Single A taxpayer is unmarried if: The taxpayer has never married, The taxpayer was legally separated, according to state law, under a decree of divorce or separate maintenance. The taxpayer’s spouse died before January 1, of the filing year, and the taxpayer did not remarry in the filing year. If the taxpayer meets the definition of unmarried, file as Single unless the requirements for one of the following filing statuses are met. Head of Household, [...]
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If you use your automobile for business, you may be entitled to tax deductions. Unless your car is used exclusively for business, you cannot claim a 100% business deduction. Deducting auto expenses requires diligent recordkeeping. There are two methods available for calculating your auto deductions—the standard mileage rate or actual expenses. These methods are available regardless of whether you own or lease your vehicle. Taxpayers who wish to use the standard mileage rate [...]
Gift Tax There is no dollar limit on the amount that one person is allowed to give to another. Gift tax rules do not prohibit a donor from making gifts in excess of the annual exclusion ($14,000 for 2017). However, if more than the annual exclusion is given to any one recipient, the amount over the annual exclusion is considered a “taxable gift.” Consequences of making taxable gifts: Donor is required to file a gift tax return (Form 709) for the [...]
One advantage of operating your own business is hiring family members. Not only is this a great way to teach your kids work ethics and money-management skills, but there are tax saving benefits to hiring your children as well. When your children are under age 18, you are not required to withhold social security and Medicare taxes from their wages. You are not required to pay federal unemployment taxes on their wages either until they reach age 21. Your children (or [...]
Estimated Taxes The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay as you go, either by employer withholding or estimated tax payments. Employer withholding If you are an employee, your employer generally withholds income tax from your pay. In addition, tax may be withheld from certain other income such as pensions, bonuses, commissions, and gambling winnings. [...]
Last month, the IRS started turning over to private collection agencies (PCA) the accounts of individual taxpayers who have inactive tax receivables. The IRS will be using these four collection agencies: ConServe Pioneer Performant CBE Group If your debt has been turned over to a PCA, the IRS will first notify you with a letter (CP40) that provides the name of the agency and a Taxpayer Authentication Number. The PCA will then contact you with a [...]
If you've been procrastinating on preparing and filing your tax return, you might be considering filing an extension. While obtaining a 6-month extension to file is relatively easy, there are both pros and cons to filing an extension. If you need to file an extension, here's what you need to know. What is an Extension? An extension of time to file is a formal way to request additional time from the IRS to file your tax return, which is [...]
Have you filed your taxes yet? With the April 18 tax filing deadline approaching, here are some last minute filing tips: Stop Procrastinating: Call your accountant and schedule an appointment as soon as possible. It takes time prepare accurate tax returns and additional information from you may be necessary to complete your returns. Include All Income: Make sure to include all income to avoid liability for penalties and interest on unreported income. Report income from side jobs [...]
The Treasury Inspector General for Tax Administration (TIGTA) has been actively tracking down and bringing to justice those who make phone calls impersonating IRS employees in an attempt to scam innocent taxpayers. Although TIGTA has recently been instrumental in prosecuting some of these scammers, there is still concern that the perpetrators will attempt to ramp up their criminal activity at any time. Remember that the IRS will not contact you by phone with threats for [...]
When cleaning out your household files, make sure you don’t throw out items that you might need in the future! The main reason to save tax records is to substantiate the information reported on your tax return. For most federal returns, the statute of limitations—the time frame the IRS has to audit a tax return—is three years from the date the tax return was due. That time period is extended to six years if gross [...]