How Do I File A Deceased Person's Tax Return?

You can usually use form 1040.

1. Write deceased name in name section BUT put personal representative's name on address line with their address info.
2. Write "Deceased" and the date of their death across top of 1040.
3. Sign 1040 as 'Personal Rep.'
4. Attach a court document stating who the personal representative is.
5. Some people may need to file an actual estate tax return.
6. Include Form 1310 for certified representatives.

For Colorado:
Form DR0102


RESOURCES:
https://www.irs.gov/pub/irs-pdf/f1310.pdf
https://apps.irs.gov/app/IPAR/screen/IPAR_1/en-US/summary?user=guest

I'm Filing My Taxes Late, What Are The Penalties?

IRS Penalties

• There is no penalty if you're getting a tax refund, provided you file within 3 years of the April 18, 2016 deadline (or October 17, 2016 deadline if you filed an extension).
  • After 3 years, unclaimed tax refunds are forfeited and become the property of the U.S. Treasury.
• There is no penalty if you filed an extension and paid any additional taxes owed by April 18, 2016, as long as you file your return by the October 17, 2016 deadline.
• A late filing penalty applies if you owe taxes and didn't file your return or extension by April 18, 2016.
  • This penalty also applies if you owe taxes, filed an extension, but didn't file your return by October 17, 2016.
  • The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%.
  • If you file more than 60 days after the due date, the minimum penalty is $135 or 100% of your unpaid tax, whichever is smaller.
  • Tip: The late filing penalty can be 10 times higher than the late payment penalty. If you can't pay your tax bill and didn't file an extension, at least file your return as soon as possible! You can always amend it later.
• A late payment penalty applies if you didn't pay additional taxes owed by April 18, 2016, whether you filed an extension or not.
  • The late payment penalty is 0.5% (1/2 of 1 percent) of the additional tax owed amount for every month (or fraction thereof) the owed tax remains unpaid, up to a maximum of 25%.
  • For any month(s) in which both the late-payment and late-filing penalties apply, the 0.5% late-payment penalty is waived.

Example: Let's say you didn't file your return or an extension by April 18, 2016, and you still owe the IRS an additional $1,000.

Best-case scenario: You file your return on April 29 (2 weeks late) and submit your payment for $1,000. You would likely owe an additional $50 for the late-filing penalty ($1,000 x .05 = $50).

(Had you filed an extension by April 18, 2016, your late-payment penalty would be only $5 instead of $50. It definitely pays to file an extension!)

Worst-case scenario: You finally file your 2015 return in April of 2021, 5 years late, and submit your payment for $1,000. You would likely owe an additional $250 for filing late ($1,000 x the maximum .25), plus possible interest.

REFERENCES:
https://ttlc.intuit.com/questions/2547642-what-s-the-irs-penalty-for-filing-late

Can I Deduct Tax Payment Installments or Repayments?

No.

Is Child Support Deductible?

No. But expenses beyond just the child support can be.

REFERENCES:
http://dadsdivorce.com/articles/tax-tips-can-i-deduct-child-support/

https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/interest-dividends-other-types-of-income/alimony-child-support-court-awards-damages/alimony-child-support-court-awards-damages-1

https://www.taxact.com/support/21679/child-support/?txtSearchValue=

What Does FTP Mean?

Failure To Pay. Used typically in IRS repayment situations. i.e. 'Accrued FTP'

W-4s....Is Sick Pay Taxable?

Sick pay IS taxable. You should withhold taxes using form W-4S.

REFERENCE: IRS Sick Pay
http://taxmap.ntis.gov/taxmap/pubs/p505-004.htm

Do I Need to Use Form 5498 IRA Contribution Information on My Taxes?

No. This form is only to let you understand the current market value of your IRA. There should be an accompanying 1099-R with the correct information to be used on your income taxes.

Can I Take A Tax-Free Loan Against My IRA?

Yes as long as its repaid within 60-days.

I have an LLC, How Does it Effect My Personal Taxes?

You have a couple choices:

- If there's one owner, the LLC is treated as sole proprietorship and goes on that person's personal 1040 via a Schedule C.

- If there's two owners, the LLC is treated as a partnership, which requires a 1065 to be filed which results in a K-1 that goes on your personal 1040.

- Form 8832 can be filled out to declare the LLC a corp but then we must file a full 1120 or 1120S corporate filing naming officers, wages and such.

Basically the first two ways are the only easy way to do it. 

SOURCES:

https://www.irs.gov/instructions/i1065/ch02.html#d0e3908

https://www.taxact.com/tsupport/FAQDisplay.asp?Question=740

When Do I Have to File a 1041 on Trust or Estate Income?

Only if the estate makes more than $600 in a year.


SOURCE:
https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-is-a-Schedule-K-1-Form-1041--Estates-and-Trusts-/INF20134.html

Are Injury Settlements Taxable

No.

Where Can I Find Previous Years Forms and Instructions?

Here are all of them.

Forms start with 'f' and for instructions scroll way down and they begin with 'i.'


https://www.irs.gov/pub/irs-prior/

REITs (Real Estate Investment Trusts) and Taxes

IRS
"Regulated investment companies (RICs) (mutual funds, exchange traded funds, money market funds, etc.) and real estate investment trusts (REITs) may pay capital gain distributions. Capital gain distributions are always reported as long-term capital gains. You must also report any undistributed capital gain that RICs or REITs have designated to you in a written notice. They report these undistributed capital gains to you on Form 2439 (PDF), Notice to Shareholder of Undistributed Long-Term Capital Gains. For information on how to report qualifying dividends and capital gain distributions, refer to the Form 1040 Instructions (PDF) or Form 1040A Instructions (PDF)."

So, gains on REITs usual are on Form 2439 and are treated as cap gain distributions on a 1040.

ALSO
"Dividends paid by tax-exempt corporations or trusts such as Business Development Corporations (BDCs), Master Limited Partnerships (MLPs), Limited Liability Corporations (LLCs), or Real Estate Investment Trusts (REITs) are considered non-qualified, and may be taxed at ordinary rates. You report non-qualified dividends on Line 9a of IRS Form 1040."



SOURCES:
https://www.irs.gov/taxtopics/tc404.html
http://www.sidley.com/news/12-18-2015-tax-update
http://www.dividenddetective.com/dividend_taxes.htm

I'm a Bartender, Are Bar-back Tip-outs Deductible?

Only if your customer tips are claimed in Box 8 Allocated Tips on your W-2 AND you have written proof of each pay-out (receipt).

Reference here for more info:
https://ttlc.intuit.com/questions/2229933-how-can-i-deduct-the-20-i-tipped-out-to-my-barback

"You cannot deduct tip-outs (the tips you split with other employees) from allocated tips when you report it on your income tax return.

If your employer allocated tips to you, they are shown in box 8 of your Form W-2 (PDF).  They are not included in box 1 with your wages and reported tips.

Allocated tips are amounts your employer assigned to you in addition to the tips you reported.  Your employer is required to allocate tips only if:

• You worked in a large food or beverage establishment (restaurant, cocktail lounge, or similar business),
• You received any tips directly from customers, and
• The tips you reported to your employer were less than your share of 8% (or if your employer requested a lower rate, the rate approved by the IRS) of food and drink sales.  

Generally, you must report the full amount contained in box 8 of your Form W-2. However, you are not required to report the allocated tip amount if you can prove the amount of tips you actually received with adequate records was less than the allocated amount.  If you do not have records or have inadequate records, you must report the amount in box 8 as income on your tax return.

In the future, report the net amount of tips to your employer so that you will only pay on the tip income you actually took home.

Hope this helps."

What Can I Do If I Owe But Can't Pay?

File your return then as long as your tax liabilities are below $50,000 or as a business you owe less than $25,000 in payroll taxes, you may set-up an online payment plan.

Visit:
https://www.irs.gov/Individuals/Payment-Plans-Installment-Agreements

Are Settlement Charges Deductible?

Usually not.

"Settlement or closing costs.   If you bought your home, you probably paid settlement or closing costs in addition to the contract price. These costs are divided between you and the seller according to the sales contract, local custom, or understanding of the parties. If you built your home, you probably paid these costs when you bought the land or settled on your mortgage.

  The only settlement or closing costs you can deduct are home mortgage interest and certain real estate taxes. You deduct them in the year you buy your home if you itemize your deductions. You can add certain other settlement or closing costs to the basis of your home.

Items added to basis.   You can include in your basis the settlement fees and closing costs you paid for buying your home. A fee is for buying the home if you would have had to pay it even if you paid cash for the home.

  The following are some of the settlement fees and closing costs that you can include in the original basis of your home.

• Abstract fees (abstract of title fees).
• Charges for installing utility services.
• Legal fees (including fees for the title search and preparation of the sales contract and deed).
• Recording fees.
• Surveys.
• Transfer or stamp taxes.
• Owner's title insurance.
• Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, cost for improvements or repairs, and sales commissions.

  If the seller actually paid for any item for which you are liable and for which you can take a deduction (such as your share of the real estate taxes for the year of sale), you must reduce your basis by that amount unless you are charged for it in the settlement.

Items not added to basis and not deductible.   Here are some settlement and closing costs that you cannot deduct or add to your basis.

1. Fire insurance premiums.
2. Charges for using utilities or other services related to occupancy of the home before closing.
3. Rent for occupying the home before closing.
4. Charges connected with getting or refinancing a mortgage loan, such as:
   1. Loan assumption fees,
   2. Cost of a credit report, and
   3. Fee for an appraisal required by a lender."

   
   

SOURCE: https://www.irs.gov/publications/p530/ar02.html#en_US_2015_publink100011939

What Qualifies A Filing Status of Head-Of-Household?

1. Were unmarried as of December 31, 2015 and
2. Paid more than half the cost to run your home (or the home of a qualifying parent) in 2015 (rent, mortgage, utilities, etc.) and
3. Supported a qualifying person. <----A Qualifying Person is a stricter status than a dependent but a child or parent works.

SOURCE:

https://ttlc.intuit.com/questions/1894553-do-i-qualify-for-head-of-household

Can I Deduct the Sales Tax of a Vehicle Purchased Within The Tax Year?

You can only if:

1) You do itemized deductions.
2) Your Sales Tax on the vehicle purchase exceeds your paid state income tax for the year. Typically state income tax will always be a larger amount making this deduction rare.

**You may not deduct if your state has no income tax**

Home Mortgage Interest Deduction Limits

IN-PROGRESS:
SOURCES: https://www.irs.gov/pub/irs-pdf/p936.pdf

You can only deduct interest of up to $1,000,000 acquisition debt (regular home purchase loan) plus $100,000 of equity debt.  Any amounts beyond this, and the interest is not deductible.   Here is the worksheet provided in Publication 936 Home Mortgage Interest Deduction Pg 12.

How Do I As An Employer Transmit 1099-MISC To the IRS?

You'll need to order both the 1099-MISC and a Form 1060 from the IRS. DO NOT USE THE ONE ON THEIR WEBSITE. The copies they send you will have a scannable barcode on them. To order forms from the IRS check here:

https://www.irs.gov/Businesses/Online-Ordering-for-Information-Returns-and-Employer-Returns

1099-MISC are due Jan 31st of each year.

Send both the 1099-MISC and Form 1060 to the following locations:



SOURCES:
https://www.irs.gov/pub/irs-pdf/i1099gi_15.pdf
https://www.irs.gov/Businesses/Online-Ordering-for-Information-Returns-and-Employer-Returns
https://www.irs.gov/uac/About-Form-1099MISC

1099-K: Is Square Inc a Payment Settlement Entity (PSE)

Yes.

https://squareup.com/help/us/en/article/5048-square-tax-reporting-and-form-1099-k

There Are Limits to IRA Contribution Deductions and Some May Not Be Able to Be Deducted At All

Depending on your tax bracket and if you already contribute to a retirement plan (the box checked on your W2), you may not be able to deduct your IRA contributions. Remember IRA contributions limit for 2015 tax year is $5500 per person.

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits