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Tag Archive for IRS

Individual Taxpayer Identification Number (ITIN) Reasons And Qualification

Daniel Gray, Tax Blog, Tax Advisor, Toronoto, Canada, TaxConnections

You have to meet the return filing reason , or one of the exception-to-return-filing reasons. One cannot just arbitrarily apply for an ITIN as you must include documentation proving that you need one and that your reason aligns with IRS qualification requirements to receive one. The IRS sets out a finite prescribed list of qualification requirements – all split into two groups – IRS-return-filers OR exceptions. One reason that can be used for many applicants when they can’t qualify under other reasons, is owning many but not all types of USA bank accounts (so long as the US bank provides you with the required ITIN letter). Read more

IRS Direct Deposit Leads To Faster Refunds

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON — With the tax deadline just around the corner, the Internal Revenue Service reminds taxpayers that making an electronic direct deposit of their refund into a bank or other account is the fastest way to get their money. A taxpayer can deposit their refund into one, two or even three accounts to help with retirement or savings.

Eight out of 10 taxpayers get their refunds by using direct deposit. It is simple, safe and secure. The IRS uses the same electronic transfer system to deposit tax refunds that is used by other federal agencies to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts. Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable. Read more

IRS Reminds Those With Foreign Assets About U.S. Tax Obligations

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON — The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account to remember the upcoming deadline that applies to reports for these accounts, often referred to as FBARs.

Here is a rundown of key points to keep in mind:

Deadline For Reporting Foreign Accounts Read more

Rushing To File Taxes Can Result In Errors; E-File Decreases Errors, Extensions Available

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON — As the April 17 tax-filing deadline nears, many taxpayers may rush to finish their tax returns or find that extra time is needed to get them done. The IRS recommends that taxpayers request a filing extension if they need one.

Mistakes can happen when hurrying to file a tax return by the due date. This can mean longer processing times and possible tax refund delays. Electronic filing is the best way to avoid common mistakes; it is also the most accurate way to file a tax return. The IRS estimates that about 70 percent of taxpayers can file their tax return at no charge by using IRS Free File software. Read more

A Digital “Mailbox Rule” Is Required As The IRS Steers Taxpayers Toward Self-Help Digital Tools

As the IRS steers taxpayers toward self-help digital tools, it is necessary to bring the “statutory mailbox rule” into the 21st century. Currently, the statutory mailbox rule in IRC § 7502 does not apply to the electronic transmission of many time-sensitive documents and payments to the IRS. The rule provides that if the requirements set forth in the statute are met, a document or payment is deemed to be filed or paid on the date of the postmark stamped on the envelope.

If the postmark date is on or before the last day of the period prescribed for filing the document or making the payment, the document or payment is considered timely filed or paid even if it is received after the due date. Further, IRC § 7502(c) provides that registered or certified mail, or methods deemed substantially equivalent by the Secretary of Treasury, is prima facie evidence of delivery. Read more

Join The Taxpayer Advocacy Panel And Help Improve The IRS

WASHINGTON — The Internal Revenue Service seeks civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns and makes recommendations for improving IRS service and customer satisfaction. Taxpayers interested in serving on the panel may apply between now and April 27.

To the extent possible, the TAP includes members from all 50 states, the District of Columbia, and Puerto Rico and one member abroad who represents international taxpayers. Each member is appointed to represent the interests of taxpayers in his or her geographic location as well as taxpayers overall. Read more

Tax Payment Options You Need To Know

Lisa Nason, Tax Blog, Tax Advisor, Greenville, South Carolina, USA, TaxConnections

For those of you who may have to fork over some additional funds to Uncle Sam, there are several options available for making payments.

If you can’t pay your tax bill in full, a payment plan may be an option. Additional information about all payment and payment plan options can be found at www.irs.gov/payments and in Publication 5034, Need to Make a Payment? (English & Spanish).

The IRS also offers taxpayers the ability to pay using their mobile device through the IRS2Go app, available on the Apple or Google Play store. Read more

Tips For Updating Form W-4 After Doing A Paycheck Checkup

Form W-4, Paycheck Checkup, IRS, Withholding Calculator, Tax Return, Tax Withheld, Thomas Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

With recent tax law changes, the IRS urges taxpayers to look into whether they need to adjust their paycheck withholding and submit a new Form W-4 to their employer. Taxpayers can use the updated Withholding Calculator on IRS.gov to do a quick “paycheck checkup” to check that they’re not having too little or too much tax withheld at work.

Taxpayers who use the calculator and determine that they need to change their withholding must fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Employees will submit the completed Form W-4 to their employers. Read more

5 Common Tax Mistakes All Small Businesses Should Avoid

Common Tax Mistakes, Tax Misttake, Small Business And Tax, IRS, IRS Mistakes, Tax Deduction, Mile IQ, Tax Blog, TaxConnections

Tax season is the collective groan heard around the world. We get it. No one enjoys filing their taxes, even when they turn preparation over to a skilled professional. If you’re doing your taxes right, managing your small business taxes should be a year-round process.

Keeping up to date in real-time makes the effort come tax season exponentially easier. But if you’re not staying on top of things, you could make these five common tax mistakes for small businesses. Read more

Part III. General Descriptions Of APAs Executed In 2017

Advance Pricing And Mutal Agreement Program, APMA, Advance Pricing Agreement, APA, Thomas Kerester, IRS, Tax Blog, Tax Ambassador, Washington D.C., USA, TaxConnections

Part III. General Descriptions Of APAs Executed In 2017

This Announcement is issued pursuant to § 521(b) of Pub. L. 106-170, the Ticket to Work and Work Incentives Improvement Act of 1999, which requires the Secretary of the Treasury to report annually to the public concerning advance pricing agreements (APAs) and the Advance Pricing and Mutual Agreement Program (APMA Program), formerly known as the Advance Pricing Agreement Program (APA Program). The first report covered calendar years 1991 through 1999. Subsequent reports covered each calendar year 2000 through 2016 separately. This nineteenth report describes the experience, structure, and activities of the APMA Program during calendar year 2017. It does not provide guidance regarding the application of the arm’s length standard. Read more

Owe Taxes? These Tips Can Help

Nanda Kumar, Tax Blog, Tax Advisor, Sterling, Virginia, USA, TaxConnections

A few of us received an intimation letter from the IRS stating that we owe them some money in the form of taxes. Sure enough, nobody likes to receive such emails. However, if you do here are some ways you can handle the situation without losing your sleep.

Do Not Delay

If you receive that envelope from IRS, do not be a skeptic and not open it at all. I have seen quite a few friends who just do not wish to open the envelope. There are chances that your tax filing might have a minor error that you need to fix. Whatever the reasons could be, do not forget to open and read the letter as soon as you receive it. Read more

IRS Issues Guidance On Business Interest Expense Limitations

Thomas Kerester, Washington D.C., USA, Tax Blog, Tax Ambassador, TaxConnections

IR-2018-82, April 2, 2018

WASHINGTON ― The Treasury Department and the Internal Revenue Service (IRS) yesterday issued Notice 2018-28, which provides guidance for computing the business interest expense limitation under recent tax legislation enacted on Dec. 22, 2017.

In general, newly amended section 163(j) of the Internal Revenue Code imposes a limitation on deductions for business interest incurred by certain large businesses. For most large businesses, business interest expense is limited to any business interest income plus 30 percent of the business’ adjusted taxable income. Read more

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