New IRS Notices being sent in Error for Taxpayers Filing Self Employment Tax

The IRS has been experiencing a system error that occurs on individual tax returns that pay self-employment taxes. The system has been issuing IRS notices to some individual taxpayers in situations including: Taxpayers who have more than one Schedule C

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Posted in Self Employ

You May Have to Pay Estimated Taxes if …..

According to IRS Publication 505 you may have to pay estimated taxes if you are self-employed and have income other than your salary or you receive income that is not subject to withholding, such as: Self-employed income Rent Interest Dividends Alimony

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Posted in Estimated Taxes

Severance Payments NOT Subject to FICA Tax according to court, but ….

In February 2010, a federal district court in U.S. v. Quality Stores, Inc., (DC MI 2/23/2010) 105 AFTR 2d 2010-1110, ruled that severance payments made to terminated employees by a company going out of business were not “wages” subject to FICA. The Court said that “…where severance

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Posted in FICA, Payroll Tax Problems, Social Security Tax

Tax Treatment of Land Easement Transactions Rental Income vs. Sales Proceeds

According to the National Association of Tax Preparers the key to reporting transactions that involve land easements is to first determine whether the payment represents rental income or sale proceeds.  If the taxpayer was leasing a land easement for a

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Posted in Capital Gain, Capital Loss, Farm Tax, Rental Real Estate

Time for Claiming a Tax Refund – IRS Publication 556

According to IRS Publication 556 taxpayers generally must file a claim for a credit or refund within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. If

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Posted in Tax Refund

Written IRS Appeal Protest

You can appeal an IRS tax decision to a local Appeals Office, which is separate from and independent of the IRS office taking the action you disagree with. The Appeals Office is the only level of appeal within the IRS.

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Posted in IRS Appeal, IRS Audit, IRS Collections, IRS Examination

What to Classify Your New Entity for Tax Purposes – IRS form 8832 v IRS Form 2553

Understanding how to file LLC taxes, S Corporation taxes and taxes for other business entities can be one of the biggest headaches of starting your own business. Filing taxes for a business entity like an LLC can be especially confusing

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Posted in Entity Classification

No Medical Expense Deduction Allowed for Precautions to Treat Future Disease

Under §213, a taxpayer is allowed to deduct the cost of preventing, treating, curing, mitigating, and diagnosing a disease that is existing or imminently probable for themselves or a family member. Doctors now can store cord blood of an infant that contains stem cells that may be

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Posted in Medical Expenses

Truck Owners IRS Form 2290

e-Filing Form 2290, Heavy Highway Vehicle Use Tax Differences Between The Paper and Electronic Processes Q. Is there a cost associated with filing Form 2290, electronically? A. Yes, there is a cost associated with filing Form 2290, electronically. Taxpayers will

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Posted in Highway Tax

Deducting IRA Losses – IRS Publication 590

According to IRS Publication 590, chapter 1 section "Recognizing Losses on Traditional IRA Investments" you can indeed deduct for tax purposes a loss on IRA plans if you cash out all funs out of all IRAs of the same type be

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Posted in Capital Gain, Capital Loss
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