Read the annual newsletter right from your smartphone at your convenience. Following are the topics covered in the newsletter.
IRS TELEPHONE CALL SCAMS
HOW TO GET A COPY OF YOUR INCOME TAX RETURN
INCOME TAX REFUNDS CAN BE KEPT TO PAY UNPAID
TAXES AND/OR DEBTS
INDIVIDUALS WHO MUST PAY ESTIMATED INCOME TAXES
WHEN & HOW TO FILE AN AMENDED INCOME TAX RETURN
PENALTIES - LATE FILING OR PAYMENT OF YOUR TAXES
TAX BREAKS FOR INDIVIDUALS IN THE MILITARY
DO YOU HAVE CHILDREN WITH INVESTMENT INCOME?
CLAIMING THE CHILD & DEPENDENT CARE TAX CREDIT
TIP INCOME – WHAT YOU SHOULD REPORT AND HOW
DOES YOUR HEALTH INSURANCE QUALIFY AS MINIMUM
HEALTH COVERAGE EXEMPTION OPTIONS
USING THE SHOP MARKETPLACE TO OBTAIN EMPLOYEE HEALTH INSURANCE COVERAGE
COMBINING BUSINESS AND PERSONAL TRAVEL
WITHIN THE UNITED STATES
COMBINING BUSINESS AND PERSONAL FOREIGN TRAVEL
DEDUCTIBLE EXPENSES WHEN YOU TRAVEL FOR CHARITY
CAPITAL GAINS AND LOSSES
WHAT TO DO IF YOU CHANGED YOUR NAME
If you enjoy reading the above articles, you may contact the Elk Rapids News at 264-6670 and purchase a subscription. We write articles every two weeks for the Elk Rapids News on a variety of topics. The above articles are a sampling of what was published recently.
Be careful when removing a flash drive from your computer. You must 'disengage' the flash drive before removing or you could destroy your flash drive and not be able to read the backup or the data saved on the flash drive. To disengage, at the bottom of your desktop toolbar there is an icon for the flash drive. If you are unable to see it, click on the < and more icons will appear. If you can't find it, highlight each icon and look for the words SAFELY REMOVE HARDWARE. Click on this icon and follow the directions to safely remove your flash drive.
1. Bounced Check
a. When dealing with a bounced check - yours or one of your client’s — do nothing in the Quick Books program.
b. Show it as an outstanding check in the bank reconciliation.
c. Ignore that it goes out and comes back in at the bank.
2. No Prior Year Entries
a. After you have sent your Quick Books backup to us, you cannot input changes or new information to Quick Books dated in any prior year including the year for which we are completing the income tax return.
After age 69, watch IRA mandatory distributions due by December 31 each year. Some funds will not issue a check without original signatures. They will not accept a fax copy. If you wait until December you may not have enough time to have the distribution done by December 31. Start paperwork in June and follow-up every 2 weeks.
FEDERAL PAYROLL TAX PAYMENTS
When a company’s Federal Withholding, Social Security and Medicare taxes (Form 941 tax) are greater than $50,000.00 for the period from July 1 to June 30 of any year, they must pay payroll taxes within three business days after the date of the payroll checks. They are no longer allowed to pay these taxes once per month.
In the past, IRS sent out a letter notifying you that you needed to change the due date of your payroll taxes. However, they will no longer be sending you this letter. If you have any questions on how to do this calculation, please call our office.
COPIES OF TAX RETURNS
Banks, attorneys, mortgage companies, and other offices will sometimes ask you to bring in your income tax return. Never give away your only copies of your individual or business returns. Make them copy your tax forms in your presence and have them return your original tax return to you while you wait.
STANDARD MILEAGE RATE
When this newsletter went to the printer, IRS had not yet released the new mileage rates for 2016. Effective for payments made and expenses incurred after December 31, 2014, the rate is 57.5 cents per mile (up from 56 cents per mile in 2014). The 2015 rate for medical/moving mileage is 23 cents per mile, and the charitable mileage rate is 14 cents per mile.
IRS REPORTING REQUIREMENTS
The Internal Revenue Service has cash transaction reporting requirements for businesses that receive more than $10,000.00 in cash from a single transaction or from a series of related transactions. Included in this definition of cash are money orders, travelers checks, cashiers checks, and foreign currency. Failure to file the required reports on IRS Form 8300 can result in a penalty of $50.00 per failure ($250,000.00). If the failure is due to intentional disregard of these rules, the penalty becomes the greater of $25,000.00 or the amount of cash received (maximum of $100,000.00).
The IRS requires that all businesses file Form 1099-MISC for payments to individuals and businesses OTHER than corporations. You must provide the payee a copy no later than January 31, 2016. During 2015, IRS passed a law significantly increasing the penalties for not filing the required Form 1099-MISC. Obviously, Congress is becoming increasingly unsympathetic with business owners who fail to file the required 1099 forms. Penalties could now be $250 per return, up to $1,000,000. So the message is, file them and file them on time!
Michigan requires you file the state copy of IRS Form 1099-MISC with them. You can file these attached to the Annual Return Form 5081, or you can file them by letter.
Don’t forget to file Form 940EZ, Employer’s Annual Federal Unemployment (FUTA) Tax Return, due January 31, 2016.
Upon completion of your last State of Michigan coupon for sales, use and withholding taxes for the year, don’t forget to complete the Annual Return Form 5081 due February 28, 2016.
If your business is a corporation, now is a good time to schedule your required annual meeting, elect new officers, and update your corporate minute book.
There is a Michigan use tax of 6% due on out of state purchases, such as supplies and equipment for your business. This tax can be paid on the monthly SUW 5080 coupon, or on the Annual Return Form 5081. This tax also applies to individuals who purchase merchandise out of state or by mail order. See the Michigan individual income tax return Form MI-1040, page 2.