Did You Get a 1099-K Tax Form This Year?

One of the newest tax forms to be released is the 1099-K.

This new 1099 tax form is designed by the IRS to help catch those who under-report their income from online business transactions.

Concerns that sellers on eBay are not reporting their income, as well as other third-party transactions handled by banks and processors like PayPal, are being overlooked as income, the IRS is hoping that the 1099-K tax form can help them recapture lost revenue.

Who Issues the 1099-K?

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What is the Alternative Minimum Tax (AMT) and How Does It Impact Your Taxes?

There are few things in the world of taxes more terrifying than the Alternative Minimum Tax (AMT).

After taking all of that time with your W-2s, donations, and various deductions the AMT steps in and tells you that none of that matters; you suddenly owe thousands more in tax.

That’s scary enough for me.  Here’s an overview of the Alternative Minimum Tax and what can trigger it to impact your taxes.

What is the Alternative Minimum Tax (AMT)?

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What Business Expenses are Tax Deductible?

When it comes to reducing business income for tax purposes, the tax deduction is one of the most popular methods.

You can deduct some of the money you spend on business and lower your taxable income.

However, it’s important that you understand what makes an expense tax deductible for business purposes.  Otherwise, you could find yourself red-flagged by the IRS.

But What Business Expenses are Tax Deductible?

Ordinary and Necessary Expenses

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What is VITA – Volunteer Income Tax Assistance Program

Many people would like help with their tax returns, but don’t know how they can afford to employ the services of a tax professional.

It’s true that some of the major income tax preparation services advertise that they will file your taxes for free, but this isn’t always the same as preparing them; in many cases you can only have the 1040-EZ prepared for free.

If your taxes are a little more complicated than a 1040-EZ, yet you don’t feel like you can afford to have an accountant or other tax professional help you prepare your Form 1040, you do have a place to turn.

The IRS sponsors a program designed to help those who make less than $50,000 a year prepare and file their taxes.

Volunteer Income Tax Assistance (VITA) Program

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Obama Proposed Corporate Tax Reform – Cut Tax Rate But Seal Up Loopholes

It’s yet another example of something that most lawmakers agree on yet it most likely will not get done.  Washington gridlock is alive and well even when there is no disagreement on the core issue.

That is the main problem with the corporate tax.

Currently, American corporations pay a 35% tax rate, higher than any other advanced country and most lawmakers, tax experts and, of course, corporate CEOs believe that this is too high.

Because of that, President Obama proposed lowering the tax rate to 28% in an attempt to make America a more corporate friendly place to do business.

The chances of this issue gaining enough traction to get through Congress is essentially none.

Here’s why. Continue Reading

Tax Time: Are You Reporting Your Income? Different Tax Forms to Look For

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For many, income reporting at tax time is fairly straightforward.

You get a W-2, there’s your income.  The IRS gets a copy of the W-2, your state gets a copy, and you keep a copy for yourself.  Your income is reported on this form, and you don’t have to worry a great deal about other income reporting.

However, in a world that increasingly provides opportunities to earn money from side hustles and investments, reporting income has become a little more complex.

It can be tempting to avoid reporting income to the IRS, but it’s important to remember that failure to report your income is illegal, and can result in fines and penalties and even criminal charges.

As the IRS works to recapture some of the revenue it feels it has been losing lately, you should understand that more people are reporting your income to the IRS than before.  So you need to be on your toes. Continue Reading

How to Deduct Your Moving Expenses

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According to the U.S. Census bureau, up to 40 million people move from their current residence each year.

That represents just over 14% of the population and as everybody knows, moving is expensive, stressful, and back breaking.

For those who are moving because of a new job, the IRS softens the blow by allowing a portion of those moving expenses to be deducted on your tax filing– but be careful.

In order to deduct your moving expenses, you have to pass two important IRS tests.
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