Friday, September 12, 2014

Improving Job Opportunities for People With Disabilities



More than $8.4 million will be directed toward improving employment opportunities for people with disabilities, the department announced on Sept. 11. "Individuals with disabilities have skills and experiences that employers need," Secretary Perez said. "These federal grants will help connect these workers with employers and put them on the path to economic self-sufficiency." Recipients of the grants include eight organizations participating in the Add Us In initiative, the West Virginia University Research Corp., the Institute for Educational Leadership, the National Disability Institute, and the Rehabilitation Engineering and Assistive Technology Society of North America. The grant recipients were announced by the Office of Disability Employment Policy.

New Reporting Requirements for Fatalities and Severe Injuries



All work-related hospitalizations, amputations and loss of an eye will have to be reported to the Occupational Safety and Health Administration, according to a final rule taking effect on Jan. 1, 2015. Under the newly revised rule, employers under federal OSHA's jurisdiction will be expected to report any fatality to OSHA within 8 hours, and any in-patient hospitalization, amputation or enucleation within 24 hours. Previously, employers were required only to report fatalities, and when three or more workers were hospitalized. Though all employers will have to adhere to the new reporting requirements for fatalities and severe injuries, the rule also updates the list of industries partially exempt from routinely keeping injury and illness logs. The new rule will help OSHA focus compliance assistance and enforcement resources to better protect workers and prevent more workplace injuries, illnesses and fatalities.

Moving Can Affect Your Premium Tax Credit



If you moved recently, you’ve probably notified the U.S. Postal Service, utility companies, financial institutions and employers of your new address.  If you get health insurance coverage through a Health Insurance Marketplace, the IRS reminds you about one more important notification to add to your list – the Marketplace.

If you are receiving advance payments of the premium tax credit, it is particularly important that you report changes in circumstances, including moving, to the Marketplace. There’s a simple reason. Reporting your move lets the Marketplace update the information used to determine your eligibility for a Marketplace plan, which may affect the appropriate amount of advance payments of the premium tax credit that the government sends to your health insurer on your behalf.

Reporting the changes will help you avoid having too much or not enough premium assistance paid to reduce your monthly health insurance premiums. Getting too much premium assistance means you may owe additional money or get a smaller refund when you file your taxes. On the other hand, getting too little could mean missing out on monthly premium assistance that you deserve.

Changes in circumstances that you should report to the Marketplace include, but are not limited to:
  • an increase or decrease in your income
  • marriage or divorce
  • the birth or adoption of a child
  • starting a job with health insurance
  • gaining or losing your eligibility for other health care coverage
Many of these changes in circumstances – including moving out of the area served by your current Marketplace plan – qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you will have sixty days to enroll following the change in circumstances. You can find information about special enrollment periods at HealthCare.gov.

More Information

Find out more about the health care law, the premium tax credit and the individual shared responsibility provision at IRS.gov/aca.

Find out more about the Health Insurance Marketplace at HealthCare.gov, or by calling (800) 318-2596.

Wednesday, September 3, 2014

941 Forms Will No Longer Be Mailed

Due to the continuing growth in electronic filing, the IRS has announced that it will no longer mail Forms 941 to employers. Instead, you will have to retrieve forms from the IRS website: www.irs.gov/app/picklist/list/formsPublications.html. PDF forms can be filled in and saved. In addition, the IRS will no longer mail forms 940, 944, and 945.

You should check the IRS website at least quarterly since 941 forms are often updated from one quarter to the next.

Tuesday, September 2, 2014

You may be able to deduct some of your job hunting expenses

Are you looking for a new job? If so, you may be able to deduct some of your job hunting costs. Here are some key tax facts you should know 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 2 percent of your adjusted gross income.

• Premium Tax Credit — If you receive advance payment of the premium tax credit 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.

For more on job hunting, refer to Publication 529, Miscellaneous Deductions, on IRS.gov. You can also call 800-TAX-FORM (800-829-3676) to get it by mail.

For more information, visit IRS.gov.

Learn the rules of IRA Required Minimum Distributions

If you will be age 70 1/2 or older by the end of 2014, you must withdraw a minimum amount — a Required Minimum Distribution — from your non-Roth IRAs for 2014. Withdrawals are not required from Roth IRAs until after the owner’s death.

Required Minimum Distribution deadline

You must take your 2014 RMD by Dec. 31, 2014. If you reached the age of 70 1/2 in 2014, you can delay taking your 2014 RMD until April 1, 2015.

Required Minimum Distribution amount

Your 2014 RMD is your account balance as of the end of 2013 divided by a distribution period from the IRS’s “Uniform Lifetime Table.” A separate table is used if your spouse is your sole beneficiary and is 10 or more years younger than you. You can use these worksheets to calculate your RMDs.

Failure to take full amount of a Required Minimum Distribution

If you fail to take the full amount of your RMD (you can always withdraw more than the required amount), you may have to pay a 50 percent excise tax on the amount not distributed as required.

• To report the excise tax, file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.

• See Form 5329 instructions for additional information about this tax.

Starting a business? Check out these tax tips

If you plan to start a new business, or if you’ve just opened your doors, it’s important for you to know your federal tax responsibilities. Here are five basic tips from the IRS that can help you get started:

1. Type of business — Early on, you will need to decide the type of business you are going to establish. The most common types are sole proprietorship, partnership, corporation, S corporation and Limited Liability Company. Each type reports its business activity on a different federal tax form.

2. Type of taxes — The type of business you run usually determines the type of taxes you pay. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.

3. Employer Identification Number — Oftentimes, a business needs to use a federal EIN for tax purposes. Check IRS.gov to find out if you are required to obtain and use an EIN. If you do, you can apply for an EIN online.

4. Accounting method — Each taxpayer must also use a consistent accounting method, which is a set of rules that determine when to report income and expenses. The most common are the cash method and the accrual method of accounting. Under the cash method, you typically report income in the year that you receive it and deduct expenses in the year that you pay them. Under the accrual method, you typically report income in the year that you earn it and deduct expenses in the year that you incur them. This is true even if you receive the income or pay the expenses in a future year.

5. Employees — If you have employees, they need to fill out Form W-4, Employee’s Withholding Allowance Certificate. This ensures that you withhold the correct federal income tax from their pay.

Each state has additional requirements for starting and operating a business. For information regarding state-level requirements for starting a business, please refer to your state's Web site.

For more information, check out the Small Business and Self-Employment Tax Center page on IRS.gov. From there, review the special section on Starting, Operating, or Closing a Business. Publication 583, Starting a Business and Keeping Records, may also help new business owners with the tax aspects of running a business. The booklet is also available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Education credits: Understand your Form 1098-T

If you’re a college student or parent of a college student, you may be eligible for an education credit. Most students receive a Form 1098-T, Tuition Statement, from their educational institution. Form 1098-T contains helpful instructions and other information you’ll need to claim education credits on your federal tax form. These credits help offset your out-of-pocket expenses for tuition and fees, books and equipment.

Your educational institution is required to file a Form 1098-T with the IRS and provide you a copy when there is a reportable transaction. A reportable transaction includes payments received, amounts billed or refunds made for tuition and related expenses. The form should also give you other information for the educational institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements, or refunds, and whether you were enrolled at least half time or were a graduate student.

In most cases, you should receive Form 1098-T from the eligible educational institution by Jan. 31. If you don’t receive it by the end of January, be sure to contact your school.

Education credits

An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American Opportunity Tax Credit and the Lifetime Learning Credit.

To claim an education credit, you must file Form 1040 or 1040A with Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). See Instructions for Student on Page 4 of Form 1098-T for more details.

To see if you qualify for a credit, and for help in calculating the amount of your credit, see Pub. 970, Tax Benefits for Education; Form 8863, Education Credits; and the Form 1040 or 1040A instructions. You can also use the IRS’s Interactive Tax Assistant tool to help determine if you are eligible for these benefits.

Don’t overlook these important credits. Find out more about education credits by visiting the Education Credits Web page on IRS.gov.

Friday, August 29, 2014

Reminder about Forms W-4



An accurate Form W-4 is important. Tax Topic 753 has information to help employees and employers.

Notice about Backup Withholding for Form 1099-K available


Notice 1430

Don’t Get Caught in Backup Withholding
Information about Your Form 1099-K

Why you are receiving this notice

Your name and taxpayer identification number (TIN) submitted on Form 1099-K, Payment Card and Third Party Network Transactions, by a payment card processor or third-party settlement organization does not match IRS records. If a payment card processor or third-party settlement organization submits a Form 1099-K for tax year 2013 with an incorrect TIN or name for you, the payments you receive for your payment card or third party network transactions will be subject to backup withholding. This means the payment card processor or third-party settlement organization will be required to withhold 28% from each payment to you beginning as early as September 2014.


If you operate as a partnership or subchapter S corporation, any monies withheld due to an incorrect name or TIN can only be claimed by the partners and shareholders on their individual income tax returns for their shares of the withheld amounts. The monies are not refundable to the partnership or subchapter S corporation.


What you need to do


You need to immediately contact your payment card processor or third-party settlement organization. Verify that the name and TIN the payment card processor or third-party settlement organization has in its records matches the exact name and TIN on your income tax return.


For additional information on Form 1099-K reporting and backup withholding, visit our website at www.irs.gov and enter keywords, “Third Party Reporting Center” or “Backup Withholding.”