The IRS (IR-2004-17 dated on Feb. 3, 2004)issued a consumer alert advising taxpayers to beware of promoters’ claims that tax debts can be settled for “pennies on the dollar” through the Offer in Compromise Program.
Some promoters are inappropriately advising indebted taxpayers to file an Offer in Compromise (OIC) application with the IRS. This bad advice costs taxpayers money and time. An Offer In Compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or "compromise," federal tax liabilities by accepting less than full payment under certain circumstances, not all circumstances.
The OIC program serves an important purpose for a select group of taxpayers, if you meet the program’s requirements. The IRS is urging taxpayers not to be duped by high-priced promises to eliminate IRS tax liabilities.
The OIC may be considered only after other payment options have been exhausted. If taxpayers are unable to pay their taxes in full, there are other payment options, such as monthly installment agreements, that must be explored before an OIC can be submitted.
Taxpayers should consult with a regulated professional (e.g., CPA, EA, or a Tax attorney) or go to the IRS website for more detail information.
Monday, November 23, 2009
Sunday, November 15, 2009
To prepare for this tax season you need to:
-Find and get all your paperwork and documents ready.
-Collect and review all your check books, brokerage statements, and bank statements.
-Collect and review your W-2, 1098, and 1099 forms for accuracy and completeness.
-Give your accountant a copy of your last year tax return, and review for items that carry forward.
-Contact the document originators if you find any mistake.
-Contact your Accountant and set up a preliminary appointment.
-Find all your sales tax receipts for the year and add it all up.
-If you move, buy or sell your residence, or a second residence, let your accountant know.
-Do not forget the documentation if any of your children is attending college.
-Get all IRA or 401K distributions received.
-Gain custody of your child and/or provided support to a child, even if not leaving with you.
-Purchase any energy efficient equipment/appliance for your home.
-Purchase or sold an automobile during the year.
If you own a business:
-Close your books or hire an accountant to close your books.
-Complete your mileage log and make sure you had log all your miles by year.
-Add all car expenditures you incurred pertaining to your business.
-Complete your cell phone log entries.
-If you organize a business that is not currently in operations.
-If you cannot file your tax return by the due date, get an extension.
-Pay your quarterly estimated taxes when they are due.
-Be prepare to sit down with your accountant to review all your documents and make sure you take all deductions you are entitled too.
Money spent on an accounting professional is always well expend.
-Find and get all your paperwork and documents ready.
-Collect and review all your check books, brokerage statements, and bank statements.
-Collect and review your W-2, 1098, and 1099 forms for accuracy and completeness.
-Give your accountant a copy of your last year tax return, and review for items that carry forward.
-Contact the document originators if you find any mistake.
-Contact your Accountant and set up a preliminary appointment.
-Find all your sales tax receipts for the year and add it all up.
-If you move, buy or sell your residence, or a second residence, let your accountant know.
-Do not forget the documentation if any of your children is attending college.
-Get all IRA or 401K distributions received.
-Gain custody of your child and/or provided support to a child, even if not leaving with you.
-Purchase any energy efficient equipment/appliance for your home.
-Purchase or sold an automobile during the year.
If you own a business:
-Close your books or hire an accountant to close your books.
-Complete your mileage log and make sure you had log all your miles by year.
-Add all car expenditures you incurred pertaining to your business.
-Complete your cell phone log entries.
-If you organize a business that is not currently in operations.
-If you cannot file your tax return by the due date, get an extension.
-Pay your quarterly estimated taxes when they are due.
-Be prepare to sit down with your accountant to review all your documents and make sure you take all deductions you are entitled too.
Money spent on an accounting professional is always well expend.
2009 TAX CHANGES
Part of your unemployment compensation can be exclude from gross income.
The standard miles rate for the cost of operating your car for business use is 55 cents per mile. Also, the Medical and Moving miles rates went up, but the charitable standard mile rates remained the same.
The standard deduction amount for people who do not itemize their deductions increased from 2008.
You can deduct the state or local sales imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before Jan., 2010.
If you claimed a casualty or theft loss deduction and in a later year you received more reimbursement than you expected, you do not need re-compute the tax for the year in which you claimed the deduction.
If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive.
Non-business energy property credit. This credit, which expired after 2007, has been reinstated. You may be able to claim a non-business energy property credit of 30% of the cost of certain energy-efficient property or improvements you placed in service in 2009.
The monthly exclusion for commuter highway vehicle transportation and transit passes increased to $120 and the monthly exclusion for qualified parking increased to $230. Beginning March 1, 2009, the monthly exclusion for commuter highway vehicle transportation and transit passes increased to $230.
You may be reimbursed for reasonable expenses of qualified bicycle commuting. Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage.
The amount you can deduct for each exemption has increased to $3,650 for 2009.
Revocation of release of claim to an exemption. New rules apply to allow the custodial parent to revoke a release of claim to exemption that was previously released to the non-custodial parent.
If you or your spouse is an employee, enrolled volunteer, or volunteer leader of the Peace Corps, you may be able to exclude from income a gain from selling your main home, exceptions apply.
If you are a first-time homebuyer, you may be able to claim a one-time tax credit equal to the lesser of: $7,500 ($8,000 if you purchased your home in 2009), or 10% of the purchase price of your home.
The Emergency Economic Stabilization Act of 2008 extended the exclusion from gross income for the discharge of qualified principal residence indebtedness by an additional 3 years. The exclusion now applies to debt discharged after 2006 and before 2013.
Increase in Deductible Limit for Long-Term Care Premiums is based on age. $320 for age 40 and under; and for 71+ is $3, 980. (deduction varies by age.)
There is a new Schedule L, Standard Deduction for Certain Filers– include disaster loss deductions, real property tax deduction, and motor vehicle sales tax deductions.
Source IRS
The standard miles rate for the cost of operating your car for business use is 55 cents per mile. Also, the Medical and Moving miles rates went up, but the charitable standard mile rates remained the same.
The standard deduction amount for people who do not itemize their deductions increased from 2008.
You can deduct the state or local sales imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before Jan., 2010.
If you claimed a casualty or theft loss deduction and in a later year you received more reimbursement than you expected, you do not need re-compute the tax for the year in which you claimed the deduction.
If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive.
Non-business energy property credit. This credit, which expired after 2007, has been reinstated. You may be able to claim a non-business energy property credit of 30% of the cost of certain energy-efficient property or improvements you placed in service in 2009.
The monthly exclusion for commuter highway vehicle transportation and transit passes increased to $120 and the monthly exclusion for qualified parking increased to $230. Beginning March 1, 2009, the monthly exclusion for commuter highway vehicle transportation and transit passes increased to $230.
You may be reimbursed for reasonable expenses of qualified bicycle commuting. Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage.
The amount you can deduct for each exemption has increased to $3,650 for 2009.
Revocation of release of claim to an exemption. New rules apply to allow the custodial parent to revoke a release of claim to exemption that was previously released to the non-custodial parent.
If you or your spouse is an employee, enrolled volunteer, or volunteer leader of the Peace Corps, you may be able to exclude from income a gain from selling your main home, exceptions apply.
If you are a first-time homebuyer, you may be able to claim a one-time tax credit equal to the lesser of: $7,500 ($8,000 if you purchased your home in 2009), or 10% of the purchase price of your home.
The Emergency Economic Stabilization Act of 2008 extended the exclusion from gross income for the discharge of qualified principal residence indebtedness by an additional 3 years. The exclusion now applies to debt discharged after 2006 and before 2013.
Increase in Deductible Limit for Long-Term Care Premiums is based on age. $320 for age 40 and under; and for 71+ is $3, 980. (deduction varies by age.)
There is a new Schedule L, Standard Deduction for Certain Filers– include disaster loss deductions, real property tax deduction, and motor vehicle sales tax deductions.
Source IRS
You must check your employee elegibility to work in the US
Employers’ must verify that each new employee is legally eligible to work in the United States. Have the employees you hire fill out Form I-9. You are required to get each employee's name and Social Security Number (SSN) and to enter them on Form W-2. (This requirement also applies to resident and nonresident alien employees.)
You should ask your employee to show you his or her social security card. Do not accept an ITIN if your employee have a SSN.
(Source: IRS)
You should ask your employee to show you his or her social security card. Do not accept an ITIN if your employee have a SSN.
(Source: IRS)
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