Jun 29, 2012

Been Around The World:IRS Announces Efforts to Help U.S. Citizens Overseas




IRS Announces Efforts to Help U.S. Citizens Overseas, Including Dual Citizens and Those with Foreign Retirement Plans

The Internal Revenue Service announced a plan to help U.S. citizens residing overseas, including dual citizens, catch up with tax filing obligations and provide assistance for people with foreign retirement plan issues.

IRS Comissioner Shulman announced that the IRS will provide a new option to help some U.S. citizens and others residing abroad who haven’t been filing tax returns and provide them a chance to catch up with their tax filing obligations if they owe little or no back taxes. The new procedure will go into effect on Sept. 1, 2012.

The IRS is aware that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs). Some of these taxpayers have recently become aware of their filing requirements and want to comply with the law.
To help these taxpayers, the IRS offered the new procedures that will allow taxpayers who are low compliance risks to get current with their tax requirements without facing penalties or additional enforcement action. These people generally will have simple tax returns and owe $1,500 or less in tax for any of the covered years.

The IRS also announced that the new procedures will allow resolution of certain issues related to certain foreign retirement plans (such as Canadian Registered Retirement Savings Plans). In some circumstances, tax treaties allow for income deferral under U.S. tax law, but only if an election is made on a timely basis. The streamlined procedures will be made available to resolve low compliance risk situations even though this election was not made on a timely basis.

Taxpayers using the new procedures will be required to file delinquent tax returns along with appropriate related information returns for the past three years, and to file delinquent FBARs for the past six years. Submissions from taxpayers that present higher compliance risk will be subject to a more thorough review and potentially subject to an audit, which could cover more than three tax years.

Jun 28, 2012

Japan doubles its sales tax

Next time you complain about our sales tax in the U.S., read this:

Japan’s lower house voted on June 26th to double the country’s sales tax to 10 percent over three years in a bid to rein in a bulging national debt as an aging population burdens the country’s social security system.

The bill passed easily by a vote of 363-96, with support coming from the two biggest opposition parties. The bill must still pass the less powerful upper house to become law, which is expected.

It calls for raising the sales tax from 5 percent to 8 percent in 2014, and then to 10 percent in 2015.

Some economists warn that the tax increase will weaken consumer demand at a time when wages are stagnant and people are already holding back on spending. Key auto and electronics exporters, meanwhile, have been battered by a strong yen, natural disasters that have disrupted supply chains, and intensifying competition from Asian rivals.

If you plan to visit Japan, I would suggest to do it before 2015...just joking (but it will cost you)!

Jun 27, 2012

When The Man Come Around: Just Pay Your Taxes!


Ronald Weinland, 63, is a self-proclaimed doomsday prophet who was sure that the world was going to end on Sept. 30, 2008 and then again on May 27, 2012. Weinland was so sure in fact that he not only told all of his church members in Cincinnati, Ohio to prepare for the apocalypse, he stopped paying his taxes. After all what’s the point in paying taxes if the world is about to end.

As you have probably guessed the world did not end in 2008 or May 27, 2012 and now the Internal Revenue Service has worked with officials to convict Weinland over unpaid taxes.
Weinland was found guilty on June 13 over five counts of tax evasion. According to a grand jury indictment from 2005 through 2010 Weinland managed to skip out on $300,000 in owed taxes, funneling the money into a foreign bank account, lying on his tax forms and even writing off his own personal expenses as church expenses.

Public Announcement from the Goodfellas at J.S. Tax Corporation:

Don't listen to these con artist clowns like Weinland. Even during the apocalypse, the IRS will continue to come after you for taxes.  I rather deal with death then the IRS during my last days on earth. Therefore, just pay your fair share!

Jun 26, 2012

A Little Help From The IRS: Business taxes for the self-employed

Yes, I like alot of Beatles songs!



What is one of the best ways to learn about taxes?

Answer: From the IRS....duh!

All new business owners should check out this IRS webinar:

http://www.irsvideos.gov/BusinessTaxesSelfEmployedTheBasics/

The above webinar covers:
  • Recordkeeping
  • Reporting profit or loss
  • Self-employment tax and estimated tax payments
  • Husband and wife businesses

Jun 25, 2012

She's Leaving Home: Paying Your Child A Salary

She...(we never thought of ourselves)
Is leaving (never a thought for ourselves)
Home (we struggled hard all our lives to get by)
She's leaving home, after living alone, for so many years




Our kids will leave us one day. Why not get some additional tax deductions before they leave!

Did you know there are tax advantages associated with hiring your children? Salaries paid to your children under 18 are not subject to the social security tax, or FUTA (up to age 21) when employed in a parent's sole proprietorship. Fringe benefits are also available to the child. It's very important to remember wages must be reasonable and you have to prove your child actually worked. For example, don't say your 3-year old lifted inventory in your factory!

Think twice about giving your children allowance and consider the advantages of giving them a paycheck:
1. It enables you to take advantage of the child's full standard deduction
2. It enables you to reduce adjusted gross income, thereby preserving personal exemptions and itemized deductions
3. It enables your child to make contributions to an IRA

4. It enables the child to receive money that is not subject to the kiddie tax
As employees, your children can participate in a qualified retirement plan and any of the company's other fringe benefits, such as:

• Group-term insurance
• Accident and health insurance
• Educational assistance
• Travel and entertainment

Jun 20, 2012

Change Is Gonna Come: Online Taxes



I hope you saved your lunch money because a change gonna come with Amazon and other online retailers.
Amazon taxes are not new taxes. They merely address who is responsible for collecting tax that’s always been due on tangible personal property sales. Most states–45–have sales tax. If you buy online and have items shipped into one of those states you are liable for use tax, the mirror image of sales tax.
Since use tax is tough to collect, the battle is over getting online merchants to collect it. Soon we’ll all be paying it. In California, Amazon’s compromise exempts online retailers from collecting California sales or use tax until September 15, 2012 if the feds do not pass a federal online tax measure in the meantime.
Other Amazon agreements include Texas, July 2012; Virginia, September 2013; Indiana, January 2014; Nevada, January 2014; Tennessee, January 2014; and South Carolina, January 2016. Meanwhile, three federal bills are pending.
The Main Street Fairness Act would impose national tax standards but allow states abiding by the Streamlined Sales and Use Tax Agreement to force Internet sellers to collect tax. Other bills include the Marketplace Fairness Act and the Marketplace Equity Act.

Put in simplier words: Buying goods on the internet is about to get a whole lot of higher!!!

Jun 18, 2012

Dem IRS No Worry We: EAs Are America's Tax Experts

YES, I love my dancehall music!!!!



Friend: Dude, can you hook me up with the last Madden football video game?

America's Tax Expert: No

Friend: What do you mean “no?” I thought you worked the video game maker EA, Electronic Arts?

America's Tax Expert: You don’t listen to me; I said I’m an EA, Enrolled Agent!

Friend: Whoa I’m sorry; I thought all you penny-counters were CPAs!

Man, sometimes its tough being an Enrolled Agent. We’re America’s best kept secret in the world of taxation. I’m writing to unlock the mystery behind Enrolled Agents. The Enrolled Agent profession dates back to 1884 when after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the US Treasury Department. An Enrolled Agent is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the US Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service aka “Uncle Sam” for audits, collections, and appeals. “Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS.

You may be thinking “why should I trust an EA?” Well, let’s talk about what it takes to become an EA. It’s easy, all you have to do is know the secret password and you’re in. Okay, the previous sentence was to check if you’re still awake. An EA license can only be earned in one of two ways, by passing a comprehensive examination which covers all aspects of the tax code, or having worked at the IRS for five years in a position which regularly interpreted and applied the tax code and its regulations. Personally speaking, I took the exam which consists of three separate parts. Each part contained about 100 multiple choice questions. In addition, passing is not enough to qualify for the license. All candidates are subjected to a rigorous background check conducted by the IRS.

I hope that I shed a little light on the wonderful and exciting world of Enrolled Agents. There are only about 46,000 practicing Enrolled Agents. The IRS requires Enrolled Agents to complete 72 hours of continuing professional education, reported every three years to maintain the license. When searching for a tax professional, just don’t limit your choices by who is a CPA. Not all CPAs specialize in tax rules and regulations. Enrolled Agents can advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts and any entity with tax-reporting requirements. I know EA is not a sexier title than the well-known and recognized CPA title. However, we deserve the right to be respected and sort after for our expertise in taxation.

Jun 15, 2012

Help! R Kelly Is Trapped In The Closet with the IRS



Warning: Don't watch if you don't have a sense of humor!


R&B star R. Kelly, who last year saw his suburban Chicago mansion fall into foreclosure, now has the Internal Revenue Service at his door.

The Chicago Sun-Times reports documents held by the Cook County Recorder of Deeds show the recording artist owes the IRS nearly $5 million in unpaid taxes.
Kelly owes the money for taxes dating back as far as 2005. He paid $2.6 million in back taxes in 2008 and another $1 million last year, but the records show he still owes the federal government more than $4.8 million.

He should have contacted the GoodFellas at J.S. Tax Corporation to complete his tax returns!

Jun 13, 2012

Ain't No Sunshine When The IRS Is Gone

 
 
The IRS will close down forty-three of its offices around the country and will consolidate space in others. But this doesn't mean that the nation's tax collectors are on the verge of going out of business: It's all part of a cost-cutting initiative designed to save taxpayers a boatload of money.
 
The IRS estimates it will be save $40 million by slashing its total office space by more than one million square feet. These moves will take place over the next two years. Other than payroll, rent and related building costs are the IRS' largest operational expenses, running close to $800 million a year. 
 
The IRS hasn't issued the list of offices to be closed yet, but it notes that none of the offices are walk-in taxpayer assistance centers. Thus, it doesn't anticipate that the space-reduction measures will have much direct impact on taxpayers. But it remains to be seen how the changes will play out for tax practitioners.
 
IRS representatives in the offices being shut down will be reassigned to nearby facilities or allowed to telecommute. No IRS employees will be losing their jobs as a result of the space reduction.
 
Currently, the IRS is operating more than 650 offices around the country.

Jun 12, 2012

Everyone Hurts: IRS Offers Tips for Safeguarding Tax Records






Hurricane season has started and the IRS encourages individuals and businesses to safeguard their tax records against natural disasters by taking a few simple steps.

Here are four tips from the IRS to help you prepare in case a disaster strikes.

1. Backup records electronically Taxpayers should keep a set of backup records in a safe place away from the original set. Keeping a backup set of records, bank statements, tax returns, insurance policies, etc is easier now that many financial institutions provide statements and documents electronically. Even if the original record is only available on paper, it can be scanned into an electronic format. With documents in electronic form, taxpayers can download them to a portable backup storage device such as an external hard drive, CD or DVD that you can take with you in the event that you need to evacuate.

2. Document valuables Taxpayers should photograph or videotape the contents of their home, especially items of higher value. A photographic record can help an individual prove the market value of items for insurance and casualty loss claims. Photos should be stored at an outside location.

To document your valuables, the IRS has a disaster loss workbook, Publication 584, Casualty, Disaster and Theft Loss Workbook, which can help taxpayers compile a room-by-room list of belongings.

3. Update Emergency Plans Emergency plans should be reviewed at least once a year. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company changes functions, plans should be updated and employees should be informed.

4. IRS Ready to Help If a disaster strikes, affected taxpayers can call 1-866-562-5227 to speak with IRS specialists trained to handle disaster-related issues. Taxpayers can request copies of previously-filed tax returns by filing Form 4506, Request for Copy of Tax Return. Taxpayers can also request transcripts showing most line items on a return online at IRS.gov, by calling 1-800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Return.

More information on preparing for disasters can be found at IRS.gov. Forms and publications can be downloaded at IRS.gov or ordered by calling 1-800-829-3676.

Jun 11, 2012

No recess when it comes to financial literacy


Learning new things doesn't stop at high school! Stay thirsty my friends (lol)!

Are you tried of having to go to a tax professsional for advice? Hey, maybe you want to be a tax professional (it could happen)! Do you want to grow your business or bank account but sick of listening to millionaires who only want to sell you books and audiotapes? Well, I feel your pain. I wish that I can tell those so-called "experts" on TV to shut up. Here is a list of useful site to start your own research on financial issues. Knowledge is power. Don't ever let someone take advantage of you because your lack of knowledge.

Credit Reports

Equifax: http://www.equifax.com
Experian: http://www.experian.com
Trans Union: http://www.transunion.com

Entrepreneur

Inc. Magazine: http://www.inc.com
Entrepreneur.com: http://www.entrepreneur.com
BizJournals.com: http://www.bizjournals.com
BlackEnterprise.com: http://www.blackenterprise.com

Financial

SmartMoney.com: http://www.smartmoney.com
MSN Money Central: http://moneycentral.msn.com
Yahoo! Finance: http://finance.yahoo.com

Government Sites

US Department of Housing and Urban Development (HUD): http://www.hud.gov
Social Security Administration: http://www.ssa.gov
Internal Revenue Service: http://www.irs.gov
US Small Business Administration: http://www.sba.gov
Professional Organizations

NAEA – National Association of Enrolled Agents: http://www.naea.org
NATP – The National Association of Tax Professionals: http://www.natptax.com
AICPA – American Institute of Certified Public Accounts: http://www.aicpa.org
NABA – National Association of Black Accountants: http://www.nabainc.org

IRS Spotlights Expanded Tax Credit for Hiring Veterans and Credit for Providing Health Care

Somedays won't end ever and somedays pass on by,
I'll be working here forever, at least until I die.
Dammed if you do, dammed if you don't
I'm supposed to get a raise week, you know damn well I won't.

Workin' for a livin' (workin')
Workin' for a livin' (workin')
Workin' for a livin', livin' and workin'
I'm taking what they giving 'cause I'm working for a livin'.

Hey I'm not complaining 'cause I really need the work
Hitting up my buddy's got me feeling like a jerk
Hundred dollar car note, two hundred rent.
I get a check on Friday, but it's all ready spent.




The Internal Revenue Service wants to encourage small business owners to check out two key tax credits and a special relief program that could provide significant tax benefits during 2012.

Both the expanded credit for hiring veterans and the credit for employer-provided health care coverage can provide tax savings to eligible small businesses when they file their 2012 federal income tax returns. Here are details on each of these benefits.

Expanded Tax Credit for Hiring Veterans
A law change enacted late last year now provides an expanded Work Opportunity Tax Credit (WOTC) to employers that hire eligible unemployed veterans. The credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations. The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, hours a veteran works and the amount of first-year wages paid. Employers who hire veterans with service-related disabilities may be eligible for the maximum credit.

Certification requirements apply to these new hires. Normally, an eligible employer must file Form 8850 with the state workforce agency within 28 days after the eligible worker begins work. But under a special rule, employers have until June 19, 2012, to complete and file this form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22. This form can be faxed or electronically transmitted to the state workforce agency, as long as the agency is able to receive the certification forms that way.

Businesses claim the credit on their income tax return using Form 5884 and Form 3800. A separate claim procedure using Form 5884-C applies to eligible tax-exempt organizations. Details are on IRS.gov.

Credit Helps Small Employers Provide Health Care Coverage
Small employers that pay at least half of the premiums for employee health insurance coverage under a qualifying arrangement may be eligible for the small business health care tax credit. Enacted two years ago, the credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

Eligible small employers can claim the credit for 2010 through 2013 and for two additional years beginning in 2014. Targeted to small employers that primarily employ low-and moderate-income workers, the maximum credit, in tax-years 2010 through 2013, is 35 percent of premiums paid by small businesses and 25 percent of premiums paid by tax-exempt organizations, increasing to 50 percent and 35 percent, respectively, in 2014.

Small businesses claim the credit on their income tax return using Form 8941 and Form 3800. Tax-exempt organizations also use Form 8941 and then claim the credit on Form 990-T.

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.



Jun 7, 2012

We're Almost There: Voting and Taxes

No matter how hard
The task may seem
Don't give up our plans
Don't give up our dreams

No broken bridges
Can turn us around
Cause what we're searchin' for
Will soon be found



California voters narrowly rejected a ballot measure that would have added a $1 tax to a pack of cigarettes in the state's primary election Tuesday, an outcome observers attributed to a $47 million ad blitz by the tobacco industry.

The measure, known as Proposition 29, was defeated 50.8 percent to 49.2 percent on a day of light voter turnout, according to election results posted on Wednesday by California's secretary of state. Some absentee and other ballots remained to be counted.

The result reflected a long-standing political divide in California, with San Francisco Bay area counties heavily supporting the measure, while conservative suburban counties in more populous Southern California overwhelmingly opposed it.

I lost my grandfather to his long-term smoking habit. I never had the chance to meet him. He passed away before my father hit his teen years. We know that smoking kills. I don't want to sugar-coat that fact. Many of taxpayers' money is going to fund cancer treatments. The cigarette industry needs to pay. It is sad that low voting turnout prevented California to increase taxes on cigarettes.

COME ON PEOPLE.....GET OUT AND VOTE!!!!!

This is my rant of the week.

Jun 4, 2012

Don't be a Drop Out: IRS Helps With FAFSA


Now a good friend of mine
Sat with me and he cried
He told me a story
I know he ain't lying

Said he went for a job
And Mr. Man said
Without an education
You might as well be dead




Automated IRS System Helps College-Bound Students with Financial Aid Application Process


College-bound students and their parents typically want to make every dollar and every minute of the college experience count including money spent on tuition and time spent on the college financial aid application process. The Internal Revenue Service is helping minimize the time spent on the completion of the Free Application for Federal Student Aid (FAFSA) form by automating access to federal tax returns with the IRS Data Retrieval Tool. This tool provides the opportunity for applicants to automatically transfer the required tax data onto the FAFSA form.

Here are some tips on using the IRS Data Retrieval Tool:
  • Benefits The IRS Data Retrieval tool is an easy and secure way to access and transfer tax return information directly onto the FAFSA form, saving time and improving accuracy. Also, the increased accuracy reduces the likelihood of being selected for verification by the school’s financial aid office.
  • Eligibility Criteria Taxpayers who wish to use the tool to complete their 2012 FAFSA form must:
    • have filed a 2011 tax return;
    • possess a valid Social Security Number;
    • have a Federal Student Aid PIN (individuals who don’t have a PIN, will be given the option to apply for one through the FAFSA application process);
    • have not changed marital status since Dec. 31, 2011.
  • Exceptions If any of the following conditions apply to the student or parents, the IRS Data Retrieval Tool can not be used for the 2012 FAFSA application:
    • an amended tax return was filed for 2011;
    • no federal tax return for 2011 has been filed ;
    • the federal tax filing status on the 2011 return is married filing separately; a Puerto Rican or other foreign tax return has been filed.
  • Alternatives If the IRS Data Retrieval Tool can not be used and if the college requests verification documentation, it may be necessary to obtain an official transcript from the IRS. To order tax return or tax account transcripts, visit www.irs.gov and select Order a Transcript or call the Transcript toll-free line at 1-800-908-9946.