Individuals who are working and who have low-to-moderate taxable income may qualify for this income tax credit.
When you think about ways to offset your income as you’re preparing for income tax time, do you primarily consider the deductions you can take? Things like home mortgage interest, charitable donations, and taxes you paid that can be claimed?
Allowable credits can also work in your favor. If you meet the Internal Revenue Service’s seven criteria, you may be eligible for the Earned Income Tax Credit (sometimes called Earned Income Credit, or EIC).
Note: As you read the rules that the IRS has established, keep in mind that, as with many of the agency’s regulations, there can be exceptions. We can help you determine whether you are a candidate for this credit. [MORE] . . .
You may have done nothing wrong. But the prospect of an IRS audit makes everyone sweat.
Many things probably go through your mind as you’re preparing a tax return or looking at one that’s been completed for you. Did I declare all of my income? Are all of the deductions I claimed legitimate? Do I have the required background documentation in case I get audited?
Even if everything is in order, you may still be selected for additional scrutiny by the IRS. Some IRS audits are entirely random. You may be chosen as the result of computer screening or based on a statistical formula. Other triggers include: [MORE] . . .
Granted, retirement plans are usually easier if you’re a full-time employee. But if you’re self-employed, you can still contribute to a retirement plan.
It’s expensive to be a sole proprietor. If you’ve been one for any length of time, you already know that. There’s the self-employment tax. Business insurance. Computers and mobile devices and applications. Office expenses. Health insurance premiums.
Although you can get some of that back by documenting it on your Schedule C, you still have to pay for a lot of things that full-time employees don’t. Plus, you don’t get those nice employer-match contributions to your retirement plan that many workers get these days.
But you can still set up a retirement plan as a self-employed individual. The IRS offers a handful of options, including: [MORE] . . .
Haven’t completed your 2015 taxes yet? You’re cutting it close. Don’t short-change yourself on business expenses, though.
If you’ve been in business for several years, you have a pretty good idea of what expenses can be claimed on your income taxes. But even if you think you know or you’re filing a business return for the first time, you may be missing out on some legitimate deductions.
The IRS says that business expenses must be both ordinary (commonly used in your business) and necessary (“helpful and appropriate”). Some of the allowable business expenses are obvious, like office rent, advertising, and travel. But there are others that you may not know about. And even the obvious ones come with rules and exceptions. [MORE] . . .
Taxpayers neglect to file returns for countless reasons. If you’re one of them, here’s what you need to know.
Believe it or not, there are individuals who don’t file tax returns even though they’re owed a refund. (They do have three years to claim it.) It’s more likely the opposite, though: Some people don’t send in their 1040s because they’ve determined that they owe money and they simply can’t pay. Or there was an illness or other misfortune in the family. Or they lost the forms that came in the mail and didn’t get them replaced in time to file on April 15.
That mid-April deadline, though, is firm. The IRS expects everyone to at least fill out the forms and make an effort to pay, whether you’re a day or a month or a year late. Here are some examples of what can happen if you don’t:
You’ll of course be assessed interest charges and late payment penalties. [MORE] . . .
Accounting is about more than just numbers. QuickBooks lets you make documents available from within the program itself.
You could call QuickBooks a “green” computer program. It can conserve reams of paper by storing customer and vendor records, for example, emailing transaction forms, and accepting online payments.
Most small businesses are a long way from being “paperless offices,” despite the predictions so many people made when PCs became commonplace. Even though you’re making an effort to be as digital as possible with your accounting files, not everyone else is yet. So you still have to deal with paper.
And you’re probably still consulting paper documents or stored computer files or scanned images that relate to your accounting data. QuickBooks makes it possible to keep this information close at hand, easily accessible from the software itself. [MORE] . . .
There are a number of situations where you’ll have to create and/or file Form 1099s. Are you affected?
If you’ve been sending Form 1099s for years, you’re probably already working on them or have completed them. If you receive them regularly, they should be on their way to you soon (if they haven’t already arrived), waiting to be used in the preparation of your income taxes.
But if you’ve never sent one, it’s worth a look at your financials to see if you should. There are countless scenarios that would make that necessary. [MORE] . . .
The Income Tracker is one of QuickBooks’ more innovative features. If you’re not using it, you should be.
One of the reasons that QuickBooks appeals to millions of small businesses is because it offers multiple ways to complete the same tasks, which accommodates different work styles. Say, for example, you wanted to look up a specific invoice. You could:
1. Go to the Customer Center and select the customer, and then scan through the list of transactions,
2. Use the Find feature (Edit | Find), or
3. Create a report.
There’s also another way you can get there if you have a recent version of QuickBooks: the Income Tracker. (Note: Only the Administrator or a staff member with the correct permissions can access this feature. Talk to us about whether to allow other employees to use it, and how to set that up.) [MORE] . . .
Yes, you can start a dialogue with the IRS if you feel that its findings are incorrect.
The very thought of having to communicate with the Internal Revenue Service about something you believe is an agency error is intimidating to most people. The tax code is massive and often difficult to decipher, and everyone gets at least a little nervous they consider engaging the governing agency.
But there are numerous reasons why you might dispute something that the IRS has communicated to you. You might think, for example, that the law was not interpreted correctly, so a decision may not have been the right one. Or you don’t believe that a collections effort should have been initiated against you, or you feel that your offer in compromise should have been accepted. [MORE] . . .
Don’t panic: It isn’t necessarily bad news. But you may need to deal with it.
Getting a letter actually addressed to you personally is becoming a thing of the past, what with email and social media taking over a lot of our correspondence.
But a letter addressed to you from the IRS? Your first reaction may well be to wonder what you did wrong.
The IRS doesn’t always deliver bad news by mail. The agency may want to inform you that you have a larger refund than you expected. Or that it simply needs some additional information or some extra time (if the processing of your return is delayed). Sometimes, you don’t have to take action on the notice. [MORE] . . .