We are often asked, “How long do I have to keep this stuff?”
Whether personal or business, the minimum is 3 years to retain records since the IRS generally has 3 years to audit you from the date you file your taxes (with the exceptions of a false return or willful attempt to avoid tax). However, the general rule is 7 years for records retention. We generally use 10 years.
Scanning and creating electronic versions of your backup information helps to cut down on the paper pile.
Contact us if you’d like a more detailed guide for keeping all that “stuff”.
The law says that a business loss can produce a tax write-off as long as the owner is honestly trying to make a profit. The Tax Code provides a test for profit motive: If a venture doesn’t make money in at least three of five years, it is presumed to be a hobby, and not operated for profit.
Whenever writing the IRS, always make several copies of whatever you send. If the IRS misplaces your first correspondence, you can send it again – and again, if necessary.
Avoid giving original documents to the IRS.
Students will soon be looking for summer jobs, and Colorado has some work restrictions for minors working in the state of Colorado.
Minors are not allowed to work more than 40 hours in a workweek or in excess of eight hours in any 24-hour period.
Minors under the age of 16
The minimum age for employment in Colorado is 14.
Minors under the age of 16 may do office and clerical work, retail food service, and hold jobs in retail stores, gasoline service, parks and recreation, and other occupations.
They may not be on the job more than three hours on a school day (including Friday) nor beyond 18 hours in a school week.
They also cannot work earlier than 7:00am or past 7:00pm during the school year or after 9:00pm in the summer (June 1 to Labor Day).
Minors age 16 and 17
There are no limitations on the times of day when minors age 16 and 17 may work.
At 16, minors can perform the same jobs as 14-year-olds plus operate a motor vehicle if they have the proper license to do so.
The CEO of a company calls in an engineer and asks him what is 2 plus 2. He says, “4.000000.” He calls in the head of manufacturing and asks him what is 2 plus 2. He says, “To be safe, 4.5.” He calls in the sales manager and asks him what is 2 plus 2. He says, “To make it effective, 3.98.” He asks the director of finance what is 2 plus 2. He locks the doors, pulls the blinds, and makes sure no one is around. Then he whispers, “Whatever you want it to be.”
“The (tax) code has grown more complex by the year, as evidenced by the fact that Congress has made more than 5,900 changes to the code – an average of more than one a day – just since 2001.”
–National Taxpayer Advocate Delivers Annual Report
The government can make regular changes in regards to how much you can contribute to your retirement accounts, but for 2017, everything will remain almost identical to 2016.
Here are the limits related to 2017 retirement plan contributions:
- You can defer a maximum of $18,000 of your salary to a 401(k) plan (same as 2016).
- You can contribute a maximum of $5,500 to your Roth or traditional IRA (same as 2016).
- If you’re age 50 or older, you can use the catch-up contribution to save an additional $6,000 in your 401(k).
If you’re age 50 or older, you can use the catch-up contribution to save an additional $1,000 in your IRA.
The Internal Revenue Service has issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on January 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 53.5 cents per mile for business miles driven, down from 54 cents for 2016
• 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
• 14 cents per mile driven in service of charitable organizations
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
There is a new phishing scam targeting small businesses. It is an email alert supposedly about QuickBooks with the subject line “QuickBooks Support: Change Request.” The message is “confirming” that you changed your business name with Intuit, QuickBooks’ manufacturer. The email contains a link to cancel, but if you click the link, it downloads malware to your device. Scammers can use that to capture passwords or hunt for sensitive information on your machine which can lead to identity theft.