IRS Documentation

Avoid giving original documents to the IRS.

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Youth Summer Employment

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.

Posted in Colorado

Accounting Humor

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.”

Posted in Humor

Tax Code

“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

Posted in IRS

2017 Retirement Plan Contributions

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.

Posted in IRS

2017 Standard Mileage Rates

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.

Posted in IRS

QuickBooks Phishing Scam

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.

Posted in Tips

2016 Tax Form Changes – Part 2

The IRS has released a number of draft tax forms and instructions for the 2016 tax year. The previous post, Part 1, looked at the Form 1040 itself.  This post, Part 2, covers related draft forms and schedules.

–Form 1040—Schedule A, Itemized Deductions

*Line 29. Limit on itemized deductions.

Itemized deductions for taxpayers with adjusted gross incomes in excess of the “applicable amount” ($311,300 for joint filers or a surviving spouse, $285,350 for a head of household, $259,400 for a single individual who isn’t a surviving spouse, and $155,650 for marrieds filing separately) may be reduced.

–Form 1040—Schedule B, Interest and Ordinary Dividends

*The exclusion for education-related savings bond interest phases out at higher income levels. The phase out begins at modified AGI above $77,550 ($116,300 on a joint return).

–Form 1040—Schedule C, Profit Or Loss From Business

*Line D. Employer ID number.

The Line D instructions provide that the sole owner of a limited liability company that is not treated as a separate entity for federal income tax purposes, and that has an Employer ID Number issued in the LLC’s legal name because it is required to file employment tax returns, should enter the LLC’s EIN here.

*Part II. Expenses. Line 27a. Other expenses.

Taxpayers can also elect to deduct the costs of certain qualified live theatrical productions that have their first public performance for a paying audience.

–Form 4562, Depreciation and Amortization

*Part I. Election to expense certain tangible property under Sec. 179.

The maximum section 179 expense deduction is $500,000 ($535,000 for qualified enterprise zone property). This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2,010,000.

*Part V. Listed property.

First-year luxury auto limits for vehicles first placed in service in 2016 are $3,160 for autos and $3,560 for light trucks or vans.

Posted in IRS

Minimum Wage to Increase January 1st

An amendment to the Colorado constitution has passed that will raise the state minimum wage to $9.30 per hour effective January 1st. The tipped minimum wage will be $6.28.

The minimum wage will continue to increases 90 cents each January 1st until the rate reaches $12.00 on January 1, 2020.

Posted in Colorado

IRS Changes W-2 1099 Filing Deadlines

Beginning with forms for tax year 2016, the filing deadline for all federal W-2s is January 31 whether filing paper or electronic returns.

Until now, employers had two dates to keep in mind when remitting W-2’s:
-January 31, to provide employee copies
-February 28, for paper filings submitted to the Social Security Administration (March 31 for electronic filings)

The new January 31 deadline applies to certain types of 1099s.  If you’re filing Form 1099-Misc and reporting amounts in Box 7: Nonemployee Compensation, then you will need to observe the new filing deadline of January 31.

If you don’t have amounts in Box 7, then the deadline remains February 28 for paper filings or March 31 for electronic filings.

If you need to make corrections after sending your file to the Social Security Administration, you can do so by filing Form W-2c, Corrected Wage and Tax Statement.

Colorado has also adopted the new deadline of January 31, beginning with the upcoming filings for 2016 Form W-2.

Posted in IRS