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Are You a Tax Procrastinator?

Mon, 15 Apr 2013 10:56:05 EDT

Ross Kenneth Urken

NEW YORK (MainStreet) --I have been meaning to write this article for a while now, but just like your approach to your taxes, procrastination became my modus operandi. Tomorrow--whether intoned with the hope of Orphan Annie or the despair of Macbeth--always seemed more convenient. There are, of course, huge financial consequences to a dilatory tax return filing, and still loads of us persist in this behavior.

Even with the tax deadline looming, year after year, thousands of people wait to file. In fact, 28% of Americans wait until the last few weeks, according to the IRS. ...

Tax Tip: Don't Be Late

Mon, 15 Apr 2013 10:14:02 EDT

Editor's Note: This article is part of our 2013 Tax Tips series. Robert Flach is an expert with almost 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.

NEW YORK (MainStreet) --Happy Tax Day!

Today is the deadline for filing your 2012 federal and state income tax returns. The envelopes must be postmarked by midnight tonight! ...

April Brings a Bit More Anxiety Than Usual to Taxpayers

Wed, 10 Apr 2013 11:00:00 EDT

NEW YORK (TheStreet) -- Call it the best of times and the worst of times.

"It" is tax season, racing to a close as April 15 draws a bead on the millions of taxpayers who haven't filed their paperwork with Uncle Sam.

According to an April 1 study by Rasmussen Reports, only 61% of taxpayers had filed two weeks before the deadline. Another 25% said they would file by April 15, and another 7% planned to ask for an extension. Also see: Last-Minute Tax Tips For 2013 ...

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Are You the Partner With 'Material Participation'?

Wed, 10 Apr 2013 07:00:00 EDT

By Elizabeth Rosen NEW YORK (IRS.com) -- When it comes to your income taxes, U.S. tax law makes a distinction between different types of income -- including income from passive investments and active businesses in which the taxpayer "materially participates." The issue of material participation can be extremely important for you as a business owner or investor. Whether you qualify as a material participant determines the extent to which you are allowed to deduct losses on your tax return.

For example, let's say you are completing Schedule C of Form 1040 (the U.S. Individual Income Tax Return) to report your business' profits and losses. You will have to check a box indicating whether you materially participated in the business during the tax year. Generally, you are eligible to claim material participation if you participated in a business on a "regular, continuous and substantial basis." To claim material participation, check "yes" on your tax form.

Most sole proprietors are qualified to claim material participation because they typically spend substantial amounts of time running their business. Merely having a financial interest in a business (even if it is significant), though, is not enough to meet the material participation criteria -- unless you also handle the day-to-day management of the business. This means your managerial tasks do not qualify you for material participation if you are simply reviewing financial statements, monitoring operations or providing business advice. ...

The Most Important Tax Documents You Might Be Missing

Thu, 04 Apr 2013 13:19:24 EDT

NEW YORK (MainStreet) -- Even though most Americans filed their taxes weeks ago and have by now kicked back to wait on their refund check, many will spend the next week scrambling to gather the documents they need before that all-important April 15 deadline.

Thankfully, most businesses and investment firms are diligent when it comes to sending out the appropriate W-2 and 1099 forms, but other essential documents may need to be requested, such as those reflecting mortgage and tuition payments. Also see: How To Consolidate Your 401(k)s

We checked in with the experts to find the most important tax documents you'll need to find now, and what to do when you -- or a former employer -- can't find them in time. ...

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How to Get the Most Out of Your Tax Refund

Mon, 01 Apr 2013 09:30:01 EDT

NEW YORK (LowCards.com) -- Millions of American households will soon get tax refunds. According to the IRS, the average tax refund last year was nearly $2,800.

It will be tempting to use the refund to buy some big-ticket items on your wish list or go on a much-needed vacation, but you may want to resist the urge to splurge and use that refund to pay down high-interest debt or to get ahead in savings. ...

Mail Is a Slow, Distant Second to e-Filing Your Taxes

Sat, 23 Mar 2013 08:01:42 EDT

SAN DIEGO (MainStreet) -- When sending personal information to the Internal Revenue Service, which method feels safer to you: traditional snail mail or electronic submission?

If you answered electronic submission -- such as e-filing -- you're among a growing number of people in the United States becoming more comfortable with filing taxes and sending personal information via computer and online.

A few years ago, the IRS actually established a mandate to have 80% of consumers e-filing. ...

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Stay Calm and Survive Your Own Audit Horror Story

Fri, 22 Mar 2013 12:00:00 EDT

NEW YORK (TheStreet) -- For Shauna Wekherlien, the owner of Tax Goddess Business Services PC in Scottsdale, Ariz., the scariest tax audit she saw was a corker, including threats from the Internal Revenue Service and a dash of ignorance and hostility.

"This client was in manufacturing," she says. "They sent out a young auditor, who CPAs refer to as 'iPod auditors' because during the whole audit all they do is listen to their iPods. This auditor came in and asked for bank statements -- a very normal thing for an auditor to do. However, in this instance, the auditor kept telling the client that he was missing the November bank statement. Of course, the auditor had the November bank statement, but didn't understand the bank statements didn't close exactly on the first of each month and end on the 31st of each month."

That led to further problems, Wekherlien says. ...

Second Tax Extensions Don't Go to Just Anyone

Wed, 20 Mar 2013 10:00:00 EDT

By Elizabeth Rosen NEW YORK (IRS.com) -- Up until tax year 2005, a taxpayer could file IRS Tax Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) and get a four-month automatic tax extension. An additional two-month tax extension could be obtained by completing Tax Form 2688.

Then the Internal Revenue Service (modified Tax Form 4868) to allow for an automatic six-month extension of the original April 15 filing deadline.

READ: 4 great tax tips for this year's return ...

The Business Owner's Tax Extension FAQ

Wed, 20 Mar 2013 07:30:00 EDT

NEW YORK (MainStreet) -- Millions of Americans think of April 15 as a day they'd rather stay in bed -- submitting taxes is on no one's short list for a good time. But for thousands of small-business owners, the looming deadline can be almost impossible to meet -- with 24-hour-a-day commitments to daily operations and employees, many companies will be unable to wrangle the appropriate documents in the next few weeks.

If you're thinking of filing for an extension on your taxes, experts say there's still time to get your things in order, but now's the time to get to work. Our tax gurus tackle the five most frequently asked questions for filing a small-business extension.

How do you know if you really need an extension or if you should just push on through and try to file by April 15? ...

10 Tax Tips For Newlyweds

Mon, 18 Mar 2013 07:00:00 EDT

NEW YORK (TheStreet) -- American newlyweds have cleared one financial hurdle already, paying on average more than $25,000 for a wedding in 2012, according to WeddingReport.com.

But right around the bend is another hurdle to clear, and this time mom and dad may not be pitching in.

The hurdle is taxes, and not paying attention to how a marriage changes your tax picture can hit newlyweds in the bank account for years after a wedding. ...

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Don't Forget to Deduct the Cost of Medical Travel

Fri, 15 Mar 2013 09:00:00 EDT

NEW YORK (MainStreet) -- One medical deduction that is often overlooked is the cost of traveling to and from doctors, dentists, therapists, hospitals, clinics and the like to get medical care. Your insurance company may cover the cost of the actual medical care, but it rarely if ever reimburses you for your transportation.

If you take a taxi, bus, train, airplane or ambulance you can deduct the actual expense. If you drive you can deduct 23 cents per mile in lieu of gas and oil, plus any parking fees and tolls.

You can also deduct round-trip travel to visit a sick spouse or dependent if the visits are recommended by a doctor as part of the patient's treatment. ...

Your Smartphone's Newest Skill: Filing Your Tax Return

Thu, 14 Mar 2013 10:00:00 EDT

SAN DIEGO (TheStreet) -- These days you can use your smartphone for just about everything, including e-filing your taxes.

In fact, submitting tax returns via a mobile device is the fastest-growing way of filing, according to H&R Block Product Specialist Heather Watts.

"There's a lot more people, getting a lot more comfortable doing things on their smartphone," Watts says. "If you have your W2 in front of you, it can be done in 15 minutes." ...

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5 Unusual Tax Deductions for Small Businesses

Wed, 13 Mar 2013 15:22:51 EDT

NEW YORK (TheStreet) -- For many small business owners, filing taxes can be a timely and excruciatingly painful experience.

Yes, everyone wants to get money back, but for sole proprietors and business owners taking on filing their taxes themselves, knowing what is and what isn't deductible for your business could be challenging, especially given the Internal Revenue Service's myriad and constantly changing rules and regulations.

Outright.com, an online accounting and bookkeeping service for e-commerce sellers owned by GoDaddy.com, provided TheStreet with a few unconventional, yet perfectly legal, business-related tax deductions. ...

5 Tax Tips That Could Be Big for a Small Business

Wed, 13 Mar 2013 11:00:00 EDT

NEW YORK (TheStreet) -- If you're a small-business owner, chances are you're spending way too much time on taxes or money on an accountant or tax specialist to help you out.

According to the National Small Business Association, 64% of business owners spent more than 40 hours per week last year dealing with federal taxes (up from 57% in 2011), while spending more than $5,000 to complete their tax forms and ship them off to Uncle Sam.

The NSBA says that's because the tax code is way too complex, and small-business owners have few options in trying to simplify things and keep their tax liabilities to a minimum. ...