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Tag Archive for Form 1040

Driving For Uber – The Tax Consequences

John Stancil

You have decided to take the plunge and become a driver for Uber, Lyft or some other rideshare program. Congratulations! You are now a small business owner and your tax return just got more complicated. The income you earn from Uber is taxable and must be reported on Schedule C of your 1040. However, you may deduct expenses incurred in earning this income.

In January, you should receive a Form 1099-MISC from Uber or whatever company you drive for. The amount should be Read more

The Newly Issued Form 1042-S – Foreign Person’s U.S. Source Income Subject to Withholding

Ronald Marini

IRS has issued the 2016 version of Form 1042-S, Foreign Persons’ U.S. Source Income Subject to Withholding, and the instructions for that form. The form requests even more information then the 2015 version of this form!

What’s New In 2016:

Substitute forms. A substitute form furnished to a recipient must conform in format and size to the official IRS form and contain the exact same information as the copy filed with the IRS. However, the size of the form may be adjusted if the Read more

Can IRS Stop Printing Forms And Pubs?

Annette Nellen

Who remembers when the IRS mailed a packet with blank tax forms and instructions AND your Social Security number printed on your mailing label?  Several years ago the IRS reduced mailings such as when they could tell the taxpayer prepared their return with software the year before and for the past few years don’t mail forms.  They do still print them to pick up at IRS service locations. All of the forms, instructions and publications can be read or printed from the IRS website. Read more

Transparency For Individual Taxes

Annette Nellen

Transparency as a principle of good tax policy means taxpayers should understand taxes and how they apply to them. Despite lots of data on a filer’s Form 1040, the one number people focus on is the amount due or refund. Clearly the better number is total federal income tax liability. And better yet, people should also Read more

Obtaining and Claiming a Health Coverage Exemption

David Green

The Affordable Care Act requires you and each member of your family to have minimum essential coverage, qualify for an insurance coverage exemption, or make an individual shared responsibility payment for months without coverage or an exemption when you file your federal income tax return.You, your spouse or your dependents may be eligible to claim an exemption Read more

Amended Returns

Debra Thompson

Oops! You’ve discovered an error after your tax return has been filed. What should you do? You may need to amend your return.

The IRS usually corrects math errors or requests missing forms (such as W-2s) or schedules. In these instances, do not amend your return. However, do file an amended return if any of the following were reported incorrectly: Read more

Tax Return Due Dates and Some History

Annette Nellen 10

Several federal bills enacted in 2015 included tax changes. One of these was P.L. 114-41 (7/31/15), the Surface Transportation and Veterans Health Care Choice Improvement Act. Given the title, we might think that any tax change involved transportation, such as the gasoline excise tax. Wrong! This bill does not increase the gasoline excise tax. Its main purpose is to transfer money from the general fund to the Highway Trust Fund because our gasoline excise tax of 18.4 cents per gallon is insufficient to fund the HTF (and more fuel efficient cars means we buy less gas each year).  [I’ve blogged on this a few times – here, for example.]

One of the tax change in P.L. 114-41 is to change due dates of certain returns, starting mostly for the 2016 tax year. The purpose is improved administration of our tax system. For example, one change is to move the due date for a Read more

Filed Joint Return But Spouse Did Not Sign?

Pallav21
Tax Court Did Not Consider To Be A Valid Return

In Reifler, TC Memo 2015-199TC Memo 2015-199, the Tax Court recently held that a joint return not signed by the wife was not a valid return and, as a result, imposed the failure-to-file penalty. In so doing, it rejected the taxpayer’s arguments that the return was valid either because it substantially complied with the valid return rules or because the wife intended to file a joint return and tacitly consented to the filing of a joint return.

Signatures on a tax return not only verify that a return has indeed been filed by the person indicated on the front page of a Form 1040 but also certify that all the statements in the tax return are made under penalty of perjury and are true, correct, and complete to the best of Read more

Sole Proprietorship – Is The Risk Worth It?

Barry Fowler7

If you are considering starting a business, the simplest and least expensive form of business is a sole proprietorship. A sole proprietorship is a one-person business that reports its income directly on the individual’s personal tax return (Form 1040) using a Schedule C. There is no need to file a separate tax return as is required by a partnership or corporation (if the business is set up as an LLC with just one member, filing is still done on Schedule C, although an LLC return may also be required by the state). Generally, there are very few bureaucratic hoops to jump through to get started.

However, we strongly recommend that you open a checking account that is used solely for depositing business income and paying business expenses. You will also need to check and see if there is a need to register for a local government business license and permit Read more

Is The IRS Withholding Some or All of Your Refund?

Barry Fowler6

If the IRS kept all or a portion of the federal refund you were expecting, it may be because you owe money for certain delinquent debts. If that is true, the IRS or the Department of Treasury’s Bureau of the Fiscal Service (BFS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt.

Here are some important facts you should know about tax refund offsets:

1. If you owe federal or state income taxes your refund will be offset to pay those tax liabilities. If you had other debt such as child support or student loan debt that was submitted for offset, BFS will take as much of your refund as is needed to pay off the debt, and send it to the agency authorized to collect the debt. Any portion of your refund Read more

Claiming The Additional Child Tax Credit

Child Tax Credit - Milton Boothe

If you cannot claim the entire amount of your child tax credit because it exceeds your tax, don’t be discouraged, because you may be able to claim the unused portion as an additional child tax credit. The additional child tax credit is a refundable credit, and is available to you whenever you cannot claim the entire amount of the child tax credit.

The amount of the refund, however, may differ depending on your total earned income. It may also be affected by the amount of Social Security and Medicare taxes that were paid.

Figuring and Claiming the Credit:

The amount of the additional child tax credit that you can claim on your income tax is the lower of: Read more

The Facts: Medical And Dental Expenses

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If you, your spouse or dependents had significant medical or dental costs in 2015, you may be able to deduct those expenses when you file your tax return. Here are eight things you should know about medical and dental expenses and other benefits.

1. You must itemize. You can only claim medical expenses that you paid for in 2015, and only if you itemize on Schedule A on Form 1040. If you take the standard deduction, you can’t claim these expenses.

2. Deduction is limited. You can deduct all the qualified medical costs that you paid for during the year. However, you can only deduct the amount that is more than 10 percent of your adjusted gross income. The AGI threshold is still 7.5 percent of your AGI if you or Read more

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