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Visit IRS.gov for answers to 2019 tax-filing season questions

Visit IRS.gov for answers to 2019 tax-filing season questions

With major changes made by the Tax Cuts and Jobs Act, the IRS encourages business owners and self-employed individuals seeking more information on tax reform to review Publication 5318, Tax Reform What’s New for Your Business. Visit the IRS Tax Reform and Get Ready pages on IRS.gov for additional information.

Choosing e-file and direct deposit remains the fastest and safest way to file an accurate income tax return and receive a refund. “Where’s My Refund?” has the most up-to-date information available about refunds. The tool is updated once daily, so taxpayers don’t need to check more often

Ten things for taxpayers to think about when choosing a tax preparer

Ten things for taxpayers to think about when choosing a tax preparer

It’s the time of the year when many taxpayers choose a tax preparer to help file a tax return. These taxpayers should choose their tax return preparer wisely.  This is because taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return.

Here are ten tips for taxpayers to remember when selecting a preparer:

  • Check the Preparer’s Qualifications. People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.
  • Check the Preparer’s History. Taxpayers can ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, people can check with the State Board of Accountancy. For attorneys, they can check with the State Bar Association. For Enrolled Agents, taxpayers can go to the verify enrolled agent status page on IRS.gov or check the directory.
  • Ask about Service Fees. People should avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.
  • Ask to E-File. Taxpayers should make sure their preparer offers IRS e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit.
  • Make Sure the Preparer is Available. Taxpayers may want to contact their preparer after this year’s April 15 due date. People should avoid fly-by-night preparers.
  • Provide Records and Receipts. Good preparers will ask to see a taxpayer’s records and receipts. They’ll ask questions to figure things like the total income, tax deductions and credits.
  • Never Sign a Blank Return. Taxpayers should not use a tax preparer who asks them to sign a blank tax form.
  • Review Before Signing. Before signing a tax return, the taxpayer should review it. They should ask questions if something is not clear. Taxpayers should feel comfortable with the accuracy of their return before they sign it. They should also make sure that their refund goes directly to them – not to the preparer’s bank account. The taxpayer should review the routing and bank account number on the completed return. The preparer should give you a copy of the completed tax return.
  • Ensure the Preparer Signs and Includes Their PTIN. All paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN.
  • Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients. However, some preparers are dishonest. People can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their return without the taxpayer’s consent, they should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.

Here’s what taxpayers should consider when determining if they need to file

Here’s what taxpayers should consider when determining if they need to file

As people prepare to file their taxes, there are things to consider. They will want to determine if they need to file and the best way to do so.

For tax year 2018, all individual taxpayers will file using the new Form 1040. Forms 1040A and 1040EZ are no longer available.  Taxpayers who previously filed these forms will now file Form 1040. The new Form 1040 uses a “building block” approach allowing individuals to add only the schedules they need to their 2018 federal tax return. Taxpayers with more complicated returns will need to complete one or more of the new Form 1040 Schedules. This group of taxpayers includes those who claim certain deductions or credits, or who owe additional taxes.

Individuals who filed their federal tax return electronically last year may not notice any changes, as the tax return preparation software will automatically use their answers to the tax questions to complete the Form 1040 and any needed schedules.

Here are three more things for people to keep in mind as they prepare to file their taxes:

Who is required to file.  In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or if they are a dependent of another person. For example, if a taxpayer is single and younger than age 65, they must file if their income was at least $12,000. There are other instances when a taxpayer must file. Taxpayers can visit IRS.gov/filing for more information.

Filing to get a refund. Even if a taxpayer doesn’t have to file, they should consider filing a tax return if they can get money back. If a taxpayer answers “yes” to any of these questions, they could be due a refund:

  • Did my employer withhold federal income tax from my pay?
  • Did I make estimated tax payments?
  • Did I overpay on my 2017 tax return and have it applied to 2018?
  • Am I eligible for certain refundable credits such as, the earned income tax credit

Taxpayers can file for free. Join the millions of Americans who safely file their taxes and save money using IRS Free File. Seventy percent of the nation’s taxpayers are eligible for IRS Free File. The IRS’s commercial partners offer free brand-name software to about 100 million individuals and families with incomes of $66,000 or less. Taxpayers who earned more can use Free File Fillable Forms. This option allows taxpayers to complete IRS forms electronically. It is best for those who are comfortable doing their own taxes.

Taxpayers can also use the Interactive Tax Assistant tool on IRS.gov to answer many tax questions.. They should look for “Do I need to file a return?” under general topics.

All taxpayers should keep a copy of their tax return. Taxpayers using a software product for the first time may need their adjusted gross income amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Starting a Business Checklist

Starting a Business Checklist

For any new business owner, starting a business checklist should be a top priority.

Opportunities to launch a business, in many respects, have never been easier than today. Technology has advanced to a point where many necessary components can be addressed online, without the time-consuming and labor-intensive obligations of the past.

Nevertheless, if you want to launch a business, you may need to take certain key actions to tilt the odds of success in your favor. While great ideas for startups are unique to most individual entrepreneurs, a business checklist is often similar for everyone.

What are some must-have elements of any effective business strategy? Which processes should be initiated and completed? What other to-do action steps should be followed?

Here is a starter list of must-dos to include in your own business checklist:

Bring passion to your enterprise. A new business will probably consume most of your waking hours, so it’s important that you care deeply about your proposed product or service. This can get you through difficult times and keep you energized on a continual basis.

Do industry research. Before going further, it’s important to know that someone else hasn’t already preempted your great new idea. Fundamental market research may quickly indicate whether there’s a void in the marketplace that your new product or service idea can fill.

Address essential elements in your startup tool kit. Deborah Sweeney, CEO of MyCorporation, which provides leading online legal filing services for entrepreneurs and businesses, pinpoints crucial elements every would-be business owner should address:

Make sure your business is protected by forming a corporation or an LLC. A separate corporate entity helps to protect your personal assets from those of your business, partners, and investors. It also helps to maintain a separate corporate presence that protects you personally and limits your personal liability. This adds a level of credibility and professionalism. Finally, having a corporate structure lends itself to potential tax savings – especially with new business-friendly tax laws.
Ensure that you have bylaws or an operating agreement in place. Set forth the terms of your business, including money invested, owners, roles, and responsibilities. Having everything in writing from the outset is key. If all partners and investors know their roles and the revenue opportunities of profits and losses, it is much clearer when questions arise.
Protect your business’s intellectual property. Trademarks, copyrights, and patents can be a critical business asset. Make sure to protect your assets because they often involve a huge investment from the business owners, and therefore, should be adequately protected.
Business licenses may be a critical part of your business. Depending on the business type, different business licenses requirements may vary. Even if a business does not incorporate, most states and counties require a “DBA” or business license to designate the business is operating. It is important to be aware of these licenses and to make sure they are timely filed to avoid penalties.
“As the entrepreneur decides to move forward, it’s important to remember that a small business is a living and breathing entity,” Sweeney notes. “Things change. Businesses grow. You need to remain flexible as the business grows, but you don’t need to have all of the answers at the outset.”

How does a business plan fit in?
Your new venture requires a detailed plan that covers some of the above-mentioned components, but should also include your strategy to launch and maintain the new business. Other aspects of the plan may cover marketing and technology needs, a method for identifying your target audience, anticipated expenses, cash-flow scenarios, and hiring strategies.

Many plans include a financial forecast, where the business is likely to be within one year, three years, and five years. The Small Business Administration offers a free business plan tool, noting that a well-crafted plan “helps you to step back and think objectively about the key elements of your business venture and informs your decision-making on a regular basis.”

“The business plan is associated with how the business will be expected to run, but that will still be a moving, changing document,” Sweeney says. “A key component of a business plan is finance. Evaluate the key strategies for income and associated expenses. Make sure to continuously evaluate return on investment (ROI) because this part of the plan will change as you recognize that ROI is higher for some initiatives.”

“Things change. Businesses grow. You need to remain flexible as the business grows, but you don’t need to have all of the answers at the outset.”

Also, consider:

Marketing strategy: How do you anticipate going to market and growing your customer base?
Sales and promotions: Will your product or service be sold online, in stores, via referrals, or storefront?
Branding: Evaluate your brand name, logos, slogans, and the associated protection of the business from an intellectual property perspective.
Key employees and roles in the company: Define their roles and your expectations of these positions.
Key investors and advisors to your business: You may want to have someone to turn to for advice and guidance, perhaps in the form of an advisory board.
A market and competitive analysis: Look at who your target market is, what the competitors in the industry are doing, and how you differentiate.
“As a new business owner, you won’t have all of the answers,” Sweeney says, “but a strong start in these key areas will give you the base from which to grow and evolve.”

Anticipate the costs of your startup
Any startup launch checklist must include an advance plan for addressing the costs involved in getting that business off the ground (and maintaining it in the future).

“It’s very difficult to anticipate expenses with any business,” Sweeney says. “I believe the number one way to grow is to associate business costs with a particular return. When you evaluate where your expenses relate to that specific return, it can be very eye-opening for an entrepreneur.”

She offers this example:

If you invest in paid search, you may learn that your ROI is 1:1. For every dollar you spend on Google, you make $1. You may grow because you offer annuity (ongoing services), so you’re fine to be “revenue-neutral” on the initial customer acquisition.

On the other hand, you may learn that by hiring a sales person, you make 2:1 ROI. In this instance, having the salesperson leads to a higher ROI, so you may decide to double down and hire a second salesperson rather than invest more of your cash flow in online advertisements.

“Each of your costs likely has a return (or lack of return), so it’s not just important to know your costs, but also to know how your costs impact your return,” Sweeney says. “If your intent is to grow organically, spend carefully. Hire as you need based upon customer demand. Do not hire in anticipation of growth. Costs may also come in the form of unexpected expenses – consider your rent, insurance, employee expenses, benefits, marketing, advisors, etc.”

Here are some critical elements to factor into your planning:

Put together a realistic budget. It’s impossible to determine down to the last penny what your operating costs will be. But putting together an estimate helps you create a working budget and get a better grasp of where funds should be allocated and in what order. Nearly everything about a startup costs money. Your job is to establish a realistic budget that accounts for all these outgoing expenses. Typically, this involves planning your startup’s “burn rate” – the amount of money you’ll likely spend per month before making a profit becomes necessary. As a general rule of thumb, it’s a good idea to add 15-20 percent to your estimated burn rate in order to cover all the expenses you don’t foresee at this time. Additional potential expenses include renting retail space, interior or exterior renovations, funds to hire employees, and branding and marketing materials.
Start the search for funding. You’ll need financial resources to get your business off the ground. If you have funds in reserve, be sure to place them in an account that’s separate from your personal savings or checking account. Establishing a free business account at a bank or credit union generally requires no more than an initial deposit, filing paperwork, and proprietor licensing data.
It’s impossible to determine down to the last penny what your operating costs will be. But putting together an estimate helps you create a working budget and get a better grasp of where funds should be allocated and in what order.

Sweeney offers insights into other potential funding sources:

Family and friends: “Funds from these sources are often easiest to come by, but can lead to personal and family conflict if the parties don’t get out of it what they hope for. It’s important to have everything in writing and to make sure that all parties have a strong understanding of the investment and risk of return.”
Venture capitalists: “Venture capitalists may take an ownership interest in a successful, thriving startup (or one that presents unique revenue opportunities). Often, the money is significant, but there is also traditionally significant involvement of the investors. You may have to give up a big portion of your business to have VC funding.”
Bank or online business loan: “A bank or online business loan could be a great resource for funds, especially if you have strong credit. Your hope is to get a loan with low interest and strong terms of repayment. The better your credit, the stronger the loan potential is. You may also have to have a strong business plan to present to the bank so they can evaluate your potential for repayment.”
Organic funding: “Start selling your product or service with just you and one or two employees, and then grow the space, number of employees, and products as the revenue starts to flow in. Online funding sites like GoFundMe can be a great way to get initial capital. Some of the amount donated goes to the funding source (i.e., the site that is collecting the money), but the rest of the funds get your business going.”
Determine your startup’s legal status and tax structure
As noted above, you must be prepared to attend to all city, county, municipality, or state licensing requirements for your new business. Designating yourself as “sole proprietor” has both advantages and disadvantages, so consult a local attorney or tax professional for the best guidance on how to proceed.

Adhering to certain legalities (which can differ from state to state) is mandatory. Remember, everything in business from trademarks and intellectual property protection to contracts with vendors is legal in nature. This also includes obtaining the appropriate permits and licenses, as well as formally registering the name of your new business.

As for taxes, it’s important to interact with the Internal Revenue Service (IRS) in the proper manner. Here are some valuable tips:

Learn about tax responsibilities. As a new business owner, you have many tax responsibilities, including:

Filing your business’s annual income tax return;
Paying estimated taxes if you own a pass-through entity or for your C corporation;
Payroll tax responsibilities (figuring withholding, depositing payments, and filing employer tax returns); and
Submitting information returns. This may be necessary if you have independent contractors, maintain a qualified retirement plan, or have certain other benefit programs for your staff.
The IRS provides more information about filing and paying your business taxes.

Get a tax ID number. When you start a business, even if you have no employees, you usually need to obtain an employer identification number (EIN), which you can get online. You don’t need an accountant or attorney to do this. If you’re a sole proprietor or independent contractor, you can use your Social Security number and don’t need an EIN in most situations. However, it may be wise to obtain an EIN for identity theft protection purposes, and use it whenever your tax ID number is requested.

“If you are leveraging payroll to pay employees, it is critical to make sure you have your state ID accounts established,” Sweeney notes. “These may include state withholding IDs and state unemployment insurance IDs. Make sure you have established the appropriate accounts and ensured you are paying into the right holding accounts pursuant to your state laws.”

Depositing taxes. If you have a payroll or make estimated tax payments, you can do this electronically. There is no cost for using this service, and you can schedule your tax deposits in advance. Using EFTPS.gov doesn’t give the government access to your bank account; instead you authorize the bank to make withdrawals from your account to cover the tax deposits or payments you specify.

Transmitting W-2s to the Social Security Administration. You can submit copies of employees’ W-2s, along with an IRS transmittal form (Form W-3) to the Social Security Administration through its Business Services Online. You can even register by telephone to create a password.

Remitting information returns to the IRS. If you engage independent contractors, you may have to file annual information returns to inform the IRS about your payments to them. This can be done through the Filing Information Returns Electronically (FIRE) system.

Filing annual retirement plan returns. If you want or need to file electronically a form in the 5500 series (e.g., you maintain a 401(k) plan for you and your staff), it is done through the Department of Labor’s EFAST2. This is the portal to use even though you’re filing an IRS form.

Interacting with the IRS may seem intimidating to some new business owners, but as long as you’re in business, interaction is required. You can call upon valuable experts, as well as IRS guides, such as the Small Business Self-Employed Tax Center and an A-Z Index for Business.

Importance of business insurance
Some of the most common varieties of business insurance are commercial property, home-based business insurance, and general and/or product liability. Selecting the most appropriate insurance coverage depends on the type of product or service you intend to sell, as well as any planned need to bring on employees. You may also need to have workers’ compensation coverage.

“It’s important to consider insurance for your employees, for business interruption, and if you’re a professional, for your professional services,” Sweeney says. “Business insurance protects your personal assets and ensures that you’re protected in the event of business interruption, theft, or lawsuits. You may think you’re too small to get insurance, but often insurance is not as expensive when you are smaller. Insurance is often based on revenue and risk and the lower your revenue, often, the risk is less.”

IRS issues guidance on small business accounting method changes under Tax Cuts and Jobs Act

IRS issues guidance on small business accounting method changes under Tax Cuts and Jobs Act

 

IR-2018-160, Aug. 3, 2018

 

WASHINGTON – The Internal Revenue Service issued guidance today on new tax law changes that allow small business taxpayers with average annual gross earnings of $25 million or less in the prior three-year period to use the cash method of accounting.

 

The Revenue Procedure outlines the process that eligible small business taxpayers may obtain automatic consent to change accounting methods that are now permitted under the Tax Cuts and Jobs Act, or TCJA.

 

The TCJA, enacted in December 2017, expands the number of small business taxpayers eligible to use the cash method of accounting and exempts these small businesses from certain accounting rules for inventories, cost capitalization and long-term contracts.  As a result, more small business taxpayers will be allowed to change to cash method accounting starting after Dec. 31, 2017.

 

The Department of the Treasury and the Internal Revenue Service welcome public comments on future guidance. For details on submitting comments, see the Revenue Procedure.

Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.

California Business Search

 Business Search


This search provides access to available information for corporations, limited liability companies and limited partnerships of record with the California Secretary of State, including free PDF copies of imaged business entity documents, including the most recent imaged Statements of Information filed for corporations and limited liability companies. Please note: This search is not intended to serve as a name availability search. For information on checking or reserving a name, refer to Name Availability.

To conduct a search:

  • Select the applicable search type.
  • In the “Search Criteria” box, enter the entity name or number you wish to search. Note: If entering the entity number of a corporation, the number must begin with the letter C.
  • Select the search filter you wish to use to locate the entity if searching for an entity name.
  • Select the Search button.
  • For help with searching an entity name or number, refer to Search Tips.

All fields marked with an asterisk (*) are required.

Search Type *

     

 
 

Disclaimer: This tool allows you to search the Secretary of State’s California Business Search database for abstracts of information for domestic stock, domestic nonprofit and qualified foreign corporations, limited liability companies and limited partnerships that have filed with this office. This search tool groups corporations separately from limited liability companies and limited partnerships and returns all entities for the search criteria in the respective groups regardless of the current status.

Although every attempt has been made to ensure that the information contained in the database is accurate, the Secretary of State’s office is not responsible for any loss, consequence, or damage resulting directly or indirectly from reliance on the accuracy, reliability, or timeliness of the information that is provided. All such information is provided “as is.” For information on ordering copies of the official business entity records for a particular entity, please refer to Information Requests.

Here’s how the IRS contacts taxpayers

Here’s how the IRS contacts taxpayers

Everyone should know how the IRS contacts taxpayers. This will help people avoid becoming a victim of scammers who pretend to be from the IRS with a goal of stealing personal information.
Here are some facts about how the IRS communicates with taxpayers:

  • The IRS doesn’t normally initiate contact with taxpayers by email.
  • The agency does not send text messages or contact people through social media.
  • When the IRS needs to contact a taxpayer, the first contact is normally by letter delivered by the U.S. Postal Service.  Fraudsters will send fake documents through the mail, and in some cases will claim they already notified a taxpayer by U.S. mail.
  • Depending on the situation, IRS employees may first call or visit with a taxpayer. In some instances, the IRS sends a letter or written notice to a taxpayer in advance, but not always.
  • IRS revenue agents or tax compliance officers may call a taxpayer or tax professional after mailing a notice to confirm an appointment or to discuss items for a scheduled audit.
  • Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.
  • IRS revenue officers and agents routinely make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed, delinquent tax returns or a business falling behind on payroll tax deposits. IRS revenue officers will request payment of taxes owed by the taxpayer. However, taxpayers should remember that payment will never be requested to a source other than the U.S. Treasury.
  • When visited by someone from the IRS, the taxpayers should always ask for credentials. IRS representatives can always provide two forms of official credentials: a pocket commission and a Personal Identity Verification Credential.

Business Travel, can become a Nightmare!

Motivator excursions, meetings and different kinds of worker travel are basic courses for businesses to prepare, compensate and inspire their best representatives and chiefs. In any case, off-site work occasions can likewise be a legitimate land mine. From wounds to ambushes to liquor related episodes, your independent venture needs laborers’ comp scope to be set up for the different issues that can surface on work-supported treks—and possibly prompt exorbitant claims.

Here are probably the most widely recognized significant issues that jump up amid worker excursions and gatherings, alongside genuine circumstances:

Genuine damage.

In 2006, Danny Douglas, a PC bolster examiner for Advertisement Astra in Overland Stop, Kansas, went to an organization supported “group building” occasion at an indoor go-truck hustling office. Representatives were given a short get up and go discuss an up and coming item and were then isolated into groups and told they could win prizes by going the quickest. While adjusting a bend at 25 miles for every hour, Douglas was tossed from his go-truck and arrived on his side and endured a broke rib and lung damage that required prompt medical procedure.

His organization at first declined to pay laborers pay since it guaranteed the movement was willful; a judge later decided that the organization must pay specialists’ comp, as indicated by SafetyNewsAlert.com. The case in the long run achieved the Kansas Incomparable Court, which concurred that it seemed likely that Douglas was required to either be working or at the go-truck office, however said the state’s specialist remuneration board expected to reconsider the case utilizing an alternate test.

Representative wrongdoing.

A previous Microsoft director in the Assembled Kingdom, Simon Negus, was fired for “untrustworthiness” after he was professedly observed kissing another Microsoft worker at an Atlanta meeting in 2009. The organization rejected Negus the next September and sued him for $126,000—some portion of his 2008 marking reward—and for another piece of his vacation pay, as indicated by Bloomberg. Negus later counter-sued. For another situation of asserted offense, no less than one programming designer was laid off from his manager in 2013 after a tech blogger caught him and another engineer making jokes sexual in nature about “dongles” at PyCon, a Python designer meeting in Santa Clause Clara, California, as indicated by ArsTechnica.com.

Sickness and sustenance harming.

Legionnaire’s sickness is maybe the most scandalous instance of a noteworthy ailment episode amid a tradition (of the American Army in 1976). Be that as it may, representatives becoming ill amid a business related occasion isn’t so bizarre, truly. There’s dependably the hazard that representatives they will get sustenance harming or get an infectious ailment when going for work. Prior this year, indeed, in excess of 100 participants of—amusingly—a nourishment security summit in Baltimore, Maryland clearly got tired after one of the dinners, as per NBC News. Around 12 hours after the dinner, numerous visitors revealed queasiness, the runs and different side effects regularly connected with nourishment borne ailments. No participants were hospitalized and nourishment security overseers couldn’t promptly find the reason for the disease. Episodes, for example, this are simply one more motivation behind why organizations ought to consider a laborers’ pay protection design.

Worker captured.

At the point when outside the workplace—notwithstanding when actually on the clock—in some cases representatives can get stuck in an unfortunate situation. A judge in Guadalupe Area, Texas, Mike Wiggins, was captured on medicate ownership when going to a gathering in 2012. A laborer at the inn where the meeting was occurring noticed pot amid the gathering and followed it back to Wiggins’ room, as per KWTX.com.

Following stages: Would you say you are hoping to deal with your representatives all the more viably however don’t have room schedule-wise to stay aware of the most recent research and patterns in ability administration? We have you secured with the week by week Little Business Ahead Bulletin. Join today and begin accepting the week after week pamphlet stuffed with the most recent devices and assets to enable you to maintain an effective business.

IRS offers summer tips for temporary jobs, marriage, deductions and credits

IRS offers summer tips for temporary jobs, marriage, deductions and credits

WASHINGTON – Before starting a summer job, taking a vacation or sending the kids off to camp, the Internal Revenue Service wants taxpayers to know that some summertime activities may qualify for tax credits or deductions. The IRS also recommends that taxpayers check the amount of their withholding taxes now to help avoid surprises next filing season.

Here are some tips from the IRS that may help taxpayers lower taxes and avoid issues with their taxes:

  1. Worker classification matters.  As with other workers, business owners must correctly determine whether summer workers are employees or independent contractors. Independent contractors are not subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes. Workers can avoid higher tax bills and lost benefits if they know their proper status.
  2. Summer workers may be exempt from tax withholding. Workers may not earn enough from summer jobs to owe income tax, but employers usually must withhold Social Security and Medicare taxes from pay. If self-employed or an independent contractor, workers need to pay their own Social Security and Medicare taxes, even if they have no income tax liability. This is important because these taxes count toward coverage under the Social Security system. Normally, employees receive a Form W-2, Wage and Tax Statement, from their employer (even if they don’t work there anymore) to account for the summer’s work by Jan. 31 of the following year. The Form W-2 shows the amount of earnings. It also shows withholdings for state and federal taxes, Social Security, Medicare wages and tips. Employees use the information on this form when they file their annual tax returns.
  3. Check withholding. For those who work a seasonal or part-year job, checking withholding now can help make sure employers withhold the right amount of tax. Taxpayers who work part of the year should check early in the employment period to determine an accurate amount for their withholding. The Withholding Calculator on IRS.gov helps employees determine whether they need to submit a new Form W-4, Employee’s Withholding Allowance Certificate to their employer. It estimates income, credits, adjustments and deductions for most financial situations. Employees can use their results from the calculator to fill out the form and adjust their income tax withholding. They must give their updated forms to their employers to take effect.
  4. Getting married? Newlyweds can help make wedded bliss last longer by doing a few things now to avoid problems at tax time. First, report any name change to the Social Security Administration before filing next year’s tax return. Then, report any address change to the United States Postal Service, any employers and the IRS to ensure receipt of tax-related items. Finally, use the Withholding Calculator at IRS.gov to make sure withholding is correct now that there are two people to consider. This is especially important for families with more than one wage earner, for taxpayers who have more than one job at a time, or for those who have children. For best results, do it as soon as possible.
  5. Clean out, donate, deduct.  If they are in good condition, those long-unused items found during spring or summer cleaning and donated to a qualified charity may qualify for a tax deduction. Taxpayers must itemize deductions to deduct charitable contributions, and be sure to have proof of all donations.
  6. Help with service project, deduct mileage. While there’s no tax deduction for time donated toward a charitable cause, driving a personal vehicle while donating services on a trip sponsored by a qualified charity could qualify for a tax break. Itemizers can deduct 14 cents per mile for charitable mileage driven in 2018. Keep good records of mileage.
  7. Get tax credit for summer day camp expenses. Many working parents must arrange for care of their younger children under 13 years of age during the school vacation period. A popular solution — with favorable tax consequences — is a day camp program. Unlike overnight camps, the cost of day camp may count as an expense towards the Child and Dependent Care Credit. See IRS Publication 503, Child and Dependent Care Expenses, for more information.
  8. Refunds require a tax return. Although workers may not have earned enough money from a summer job to require filing a tax return, they may still want to file when tax time comes around. It is essential to file a return to get a refund of any income tax withheld. There is no penalty for filing a late return for those receiving refunds, however, by law, a return must be filed within three years to get its refund. Otherwise, the money becomes property of the U. S. Treasury.

Tips for Taxpayers Who Have to Amend a Tax Return

Tips for Taxpayers Who Have to Amend a Tax Return

Taxpayers who discover they made mistakes or omissions on their tax return can correct them by filing an amended tax return. Those who need to amend should remember these tips:

  • File using paper form. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct the tax return. Taxpayers can’t file amended returns electronically. They can obtain the form on IRS.gov/forms. Mail the Form 1040X to the address listed in the form’s instructions.
  • Amend to correct errors. File an amended tax return to correct errors or make changes to an original tax return; for example, taxpayers should amend to change their filing status or to correct their income, deductions or credits.
  • Don’t amend for math errors, missing forms. Taxpayers generally don’t need to file an amended return to correct math errors on their original return. The IRS will automatically correct these items. In addition, taxpayers don’t need to file an amended return if they forgot to attach tax forms, such as a Form W-2 or a schedule. The IRS will mail a request to the taxpayer, if needed.
  • File within three-year time limit. Taxpayers usually have three years from the date they filed the original tax return to file Form 1040X to claim a refund. Taxpayers can file it within two years from the date they paid the tax, if that date is later.
  • Use separate forms for each year. Taxpayers who are amending more than one tax return must file a Form 1040X for each tax year. They should mail each year’s Form 1040X in separate envelopes to avoid confusion. Taxpayers should check the box for the calendar year or enter the other calendar year or fiscal year they are amending. The form’s instructions have the mailing address for the amended return.
  • Attach other forms with changes. Taxpayers who use other IRS forms or schedules to make changes must attach them to the Form 1040X.
  • Wait to file for corrected refund for tax year 2017. Taxpayers who are due refunds from their original tax year 2017 return should wait to get it before filing Form 1040X to claim an additional refund. Amended returns may take up to 16 weeks to process.
  • Pay additional tax. Taxpayers who will owe more tax should file Form 1040X and pay the tax as soon as possible to avoid penalties and interest. They should consider using IRS Direct Pay to pay any tax directly from a checking or savings account at no cost.
  • Track amended return. Generally, taxpayers can track the status of their amended tax return three weeks after they file, using ‘Where’s My Amended Return?’ It’s available in English, Spanish, Chinese, Korean, Vietnamese and Russian. The tool can track the status of an amended return for the current year and up to three previous years. Taxpayers who have filed amended returns for multiple years can check each year, one at a time.

 

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