TAX CREDIT- Do you took advantage of this Tax Credit?

Expanded Work Opportunity Tax Credit- Available for Hiring Qualified Veterans:

The VOW to Hire Heroes Act of 2011 added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer’s share of social security tax.

DUE DATE:

The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013.

AMOUNT OF CREDIT:

As high as $9,600 per qualified veteran for for-profit employers or up to $6,240 for qualified tax-exempt organizations.  The credit will also depend on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. However, the amount of the credit for qualified tax-exempt organizations may not exceed the organization’s employer social security tax for the period for which the credit is claimed.

PRE-SCREENING AND CERTIFICATION

All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit.

FORM TO FILE

An eligible employer must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their respective state workforce agency within 28 days after the eligible worker begins work.

The Form due date was June 19, 2012, for veterans hired on or after Nov. 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22, 2012.

SOURCE: http://www.irs.gov

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2012 Tax Calendar

Let's look at what is due on the last week of August 2012:

August 29, 2012:

• Deposit Payroll tax for payments on August 22-24 if the semiweekly deposit rules appplies.

August 31, 2012: 

• File Form 730 and pay tax on wagers accepted during July. 
• File Form 2290 and pay the tax for vehicles first used during July. 
• Deposit payroll tax for payments on August 25-28 if the semiweekly deposit rules applies.  

Source:  http://www.irs.gov


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IRS Compliance

The IRS has increased their compliance efforts to close the estimated tax gap of $345 billion dollars, so taxpayers should expect more scrutiny from the IRS.  With the help of technology and data mining, the IRS have many tools at their disposal to inquire about out of the ordinary and complex transactions than in the past.  The most common issues are automatic non-matching documents and the like as we moved to use e-filing tax returns and documents.  The IRS issues non compliance letters for multiple reasons and many have specific numbers requiring careful attention by the taxpayer and tax preparer.  CPAs and tax professionals must stay current on best practices to help taxpayers deal with these issues.  

The IRS commissioner, Doug Shulman, said in May of this year that the IRS created an office of compliance data analytics that help determine possible non compliance tax returns.

Be prepare, keep good records, and consult a tax professional or CPA if you receive an IRS notice.

Source:  IRS.gov

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