#Taxpayers should include #tax #plans in their #wedding #plans

Couples getting married this year know there are a lot of details in planning a wedding. Along with the cake and gift registry, their first tax return as a married couple should be on their checklist. The IRS has tips and tools to help newlyweds consider how marriage may affect their taxes.

Here are five simple steps that can make filing their first tax return as newlyweds less stressful.

Step 1: Taxpayers should check their withholding at the beginning of each year, or when their personal circumstances change — like after getting married. Using the IRS Withholding Calculator is a good way for taxpayers to check their withholding. Taxpayers who need to change their withholding should complete and submit a new Form W-4, Employee’s Withholding Allowance Certificate, to their employer.

Step 2: Marriage may mean a change in name. If either – or both – of the newlyweds legally change their name, it’s important to report that change to the Social Security Administration. The names on the taxpayers’ tax return must match the names on file at the SSA. If it doesn’t, it could delay any refund.

Step 3: If a marriage means a change in address, the IRS and the U.S. Postal Service need to know. Newlyweds can file Form 8822, Change of Address, to update their mailing address with the IRS. They should notify the postal service to forward their mail by going online at USPS.com or by visiting their local post office.

Step 4: Taxpayers who receive advance payments of the premium tax creditshould report changes in circumstances to their Health Insurance Marketplace as they happen. Certain changes to household, income or family size may affect the amount of the premium tax credit. This can affect a tax refund or the amount of tax owed. Taxpayers should also notify the Marketplace when they move out of the area covered by their current Marketplace plan.

Step 5: Newlyweds should consider their filing status. A taxpayer’s marital status on December 31 determines whether they’re considered married for that full year. Generally, the tax law allows married couples to file their federal income tax return either jointly or separately in any given year. Taxpayers can use the Interactive Tax Assistant to determine which status is best for them.

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Important Notice May 2019 Increased Cap Amount in Effect from June 1, 2019, to May 31, 2020, for the Sales Tax Exemption for Electronic News Services

The cap amount for purposes of the sales tax exemption for sales or uses of electronic news services that occur from June 1, 2019, to May 31, 2020, is: $3,441. The new cap amount is an increase from last year’s amount of $3,285. Background The Tax Law provides an exemption from sales and use taxes for certain electronic news services. One of the conditions for the exemption is that the service must be sold at or below a cap amount. The cap amount is 300% of the annualized average daily newsstand price of the three newspapers with the largest total paid national daily circulation. The Tax Department must determine the cap amount annually by April 1 of each year, based on the prices charged for the three newspapers as described above, during the first week of January of each year. The cap amount will then apply for the succeeding twelve-month period beginning on June 1 and ending on May 31. For more information, see TSB-M-12(1)S, Sales and Use Tax Exemption for Electronic News Services and Electronic Periodicals. Note: An N-Notice is generally issued to announce a singular event, such as an update to a previously issued tax form or instruction, or to announce a new due date for filing returns and making payments of tax because of a natural disaster. The department does not revise previously issued N-Notices.

Research & Development Tax Credit

The Research & Development Tax Credit is a federal benefit (also available in many states) that was enacted to promote growth, innovation, and inspire advancements in all areas and facets of business. The credit is an undoubtedly beneficial incentive for businesses large and small. However, many companies are hesitant to take advantage of the credit for fear of a possible IRS audit. This is a common misconception. Taking a research credit on a timely filed return, including extension, does not increase your audit risk. Recent IRS statistics indicate that approximately .9% of all Corporate tax returns and .2% of pass-through (S-Corp and Partnership) tax returns are audited annually. When a return is selected, it can be for a variety of reasons including random selection. If a tax return is selected for review by the IRS, agents generally will focus on the most material items included on a return. The research credit tends to be one of the most material and effective items used by taxpayers to lower effective tax rates.

As such, properly detailed documentation goes a long way toward the sustainability of the credits claimed, which minimizes time, effort, and stress under IRS audit. Working with a qualified, ethical firm with integrity can abate many issues that could arise during an audit. Companies need to select a provider that can ensure the highest standard of documentation prepared during the study. Learning what to expect and how to be prepared in the event of an audit is highly recommended.

published by KBKG

#Home_office_deduction benefits eligible #small #business owners

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Small business owners may qualify for a #home office deduction that will help them save money on their taxes, and benefit their bottom line. Taxpayers can take this deduction if they use a portion of their home exclusively, and on a regular basis, for any of the following:

  • As the taxpayer’s main place of business.
  • As a place of business where the taxpayer meets patients, clients or customers. The taxpayer must meet these people in the normal course of business.
  • If it is a separate structure that is not attached to the taxpayer’s home. The taxpayer must use this structure in connection with their business
  • A place where the taxpayer stores inventory or samples. This place must be the sole, fixed location of their business.
  • Under certain circumstances, the structure where the taxpayer provides day care services.

Deductible expenses for business use of a home include:

  • Real estate #taxes
  • Mortgage #interest
  • Rent
  • Casualty losses
  • Utilities
  • Insurance
  • Depreciation
  • Repairs and Maintenance

Certain expenses are limited to the net income of the business. These are known as allocable expenses. They include things such as utilities, insurance, and depreciation.  While allocable expenses cannot create a business loss, they can be carried forward to the next year. If the taxpayer carries them forward, the expenses are subject to the same limitation rules.

There are two options for figuring and claiming the home office deduction.

Regular method
This method requires dividing the above expenses of operating the home between personal and business use. Self-employed taxpayers file Form 1040, Schedule C, and compute this deduction on Form 8829.

Simplified method
The simplified method reduces the paperwork and recordkeeping for small businesses. The simplified method has a set rate of $5 a square foot for business use of the home. The maximum deduction allowed is based on up to 300 square feet.

There are special rules for certain business owners:

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It’s not too late to check #IRS #payment options

IRS offers taxpayers convenient, secure ways to pay their taxes throughout the year. Taxpayers can pay:

  • Online
  • By phone
  • With their mobile device using the IRS2Go app

Additionally, some taxpayers must make quarterly estimated tax payments throughout the year. These taxpayers may include sole proprietors, partners, and S-corporation shareholders who expect to owe $1,000 or more when they file. Individuals who participate in the sharing economy might also have to make estimated payments.

There are several options for taxpayers who need to pay their taxes. They can:

  • Pay using their bank account when they e-file their return. Taxpayers can do this for free using electronic funds withdrawal.
  • Use IRS Direct Pay to pay their taxes, including estimated taxes. Direct Pay allows taxpayers to pay electronically directly from their checking or savings account for free. Taxpayers can also choose to receive email notifications about their payments. Taxpayers should remember to watch out for email scams. IRS Direct Pay sends emails only to users who requested the service.
  • Pay by credit or debit card through a card processor. There is a fee to pay this way. Taxpayers can make these payments online, by phone, or using their mobile device with the IRS2Go app.
  • Make a cash payment at a participating 7-Eleven store. Taxpayers can do this at more than 7,000 store locations nationwide. To pay with cash, taxpayers can visit IRS.gov/paywithcash and follow the instructions.
  • Spread out their payments over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.

More information: 
Electronic payment options
Topic No. 202: Tax Payment Options

IRS YouTube Videos:
Owe Taxes but Can’t Pay  –  English | Spanish | ASL

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New requirement applies to any business seeking a #tax_ID_number; #IRS offers data #security tips during National #Small #Business Week

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WASHINGTON — During National Small Business Week, the Internal Revenue Service wants small business taxpayers and the self-employed to know that, starting May 13, an important change will affect the way it issues employer identification numbers, or EINs.

With identity theft on the rise in the business community, the agency also offered business taxpayers tips and resources for protecting their data from theft.  

National Small Business Week is May 5-11. For more than 50 years, the week has recognized the important contributions of America’s entrepreneurs and small business owners.

EINs and responsible parties

Beginning May 13, only individuals with tax identification numbers – either a Social Security number (SSN) or an individual taxpayer identification number (ITIN) – may request an employer identification number. This new requirement, which was first announced by the IRS in March, will provide greater security to the EIN process by requiring an individual to be the responsible party and will also improve transparency.

An EIN is a nine-digit tax identification number assigned to sole proprietors, corporations, partnerships, estates, trusts, employee retirement plans and other entities for tax-filing and reporting purposes.

The change prohibits entities from using their own EINs to obtain additional EINs. The new requirement applies to both the paper Form SS-4, Application for Employer Identification Number, and online EIN applications.

Data security

Individuals are not the only ones who need to protect their identities. Businesses and other organizations, especially trusts, estates and partnerships, can also be victims of identity theft. For example, criminals may file Forms 1120 (corporations), 1120S (S corporations) or Schedules K-1 in their names. Last year, 2,450 businesses reported that they were victims of tax-related identity theft, a 10-percent increase over 2017.
 
Businesses and other organizations can help combat identity theft by educating their employees, clients and customers. They can share Publication 4524, Taxes. Security. Together: Security Awareness for Taxpayers, or create their own messages urging employees, clients or customers to protect their data and beware of phishing emails, the most common tactic used by criminals to steal data.

Businesses should also educate their payroll and human resources employees about a dangerous phishing scam. The Form W-2 scam tricks payroll and human resources employees into sharing employee wage and income information by posing as a company executive. See Form W-2/SSN Data Theft: Information for Businesses and Payroll Service Providers.

Businesses that retain sensitive financial data should review and update their security plan. Publication 4557, Safeguarding Taxpayer Data, provides a good starting point and includes helpful recommendations.

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