The deadline for E-File Magic to receive print and mail uploads was January 24th. However, we are still accepting print and mail uploads, we just cannot guarantee the forms will be mailed to the recipients prior to the IRS deadline of January 31st.
Last Thursday, January 20th the IRS announced that they will be able to start processing tax returns on February 14th. Although this wait only affects a “handful” of tax payers, you could be one of the few eagerly anticipating the filing of your tax return. Below is the article I found on the IRS website,
IR-2011-7, Jan. 20, 2011
WASHINGTON — The Internal Revenue Service plans a Feb. 14 start date for processing tax returns delayed by last month’s tax law changes. The IRS reminded taxpayers affected by the delay they can begin preparing their tax returns immediately because many software providers are ready now to accept these returns.
Beginning Feb. 14, the IRS will start processing both paper and e-filed returns claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917 and the educator expenses deduction. Based on filings last year, about nine million tax returns claimed any of these deductions on returns received by the IRS before Feb. 14.
People using e-file for these delayed forms can get a head start because many major software providers have announced they will accept these impacted returns immediately. The software providers will hold onto the returns and then electronically submit them after the IRS systems open on Feb. 14 for the delayed forms.
Taxpayers using commercial software can check with their providers for specific instructions. Those who use a paid tax preparer should check with their preparer, who also may be holding returns until the updates are complete.
Most other returns, including those claiming the Earned Income Tax Credit (EITC), education tax credits, child tax credit and other popular tax breaks, can be filed as normal, immediately.
The IRS needed the extra time to update its systems to accommodate the tax law changes without disrupting other operations tied to the filing season. The delay followed the Dec. 17 enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended a number of expiring provisions including the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.
As the IRS starts to get more technology advanced, by using Twitter and YouTube, the next logical step is to create a smartphone app. The IRS has announced this morning their new application for iPhones and Androids. IRS2Go allows you to find out the status on your refund, get tax updates, and follow the IRS Twitter feed.
IR-2011-8, Jan. 24, 2011
WASHINGTON — The Internal Revenue Service today unveiled IRS2Go, its first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.
“This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it,” said IRS Commissioner Doug Shulman. “As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information.”
The IRS2Go phone app gives people a convenient way of checking on their federal refund. It also gives people a quick way of obtaining easy-to-understand tax tips.
Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.
“This phone app is a first step for us,” Shulman said. “We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers.”
The mobile app, among a handful in the federal government, offers a number of safe and secure ways to help taxpayers. Features of the first release of the IRS2Go app include:
Get Your Refund Status
Taxpayers can check the status of their federal refund through the new phone app with a few basic pieces of information. First, taxpayers enter a Social Security number, which is masked and encrypted for security purposes. Next, taxpayers pick the filing status they used on their tax return. Finally, taxpayers enter the amount of the refund they expect from their 2010 tax return.
For people who e-file, the refund function of the phone app will work within about 72 hours after taxpayers receive an e-mail acknowledgement saying the IRS received their tax return.
For people filing paper tax returns, longer processing times mean they will need to wait three to four weeks before they can check their refund status.
About 70 percent of the 142 million individual tax returns were filed electronically last year.
Get Tax Updates
Phone app users enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.
Follow the IRS
Taxpayers can sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews provides the latest federal tax news and information for taxpayers. The IRSnews tweets provide easy-to-use information, including tax law changes and important IRS programs.
IRS2Go is the latest IRS effort to provide information to taxpayers beyond traditional channels. The IRS also uses tools such as YouTube and Twitter to share the latest information on tax changes, initiatives, products and services through social media channels.
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For those of you who live in the Pacific NW, and probably many other parts of the country, January can be a long and dreary month. By now, all of the holiday decorations have been put away and most people are eagerly awaiting the arrival of spring. The one good thing about tax season is that the weather gets nice just about the time April 15, well April 18th this year, rolls around.
Today seemed like an excellent day to shed some light on Form 1099-R. Form 1099-R is for people who have received distributions of $10 or more from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts and/or pensions.
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The IRS announced on Thursday, January 13th that tax-exempt organizations with gross annual receipts of $50,000 or less can file 990-N for the 2010 annual information reporting.
WASHINGTON — The Internal Revenue Service today announced that small tax-exempt organizations may be able to shift to the simpler Form 990-N (e-Postcard) for their 2010 annual information reporting.
The IRS today issued guidance ( Revenue Procedure 2011-15) that will allow more tax-exempt organizations to file the e-Postcard rather than the Form 990-EZ or the standard Form 990.
For tax years beginning on or after Jan. 1, 2010, most tax-exempt organizations whose gross annual receipts are normally $50,000 or less can file the e-Postcard. The threshold was previously set at $25,000 or less. (However, supporting organizations of any size must file the standard Form 990 or, if eligible, Form 990-EZ).
A tax-exempt organization’s annual gross receipts or total assets are used to determine which of the three versions of Form 990 it is required to file.
The Pension Protection Act of 2006 made important changes to rules regarding tax-exempt organizations’ annual filing requirements, which took effect as of the beginning of 2007.
First, it mandated that small tax-exempt organizations, other than churches and church-related organizations, file an annual notice with the IRS if they were too small to file Form 990 or Form 990-EZ. (The Form 990-N was created for small tax-exempt organizations that had not previously had a filing requirement.) Second, it required all supporting organizations, regardless of their size, to file the standard Form 990 or Form 990-EZ. Finally, the law specifies that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
Any tax-exempt organization that has not yet complied with these new requirements should do so immediately. If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.
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Although, the IRS is not quite finished with all the forms for this filing season, they are now allowing E-Filing for the returns with the forms that are completed. The folks who itemize deductions on Form 1040 Schedule A, as well as those who want to take the higher education tuition and fees deduction, and claim state and local sales tax deductions still need to wait.
I was raised in a small town in Minnesota and big families were common, especially if your family had a farm. However, there was a restaurant in a neighboring town that employed all its’ family members. I believe there were a total of 13 children, employed as hosts, servers, cooks, and dishwashers. It’s been awhile since I’ve been back – the number may have grown. Manny Davis over at allbusiness.com wrote a blog on the tax benefits of hiring family members and I thought all you entrepreneurs out there might enjoy it.
When you own your own business it is important to understand how your tax situation will change and what actions can be taken to reduce your tax liability legally. In the case of family owned businesses, there are certain tax advantages that may be recognized by employing family members as long as the rules set forth by the IRS are followed. Here we look at some of the benefits of hiring family members to work for a family business.
Tax Benefits
There are several ways in which the hiring of a family member to work for a family owned business can be advantageous in the area of taxes.
- Children (under age 18) employed by a parent who is a sole proprietor or business that is unincorporated are not subject to FICA taxes. Since the child in not responsible for their half of the taxes, neither is the business.
- Wages paid to children reduce the net income of the business, in turn reducing the amount the parent pays in self-employment taxes.
- Income paid to the child is taxed in a lower tax bracket than that of the parent. This helps reduce the tax burden across the board.
- Insurance costs and other benefits paid to a family member can be used as a tax deduction by the business owner (parent).
If you are thinking about adding your child or spouse to the payroll, keep in mind that the IRS will pay close attention to how your business is being handled and is a bit more likely to audit your business. It is completely logical to take advantage of any tax breaks you may see by employing your child or other family members, however you must be sure they are bona fide employees. If you are simply attempting to reduce your tax burden without actually providing documentation of hours worked and duties performed, you may find yourself in hot water with the IRS. Another important factor to remember is that when hiring your child to work for a family business, all child labor laws must be adhered to as well. Special privileges are not extended to parents who bring their children into the family business.
Other Benefits
There are many other benefits to hiring family members. Whether you are hiring your spouse or your child, you are bringing them into a very important aspect of your life and the foundation of the family. You can teach your children the importance of having a strong work ethic and they can see both the rewards and hardships associated with self-employment. This may help them make a decision regarding which direction they would like to go when the time comes to choose a career path. Children of self-employed parents often have greater confidence in their ability to follow their own dreams or in some cases, follow in their parents footsteps as successors in the family run business.
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Out of all the forms E-File Magic offers, Form 1099-PATR might be one of the few that is used the least. Because of this, I thought I would enlighten everyone about this form. Form 1099-PATR is an extremely simple form to define. If your cooperative pays at least $10 in patronage dividends and other distributions or from whom you withheld any federal income tax under the backup withholding rules a 1099-PATR must be sent out.
Today is another brisk January morning in Portland, Oregon and I have Form 1099-INT on my mind. Here is some clarifications on the 1099-INT. If you have paid interest income to a person during the year in the amount of at least $10.00 or more you must send out a 1099-INT, like all 1099′s must be sent to the taxpayer by January 31st, 2011, and must be sent to the IRS by March 31st 2011. E-File Magic can help you with all of your 1099-INT needs. Download the E-File Magic Software Today!
I often get questions about which form applies to whom? This quick blog should help with understanding what a 1099-MISC is.
1099-MISC is a form you should send out if you have paid an individual or business money of $600.00 or more that was not from salaries or wages. The form of payment can be from items such as prizes, awards, commissions, rents or royalties.
The deadline to send out Form 1099-MISC is January 30th, if you want E-File Magic to print and mail this form for you we ask to have all the recipient information by January 18th.
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