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IRS Warns of Rampant Telephone Scam

The IRS today warned consumers about a sophisticated phone scam targeting taxpayers, especially immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly via pre-loaded debit card or wire transfer. If the victim refuses to comply, they are threatened with arrest, deportation or suspension of a business or driver’s license. In most cases, the caller becomes hostile and continues the threats. As I have written about before the IRS is very particular in how it collects on past due liabilities. There are a series of letters that are generated subsequent to a return being filed that become progressively more severe in language as the process plays out. The IRS does NOT email. There are situations where the IRS does call a taxpayer but the representative will identify themselves by name, and in the case of a Revenue Officer, provide their badge number. ACS representatives have an employee number that be provided. Common characteristics of the scam include: – Using fake names and badge numbers – look for common names and surnames – Scammers may be able to provide last four of SSN – Bogues emails and phone caller ID’s showing IRS as caller – After threatening victims with jail time or other adverse action, scammers hang up and others call back pretending to be local police or DMV If you should receive a suspicious phone call, here’s what you should do: – Call the IRS yourself – call 800-829-1040 – IRS can confirm any issue you may have – If you know that you have no outstanding issue with the IRS...

Hire Veterans, Save on Taxes

If you plan on hiring additional workers prior to year end December 31, 2013, consider hiring veterans. If you do, you may be able to claim the Work Opportunity Tax Credit with the IRS worth potentially thousands of dollars. As an added benefit you will be hiring a proven commodity in a veteran. Time is short – The credit is available to employers that hire prior to January 1, 2014. What follows are six facts about the WOTC: 1. Hiring deadline – as stated prior, deadline is January 1, 2014 – the American Taxpayer Relief Act of 2012 extended it for one year beyond its original expiration date of 2012 2. Maximum credit – the tax credit is $9,600 per worker for employers that operate a taxable business while the limit for tax exempt groups is $6,240 per worker 3. Credit factors – these include length of time veteran was unemployed, number of hours worked and wages paid during initial year 4. Disabled Veterans – employers hiring veterans with service related disabilities may be eligible for the maximum tax credit. 5. State certification – employers must file Form 8850, Prescreening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. The form must be filed within 28 days after the qualified veteran starts work. 6. E-file – some states accept Form 8850 electronically For  more info visit irs.gov and search WOTC   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014...

Tax Relief for Victims of Severe Storms in Illinois

Victims of severe storms, straight-line winds and tornadoes that began on November 17, 2013 in parts of Illinois may qualify for tax relief from the Internal Revenue Service. The President has declared the counties of Champaign, Douglas, Fayette, Grundy, Jasper, LaSalle, Massac, Pope, Tazewell, Vermillion, Wabash, Washington, Wayne, Will and Woodford a federal disaster area. The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For example, deadlines falling on or after Nov. 17, and on or before Feb 28, 2014, have been postponed to Feb 28, 2014. Failure to deposit penalties will be waived for employment and excise taxes as long as they are paid by Dec 2, 2013. Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For further details see Form 4684 and corresponding instructions. See IRS announcement dated November 27, 2013 for further detail.   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014 Tax Season Delayed Recent...

Bartering and trading

Despite common misconceptions engaging in bartering and/or trading is taxable to both parties. This type of transaction can be beneficial when cash-flow problems would otherwise prevent you from securing needed goods or services. And, while there is no exchange of cash or credit, the fair market value of the transaction is taxable to both parties and must be claimed as other income on an individual or business income tax return. Please note, just like payments made with money, if a business makes payments of bartered services to another business (sans corporation) of $600 or more over the course of a year, these payments must be reported on Form 1099-Misc. You can visit the IRS’s Barter Tax Center or use IRS forms and publications Form 1099-Misc and Form 1099-B.   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014 Tax Season Delayed Recent...

Start of 2014 Tax Season Delayed

The IRS  announced a delay of approximately one to two weeks to the start of the 2014 filing season to allow adequate time to program and test tax processing systems following the 16 day shutdown. The original start date for 2014 was January 21, 2014, with a two week delay the IRS would start accepting and processing returns no earlier than January 28th and no later than February 4th. A final start date is to be announced sometime in December. About 90% of IRS operations were closed during the shutdown which has resulted in very heavy phone volume along with walk-in sites being inundated with traffic from taxpayers and practitioners. The IRS encourages taxpayers to use irs.gov whenever possible.   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014 Tax Season Delayed Recent...

Alert – Taxpayer Extensions

The October 15 deadline for filing your 2012  1040  remains in effect for those taxpayers who filed for an extension. The government shutdown does not affect the federal tax law.  All taxpayers, Corporations, Sole Proprietors and Individuals, must continue to meet their tax obligations as normal.  That means all returns and deposits need to be made as required by statute. More than 12 million individuals requested an automatic six-month extension to file earlier this year.  That deadline is now less than a week away.  However there are a few exceptions to the October 15th deadline, those serving in Combat Zones and people residing in Colorado who were affected y the flooding, landslides and mudslides.  Refunds will not be issued until normal government operations resume.   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014 Tax Season Delayed Recent...

Check Withholding and Estimated Tax Payment to Avoid a Tax Surprise

By reviewing your withholdings now, you can avoid surprises, either positive or negative, when your 2013 1040 is filed for next year. What follows are some tips to help you bring the tax you pay during the year closer to what you’ll actually owe. Wages and Income Tax Withholding New Job – Complete the form W-4 as accurately as possible. Life Events – Change in marital status, birth of a child or purchase of a home. You can use the IRS  withholdings on IRS.gov to help figure what to claim on Form w-4. Self Employment and Other Income Estimated tax – This is how you pay tax on income that’s not subject to withholdings. Form 1040-EZ  – Use this worksheet to figure out what needs to be paid in for estimates. New Affordable Care Act Taxes – Additional Medicare tax of 0.9% and the Net Investment Income Tax of 3.8%. You can view Publication 505 for further details.   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014 Tax Season Delayed Recent...

Give Tax Records A Mid Year Tune-Up

Organizing tax records now can make filing easier and faster when April 15th rolls around.  It also helps reduce the chance that you’ll lose a receipt or statement that you need. Here are some tips from IRS on recordkeeping: Keep copies of prior year returns in case of an audit, the need to amend and/or assistance with current year preparation. You must keep records to support items reported on your return.  The IRS suggests keeping basic records, such as W-2 forms, 1099s, Mortgage Interest Documents, for 3 years.  I recommend keeping returns and corresponding proof for 6 years. If the event you own investment property it is vital that you keep detailed records regarding the purchase, improvements, repairs and if applicable, depreciation. If you own a business, maintaining accurate books and records in fundamental to its success.  Records should reflect total receipts, proof of purchase and other business expenses and assets.  Electronic records include, databases saved files, emails, faxes and voicemails. If you own a business with employees, you should generally keep all employment-related tax records for at least four years after the tax is due, or after the tax is paid, whichever is later.   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014 Tax Season Delayed Recent...

Tax Tips for Individual Selling Their Home

What follows are 10 tips from the IRS to keep in mind when selling your home. If you are one of the chosen few who sell their home at a gain.  You may be able to exclude part or all of the profit from your income.  The general rule is that if you have owned and used the property as your main home for at least two at of the five years prior to the date of sale. You can normally exclude up to $250,000 of the gain from your income ($500,000 for a joint return).  The exclusion is NOT subject to the new Net Investment Income Tax, which took effect this year. If the gain is excludable from income, you will likely not need to report the sale on your return. If part of a sale proceeds are taxable, or you choose not to exclude it, you’ll need to report the sale.  A reporting requirement also applies when a 1099-S is received. If you prepare and file a paper return you can utilize Publication 523, selling your home, to help figure the gain or loss on the sale. It most cases you can only exclude a gain from the sale of your main home once every two years. The home some exclusion only applies to the sale of you main home, not second homes or vacation properties.  The latter would be a taxable event.  If you believe you have two main homes a determination will need to be made as to which you reside in the majority of the time. Special rules will most likely apply when selling...

Helpful Hints Tax Tips for Moving

If you make a work related move this summer, you may be eligible to deduct the costs of  your move.  It applies if you move for the same job in a different location or to a new job. In order to be eligible to deduct money expenses, you must meet the following three criteria: The move corresponds to the start of work – The general rule is that you can consider moving related expenses within one year of the date you first report to work at the new location.  There are additional requirements to qualify. The distance test – The new job location must be 50 miles further from your former move than the previous job.  For example, if your commute was 10 miles then the new job location must be at least 60 further away. The time test – After the move you must work full time at your new job location for at least 39 weeks during the first year.  Self-employer’s must meet a 78 week test in the initial 24 months. Go to IRS.gov.  See Pub 521, moving expenses, for more information.   Archives August 2015 July 2015 Recent Posts IRS Warns of Rampant Telephone Scam Hire Veterans, Save on Taxes Tax Relief for Victims of Severe Storms in Illinois Bartering and trading Start of 2014 Tax Season Delayed Recent...

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