Numerous reports of scammers sending fraudulent CP2000 Notices for tax-year 2015 have been received by the IRS, resulting in an investigation by the Treasury Inspector General for Tax Administration.
The notice relates to the Affordable Care Act (ACA) and requests information regarding 2014 coverage. It also includes a request for payment of unpaid taxes.
When you decide to start a business, one of the most important decisions you’ll need to make is choosing the right business entity. It’s a decision that impacts many things–from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face.
Forms of Business
The most common forms of business are Sole Proprietorships, Partnerships, Limited Liability Companies (LLCs), and Corporations (C-Corporations). Federal tax law also recognizes another business form called the S-Corporation. While state law controls the formation of your business, federal tax law controls how your business is taxed.
Every business should keep their books updated on a regular basis. However, many business owners do not have enough time to actually keep their books current. Instead, they wait until the end of the year to pull their records together to give to their tax accountant. This is a mistake. It is essential that businesses update their books at least monthly. There are several reasons for keeping the company books updated throughout the year.
Whether you’re new to mutual funds or a seasoned investor who wants to learn more, these tips will help you avoid the tax bite on mutual fund investments.
First, you need to understand how distributions from mutual funds are taxed.
Tax law generally treats mutual fund shareholders as if they directly owned a proportionate share of the fund’s portfolio of securities and you must report as income any mutual fund distributions, whether or not they are reinvested. Thus, all dividends and interest from securities in the portfolio, as well as any capital gains from the sales of securities, are taxed to the shareholders.
As an active trader, you quite rightly want to reduce the amount of tax you owe on your profits to the legal minimum. At first thought, you might consider trading from a traditional or Roth IRA to shelter your profits. In a traditional IRA, your contributions are tax-deductible and you don’t have to pay taxes until you withdraw the money. You can’t deduct Roth IRA contributions but you can withdraw your money tax-free if you follow the rules. Obviously, your record keeping for tax reporting is greatly simplified using an IRA, since you don’t declare profits and losses. However, further investigation reveals that a 401K is a much better vehicle to tax shelter your trading profits. Here’s why.
Filing a past due return may not be as difficult as you think.
Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. It is important, however, to know that full payment of taxes upfront saves you money.
Looking to save money on your taxes this year? It’s never too early to start planning ahead using these proven tax planning strategies.
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