The IRS has released the helpful video clip below which explains the extension of the deadline to close and what steps you need to take in order to obtain the credit.
If you want to learn about how the homebuyer tax credit closing extension passed, watched this informational video.
As part of a Special Edition Tax Tip, the IRS provides 9 Tips on the 10 Percent Tax on Tanning Services for businesses offering tanning services :
- Businesses providing ultraviolet tanning services must collect the 10 percent excise tax at the time the customer pays for the tanning services.
- If the customer fails to pay the excise tax, the tanning service provider is liable for the tax.
- The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises.
- The tax does not apply to spray-on tanning services.
- If a payment covers charges for tanning services along with other goods and services, the other goods and services may be excluded from the tax if they are separately stated and the charges do not exceed the fair market value for those other goods and services.
- If the customer purchases bundled services and the charges are not separately stated, the tax applies to the portion of the payment that can be reasonably attributed to the indoor tanning services.
- The tax does not have to be paid on membership fees for certain qualified physical fitness facilities that offer indoor tanning services as an incidental service to members without a separately identifiable fee.
- Tanning service providers must report and pay the excise tax on a quarterly basis.
- To pay the tax, businesses must file IRS Form 720, Quarterly Federal Excise Tax Return using an Employer Identification Number assigned by the IRS. Businesses that don’t already have one can apply for an EIN online at IRS.gov.
Other resources:
Excise on Indoor Tanning Services FAQs
Affordable Care Act Tax Provisions
And for good measure a video from the IRS explaining the tax. Enjoy!
In IR 2010-78, the IRS issued guidance to individuals and businesses effected by the oil spill in the Gulf of Mexico. In addition to a number of new efforts to assist taxpayers, the service announced that on July 17th there will be a special Gulf Coast Assistance Day:
The guidance released today is based on current law, and it explains how recipients of payments from BP should treat the payments for tax purposes. According to the current law, BP payments for lost income are taxable in the same way that the wages or business income these payments are replacing would have been. The law treats compensation for lost wages or income differently for tax purposes than compensation for physical injuries or property loss, which generally are nontaxable.
Here are links to additional IRS Gulf Oil Spill Resources:
On today’s NPR’s All Things Considered radio program, it was reported that there have been thousands of fraudulent first-time homebuyer tax credit claims as revealed in a report by the U.S. Treasury Inspector general. The program also notes that prisoners have been able to take advantage of the credit:
The tax credit applies only to a primary residence — a person has to actually live in the house. So if someone is in prison, it would be pretty tough to qualify for the credit. But that didn’t stop an estimated 1,300 inmates from fraudulently collecting the tax credit from behind bars.
“Unfortunately, they have a lot of time on their hands, and so this is how they’ve elected to use that time,” says J. Russell George, the Treasury inspector general for tax administration. George says it is possible for a prisoner to buy a house, and if the prisoner has a spouse on the outside, that property could even qualify for the credit.
The Internal Revenue Service has awarded Accenture a five-year contract to design, implement, and operate the Return Preparer Registration (RPR) Program according to MarketWatch:
The RPR program is designed to allow the IRS to regulate and improve the quality of the paid tax return preparer community by requiring registration and mandating competency level testing and annual continuing education requirements. The IRS expects that better tracking and qualification of preparers will result in increased taxpayer compliance and more uniform ethical standards of conduct for preparers.
Accenture is a global management, consulting, technology services and outsourcing company.
In the Wall Stree Journal article, How the New Wealth Taxes Will Hit You, Laura Saunders analyzes the new health care legislation which imposed two new taxes on couples earning more than $250,000. Here is an excerpt:
The health-care bill that Congress passed in March contained two surprising new taxes to help pay for the changes: an extra 0.9% levy on wages for couples earning more than $250,000 ($200,000 for singles) and a new 3.8% tax on investment income on those same people (technically, people with “adjusted gross incomes” above those amounts).
Each tax signals a radical change in policy. For workers, the extra 0.9% levy puts a progressive element in what used to be a totally flat tax. The 3.8% tax on investment income also knocks down a longstanding wall by applying a “payroll” tax to unearned income. Until now, FICA taxes for Social Security and Medicare have applied only to wages, not investment income.
While many details remain unclear and the Internal Revenue Service hasn’t issued any guidance, here are preliminary answers to the most important questions taxpayers are asking.
Soon after the buzz surrounding the Snooki John McCain tweets began (see previous post John McCain to Snooki: I Would Never Tax Your Tanning Bed) the IRS announced (not via tweet) that it has issued regulations outlining the 10-percent tanning tax:
In general, providers of indoor tanning services will collect the tax at the time the purchaser pays for the tanning services. The provider then pays over these amounts to the government, quarterly, along with IRS Form 720, Quarterly Federal Excise Tax Return.
The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises. The regulations also provide an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee.
According to Tax Watchdog, Chamillionaire (Hakeem Seriki) and his wife owe the federal government more than $184,000 in back taxes. The IRS filed the lien against him and his wife last year on November 23rd with the Montgomery County Clerk in Texas for 2007 income taxes. The release of these tax problems comes shortly after his Houston, Texas mansion was repossessed for failure to pay the mortgage.
Chamillionaire is known for his song Ridin’ which you can listen to below.
From the Wall Street Journal’s article Gay Couples Get Equal Tax Treatment:
The Internal Revenue Service has ruled that same-sex couples must be treated the same as heterosexual couples under a feature of California tax law. Advocates for the change say it is the first time the agency has acknowledged gay couples as a unit for tax purposes.
The change reverses a 2006 IRS ruling and opens a tax benefit to many same-sex couples that wasn’t available before. It may affect couples in Nevada and Washington state, as well.
Specifically, the agency said nearly 58,000 couples who are registered as domestic partners in California must combine their income and each report half of it on their separate tax returns. Same-sex couples account for an estimated 95% of the state’s domestic partnerships; partnership status is also available to heterosexual couples in which one partner is over age 62.
The Journal of Accountancy has published Tax Return Preparation Mistakes: How to Avoid or Mitigate Professional Liability:
Errors and omissions in preparing tax returns can occur easily. You might accidentally enter a number incorrectly, misinterpret a law, or misconstrue the client’s facts. Later, before an IRS audit, you might discover the mistake, raising gut-wrenching questions: Do you call the mistake to your client’s attention? Do you advise the client to file an amended tax return? If so, by acknowledging the mistake, have you essentially conceded that you have committed malpractice? What, if anything, can you do to limit your professional liability?
You can watch the video clip below to get a gist of what the article is talking about.
