Can you turn your hobby into a business?
Many small businesses are started when someone turns a personal interest into a money-making endeavor. But what’s the difference between a hobby and a business? And why does it matter in the first place?
As with many tax questions, it’s complicated, but Kay Bell at the Bankrate tax blog has a great rundown of the rules to keep in mind.
The IRS defines a hobby as an activity you pursue without expecting to make a taxable profit. Basically, you do it because you like it, regardless of the cost.
But if you demonstrate that you are involved in an activity with the expectation of making money on it, the IRS will consider it a business. As such, you’ll be able to deduct expenses directly from your income. You even can deduct overall business losses in the years you don’t turn a profit.
You must, however, make the right moves to convince the IRS that your sideline is a legitimate business.
Read more: http://www.bankrate.com/finance/taxes/tax-breaks-turn-hobby-into-business.aspx
And as always, know that we’re here to help you navigate all these rules and much more!
IRS provides relief for small businesses from filing Form 3115
On February 13, the IRS released Rev. Proc. 2015-20, which provides a simplified method for qualifying small businesses to comply with the final tangible property regulations.
Here’s an article from the Journal of Accountancy discussing the changes, and here’s a link to the original Revenue Procedure from the IRS.
Finally, don’t forget we’re always available to help small businesses navigate the latest rules and regulations from the IRS.
Now’s the time to change your withholdings!
Whether you ended up owing money or getting a refund at tax time, did you know you can modify the amount of money withheld from your paycheck? Here’s how
Some people love receiving a tax refund every spring, while others prefer to have the money in their regular paychecks and make their refund as small as possible. And then there are those that cringe when they have to write a check to the IRS when filing their tax return.
Though changing your withholdings won’t change how much tax you pay, it can affect whether you owe money or get a refund when filing, as well as how big that refund or payment will be! Check out the article for more information and a brief guide on how to modify your withholdings.
And as always, if you have any questions, we’re ready and willing to help!
IRS Releases Full List of “Dirty Dozen” Tax Schemes
The IRS has released all twelve of the Dirty Dozen tax schemes to look out for during the 2015 filing season.
The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.
Identity theft, phone scams, and phishing lead the list this year. Other issues include impersonation of charitable organizations, false income, expenses, or exemptions, and abusive tax structures.
For more information and the full list, click here.
Scharf Pera’s Rob Phillips on WBTV Talking About Tax Changes
Our own Rob Phillips was invited to speak about upcoming tax changes on WBTV’s morning news. Check it out HERE!
Identity Theft at Tax Time: Still a Major Concern for IRS
The Internal Revenue Service today issued a filing season alert warning taxpayers to watch out for identity theft at tax time, one of the year’s “Dirty Dozen” tax scams. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number.
“We remain dedicated to stopping tax-related identity theft and protecting taxpayers, and we are making important progress on that front. Taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim,” said IRS Commissioner John Koskinen.
For more information, including helpful videos on what to do if you are a victim of identity theft, click HERE.
Fake IRS scams are on the rise! Here’s what you need to know.
Aggressive and threatening phone calls by criminals impersonating IRS agents remain near the top of the annual “Dirty Dozen” list of tax scams for the 2015 filing season. The IRS reports a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. In fact, nearly 3,000 victims have collectively paid over $14 million to scam artists according to a new warning from the Treasury Inspector General for Tax Administration. Here’s everything you need to know.
What will the impact of the new Federal tax increase be on North Carolina?
The North Carolina Department of Revenue (NCDOR) explains what the Federal Tax Increase Prevention Act of 2014 means for North Carolina’s corporate and individual taxes. Read more HERE.
Help From the IRS Will Be Harder to Come By This Year
While tax returns are becoming more complicated this year, don’t expect a lot of help from the IRS. The agency says only half of the 100 million people expected to call this year will be able to get through and those who do may have to wait 30 minutes or longer. Read More.
FASB Makes Accounting a Little Easier for Private Businesses
The Financial Accounting Standards Board (FASB) has issued a new Generally Accepted Accounting Principles (GAAP) alternative that is designed to make accounting for certain intangible assets acquired in a business combination less costly and less complicated for private companies.
Accounting Standards Update No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination, describes the alternative, which was designed by the Private Company Council and endorsed by FASB. Read more HERE.