I am missing a W-2

What to Do? 

Most of the time you get all your documents, but there is that one time when you don't.  There is no reason to panic but you should take proactive measures to get all the documents to file your 2011 tax return.  Generally, you should receive an IRS Form W-2, Wage and Tax Statement, from each of your employers by Jan. 31, 2012, but you are in February 2012 and you are mising one or two W-2s. It happens.

The IRS suggest you do the following steps:
1. Contact your employer ASP.

• Inquire if and when the W-2 was mailed.
• If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address.
• Update your address with your employer and allow a reasonable amount of time for them to resend or issue a corrected W-2.

2. Contact the IRS If you do not receive your W-2 by Feb. 14, 2012.

• Call the IRS for assistance at 800-829-1040.
• Have your name, address, Social Security number, phone number with you when you are ready to call.
• Also, provide the IRS with the following information:
• Employer’s name,
• Employers address
• Employer phone number
• Dates of employment
• Provide an estimate of the wages you earned,
• The federal income tax withheld, 
• The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3. File an extension your return (3.1) or File a return along with Form 4852 (3.2) Even with the missing W-2, you must either file your tax return or request an extension to file. However, all taxes due should be paid if you do not want to pay a possible penalty.

1. Request an extension (Form 4868) to file by April 17, 2012.  (Personal Preference not an advise- I would do all calculations to see if I owe any additional taxes, paid them, and file an automatic extension. You must consult your tax advisor.)  
2. Alternatively to the step above, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. In this scenario, there may be a delay in any refund due while the information is verified. 
1. If your estimated tax information provided was not accurate, then you must File a Form 1040X (i.e, Amended U.S. Individual Income Tax Return) to correct the previously file tax return. 
2. On occasion, you may receive your missing W-2 after you file your return using Form 4852, and the information may be different from what you reported on step 3.2, above. 

Source: http://www.irs.gov/  Form 4852, Form 1040X and instructions are available on this website or by calling 800-TAX-FORM (800-829-3676).

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IRS Tax Tips for Self Employed individuals

Key points the IRS would like you to know about self-employment and self- employment taxes:

Who is considered to be Self-employed
If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed.

Part-time or Full-time work

Self-employment can include work in addition to your regular full-time business activities, such as part-time work you do at home or in addition to your regular job.

Self-Employment Tax

If you are self-employed you generally have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. You figure self-employment tax using a Form 1040 Schedule SE. Also, you can deduct half of your self-employment tax in figuring your adjusted gross income.

Where you are required to report your Income and expenses?

You file an IRS Schedule C, Profit or Loss from Business, or C-EZ, Net Profit from Business, with your Form 1040.

Estimated Tax PaymentsIf you are self-employed you may have to make estimated tax payments. This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages. Estimated tax is the method used to pay tax on net income that is not subject to withholding. If you fail to make quarterly payments you may be penalized for underpayment at the end of the tax year.

Cost of running your Business

You can deduct the costs of running your business. Some cost will be capitalized, others deducted in its entirety depending on many factors.  Some business expenses are clasiffyed as part of the cost of goods sold, report as inventory and/or as an asset and portion of these could be expensed in the current year.

What determine its deductibility?

For a cost of running a business be deductible, the business expense must be both ordinary and necessary in carry on a business. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.

Source of additonal information:

Contact your CPA, and/or the Self-employment Tax Center, IRS Publication 334, Tax Guide for Small Business, IRS Publication 535, Business Expenses and Publication 505, Tax Withholding and Estimated Tax, available at www.irs.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

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Do you have to repay The First-Time Homebuyer Credit?

Reminders Letters

If you received the tax credit and do not make yearly payments you will receive a letter from the IRS asking you to make the required payment.  These letters are called "Reminders Letters".  In the past the IRS was mailing letters to both the taxpayers who pay their obligation and does that forgot to pay.  The IRS will no longer mail you a reminder letter if you are paying on time, April 15 or before.

Taxpayers Affected

If you bought a home in 2008 and claimed the First-Time Homebuyer Credit, the credit is similar to a no-interest loan and must be repaid in 15 equal annual installments that began with your 2010 return. Also, anyone who sold their home, or stopped using it as their main home, may have to repay the entire credit whether their home was purchased in 2008, 2009 or 2010. 

IRS Credit Lookup Tool 

The IRS has an online lookup tool on the IRS website to check your repayment obligation. To access the tool you will need: your Social Security number, date of birth and complete address. If you file a joint return, you’ll only be able to access your portion of the First-Time Homebuyer Credit account information.  The tool will show the original amount of the credit, annual repayment amounts, total amount paid and the total balance left to be paid. You will be able to print your account page to share with your tax preparer and keep for your records.

Installment payments and Form 5405

If you make an installment payment, you do not need to attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, to your tax return. However, if you are repaying the credit because the home stopped being your main home, you must attach Form 5405.

Source:  To access the First-Time Homebuyer Credit Lookup Tool, 24 hours a day, seven days a week, visit the IRS.gov website.

 

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Self-employed Basic Points to Remember

 If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed.

Key BASIC points about self-employment and self- employment taxes:

As a self-employed you generally have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax.  

You figure self-employment tax using a Form 1040 Schedule SE, and you can deduct in Form 1040 half of your self-employment tax. 

You report your business transactions on Schedule C, Profit or Loss from Business, or C-EZ, Net Profit from Business.  The applicable Schedule in included with your Form 1040.

You have to make estimated tax payments on your self employment net profits above a threshold. If you are required but failed to make quarterly payments you may be penalized for underpayment. 

You have to make an educated distinction between cost incurred that can be expenses from the ones that required to be capitalized over their useful life or after they are disposed off.  (e.g., Merchandise inventory and equipment comes to mind.)

For an expense to be deductible, the itmem must be both ordinary and necessary; an ordinary expense is one that is common and accepted in your field of business, while a necessary expense is one that is helpful and appropriate to carry on in your trade or business.

For more information see the Self-employment Tax Center, IRS Publication 334, Tax Guide for Small Business, IRS Publication 535, Business Expenses and Publication 505, Tax Withholding and Estimated Tax, available at www.irs.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

(Paraphrased)

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Latest U.S.A. Economic News

Quaterly Data - 2011 Third Qtr. (estimated)

Real GDP (% change)    1.8+

   Business Investments    15.7+

   Residential Construction   1.3+

   Exports     4.7+

   Imports     1.2+

   Net Export Balance (Nominal)   -562.3

   Current Account Bal as share of GDP   -2.9

Price Indexes:
   GDP   2.6+
   Gross Domestic Purchases   2.0+
 
Personal Savings Rate   3.9+

Productivity:
  Nonfarm     2.3+
  Manf          5.0+

Monthly Economic Data:  From 2010 to November 2011 or Dec 2011 * (%)

Unemployment rate -  from 9.6 (2010) to 8.5  *
Inflation CPI (over year or month) - from 1.4 to 3.4
PPI (Producer Price Index)- from 3.8 to 5.9
Oil (West TX) - from 79.4 to 98.2 *

Housing Starts - from 585 to 685
Single Fam sold - from 321 to 315
Auto and Light Truck Sales  - from 11.6 to 13.6 *
Retail Sales and Food Services - from 7.6 to .1 *
Capacity Utilization - from 74.5 to 77.8

New Orders for Nondefense capital goods - 16.2 to 8.1
Buss Inv/Sales Ratio  from 1.29 to 1.27
Index Leading Indicators 5.7 to .5

Interest Rastes"
3 mo T-bill  .13 to .02
10 yr T-note  from 3.21 to 1.98 *
Mortg rate-30 yr Fixed  - from 4.69 to 3.96 *

The economy is improving...no doubt.  2008 and 2009 years most of these numbers were negative  or very anemic.
Source: U.S. Treasury Department

 

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January 31, 2012 Reminders

End-of-Month Federal (IRS) Reminders:

• Must file Form 720 for the Qtr ending 12/31/2011.
• Furnish Forms 1098, 1099 and W-2G to recipients for certain payments during the year ending 12/31/2011. Including Form W-2 to your employees.
• File Form 730 and pay taxes on wagers accepted during the month of December 2011.
• Deposit any FUTA (Federal Unemployment) tax owed through December 2011.
• File Form 2290 and pay the tax for vehicles used in December 2011.
• File Forms 940, 941, 943, 944 and/or 945 if you did not deposit all taxes when due.
• File your tax return if you did not pay your last installment of estimated tax by January 17, 2012.

Source IRS.gov. 

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New Tax Provisions for 2012

New Tax Provisions for 2012

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Payroll due date- for this week

Payroll deposit due date is January 6, 2012 (Friday); Payroll taxes for payments on January 1-3, if the semiweekly deposit rule applies to you.

 

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TAX CALENDAR- January 1-31, 2012

January 6, 2012

Deposit payroll tax on Jan 1-3 if the semiweekly deposit rules applies to you.

January 10, 2012

Employees who work for tips. If you received $20 or more in tips during December, report them to your employer. You can use Form 4070, Employee's Report of Tips to Employer.

January 11, 2012

Deposit payroll taxes for payments on January 4-6. if the semiweekly deposit rules applies.

January 13, 2012
Deposit payroll taxes for payments on January 7-10, if the semiweekly deposit rules applies.

January 16, 2012 Holiday Martin Luther King's Birthday.

January 17, 2012

Individuals. Make a payment of your estimated tax for 2010 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES. This is the final installment date for 2010 estimated tax. However, you do not have to make this payment if you file your 2011 return (Form 1040) and pay any tax due by January 31, 2012.

Farmers and Fishermans: Pay your estimated tax for 2011. Use form 1040ES.

Employers: Deposit payroll tax for December 2011 if the monthly deposit rules applies.

January 19, 2012

Deposit payroll taxes for payments on January 11-13, if the semiweekly deposit rules applies.

January 20, 2012Deposit payroll taxes for payments on January 14-17, if the semiweekly deposit rules applies.

January 25, 2012Deposit payroll taxes for payments on January 18-20, if the semiweekly deposit rules applies.

January 27, 2012Deposit payroll taxes for payments on January 21-24, if the semiweekly deposit rules applies.

January 31, 2012Individuals who must make estimated tax payments. If you did not pay your last installment of estimated tax by January 17, you may choose (but are not required) to file your income tax return (Form 1040). Filing your return and paying any tax due by today prevents any penalty for late payment of the last installment. If you decided to wait, then file and pay your tax by April 17.

(Disclosure: We are not responsible for due dates since it is not within our control, but the IRS.  We are not responsible for choices you made either based on the information provided here, you must consult your tax consultant or get an appointment with us to better explain the IRS due dates and related regulations that may apply to your particular situation.  Allways refer back to the IRS website for a more up-to-date nformation.)

Source: IRS.gov



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Do you qualify as an "Acredited Investor", under the SEC rules?

Interested in purchasing Unregistered Securities? 

New Security and Exchange Commission regulations prevent you from including your primary residence value as an Asset in the calculation.  In the past, investors were allowed to count their principal residence value plus other investments and in the agregate mee the $1 million Net Worth thereshold.   

Who are these Unregister Securities?
These securities may could be; hedge funds to derivatives and private debt.  Generally, these instruments could be less transparent and risky than other publicly registered offerings.  Because, they are highly leverage and risky these securities are only limited to oly acredited investors.

Why the change?

The Security and Exchange Commission (SEC) wants to define an accredited investor the same way is defined under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

(Source:  SEC website, 2010 Dodd-Frank legislation.)

Revised wording on 12/26/2011.




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