IRS Form 1099-K Banks Not to be Penalized for Reporting Information Incorrectly

Okay this blew my mind today. The IRS is providing special relief to banks and other ‘payment settlement entities’ required to begin reporting payment card and third-party network transactions to the IRS on new Form 1099-K. Payers (Banks) have to make good-faith efforts to file accurate 1099-Ks, but the IRS will not penalize for incorrect…

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Tax Treatment of Incentive Stock Options (ISO’s): Qualifying Disposition

Incentive Stock Options (ISO) are taxed based on how and when the stock is disposed and whether the disposition is qualifying or non-qualifying. Disposition of stock is typically when the employee sells the stock, transfers the stock to another person or gives the stock to charity. A qualifying disposition simply means that the stock, acquired…

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IRS Worker Classification Settlement Program IRS Form 8952

If you are an employer you can appreciate the fact that everyone working for you it seems wants to be an independent contractor until they get injured on the job or get pissed off at you and seek relief outside of your organization. Employees and the subsequent employment tax liability they bring can be a…

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First Time Home Buyer Credit

Many taxpayers who claimed the first time home buyer’s credit are having their tax returns examined by the IRS. Turns out generally that this credit is not being properly reported. Even tax practitioners are demonstrating incompetence when it comes to preparing, signing and filing tax returns of this nature. This is becoming a real mess…

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What Are The Tax Benefits Available to a Self Employed Individual with a 401(K)

The benefits available to a self-employed individual in a solo 401(k) plan have increased. The self-employed individual can contribute to the solo 401(k) plan two ways: Through elective deferrals limited to the lesser of $16,500 or 100% of the self-employed individual’s compensation for 2011 and 2012. Through employer contributions limited to 20% of the self-employed…

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Small Employer Health Insurance Credit 2011 – IRS Form 8941

The small employer health insurance credit is applied for on IRS Form 8941.  The credit itself is based on the non-shareholder staff, their hours worked, wages and the premiums paid for them. The hours worked, wages and health insurance premiums of shareholders are not taken into account for purposes of the credit under §45R(e)(1)(A).

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Tax Amnesty Offer Allows Coloradans a Chance to Settle Up Support Education, but Ends Soon!

I write in support of this effort on behalf of our elected officials here in Colorado and urge anyone delinquent in their Colorado tax responsibilities to come forward NOW before the Amnesty period ends. Although it seems like a ruse to ‘root you out’ as it were it is for real and I’m here to…

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Social Security and Medicare Changes 2012

The Social Security Administration has announced the new benefits and thresholds for 2012 as follows: Gross Social Security benefits increase for 2012 by 3.6%.  The amount of earnings subject to Social Security taxes increases to $110,100.  The amount of earnings required to be subjected to Social Security taxes in order to receive a quarter of…

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Paying Past Employment Tax Liabilities with an Installment Agreement

Employment taxes withheld by your employer are considered ‘trust fund’ taxes. I’m not entirely sure of its origin but I think the term trust fund tax is used because the US Treasury considers employment taxes withheld from your paycheck the US federal government’s money and the US Treasury is ‘trusting’ your employer to not only…

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Adoption Tax Credit

The Affordable Care Act increased the amount of the Adoption Tax Credit and made it fully refundable, which means it can increase the amount of your refund or decrease the amount of your tax liability in the immediate tax year. Additionally: The adoption tax credit, which is as much as $13,170, offsets qualified adoption expenses making…

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