Site Updated for 2013
I walked by the field of a certain lazy fellow and saw that it was over grown with thorns, and covered with weeds, and its walls were broken down.
Then, as I looked, I learned this lesson:
A little extra sleep, A little more slumber, A little folding of the hands to rest means that poverty will break in upon you suddenly like a robber, and violently like a bandit.
THE LIVING BIBLE, PROVERBS: 24:30-34
There are several things you need to consider once you're married. Here are some helpful tips:
According to a news release on July 10, 2014 from the OSC (the U.S. Office of Special Council, the ethics watchdog agency), an IRS employee tasked with fielding taxpayer questions on the IRS help-line “acknowledged that he had used his authority and influence as an IRS customer service representative for a political purpose and did so while at work,” .
The IRS worker agreed to a 100-day unpaid suspension for violating the Hatch Act, which prohibits federal employees from either running as candidates or soliciting contributions and promoting candidates for political office while they’re on duty and in a federal workplace. The settlement agreement resolves the formal Hatch Act complaint OSC filed with the Merit Systems Protection Board in April.
Hearing the news, Rep. Charles Boustany (R-La.) blasted the IRS as “totally out of control.”
“This latest development exposes a culture that tolerates or even encourages politically motivated activities, contrary to the agency’s mission and purpose,” he said in a statement. “This is inexcusable. If the IRS wishes to preserve what little credibility it has with the American people, they will immediately terminate this employee and conduct a thorough internal review into this matter."
The Hatch Act of 1939, officially An Act to Prevent Pernicious Political Activities, is a United States federal law whose main provision prohibits employees in the executive branch of the federal government, except the president, vice-president, and certain designated high-level officials of that branch, from engaging in partisan political activity. The law was named for Senator Carl Hatch of New Mexico. It was most recently amended in 2012.
The Merit Systems Protection Board (MSPB) is empowered to hear and decide complaints for corrective or disciplinary action when an agency is alleged to have committed a prohibited personnel practice. 5 U.S.C. §§ 1214, 1215. It is a prohibited personnel practice to (among other things) take an action in violation of the Merit System Principles. 5 U.S.C. § 2302(b)(12). In addition, Merit System Principles are mirrored in the list of prohibited personnel practices.
For example, Merit System Principle No. 9 provides that employees "should be protected against reprisal for the lawful disclosure" of waste, fraud, and abuse, while the list of prohibited personnel practices also prohibits reprisal for such disclosures.
If so, the IRS says now is the time for a mid-year premium tax credit checkup.
If you obtained health insurance through the Health Insurance Marketplace you may be getting tax credits in the form of advance payments made directly to your insurance company to lower your monthly premium.
If this applies to you, it is important to keep in mind that changes in your income or family size may affect your premium tax credit. In fact, depending on your income, you may have to pay back part or all of the premium tax credit.
If your circumstances have changed, the IRS says the time is right for a mid-year checkup to see if you need to adjust the premium assistance you are receiving.
Report changes that have occurred since you signed up for your health insurance plan to your Marketplace as they occur. Here are examples of some of the changes you should report:
Reporting the changes will help you avoid getting an advance payment that is either higher or lower than the allowed premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance to reduce your monthly premiums.
Repayments of excess premium assistance may be limited to an amount between $400 and $2,500 depending on your income and filing status.
However, if advance payment of the premium tax credit was made but your income for the year turns out to be too high to receive the premium tax credit, you will have to repay all of the payments that were made on your behalf, with no limitation. Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.
Changes in circumstances also may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you will have sixty days to enroll following the change in circumstances.
Gambling winnings are taxable and are reported on your tax return as "Other income". Gambling losses are deductible on Schedule A as "Other Miscellaneous Deductions" up to the amount of your winnings. Gambling losses do not have to exceed 2% of adjusted gross income to get a tax benefit.
Here are seven tips to keep in mind if you're a casual gambler and plan on doing some gambling this summer:
On March 23, 2014 it was reported by various news media that people are receiving phone calls from individuals purporting to be from the IRS claiming that taxes are due and must be paid immediately over the phone. About 20,000 people have been affected so far. The victims are asked to use their credit or debit cards to pay the bogus tax.
If you get such a call (or email), IGNORE it. The IRS does not call or email taxpayers regarding tax problems, it always initiates contact by snail-mailing written correspondence. Follow-up contacts are also sent through the U.S. postal service.
The only time the IRS may call you is when YOU contacted them FIRST and they are simply responding to your contact.
Report suspicious calls or emails to the Treasury Inspector General at 1-800-366-4484. You can also report fraud by going to the Treasury Inspector General for Tax Administration web site.
During fiscal year 2013, the IRS collected almost $2.9 trillion in federal revenue and processed 240 million returns of which 151 million were filed electronically. Out of the 146 million individual income tax returns filed, almost 83 percent were e-filed. More than 118 million individual income tax return filers received a tax refund, which totaled almost $312.8 billion. On average, the IRS spent 41 cents to collect $100 in tax revenue during fiscal year 2013.
The IRS examined just under one percent of all tax returns filed and about one percent of all individual income tax returns during fiscal year 2013. Of the 1.4 million individual tax returns examined, over 39,000 resulted in additional refunds.
Seven states do not have a personal income tax. They are: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. New Hampshire and Tennessee do not tax wages. They tax investment income from stocks and bonds.
The IRS uses occupational codes to measure typical amounts of travel by profession. A tax return showing 20 percent or more above the norm might get a second look? Here are a few other red flags that can trigger an IRS audit.
Silly as it may seem, if you robbed a bank dung 2013, you had taxable income. Intentionally not reporting ill-gotten gains is considered tax evasion. The IRS doesn't care how we "earn" our loot as long as they get their cut, from a tax compliance standpoint of course. So, if you're selling drugs or scamming investors and not reporting the income, some day you could find yourself in the same predicament that Al Capone found himself in! Here are some of the top tax myths.
The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on Form W-2, Box 12, with Code DD. This is for information purposes only. The amount reported in Box 12 for health care coverage is not taxable.
Several important tax changes went into affect in 2013. Depending on your income, age, marital status, or whether you operate a business, you could be affected.
For example, higher income taxpayers will be impacted by the new top tax bracket of 39.6% and the two additional Medicare taxes, 0.9% and 3.8%.
Taxpayers under age 65 will have a tougher time deducting medical expenses because the floor for deducting medical expenses was increased to 10% from 7.5%.
The 2013 social security wage base is $113,700. It will be increased to $117,000 in 2014. For 2013 and 2014, the self-employment tax rate is 15.3% (social security rate 12.4% plus Medicare tax rate of 2.9%).
For 2013, the social security rate for employees and employers is 6.2% each and the Medicare tax rate is 1.45% each. No change in 2014.
If keeping records of meal expenses while traveling away from home on business is difficult for you, you can claim the IRS meal allowance.
The IRS meal allowance shown in the General Services Administration (GSA) tables is referred to as the M&IE rate (meals and incidental expenses). The table lists six tiers for the lower 48 continental United States ranging from $46 to $71.
The rates are broken down by category: breakfast, lunch, dinner, and incidentals (i.e. fees and tips for various services).
If you need to deduct a meal amount, first determine the location where you will be working while on official travel. Next, look up location-specific information at www.gsa.gov/perdiem. The M&IE rate for your location will be one of the six tiers listed on this table.
Self-employed individuals may claim the M&IE allowance. Employees who have expenses that are not reimbursed under an "accountable" plan may also claim the M&IE allowance.
To be tax-deductible, clothing and household items donated to charity generally must be in good used condition or better.
A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return.
Donors must get a written acknowledgment from the charity for each gift worth $250 or more that includes a description of the items contributed. Household items include furniture, furnishings, electronics, appliances and linens.
To deduct cash donations, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.
Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.
Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction.
For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.
The taxpayer must obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more.
Tax-Free Charitable Distributions for IRA Owners 70 1/2 or older
An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 to an eligible charity and can use the excluded amount to satisfy any required minimum distributions that you must otherwise receive from your IRAs in 2013. This option, which is scheduled to expire at the end of 2013, was first available in 2006.
The funds must be transferred directly by the IRA trustee to the eligible charity. Distributed amounts may be excluded from the IRA owner’s income, which lowers taxable income and avoids taxes on the distribution
If the IRA owner excludes the distribution from income, no deduction, such as a charitable contribution deduction on Schedule A, may be taken for the distributed amount.
Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.
Unless Congress acts, the first-year expensing limit for qualified business property is scheduled to fall to $25,000 in 2014. The expensing limit for 2013 is $500,000. That's a 95% reduction!
In addition, the phaseout threshold for 2014 is scheduled to fall to $200,000. The threshold for 2013 is $2,000,000. That's a 90% reduction.
Bonus depreciation is scheduled to expire at the end of 2013.
If you made contributions to a retirement plan, including a traditional IRA or Roth IRA, you may be able to claim the retirement savings contribution credit, (referred to as the saver's credit) on your 2013 return.
The maximum tax credit is $1,000 ($2,000 if married filing jointly). The deadline for setting up a new IRA or adding money to an existing one is April 15, 2014. Elective deferrals (contributions) must be made by the end of the year.
The IRS has posted important dates for December 2013 and January 2014 related to retirement plans administered by employers, trustees, and custodians.
The Internal Revenue Service recently announced that interest rates for overpayments and underpayments will remain the same for the calendar quarter beginning Jan. 1, 2014. The rates will be:
The IRS plans to increase fees charged for Installment Payment Agreements and Offers in Compromise effective January 1, 2014.
For more information on IRS Installment Payment Agreements and Offers in Compromise visit IRS.gov.
To apply for an IRS installment agreement online, use the Online Payment Agreement application.
To find out if you are eligible for an Offer in Compromise and what a reasonably acceptable offer amount might be, use the IRS Offer in Compromise Pre-Qualifier Tool.
John Koskinen, President Obama's nominee to head the IRS, was confirmed by a Senate vote of 59 to 36 December 20, 2013. Koskinen succeeds acting commissioner Daniel Werfel.
Beginning January 1, 2014, the standard mileage rate for a car, van, pickup or panel truck, will be reduced to 56 cents per mile for business miles driven during 2014. The rate for 2013 is 56.5 cents per mile.
Medical and moving related miles will also be decreased 1/2 cent to 23.5 cents per mile. The 2013 rate is 24 cents per mile for medical and moving miles.
The 2014 rate for charitable-related miles is 14 cents per mile. This rate is based on statute and hasn't changed for several years.
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