Tag Archives: Internal Revenue Service

Crowd Funding Can Be A Stumbling Block For Entrepreneurs

In Salt Lake City, designer Jenny Wecker collected pledges in the mount of $42,000 when she used Kickstarter to test market a diaper bag she had created. She received over 300 orders. Previously, she had handmade her product and marketed it on Instagram.

She indicated that she and her husband never considered the tax impact of such success. Apparently, other entrepreneurs are in the same position as they succeed at crowd funding but don’t realize that the IRS considers them to be small businesses with tax responsibilities.

Abraham Finberg, an L.A. tax accountant, says people are stunned when they receive a 1009-K and don’t know what to do. In addition, crowd funding complicates issues related to charitable giving. Is giving money toward having your company name stencilled on a food truck a charitable donation in the eyes of the IRS? Kelly Phillips Erb, a tax attorney from Pennsylvania, says the IRS has to make a decision on these nebulous issues.

English: A photo of crowd funding expert Pim B...

English: A photo of crowd funding expert Pim Betist (Photo credit: Wikipedia)

Diaper bag inventor, Jenny Wecker, who normally uses TurboTax software to prepare her returns, says she and her husband get tax refunds. This year, she used a paid preparer. She was relieved when, despite the surprise implications of crowd funding her project, they had a flat tax year–neither owing nor being refunded money.

Since Wecker explored Kickstarter, she has gotten questions from many potential customers and has lined up retail clients and wholesale customers, too. She indicates that the crowd funding experiment taught her what mistakes to avoid and also helped launch her design business.

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TurboTax Can Help You With Your Taxes Filing

According to the IRS, tax-filing seasons starts Jan. 20

According to a statement made by the IRS yesterday, taxpayers can being filing their taxes 2014 returns on Jan. 20.

In spite of a last-minute tax law that as passed by Congress and and signed by President Obama, tax-filing season will begin on time.

Early in December, a bill was passed by Congress that extended more than 50 tax breaks that expired at the beginning of the year. This law has extended these tax breaks through the year’s end, making it possible for people to claim these on their taxes 2014 returns. This bill was signed into law by President Obama on Dec. 10.

View image | gettyimages.com

In years past, tax season has been delayed by last-minute tax laws that were passed by Congress. According to John Koskinen, the IRS Commissioner, this will not be the case this year.

In a statement, Koskinen said that the IRS has reviewed the late changes to tax law and found that there was nothing to prevent them from testing and updating their systems.

Every year, millions of Americans file their returns during the first several weeks of the tax season in order to expedite their tax returns.

The IRS says that in recent years, it has been able to issue the majority of tax returns within just 21 days if these returns were e-filed through a system like TurboTax. According to the IRS, filing electronically is the quickest way to get a tax return.

Kosinken also told reporters that refunds could be delayed as the result of agency budget cuts. In this recent statement, however, he did not estimate the time frame for this delay.

Approximately 150 million individual tax returns will be processed by the IRS this year. The average refund this year was about $2,800.

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Talking About Buying A Home

Things To Know When You Are Buying A Home

Buying a home can be a lot of different things. It will most likely be the most money you will spend on any single purchase. It may be the biggest debt you ever incur. And very likely, it could be the best investment you will ever make. Needless to say, it is a major decision to be made.

H&R Block

There are certainly many ways in which buying and owning a home is going to reflect on your personal income taxes. This is why seeking a consultation with H&R Block prior to making that purchase simply makes so much sense. They will make sure you grasp precisely what you are getting involved with.

Congress is constantly revamping the rules in the tax code, points out Lynn Ebel who is a tax attorney. Lynn works with the H&R Block Tax Institute.

Itemizing Deductions Helps Lower Tax Bill

“Itemizing deductions gets the homeowner a better benefit than the standard deduction”, Lynn points out. Homeowners doing so must complete Schedule A of Form 1040.

Regarding your home purchase, here are five things important that you know.

1. Mortgage interest may be deducted.

Homeowners are allowed to deduct the interest on their mortgage. For the year, couples may deduct up to one million filing jointly, and five hundred thousand each filing separately.

2. Real property taxes paid may be deducted

A great positive when you itemize your deductions is that you may claim your real property taxes for the time you hold ownership of a home that particular year.

3. For the purchase of your first home, a retirement savings may be used.

Without incurring the 10% penalty for early withdrawal, $10,000 may be withdrawn from your Roth or traditional IRA.

4. Closing costs are not deductible

5. At tax time, home improvements help

The bottom line is that before proceeding with a major purchase like a home, be sure to check with your tax adviser first.

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Five Common Tax Myths Explained

Ginita Wall points out 5 tax myths that everyone should know about, especially with the deadline for filing right around the corner.

I would like to address some of those common tax myths that most people have heard about, although don’t really fully understand. Another source of information is TurboTax.com and the easy to use site will explain the tax myths as well as ensure that you get the biggest possible refund.

English: United States Internal Revenue Servic...

English: United States Internal Revenue Service Criminal Investigation Division Badge (Photo credit: Wikipedia)

Myth 1:

Despite popular belief, there is no evidence to suggest that if you file for an extension, you are more likely to be audited. Less than 1 percent of all tax payers are audited by the IRS, and you are also not any more likely to be audited if you file your taxes early.

Myth 2:

Whether or not you have the money to pay the IRS, you must still file your taxes by the April 15th deadline. if you owe money, you can work out a payment plan with the IRS, but you cannot delay filing just because you may owe money.

Myth 3:

Dependents who are not your relatives must be living with you, although parents are the exception to that rule, and if they live in a nursing home you can still claim them as dependents.

Myth 4:

Unless your pet expenses are directly related to your business, such as paying for a guard dog, you cannot claim your pet on your taxes, which is also one of the common tax myths. A seeing eye dog or another medically required dog would also be an allowable exception to this rule.

Myth 5:

Some states impose an inheritance tax (IN, IA, KY, MD, NE, NJ, PE, TN) and unless you live in one of those states, any tax is paid by the estate of the deceased person. Gifts that you give or receive are not taxable when it comes to filing your taxes and you do not have to declare them.

TurboTax.com is the place to look for information on these and other tax myths, and TurboTax.com can help you file your taxes easily and accurately.

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How An IRS Debt Relief Program Can Get Your Taxes Back On Track Again

IRS Debt Relief Program

The IRS is well known for pulling strong-arm tactics on those who do not pay their taxes, but to be honest, they do have a softer side for those who have a legitimate reason for being late with their payments. To make it easier for you the taxpayer, as well as the IRS, they have developed programs for you to use, to get your tax payments back on track again, and in their good books again, as it were.

IRS Form 1040X, 2005 revision

IRS Form 1040X, 2005 revision (Photo credit: Wikipedia)

Installment agreement is an IRS debt relief program aimed at those who owe a large amount of money. Basically, they let you pay off the money in even installments, until the debt is fully paid. Interest will still accumulate on these late payments though, so the bigger the payment you make each month, the better.

Then there is the Penalty Abatement Program which, if you can prove without a doubt, that you have a viable reason for not being in a position to pay your taxes, will have the IRS do away with the penalties to reduce your debt to them.

The Non Collectible Status IRS debt relief program, is for those who are barely existing on their wages and just do not have the money to pay their late taxes. For these people, the taxman will stop taking any action against them, until their circumstances have improved. Again, interest will still accumulate on any money owed to the IRS, so it is a good idea to get it paid off as soon as possible.

Anyone considering using an IRS debt relief program, is can call an Enrolled Agent at IRS Tax Relief who will guide them through the whole process of getting their tax payments back on track again.

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Getting Taxes For Free

Getting 2012 Taxes For Free

Many reasons exist that an individual taxpayer would want to get his or her 2012 taxes for free. One reason may be that he or she simply forgot to file. The 2012 taxes had a deadline that ended in April. Therefore, a person who owes taxes may have to pay interest and fees implemented by the Internal Revenue Service. Getting the taxes done free will save that person some money so that he or she can use the rest to pay the IRS.

IRS Form W-2

IRS Form W-2 (Photo credit: Wikipedia)

Another reason someone might want his or her 2012 taxes for free is a huge refund. Single mothers and students can sometimes obtain large refunds because of their annual diligence and struggles. The government looks kindly upon those individuals. Therefore, any person who has not yet filed taxes would be happy to get them done free.

An individual can get 2012 taxes free in a wide variety of locations. The number one place to file taxes free is the government website. However, several independent providers offer tax-filing services to individual taxpayers and businesses. Each provider has varying features and benefits, and each provider has a specific period for filing taxes. The best way for a person to get 2012 taxes free is by conducting research and working with the provider that offers the fastest turnaround and the best customer service.

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