Yearly Archives 2016

When a move is closely related to the start of a new job, moving expenses incurred within one year of the job start date can generally be deducted. The following 2 factors are used to determine the eligibility of deducting moving expenses: 1) Distance: The new job location must be at least 50 miles farther from the taxpayer’s old home than the taxpayer’s previous job location. 2) Time: Taxpayers must work full-time at their new job for at least 39 weeks in the first year of the move. Self-employed taxpayers must work full-time for a total of at least 78
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The IRS published a bulletin with tax tips about taxes on home sales. Most gains on home sales aren’t subject to tax but exceptions and exclusions may apply. Please click here to read the full IRS bulletin.
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Taxpayers who pay for college in 2016 may receive tax savings on their federal tax return. These credits are available for study abroad education, too. Education credits are subject to income limitations and may be reduced or eliminated based on the taxpayer’s income. Taxpayers may only use qualified expenses to figure their education credit. Qualified expenses include the costs paid for tuition, fees and other related expenses for an eligible student to enroll at, or attend, an eligible educational institution. Items such as computers, books, and other school supplies can also be claimed as qualified education expenses. Items such as
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Most gifts are not subject to the gift tax. There is usually no tax when: –you give a gift to your spouse –you give a gift to a political organization for its use –you give a gift to a qualified charity –your gift to anyone besides your spouse or dependent does not exceed the annual exclusion –you’ve paid tuition or medical expenses directly to an educational institution or medical facility for anyone that you don’t claim as a dependent on your tax return (If you pay tuition or medical expenses for yourself, a spouse, or a dependent, you may be
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Employees may be able to deduct the amount of work-related expenses when they purchase items required for their job and they are not reimbursed for those expenses. Amounts spent on work-required expenses that are over two percent of an employee’s adjusted gross income may be deducted as an employee business expense. Schedule A is used to claim employee business expense deductions on individual tax returns.  Records such as receipts, cancelled checks, and credit card statements must be kept to prove the expenses that are deducted. Some costs that employees may be able to deduct include uniforms and other required work clothing
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Effective July 1, 2016, the Internal Revenue Service  lowered the application fee for organizations with annual gross receipts of $50,000 or less or assets of $250,000 or less to apply for 501(c)(3) tax exempt status.  The application fee is being lowered from $400 to $275. Organizations who meet income and asset requirements may use Form 1023EZ, to apply for 501(c)(3) tax exempt status. The $275 fee may be submitted through www.pay.gov. The IRS introduced Form 1023EZ in 2014 to streamline the process for small organizations to apply for tax-exempt status under Section 501(c)3 of the Tax Code.
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Happy 4th of July!  We are blessed to live in the USA.  As Americans we enjoy many freedoms and protections.  The Taxpayer Bill of Rights is listed below: The Right to Be Informed Taxpayers are entitled to clear explanations of the laws and IRS procedures on all tax forms, instructions, publications, notices and correspondence. Taxpayers have the right to know what they need to do to comply with tax laws. Taxpayers have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes. The Right to Quality Service Taxpayers have the right
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If you use your home for business, you may be able to deduct expenses for the business use of your home whether you rent or own your home. There are two methods that can be used to claim the home office deduction. If you use the simplified option just multiply the allowable square footage of your office by a rate of $5. The maximum footage allowed is 300 square feet. If you use the regular option, actual expenses must be calculated based on the percentage of your home devoted to business.  These expenses may include mortgage interest, insurance, utilities, repairs, and
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Sometimes tax returns need to be amended due to mistakes or omissions when the return is filed.  Here are some things to remember when amending a return: Tax return amendments must be paper filed using Form 1040X. Amended returns can take up to 16 weeks to process. Amendments should be filed to correct errors in filing status, income, deductions, or credits.  You do not need to file an amendment for math errors or for missing forms or information.  The IRS will correct math errors and send you a request for missing forms or information. Generally, taxpayers have 3 years from the
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If you make quarterly estimated tax payments, don’t forget that the 2nd quarter estimate is due on June 15th. Now is a good time to be thinking about next year’s taxes. There are several ways you can begin preparing for the 2017 tax season: 1) If you have a life change such as marriage, divorce, death of a spouse, birth of a child, a child not being claimed as a dependent anymore, or changes in your income, you should change your withholdings or quarterly estimated tax payment amounts to reflect the change. Life changes could also affect health care tax
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