Pyrrhic victory on health reform?
Washington Times op-ed. Leonard Burman discusses the politics of the health care reform debate.
DCAA audit requirements
August 31, 2009 by Tax Blog
Filed under Questions & Answers
Today TaxMama hears from Virginia in Maryland who wants to know. “Can QuickBooks be used for government contractors who need to meet DCAA audit requirements? If so, is there anything specific that needs to be done when setting up the chart of accounts to make it DCAA compliant?”
Dear Virginia,
That’s an excellent question.
I don’t know the answer.
No doubt, you should be able to use QuickBooks.
You should be able to find the answer if you read through the link relating to your, or your client’s, business here in the Defense Contract Audit Agency audit manual.
http://www.dcaa.mil/cam.htm
Or you might find some guidance here on their main site:
http://www.dcaa.mil/
Of course, you could always call them directly, or e-mail them to get a direct answer.
Incidentally, the SBA might be able to help, too:
http://www.federaltimes.com/index.php?S=4241031
Good luck!
And remember, you can find answers to all kinds of questions about government contract audits and other tax issues, free. Where? Where else? At TaxMama.com.
[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- Defense Contract Audit Agency :: audit manual
- Defense Contract Audit Agency website ::
- The Federal Times :: article about SBA helping small businesses get government contracts
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Federal Rules Regarding Treatment Of Workers As Employees Or As Independent Contractors
In previous blog posts, I addressed California’s rules regarding a worker’s status as an independent contractor versus an employee. Click here and here to revisit those posts.
The Internal Revenue Service recently posted tips regarding federal rules that apply to a worker’s status. As an owner of a small business, whether you hire workers as independent contractors or as employees will impact the amount of taxes you withhold from their paychecks and how much taxes you pay. Additionally, it will affect what documents and information they must provide to you, what tax documents you must give to them and how much additional cost your business must bear.
Here are the top ten things every business owner should know about hiring people as independent contractors versus hiring them as employees.
Automatic Enrollment in IRAs: Costs and Benefits
To encourage better retirement saving, President Obama recently proposed policies that would require firms without retirement savings plans to automatically enroll their workers in IRAs. In addition, the president proposed an expansion of the Saver’s Credit to be fully refundable and available to middle-income taxpayers. This report estimates the revenue costs and distributional effects of the president’s proposals.
Filing Taxes Online Provides Speedy Refunds
Filing taxes online is the safe and sane way to get all complicated tax forms created in a professional manner and filed without any risks involved. What some taxpayers fail to realize today is that their tax forms often contain everything necessary to aide a bad person in taking their identity. Each year at tax time, the IRS alerts taxpayers to many schemes in progress with goals of procuring important information or refunds illegally.
While filing taxes online, users are protected from their important information falling into the wrong hands through an encryption process that makes their information impossible to read by anybody except the IRS with the computerized key to the complicated codes being used. Completed forms can often leave the computer that they are on and arrive at the IRS almost instantly through the use of telephone line transportation.
As taxpayer information travels through the telephone line in a format that is encrypted, it comes out on the other end inside of an IRS computer. When tax forms are mailed instead filing taxes online, the mail arrives in a paper format that IRS employees must read and type into the IRS computer system before it can be processed. When humans are typing, there is a possibility of mistakes being made by accident.
The computerized tax preparation sites with their software available for filing taxes online ensure the taxpayers safety while allowing for an error-free tax experience. All possible credits, tax reductions, and refund options are explored with the taxpayer filling out the forms through a series of questions. The questions are all asked in an easy to answer format that double-checks all arithmetic and numbers for accuracy.
Nobody enjoys filing taxes with the IRS books of instructions and selection of forms a complicated mess to get through for people who are trying to do everything offline. Online tax preparation is a fool-proof way of achieving a professionally prepared tax form without the brain damage involved. Most of the online tax preparation programs will allow users to answer their preparation questions over hours or weeks as they wish.
Refunds that result from filing taxes online can be sent directly into a taxpayer’s bank account quickly because man-hours are cut back at the IRS when the forms go directly into the computer system. The direct deposit refunds protect the taxpayer from having their money stolen out of the mail systems, as happens each year to many people. Filing taxes online keeps users safe and provides a speedier method of receiving refund money.
Ask TaxMama Issue 518 - IRS Virtually
August 28, 2009 by Tax Blog
Filed under Questions & Answers
Dear Family,
This will be a short issue, since your TaxMama® is on vacation. The EA Exam students voted to take two weeks off, until after Labor Day, before starting to study Part III. Although the class isn’t really a democracy, Rick and I jumped on the opportunity, since we haven’t had a moment to ourselves all summer.
We took off on another of our famous camping adventures…and ended up someplace really terrific, in the Angeles National Forest. (Have you been following the fire reports over the past couple of days, where they are evacuating hundreds of homes in the area? Fortunately, we were nowhere near the area where the fire started. Not our fault. Whew!) We had a great time, until a young couple with a new, used car needed help getting their battery recharged. Yup. It needed more than just a jump start. It needed a full re-charge. Of course, Rick was up to the task, with his portable generator and all his nifty tools. We fixed them up so they could stay the night and still have their car start the next day to go home.
As you know, no good deed goes unpunished. Yup. You guessed it. Rick’s recharging caused a power surge and blew out lots of fuses. (No problem. Rick has lots of spares.) We didn’t know what else was blown until after we were…uh huh…you got it…we were towed home. Then, Rick identified the problem in no time. And after doing some research and shopping, had the RV all fixed up yesterday.
Along the way, we met Ashley and Mark (did I get the names right? You know I am terrible with names – and we didn’t really exchange contact information), a couple of teenagers about to start college next week. They spent most of their afternoon and evening helping us. Naturally, this camping area did not have cell phone reception, or a payphone (though there was a phone booth worthy of Superman). So Ashley and Mark drove me down to restaurant (about 11 miles away) where there was a payphone, and were willing to stay with me until AAA showed up. (Who said teens aren’t terrific these days?) I sent them back to their campsite. But I did accept their offer to return. Frankly, if I hadn’t come back with the tow truck after two hours, that seemed a good time to return. They were back, right on time. Those teens stayed with us and helped us out, taking precious time out of their vacation to make sure a couple of strangers were safe and all right. They are starting college next week – Ashley in Santa Monica; Mark in Pepperdine. Life is just opening up for this charming couple. And they are starting out so well. My thanks and best wishes to you both!
Speaking of cool people…IRS is getting very creative and hip about getting their message out to you, the taxpaying public. Did you know that IRS now has a series of videos on YouTube? They do. Really! In fact, IRS says that these videos will be in English, Spanish, American Sign Language and other languages. You can also find IRS on iTunes. How cool is that?
Want cooler? IRS has a virtual presence on Second Life. They are using it for recruiting and other functions. IRS even has a virtual racetrack on the site. Talk about getting really avant-garde!
For this week’s AccountingWeb.com blog, I was on vacation and haven’t written anything new. But I am wondering, as are other bloggers, how do we get people to respond to our AccountingWeb.com blogs? Although we write to bring your attention to issues, or procedures, or law changes, we also want you to tell us what you think, or what you’ve learned. The field of taxes is vast. Regardless of how much experience we have, or all our attempts to stay informed, there’s just too much for any one person to know. So we’d love to hear from you, too.
TaxMama’s AccountingWeb.com Blog
In IRS News this week you learn what to do if you get an IRS notice.
http://taxquips.com/index.php?cat=IRSNews
In today’s Money Funny – we meet a blonde IRS auditor.
http://taxquips.com/index.php?cat=MoneyFunnies
TaxQuips this week was dark, since I was on vacation. But you’re certainly free to peruse and comment on previous TaxQuips.
http://taxquips.com/index.php?cat=TaxQuips
As always, we love your feedback, opinions and ideas.
You are what makes all this fun – and interesting!
Please use the Comments link online.
http://taxquips.com/index.php?id=1324
TaxNerd gear makes a bold statement during tax season.
Shop at www.taxnerd.net or http://www.zazzle.com/taxmama*
Hugs from your favorite TaxNerd,
Eva Rosenberg, EA
Your TaxMama is watching…out for you.
www.TaxMama.com
www.TaxQuips.com
www.IRSExams.com
www.taxnerd.net
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TAX CALENDAR 2009
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09.15.2009 Employers Make monthly Payroll tax deposit
09.15.2009 Corporate & Partnership Returns Due- FINAL DEADLINE
09.15.2009 3rd 2009 Estimated Payment – all entities Due
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Download the book here (just use your e-mail address in this e-mail, so you can avoid subscribing to
my newsletters twice.)
Feel free to share this link with your friends, your clients and your mailing list.
http://www.simpleology.com/p/blogging/taxmama/ATM440
Explore Simpleology 101 - It includes set of step-by-step daily missions for you to follow to get more focused and become more successful this year.
You can check them off as you go.
Audio and Video Training
Is 2009 the year you learn to put use audio and video
on your websites or online? Here are some excellent
no-cost training opportunities. All you need is time.
Join David at AudioAcrobat.com
Join SuccessNet.org for free and learn the 10 Essential Success Keys You Need to Know for You
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ThinkGeek has some wonderful, unusual stuff, including something very like a Dick Tracy watch – a touchscreen cell phone PDA watch. They also have the USB Memory watch that holds 2GB of data.
Open your own Zazzle account and create personalized
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You don’t need to use my designs – use your own photos and artwork.
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Customised Personal or Businesswear – 3 Choices:
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It costs much less than you think to be creative, and to develop your own look and identity.
Use your art or others – and customize it
Zazzle your Imagination. Are you a TaxNerd?
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Create your own customized Zazzle Apparel, bags or more.
Get volume discounts on orders of 2 or more.
Get extra discounts for yourself and friends after you order.
Stuff for business, travel and fun
Cafe Press is the home of TaxMama’s shops
http://www.cafepress.com/taxmama
But you can upload your own art and graphics and unify your family – even your pets.
http://www.cafepress.com/
Get extra discounts for yourself and friends after you order.
WOW DEAL! Embroidery
Wouldn’t you love to get your logo or family crest, or picture or whatever, EMBROIDERED on hats and T-Shirts?
Well, it costs a heck of a lot less than you think.
And there’s always a sale!
At the Queensboro Shirt Company
(They have a lot more than shirts – and all sizes)
They do a gorgeous job.
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- Money Funnies & Inspiration :: Meet the blonde IRS Auditor
- IRS News :: What to do if you get a notice, and IRS's cool online presence
- Prepare your own tax return :: $19.95 includes IRS, State, e-filing and tech support
- The 100% Home-Based Business Tax Solution :: The evolving e-book and Tax MiniMiser
- Pass the IRS Special Enrollment Examination :: Becoming an EA is more than a job, it's a recession-proof career
- iTaxMama - ipod Application :: Download your own TaxMama Tax Calendar
- Follow TaxMama on Twitter :: updates and tips you get nowhere else
- Put a TaxMama Widget on your site or phone ::
TAX AGENCIES TRACING TAX DODGERS ON LINE
It has been released that many State tax agencies are using social media and other on line social sites to successfully track down individuals who owe taxes and have failed to pay or file their returns. Though the IRS may not be doing this yet (they are often slow), the success various States have had with this technique will no doubt result in the IRS doing the same in the future. The Wall Street Journal Article on the techniques used can be found here.
Eight Things to Know If You Receive an IRS Notice
August 28, 2009 by Tax Blog
Filed under Questions & Answers
Courtesy of the IRS
Every year, the IRS sends millions of letters and notices to taxpayers. Many taxpayers will receive this correspondence during the late summer and fall. Here are eight things every taxpayer should know about IRS notices – just in case one shows up in your mailbox.
1. Don’t panic. Many of these letters can be dealt with simply and painlessly.
2. There are number of reasons the IRS sends notices to taxpayers. The notice may request payment of taxes, notify you of a change to your account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return.
3. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.
4. If you receive a correction notice, you should review the correspondence and compare it with the information on your return.
5. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.
6. If you do not agree with the correction the IRS made, it is important that you respond as requested. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call to help us respond to your inquiry.
8. It’s important that you keep copies of any correspondence with your records.
For more information about IRS notices and bills, see Publication 594, The IRS Collection Process. Information about penalties and interest charges is available in Publication 17, Your Federal Income Tax for Individuals. Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
[TaxMama® note: You will find more detailed information in Chapter 13 of Small Business Taxes Made Easy.]
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- IRS Publication 954 :: The IRS Collection Process
- IRS Publication 17 :: Your Federal Income Tax for Individuals
- The REAL IRS site ::
- Small Business Taxes Made Easy :: Chapter 13 covers IRS Notices, Audits, and Appeals
Taxpayer Identity Issues
August 28, 2009 by Tax Blog
Filed under Questions & Answers
A blonde female IRS auditor drops in on the business of a blonde female. The IRS auditor asks the blonde businessowner for some ID. The blonde searches through her purse in vain. Finally she asks, “What does it look like?”
The blonde IRS auditor tells her, “It’s that thing with your picture on it.”
The blonde businessowner searches for a few more seconds, pulls out her compact, opens it, and sure enough, she sees her picture. She hands the compact to the blonde IRS auditor.
The blonde IRS auditor looks at the compact for a few seconds, then rolls her eyes, hands the compact back to the blonde driver and says,”If you had told me you were an IRS agent when I first came in, we could have avoided this whole thing.”
Courtesy of Courtesy of Blakely Sanford, EA in San Diego
(with a little re-writing by TaxMama® )
Please remember to send us your humor.
Clean jokes preferred.
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- Money Funnies at TaxMama.com :: More Money Funnies at TaxMama.com
Taxing Adjusted Gross Income Instead of Taxable Income
The House leadership has proposed to finance health care reform with a surtax on adjusted gross income (AGI) of high-income individuals, while the president’s budget would increase the two top marginal tax rates on taxable income. Income taxed at statutory marginal rates is 58 percent of AGI for all taxpayers but only 46 percent of AGI for taxpayers with income over $1 million. While personal exemptions and deductions account for most of the difference between the two tax bases for the population as a whole, capital gains and qualified dividends make up most of the difference for very high income taxpayers.