Posted by admin on March 12th, 2011
As we begin 2005, you’re probably not thinking about taxes at all. This is a mistake as deadlines are approaching for issuing and filing 1099s to independent contractors.
What is a 1099 MISC?
Generally speaking, the IRS requires you to report certain payments you made during the year to independent contractors. The 1099-MISC form is a single page on which you report to total amount you paid to the independent contractor during 2005.
The 1099-MISC forms must be issued to any person you paid at least $600 in rents, services or other income payments. For example, if you hired a contractor to renovate a room in your home and paid them $5,000, a 1099-MISC filing would be required. As with practically any IRS filing, there are additional situations that require a 1099 filing. Any payments to attorneys must be reported regardless of the amount. Royalties totaling over $10 also must be reported. Generally, you are not required to report payments to a corporation.
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Posted by admin on June 14th, 2010
In recent years, the IRS has made a concerted effort to get people back into good status by reaching deals on overdue taxes. The rules affecting this program have just changed dramatically.
Changes to IRS Tax Settlement Rules
The IRS used to be the terror in most peoples nightmares. Specifically, people who got behind on their taxes lived in dread of having the IRS catch up with them and freeze their bank account, sell off their home and so on. To promote voluntary resolutions, the IRS instituted a program known as the offer in compromise.
The offer in compromise program was designed to let taxpayers with back tax problems resolve their problems voluntarily. Instead of waiting for the IRS to catch up to them, taxpayers could come forward and essentially admit their sins. In exchange for this voluntary action, the IRS would consider a reduction of the amount past due including penalties and interest. To be frank, the program was a massive success.
Starting July 16, 2006, the offer in compromise program is undergoing changes pursuant to a new federal law. Ironically, the small government Republican majority in Congress pushed through this nasty piece of legislation known as the Tax Increase Prevention and Reconciliation Act of 2005. The legislation dictates very specific changes to the offer in compromise program.
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Posted by admin on May 20th, 2010
Capital Gains tax is a federal tax penalty that is imposed on capital accumulation, investment and productivity. Some of the income that is subject to capital gains tax includes the sale of an investment, a home, a family business, a farm or ranch or even a work of art. The capital gains tax is applied on the difference between the price paid for an item and the money received from selling it, or the capital gain. The most common form of capital gain for people is the sale of their corporate stock. The capital gains tax rate for individuals is currently at one of its highest rates ever and is at 28% while the corporate rate is at its greatest level in history, namely 35%. There is an inequality with capital gains tax in the fact that people must pay taxes on all of their gains but are only able to deduct a portion of their losses. This particularly applies to investments that fluctuate between gains and losses over time.In many states taxpayers are liable, not only for the federal capital gains tax but also the state’s own form of capital gains tax. This can actually take the combined rate to almost 40%. California, Montana and Rhode Island are amongst the highest in the country.
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Posted by admin on May 11th, 2010
Capital is a unique term when it comes to taxes. If it gains value, you pay a tax. If it loses it, you can write at least some of the loss off.
Capital Assets – Gains and Losses for Taxes
Practically everything you own is a capital asset. This is true whether you use it for business purposes or personal use. The internet revenue service is very interested in your capital assets. Why? The IRS likes to tax the full gains while only giving you a small break on any lost value. Specifically, you have to report and pay taxes on gains in value of your capital assets when you sell them. Unfortunately, you only get to claim a loss on capital assets if it is an investment property such as stocks. Doesn’t seem fair, but that is how the cookie crumbles these days!
Here are some tax issue highlights on capital assets:
1. Generally, you report gains and losses on capital assets by subtracting the price you purchased it for from the price you sold it for. This calculation is reported to the IRS on Schedule D, which should be attached to your 1040 tax return. Lucky you!
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