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December 2015

How do I . . . Change my tax withholding?

An employer must withhold income taxes from compensation paid to common-law employees (but not from compensation paid to independent contractors). The amount withheld from an employee’s wages is determined in part by the number of withholding exemptions and allowances the employee claims. Note that although the Tax Code and regulations distinguish between “withholding exemptions” and “withholding allowances,” the terms are […]

How do I…Protect against tax-related identity theft?

The IRS expects to receive more than 150 million individual income tax returns this year and issue billions of dollars in refunds. That huge pool of refunds drives scam artists and criminals to steal taxpayer identities and claim fraudulent refunds. The IRS has many protections in place to discover false returns and refund claims, but taxpayers still need to be […]

November 2015

How Do I…Shift Taxable Income into 2016?

As the calendar approaches the end of 2015, it is helpful to think about ways to shift income and deductions into the following year. For example, spikes in income from selling investments or other property may push a taxpayer into a higher income tax bracket for 2015, including a top bracket of 39.6 percent for ordinary income and short-term capital […]

How Do I…Shift Taxable Income into 2016?

As the calendar approaches the end of 2015, it is helpful to think about ways to shift income and deductions into the following year. For example, spikes in income from selling investments or other property may push a taxpayer into a higher income tax bracket for 2015, including a top bracket of 39.6 percent for ordinary income and short-term capital […]

How do I? Compute withholding using the part-year employment method

Employers generally withhold from wages by way of the wage-bracket or percentage method (Code Sec. 3402(b) and Code Sec. 3402(c)). However, an employee may request that the amount of tax withheld by the employer from the employee’s wages be computed on the basis of the part-year employment method (Reg. §31.3402(h)(4)-1(c)(1)). Under this method, an individual who is employed no more […]

How do I? Comply with the Affordable Care Act’s individual mandate?

Beginning January 1, 2014, the Affordable Care Act (ACA) required individuals to carry minimum essential health coverage or make a shared responsibility payment, unless exempt. Individuals will report on their 2014 federal income tax return if they had minimum essential health coverage for all or part of the year. Individuals who file Form 1040, U.S. Individual Income Tax Return, will […]

September 2015

How Do I? Form a partnership for tax purposes

A business operated by two or more owners can elect to be taxed as a partnership by filing Form 8832, the Entity Classification Election form. A business is eligible to elect partnership status if it has two or more members and:

is not registered as anything under state law,
is a partnership, limited partnership, or limited liability partnership, or
is a limited liability […]

August 2015

How Do I? Form a partnership for tax purposes

A business operated by two or more owners can elect to be taxed as a partnership by filing Form 8832, the Entity Classification Election form. A business is eligible to elect partnership status if it has two or more members and:

is not registered as anything under state law,
is a partnership, limited partnership, or limited liability partnership, or
is a limited liability […]

How do I? Compute withholding using the part-year employment method

Employers generally withhold from wages by way of the wage-bracket or percentage method (Code Sec. 3402(b) and Code Sec. 3402(c)). However, an employee may request that the amount of tax withheld by the employer from the employee’s wages be computed on the basis of the part-year employment method (Reg. §31.3402(h)(4)-1(c)(1)). Under this method, an individual who is employed no more […]

July 2015

How Do I? Determine when the “at risk” rules apply to my business

Taxpayers that invest in a trade or business or an activity for the production of income can only deduct losses from the activity or business if the taxpayer is at risk for the investment. A taxpayer is at risk for the amount of cash and the basis of property contributed to the activity. Taxpayers are also at risk for amounts […]

April 2015

How do I . . . Change my tax withholding?

An employer must withhold income taxes from compensation paid to common-law employees (but not from compensation paid to independent contractors). The amount withheld from an employee’s wages is determined in part by the number of withholding exemptions and allowances the employee claims. Note that although the Tax Code and regulations distinguish between “withholding exemptions” and “withholding allowances,” the terms are […]

March 2015

FAQ: What is new Form 1095-A, Health Insurance Marketplace Statement

Form 1095-A, Health Insurance Marketplace Statement, is a new information return. The IRS requires the Health Insurance Marketplace to report certain information about every individual who receives health insurance coverage through the Marketplace to the agency and also to the enrollee. Form 1095-A reports information about the individual(s) covered by Marketplace coverage, the starting and ending dates of coverage, and […]

January 2015

How do I? Comply with the Affordable Care Act’s individual mandate?

Beginning January 1, 2014, the Affordable Care Act (ACA) required individuals to carry minimum essential health coverage or make a shared responsibility payment, unless exempt. Individuals will report on their 2014 federal income tax return if they had minimum essential health coverage for all or part of the year. Individuals who file Form 1040, U.S. Individual Income Tax Return, will […]

December 2014

How Do I? Follow the new-for-2015 one-IRA rollover-per-year limit?

As most people know, a taxpayer can take a distribution from an IRA without being taxed if the taxpayer rolls over (contributes) the amount received into an IRA within 60 days. This tax-free treatment does not apply if the individual rolled over another distribution from an IRA within the one-year period ending on the day of the second distribution.

Taxpayers and […]

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