Paperwork cloud lifts
Wednesday, April 27th, 2011
A paperwork cloud has hung over business owners and landlords for much of the last year. A clause in the health care reform law (Patient Protection and Affordable Care Act) required businesses to report payments of more than $600 to corporations (not required under prior law) on Form 1099. It also added reporting of payments […]
Read More »Complexity of the tax code
Thursday, April 7th, 2011
We just received a printed copy of the tax code, otherwise known as the Internal Revenue Code, or just the code. Sometimes we prefer to go to a book rather than navigate through searches and database links to find information that will help our clients. The book is 2.5 inches thick, printed on paper I […]
Read More »IRS abates penalties
Monday, April 4th, 2011
In a payroll tax case we have been working on for over a year, the IRS has agreed to abate penalties, saving the taxpayer over $200,000. This is a very unusual decision for the IRS, which considers non-payment of payroll taxes to be an unauthorized loan of government funds. Employers are required to withhold income […]
Read More »Minimize capital gains tax
Thursday, March 31st, 2011
When you sell an asset for more than your investment in it, the IRS says you must pay tax on the difference, called capital gain. For some years, the tax rate on such gains has been lower than regular rates if the asset is held for a long term (currently, more than one year). Hence […]
Read More »Next IRS target – generous relatives
Wednesday, March 30th, 2011
Generous relatives may be the next targets of IRS hunting expeditions. The IRS has asked a federal judge for a “John Doe” summons on the California Board of Equalization to force the board to turn over records of property transfers for little or no consideration. They are looking for people who have not paid gift […]
Read More »Bad tax preparer leads to audit trouble
Thursday, March 24th, 2011
We recently met with a new client who had been invited to the IRS local office for an examination of two years of her tax returns. She called the tax preparer, who told her she would not need the preparer at the meeting (red flag number one). After the meeting, she called the preparer back […]
Read More »Most-overlooked tax deductions
Wednesday, March 23rd, 2011
Here is a list of some of the most-overlooked tax deductions each year. Overlooking these deductions may cost you money by raising your tax bill, and the IRS seldom complains when you overpay your taxes. Check this list, and then call us to see how you might claim these deductions. State sales taxes. If you […]
Read More »What's taxable? Prizes
Wednesday, March 16th, 2011
What’s taxable? According to the IRS, all receipts from all sources in any form, unless specifically excluded from taxation. Did you win the lottery? Taxable, although you can deduct the cost of the lottery tickets you bought (you saved them as proof, right?) Did you win a TV in a giveaway? Taxable. ‘Tax-exempt’ interest income? […]
Read More »Business tax form update
Monday, March 14th, 2011
Due to extender provisions in the Tax Relief Act enacted on December 17, 2010, the IRS delayed accepting some business tax forms, as we posted previously. The IRS has recently announced updated information for these tax forms on irs.gov. Form 941 for first quarter 2011 now may be filed. The due date is May 2, […]
Read More »Making Work Pay Credit
Thursday, March 10th, 2011
The Making Work Pay Credit is an income tax credit available to most taxpayers with earned income. We’ve talked to several folks who were unfamiliar with the Making Work Pay Credit, which is available only on your 2010 individual tax return. One of them was surprised when her refund was $400 more than she calculated, […]
Read More »