Employers Hiring Veterans by Year’s End May Get Expanded Tax Credit

IRS Special Edition Tax Tip 2012-14

Employers planning to claim an expanded tax credit for hiring certain veterans should act soon, according to the IRS. Many businesses may qualify to receive thousands of dollars through the Work Opportunity Tax Credit, but only if the veteran begins work before the new year.

Here are six key facts about the WOTC as expanded by VOW to Hire Heroes Act of 2011.

1. Hiring Deadline: Employers may be able to claim the expanded WOTC for qualified veterans who begin work on or after Nov. 22, 2011, but before Jan. 1, 2013.
   
2. Maximum Credit: The maximum tax credit is $9,600 per worker for employers that operate for-profit businesses, or $6,240 per worker for tax-exempt organizations.
   
3. Credit Factors: The amount of credit will depend on a number of factors. Such factors include the length of the veteran’s unemployment before being hired, the number of hours the veteran works and the amount of the wages the veteran receives during the first-year of employment.
   
4. Disabled Veterans: Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
   
5. State Certification: Employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. The form must be filed within 28 days after the qualified veteran starts work. For additional information about your SWA, visit the U.S. Department of Labor’s WOTC website.
   
6. E-file: Some states accept Form 8850 electronically.

Visit the IRS.gov website and enter ‘WOTC’ in the search field for forms and more details about the expanded tax credit for hiring veterans.

Links:

• Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans
• VOW to Hire Heroes Act - Frequently Asked Questions and Answers
• Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit

IRS YouTube Videos:

• Work Opportunity Tax Credit - English | Spanish

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In 2013, Various Tax Benefits Increase Due to Inflation Adjustments

WASHINGTON — For tax year 2013, the Internal Revenue Service announced today annual inflation adjustments for more than two dozen tax provisions.

• The annual exclusion for gifts rises to $14,000 for 2013, up from $13,000 for 2012.
• The amount used to reduce the net unearned income reported on a child’s tax return subject to the “kiddie tax,” is $1,000, up from $950 for 2012.
• The foreign earned income exclusion rises to $97,600, up from $95,100 in 2012.

Details on these inflation adjustments and others such as the low-income housing credit, the dollar limits for high-deductible health plans and other amounts can be found in Revenue Procedure 2012-41, which will be published in Internal Revenue Bulletin 2012-45 on
Nov. 5, 2012.

How to get Federal Tax Lien off...

http://www.irsvideos.gov/Individual/IRSLiens/LienNoticeWithdrawal

Video about the IRS Payment Agreement

http://www.irsvideos.gov/Individual/PayingTaxes/OPA

Diesel fuel penalty waived

In New Jersey, New York and Pennsylvania, the IRS will not impose a tax penalty when dyed diesel fuel is sold for use or used on the highway Oct. 30 through Nov. 20, 2012.

IR-2012-85 has more information.

The Extraordinary Possibilities of the Accounting Profession

AICPA Insights

Posted: 07 Nov 2012 04:00 AM PST I was a kid from a blue-collar immigrant background, growing up in a neighborhood where most adults cobbled together a living from two or three jobs. When I turned 12, our community got its first CPA resident. That’s when I learned what a CPA was, and that it could lead to a better life. Thanks to the CPA profession, I grew up to be able to live the great American Dream. I am honored and excited to write to you as the new AICPA Chairman of the Board of Directors. I believe the CPA profession is full of even more promise today than it was when I first started my career. For those with determination, adaptability and persistence, the profession offers extraordinary possibilities. I’ve learned the key to achieving that success: embracing change and seeing the opportunities in it. There are three ways we can make sure to continue the vibrancy of the profession for the future: We need to actively monitor and address changes in the world around us. A mark of our profession’s greatness is the ingenuity and intelligence with which we anticipate and respond to change. The AICPA is actively engaged in developments related to globalization of business, audit quality, attest services, financial reporting, legislation and regulation, tax law, technology and more. In addition, CPAs who hold the Chartered Global Management Accountant designation will determine what management accounting looks like in the future, and will be integral to shaping the profession as we move through the 21st Century. We must continue to address challenges and shape our future on many fronts. We must maximize our talent pool by making sure everyone, regardless of race, ethnicity, gender, religion or anything else is aware of the rewards and possibilities of the accounting profession. We need to make the profession more desirable to the smartest people from all backgrounds. During my term, we’ll be redoubling our efforts to achieve diversity. In Sept., we launched the AICPA National Commission on Diversity and Inclusion, which brings together advocacy groups and employers to help all stakeholders implement best practices while sharing resources and knowledge. We also will be focusing on improving gender diversity in the profession and promoting women’s advancement. Attaining enhanced diversity today will help the profession recruit the brightest minds of tomorrow. The nation’s demographics are changing, and it’s essential that the profession be an open one that makes our clients, customers, suppliers and other stakeholders feel welcomed. We have to develop a sustainable framework so the profession continues to thrive. To accomplish that goal, we will have to challenge ourselves in several areas. We must, for one, remain deeply involved in advocacy in Washington to protect the interests of the profession and the public. We also need to do some introspection. For instance, I think we should consider whether it’s time to change our firm revenue model and the way our practices are structured and managed to meet the needs and expectations of a new generation. And we have to ensure new CPAs are prepared to take on leadership responsibilities and become the stewards of our profession in years to come. The beauty of being a CPA is that the opportunities never end. The same can be said of our profession as a whole: Many opportunities await us if we identify and seize them. We can’t leave the future of our profession to chance. I’m excited to work with all of you to position our profession for future success by affecting the changes that lie ahead instead of them affecting us.   Richard J. Caturano, CPA, CGMA, Chairman, American Institute of CPAs

IRS Announces Qualified Disaster Treatment of Payments to Victims of Hurricane Sandy

The Internal Revenue Service today alerted employers and other taxpayers that because Hurricane Sandy is designated as a qualified disaster for federal tax purposes,  qualified disaster relief payments made to individuals by their employer or any person can be excluded from those individuals’ taxable income.

Qualified disaster relief payments include amounts to cover necessary personal, family, living or funeral expenses that were not covered by insurance. They also include expenses to repair or rehabilitate personal residences or repair or replace the contents to the extent that they were not covered by insurance. Again, these payments would not be included in the individual recipient’s gross income.

The IRS also announced that the designation of Hurricane Sandy as a qualified disaster means that employer-sponsored private foundations may provide disaster relief to employee-victims in areas affected by the hurricane without affecting their tax-exempt status.  Like all charitable organizations, employer-sponsored private foundations should follow the guidance in Publication 3833, Disaster Relief: Providing Assistance Through Charitable Organizations, in providing assistance to employees or their family members affected by Hurricane Sandy.

1. IRS Provides Tax Relief to Victims of Hurricane Sandy; Return Filing and Tax Payment Deadline Extended to Feb. 1, 2013

In the aftermath of Hurricane Sandy, the Internal Revenue Service announced additional tax relief to affected individuals and businesses.

Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Connecticut, New Jersey and New York will receive tax relief. Other locations may be added in coming days based on additional damage assessments by FEMA.

The tax relief postpones various tax filing and payment deadlines that occurred starting in late October. As a result, affected individuals and businesses will have until Feb. 1, 2013 to file these returns and pay any taxes due. This includes the fourth quarter individual estimated tax payment, normally due Jan. 15, 2013. It also includes payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct. 31, 2012 and Jan. 31, 2013 respectively. It also applies to tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period. 

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply. The IRS automatically provides this relief to any taxpayer located in the disaster area. Taxpayers need not contact the IRS to get this relief.

Beyond the relief provided by law to taxpayers in the FEMA-designated counties, the IRS will work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in the areas affected by Hurricane Sandy. All workers assisting the relief activities in the covered disaster areas who are affiliated with a recognized government or philanthropic organization are eligible for relief.  Taxpayers who live outside of the impacted area and think they may qualify for this relief need to contact the IRS at 866-562-5227 begin_of_the_skype_highlighting            866-562-5227      end_of_the_skype_highlighting.

In addition, the IRS is waiving failure-to-deposit penalties for federal payroll and excise tax deposits normally due on or after the disaster area start date and before Nov. 26, if the deposits are made by Nov. 26, 2012. Details on available relief can be found on the disaster relief page on IRS.gov.

The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, individuals should visit disasterassistance.gov.

The IRS wants to assure taxpayers, businesses and tax preparers that it is working aggressively to monitor the situation and provide additional relief as needed.
So far, IRS filing and payment relief applies to the following localities:

In Connecticut (starting Oct. 27): Fairfield, Middlesex, New Haven, and New London Counties and the Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation located within New London County;

In New Jersey (starting Oct. 26): Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, Somerset and Union;

In New York (starting Oct. 27): Bronx, Kings, Nassau, New York, Queens, Richmond, Rockland, Suffolk and Westchester.

IRS Gives Additional Time to Taxpayers and Preparers Affected by Hurricane Sandy; File and Pay by Nov. 7

WASHINGTON — The Internal Revenue Service today announced it is granting taxpayers and tax preparers affected by Hurricane Sandy until Nov. 7 to file returns and accompanying payments normally due today.  

The relief applies to taxpayers and tax preparers in an area affected by Hurricane Sandy or otherwise impacted by the storm that hit the Mid-Atlantic and Northeastern United States this week.

This relief primarily applies to businesses whose payroll and excise tax returns and payments are normally due today. No action is required by the taxpayer; this relief is automatic. Regular federal tax deposits are due according to current rules. However, the IRS notes that if taxpayers or tax practitioners receive a penalty notice for this period, they can contact the IRS at the number on the notice to request penalty abatement due to reasonable cause on account of the storm.

IRS expects to grant additional filing and payment relief as qualifying disaster declarations are issued by the Federal Emergency Management Agency (FEMA). Details will be posted on the Tax Relief in Disaster Situations page on IRS.gov.

Choose your tax volunteer role – a chance to touch many lives

Ever thought about volunteering to help people with their tax returns? With thousands of volunteer tax preparation sites nationwide, you can touch many lives as a tax volunteer. Helping in either the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs can be rewarding while serving a vital role in your local community. Full story