Do You Have a Form W-9 for Each Vendor?
When dealing with vendors, make sure all of them fill out a Form W-9 before rendering payment to avoid backup withholding issues. It’s always a good policy for your business to have each vendor fill out a new W-9 form every year. The form requires vendors to disclose whether they are set up to do…
Health Care: 2015 Large Employer Reporting Requirements
Under the Affordable Care Act, large employers are required to file information returns with the IRS and provide statements to full-time employees. You are a large employer if you employed, on average, 50 full-time equivalent employees or more during 2014. You must include employees of other members of any companies under common control. A full-time…
Criminal Plea Deal Doesn’t Negate Civil Action
In a recent case, an appeals court upheld the Tax Court’s decision that a bookie’s plea agreement on criminal charges does not bar a civil action for unpaid taxes. Gary Kaplan operated an illegal sports booking business called BetOnSports. The majority of Kaplan’s booking business was located in the Caribbean islands and Costa Rica for…
Starting a Business? Some Things to Consider
When starting a new business, a wise first step is to seek the advice of your CPA. Some things you might want to consider before starting the business: 1. Business Structure – Determining the business structure should be the first decision that you make. The basic choices are sole proprietorship, corporation, limited liability company or…
An Easier Way to Claim a Home Office Deduction
The IRS allows taxpayers to use an optional safe harbor method when claiming a home office deduction. The safe harbor method saves the taxpayer from having to substantiate, calculate and allocate deductible home office expenses, a procedure that is part of the nightmare taxpayers have to go through if they want to use the old…
File a Return Even if you Don’t Like It
Nonemployee compensation received in exchange for services rendered is taxable income, despite tax protester arguments to the contrary. Stephan Foryan, a resident of the state of Washington and an apparent tax protester, did not file a tax return for 2009. He also did not make any estimated tax payments for the 2009 tax year. Foryan…
Estates Must Now Request a Closing Letter
The IRS has announced that it will issue estate tax closing letters only on request for estate tax returns filed on or after June 1, 2015. Prior to this change, CPAs and clients anxiously awaited the closing letter for filed estate tax returns. A very large portion of returns are audited. Receiving the closing letter…
Five Tax Items to Include in Summer Wedding Checklist
Summertime is a busy time for weddings, which can raise concerns about finances. A few helpful tax tips can make things much easier come tax return filing time: 1. Change of name – If you’re changing your name legally, you must also do so at the Social Security Administration (SSA). Your name and Social Security…
What Goes on Line 21 of your 1040 Return?
Line 21 on your Form 1040 return may be confusing because it’s somewhat of a catch-all line where different items are reported. Basically, use line 21 to report taxable income not reported elsewhere on your return or on other schedules of your return. You should list the type and amount of income. Some examples of…
Taxpayer Responsible for Inaccurate Return
It’s obvious that taxpayers aren’t eligible for the American Opportunity Credit when they don’t have any qualified educational expenses, but it may not be as clear to taxpayers that they are responsible for the accuracy of their federal income tax returns – even when they pay a tax preparer to file for them. William Billy…