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ATABS TAX SCHOOL

I don't know of a government that does not tax its citizens.  Many people like to debate about who should be paying and how much, alas that is not the concern of the tax preparer.

The tax preparer is only concerned with making sure you deduct what it cost you to make your money...

For you GAMBLERS...

Do you enjoy wagering at casinos and participating in other games of chance? The IRS requires you to pay tax on your fair share of winnings as reported by the "house."

Alert: The IRS has issued new final reporting regulations that address the rules for reporting payments from bingo, keno and slot machine winnings. (IRS Reg. 1.6041-10, 12/29/16)

Specifically, the IRS simplified and updated existing rules for providing required information.

Here's the whole story: For starters, you must pay tax on gambling winnings, but you can offset some of the tax by substantiating losses up to the amount of the winnings. To keep track of winning amounts, the IRS generally requires reporting for $600 or more in a year, but prior regulations established higher amounts of $1,200 for bingo games and slot machines and $1,500 from keno. These payments are reported on Form W-2G, Certain Gambling Winnings.

Among other requirements, Form W-2G must include the name, address and taxpayer identification number of the recipient and a general description of two forms of identification used to verify this information.

Following up on proposed regulations issued in 2015, the new final regs contain the following clarifications:

  • Reportable winnings for bingo means winnings of $1,200 or more from one bingo game without reduction for the amount wagered. All winnings received from all wagers made during one bingo game are combined.
  • Reportable winnings for keno means winnings of $1,500 or more from one keno game reduced by the amount wagered on the same keno game. All winnings received from all wagers made during one keno game are combined.
  • Reportable winnings for slot machines means winnings of $1,200 or more from one slot machine play without reduction for the amount wagered.

Tip: The new final regs are generally effective for gambling winnings from bingo, keno and slot machines reported after 2016.

 

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Copyright 2017 Business Management Daily, a division of Capitol Information Group, Inc. All rights reserved.

FYI AND FOR THOSE WHO HAVE IT "TWISTED"

Unfortunately, many people mistakenly believe all CPAs do Tax Preparation when this is not the case.  CPAs have their work cut out for them keeping up with income and expenditures for businesses and do not specialize in tax law nor tax preparation!  Some DO prepare, but do not expect them to be better at it than seasoned tax preparers.  If you are not incorporated, nor have publicly traded stock, you probably don't need a CPA.  Corporations submitting "audited books" are REQUIRED to have them signed by a CPA.   Sole proprietors will fare better and cheaper with a Tax Pro.  Many CPA firms have Tax Pros working for them...

What does THIS STATEMENT Presuppose?

When long-term disability premiums (LTD) are paid with pre-tax dollars, the monthly disability benefit becomes taxable income.

The BENEFIT should FAR EXCEED the amount paid in PREMIUMS.  Taxing the benefit instead of the amount paid appears greedy.  The premiums paid in advance of the retirement period is money being used by the Insurer immediately and possibly long term.

Don't they (The Insurer) have to pay taxes on that money as INCOME?  How many times is the Government trying to get paid on that money?

Ok, so the money having been made by you and spent on insurance, but "not counted" for tax purposes is money the Government loses.  It is also a lost deduction because you are not supposed to claim it as an expense although it was.

I wonder which is greater, the loss of the tax to them, or the deduction to you annually?

So to make up for the loss of the amount of tax on that little money, they will tax ALL THE MONEY IN THE BENEFIT when you start getting it!  That just seems over the top to me. IJS

Time Running Out to Claim $1 Billion in Tax Refunds from 2013

Taxpayers who did not file a tax return for 2013 may be one of the nearly 1 million who may be due a refund from that year. Taxpayers must claim their part of almost $1 billion by this year’s April 18 tax deadline. To claim a refund, taxpayers must file a 2013 federal income tax return. Here are some facts about unclaimed refunds:

The unclaimed refunds apply to people who did not file a federal income tax return for 2013. The IRS estimates that half the potential refunds are more than $763.
Some people, such as students and part-time workers, may not have filed because they had too little income to require them to file a tax return. They may have a refund waiting if they had taxes withheld from their wages or made quarterly estimated payments. A refund could also apply if they qualify for certain tax credits, such as the Earned Income Tax Credit.
The law generally provides a three-year window to claim a tax refund. For 2013 returns, the window closes on April 18, 2017.
The law requires that taxpayers properly address, mail and postmark their tax returns by April 18, 2017, to claim their refund.
After three years, unclaimed refunds become property of the U.S. Treasury. There is no penalty for filing a late return if taxpayers are due a refund.
The IRS may hold 2013 refunds if taxpayers have not filed tax returns for 2014 and 2015. The U.S. Treasury will apply the refund to any federal or state tax owed. Refunds may also be held to offset unpaid child support or past due federal debts such as student loans.
Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for prior years should ask for copies from employers, banks or other payers. Taxpayers unable to get these copies can request a wage and income transcript either online or by mail. Taxpayers can also file Form 4506-T to get a transcript.
The three-year window also usually applies to a refund from an amended return. In general, you must file Form 1040X, Amended U.S. Individual Income Tax Return, within three years from the date you filed your original tax return. You can also file it within two years from the date you paid the tax, if that date is later than the three-year rule. That means the deadline for most people to amend their 2013 tax return and claim a refund will expire on April 18, 2017.

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ANYONE CAN BE AUDITED

Don’t be too quick to blame your preparer for your return being audited.  Certain types of returns are randomly audited because they contain income and or expenses that have no real “paper trail” (w2/1099, agency-recorded events, etc.) and may need to be verified.  This is true especially if these returns include refundable credits (EIC, Tuition, etc.).