Author: Debra Watkins

IRS reveals start date for 2014 tax filing season

alice-in-wonderland-costumes-white-rabbit-3The IRS has finally announced an official start date for the 2014 filing season: It will start accepting returns on Jan. 31. This date is 10 days later than the originally planned starting date of Jan. 21. “The late January opening gives us enough time to get things right with our programming, testing, and systems validation,” said Acting IRS Commissioner Danny Werfel in a press release. This process involves programming, testing, and deploying the more than 50 IRS systems that are needed to handle nearly 150 million tax returns.

Read more:  Journal of Accountancy

Candy from Mexico, Sugar from Minnesota

dumdums Candy maker, Kirk Vashaw, of Spangler Candy Company, the maker of Dum Dums lollipops states that he could pay no taxes (zero tax rate!) and have no regulations and would still not be able to compete with foreign producers of candy because of the Farm Bill’s price supports for sugar.  This price support costs the company $15,000 per day. Hear Zoe Chace’s report for  Planet Money.  Read the Farm Bill.

The Heat is on Contract Labor

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The Wall Street Journal reports that the IRS and the Department of Labor (DOL) are increasing the pressure on employers to properly classify their workers through payroll audits.  A goal has been set to investigate 6,000 employers. The authors write:

The U.S. Treasury estimates that forcing employers to properly classify their workers—while tightening so-called “safe harbor” rules that provide them with leeway in determining who is and isn’t an employee—would yield $8.71 billion in added tax revenue over the next decade.

 

Taxable Scholarships

 

crop380w_tax_pic_receiptsTax-Free Scholarships and Fellowships

  • A scholarship or fellowship is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution.
  • A scholarship or fellowship is tax free only to the extent:
  • It does not exceed your expenses;
  • It is not designated or earmarked for other purposes (such as room and board), and does not require (by its terms) that it cannot be used for qualified education expenses; and
  • It does not represent payment for teaching, research, or other services required as a condition for receiving the scholarship.

Taxable Scholarships and Fellowships 

If and to the extent your scholarship or fellowship does not meet the requirements described earlier, it is taxable and must be included in gross income. You can use Worksheet 1–1, Taxable Scholarship and Fellowship Income (pg 6) to figure the tax-free and taxable parts of your scholarship or fellowship.

Get out of jail free card

man-in-prison-behind-bars-jailWell, not jail exactly.

Many employers prefer to classify employees as contractors to avoid paying payroll taxes and employee benefits.  If the IRS , state employment agency, or the Department of Labor (DOL) audits a taxpayer and determines that employees have been miss classified as contractors, the employer may have to pay the employees’ shares of taxes, including estimated income tax, plus the employer share of payroll taxes, interest, and penalties.  In addition there is a special six year statute of limitations rather than the normal three year limit as to how far back the IRS can asses additional tax.

The IRS Voluntary Classification Settlement Program (VCSP) as described  in Announcement 2012-45 offers employers the opportunity to reclassify their contractors as employees  and limit exposure to additions to tax, penalties and interest.  Announcement 2012-46 temporarily expands the VCSP through June 30, 2013, to employers that failed to file Forms 1099 for their contractors.

Here’s a good article about the VCSP:  Get Your Worker Reclassification Relief While It Lasts

Amplify Austin

Amplify_UFCU_verticalJoin the first community wide giving festival through Amplify Austin. 

How It Works

Visit this website (AmplifyATX.org) during Amplify Austin Day, which starts at 7pm, March 4 and ends 7pm, March 5.

At that time, this website will be transformed into a giving site; you’ll be able to search by the name of the nonprofits you love or the causes you’re passionate about.

You will have a greater impact by giving through this website on Amplify Austin Day because our sponsors have created an incentive pool to enhance your donations, and prizes of $1,000 will be given hourly to the nonprofits that garner the most dollars or donors.

On Amplify Austin Day, we are giving back to the city we love. Join us!