TaxMamas TaxQuips

Ask TaxMama Issue 628 - Cheery Cherry Month

Eva Rosenberg — Fri, 03 Feb 2012 14:25:00 -0600

This is SuperBowl Weekend. The world will come to halt while sports fans eat, watch, and cheer for their favorite teams. This event is one of the highest grossing events for advertising revenue – while the show’s sponsors try to outdo each other with the best SuperBowl ads. They are such works of art, the ads themselves have fans. Do you want to see them? Someone has archived the last 14 years worth of SuperBowl ads.

We’re deeply into the heart of tax season now. But, apparently, there are some delays in processing refunds. I’ve been getting calls from journalists asking if I know anything. Don’t worry. It’s just IRS trying to safeguard our nation’s funds. They were working through some of the security issues last month. If you file now, you should get your electronic deposits quickly. However, if your tax return is claiming a refundable credit (like free money from Uncle Sam), it will be held up a few days while your tax return is run through a quickie criminal review.

IRS is fighting off concerted efforts at identity theft. I learned about some techniques people are using to steal Social Security numbers and file batches of fake, refund returns. I won’t tell you how it’s done. One of my pet peeves is when journalists tell you HOW TO commit a crime, or how to overcome safeguards that are in place to set off alarms…and things like that. Now that they explained to me how it’s done, I understand the scope of the problem. If you were a victim of any kind of identity theft, remember to call IRS and let them know, too – not just the credit agencies.

Which brings us to today’s IRS News – which is all about the IRS sweeping the nation to arrest identity theft criminals. Our second article is all about the top 12 Regulatory Changes businesses should know about this year, courtesy of Paychex, the payroll folks.

After all that heavy stuff, you need a laugh. So, let’s visit mom, trying to get her son to go to school, in today’s Money Funnies.

More about Something fun. Last week, I told you about Wazzub. Quite a few people dropped by to sign up. One person hinted that I might be spamming. But James actually asked wassup with Wazzub? Good question. Why is TaxMama telling you about something that just might be slimy? Read the response in the TaxQuips Forum. Over 1 million people have already signed up. So, they will have the power to generate a substantial amount of advertising revenue – and good content. Take a chance – join up! And invite your friends. You’ll get paid for doing that.

Let’s address a few tidbits of news – and go back to work!

1) Weekly Equifax blog is still going strong.

http://blog.equifax.com/tax/
Saving Money On Taxes For Business Expenses

MarketWatch
February To Do List

AccountingWeb Blog
Mitt & Newt, What can we Learn for Our Clients?

IShade.com
Mitt & Newt, again

2) Radio and news Interviews done recently or coming up

Smarter Travel by Tim Winship of FrequentFlier.com
Are Taxable Frequent Flyer Miles in Your Future?

International Business Times by Hao Li
Small Business Accounting Tips Tricks and Advice from TaxMama …
Small Business Ideas for Women at Home: Working with Realities

January 24, 2012 Quickie interview withBob McCormick’s Money 101
about Mitt’s and Newt’s tax returns and tax reduction tips

February 27, 2012 – Bob McCormick’s Money 101 show on KFWB.
2-hours. Call us 888-KFWB-980 (888-539-2980)

February 22, 2012 #SmallBizChat with Melinda Emerson
http://succeedasyourownboss.com/what-is-smallbizchat/

3) CPE Link courses www.cpelink.com/teamtaxmama
Great class coming in February – Tax Checklist for Knotty Divorces

And we recorded GOOD self-study RTRP course next week.
It will be ready for prime time by about the Ides of March.

You can find daily TaxQuips into YouTube videos
http://www.youtube.com/taxmama1

This week’s TaxQuips

Moved out Too Soon – Today TaxMama® hears from Elisa in the TaxQuips Forum with this question. “I purchased a home in 2009 getting a first-time homebuyers credit. I lived in it for 1 year. I moved to be closer to work and am renting an apartment. I have been renting my house out since July 2010. How will me [...] Read the full article →

Deducting Uniforms – Today TaxMama® hears from our friend Kristi who is starting a new job. “My new job requires me to wear brown pants and either a certain green or blue shirt. I would only wear these clothes for work. Does that qualify as a uniform?” Read the full article →

Delivering Newspapers – Today TaxMama® hears from Trina in the Tax Quips Forum who wasn’t an employee. “I started working for a newspaper company over the summer of 2011, delivering papers to homes using my own vehicle. The company did give me company checks, but they did not take any taxes out. I believe they called their employees [...] Read the full article →

Child Support Payment – Today TaxMama® hears from Danny in the Tax Quips Forum with this question. “My kids stay with their mother from Sunday noon until Thursday noon; then stay with me from Thursday noon until Sunday noon. I pay $140 monthly in child support. Can I claim them in my taxes?” Read the full article →

Remember TaxMama’s Tax Calendar has been updated for 2012, with enough information to carry you through to the first quarter of 2013.

As always, we love your feedback, opinions and ideas.

You are what makes all this fun – and interesting!

Please use the Comments link online.

http://taxmama.com/asktaxmama/ask-taxmama-issue-628

TaxNerd gear makes a bold statement year-round.

It helps attract the opposite sex!

Shop at www.taxnerd.net or http://www.zazzle.com/taxmama*

Hugs from your favorite TaxNerd,

http://www.zazzle.com/taxmama*

Eva Rosenberg, EA

Your TaxMama®

www.TaxMama.com

Your TaxMama® is watching…out for you.

www.TaxMama.com

www.TaxMama.com/TaxQuips

www.IRSExams.com

www.TaxNerd.net

—————————————–

TAX CALENDAR

http://taxmama.com/tax-calendar/

—————————————–

01/04/2012 Employers Make Semi-Weekly Payroll tax deposit on Wednesday’s & Friday’s
01/17/2012 Individuals, Farmers & Fishermen Pay 4th Estimated Tax Payment
01/17/2012 Estates & Trusts 4th Estimated Tax Payment
01/17/2012 Employers Make Monthly Payroll tax deposit on the 15th of each month
01/31/2012 File Heavy Highway Vehicles Form 2290 – various deadlnes – see form instructions
01/31/2012 File Form 730 – Tax Return for Wagers (Accepting Wagers, Pool, Lottery for Profit). Note: This is a monthly form.
01/31/2012 Furnish W-2s recipients
01/31/2012 Furnish 1099 MISC to recipients
01/31/2012 Furnish 1099 Interest to recipients
01/31/2012 Furnish 1099 Dividends to recipients
01/31/2012 Furnish 1098s to borrowers – Mortgage interest
01/31/2012 File 4th, Quarter Payroll Reports
01/31/2012 File Employers Annual Payroll Reports
01/31/2012 File Annual Payroll for Agricultural employees
01/31/2012 Employer’s Annual Federal Unemployment (FUTA) Tax Return
01/31/2012 Individuals who missed 4th estimated pmt – May file & pay taxes now
02/15/2012 Employees to File new W-4 with Employer
02/15/2012 Employers Make Monthly Payroll tax deposit on the 15th of each month
02/29/2012 File Paper copy W-3′s with Social Security Admin including copies of W-2′s
02/29/2012 File paper copy of US transmittal of US information Returns
02/29/2012 Farmers & Fisherman – Use Personal Income Tax Return – Sole Proprietor
02/29/2012 Employers File Annual Report for Employees TIP Income – Form 8027
—————————————–

From TaxMama® to You!

—————————————–

Follow TaxMama®’s Tweets – http://twitter.com/TaxMama

You are invited to put a TaxQuips Widget on your phone, social networking page, website, or… You’ll get the TaxQuips as soon as they published – long before they are distributed in by e-mail. It’s a nifty gadget. Just pick up the code and paste into your site or application.

http://www.widgetbox.com/widget/taxmamas-taxquips-daily-tax-podcasts

—————————————–

SPECIAL DEALS

—————————————–

=> Do it Yourself Legal Material

NOLO answers the question –

What can I do if my spouse gets into debt – do I owe his/her debts?

(disclosure – TaxMama receives a commission)

=> Need a Corp, LLC, Registered Agent

Incorp Services Inc. in Nevada – DISCOUNT

20% off on formation services.

Similar discounts on Registered Agent services.

Call 800.2.INCORP – use coupon code – TAXMAMA

http://vurl.bz/taxmama/Incorp – no coupon needed

=> Business Uniforms – 3 Choices:

Zazzle - Cafe Press – Queensboro

=> Use your art or others – and customize it

Great for promotions – and to gear up for tax season!

Zazzle your Imagination. Are you a TaxNerd?

Tell everyone – proudly!

http://www.zazzle.com/taxmamate

your own customized Calendar at Zazzle

http://www.kqzyfj.com/click-241922-10414512

Get volume discounts on orders of 2 or more.

Get extra discounts for yourself and friends after you order.

=> Stuff for Pets and Pregnant Moms

Cafe Press is the home of TaxMama® ‘s shops

<a href="http://www.cafepress.com/taxmama">http://www.cafepress.com/taxmama</a>

You can upload your own art and graphics

<a href="http://www.jdoqocy.com/click-241922-10463747">http://www.jdoqocy.com/click-241922-10463747</a>

Get extra discounts for yourself and friends after you order.

=>WOW! Embroidered Logo on ANYTHING – on sale!

Always a sale at the Queensboro Shirt Company

http://www.queensboro.com/index.html?ref_id=632192

(They have clothes and novelties – and all sizes)

They do a gorgeous job. CHEAP!

—————————————–

EA EXAM NEWS & SOLVING THE TAX PUZZLE

—————————————-

Take TaxMama®’s 2011 EA Exam Review Class

http://irsexams.com/

I’m geting notes from people who are passing their exams. How exciting!

Replay the session –
Everything You Wanted to Know About the EA Exam

=== CPA Exam Review

Looking for a great course?

You can’t do any better than this!

Phil Yaeger’s CPA Exam Review Course

http://www.yaegercpareview.com

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online

IRS Identity Theft Crackdown Sweeps Across the Nation; More than 200 Actions Taken in Past Week in 23 States

Eva Rosenberg — Fri, 03 Feb 2012 13:42:00 -0600

em>Courtesy of the IRS. For more information, see the Special Identity Theft Enforcement Efforts – 2012 page.
See related article about IP PIN at MarketWatch.com this weekend.

WASHINGTON – The Internal Revenue Service and the Justice Department today announced the results of a massive national sweep cracking down on suspected identity theft perpetrators as part of a stepped-up effort against refund fraud and identity theft.

Working with the Justice Department’s Tax Division and local U.S. Attorneys’ offices, the nationwide effort targeted 105 people in 23 states. The coast-to-coast effort took place over the last week and included indictments, arrests and the execution of search warrants involving the potential theft of thousands of identities and taxpayer refunds. In all, 939 criminal charges are included in the 69 indictments and informations related to identity theft.

In addition, IRS auditors and investigators conducted extensive compliance visits to money service businesses in nine locations across the country in the past week. The approximately 150 visits occurred to help ensure these check-cashing facilities aren’t facilitating refund fraud and identity theft.

“This unprecedented effort against identity theft sends a strong, unmistakable message to anyone considering participating in a refund fraud scheme this tax season,” said IRS Commissioner Doug Shulman. “We are aggressively pursuing cases across the nation with the Justice Department, and people will be going to jail. This is part of a much wider effort underway at the IRS to help protect taxpayers.”

“The Justice Department is working closely with the IRS to investigate, prosecute, and punish tax refund crimes committed through the theft of identities,” said Principal Deputy Assistant Attorney General John A. DiCicco of the Tax Division. “Now, more than ever, we must remain vigilant against the unauthorized use of identification information to defraud the U.S. government.”

The national effort is part of a comprehensive identity theft strategy the IRS has embarked on that is focused on preventing, detecting and resolving identity theft cases as soon as possible. In addition to the law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued as well as working to help victims of the identity theft refund schemes.

The law-enforcement sweep started last week across the country, reflecting investigative efforts stretching back months and even years.

The nationwide effort by the Justice Department and the IRS led to actions taking place in 23 locations across the country with 105 individuals. The actions included 80 complaints/indictments and informations, 58 arrests, 19 search warrants, 10 guilty pleas and four sentencings. A map of the locations and additional details on the actions are available on IRS.gov, the IRS Civil and Criminal Actions page and the Department of Justice Tax Division page.

Beyond the criminal actions, the IRS enforcement personnel conducted a special sweep last week and on Monday to visit 150 money services businesses to help make sure these businesses are not knowingly or unknowingly facilitating identity theft or refund fraud. The visits occurred in nine high-risk places identified by the IRS covering areas in and surrounding Atlanta, Birmingham, Ala., Chicago, Los Angeles, Miami, New York, Phoenix, Tampa and Washington, D.C.

In addition, the IRS has more than 250 check-cashing operations under audit across the country and will be looking for indicators of identity theft as part of the exam effort.

The information from these audits and compliance visits will be used to assist continuing IRS investigations into refund fraud and identity theft.

The IRS also is taking a number of additional steps this tax season to prevent identity theft and detect refund fraud before it occurs. These efforts includes designing new identity theft screening filters that will improve the IRS’s ability to spot false returns before they are processed and before a refund is issued, as well as expanded efforts to place identity theft indicators on taxpayer accounts to track and manage identity theft incidents.

To help taxpayers, the IRS earlier this month created a new, special section on IRS.gov dedicated to identity theft matters, including YouTube videos, tips for taxpayers and a special guide to assistance. The information includes how to contact the IRS Identity Protection Specialized Unit and tips to protect against “phishing” schemes that can lead to identity theft.

Identity theft occurs when someone uses another’s personal information without their permission to commit fraud or other crimes using the victim’s name, Social Security number or other identifying information. When it comes to federal taxes, taxpayers may not be aware they have become victims of identity theft until they receive a letter from the IRS stating more than one tax return was filed with their information or that IRS records show wages from an employer the taxpayer has not worked for in the past.

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website.

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
IRS & Tax News :: Where you can read this week's issue
IRS News :: Where you can add your comments, too

The Paychex Top 12 in ’12: Potential Regulatory Changes Every Small Business Needs to Know About in the New Year

Eva Rosenberg — Fri, 03 Feb 2012 11:57:00 -0600

human resource, and employee benefits solutions for small and medium-sized businesses, today released its top 12 in ’12 list, containing the top 12 potential regulatory changes that America’s small businesses need to know about in 2012. Paychex works closely with the IRS and other government agencies on issues of importance and is constantly monitoring regulatory and compliance-related matters that impact its 564,000 clients.

“As we close the book on 2011 and prepare to ring in the New Year, Paychex is looking out for America’s small businesses by identifying the top 12 issues to follow as 2012 unfolds,” said Martin Mucci, Paychex president and CEO. “Some of these issues will lead to changes that are made legislatively, and others may be changed through simple rule modifications. Regardless of the level of attention they receive, changes to each of these issues could require business owners to make significant adjustments to the way they manage their businesses.”

1. Job Creation – President Obama will continue working with Congress in 2012 to jump start hiring. While the President’s Jobs Bill wasn’t passed in the same form it was proposed, legislation was passed in 2011 to provide tax credits for hiring veterans and relief for the long-term unemployed. Additionally, after much debate, the temporary reduction of employee payroll taxes, due to expire on December 31, 2011, was extended for an additional two months and includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period. Pending further negotiations, the tax cut could potentially extend through 2012. Additional provisions that could be considered as part of the job creation effort include elements from the President’s proposal that have not yet been passed, including: earmarking funding for infrastructure projects and measures to help entrepreneurs and small businesses access capital and grow.

2. Worker Classification – The misclassification of workers is an issue that promises to receive more scrutiny in 2012. The IRS recently unveiled an opportunity for eligible employers to voluntarily reclassify workers as employees in exchange for partial tax relief from past federal employment taxes. In late 2011, the U.S. Department of Labor agreed to work with the IRS, as well as several states, to share information and coordinate enforcement to ensure that employees receive protections they are entitled to under federal and state law. Legislation in several states to increase fines for worker misclassification may also impact employers in 2012. [Read related MarketWatch article about the IRS VCSP voluntary program.]

3. Deficit Reduction – Running parallel to the jobs initiatives are a series of proposals that focus on reducing the record-high federal budget deficit through spending reductions and tax increases. Many of the ideas on the table center on personal and business tax reform and the closing of current tax “loopholes.”

4. Immigration – The U.S. Government is strengthening efforts to crack down further on the employment of illegal immigrants through rigorous worksite enforcement and paperwork inspections of companies of all sizes. In 2012, state laws will require more private sector employers to register and utilize the federal E-verify system for employee verification, and most Federal contractors and subcontractors will continue to be required to use E-verify to determine employment eligibility. Congressional immigration reform proposals, which may include further federal employment verification obligations, are also possible in 2012.

5. Employment Law – Employers will need to keep current with federal and state legislative and regulatory developments that are likely to impact human resource practices. Many states now restrict the use of an employee’s credit information in employment-related decisions or are considering doing so. Additionally, the U.S. Department of Labor and many states have enacted or are considering regulations to provide greater transparency to workers. These regulations specifically focus on the amount and calculation of workers’ pay, especially as it relates to minimum wage and overtime requirements.

6. Security and Privacy – In 2012, businesses will continue to be challenged by security considerations. Instances of cybercrime and corporate bank account takeovers against small businesses are becoming more widespread. Employers should take security precautions such as using stand-alone computers for online banking, not clicking on attachments or hyperlinks from unknown sources, and working with their bank to implement fraud detection tools on their accounts. Onerous privacy and security breach regulations enacted in many states make this an even more important consideration for businesses.

7. Dodd-Frank – The sweeping Dodd-Frank financial regulatory legislation is primarily focused on Wall Street reforms and consumer protection. However, the increased burden it places on some industries, especially banks, may result in small businesses experiencing limited availability of, or higher costs for, credit or other financial services.

8. Health Care Reform – The Supreme Court is expected to rule in 2012 on the constitutionality of the individual mandate provision in the Affordable Care Act. The court’s decision, and the potential fallout, could have broad impacts to businesses.

9. Unemployment Insurance Implications – Congress is contemplating the reinstatement of the federal unemployment surtax, which would result in virtually all businesses seeing higher unemployment insurance taxes. Companies in many states will see higher taxes due to the repayment of outstanding federal loans that were taken to allow for continued payment of benefits and to replenish depleted state unemployment trust funds. Many states are also contemplating additional or more extensive employer reporting requirements in an effort to decrease unemployment insurance fraud.

10. 401(k) – In 2012, additional fee disclosures will be required by 401(k) service providers to plan sponsors, and by plan sponsors to participants, with the intention of providing greater transparency around retirement plan fees. The limits for contributions to those plans will increase in 2012. Other regulations that will be enacted in 2012, or are under consideration, include those that would broaden the definition of who would be considered a plan fiduciary, make investment advice more accessible to plan participants, and restrict the number of loans an employee can take from their 401(k).

11. Taxes – 2012 will bring a number of important tax changes, including a higher Social Security wage base and changes to transportation and adoption assistance benefit limits. The accelerated depreciation benefits available to most businesses for certain asset purchases which were in place in 2011 may expire or be scaled back in 2012. All employers will need to keep an eye on what are likely to be additional tax changes as the year progresses.

12. Form W-2 – The IRS further delayed the requirement for smaller employers to report the cost of employer-sponsored health coverage on employee Forms W-2, indefinitely postponing it until further guidance is issued. However, employers filing 250 or more Forms W-2 in 2011 are required to include this cost on the W-2 starting in tax year 2012. The health care amounts reported on the W-2 will be strictly informational and not taxable to the employee.

About Paychex

Paychex, Inc. (NASDAQ:PAYX) is a leading provider of payroll, human resource, and benefits outsourcing solutions for small- to medium-sized businesses. The company offers comprehensive payroll services, including payroll processing, payroll tax administration, and employee pay services, including direct deposit, check signing, and Readychex®. Human resource services include 401(k) plan recordkeeping, section 125 plans, a professional employer organization, time and attendance solutions, and other administrative services for business. A variety of business insurance products, including group health and workers’ compensation, are made available through Paychex Insurance Agency, Inc. Paychex was founded in 1971. With headquarters in Rochester, New York, the company has more than 100 offices serving approximately 564,000 payroll clients nationwide as of May 31, 2011. For more information about Paychex and our products, visit www.paychex.com. For more information, call 888-681-3304 .

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
IRS & Tax News :: Where you can read this week's issue
IRS News :: Where you can add your comments, too

School Daze

Eva Rosenberg — Fri, 03 Feb 2012 11:18:00 -0600

You may remember the story – the one about the woman who shook her son awake in the morning. “Get up and get ready for school,” she urged. “You’re going to be late!”

“Ah, Mom,” he pleaded “I don’t want to go to school. The kids don’t like me. The teachers are against me. Even the custodian hates me. Give me three good reasons to go.”

“All right,” she agreed.

1) “It’s 6:30.

2) You’re 45 years old.

3) And you’re the principal!”

Besides, you’ve got to go to work – on principle!

Courtesy of the old I-HelpDesk & WebReview Digest

Please remember to send us your humor and your inspiration.
Clean jokes preferred.

Read more Money Funnies and Inspiration here:
http://taxmama.com/category/asktaxmama/money-funnies/

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
Money Funnies :: Where you can find more humor and fun
Money Funnies :: Where you can add your comments, too

Moved out Too Soon

Eva Rosenberg — Thu, 02 Feb 2012 05:00:00 -0600

Today TaxMama® hears from Elisa in the TaxQuips Forum with this question. “I purchased a home in 2009 getting a first-time homebuyers credit. I lived in it for 1 year. I moved to be closer to work and am renting an apartment. I have been renting my house out since July 2010. How will me renting out my house impact my taxes? Am I required to repay the monies received from the first-time homebuyer credit?

Dear Elisa,

Ouch! I truly wish you had asked this question last year. When you rented out your home in 2010, you terminated your right to the First Time Homebuyers Credit. (You had to live in the house for three years.) You needed to include the full repayment on your 2010 tax return. You will need to amend your 2010 tax return and pay it back, with penalties and interest.

I don’t know of any way around this. But, you might get the penalties waived, because the rules were complicated and confusing. If you are very persausive. (I truly hope you mis-typed the year and you actually started to rent it out in 2011 – so you wouldn’t have to amend your tax return!)

As to the impact on your tax return due to the rental? Well, you should already know this. Did you include your rental income on your 2010 tax return?

Regardless, how will it impact you this year? Odds are, you will show a loss. You will report the rental income on Schedule E, page 1. You will deduct the mortgage, property taxes, insurance, and depreciation. If you’re paying any other expenses related to the property, you can deduct those, as well. Most likely, your rent is not high enough to cover them all.

As long you are earning less than $100,000, you will be able to deduct up to $25,000 worth of rental loss in any given year. If your loss is greater than that (you should sell the house), the rest of the loss can be used in future years.

For more information, please read IRS Publication 527 - Residential Rental Property.

And remember, you can find answers to all kinds of questions about rentals, homebuyers’ credits, and other tax issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the new TaxQuips Forum .

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
TaxQuips Forum :: When you can ask questions, too
TaxQuips :: Where you can add your comments, too

File Download (0:00 min / 1 MB)

Deducting Uniforms

Eva Rosenberg — Wed, 01 Feb 2012 04:20:00 -0600

Today TaxMama® hears from our friend Kristi who is starting a new job. “My new job requires me to wear brown pants and either a certain green or blue shirt. I would only wear these clothes for work. Does that qualify as a uniform?”

Dear Kristi,

Good try, but, Sorry, No.

UNIFORMS are deductible.
Uniforms have the company’s logo on them.
They are generally obnoxious, unpleasant, ill-fitting garments, unless you are Ponch on CHIPS – who tailored his uniforms.

Street clothes of a specific color are not uniforms.

Here is how IRS defines Uniforms:

You must wear them as a condition of your employment.

The clothes are not suitable for everyday wear.

If the clothing meets the definition, like my husband’s school-bus driver outfits, you can deduct the cost and upkeep of work clothes.

Incidentally, IRS doesn’t spell it out, but if you show up for an audit in your uniform, to prove it IS a uniform, IRS has been known to disallow the uniform deduction. Why? Because, since you wore it into the IRS office, clearly, it’s suitable for street wear. I swear. Kind of a Catch-22. They really did that to someone I know!

And remember, you can find answers to all kinds of questions about businesswear and other tax issues, free. Where? Where else? At www.TaxMama.com.

Please post all Comments and Replies in the new TaxQuips Forum .

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
TaxQuips Forum :: Where you can comment on this

File Download (0:00 min / 0 MB)

Delivering Newspapers

Eva Rosenberg — Tue, 31 Jan 2012 04:15:00 -0600

Today TaxMama® hears from Trina in the Tax Quips Forum who wasn’t an employee. “I started working for a newspaper company over the summer of 2011, delivering papers to homes using my own vehicle. The company did give me company checks, but they did not take any taxes out. I believe they called their employees “independent contractors.” How do I file my taxes, since there has not been anything taken out?”

Hi Trina,

Yes, I remember seeing those ads in the newspaper about making SO MUCH money per month, early in the morning, delivering newspapers. It does sound tempting, doesn’t it? You get your work out of the way early – then have the whole day to do a regular job, or your studies, or take care of your children. Sigh…it doesn’t really work out that way, does it?

Did you also have to collect the subscription fees? My husband used to have to do that as a young boy. It is common in the newspaper industry to hire delivery folks as independent contractors.

OK, here’s how you report the income.

1) Report the amount on that 1099-MISC on Schedule C, on the long version of the Form 1040.

2) If you tracked the mileage, total up the miles from January – June 30; and from July 1 – December 31, 2011, or the corresponding time period when you worked this job.

a. The miles before June 30 are worth 51 cents per mile x the miles you drove.

b. The miles from July 1st onward are worth 55.5 cents per mile x the miles you drove.

c. Report the total mileage expense on line 9 of the Schedule C.

3) If you have other expenses, like office supplies, other supplies, postage, telephone, etc. you can deduct those as well.

4) Since you were working from home, it’s possible that you may be entitled to office in home deductions. Maybe not, if you didn’t have a specific area where you were working.

5) Once you arrive a net profit, you will be paying self-employment taxes on that profit at 13.3% (only for 2011, it’s usually 15.3% in other years). IRS Publication 334 will provide more information about business expenses.

If you’ve never done this before, perhaps, for this year, you should have a tax pro help you. There are a lot of deductions you might be entitled to use – perhaps even to wipe out your profits.

And remember, you can find answers to all kinds of questions about being in business and other tax issues, free. Where? Where else? At www.TaxMama.com.

Please post all Comments and Replies in the new TaxQuips Forum .

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
TaxQuips Forum :: When you can ask questions, too
TaxQuips :: Where you can add your comments, too

File Download (0:00 min / 1 MB)

Child Support Payment

Eva Rosenberg — Mon, 30 Jan 2012 04:00:00 -0600

Today TaxMama® hears from Danny in the Tax Quips Forum with this question. “My kids stay with their mother from Sunday noon until Thursday noon; then stay with me from Thursday noon until Sunday noon. I pay $140 monthly in child support. Can I claim them in my taxes?”

Dear Danny,

What did you arrange with your ex-wife? Or in the divorce documents? Technically, the children are with her for more than half the year. So she is the custodial parent.

The next question is, who pays more than half their support? I don’t know where you live, but $140 a month doesn’t even pay half the support for one child where I live, much less “children.” (You don’t say how many.) So you’re not paying more than half the support.

It truly does boil down to what you two agreed upon. If your wife signed a Form 8332 relinquishing her right to one or both children, then you can claim one or more of your children. Without that, you’ll have a battle on your hands – and will most likely lose.

I’m sorry to give you the bad news.

But…if you do have more than one child, consider having each of you take at least one child. You will both be head of household and get some nice benefits.

And remember, you can find answers to all kinds of questions about children, exemptions, and other tax issues, free. Where? Where else? At www.TaxMama.com.

Please post all Comments and Replies in the new TaxQuips Forum .

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
TaxQuips Forum :: When you can ask questions, too
TaxQuips :: Where you can add your comments, too

File Download (0:00 min / 0 MB)

Ask TaxMama Issue 627 - Bubbling Over

Eva Rosenberg — Fri, 27 Jan 2012 13:05:00 -0600

Dear Family,

Earlier today, IRS announced that electronic refunds are on target. People can expect to find them in your bank accounts within about 10 days. But, some refunds will be delayed. IRS is beefing up the fraud detection system. Returns with Earned Income Credits, American Opportunity Credits and other refundable credits will take a little longer. That’s good news, believe it or not. Last year, IRS releases millions of dollars of fraudulent refunds, despite safeguards. Hopefully, beefier security will cut that down.

[Don’t forget to play with the bubble wrap. Click on the picture to find games.]

What else is going on in tax news? Today’s IRS News announces that over 12,000 free tax prep sites have opened their doors to help taxpayers needing advice and preparation. We also tell you about 10 tax benefits open to parents, since they have children.
Today’s Money Funnies are really funny – if you have a sense of humor, and irony. Anyone who is easily offended, please do NOT ready today’s story about He-l*l – As Explained By A Chemistry Student . (the dashes and stuff are for spam systems). On the other hand, there are over 200 other funny bits you can enjoy.

The Republican primaries are grabbing a lot of attention. This week, Mitt Romney was compelled to release his own tax returns, even before getting the nomination. (It was his intention to wait. One attorney, William Funk, wrote a scathing reprimand of all the sensationalists who’ve been blowing legitimate information out of proportion.

People are entitled to use the legal tax breaks written into the tax code. After all, isn’t that why you’re here? Certainly, we all want to know all the legal ways we can reduce our taxes. Why begrudge the same benefit to our politicians?

I was invited to review the two candidates’ tax returns by Bob McCormick for Money 101. You can see the comparison of Romney’s and Gingrich’s tax returns here. You will also have access to the actual tax returns, in case you want to see them. Some of Romney’s are over 200 pages long.

Incidentally, I want to thank all of you for your patience with the site this week. It’s finally stabilized and will stop popping off to sleep. We got too busy for the new server – and finally convinced our kind hosts to upgrade us and to keep an eye on things. You should be able to ask your questions and get answers now. Hooray!

Something fun? There’s a new site launching in April. It’s called Wazzub. You can sign up for it early. You can make some money doing it. This company has picked up enough investment capital to be paying the members who promote them. They plan to be your new home page. Hopefully, you’ll have everything on there you could ever want. At no charge.

Once they’ve opened their doors, they will be sharing 50% of their advertising revenue with us – those of us who get in at the beginning. [Note: This $1 per member concept worked very well for the folks who promoted ClubMom (now CafeMom). Some affiliates earned as much as $10,000 per month, just for sending them new members.] So, please join now.

Let’s address a few tidbits of news – and go back to work!
1) Weekly Equifax blog is still going strong.
http://blog.equifax.com/tax/
It’s a New Year—It’s Time to Lose Weight!

MarketWatch
How to File your Taxes For Free
Top Tax Sites

AccountingWeb Blog
Mitt & Newt, What can we Learn for Our Clients?

IShade.com
Mitt & Newt, again

2) Radio Interviews done recently or coming up

January 24, 2012 Quickie interview withBob McCormick’s Money 101
about Mitt’s and Newt’s tax returns and tax reduction tips

February 27, 2012 – Bob McCormick’s Money 101 show on KFWB.
2-hours. Call us 888-KFWB-980 (888-539-2980)

February 22, 2012 #SmallBizChat with Melinda Emerson
http://succeedasyourownboss.com/what-is-smallbizchat/

3) CPE Link courses www.cpelink.com/teamtaxmama
Great class coming in February – Tax Checklist for Divorce

And we are recording a GOOD self-study RTRP course next week.

You can find daily TaxQuips into YouTube videos
http://www.youtube.com/taxmama1

This week’s TaxQuips

Direct Sellers Personal Use of Product – Today TaxMama® hears from Bill in the Tax Quips Forum who raises a good question. “I have a lot of independent distributors asking about deducting their autoship of product for personal use. They say that their tax person said you can claim the deduction because you have to “be a product of the product” or [...] Read the full article →

Getting Double 1099s – Today TaxMama® hears from Stephanie in the Tax Quips Forum with a very valid concern. “I’m concerned about this requirement that PayPal report my sales numbers via the 1099-K. The clients I work with will also have to send me a 1099-MISC. Won’t that be income that is double reported? Usually I just enter my [...] Read the full article →

TaxMama s TaxQuips Reimbursement Plans, Part 2 – Yesterday TaxMama® started discussing employee reimbursement plans. Today, TaxMama® explains how company reimbursement policies affect tax audits. Read the full article →

TaxMama s TaxQuips Reimbursement Plans, Part 1 – Today TaxMama® hears from Josh in the TaxQuips Forum with a complex question about reimbursement plans. So, TaxMama wants to explain the overall concept. Read the full article →

Remember TaxMama’s Tax Calendar has been updated for 2012, with enough information to carry you through to the first quarter of 2013.

As always, we love your feedback, opinions and ideas.

You are what makes all this fun – and interesting!

Please use the Comments link online.

http://taxmama.com/asktaxmama/ask-taxmama-issue-627

TaxNerd gear makes a bold statement year-round.

It helps attract the opposite sex!

Shop at www.taxnerd.net or http://www.zazzle.com/taxmama*

Hugs from your favorite TaxNerd,

http://www.zazzle.com/taxmama*

Eva Rosenberg, EA

Your TaxMama®

www.TaxMama.com

Your TaxMama® is watching…out for you.

www.TaxMama.com

www.TaxMama.com/TaxQuips

www.IRSExams.com

www.TaxNerd.net

==========================

—————————————–

TAX CALENDAR

http://taxmama.com/tax-calendar/

—————————————–

01/31/2012 File Heavy Highway Vehicles Form 2290 – various deadlnes – see form instructions
01/31/2012 File Form 730 – Tax Return for Wagers (Accepting Wagers, Pool, Lottery for Profit). Note: This is a monthly form.
01/31/2012 Furnish W-2s recipients
01/31/2012 Furnish 1099 MISC to recipients
01/31/2012 Furnish 1099 Interest to recipients
01/31/2012 Furnish 1099 Dividends to recipients
01/31/2012 Furnish 1098s to borrowers – Mortgage interest
01/31/2012 File 4th, Quarter Payroll Reports
01/31/2012 File Employers Annual Payroll Reports
01/31/2012 File Annual Payroll for Agricultural employees
01/31/2012 Employer’s Annual Federal Unemployment (FUTA) Tax Return
01/31/2012 Individuals who missed 4th estimated pmt – May file & pay taxes now
02/15/2012 Employees to File new W-4 with Employer
02/15/2012 Employers Make Monthly Payroll tax deposit on the 15th of each month
02/29/2012 File Paper copy W-3′s with Social Security Admin including copies of W-2′s
02/29/2012 File paper copy of US transmittal of US information Returns
02/29/2012 Farmers & Fisherman – Use Personal Income Tax Return – Sole Proprietor
02/29/2012 Employers File Annual Report for Employees TIP Income – Form 8027
—————————————–

From TaxMama® to You!

—————————————–

Follow TaxMama®’s Tweets – http://twitter.com/TaxMama

http://www.widgetbox.com/widget/taxmamas-taxquips-daily-tax-podcasts

—————————————–

SPECIAL DEALS

—————————————–

=> Do it Yourself Legal Material

NOLO answers the question –

What can I do if my spouse gets into debt – do I owe his/her debts?

(disclosure – TaxMama receives a commission)

=> Need a Corp, LLC, Registered Agent

Incorp Services Inc. in Nevada – DISCOUNT

20% off on formation services.

Similar discounts on Registered Agent services.

Call 800.2.INCORP – use coupon code – TAXMAMA

http://vurl.bz/taxmama/Incorp – no coupon needed

=> Business Uniforms – 3 Choices:

Zazzle - Cafe Press – Queensboro

=> Use your art or others – and customize it

Great for promotions – and to gear up for tax season!

Zazzle your Imagination. Are you a TaxNerd?

Tell everyone – proudly!

http://www.zazzle.com/taxmamate

your own customized Calendar at Zazzle

http://www.kqzyfj.com/click-241922-10414512

Get volume discounts on orders of 2 or more.

Get extra discounts for yourself and friends after you order.

=> Stuff for Pets and Pregnant Moms

Cafe Press is the home of TaxMama® ‘s shops

<a href="http://www.cafepress.com/taxmama">http://www.cafepress.com/taxmama</a>

You can upload your own art and graphics

<a href="http://www.jdoqocy.com/click-241922-10463747">http://www.jdoqocy.com/click-241922-10463747</a>

Get extra discounts for yourself and friends after you order.

=>WOW! Embroidered Logo on ANYTHING – on sale!

Always a sale at the Queensboro Shirt Company

http://www.queensboro.com/index.html?ref_id=632192

(They have clothes and novelties – and all sizes)

They do a gorgeous job. CHEAP!

—————————————–

EA EXAM NEWS & SOLVING THE TAX PUZZLE

—————————————-

Take TaxMama®’s 2011 EA Exam Review Class

http://irsexams.com/

I’m geting notes from people who are passing their exams. How exciting!

Replay the session –
Everything You Wanted to Know About the EA Exam

=== CPA Exam Review

Looking for a great course?

You can’t do any better than this!

Phil Yaeger’s CPA Exam Review Course

http://www.yaegercpareview.com/

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online

IRS Reminds Parents of Ten Tax Benefits

Eva Rosenberg — Fri, 27 Jan 2012 12:07:00 -0600

Your kids can be helpful at tax time. That doesn’t mean they’ll sort your tax receipts or refill your coffee, but those charming children may help you qualify for some valuable tax benefits. Here are 10 things the IRS wants parents to consider when filing their taxes this year.

Dependents In most cases, a child can be claimed as a dependent in the year they were born. For more information see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.

Child Tax Credit You may be able to take this credit for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit. For more information see IRS Publication 972, Child Tax Credit.

Child and Dependent Care Credit You may be able to claim this credit if you pay someone to care for your child or children under age 13 so that you can work or look for work. See IRS Publication 503, Child and Dependent Care Expenses.

Earned Income Tax Credit The EITC is a tax benefit for certain people who work and have earned income from wages, self-employment or farming. EITC reduces the amount of tax you owe and may also give you a refund. IRS Publication 596, Earned Income Credit, has more details.

Adoption Credit You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. If you claim the adoption credit, you must file a paper tax return with required adoption-related documents. For details, see the instructions for IRS Form 8839, Qualified Adoption Expenses.

Children with earned income If your child has income earned from working, they may be required to file a tax return. For more information, see IRS Publication 501.

Children with investment income Under certain circumstances a child’s investment income may be taxed at their parent’s tax rate. For more information, see IRS Publication 929, Tax Rules for Children and Dependents.

Higher education credits Education tax credits can help offset the costs of higher education. The American Opportunity and the Lifetime Learning Credits are education credits that can reduce your federal income tax dollar-for-dollar. See IRS Publication 970, Tax Benefits for Education, for details.

Student loan interest You may be able to deduct interest paid on a qualified student loan, even if you do not itemize your deductions. For more information, see IRS Publication 970.

Self-employed health insurance deduction If you were self-employed and paid for health insurance, you may be able to deduct any premiums you paid for coverage for any child of yours who was under age 27 at the end of the year, even if the child was not your dependent. For more information, see the IRS website.

Forms and publications on these topics are available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Ask TaxMama :: Where taxes are fun and answers are free
TaxQuips :: The number ONE free tax podcast online
IRS News :: Where you can read this week's issue
IRS News :: Where you can add your comments, too