Not good at tracking your expenses? I know it’s a drag! But, here’s an idea! Get a credit card that you use only for business. Make sure the credit card categorizes expenses on the statement. Use the credit card for all your business activities and, viola, instant accounting system. If you absolutely need to pay cash then get in the habit of jotting those expenses down in your electronic day planner. Either way, using a combination of both methods will help you prevent forfeiting tax-time write-offs. #notsotaxingnow
First, try contacting your employer and be sure they have your correct address.
Second, call the IRS at 800-829-1040 after February 23rd. Have handy your social security number and phone number, the dates you worked for the employer, and your last pay stub for the year. Also, give them your employer’s name, address and phone number. The IRS will send a letter to your employer for you.
And, lastly, file your tax return on time even if you don’t have your W-2 yet. Use Form 4852, Substitute for Form W-2 and estimate your wages and withholdings using your last pay stub.
- Minus 40 degrees or “40 below” is the only temperature that is the same in both Fahrenheit and Celsius
- It took chemists 40 attempts to develop the magical spray we know as WD-40. Stands for Water Displacement, 40th formula
- Forty is the maximum number of players a Major League Baseball team can sign to its roster at once.
- And, why is it that the standard American workweek is 40 hours?
Normally, when companies sell properties, they must pay taxes on any gain they receive. Like-kind exchanges, transactions in which companies trade properties, may be carried out without any immediate tax consequences. They must satisfy IRS rules, however, which include:
- The properties must have the same “nature or character,” as set forth in IRS guidance.
- The exchanges can be business or investment properties put to a productive use.
- The exchanges can’t involve inventory, most securities and some other assets.
- Taxes must be paid on any cash or non-similar property that is part of the deal.
Keep in mind that like-kind exchanges are tax-deferred transactions, not tax free. When a company eventually sells the property it received in an exchange, it must pay tax on any gain from its original investment. In the meantime, though, the business/company can use the funds it would have paid in taxes and it has acquired a new property that may better suit its needs without necessarily making a cash outlay.
The IRS reported successfully blocking over 900,000 fraudulently filed tax refunds from being distributed last year, which would have totaled $6.5 billion being paid to scammers. But, over 1.5 million possible fraudulent tax returns were processed and have paid out an estimated $5.2 billion in tax refunds.
How do you know if you have become a victim?
If you receive a real letter from the IRS and it states any of the following notices, you may have been an identity theft victim:
- More than one tax return for you was filed for you in a certain year
- You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return, or
- IRS records indicate you received wages from an employer unknown to you.
If you become a victim of identity theft, you should report it to the IRS right away. You can forward suspicious emails to email@example.com and visit the US Federal Trade Commission’s website for identity theft at www.OnGuardOnline.gov for more advice. Be sure to pay attention to whom sends you emails to keep yourself safe from identity theft next tax season!
Did you know that the IRS doesn’t always let you treat your “business” as a business? They might consider it just a “hobby”! Put simply, a business is an activity you are involved in with the purpose of making money and a hobby is not.
Here are a few easy questions that may help you determine if you have a business or hobby:
- Do you put in enough time and effort to the activity to show a goal to make a profit?
- Do you depend on the income from this activity?
- If you have losses, did they occur in the start-up of the business or are they due to circumstances beyond your control?
- Have you changed methods of operation to help improve profitability?
- Do you or your advisors have the information needed to run this activity as a successful business?
- Have you made a profit in similar activities in the past?
- Does the activity make a profit in some years?
- Can you expect to make a profit in the future from the appreciation of assets used in the activity?
If you can answer yes to most of these questions then, you most likely have a business activity and not a hobby. If your activity is considered a hobby, losses from that activity may be used to offset income from the same source only.