IRS Releases 2014 Tax Calendar

It’s nearing that time of year again. The IRS recently has released its 2014 calendar for businesses and individuals in preparation of the upcoming tax-filing season.

Remember that these dates do not apply to everyone. It will not include employment rules or excise deposit rules, nor will it state requirements for trusts, foreign partnerships, estates, gift taxes, corporations, federal estate taxes or exempt organizations.

It is worth saying that you will receive no extra time to file this year because April 15^th falls on a Tuesday, so make sure you get your returns in by then. People are fined constantly for missing the due date, making it vital to have yours in as soon as possible.

If you have a business and your file your returns fiscally, make sure you file your returns in before your due date. The IRS does allow some leeway. For instance, if yours falls on a legal holiday or a Saturday or Sunday, your deposit or return can be considered on time if you file it the next day. Of course, legal holidays represent any holidays that D.C. deem legal, so keep that in mind.

Here are some key numbers that are referenced in the new calendar:

• If your taxable income is under $9,075, your tax is now 10% of your taxable income.
• If your taxable income is over $9,075, but under $36,900, your tax is $907.50 plus 15% in excess over the $9,075.
• Over $36,900, but under $89,350, your tax is $5,081.25 plus 25% in excess over the $36,900.
• Over $89,350, but under $186,350, your tax is $18,193.75 plus 28% in excess over the $89,350.

You can find the complete bracket on the IRS website. For more information about this and other legal matters, check out the IRS website or contact your financial adviser. If you’re dealing with an old tax penalty or still trying to file overdue taxes, be sure you get tax relief help from a tax expert as soon as possible.

Banking Businesses Facing Possible Tax Prosecution

The Fair and Accurate Credit Transactions Act (FATCA) and global bank transparency go hand-in-hand, and as of late has helped play a part in many big businesses involved in tax evasion. Most recently the U.S. government has turned its eyes toward the banking industry in particular regarding transparency and just how taxes are being reported (or not).

The latest investigation in regards to big banking involved Swiss banking institution, UBS. The IRS got a judge to sign off on a John Doe Summons, allowing the IRS to summon UBS, probing them for information about their U.S. taxpayers’ accounts.

This summons led to many Americans emptying their accounts and attempting to disappear, but it was too late. In the end, UBS forked over the names and account information of many Americans and paid a massive $780 million penalty for its troubles.

Having found several accounts that were found guilty of tax evasion, the U.S. government has widened it’s critical eye on other institutions. Citibank and New York Mellon are next on the list as they’ve been asked to disclose information about accounts at the Zurcher Kantonalbank, also in Switzerland.

The IRS states it knows of plenty taxpayers that have funds at banks’ Butterfield’s and ZKB. In 2012, three employees from ZKB were indicted on counts of conspiring with taxpayers to hide over $420 million from the government. With the amount of data collected, the IRS has well over 40,000 voluntary disclosures. The DoJ and IRS are working with cooperating witnesses to close cases as fast as possible.

There are cases where the government will grant immunity and some where they will prosecute. In some instances, tax relief may be possible but if you are unsure whether you are affected or not, or what this means to you, you may want to speak to a financial adviser and/or lawyer.

Tips for Making a Holiday Budget That You Will Keep

With deals abound and stores going into over drive with the advertising, you know that the holidays are here. But with the state of the economy, many families are finding that holiday spending is the easiest place to cut funds from in order to ensure a happy, healthy financial year. Whether you need it or not, a budget can help provide some order to this chaotic season and can ensure that you start the new year with few regrets.

Take a look at these holiday budget ideas to help you create a plan that works for you.

1. Write out a spending plan. This starts out with you writing down an idea of what you can spend (realistically) during the holiday season. This covers everything from travel expenses to gifts to entertainment.
2. Know the limits. There aren’t many middle class families that can afford to buy whatever they want for the whole family. This means you should prioritize on who gets what. If you know that you can’t buy a person a gift this year, tell them well in advance.
3. Track spending. Make sure you keep to the budget. If you don’t do this, then what is the point of making a budget in the first place? Write down everything you’ve spent during the holidays and compare it to your budget. The key is to stay on track or below budget.
4. Use a list. Just like with grocery shopping, do your holiday shopping via a list. Never impulse buy.
5. Shop early. Anytime between October 1^st and December 1^st is a great time to do holiday shopping. The prices may not be as great as it is right before Christmas, but you will still find great deals and you will not have to worry about large crowds.

Following this list should have you enjoying your holiday and resting easy knowing your finances are in order. Don’t forget that some charitable donations can count toward tax relief in the upcoming tax year, so be sure you know what the tax deductions for charitable donations entails. For other financial tips, be sure to talk to your financial advisor.

Common Mistakes to Avoid When Starting a Business

When starting a new business, you should have a good business strategy otherwise you will never succeed in your endeavor. Mistakes are inevitable, and experience is the best teacher, but as they say, better safe than sorry.

Most businesses end up with financial issues that can linger even after the dissolution of the enterprise. To avoid tax problems, lingering debt, and other woes, take a look at the common mistakes first time business owners make, and learn from them.

1. Poor marketing. Marketing encourages growth by attracting customers. If you do not have a good marketing strategy, then your chances of progress are slim. Marketing is crucial during the start-up phase, but you should not stop advertising your product once it is established.
2. Relying on claims. Those who are trying to project a false image, with the chance to acquire customers, will hide behind claims. This is a serious issue as it will surely backfire in the future. Do not lie to your customers. Being honest will help you grow just based on your merits alone.
3. Ignoring legal and financial matters. One of the main reasons for the failure of many businesses is not considering the legal aspects of which every business faces.
4. Using credit cards excessively. You should never buy items you do not absolutely need, even if your credit card is a business card. Also, buying personal items with a business card is not advised.
5. Not adhering to the budget. You have a budget for a reason. Not following could have disastrous consequences, one being you losing your business.

Owning a business can be one of the most rewarding adventures in a lifetime, and it can also be one of the most challenging. One way to help make the process easier is with the help of a mentor. A mentor can advise you on several issues sure to come up, such as advising on when to see tax relief assistance, building a business plan, and several other issues.

Green Energy Tax Initiatives Likely to Lapse? Fate Unknown

For years green homeowners and energy companies have enjoyed special tax initiatives. For many, these tax breaks are what is helping fund the drive to more responsible energy sources. But come this year, if something isn’t done quickly, the bill that gives tax relief to green energy initiatives will go under.

The tax credit, as it stands, drives over $25 billion annually in private investments and it brings electricity to over 15 million homes in the country. Even though the government has spent an average of $2.47 billion per year over the past 10 years, the amount of money it has put back in the economy has doubled or even tripled that amount.

Some senior officials say that the wind energy industry, one of the biggest beneficiaries of the green energy tax initiatives, doesn’t need the help any longer. Many states are now dependent on wind power, or at least demanding it. This makes the industry an “infant” no longer.

Rather than cut off tax breaks all together, however, some are stating there are other options that should be considered. Experts say that one of the best options could be to slowly phase out production tax credits while giving the renewable projects the chance to qualify for real estate trusts and limited partnerships that offer people unique tax treatment.

Is this going to be enough to make all the troubles go away, especially those from the past few months? Probably not but it will go a long way in starting the rebuilding process and helping green energy industries grow.

What to do About Taxes During the Shutdown

With the shutdown in full swing and news that the IRS is one of the agencies being furloughed, many individuals facing the upcoming tax deadline celebrated at the prospect of a few extra days to get those returns in. Yet as the shutdown continues to drag on the IRS has released a statement: the Oct. 15^th tax deadline still stands.

If you filed for an extension earlier this year, you should have gotten your taxes in by the October 15^th deadline. If you didn’t, you are risking a serious penalty.

To make things worse, if you are due a refund, the IRS said the government is not issuing tax refunds until the shutdown has been lifted. Yes, you still have to pay on time, but that doesn’t mean the government is able to do the same. The IRS wants to emphasize that the payment you send to them will be cashed out as soon as possible though.

About 11 million people received extensions this year, which means the IRS will be waiting for a good amount of money to be coming in. If you are due for a refund in October – be patient. The IRS says that you will get your refund eventually. And this will depend on the amount of people being refunded and the length of the shutdown.

While the deadline is not affected by the shutdown, several other IRS services and procedures are halted, including:

• Levies and liens
• Audits
• Phone support
• Non-automated help lines
• Tax returns

If you are unsure if you will be able to make the Oct. 15^th deadline, seek help now. Unfiled returns will garner the same penalties that would accumulate if the government were operational. Get the tax relief you need with the help of a tax professional today.

What to Look For When Choosing a Tax Professional for Your Small Business

Looking to work with a tax professional who really knows his or her stuff, and can find tax relief for your small business, as well as assure you that you have legally and responsibly handled all issues with the IRS? How do you start looking for such a professional?

First, be sure that a potential tax professional has the right training and credentials to work with your small business tax issues? Would you go to a healthcare provider who did not complete medical school? Probably not. Same goes for your tax professional.

Look for tax professionals with experience working with small business and self-employed individuals, especially tax professionals who are enrolled agents, certified public accountants, or tax attorneys.

Once you have established that a potential tax professional offers the satisfactory credentials, you must get a feel for that professional. If he or she makes promises right off the bat that you’ll never have to pay taxes again, or something along those lines, do not work with that professional. Tax experts should be honest, thorough, and straightforward, and making such nonsensical promises – especially before examining your company’s tax issues – is a huge red flag.

Another red flag exists when a tax professional asks for your credit card number right away, before having an initial discussion with you about your company, tax concerns, and the like. Tax professionals should offer a baseline discussion or consultation before getting into the nitty-gritty of your company’s tax situation. Be aware that professionals have every right to charge for that initial consultation, but a professional who wants to know your credit card information right off the bat may be asking for that information for the wrong reasons.

New Federal Tax Ruling Recognizes Same-Sex Marriages

Thanks to a joint ruling by the Department of the Treasury and the Internal Revenue Service, announced on August 29, same-sex married couples may soon find tax relief, as the ruling recognizes same-sex marriages in terms of federal taxes.

Revenue Ruling 2013-17 states that same-sex married couples will now be recognized as legally married for all tax purposes, as long as they were married in a jurisdiction that recognizes such marriages as legal, and regardless of where they live. What’s more, such couples do not have to fear that their federal filing status may change if they choose to move throughout the country. The ruling applies to any same-sex marriage legally entered in all 50 states, the District of Columbia, U.S. territories and a foreign country. The ruling, however, does not apply to registered domestic partnerships or civil unions recognized under state law.

What does this mean for future filing? Legally married same-sex couples must file their 2013 federal income tax returns using either the “married filing separately” or “married filing jointly” filing status. Those taxpayers who were in same-sex marriages prior to the ruling may file original, amended or adjusted returns as married for federal tax purposes for prior tax years that are still open under the statute of limitations. The statute of limitations is usually open for the previous three tax years.

The Internal Revenue Service explained that the reason for the ruling lies in creating uniform nationwide rules, as it is much easier, from a tax standpoint, to recognize legal unions nationwide as it would be to apply federal tax codes dependent upon state law.

If you’re unsure as to whether the ruling applies to you or if you find yourself with tax problems that may affect your joint filing be sure to seek out the opinion of a tax expert.

Common Tax Scams to Watch Out For

The IRS wants you to know that scammers are looking to make a buck off you no matter what time of year it is. In fact, the government agency just released its annual “Dirty Dozen” list, which is a long list of scams that identity thieves use to target unsuspecting Americans.

Every year, the list names the most common scams taxpayers will deal with. Most of the schemes involved will peak during tax season but you need to keep your eyes peeled for these tax relief scams year-round.

Here is the “Dirty Dozen” list for 2013 as named by the IRS:

1. Identity Theft. This occurs when another person uses your information without your permission. Most of the time they will use this to file a tax return.
2. Phishing. Unsolicited emails or fake websites can lure people into providing personal information, something of which they should not do.
3. Preparer Fraud. 3/5 of all taxpayers will use a tax professional this year. Most of those professionals are honest people but there are a few who are looking to make some money off you. Go to a reputable service or preparer.
4. Hiding Income Offshore.
5. Scams Dealing with Social Security.
6. Charitable Organization Impersonation. There are some people out there that will say they are from a charitable organization looking for donations when, actually, they are just scamming you.
7. False Income and Expenses.
8. Falsifying 1099 Forms.
9. Frivolous Arguments.
10. Falsely Claiming Zero Income. Most people who get paid under the table or who are self-employed are the ones who get caught here.
11. Disguised Corporate Ownership.
12. Misuse of Trusts.

Be sure to visit the IRS’s website for more information. If you feel that you are the victim of one of these scams, be sure to seek help immediately from a qualified expert. Fraud causes can take time to resolve and the sooner the issue is brought up and looked into the better.

New Home Office Deduction

Much to the celebration of the millions of taxpayers who claim home office space on their taxes, the IRS has finally released the details on new simplifications for home office deductibles and tax relief.

Coined the “safe harbor” method by the IRS, Rev. Proc 2012-2013, which begins this tax year (January 1, 2013), taxpayers will now be able to easily calculate their 2013 deduction for their home office by multiplying the square footage of the area of their home that is used strictly for business by the prescribed rate of $5 per square foot. That calculation results in the tax deduction to be taken for home office usage.

To delve into specifics, under IRS Code 280A, home office usage is defined as the taxpayer’s primary place in which he or she conducts trade or business. It may or may not be attached to the taxpayer’s residence, as it may be a separate structure on the property used exclusively as a home office and it is where the taxpayer meets clients, customers, or patients during the normal course of business.

As for safe harbor limitations, the deduction is limited to $1,500 per year with an exception depending upon how many qualified home offices are located under the same roof, and taxpayers who have more than one qualified home office may use the safe harbor method for only one home office space. Furthermore, a taxpayer cannot opt for the new method if that taxpayer derives rental income from the same home, and the method is not applicable for any taxpayer reimbursed by an employer for home office expenses.

Finally, the safe harbor method is optional and taxpayers may opt for the new or traditional method year after year, but once taxpayers choose their method for that tax year, that decision is irrevocable.

If you’re unsure on what to do or what will be best for you, consult a professional accountant or tax expert today. They can help you decide which financial option will most benefit you.