How to Set Up Your Business, LLC, C Corp, S Corp, LLP, SP, Non Profit

The wizard includes the following recommended business structures based on the user's responses: LLC (Limited Liability Company), C Corporation, S Corporation, Sole Proprietorship, Partnership, LLP (Limited Liability Partnership), and Non Profit Corporation. Click on the invisible image! Choosing a business structure can be a tough decision for the new business owner. You are often in a quandry as to wheher you should incorporate, form an LLC, or simply file a DBA (aka "doing business as filing") and remain as a sole proprietorship or partnership. We've designed the Business Structure Wizard to be a very accessible starting point for anyone who wants to start a business or change their existing business structure. The Business Structure Wizard guides users through a series of basic questions on their business, industry, finances, and long-term plans. The entire wizard should take approximately 5 minutes or less to complete and provides a recommended company structure based on the user's responses. Go ahead: give it a try:

Looking for New Clients for Your Business?

If you need new clients for your business, you may want to consider the Federal gov, the state, city, county or utility company. They have thousands of contracts each month, and they are looking for small businesses in many cases to fill the contracts.

There are over 1400 government contacts posted on Accounts-Receivable-Funding.com right now.  In fact there were so many contracts posted, which are up for bid, that the site bandwidth went over it's limit and the site shut down.  The good news is we increased the bandwidth and deleted some of the old contracts from last year.  The site is back up.

There are contracts for construction, web design, programming, security, re-modeling, food contracts and much more.  We built the site in order for small business owners to know which types of government contracts can be factored.  (accounts receivable funding, turning Invoices into working capital) 

It was never our intentions for the sight to become as large as it has, but we're not complaining and neither will you when you see how many different types of contracts are posted on the site.  Each post is linked directly to the government agency, or representative which put the contract up for bid.

If you now or in the future have a need to turn your invoices into working capital, we locate the best lender, at the lowest rate, within 24 hours.

Important Tax Information, First Time Homebuyer Credit, Who Must Repay the Credit

Here are some important information which taxpayers need to know in reference to the First Time Home buyer Credit.  The IRS is no longer sending out letters to taxpayers who must repay the credit.  If you used the First Time Home buyer Credit, here is some important information

 

 

First-Time Homebuyer Credit Look-up Tool
Helps Taxpayers Who Must Repay the Credit

The IRS no longer mails reminder letters to taxpayers who have to repay the First-Time Homebuyer Credit. To help taxpayers who must repay the credit, the IRS website has a user-friendly look-up tool.

Here are four reminders about repaying the credit and using the tool:

1. Who needs to repay the credit? If you bought a home in 2008 and claimed the First-Time Homebuyer Credit, the credit is similar to a no-interest loan. You normally must repay the credit in 15 equal annual installments. You should have started to repay the credit with your 2010 tax return.

 

You are usually not required to pay back the credit for a main home you bought after 2008. However, you may have to repay the entire credit if you sold the home or stopped using it as your main home within 36 months from the date of purchase. This rule also applies to homes bought in 2008.

 

2. How to use the tool. You can find the First-Time Homebuyer Credit Lookup tool at IRS.gov under the ‘Tools’ menu. You will need your Social Security number, date of birth and complete address to use the tool. If you claimed the credit on a joint return, each spouse should use the tool to get their share of the account information. That’s because the law treats each spouse as having claimed half of the credit for repayment purposes.
 

3. What the tool does. The tool provides important account information to help you report the repayment on your tax return. It shows the original amount of the credit, annual repayment amounts, total amount paid and the remaining balance. You can print your account page to share with your tax preparer and to keep for your records.
 

4. How to repay the credit. To repay the First-Time Homebuyer Credit, add the amount you have to repay to any other tax you owe on your federal tax return. This could result in additional tax owed or a reduced refund. You report the repayment on line 59b on Form 1040, U.S. Individual Income Tax Return. If you are repaying the credit because the home stopped being your main home, you must attach Form 5405, Repayment of the First-Time Homebuyer Credit, to your tax return.

The Battle is On, and Continues Between the Courts, IRS and RTRP

This article is a summary of what is happening between the courts, the IRS and tax prepares, in reference to testing and continuing education requirements for Registered Tax Return Preparers.  The latest ruling allows tax professionals to continue the testing procedure on a volunteering bases.  We encourage tax professional to do so.  Not sure how all this will turn out, however, we'll keep you posted.  Note:  The test is not that difficult, IF you know what to study.

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The Internal Revenue Service has filed notices with a federal district court and appeals court of its intention to appeal a judge’s ruling that struck down the mandatory testing and continuing education requirements of its Registered Tax Return Preparer regime and asked the court to suspend the January ruling that invalidated the RTRP regime.

Judge James Boasberg

 

Last month, U.S. District Judge James E. Boasberg of the District of Columbia ruled against the IRS on behalf of three independent tax preparers— Sabina Loving of Chicago, John Gambino of Hoboken, N.J., and Elmer Kilian of Eagle, Wis.— who had filed suit against the IRS’s tax preparer regulatory scheme (see Court Rules IRS Doesn’t Have the Authority to Regulate Tax Preparers). The suit, known as Loving v. IRS, was brought by the Institute for Justice, a libertarian law firm in Arlington, Va. It argued that the IRS lacked the statutory authority to impose the requirements for all tax preparers to pass a competency exam and take continuing education courses, and the judge agreed.

The IRS then announced its intention to appeal the ruling and asked Judge Boasberg to suspend his original ruling, arguing that it would disrupt tax season (see IRS to Appeal Ruling Barring Licensing of Tax Preparers). Boasberg denied the IRS’s request, but clarified the ruling on February 1, enabling the IRS to re-open its Preparer Tax Identification Number, or PTIN, online registration system for tax preparers. The judge also clarified that tax preparers could take competency tests and continuing education courses on a voluntary basis, but they would not be required to do so while his injunction remained in place (see Court Modifies Ruling Invalidating Tax Preparer Regulations).

Last week, the IRS filed notices of appeal in both the district court and the D.C. Circuit Court of Appeals announcing its intention to appeal the earlier rulings, and on Monday it filed a Motion for Stay Pending Appeal in the D.C. Circuit Court, similar to the motion for a stay that it filed in the district court that Judge Boasberg had denied on February 1.

Dan Alban, the lead attorney on the case with the Institute for Justice, noted that the IRS has not filed its appeals brief yet, and probably will not for some time, as it needs to wait for the district court to transmit the case record to the court of appeal, and for the court of appeal to set a briefing schedule. Another hurdle for the IRS is that it has not yet obtained the approval of the Solicitor General for the appeal, which is required before it can proceed with the appeal. The IRS indicated in one of the briefs that it intends to file an opening brief in March and move for expedited oral argument. The IRS did not respond to a request for comment.

“Footnote 2 of their motion this week notes that they still don’t have authorization from the Solicitor General to proceed with the appeal so they actually refer to those notices as a ‘protective notice of appeal,’ meaning they’re protecting their ability to appeal if the Solicitor General gives them authorization,” Alban said in an interview Tuesday. “But, as of when they filed the brief yesterday around 3:00 or 3:30 pm, they didn’t have authorization from the Solicitor General, which they need in order to proceed with the appeal.”

The motion filed by the IRS for a stay pending appeal in the D.C. Circuit Court of Appeals is similar to the motion in the U.S. District Court that the IRS filed with Judge Boasberg. “They’re asking the Circuit Court to suspend the injunction while the case is on appeal,” Alban explained. “They’re asking for the same relief they were asking the district judge for. This will probably be heard by a panel of three judges, but it can in some cases be heard by just one judge. It’s not an emergency motion, so it probably would be heard by a panel, but that’s up to the court to make that determination.”

Alban is uncertain of when the IRS will file the actual appeal in the case. “They have filed their notice of appeal, so they’re on record as having signaled an intent to appeal in both the district court and the actual court of appeal itself,” he said. “In footnote 2 of their motion that they filed on Monday, they say they intend to file their brief in March and to request an expedited oral argument. Now that assumes that they get the approval of the Solicitor General to proceed with the appeal, and it also assumes that in order for the briefing schedule to be set, the case record needs to be transmitted from the district court to the court of appeals, and in addition the court of appeals needs to set up a briefing schedule. Those things will have to happen first. Then once they have set a briefing schedule, they would give the IRS about 40 days from when the record was transmitted or when they set the briefing schedule to file their opening brief.”

Since March is only a few days away, the court may not act that soon, but Alban conceded it was possible. “At the same time this motion for the stay pending appeal will be ongoing,” he added. “Our brief is due in a couple of weeks. They would get a reply brief, I believe, a week after that, and then the court could rule at that point.”

He estimates the briefing probably wouldn’t be completed until around March 18. The court wouldn’t be able to rule on the IRS’s motion for a stay until the briefing is completed, but the court could set a briefing schedule for the main appeal itself, Alban acknowledged.

“The motion for a stay is sort of a side issue,” he explained. “It’s not the main merits of the appeal. It’s just whether the injunction is temporarily suspended while the case is on appeal.”

Optimistic Prospects
Alban noted that the IRS is asking the D.C. Circuit for the same relief that it asked Judge Boasberg to grant in late January and that he had denied on February 1. He is optimistic about the chances of prevailing against the IRS on both the appeal and the motion for a stay.

“We think Judge Boasberg issued two very sound opinions that were well considered, authoritative and definitive on the subjects he was ruling on,” said Alban. “I’ve had a chance to review their motion for a stay, and it raises many of the same arguments they raised before Judge Boasberg, and that he rightly found to lack merit.”

In Boasberg’s second ruling, Alban noted that the judge was merely clarifying that his original order did not affect the PTIN regulations, and the IRS was not enjoined from enforcing the requirement for tax preparers to register for a PTIN. Alban doesn’t have any objection to the PTIN, nor to the judge’s clarification that tax preparers can still take competency tests and continuing education on a voluntary basis.

“I think that’s fine,” he said. “That allows people to choose whether it’s something they value. If tax preparers think that their customers would value that certification, then they can voluntarily choose to obtain it. On the other hand, if they have longtime customers who aren’t shopping around, and they’re not looking to expand their customer base and are happy with how many people they have currently, then the certification might not be worth it for them, so this gives them the freedom to choose. It also gives consumers the freedom to choose whether they want someone who has this RTRP certification or whether they want someone who has a different certification or whether they want perhaps a preparer who has prepared their taxes for 10 or 20 years, or someone who they have heard good things about through references or good word of mouth.”

The IRS, in its latest briefs, continues to make similar arguments about statutory authority dating back to an 1884 law allowing a government agency to regulate those who practice before it. The IRS also included a paragraph arguing it has “inherent authority,” but Alban noted that it is not making as much of that as it did earlier after the district court was dismissive of that argument. The IRS cited a new statute that it claimed gave it this “inherent authority,” but Alban noted that the statute is not one that the IRS told Congress it was relying upon when it passed the regulations in the first place.

 

No Additional Plaintiffs

Since prevailing in the lawsuit, the Institute for Justice has heard from well over 100 tax preparers across the country who contacted the firm either asking to join the lawsuit, express support, or simply tell their story. However, the firm so far has declined to add anyone else to the lawsuit.

“We don’t need additional plaintiffs at this point,” said Alban. “Although this case is not a class action, it effectively operates like a class action because it affects not just the three plaintiffs—Sabina Loving, Elmer Kilian and John Gambino—but it also affects all tax preparers who would have been subject to these regulations. All 350,000 tax preparers who would have been subject to this licensing scheme, according to estimates from the IRS, will benefit from this lawsuit because they no longer are forced to comply with the RTRP licensing imposed by the IRS.

“At least they benefit for now,” he added. “Obviously the case is on appeal, so that’s not final.”

Below is information on how to get previous year tax return information, however, most people we come across need tax information in order to file previous year tax returns or back taxes.

 

This is another whole different story, because what you need from the IRS is the income and wage information AND any other information the IRS has on file, so you can prepare your past due tax returns.

 

This all sounds easy enough, however, know that if you have NOT filed your taxes, and you contact the IRS, they will have a lot more questions of you.  Questions like:

1. your current address?
2. where do you work?
3. what is your bank account information?
4. what is your contact telephone number?
5. and any additional questions they may have with pertains to your case.

That is why, it is often best to hire a tax professional to seek out this information for you, and have the tax professional prepare the taxes based on the information which the IRS provides.  This helps to ensure that the tax return is correct AND it decreases the chances of an audit, because ALL income for the tax year is accounted for.

 

Usually this entire process can be expensive.  There are online tax services which can help you and prices are published.  Unfiled Taxes Prepared dot com

 

 

How You Can Get Prior Year Tax Information from the IRS

 

The IRS offers several different ways to get tax return information or a copy of your own tax return for prior years. Here are options to help you get the information you need.

• Tax Return Transcript. This shows most line items from your tax return as originally filed, along with any forms and schedules from your return. This transcript does not reflect any changes made to the return after you filed it. Tax return transcripts are free. After the IRS has processed a return, transcripts are available for the current tax year and the past three tax years.
• Tax Account Transcript. This shows any adjustments made by you or the IRS after filing your return. This transcript shows basic data, like marital status, type of return filed, adjusted gross income and taxable income. Tax account transcripts are free, and are available after the IRS has processed the return for the current tax year and the past three tax years.
• Order a Transcript. You can request both transcript types online, by phone or by mail. To place your order online, go to IRS.gov and use the “Order a Transcript” tool. Order a transcript by phone at 800-908-9946. A recorded message will guide you through the process. You can also request your tax return transcript by mail by completing Form 4506T-EZ. Use Form 4506T to mail a request for your tax account transcript. You can get both forms online at IRS.gov.
• Tax Return Copies. Actual copies of your tax returns are generally available for the current tax year and as far back as six years. The fee for each copy you order is $57. To request a copy of your tax return, complete Form 4506, available on IRS.gov. Mail your request to the IRS office listed on the form for your area.
• Delivery Times. The turnaround time for online and phone orders is typically 5 to 10 days from the time the IRS receives the request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail using Form 4506T-EZ or Form 4506T, and allow 60 days when ordering actual copies of your tax return by mail.
• More Information. The IRS website can help you decide which form you need. Visit IRS.gov, or call the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

Eleven things I wish I knew before starting my first startup

Article by Neil Patel

Although I’ve co-founded a handful of companies, I didn’t really create my first startup till 7 years ago. The first one was Crazy Egg, which helps make websites more useable. And it wasn’t till 4.5 years ago till I co-founded my first venture-backed startup, KISSmetrics.

As they say, the startup life is a roller coaster with ups and downs. So if you are looking to start one, hopefully this blog post will help you

Here are 11 things I wish I knew before starting my first startup: read the entire article by Neil Patel

See if you qualify for an Offer in Compromise

This information is for tax professionals, however, if you don't tell, I won't either.  See if you qualify for an Offer in Compromise.

New Offer in Compromise Pre-Qualifier Available

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An item in a previous edition of e-News announcing the IRS Offer in Compromise (OIC) Pre-Qualifier tool contained the wrong URL to access the Pre-Qualifier. Here is the correct link.
The OIC Pre-Qualifier can help you determine a client’s OIC eligibility and calculate a preliminary offer amount.

Tax Credits, Benefits Education for Parents and Students, form 1098-T, EIC

Be sure to read the complete  article.  You will learn that parents may be able to claim the EIC credit for children up to the age of 24.

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Parents and Students: Check Out College Tax Benefits for 2012 and Years Ahead

 

WASHINGTON — The Internal Revenue Service today reminded parents and students that now is a good time to see if they qualify for either of two college education tax credits or any of several other education-related tax benefits.

In general, the American opportunity tax credit, lifetime learning credit and tuition and fees deduction are available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the primary taxpayer, the taxpayer’s spouse or a dependent of the taxpayer.

Though a taxpayer often qualifies for more than one of these benefits, he or she can only claim one of them for a particular student in a particular year. The benefits are available to all taxpayers – both those who itemize their deductions on Schedule A and those who claim a standard deduction. The credits are claimed on Form 8863 and the tuition and fees deduction is claimed on Form 8917.

The American Taxpayer Relief Act, enacted Jan. 2, 2013, extended the American opportunity tax credit for another five years until the end of 2017. The new law also retroactively extended the tuition and fees deduction, which had expired at the end of 2011, through 2013. The lifetime learning credit did not need to be extended because it was already a permanent part of the tax code.

For those eligible, including most undergraduate students, the American opportunity tax credit will yield the greatest tax savings. Alternatively, the lifetime learning credit should be considered by part-time students and those attending graduate school. For others, especially those who don’t qualify for either credit, the tuition and fees deduction may be the right choice.

All three benefits are available for students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions. None of them can be claimed by a nonresident alien or married person filing a separate return. In most cases, dependents cannot claim these education benefits.

Normally, a student will receive a Form 1098-T from their institution by the end of January of the following year. This form will show information about tuition paid or billed along with other information. However, amounts shown on this form may differ from amounts taxpayers are eligible to claim for these tax benefits. Taxpayers should see the instructions to Forms 8863 and 8917 and Publication 970 for details on properly figuring allowable tax benefits.

Many of those eligible for the American opportunity tax credit qualify for the maximum annual credit of $2,500 per student. Here are some key features of the credit:

• The credit targets the first four years of post-secondary education, and a student must be enrolled at least half time. This means that expenses paid for a student who, as of the beginning of the tax year, has already completed the first four years of college do not qualify. Any student with a felony drug conviction also does not qualify.
• Tuition, required enrollment fees, books and other required course materials generally qualify. Other expenses, such as room and board, do not.
• The credit equals 100 percent of the first $2,000 spent and 25 percent of the next $2,000. That means the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualified expenses for an eligible student.
• The full credit can only be claimed by taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less. For married couples filing a joint return, the limit is $160,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $180,000 or more and singles, heads of household and some widows and widowers whose MAGI is $90,000 or more.
• Forty percent of the American opportunity tax credit is refundable. This means that even people who owe no tax can get an annual payment of up to $1,000 for each eligible student. Other education-related credits and deductions do not provide a benefit to people who owe no tax.

The lifetime learning credit of up to $2,000 per tax return is available for both graduate and undergraduate students. Unlike the American opportunity tax credit, the limit on the lifetime learning credit applies to each tax return, rather than to each student. Though the half-time student requirement does not apply, the course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills. Other features of the credit include:

• Tuition and fees required for enrollment or attendance qualify as do other fees required for the course. Additional expenses do not.
• The credit equals 20 percent of the amount spent on eligible expenses across all students on the return. That means the full $2,000 credit is only available to a taxpayer who pays $10,000 or more in qualifying tuition and fees and has sufficient tax liability.
• Income limits are lower than under the American opportunity tax credit. For 2012, the full credit can be claimed by taxpayers whose MAGI is $52,000 or less. For married couples filing a joint return, the limit is $104,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $124,000 or more and singles, heads of household and some widows and widowers whose MAGI is $62,000 or more.

Like the lifetime learning credit, the tuition and fees deduction is available for all levels of post-secondary education, and the cost of one or more courses can qualify. The annual deduction limit is $4,000 for joint filers whose MAGI is $130,000 or less and other taxpayers whose MAGI is $65,000 or less. The deduction limit drops to $2,000 for couples whose MAGI exceeds $130,000 but is no more than $160,000, and other taxpayers whose MAGI exceeds $65,000 but is no more than $80,000.

Eligible parents and students can get the benefit of these provisions during the year by having less tax taken out of their paychecks. They can do this by filling out a new Form W-4, claiming additional withholding allowances, and giving it to their employer.

There are a variety of other education-related tax benefits that can help many taxpayers. They include:

• Scholarship and fellowship grants—generally tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.
• Student loan interest deduction of up to $2,500 per year.
• Savings bonds used to pay for college—though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years old.
• Qualified tuition programs, also called 529 plans, used by many families to prepay or save for a child’s college education.

Taxpayers with qualifying children who are students up to age 24 may be able to claim a dependent exemption and the earned income tax credit.

2012 Taxes Do you qualify for $1000 Tax Credit; Child Tax Credit?

 

If you are doing your own taxes, be sure to include the Child Tax Credit, IF you have childrend under the age of 17.  This tax credit is worth $1000 for each child.  However there are seven test, which are easy enough to pass.  Below you will find the reminder in IRS's own words: 
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If you have a child under age 17, the Child Tax Credit may save you money at tax-time. Here are some facts the IRS wants you to know about the credit.

• Amount. The non-refundable Child Tax Credit may help reduce your federal income tax by up to $1,000 for each qualifying child you claim on your return.
• Qualifications. For this credit, a qualifying child must pass seven tests:

1. Age test. The child must have been under age 17 at the end of 2012.

2. Relationship test. The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. A child may also be a descendant of any of these individuals, including your grandchild, niece or nephew. You would always treat an adopted child as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

3. Support test. The child must not have provided more than half of their own support for the year.

4. Dependent test. You must claim the child as a dependent on your federal tax return.

5. Joint return test. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.

6. Citizenship test. The child must be a U.S. citizen, U.S. national or U.S. resident alien.

7. Residence test. In most cases, the child must have lived with you for more than half of 2012.

• Limitations. The Child Tax Credit is subject to income limitations, and may be reduced or eliminated depending on your filing status and income.
• Additional Child Tax Credit. If you qualify and get less than the full Child Tax Credit, you could receive a refund even if you owe no tax with the refundable Additional Child Tax Credit.
• Schedule 8812. If you qualify to claim the Child Tax Credit make sure to check whether you must complete and attach the new Schedule 8812, Child Tax Credit, with your return. If you qualify to claim the Additional Child Tax Credit, you must complete and attach Schedule 8812.

IRS Publication 972, Child Tax Credit, can provide you with more details. View it online at IRS.gov or request it by calling 800-TAX-FORM (800-829-3676). You can also use the Interactive Tax Assistant tool on the IRS website to check if you can claim the credit. The ITA is a resource that can help answer tax law questions.

What is the IRS Up To? Reducting Taxpayer Burden?

Having been involved with the IRS for a little over 14 years, I have learned one thing. They are one of the most pre-determined agencies with our Government. They appear to always have a “big picture” in mind when they implement certain request or open the suggestion box for particular suggestions.

When we received this information in our inbox, from the IRS (it was listed alone with several items in a weekly bulletin for tax professionals) I immediately wondered what is the “big picture” behind this particular action/request?  Reducing taxpayer burden in order for taxpayers to comply with IRS tax codes…… humm……..

The Slient Tax That Can Change Everything on a Tax Return

 

First of all, people who are subject to the AMT Tax should know about it BEFORE the year ends.  This is not a tax that you want to sneak up on you, as it does with millions of taxpayers.  Once this tax kicks in, there is very little you can do to change or lower it. 

 

In our opinion, avoiding the AMT tax takes tax planning, and knowing exactly what tax situation you are in for the year.  If you have a tax on Line 45 of your Form 1040, you may want to consult with a tax professional.  If you believe that you may run into trouble in the next tax year, you can consult with the tax professional on ways to avoid or lower the tax. 

 

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Five Facts to Know about AMT

The Alternative Minimum Tax may apply to you if your income is above a certain amount. Here are five facts the IRS wants you to know about the AMT:

1. You may have to pay the tax if your taxable income plus certain adjustments is more than the AMT exemption amount for your filing status.

 

2. The 2012 AMT exemption amounts for each filing status are:

• Single and Head of Household = $50,600;
• Married Filing Joint and Qualifying Widow(er) = $78,750; and
• Married Filing Separate = $39,375.

3. AMT attempts to ensure that some individuals and corporations who claim certain exclusions, tax deductions and tax credits pay a minimum amount of tax.

 

4. You should use IRS e-file to prepare and file your tax return. You figure AMT using different rules than those you use to figure your regular income tax. IRS e-file software will determine if you owe AMT, and if you do, it will figure the tax for you.

 

5. If you file a paper return, use the AMT Assistant tool on IRS.gov to find out if you may need to pay the tax.

Visit IRS.gov for more information about AMT. You should also check Form 6251, Alternative Minimum Tax – Individuals and its instructions. Both are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

Mega Office Supply Mergers Can Effect Tax Write Offs for Small Businesses

The following news will ultimately effect millions of dollars spent on office supplies and written off each year in an effort to lower annual taxes, both by large corporations and small businesses  Office supplies is a reliabe write off which takes a small to medium size bite out of every business budget.

For that reason, marriages between mega companies can ultimately effect a small business owners bottom line.  When a company becomes one of the largest in the industry, they have the power to set prices, trends and ultimately our bottom line.  The article talks about several recent corporate merges and the effects the announcements had on investors.

Office Depot announced a deal to buy smaller rival OfficeMax in an all-stock deal worth about $1.2 billion.

By Chris Isidore @CNNMoney

Details on the deal were limited. The companies said they expect to save $400 million to $600 million annually from the combination. But there were no estimates of staffing cuts or store closings.

The decision about what to call the combined company will be determined after a CEO is selected. The company will look at both current CEOs as well as outside candidates before deciding who will run the companies.
                                        
The announcement itself was a bit of an embarrassment and cast a negative light on Office Depot's operational controls.
                                        
First word of the deal came when Office Depot posted, apparently by mistake, a fourth quarter earnings statement which mentioned the deal on page 4 under "other matters." That earnings statement was then removed from the company's investors relations Web site later in the morning. Once the earnings statement disappeared the New York Times reported that the negotiations on the deal were still ongoing. Then immediately after the market opened came the official joint announcement of the deal, which the companies described as a "merger of equals." News of this type typically is announced before or after market trading hours, not immediately after the start of trading.
The deal is clearly an attempt for the two companies to compete with larger rival Staples (SPLS, Fortune 500).
                                        
Office Depot (ODP, Fortune 500) has 1,629 stores worldwide and 38,000 employees.
                                        
Office Max (OMX, Fortune 500) had 941 stores at the end of 2012, and 29,000 employees in 2011, the most recent year it has reported.
                                        
Staples operated 2,248 stores worldwide in 2011 and has 90,000 employees.
                                        
All the companies in this business have faced increased competition from online retailers such as Amazon (AMZN, Fortune 500).
                                        
According to Wednesday's release OfficeMax shareholders will 2.69 shares of Office Depot stock for each of their shares. That is only about a 4% premium, based on Tuesday's closing stock prices. But OfficeMax shares had closed up nearly 21% in Tuesday trading based on widespread reports of the deal. Office Depot shares had closed up 9%.
                                        
OfficeMax shares were higher once again in early trading, while Office Depot shares were slightly lower, as were shares of Staples.
                                        
Related: M&A making a comeback

The combination would come as mergers and acquisitions have picked up.
                                        
Just last week, US Airways (LCC, Fortune 500) announced a merger with American Airlines parent AMR (AAMRQ, Fortune 500). Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) announced it was buying Heinz (HNZ, Fortune 500). And Comcast (CMCSA) announced a $16.7 billion deal for the 49% of NBC Universal that was still owned byGeneral Electric (GE, Fortune 500).

Important Info on tip income, especially if you are doing your own taxes

Be very sure to include your tip income if you receive tips on your job.  Being a waiter or waitress who earns minimum wage and show NO tip income year after year, is begging to be audited.  You could easily be selected as a random audit.  Include your tip income and eliminate the possibility of the IRS asking questions, or not.

If your pay from your job includes tips, the IRS has a few important reminders about tip income:

• Tips are taxable. Individuals must pay federal income tax on any tips they receive. The value of non-cash tips, such as tickets, passes or other items of value are also subject to income tax.
• Include all tips on your return. You must include all tips that you receive during the year on your income tax return. This includes tips you received directly from customers, tips added to credit cards and your share of tips received under a tip-splitting agreement with other employees.
• Report tips to your employer. If you receive $20 or more in cash tips in any one month, you must report your tips for that month to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes on the reported tips.
• Keep a daily log of tips. You can use IRS Publication 1244, Employee's Daily Record of Tips and Report to Employer, to record your tips.

For more information, see IRS Publication 1244 or Publication 531, Reporting Tip Income. Both are available at IRS.gov or by calling 800-TAX-FORM
(800-829-3676).

IRS's Tool, "Where's My Refund

 
Not to worry the IRS is on time with refunds.  And if you are a little worried you can read their statement on using the "Where's My Refund" Ninety percent of all taxpayers are receiving a refund within 21 days when they file electronically using the direct deposit option.  Below are some special tips to help lower your blood pressure:
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The IRS alerted taxpayers and the tax community it is experiencing high traffic on Where's My Refund as more tax returns come in. The heavy volume of refund inquiries means that the IRS anticipates both "Where's My Refund?" on IRS.gov and the refund feature on the IRS2go phone app will have limited availability during busier periods.

Due to the large number of inquiries and to avoid service disruptions, the IRS strongly urges taxpayers to only check on their refunds once a day. IRS systems are only updated once a day, usually overnight, and the same information is available whether on the internet, IRS2go smartphone app or on IRS toll-free lines. While "Where's My Refund" is updated nightly, your account will not change that frequently.

The IRS is seeing a good start to the filing season, and tax refunds are being issued timely. Nine out of 10 taxpayers typically receive refunds in less than 21 days when they use e-file with direct deposit.
The IRS expects to see the number of tax returns -- and related refund inquiries --steadily increase around the President's Day holiday week.

Here are some tips to help taxpayers with their refund questions:

• Have the right tax information ready before using any of the IRS refund tools. This includes Social Security number, filing status and refund amount.

• You don't need to check Where's My Refund more than once a day as your information will not change.

• To avoid system delays, the best time to check on refunds is evening and weekends.

• There is no need to call the IRS about your refund; the telephone service has the same information that is available on Where’s My Refund.

Google Plans Lawsuit against IRS over Domestic Tax Dispute

Ever wonder how mega giants such as Google lower their taxes?  This is definitely high finance, which many people don't understand because most people in the industry are still trying to figure out if all these maneuvers are legal, and if so, why?

This article will give you some insight into the silent battles going on between the IRS and Corporate America.
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Bloomberg) Google Inc.’s planned litigation against the Internal Revenue Service centers on a domestic, not international, tax dispute, the company said.

 

The lawsuit, which will be filed in U.S. Tax Court, relates to Google’s 2003 and 2004 tax bills, Niki Fenwick, a company spokeswoman, said Thursday in an interview. The amount at stake is not material to the company, she said.

Google disclosed the potential lawsuit in its annual 10-K report with the Securities and Exchange Commission filed Jan. 29.

In the SEC filing, Google said it had settled its outstanding 2003 and 2004 issues with the IRS during 2012 except for “one issue which we plan to litigate in court.” The filing provided no additional details on the substance of the dispute or the amount of money involved.

Dean Patterson, a spokesman for the IRS, didn’t respond to an e-mailed request for comment.
Federal privacy laws prohibit the IRS from discussing the cases of individual taxpayers and companies.

Google, based in Mountain View, California, has been scrutinized by tax authorities around the world, including in France, Italy, the U.K. and Australia.

Shifting Profits

The company has used a series of maneuvers to shift profits out of the U.S. and into low-tax countries. The company has used techniques such as the “Double Irish” and “Dutch Sandwich” that route profits through Ireland and the Netherlands into Bermuda.

In the annual filing, the company reported its effective tax rate as 19.4 percent for 2012, down from 21.2 percent in 2010 and less than half of the combined U.S. federal and state statutory rate of 39.1 percent.

In 2011, the company avoided about $2 billion in taxes by shifting $9.8 billion in revenue to a Bermuda subsidiary, Bloomberg News reported in December 2012. In 2011, the IRS was auditing Google’s offshore deals, including how the company valued software rights and other intellectual property it licensed abroad.

In 2006, the IRS signed off on a 2003 intracompany transaction that moved foreign rights to Google’s search technology outside the U.S., Bloomberg reported in 2011. That means future profits associated with that intellectual property get reported outside the country.

The company reported pretax income in 2012 of $5.3 billion in the U.S. and $8.1 billion outside the country.

Like most large companies, Google is regularly audited by the IRS. The company said it expects the IRS to complete its examination of the 2007, 2008 and 2009 tax years over the next 12 months.

Filing Your Own Taxes? Here's How to Determine Your Filing Status

 

If you are filing your own taxes for the first time, getting your filing incorrect would cause your entire return to be incorrect.  This is NOT how you want to start off your relationship with the IRS.  The IRS sent out an announcement telling taxpayers how to determine their filing status.

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It’s important to use the correct filing status when filing your income tax return. It can impact the tax benefits you receive, the amount of your standard deduction and the amount of taxes you pay. It may even impact whether you must file a federal income tax return.

Are you single, married or the head of your household? There are five filing statuses on a federal tax return. The most common are "Single," "Married Filing Jointly" and "Head of Household." The Head of Household status may be the one most often claimed in error.

The IRS offers these seven facts to help you choose the best filing status for you.

1. Marital Status. Your marital status on the last day of the year is your marital status for the entire year.

 

2. If You Have a Choice. If more than one filing status fits you, choose the one that allows you to pay the lowest taxes.

 

3. Single Filing Status. Single filing status generally applies if you are not married, divorced or legally separated according to state law.

 

4. Married Filing Jointly. A married couple may file a return together using the Married Filing Jointly status. If your spouse died during 2012, you usually may still file a joint return for that year.

 

5. Married Filing Separately. If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately.

 

6. Head of Household. The Head of Household status generally applies if you are not married and have paid more than half the cost of maintaining a home for yourself and a qualifying person.

 

7. Qualifying Widow(er) with Dependent Child. This status may apply if your spouse died during 2010 or 2011, you have a dependent child and you meet certain other conditions.

IRS e-file is the easiest way to file and will help you determine the correct filing status. If you file a paper return, the Interactive Tax Assistant at IRS.gov is a tool that will help you choose your filing status.

Eight Day South America Tour, Affordable : T360Travel Classifieds, Travel Articles, Deals,

Eight Day South America Tour, Affordable : T360Travel Classifieds, Travel Articles, Deals,

Unpublished rates, great tour 3 major destinations within South America, including Rio.  Great tour for  the family

The Next Industry to Crumble Will Create the Next Big Investment Opportunity

This was in my inbox and after listening to the video, I decided that it would be best to share this information with clients, associates and friends.  I believe what The Motley Fool information and have advised clients for a couple years of this upcoming change.  Take a listen and see what you think.  I am not being compensated for sharing this information, I just know that TV as we know it, will be changing in the future.

Another major industry is about to fall. Hard. And it will happen much sooner than anyone on Wall Street expects. (All signs are pointing to 2014.) Everyone will claim they saw it coming. They'll say they knew all about the experimental project that Google launched in Kansas City. They'll say when they heard Apple's big March announcement, they knew for sure. They'll say that the one last "insurmountable" obstacle was obviously no big deal. And they'll be lying. But that's okay. Because you'll be the one who knew which 3 overlooked stocks to invest in now for max profit... before 57.3 million Americans hit the OFF button.

Click here for the new investor alert video!

Doing Your Own Taxes? Taxable and Nonetaxable Income

If you insist on doing your own taxes, then you will need to fully understand this announcement sent out by the IRS.  If you make a mistake and do NOT include certain income on your tax return, then you will more than likely end up with a paper audit, a CP 2000.  The IRS sends this notice out to taxpayers when they need to inquire about a deduction, expense or income not reported.

This is not meant to be a scare tactic.  If you read the article, you should be OK.  The bottom line, is you want to always avoid a CP-2000, because it will cost a lot more money to hire a tax professional to help you with a audit, (paper audit) then to do your taxes.

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Most types of income are taxable, but some are not. Income can include money, property or services that you receive. Here are some examples of income that are usually not taxable:

• Child support payments;
• Gifts, bequests and inheritances;
• Welfare benefits;
• Damage awards for physical injury or sickness;
• Cash rebates from a dealer or manufacturer for an item you buy; and
• Reimbursements for qualified adoption expenses.

Some income is not taxable except under certain conditions. Examples include:

• Life insurance proceeds paid to you because of an insured person’s death are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.

• Income you get from a qualified scholarship is normally not taxable. Amounts you use for certain costs, such as tuition and required course books, are not taxable. However, amounts used for room and board are taxable.

All income, such as wages and tips, is taxable unless the law specifically excludes it. This includes non-cash income from bartering - the exchange of property or services. Both parties must include the fair market value of goods or services received as income on their tax return.

If you received a refund, credit or offset of state or local income taxes in 2012, you may be required to report this amount. If you did not receive a 2012 Form 1099-G, check with the government agency that made the payments to you. That agency may have made the form available only in an electronic format. You will need to get instructions from the agency to retrieve this document. Report any taxable refund you received even if you did not receive Form 1099-G.

See if you qualify for an Offer in Compromise using new OIC tool

Taxpayers can now use the new  offer in compromise pre-qualifier tool to determine if you might qualify for an OIC.  (This tool is for tax professionals, I won't tell if you won't) click here for the
pre-qualifier tool  First   you can read the following information, so you will know how to work the tool!

Below are details involving an Offer In Compromise.  Before you hire anyone, read over this information from the IRS:

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:

• Ability to pay;
• Income;
• Expenses; and
• Asset equity.

We generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone. If you hire a tax professional to help you file an offer, be sure to check his or her qualifications.

Make sure you are eligible

Before we can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding. Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.

Submit your offer

You'll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF). You can also view the "Complete Form 656" video. Your completed offer package will include:

• Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
• Form 656(s) - individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
• $150 application fee (non-refundable); and
• Initial payment (non-refundable) for each Form 656

Select a payment option

Your initial payment will vary based on your offer and the payment option you choose:

• Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
• Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.

If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer. See your application package for details.

Understand the process

While your offer is being evaluated:

• Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt);
• A Notice of Federal Tax Lien may be filed;
• Other collection activities are suspended;
• The legal assessment and collection period is extended;
• Make all required payments associated with your offer;
• You are not required to make payments on an existing installment agreement; and
• Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.

If your offer is accepted

If your offer is rejected

You must meet all the Offer Terms listed in Section 8 of Form 656, including filing all required tax returns and making all payments; Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt; Federal tax liens are not released until your offer terms are satisfied; and Certain offer information is available for public review at designated IRS offices.

You may appeal a rejection within 30 days using Request for Appeal of Offer in Compromise, Form 13711 (PDF).

Tax Credits, Deductions, Eight Tax Benefits for Parents

The IRS has listed out eight different tax credits which parents can qualify for to help reduce their tax liability and in some cases provide an out and out refund.  If you are doing your own taxes you want to be aware of these deductions and credits.  If you are paying a tax professional, then you want to be sure they include all tax credits which you qualify for.

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Your children may help you qualify for valuable tax benefits, such as certain credits and deductions. If you are a parent, here are eight benefits you shouldn’t miss when filing taxes this year.

 

1. Dependents. In most cases, you can claim a child as a dependent even if your child was born anytime in 2012. For more information, see IRS Publication 501, Exemptions, Standard Deduction and Filing Information.

 

2. Child Tax Credit. You may be able to claim the Child Tax Credit for each of your children that were under age 17 at the end of 2012. If you do not benefit from the full amount of the credit, you may be eligible for the Additional Child Tax Credit. For more information, see the instructions for Schedule 8812, Child Tax Credit, and Publication 972, Child Tax Credit.

 

3. Child and Dependent Care Credit. You may be able to claim this credit if you paid someone to care for your child or children under age 13, so that you could work or look for work. See IRS Publication 503, Child and Dependent Care Expenses.

 

4. Earned Income Tax Credit. If you worked but earned less than $50,270 last year, you may qualify for EITC. If you have qualifying children, you may get up to $5,891 dollars extra back when you file a return and claim it. Use the EITC Assistant to find out if you qualify. See Publication 596, Earned Income Tax Credit.

 

5. Adoption Credit. You may be able to take a tax credit for certain expenses you incurred to adopt a child. For details about this credit, see the instructions for IRS Form 8839, Qualified Adoption Expenses.

 

6. Higher education credits. If you paid higher education costs for yourself or another student who is an immediate family member, you may qualify for either the American Opportunity Credit or the Lifetime Learning Credit. Both credits may reduce the amount of tax you owe. If the American Opportunity Credit is more than the tax you owe, you could be eligible for a refund of up to $1,000. See IRS Publication 970, Tax Benefits for Education.

 

7. Student loan interest. You may be able to deduct interest you paid on a qualified student loan, even if you do not itemize your deductions. For more information, see IRS Publication 970, Tax Benefits for Education.

 

8. Self-employed health insurance deduction - If you were self-employed and paid for health insurance, you may be able to deduct premiums you paid to cover your child. It applies to children under age 27 at the end of the year, even if not your dependent. See IRS.gov/aca for information on the Affordable Care Act.

 

Forms and publications on these topics are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Corporations Moving Profits Offshore

We could not  verify the information written in this article, however, it appears to be more correct, then not.  This is fast becoming a major concern.  When individuals are caught doing this very act, without sharing the information with the IRS AND paying the taxes, they are subject to extensive fines and extended vacations in Federal prisons.
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States Lost $40 Billion in Tax Revenue from Offshore Profit Shifting

Washington D.C. (February 6, 2013)

By Michael Cohn

State budgets across the country collectively lost an estimated $40 billion in tax revenue due to corporations and individuals shifting their profits and income to offshore tax havens, according to a new report.

 

The report, from the U.S. Public Interest Research Group, estimated that states lost $28 billion from the corporate abuse of tax havens and $12 billion from individuals, at a time when many states have been forced to cut their budgets drastically due to shrinking revenue after the financial crisis.

The $40 billion roughly equals the total amount spent by all state and local governments on firefighters in 2008, and enough money to cover the educational costs for 3.7 million children for one full year.

“Tax dodging is not a victimless offense,” said Dan Smith, tax and budget advocate for the U.S. PIRG Education Fund, who co-authored the report. “When corporations skirt taxes, the public is stuck with the tab. And since offshore tax dodgers avoid both state and federal taxes, they hurt everyday taxpayers twice. States should be using that money to benefit the public.”

At the national level, offshore profit shifting cost federal taxpayers $150 billion each year, more than enough to cover the scheduled spending cuts set to take effect in a few weeks.

“Offshore tax abuses undermine public confidence in our tax system,” said Rep. Lloyd Doggett, D-Texas, a senior member of the House Ways and Means Committee, who appeared at a U.S. PIRG press conference Tuesday. “They add to both the deficit and the tax burden imposed on small businesses and individuals that play by the rules. In quantifying the enormous cost to our economy of tax haven abuse, U.S. PIRG has once again offered valuable work. More state and federal action is required to ensure that the cost of necessary security and other public services is shared fairly.”

As of 2008, at least 83 of the top 100 publicly traded corporations in the U.S. used tax havens, according to the Government Accountability Office. At the end of 2011, 290 of the top Fortune 500 companies reported that they collectively held $1.6 trillion offshore, according to a report from the advocacy group Citizens for Tax Justice.

Among the examples cited in the reports, Google used accounting techniques nicknamed the “Double Irish” and the “Dutch Sandwich,” involving two Irish subsidiaries and one in Bermuda, to help shrink its tax bill by $3.1 billion from 2008 to 2010. Wells Fargo paid no federal income taxes in 2008, 2009 and 2010, despite being profitable all three years, largely due to its use of 58 offshore tax haven subsidiaries.

Microsoft avoided $4.5 billion in federal income taxes over three years by using sophisticated accounting tricks to artificially shift its income to tax-friendly Puerto Rico. The company pays its Puerto Rican subsidiary 47 percent of the revenue generated from its American sales, despite the fact that those products were developed and sold in the U.S.

IRS is Hiring?

Here is some news for recent Accounting grads and advanced bookkeepers who need a change.  Or anyone with the necessary qualifications.

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Washington, D.C. (February 6, 2013)

By Michael Cohn
                                                                                                                                                               The Internal Revenue Service is making progress in the management of its employees but faces continued challenges, according to a new report.

J. Russell George

released Wednesday, by the Treasury Inspector General for Tax Administration, noted that since fiscal year 2002, TIGTA has designated human capital as one of the major management challenges facing the IRS.

 

TIGTA reviewed the status of actions the IRS has taken in response to recommendations on human capital issues made by TIGTA in a series of audit reports issued since fiscal 2009. TIGTA also reviewed the status of the IRS’s implementation of the recommendations of an IRS-led task force.
TIGTA’s new report found that the IRS has made progress in addressing human capital issues. For example, the IRS developed an agency-wide recruitment strategy that should place it in a better position to identify and attract qualified candidates. IRS documentation shows that it has completed corrective actions for 78 percent of the 46 TIGTA recommendations and 91 percent of the 58 recommendations made by the IRS task force formed to address serious workforce issues.
Despite this progress, however, continued focus by IRS executive management on human capital is important because the IRS’s workforce has decreased by about 10,000 full-time equivalents in the last two fiscal years, the report noted. In addition, many of the IRS’s experienced leaders and employees will be eligible to retire in the next five years.
At the same time, significant Tax Code changes, such as those implementing the Patient Protection and Affordable Care Act, are on the horizon, and the IRS needs to make improvements to stop billions of dollars in fraudulent or improper tax refunds resulting from identity theft and erroneous claims for tax credits.
“The IRS’s continued focus is needed to provide reasonable assurance that the right people will be in the right place at the right time to provide taxpayers with top-quality service and to enforce the law with integrity and fairness to all,” said TIGTA Inspector General J. Russell George in a statement.
TIGTA made no recommendations in this report; however, key IRS management officials reviewed it prior to issuance.

In a related report issued last week, TIGTA found that the IRS is hiring new employees more quickly. While in June 2009, the IRS took more than five months to hire employees from outside the government, some of its divisions, like the Information Technology organization, are now close to meeting the federal government’s goal of 80 calendar days, TIGTA’s auditors found.

At the request of the IRS, TIGTA audited the actions taken by the IRS divisions to monitor and improve the efficiency of hiring new employees. Hiring quality employees quickly is important to the IRS, as it hires a large number of employees each year. For example, the IRS hired approximately 19,000 employees in fiscal year 2011.

TIGTA found that IRS divisions and the Human Capital Office have taken action to reduce hiring timelines, but need to continue to focus on keeping hiring timelines low and making additional improvements. For example, the Information Technology organization has cut the time it takes to hire new employees from 218 calendar days in November 2009 to an average of 90 calendar days at the end of March 2012. As a result, Information Technology is close to meeting the Office of Personnel Management 80-calendar-day hiring goal. Similarly, the Wage and Investment Division has taken action to reduce hiring timelines and is also close to meeting the hiring goal.

However, the Small Business/Self-Employed Division uses a hiring process that is based on bringing large groups of employees on board at the same time for training and orientation purposes. While this may result in efficient training and orientation programs for enforcement personnel, it can take up to 200 calendar days to hire employees, which results in not meeting the hiring goal.

TIGTA made several recommendations for improvement such as deactivating certificates with lists of job applicants that are not used, providing guidance to employment offices for selecting the correct certificates, and correcting computer report-writing programming to ensure the correct date was used in calculating hiring timelines. The IRS agreed with TIGTA’s recommendations and implemented corrective actions.

Lost Your W2, or Didn't Receive Your W2, What to Do

 

If you misplaced your W2  or moved and didn't receive your W2, or your Employer mailed to the wrong address, here is what to do: 

It’s a good idea to have all your tax documents together before preparing your 2012 tax return. You will need your W-2, Wage and Tax Statement, which employers should send by the end of January. Give it two weeks to arrive by mail.

If you have not received your W-2, follow these three steps:

1. Contact your employer first. Ask your employer – or former employer – to send your W-2 if it has not already been sent. Make sure your employer has your correct address.

 

2. Contact the IRS. After February 14, you may call the IRS at 800-829-1040 if you have not yet received your W-2. Be prepared to provide your name, address, Social Security number and phone number. You should also have the following information when you call:

 

• Your employer’s name, address and phone number;

• Your employment dates; and

• An estimate of your wages and federal income tax withheld in 2012, based upon your final pay stub or leave-and-earnings statement, if available.

 

3. File your return on time. You should still file your tax return on or before April 15, 2013, even if you have not yet received your W-2. File Form 4852, Substitute for Form W-2, Wage and Tax Statement, in place of the W-2. Use the form to estimate your income and withholding taxes as accurately as possible. The IRS may delay processing your return while it verifies your information.

 

If you need more time to file you can get a six-month extension of time. File Form 4868, Application for Automatic Extension of Time to File US Individual Income Tax Return. If you are requesting an extension, you must file this form on or before April 15, 2013.

If you receive the missing W-2 after filing your tax return and the information on the W-2 is different from what you reported using Form 4852, then you must correct your tax return. File Form 1040X, Amended U.S. Individual Income Tax Return to amend your tax return.
Forms and instructions are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

• Form 4852, Substitute for Form W-2, Wage and Tax Statement
• Form 1040X, Amended U.S. Individual Income Tax Return

2013 IRS Facts about Dependents and Exemptions

 

A tax client sent in her taxes to be completed.  She was planning on filing Single, as usual for the past several years.  Through our conversation, I learned that her son was not working, and was living at home for the past 14 moths.  He had finally decided to interview for the military since there were no job possibilities.  I then informed her that because her son was living at home, and she had provided more than half of his sport for the year, that she could claim her son as a dependent.  She was ecstatic, because this increased her refund, 10 fold. 

The information below from the IRS can help you better understand the tax codes when it comes to Exemptions and Dependents, which can make a big difference on your tax return.
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While each individual tax return is unique, there are some tax rules that affect every person who files a federal income tax return. These rules involve dependents and exemptions. The IRS has six important facts about dependents and exemptions that will help you file your 2012 tax return.

1. Exemptions reduce taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. You can deduct $3,800 for each exemption you claim on your 2012 tax return.

 

2. Personal exemptions. You usually may claim one exemption for yourself on your tax return. You also can claim one for your spouse if you are married and file a joint return. If you and your spouse file separate returns, you may claim the exemption for your spouse only if he or she had no gross income, is not filing a joint return and was not the dependent of another taxpayer.

 

3. Exemptions for dependents. Generally, you can claim an exemption for each of your dependents. A dependent is either your qualifying child or qualifying relative. If you are married, you may not claim your spouse as your dependent. You must list the Social Security Number of each dependent you claim on your return. See Publication 501, Exemptions, Standard Deduction, and Filing Information, for information about dependents who do not have Social Security numbers.

 

4. Some people do not qualify as dependents. While there are some exceptions, you generally may not claim a married person as a dependent if they file a joint return with their spouse.

 

5. Dependents may have to file. If you can claim someone else as your dependent on your tax return, that person may still be required to file his or her own tax return. Whether they must file a return depends on several factors, including the amount of their gross income (both earned and unearned income), their marital status and any special taxes they owe.

 

6. Dependents can’t claim a personal exemption. If you can claim another person as a dependent on your tax return, that person may not claim a personal exemption on his or her own tax return. This is true even if you do not actually claim that person as your dependent on your tax return. The fact that you could claim that person disqualifies them from claiming a personal exemption.

 

Remember that a person must meet several tests in order for you to claim them as your dependent. See Publication 501 for the tests you will use to determine if you can claim a person as your dependent.

Top 10 Ways to Get Help from IRS.gov

 

When you’re looking for tax information, you want to find it as quickly and easily as possible. That’s why the IRS redesigned its website. It’s now even more user friendly. Here are the top 10 reasons to visit IRS.gov:

1. Get 24/7 Access. Whether you do your taxes during the day or burn the midnight oil, IRS.gov has the tax forms and answers you need when you need them. It's accessible all day, every day. The Interactive Tax Assistant is a helpful tool that will answer many of your tax law questions. Several tax forms, publications and information are also available in Spanish.

 

2. Use Free File. Anyone can prepare and e-file their taxes for free with IRS Free File. Offered exclusively at IRS.gov, Free File’s brand name software or fillable forms do the work for you. If you made $57,000 or less, you qualify to use free tax software. If your income is more than $57,000 or you feel comfortable preparing your own tax return, use Free File Fillable Forms. This option provides the electronic versions of IRS paper forms.

 

3. Try IRS e-file. Whether you do your own taxes or hire a preparer, IRS e-file is the safest, easiest and most popular way to file a complete and accurate tax return. Since 1990, taxpayers have e-filed more than one billion returns. If you owe taxes, e-file gives you options to file early and pay by the tax deadline. If you are due a refund, you should receive it in less than 21 days.

 

4. Check Your Refund Status. You can track your refund using the enhanced “Where’s My Refund?” tool. It’s quick, easy and secure and has a new look this year. You can start checking on the status of your refund within 24 hours after the IRS has received your e-filed return. You can check your refund status four weeks after you mail a paper return. The tool includes a tracker that displays the progress of your return in three stages while it is processed. Once IRS approves your refund, “Where’s My Refund?” will give a date to expect your refund.

 

5. Make Payments Electronically. E-payment options are a convenient, safe and secure way to pay taxes. You can authorize an electronic funds withdrawal, use a credit or debit card or enroll in the U.S. Treasury’s Electronic Federal Tax Payment System.

 

6. Use the EITC Assistant. The Earned Income Tax Credit is a tax credit for working people who earned less than $50,270 in 2012. The credit can be worth as much as $5,891. Check your eligibility using the EITC Assistant tool. You may be among the millions of eligible workers who get the EITC this year.

 

7. Get Tax Forms and Publications. You can view and download tax forms and publications any time. It’s the easiest way to get IRS forms and publications.

 

8. Figure the Right Withholding. The IRS Withholding Calculator will help to ensure you don’t have too much or too little income tax withheld from your pay.

 

9. Request a Payment Agreement. Paying all your taxes on time avoids penalties and interest. However, if you cannot pay your taxes in full you may be eligible to use the Online Payment Agreement Application to request an installment agreement.

 

10. Get the Latest Tax Law Changes. Learn about tax law changes that may affect your tax return. Special sections of the website highlight changes that affect individual and business taxpayers.

 

The address of the official IRS website is www.irs.gov. Don’t be misled by sites that claim to be the IRS but end in .com, .net, .org. Some thieves use phony websites to gain your personal and financial information. They then use this information to commit identity theft or steal your money.