Participating in the Sharing Economy Can Affect Taxes

by admin 8. November 2017 06:00

In 2017, many taxpayers use their phones and computers to provide services and sell goods. This includes the use of sites and apps to rent a home to travelers, sell crafts, or to provide car rides. Taxpayers who do this may be involved in the sharing economy. Participating in the sharing economy may affect a person’s taxes. These taxpayers can visit the Sharing Economy Tax Center on the IRS website to find resources that can help them meet their tax obligations.

Here are six things taxpayers should know about how the sharing economy might affect their taxes:

Taxes. Sharing economy activity is generally taxable. This includes:

  • Part-time work.
  • A side business.
  • Cash payments received.
  • Income stated on a Form 1099 or Form W-2.

 
Deductions. Some taxpayers can deduct their business expenses. For example, a taxpayer who uses a car for business use often qualifies to claim the standard mileage rate.
 
Rentals. Special rules apply to a taxpayer who rents out a home or apartment, but who also lives in it during the year. Publication 527, Residential Rental Property (Including Rental of Vacation Homes), has more information about these rules. Taxpayers can also use the Interactive Tax Assistant Tool. This tool is titled Is My Residential Rental Income Taxable and/or Are My Expenses Deductible? It walks a taxpayers through a series of questions to determine if their rental income is taxable.
 
Estimated Payments. Taxpayers can pay as they go, so they don’t owe. One way that taxpayers can cover the tax they owe is to make estimated tax payments during the year. These payments can help cover their tax obligation. Taxpayers use Form 1040-ESto figure these payments.
 
Payment Options. The fastest and easiest way to make estimated tax payments is through IRS Direct Pay. Taxpayers can also use the Treasury Department’s Electronic Federal Tax Payment System.
 
Withholding. Taxpayers involved in the sharing economy as an employee might want to review their withholding from that job and any other jobs they might have. They can often avoid making estimated tax payments by having more tax withheld from their regular paychecks. These taxpayers can file Form W-4 with their employer to request additional withholding. They can also use the Withholding Calculator on IRS.gov. This tool helps determine if they are having too much or too little tax withheld from their income.

 

Source: https://www.irs.gov/newsroom/participating-in-the-sharing-economy-can-affect-taxes

 

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Tax relief is available to the victims of Hurricane Harvey

by admin 1. September 2017 07:34

The IRS is providing help to the victims of Hurricane Harvey. Special tax relief and assistance is available to taxpayers in the Presidential Disaster Areas. 

IRS News Releases

  • IR-2017-139, IRS Waives Diesel Fuel Penalty Due to Hurricane Harvey
  • IR-2017-138, Retirement Plans Can Make Loans, Hardship Distributions to Victims of Hurricane Harvey
  • IR-2017-138SP, Planes de retiro pueden hacer préstamos, distribuciones por dificultad a víctimas del huracán Harvey
  • IR-2017-137, Beware of Fake Charity Scams Relating to Hurricane Harvey
  • IR-2017-135, IRS Gives Tax Relief to Victims of Hurricane Harvey; Parts of Texas Now Eligible; Extension Filers Have Until Jan. 31 to File
  • IR-2017-135SP, IRS otorga alivio tributario a víctimas del huracán Harvey; parte de Texas es elegible; aquellos que presentan con prórroga tienen hasta el 31 de enero

 

 

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IRS Reminds Truckers: For Most, Highway Use Tax Return Is Due Aug. 31

by admin 10. August 2017 08:51

WASHINGTON — The Internal Revenue Service today reminded truckers and other owners of heavy highway vehicles that, in most cases, their next federal highway use tax return is due Thursday, Aug. 31, 2017.

The deadline generally applies to Form 2290 and the accompanying tax payment for the tax year that begins July 1, 2017, and ends June 30, 2018. Returns must be filed and tax payments made by Aug. 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.

More information can be found at IRS trucking tax center.

Related links:

- How to pay drivers by mileage

- How to pay drivers by load

 

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business news

IRS Gives Expanded Tax Relief to Victims of Hurricane Matthew

by admin 18. October 2016 06:20

WASHINGTON –– Hurricane Matthew victims in much of North Carolina and parts of South Carolina, Georgia and Florida have until March 15, 2017, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today. This includes an additional filing extension for those with valid extensions that run out at midnight tonight, Oct. 17

 

The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 4, 2016. As a result, affected individuals and businesses will have until March 15, 2017, to file returns and pay any taxes that were originally due during this period. This includes the Jan. 17 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2015 income tax returns that received a tax-filing extension until today, Oct. 17, 2016. The IRS noted, however, that because tax payments related to these 2015 returns were originally due on April 18, 2016, those are not eligible for this relief.

 

More information can be found at

https://www.irs.gov/uac/newsroom/irs-gives-expanded-tax-relief-to-victims-of-hurricane-matthew-parts-of-four-states-eligible-extension-filers-have-until-march-15-to-file


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business news

Moving Expenses Can Be Deductible

by admin 30. August 2016 04:50

Did you move due to a change in your job or business location? If so, you may be able to deduct your moving expenses, except for meals. Here are the top tax tips for moving expenses.

In order to deduct moving expenses, your move must meet three requirements:

  1. The move must closely relate to the start of work.  Generally, you can consider moving expenses within one year of the date you start work at a new job location. Additional rules apply to this requirement.
  2. Your move must meet the distance test.  Your new main job location must be at least 50 miles farther from your old home than your previous job location. For example, if your old job was three miles from your old home, your new job must be at least 53 miles from your old home.
  3. You must meet the time test.  After the move, you must work full-time at your new job for at least 39 weeks in the first year. If you’re self-employed, you must meet this test and work full-time for a total of at least 78 weeks during the first two years at your new job site. If your income tax return is due before you’ve met this test, you can still deduct moving expenses if you expect to meet it.

Learn more at
https://www.irs.gov/uac/moving-expenses-can-be-deductible

 

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small business 101

Tax Tips: Renting Your Vacation Home

by admin 16. August 2016 09:58

Renting out a vacation property to others can be profitable. If you do this, you  must normally report the rental income on your tax return. You may not have to report the rent, however, if the rental period is short and you also use the property as your home. Here are some tips that you should know:

 

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 rental use and 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 considered 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.

 

More information can be found at

https://www.irs.gov/businesses/small-businesses-self-employed/rental-income-and-expenses-real-estate-tax-tips

 

Source: IRS newsletter

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HOW TO or DIY

IRS Direct Pay Helps You Pay Taxes Easier

by admin 10. August 2016 12:29

Use IRS Direct Pay to pay your taxes or pay your estimated tax directly from your checking or savings account. Direct Pay is safe, easy and free. This tool walks you through five simple steps to pay your tax in a single online session. You can also use Direct Pay with the IRS2Go mobile app. With Direct Pay, you can pay for 1040, 1040A, 1040ES, 1040 EZ, 1040X, 5329 and more.

 

Note: All business tax payments should be made through the Electronic Federal Tax Payment System (EFTPS).

 

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IRS Reminds Truckers: For Most, Highway Use Tax Return Is Due Aug. 31.

by admin 5. August 2016 10:05

WASHINGTON — The Internal Revenue Service today reminded truckers and other owners of heavy highway vehicles that in most cases their next federal highway use tax return is due Wednesday, Aug. 31, 2016.

The deadline generally applies to Form 2290 and the accompanying tax payment for the tax year that begins July 1, 2016, and ends June 30, 2017. Returns must be filed and tax payments made by Aug. 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.

More detailed information can be from Truckng tax center

https://www.irs.gov/businesses/small-businesses-self-employed/trucking-tax-center

 

 

 

 

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business news

What Is New of 2016 Payroll Income Tax Rate

by admin 15. December 2015 11:31

IRS published Notice 1036, Early Release Copies of the 2016 Percentage Method Tables for Income Tax Withholding. Here are some majors changes an employer should know for Year 2016 payroll processing.

Social Security and Medicare Tax for 2016

- For social security, the tax rate is 6.2% each for the employee and employer, unchanged from 2015. 
- The social security wage base limit is $118,500, 
unchanged from 2015. 
 
- The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2015. There is no wage base limit for Medicare tax.

 

IRS Announces new 2016 Tax Brackets and Standard Deduction

The new standard deduction for each dependent is $4050.00, which was $4000.00 in 2015.

 You can view 2016 Payroll Income Tax Withhold Tables here to see tax brackets changes and more details. 

 

 

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How to Make Federal Tax Deposit Payment Using EFTPS Site

by admin 3. September 2014 06:09

The Electronic Federal Tax Payment System (EFTPS) is a free service from the U.S. Department of the Treasury. All federal taxes can be paid using EFTPS. Many of our customers are using this feature to deposit tax payments. Per customers' requests, we just published a new step by step guide  

How to Make Federal Tax Deposit Payment Using EFTPS Site

 

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HOW TO or DIY

275000 Nonprofits Lose Tax Exempt Status

by admin 13. June 2011 10:26

The IRS has started publishing a list of organizations that have had their federal tax-exempt status automatically revoked for failing to file an annual information return or notice with the IRS for three consecutive years. The Automatic Revocation of Exemption List (Auto-Revocation List) is available in Adobe and Excel formats, and divided into separate lists by jurisdiction. The Auto-Revocation List provides the name, employer identification number (EIN), organization (subsection) code, last known address, effective date of revocation, and date on which the name was posted on IRS.gov.

Check the full list at:

http://www.irs.gov/charities/article/0,,id=240099,00.html

Tip Sheet on Revocation of Tax-Exempt Status from National Council of Nonprofits

http://www.councilofnonprofits.org/sites/default/files/Automatic%20Revocation%20Tip%20Sheet.pdf

 

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business news

IRS Marks Small Business Week by Spotlighting Tax Benefits Available in 2011

by admin 18. May 2011 01:57

IRS Marks Small Business Week by Showcasing Tools, Resources; Spotlights Tax Benefits Available in 2011

During Small Business Week, May 16-20, the Internal Revenue Service encourages those who are self-employed or own a small business to take advantage of certain tax benefits and learn about IRS resources that can help them meet their federal tax obligations.

The Small Business Tax Center (www.irs.gov/smallbiz) has links to some of the most useful tools the IRS offers, including the Virtual Small Business Tax Workshop, a downloadable tax calendar, common forms and their instructions and help on everything from how to get an Employer Identification Number (EIN) online to how to engage with the IRS in the event of an audit.

The IRS is offering a free, 30-minute webinar called “Small Business Advantage” to show small business owners what’s available to them. The webinar is scheduled for Wednesday, May 18 at 2 p.m. ET. To register and watch, visit IRS.gov and type “webinars” into the search box.

Source: http://www.irs.gov/newsroom/article/0,,id=239507,00.html

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