Category Archives: Tax Time Prep

When To Expect Your W-2, 1099 & More Tax Forms In 2017 (And What To Do If They’re Missing)

Tax season is open. Most tax reporting forms are either in the hands of taxpayers or in the mail. Here’s what you need to know about tax form due dates and what to do if yours is late.

Source: When To Expect Your W-2, 1099 & More Tax Forms In 2017 (And What To Do If They’re Missing)

Accio! Harry Potter Star Rupert Grint Hopes To Summon £1m Tax Refund – Forbes

As J.K. Rowling’s Ron Weasley, Rupert Grint faced a number of challenges, including keeping the Philosopher’s Stone from Professor Quirinus Quirrell, finding and destroying the Horcruxes of Lord Voldemort with Harry and Hermione, and fighting in the Battle of Hogwarts. Grint, however, has come up against a Voldemort-sized obstacle in the form of Her Majesty’s Revenue and Customs (HMRC). Grint has gone to court seeking a refund worth approximately £1 million ($1.33 million U.S.) as part of a tax dispute. The dispute focuses on Grint’s choice to use an accounting period shorter than 12 months between 31 July 2009 and 5 April 2010. Grint made millions as part of the Harry Potter franchise, shooting the final films, Harry Potter and the Deathly Hallows Part 1 and Part 2, in 2009 and 2010. Grint’s take was said to be just below co-star, Emma Watson, who was named Hollywood’s highest paid female actor by Vanity Fair after pulling in a cool £20 million ($26.60 million US).

Read More: Accio! Harry Potter Star Rupert Grint Hopes To Summon £1m Tax Refund – Forbes

Do You Need To File A Tax Return In 2016? – Forbes

Do you need to file a tax return in 2016? Here’s what you need to know.

Check it out at Do You Need To File A Tax Return In 2016? – Forbes

Understanding Your Tax Forms 2016 – Forbes

Tax season is officially in full swing. The Internal Revenue Service (IRS) began accepting paper and electronically filed returns on Tuesday, January 19, 2016; the due date for tax returns is Monday, April 18, 2016 (not April 15, 2016, as in years past since there’s a holiday).

By now, you should have received most of your forms. If you’re still looking for yours, here’s a list of due dates for forms – along with information about what to do if yours are late.

Figuring out what’s on your tax forms – and how to report that information on your tax return – can be daunting. Follows is a quick primer for tax forms you might expect to receive in 2016:

Source: Understanding Your Tax Forms 2016 – Forbes



Changes proposed to allocation rules for rollovers

The IRS says it has become aware that some plan providers have been treating disbursements from retirement plans that contain both pretax and after-tax contributions as a single distribution of the aggregate disbursement amount, rather than as separate distributions, as required by the regulations. In proposed regulations issued on Thursday (REG-105739-11) and Notice 2014-54, the IRS gave its blessing to this treatment, providing rules on how to allocate pre- and after-tax amounts distributed from IRAs, including Roth IRAs, to multiple destinations.

Current Regs. Sec. 1.402A-1, Q&A-5(a) provides that “any amount paid in a direct rollover is treated as a separate distribution from any amount paid directly to the employee.” Under the proposed amendment, that separate distribution requirement would not apply to distributions made on or after Jan. 1, 2015, or an earlier date the taxpayer chooses, so long as that date is not earlier than Sept. 19, 2014, the date the regulations were filed for public inspection in the Federal Register.

Under the new rules, all disbursements of benefits from the plan to the recipient that are scheduled to be made at the same time are treated as a single distribution no matter whether the recipient has directed that the disbursements be made to a single destination or multiple destinations.

If the pretax amount of the aggregated disbursements that are treated as a single distribution is less than the amount of the distribution that is directly rolled over to one or more eligible retirement plans, the entire pretax amount is assigned to the amount of the distribution that is directly rolled over. If the rollover is to two or more plans, then the recipient can select how the pretax amount is allocated among these plans. To make this selection, the recipient must inform the plan administrator before the direct rollovers are made.

If the pretax amount equals or exceeds the amount of the distribution that is directly rolled over, it is assigned to the portion of the distribution that is directly rolled over up to the amount of the direct rollover. Any remaining pretax amount is then assigned to any 60-day rollovers (not direct rollovers).

If the remaining pretax amount is less than the amount rolled over in 60-day rollovers, the recipient can select how the pretax amount is allocated among the plans that receive 60-day rollovers. If, after the assignment of the pretax amount to direct rollovers and 60-day rollovers, there is a remaining pretax amount, that amount is includible in the distributee’s gross income. If the amount rolled over to an eligible retirement plan exceeds the portion of the pretax amount assigned or allocated to the plan, the excess is an after-tax amount.

more information at Changes proposed to allocation rules for rollovers.

12 Expenses That Aren’t Tax Deductions For Most Taxpayers

“Can I deduct the cost of taking care of my cat? She’s like a member of the family.”

Over the course of the year, I’ve received a bunch of questions – like the one above – about deductions. My answer is often, “It depends.” That’s because facts and circumstances matter: deductibility may hinge on such specifics as your occupation, whether you’re self-employed, the location of your office or whether you have a diagnosed medical condition.

But for many taxpayers, the ones without quirky jobs or unusual circumstances, the answers are largely the same. With that in mind, I’ve compiled a list 12 expenses that you likely can’t deduct on your individual federal income tax return:

Pets. No matter how much your four-legged, scaly or feathered friend feels like a member of your family, the cost of caring for your pet – from food to vet visits – is generally not deductible. The IRS considers pet-related expenses routinely personal. A few exceptions do apply, including service animals and guard dogs.

Alarm systems. Generally, there is no tax deduction for installing an alarm system at your home. Similarly, the monthly fees are not deductible. If, however, the property that you alarm is a rental or commercial property, the installation and the monthly fees are deductible as the cost of doing business. Additionally, if you take the home office deduction, then you may claim the pro rata portion of the alarm system on your taxes, just as you do with other home office expenses; the portion attributable to the non-office portion of your home is still not deductible.

Gym memberships. Most weight loss programs are only deductible as a treatment for a specific disease diagnosed by a physician. The diagnosis is key and the program must be specifically ordered by the doctor: if your doctor merely advises you to lose some weight to protect your health, that’s not sufficient. That said, you cannot deduct gym or health club membership dues even if your doctor orders you to up your activity level. Some separately stated activity fees, such as those for water aerobics, however, could be deductible if prescribed by a doctor.

Maternity clothes. Clothing for work is only deductible if the sole purpose of the clothing/uniform is clearly for business purposes (think branded uniforms). It’s not deductible if you could wear the clothes outside of your workplace even if you don’t. That goes for maternity clothes, too. If you have to stock up on maternity clothes – including suits for court or coats for outdoor use – to get you through your pregnancy, that cost is not deductible even if you don’t plan to wear them again.

Driver’s license fees. While state and local taxes are deductible, including certain personal and real property taxes, associated costs and fees may not be. That includes your driver’s license fees and car inspection fees. Similarly, you can’t deduct the cost of licensing dogs, cats or other animals – even if they’re considered property in the state where you live.

Plastic surgery. You cannot deduct the cost of surgeries to simply look or feel better; the procedure must be a treatment for a specific disease diagnosed by a physician. But plastic surgery for non-medical purposes (including breast augmentation surgery for cosmetic reasons) is never a deductible expense.

Political contributions. You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. And don’t try to be tricky: you can’t get around the rules by claiming it’s for business or other purposes. The IRS clearly states that advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible.

Commuting expenses. You cannot deduct the costs of getting to and from work, no matter if you take a bus, trolley, subway, taxi, or drive your own car. Commuting expenses to and from your regular place of work (as opposed to travel for work) are never deductible.

Private school. Private school expenses (including tuition) are not deductible. However, expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are deductible for purposes of the child care tax credit if they otherwise qualify as child care. The IRS takes the position in Pub 503 (downloads as a pdf) and in the Regs that expenses to attend private or parochial kindergarten or higher grades are not deductible (I happen to think that’s not always the case).

Babysitting. Occasional babysitting so that you can catch a movie that isn’t animated (!) or enjoy a nice meal may be a much-needed expense, but it’s still considered personal in nature and not deductible. This should be distinguished from childcare that allows you to work or look for work: those expenses may be count towards the child and dependent care credit.

Vitamins. For federal income tax purposes, you can only deduct qualifying medical expenses: qualifying medical expenses include the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. That includes any medicine or drug which requires a prescription of a physician for legal use. Over the counter meds – even if you need them – don’t count unless prescribed by a doctor (like gym memberships, the prescription is required, a mere mention or suggestion isn’t sufficient).

Child support. Child support is tax neutral. It is neither tax deductible to the payor nor taxable to the recipient. Spousal support, on the other hand, is both tax deductible to the payor and taxable to the recipient. You don’t get to choose which is which at tax time: that’s up to the judge or it must be memorialized in agreement.


It’s worth mentioning again that some taxpayers can claim certain of these deductions under specific circumstances (home offices, diagnosed medical conditions, special occupations) but these deductions are off-limits for your average taxpayer. If you think they might apply to you – or you’re not sure – it’s always best to consult with your tax professional.

–from Kelly Phillips Erb via For more info go to 12 Expenses That Aren’t Tax Deductions For Most Taxpayers.

ATTN BUSINESS TAXPAYERS! Section 179 Deductions will dwindle to 25,000 in 2014

The bonus depreciation tax break is set to expire on December 31st, and the dollar limits for Section 179 are to drop from $500,000 with a $2.5 million to $25,000 with a $200,000 ceiling.

Ashlea Eberling suggests that it makes sense to accelerate purchases before year’s end citing that under section 179 as it presently stands, a small business owner may deduct the entire cost of up to $500,000 of equipment that has a 20-year life.



Fourth Largest Tax Prep Business In The Country Shut Down By Feds – Forbes

Instant Tax Service (“ITS”), the fourth-largest tax preparation business in the United States, has been ordered by a federal court judge to shut down its operations.

U.S. District Judge Timothy S. Black found that ITS had a culture of “fraud and deception.” The order, which was quite extraordinary, was said to be “necessary to protect the public and the Treasury.”

via Fourth Largest Tax Prep Business In The Country Shut Down By Feds – Forbes.

Zombies and the IRS

Recently an Ohio judge turned down Donald E. Miller Jr.’s request to be declared alive. Miller, according to the state of Ohio, is legally dead.

Move up tMove down

Miller was declared dead nearly 20 years ago after he disappeared. His ex-wife, Robin Miller, asked a judge for the declaration after Miller went missing so that her daughters could receive Social Security benefits. Miller, who owed tens of thousands of dollars in child support, and an admitted alcoholic, told the judge this week that he wasn’t dead – he had merely drifted for a number of years.

What brought Miller, er, back from the dead? He wants a driver’s license and needs a valid Social Security number.

If the whole situation feels macabre, it is. It’s also not as unusual as you’d think to be declared dead: nearly 40 people per day are “accidentally” deemed dead by the feds each year. A federal database, nicknamed the “Death Master File” is filled with tens of thousands of Americans reported as dead – much to their surprise. The Death Master File was created in 1980 by the United States Social Security Administration and is better known as the Social Security Death Index (SSDI). The file has a disturbing amount of personally identifying information – including name, dates of birth and death and Social Security Number. And it’s all public information.

Judge Orders Man To Stay Dead Despite His Insistence He’s Alive: Could You Be Next? – Forbes.

One more thing…if you’re wondering if the IRS thinks you are no longer among the living, check out this website: I found both of my grandparents, so yeah, it works. I, fortunately, am not ready for the Walking Dead quite yet. –Debra

Order Your IRS Forms Online for Free

If you’re an employer, you’ve probably purchased those red tax forms at one point or another from an office supply house. They aren’t cheap…so why not get them for free?

You may not know that you can order W-2’s, 1099’s and other forms online from the IRS, and they will be mailed directly to you for nothing. (After the IRS is up and running again, of course.)

The website for ordering is here:

I recommend ordering them soon so you’ll be ready when the tax year ends. It does take a week or so (normally) to get them.

(I’m going to order some today and we’ll see how long it does take…)