IRS Tip Sheet on Gambling Income and Losses

Posted on May 12, 2020 by FCA Admin

Issue Number:    IRS Summertime Tax Tip 2014-03

Inside This Issue

Whether you like to play the ponies, roll the dice or pull the slots, your gambling winnings are taxable. You must report all your gambling income on your tax return. If you’re a casual gambler, odds are good that these basic tax tips can help you at tax time next year:

1. Gambling income.  Gambling income includes winnings from lotteries, horse racing and casinos. It also includes cash prizes and the fair market value of prizes like cars and trips.

2. Payer tax form.  If you win, you may get a Form W-2G, Certain Gambling Winnings, from the payer. The IRS also gets a copy of the W-2G. The payer issues the form depending on the type of game you played, the amount of your winnings and other factors. You’ll also get the form if the payer withholds taxes from what you won.

3. How to report winnings.  You must report all your gambling winnings as income. This is true even if you don’t receive a Form W-2G. You normally report your winnings for the year on your tax return as ‘other income.’

4. How to deduct losses.  You can deduct your gambling losses on Schedule A, Itemized Deductions. The amount you can deduct is limited to the amount of the gambling income you report on your return.

5. Keep gambling receipts.  You should keep track of your wins and losses. This includes keeping items such as a gambling log or diary, receipts, statements or tickets.

For more on this topic see Publications 525, Taxable and Nontaxable Income, and 529, Miscellaneous Deductions. Both are available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

IRS YouTube Videos:

IRS Podcasts:

Note. From Issue Number: IRS Tax Tip 2014-03.  Copyright 2014 by Copyright Holder. Reprinted with permission.

 

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How to Obtain Prior Year Tax Information

Posted on February 2, 2020 by FCA Admin

Many people often need prior year tax records for various reasons.  Some of these reasons include loan applications or other legal matters.  Often people don’t know how to obtain this information or that the information is even available.   Taxpayers can make a request to get free copies by going on line, through the mail, or calling the IRS directly.

  • There is no fee for transcripts for the current or past three years.
  • A tax return transcript can be ordered on line at www.irs.gov using the online tool called Order A Transcript.
  • Phone orders can be made by dialing l 800-908-9946.
  • Individuals wishing to order by mail should complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript.  Form 4506T, Request for Transcript of Tax Return should be used by businesses.
  • Online or phone orders are fulfilled within 10 days. Mail orders are fulfilled within 30 days.

 

Your tax professional is always a good resource for any tax questions that you have or if you need assistance ordering your transcripts.

 

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Tips for Running a Green Business

Posted on January 23, 2020 by FCA Admin

Going green is the new buzz word.  Many people think that only large businesses can go green.  Well, no matter how big or small your business, there are many things that can be done to promote a cleaner environment.  Here are my top tips below:

  1. Turn off office equipment. It doesn’t make sense to leave your equipment on if it is not being used.  Leaving your equipment on wastes energy and wastes money.
  2. Use email.  Email is a fast means of communication and also does not waste paper. 
  3. Print documents double-sided. This is also an effective way to not waste paper.
  4. Use paper suppliers with maximum recycled content. Using recycled material is great for the environment.
  5. Investigate to see if existing office furniture can be refurbished.  This is cost effective and is safe for the environment. 
  6. Use suppliers who take back packaging for reuse.  This is yet another great method to improve our environment.
  7. Check faucets for dripping water. Reducing water usage is great for the environment and great for cost savings for your business.

 

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Eleven Tips for Taxpayers Who Owe Money to the IRS

Posted on December 6, 2019 by FCA Admin

Issue Number:    IRS Summertime Tax Tip 2012-13

Inside This Issue

Most taxpayers get a refund from the Internal Revenue Service when they file their tax returns. For those who don’t get a refund, the IRS offers several options to pay their tax bill.

Here are eleven tips for taxpayers who owe money to the IRS.

1. Tax bill payments If you get a bill from the IRS this summer that shows you owe late taxes, you are expected to promptly pay the tax owed including any penalties and interest. If you are unable to pay the amount due, it may be better for you to get a loan to pay the bill in full rather than to make installment payments to the IRS. That’s because the interest rate and penalties the IRS must charge by law are often higher than what lending institutions may be offering.

2. Electronic Funds Transfer You can pay your tax bill by electronic funds transfer, check, money order, cashier’s check or cash. To pay using electronic funds transfer, use the Electronic Federal Tax Payment System by either calling 800-555-4477 or using the online access at www.eftps.gov.

3. Credit card payments You can pay your bill with a credit card. Again, the interest rate on a credit card may be lower than the combination of interest and penalties the IRS must charge. To pay by credit card contact one of the following processing companies:

– WorldPay US, Inc. at 888-9PAY-TAX (or www.payUSAtax.com),

– Official Payments Corporation at 888-UPAY-TAX (or www.officialpayments.com/fed), or

– Link2Gov Corporation at 888-PAY-1040 (or www.pay1040.com).

4. Additional time to pay Based on your circumstances, you may be granted a short additional time to pay your tax in full. A brief additional amount of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. There generally is no set up fee for a short-term agreement.

5. Installment Agreement You may request an installment agreement if you cannot pay the total tax you owe in full. This is an agreement between you and the IRS to pay the amount due in monthly installment payments. You must first file all required returns and be current with estimated tax payments.

6. Apply Using Form 9465 You can complete and mail an IRS Form 9465, Installment Agreement Request, along with your bill using the envelope you received from the IRS. The IRS will inform you (usually within 30 days) whether your request is approved, denied, or if additional information is needed.

7. Apply Using Online Payment Agreement If you owe $50,000 or less in combined tax, penalties and interest, you can request an installment agreement using the Online Payment Agreement application at IRS.gov. You may still qualify for an installment agreement if you owe more than $50,000, but you are required to complete a Form 433F, Collection Information Statement, before the IRS will consider an installment agreement.

8. User fees If an installment agreement is approved, a one-time user fee will be charged. The user fee for a new agreement is $105 or $52 for agreements where payments are deducted directly from your bank account. For eligible individuals with lower incomes, the fee can be reduced to $43.

9. Offer in Compromise IRS is now offering more flexible terms with its Offer-in-Compromise (OIC) Program. An OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than the full amount owed. An OIC is generally accepted only if the IRS believes, after assessing the taxpayer’s financial situation, that the tax debt can’t be paid in full as a lump sum or through a payment agreement.

10. Check withholding Taxpayers who have a balance due may want to consider changing their Form W-4, Employee’s Withholding Allowance Certificate, with their employer.

11. Fresh Start The IRS has a program to help struggling taxpayers get a fresh start. Through the Fresh Start program, individuals and small businesses may be able to pay the taxes they owe without facing additional or unnecessary burden.

For more information about payment options or IRS’s Fresh Start program, visit IRS.gov. IRS Publications 594, The IRS Collection Process, and 966, Electronic Choices to Pay All Your Federal Taxes, also provide additional information regarding your payment options. These publications and Forms 9465 and W-4 can be obtained from IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Links:

Note. From Issue Number: IRS Tax Tip IRS-2012-13. Copyright 2012 by Copyright Holder. Reprinted with permission.

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Beware of Bogus IRS Emails

Posted on November 14, 2019 by FCA Admin

Issue Number:    IRS Tax Tip 2013-19

Inside This Issue

The IRS receives thousands of reports every year from taxpayers who receive emails out-of-the-blue claiming to be from the IRS. Scammers use the IRS name or logo to make the message appear authentic so you will respond to it. In reality, it’s a scam known as “phishing,” attempting to trick you into revealing your personal and financial information. The criminals then use this information to commit identity theft or steal your money.

The IRS has this advice for anyone who receives an email claiming to be from the IRS or directing you to an IRS site:

  • Do not reply to the message;
  • Do not open any attachments. Attachments may contain malicious code that will infect your computer; and
  • Do not click on any links in a suspicious email or phishing website and do not enter confidential information. Visit the IRS website and click on ‘Identity Theft’ at the bottom of the page for more information.

Here are five other key points the IRS wants you to know about phishing scams.

1. The IRS does not initiate contact with taxpayers by email or social media channels to request personal or financial information;

2. The IRS never asks for detailed personal and financial information like PIN numbers, passwords or similar secret access information for credit card, bank or other financial accounts;

3. The address of the official IRS website is www.irs.gov. Do not be misled by sites claiming to be the IRS but ending in .com, .net, .org or anything other than .gov. If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on their site and report it to the IRS;

4. If you receive a phone call, fax or letter in the mail from an individual claiming to be from the IRS but you suspect they are not an IRS employee, contact the IRS at 1-800-829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence. Forward a suspicious email to phishing@irs.gov;

5. You can help the IRS and other law enforcement agencies shut down these schemes. Visit the IRS.gov website to get details on how to report scams and helpful resources if you are the victim of a scam. Click on “Reporting Phishing” at the bottom of the page.
Additional IRS Resources:

IRS YouTube Videos:

IRS Podcasts

Note. From Issue Number: IRS Tax Tip 2013-19. Copyright 2013 by Copyright Holder. Reprinted with permission.

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Social Security Benefits and Your Taxes

Posted on October 2, 2019 by FCA Admin

Issue Number:    IRS Tax Tip 2013-24

Inside This Issue

Some people must pay taxes on their Social Security benefits. If you get Social Security, you should receive a Form SSA-1099, Social Security Benefit Statement, by early February. The form shows the amount of benefits you received in 2012.

Here are five tips from the IRS to help you determine if your benefits are taxable:

1. The amount of your income and your filing status affect whether you must pay taxes on your Social Security.

2. If Social Security was your only income in 2012, your benefits are probably not taxable. You also may not need to file a federal income tax return.

3. If you received income from other sources, then you may have to pay taxes on your benefits.

4. You can follow these two quick steps to see if your benefits are taxable:

• Add one-half of the Social Security benefits you received to all your other income, including tax-exempt interest. Tax-exempt interest includes interest from state and municipal bonds.

• Next, compare this total to the ‘base amount’ for your filing status. If the total is more than your base amount, then some of your benefits may be taxable.

The three 2012 base amounts are:

$25,000 for single, head of household, qualifying widow or widower with a dependent child or married individuals filing separately who did not live with their spouse at any time during the year;

$32,000 for married couples filing jointly; and

$0 for married persons filing separately who lived together at any time during the year.

5. If you use IRS e-file to prepare and file your tax return, the tax software will figure your taxable benefits for you. If you file a paper return, you can use the Interactive Tax Assistant tool on the IRS website to check if your benefits are taxable. The ITA is a resource that can help answer tax law questions. There also is a worksheet in the instructions for Form 1040 or 1040A that you can use to figure your taxable benefits.

For more information on the taxability of Social Security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. You can get a copy of this booklet on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:

IRS YouTube Videos:

 

Note. From Issue Number: IRS Tax Tip 2013-24. Copyright 2013 by Copyright Holder. Reprinted with permission.

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Avoid Summertime Tax Scams

Posted on September 12, 2019 by FCA Admin

Issue Number:    IRS Summertime Tax Tip 2014-04

Inside This Issue

 

Ah, summertime! Warm days, rest and recreation and…tax scams. Thieves don’t stop victimizing unsuspecting taxpayers with their scams after April 15. Identity theft, phone and phishing scams happen year-round. Those three top the IRS’s ‘Dirty Dozen’ list of tax scams this year. Here’s some important information you should know about these common tax scams:

1. Identity Theft.  Identity thieves steal personal and financial information to commit fraud or other crimes. This can include your Social Security number or bank information. An identity thief may file a phony tax return to claim a fraudulent refund.

The IRS has a special identity protection page on IRS.gov. It has many resources you can use to reduce your risk of becoming a victim. The page can also tell you what steps to take if you are a victim of identity theft and need help. This includes how and when you should contact the IRS Identity Protection Specialized Unit.

2. Phone Scams.  In these scams, thieves pose as the IRS and call would-be victims with one goal in mind: to steal their money. Callers will tell you that you owe taxes and demand immediate payment. They will tell you that you must pay the bogus tax bill with a pre-loaded debit card or wire transfer. The callers are often abusive and threaten arrest or deportation. They may know the last four digits of your Social Security number. They also rig caller ID to falsely show that the call is from the IRS.

Keep in mind that if a person owes taxes, the IRS will first contact them by mail, not by phone. The IRS doesn’t ask for payment with a pre-paid debit card or wire transfer. If you owe, or think you might owe federal taxes and you get one of these calls, hang up. Call the IRS at 800-829-1040. The IRS will work with you to pay what you owe. If you don’t owe taxes, call and report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.

3. Phishing Scams.  Criminals use the IRS as bait in a phishing scam. Scammers typically send emails that purport to come from the IRS. They often lure their targets with a false promise of a refund or the threat of an audit. They may also set up a phony website that looks like the real IRS.gov. These phony sites often have the IRS seal and other graphics to make them appear official. Their goal is to get their victim to reveal personal and financial information. They use the information they get to steal identities and commit fraud.

The IRS doesn’t contact people by email about their tax account. Nor does the agency use email, social media, texting or fax to initiate contact or ask for personal or financial information. If you get an email like this, do not click on a link or open any attachments. You should instead forward it to the IRS at phishing@irs.gov. For more on this topic visit IRS.gov and select the ‘Reporting Phishing’ link at the bottom of the page.

Don’t let tax scams take the fun out of your summer. Be alert to phone and phishing email scams that use the IRS as a lure. Visit the genuine IRS website, IRS.gov, for more on what you can do to avoid becoming a victim and how to report tax fraud.

IRS YouTube Videos:

IRS Podcasts

 

Note. From Issue Number: IRS Tax Tip 2014-04.  Copyright 2014 by Copyright Holder. Reprinted with permission.

 

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IRS Intensifies National Crackdown on Identity Theft

Posted on August 6, 2019 by FCA Admin

Issue Number:    IR-2013-17

Inside This Issue

WASHINGTON – Continuing a year-long enforcement push against refund fraud and identity theft, the Internal Revenue Service today announced the results of a massive national sweep in recent weeks targeting identity theft suspects in 32 states and Puerto Rico, which involved 215 cities and surrounding areas.

The coast-to-coast effort against 389 identity theft suspects led to 734 enforcement actions in January, including indictments, informations, complaints and arrests. The effort comes on top of a growing identity theft effort that led to 2,400 other enforcement actions against identity thieves during fiscal year 2012.

The January crackdown, a joint effort with the Department of Justice and local U.S. Attorneys offices, unfolded as the IRS opened the 2013 tax season. IRS Criminal Investigation expanded its efforts during January, pushing the total number of identity theft investigations to more than 1,460 since the start of the federal 2012 fiscal year on Oct. 1, 2011.

“As tax season begins this year, we want to be clear that there is a heavy price to pay for perpetrators of refund fraud and identity theft,” said IRS Acting Commissioner Steven T. Miller. “We have aggressively stepped up our efforts to pursue and prevent refund fraud and identity theft, and we will continue to intensely focus on this area. This is part of a much wider effort underway for the 2013 tax season to stop fraud.”

The national effort with the Justice Department and other federal, state and local agencies is part of a larger, comprehensive identity theft strategy the IRS has embarked on that is focused on preventing, detecting and resolving identity theft cases as soon as possible.

The identity theft effort – which intensified in January as the 2013 filing season opened – involved 734 enforcement actions related to identity theft and refund fraud. The effort led to actions taking place throughout the country involving 389 individuals. The effort included 109 arrests, 189 indictments, informations and complaints, as well as 47 search warrants.

In addition to the criminal actions, IRS auditors and criminal investigators conducted a special compliance effort starting on Jan. 28 to visit 197 money service businesses to help make sure these businesses are not assisting identity theft or refund fraud when they cash checks.  The compliance visits occurred in 17 high-risk places identified by the IRS covering areas in and surrounding New York, Philadelphia, Atlanta, Tampa, Miami, Chicago, Houston, Phoenix, Los Angeles, San Diego, El Paso, Tucson, Birmingham, Detroit, San Francisco, Oakland and San Jose.

A map of the locations and additional details on the January enforcement actions and compliance visits are available on IRS.gov. The latest updates on the identity theft enforcement efforts and individual cases are available on a special Identity Theft Schemes page on IRS.gov. More information on enforcement actions can be found on a DOJ Tax Division page.

The identity theft push over the last several weeks reflects a wider effort underway at the IRS. Among the highlights:

  • The number of IRS criminal investigations into identity theft issues more than tripled in fiscal year 2012. The IRS started 276 investigations in fiscal year 2011, a number that jumped to 898 in fiscal year 2012. So far in fiscal year 2013, there have been more than 560 criminal identity theft investigations opened.
  • Total enforcement actions continue to rapidly increase against identity thieves. This category covers actions ranging from indictments and arrests to search warrants. In fiscal year 2012, enforcement actions totaled 2,400 against 1,310 suspects. After just four months in fiscal 2013, enforcement actions totaled 1,703 against 907 suspects.
  • Sentencings of convicted identity thieves continue to increase. There were 80 sentencings in fiscal year 2011, which increased to 223 in fiscal year 2012.
  • Jail time is increasing for identity thieves. The average sentence in fiscal year 2012 was four years or 48 months – a four-month increase from the average in fiscal year 2011. So far this fiscal year, sentences have ranged from 4 to 300 months.

More information on IRS Criminal Investigation efforts is available on IRS fact sheet FS-2013-12.

In addition to the national “sweeps” effort announced today, IRS work on identity theft and refund fraud continues to grow. For the 2013 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

To stop identity thieves up front, the IRS has made a significant increase for the 2013 tax season in the number and quality of identity theft screening filters that spot fraudulent tax returns before refunds are issued. The IRS has dozens of identity theft screens now in place to protect tax refunds.

These efforts helped the IRS in 2012 protect $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.

By late 2012, the IRS assigned more than 3,000 IRS employees — over double from 2011 — to work on identity theft-related issues. IRS employees are working to prevent refund fraud, investigate identity theft-related crimes and help taxpayers who have been victimized by identity thieves. In addition, the IRS has trained 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.

“We are strengthening our processing systems to watch for identity theft and detect refund fraud before it occurs,” Miller said. “And we continue to put more resources on helping people who are victims of identity theft and resolve these complex cases as quickly as possible.”

Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.

To help taxpayers, the IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and a special guide to assistance. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490.  The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the special identity protection page on IRS.gov.

Note. From Issue Number: IRS Tax Tip 2013-17. Copyright 2013 by Copyright Holder. Reprinted with permission.

 

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What are you doing with your tax refund?

Posted on June 25, 2019 by FCA Admin

Now that tax season is officially over, those who are getting refunds are already making plans for their money.  But what about those that have no clue of what to do with their refunds?  Well here are some suggestions for you.

 

  • Build an emergency cash reserve. By far, I think this is one of the best uses for a tax refund.  Since the country is in a recession, it makes a lot of sense to start that emergency fund.  An emergency fund will come in handy in more ways than one.
  • Pay off debt.  Another good use of your tax refund is to pay off some debt.  This may be credit card debt or student loan debt etc.  If you choose to pay down credit card debt, be sure to read my blog on paying credit card debt.
  • Contribute to an IRA or 401K.  This is another great use of your refund dollars.  Saving for retirement never goes out of style.  In fact, contributions to your IRA are tax deductible if you meet certain income and employment requirements.  Bankrate.com offers some great tips on how to start investing in IRAs. Visit this site at: http://www.bankrate.com/individual-retirement-accounts.aspx.
  • Improve your skills.  It is never too early or too late to acquire or enhance your existing skills.  In this tough economy, it is truly an asset to have additional skills that your employer can use or that you can use yourself if you are self employed.   In the Tampa Bay Area, the University of South Florida offers several certificate courses in continuing education programs.  Visit its website at http://www.usf.edu/Academics/Continuing-Education/index.asp.

 

 

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Affordable Summer Vacations

Posted on May 18, 2019 by FCA Admin

 

Summer is upon us and many have already planned their vacations.  Others are contemplating if and how they can afford a summer vacation.  Although, the economy is in a slump, a well deserved vacation can still be affordable with the right planning strategy.  So how can you afford that vacation?

  1. Use the web:  Search online for affordable vacation deals.  The web has great websites with easy functionality to help you find the best deals.  Try using Yahoo Travel.
  2. Use your membership benefits:  If you’re a member of AAA or your local Sam’s Club, call them for the latest travel deals.
  3. Travel within your home state:  Many local attractions such as Disney and Busch Gardens offer discounts to Florida residents.  Busch Gardens even has a pass that you can use for the whole year.
  4. Visit relatives:  This is another great way to save on vacations.  By visiting relatives you will most likely save on lodging and maybe even food.
  5. Don’t travel during the peak season: Travel agencies offer great deals to those willing to travel during the fall.  This helps them to compensate after the busy Summer Travel Season.  If you’re flexible enough you will be able to get great deals on fall travel.

 

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