IR-2014-119, Dec. 29, 2014 WASHINGTON — Following the passage of the extenders legislation, the Internal Revenue Service announced today it anticipates opening the 2015 filing season as scheduled in January. The IRS will begin accepting tax returns electronically on Jan. 20. Paper tax returns will begin processing at the same time. The decision follows Congress renewing a number of “extender” provisions of the tax law that expired at the end of 2013. These provisions were renewed by Congress through the end of 2014. The final legislation was signed into law Dec 19, 2014. “We have reviewed the late tax law changes and determined there was nothing preventing us from continuing our updating and testing of our systems,” said IRS Commissioner John Koskinen. “Our employees will continue an aggressive schedule of testing and preparation of our systems during the next month to complete the final stages needed for the 2015 tax season.” The IRS reminds taxpayers that filing electronically is the most accurate way to file a tax return and the fastest way to get a refund. There is no advantage to people filing tax returns on paper in early January instead of waiting for e-file to...
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If you are an employee, the Withholding Calculator can help you determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form. Who Can Benefit From The Withholding Calculator? Employees who would like to change their withholding to reduce their tax refund or their balance due; Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit); Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures. CAUTION: If you will be subject to alternative minimum tax, self-employment tax, or other taxes; you will probably achieve more accurate withholding by following the instructions in Pub 505: Tax Withholding and Estimated Tax. Ready to start? Make sure scripting is enabled before using this application. Continue to the Withholding Calculator Tips For Using This Program Have your most recent pay stubs handy. Have your most recent income tax return handy. Estimate values if necessary, remembering that the results can only be as accurate as the input you provide. To Change Your Withholding: Use your results from this calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate. Submit the completed Form to your...
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Your Business is NOT Growing Are you too busy with the day to day operations of your business and the bookkeeping to focus on growing your business? Sometimes if a business owner could just step back and take the time to create and implement strategies, their business would do much better. Also, if you aren’t a “numbers” person, it probably takes you longer to do some of the tedious bookkeeping items than it would for you to be an entrepreneur. Business owners become business owners because they are entrepreneurs first. It is in their blood. Unfortunately, bookkeeping and numbers are a part of owning a business and can bog a business owner down and keep their creativity at bay. You are Worried About Audits If the thought of the IRS paying you a visit makes you nervous because your records aren’t in order, it may be better to have a CPA on your side. Compliant books will give you peace of mind in case you ever are audited. You are Paying Too Much in Taxes and/or Overhead A CPA can help you assess your tax and overhead situation. Many times we find that business owners are paying too much in taxes and that their overhead is much higher than it needs to be. You Question Your Profit Margin and/or Business Structure We will compare your profit margin to industry standards and if you are off, we will help you get back on track. Often, we find that money can be saved in taxes just by changing your business...
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1862 – President Lincoln signed into law a revenue-raising measure to help pay for Civil War expenses. The measure created a Commissioner of Internal Revenue and the nation’s first income tax. It levied a 3 percent tax on incomes between $600 and $10,000 and a 5 percent tax on incomes of more than $10,000. 1867 – Heeding public opposition to the income tax, Congress cut the tax rate. From 1868 until 1913, 90 percent of all revenue came from taxes on liquor, beer, wine and tobacco. 1872 – Income tax repealed. 1894 – The Wilson Tariff Act revived the income tax and an income tax division within the Bureau of Internal Revenue was created. 1895 – Supreme Court ruled the new income tax unconstitutional on the grounds that it was a direct tax and not apportioned among the states on the basis of population. The income tax division was disbanded. 1909 – President Taft recommended Congress propose a constitutional amendment that would give the government the power to tax incomes without apportioning the burden among the states in line with population. Congress also levied a 1 percent tax on net corporate incomes of more than $5,000. 1913 – As the threat of war loomed, Wyoming became the 36th and last state needed to ratify the 16th Amendment. The amendment stated, “Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.” Later, Congress adopted a 1 percent tax on net personal income of more than $3,000 with a surtax of 6 percent on incomes of more than $500,000. It also repealed the 1909 corporate income tax. The first Form 1040 was introduced. 1918 – The Revenue Act of 1918 raised even greater sums for the World War I effort. It codified all existing tax laws and imposed a progressive income-tax rate structure of up to 77 percent. 1919 – The states ratified the 18th Amendment, barring the manufacture, sale or transport of intoxicating beverages. Congress passed the Volstead Act, which gave the Commissioner of Internal Revenue the primary responsibility for enforcement of Prohibition. Eleven years later, the Department of Justice assumed primary prohibition enforcement duties....
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If you pay someone to prepare your tax return, the IRS urges you to choose that preparer wisely. Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. So, it is important to choose carefully when hiring an individual or firm to prepare your return. Here are a few points to keep in mind when someone else prepares your return: Check the person’s qualifications Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics. New regulations effective in 2011 require all paid tax return preparers including attorneys, CPAs and enrolled agents to have a Preparer Tax Identification Number. Check the preparer’s history Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Professional Responsibility for enrolled agents. Find out about their service fees Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Make sure the tax preparer is accessible Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise. Provide all records and receipts needed to prepare your return Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items. Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it. Make sure the preparer signs the form and includes their PTIN A paid preparer must sign the return and include their PTIN as required by law. Although the...
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Although the optimal outcome is to break even with Uncle Sam, many people count on a tax refund like a kind of savings account. A change to your income or circumstances may affect how much Income Tax you have to pay. It’s important to let us know about any changes right away so we can work out whether you need to pay extra or less tax. By contacting us early you can avoid paying too much tax or owing tax at the end of the year. Check list of changes you should notify our office about: If you get married If you start getting a second income If you become – or stop being – self-employed If you start or stop getting company benefits – a company car or medical insurance If you start getting a company or personal pension If you start getting a State Pension or other taxable benefits If there is a substantial change in your income If your spouse dies...
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