Payroll Deposits

If you are required to make by-weekly payroll deposits to the IRS, you have until this Wednesday, January 26, 2011.  (Apply for payroll payments pay between January 19-21) And If you have not done your tax return yet, you can still notify me to set an appointment.   

Hit Counter

Work Pay Tax Credit

Are you eligible for the Making Work Pay Tax Credit in 2010?  it would depend on several factors like: What s your filing status?  How much you earned in 2010? Are you a dependent of someone else? These are some of the relevant questions .

  

Practical information to know about this tax credit:

• The Making Work Pay Credit provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns.
• Most workers received the benefit of the Making Work Pay Credit through larger paychecks, reflecting reduced federal income tax withholding during 2010.
• Taxpayers who file Form 1040 or 1040A will use Schedule M to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit.
• Taxpayers who file Form 1040-EZ should use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Credit.

You cannot take the credit if:

1. your modified adjusted gross income is $95,000 for individuals or $190,000 if married filing jointly or more, you can be claimed as a dependent on someone else return,
2. you do not have a valid social security number or
3. you are a nonresident alien.

Source IRS


Hit Counter

Payments to the Government after 13/31/2011 requires a 3% or not?

Withholding on government payments delayed. For payments made after Dec. 31, 2011, governments at the federal, state and local levels will have to deduct and withhold tax in an amount equal to 3% of any payments they make to a person providing property or services. However, the IRS has announced that withholding and reporting requirements will not apply to any payment made by payment card, including credit cards, debit cards, and stored value cards, for any calendar year beginning earlier than at least 18 months from the date further guidance on this subject is finalized. Thus, the new requirements will not apply to payment card payments for the 2012 calendar year.

IRS source





Hit Counter

Are you filing a 1040 with Schedule A? You may want to delay filing 'til Feb.

The 2010 Tax Relief Act passed later in the year had caught the IRS of guard and they need time to reprogram its computers for the new changes.  This does not apply to all taxpayers.  Some taxpayers planning to file their 2010 tax returns early have been advised by the IRS to wait until mid- to late-February, 2011.

Who are affected? Affected taxpayers are those planning to file Schedule A or claim above-the-line deductions for higher-education tuition and fees or educator expenses.

Hit Counter

When is the tax return due date?

Extended due date this year. Because of the Emancipation Day holiday in the District of Columbia, the due date of Form 1040 for 2010 is Apr. 18, 2011, instead of Apr. 15, 2011. The Apr. 18 due date applies even for taxpayers who do not live in the District of Columbia.

Hit Counter

Deduction allowed

Repairs to your personal residence incurred because of corrosive drywall can be deductible.  However, there is a catch as to when they were installed.   Source IRS.

Hit Counter

Payroll Deductions...

The 2010 Tax Relief Act reduces the employee OASDI tax rate under the FICA tax by two percentage points to 4.2%. The self-employment income is reduced by two percentage points to 10.4% percent.  Thus, you should see an increase in your paycheck and a reduction in your deductions in 2011.   The limit remains at $106,800.   Source IRS 

Hit Counter

Gift Card received during X-mass...is it reportable income or not?

A new revenue procedure allows a taxpayer to defer recognizing in gross income advance payments received from the sale of gift cards that are redeemable for goods or services of the taxpayer or a third party.   Excerts from the IRS.

Hit Counter