The latest data I read shows that IRS income in 2009 is down 42% from 2008. What does this mean for you and me? Uh….can you say aggressive.
Yes, they have hired more auditors to keep us all in line and make sure they extract all they can from us. I have helped many clients over this past summer with IRS problems.
Just the other day, I helped a client get a wage garnishment released to allow the IRS time to process the returns they had already received from us.
It’s more important than ever to have a competent professional prepare your taxes for you.
These guys are getting re-acquainted with Joe the taxpayer. Their revenue is down 42% from last year. I have seen more IRS letters this past summer than in the entire past 3 years combined.
This is a disturbing trend. This can be intimidating and frustrating, and I don’t recommend going it alone unless it is a simple issue you fully understand.
Just a few weeks ago, I spent some time on the phone with a few IRS agents regarding a client’s account. It is amazing to see the broad range of attitudes you can encounter within such a “standardized” agency.
The good news is that I was able to get the collection levy action suspended for an additional 30 days under the “doubt as to liability” statute.
Rental property improvements, capitalization
I get many questions regarding rental property improvements and depreciation. Typically, any improvement or modification that adds value and extends the life of a property will need to be depreciated over a period of several years. For residential property, this period is 27.5 years, and 39 years for commercial property.
Some improvements can be depreciated over a much shorter period of time. When reporting expenses for your rentals, remember to add your mileage and out-of-pocked expenses for advertising, lawn care, and so forth.
I have seen more IRS letters this year than in the last three years combined. They have expanded their auditor workforce.
I know how frustrating these letters can be. They are written in generic, computer-generated language that is hard to decipher.
Don’t assume that just because you received a notice that the IRS is correct. They are frequently wrong.
Please call this office before responding to any IRS notice. Tax laws are complicated, and the notices are not always easily understood.
If you should choose to call the IRS yourself, make sure you have the letter with you. When discussing the issue with them, make sure you know the date of the letter and the type of letter.
At the top right of page 1, you will see a letter type, such as: CP 2000. This will tell the agent what type of letter, and often the general nature of the issue.
If you have one of those letters, get a good book to read while on hold, and give them a call.
Did you know that some employees can deduct their work mileage? It’s true.
If your mileage is significant, you can deduct the amount over 2% of your adjusted gross income along with your other itemized deductions.
You cannot deduct mileage to your everyday workplace. You can, however, deduct mileage to any location other than your normal workplace.
Here are a few scenarios where you would be able to deduct work mileage:
1) Your boss assigns you temporarily to the office across town
2) You make runs to the bank to make deposits for the boss
3) You run personal errands, and also do things fro the boss while you are there
Read the latest announcement from IRS on mileage. Click Here
I had an over-the-road truck driver call me the other day asking about his meals expenses. Those people who work in the transportation industry may deduct up to 80% of their meals expense from their income taxes.
If you are like most people who hate keeping up with all of those receipts (which fade anyway), you can just use the federal standard amount.
This amount for 2008 is $39/day for meals and entertainment and $70/day for lodging. So let’s think about this. You could sleep in you rig and eat bologna sandwiches, and you would still get to deduct $109/day on your tax return.
I see a lot of people who do not have an adequate amount of life insurance. Just with any product line, there are good and bad options in the life insurance world.
One of my aunts from south Alabama just passed away with a dependent granddaughter and no life insurance. We had to literally pass the hat around just to get her buried.
This happens far too often. If you are the family breadwinner, then you need life insurance. Term life is typically the best. The rule of thumb is that you need life insurance in the amount of ten times your annual earnings.
You may need even more, depending upon your unique situation. I am now selling life insurance.
