Retrieve your tax forms from Edward Jones and others online

March 26, 2013 at 4:37 pm (Uncategorized)

Tired of scanning and faxing only to discover that your investment statements are blurry and unreadable? For Edward Jones clients relief now comes in the form of a new, secure electronic feature that allows you to share your E. J. tax forms with your tax professional. Follow the steps here to access your online account and get the process going.

Need tax forms from another brokerage firm, financial or educational institution? Many offer your tax forms downloadable from your online account. Check with your firm or institution today!

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The “Appearance & Image” Issue Demystified

March 4, 2013 at 11:16 am (Adult Industry, Business, Uncategorized)

Since I announced the IRS’ new, specific wording last Summer about “Appearance & Image”, I have been inundated with questions and pleas about the issue. I understand your frustration and anger as I know how much those of you in both the Vanilla and Adult entertainment invest in your businesses. Even though we both know that these are, in IRS terms, “ordinary and necessary” business expenses, the IRS has put specific limits in specific wording on what can be taken as a deduction.

Firstly, please let me say that we tax professionals can only interpret the tax laws and follow them as we interpret them. However, when wording is specific, there is no magic power that we hold that can change it. We are not trying to be mean, but instead taking our clients’ best interest into consideration. Knowingly taking non-allowed deductions is considered fraud, therefore a tax professional who cares for their client at all will not lead them into these shark-infested waters.

I am going to share with you a few exerpts (below) from the IRS MSSP (Market Segment Specialization Program) – 1040 Tax Issues – Entertainment.

This guide is what the IRS auditors are given to assess the entertainers who they are auditing. The guide is “designed to provide assistance in auditing individuals in various aspects of the entertainment industry.”

Make-up
Make-up for performances is usually provided by the studio. Stage make-up that the
taxpayer buys for an audition or a live theatrical performance may be deductible, if it is
not a general over-the-counter product.

Wardrobe
To deduct clothes as a business expense, two requirements must be met. First, the
clothes must be required by the employer. Second, clothes must not be adaptable to
street or general use.

Expenses for costumes and “period” clothing are generally deductible. However, most
union contracts provide for compensation to be given performers who require special
wear. The taxpayer must prove that his or her contract did not include such
reimbursement for the expense to be allowable.

Physical Fitness
Deductions for general physical fitness are not allowable. Usually, if physical fitness is
required of a specific job, the studio will provide the cost. If the taxpayer was
employed in a capacity that required physical conditioning, allow expenses for the
duration of employment if no reimbursement or compensation was available.

What are solutions to this dilemma you can take right now? Well, buy stage makeup from a theatrical supply store and make certain that your costumes are indeed clothing that would not be worn in public, regardless if you would personally wear them or not.

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Mailing your tax return with USPS

January 10, 2013 at 3:56 pm (Uncategorized) ()

Mailing your tax return with USPS

Information about USPS services offered and the best way to mail your tax returns to the IRS.

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IRS releases filing 2013 dates

January 10, 2013 at 3:53 pm (Uncategorized)

The IRS has just announced that paper and e-filing of 2012 1040 tax returns will begin January 30th, two weeks later than usual. For those with depreciation and mileage, you may not be able to file until late February due to form updates. This affects other forms too, so be prepared to wait.

Corporations (not unincorporated LLCs/Partnerships) must file by March 15th. The rules do have not yet affected corporations. I will keep you up-to-date if anything changes.

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IRS Announces More Flexible Offer-in-Compromise Terms to Help a Greater Number of Struggling Taxpayers Make a Fresh Start

May 24, 2012 at 2:37 pm (Uncategorized)

IR-2012-53, May 21, 2012

WASHINGTON — The Internal Revenue Service today announced another expansion of its “Fresh Start” initiative by offering more flexible terms to its Offer in Compromise (OIC) program that will enable some of the most financially distressed taxpayers to clear up their tax problems and in many cases more quickly than in the past.

“This phase of Fresh Start will assist some taxpayers who have faced the most financial hardship in recent years,” said IRS Commissioner Doug Shulman. “It is part of our multiyear effort to help taxpayers who are struggling to make ends meet.”

Today’s announcement focuses on the financial analysis used to determine which taxpayers qualify for an OIC. This announcement also enables some taxpayers to resolve their tax problems in as little as two years compared to four or five years in the past.

In certain circumstances, the changes announced today include:

  • Revising the calculation for the taxpayer’s future income.
  • Allowing taxpayers to repay their student loans.
  • Allowing taxpayers to pay state and local delinquent taxes.
  • Expanding the Allowable Living Expense allowance category and amount.

In general, an OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. An OIC is generally not accepted if the IRS believes the liability can be paid in full as a lump sum or a through payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination of the taxpayer’s reasonable collection potential. OICs are subject to acceptance on legal requirements.

The IRS recognizes that many taxpayers are still struggling to pay their bills so the agency has been working to put in place common-sense changes to the OIC program to more closely reflect real-world situations.

When the IRS calculates a taxpayer’s reasonable collection potential, it will now look at only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years. All offers must be fully paid within 24 months of the date the offer is accepted. The Form 656-B, Offer in Compromise Booklet, and Form 656, Offer in Compromise, has been revised to reflect the changes.

Other changes to the program include narrowed parameters and clarification of when a dissipated asset will be included in the calculation of reasonable collection potential. In addition, equity in income producing assets generally will not be included in the calculation of reasonable collection potential for on-going businesses.

Allowable Living Expenses

The Allowable Living Expense standards are used in cases requiring financial analysis to determine a taxpayer’s ability to pay. The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for basic necessities for citizens in similar geographic areas. These standards are used when evaluating installment agreement and offer in compromise requests.

The National Standard miscellaneous allowance has been expanded to include additional items. Taxpayers can use the miscellaneous allowance for expenses such as credit card payments and bank fees and charges.

Guidance has also been clarified to allow payments for loans guaranteed by the federal government for the taxpayer’s post-high school education. In addition, payments for delinquent state and local taxes may be allowed based on percentage basis of tax owed to the state and IRS.

This is another in a series of steps to help struggling taxpayers under the Fresh Start initiative.

In 2008, IRS announced lien relief for taxpayers trying to refinance or sell a home. The IRS added new flexibility for taxpayers facing payment or collection problems in 2009. The IRS made changes to lien policies in 2011 and expanded the threshold for small businesses to resolve tax issues through installment agreements. And, earlier this year, the IRS increased the threshold for a streamlined installment agreement allowing individual taxpayers to set up an installment agreement without providing a significant amount of financial information.

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Fresh Start Video from the IRS

March 8, 2012 at 2:23 pm (Uncategorized)

Fresh Start (English)

 

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