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IRS REFUNDS $10 MILLION TO TAX PREPARERES
Suppose your home is burglarized while you are away. You have to promptly notify the local authorities and your insurance company But is that the end of the matter? Not as far as taxes are concerned.
Determine if you qualify for a theft loss deduction on your tax return. Personal theft losses are lumped in with personal casualty losses from natural disasters and other events.. Under the basic rules you ae entitled to a deduction only after you clear onetax hurdles
A theft is defined as the taking and removal of money or property with the intent to deprive the owner of it. It must be illegal under the law of the state where it occurred and done with criminal intent. The amount of your theft loss is generally the adjusted basis of your property immediately after the theft is considered to be zero. The amount must be reduced by insurance proceeds.
RECOUP TAX DOLLARS FOR A THEFT LOSS
The law will change the face of health care. US businessess of all sizes will be challenged as new provisions of the law kick in in 2016. The next big test: The expanded mandate that companies with 50 to 99 full time employees offer them affordable health insurance or pay a penalty. The coming change may prompt a reduction in hours as employers strive to stay under the 30 hour limit. that Obamacare defines as a full time workload
An even bigger worry for many employers: A hefty excise tax on high cost coverage that starts in 2018. At first the 40% tax will apply to health care premiums that top $10,200 a year for individuals or $27,500 for family health plans. About one third of employers may hit the threshold in 2018 but the share may top 50% in 2022. The cap in indexed to general inflation, not medical inflation, which goes up faster than overall prices. Plans in the Northeast, are especially susceptible to exceeding the limit. The excise tax will be paid by insurers and plan administrators. They are certain to pass the cost on to employers
Firms worried about the tax and rising costs will make cuts in health plans. Among changes, more companies will impose a fee for covering spouses, particulary those eligible for health benefits through their own jobs.
Expect interest rates to rise as 2015 progresses. But not very much. Once credit markets prepare for the Federal Reserve to raise short-term rates later this year, yields on longer term debt will perk up as well. Look for a brief spike as the Fed gets ready to make its move and investors probably overreact to the news. By year end, the yield on the 10-year US Treasury note should settle around 2.4% versus 1.9% now. The average 30 year mortage will hit 4.1% up a bit from 3.7% now.
Expenses in the start up phase of a business are not tax deductible right away, the tax court says in the case of an engineer who was a full time employee and was also in the process of opening his own company. He visited construction sites after work to hand out business cards and promote his firm, and he set up a website. Be he had no clients or income and did not bid on jobs during the year under audit. Because his business was not operating as a going concern, the expenses he reported on Schedule C are nondeductible start up costs. Firms can elect to write off up to $5,000 costs in the first year they actively engage in business. Any remaining amount is amortized over 15 years.
BUSINESS START UP EXPENSES
The procedure involves three steps
Work at least 35 years
If you have less than 35 years of earnings, you may want to work enough additional years so you have a full 35 years of earnings. Other wise the Social Security Administration will average in zeros for any years less than 35. The net result is your social security benefit will be lower.
HOW ARE SOCIAL SECURITY BENEFITS CACULATED
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MAY NEWS LETTER
IRS investigators believe the identity thieves who stole the personal tax information of more than 100,000 taxpayers from an IRS website are part of a sophisticated criminal operation based in Russia, two IRS officials told the Associated Press. the information was stolen as part of an elaborate scheme t claim fraudulent tax refunds. IRS Commissioner John Koskinen told reporters. Koskinen declined to say where the crime originated.
Two officials briefed on the matter said Wednesday the IRS believes the criminals were in Russia, based on computer data about who accessed the information. The officials spoke on the condition of anonymity. The information was taken from an IRS website called " Get Transcript" where taxpayers can get tax returns from previous years. To access the information, the thieves cleared a security screen that required detailed knowledge about each taxpayer including their Social Security number, date of birth, tax filing status and address. The IRS believes the criminals obtained this information from other sources. They were accessing the IRS website to et even more information about the taxpayers, which would help them claim fraudulent tax refunds in the future.
HACKERS OF IRS DATA SEEN AS BASED IN RUSSIA
The IRS is refunding a total of $10 million to thousands of tax preparers who paid to take a competency test. A federal court struck down IRS regulatiions in 2013 that soght to require some tax preparers to get training and take a test. An appellate court up held the ruling last year, saying the iRS lacked the legal authority to mandate the testing. The IRS said about 89,000 preparers paid $116 apiece to take the test. The agency is issuing refunds.
The Obama administration has proposed giving he iRS the authority to regulate paid tax return preparers. The IRS remains committed to the principle that all persons who prepare federal tax returns for compenssation should be required to pass a test of minimal competency and take annual continuing education training.