AICPA has expressed concerns to the IRS about the Service’s public
release of information of CPAs and other federal tax return preparers
the IRS collects as part of its preparer tax identification number
(PTIN) registration requirement.
Some of the PTIN information is subject to public
release under the federal Freedom of Information Act (FOIA). The IRS
makes a database of all approximately 700,000 registered preparers
available to anyone who requests it and pays a fee of $35. The
information subject to release includes the preparer’s name, business
name, business mailing address, business phone number, business website
address, email address, and professional credentials.
Some private commercial enterprises have purchased the
PTIN information released by the IRS and used it to create online
lookup directories. These private sites are not endorsed by the IRS
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A comprehensive list of helpful publications for small businesses. Most
are available to browse online. All may be downloaded in Adobe PDF
format and printed.Link
IRS Tax Tip 2012-54 -- Employee Business Expenses
employees may be able to deduct certain work-related expenses. The
following facts from the IRS can help you determine which expenses are
deductible as an employee business expense. You must be itemizing
deductions on IRS Schedule A to qualify.
Expenses that qualify for an itemized deduction generally include:
• Business travel away from home
• Business use of your car
• Business meals and entertainment
• Use of your home
• Miscellaneous expenses
You must keep records to prove the business expenses you deduct. For
general information on recordkeeping, see IRS Publication 552,
Recordkeeping for Individuals available on the IRS website at www.irs.gov, or by calling 1-800-TAX-FORM (800-829-3676).
If your employer reimburses you under an accountable plan, you should
not include the payments in your gross income, and you may not deduct
any of the reimbursed amounts.
An accountable plan must meet three requirements:
1. You must have paid or incurred expenses that are deductible while performing services as an employee.
2. You must adequately account to your employer for these expenses within a reasonable time period.
3. You must return any excess reimbursement or allowance within a reasonable time period.
If the plan under which you are reimbursed by your employer is
non-accountable, the payments you receive should be included in the
wages shown on your Form W-2. You must report the income and itemize
your deductions to deduct these expenses.
Generally, you report unreimbursed expenses on IRS Form 2106 or IRS
Form 2106-EZ and attach it to Form 1040. Deductible expenses are then
reported on IRS Schedule A, as a miscellaneous itemized deduction
subject to a rule that limits your employee business expenses deduction
to the amount that exceeds 2 percent of your adjusted gross income.
Many small employers that pay at least half
of the premiums for employee health insurance coverage under a
qualifying arrangement may be eligible for the small business health
care tax credit. This credit can enable small businesses and small
tax-exempt organizations to offer health insurance coverage for the
first time. It also helps those already offering health insurance
coverage to maintain the coverage they already have. The credit is
specifically targeted to help small businesses and tax-exempt
organizations that primarily employ 25 or fewer workers with average
income of $50,000 or less.
Here is what small employers need to know so they don’t miss out on the credit for tax year 2010:
- Hurricane Irene, Tropical Storm Lee and other recent
disaster-related tax relief postponed certain tax filing and payment
deadlines to Oct. 31, 2011. Qualifying businesses affected by these
natural disasters still have time to file and claim the small employer
health care credit on Form 8941 and claim it as part of the general
business credit on Form 3800, which they would include with their tax
return. For more information on the disaster relief visit IRS.gov.
- Sole proprietors who file Form 1040, Partners and S-corporation
shareholders who report their income on Form 1040 and had requested an
extension have until Oct. 17 to complete their returns. They would also
use Form 8941 to calculate the small employer health care credit and
claim it as a general business credit on Form 3800, reflected on line 53
of Form 1040.
- Tax-exempt organizations that file on a calendar year basis and
requested an extension to file to Nov. 15 can use Form 8941 and then
claim the credit on Form 990-T, Line 44f.
- Businesses who have already filed can still claim the credit. For
small businesses that have already filed and later determine they are
eligible for the credit, they can always file an amended 2010 tax
return. Corporations use Form 1120X and individual sole proprietors use
- Businesses that couldn’t use the credit in 2010 may be eligible to
claim it in future years. Some businesses that already locked into
health insurance plan structures and contributions for 2010 may not have
had the opportunity to make any needed adjustments to qualify for the
credit for 2010. So these businesses may be eligible to claim the credit
on 2011 returns or in years beyond. Small employers can claim the
credit for 2010 through 2013 and for two additional years beginning in
For tax years 2010 to 2013, the maximum credit for eligible small
business employers is 35 percent of premiums paid and for eligible
tax-exempt employers the maximum credit is 25 percent of premiums paid.
Beginning in 2014, the maximum tax credit will go up to 50 percent of
premiums paid by eligible small business employers and 35 percent of
premiums paid by eligible tax-exempt organizations.
Additional information about eligibility requirements and calculating
the credit can be found on the Small Business Health Care Tax Credit
for Small Employers page of IRS.gov.
Small Business Health Care Tax Credit English | Spanish | ASL
Updated 6/28/11 to include Wabash county.
IL-2011-29, June 8, 2011
CHICAGO — Victims of severe storms and flooding beginning April 19,
2011 in parts of Illinois may qualify for tax relief from the Internal
The President has declared the following counties a federal disaster
area: Alexander, Franklin, Gallatin, Hardin, Jackson, Lawrence, Massac,
Perry, Pope, Pulaski, Randolph, Saline, Wabash, White and Williamson
counties. Individuals who reside or have a business in these counties
may qualify for tax relief.
The declaration permits the IRS to postpone certain deadlines for
taxpayers who reside or have a business in the disaster area. For
instance, certain deadlines falling on or after April 19 and on or
before June 30 have been postponed to June 30. This includes the
estimated tax payment for the second quarter of 2011 normally due June
In addition, the IRS is waiving the failure-to-deposit penalties for
employment and excise tax deposits due on or after April 19 and on or
before May 4, 2011, as long as the deposits were made by May 4, 2011.
If an affected taxpayer receives a penalty notice from the IRS, the
taxpayer should call the telephone number on the notice to have the IRS
abate any interest and any late filing or late payment penalties that
would otherwise apply. Penalties or interest will be abated only for
taxpayers who have an original or extended filing, payment or deposit
due date, including an extended filing or payment due date, that falls
within the postponement period.
The IRS automatically identifies taxpayers located in the covered
disaster area and applies automatic filing and payment relief. But
affected taxpayers who reside or have a business located outside the
covered disaster area must call the IRS disaster hotline at
1-866-562-5227 to request this tax relief.
Covered Disaster Area
The counties listed above constitute a covered disaster area for
purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the
relief detailed below.
Taxpayers considered to be affected taxpayers eligible for the
postponement of time to file returns, pay taxes and perform other
time-sensitive acts are those taxpayers listed in Treas. Reg. §
301.7508A-1(d)(1), and include individuals who live, and businesses
whose principal place of business is located, in the covered disaster
area. Taxpayers not in the covered disaster area, but whose records
necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are
in the covered disaster area, are also entitled to relief. In addition,
all relief workers affiliated with a recognized government or
philanthropic organization assisting in the relief activities in the
covered disaster area and any individual visiting the covered disaster
area who was killed or injured as a result of the disaster are entitled
Grant of Relief
Under section 7508A, the IRS gives affected taxpayers until June 30
to file most tax returns (including individual, corporate, and estate
and trust income tax returns; partnership returns, S corporation
returns, and trust returns; estate, gift, and generation-skipping
transfer tax returns; and employment and certain excise tax returns), or
to make tax payments, including estimated tax payments, that have
either an original or extended due date occurring on or after April 19
and on or before June 30.
The IRS also gives affected taxpayers until June 30 to perform other
time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and
Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007), that are due
to be performed on or after April 19 and on or before June 30.
This relief also includes the filing of Form 5500 series returns, in
the manner described in section 8 of Rev. Proc. 2007-56. The relief
described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind
exchanges of property, also applies to certain taxpayers who are not
otherwise affected taxpayers and may include acts required to be
performed before or after the period above.
The postponement of time to file and pay does not apply to
information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or
8027. Penalties for failure to timely file information returns can be
waived under existing procedures for reasonable cause. Likewise, the
postponement does not apply to employment and excise tax deposits. The
IRS, however, will abate penalties for failure to make timely employment
and excise tax deposits due on or after April 19 and on or before May 4
provided the taxpayer made these deposits by May 4.
Affected taxpayers in a federally declared disaster area have the
option of claiming disaster-related casualty losses on their federal
income tax return for either this year or last year. Claiming the loss
on an original or amended return for last year will get the taxpayer an
earlier refund, but waiting to claim the loss on this year’s return
could result in a greater tax saving, depending on other income factors.
Individuals may deduct personal property losses that are not covered
by insurance or other reimbursements. For details, see Form 4684 and its
Affected taxpayers claiming the disaster loss on last year’s return
should put the Disaster Designation “Illinois/Severe Storms and
Flooding” at the top of the form so that the IRS can expedite the
processing of the refund.
The IRS will waive the usual fees and expedite requests for copies of
previously filed tax returns for affected taxpayers. Taxpayers should
put the assigned Disaster Designation in red ink at the top of Form
4506, Request for Copy of Tax Return, or Form 4506-T, Request for
Transcript of Tax Return, as appropriate, and submit it to the IRS.
Affected taxpayers who are contacted by the IRS on a collection or
examination matter should explain how the disaster impacts them so that
the IRS can provide appropriate consideration to their case.
Taxpayers may download forms and publications from the official IRS
Web site, irs.gov, or order them by calling 1-800-TAX-FORM
(1-800-829-3676). The IRS toll-free number for general tax questions is
Now that the federal income tax filing deadline is
in your rear-view mirror, what happens after you file? A lot of
taxpayers have post tax-filing questions such as what records do I keep
and more importantly, “Where’s my Refund?” The IRS has answers for you
You can go online to check the status of your 2010
refund 72 hours after IRS acknowledges receipt of your e-filed return,
or 3 to 4 weeks after you mail a paper return. Be sure to have a copy of
your 2010 tax return available because you will need to know your
filing status, the first Social Security number shown on the return, and
the exact whole-dollar amount of the refund. You have three options for
checking on your refund:
- Go to http://irs.gov and click on “Where’s My Refund”
- Call 800-829-4477~24 hours a day, seven days a week, for
automated refund information
- Call 800-829-1954 during the hours shown in your tax form
- Use IRS2Go. If you have an Apple iPhone or iTouch or an
Android device you can download an application to check the status of
What Records Should I Keep?
Normally, tax records should be kept for three
years, but some documents — such as records relating to a home purchase
or sale, stock transactions, IRAs and business or rental property —
should be kept longer.
You should keep copies of tax returns you have filed and the
tax forms package as part of your records. They may be helpful in
amending already filed returns or preparing future returns.
Change of Address
If you move after you filed your return, send Form
8822, Change of Address, to the Internal Revenue Service. If you are
expecting a paper refund check, you should also file a change of address
with the U.S. Postal Service.
What If I Made a Mistake?
Errors may delay your refund or result in notices
being sent to you. If you discover an error on your return, you can
correct your return by filing an amended return using Form 1040X,
Amended U.S. Individual Income Tax Return.
Visit the IRS website at http://www.irs.gov for more information on refunds, record keeping, address changes and amended returns.
Eight Facts on Penalties
When it comes to filing a tax return – or not
filing one - the IRS can assess a penalty if you fail to file, fail to
pay or both. Here are eight important points the IRS wants you to know
about the two different penalties you may face if you do not file or pay
- If you do not file by the deadline, you might face a
failure-to-file penalty. If you do not pay by the due date, you could
face a failure-to-pay penalty.
- The failure-to-file penalty is generally more than the
failure-to-pay penalty. So if you cannot pay all the taxes you owe, you
should still file your tax return on time and explore other payment
options in the meantime. The IRS will work with you.
- The penalty for filing late is usually 5 percent of the
unpaid taxes for each month or part of a month that a return is late.
This penalty will not exceed 25 percent of your unpaid taxes.
- If you file your return more than 60 days after the due date
or extended due date, the minimum penalty is the smaller of $135 or 100
percent of the unpaid tax.
- If you do not pay your taxes by the due date, you will
generally have to pay a failure-to-pay penalty of ½ of 1 percent of your
unpaid taxes for each month or part of a month after the due date that
the taxes are not paid. This penalty can be as much as 25 percent of
your unpaid taxes.
- If you timely filed a request for an extension of time to
file and you paid at least 90 percent of your actual tax liability by
the original due date, you will not be faced with a failure-to-pay
penalty if the remaining balance is paid by the extended due date.
- If both the failure-to-file penalty and the failure-to-pay
penalty apply in any month, the 5 percent failure-to-file penalty is
reduced by the failure-to-pay penalty. However, if you file your return
more than 60 days after the due date or extended due date, the minimum
penalty is the smaller of $135 or 100% of the unpaid tax.
- You will not have to pay a failure-to-file or failure-to-pay
penalty if you can show that you failed to file or pay on time because
of reasonable cause and not because of willful neglect.
Video: Last-Minute Tax Tips: English
For this and other videos, see: YouTube/IRSVideos
IR-2011-43, April 12, 2011
WASHINGTON — Are you unable to complete and file your federal
individual tax return by the April 18 deadline? If so, you can request
an extension of time to file, which will automatically give you until
Oct. 17, 2011, to submit your tax return to the Internal Revenue
An extension gives you an additional six months to file your tax
return. But keep in mind that an extension of time to file is not an
extension of time to pay. All outstanding balances are due on April 18,
The IRS expects to receive approximately 10 million extension
requests in 2011, which is about the same as last year.
Numerous Ways to Get an Extension
In order to get an extension, you need to file Form 4868 with the
Taxpayers can electronically file Form 4868 through IRS Free
File or Free File
Fillable Forms. Using Free File to prepare and electronically submit
Form 4868 is free to everyone, regardless of income.
Paid preparers can also electronically file Form 4868 as can tax
software that you run on your computer.
Finally, a paper
version of Form 4868 is available for download from IRS.gov.
However, the IRS will only provide an acknowledgement of your extension
request if you e-file or Free File the request.
When you request an extension, you need to estimate your
tax liability and pay any
balance due by the April 18 deadline. If you are unable to pay the
total balance due, you should pay as much as possible and apply for an installment
(this is a re-post)
Employer-Provided Health Coverage — Not Taxable;
Reporting is Voluntary for All Employers for 2011 and Small Employers
Starting in tax year 2011, the Affordable Care Act
requires employers to report the cost of coverage under an
employer-sponsored group health plan. To give employers more time to
update their payroll systems, Notice 2010-69, issued last fall, made
this requirement optional for all employers in 2011. IRS Notice 2011-28
provided further relief for smaller employers filing fewer than 250 W-2
forms by making the reporting requirement optional for them at least for
2012 and continuing this optional treatment for smaller employers until
further guidance is issued. Notice 2011-28 also includes information on
how to report, what coverage to include and how to determine the cost
of the coverage.
The 2011 Form W-2 is available for viewing on IRS.gov. This is the
W-2 that most employees will receive in early 2012. The form includes
the codes that employers may use to report the cost of coverage under an
employer-sponsored group health plan.
This reporting is for informational purposes only, to show employees the
value of their health care benefits so they can be more informed
consumers. The amount reported does not affect tax liability, as the
value of the employer contribution to health coverage continues to be
excludible from an employee's income, and it is not taxable.
For more information, see the 2011 Form W-2, IR-2011-31,
and our frequently
Nine Facts on filing an Amended
An amended tax return generally allows you to file
again to correct your filing status, your income or to add deductions
or credits you may have missed.
Here are nine points the IRS wants you to know about amending
your federal income tax return.
- Use Form 1040X, Amended U.S. Individual Income Tax Return,
to file an amended income tax return.
- Use Form 1040X to correct previously filed Forms 1040, 1040A
or 1040EZ. An amended return cannot be filed electronically, thus you
must file it by paper.
- Generally, you do not need to file an amended return due to
math errors. The IRS will automatically make that correction. Also, do
not file an amended return because you forgot to attach tax forms such
as W-2s or schedules. The IRS normally will send a request asking for
- Be sure to enter the year of the return you are amending at
the top of Form 1040X. Generally, you must file Form 1040X within three
years from the date you filed your original return or within two years
from the date you paid the tax, whichever is later.
- If you are amending more than one tax return, prepare a
1040X for each return and mail them in separate envelopes to the
appropriate IRS campus. The 1040X instructions list the addresses for
- If the changes involve another schedule or form, you must
attach that schedule or form to the amended return.
- If you are filing to claim an additional refund, wait until
you have received your original refund before filing Form 1040X. You may
cash that check while waiting for any additional refund.
- If you owe additional 2010 tax, file Form 1040X and pay the
tax before the due date to limit interest and penalty charges that could
accrue on your account. Interest is charged on any tax not paid by the
due date of the original return, without regard to extensions.
- Form 1040X was recently redesigned. Previously the form
consisted of three columns; Column A-Original amount, Column B-Net
change, and Column C-Correct amount. The redesigned form now has just
one column where the Correct Amount is the only figure entered, making
it easier to make changes to previously filed returns.