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Mid Year Life Changes that bring New Year Tax Surprises

A Mid Year Adjustment Can Prevent a Tax-Time Surprise When it comes to filing a federal tax return. Many people discover that they either get a larger refund or owe more tax than they expected. But this type of tax surprise doesn’t have to happen to you. One way to prevent it is to change the amount of tax withheld from your wages. You can also change the amount of estimated tax you pay.

Here are some tips to help you bring the amount of tax that you pay in during the year closer to what you’ll actually owe:

  • New Job. When you start a new job, you must fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use the form to figure the amount of federal income tax to withhold from your pay. Call us at 702-564-1040 or make an appointment online with any questions.
  • Estimated Tax. If you get income that’s not subject to withholding you may need to pay estimated tax. This may include income such as self-employment, interest, dividends or rent. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay this tax. You normally pay it four times a year. We can calculate this for you if you call 702-564-1040 or make an appointment online at www.5641040.com.
  • Life Events. Make sure you change your Form W-4 or change the amount of estimated tax you pay when certain life events take place. A change in your marital status, the birth of a child or buying a new home can change the amount of taxes you owe. Call us to see what new tax laws and changes you make in your life can lower your tax bill. You can reach us at 702-564-1040 or make an appointment online at www.5641040.com.
  • Changes in Circumstances. If you receive advance payment of the premium tax credit in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance. If at anytime you want some up to date tax advice feel free to call us at 702-564-1040 look online for tax tips articles or make an appointment at www.5641040.com.

What to do if you get a Notice from the IRS

What to do if you get a Notice from the IRS. Each year the IRS mails millions of notices. Sometimes it seems like tens of millions if you get them personally. Here’s what you should do if you receive a notice from the IRS:

  1. Don’t ignore it. You can respond to most IRS notices quickly and easily. And it’s important that you reply promptly. If you don’t know what to do make an appointment at www.5641040.com.
  2. IRS notices usually deal with a specific issue about your tax return or tax account. For example, it may say the IRS has corrected an error on your tax return. Or it may ask you for more information. If you don’t know what to do make an appointment at www.5641040.com.
  3. Read it carefully and follow the instructions about what you need to do. If you don’t know what to do make an appointment at www.5641040.com.
  4. If it says that the IRS corrected your tax return, review the information in the notice and compare it to your tax return. If you don’t know what to do make an appointment at www.5641040.com.
  5. If you agree, you don’t need to reply unless a payment is due. If you don’t agree, it’s important that you respond to the IRS. Write a letter that explains why you don’t agree. Make sure to include information and any documents you want the IRS to consider. Include the bottom tear-off portion of the notice with your letter. Mail your reply to the IRS at the address shown in the lower left part of the notice. Allow at least 30 days for a response from the IRS.
  6. You can handle most notices without calling or visiting the IRS. If you do have questions, call us at 702-564-1040 or if you don’t know what to do make an appointment at www.5641040.com.
  7. Keep copies of any notices you get from the IRS. If you don’t know what to do make an appointment at www.5641040.com.
  8. Don’t fall for phone and phishing email scams that use the IRS as a lure. The IRS first contacts people about unpaid taxes by mail – not by phone. The IRS does not contact taxpayers by email, text or social media about their tax return or tax account. If you think someone is trying to scam you call us at 702-564-1040 or make an appointment online at www.5641040.com.

Gambling Winnings Tax Tips

Tip Sheet on Gambling Income and Losses

Whether you like to play the ponies, roll the dice or pull the slots, your gambling winnings are taxable.

You must report all your gambling income on your tax return. If you’re a casual gambler, odds are good that these basic tax tips can help you at tax time next year:

1. Gambling income. Gambling income includes winnings from lotteries, horse racing and casinos. It also includes cash prizes and the fair market value of prizes like cars and trips.

2. Payer tax form. If you win, you may get a Form W-2G, Certain Gambling Winnings, from the payer. The IRS also gets a copy of the W-2G. The payer issues the form depending on the type of game you played, the amount of your winnings and other factors. You’ll also get the form if the payer withholds taxes from what you won.

3. How to report winnings. You must report all your gambling winnings as income. This is true even if you don’t receive a Form W-2G. You normally report your winnings for the year on your tax return as ‘other income.’

4. How to deduct losses. You can deduct your gambling losses on Schedule A, Itemized Deductions. The amount you can deduct is limited to the amount of the gambling income you report on your return.

5. Keep gambling receipts. You should keep track of your wins and losses. This includes keeping items such as a gambling log or diary, receipts, statements or tickets.