Tax Organizer - brief format
An employee is someone who:
Is told where to work
Is told when to work
Is told what work to do
Uses employer's tools, equipment or supplies
May be hired and fired at the employer's discretion
is paid a salary or by the hour rather than on the job basis
Does not have risk of operaeting loss
Credit for dependents attending kindergarten through 12th grade at an Iowa school. Select article for details. In addtion, items required by school for entrollment are included, such as the list a school may provide as required items the first day of school (or ongoing). It would be best to keep the documented list with accompanying receipts.
The standard Meal/Snack Rates increased slightly for 2012. For 2011 breakfast was $1.19, lunch/dinner $2.22 and Snacks $.66. For 2012 the rates are breadfast $1.24, lunch/dinner $2.32 and snacks $.69
If you would like a copy of your tax return sent to a bank or someone else please Select Consent to Disclose Tax Return Information, print the form and return to us via e-mail or fax. We will assist with your request as soon as possible.
Need help with preparation of 1099's? Select 1099's for questionnaire to let us know information so we can be of assistance. just print the questionnaire and return the completed information to use via e-mail or fax.
Select for form for us to assist you with 1099 preparation. Just print form, complete and forward to Collins Cosnulting Service.
1099
Select job related expenses deductible job related expenses. (uniforms are deductible if required by employer and not suitable for ordinary wear - For example, Rocky Wolverine's work boots were disallowed when he wore them to the IRS audit) There is a deduction of 2% of income from the total of these expenses (and you must itemize), so small amounts will not create a tax deduction.
Safety equipment, small tools and supplies needed for the job
Uniforms required by the employer that are not suitable for ordinary wear (Military uniforms are only deductible if regulations prohibit their off-duty wear)
Protective clothing such as hard hats, safety shoes or glasses not suitable for continuouse usage as ordinary clothing
Physical examinations required by employer
Dues of porfessional organizations or chambers of commerce
Subscriptions to professional journals
Employment agency fees or costs to search for a new job
Certain business use of home
Certain educational expenses
Certain meals and entertainment
Vehicle Expense - not travel back and forth to metro area work place
Tax Preparation fees
Selcted Lawsuite settlements for list of awards and info about taxability
Personal Injury Exempt
Class Action award (consumer) Exempt
Civil Rights Taxable
Punitive damages Taxable
Contract claims Taxable
Slander/Defamaton Taxable
Backpay Taxable
interest Taxable
Emotional distress Taxable
Mental Anguish Taxable
Loss of reputaton Taxable
Other Awards Taxable
Select Disaster Losses to review computation of a disaster loss. The IRS indicates a claim must be filed with insurance company or FEMA to get a tax deduction. Appraisals before and after loss will be helpfull if audited.
Determine cost or other basis of property before the disaster
less fair market value after the disaster
less amount reimbursed by insurance or other reimbursements
less $100
less 10% of your income
net Casualty Loss
or the second method is the actual cost of repairing the property to original condition before the loss which can only be done when the property is actually repaired.
Thus small losses will get no tax deductions (such as insurance deductibles). If you disagree with insurance companies value, sorry, but the IRS will probably ue the same amounts as the insurance company.
You generally have 2 years to replace the property involved in the disaster for which you may receive funds from insurance companies or others. The replacement period ends 2 years after the close of the 1st tax year in which the gain was realized (4 years for personal residences and livestock). If property is not replaced, the reimbursement is generally taxable income.
Select Travel heading for list of required proof to deduct these business expenses
Date the expense took place
Place the expense was incurred
Business purpose of the expense
Business relationship (for entertainment and gifts)
Amount of the expenses
All lodging expenses require receipts - there is not a per diem rate
All entertainment or meals require a receipt for over $75 per meal
Promotional or closing gifts for customers are limited for tax deduction purposes to $25 per year per customer
Proof is to be timely documented. The last day of the year, the day before your tax appointment or after receiving an audit letter is not timely doccumented.
We've heard for many years, social security may not be around when I need it. Select Social Security to find list of what does my social security/self employment tax really get me.
Retrirement benefit for you as early as age 62
Retirment benefit based on my account for your spouse, if married for at least 10 years
Disability benefit for you at any age
Disability benefit for your spouse as early as age 50 if married for at least 10 years
income benefits for your children under age 18 if you become deceased, disabled or drawing retirement benefits
income benefits for your spouse if there is a child in your home under age 16 and you become deceased, disabled or drawing retirement benefits
Lifetime medical benefits for you at age 65 or earlier if disabled
Lifetime medical benefits for your spouse at age 65 or earlier if disabled
income for your dependent parents if you become deceased, disabled or retired
Death benefit for your spouse upon your death
Items to review before trying to get out of paying social security
Horrible things happen if you are determined to be operating a hobby. Losses are not deductible, no office in home deduction, no reduction in social security taxes, sales are added to income, expenses are deducted as an itemized deduction reduced by 2% of total income. The overall impact is paying taxes on additonal income rather than a tax write-off. Select Business or hobby for what the Internal Revenue looks at to determine if business or hobby.
Must illustracte a profit motive, such as making a profit 3 out of 5 years
And/or business organiztion factors such as a separate checking account, business name, separate set of accounting records, business license, separate phone and/or fax line, stationery, business cards, advertising or marketing, existence of a business plan and growth of asset values.
Review the time and effort extended by the taxpayer thru regular time spent each day or week on this business activity, new ideas, plans or concepts to make a profit, regular meetings with customers, reasonable profit-oriented efforts similar to successful competitors, or losses due to circumstances beyound the taxpayer's control.
Other factors such as history of profit-making activiities in other ventures, reasonable expertise or knowledge, and dependency on the activity for income.
Select Depreciation Schedule for a list of various equipment and properties with the current length they are depreciated. This is after applicable Bonus or first year depreciaiton.
Select standard mileage rate for a list of standard mileage rates for the last 6 years. For 2012 the business reate remains at $.555 per mile but the medical rate decreases to $.23 and charitable to $.14.
Select Charitable Contributions to find a list of normal Charitable Contributions that are deductible and those that are not. Remember donations of over $250 at one time or in one day requires a receipt to reflect the charity's name, amount and date and must be dated before the due date or actual filing date of the tax return. A cancelled check is not adequate. ALL deductilbe contribtuions must be substantiated with a receipt.
The are some tricky rules about who can claim the College Tuition and related expenses based on who is eligible to claim the student and who actually pays for the tuition. In some cases the tuition may not be deductible by anyone.
Several free online calculators are available to help you weigh option of whether it is better to purchase or rent a home.
President Biden support extending the individual tax provisions of the Tax Cuts and Jobs Act, many of which are set to expire next year, Department of the Treasury Secretary Janet Yellen said.
President Biden support extending the individual tax provisions of the Tax Cuts and Jobs Act, many of which are set to expire next year, Department of the Treasury Secretary Janet Yellen said.
"The President has made it clear that he would oppose raising back the taxes for working people and families making under $400,000," Secretary Yellen testified before the Senate Finance Committee during a March 21, 2024, hearing to review the White House fiscal year 2025 budget proposal.
She then affirmed that "he would" support extending the individual tax provisions of the TCJA when asked by committee Ranking Member Mike Crapo (R-Idaho), who noted that the budget did not make any mention of this.
Yellen defended the fiscal 2025 budget request against assertions that taxes will indeed go up for those making under $400,000, contrary to President Biden’s promise, because the taxes that are targeted to wealthy corporations to ensure they are paying their fair share will ultimately be passed down to their consumers in the form of higher prices and lower wages.
"I think what the impact when you change taxes on corporations, what the impact is on families involves a lot of channels that are speculative," Yellen said. "They are included in models that sometimes the Treasury used for the purposes of analysis, in a tax that is levied on corporations, that has no obvious direct effect on households."
The proposed budget would increase the corporate minimum tax from the current 15 percent to 21 percent, as well as raise the tax rate on U.S. multinationals’ foreign earnings from the current 10.5 percent to 21 percent. The current corporate tax rate would climb to 28 percent and the budget would eliminate tax breaks for million-dollar executive compensation. It would also increase the tax rate on corporate stock buybacks from 1 percent to 4 percent, among other business-related tax provisions.
By Gregory Twachtman, Washington News Editor
Corporations and billionaires will be paying more in taxes if Congress follows recommendations President Biden gave during his State of the Union address.
Corporations and billionaires will be paying more in taxes if Congress follows recommendations President Biden gave during his State of the Union address.
President Biden highlighted a number of initiatives during the March 7, 2024, address. For corporations, he said that it is "time to raise the corporate minimum tax to at least 21 percent."
"Remember in 2020, 55 of the biggest companies in America made $40 billion and paid zero in federal income taxes," President Biden said. "Zero. Not anymore. Thanks to the law I wrote [and] we signed, big companies have to pay minimum 15 percent. But that’s still less than working people paid federal taxes."
Additionally, he alluded to further recommendations that will likely be included when the administration released its budget proposal, expected as early as the week of March 11, 2024. This includes limiting tax breaks related to corporate and private jets and capping deductions on certain employees at $1 million.
For billionaires, President Biden is looking to increase their tax rate to 25 percent.
"You know what the average federal taxes for those billionaires [is]?" he asked. “"They’re making great sacrifices. 8.2 percent. That’s far less than the vast majority of Americans pay. No billionaire should pay a lower federal tax rate than a teacher or a sanitation worker or nurse."”
President Biden said this proposal would raise $500 billion over the next 10 years and suggested some of that additional tax money would help strengthen Social Security so that there would be no need to cut benefits or raise the retirement age to extend the life of the Social Security program.
The IRS has launched a new initiative to improve tax compliance among high-income taxpayers who have not filed federal income tax returns since 2017.
The IRS has launched a new initiative to improve tax compliance among high-income taxpayers who have not filed federal income tax returns since 2017. This effort, funded by the Inflation Reduction Act, involves sending out IRS compliance letters to over 125,000 cases where tax returns have not been filed since 2017. These mailings include more than 25,000 to individuals with incomes exceeding $1 million and over 100,000 to those with incomes ranging between $400,000 and $1 million for the tax years 2017 to 2021. The IRS will begin mailing these compliance alerts, formally known as the CP59 Notice, this week.
Recipients of these letters should act promptly to prevent further notices, increased penalties, and stronger enforcement actions. Consulting a tax professional can help them swiftly file late tax returns and settle outstanding taxes, interest, and penalties. The failure-to-file penalty is 5 percent per month, capped at 25 percent of the tax owed. Additional resources are available on the IRS website for non-filers.
The non-filer initiative is part of the IRS's broader campaign to ensure large corporations, partnerships, and high-income individuals fulfill their tax obligations. Non-respondents to the non-filer letter will face further notices and enforcement actions. If someone consistently ignores these notices, the IRS may file a substitute tax return on their behalf. However, it's still advisable for the individual to file their own return to claim eligible exemptions, credits, and deductions.
FS-2024-6
IR-2024-56
An individual’s claim for innocent spouse relief was rejected for lack of jurisdiction because the taxpayer failed to file his petition within the 90-day deadline under Code Sec. 6015(e)(1)(A).
An individual’s claim for innocent spouse relief was rejected for lack of jurisdiction because the taxpayer failed to file his petition within the 90-day deadline under Code Sec. 6015(e)(1)(A). The taxpayer argued that the deadline to file a petition for a denial of innocent spouse relief was not jurisdictional and asked that the Tax Court hear his case on equitable grounds. However, the Tax Court noted that a filing deadline is jurisdictional if Congress clearly states that it is. The IRS argued that argues that the 90-day filing deadline of Code Sec. 6015(e)(1)(A) was jurisdictional because Congress clearly stated that it was and the Supreme Court’s decision in Boechler, P.C. v. Commissioner, 142 S. Ct. 1493, in addition to numerous appellate cases, supported this argument.
The Tax Court examined the "text, context, and relevant historical treatment" of the provision at issue and concluded that the 90-day filing deadline of Code Sec. 6015(e)(1)(A) was jurisdictional. On the basis of statutory interpretation principles, the jurisdictional parenthetical in Code Sec. 6015(e)(1)(A) was unambiguous. It did not contain any ambiguous terms and there was a clear link between the jurisdictional parenthetical and the filing deadline. Specifically, Code Sec. 6015(e)(1)(A) is a provision that solely sets forth deadlines. Further, it was unclear what weight, if any, should be given to the equitable nature of Code Sec. 6015. The statutory context arguments were not strong enough to overcome the statutory text. Accordingly, the Tax Court ruled that the 90-day filing deadline in Code Sec. 6015(e)(1)(A) was jurisdictional.
P.A. Frutiger, 162 TC —, No. 5, Dec. 62,432
The IRS has continued to increase the amount of information available in multiple languages. This was part of the IRS transformation work under the Strategic Operating Plan, made possible by additional resources provided by the Inflation Reduction Act (P.L. 117-169).
The IRS has continued to increase the amount of information available in multiple languages. This was part of the IRS transformation work under the Strategic Operating Plan, made possible by additional resources provided by the Inflation Reduction Act (P.L. 117-169). On IRS.gov, taxpayers can select their preferred language from the dropdown menu at the top of the page, including Spanish, Vietnamese, Russian, Korean, Haitian Creole, Traditional Chinese and Simplified Chinese. Additionally, the Languages page gives taxpayers information in 21 languages on key topics such as "Your Rights as a Taxpayer" and "Who Needs to File."
"The IRS is committed to making further improvements for taxpayers in a wide range of areas, including expanding options available to taxpayers in multiple languages," said IRS Commissioner Danny Werfel. "Understanding taxes can be challenging enough, so it’s important for the IRS to put a variety of information on IRS.gov and other materials into the language a taxpayer knows best. This is part of the larger effort by the IRS to make taxes easier for all taxpayers," he added.
If taxpayers cannot find the answers to their tax questions on IRS.gov, they can call the IRS or get in-person help at an IRS Taxpayer Assistance Center. Finally, hundreds of IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs have access to Over the Phone Interpreter services. VITA and TCE offer free basic tax return preparation to qualified individuals.
The IRS has granted to withholding agents an administrative exemption from the electronic filing requirements for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.
The IRS has granted to withholding agents an administrative exemption from the electronic filing requirements for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. Under the exemption:
- withholding agents (both U.S. and foreign persons) are not required to file Forms 1042 electronically during calendar year 2024; and
- withholding agents that are foreign persons are not required to file Forms 1042 electronically during calendar year 2025.
The exemption is automatic, so withholding agents do not need to file an electronic filing waiver request to use the exemption.
Electronic Filing of Form 1042
Under Code Sec. 6011(e), the IRS must prescribe regulations with standards for determining which federal tax returns must be filed electronically. In 2023, final regulations were published to implement amendments to Code Sec. 6011(e) that lowered the threshold number of returns for required electronic filing of certain returns. The regulations included requirements for filing Form 1042 electronically.
The final regulations provide that:
- a withholding agent (but not an individual, estate,or trust) must electronically file Form 1042 if the agent is required to file 10 or more returns of any type during the same calendar year in which Form 1042 is required to be filed;
- a withholding agent that is a partnership with more than 100 partners must electronically file Form 1042 regardless of the number of returns the partnership is required to file during the calendar year; and
- a withholding agent that is a financial institution must electronically file Form 1042 without regard to the number of returns it is required to file during the calendar year.
The final regulations apply to Forms 1042 required to be filed for tax years ending on or after December 31, 2023. This means that withholding agents must apply the new electronic filing requirements beginning with Forms 1042 due on or after March 15, 2024.
Challenges to Withholding Agents
Since the final regulations were published, the IRS received feedback from withholding agents noting challenges in transitioning to the procedures needed for filing Forms 1042 electronically. Withholding agents expressed concerns about the limited number of Approved IRS Modernized e-File Business Providers for Form 1042, and difficulties accessing the schema and business rules for filing Form 1042 electronically. Withholding agents that do not rely on modernized e-file business providers said that they needed more time to upgrade their systems for filing on the IRS’s Modernized e-File platform. Agents also noted challenges specific to foreign persons filing Forms 1042 regarding the authentication requirements necessary for accessing the platform.
In response to these concerns, the IRS used its power under the regulations to provide the exemption from the electronic filing requirement for Form 1042, in the interest of effective and efficient tax administration.
