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Yea!!! Tax Credits for Hurricane Irma Employers

By the way…I think there are more credits and provisions for individuals to follow; but if you are an employer with employees, continue reading…
A federal tax credit is now available to employers affected by Hurricane Harvey, Irma or Maria.
The Employee Retention Tax Credit can be utilized by businesses left inoperative by the hurricanes’ devastation.
The credit allows employers to claim a tax credit equal to 40% of up to $6,000 in wages paid to an employee if their location of employment was in an applicable disaster area. The credit also applies to wages paid during the time that the business remained inoperative.
The credit is part of the Disaster Tax Relief and Airport and Airway Extension Act of 2017, which was signed into law September 29. Eligible areas are those declared hurricane disaster areas by the federal government before September 21, 2017.
READ MORE: Deducting Disaster Losses: 10 Tips Taxpayers Should Know
Businesses that were or remain inoperative during the following time periods may qualify for the Employee Retention Tax Credit:
Hurricane Harvey: August 23, 2017 – January 1, 2018
Hurricane Irma: September 4, 2017 – January 1, 2018
Hurricane Maria: September 16, 2017 – January 1, 2018

The maximum credit per employee works out to be $2,400 ($6,000 times 40%). Here’s an example of how it could work:
A business is an eligible employer in the Hurricane Harvey disaster zone. The business has two eligible employees, A and B, to whom it paid qualified wages of $4,000 and $7,000 respectively. The business is entitled to a total credit of $4,000; $1,600 for the wages paid to A ($4,000 × 40%) and $2,400 for $6,000 of the wages paid to B ($6,000 × 40%).
Please contact us with any questions about how to obtain the credit.

Hurricane IRMA Relief

If you go to the website for your mortgage and car payments-and even other monthly payments, you might be able to get at least a 1 month deferral because of IRMA.

IRMA IRS S-Corp, P-Ship and Payroll extensions

The Internal Revenue Service (IRS) has announced significant tax relief for victims of Hurricane Irma. Those who have been affected by the storm have until January 31, 2018, to file certain individual and business tax returns and make certain tax payments. This includes an additional filing extension for taxpayers with valid extensions through October 16 and businesses with extensions through September 15. This is the same relief granted to the victims of Hurricane Harvey.
Currently, the IRS said that affected taxpayers in the islands of St. John and St. Thomas; the municipalities of Culebra and Vieques in Puerto Rico; and those in Broward, Charlotte, Clay, Collier, Duval, Flagler, Hillsborough, Lee, Manatee, Miami-Dade, Monroe, Palm Beach, Pinellas, Putnam, Sarasota and St. Johns Counties in Florida would receive this and other special tax relief. Locations may be added in coming days, based on damage assessments by the Federal Emergency Management Agency (FEMA). I’ll update the list as information is made available

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IRS Problems

Save sea turles-they are nesting now along the Florida coastline

Watch where you walk! The nests are usually roped off

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Independent contractor vs. an Employee

The IRS is cracking down on treating employees as independent contractors. While, as an employer, it may be cost beneficial to treat all as IC’s here are some guidelines, as published by the IRS, as to whether or not you must treat these people as employees and share the burden of self-employment tax as well as florida unemployment taxes…

IRS Summertime Tax Tip 2010-20

 

As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.

Here are seven things every business owner should know about hiring people as independent contractors versus hiring them as employees.

  1. The IRS uses three characteristics to determine the relationship between businesses and workers:
    • Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
    • Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.
    • Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
  2. If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
  3. If you can direct or control only the result of the work done — and not the means and methods of accomplishing the result — then your workers are probably independent contractors.
  4. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
  5. Workers can avoid higher tax bills and lost benefits if they know their proper status.
  6. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.
  7. You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link.  Additional resources include IRS Publication 15-A, Employer’s Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).

Links:

Publication 15-A, Employer’s Supplemental Tax Guide ( PDF )

Publication 1779, Independent Contractor or Employee ( PDF )

Publication 1976, Do You Qualify for Relief under Section 530? ( PDF  )

Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding ( PDF )

Strange but allowable tax deductions…

Examples of Unusual but Legitimate and Qualified Tax Deductions

Pet moving deduction
1. Are pet moving expenses deductible?
If you lost your job and you are relocating to start a new job, you might know that these expenses are generally tax deductible (you must meet a few requirements). You might not know that the expense of moving your cat, dog, bird, python, or whatever pet you might have from your current or old home to your new home is treated the same as moving your other personal properties.

2. Can clarinet lessons be a deduction?
A parent was able to deduct the expenses for clarinet lessons for her child because she claimed it corrected her child’s overbite. This was based on a 1962 case where an orthodontist argued that playing the clarinet helps correct a child’s overbite.

3. Can babysitter expenses be deducted?
A mother claimed her babysitter expenses as a deduction because she was performing charitable deeds while she was away from her child. This would mean that you pay somebody to look after your child while you work for no pay for a charity. In this case the tax court rejected and overruled an IRS revenue ruling when, despite not having the money go directly to a charity, a parent used the baby sitter expense as a charitable contribution while volunteering for a charity.

4. Are private airplane expenses deductible?
A couple owned and rented out a condo that was a 7 hour drive away from their primary residence. To save time and money, they bought a private airplane and were able to deduct airplane expenses, like fuel and depreciation for business use, for the property management trips to their condo. However, it turned out that the expenses increased the overall loss on the rental condo.

5. Is cat food deductible?
Yes, under certain conditions the cost cat food might be considered a legitimate deductible expense. A junkyard owner bought cat food to attract local stray cats in order to drive away mice and rats. He claimed it as a business expense and it was approved by the IRS. The average house cat will likely not qualify because the cat would need to perform some task associated with the upkeep of a business.

6. Can a swimming pool be a tax deduction?
If you have a medical condition that would improve with a swimming pool exercise regimen, your swimming pool expenses might qualify as a deductible medical expense. That’s what happened in the case of an arthritis patient who was prescribed to swim frequently in order to treat his condition. He installed a swimming pool on his property and deducted the expenses from his taxes. After some investigation, the IRS approved the deduction, but if the pool were used for recreational purposes, it wouldn’t have been approved.

7. Is a sex-change operation a qualified tax deduction?
A man who was diagnosed with gender-identity disorder (he felt he was a woman trapped in a male body) wanted to deduct almost $22,000 in out-of-pocket medical expenses for various surgeries, including hormone therapy, sexual-reassignment surgeries, and breast augmentation, in order to become a woman. Here is what the tax court decided: the hormone therapy and the sex-change operation in the amount of $14,500 was a qualified medical tax deduction. However, the expenses for the breast augmentation was not; it was deemed nondeductible cosmetic surgery by the court.

8. Is quitting smoking a deductible medical expense?
Yes, you might qualify to deduct expenses for smoking cessation programs, nicotine patches, stop-smoking aides, etc.

9. Is the cost of getting in shape deductible?
It is, if your doctor signs off on it, and tells you that your life might be in danger if you don’t start exercising and lose weight. The cost for remedies that help you drop a few pounds, improve your heart rate, or reduce your cholesterol might all be deductible.

10. Can a business trip qualify for a tax deduction?
Any business trip viewed as “ordinary and necessary” to the course of doing business by the IRS is eligible for a deduction. In one case, the owner of a dairy took a trip to Africa to conduct research on wild animals, and successfully claimed it as a business expense because it was relevant to his business.

11. Can lawn care expenses be claimed as a deduction?
Yes, they might, but your house will have to be your workplace and the state of your lawn would have to have some relevance to the performance of your business. A sole proprietor successfully deducted lawn care expenses as business expenses because he met his clients in his home office.

12. Can the cost of body oil be deducted?
For one bodybuilder, it worked. He claimed a deduction for the cost of body oil that he used in competitions. The IRS didn’t seem to have any problem with this, as it was a business expense.

13. Can you deduct the cost of beer?
If you are a business trying to attract customers, it might be deductible. A deduction was approved when one business deducted the cost of beer it used to attract customers and promote its business as a business expense.

14. Can whaling boat repairs be claimed as a deduction?
Whaling boats need repairs and, since 2004, captains of whaling boats can deduct up to $10,000 for repairs, equipment purchases, and other expenses associated with the business. However, starting a whaling business to claim a deduction will not work for most people, since whaling is banned by the United States government and only Native American tribes are allowed to engage in it.

15. Can the cost of breast implants be deducted?
In 1994, one stripper’s attempt to get more tips led her to undergo breast augmentation surgery. She then proceeded to deduct the expense from her taxes. A tax court judge ruled in favor of the stripper, stating that the implants were a stage prop, and thus a legitimate work expense that can be deducted.

Identity Theft Victim? Here’s what to do

There has been a recent scourge of identity theft cases popping up through the Tax filing system. Usually, the identity thieves use your identity to claim a false refund. I went to the IRS website and found a good article that explains what you should do if you suspect your think your identity might have been stolen- here it is…

“We know identity theft is a frustrating process for victims. We are committed to working with you to resolve your case as quickly as possible.
What is tax-related identity theft?

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund.

Generally, an identity thief will use your SSN to file a false return early in the year. You may be unaware you are a victim until you try to file your taxes and learn one already has been filed using your SSN.

Know the warning signs
Be alert to possible identity theft if you receive an IRS notice or letter that states that:
•More than one tax return was filed using your SSN;
•You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return;
•IRS records indicate you received wages from an employer unknown to you.

Steps to take if you become a victim
•File a report with law enforcement.
•Report identity theft at www.ftc.gov and learn how to respond to it at identitytheft.gov.
•Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records: ◦Equifax, www.Equifax.com, 1-800-525-6285
◦Experian, www.Experian.com, 1-888-397-3742
◦TransUnion, www.TransUnion.com, 1-800-680-7289
•Contact your financial institutions, and close any accounts opened without your permission or tampered with.

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, take these additional steps:
•Respond immediately to any IRS notice; call the number provided
•Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form at IRS.gov, print, then mail or fax according to instructions.
•Continue to pay your taxes and file your tax return, even if you must do so by paper.

If you previously contacted the IRS and did not have a resolution, contact the Identity Protection Specialized Unit at 1-800-908-4490. We have teams available to assist.

How to reduce your risk
•Don’t routinely carry your Social Security card or any document with your SSN on it.
•Don’t give a business your SSN just because they ask – only when absolutely necessary.
•Protect your personal financial information at home and on your computer.
•Check your credit report annually.
•Check your Social Security Administration earnings statement annually.
•Protect your personal computers by using firewalls, anti-spam/virus software, update security patches and change passwords for Internet accounts.
•Don’t give personal information over the phone, through the mail or the Internet unless you have either initiated the contact or are sure you know who is asking.

The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

Report suspicious online or emailed phishing scams to:phishing@irs.gov. For phishing scams by phone, fax or mail, call: 1-800-366-4484. Report IRS impersonation scams to the Treasury Inspector General for Tax Administration’s IRS Impersonation Scams Reporting. ”

Getting out of debt in 5 easy steps

This is a good article I found. Pay special attention to #4. Instead of attempting to settle your highest interest debt first…it may be more psychologically advantageous to first settle smaller debts first… Also, I recommend to all of my clients to check out www.daveramsey.com
This is a great financial resource-…

“Being in debt can be a stressful experience. No matter what your circumstance is, if you signed for a loan, you are obligated to pay it back even if you have a life altering experience like losing a job, getting into an accident, or even if you have increased expenses due to having a child.

Many people try to get out of debt, but life slaps them in the face hard enough that they give up. That doesn’t have to be the case.
Here are 5 simple steps to help you eliminate your debt pronto

1. Make a conscious decision to stop borrowing money
If you want to get out of debt fast, you have to stop using debt to fund your lifestyle. This means no more financing furniture, no more signing up for credit cards, no more test driving brand new cars that you don’t have the cash to pay for. This will help you focus solely on the debt that you currently do have so that you can develop a game plan to pay it off quickly.

2. Establish a starter Emergency Fund of $1000
You might be wondering, ‘Why is having an emergency fund important’? Well, if you don’t have any money in the bank and an emergency does happen, how are you going to pay for it? For most people, credit cards become the funding source for those emergencies. If you are trying to get out of debt then you need to put a buffer between you and debt; that is exactly what an emergency fund does.

3. Create a realistic budget and stick to it
Developing a budget that tracks your income and your expenses is crucial to getting out of debt in a short period of time. It will help you gauge where you are with your finances so that you can move forward toward your goal. It will expose whether you have money left over, which is called a surplus, or if you are in the negative, which is called a deficit. The goal is to increase your surplus and use that money to pay down your debt. Below are two ways that you can do this.

The first way is to earn some extra cash. If you are in a commission-based job then this means that you need to make more sales, which will probably involve having to work more hours. If you are in a salary job and you are limited in the hours that you can work, then you might need to pick up a second job. When my wife and were toward the end of paying off our consumer debt, I was able to get a second job delivering pizzas which gave us the extra income we needed to hit our deadline of 18 months.

The second thing that you can do is trim your expenses. Go over each line item on your budget and ask yourself, ‘how can I make this number smaller?’ It may involve cancelling services that you rarely use like a gym membership, Netflix subscription, etc. It might even involve reducing the amount of times that you eat out at restaurants each month. The amount that you slash depends upon your commitment level to getting out of debt. The more committed you are, the easier it will be for you to give up some of the unnecessary amenities in life. You might not even need to sacrifice much if you can find these items or services for less. Check out Clark’s Free and Cheap List to help you with this process.

4. Organize your debt
This is paramount to mapping out a plan to pay off your debt. There are two approaches that are worth considering. The first is where you list your debts smallest to largest regardless of the interest rate. This is the method that we used to pay off $52,000 in debt in 18 months and it worked great because it helped us build momentum. When we paid off our first debt it put wind in our sails. Even though we had higher interest debts, this gave us something that was very powerful: the belief that we could get out of debt quickly if we stuck to the plan.

The other method is called laddering. This is where you list your debts, starting with the highest interest rate first and end with the debt with the lowest interest rate. This method makes the most mathematical sense, because you will save the most money in interest over time. Regardless of which process you choose, the key is to stick with it.

5. Throw any excess cash at your debt
When we were getting out of debt, there were several times where extra money fell in our laps that we had not factored into our debt elimination originally. We decided to take this cash and use it to tackle our debt. Some good examples would be a tax refund, selling a car, an inheritance, winning a bet, etc. The more cash you can put towards your debt, the faster it will disappear.

Debt doesn’t have to be forever. Develop your financial game plan and start your journey toward being debt-free today.”