mq4/

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Windows 8 upgrade diary: a defiantly successful installation

Windows 8 upgrade diary: a defiantly successful installation

Nothing's nicer than a happy ending. Except maybe a happy beginning, which is precisely what you're looking at above -- Microsoft's new OS captured in all its glory within minutes of completing the installation. What's more, if you saw the first part of this upgrade diary, then you'll know I was aiming for a trickier-than-average setup, with Windows 8 Pro running on a brand new and untouched SSD, alongside Windows 7 Ultimate running in dual-boot mode on my old HDD. As it turned out, this configuration was a breeze -- so long as I totally ignored the Getting Started instructions that came in the box. Read on if you'd like to know more.

Continue reading Windows 8 upgrade diary: a defiantly successful installation

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Windows 8 upgrade diary: a defiantly successful installation originally appeared on Engadget on Mon, 29 Oct 2012 18:20:00 EDT. Please see our terms for use of feeds.

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Source: http://feeds.engadget.com/~r/weblogsinc/engadget/~3/KbG5DN8oxkE/

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Mother's little helpers let her relax

Monday, October 29, 2012

Published in Behavioral Ecology and Sociobiology, the research shows that mother chestnut-crowned babblers bring food to their chicks much less often when they have family members doing the same.

'We were expecting that mothers would work hardest at feeding their chicks because, on average, they have the greatest genetic stake in their young. But this was not the case,' says Dr Lucy Browning, now of the University of New South Wales, who led the research.

Yet by slacking off on the communal task of feeding, it may be that the mother avoids spending energy and risking predator attack while looking for suitable food. Instead, she can save her energy for her next attempt to breed.

This isn't just relevant to birds; ultimately it could help shed light on how we reproduce and raise children ourselves.

'The breeding female produces all the group's offspring, and the more the others can support her, the higher quality offspring she will produce, which is better for everyone,' says Dr Andy Russell of the University of Exeter, another of the paper's authors. 'So in a small group the breeding female does as much as anyone else, but we found that as the group gets larger she reduces her feeding activity by about two thirds.'

The researchers monitored numerous groups of babblers at the University of New South Wales Arid Zone Research Station throughout the process of rearing young. They tracked the size of prey that each adult brought the chicks, what kind of food it was and how often they did it.

Chestnut-crowned babblers are what ecologists call 'obligate cooperative breeders' - they breed in family groups, in which only the dominant pair ever get to produce the offspring, and breeding without help is rare and generally unsuccessful. The other birds have to content themselves with helping their relations raise their chicks, and hoping to improve the chances of their genes getting passed on to the next generation that way. Bringing prey for the youngsters to eat is a big part of this.

This means breeding female babblers don't just have their mate to help take care of their chicks, but also numerous grown-up offspring and other relations. So they can put less effort in without significantly adding to the risk their offspring will starve. Flying about looking for food is tiring, and exposes mothers to the risk of attack by hawks and falcons. And the whole process of breeding is hard work for females; they have to lay eggs and stay sitting on them until they hatch.

So in theory it makes sense that mothers should put less effort into feeding chicks when there are others to do that. But this is one of the first times scientists have shown such a clear pattern for the breeding female alone.

Males may scale back their feeding contributions a little, but there's less reason for them to slack off as they invest much less in each attempt at breeding. They don't have to lay eggs or spend weeks incubating them, so there's less incentive to try to conserve as much energy as possible for the next breeding attempt. Meanwhile the females generally brought large items of prey, but much less often. This increased prey size didn't come close to counterbalancing the drop in how often they brought food.

Russell says that similar group cooperation could have played an important role in the development of human reproduction as we know it. People have an unusually short birth interval compared to with primates of a similar size - women can have another child only another year or so after their last one, compared to about five years in chimpanzees. 'In humans, grannies, siblings and older children provide mothers with a huge amount of support,' he says. 'It's likely that our short birth interval evolved as a consequence of this kind of helping behaviour, which allowed mothers to reduce their investment of energy in their current child in order to prepare for the next one.'

The behaviour is subtly different from that of other obligate cooperative breeders like meerkats; there, both parents significantly reduce their investment in feeding young, not just the mother. Another recent paper by the same team showed that the chestnut-crowned babblers don't just share the burden of child-rearing; they are honest about always feeding the food they bring to the young, even when they're hidden inside the domed nest and could easily just eat it themselves.

###

Browning, L.E., Young C.M., Savage J.L., Griffith S.C. & Russell A.F. (2012) Carer provisioning rules in an obligate cooperative breeder: prey type, size and delivery rate. Behavioral Ecology & Sociobiology.

Natural Environment Research Council: http://www.nerc.ac.uk/

Thanks to Natural Environment Research Council for this article.

This press release was posted to serve as a topic for discussion. Please comment below. We try our best to only post press releases that are associated with peer reviewed scientific literature. Critical discussions of the research are appreciated. If you need help finding a link to the original article, please contact us on twitter or via e-mail.

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Source: http://www.labspaces.net/124888/Mother_s_little_helpers_let_her_relax

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Google Play Movies purchase options going live in more countries

Android Central

Google's "Playground" event may have been called off, but it seems some changes to the Google Play Store may be arriving regardless. We're seeing movie purchase options appearing for some Google Play Movies titles here in the UK, though the selection is extremely limited at the moment. Likewise, Ausdroid reports that Google's started rolling out movie purchases in Australia, where previously only rental options were available.

In the UK, we've spotted titles such as Ill Manors on sale for £7.99. Down under, prices reportedly range from AU$8 for older movies all the way up to AU$25 for more recent offerings.

Considering today was originally going to be a big day for Google Play and Android, we'll be watching throughout the day to see if any other changes quietly drop.

International folks -- seeing anything new on Google Play today? Drop us a line in the comments.

Source: Ausdroid

Source: http://feedproxy.google.com/~r/androidcentral/~3/PaiazyP9Nww/story01.htm

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Higher-math skills entwined with lower-order magnitude sense

ScienceDaily (Oct. 28, 2012) ? The ability to learn complex, symbolic math is a uniquely human trait, but it is intricately connected to a primitive sense of magnitude that is shared by many animals, finds a study to be published by the Proceedings of the National Academy of Sciences (PNAS).

"Our results clearly show that uniquely human branches of mathematics interface with an evolutionarily primitive general magnitude system," says lead author Stella Lourenco, a psychologist at Emory University. "We were able to show how variations in both advanced arithmetic and geometry skills specifically correlated with variations in our intuitive sense of magnitude."

Babies as young as six months can roughly distinguish between less and more, whether it's for a number of objects, the size of objects, or the length of time they see the objects. This intuitive, non-verbal sense of magnitude, which may be innate, has also been demonstrated in non-human animals. When given a choice between a group of five bananas or two bananas, for example, monkeys will tend to take the bigger bunch.

"It's obviously of adaptive value for all animals to be able to discriminate between less and more," Lourenco says. "The ability is widespread across the animal kingdom -- fish, rodents and even insects show sensitivity to magnitude, such as the number of items in a set of objects."

Only humans, however, can learn formal math, including symbolic notations of number, quantitative concepts and computational operations. While the general magnitude system has been linked primarily to the brain's intraparietal sulcus (IPS), higher math requires the use of more widely distributed areas of the brain.

For the PNAS study, the researchers wanted to build on work by others indicating that a lower-order sense of number is not just a separate function, but plays a role in the mental capacity for more complex math.

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Story Source:

The above story is reprinted from materials provided by Emory University. The original article was written by Carol Clark.

Note: Materials may be edited for content and length. For further information, please contact the source cited above.


Journal Reference:

  1. S. F. Lourenco, J. W. Bonny, E. P. Fernandez, S. Rao. Nonsymbolic number and cumulative area representations contribute shared and unique variance to symbolic math competence. Proceedings of the National Academy of Sciences, 2012; DOI: 10.1073/pnas.1207212109

Note: If no author is given, the source is cited instead.

Disclaimer: This article is not intended to provide medical advice, diagnosis or treatment. Views expressed here do not necessarily reflect those of ScienceDaily or its staff.

Source: http://feeds.sciencedaily.com/~r/sciencedaily/top_news/top_health/~3/C2F-DRwD0Dw/121028154914.htm

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