Taxpayers who have a tax debt they cannot pay may have heard that they can settle their tax debt for less than the full amount owed. Called an Offer in Compromise.
Before applying for an Offer in Compromise, here are some things to know:
Additional IRS Resources:
IRS YouTube Videos:
It is Important to know the rules whe it comes to Employee or Independent Contractors.The IRS encourages all businesses and business owners to know the rules when it comes to classifying a worker as an employee or an independent contractor.An employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee. Employers normally do not have to withhold or pay any taxes on payments to independent contractors.Here are two key points for small business owners to keep in mind when it comes to classifying workers.
1. Control. The relationship between a worker and a business is important. If the business controls what work is accomplished and directs how it is done, it exerts behavioral control. If the business directs or controls financial and certain relevant aspects of a workers job, it exercises financial control. This includes:
2. Relationship. How the employer and worker perceive their relationship is also important for determining worker status. Key topics to think about include:
The IRS can help employers determine the status of their workers by using form Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. IRS Publication 15-A, Employer's Supplemental Tax Guide, is also an excellent resource.
Millions of people enjoy hobbies that are also a source of income. From catering to cupcake baking, crafting homemade jewelry to glass blowing -- no matter what a persons passion, the Internal Revenue Service offers some tips on hobbies.Taxpayers must report on their tax return the income earned from hobbies. The rules for how to report the income and expenses depend on whether the activity is a hobby or a business. There are special rules and limits for deductions taxpayers can claim for hobbies. Here are five tax tips to consider:
With the election of Donald Trump, tax reform is on the front burner for this President Elect. If and when his changes materialize is another question.Individual Tax Change Proposals
Warning: Mr. Trump has proposed three tax brackets: 12%, 25% and 33%. Some may find that they were paying at 28% rate may be pushed into paying 33% rate on a portion of their taxable income. Single parents are also likely to pay more taxes as Mr. Trump has proposed to eliminate personal exemptions and the head of household status.
For gains subject to the 3.8% tax on net investment income (NII), the different is minimal. If you are a real estate professional or the gains are from assets used in the individuals material participation business, there could be an $11,000 increase in taxes between a sale in 2016 and 2017.
Estate & Gift Tax Change Proposal
Corporate Tax Change Proposal
Proposed Repeal of the Affordable Care Act
What you should be aware of about the repeal? If now receiving a premium assistance credit, the credit will disappear when Obamacare is repealed. This does mean that some people will not be able to afford health insurance without the governments subsidy. Also employers who were pushed into offering health insurance to their employees because of Obamacare may drop their policies. If you are likely to lose coverage in 2017 all medical services should be completed while insurance is still in place. (Maybe before February 2017?) Self-employed individuals that now receive a premium assistance credit, the credit will disappear when Obamacare is repealed. This means that some individuals will not be able to afford health insurance without the government subsidy. If you are likely to lose coverage in 2017 all medical services should be completed while insurance is still in place. (Maybe before February 2017?) Small Business owners who now benefit from the small employer health insurance credit, it will disappear with the repeal of Obamacare. Because the small employer health insurance credit is only available for two years, this change will have a short term impact.Â· Small business owners who dropped their health reimbursement account (HRA) because the limits on an HRA violated health care reform that the repeal of Obamacare may allow then to reinstate the reimbursement of individual health insurance premiums, medicare premiums and out of pocket medical costs. But NOT yet! You will tell them when. Advise large business owners (applicable large employers) should not invest in compliance infrastructure (people, software and service providers) because the record keeping and requirements to file form 1095 will disappear with Obamacare.
If you start a business, one key to success is to know about your federal tax obligations. You may need to know not only about income taxes but also about payroll taxes. Here are five basic tax tips that can help get your business off to a good start.
Have you ever wondered if the Alternative Minimum Tax applies to you? You may have to pay this tax if your income is above a certain amount. The AMT attempts to ensure that some individuals who claim certain tax benefits pay a minimum amount of tax.Here are some things from the IRS that you should know about AMT:
1. You may have to pay the tax if your taxable income, plus certain adjustments, is more than the AMT exemption amount for your filing status. If your income is below this amount, you usually will not owe AMT.
2. The 2017 AMT exemption amounts for each filing status are:
3. The rules for AMT are more complex than the rules for regular income tax. 4.If you file a paper return, use the AMT Assistant tool on IRS.gov to find out if you may need to pay the tax or consult your tax professional.5.If you owe AMT, you usually must file Form 6251, Alternative Minimum Tax Individuals. Some taxpayers who owe AMT can file Form 1040A and use the AMT Worksheet in the instructions.