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Questions and Answers for the Additional Medicare Tax

Questions and Answers for the Additional Medicare Tax: Source: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Questions-and-Answers-for-the-Additional-Medicare-Tax The following questions and answers provide employers and payroll service providers information that will help them as they prepare to implement the Additional Medicare Tax which goes into effect in 2013. The Additional Medicare Tax applies to individuals’ wages, other compensation, and self-employment income over […]

Payments made with a credit card are not subject to reporting on Form 1099-MISC

An excerpt from IRS Form 1099-MISC instructions:  Payments made with a credit card or payment card and certain other types of payments, including third party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for […]

2013 IRS Retirement Contribution Limits

2013 IRS Retirement Contribution Limits http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-SIMPLE-IRA-Contribution-Limits

Before you donate, check the organization’s tax exempt status

Want to know if the the exempt organization that you are planning to donate to is elgible to receive charitble contributions or had their exempt status revoked? Go here: http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check Tip: If you do not know the organization’s EIN, just leave it blank. Churchs may not be required to file IRS Form 990 in many cases. See IRS Publication […]

Per diem limitations for business owners and >10% shareholders

If all of the actual travel costs are being put on the company credit card, then there is no per diem to pay, the company has paid the actual expenses because they are charged to the company’s credit card and paid by the company. If owner uses his personal credit card or personal cash for […]

Business Gifts – tax deduction limitations

The IRS allows you to $25 or less for business gifts you give to any one person during your tax year, whether directly or indirectly. Any amount in excess is non-deductable. Gifts your spouse gives to the same person or gifts given to someone who you reasonally expect will give it to the same person combine […]

C corp converted to S corp results in B.I.G. tax.

This excerp is from the executive summary of an article cited below. When a C corporation converts to an S corporation or an S corporation acquires assets from a C corporation in a tax-free transaction, it may be subject to a corporate-level “built-in gains” tax in addition to the tax imposed on its shareholders. The […]

The basics of S corporation stock basis

This is a great article about the basics of S-Corporation shareholder stock basis. http://www.journalofaccountancy.com/issues/2012/jan/20114319.htm

Tax Court: Itemized receipts required to substantiate deductions.

A recent court case (Gorokhovsky v. Commissioner, T.C. Memo. 2012-206) disallowed deductions because the taxpayer lacked itemized receipts necessary to substatiate deductions. Main Issue: Credit card statements and cancelled checks while are important to prove payment, do not contain the detail and itemization necessary to substantiate a deductable business expense, nor do self-generated expense records. […]

Partners are not employees and should not be issued a W-2

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. A partnership must file an annual information return to report the income, deductions, gains, losses, […]

2012 SIMPLE IRA Contribution Limits

SIMPLE IRA contributions include: salary reduction contributions and employer contributions: a. matching contributions or b. nonelective contributions. No other contributions can be made to a SIMPLE IRA plan. Salary reduction contributions. The amount the employee contributes to a SIMPLE IRA cannot exceed $11,500 for 2011 and 2012. If an employee participates in any other employer plan […]

IRS Personal Tax Return Refund Status

IRS Personal Tax Return Refund Status: http://www.irs.gov/individuals/article/0,,id=96596,00.html

Corporate tax return due date is today, need an extention?

The due date for corporations whose tax year ends on December 31st is March 15. If you are unable to file by then, most domestic corporations can apply for an automatic 6 month extention using IRS Form 7004. IRS Form 7004: http://www.irs.gov/pub/irs-pdf/f7004.pdf Intructions for IRS Form 7004: http://www.irs.gov/pub/irs-pdf/i7004.pdf  A corporation with any other fiscal year-end has […]

Employer-Provided Health Coverage Reporting Requirements on W-2 (2011 and 2012)

Employer-Provided Health Coverage Reporting Requirements on W-2. Source: http://www.irs.gov/newsroom/article/0,,id=237894,00.html QuickBooks “Health Coverage Cost” set-up for reporting code DD in Box 12 Source: http://payroll.intuit.com/support/kb/2001263.html and http://www.payroll.com/healthcoverage

What is Form 1099-K and why should I care?

You may receive for the first time for tax year 2011 Form 1099-K from your merchant account provider or other third party payment processors such as Paypal for amounts customers paid to you through their network. You should add up all Form Form 1099-MISC and Form 1099-K amounts and make sure that total amount is equal […]

2012 IRS Standard Mileage Rates

IRS Announces 2012 Standard Mileage Rates, Most Rates Are the Same as in July   IR-2011-116, Dec. 9, 2011WASHINGTON — The Internal Revenue Service today issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2012, the […]

How To Find A Merchant’s MCC Code

How to find a MCC (Merchant Classification Code) http://visa.via.infonow.net/locator/usa/supplier/NewSearch.do

2011 Form 1099-MISC Confusion

There’s been new rules, then some rules repealed and then some added. It’s hard to know where we stand with all the Form 1099-MISC filing requirements. First, where’s the specific 2011 Form 1099-MISC Instructions? It’s missing from the IRS’s web site as of the writing of this post. There’s instructions for 2010 and 2012 but […]

Wage Compensation for S Corporation Officers

FS-2008-25, August 2008 Corporate officers are specifically included within the definition of employee for FICA (Federal Insurance Contributions Act), FUTA (Federal Unemployment Tax Act) and federal income tax withholding under the Internal Revenue Code. When corporate officers perform services for the corporation, and receive or are entitled to receive payments, their compensation is generally considered […]

IRS: Bus mileage rate 55.5 cents per mile 7/1/11-12/31/11

IRS Business Mileage Rates 07/01/11 – 12/31/11  55.5 cents per mile http://www.irs.gov/newsroom/article/0,,id=240903,00.html 01/01/11 – 06/30/11 51 cents per mile. http://www.irs.gov/newsroom/article/0,,id=232017,00.html