Did You Get a Notice from the IRS?

This is what you should Call Be's Professional Services at 972-296-4237972-296-4237!

1. Don’t ignore it. Remember it is important!
2. IRS notices usually deal with a specific issue about your tax return or tax account. Read it carefully and follow the instructions about what you need to do and Call Be's Income Tax Firm!
3. If it says that the IRS corrected your tax return, review the information in the notice and compare it to your tax return and then Call Be's
4. We can handle most notices without calling or visiting the IRS.
5. Keep copies of any notices you get from the IRS for your records

Job Hunting Expenses

Many people change their job in the summer. If you look for a new job in the same line of work, you may be able to deduct some of your job hunting costs.

Here are some key tax facts you should know about if you search for a new job:

• Same Occupation. Your expenses must be for a job search in your current line of work. You can’t deduct expenses for a job search in a new occupation.
• Résumé Costs. You can deduct the cost of preparing and mailing your résumé.
• Travel Expenses. If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.
• Placement Agency. You can deduct some job placement agency fees you pay to look for a job.
• First Job. You can’t deduct job search expenses if you’re looking for a job for the first time.
• Work-Search Break. You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.
• Reimbursed Costs. Reimbursed expenses are not deductible.
• Schedule A. You usually deduct your job search expenses on Schedule A , Itemized Deductions. You’ll claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than two percent of your adjusted gross income.
• Premium Tax Credit. If you receive advance payment of the premium credit card in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

Per irs.gov

Tax Benefits for Members of the Armed Forces

Special tax benefits apply to members of the U. S. Armed Forces. For example, some types of pay are not taxable. And special rules may apply to some tax deductions, credits and deadlines. Here are some of those benefits:

1. Deadline Extensions. Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.
   
2. Combat Pay Exclusion. If you serve in a combat zone, certain combat pay is not taxable. You won’t need to show the pay on your tax return because combat pay isn’t included in the wages reported on your Form W-2, Wage and Tax Statement. Service in support of a combat zone may qualify for this exclusion.
   
3. Earned Income Tax Credit. If you get nontaxable combat pay, you may choose to include it to come up with EITC. You would make this choice if it increases your credit. Even if you do, the combat pay stays nontaxable.
   
4. Moving Expense Deduction. You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station.
   
5. Uniform Deduction. You can deduct the costs of certain uniforms that regulations prohibit you from wearing while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.
   
6. Signing Joint Returns. Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return.
   
7. Reservists’ Travel Deduction. If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.
   
8. Nontaxable ROTC Allowances. Active duty ROTC pay, such as pay for summer advanced camp, is taxable. But some amounts paid to ROTC students in advanced training are not taxable. This applies to educational and subsistence allowances.
   
9. Civilian Life. If you leave the military and look for work, you may be able to deduct some job hunting expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.
   

per IRS.gov

Applying for 501(c)(3) Tax-Exempt Status

New 1023-EZ Form Makes Easier
The Internal Revenue Service today introduced a new, shorter application form to help small charities apply for 501(c)(3) tax-exempt status more easily.

“This is a common-sense approach that will help reduce lengthy processing delays for small tax-exempt groups and ultimately larger organizations as well,” said IRS Commissioner John Koskinen. “The change cuts paperwork for these charitable groups and speeds application processing so they can focus on their important work."

The new Form 1023-EZ, available today on IRS.gov, is three pages long, compared with the standard 26-page Form 1023. Most small organizations, including as many as 70 percent of all applicants, qualify to use the new streamlined form. Most organizations with gross receipts of $50,000 or less and assets of $250,000 or less are eligible.

"Previously, all of these groups went through the same lengthy application process -- regardless of size," Koskinen said. "It didn't matter if you were a small soccer or gardening club or a major research organization. This process created needlessly long delays for groups, which didn’t help the groups, the taxpaying public or the IRS.”

The change will allow the IRS to speed the approval process for smaller groups and free up resources to review applications from larger, more complex organizations while reducing the application backlog. Currently, the IRS has more than 60,000 501(c)(3) applications in its backlog, with many of them pending for nine months.

Following feedback this spring from the tax community and those working with charitable groups, the IRS refined the 1023-EZ proposal for today's announcement, including revising the $50,000 gross receipts threshold down from an earlier figure of $200,000.

"We believe that many small organizations will be able to complete this form without creating major compliance risks," Koskinen said. "Rather than using large amounts of IRS resources up front reviewing complex applications during a lengthy process, we believe the streamlined form will allow us to devote more compliance activity on the back end to ensure groups are actually doing the charitable work they apply to do."

There are more than a million 501(c)(3) organizations recognized by the irs.

Per.IRS.gov

Get Credit for Child and Dependent Care This Summer

Many parents pay for childcare or day camps in the summer while they work. If this applies to you, your costs may qualify for a federal tax credit that can lower your taxes. Here are 10 facts that you should know about the Child and Dependent Care Credit:

1. Your expenses must be for the care of one or more qualifying persons. Your dependent child or children under age 13 usually qualify.

2. Your expenses for care must be work-related. This means that you must pay for the care so you can work or look for work. This rule also applies to your spouse if you file a joint return. Your spouse meets this rule during any month they are a full-time student. They also meet it if they’re physically or mentally incapable of self-care.

3. You must have earned income, such as from wages, salaries and tips. It also includes net earnings from self-employment. Your spouse must also have earned income if you file jointly. Your spouse is treated as having earned income for any month that they are a full-time student or incapable of self-care. This rule also applies to you if you file a joint return.

4. As a rule, if you’re married you must file a joint return to take the credit. But this rule doesn’t apply if you’re legally separated or if you and your spouse live apart.

5. You may qualify for the credit whether you pay for care at home, at a daycare facility or at a day camp.

6. The credit is a percentage of the qualified expenses you pay. It can be as much as 35 percent of your expenses, depending on your income.

7. The total expense that you can use for the credit in a year is limited. The limit is $3,000 for one qualifying person or $6,000 for two or more.

8. Overnight camp or summer school tutoring costs do not qualify. You can’t include the cost of care provided by your spouse or your child who is under age 19 at the end of the year. You also cannot count the cost of care given by a person you can claim as your dependent. Special rules apply if you get dependent care benefits from your employer.

9. Keep all your receipts and records. Make sure to note the name, address and Social Security number or employer identification number of the care provider. You must report this information when you claim the credit on your tax return.

10. Remember that this credit is not just a summer tax benefit. You may be able to claim it for care you pay for throughout the year.

Per IRS.gov

BOOKKEEPING TIPS

                                                   Are you up to date?

The quiz below is based exclusively on just one recent issue of The General Ledger. See if you are up to date. Scroll down for answers.

1.    To avoid being defrauded by tax scams, it is important to know that if the IRS believes your company or you owe money, you will receive a bill or other communication through _____ _____—not a _____ _____ or _____.

2.    As of Jan. 1, 2014, an employer or retirement plan with an EIN must file Form 8822-B for any change in a “_____ _____,” including the addition of a _____ _____, within _____ days of the change.

3.    Is ill health a reasonable cause for late filing or late payment of employment taxes?

4.    In the language of a negotiated settlement of a government fine or penalty, a payment that is specified as remedial (can/cannot) be deductible, and a payment that is specified as punitive (can/cannot) be deductible.

Questions 5-9: SEP v. Simple retirement Plans. Under a SEP Plan:

5.    Employer contributions (are/are not) mandatory; generally limited to _____% of the employee’s annual pay.

6.    Employees (do/do not) contribute.

Under a Simple Plan, the employer has two options for contributing:

7.    Mandatory _____% dollar-for-dollar matching contributions of employee elective deferrals (i.e., if employee elects not to defer salary, employer has no contribution requirement); or

8.    Mandatory ____% non-elective contribution for all employees.

9.    Under a Simple Plan, employee contributions are made by _____ _____ _____.

10. A monthly car allowance is treated as wages, and all employment taxes apply if the allowance is a _____ _____.

 per AIB

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