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IRS Tips For Recently Married Taxpayers

July 15, 2009 6:19 pm / Leave a comment

If you have recently gotten married or plan to get married in the near future, the IRS has some tips to help you avoid stress at tax time.

1) Notify the Social Security Administration – Report any name change to the Social Security Administration, so your name and SSN will match when you file your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security card at your local SSA office. The form is available on SSA’s Web site at http://www.socialsecurity.gov/, by calling 800-772-1213 or at local offices.
2) Notify the IRS – If you have a new address you should notify the IRS by sending Form 8822, Change of Address. You may download Form 8822 from the IRS website IRS.gov or order it by calling 800–TAX–FORM (800–829–3676).

3) Notify the U.S. Postal Service – You should also notify the U.S. Postal Service when you move so it can forward any IRS correspondence.
4) Notify Your Employer – Report any name and address changes to your employer(s) to ensure receipt of your Form W-2, Wage and Tax Statement after the end of the year.
5) Check Your Withholding – If both you and your spouse work, your combined income may place you in a higher tax bracket. You can use the IRS Withholding Calculator available on IRS.gov to assist you in determining the correct amount of withholding needed for your new filing status.

6) The IRS Withholding Calculator will even provide you with a new Form W-4, Employee’s

Withholding Allowance Certificate you can print out and give it to your employer so they can withhold the correct amount from your pay.
Links:
IRS Withholding Calculator
Form 8822, Change of Address

Starting a New Business

July 10, 2009 8:22 pm / Leave a comment

Anyone starting a new business this summer should be aware of their federal tax responsibilities.

Here are the top seven things the IRS wants you to know if you plan on opening a new business this year.

first, you must decide what type of business entity you are going to establish. The type your business takes will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.

The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.

An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.

Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.

Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.

Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.

Visit the Business section of IRS.gov for resources to assist entrepreneurs with starting and operating a new business.

Links:
Starting A Business
Operating A Business
Closing A Business
Publication 4591, Small Business Federal Tax Responsibilities (PDF 470.1K)
Publication 334, Tax Guide for Small Business (PDF 286.2K)
Order Publication 1066C, A Virtual Small Business Tax Workshop DVD

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