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Archive for John Stancil

You Could be Taxed on that “Non-Taxable” Employee Benefit

A benefit frequently offered to employees is discounts on products or services that the company sells. Under the Internal Revenue Code, all benefits provided to an employee are taxable, unless they are specifically excluded from income or defers tax on the benefit.

One example of deferring tax on the benefit would be employer contributions to a pension plan for the employee. This is not subject to income tax at the time received, but is taxed then the employee begins making withdrawals from the plan upon retirement.

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Much Ado About Nothing? Court Rules On PTIN Lawsuit

John Stancil

The Preparer Taxpayer Identification Number (PTIN) was originated by the IRS in 1999 as a measure to protect the Social Security number identity of tax preparers. At that time, the IRS stated that preparers could use their SSN or apply for the free PTIN. The PTIN was apparently permanent, as it did not need to be renewed. And this was the status quo for 12 years. Read more

Nine Tax Code “Head Scratchers”

John Stancil

Having survived tax season for one more year, I was struck by how complex our tax code really is. I’ve been preparing taxes for over 40 years, yet I ran into several provisions that I had not previously encountered. I am fully aware that there is much wrong with the code, that there are some major overhauls needed. In the midst of all this complexity, it struck me that there are provisions in the code which are not big deals, but are head scratchers. Why are these things in the code? Eliminating them can go a long way toward helping the middle-class taxpayer.

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Misdeeds With Form 1023-EZ

John Stancil

When an organization wishes to become a tax-exempt organization eligible to accept tax deductible contributions from donors it is not sufficient that it be a non-profit organization. That, however, is the first step. Before the organization can be recognized by the IRS as a tax-exempt organization, it must file organization papers with the state as a non-profit corporation.

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“Where’s My Refund?” – IRS Changes

John Stancil

So you get all your tax information together early and go to your preparer so you can file your tax return early and get the refund quickly. Not so fast. Certain refunds will be delayed and will not be released by the IRS until February 15. This is due to a provision in the PATH Act, enacted by Congress in 2015, prohibiting the IRS from releasing certain refunds prior to February 15. This provision takes effect this year. Note that the 15th is the release date, so it will take a few more days for you to receive the refund.

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Rental Property Sales – A Simplified Look

John Stancil

When one has rental real estate, the sale of that property can have significant tax ramifications. Some of these are good, while others can create significant tax liabilities.

First, the good news. If there were losses that could not be deducted due to the passive activity rules, these losses may be deducted on Schedule E in the year of sale, assuming the property is sold in a taxable transaction.

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Safeguarding Form 4361

John Stancil

A minister who wishes to be exempt from social security/Medicare tax must file a Form 4361 with the IRS for approval. Before your application can be approved, the IRS must verify that you are aware of the grounds for exemption and that you want the exemption on that basis.

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The Truth About Section 179 And Vehicles

John Stancil

I recently received a mailing from an American automobile company regarding the Section 179 deduction. The letter expressed some urgency to purchase a vehicle before the end of the year to get a large Section 179 deduction. While this is true, the letter left me with the impression that I needed to take action before December 31, 2016, or the deduction would be lost. What they stated was true. However, it is what was left unstated that concerns me.

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Don’t Let Not Having A Form 1095 Delay Your Filing

John Stancil

The IRS has extended the due date for ACA related statements 1095-B and 1095-C to be given to individuals. IRS Notice 2016-70 extends the due date for these forms from January 31, 2017 to March 2, 2017. Note that the due date to provide these forms to the IRS has not changed, that date remains February 28, 2017.

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IRS Challenged On Legality Of PTIN Fees

John Stancil

PTIN stands for Preparer Tax Identification Number. This was originated by the IRS in 1999 to protect the identity of professional tax return preparers. Prior to that time, preparers were required to list their social security number on the prepared return. This, obviously, was a good move that preparers readily accepted as it helped protect their identity. It was simple. You applied for the PTIN, paid no fee, and it was presumably good for life.

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A Modest Proposal – Let’s Fix Extensions

John Stancil

I remember when tax season was pretty much over after April 15. Sure, there were extensions, but for four months and you had to justify an additional two-month grace period. Since the additional extension was mostly perfunctory, the IRS changed things and now grants a single six-month extension. No additional extensions are granted except in the case of a federally declared disaster area.

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When Is A Corporation Not A Corporation?

Most taxpayers are aware that an organization must submit papers to a state official, usually the Secretary of State in order to obtain a corporate charter and file an 1120 tax form as a corporation. However, one must meet all the IRS requirements for corporate status in order to file as a corporation.

First, some background.  In founding a Limited Liability Company (LLC) the taxpayer must file with the appropriate state official and receive its charter as an LLC. Read more

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