Paying Estimated Taxes IRS Form 1040-ES

As a general rule, you must pay estimated taxes if both of these statements apply: 1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and tax credits, and 2) You

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Posted in Estimated Taxes, Paying Taxes, Tax Guidance & Preparation

IRS Fresh Start Initiative: Apply for Extension of Time to PAY with Form 1127A or Request an Installment Agreement with IRS Form 9465FS

If you don't have the money to pay your taxes you should file your return on time and pay as much as you can with the return to eliminate the late filing penalty and minimize the late payment penalty/interest charges.

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Posted in Installment Agreement, IRS Collections, IRS Enforcement, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Partial Payment Installment Agreement, Paying Taxes, Tax Guidance & Preparation

Statutory Employee

I've found myself needing to specifically clarify what the definition of statutory employee means for IRS employment tax purposes. Statutory employees include: 1. full-time life insurance agents, 2. certain agent or commission drivers, 3. traveling salespersons, and 4. certain homeworkers. Statutory

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Posted in Employment Tax

Start Up Expenses

The two major start up business expenses are the costs to organize and the costs of normal business expenses incurred prior to the beginning of business or the point where the business is ready to receive revenue. Sole proprietors do not normally have costs

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Posted in Business Expense, Sole Proprietor, Start up costs

Acquisition Debt and Divorce

Generally speaking IRS regulations provide that debt incurred to acquire the interest of a spouse or former spouse in a residence, incident to divorce or legal separation, may be treated as acquisition indebtedness under IRC Sec. 163 (mortgage interest deductions) without regard to the treatment

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Posted in Basis, Debt, Family, Gift Tax, Home Office, Marriage, Tax Guidance & Preparation

IRS Tax Treatment of Incentive Stock Options Forms 3921, 6251, 8949

Incentive stock options (ISO) are compensation to employees in the form of stock rather than cash. With an ISO, the employer grants to the employee an option to purchase stock in the employer's corporation, or parent or subsidiary corporations, at

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Posted in Alternative Minimum Tax (AMT), Stock Options

Cash Basis Balance Sheet Basic Overview

Having spent way too much time dissecting a balance sheet today I thought it might be a good idea to put out a cash basis balance sheet basic overview post. A balance sheet is a snap shot at a specific

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Posted in Accounting Method, Self Employ, Small Business, Sole Proprietor, Sub-chapter S, Tax Guidance & Preparation, Tax Preparer, Tax Problems & Requests

IRS And the Trust Fund Recovery Penalty (TFRP) for Employment Tax Delinquencies

Here are 5 things I learned through experience regarding TFRP: 1. An IRS Revenue Officer makes a determination to "assess" or "not assess" the Trust Fund Recovery Penalty (TFRP). Bankruptcy does not stop the Assessment Statute even though it can

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Posted in Employment Tax, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Penalty and Interest Abatement, Tax Guidance & Preparation, Trust Fund Recovery Penalty

Major Changes Made to IRS Penalty Relief + Lien Process Through New Fresh Start Program

The IRS announced new policies and programs to help taxpayers pay back taxes and avoid tax liens. The changes include: Tax Lien Thresholds The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is

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Posted in IRS Lien

IRS Undercover Operations STILL Lacks Sufficient Oversight

The Treasury Inspector General for Tax Administration released a report today dated February 3rd 2012 titled Criminal Investigation Can Take Steps to Strengthen Oversight of Its Undercover Operation. This audit was conducted as a follow up to an audit in tax years 2001 and

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Posted in IRS Collections, IRS Criminal Enforcement, IRS Enforcement, IRS Examination
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