Dec 292016
 
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Beginning on January 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 53.5 cents per mile for business miles driven, down from 54 cents
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents
  • 14 cents per mile driven in service of charitable organizations

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Jun 132015
 
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We are quickly approaching the middle of the 2015 tax year.  You should know how to pay far less taxes this year and every future year for that matter.

If you paid too much in taxes last year, you do not want to miss this web briefing!  I don’t recommend training unless it’s something I know you will get valuable information from that will improve your financial situation.

In this webinar, you will learn:

  • Research by Small Business Tax Strategies concluded “Small Businesses OVERPAY the IRS by an average of $11,638.”
  • WHY is nearly EVERY small business owner OVER-PAYING their TAXES???

Surprisingly, the answer is not complicated.

If you’re paying your taxes and there is a line (or several lines) on the tax forms asking for your deductions, but you don’t know about any deductions, you will OVERPAY your taxes.

That’s why nearly all small business owners are overpaying their taxes – they are completely unaware of some major tax deductions they can
easily qualify for.

There is no reason the IRS should be able to suck tons of extra cash out of you just because they have hidden important tax deduction information from you.

The truth is, small business owners get more tax deductions than any other category of taxpayer in America, bar none!

Isn’t it time you knew what they are?

TOMORROW, Sunday, June 14th, 2015, my friend Ron Mueller will reveal ALL of the SIX BIGGEST deductions, and he’ll tell you exactly how to qualify for all of them.

GET THE DETAILS TOMORROW, Sunday, 6/14/2015, DURING A FREE WEB BRIEFING

Learning and using just SIX specific tax deductions, that ONLY small and home based business owners can qualify for, can easily slash this year’s taxes by up to $3,000 to $5,000 or more.

He will conduct this live, FREE web briefing ONE FINAL TIME, tomorrow, Sunday, 6/14/2015.

6:00 pm Pacific time
7:00 pm Mountain time
8:00 pm Central time
9:00 pm Eastern time
To REGISTER for SUNDAY, Click HERE

After this web briefing, you will be able to immediately:

  • STOP OVERPAYING Your TAXES!
  • SLASH them to the MINIMUM required by LAW!
  • Keep More of YOUR Money in YOUR Pocket!

WARNING: If you have a small or home based business – even on a very part-time basis – and you are NOT using these SIX specific deductions, you are very likely OVERPAYING your TAXES by AT LEAST $3,000, and probably even more.

After the webinar, feel free to contact me with additional questions or for more information related to how to pay far less taxes this year.

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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May 242015
 
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Facts about Filing an Amended U. S. Individual Income Tax Return

You’ve filed your tax return and received your refund and later discover that you left out a tax document.  Perhaps it was an oversight or you received a tax document after filing your return.  You may also need to make a correction to the information previously reported or for some other reason.  How do you handle this situation?  Generally, filing an amended U. S. individual income tax return is the solution.

There are nine points you should know about when filing an amended U. S. individual income tax return:

  1. Use Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended income tax return.
  1. Use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ.  An amended return cannot be filed electronically, thus you must file it by mail.  It’s always best to use a method of mailing which allows for tracking so that you can confirm the IRS received your return.  This is also true for original returns filed by mail.
  1. Generally, you do not need to file an amended return due to math errors.  The IRS will automatically make that correction.  Also, do not file an amended return because you forgot to attach tax forms such as W-2s or schedules.  The IRS normally will send a request asking for those.
  1. Be sure to enter the year of the return you are amending at the top of Form 1040X.  Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.
  1. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS address.  The 1040X instructions list the addresses.
  1. If the changes involve another schedule or form, you must attach that schedule or form to the amended return.
  1. If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X.  You may cash that check while waiting for any additional refund.
  1. If you owe additional tax, file Form 1040X and pay the tax before the due date to limit interest and penalty charges that could accrue on your account.  Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.
  1. Your state tax liability may be affected by a change made on your federal return.  For information on how to correct your state tax return, contact your state tax agency.

Filing an Amended U. S. individual income tax return can be a complex and confusing task.  For assistance with preparing and filing Form 1040X, you may wish to seek the services of a professional tax preparer.  For more information contact me via the form below.

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Jan 132015
 
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​2015 Payroll Tax Changes

The 2015 Social Security wage base has increased from $117,000.00 to $118,500.00. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore, all covered wages are still subject to the 1.45 percent tax.

Wages paid in excess of $200,000 in 2015 will be subject to an extra 0.9 percent Medicare tax.

The FICA tax rate, which is the combined Social Security tax rate of 6.2 percent and the Medicare tax rate of 1.45 percent remains at 7.65 percent for 2015. The maximum social security tax employees and employers will each pay in 2015 is $7,347.00.

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Jan 092015
 
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Taxpayer Bill of Rights

Every taxpayer has a set of fundamental rights. You should be aware of these rights when you interact with the Internal Revenue Service.

The “Taxpayer Bill of Rights” takes the many existing rights in the tax code and groups them into 10 broad categories. That makes them easier to find and to understand.

You can find a list of your rights and the IRS’s obligations to protect them in Publication 1, Your Rights as a Taxpayer. It includes the following:

1. The Right to Be Informed.
Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

2. The Right to Quality Service.
Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS and to speak to a supervisor about inadequate service.

3. The Right to Pay No More than the Correct Amount of Tax.
Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

4. The Right to Challenge the IRS’s Position and Be Heard.
Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

5. The Right to Appeal an IRS Decision in an Independent Forum.
Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

6. The Right to Finality.
Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

7. The Right to Privacy.
Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections, and will provide, where applicable, a collection due process hearing.

8. The Right to Confidentiality.
Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer return information.

9. The Right to Retain Representation.
Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.

10. The Right to a Fair and Just Tax System.
Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.

The IRS is trying to increase the number of Americans who know and understand their rights under the tax law. To expand awareness, the IRS is making Publication 1 available in multiple languages on IRS.gov. This important publication is available in English, Chinese, Korean, Russian, Spanish and Vietnamese.

The IRS will include Publication 1 when sending notices to taxpayers on a range of issues, such as an audit or collection matter. All IRS facilities will publicly display the rights for taxpayers and employees to see.

The IRS released the Taxpayer Bill of Rights following extensive discussions with the Taxpayer Advocate Service. TAS is an independent office inside the IRS that represents the interests of U.S. taxpayers.

If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to follow this blog, subscribe to my newsletter or request additional information using the form below. Also, you may visit my my website at R. Darren Sanford, CPA.

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Dec 242014
 
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Season’s Greetings!

Sorry for the delay in my blog post.  I was hoping the Tax Extenders would be final before the 18th.  The President signed the bill (Tax Increase Prevention Act) on Friday, December 19.  I have some important information listed, so please read.  This extension ends December 31, 2014.

First of all, for those of you who pay estimated tax payments, the due date for the fourth quarter of tax year 2014 is January 15, 2015.  If you are not in the AMT tax bracket, please pay your state estimated tax payment on or before December 31, 2014 so you can get the tax deduction on your 2014 tax return.

Mileage rates for 2015:  57.5 cents for business use, 23 cents for medical/moving, and 14 cents for charity.

Tax Extenders for 2014 include, but are not limited to, the following:

  • The deduction for mortgage insurance premiums.
  • A provision allowing persons over age 70-1/2 to make tax-free withdrawals from their Individual Retirement Accounts (IRAs) to make charitable contributions.
  • Debt Forgiveness exclusion for a personal residence.
  • The educator expense deduction-adjustment to income of up to $250 for grade K-12 educators.
  • Tuition and fees deduction-adjustment to income up to $4,000.
  • Deduction for state and local general sales tax as an itemized deduction (Schedule A) for sales tax in lieu of state income tax.
  • Nonbusiness energy property credit-up to $500 maximum lifetime credit for qualified energy efficient home improvements (windows, furnaces, etc.).
  • Electric drive vehicle credits-the credit for two-and three-wheeled vehicles has been extended.  (The provisions for low-speed electric vehicles expired).
  • The credit for plug-in electric drive motor vehicles, such as the Nissan Leaf or Chevy Volt, is still available.
  • Energy-efficient appliance credit.

Provisions affecting businesses:

  • Bonus Depreciation allowing an additional first year deduction of 50 percent of the cost of new equipment.
  • Enhanced Section 179 Expense Limitations allowing for the expense of $500,000 on acquired property for business use.
  • New markets tax credit.
  • Wage credit for employers of uniformed active duty service personnel.
  • Work opportunity tax credit.
  • Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements.
  • Enhanced charitable deduction for contributions of food inventory.
  • Incentives for biodiesel and renewable diesel.
  • Alternative fuels excise credit.

For a detailed list of all tax extenders related to tax year 2014, click here.

Feel free to contact me if you have any questions.

************************************************

Thanks for taking your time to read this.

Sincerely,

R. Darren Sanford, CPA, CGMA

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Dec 192014
 
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Tell the IRS about Suspected Tax-Exempt Status Abuses

Logo of the Internal Revenue Service

Logo of the Internal Revenue Service (Photo credit: Wikipedia)

Go ahead and complain. The Internal Revenue Service (IRS) is all ears – particularly about complaints alleging any abuse of the tax-exempt status granted to a non-profit organization.

When reviewing filed complaints, the IRS follows special procedures that enable it to treat all organizations fairly and without outside influence.

A complaint – which the IRS calls a referral – is any communication alleging a tax-exempt organization is in potential noncompliance with the tax law. Every year, the IRS receives complaints from the public, members of Congress, federal and state government agencies, and internal sources.

Referrals go to analysts at the Exempt Organizations Classifications Office in Dallas, TX. The IRS sends an acknowledgement letter to all non-IRS sources making a referral, unless it was made anonymously.

The IRS cannot disclose whether it has initiated an examination or the results of an examination. In fact, the source of a referral only receives an
acknowledgement letter.

Classification experts confirm the identity of the referred organization. A revenue agent then performs a technical analysis of the allegation and decides one of the following:

  • The information does not warrant further action. The agent inputs information, including rationale, into the “referral database” and closes the referral.
  • The referral relates to activities that should be considered at a futuredate. The agent documents information in the database and schedules the appropriate date to re-evaluate it.
  • The referral contains characteristics that require it to be forwarded to acommittee of career EO managers and agents. The committee evaluates referrals and decides whether to proceed with an examination.
  • The information warrants an examination of the organization. The agent documents the reasons for his decision in the database and the information becomes part of the examination file.

When the IRS decides to examine an organization, the classification office will forward the case to a field group for assignment to a revenue agent. The agent will contact the organization and schedule an appointment to begin the examination.

To make a referral of a tax-exempt organization, submit Form 13909, Tax-Exempt Organization Complaint (Referral) Form.

Form 13909, and any supporting documentation, can be submitted in a variety of ways:

  • Mail to IRS EO Classification, Mail Code 4910DAL, 1100 Commerce St., Dallas, TX 75242-1198
  • Fax to 214-413-5415, or
  • Email to eoclass@irs.gov.

The IRS takes all complaints seriously and scrutinizes all referrals.

For more information on this or other IRS topics, go to IRS.gov.

Helpful links:

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Dec 102014
 
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The new standard mileage rates for 2015 are now available.

The Internal Revenue Service today issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 57.5 cents per mile for business miles driven, up from 56 cents in 2014
  • 23 cents per mile driven for medical or moving purposes, down half a cent from 2014
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.

Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.

It’s important to note, however, that a taxpayer cannot go from using actual expenses, including accelerated depreciation and the Section 179 deduction, to the standard mileage rate method.  Also, the standard mileage rate is not available to fleet owners (more than four vehicles used simultaneously). Details on these and other special rules are in Revenue Procedure 2010-51, the instructions to Form 1040 and various online IRS publications including Publication 17, Your Federal Income Tax.

Besides the standard mileage rates, Notice 2014-79, posted today on IRS.gov, also includes the basis reduction amounts for those choosing the business standard mileage rate, as well as, the maximum standard automobile cost that may be used in computing an allowance under a fixed and variable rate plan.

Be reminded that while using the standard mileage rate is simpler, it still requires some record keeping.  Proper documentation should be maintained including the date, the origin and destination of travel and the purpose of the trip.  This documentation is required when answering the question related having a written record of the mileage claimed for tax return purposes.

For more information or assistance with standard mileage rates for 2015, feel free to contact me via the form below:

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Oct 172014
 
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The new health care law has been a topic of much controversy.  While the primary focus of this new law is health insurance, it does contain income tax ramifications.

Have you been affected by the new health care law and if so, how?

English: U.S. Health Insurance Status (Under 65)

English: U.S. Health Insurance Status (Under 65) (Photo credit: Wikipedia)

Post by Darren Sanford.

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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Jul 302014
 
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I had put it on some time ago. I kept it on everywhere I had a presence. I was submissive and had a desire to be obedient.  The ramifications of not doing as the master said weren’t nearly as pleasurable as complying with my master’s commands.

Having become a creature of habit, and not wanting to displease my master, I had put it on everywhere. Having quite the presence online, I had it on in lots of places. You could see on me in my blog posts, my web page, my social media posts. Everywhere I was, I had it on.

Now, after months of making sure I’d covered my a**, I’m told to TAKE IT OFF!

Yep. In a webinar presented by the Office of Professional Responsibility, Karen Hawkins told me to take it off. I no longer have to include the Circular 230 disclaimer at the bottom of my emails, in my tax advice blog posts, or any other place where I contribute information related to the U.S. tax laws. In fact, if I keep it on, I can be reprimanded which I’m sure won’t be a pleasure.

Because I’m still seeing so many areas where the disclaimer is being worn, I want to make you aware of the rule change. As a reminder, it is your responsibility to keep up with the rules contained in Circular 230. If you haven’t complied with the rule, I encourage you to TAKE IT OFF!

You can find the Circular 230 Overview at http://www.irsvideos.gov/Circular230Overview_June_25_2014/

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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