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Tax Tips and Resources in Twin Cities, MN


 
 

Resources

 
Internal Revenue Service www.irs.gov

MN Department of Revenue http://taxes.state.mn.us

Social Security Administration www.socialsecurity.gov

MN Dept of Employment and Economic Development www.uimn.org

MN Secretary of State www.sos.state.mn.us

MN Attorney General www.ag.state.mn.us

MN New Hire www.mn-newhire.com
 
Public-accountant-in-Purple-Suit---Public-acc
 

Resources


 

Archived Tuesday Tax Tips

 

Unemployment Benefits:

Unemployment compensation is included as income for the year received. The taxpayer should receive a Form 1099G, Certain Government Payments, by January 31. This form shows the amount received and the amount of any federal income tax withheld. You can choose to have federal income tax withheld by using Form W-4V, Voluntary Withholding Request. If you decide not to have withholding you may have to make estimated tax payments during the year. (IRS 2017ARD 047-2) (TTT 7/11/17)
 

MN Political Contribution Refund:

Minnesota voters can claim a political contribution refund on amounts they donated to candidates for state office or to a state political party on or after July 1, 2017. An individual may claim a refund of up to $50 and a married couple who filed a joint political contribution refund application may claim a refund of up to $100. In order to claim the refund, taxpayers must complete Form PCR, Political Contribution Refund, and must include the original Form EP-3, Minnesota Political Contribution Receipt. (MDOR News Release 6/23/17) (TTT 6/27/17 & 7/4/17)
 

Are Social Security Benefits Taxable?

A quick way to find out if you should/may have to pay tax on the income is: Add one-half of the social security income to all other income, including tax-exempt interest. Then compare that amount to the base amount for your filing status. If the total is more than the base amount, some of your benefits may be taxable. Base amounts are: $25,000 Single, head of household, qualifying widow or widower with a dependent child, or married filing separate and lived apart for all of the year; $32,000 Married filing jointly; $0 married filing separate and lived with your spouse at any time during the year. (IRS 2017 ARD 031-1) (TTT 6/20/17)
 

Estimated Tax Payments:

Taxpayers usually will have taxes withheld from their pay if they are an employee. However, if a person doesn’t have taxes withheld, or they don’t have enough tax withheld, they may need to make estimated tax payments. Taxpayers that are self-employed normally have to pay their taxes this way. Taxpayers normally make estimated tax payment four times a year. Dates that apply to most people for 2017 are April 18, June 15, Sept 15, and Jan 16, 2018. Taxpayers can pay online – Direct Pay or by payment vouchers – Form 1040-ES. (IRS 2017ARD 069-38) (TTT 6/13/17)
 

IRS Payment Options:

Taxpayers who owe money have many payment options, including direct pay, electronic funds withdrawal, same-day wire, debit or credit card, and check or money order. Some of these options are free; others require a fee. Taxpayers who missed the filing deadline because they could not pay all of the taxes they owe should consider filing and paying what they can to lessen interest and penalties. (IRS IR-2017-85) (TTT 6/6/17)
 

Basic Tax Tips for the Sharing Economy:

What is the “Sharing Economy?” Taxpayers using one of the many online platforms to rent a spare bedroom, provide car rides or any number of other goods or services may be involved in the sharing economy. The IRS offers a “Sharing Economy Tax Center” on their web site. A few keys areas you may want to review are the taxes, deductions, rentals, estimated payments, payment options, and withholding. The IRS has a YouTube Video “Your Taxes in the Sharing Economy” that may be helpful. (IRS 2017ARD 064-5) (TTT 05/30/17)

 
 
Public Account Standing in Door way - Public Accountant in Oakdale, MN
 

IRS Tips to Safeguard Against Natural Disaster:

The IRS suggests that taxpayers should always keep a duplicate set of records including bank statements, tax returns, identification, and insurance policies in a safe place. Keeping an additional set of records is easier now that many financial institutions provide statements and documents electronically. Financial documents are available on the internet. Even if the original records are only provided on paper, these can be scanned into an electronic format. Taxpayers are encouraged to save the scanned records to electronic storage devices. IRS Publication 584, Casualty, Disaster, and Theft Loss may be helpful. (IR 2017-98) (TTT 05/23/17)
 

What to Do When an IRS Letter Arrives in the Mail?

The IRS mails millions of pieces of correspondence every year to taxpayers for a variety of reasons. First, do not panic. Second, open the letter and read it carefully. Most IRS notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and provides specific instructions on what to do. If a call seems necessary, use the phone number in the upper right-hand corner of the notice. Always keep copies of any notices received with tax records. For more information see IRS.gov (2017ARD 077-5) (TTT 5/16/17)

Are Tips Taxable?

All tips are taxable. This includes tips directly from customers, tips added to credit cards, and tips received from a tip-splitting agreement with other employees. Use Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to report the amount of any unreported tip income to include as additional wages. This includes the value of non-cash tips such as tickets, passes or other items. See IRS Publication 531, Reporting Tip Income on irs.gov. (IRS 2017ARD 061-6) (TTT 05/09/17)

What to do after Tax-Filing Deadline:

(1) If you missed filing, file and pay as soon as possible to reduce penalties and interest. There is no penalty for filing a late return after the tax deadline if the taxpayer receives a refund. (2) Taxpayers who owe taxes can view their balance, pay with IRS Direct Pay, by debit or credit card or apply for an online payment agreement. (3) If the taxpayer receives an IRS notice or letter, visit the “Understanding Your Notice or IRS Letter” on the IRS website for various questions and answers you may find helpful. (IR-2017-88) (TTT 05/02/17

Missed the Tax Return Deadline:

Taxpayers who owe federal income tax should file and pay as soon as they can to minimize any penalty and interest charges. For taxpayers due a refund, there is no penalty for filing a late return. If you owe and cannot pay in full, pay as much as you can when you file your return. Taxpayers should use the IRS Online Payment Agreement Tool to set up a monthly payment plan. (IRS 2017ARD 078-1) (TTT 04/25/17)

Credit for Retirement Savings Contribution:

Taxpayers who contribute to a retirement plan, like a 401(k) or an IRA, may be able to claim the Saver’s Credit. The maximum contribution is $2000 per person. The credit cannot be more than the amount of the tax that a taxpayer would otherwise pay in taxes. This credit will not change the amount of refundable tax credits. There are income limits per filing status and several other rules. See Form 8880 and instructions for more information. (IRS 2017ARD 063-10) (TTT 04/18/17)