IRS Tax Tip If you earn money managing or working on a farm, you are in the farming business. Farms include plantations, ranches, ranges and orchards. Farmers may raise livestock, poultry or fish, or grow fruits or vegetables. Here are 10 things about farm income and expenses that the IRS wants you to know. Crop insurance proceeds. Insurance payments from crop damage count as income. They should generally be reported the year they are received. Deductible farm expenses. Farmers can deduct ordinary and necessary expenses as business expenses. An ordinary farming expense is one that is common and accepted in the farming business. A necessary expense is one that is appropriate for that business. Employees and hired help. You can deduct reasonable wages you paid to your farm’s full and part-time workers. You must withhold Social Security, Medicare and income taxes from your employees’ wages. Items purchased for resale. If you purchased livestock and other items for resale, you may be able to deduct their cost in the year of the sale. This includes freight charges for transporting livestock to your farm. Repayment of loans. You can only deduct the interest you paid on a loan if the loan proceeds are used for your farming business. You cannot deduct interest on a loan used for personal expenses. Weather-related sales. Bad weather may force you to sell more livestock or poultry than you normally would. If so, you may be able to postpone reporting a gain from the sale of the additional animals. Net operating losses. If deductible expenses are more than income for the year, you may have a net operating loss. You can carry that loss over to other years and deduct it. You may get a refund of part or all of the income tax you paid for past years, or you may be able to reduce your tax in future years. Farm income averaging. You may be able to average some or all of the current year’s farm income by spreading it out over the past three years. This may lower your taxes if your farm income is high in the current year and low in one or more of the past three years. This method does not change your prior...
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IR-2015-106, Sept. 4, 2015 WASHINGTON – The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning October 1, 2015. The rates will be: three (3) percent for overpayments [two (2) percent in the case of a corporation]; one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000 three (3) percent for underpayments; and five (5) percent for large corporate underpayments. Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point. The interest rates announced today are computed from the federal short-term rate determined during July 1 2015 to take effect Aug. 1, 2015, based on daily compounding. Revenue Ruling 2015-17 announcing the rates of interest is attached and will appear in Internal Revenue Bulletin 2015-39, dated Sept. 28,...
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Identity theft places a burden on its victims and presents a challenge to businesses, organizations and government agencies, including the IRS. Tax-related identity theft occurs when someone uses your stolen social security number to file a tax return claiming a fraudulent refund. The IRS combats tax-related identity theft with an aggressive strategy of prevention, detection and victim assistance. We are making progress against this crime, but it remains one of our highest priorities. And, if you become a victim, we are committed to helping you resolve your case as quickly as possible. The IRS, the states and private-sector partners have announced new steps to fight identity theft and protect taxpayers. Are you a victim of tax-related identity theft? Review the following resource information: Taxpayer Guide to Identity Theft Publication 5027 Identity Theft Information for Taxpayers (PDF) Data Breach: Tax-Related Information Identity Protection Tips Identity theft information for tax preparers and businesses Identity Theft Information for Tax Preparers Publication 5199 Tax Preparer Guide to Identity Theft (PDF) Information for businesses about data breaches and identity theft Tax Practitioner Guide to Business Identity Theft What the IRS is doing to combat identity theft What we’re doing to combat identity theft Special identity theft enforcement efforts Law Enforcement Assistance Program Additional Identity Theft Resources Identity Theft News and Outreach Federal Trade Commission Social Security Administration Remember: The IRS doesn’t initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media...
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IRS YouTube Videos Oct. 15 Tax Deadline: English | Spanish | ASL IRS Tax Payment Options: English | Spanish | ASL IRS2Go 5.2: English | Spanish | ASL Online Payment Agreement: English | Spanish | ASL IR-2015-109, Sept. 28, 2015 WASHINGTON — The Internal Revenue Service today urged taxpayers whose tax-filing extension runs out on Oct. 15 to double check their returns for often-overlooked tax benefits and then file their returns electronically using IRS e-file or the Free File system. About a quarter of the 13 million taxpayers who requested an automatic six-month extension this year have yet to file. Although Oct. 15 is the last day for most people, some still have more time, including members of the military and others serving in combat zone localities who typically have until at least 180 days after they leave the combat zone to both file returns and pay any taxes due. “If you still need to file, don’t forget that you can still file electronically through October 15,” said IRS Commissioner John Koskinen. “Many people may not realize they may be eligible to use Free File available on IRS.gov/freefile. Free File is free tax software that takes the guesswork out of return preparation. Even if you’re filing in the final days, filing electronically remains easy, safe and the most accurate way to file your taxes.” Check Out Tax Benefits Before filing, the IRS encourages taxpayers to take a moment to see if they qualify for these and other often-overlooked credits and deductions: Benefits for low-and moderate-income workers and families, especially the Earned Income Tax Credit. The special EITC Assistant can help taxpayers see if they’re eligible. Savers credit, claimed on Form 8880, for low-and moderate-income workers who contributed to a retirement plan, such as an IRA or 401(k). American Opportunity Tax Credit, claimed on Form 8863, and other education tax benefits for parents and college students. Health Care Tax Reporting While most taxpayers will simply need to check a box on their tax return to indicate they had health coverage for all of 2014, there are also new lines on Forms 1040, 1040A and 1040EZ related to the health care law. Visit IRS.gov/aca for details on how the Affordable Care Act affects the 2014...
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File all tax returns that are due, regardless of whether or not you can pay in full. File your past due return the same way and to the same location where you would file an on-time return. If you have received a notice, make sure to send your past due return to the location indicated on the notice you received. Why you should file your past due return now Avoid interest and penalties File your past due return and pay now to limit interest charges and late payment penalties. Claim a refund You risk losing your refund if you don’t file your return. If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date. The same rule applies to a right to claim tax credits such as the Earned Income Credit. We hold income tax refunds in cases where our records show that one or more income tax returns are past due. We hold them until we get the past due return or receive an acceptable reason for not filing a past due return. Protect Social Security benefits If you are self-employed and do not file your federal income tax return, any self-employment income you earned will not be reported to the Social Security Administration and you will not receive credits toward Social Security retirement or disability benefits. Avoid issues obtaining loans Loan approvals may be delayed if you don’t file your return. Copies of filed tax returns must be submitted to financial institutions, mortgage lenders/brokers, etc., whenever you want to buy or refinance a home, get a loan for a business, or apply for federal aid for higher education. If you owe more than you can pay If you cannot pay what you owe, you can request an additional 60-120 days to pay your account in full through the Online Payment Agreement application or by calling 800-829-1040; no user fee will be charged. If you need more time to pay, you can request an installment agreement or you may qualify for an offer in compromise. What if you don’t file voluntarily Substitute Return If you fail to file, we may file a substitute return for you. This return...
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Listed below are links to basic federal tax information for people who are starting a business, as well as information to assist in making basic business decisions. The list should not be construed as all-inclusive. Other steps may be appropriate for your specific type of business. Information about specific industries can be found on the Industries/Professions Web page. For information regarding state-level requirements for starting and operating a business, please refer to your state’s website. What New Business Owners Need to Know About Federal Taxes Is it a Business or a Hobby? Selecting a Business Structure Employer Identification Number (EIN) Business Taxes Recordkeeping When Do I Start My Tax Year? Checklist for Starting a Business Types of Retirement Plans Small Business...
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