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Happy New Year

2015-12-30 by Eva Rosenberg

Fireworks - Adelaide Skyshow 2010
Today TaxMama® wants to wish you a Happy New Year 2016 – and leave you with these snippets of fun.

 

I was thinking…

...about how the status symbol of today is those cell phones that everyone has clipped on. I can’t afford one so I’m wearing my garage door opener.

You know, I spent a fortune on deodorant before I realized that people didn’t like me anyway.

...that women should put pictures of missing husbands on beer cans.

...about old age and decided that it is when you still have something on the ball but you are just too tired to bounce it.

...about making a movie for folks my age and call it “Pumping Rust.”

I have gotten that dreaded furniture disease … that’s when your chest is falling into your drawers.

You know when people see a cat’s litter box, they always say, “Oh have you got a cat?” Just once I wanted to say, “Nope. It’s for company. Help yourself. Make yourself comfy. Take your time.”

Employment application blanks always ask who is to be notified in case of an emergency. I think you should write A Good Doctor … or 911!

Why do they put pictures of criminals up in the Post Office? What are you supposed to do, write to these men? Why don’t they just put their pictures on the postage stamps so the mailmen could look for them while they deliver the mail?

...about how people seem to read the Bible a whole lot more as they get older, then it dawned on me: they were cramming for their finals.

And remember, you can find answers to all kinds of questions about tax and business issues, free. Where? Where else? At www.TaxMama.com.

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Innocent Spouse Relief - Sort of

2015-12-15 by Eva Rosenberg

consumersToday TaxMama® hears from Melissa in the TaxQuips Forum. “I was granted innocent spouse relief after my divorce in 2013. Yet when I filed my taxes this year, I didn’t get my refund and received no info on why; or if it went to my ex-husband’s unpaid state (WV) taxes, that he hasn’t paid for 3 yrs on his small business. They took my refund for 2013. But I thought if I was granted innocent spouse, they couldn’t take them for 2014.”

 

Hi Melissa,

You may have been granted innocent Spouse relief from the IRS. But were you granted the same thing in WV?

If you did not file for relief with them, you are still responsible.

Try filing a claim with them on the basis of your IRS relief. Send them the IRS determination letter, along with any forms that WV uses for innocent spouses.

Until you do, the IRS simply acts as a collection agency for the state. They have no choice, if you don’t resolve it on the state level.

If you have filed for relief with the state, then call the state and ask them to return your money. Have their relief letter handy to fax over to them.

And remember, you can find answers to all kinds of questions about innocent spouse and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the new TaxQuips Forum .

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October 15th is NOT the filing deadline for Everyone

2015-10-13 by Eva Rosenberg

October 15th is the annual filing deadline for all personal income tax returns. Let it Rain and StormThis year, some (un)lucky folks in several disaster areas around the country have extra time to file – as long as they were wise enough to put their personal tax returns on extension. What about the rest of us?

We still face the usual deadline – and it’s nearly here. Let’s outline the special provisions available to victims in the various disaster areas.

One tax professional posted on Facebook that he was burning the midnight oil trying to get the bookkeeping done for a business client. He was frustrated with all garbage (personal expenses) in the records that was taking him forever to clear out of the business Profit and Loss data, so he could complete tax return before October 15. Suddenly, he realized – the client was in the flood area of South Carolina. What a relief, the tax return would not be due for four more months.

Why? Several South Carolina counties were victims of floods[1]. All tax payments and filings that were due from October 1, 2015 are also deferred until February 16, 2016. They include the following benefits, many of which apply to all disaster areas:


  • They can make their 4th quarter personal estimated tax payment on February 16, 2016. Since that’s normally due on January 15, 2016, they have an extra month.

  • Quarterly payroll tax returns and excise tax returns for the 3rd and 4th quarters.

  • Late payment penalties, late filing penalties and interest will be forgiven during this period.

  • People living outside the affected areas may also qualify for these benefits if their records were in the flood areas and were destroyed or damaged.


September brought fires to parts of Northern California[2], while August brought the Napa earthquake. Those affected have until January 15, 2016 to file their personal tax returns, as well as any corporate tax returns that were due on September 15th. Their third and fourth IRS estimated tax payments are deferred until then, as well.

The Commonwealth of the Northern Mariana Islands was hit by Typhoon Soudelor[3]. Believe it or not, there are American taxpayers. They get to defer their filings and payments for anything that was due on or after August 1, 2015 until November 30, 2015. As with California, that includes all personal and business tax filings, payments and reports.

Victims of the severe storms in Kentucky last summer, have a couple of extra weeks to file their personal tax returns – until November 2, 2015[4].

If you live in anywhere that has been declared a Presidential Disaster Area, you are entitled to extra time for a variety of filings. Relief from penalties and interest – and get special disaster filing privileges to report your casualty losses. Please visit the IRS’s Tax Relief in Disaster Area page to see what your deadlines and benefits are – https://www.irs.gov/uac/Tax-Relief-in-Disaster-Situations
————References:

[1] https://www.irs.gov/uac/Newsroom/IRS-Provides-Tax-Relief-to-South-Carolina-Flood-Victims-Oct.-15-Tax-Deadline-Extended-to-Feb.-16

[2] https://www.irs.gov/uac/Tax-Relief-for-Victims-of-Valley-and-Butte-Fires-in-California

[3] https://www.irs.gov/uac/Tax-Relief-for-Victims-of-Typhoon-Soudelor-in-the-Commonwealth-of-the-Northern-Mariana-Islands

[4] https://www.irs.gov/uac/Tax-Relief-for-Victims-of-Storms-Tornadoes-Winds-Flooding-Landslides-and-Mudslides-in-Kentucky

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Taxable Complimentary Stuff

2015-10-12 by Eva Rosenberg

Diagonal shift test folds
Today TaxMama® hears from Rick in the TaxQuips Forum. Let me summarize his issue. He just learned that he is getting a $9,000 1099MISC for items he receives to review. He can’t use most of those things, but he’s not allowed to sell them. Yet, he will be paying taxes on the retail value of these things. What can he do?

 

Dear Rick,

I honestly don’t know what to tell you. This IS a bad deal. The taxes might be higher than your actual compensation. If you had discussed this with a tax pro before starting this, you might have negotiated the contract differently.

For instance, under the circumstances, you need to talk to them about changing your arrangement. If these are non-consumables (things you don’t use up in the course of the review), INSIST that you will return the items and not get 1099’d for them.

In the meantime, you have a problem. Your business can’t really take a charitable contribution for the donations. YOU may take the contribution on your Schedule A – Itemized Deductions. And if you don’t have enough expenses to itemize, you don’t even get that benefit.

You MIGHT try to deduct the items you donate to charity on you Schedule C. Defend the Schedule C deduction because the contract requires you to donate them, I suppose.

Or look up what it would cost you to buy each item and print it out. Report the full 1099 income on your Schedule C, but on the second page where you have blank lines you use, enter “adjustment for actual market value of 1099 goods” and deduct the difference.
Keep the records in your file. Pray you are never audited.

And remember, you can find answers to all kinds of questions about 1099s and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the new TaxQuips Forum .

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Business Tax Returns

2015-09-08 by Eva Rosenberg

Building an open source businessToday TaxMama® wants to talk about the upcoming tax filing deadline on September 15th for calendar year entities. Returns that are due include partnerships, corporations – C & S, certain estates and trusts. It’s important to know what to get ready for your tax pro or you.

Dear Family,

After decades of preparing business returns for my own clients, teaching my students or advising others, I take a lot of organizations elements for granted. There are certain minimum reports you need when you prepare an entity’s tax return – whether you do it yourself, or have a tax pro help you. Here’s the list of the copies we need – not originals:


  • All 1099s and other outside party reports sent TO the business.

  • Copies of all estimated tax payments made by your business to the IRS and state, if applicable.

  • Sales tax returns for all periods (monthly, quarterly, semi-annually, or annually)

  • Payroll tax returns – note: if your business is a corporation, YOU need to be on payroll. They are needed for each quarter, plus the year-end reports that include the W-3/W-2s, and unemployment insurance.

  • Copies of all state, city, county or other reports you have (or should have) filed during the year.

  • 1099s – copies of all that were filed. They should have been filed no later than March 31st if they were filed electronically. By February 28th, if filed on paper.

  • Mileage report on each business vehicle – it should include total miles driven and the business miles

  • Financial Statements – and yes, if you are filing an entity tax return – you SHOULD be keeping books. Know if you file on cash or accrual – and pull both reports using the same accounting method

    • Profit and Loss Statement

    • Balance Sheet

    • Detailed General Ledger – to look up information in certain accounts to see if all expenses are recorded in the correct place – and if they are deductible.




While not absolutely essential, a copy of all the December bank statements for your business, reconciled.

I know this seems like a lot. And it might seem as if your tax pro is auditing your business. We are not. What we are doing is matching up everything that the IRS and state governments know about you. By reconciling all these elements, we are able to reduce your audit risk substantially.

And remember, you can find answers to all kinds of questions about business tax returns and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the new TaxQuips Forum .

Download the MP3 (0:00min, 4MB) or listen now...

Ask TaxMama
Where Taxes are Fun
TaxQuips
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TaxQuips Forum
Where you can you ask your tax questions
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