What Should Non-Filing Taxpayers Do?
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Are you someone who hasn’t filed your taxes with the IRS in several years? Are you scared, stressed, and unsure what to do? Perhaps you haven’t filed for one of the following reasons:
- Catastrophic events in your personal life
- Death in your family
- A failed business
- Failed relationships
And now, you’re trapped in a position where you believe that if you come clean with your actions, you’ll get sent to jail. Fortunately, the IRS only prosecutes the most egregious cases of non-filing, and the occasional common person in order to demonstrate a point.
If you choose to approach the IRS about non-filing, in most cases they will work with you. The term for the process of approaching the IRS to resolve your delinquent taxes is “voluntary compliance.”
Once you have identified with the IRS as someone who is providing “voluntary compliance,” it is important to be accurate and truthful. If the IRS believes any of your late-filed returns are dishonest, your chances of prosecution skyrocket.
In order to qualify for “voluntary compliance” status, you must:
- Voluntarily notify the IRS of each year you failed to file
- Have income from only legal sources
- Approach the IRS prior to being criminally investigated
- Cooperate with the IRS in determining your correct tax liability
- Pay the full amount due or make arrangements to do so if you are unable
It’s better to file your taxes late than not at all. The IRS is typically willing to create installment payment plans for those who are unable to pay in full right away. You may also qualify for an offer in compromise, which forgives all or part of your tax liability.
What Happens If I Never File?
If you choose not to file voluntarily, you may eventually face criminal prosecution by the IRS. More commonly, if you were owed a refund in the past 3 years, you may lose it if you don’t file. If you did owe money, your interest and penalties will continue to grow.
If you approach the IRS, however, they may be willing to forgive some of your interest and penalties.
Additionally, the IRS may file a tax return on your behalf. In this case, the IRS prepares a tax return in its own best interest. This tax return may not give your credit for deductions and exemptions for which you may normally be entitled.
It’s Always Best to Approach the IRS!
No matter what way you look at it, it’s always best to approach the IRS than to say nothing at all. If you use the assistance of an experienced tax attorney, your chances of receiving a favorable outcome dramatically increase.
About the Author:
Jeff Fouts is a tax attorney. If you are a “non-filer,” use the help of an experienced tax attorney or other tax professional to deal effectively with the IRS.
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- What to Do When You’re Struggling With Taxes
Should You File a Tax Return?
Do you ever wonder whether your income is high enough to warrant the filing of a tax return? Because the minimum income level varies depending on filing status, age, and the type of income you receive, it can be a bit complicated.
Use the following guide to determine whether you must file a federal income tax return for 2010.
Single Taxpayers
If you expect to file a single return, the IRS requires you to file a return for 2010 if your gross income for the year is at least $9,350 if you are under age 65 and $10,750 if you are 65 or older.
Married Filing Jointly
For married persons filing jointly, you are required to file a return if gross income for 2010 is at least $18,700 if both of you are under age 65. If one of you was at least age 65 in 2010, the limit is $19,850 – and if both of you were 65 or over, you must file if you made at least $20,900.
If you are not living with your spouse at the end of the year or you weren’t living with them on the day they passed away, the IRS requires you to file a return if your gross income is at least $3,650. Each personal exemption in 2010 is worth $3,650.
For married persons filing a separate return, no matter what age, you must file a return if gross income is at least $3,650.
Head of Household
For persons filing as head of household, you must file a return for 2010 if gross income is at least $12,000 if under age 65 and $13,400 if at least age 65.
Qualifying Widow or Widower
For persons filing as a qualifying widow or widower with a dependent child, you must file a return for 2010 if gross income is at least $15,050 if under age 65 and $16,150 if at least age 65.
Other Situations That Require Filing
Even if you don’t earn this much income, other situations necessitate filing a tax return. For example, a dependent has to file a return for 2010 if they received more than $950 in unearned income or more than $5,700 in earned income.
Other situations include:
You Owe Certain Taxes. If you owe FICA or Medicare taxes (also called payroll taxes) on unreported tips or other reported income that were not collected, you must file a return. You must also file a tax return if you are liable for any alternative minimum tax. Finally, you must file a return if you owe taxes on individual retirement accounts, Archer MSA accounts, or an employer-sponsored retirement plan.
Advance Earned Income Tax Credit Payments. The Earned Income Tax Credit is a federal income tax credit for eligible low-income workers. The credit reduces the amount of tax an individual owes, which may be returned in the form of a refund. If you receive advance payments for the earned income credit from your employer, you must file a return.
Self-Employment Earnings. If your net earnings from self-employment are $400 or more, you must file a return.
Church Income. If you earn employee income of at least $108.28 from either a church or a qualified church-controlled organization that is exempt from employer-paid FICA and Medicare taxes, you must file a return.
Questions?
Contact me for more information about filing requirements and your eligibility to receive any tax credits.
Form 1099 Rules & Regulations
Here are some guidelines to help determine if a vendor needs to be set up as a 1099 vendor.
Who must file Form 1099?
Persons engaged in a trade or business must file Form 1099 MISC when certain payments are made. A person is engaged in business if he or she operates for profit; thus, personal payments aren’t reportable.
Payments to Report
A Form 1099 MISC must be filed for each person to whom payment is made of:
- $600 or more for services performed for a trade or business by people not treated as employees;
- Backup Withholding (all amounts);
- Rent or prizes and awards that are not for service ($600 or more) and royalties ($10 or more);
- All payments to crew members by owners or operators of fishing boats;
- Payments of $600 or more to a supplier of health and medical services; and
- Crop insurance proceeds.
Payments made to corporations, except those made for medical or health care services and attorney fees, are not required to be reported on Form 1099 MISC.
Non-Employee payments – Non-employee payments are reported in Box 7 of Form 1099 MISC. Non-employee payments include fees, commissions, prizes and awards, and other forms of compensation provided for services performed for a trade or business by an individual who is not an employee. If the following four conditions are met, a payment generally is reportable as non-employee compensation:
- The taxpayer made the payment to someone who is not an employee;
- The payment was made for services in the course of a trade or business;
- The payment was made to someone other than a corporation; and
- Payments of at least $600 were made to the payee during the year.
Real Estate Agents
Real estate agents must report on Form 1099 MISC rents collected for property owners before deduction of commissions, fees, or other expenses if the amount paid to any one property owner totals $600 or more during the calendar year.
Payments for Services
When a business pays an independent contractor for services performed in the course of that business, the service recipient must file Form 1099 MISC if the payment is $600 or more for the year, unless the service provider is a Corporation.
Direct Sales
The law requires information reporting on Form 1099 MISC for certain direct sellers. This requirement applies to persons who, in the course of a business, sell consumer products on a buy/sell basis, deposit/commission basis, or any similar basis to any buyer who (1) sells such product in a home or other than in a store or (2) sells these products to another seller. Sales of $5000 or more are reportable.
Deceased Employee Wages
If an employee dies during the year, the employer must report the accrued wages, annual leave pay, and other compensation paid to an estate or beneficiary after death on Form 1099 MISC; this applies whether the payment is made in the year of death or after the year of death.
Listed below are a few examples of payments that should be reported on Form 1099-MISC
Medical Services
- Medical & Dental Services
- Hospitalization
- Medical Assistance Benefits
- All payments to Medical Service Corporations
Non-Employee Compensation
- Occasional Salaries & Wages (to Non-Employees)
- Professional Service Payments
- Advertising
- Appraisal
- Architectural
- Attorney
- Auditing
- Board Members
- Chaplains
- Computer Programming
- Consulting
- Design & Testing
- Engineering
- Evaluation Consultant
- Graphic Artist
- Institution Contracts
- Teacher/Instructor
Maintenance & Repairs
- Commercial Repairs – Hwy Vehicles
- Contracted Repairs
- Computer Repairs
- Extermination Services
- Janitorial Services
- Maintenance Agreements
- Protection & Security Services
Law Enforcement & Court Services
- Court Reporters
- Court Appointed Workers
- Expert Witnesses
- Prison Labor Allowance
- Non-Employee Allowance
Other Services
- Armored Car
- Cleaning
- Construction
- Keypunch
- Laundry
- Parcel & Delivery
- Printing
- Refuse Collection
- Security
Rents (except rent paid to real estate brokers)
- Real Property
- Other Property
Note: This is only a partial listing of accepted 1099 MISC Vendors. If a vendor is entered as a 1099 vendor and it doesn’t look correct, the Vendor Maintenance team will research the problem. It may mean a phone call to the person who entered the vendor or a phone call to the vendor directly.
For more information Please visit my company website. L & R Tax Preparation.
A Week in Perspective
HERE I GO ONE MORE TIME – This message cannot be repeated often enough
Don’t miss the Articles that TWTP is putting out over at mainstreet.com
How to Save the American Dream
IRS Increases Tax Deduction for Drivers
5 Money Moves to Make Before Year-End – I have thought about my finances and some things I need to do as the year comes to a close. There are tons of year-end money lists out there and they all talk about decreasing taxes, selling investments, and saving for retirement. There are a few other things I like to think about when the year ends.
“Be always at war with your vices, at peace with your neighbors, and let each New Year find you a better man.”
- Benjamin Franklin
Why None of Your Credit Scores are the Same – Many people are rather surprised when they look at their credit scores and see that they don’t match up. A credit score may differ across different credit bureaus, and those scores are often a little bit different than what you see when you get your score from FICO. Sometimes the difference is more than a “little.” In some cases, you might find that your credit scores vary by up to 20 points — or more. Why is this?
I try not to place things in here that promote advertising as the first thing you see when you get there but you need to see this article.
How To Instantly Increase Your Motivation For Sticking to Your Budget?
Tax Carnival #77: Stocking Stuffers 2010
2011 Mileage Rates Released – Despite the fact that many predict that the cost of gas will inch up to $4 per gallon by the holidays, the standard mileage rates for 2011 are just slightly different than those for 2010. The IRS has announced the standard mileage rates for 2011 as follows:
Free Spreadsheet to Track Business Expenses for Schedule C
I only lie to the IRS and my CPA, not to you! – Sometimes being too clever in doing taxes can come back to haunt a small business owner, as Steve Sink explains at IowaBiz.com:
How Do Banks Make Money? – Banks are in the business of money. Some companies sell goods and others sell services, but banks are in the money business. From credit cards to personal loans to mortgages, banks make money the old fashioned way. . .
Section 179: First, you have to have a business – The Section 179 deduction will be a huge part of year-end tax planning for countless business taxpayers this year. The ability to take a current deduction for the purchase of equipment that would otherwise be capitalized and depreciated opens many planning doors. But there are limits, as a Nevada tax preparer learned yesterday in Tax Court.
This weeks, must read – Struggling With an Ongoing Issue? Ask Yourself This
Are You Ready For The Big Payroll Tax Deposit Change? – The IRS is changing the rules in a BIG way, when it comes to payroll and corporation tax deposits. Are you going to be ready for this new change? If not, you don’t have long to get ready! The new change goes into effect on January 1, 2011. I got a letter from the IRS today that really surprised me. It said that starting on January 1st, I was no longer able to make manual payroll…
Opportunity is missed by most people because it is dressed in overalls and looks like work.
–Thomas A. Edison
And the big news last week: A proposal. . . .
THE FIRST STEP – It appears that BO has agreed to a final compromise with the Republicans to “get ‘er done” and temporarily extend the “Bush” tax cuts for two years.
How the Tax Deal Affects Taxpayers – President Barack Obama called the bipartisan tax agreement announced on Monday a “framework.” As yet there is no legislative language or even a comprehensive outline of the proposals, and its passage by Congress isn’t assured.
Small-Business Groups Parse Tax Deal – The trade group estimates that 75% of small-business owners pay taxes for their establishments at the individual level because those concerns are either S corporations, limited liability companies or sole proprietorships. Under the president’s proposal, such entrepreneurs would continue to be eligible for tax cuts available to couples earning more than $250,000 a year for at least the next two years.
What to Do With a Payroll Tax Cut – Working taxpayers will get a little, temporary raise, if the payroll tax reduction in the tax agreement reached by Congress goes into effect. It’s not life-changing money – the benefit tops out at $2,100 per year for anyone making $106,800 or more – but it is enough to have a ripple effect if used wisely.
Bush Tax Cuts Extended As Part of Unemployment Insurance Extension and Payroll Tax Deal
Payroll Tax Cut and Social Security Benefits – News came President Obama and Republicans agreed to a “payroll tax holiday” in 2011. For one year only, an employee’s portion of the Social Security tax will be reduced from 6.2% to 4.2%. This will replace the Making Work Pay tax credit in effect in 2009 and 2010.
Obama Woos Wary Party on Tax Deal – Democrats criticized the broad tax package for cutting taxes on high earners and setting tax rates too low on large inheritances, as well as for its effect on the country’s budget deficit. But Democrats also said they didn’t yet see a revolt spreading so far that it would derail the agreement in the Senate. Prospects for passage are more uncertain in the House, where many liberal members are balking at planned changes to the estate tax.
Defiant Obama defends tax cuts, eyes 2012 – WASHINGTON (AFP) – US President Barack Obama has come out fighting, urging Democratic allies to back a hard-won compromise deal on tax cuts and putting Republicans foes on notice ahead of the 2012 elections.
In face of criticism from many on the left of the Democratic Party, Obama passionately defended the deal that will see tax breaks extended for the wealthiest Americans saying his critics had to take a long-term view.
What the Tax Deal Means for You – The entire package would cost about $900 billion over the next two years, and would be paid for entirely by adding to the national debt. Here’s what it means for your pocketbook (this information was culled from our main story; we’ll update with more details later):
And you must read this from Kelly!
The Morning After: The Tax Deal Hangover – I’ll admit that I didn’t see yesterday’s tax deal coming. I was fairly certain that the drama would play out through this week. We still have drama but now it’s more of the “let me explain” variety.
Let me see if I can sort out for you what happened and why.
Why the Tax Compromise is a Mistake – Compromises often are defended as beneficial because both sides to a disagreement surrender something or some things, and both sides get something or some things. But there are times when compromise is a mistake.
Tax Package Makes IRA Conversions Easier
Bush Tax Cuts Likely Will be Temporarily Extended
Compromise Reached on Taxes; Will It Pass Congress?
And by all means please remember this is a tentative deal with Congressional Republicans to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy.
Please. . . use your head. Think responsibly.
“Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents?”
~Peg Bracken
Get Ready for Tax Filing Season – Part 1: Reporting Employee & Contractor Wages
Get Ready for Tax Filing Season, Part 2 – New Laws & Credits that Impact 2010 Returns
What Does 13 Months of Extended Unemployment Mean? (Not What You Think.)
Increasing Your Business Confidence – We need outside proof to build confidence. When someone says that we are smart, talented, or amazing we can look back on those things as examples of our awesomeness. It can take someone else to give us proof of our own talents and amazing abilities.
Mortgage tax break in the crosshairs – Charged with finding ways to reduce the nation’s exploding federal debt, the bipartisan debt panel recommended Wednesday a wide range of controversial spending cuts and tax changes that would slash $4 trillion in deficits over the next 10 years.
Among the proposals was a major change to the mortgage interest deduction, which costs the Treasury Department an estimated $131 billion a year.
I have a few interviews working right now and they are scheduled to post. I am interviewing PF and tax bloggers alike. They won’t start posting until 2011. My first interview will post on Jan 3rd. In the meantime please check out TWTP weekly event, Tax Blogosphere Buddies, a weekly series of brief introductory interviews with some of RDFs favorite fellow tax bloggers, which will appear every Friday. I was lucky enough to be first.
Check it out.
TAX BLOGOSPHERE BUDDIES – BRUCE MCFARLAND
Asset Allocation for a 529 Plan
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – The tax blogosphere has been a-BUZZ the past few days with postings on the idiots in Congress still arguing over BO’s compromise tax package. The problem appears to be with House Democrats who feel that the new Estate Tax exemption and rate is too generous. Quick answer and easy fix – return the federal estate tax to what it was for 2009 for the same two years as the rest of the “Bush” tax cut extension.
If you are interested you can check out the blogs of Kay, Kelly, Joe K and A, Russ, and others for the specific details of the fight.
21 Million Effected – 21 million are the number of taxpayers who didn’t pay AMT in 2009 but will in 2010 unless Congress does something constructive.
Pros and Cons of Giving Gift Cards This Holiday Season
SSA Revises Withdrawal Policy – On December 8, 2010, the Social Security Administration published a revision to their “withdrawal policy”, which we talked about in detail in the article “The Ultimate Do Over”. It’s important for you to know what has changed about this rule, especially if you have been counting on this in your planning for Social Security benefits.
10 Expiring Tax Cuts to Watch For – The expiring Bush tax cuts – and what will happen to them – are all over the place these days. Folks seem to have very definite opinions about what should (and shouldn’t) happen. But it also seems like, for all of the publicity over the cuts, taxpayers really don’t understand what it all means.
Banks or credit unions: Which will give you the best bang for your buck?
Contract Accounting Becoming Hot Option – Contract accounting, hiring a CFO or controller on a part time basis to do what your full time book keeper does? Hiring someone who is a specialist in contract accounting could save you big bucks and lots of headache. Jason Hermanson tells us why.
Year-end tax moves, December 2010 part 1
Year-end investing moves, Dec. 2010 part 2
Year-end retirement moves, Dec. 2010 part 3
Year-end giving moves, December 2010 part 4
Okay I really don’t like using this as a plug or even a pimp my practice for clients place however I have a new ad running with one of the local stations here. It is part of their web site dedicated to different areas around Kansas City. Feel free to check it out. I’d really enjoy your feedback on it. What you liked or don’t.
And for my clients in other states, the coupon will applies to you as well. So long as it accompanies your information
Just a reminder, you can go to my company web site Tax Center page where you’ll find this year I have a Free Tax Organizer. You’ll need a .pdf reader to open this 14 page organizer. You can also find my Online Tax Organizer, used mostly by clients and/or those who will be clients.
Enter your email to subscribe to the L & R Tax Preparation monthly newsletter.
A Week in Perspective
The Turbo Tax defense doesn’t work in Tax Court. No Gold at the End of the Rainbow – The Court also noted that they gave plenty of opportunities for the Aus to negotiate a settlement with the IRS, and/or to consult attorneys regarding their case. They didn’t until the Court was about to render its decision. Had they asked a tax professional or an attorney familiar with tax law about their case, they likely would have been advised to settle and they would be paying less than they’ll have to.
Disability Insurance Policy To Protect Your Most Important Asset – Your Income – Ask yourself this question. What is your most important and valuable asset? Think about it for a minute. Is it your house? Your savings or your 401(k) retirement plan? Your sports car or rare memorabilia? While all of these things are both important and valuable, none of them truly represent your MOST valuable asset
Don’t Get Taken! What Passive Income Really Means
Love And Money – Love and money don’t always go hand in hand. It can be the cause of countless arguments especially since most of us have different money styles. However, with a few guidelines to promote better money communication, money can become a source of joy within a relationship rather than a stress inducer.
I like this – My “Reverse” Black Friday
ANOTHER ONLINE DEBATE – It seems the announcement of THE SCHEDULE C LETTER has re-opened the online debate of “Should a Sole Proprietor Incorporate, or A One-Person LLC Elect To Be Taxed As A Corporation, For No Other Reason Than to Reduce the Chance of an IRS Audit?” –
The Answer is individually situational. Please see a lawyer then see you tax professional before making your choice.
Not Going To Happen – All over the tax blogs today has been coverage of the President’s Debt Reform Panel’s Tax Reform Panel options for cleaning up the American Tax Code. It looks well thought out and I intend to give it much more study over the next couple of days. But it doesn’t matter what the options suggest, it won’t happen.
Veterans Day 2010: Tax considerations for members of the military
Home Improvements That Qualify for Tax Deductions – Did you know that some home improvements may qualify for federal tax deductions or tax credits? Knowing which renovations and improvements are eligible for tax deductions can help you decide whether or not to make the improvements, and can help you correctly claim deductions or credits for these renovations when you file your taxes.
The One Thing to Drop from Your Budget Like a Hot Potato
Financial Loopholes to Take Advantage of Now – In 2001 Congress passed a massive tax reform bill called the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which provided tax cuts to all Americans, in all income levels, via a multitude of changes to the tax code. These tax benefits have come to be known as the Bush tax cuts.
Tax Relief FAQ: How Does the IRS Compute Penalties For Delinquent Tax Returns? – An important step in avoiding IRS tax trouble is to understand how the IRS approaches delinquent tax return penalties.
1099s – The Good, the Bad and the Ugly - Having a small business issue 1099s for these purchases starting in 2012 would be pointless:
- $852 of office supplies purchased from Staples
- $2,592 of airline tickets purchased directly from the airlines
- $1,300 of services from their CPA firm
Issuing a 1099 for $700 of services rendered by a web designer makes sense though and existing law already covers that.
Steve Jobs Is NOT Giving You Tax Advice (But If He Did…) – . . . , as marketing goes, it’s pretty darn clever. And despite whether you love Apple or not, you have to give them credit for consistently being above the curve on the marketing side. As a tax geek, I’m a little bit in love. Using the Tax Code as a marketing tactic is genius (so, hey Apple, call me).
How to Work a Job Fair – Before You Go to a Job Fair, It’s best to be prepared for a job or career fair. Before you go, prepare yourself to impress, and have an idea of what companies you want to talk to. As get ready to go, consider taking these actions:
So I Won a Free Trip to the Bahamas. Now, How do I Report It on my Tax Return? - “I will not be sent a Form 1099-MISC. So how should I account for this on my tax return?”
What are the odds of an Obama compromise on Bush rates? – Tax planners got all excited yesterday when top White House aide David Axelrod hinted to the Huffington Post website that the President might be ready to extend the 2010 tax rates for top earners. Absent new legislation, the top marginal rate will rise from 35% to 39.6% in 2011 — and higher when phase-outs are counted. But if the Axelrod statements are a trial balloon, the President isn’t ready to climb aboard just yet. CNN reports on comments he made in Seoul:
Lottery winnings, charitable donations and the tax collector – By now I’m sure you’ve heard about the Nova Scotia couple who hit the lottery and then gave away most of their $10.9 million (Canadian) winnings to charities.
Allen and Violet Large are generous, but they’re no fools. They kept nearly a million for themselves. The septuagenarians say they’ll use the money for emergencies and to buy more lottery tickets.
Good for them! And doubly good for them that Canadian tax law allows them to give away so much of their windfall.
Wash Sale Rule for Investment Losses – All investors experience losses, no matter how experienced or knowledgeable they are. The Internal Revenue Service (IRS) allows investors to deduct capital losses from investing gains in order to reduce your capital gains taxes. Under the IRS rules, short-term capital losses can be used to reduce short-term capital gains, which is extremely beneficial because short-term capital gains tax is equal to your ordinary income tax rate.
Roth Conversion Planning Ideas
5 Ways to Make Sure that a Partnership is a Good Idea for Your Business – Ask most business people their most horrendous business story, and it will almost always involve a partner.
Lucky Number 13: 13 Financial Changes for My 23rd Birthday – now that I’m one day away from being 23, I’ve realized it’s time to start being more financially responsible.
A Week in Perspective
EXPLAINING THE “METHODS” OF MY “MADNESS” – A look into the world of my blogging friend. (RDF- Looking forward to meeting up with you in St. Louis on August 15 – 18, 2011)
November’s Important IRS Dates – A new month is upon us, along with a new set of IRS Deadlines. We’re entering the IRS’s fourth and final quarter. Here’s the important IRS dates you need to know:
IRS Makes Few Changes to Retirement Rules – For the second year in a row, the Internal Revenue Service has announced that there will be no change to the maximum allowable contributions to pension plans or to individual retirement accounts in 2011. Here are the limits that will remain the same in 2011:
Expensing of Business Assets – New Treasury Report – Economic stimulus provisions of the past few years have included bonus depreciation and higher expensing amounts under IRC Section 179.
What Non-profits should know about Tax Form 990 – Form 990 or Return of Organization Exempt from Income Tax form is due to be submitted to the IRS by non-profits. Ever since 2008, this Form has been substantially revised to include several reporting requirements by the IRS. There are a few pertinent changes to the form and its requirements that non-profit organizations should know.
My favorite post this week.
A must read.
Being an Entrepreneur / Your Business – The topic of working on your own, or, even if you don’t the importance of the entrepreneur “in you” wherever you do work. Do you consult, do you have your own clients or are you striving to? There are some principals I think are necessary to make it “on your own” or excel where you are working. While I am a younger CPA and take a lot of pride in what I have accomplished so far, I keep working hard knowing that I have hardly touched the tip of the iceberg of what I can accomplish in my life.
Like my bloging mentor said about The Missouri Taxguy, Do I really need to keep reminding you to check out BlogRoll Beans from Joe Arsenault over at CafeTax? Thanks Joe.
Suggested first Republican budget cut: Congressional salaries – Watch out for the pigs as they pass over Kay.
What if you are donating it to an arson awareness organization?
Another must read –
Commercials, Kids, and Materialism – If you’ve been reading The Simple Dollar for long, you’ll know that this ad takes a swing directly at a lot of different ideas I’ve shared over the years about parenting, money, materialism, and other things. I thought I’d run through them again in light of this ad.
Tax moves to make in November – we have to get through the lame-duck session. In the next few weeks, Congress has vowed to deal with the expiring expiring Bush tax cuts, stimulus tax breaks that are only good for a couple more months, the already ended extenders and even the estate tax that’s scheduled to come back to life on Jan 1. 2011.
Tax Carnival #76: Election Day 2010
Pension Plan Limits for 2011 – The IRS has announced the 2011 cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items.
3 Tips for Launching a New Business – Starting a business may not be one of the easiest things to do, but it could be one of the most rewarding, as well as one of the most financially freeing decisions you could make for yourself. Seeing that most, if not all of us, need some hand-holding whenever we’re starting a new venture, here is some advice on three routine yet absolutely crucial areas of a business.
How to Fund a Startup – Deciding to start a business is exciting. You are in charge of making decisions large and small, and you have the opportunity to change your life, and possibly other lives as well. But starting a business also brings challenges. Almost all businesses will require some form of capital to start. If you don’t have cash reserves in a savings account or other liquid investment available to use, you’ll have to find other ways to fund your startup. Here are some common methods for getting the money you need to start your business:
Did Obama Really Cut Small-Business Taxes 16 Times? – The assertion that the Obama administration has cut taxes for small business 16 times might surprise some entrepreneurs —But the White House backed the claim with a fact sheet. Here, for the record, are the taxes the administration says it has cut, in its words:
Bill Gates Loses on Election Night
Could Tax Law Professors Be More “Tax Return Hands-On” Than Tax Practitioners? – Mike Foster, who practices with Venable LLP, said, “I don’t even do my tax returns anymore. I don’t know any tax lawyer who does their own tax returns. The forms are Greek even to us.” Hopefully someone does a survey to determine how many tax lawyers do their own returns.
Please Ask Me Before… – …you make decisions that might affect your taxes. . . .
In short, please see me (or your tax professional) before you do something that will affect your taxes. If you’re not sure if there will be an effect, please call and ask.
5 ways to save on heating costs – We are always on the lookout for ways to save a few extra dollars and heating costs are a good place to start, especially in the fall and winter.
FAIR Tax isn’t just a bad tactic; it’s a bad idea. – The Wall Street Journal and the Cato Institute’s Daniel Mitchell have branded the “FAIR Tax” sales tax proposal a loser issue for political candidates. In a more-in-sorrow-than-anger tone, the Journal notes the difficulties of candidates who embrace this national sales tax:
5 Do-It-Yourself Services You Should Leave to the Professionals – Many people are tightening their belts in these uncertain economic times.One of the first places we often look to save money is finding projects around the home that we can do ourselves rather than calling the professionals. All do-it yourself projects are not created equal, though, and there are times when you are better off calling in the professionals rather than potentially causing more problems by doing it on your own.
What is QE2, and What Does it Mean for You? – The big news on the economic front is that the Federal Reserve has decided to launch a second round of “quantitative easing” – dubbed QE2. If you’re not familiar with the concept of quantitative easing
Don’t pay the seller’s income tax – The Foreign Investment in Real Property Tax Act of 1980 requires buyers to withhold 10 percent federal income tax when buying real estate from those diabolical foreign sellers. The IRS can force a buyer who fails to withhold the 10 percent from the purchase payment to come up with the 10 percent withholding out of his own assets.
Saving Money at Christmas – Christmas spending over the last 2 or 3 years has been relatively low in comparison with other years, but that’s all set to change this Christmas. According to the National Retail Federation (NRF), shoppers are ready to part with their cash this holiday season for the first time since the recession hit. The NRF has forecast total retail sales growth of 2.3% for November and December this year, which means that consumers plan to spend an average of $688.87 on holiday shopping this year, an incredible figure. So if that’s the sort of money the average person on the street is willing to spend this Christmas, how many of you are actually trying to save?
Jason Blumer CPA, He’s a Funny Guy
Carnival of Wealth #10 – Halloween Edition
Website 101: How to Build a Site and Get It Online – Building and putting a website online doesn’t have to be difficult or complicated, though. If you are willing to do a little mental gymnastics and learn a few tricks, you can build a simple website on your own and publish it to your server yourself. Here are a few simple tips for do-it-yourselfers.
How Much Will You Spend in Retirement? – When people share their retirement plans with me, they often assume that they’ll be able to reduce their spending once they retire. At first glance, this seems reasonable. After all (they tell themselves) they won’t have to support the kids anymore and the house will be paid for. And the media encourages people to think this way too. They make the argument that once folks retire, they usually spend 80% of what they spend while they are working. This kind of thinking is wrong and dangerous… Unless you are very mindful and really understand how much money you will need to retire.
Five Ways to Save Money on Food – The number one way to save money is by learning how to cook. You might have a hectic schedule and be exhausted at the end of the day but push yourself to prepare a nice meal. You’ll get to enjoy it, expand your knowledge about cooking, and eat better than ordering it from some fast food place. You won’t be good at it in the beginning but over time your skills will improve and you’ll enjoy it even more.
A Week in Perspective
Recently, I read a tweet asking why we don’t comment on blogs any more. My thought. No need to. Everyone is in too big of a hurry. In response to this, here is what I ask of you: Most bloggers including myself have some sort of way for you to share the post. The post is full of great information. You liked it to the end, and you may have found it informational and or useful. So why not share it. Use the buttons, share it on your Facebook page or your twitter or Digg this or whatever you happen to be on. We are all out here providing information not for fame but to help you the American taxpayer find out what could save you money. Send it on to your friends and followers.
IRS Taxing Your Pumpkin Stands? Good Grief!
An Investor Nightmare Waiting to Happen – In order to claw our way out of a scary recession, we’ve dropped interest rates to artificially low levels to stimulate the economy. What happens to our financial institutions and our pocketbooks when interest rates go back up?
How the battle over credit card swipe fees hits consumers – The feud over the so-called swipe fees merchants pay banks when customers use plastic is reaching a crescendo and will likely hit registers in coming months. Both sides — merchants and card issuers — insist they’re fighting for the best interests of the consumer. At stake are billions of dollars in swipe fees, otherwise known as interchange fees.
IRS paid more than $111 million in erroneous stimulus-related tax benefits
If you missed it yesterday. Please go back and read this week’s rendition of WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
I just finished up some work for the auto company (shame it didn’t last long) and find it in the news more than I seemed to think it was before. Michigan Gets Ford Tough on Tax Credits – The Michigan Economic Growth Authority (MEGA) is seeking tax cuts for the auto giant, as well as its counterparts, GM and Chrysler. Michigan Governor Jennifer Granholm announced the tax cuts, noting the intent of the cuts was to create and retain jobs in the state.
My favorite post this week – Recognize and Eliminate Distractions – One of the things that’s critical when it comes to achieving goals is just plain sticking to the goal until it is complete. It can be super-easy to become sidetracked without even realizing it.
A great book review – Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back – Personal finance is a broad topic and can be difficult to understand when you don’t know where to start. That’s where the book, Generation Earn, by Kimberly Palmer comes into play. Generation Earn is geared toward young professionals, (it is subtitled The Young Professional’s Guide to Spending, Investing, and Giving Back), but I also think it is a great book for anyone starting off on their own, including high school and college students, recent college grads, someone separating from the military or making another similar career change, or anyone else dealing with a major life change that affects their financial situation.
You Can Request an IRS Appeal- Here’s How: - Don’t like the IRS’s rulings? Don’t think you owe? Believe it or not, if you have a conflict with a notice sent to you by the IRS, you have the right to appeal.
IRS Patrol: IRS Announces Pension Plan Limitations for 2011
Off the rails – The federal government has decided to spend $218 million that it doesn’t have on railroad track repairs between Chicago and Iowa City. The State of Iowa will throw in $20 million it doesn’t have, all to enable Amtrak to start losing money forever at $42 per ticket to run trains that will take five hours to make the trip, on the occasional day that Amtrak is on time.
NZ Approves Tax Break for The Hobbit
Is the Mortgage Interest Deduction on the Table? – The Wall Street Journal reported Monday that President Obama’s deficit commission is mulling the idea of reforming the mortgage interest deduction as a way to help solve the nation’s budget problem. You can expect the typical reaction from those in the housing industry (Realtors® and homebuilders) who will claim this is the end of the world as we know it, as well as the anti-tax caucus who won’t accept any tax increase ever.
Still waiting for my confirmation, my friend posted I GOT IT! Cash Basis Balance Sheet balance for A/R or A/P – What can you do if you do have an Accounts Receivable balance on your Cash Basis Balance Sheet?
Five Steps to Starting a Business – Starting a business can be a rewarding experience, but it can also be very time consuming and difficult. Many resources are available to assist you, but information overload can cause you from moving forward.
5 IRA Moves to Make Before the New Year – it’s time to start thinking about holiday shopping—and some year-end money moves. When it comes to your IRA, there are five moves you ought to consider before the ball drops in Times Square.
4 Ways to Blast Away Your Debt – Debt can be as blinding as a blizzard in Buffalo during February. If you are in debt, chances are you have never taken the time to add up the exact amount you owe. Figuring out your net worth is simple and must be done if you ever expect to get out of debt.
This is a number one must read for the small business crowd – New Sec. 179 Rules Have Pleasant Surprise - Many small businesses placing assets in service in 2010 will get a big additional break if they are above the normal $250k.
Understanding Financial Statements Fundamentals
Reading the Story of a Financial Statement
Tracking Stats For Your Business
A LOAD OF CRAP! – My fellow tax bloggers and I are constantly reporting on emails allegedly from the IRS that are in reality “phishing” scams, and reminding you that the IRS will NEVER initiate contact with a taxpayer via email. But those are not the only emails you need to worry about. I am often forwarded tax-related emails that clients have themselves been forwarded, often from friends or family, with the question, “Is this true?”.
Tax Day Gets 2011 Change – Procrastinators rejoice! Next year you will be able to wait three days longer to queue up at your local post office and send in your taxes.
13 Things Your Auditor Will Need For An Initial Audit – We often are engaged to do initial audits of companies preparing to go public. Many have limited operating histories and have never been through an audit. Your auditors are going to need a lot of information to complete the audit and I can tell you we appreciate it when our clients have everything together. What should you have ready? Here is the list we give to our new clients:
How the HIRE Act Incentives Work
2011 IRA contribution limits: 3 ways to maximize your retirement tax advantages – . . . find it useful to think of saving money like distance running. If you obsess over the total distance, then each step seems hopelessly insignificant in covering the necessary ground. If instead you just start making those steps, and concentrate on finding a comfortable and consistent pace, you’ll find that before you know it, the distance will take care of itself.
Music Video – Los Bank Auditors- I’m on an Audit – Fantastic
BusinessWeek Publishes Misleading Article on Federal Withholding Changes in 2011 – All taxpayers should be concerned about the impending expiration of tax cuts (from both the Bush and Obama years) but no one should have a heart attack reading BusinessWeek’s latest estimates of how much higher the taxes will be. They’re way too high.
Even tax lawyers need tax filing help
Best, worst state tax climates for business – Most folks are obsessing over how the expiring Bush tax cuts might affect individual taxpayers, but when it comes to businesses, a lot of other factors come into play. So the Tax Foundation analyzes each year the tax climates of the 50 states to determine which states, from a tax standpoint, are the most business-friendly and which tend to cause companies to flee their borders.
7 Costs to Eliminate Before You Retire – You will be able to get by in retirement with a smaller nest egg if you eliminate as many expenses as possible before you leave the workforce, such as mortgage and credit card debt. While you’re still working, you can also take care of many other expenses that are likely to crop up in retirement, including home repairs, and even taxes in some cases. Here are some expenses you should try to tackle before you retire.
Small Business Payroll Tax Management – When it comes to payroll tax filing, perfection is essential. For small business owners who lack the luxury of having an accounting staff at their disposal, staying on top of filing deadlines and keeping abreast of changing regulatory requirements can be a time-consuming ordeal.
In addition to freeing you up to focus on revenue-producing tasks, full-service payroll companies offer a range of additional benefits:
Renting Vs. Buying A Home: Which Is The Best Choice?
Tax plan now for year end – With just a little over 2 months left until the end of 2010, it is looking more like we will not get an extension of the Bush era tax cuts. The impact of not extending the current tax cuts will be a tax increase for just about everyone, but especially hard hit will be families with over $250,000 of income.
Sadly several of the links do not take you anywhere. Also I noticed that several of the listed blogs actually haven’t contributed to their sites for a very long time.64 Tax Blogs for Geeks and Wonks – Although taxguy not listed you need this list – There’s something for everybody in this list — one of the best we’ve seen — of blogs for tax geeks and wonks. This list includes four kinds of tax blogs: Tax Policy Blogs by American Professors, “Think Tank” Tax Policy Blogs, State and Local Tax Policy Blogs, Helping American Taxpayers Make Sense Of Policy.
Colbert: Tax Shelter Skelter – Comedy Central’s Stephen Colbert explains why we need to keep George W. Bush’s tax cuts alive.
A few weeks ago I received several letters (can you call them letters if they come to you via e-mail?) asking if I had room in my practice for newly accredited CPA’s. I responded equally to them all asking for résumé like information stating classes or experience above and beyond the call of what is taught to get by.
To get to the CPA exam in Missouri one must have 150 Semester Hours and a Minimum Degree (Baccalaureate) is required. Unfortunately to get there, tax education is very minimal in my opinion. Then, the CPA exam covers/test not so-much in the way of tax.
Other MO requirements:
- minimum of 33 semester hours in accounting (at least 1 course in Auditing and at least 18 semester hours of the accounting courses must be upper division accounting)
- 27 semester hours in general business
Of those that sent out the request, only one responded and he was/is very honest. The short version, he knew he didn’t have adequate experience and only during the CPA testing did he realize what he wanted to do. He contacted me looking to join me in an effort to learn. If I can swing it, he’ll be working for me in the upcoming season.
One of the others (just past the CPA exam), tweeted that she had $40.00 and a few days later it was gone and she had no clue where she had spent any of it. I am glad she didn’t respond to my inquiry, as after that, she’d been looking elsewhere.
My point with all of this? Tax season is fast approaching. Make sure you find a tax pro to help you with your preparation. Know and visit with the person handling and preparing your information.
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