Tag Archives: irs

Tax breaks for hiring the jobless

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Employers who hire unemployed workers could get some sweet tax breaks.

A law went into effect March 18 providing incentives for hiring "qualified" jobless workers.

Under the HIRE Act (Hiring Incentives to Restore Employment), employers could get a payroll tax exemption, namely from paying their 6.2 percent share of social security taxes on wages paid to the worker. This applies to wages paid from March 19 through the end of the year.

But wait, there’s more.

For each "qualified" employee a business retains at least a year, the business can also get a general business tax credit up to $1,000. The exact amount is computed based on the wages paid to the employee over a 52-week period.

Of course, the catch is who these "qualified" workers are. According to IRS website, they must start on the job in 2010, but not before Feb. 3.  They must have worked for no more than 40 hours in the 60 days prior to being hired. Employers can’t get the tax breaks for replacing another employee unless that employee quit or was fired for just cause. Oh, and the employer can’t get the tax break for family members hired.

To learn more, check out the IRS’s HIRE Webinar on July 8. To register, visit here.

 

Reprieve for late filers… but hurry!

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The race is on to get those taxes filed by midnight tonight. If you’re a procrastinator and can’t make the deadline or don’t have the money to pay what you owe, don’t just not file. You will face big penalties for not filing, especially for not paying taxes owed.

You can stay out of trouble with the IRS by filing for an extension. That’s Form 4868, Automatic Extension of Time to File, available at www.IRS.gov. It’s free and easy.

But while an extension gives you until Oct. 15 to file, it’s not an extension of time to pay. The meter will be running, beginning today, charging you with interest on taxes owed plus non-payment penalties.

So if you owe taxes, estimate what you owe and pay TODAY. If you can’t pay it all, pay as much as you can. You will be charged 4 percent interest and a late payment penalty on unpaid taxes each month until the tax is paid.

If you owe less than $25,000, the IRS will likely work with you on a payment plan. You can reduce your penalty by setting up a monthly payment plan with Form 9465, Online Payment Agreement application, available at www.IRS.gov.

Are you a target for an IRS audit?

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Nobody wants an IRS audit.

But the IRS is doing more audits these days to feed the shrinking federal coffers. And your chances are much greater than the average working stiff if you own your own business or you receive 1099 income, says Clark Howard, this biz blogger’s favorite consumer know-it-all.

“You have like a bullseye on your back with the IRS thinking you’re not going to report everything, or you have some side income even though you have a regular job,” Howard said recently on his Headline News network program.

So what can you do to protect yourself?

“Keep meticulous records,” Howard says. “Records are what protect you in the event you get hit with an audit.”

He says keep a separate bank account for your business and label deductions clearly. And stay clear of “miscellaneous” expenses which auditors tend to question.

If you do get audited, he says stick to the facts. If the IRS is after a lot of money from you, hire a professional to deal with them for you.

“You don’t communicate with the IRS in that kind of circumstance,” he says. 
 

Ranks of IRS paper filers shrinking fast

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If you’re still doing your taxes the old fashioned way — with paper returns –  you’re part of a shrinking minority. And if the growing trend of electronic converts continues, old school paper filing could soon go the way of Betamax, eight-track and analog TV.

Three of four Minnesotans filed electronically last year, according to the IRS. And chances are that even more will leave paper behind this year.

Since the IRS made electronic filing available 20 years ago with its electronic tax return delivery service, the number of Americans filing electronically has grown each year.

The benefits, according to the IRS, include:

–A quick tax refund (as soon as 10 days using direct deposit).

–Fewer mistakes (1 percent with electronic returns compared to nearly 20 percent with paper returns).

–Those who owe taxes can file now and pay later (by April 15).

–E-filers also get an e-mail confirmation that their returns have been received and accepted.

Electronic filing can be done in three ways: with IRS’s Free File (accessed through www.irs.gov), with tax preparation software and by a professional tax preparer.

 

Need a job? The IRS is hiring.

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If you can’t beat the taxmen, maybe it’s time to join them. The following notice was sent to our newsroom this morning…

IRS Recruiting Hundreds of Revenue Officers Nationwide; Positions Available in Duluth

ST. PAUL — The Internal Revenue Service (IRS) is seeking qualified Revenue Officer candidates for positions in the Duluth IRS Office. Applicants must apply by Sept. 10. See www.usajobs.opm.gov for more information on how to apply.

 

Interested applicants must be a United States citizen and have a bachelor’s degree (with superior academic achievement – 3.0 or higher overall or 3.5 or higher in major), equivalent work experience or a combination of education and related work experience. Examples of related work experience include:

  • Reviewing individual/business financial condition, ability to pay debt
  • Evaluating assets, equity and credit
  • Collecting delinquent payments
  • Establishing or operating a small business and/or administering a budget
  • Counseling individuals on tax filing and paying obligations
  •  Dealing with various legal instruments (i.e.: leases, wills, deeds and trusts)

 

Revenue officers are trained in both tax law and collection techniques necessary for the collection of delinquent taxes and delinquent tax returns. Duties include conducting research, interviews, investigations and analysis of financial information for assigned cases, often at the taxpayer’s home or business. Revenue officers counsel taxpayers on their tax obligations and determine how they can best resolve their delinquencies, while also ensuring that their rights are protected.

Starting salary varies by geographic area based on costs of living adjustments and range from $38,117 to $49,533.

Individuals interested in a challenging career with excellent benefits, training and strong growth potential are encouraged to apply. Get the details at http://www.jobs.irs.gov/home.html. Application information is available at www.usajobs.opm.gov . The IRS is an equal opportunity employer.

 

IRS warns homebuyers of fraud

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The Internal Revenue Service has warned first-time homebuyers of possible fraud schemes while using the federal tax credit program.

If you’ve fallen victim to fraud in this nature, please post a comment here or e-mail agreder@duluthnews.com. (Please include contact information.)

Here is today’s IRS news release:

ST. PAUL, MINN. — The Internal Revenue Service today announced its first successful prosecution related to fraud involving the first-time homebuyer credit and warned taxpayers to beware of this type of scheme.

On Thursday July 23, 2009, a Jacksonville, Fla.-tax preparer, James Otto Price III, pled guilty to falsely claiming the first-time homebuyer credit on a client’s federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both.

To date, the IRS has executed seven search warrants and currently has 24 open criminal investigations in pursuit of potential instances of fraud involving the credit. The agency has a number of sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.

“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”

Whether a taxpayer prepares his or her own return or uses the services of a paid preparer, it is the taxpayer who is ultimately responsible for the accuracy of the return. Fraudulent returns may result not only in the required payment of back taxes but also in penalties and interest.

First-Time Homebuyer Credit

The First-Time Homebuyer Credit, originally passed in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser, however, must qualify as a first-time homebuyer, which for purposes of this credit means someone who has not owned a primary residence in the past three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse. The home purchase must close before Dec. 1, 2009, to qualify, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home.

Different rules apply for homes bought in 2008.

Full details and instructions are available on the official IRS Web site, IRS.gov.