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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If you receive a letter from the IRS, don’t ignore it. You can usually deal with an IRS notice simply by responding to it. Most IRS notices are about federal tax returns. The notice will have specific instructions about what you need to do. You need to keep copies of any IRS notices you receive with your tax records. There are a lot of tax scams that correspond by email and phone calls. The IRS sends letters and notices by mail . If you owe tax, you have several payment options and the IRS won’t demand that you pay a
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Many students and teachers take summer jobs. Employees must fill out a Form W-4 so their employers will know how much federal income tax to withhold from their paychecks. The IRS has a Withholding Calculator Tool that can help employees determine the number to use for their withholdings. Social Security and Medicare Taxes will also be withheld from employee paychecks. Employers are required to provide employees with a W-2 by January 31 of the following year. Employees will need to use their W-2 to file their income taxes. Self-employed workers should make estimated tax payments to avoid penalties and interest
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Non Profit Organizations are required to annually file the appropriate tax return for their organization. Non Profit Organizations with annual gross receipts under $50,000 should file Form 990-N. Non Profit Organizations with annual gross receipts under $50,000 may choose to file Form 990 or Form 990 EZ. If so, these returns must be fully completed and filed before the due date to avoid penalty. Non Profit Organizations with annual gross receipts under $200,000 and assets under $500,000 should file Form 990-EZ or Form 990. Non Profit Organizations with annual gross receipts over $200,000 and assets over $500,000 should file Form
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April 18 was this year’s tax day. What happens if a taxpayer didn’t file or pay their taxes? If the taxpayer is due a refund there is no penalty to file a late tax return. If the taxpayer requested an extension of time to file their income tax return by the tax due date and they paid at least 90 percent of the taxes they owe, they may not face a failure-to-pay penalty. However, the remaining balance must be paid by the extended due date. Interest will be owed on taxes paid after the April 18 due date. If the
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Taxpayers who aren’t ready to submit their tax return can get an automatic six-month extension to file by filing Form 4868 with the IRS. Taxpayers who file extensions have until Oct. 17 to file their return. If the taxpayer is due a refund, there is no penalty for fling late. If the taxpayer has a tax liability, it must be estimated on Form 4868 and should also be paid. If the liability isn’t paid, penalties and interest will begin to accrue on April 19, 2016. Taxpayers can figure their late penalty and interest amounts by using the IRS Calculator. Tax
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Taxpayers who don’t have taxes withheld and who expect to owe at least $1000 in taxes when they file their tax return should make estimated tax payments throughout the prior tax year to meet their tax obligations and avoid penalties. This includes tax payers who are self-employed and also taxpayers who have retirement or investment income. Taxpayers can figure the amounts of their estimated payments by estimating their income and then deducting expenses and credits that they can claim. Once the amount is figured, it should be divided into 4 payments that should be paid quarterly. The due dates for
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Medical and Dental Expenses can only be deducted if they exceed 10% of a taxpayer’s adjusted gross income and the taxpayer itemizes their deductions on Schedule A.  If the taxpayer or their spouse is age 65 or older, then the total medical and dental expenses only need to exceed 7.5% of their adjusted gross income in order to claim the deduction.  This temporary threshold for taxpayers age 65 and older applies through December 31, 2016. Most medical and dental expenses that taxpayers pay themselves can be counted in the total.  Travel expenses for medical care can also be counted.  The
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