Sunday, July 12, 2015

Surf the Net to IRS.gov this Summer

IRS Summertime Tax Tip 2015-04, July 10, 2015               
                           
Summertime or anytime, get the tax help and information you need on IRS.gov. Our many online tools and services make it easy for you to do business with the IRS. Here are the top reasons to visit IRS.gov this summer:
  • Use IRS Free File.  If you still need to file your 2014 tax return, you can use IRS Free File to e-file for free. Free File is available through Oct. 15. If you earned $60,000 or less you can prepare and e-file your taxes with free tax software. If you made more, use Free File Fillable Forms to e-file for free. This option is the electronic version of IRS paper forms.

  • Check on your refund.  The Where’s My Refund? tool is a fast and easy way to check on your tax refund. Use the IRS2Go mobile app to access it or click on the “Refunds” tab on IRS.gov.

  • Try IRS Direct Pay.  If you owe taxes, pay them with IRS Direct Pay. It’s the safe, easy and free way to pay from your checking or savings account. Just click on the “Pay Your Tax Bill” link on the IRS home page.

  • Apply to make payments.  If you are not able to pay your tax in full, you may apply for an Online Payment Agreement. Check out the direct debit payment plan. It has a lower set-up fee and you will not miss a payment. With a direct debit plan the IRS will not send you a monthly reminder to send your check.

  • Correct your tax withholding.  Did you get a big refund or owed more tax than you expected when you filed your tax return? If so, you may want to change your tax withholding. To make a change, complete and give your employer a new Form W-4, Employee's Withholding Allowance Certificate. The IRS Withholding Calculator tool can help you fill out a new Form W-4.

  • Get health care tax information.  The IRS website also has information about the Affordable Care Act tax provisions at IRS.gov/aca. You can visit this site for educational material that describes how the health care law tax provisions affect individuals and businesses. There you will find information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources.

  • Check out a charity.  If you donate to a charity, the value of your gift may be deductible. Use the Select Check tool to see if your charity qualifies.

  • Get answers to tax questions.  The Interactive Tax Assistant covers many common tax topics. Type in your question or search terms and it can lead you step-by-step to the answer. The IRS Tax Map gives you a single point of access to tax law information by subject. It integrates tax topics, forms, instructions and publications into one tool.

  • Get forms and publications.  View, download and print federal tax forms and publications on IRS.gov/forms at any time.
Additional IRS Resources:
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Source: Internal Revenue Service
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Wednesday, July 8, 2015

Health Care Tax Credit for Small Businesses

The IRS recently released information pertaining to the Small Business Health Care Tax Credit, outlining the prerequisites for receiving the credit and which forms need to be filed.


For a business to receive the credit, it must have used the Small Business Health Options Program (SHOP) to purchase health care for employees. Eligible businesses must pay at least half the cost of employee premiums, and must have “fewer than 25 full-time equivalent” workers who – on average – are paid less than $50,000 annually.

To file, the eligible business must complete Form 8941. Some non-profits might also be eligible for the credit: They would include the information on their Form 990-T.

It may still be possible to claim the credit for 2014 returns. The window for applying for a refund is “within three years from the time the return was filed or two years from the time the tax was paid, whichever … expires later.”

To read the full article, click here.

Source: Internal Revenue Service
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IRS Tips about Vacation Home Rentals

IRS Summertime Tax Tip 2015-03, July 8, 2015

If you rent a home to others, you usually must report the rental income on your tax return. However, you may not have to report the rent you get if the rental period is short and you also use the property as your home. In most cases, you can deduct your rental expenses. When you also use the rental as your home, your deduction may be limited. Here are some basic tax tips that you should know if you rent out a vacation home:
  • Vacation Home.  A vacation home can be a house, apartment, condominium, mobile home, boat or similar property.

  • Schedule E.  You usually report rental income and rental expenses on Schedule E, Supplemental Income and Loss. Your rental income may also be subject to Net Investment Income Tax.

  • Used as a Home.  If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received. For more about these rules, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

  • Divide Expenses.  If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use. To figure how to divide your costs, you must compare the number of days for each type of use with the total days of use.

  • Personal Use.  Personal use may include use by your family. It may also include use by any other property owners or their family. Use by anyone who pays less than a fair rental price is also personal use.

  • Schedule A.  Report deductible expenses for personal use on Schedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses.

  • Rented Less than 15 Days.  If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income. In this case you deduct your qualified expenses on schedule A.

  • Use IRS Free File.  If you still need to file your 2014 tax return, you can use IRS Free File to make filing easier. Free File is available until Oct. 15. If you make $60,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available only through the IRS.gov website.
You can get forms and publications on IRS.gov/forms at any time.

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Renting Your Vacation Home – English | Spanish

Source: Internal Revenue Service

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Monday, July 6, 2015

Reporting Gambling Income and Losses on Your Tax Return

IRS Summertime Tax Tip 2015-02, July 6, 2015

If you play the ponies, play cards or pull the slots, your gambling winnings are taxable. You must report them on your tax return. If you gamble, these IRS tax tips can help you at tax time next year:
  1. Gambling income.  Income from gambling includes winnings from the lottery, horse racing and casinos. It also includes cash and non-cash prizes. You must report the fair market value of non-cash prizes like cars and trips.

  2. Payer tax form.  If you win, the payer may give you a Form W-2G, Certain Gambling Winnings. The payer also sends a copy of the W-2G to the IRS. The payer must issue the form based on the type of gambling, the amount you win and other factors. You’ll also get a form W-2G if the payer must withhold income tax from what you win.

  3. How to report winnings.  You normally report your winnings for the year on your tax return as “Other Income.” You must report all your gambling winnings as income. This is true even if you don’t receive a Form W-2G.

  4. How to deduct losses.  You can deduct your gambling losses on Schedule A, Itemized Deductions. The amount you can deduct is limited to the amount of the gambling income you report on your return.

  5. Keep gambling receipts.  You should keep track of your wins and losses. This includes keeping items such as a gambling log or diary, receipts, statements or tickets.
See Publication 525, Taxable and Nontaxable Income for rules on this topic. Refer to Publication 529, Miscellaneous Deductions for more on losses. It also lists some of the types of records you should keep. You can download and view both on IRS.gov/forms at any time.

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Source: Internal Revenue Service
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Wednesday, July 1, 2015

Ten Things to Know about Identity Theft and Your Taxes

IRS Summertime Tax Tip 2015-01, July 1, 2015

Learning you are a victim of identity theft can be a stressful event. Identity theft is also a challenge to businesses, organizations and government agencies, including the IRS. Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund.

Many times, you may not be aware that someone has stolen your identity. The IRS may be the first to let you know you’re a victim of ID theft after you try to file your taxes.
The IRS combats tax-related identity theft with a strategy of prevention, detection and victim assistance. The IRS is making progress against this crime and it remains one of the agency’s highest priorities.

Here are ten things to know about ID Theft:
  1. Protect your Records.  Do not carry your Social Security card or other documents with your SSN on them. Only provide your SSN if it’s necessary and you know the person requesting it. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for Internet accounts.

  2. Don’t Fall for Scams.  The IRS will not call you to demand immediate payment, nor will it call about taxes owed without first mailing you a bill. Beware of threatening phone calls from someone claiming to be from the IRS. If you have no reason to believe you owe taxes, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 FREE.

  3. Report ID Theft to Law Enforcement.  If your SSN was compromised and you think you may be the victim of tax-related ID theft, file a police report. You can also file a report with the Federal Trade Commission using the FTC Complaint Assistant. It’s also important to contact one of the three credit bureaus so they can place a freeze on your account.

  4. Complete an IRS Form 14039 Identity Theft Affidavit.  Once you’ve filed a police report, file an IRS Form 14039 Identity Theft Affidavit.  Print the form and mail or fax it according to the instructions. Continue to pay your taxes and file your tax return, even if you must do so by paper.

  5. Understand IRS Notices.  Once the IRS verifies a taxpayer’s identity, the agency will mail a particular letter to the taxpayer. The notice says that the IRS is monitoring the taxpayer’s account. Some notices may contain a unique Identity Protection Personal Identification Number (IP PIN) for tax filing purposes.

  6. IP PINs.  If a taxpayer reports that they are a victim of ID theft or the IRS identifies a taxpayer as being a victim, they will be issued an IP PIN. The IP PIN is a unique six-digit number that a victim of ID theft uses to file a tax return. In 2014, the IRS launched an IP PIN Pilot program. The program offers residents of Florida, Georgia and Washington, D.C., the opportunity to apply for an IP PIN, due to high levels of tax-related identity theft there.

  7. Data Breaches.  If you learn about a data breach that may have compromised your personal information, keep in mind not every data breach results in identity theft.  Further, not every identity theft case involves taxes. Make sure you know what kind of information has been stolen so you can take the appropriate steps before contacting the IRS.

  8. Report Suspicious Activity.  If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

  9. Combating ID Theft.  Over the past few years, nearly 2,000 people were convicted in connection with refund fraud related to identity theft. The average prison sentence for identity theft-related tax refund fraud grew to 43 months in 2014 from 38 months in 2013, with the longest sentence being 27 years.

    During 2014, the IRS stopped more than $15 billion of fraudulent refunds, including those related to identity theft.  Additionally, as the IRS improves its processing filters, the agency has also been able to halt more suspicious returns before they are processed. So far this year, new fraud filters stopped about 3 million suspicious returns for review, an increase of more than 700,000 from the year before.

  10. Service Options.  Information about tax-related identity theft is available online. We have a special section on IRS.gov devoted to identity theft and a phone number available for victims to obtain assistance.
For more on this Topic, see the Taxpayer Guide to Identity Theft.
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Source: Internal Revenue Service
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Six Tips to Help You Pay Your Tax Bill this Summer

IRS Special Edition Tax Tip 2015-15, June 30, 2015

If you get a tax bill from the IRS, don’t ignore it. The longer you wait the more interest and penalties you will have to pay. Here are six tips to help you pay your tax debt and avoid extra charges:
  1. Reply promptly.  After tax season, the IRS typically sends out millions of notices. Read it carefully and follow the instructions. If you owe, the notice will tell you how much and give you a due date. You should respond to the notice promptly and pay the bill to avoid additional interest and penalties.

  2. Pay online.  Using an IRS electronic payment method to pay your tax is quick, accurate and safe. You also get a record of your payment. Options for electronic payments include:
    Direct Pay and EFTPS are free services. If you pay by credit or debit card, the payment processing company will charge a fee.

  3. Apply online to make payments.  If you are not able to pay your tax in full, you may apply for an installment agreement. Most people and some small businesses can apply using the Online Payment Agreement Application on IRS.gov. If you are not able to apply online, or you prefer to do so in writing, use Form 9465, Installment Agreement Request to apply. The best way to get the form is on IRS.gov/forms. You can download and print it at any time.

  4. Check out a direct debit plan.  A direct debit installment agreement is the lower-cost hassle-free way to pay. The set-up fee is less than half of the fee for other plans. The direct debit fee is $52 instead of the regular fee of $120. With a direct debit plan, you pay automatically from your bank account on a day you set each month. There is no need for you to write a check and make a trip to the post office. There are no reminder notices from the IRS and no missed payments. For more see the Payment Plans, Installment Agreements page on IRS.gov.

  5. Pay by check or money order.  Make your check or money order payable to the U.S. Treasury. Be sure to include:       
    • Your name, address and daytime phone number
    • Your Social Security number or employer ID number for business taxes
    • The tax period and related tax form, such as “2014 Form 1040”

    Mail it to the address listed on your notice. Do not send cash in the mail.

  6. Consider an Offer in Compromise.  With an Offer in Compromise, or OIC, you may be able to settle your tax debt with the IRS for less than the full amount you owe. An OIC may be an option if you are not able to pay your tax in full. It may also apply if full payment will create a financial hardship. Not everyone qualifies, so you should explore all other ways to pay before submitting an OIC. To see if you may qualify and what a reasonable offer might be, use the IRS Offer in Compromise Pre-Qualifier tool.
Find out more about the IRS collection process on IRS.gov.
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Source: Internal Revenue Service
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Include a Few Tax Items in Your Summer Wedding Checklist

IRS Special Edition Tax Tip 2015-14, June 29, 2015

If you’re preparing for summer nuptials, make sure you do some tax planning as well. A few steps taken now can make tax time easier next year. Here are some tips from the IRS to help keep tax issues that may arise from your marriage to a minimum:
  • Change of name.  All the names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name, report it to the SSA. To do that, file Form SS-5, Application for a Social Security Card. The easiest way for you to get the form is to download and print it on SSA.gov. You can also call SSA at 800-772-1213 FREE to order the form, or get it from your local SSA office.

  • Change tax withholding.  When you get married, you should consider a change of income tax withholding. To do that, give your employer a new Form W-4, Employee's Withholding Allowance Certificate. The withholding rate for married people is lower than for those who are single. Some married people find that they do not have enough tax withheld at the married rate. For example, this can happen if you and your spouse both work. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information. You can get IRS forms and publications on IRS.gov/forms at any time.

  • Changes in circumstances.  If you receive advance payments of the premium tax credit you should report changes in circumstances, such as your marriage, to your Health Insurance Marketplace. Other changes that you should report include a change in your income or family size. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

  • Change of address.  Let the IRS know if you move. To do that, file Form 8822, Change of Address, with the IRS. You should also notify the U.S. Postal Service. You can change your address online at USPS.com, or report the change at your local post office.

  • Change in filing status.  If you are married as of Dec. 31, that is your marital status for the entire year for tax purposes. You and your spouse can choose to file your federal tax return jointly or separately each year. It is a good idea to figure the tax both ways so you can choose the status that results in the least tax.
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Source: Internal Revenue Service
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