Wednesday, February 9, 2011
CONGRATULATIONS
We are very excited to announce that we had 12 clients in the Salon Today's Top 200 for 2011. Our team is proud to be associated with so many wonderful clients – those that won and those who never applied. Congrats to each and every winner!!!
Tuesday, February 8, 2011
WHEN WILL THE IRS BE PROCESSING RETURNS?
Q. Is the 1040- Schedule A problem still causing a delay in filing the long form for 2010? When can we expect a resolution?
A. Maybe it is a coincidence but the IRS seems to be giving us a Valentine's Day present. They have announced that their programs will be up and running and that they will be processing returns on February 14th. And people say that the IRS does not have a heart.
Larry Kopsa CPA
A. Maybe it is a coincidence but the IRS seems to be giving us a Valentine's Day present. They have announced that their programs will be up and running and that they will be processing returns on February 14th. And people say that the IRS does not have a heart.
Larry Kopsa CPA
Obama budget plan proposes an increase in payroll taxes
States would have more tools to collect additional payroll taxes from businesses under President Barack Obama's budget proposal. It would raise the level of wages on which companies must pay unemployment taxes to $15,000 from $7,000. This could potentially double the amount you are paying in state unemployment taxes.
Here is the latest from the Wall Street Journal.
http://r.smartbrief.com/resp/AXhgvscgyzgAdZnwajaoyAalBuHh?format=standard
Here is the latest from the Wall Street Journal.
http://r.smartbrief.com/resp/AXhgvscgyzgAdZnwajaoyAalBuHh?format=standard
Saturday, February 5, 2011
QUESTION ON 1099 ON RENTS RECEIVED AND CONTRACT WORK ON RENTALS
Q. Hi Larry, Hope things are going well for you this tax season. After reading some of your information I need to clarify some information. Do we need to give our renters 1099’s and do I need to give one to the guy that did some remodeling on our rental?
A. You do not need to give your renters a 1099. As far as the contractor that did the remodeling on your rentals you do not need to give that person a 1099 for 2010.
But watch out, this changes for 2011. In 2011 landlords/lady’s will need to give a 1099 for work done on rentals so keep track. Remember it is $600 for the entire year so, for example if someone does repairs of $200 in February and $500 in November then you will be required to give them a 1099.
There is some controversy in Washington about the 1099 requirements in Obama Care but that does not affect this requirement. In addition Congress just increased the penalty to $295 for each 1099 not prepared.
Let me know if you have any other questions. It is a pleasure serving you.
Larry Kopsa CPA
A. You do not need to give your renters a 1099. As far as the contractor that did the remodeling on your rentals you do not need to give that person a 1099 for 2010.
But watch out, this changes for 2011. In 2011 landlords/lady’s will need to give a 1099 for work done on rentals so keep track. Remember it is $600 for the entire year so, for example if someone does repairs of $200 in February and $500 in November then you will be required to give them a 1099.
There is some controversy in Washington about the 1099 requirements in Obama Care but that does not affect this requirement. In addition Congress just increased the penalty to $295 for each 1099 not prepared.
Let me know if you have any other questions. It is a pleasure serving you.
Larry Kopsa CPA
QUESTION ON GAMBLING WINNINGS AND DEDUCTIONS
Q. I filed the 1040 for 2009 and had gambling winnings of $2500.00 but I lost that much and more so I did not put the winning on my return. Now I get a notice from IRS wanting $625.00. I did get a w-2g and I filed the short form, no itemized deductions. Do I owe the IRS since I lost more than I won?
A. Bad news. It sounds like you owe the money. Unfortunately, while you must claim all gambling winnings on your return, you can only deduct your losses if you itemize. So, if you’re not filing a Schedule A, you cannot deduct your gambling losses. For 2009, the standard deduction is $5700 for an individual taxpayer and $11,400 for married.
“Casual gamblers” (in other words, nonprofessional gamblers) must report winnings on line 21 (other income) of a form 1040.
There are some additional rules with respect to gambling losses. You must be able to document your losses by type of loss, date, name and location of the gambling establishment and amount. You will need records of your losses. In addition, you cannot deduct more in losses than you report in winnings; even though you stated you lost more than you earned, your actual deduction is limited to the smaller of the two.
More bad news… you can most likely expect a notice from the state wanting their share.
Larry Kopsa CPA
A. Bad news. It sounds like you owe the money. Unfortunately, while you must claim all gambling winnings on your return, you can only deduct your losses if you itemize. So, if you’re not filing a Schedule A, you cannot deduct your gambling losses. For 2009, the standard deduction is $5700 for an individual taxpayer and $11,400 for married.
“Casual gamblers” (in other words, nonprofessional gamblers) must report winnings on line 21 (other income) of a form 1040.
There are some additional rules with respect to gambling losses. You must be able to document your losses by type of loss, date, name and location of the gambling establishment and amount. You will need records of your losses. In addition, you cannot deduct more in losses than you report in winnings; even though you stated you lost more than you earned, your actual deduction is limited to the smaller of the two.
More bad news… you can most likely expect a notice from the state wanting their share.
Larry Kopsa CPA
Friday, February 4, 2011
INCOME TAXES - IT IS NOT AS IT SEEMS
Below is a link to a summary of how income taxes serves to redistribute wealth and the common misconception that lower tax rates help the wealthy. I thought that you might find interesting.
Thursday, February 3, 2011
HOW TO GET A COPY OF YOUR PAST RETURNS FROM THE IRS
Q. I lost my old tax returns and now I need them to give to the bank. Is there anyway that the IRS keeps old copies that I can get?
Ralph
A. It is a good idea to have a filing system that keeps good track of your records. If you go to the Kopsa Otte website at http://www.kopsaotte.com/ we have a record retention guide in the publications section.
As far as your current problem is concerned there are a couple of ways you can get the information that the bank is requesting. The quickest, easiest and cheapest way as to ask for a transcript. This is not a copy of your return, but rather pertinent numbers that are on the return. I would ask the bank if they would accept a transcript. If not, then you will need to request a full copy.
Requesting a Transcript
The IRS does not charge a fee for transcripts, which are presently available for the current tax year as well as the past three tax years. As mentioned above, a tax return transcript shows most line items from your tax return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes made after the return was filed. In addition a transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data – including marital status, type of return filed, adjusted gross income and taxable income.
To request a transcript online, go to http://www.irs.gov/ and look for a online tool called Order A Transcript. To order by phone, call 800-908-9946 and follow the prompts in the recorded message.
To request a 1040, 1040A or 1040EZ tax return through the mail, complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses, partnerships and individuals who need transcript information from other forms or need a tax account transcript must use the Form 4506T, Request for Transcript of Tax Return.
If you order online or by phone, you should receive your tax return transcript within 5 to 10 days from the time the IRS receives your request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail using Form 4506T or Form 4506T-EZ.
Requesting An Actual Copy
If you still need an actual copy of a previously processed tax return, it will cost $57 for each tax year that you order. Complete Form 4506, Request for Copy of Tax Return, and mail it to the IRS address listed on the form for your area. Copies are generally available for the current year as well as the past six years. Allow 60 days for actual copies of your return.
I hope that this helps.
Larry Kopsa CPA
Ralph
A. It is a good idea to have a filing system that keeps good track of your records. If you go to the Kopsa Otte website at http://www.kopsaotte.com/ we have a record retention guide in the publications section.
As far as your current problem is concerned there are a couple of ways you can get the information that the bank is requesting. The quickest, easiest and cheapest way as to ask for a transcript. This is not a copy of your return, but rather pertinent numbers that are on the return. I would ask the bank if they would accept a transcript. If not, then you will need to request a full copy.
Requesting a Transcript
The IRS does not charge a fee for transcripts, which are presently available for the current tax year as well as the past three tax years. As mentioned above, a tax return transcript shows most line items from your tax return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes made after the return was filed. In addition a transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data – including marital status, type of return filed, adjusted gross income and taxable income.
To request a transcript online, go to http://www.irs.gov/ and look for a online tool called Order A Transcript. To order by phone, call 800-908-9946 and follow the prompts in the recorded message.
To request a 1040, 1040A or 1040EZ tax return through the mail, complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses, partnerships and individuals who need transcript information from other forms or need a tax account transcript must use the Form 4506T, Request for Transcript of Tax Return.
If you order online or by phone, you should receive your tax return transcript within 5 to 10 days from the time the IRS receives your request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail using Form 4506T or Form 4506T-EZ.
Requesting An Actual Copy
If you still need an actual copy of a previously processed tax return, it will cost $57 for each tax year that you order. Complete Form 4506, Request for Copy of Tax Return, and mail it to the IRS address listed on the form for your area. Copies are generally available for the current year as well as the past six years. Allow 60 days for actual copies of your return.
I hope that this helps.
Larry Kopsa CPA
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