The IRS Audit Blog

Archive for April, 2008

Question: 1099 and business-related expense deduction?

To figure out and claim business-related expense deduction for having worked under 1099 as an independant contractor, what form do I use?

Is it Form 1040-ES or Schedule C-EZ (if my exception is under IRS threshold) or both?

Answer: Schedual C-EZ or C, whichever you’re required.

(Never limit your business deductions to 1099′s that you send out. You will almost always be able to claim an aweful lot more. Examples: mileage on your vehicle, square footage in your home and depreciation, if you use it for the business, any cash expenses that you get receipts for, depreciation on equipment…)

Tax assistance

The Marshall County Retired and Senior Volunteer Program will be providing free income tax preparation and electronic filing again this year, which will allow most taxpayers to file not only their fed

3. Unikátne / INTERNATIONAL RESCUE SYSTEM s.r.o. – IRS Slovakia / Mimoriadna udalosť na Slovensku

Question: Severance pay – tax deductible?

Ok, this is in an S Corporation point of view – not the individual who gets the severance package. If the business pays the package to an employee after he/she leaves, is that deductible to the company? Or is it just set off as an expense? I’ve looked into it and found nothing on irs.gov yet… Looked in Form 1120. Any help would be great!

Thanks!

Answer: Well, you won’t find on the 1120S form either….

It’s a version of wages, which is defined in IRS pub 15.

Proposed Schedule

The Announcement provides that the IRS is currently developing the Schedule and that the Schedule will be required to be filed with the taxpayer’s Form 1120 (U.S. Corporation Income Tax Return) or other business tax return.

Creating a Healthy “New You”

Camp “New You” is a program that’s designed to teach children and their families how to live healthy and get active.

TIGER’S Apology Video Gave Me WOOD!

Question: IT/Contractor small business tax calculations?

I want to register with the IRS as an independent IT contractor of sorts? I would essentially have to get an EIN as my few little clients require it for auditing purposes. My question is, if I intend to make less than 10k with this small business venture, what can I expect in relation to how much I’ll be taxed?

Also any suggestions to help me out as a start this venture would be awesome. Thanks in advance!

Answer: If that’s your only income, and you are not a dependent, your income tax will be very low, around $105 on $10,000. If you have other income, your income tax will depend on your total income for the year, filing status, and deductions.

If you are a dependent, then your income tax would be more like $455.

In either case, you’d owe self employment tax, for social security and medicare, of around $1413.

This assumes a net income of $10,000 after any associated allowable expenses have been deducted.

IRS targets firms that misclassify contractors

Companies that misclassify workers as independent contractors instead of actual employees could face scrutiny and penalties in IRS audits that begin this month, industry observers say.

Scientology A Pyramid Scheme

Question: Change my EIN to a non-profit?

I started a new Non-Profit corporation, but while filling out the IRS online application for an EIN I chose “corporation” instead of “non-profit”. The letter with the EIN states that we have to file form 1120. Do I need to take any steps to change the official status to that of a Non-Profit, which files form 990?

Thanks!

Answer: If you have not received IRS exemption determination, it may be treated by the IRS as a regular for-profit entity, which means that it would need to file annual returns, for example for 1120 for corporations. It may be exempt from filing, though, if it is merely a club. The IRS explains that, when applying for the Employer Identification Number, the club may check the line for “banking purposes only”
Please visit www.irs.gov/instructions/iss4/ch02.html for further clarification.

Marvell Technology Reports Fiscal Fourth Quarter and Fiscal 2010 Results

SANTA CLARA, Calif., March 4 /PRNewswire-FirstCall/ — Marvell Technology Group Ltd.

IRS Form 990 Updates