Renting out a vacation property to others can be profitable. If you do this,
you must normally report the rental income on your tax return. You may
not have to report the rent, however, if the rental period is short and you
also use the property as your home. Here are some tips that you should know:
- Vacation Home. A vacation home
can be a house, apartment, condominium, mobile home, boat or similar
property.
- Schedule E. You usually
report rental income and rental expenses on Schedule
E, Supplemental Income and Loss. Your rental income may also be
subject to Net
Investment Income Tax.
- Used as a Home. If the property is
“used as a home,” your rental expense deduction is limited. This means
your deduction for rental expenses can’t be more than the rent you
received.
- Divide Expenses. If you personally
use your property and also rent it to others, special rules apply. You
must divide your expenses between rental use and personal use. To figure
how to divide your costs, you must compare the number of days for each
type of use with the total days of use.
- Personal Use. Personal use may
include use by your family. It may also include use by any other property
owners or their family. Use by anyone who pays less than a fair rental
price is also considered personal use.
- Schedule A. Report deductible
expenses for personal use on Schedule
A, Itemized Deductions. These may include costs such as mortgage
interest, property taxes and casualty losses.
- Rented Less than 15
Days.
If the property is “used as a home” and you rent it out fewer than 15 days
per year, you do not have to report the rental income. In this case you
deduct your qualified expenses on Schedule A.
Source: Internal Revenue Service
contact@officetaxservices.com
(858)247-1680
Understanding your tax obligation is one key to business success. When you
start a business, you need to know about income taxes, payroll taxes and much
more. Here are five IRS tax tips that can help you get your business off to a
good start:
- Business Structure. An early choice you
need to make is to decide on the type of structure
for your business. The most common types are sole proprietor,
partnership and corporation. The type of business you choose will
determine which tax forms you file.
- 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 your
business pays depends on the type of business structure you set up. You
may need to make estimated
tax payments. If you do, you can use IRS
Direct Pay to make them. It’s the fast, easy and secure way to pay
from your checking or savings account.
- Employer Identification
Number (EIN).
You
may need to get an EIN for federal tax purposes.
- Accounting Method. An accounting
method is a set of rules that you use to determine when to report
income and expenses. You must use a consistent method. The two that are
most common are the cash and accrual methods. Under the cash method, you
normally report income and deduct expenses in the year that you receive or
pay them. Under the accrual method, you generally report income and deduct
expenses in the year that you earn or incur them. This is true even if you
get the income or pay the expense in a later year.
- Employee Health Care. The Small
Business Health Care Tax Credit helps small businesses and tax-exempt
organizations pay for health care coverage they offer their employees.
You’re eligible for the credit if you have fewer than 25 employees who
work full-time, or a combination of full-time and part-time. The maximum
credit is 50 percent of premiums paid for small business employers and 35
percent of premiums paid for small tax-exempt employers, such as
charities.
Source: Internal Revenue Service
contact@officetaxservices.com
(858)247-1680
8/31/2016
- File Form 730 (Monthly Tax Return for Wagers) and pay tax on wagers accepted during July.
-
File Form 2290 (Heavy Highway Vehicle Use Tax Return) and pay the tax for vehicles first used during
July.
- Deposit payroll tax for payments on Aug 24-26 if the semiweekly
deposit rule applies
contact@officetaxservices.com
(858)247-1680
Tax-related identity theft normally occurs when someone uses your stolen
Social Security number to file a tax return claiming a fraudulent refund. Many
people first find out about it when they do their taxes.
The IRS is working hard to stop identity theft with a strategy of
prevention, detection and victim assistance. Here are nine key points:
- Taxes. Security.
Together.
The IRS, the states and the tax industry need your help. We can’t fight
identity theft alone. The Taxes. Security. Together. awareness campaign is
an effort to better inform you about the need to protect your personal,
tax and financial data online and at home.
- Protect your Records. Keep your Social
Security card at home and not in your wallet or purse. Only provide your
Social Security number if it’s absolutely necessary. Protect your personal
information at home and protect your computers with anti-spam and
anti-virus software. Routinely change passwords for internet accounts.
- Don’t Fall for Scams. Criminals often
try to impersonate your bank, your credit card company, even the IRS in
order to steal your personal data. Learn to recognize and avoid those fake
emails and texts. Also, the IRS will not call you threatening a lawsuit,
arrest or to demand an immediate tax payment. Normal correspondence is a
letter in the mail. Beware of threatening phone calls from someone
claiming to be from the IRS.
- Report Tax-Related ID
Theft to the IRS. If you cannot e-file your return because a tax return
already was filed using your SSN, consider the following steps:
• File your taxes by paper and pay any taxes owed. • File an IRS
Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according
to the instructions. You may include it with your paper return.
• File a report with the Federal Trade Commission using the FTC
Complaint Assistant; • Contact one of the three credit bureaus so
they can place a fraud alert or credit freeze on your account;
- IRS Letters. If the IRS identifies a
suspicious tax return with your SSN, it may send you a letter asking you
to verify your identity by calling a special number or visiting a Taxpayer
Assistance Center. This is to protect you from tax-related identity theft.
- IP PIN. If you are a confirmed
ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique
six-digit number that you will use to e-file your tax return. Each year,
you will receive an IRS letter with a new IP PIN.
- Report Suspicious
Activity.
If you suspect or know of an individual or business that is committing tax
fraud, you can visit IRS.gov and follow the chart on How to Report
Suspected Tax Fraud Activity.
- Combating ID Theft. In 2015, the IRS
stopped 1.4 million confirmed ID theft returns and protected $8.7 billion.
In the past couple of years, more than 2,000 people have been convicted of
filing fraudulent ID theft returns.
- Service Options. Information about
tax-related identity theft is available online. We have a special section
on IRS.gov devoted to identity theft and a phone number available for
victims to obtain assistance.
Source: Internal Revenue Service
contact@officetaxservices.com
(858)247-1680
