Organizations Take These Easy Steps To Apply For Tax-Exempt Status

Organizations take these easy steps to apply for tax-exempt status Some taxpayers think simply creating a nonprofit automatically means an organization is tax exempt. There’s more to it than that. To become a tax-exempt nonprofit, there are few things the group must do up front. An organization must determine whether it’s a trust, corporation or association. They then must apply for tax-exempt status with the IRS and be approved. This process includes these steps. 1. Gather documents about the organization An organization applying for tax-exempt status must have organizing documents. Each application must be accompanied by an exact copy of the organizing documents, except for
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Good Record Keeping Is Just Good Business

Record keeping is an important part of running a small business. In fact, keeping good records helps business owners make sure their business stays successful. Here are some things small business owners should remember about record keeping: Good records will help business owners: Monitor the progress of their business Prepare financial statements Identify income sources Keep track of expenses Prepare tax returns and support items reported on tax returns Small business owners may choose any record keeping system that fits their business. They should choose one that clearly shows income and expenses. Except in a few cases, the law does not
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IRS Announces 2020 Retirement Contribution Limits

WASHINGTON — The Internal Revenue Service announced that employees in 401(k) plans will be able to contribute up to $19,500 next year. The IRS announced this and other changes in Notice 2019-59 (PDF), posted on IRS.gov. This guidance provides cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020. Highlights of changes for 2020 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500. The catch-up contribution limit for employees aged 50 and over who participate in these plans
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Four Common Tax Errors That Can Be Costly For Small Businesses

A small business owner often wears many different hats. They might have to wear their boss hat one day, and the employee hat the next. When tax season comes around, it might be their tax hat. They may think of doing their taxes as just another item to quickly cross off their to-do list. However, this approach could leave taxpayers open to mistakes when filing and paying taxes. Accidentally failing to comply with tax laws, violating tax codes, or filling out forms incorrectly can leave taxpayers and their businesses open to possible penalties. Using IRS Free File or a certified public accountant is the
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Using Strong Passwords is a Strong Defense Against Identity Thieves

Two things taxpayers can do to prevent themselves from identity theft is to use strong passwords and keep those passwords secure. While many people use fingerprint or facial recognition technology to protect their devices, sometimes it’s still necessary to use a password. In recent years, cybersecurity experts’ recommendations on what constitutes a strong password has changed. With that in mind, here are four tips for building a better password: Use word phrases that are easy to remember rather than random letters, characters and numbers that cannot be easily recalled. Use a minimum of eight characters; longer is better. Use a
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IRS Revises Form 1023

IRS revises Form 1023 for applying for tax-exempt status; New electronic filing available to help charities WASHINGTON – As part of an ongoing effort to improve service for the tax-exempt community, the Internal Revenue Service has revised Form 1023 to allow electronic filing for the first time starting later this month. To help charities apply for Section 501(c)(3) tax-exempt status, the IRS has revised Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and its instructions. “Filing electronically reduces errors, and we believe this will help provide a smoother application process for those seeking
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Gig Economy Tax Center on IRS.gov

IRS helps workers, businesses with new Gig Economy Tax Center WASHINGTON — The Internal Revenue Service this week launched a new Gig Economy Tax Center on IRS.gov to help people in this growing area meet their tax obligations through more streamlined information. “The IRS developed this online center to help taxpayers in this emerging segment of the economy,” said IRS Commissioner Chuck Rettig. “Whether renting out a spare bedroom or providing car rides, we want people to understand the rules so they can stay compliant with their taxes and avoid surprises down the line.” The gig economy is also known as
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2020 Mileage Rates

The IRS issued the 2020 optional standard mileage rates (PDF) used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019, 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and 14 cents per mile driven in service of charitable organizations.
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4 Common Tax Errors That Can Be Costly For Small Businesses

IRS TAX TIP 2019-164 Four common tax errors that can be costly for small businesses A small business owner often wears many different hats. They might have to wear their boss hat one day, and the employee hat the next. When tax season comes around, it might be their tax hat. They may think of doing their taxes as just another item to quickly cross off their to-do list. However, this approach could leave taxpayers open to mistakes when filing and paying taxes. Accidentally failing to comply with tax laws, violating tax codes, or filling out forms incorrectly can leave taxpayers and
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2020 Tax Year Inflation Adjustments

IR-2019-180, November 6, 2019 WASHINGTON — The Internal Revenue Service today announced the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2019-44 (PDF) provides details about these annual adjustments. The tax law change covered in the revenue procedure was added by the Taxpayer First Act of 2019, which increased the failure to file penalty to $330 for returns due after the end of 2019. The new penalty will be adjusted for inflation beginning with tax year 2021. The tax year 2020 adjustments generally are used on tax
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