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News & Updates in the Tax World
Use our News section below filled with helpful tips regarding your tax income updates and industry resources. Doing our job well doesn’t end at handling accounts and managing finances - it extends past the office and into the trends, changes and news in the finance industry. We’re especially proud of staying up to date on new ways to help our clients manage their money, and we will always share thoughts and updates with visitors and customers to ensure they’re in the loop too.
Individual Tax Identification Number (ITIN)
Last updated: 23-Dec 2016
What You Need to Know
Processing delays are likely for filers with expired Individual Tax Identification Numbers.
There are two reasons an ITIN would expire December 31, 2016:
If you have not used your ITIN on a U.S. tax return at least once for tax years 2013, 2014 or 2015 or
If your ITIN has the middle digits 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN)
What You Need to Do
You can renew your ITIN now if it expired and you plan to use it on a U.S. tax return.
No action is needed by expired ITIN holders who don’t need to file a tax return next year.
There are new documentation requirements when applying for or renewing an ITIN for certain dependents.
To avoid delays, ensure accurate W-7 and valid ID documents are submitted.
Find more information at IRS.gov/ITIN.
Refunds
Last Updated: 23-Dec 2016
What You Need to Know
Expecting a refund? Some refunds must be held until February 15.
According to a new tax law change, the IRS cannot issue refunds before February 15 for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit.
This applies to the entire refund, even the portion not associated with these credits.
The IRS will begin to release EITC/ACTC refunds starting February 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or on debit cards until the week of February 27. Read more about refund timing for early EITC/ACTC filers.
What You Need to Do
Be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations.
You don’t need to wait until February 15 to file your tax return. While the IRS must hold the refund until February 15, it will begin taking the steps it normally does to process your tax return once the filing season starts.
File a complete and accurate return and include all known refundable credits with your original return.
Check Where’s My Refund on IRS.gov or the IRS mobile app, IRS2Go, after February 15 for your personalized refund status.
Adjusted Gross Income (AGI)
Last Updated: 23-Dec 2016
Adjusted Gross Income (AGI)
What You Need to Know
Some taxpayers using a software product for the first time may need to know their 2015 Adjusted Gross Income, or AGI, to e-file their 2016 tax return.
When self-preparing your taxes and filing electronically, you must sign and validate your electronic tax return by entering your prior-year AGI or your prior-year Self-Select PIN. Using an electronic filing PIN is no longer an option.
What You Need to Do
If you have a copy of your 2015 federal income tax return, your AGI is on line 37 of the Form 1040; line 21 on the Form 1040-A or line 4 on the Form 1040-EZ.x
Learn more about how to verify your identity and electronically sign your tax return at Validating Your Electronically Filed Tax Return.
Self-Employed Individuals Tax Center
Last Updated: 5-Jan-2017
Who is Self-Employed?
Generally, you are self-employed if any of the following apply to you.
You carry on a trade or business as a sole proprietor or an independent contractor.
You are a member of a partnership that carries on a trade or business.
You are otherwise in business for yourself (including a part-time business)
What are My Self-Employed Tax Obligations?
As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.
Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording "self-employment tax" is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).
Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income on page 1 of Form 1040. But in some situations your loss is limited. See Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) for more information.
You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file
an income tax return if you meet any other filing requirement listed in the Form 1040 instructions (PDF).
How Do I File My Annual Return?
To file your annual tax return, you will need to use Schedule C (PDF) or Schedule C-EZ (PDF) to report your income or loss from a business you operated or a profession you practiced as a sole proprietor. Schedule C Instructions (PDF) may be helpful in filling out this form.
Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C. To find out if you can use Schedule C-EZ, see the instructions in the Schedule C-EZ form.
In order to report your Social Security and Medicare taxes, you must file Schedule SE (Form 1040), Self-Employment Tax (PDF). Use the income or loss calculated on Schedule C or Schedule C-EZ to calculate the amount of Social Security and Medicare taxes you should have paid during the year. The Instructions (PDF) for Schedule SE may be helpful in filing out the form.
Am I Required to File an Information Return?
If you made or received a payment as a small business or self-employed (individual), you are most likely required to file an information return to the IRS.