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Online & Birmingham, AL, United States
MOORE’S SERVICES, LLC is a full service Tax Preparation Company that provides year-round services. We specialize in both individual and business taxes. We also offer Notary Public Services. Come in and see us today.

Friday, August 11, 2017

Five Tax Tips when starting a business



1. Business Structure.  An early choice to make is to decide on the type of structure for the business. The most common types are sole proprietor, partnership and corporation. The type of business chosen will determine which tax forms to file.
2. Business Taxes. There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax a business pays depends on the type of business structure set up. Taxpayers may need to make estimated tax payments. If so, use IRS Direct Pay to make them. It’s the fast, easy and secure way to pay from a checking or savings account.
3. Employer Identification Number (EIN).  Generally, businesses may need to get an EIN for federal tax purposes. Search “EIN” on IRS.gov to find out if the number is necessary. If needed, it’s easy to apply for it online.
4. Accounting Method.  An accounting method is a set of rules used to determine when to report income and expenses. Taxpayers must use a consistent method. The two most common are the cash and accrual methods:
a. Under the cash method, taxpayers normally report income and deduct expenses in the year that they receive or pay them.
b. Under the accrual method, taxpayers generally report income and deduct expenses in the year that they earn or incur them. This is true even if they get the income or pay the expense in a later year.


For more info visit www.mooresservicesonline.com

MOORES'S SERVICES, LLC 
2160 Green Springs Hwy Suite E.
Birmingham, Al  35205

Phone: 205-324-8753
Email: mooresservices1@gmail.com

Tuesday, March 14, 2017

Electronic Payment/Payment Agreement Options Available to Those Who Owe Taxes

The Internal Revenue Service today reminded taxpayers that it’s easier than ever to pay taxes electronically. For those unable to pay on time, several quick and easy solutions are available.
This is the seventh in a series of 10 IRS tips called the Tax Time Guide. Taxpayers can use these tips to find solutions to common tax issues as the April 18 tax deadline approaches.
Taxpayers who owe taxes can now choose among several quick and easy electronic payment options, including the following:
  • Electronic Funds Withdrawal allows taxpayers to e-file and pay from their bank account when using tax preparation software or a tax professional. EFW is only available when electronically filing a tax return.
  • Direct Pay. Available at IRS.gov/directpay, this free online tool allows taxpayers to securely pay their taxes directly from checking or savings accounts without any fees or preregistration. Taxpayers can schedule payments up to 30 days in advance. Those using the tool will receive instant confirmation when they submit their payment.
  • Credit or Debit Card. Taxpayers can pay online, by phone or with their mobile device through any of the authorized debit and credit card processors. The processor charges a fee. The IRS doesn’t receive or charge any fees for payments made with a debit or credit card. Go to https://www.irs.gov/payments for authorized card processors and phone numbers.
  • IRS2Go. The IRS2Go mobile app is free and offers taxpayers the option to make a payment with Direct Pay for free or by debit or credit card through an approved payment processor for a fee. Download IRS2Go free from Google Play, the Apple App Store or the Amazon App Store.
  • Electronic Federal Tax Payment System. This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll or for more information, call 800-555-4477, or visit eftps.gov.
  • Cash. Taxpayers paying with cash can use the PayNearMe option. Payments are limited to $1,000 per day, and a $3.99 fee applies to each payment. The IRS urges taxpayers choosing this option to start early, because PayNearMe involves a four-step process. Initiating a payment well ahead of the tax deadline will help taxpayers avoid interest and penalty charges. The IRS offers this option in cooperation with OfficialPayments.com/fed and participating 7-Eleven stores in 34 states. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.    
Taxpayers can electronically request an extension of time to file. An extension of time to file is not an extension to pay. Taxes are still due by the original due date. Taxpayers can get an automatic extension when making a payment with Direct Pay, Electronic Federal Tax Payment System or by debit or credit card. Select “Form 4868” as the payment type to receive the automatic extension.
Taxpayers who choose to pay by check or money order should make the payment out to the “United States Treasury.” To help ensure that the payment gets credited promptly, also enclose a Form 1040-V payment voucher. Also, print on the front of the check or money order: “2016 Form 1040”; name; address; daytime phone number; and Social Security number.

Taxpayers can view their federal tax account balances online. It’s safe, secure and available on the "Finding out How Much You Owe" page on IRS.gov. They can also access payment options or apply for an installment agreement on this page. The IRS advises taxpayers to file either an income tax return or a request for a tax-filing extension by this year’s April 18 deadline to avoid late-filing penalties. This penalty can be ten times as costly as the penalty for paying late.
Taxpayers who owe, but can’t pay the balance in full, do have options. Often they qualify for one of several relief programs, including:
  • Payment Plans, Installment Agreements -- Most people can set up a payment plan with the IRS online in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement application to set up a short-term payment plan of 120-days or less, or a monthly payment agreement for up to 72 months. With the Online Payment Agreement, no paperwork is required, there is no need to call, write or visit the IRS and qualified taxpayers can avoid the IRS filing a Notice of Federal Tax Lien unless it previously filed one. Alternatively, taxpayers can request a payment agreement by filing Form 9465. This form can be downloaded from IRS.gov and mailed along with a tax return, IRS bill or notice.
  • Offer In Compromise -- Some struggling taxpayers may qualify for an offer-in-compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to make a determination on their ability to pay. To help determine eligibility, use the Offer in Compromise Pre-Qualifier, a free online tool available on IRS.gov.

Deceased Taxpayers – Filing the Estate Income Tax Return

There are two kinds of taxes owed by an estate: One on the transfer of assets from the decedent to their beneficiaries and heirs (the estate tax), and another on income generated by assets of the decedent’s estate (the income tax). This page contains basic information to help you understand when an estate is required to file an income tax return.

When someone dies, their assets become property of their estate. Any income those assets generate is also part of the estate and may trigger the requirement to file an estate income tax return. Examples of assets that would generate income to the decedent’s estate include savings accounts, CDs, stocks, bonds, mutual funds and rental property. IRS Form 1041, U.S. Income Tax Return for Estates and Trusts, is required if the estate generates more than $600 in annual gross income.

The decedent and their estate are separate taxable entities. Before filing Form 1041, you will need to obtain a tax ID number for the estate. An estate’s tax ID number is called an “employer identification number,” or EIN, and comes in the format 12-345678X. You can apply online for this number. You can also apply by FAX or mail; see How to Apply for an EIN.

Filing the Final Return(s) of a Deceased Person

In general, the final individual income tax return of a decedent is prepared and filed in the same manner as when they were alive. All income up to the date of death must be reported and all credits and deductions to which the decedent is entitled may be claimed. File the return using Form 1040 or, if the decedent qualifies, one of the simpler forms in the 1040 series (Forms 1040-A or 1040-EZ). More information is available in the Form 1040 Instructions, in Publication 17, Your Federal Income Tax, and in IRS Publication 559, Survivors, Executors and Administrators.
If the decedent has not done so, you may also have to file individual income tax returns for years preceding the year of death. From IRS correspondence you find in their personal records, you may learn that the decedent has not filed required returns. You may also obtain verification of non-filing and certain income documents of the decedent from the IRS using IRS Form 4506-T, Request for Transcript of Tax Return. Before you submit any information request to the IRS, see Getting Information from the IRS.

If tax is due on the decedent’s individual income tax return for the year of death, or on any returns you file for preceding years, submit payment with the return or see Make a Payment for other payment options, including payment by debit card, credit card or electronic funds transfer. If you can't pay the amount due immediately, you may qualify for a payment plan or installment agreement.
If the decedent is due a refund of any individual income tax (Form 1040), you may claim that refund using IRS Form 1310, Statement of a Person Claiming Refund Due a Deceased Taxpayer

Estate Tax

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706 (PDF)). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit.
Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012, $5,250,000 in 2013, $5,340,000 in 2014, $5,430,000 in 2015, $5,450,000 in 2016, and $5,490,000 in 2017.

Beginning January 1, 2011, estates of decedents survived by a spouse may elect to pass any of the decedent’s unused exemption to the surviving spouse. This election is made on a timely filed estate tax return for the decedent with a surviving spouse. Note that simplified valuation provisions apply for those estates without a filing requirement absent the portability election

Filing Estate and Gift Tax Returns

When to File

Generally, the estate tax return is due nine months after the date of death. A six month extension is available if requested prior to the due date and the estimated correct amount of tax is paid before the due date.
The gift tax return is due on April 15th following the year in which the gift is made.

Where to File

Use the below mailing address for all tax forms filed at the Cincinnati Service Center including Estate and Gift tax returns:
Internal Revenue Service
Cincinnati, OH 45999
To mail FedEx packages, please use the following street address:
Internal Revenue Service
201 W. Rivercenter Blvd
Covington, KY 41011
To pay Estate and Gift tax online, use the secure and convenient Electronic Federal Tax Payment System.

Contact Information

For questions about return accounts, lien discharges, extensions (no tax law questions), and closing letter requests for estate tax returns filed on or after June 1, 2015, call: (866) 699-4083. For more information on closing letters, see When can I expect the Estate Tax Closing Letter? at Frequently Asked Questions on Estate Taxes.
Many general estate and gift tax law questions can still be answered by calling: (800) 829-1040. You may also find many answers to your questions by visiting Forms and Publications.
Caution: DO NOT submit tax related questions below. If you have a tax question that was not answered here or by checking Frequently Asked Questions, please call our toll-free tax assistance line at 1-800-829-1040 for individual tax questions or 1-800-829-4933 for business tax questions. We will not respond to tax related inquiries submitted on this page.
If you have suggestions or comments (or suggested FAQs) for the Estate and Gift Tax website, please contact us by clicking here: CONTACT ESTATE AND GIFT TAX. We will not be able to respond to your email, but will consider it when making improvements or additions to this site.

Disability and Earned Income Tax Credit

Some disability retirement benefits qualify as earned income to claim the Earned Income Tax Credit or EITC. Also, you may claim a relative of any age as a qualifying child if the relative is totally and permanently disabled and fits all other EITC requirements.

What Disability Benefits Qualify as Earned Income for EITC?

IRS considers disability retirement benefits as earned income until you reach minimum retirement age. Minimum retirement age is the earliest age you could have received a pension or annuity if you did not have the disability.

After you reach minimum retirement age, IRS considers the payments your pension and not earned income.

Benefits such as Social Security Disability Insurance, SSI, or military disability pensions are not considered earned income and cannot be used to claim the EITC. You may qualify for the credit only if you,or your spouse, if filing a joint return, have other earned income.

Read more about additional requirements for qualifying for EITC here. Or, use the EITC Assistant to help you determine if you meet the additional requirements for qualifying for EITC. Spanish EITC Assistant.

Read more about Disability Benefits in Publication 596, Earned Income Credit or Publication 596 (SP), Credito por Ingreso del Trabajo

Disability Insurance Payments. Payments you received from a disability insurance policy that you paid the premiums for are not earned income. It does not matter whether you have reached minimum retirement age. If this policy is through your employer, your Form W-2 may show the amount in box 12 with code “J.”Read more about Life Insurance & Disability Insurance Proceeds here.

A Qualifying Child with a Disability

To be your qualifying child for EITC, a child must have a Social Security Number that is valid for employment and is issued before the due date of the return. The child must also pass the age, relationship, residency, and joint return tests. Your child must be your son, daughter, adopted child, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister or a descendent of any of them.
Age Test for Qualifying Child with a Disability. There is no age limit and the child does not have to be younger than you if the qualifying child is permanently and totally disabled. Your qualifying child is permanently and totally disabled if both of the following apply:
  1. He or she cannot engage in any substantial gainful activity because of a physical or mental condition and
  2. A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.

If the qualifying child receives disability benefits, you can still use the child for EITC purposes. Read more about the additional tests for a qualifying child here.
Proof of Permanently and Totally Disabled. To prove your claim of EITC for a child who is permanently and totally disabled, you need a letter from the child’s doctor, other healthcare provider or any social service program or agency verifying the child is permanently and totally disabled.
Sheltered Employment. A child working for minimal pay under a special program for people with disabilities is not engaged in a “substantial gainful activity” under the definition of permanently and totally disabled. Work for minimal pay offered to people with physical or mental disabilities or sheltered employment must be offered by qualified locations. Qualified locations are:
  • Sheltered workshops,
  • Hospitals and similar institutions,
  • Homebound programs, and
  • Department of Veterans Affairs (VA) sponsored homes.

What do I have to do to get EITC?

You must file a tax return to determine your eligibility to claim the EITC. Many miss out because they owe no tax so do not file a tax return.

Free Tax Assistance. Special assistance is available for persons with disabilities. If you are unable to complete your tax return because of a disability, you may be able to obtain assistance from an IRS office or the Volunteer Income Tax Assistance or Tax Counseling for the Elderly Programs sponsored by IRS.
Free File Your Return. Free File is the fast, easy and free way to prepare and e-file your federal taxes online. The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the Internal Revenue Service and the Free File Alliance LLC, a group of private sector tax software companies. Or you can use the free fillable tax forms feature. Find out more about Free File here.
Find Tips for Choosing a Tax Return Preparer here.

EITC Impact on Other Government Benefits

Refunds received from the Earned Income Tax Credit (EITC or EIC), the Child Tax Credit (CTC) or other refundable credits are not considered income and is not counted as a resource for at least 12 months from when your receive it for benefits or assistance under any Federal program or under any State or local program financed in whole or in part with Federal funds.
But, it is always best to check with your local benefit coordinator to find out if your benefits fall under this provision.