A tax return is signed under penalties of perjury and is not an opening offer, quipped journalist Lee Sheppard. True, but we all make mistakes. Besides, some items—like an amended an Form K-1 or 1099, may show up after you’ve filed. The IRS doesn’texactly allow tax return do-overs.
Still, if you discover an error on your tax return, the only way to fix it is to amend your return. There are many myths about amended returns, but the IRS recently listed some things they want you to know. See IRS Summertime Tax Tip 2011-12.
Do Amend. If your filing status, dependents, total income, deductions or credits were reported incorrectly, amend. » Read more..
Same-sex married couples have tough tax filing issues, far more complex than heterosexual couples. Clearly that shouldn’t be true, but for the time being it is. To its credit, New York State has released helpful information about tax filing under the Marriage Equality Act. The Marriage Equality Act was signed into law June 24, 2011. Little more than a month later the New York Department of Taxation and Finance weighed in with this guidance.
Here are the highlights:
Different Filing Status. Same-sex married couples in New York must file their personal tax returns as married even though their marriage isn’t recognized for federal tax purposes. You use a filing status of single or head of household on your federal Form 1040, but for New York, either married filing » Read more..
It’s nothing but lawless anarchy in the unregulated tax preparation industry. Just look at what’s happening out there:
- A practitioner spends years helping taxpayers improperly deduct “lifestyle expenses” — their clothes, their make up — even their pets!
- A practitioner costs the Treasury hundreds of millions of dollars setting up corporations and arranging sham transactions to hide income in a tax-exempt shell.
- Another practitioner helps taxpayers unlawfully avoid taxes using sham trusts and transparently phony legal arguments.
It’s no wonder the IRS has started its huge new program to register all unregulated tax practitioners, make them pass a competency test, and subject them to continuing education each year.
Oh, wait… these cases didn’t involve unregulated preparers. They involved an Enrolled Agent, an Attorney, and a CPA — all tax professionals that already have to pass much stiffer entrance tests and take more continuing education that anything proposed under the new unregulated preparer rules. » Read more..
You may think the IRS pursues all taxes equally but they don’t. The IRS is especially vigorous in going after payroll taxes withheld from wages that somehow don’t get paid to the government. This is trust fund money that belongs to the government and was withheld from wages.
That makes any failure to pay—or even late payment—much worse. In fact, that’s so regardless of how or why the employer or its principals use the money. See No Get-Out-Of-Jail-Free Card For Payroll Tax Liability.
When a tax shortfall occurs in this setting, the IRS will usually make personal assessments against allresponsible persons who have ownership in or signature authority over the company and its payables. » Read more..
Does your business use an outside payroll service? Are you thinking of using one?
Payroll service companies perform an important function assisting employers comply with payroll tax laws. But these services pose risks for employers.
There are three categories of payroll service companies. In all three categories, the payroll service company computes employees’ withholdings and net pay, compiles payroll accounting records for the employer, and prepares payroll tax returns for the employer.
The first category of payroll service companies are payroll service providers (“PSPs”). A PSP prepares payroll tax returns using the employer’s employer identification number (“EIN”). The employer signs and files the tax returns. » Read more..
While nearly everyone these days is familiar with the individual retirement account, many people remain unaware of the additional control possible by converting to or selecting the self-directed individual retirement account. Need more control over your retirement future? Want more, different, and better investment choices ? Do you want to choose the custodian for your account? If you want to control the decisions that could decide your financial future, then a self-directed individual retirement account should be right for you. It’s simple to get started. Research custodial companies to find out which allows the investment types that fit your goals. Beyond conventional stocks, bonds and mutual funds there are a variety of tangible investments to consider , including gold, silver, real estate and tax liens. Confirm that the custodian has a good level of experience with these kinds of investments. With some minimal paperwork, you can roll over an existing IRA or open a new self-directed individual retirement account. Always ask about the fee structure for transactions, wire transfers, maintenance and other work done on behalf of the account. The custodian will then, at the investor’s instruction , make the specific investments requested for the account. Profits from the investments will flow directly back into the self-directed individual retirement account. The investor no longer has to rely on the meager earnings of under-performing stocks or be pitched by a brokerage house on their newest funds and other investment opportunities. Taking control means paying attention and having a plan. It’s having clarity on your personal and retirement goals, and working to reach them with wise investment options and consistent contributions to the individual retirement account. Everyone can take advantage of the tax-advantaged IRA to start building retirement wealth. Determine which self-directed individual retirement plan will best serve in achieving your goals. A Traditional IRA or a Roth IRA can both be self-directed, so the ultimate control remains with you.