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February 2013

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IRS Extends Tax Relief to Some New Jersey and New York Victims of Hurricane Sandy; Return Filing and Tax Payment Deadline Extended to April 1, 2013

  

 

Dear Friend,

 

WASHINGTON -- In the aftermath of Hurricane Sandy, the Internal Revenue Service announced additional tax relief to affected individuals and businesses. The IRS today is further extending tax deadlines of that relief until April 1 for the following localities:

  • In New Jersey (starting Oct. 26): Monmouth and Ocean counties.
  • In New York (starting Oct. 27): Nassau, Queens, Richmond and Suffolk counties.

Beyond the relief provided by law to taxpayers in the FEMA-designated counties, the IRS will work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in the areas affected by Hurricane Sandy. All workers assisting the relief activities in the covered disaster areas who are affiliated with a recognized government or philanthropic organization are eligible for relief. Taxpayers who live outside of the impacted area and think they may qualify for this relief need to contact the IRS at 866-562-5227.

 

The IRS also announced today that Taxpayer Assistance Centers in several New York and New Jersey locations will be open additional hours to provide help to taxpayers impacted by Hurricane Sandy. There will also be special assistance available at several New Jersey and New York locations on Saturday, February 23 from 9 a.m. until 2 p.m. More information will be available on irs.gov.

 

The tax relief postpones various tax filing and payment deadlines that occurred starting in late October. As a result, affected individuals and businesses will have until April 1, 2013, to file these returns and pay any taxes due. This includes the fourth quarter individual estimated tax payment, normally due Jan. 15, 2013. It also includes payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct. 31, 2012 and Jan. 31, 2013 respectively, and calendar year corporate income tax returns due March 15. It also applies to tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period.

 

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply. The IRS automatically provides this relief to any taxpayer located in the disaster area. Taxpayers need not contact the IRS to get this relief.

 

The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, individuals should visit disasterassistance.gov.

 

Very truly yours,

 

AVZ

 
 
  

8 Tax Moves to Make Right Now

  

It's that time of year again when you have to dig through your shoe-box of receipts, be on the look-out for tax information in the mail and most important make an appointment with your accountant (hopefully that's AVZ).  To help you out please take a moment to read the information below to help you with the process of filing your 2012 taxes.

  

Here's what you could and should be doing in February:

  

 

First of all, transmitters have been storing up tax return data for weeks, just chomping at the bit, waiting for the starting pistol to go off. Finally, this week, the IRS opened the e-filing gates.

Still, things are running behind schedule this year. Common refund-generating forms, like the Education Credit, for instance, (see "Instructions for Form 8863") are not being processed until the end of February. This is holding up refunds for taxpayers, as well as fees for tax professionals - who often don't get paid until the tax return is filed. One tax pro even asked me whether it would be unethical to complete and file tax returns without the Form 8863 - and amend them later.

  

 

1. Schedule your tax appointment.

 

Aldrich also recommends that you say hello to your accountant. Remind your tax pro that you want an appointment with him or her. If you don't already have one, choose a tax preparer or accountant now so that they have time to talk with you about tax-planning as well as tax-preparation matters.

 

2. Track down stray forms.

 

W-2s and 1099s are rolling in. They should all have been postmarked by Jan. 31. If you don't receive them by mid-February, track them down - especially if you've moved since filling out W-4s and W-9s. Contact your former employers - and clients. But remember, if you're self-employed; don't do your bookkeeping by collecting 1099s. It's up to you to keep your own records.

 

3. Get an IP PIN.

 

Identity theft is on the rise. At a recent San Fernando Valley Breakfast Meeting for tax professionals, practically every single tax pro said they had clients who'd been ID-theft victims. If your identity has been compromised, make sure you get your special IP PIN. Fill out Form 14039, the Identity Theft Affidavit (find Form 14039 here). If you did that last year and still haven't received a PIN, contact the IRS immediately (see the IRS Identity Protection page). If you find yourself getting nowhere after 30 days, contact the Taxpayer Advocate Service at 1-877-777-4778 (or find them online).

 

This special IP PIN is issued to people who have informed the IRS that someone may have filed a fraudulent tax return using their Social Security number. Getting an IP PIN will ensure that only you are able to file a tax return using your own Social Security number. Even if you were a victim of credit card-related identity theft rather than tax-related theft, alert the IRS.

 

4. File a new W-4.

 

Provide your employer with a new W-4 Form for 2013 if you told them you were exempt from withholding last year. If you end up with a refund for 2012, or owe less than $1,000 (see Tax Withholding rules here), you may file exempt again this year.

 

5. Businesses: Submit paper 1099s.

 

Businesses that file 1099s on paper must submit them by Feb. 28. Those who file electronically can wait until March 31. Remember, W-2s and 1099s should have been sent to recipients by Jan. 31. One of the reasons to hold off filing the forms for a month or so is to wait for corrected information. Some workers may have moved. Others may find discrepancies between their numbers and yours. Making corrections before filing the 1099s and W-2s means that you don't have to file amendments with Uncle Sam.

 

6. Check for duplicated income.

 

Steven Aldrich, CEO of Outright.com, a Go Daddy company, recommends reviewing1099-MISC and 1099-K forms carefully. It's quite possible that you could get a 1099-MISC from your vendors, and a 1099-K from your merchant account processor for the same work. There may be overlapping amounts, making it appear that you earned more than you really did. Keeping good books - using a system like Outright.com, FreshBooks or QuickBooks - will ensure you know how much you really earned. (Note: TaxMama is holding a workshop in late February on how to adjust your tax returns to avoid paying tax on duplicated income. To get an invitation, sign up for a free TaxMama.com membership here.

 

7. Set up a filing system for 2012 documents.

 

In January, we talked about setting up your 2013 filing system. With all the 2012 documents coming in now, this is also a good time to set up your 2012 filing system. Aldrich thinks it's wise to keep everything in one place. Organize the information into folders if it's on paper, or enter the data into spreadsheets. Remember to separate personal spending from business spending to make tax preparation easy, regardless of how you prepare your returns (paper and pencil, tax software, accountant). These expense categories were used by many e-commerce businesses last year: cost of goods sold, marketplace fees, shipping costs, office supplies, and utilities. Service businesses generally reported expenses in these categories: taxes/licenses, office supplies, meals, and travel.

 

When it comes to organizing and storing your documents in the cloud, you have a free resource at TaxACT's DocVault (link). Or you can dump your boxes and bags of records on ShoeBoxed.com (link) and let them organize it for you. Incidentally, every resource mentioned in this article has mobile apps to let you upload or transmit data on the go.

 

8. Set up your EFTPS account.

Taxpayers who expect to be making estimated tax payments should set up an Electronic Federal Tax Payment System (EFTPS) account this month. This will enable you to pay all federal taxes, without a fee, directly from your bank account. This is perfect if you're a procrastinator and often make payments at the last minute.

 

Check to see if your state has a similar system. (Find your state's tax site here.) 

 

Issue: 53

IRS Extends Tax Relief; Return Filing & Tax Payment
8 Tax Moves To Make Right Now
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