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Tax Literacy


  • Submitted on 31 January 2014

    Created on January 31, 2014
     

    As part of our blog series on tax literacy, MBDA will highlight the latest tax-related news issued by the IRS for business owners.  The material presented in this website is not offered as legal or tax advice.  You are urged to seek the advice of your tax advisor, attorney, and/or financial planner for any issue related to tax obligations.

    This post originally appeared as a IRS Tax Tip

    Tax TimeMany people look for help from professionals when it’s time to file their tax return. If you use a paid tax preparer to file your federal income tax return this year, the IRS urges you to choose that preparer carefully. Even if someone else prepares your return, you are legally responsible for what is on it.

    Here are ten tips to keep in mind when choosing a tax return preparer:

    1. Check the preparer’s qualifications.  All paid tax return preparers are required to have a Preparer Tax Identification Number. In addition to making sure they have a PTIN, ask if the preparer belongs to a professional organization and attends continuing education classes.  
       
  • Submitted on 03 January 2014

    Created on January 3, 2014
     

    Planning ChecklistStart 2014 off right. Here are some actions to take now or in early January that will help you optimize your tax and financial results for the coming year.

    1.  Revisit your recordkeeping practices

    Records are vital for both business and tax purposes. They help know whether or not you’re profitable and provide key information to help you take business actions, such as adjusting prices, cutting expenses, or raising money.

    What’s more, in order to take all the deductions and credits to which your business is entitled in 2014, you’ll need good books and records. Often business owners fail to pay attention to this detail until it’s too late and the IRS is questioning write-offs claimed on a return.

    Set up a recordkeeping system that satisfies tax law requirements, and make sure that employees know what to do. Check IRS Publication 583 [pdf] for details on recordkeeping rules for tax purposes. Consider using apps that can help with recordkeeping, such as those for capturing receipts for travel and entertainment expenses. Some may be available for use with, or provided by, your current bookkeeping software or cloud solution.

  • Submitted on 18 December 2013

    Created on December 18, 2013
     

     

    Business is underway, and you’ve hired some help. You’ll need to take care of employees by making sure that the right tax forms are complete.

    One-on-One Help from the Social Security Administration

    W2 Form, Pen, Calculator and MugEmployers who need help with general wage reporting information can call the Social Security Administration’s Employer Reporting Service Center at 800-772-6270. For answers to more technical questions, employer service liaison officers are available around the country by calling 800-772-6270.

    Other Services

    FORM W-2 FILING INFORMATION

    Each year, employers must send Copy A of each employee’s Form W-2, Wage and Tax Statement, with one Form W-3,Transmittal of Wage and Tax Statement, to the Social Security Administration by the last day of February (or last day of March if they file electronically) to report the wages and taxes of their employees for the previous calendar year.

    Complete wage reporting information and all publications needed to meet their wage reporting responsibilities are now online on the Social Security Online website, Employer W-2 Filing Instructions and Information page.

  • Submitted on 11 April 2013

    Created on April 11, 2013
     

    IRS Mobile AppThe Internal Revenue Service recently released an update to their IRS2Go mobile app. One of the new features of the app, available on the Android and iOS platforms, is that it detects whether a user’s device is set to English or Spanish and delivers the app in that language.

    Other resources available on IRS2Go include:

    • Get Your Refund Status. Taxpayers can check the status of their federal refund through the mobile app with a few basic pieces of information. An updated refund status is available 24 hours after the IRS acknowledges receipt of an e-filed return, or four weeks after mailing a paper return.

    • Get My Tax Record. Taxpayers can now order their tax account or tax return transcript from a mobile device. The transcript will be delivered via U.S. Postal Service to their address of record.

    • Watch Us. People can view the IRS YouTube videos right on their smartphones. The IRS YouTube video channels provide short, informative videos in EnglishSpanish and in American Sign Language on a variety of tax topics.

    • Follow the IRS. Taxpayers can sign up to follow the IRS Twitter newsfeeds, @IRSnews or @IRSenEspanol, which provide easy-to-use information, including tax law changes and important IRS programs

    • Get Tax Updates. Phone app users enter their e-mail address to automatically get simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the filing season and periodically throughout the rest of the year.

    • Get the latest news. With this tool users can quickly access the most recent updates on the IRS.gov English and Spanish news pages

    You can view more mobile products like IRS2Go on the USA.gov Apps Gallery.

  • Submitted on 11 April 2013

    Created on April 11, 2013
     

    Can’t File By April 15?

    There are three ways you can request an automatic extension of time to file a U.S. individual income tax return: (1) you can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) you can pay all or part of your estimate of income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS); or (3) you can file a paper Form 4868 by mail.

    If you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records and you do not need to mail in Form 4868. If you need to pay additional taxes when filing Form 4868 electronically, you may do so through the outside service provider or through e-file. You can refer to your tax software or tax professional for ways to file electronically using e-file services. Several companies offer free filing of Form 4868 through the Free File program that you can access on the IRS.gov website. If you wish to file electronically, be sure to have a copy of last year's tax return. You will be asked to provide the adjusted gross income (AGI) from the return for taxpayer verification.

  • Submitted on 01 March 2013

    Created on March 1, 2013
     

    TaxesAs a business owner you need to understand how taxes are going to affect you and your business. It is important that you file properly, avoid audits, and claim the right tax deductions.

    Here are a five tips that may ease the burden of tax preparation and to help you get ready for the April 15, 2013 deadline.

  • Submitted on 11 October 2012

    Be Attentive to Employee and Worker ConcernsBe Attentive to Employee and Worker Concerns

    As part of our blog series on tax literacy, MBDA will highlight the latest tax-related news issued by the IRS for business owners.  The material presented in this website is not offered as legal or tax advice.  You are urged to seek the advice of your tax advisor, attorney, and/or financial planner for any issue related to tax obligations.

    Payroll

    Maintaining good payroll records is critical for both you and your employees. Keep all records of employment taxes for at least 4 years. They should be available for IRS review. The following is a list of some of the records you should keep:

  • Submitted on 24 September 2012

    Created on September 24, 2012
     

    All Those Extras Add UpCar Expenses

    To take a business deduction for the use of your car, you must determine what percentage of the vehicle was used for business. No deduction is allowed for strictly personal use, such as commuting.

    Deductible car expenses can include the cost of: 1) traveling from one workplace to another, 2) making business trips to visit customers or attending business meetings away from your regular workplace, and 3) traveling to temporary workplaces.

    It is important to keep complete records to substantiate items reported on a tax return. In the case of car and truck expenses, the types of records required depend on whether you claim the standard mileage rate or actual expenses.

    Standard mileage rate: To claim the standard mileage rate, appropriate records would include documentation identifying the vehicle and proving ownership or a lease and documentation showing miles traveled, destination and business purpose. The 2012 standard mileage rates for the use of a car (including vans, pickups or panel trucks) are on www.irs.gov, search: standard mileage rate. If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then in later years, you can choose to use either the standard deduction or actual expenses.

  • Submitted on 29 March 2012

    With business tax-filing deadlines fast approaching, the Internal Revenue Service today encouraged small employers that provide health insurance coverage to their employees to check out the small business health care tax credit and then claim it if they qualify.

    The recently-revamped Small Business Health Care Tax Credit page on IRS.gov is packed with information and resources designed to help small employers see if they qualify for the credit and then figure it correctly. These include a step-by-step guide for determining eligibility, examples of typical tax savings under various scenarios, answers to frequently-asked questions, a YouTube video and a webinar.

  • Submitted on 20 March 2012

    Estimated Taxes CalculatorEstimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.

    Estimated tax is used to pay income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. If you do not pay enough through withholding or estimated tax payments, you may be charged a penalty. If you do not pay enough by the due date of each payment period you may be charged a penalty even if you are due a refund when you file your tax return.

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