Showing posts from August, 2007

Husband and Wife Partnership Election to be Treated as Sole Proprietors

Husband and Wife Partnership Election to be Treated as Sole Proprietors

Under the Act, a husband and wife that report their joint business activities on their joint tax return may elect to be treated as sole proprietors and not as a partnership. Although some commentators believe this provision will be used infrequently, this will have a tremendous impact on Husband/Wife owned Limited Liability Companies. Because there were two owners, the LLC would have to file a 1065 US Partnership Tax Return. This makes no sense for a couple filing a joint return. So long as both the husband and wife materially participate in the business and the business, a Schedule C may be filed. This will save unnecessary accounting expense. If only one spouse materially participates in the business even though both spouses own the business, they will not qualify for this election. Also, the LLC must be a trade or business, not merely an investment to qualify.

Housing "Bust" Gets Worse.

Housing "Bust" Gets Worse

The housing boom is long gone. In NJ, the housing boom ended in the Summer of 2005, and since 2006 the housing market has been crashing. New home builders are trying to unload excess inventory by cutting prices and offering incentives. The National Association of Home Builders reported builder confidence sank by two points to 22 which is the lowest reading since January 1991. The US Commerce Department reports new home construction rapidly declined 6.1% in July to a seasonally adjusted annual rate of 1.38 million which is down 20.9% over the past year.

On top of the housing decline, the tightening credit standards is making it harder for homeowners with adjustable rates to refinance and avoid skyrocketing payments. This does not look good for the construction industry and the economy in general.

Shulz' phoney Tax Scams Stopped

A New York Court permanently stopped Robert L. Schulz and his two groups, We the People Foundation for Constitutional Education Inc. and We the People Congress, from selling materials by mail, over the Internet or in person that falsely claim citizens do not have an obligation to pay federal income taxes. The phoney materials mislead people into believing they can opt-out of filing W-4 withholding forms. The scheme is to prevent withholding. The Court determined "Defendants' materials are intended to cause employees to believe that they need not pay an income tax and employers to believe that they need not withhold taxes from employees' wages or pay matching amounts."

Part of Schulz' program is "Operation Stop Withholding." Watch out for anyone that claims you simply do not have to file or pay taxes.