IRS Summertime Tax Tip 2017-15: Helpful Tips to Know About Gambling Winnings and Losses

Source: IRS Summertime Tax Tip 2017-15: Helpful Tips to Know About Gambling Winnings and Losses

 

Helpful Tips to Know About Gambling Winnings and Losses

Taxpayers must report all gambling winnings as income. They must be able to itemize deductions to claim any gambling losses on their tax return.

Taxpayers who gamble may find these tax tips helpful:

  1. Gambling income. Income from gambling includes winnings from the lottery, horseracing and casinos. It also includes cash and non-cash prizes. Taxpayers must report the fair market value of non-cash prizes like cars and trips to the IRS.
  2. Payer tax form. The payer may issue a Form W-2G, Certain Gambling Winnings, to winning taxpayers based on the type of gambling, the amount they win and other factors. The payer also sends a copy of the form to the IRS. Taxpayers should also get a Form W-2G if the payer withholds income tax from their winnings.
  3. How to report winnings. Taxpayers must report all gambling winnings as income. They normally should report all gambling winnings for the year on their tax return as “Other Income.” This is true even if the taxpayer doesn’t get a Form W-2G.
  4. How to deduct losses. Taxpayers are able to deduct gambling losses on Schedule A, Itemized Deductions, but keep in mind, they can’t deduct gambling losses that are more than their winnings.
  5. Keep gambling receipts. Keep records of gambling wins and losses. This means gambling receipts, statements and tickets or by using a gambling log or diary.

See Publication 525, Taxable and Nontaxable Income, for rules on gambling and Publication 529, Miscellaneous Deductions, for more information on losses. Publication 529 also lists specific types of gambling records a taxpayer may want to keep. Download and view IRS publications on IRS.gov/forms at any time.

IRS Summertime Tax Tip 2017-13: Tips to Keep in Mind on Income Taxes and Selling a Home

Source: IRS Summertime Tax Tip 2017-13: Tips to Keep in Mind on Income Taxes and Selling a Home

 

Homeowners may qualify to exclude from their income all or part of any gain from the sale of their main home.

Below are tips to keep in mind when selling a home:

Ownership and Use. To claim the exclusion, the homeowner must meet the ownership and use tests. This means that during the five-year period ending on the date of the sale, the homeowner must have:

  • Owned the home for at least two years
  • Lived in the home as their main home for at least two years    Gain.  If there is a gain from the sale of their main home, the homeowner may be able to exclude up to $250,000 of the gain from income or $500,000 on a joint return in most cases. Homeowners who can exclude all of the gain do not need to report the sale on their tax return

Loss.  A main home that sells for lower than purchased is not deductible.

Reporting a Sale.  Reporting the sale of a home on a tax return is required if all or part of the gain is not excludable. A sale must also be reported on a tax return if the taxpayer chooses not to claim the exclusion or receives a Form 1099-S, Proceeds from Real Estate Transactions.

Possible Exceptions.  There are exceptions to the rules above for persons with a disability, certain members of the military, intelligence community and Peace Corps workers, among others. More information is available in Publication 523, Selling Your Home.

Worksheets.  Worksheets are included in Publication 523, Selling Your Home, to help you figure the:

  • Adjusted basis of the home sold
  • Gain (or loss) on the sale
  • Gain that can be excluded

Items to Keep In Mind:

  • Taxpayers who own more than one home can only exclude the gain on the sale of their main home. Taxes must paid on the gain from selling any other home.
  • Taxpayers who used the first-time homebuyer credit to purchase their home have special rules that apply to the sale. For more on those rules, see Publication 523. Use the First Time Homebuyer Credit Account Look-up to get account information such as the total amount of your credit or your repayment amount.
  • Work-related moving expenses might be deductible, see Publication 521, Moving Expenses.
  • Taxpayers moving after the sale of their home should update their address with the IRS and the U.S. Postal Service by filing Form 8822, Change of Address.
  • Taxpayers who purchased health coverage through the Health Insurance Marketplace should notify the Marketplace when moving out of the area covered by the current Marketplace plan.

Avoid scams. The IRS does not initiate contact using social media or text message. The first contact normally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

Additional Resources:

I’m not going to stop filing my income tax returns… yet. But check out this documentary. I’m intrigued.

AMERICA — From Freedom To Fascism (Full Length Documentary)

 

 

The documentary America – From Freedom To Fascism can be viewed on youtube.com and has been viewed over 785,000 times.  The question, Aaron Russo, a well known producer and director, inquired about should be a top priority for every citizen of the United States.

 

The tax in question is solely the income tax on wages.  The following list (taken directly from the film) are the many types of taxes we maybe be required to pay depending on our wants and/or needs:

 Automobile Registration Tax | Building Permit Tax | Capital Gains Tax |  CDL License Tax |  Cigarette Tax |  Corporate Income Tax |  Dog License Tax |  Estate Tax |  Federal Unemployment Tax |  Fishing License Tax |  Food License Tax |  Fuel Permit Tax |  Gasoline Tax |  hunting License Tax |  Inheritance Tax |  IRS Interest and Penalties |  Liquor Tax |  Local Income Tax |  Luxury Tax |  Marriage License Tax |  Medicare Tax | Property Tax|  Parking Meters?|  Real Estate Tax |  Septic Permit Tax |  Service Charge Taxes |  Social Security Tax |  Road Usage Tax | Sales Tax | Recreational Vehicle Tax|  Road Toll Booth Taxes |   State Income Tax |  State Unemployment Tax |  Telephone Federal Excise Tax |  Telephone Federal Universal Service Fee Tax |  Telephone Federal, State and Local Surcharges Taxes |  Telephone Recurring and non Recurring Charges Tax |  Telephone State and Local Tax |  Telephone Usage Tax | Toll Bridge Tax | Toll Tunnel Tax |  Trailer Registration Tax |  Utility Tax |  Vehicle License Registration Tax |  Vehicle Sales Tax |  Watercraft Registration Tax |  Well Permit Tax |  Workers Compensations Tax | ….

And once you’ve paid all that, then there’s this: the Tax Rate Schedule for individuals.

(Picture taken from the text Concepts in Federal Taxation 2018 Edition)

2017 tax rate schedule

Keep in mind the term TAXABLE INCOME is imperative because it’s the base amount to determine what your tax will be according to the tax rate schedule.  It already accounts for most of those prior taxes listed above that you’ve paid and then some.

*Yes, there “credits and deductions” available to help lower that taxable income, but they will be covered in a different post.

Two concepts to notice with the tax rate schedule are:

  1.  There is the tax + the percentage over “the next dollar (S)” of income.
  2. You are either paying half (employee) or the full (self-employed) cost of your SOCIAL SECURITY TAX AND MEDICARE taxes throughout the year.

I had a client call me after I prepared her returns one time asking why she doesnt get a refund of boxes 4 and 6 on form W2.  Well ma’am, those are non-refundable taxes paid on your wages (employment taxes).  Box 2 is somewhat of a refundable tax meaning if you chose to withhold more than what’s due, you’ll get the difference back.

Social Security Rates
Old Age, Survivors, and Disability Insurance and Medical Health Insurance.
W2 boxes
Sample generic copy of form W2

 

AMERICA — From Freedom To Fascism (Full Length Documentary)

Corporate Fascism  is another film that I found fascinating.

 

There is so much more to discuss here, but this is just my intro into the topic of tax reform.  It’s a touchy subject, I know, but it should be on the minds of everyone who earns a living and spends their hard earned cash.  I encourage you to pull out last years copy of your W2’s and your 1040 (just 2 pages) and scrutinize it a little bit.  Know what your taxable income was last year. You have a tax adviser/preparer, yes, but it will benefit you to also have an understanding of this very important information.  You have a stake in you!

 

Currently, I try to use the Internal Revenue Code to my advantage to maximize after tax wealth; but that doesn’t mean that I don’t fantasize about what a world the less stress on the implications of income taxes would be like.  Anyway.  More to come.

IR-2017-121: Taxpayers Should Review Their Withholding; Avoid Having Too Much or Too Little Federal Income Tax Withheld

Taxpayers Should Review Their Withholding; Avoid Having Too Much or Too Little Federal Income Tax Withheld

WASHINGTON — The Internal Revenue Service today encouraged taxpayers to consider checking their tax withholding, keeping in mind several factors that could affect potential refunds or taxes they may owe in 2018.

Reviewing the amount of taxes withheld can help taxpayers avoid having too much or too little federal income tax taken from their paychecks. Having the correct amount taken out helps to move taxpayers closer to a zero balance at the end of the year when they file their tax return, which means no taxes owed or refund due.

During the year, changes sometimes occur in a taxpayer’s life, such as in their marital status, that impacts exemptions, adjustments or credits that they will claim on their tax return. When this happens, they need to give their employer a new Form W-4, Employee’s Withholding Allowance Certificate, to change their withholding status or number of allowances.

Employers use the form to figure the amount of federal income tax to be withheld from pay. Making these changes in the late summer or early fall can give taxpayers enough time to adjust their withholdings before the tax year ends in December.

The withholding review takes on even more importance now that federal law requires the IRS to hold refunds a few weeks for some early filers claiming the Earned Income Tax Credit and the Additional Child Tax Credit. In addition, the steps the IRS and state tax administrators are now taking to strengthen protections against identity theft and refund fraud mean some tax returns could face additional review time next year.

So far in 2017, the IRS has issued more than 106 million tax refunds out of the 142 million total individual tax returns processed, with the average refund well over $2,700. Historically, refund dollar amounts have increased over time.

Making a Withholding Adjustment

In many cases, a new Form W-4, Employee’s Withholding Allowance Certificate, is all that is needed to make an adjustment. Taxpayers submit it to their employer, and the employer uses the form to figure the amount of federal income tax to be withheld from their employee’s pay.

The IRS offers several online resources to help taxpayers bring taxes paid closer to what they owe. They are available anytime on IRS.gov. They include:

IRS Withholding Calculator – Online tool helps determine the correct amount of tax to withhold.
IRS Publication 505 – Tax Withholding and Estimated Tax.
Tax Withholding – Complete information on withholding, estimated taxes, FAQs, and more.

Self-employed taxpayers, including those involved in the sharing economy, can use the Form 1040-ES worksheet to correctly figure their estimated tax payments. If they also work for an employer, they can often forgo making these quarterly payments by instead having more tax taken out of their pay.

Source: IR-2017-121: Taxpayers Should Review Their Withholding; Avoid Having Too Much or Too Little Federal Income Tax Withheld

IRS Summertime Tax Tip 2017-08: Summer Newlyweds Should Also Think About Taxes

Summer Newlyweds Should Also Think About Taxes

Spring showers bring summer flowers and weddings typically aren’t far behind. Newlyweds have a lot to think about and taxes might not be on the list. However, there is good reason for a new couple to consider how the nuptials may affect their tax situation.

The IRS has some tips to help in the planning:

Report changes in:

Name. When a name changes through marriage, it is important to report that change to the Social Security Administration. The name on a person’s tax return must match what is on file at SSA. If it doesn’t, it could delay any refund. To update information, file Form SS-5, Application for a Social Security Card. It is available on SSA.gov, by calling 800-772-1213 or at a local SSA office.

Address. If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, send the IRS Form 8822, Change of Address. Notify the postal service to forward mail by going online at USPS.com or at a local post office.

Consider changing withholding. Newly married couples must give their employers a new Form W-4, Employee’s Withholding Allowance Certificate, within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the Additional Medicare Tax. Use the IRS Withholding Calculator at IRS.gov to help complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information.

Decide on a new filing status. Married people can choose to file their federal income taxes jointly or separately each year. While filing jointly is usually more beneficial, it’s best to figure the tax both ways to find out which works best. Remember, if a couple is married as of Dec. 31, the law says they’re married for the whole year for tax purposes.

Select the right tax form. Choosing the right income tax form can help save money. Newly married taxpayers may find they now have enough deductions to itemize them on their tax returns. Newlyweds can claim itemized deductions on Form 1040, but not on Form 1040A or Form 1040EZ.

Avoid scams. The IRS will never initiate contact using social media or text message. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

Additional Resources:

Topic 157, Change Your Address – How to Notify the IRS

IRS YouTube Videos:

Getting Married? – English | Spanish | ASL
Changed Your Name After Marriage or Divorce? – English | Spanish | ASL
IRS Withholding Calculator – English | Spanish | ASL

Share this tip on social media: #IRSTaxTip – Summer Newlyweds Should Also Think About Taxes. https://go.usa.gov/xNuUq

Source: IRS Summertime Tax Tip 2017-08: Summer Newlyweds Should Also Think About Taxes

Independent Contractor or Sub Contractor (Self-Employed individual),  also known as the Sharing Economy

If you use one of the many online platforms available to rent a spare bedroom, provide car rides, or to connect and provide a number of other goods or services, you’re involved in what is sometimes called the sharing economy.

An emerging area of activity in the past few years, the sharing economy has changed how people commute, travel, rent vacation accommodations and perform many other activities. Also referred to as the on-demand, gig or access economy, the sharing economy allows individuals and groups to utilize technology advancements to arrange transactions to generate revenue from assets they possess – (such as cars and homes) – or services they provide – (such as household chores or technology services). Although this is a developing area of the economy, there are tax implications for the companies that provide the services and the individuals who perform the services.

This means if you receive income from a sharing economy activity, it’s generally taxable even if you don’t receive a Form 1099-MISC, Miscellaneous Income, Form 1099-K, Payment Card and Third Party Network Transactions, Form W-2, Wage and Tax Statement, or some other income statement. This is true even if you do it as a side job or just as a part time business and even if you are paid in cash. On the other hand, depending upon the circumstances, some or all of your business expenses may be deductible, subject to the normal tax limitations and rules.

The IRS encourages taxpayers participating in the sharing economy to understand the potential tax issues affecting them. The IRS is providing additional information to help people, and many tax professionals can assist with tax issues and questions related to this emerging area. The tax software industry is also looking at this area, and many software programs can help when people prepare their taxes in 2017.

The following tax issues may apply to those participating in the sharing economy:

Issues for Individuals Performing Services

The IRS reminds taxpayers in the sharing economy that there are several tax components they need to keep in mind throughout the year, not just when it comes time to file the tax return. Important areas include these:

Filing Requirements

Whether or not you participate in the sharing economy, if you received a payment during the calendar year as a self-employed individual, an employee or a small business, you may be required to file a tax return to report that income to the IRS. This includes payment received in the form of money, goods, property, or services.

Helpful Links:

Related Forms:

Employee or Independent Contractor

If you are providing services and are not certain whether you are an employee or independent contractor, more information is available in Publication 1779 – Independent Contractor or Employee?.

Helpful Links:

Related Forms:

Tax Payments: Those in Sharing Economy May Need to Make Estimated Payments

You may make estimated tax payments to pay tax on income that isn’t subject to withholding (such as income from self-employment and rental activities). You may also make estimated tax payments to avoid penalties if the amount of income tax withholding from your salary, pension or other income is not enough to cover your tax for the year.

Taxes are pay-as-you-go, and making estimated tax payments is HOW you pay-as-you-go. Taxpayers use estimated tax payments to pay both income tax and self-employment tax (Social Security and Medicare). If you don’t pay enough tax, through either withholding or estimated tax, or a combination of both, you may have to pay a penalty. The payment of estimated tax for the income for the first quarter of the calendar year (that is, January through March) is due on April 15. Payments for subsequent quarters are due on June 15, September 15 and January 15. If you don’t pay enough by these dates you may be charged a penalty even if you’re due a refund when you file your tax return.

If you also work as an employee, you can often avoid needing to make estimated tax payments by having more tax withheld from your paycheck. This may be a particularly attractive option if, for example, your sharing economy activity is merely a side job or part-time business. To do this, fill out a new Form W-4 and give it to your employer. The Withholding Calculator is a helpful resource.

Example: You file as head of household claiming a dependent son. You take the standard deduction and you expect no refundable credits for 2016. For all of 2016, you worked full-time as an office manager and earned wages from this employment. During the last half of the year, you also went to work for a company that provides transportation through an app request and earned $10,000. Federal taxes were not withheld from these earnings.

Your adjusted gross income (AGI) for the year is $95,250. In 2015, your AGI was $74,325 and your federal tax liability was $8,591. You use the Estimated Tax Worksheet and estimate your 2016 federal tax liability to be $11,015. You only had $8,500 in withholding from your wages from your employment as an office manager.

Since your federal tax withheld of $8,500 is less than your total tax for 2015 and your federal tax withheld is less than 90% of your estimated tax ($11,015 x 90% (.90) = $9,913.50), you must increase your withholding or pay estimated tax for 2016. If not, you can expect to be subject to the Estimated Tax penalty when you file your return.

Helpful links:

Related forms:

Self-Employment Taxes

Self-employed workers are taxed differently from employees. Self-employed individuals (e.g., independent contractors) must pay self-employment tax. Self-employment tax consists of Social Security and Medicare taxes, and with no employer-matching of these taxes, self-employed individuals pay the full amount of Social Security and Medicare taxes themselves. However, don’t confuse it with income tax or estimated taxes.

Helpful links:

Related forms:

Depreciation

Depreciation is an income tax deduction for wear and tear and deterioration of property with a life longer than a year. It’s an annual allowance that lets you recover, over time, the cost or other basis of certain property you own. The kinds of property you can depreciate include machinery, equipment, buildings, vehicles and furniture. You can’t claim depreciation on property held for personal purposes. If you use property, such as a car, for both business or investment and personal purposes, you can depreciate only the business or investment use of that property. Other special rules and limits often apply, especially if you are an employee rather than an independent contractor. In some instances, you may qualify for one of the simplified options, such as the standard mileage rate for business use of a car or the simplified method for claiming the home office deduction.

Helpful links:

Related forms:

Rules for Home Rentals

If you receive rental income for the use of a house or an apartment, including a vacation home, that rental income must be reported on your return in most cases. You may deduct certain expenses, but special rules and limits often apply. These deductible expenses, which may include mortgage interest, real estate taxes, casualty losses, maintenance, utilities, insurance and depreciation, reduce the amount of rental income that is subject to tax.

If you use the dwelling unit for both rental and personal purposes, you generally must divide your total expenses between the rental use and the personal use based on the number of days used for each purpose. You won’t be able to deduct your rental expense in excess of the gross rental income limitation.

Example: You used an online app to rent a room in your house 73 days last year, or 20% of the year. The room is 12 × 15 feet, or 180 square feet. Your entire house has 1,800 square feet of floor space. You can deduct as a rental expense 10% of any expense that must be divided between rental use and personal use, divided again by the percentage of the time the room was available for rent during the year. If your heating bill for the year for the entire house was $600, $12 ($600 × .10 × .20) is a rental expense. The balance, $588, is a personal expense that you cannot deduct

Example: For the purposes of this example, assume that you are using the rental property in the capacity of a self-employed individual. On April 6, you bought a 2000 sq. ft. house to use as a rental property. You do not use the property as your personal residence. You planned to use an online app to advertise and to rent the house for short durations on a full-time basis. You made several repairs and had it ready for rent on July 5. At that time, you offered the house for rent through the online app. The house is considered placed in service in July when it was ready and available for rent. You can begin to depreciate the home’s cost in July.

Example: You repair a small section on one corner of the roof of a house you rent out full time through an online vacation rental application. You deduct the cost of the repair as a rental expense. However, if you completely replace the roof, the new roof is an improvement because it is a restoration of the building. You depreciate the cost of the new roof

There’s a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, don’t report any of the rental income and don’t deduct any expenses as rental expenses. If you provide substantial services that are primarily for your tenant’s convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services don’t include such things as heat and light, cleaning of public areas, or trash collection.

Helpful links:

Business Expenses

The tax code allows you to deduct certain costs of doing business from gross income. Generally, you cannot deduct personal, living or family expenses. You can deduct the business part only, such as supplies, cell phones, auto expenses, food and drinks for passengers, car washes, parking fees, tolls, roadside assistance plans, taxes, and incentives associated with certain electric and hybrid vehicles.

Example: You used your car only for personal purposes during the first 6 months of the year. During the last 6 months of the year, you drove the car a total of 15,000 miles of which 12,000 miles were driven to provide transportation services through a company that provides such services through requests to its app. This gives you a business use percentage of 80% (12,000 ÷ 15,000) for that period. Your business use for the year is 40% (80% × 6/12).  If you are an employee of the transportation company the business portion of the auto expenses related to that job may be deducted only to the extent those expenses exceed 2 percent of your adjusted gross income.

Example: You use your car both for personal purposes and to provide transportation arranged through a company that provides transportation service through its app. You must divide your personal and business expenses based on actual mileage. You can deduct the business part of these actual car expenses, which include depreciation (or lease payments), gas and oil, tires, repairs, tune-ups, insurance, and registration fees. Or, instead of figuring the business part of these actual expenses, you may be able to use the standard mileage rate to figure your deduction. Depending on the facts and circumstances, you may be providing the services either in a self-employed capacity or as an employee. If you are self-employed, you can also deduct the business part of interest on your car loan, state and local personal property tax on the car, parking fees, and tolls, whether or not you claim the standard mileage rate.  If you are providing services as an employee of the company, the business portion of the auto expenses related to that job may be deducted only to the extent those expenses exceed 2 percent of your adjusted gross income.

It’s important to keep good records. Choose a recordkeeping system suited to your business that clearly shows your income and expenses. The business you’re in affects the type of records you need to keep for federal tax purposes. Your recordkeeping system should include a summary of your business transactions. Your records must also show your gross income, as well as your deductions and credits. Federal law sets statutes of limitations that can affect how long you need to keep tax records.

Helpful links:

Form 1099-K, Payment Card and Third Party Network Transactions

Form 1099-K, Payment Card and Third Party Network Transactions, is an information return that reports the gross amount of reportable payment card and third party network transactions for the calendar year to you and the IRS.  If you receive a Form 1099-K, you should retain it and use the information reported on the Form 1099-K in conjunction with your other tax records to determine your correct tax.

Helpful links:

Issues for the Companies Providing Services

Companies providing services in the sharing economy should consider several employment tax issues:

Determining Whether the Individuals Providing Services are Employees or Independent Contractors

This is an important question for taxpayers who are paying others for providing their services in the sharing economy. Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services.

Helpful links:

Employer/Payer Employment Tax Obligations

Once a determination is made (whether by the business or by the IRS), the next step is filing the appropriate forms and paying the associated taxes.

Example: You start your own business that takes product orders online and your employees fill the orders and deliver them to your clients. The first thing you have to do is to get an Employer Identification Number (EIN). You can get your EIN online.

In general, as an employer you must deduct and withhold from each employee’s wages federal income tax and the employee’s share of social security and Medicare taxes. The employer must use the Electronic Federal Tax Payment System (EFTPS) to deposit federal income tax withholding, and both the employer and employee shares of social security and Medicare taxes. You must use either a monthly or a semi-weekly deposit schedule. Before the beginning of each calendar year, you must determine which of the two deposit schedules you are required to use. To determine your payment schedule, review Publication 15 for Forms 941, 944 and 945, or Publication 51 for Form 943. If you fail to make a timely deposit, you may be subject to a failure-to-deposit penalty of up to 15 percent. Generally, you are also liable for Federal Unemployment Tax Act (FUTA) taxes based upon the wages paid to an employee. Once the cumulative liability for FUTA tax exceeds $500, you must deposit that tax with respect to the quarter when the liability exceeded $500.

Example: You run a car service where your customers request rides through your mobile application and your employees provide the transportation services. In addition to withholding and depositing employment taxes during the year, you must prepare and file Form W-2, Wage and Tax Statement to report wages, tips and other compensation paid to an employee. Use Form W-3, Transmittal of Wage and Tax Statements to transmit Forms W-2 to the Social Security Administration. Additionally, in general, you must file Form 941, Employer’s Quarterly Federal Tax Return each quarter. The Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, must also be filed annually

Helpful links:

Related forms:

Payment Card and Third Party Network Transaction Reporting

Section 6050W of the Internal Revenue Code requires payment settlement entities to report payment card and third party network transactions to recipients of payments and the IRS.  Payment settlement entities make these reports on Forms 1099-K, Payment Card and Third Party Network Transactions.  Please note that if you are an employer paying wages to employees, those wage payments should be reported on Forms W-2 and not on Forms in the 1099 series.

Helpful Links:

Source: Sharing Economy Tax Center

New Fax Number for Pauline’s Tax Service.

Sometimes you may find that you have to send over some documents as soon as possible.  If you don’t have access to scanning paper copies and e-mailing then you can use the old fashioned method of faxing.   The new fax number is 303-252-4664, Attention Stephanie or Pauline’s Tax Service.

Documents you might need to fax or e-mail:

  • Bank Statements,
  • New Business Documents,
  • W2’s or other tax related documents,
  • Drivers license and/or Social security card,
  • IRS or State letters/notices.

Generally, you don’t have to send your receipts to me.  However, keep your receipts organized in your -at home- filing system in case the IRS wants to see them.