Archive for August, 2010
Top 10 Things Every Taxpayer Should Know about Identity Theft
Aug 31st
IRS Summertime Tax Tips 2010-11 http://bit.ly/avRjSv
Taxpayers need to be careful to protect their personal information. Identity thieves use many methods to steal personal information and then they use the information to file a tax return and get a refund. Here are 10 things the IRS wants you to know about identity theft so you can avoid becoming the victim of an identity thief.
- The IRS does not initiate contact with a taxpayer by e-mail.
- If you receive a scam e-mail claiming to be from the IRS, forward it to the IRS at phishing@irs.gov
- Identity thieves get your personal information by many different means, including:
- Stealing your wallet or purse
- Posing as someone who needs information about you through a phone call or e-mail
- Looking through your trash for personal information
- Accessing information you provide to an unsecured Internet site.
- If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov’, forward that link to the IRS at phishing@irs.gov
- To learn how to identify a secure website, visit the Federal Trade Commission at www.onguardonline.gov/tools/recognize-secure-site-using-ssl.aspx
- If your Social Security number is stolen, another individual may use it to get a job. That person’s employer may report income earned by them to the IRS using your Social Security number, thus making it appear that you did not report all of your income on your tax return.
- Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don’t know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice.
- If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification – such as a Social Security card, driver’s license, or passport – along with a copy of a police report and/or a completed Form 14039, Identity Theft Affidavit. As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490. You should also follow FTC guidance for reporting identity theft at www.ftc.gov/idtheft
- Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your Social Security number.
- For more information about identity theft – including information about how to report identity theft, phishing and related fraudulent activity – visit the IRS Identity Theft and Your Tax Records Page, which you can find by searching “Identity Theft” on the IRS.gov home page.
Links:
Identity Theft and Your Tax Records
Suspicious e-Mails and Identity Theft
Department of Treasury’s Identity theft resource page
Federal Trade Commission’s (FTC) consumer Web site
YouTube Videos:
Six Tax-Efficient Ways to Pay for Back to School Items
Aug 30th
Students going back to school can utilize a variety of tax-favored ways to pay for college tuition, books, supplies, and computers. Here’s six ideas for paying for school expenses that have varying degrees of tax efficiency:
1. Take cash out of a 529 College Savings Plan. Distributions from a 529 plan are tax-free as long as the funds are used to pay for tuition, room and board, books, supplies, and computer equipment and software.
To read the rest of this article by William Perez, please go to http://bit.ly/aSiUuj.
Ten Tips for Taxpayers Making Charitable Donations
Aug 26th
IRS Summertime Tax Tip 2010-21 http://bit.ly/aVjA6r
Did you make a donation to a charity this year? If so, you may be able to take a deduction for it on your 2010 tax return.
Here are the top 10 things the IRS wants every taxpayer to know before deducting charitable donations.
- Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. You can also check IRS Publication 78, Cumulative List of Organizations, which lists most qualified organizations. IRS Publication 78 is available at IRS.gov.
- Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.
- You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.
- If your contribution entitles you to receive merchandise, goods, or services in return – such as admission to a charity banquet or sporting event – you can deduct only the amount that exceeds the fair market value of the benefit received.
- Be sure to keep good records of any contribution you make, regardless of the amount. For any contribution made in cash, you must maintain a record of the contribution such as a bank record – including a cancelled check or a bank or credit card statement – a written record from the charity containing the date and amount of the contribution and the name of the organization, or a payroll deduction record.
- Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September but paid the charity only $200 by Dec. 31, your deduction would be $200.
- Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.
- For any contribution of $250 or more, you must have written acknowledgment from the organization to substantiate your donation. This written proof must include the amount of cash and a description and good faith estimate of value of any property you contributed, and whether the organization provided any goods or services in exchange for the gift.
- To deduct charitable contributions of items valued at $500 or more you must complete a Form 8283, Noncash Charitable Contributions, and attached the form to your return.
- An appraisal generally must be obtained if you claim a deduction for a contribution of noncash property worth more than $5,000. In that case, you must also fill out Section B of Form 8283 and attach the form to your return.
For more information see IRS Publication 526, Charitable Contributions, and for information on determining value, refer to Publication 561, Determining the Value of Donated Property. These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Links:
- Publication 78, Cumulative List of Organizations
- Publication 526, Charitable Contributions ( PDF)
- Publication 561, Determining the Value of Donated Property ( PDF)
BBB Teaches Best Back-to-School Lesson: How Students Can Avoid Identity Theft
Aug 25th
College students have enough to worry about without falling prey to scammers looking to steal their identities and good credit.
“Identity thieves don’t care if you’re a struggling student and don’t have a penny to your name; sometimes all they want is to exploit your clean credit record,” says Angie Barnett, president and CEO of the Greater Maryland Better Business Bureau. “Young adults that establish good habits for monitoring and detecting fraud are laying a path that will help create a healthy financial road for the rest of their lives.”
A report on fraud showed that college students are the slowest to catch identity theft.
The National Consumers League and the Better Business Bureau have each put together some tips to keep your identity safe and get through the semester.
To read the rest of this article by Linda Doell, please go to http://bit.ly/c8Juyj.
How to Replace Six Vital Documents
Aug 24th
Could you produce your birth certificate, car title, or an old tax return at a moment’s notice?
You’re supposed to store vital documents in a fireproof box or keep them in a safe-deposit box, but how many of us actually do that? We may not need these papers often, but when we do need them, we really need them. You need vital documents to sell your car, travel overseas, apply for a job, get through an audit, refinance your house, and more.
The good news is that if you’ve lost important pieces of paper, you can replace them — and it might be easier than you think. Here’s how to replace six of the most important documents in your life.
To read the rest of this article by April Dykman, staff writer for Get Rich Slowly, please go to http://bit.ly/bg8V6o.
Employee vs. Independent Contractor – Seven Tips for Business Owners
Aug 23rd
IRS Summertime Tax Tip 2010-20 http://bit.ly/9jHRSQ
As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.
Here are seven things every business owner should know about hiring people as independent contractors versus hiring them as employees.
- The IRS uses three characteristics to determine the relationship between businesses and workers:
- Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
- Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.
- Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
- If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
- If you can direct or control only the result of the work done — and not the means and methods of accomplishing the result — then your workers are probably independent contractors.
- Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
- Workers can avoid higher tax bills and lost benefits if they know their proper status.
- Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.
- You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link. Additional resources include IRS Publication 15-A, Employer’s Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).
Links:
Publication 15-A, Employer’s Supplemental Tax Guide ( PDF )
Publication 1779, Independent Contractor or Employee ( PDF )
Publication 1976, Do You Qualify for Relief under Section 530? ( PDF )
Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding ( PDF )
Five Tax Tips for Recently Married Taxpayers
Aug 20th
IRS Summertime Tax Tip 2010-17 http://bit.ly/aTAVuk
Are you getting married this summer? If you recently got married or are planning a wedding, the last thing on your mind is taxes. However, there are some important steps you need to take to avoid stress at tax time. Here are five tips from the IRS for newlyweds to keep in mind.
- Notify the Social Security Administration Report any name change to the Social Security Administration, so your name and Social Security Number will match when you file your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security Card, at your local SSA office. The form is available on SSA’s website at www.socialsecurity.gov, by calling 800-772-1213 or at local offices.
- Notify the IRS If you have a new address you should notify the IRS by sending Form 8822, Change of Address. You may download Form 8822 from IRS.gov or order it by calling 800–TAX–FORM (800–829–3676).
- Notify the U.S.Postal Service You should also notify the U.S. Postal Service when you move so it can forward any IRS correspondence.
- Notify Your Employer Report any name and address changes to your employer(s) to make sure you receive your Form W-2, Wage and Tax Statement, after the end of the year.
- Check Your Withholding If both you and your spouse work, your combined income may place you in a higher tax bracket. You can use the IRS Withholding Calculator available on IRS.gov to assist you in determining the correct amount of withholding needed for your new filing status. The IRS Withholding Calculator will even provide you with a new Form W-4, Employee’s Withholding Allowance Certificate, you can print out and give to your employer so they can withhold the correct amount from your pay.
Do You Need a Board of Directors?
Aug 19th
As a small business owner, you’re always prioritizing efforts and making resource decisions. You may feel like you live in your own world… wearing all the hats of the business, or “doing it, doing it, doing it” as we often put it. Of course, we recommend getting an E-Myth Business Coach to help guide and support your business development process, but today we’re discussing a different kind of support group – one that is perhaps underutilized in your business: your Board of Directors.
Starting a board of directors and maximizing its usefulness may not be high on your list, but as your business grows, having an active board can provide significant advantages. It’s also something you may not have a choice about; every corporation is required by law to have a board of directors. You should, of course, be working with your attorney on matters such as these. But whatever the legal requirements, satisfying the laws of incorporation is only the beginning for this vastly underutilized small business resource.
What Kind Of Board Is Right For Your Business?
There are two basic kinds of boards: advisory or fully mandated. An advisory board does just what it says: it’s a board that provides feedback and advice, but nothing is binding. The second type, a fully mandated board has real power and accepts fiduciary responsibility for the company.
To read the rest of this article by E-Myth Business Coach, please go to http://bit.ly/9OVLfB
Kansas Offers Tax Amnesty
Aug 18th
Under the program, which runs Sept. 1 through Oct. 15, penalties and interest will be waived for businesses and individuals who pay off their debt in full for a given tax year. The option is available for debts accrued before Dec. 31, 2008.
Who qualifies?
•Anyone with tax debt accumulated before Dec. 31, 2008
•Those who failed to report all income or have understated their tax liability
•Taxpayers who have failed to file a tax return
•Those who did not pay their full tax liability
Who does not qualify?
•Anyone in bankruptcy
•Anyone who is being audited
•Those whose debt is subject to administrative or judicial appeal
•Those involved in a criminal investigation
To read the entire article by Jeannine Koranda from The Star’s Topeka bureau (and to find out how to participate), please go to http://bit.ly/d8uwqO.
Getting Federally Funded Construction Projects: Tips for Finding, Pursuing and Winning Government Contracts
Aug 17th
With the falloff in residential and commercial construction in many markets, some construction contractors have considered expanding their revenue horizons by investigating contracts funded by the American Recovery and Reinvestment Act of 2009.
However, locating, pursuing, and meeting the requirements of government contracts is vastly different from private sector work. Construction professionals should be aware of some of the key challenges and best practices of government contracting.
To get started, spend some time examining where contract dollars are spent in your area and which companies are winning contracts. The databases at www.usaspending.gov and www.fedspending.org contain a wealth of free information.
Almost all federal procurements must first be publicly advertised through the Federal Business Opportunities (FBO) site at www.fbo.gov. Register on this site to receive notices of upcoming procurements in your locality. Be aware that, as many experienced government contractors say, if you are only responding to procurements when they hit the FBO, you are behind the curve.
To read the rest of this article, please go to http://bit.ly/aNE4vf.
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