Thursday, March 31, 2016

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/

Thursday, March 24, 2016

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

Wednesday, March 16, 2016

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

Thursday, March 10, 2016

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

Monday, March 7, 2016

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**