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TAX TIP OF THE DAY... deductions for the night shift
Work expenses are allowed for ordinary and necessary expenditures that allow you to be productive at work. A nigh shift worker may qualify for: 1) coffee and other caffeinated drinks 2) no doze or 5 hour energy type products 3) security firearm (when legally carried), training, ammunition and supplies 4) cell phone use for safety check-ins SHARE WITH A FRIEND. If you need help... www.baboiancpa.com TAX TIP OF THE DAY... how to respond to a PA letter disallowing work expenses when your employer won't cooperate.
PA is more aggressively challenging work related deductions. You may receive a letter asking for supporting documentation for your work expenses... mileage logs, receipt copies, letter from employer. PA Sample letter from employer: http://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/Documents/Personal%20Income%20Tax/rev-757.pdf If employer refuses to supply letter: http://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/Documents/Personal%20Income%20Tax/rev-775.pdf SHARE WITH A FRIEND. If you need help... www.baboiancpa.com TAX TIP OF THE DAY... What to do? out of time.
Don't stress. Sometimes April 15th is just not convenient. Other times you are missing a W-2, K-1 or mortgage 1098 statement. NO PROBLEM. Get a deadline EXTENSION until October 15th by filing IRS form 4868 by 04/18/16. The federal extension is automatically valid for PA and Local too. What you need to know.., The extension prevents late filing penalties. But you will still have late payment penalties (interest equivalent charges) if you owe when you finally due file. So you may choose to remit a payment with your extension form. SHARE WITH A FRIEND. If you need an extension... www.baboiancpa.com TAX TIP OF THE DAY... How to prepare for an IRS audit.
Step 1: Don't panic. You will not be going to jail! Step 2: Never pay an IRS notice without questioning their assertions. Be skeptical. Find comfort in knowing that IRS letters are very often wrong. Step 3: Confirm that the IRS sent you the letter (not PA or Local) by reviewing the top of the letter. IRS audits are much tougher than PA or Local. Step 4: Review the letter to determine whether you have been "selected for examination" or just need to respond to the IRS's letter. A letter response is not really an audit... and if their letter asks for more than $500, hire a professional to help. Step 5: If after the above steps you determine that you are indeed being audited by the IRS and have been asked to schedule an appointment to meet with an IRS auditor... you should identify your tax return as basic or intermediate or complex. If your return is basic, do the audit yourself. Otherwise you should hire a professional to help prepare for the audit, point out your vulnerable issues and to go to the audit WITHOUT YOU. That's right, an IRS audit is like a funeral... you don't have to go to your own. SHARE WITH A FRIEND. If you need help... www.baboiancpa.com TAX TIP OF THE DAY... deduct a portion of your cable bill
Do you watch work related cable tv programming? A portion of the cost may be deductible: 1) Weather updates... for business travel and outdoor workers. 2) Interviews with industry experts. 3) Political updates affecting regulations for your industry. 4) TV news for updates on your industry, competitors, economic conditions... local, national & international. 5) Industry specific programming... real estate, home improvements, investments, business, art, music, government. SHARE WITH A FRIEND. If you need help... www.baboiancpa.com TAX TIP OF THE DAY... Hollywood's most famous IRS tax offenders.
1) Nicolas Cage: $14 million In 2010, Cage told People he owed $14 million to the IRS. "Over the course of my career I have paid at least $70 million in taxes, unfortunately, due to a recent legal situation, another approximate $14 million is owed to the IRS," said Cage. 2) Dionne Warwick: $2.1 million Whitney Houston's cousin Dionne Warwick owed $2.1 million to the state of California in 2009. Two years earlier, the singer owed a heftier $2.7 million. 3) Ozzy Osbourne: $1.7 million The Osbournes owed $718,948 from 2008 and $1,024,175 from 2009. The debt was paid off a few days later. 4) John Travolta: $1.1 million The IRS claimed the actor owed $1.1 million for 1993-1995. He paid back $607,400 in 2000. 5) O.J. Simpson: $700,000 In 1997, Simpson admitted that he owed the hefty fee to the IRS. 6) Christie Brinkley: $531,720The former Sports Illustrated model was caught off guard after receiving news she owed the IRS more than $500,000. She immediately resolved the tax lien, writing it off as an error. source: www.businessinsider. com http://www. businessinsider.com/the-15-most-taxing-celebrity-irs-evasions-2012-4 SHARE WITH A FRIEND. If you need a tax appointment... www.baboiancpa.com TAX TIP OF THE DAY... fixing a mistake
Your instincts told you the refund wasn't quite right. How can you fix it??? File an AMENDED TAX RETURN within 3 years of the original due date. What you need to know: ) The IRS is not in a hurry. Amended returns take months to process. 2) Send in explanatory documentation to support your correction. 3) Danger... certain amended returns can trigger audits. 4) Amended returns cause extra scrutiny of other items on the tax return. 5) Consult a professional to assess the risk of amending. SHARE WITH A FRIEND. If you need a tax appointment... www.baboiancpa.com TAX TIP OF THE DAY... "GoFundMe" donations.
Are GoFundMe donations tax deductible? Usually not. Tax deductible donations must be paid to a non-profit organization and NOT TO INDIVIDUALS. People often confuse the $14,000 maximum gift rule with the donation rule. Yes, you can make a gift up to $14k to an individual and the gift is non-taxable to that person. But gifts to individuals are not not tax deductible. However a business may be able to deduct a gift if it can qualify as advertising... due to the public nature of the gift and its ability to promote business goodwill among current and potential customers. SHARE WITH A FRIEND. If you need a tax appointment... www.baboiancpa.com TAX TIP OF THE DAY... dangerous sale of company stock!
If you purchased your employer's company stock at a discount and then sold the stock in 2015... you could be in big trouble. The IRS changed the 1099 forms. Starting in 2014 the cost and taxable gain listed on the 1099 form is WRONG!!! The gain is much too high and most people will easily over pay their tax. You need to use a code B adjustment to reduce the taxable gain for amounts already taxed as part of your W-2 compensation. SHARE WITH A FRIEND. If you need a tax appointment... www.baboiancpa.com TAX TIP OF THE DAY...
Strange Deductions, Exemptions, and Tax Breaks from the U.S. and around the World
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AuthorDavid S. Baboian, CPA Archives
February 2018
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