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Contractor or Employee? Knowing the difference is important
Too many small businesses have been taxed and penalized for having independent contractors that the IRS believes should be employees. This is even more critical given the requirement to have health insurance. Is a worker an independent contractor or an employee? This seemingly simple question is often the contentious subject of numerous IRS audits. As an employer, getting this wrong could cost you plenty in the way of Social Security, Medicare taxes, and other employment related taxes. Here is what you need to know. The basics As the worker. If you are the worker and you are not considered an
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IRS PIN Announcement: DO NOT THROW OUT Identity theft PINs are for 2015 not 2014
Recent notices sent out by the IRS for victims of identity theft refer to tax year 2014 in error. These one-time use PINs are for the 2015 tax year. Here is what you need to know. If you are one of the unfortunate victims of IRS identity theft you will need a one-time PIN to file your tax return. Without this numeric identifier your 2015 tax return will be rejected. The IRS issues taxpayer victims this PIN in a written notice. What has happened IRS notices that have this one-time PIN are hitting mailboxes of identity theft victims right now.
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The mileage rates for 2016 are now available and are noted here.
The IRS recently announced mileage rates to be used for travel in 2016. The Business mileage rate decreases by 3.5 cents while Medical and Moving mileage rates are lowered by 4.0 cents. Charitable mileage rates are unchanged. 2016 New Mileage Rates Standard Mileage Rates Mileage Rate/Mile Business Travel 54.0¢ Medical/Moving 19.0¢ Charitable Work 14.0¢ Here are 2015 rates for your reference as well. 2015 Mileage Rates Standard Mileage Rates Mileage Rate/Mile Business Travel 57.5¢ Medical/Moving 23.0¢ Charitable Work 14.0¢ Remember to properly document your mileage to receive full credit for your miles driven.
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Missing a Form? Not an Excuse.
Missing a Form? Not an Excuse. At the start of each year our mail boxes begin to fill up with information tax forms. They include W-2s, 1098s, 1099s and the new 1095-A. If you fail to receive a form, you are still liable for the tax it creates. Here are some tips to avoid this possible audit risk.
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IRS Takes Steps to Reduce Fraud
IRS Takes Steps to Reduce Fraud The IRS is now taking additional steps to combat the rapid increase in taxpayer identity theft. Here is what you need to know about what is happening now.
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Understanding Your Special K’s – 1099-Ks are now being subject to underreporting IRS audits
Understanding Your Special K’s – 1099-Ks are now being subject to underreporting IRS audits The IRS recently announced it is going to conduct automated audits of 1099-K filings against business income. This includes unicorporatated small businesses filing Schedule C with their Form 1040. How do you protect yourself from this audit risk? For the first time, the IRS is reporting that it will be comparing filed 1099-Ks against income reported on business tax returns (including those reported on 1040 Schedule C tax returns). Knowing how this impacts you can save you an unwanted IRS correspondence audit. Background A couple of
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IRS Identity Theft Season Begins Now
IRS Identity Theft Season Begins Now Be on your guard as the IRS identity theft season starts in late January. Here’s what you need to know. Each year thieves try to steal billions in Federal Withholdings by stealing your identity. As the IRS focuses more attention on this quickly growing problem, now is the time of year to be extra vigilant. Early tax filing season is the worst time Your federal tax account at the IRS has plenty of money in it from all the taxes withheld from your paycheck during the course of the year. Until you file your
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Beware of This New IRS Scam
Beware of This New IRS Scam The IRS recently announced a new scam to steal your money from theives posing as the IRS. Here is what you need to know to protect yourself. Lost in the recent news regarding stolen identities at Snapchat and the credit and debit card theft at major retailers, is the dramatic increase in identity theft and scams using the IRS. One of the more recent scams announced by the IRS is worth noting. The scam Callers identifying themselves as the IRS phone you and disclose that you owe delinquent taxes. They say that unless there
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Defending Fair Market Value
Determining the value of items on your tax return is always open to interpretation. You do not want that to happen to you during an audit as it can lead to additional tax and penalties. Here are some tips to help defend your Fair Market Value (FMV) determinations. “Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.” Source: IRS Publication 561
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Five Big Tax Mistakes – Don’t let them happen to you
Every year thousands of taxpayers go through a ”gotcha” with the IRS. A large, unexpected tax bill. Here are five common causes of tax surprises from lost refunds to retirement plan mistakes. Every year taxpayers are hit with tax surprises that could be avoided if they just knew the rules. Here are five big ones that are easy to avoid with some simple planning. Mistake #1. Withholding too little. This results in a tax surprise when filing your income tax. Don’t be too hard on yourself if this happens to you. Social Security withholdings have changed each year and new
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