Category Archives: Types of IRS Forms and Documentation

What Are The Top Six Home Office Deductions?

IRS Talks About Home Office Deductions

If you are one of our clients, you know how we handle your home office deductions.  But for those who aren’t our clients – yet – here are some tips from the IRS that you might find useful.

Issue Number:IRS Tax Tip 2015-42

If you use your home for business, you may be able to deduct expenses for the business use of your home. If you qualify you can claim the deduction whether you rent or own your home. If you qualify for the deduction you may use either the simplified method or the regular method to claim your deduction. Here are six tips that you should know about the home office deduction.

1.Regular and Exclusive Use. As a general rule, you must use a part of your home regularly and exclusively for business purposes. The part of your home used for business must also be:

  • Your principal place of business, or
  • A place where you meet clients or customers in the normal course of business, or
  • A separate structure not attached to your home. Examples could include a garage or a studio.

2.Simplified Option. If you use the simplified option, you multiply the allowable square footage of your office by a rate of $5. The maximum footage allowed is 300 square feet. This option will save you time because it simplifies how you figure and claim the deduction. It will also make it easier for you to keep records. This option does not change the criteria for who may claim a home office deduction.

3.Regular Method. If you use the regular method, the home office deduction includes certain costs that you paid for your home. For example, if you rent your home, part of the rent you paid may qualify. If you own your home, part of the mortgage interest, taxes and utilities you paid may qualify. The amount you can deduct usually depends on the percentage of your home used for business.

4.Deduction Limit. If your gross income from the business use of your home is less than your expenses, the deduction for some expenses may be limited.

5.Self-Employed. If you are self-employed and choose the regular method, use Form 8829, Expenses for Business Use of Your Home, to figure the amount you can deduct. You can claim your deduction using either method on Schedule C, Profit or Loss From Business. See the Schedule C instructions for how to report your deduction.

6.Employees. If you are an employee, you must meet additional rules to claim the deduction. For example, your business use must also be for the convenience of your employer. If you qualify, you claim the deduction on Schedule A, Itemized Deductions.

For more on this topic, see Publication 587, Business Use of Your Home. You can view, download and print IRS tax forms and publications on IRS.gov/forms anytime.

If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.

Additional IRS Resources:


US-TaxLaws is your best source for professional tax preparation and/or financial consulting services.  We make your tax dollars work for you. Find out how we can help you.  Give us a call at 619-589-8680. 

2015 Tax Dates

January 15, 2015

4th Quarter 2014 Estimated Tax Payment Due

April 15, 2015 

Individual Tax Returns Due for Tax Year 2014

Individual Tax Return Extension Form Due for Tax Year 2014

1st Quarter 2015 Estimated Tax Payment Due

Last Day to make a 2014 IRA Contribution

June 15, 2015

2nd Quarter 2015 Estimated Tax Payment Due

September 15, 2015

3rd Quarter 2015 Estimated Tax Payment Due

October 15, 2015

Extended Individual Tax Returns Due

Last Chance to Recharacterize 2014 Roth IRA Conversion

January 15, 2016

4th Quarter 2015 Estimated Tax Payment Due

 

IRS Announces Special Per Diem Rates Effective October1, 2014

Box of ReceiptsSpecial per diem rates for lodging, meals, and incidental expenses.

Notice 2014-57 announces the special per diem rates effective October 1, 2014, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home.  The rates are the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.  Use of a per diem substantiation method is not mandatory.  A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.

Notice 2014-57 will be published in Internal Revenue Bulletin 2014-41 on Oct. 6, 2014.

Source:  IRS Guidewire Issue Number:    N-2014-57

 

Electronic Recordkeeping, Hard Copies and the IRS

Caution Sign When Saving Tax Records and Using Electronic Media StorageElectronic Recordkeeping, Hard Copies and the IRS

Even if your system crashes, you still must be able to RECONSTRUCT your records to their specifications. Do you know what they are?  

Read about what you can and can’t do if you plan on storing your tax records electronically.  In many cases you need to keep hard copies – in print.  The IRS must be able to access your electronic media at any time it wants.  You need to know what you can and cannot do.  One thing you CAN’T DO is use the excuse “my computer hard drive crashed.” 

Read our post on the use of electronic media for saving tax & business records.

EDD extension for San Diego wildfire

header_ca_govEDD extension for San Diego wildfire

San Diego County – May 2014

Employers in San Diego County directly affected by the wildfire may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC). Written request for an extension must be received within 60 days from the original delinquent date of the payment or return to file/pay.

If you have any questions, contact the EDD’s Taxpayer Assistance Center at (888) 745-3886 or at  www.edd.ca.gov/Payroll_Taxes/Emergency_and_Disaster_Assistance_for_Employers.htm

 

Source:

How long should I keep records, and other business files

How Long Do You Really Need to Keep Your Financial Documents?

Files and a messy deskNow that April 15 has come and gone, everyone is writing about tax information, records to keep, and records you can discard.  For some it’s just personal tax records.  For others, it’s personal and business documents.  However, before you go out and purchase electronic media to store records and receipts, please read our March 26 blog, Keeping Business Records Continue reading

Use of Electronic Media for Saving Tax & Business Records

Electronic recordkeeping mediaConsidering the use of Electronic Media for Saving Tax & Business Records?

Whether you are starting a new business – or have an established business – you might be looking at how to improve your record keeping practices.

If you have considered the use of electronic media for saving tax & business records you will also want to be sure you are in compliance with the IRS rules and regulations for electronic storage systems. Continue reading

401(k) and IRA Limitations and Adjustments for 2014

Larger IRSIRS cost‑of‑living adjustments affect dollar limitations for pension plans and other retirement-related items for tax year 2014. 

Some pension limitations such as those governing 401(k) plans and IRAs will remain unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment.  However, other pension plan limitations will increase for 2014.  Highlights include the following: Continue reading

SPECIAL RULE FOR CHILDREN OF DIVORCED OR SEPARATED PARENTS!

Divorce jpegCHILD AND DEPENDENT CARE EXPENSES.

IRS Form 2441 is all about child and dependent care.  It has a section that talks about the *special rules* that are applied to children of divorced or separated parents.

To be a *qualifying person*, the person had to live with you for more than half of 2013.

 

First, what does *Qualifying Person* mean?  According to the IRS, a qualifying person is: Continue reading

Charitable Contributions Under the Magnifying Glass

Uncle Sam Arm holding Magnifying GlassOrganizations That Qualify To Receive Deductible Contributions

Many of us have our favorite charities that we know and have contributed to in the past.  However, not every charitable contribution is deductible – specifically – those contributions made to individuals.

Please refer to the IRS Publication 526 to get filing guidelines for tax year 2013.  They cover just about everything and include: Organizations That Qualify To Receive Deductible Contributions, Contributions You Can Deduct, Contributions You Cannot Deduct, Contributions of Property, When To Deduct, Limits on Deductions, Records To Keep, and How To Report.

A few posts back we discussed charitable contributions in Part I and Part II on Substantiating Tax Deductions for Charitable Contributions.  According to the IRS, for 2013, you may have to reduce the total amount of certain itemized deductions, including charitable contributions, if your adjusted gross income is more than:

  • $150,000 if married filing separately,
  • $250,000 if single,
  • $275,000 if head of household, or
  • $300,000 if married filing jointly or qualifying widow(er).

They also discuss Disaster relief.

“You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization (defined under Contributions) Organizations That Qualify To Receive Deductible . However, you cannot deduct contributions earmarked for relief of a particular individual or family.”

How to check whether an organization can receive deductible charitable contributions. You can ask any organization whether it is a qualified organization, and most will be able to tell you. Or go to IRS.gov. Click on “Tools” and then on “Exempt Organizations Select Check”  (www.irs.gov/Charities&NonProfits/ExemptOrganizationsSelectCheck).

This online tool will enable you to search for qualified organizations. You can also call the IRS to find out if an organization is qualified. Call 1-877-829-5500. People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www.gsa.gov/fedrelay.

The IRS has a tool that you can use to check charitable organizations.  http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check

 

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http://us-taxlaws.com/wp-content/uploads/2014/03/IRS-Publicatim-526-Charitable-Contributions.pdf

Tips for Taxpayers, Victims about Identity Theft and Tax Returns

Larger IRSIdentity theft remains a top priority for the Internal Revenue Service in 2014

IRS YouTube Videos
ID Theft: IRS Efforts on Identity Theft

FS-2014-2, January 2014

Identity theft remains a top priority for the Internal Revenue Service in 2014. Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS. This year, the IRS continues to take new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud.

CAUTION IDENTITY THEFT ALERTStopping refund fraud related to identity theft is a top priority for the tax agency. The IRS is focused on preventing, detecting and resolving identity theft cases as soon as possible.

The IRS has more than 3,000 employees working on identity theft cases. We have trained more than 35,000 employees who work with taxpayers to recognize and provide assistance when identity theft occurs.

Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.

Here are some tips to protect you from becoming a victim, and steps to take if you think someone may have filed a tax return using your name: Continue reading

IRS Combats Identity Theft and Refund Fraud on Many Fronts

Larger IRSIDENTITY THEFT MAJOR CONCERN FOR IRS

Stopping identity theft and refund fraud is a top priority for the Internal Revenue Service (IRS). The agency’s work on identity theft and refund fraud continues to grow, touching nearly every part of the organization. For the 2014 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

The IRS assigned more than 3,000 IRS employees to work on identity theft-related issues. IRS employees are working to prevent refund fraud, investigate identity theft-related crimes and help taxpayers who have been victimized by identity thieves. In addition, the IRS provides training to more than 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.

Continue reading

Important Tax Date – February 28

FOR ALL BUSINESSES – TAX FILING INFORMATION

CAUTION TAX FORMS NEEDED!File information returns (for example, Forms 1099 for certain payments you made during 2013.  There are different forms for different types of payments. Use a separate Form 1096, Annual Summary and Transmittal of U.S. Information Returns, to summarize and transmit the forms for each type of payment. See the General Instructions for Certain Information Returns for information on what payments are covered, how much the payment must be before a return is required, which form to use, and extensions of time to file.

If you file Forms 1097, 1098, 1099, 3921, 3922, or W-2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms generally remains January 31.

All businesses.

Give annual information statements to recipients of certain payments you made during 2013. You can use the appropriate version of Form 1099 or other information return. Form 1099 can be issued electronically with the consent of the recipient. Payments that may be covered include the following.

  • Cash payments for fish (or other aquatic life) purchased from anyone engaged in the trade or business of catching fish.
  • Compensation for workers who are not considered employees (including fishing boat proceeds to crew members).
  • Dividends and other corporate distributions.
  • Interest.
  • Rent.
  • Royalties.
  • Payments of Indian gaming profits to tribal members.
  • Profit-sharing distributions.
  • Retirement plan distributions.
  • Original issue discount.
  • Prizes and awards.
  • Medical and health care payments.
  • Debt cancellation (treated as payment to debtor).
  • Cash payments over $10,000. See the instructions for Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business.

This information is available in IRS Publication 509 – Tax Calendars for Use in 2014

IRS Forms and Schedules You’ll Need

January 29 Header for ChildCare Site

On Your Mark… Get Set ….. Go!

Image Credit Market Watch MW-BN104_taxtim_20131014120127_MG

GETTING NERVOUS? CALL ME! 619-589-8680

The IRS has recently announced that they will not start processing 2013 tax returns until January 31, 2014. This means there is no reason to efile or mail in your tax forms before then.

Before sending in your tax forms, here’s a review of the key business tax forms you must file and the order you should be filling them out. Continue reading →

 

Do you need to issue a Form 1099-MISC for services rendered?

CAUTION TAX FORMS NEEDED!Who Must Issue 1099’s?

Businesses.  You must report payments to others for services.
Nominees.  If you are receiving income – but part of the income belongs to another.

BUSINESSES
If you paid $600.00  or more to a person or business during 2013 and may need to issue a form. This applies to business expenses only.  You don’t need to report payment for personal expenses or any payments made to a corporation.
This is true even if you are a one-person office.

Continue reading

January Brings Important Tax Information

 DO YOU KNOW WHAT TO LOOK FOR?

CAUTION TAX TIME AHEAD!The IRS receives copy of all your tax-related forms. They are compared to your return.  You can’t miss any of these documents.  Watch the mail.

Envelopes will have “IMPORTANT TAX INFORMATION ENCLOSED” clearly printed.  You need those.

  • 1099’s.  You will either get 1099-INT or 1099-DIV for any account paying interest or dividends.  Keep them all together.  Make sure you have one for each account.
  • Real estate sales are on 1099-S.
  • Stock sales, 1099-B.
  • Pensions or IRAs, 1099-R. Continue reading