IRS Interest Rates for the First Quarter of 2014

IRS Interest Rate for the calendar quarter beginning Jan. 1, 2014

  • three (3) percent for overpayments [two (2) percent in the case of a corporation];
  • three (3) percent for underpayments;
  • five (5) percent for large corporate underpayments; and
  • one-half (0.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

Revenue Ruling 2013-25

 

IRS Failure to File or Failure to Pay Penalties

When it comes to filing your tax return, the law provides that the IRS can assess a penalty if you fail to file, fail to pay or both.

Here are eight important points about the two different penalties you may face if you file or pay late.

  1. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
  2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you.
  3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
  4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
  5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
  6. If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.
  7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
  8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

Source IRS

Software for Combining csv Files

 

This program allows merging two databases in csv format via common nominator.

For example
You have an IT system with a database containing information on the ID number, amount, order number, and other database where are the information about the partner or the product and an ID number, which is the same as the first database. Using csv combinator can quickly and easily combine both databases.

CSV Combinator is a windows desktop application.

CSV Combining Service

Do you need someone to help you combine two csv files  by some common ID?

Both files must share column with common value (key or ID).

Example:

You would like to cobine list of customers (buyers)  that contains e-mail addresses and order numbers with database with e-mail addresses and mail addresses (street, city, state). Common key in this case is e-mail address.  After combining, you will have new database of your customers with postal addresses and you will be able to send them offer by ordinary mail.

We will join two smaler files for you for just $ 20. For bigger files please send inquiry.

All we need is that you send us two files in csv format. We will do combining for you.

You will pay before we send you back combined files.  We will send you sample of merged files before you pay. We will issue Invoice for our services.

You will be able to  pay with Paypal.  To order please send inquiries using this form


 

2013 Individual Federal Income Tax Return Changes

Standard mileage rates. The 2013 rate for business use of your car is increased to 56½ cents a mile. The 2013 rate for use of your car to get medical care is increased to 24 cents a mile. The 2013 rate for use of your car to move is increased to 24 cents a mile.

Change in tax rates. The highest tax rate is 39.6%.

Net Investment Income Tax. Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). The NIIT is 3.8% of the smaller of (a) your net investment income or (b) the excess of your modified adjusted gross income over:

  • $125,000 if married filing separately,
  • $250,000 if married filing jointly or qualifying widow(er), or
  • $200,000 if any other filing status.

Tax rate on net capital gain and qualified dividends. The maximum tax rate of 15% on net capital gain and qualified dividends has increased to 20% for some taxpayers.

Medical and dental expenses. You can deduct only the part of your medical and dental expenses that is more than 10% of your adjusted gross income (7.5% if either you or your spouse is age 65 or older).

Personal exemption amount increased for certain taxpayers. Your personal exemption is increased to $3,900. But the amount is reduced if your adjusted gross income is more than:

  • $150,000 if married filing separately,
  • $250,000 if single,
  • $275,000 if head of household, or
  • $300,000 if any other filing status.

Limit on itemized deductions. You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than:

  • $150,000 if married filing separately,
  • $250,000 if single,
  • $275,000 if head of household, or
  • $300,000 if any other filing status.

Same-sex marriages. If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage.

Health flexible spending arrangements (FSAs). You cannot have more than $2,500 in salary reduction contributions made to a health FSA for plan years beginning after 2012.

Expiring credits. The plug-in electric vehicle credit and the refundable part of the credit for prior year minimum tax have expired. You cannot claim either one on your 2013 return.

Pnzi-type investment schemes. There are new rules for how to claim a theft loss deduction on Form 4684 due to a Ponzi-type investment scheme.

Home office deduction simplified method. If you can take a home office deduction, you may be able to use a simplified method to figure it. See Publication 587.

Additional Medicare Tax. Beginning in 2013, a 0.9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than:

  • $125,000 if married filing separately,
  • $250,000 if married filing jointly, or
  • $200,000 for any other filing status.

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Online Accounting Game – Bank On It

Bank On It features more than 1,000 questions inspired by content in accounting textbooks. The game challenges students on accounting fundamentals and real-world workplace scenarios in the context of an online board game.

The concept for the game was designed by high school students who won AICPA’s Project Innovation Competition. Their submission focused on creating an accounting version of a traditional board game. The questions in Bank On IT have been reviewed by CPAs and the game provides incorrect-answer explanations and rationale to increase student’s understanding of the accounting profession. In addition, the game weaves in real-life professional scenarios and reinforces principles already being taught in the classroom.

Students can play at one of two levels and can focus on one of three sectors, business and industry, public accounting or non-profit accounting. The game is won by reaching the winning bank balance set prior to starting. Players earn money by answering questions correctly and landing on other strategic spaces as they move around the board.

Bank On It provides a customizable experience for teachers as well. Educators who are registered on Start Here, Go Places. are given a unique classroom code  they can distribute to their students to track their progress. Students can play against each other, against other online players or against the computer, with the option of taking part in up to 10 games at once. In addition, the game is mobile-friendly – so students can play from their smartphones.

Source

Additional Medicare Tax

The Additional Medicare Tax is added by the Affordable Care Act (ACA). It applies to wages, railroad retirement (RRTA) compensation, and self-employment income over certain threshold amount received in taxable years beginning after Dec. 31, 2012. Employers are responsible for withholding the tax on wages and RRTA compensation in certain circumstances.

Tax rate is 0.9 percent.

An individual is liable for Additional Medicare Tax if the individual’s wages, compensation, or self-employment income (together with that of his or her spouse if filing a joint return) exceed the threshold amount for the individual’s filing status:

 

Filing Status

Threshold Amount

Married filing jointly $250,000
Married filing separate $125,000
Single $200,000
Head of household (with qualifying person) $200,000
Qualifying widow(er) with dependent child $200,000

Read more about Additional Medicare Tax

IRS final regulations (TD 9645)

IRS Form 8960 – Net Investment Income Tax

Form 8960 – Net Investment Income Tax— Individuals, Estates, and Trusts.  (Attachment to Form 1040 or Form 1041)

Individuals, estates, and trusts will use Form 8960 to compute their Net Investment Income Tax.

For individuals, the tax will be reported on, and paid with, the Form 1040. For estates and trusts, the tax will be reported on, and paid with, the Form 1041.

The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

The Net Investment Income Tax went into effect on Jan. 1, 2013. The NIIT affects income tax returns of individuals, estates and trusts, beginning with their first tax year beginning on (or after) Jan. 1, 2013. It does not affect income tax returns for the 2012 taxable year filed in 2013.

Calculating the Net Investment Income Tax for individuals is a four-step process.

  1. Calculate by how much modified adjusted gross income (MAGI) exceeds the relevant threshold.
  2. Calculate net investment income for the year.
  3. Take the lesser of the amounts in step 1 or in step 2.
  4. Multiply the amount in step 3 by 3.8% (the net investment income tax rate).

Individuals will owe the tax if they have Net Investment Income and also have modified adjusted gross income over the following thresholds:

Filing Status

Threshold Amount

Married filing jointly

$250,000

Married filing separately

$125,000

Single

$200,000

Head of household (with qualifying person)

$200,000

Qualifying widow(er) with dependent child

$250,000

Taxpayers should be aware that these threshold amounts are not indexed for inflation.

If you are an individual who is exempt from Medicare taxes, you still may be subject to the Net Investment Income Tax if you have Net Investment Income and also have modified adjusted gross income over the applicable thresholds.

Read more

Tangible Property Regulations

Source: Guidance Regarding Deduction and Capitalization of Expenditures Related to Tangible Property

BackgroundExplanation of Provisions

I. Overview

II. Materials and Supplies Under §1.162-3A. Definition of materials and suppliesB. Election to capitalize certain materials and suppliesC. Optional method for rotable and temporary spare partsD. Materials and supplies under the de minimis safe harborE. Property treated as materials and supplies in published guidance

III. Repairs Under §1.162-4

IV. De Minimis Safe Harbor Under §§1.263(a)-1(f) and 1.162-3(f)A. De minimis safe harbor ceilingB. Taxpayers without an applicable financial statementC. Safe harbor electionD. Written accounting proceduresE. Application to consolidated group membersF. Transaction and other additional costsG. Materials and suppliesH. Coordination with section 263AI. Change in accounting procedures not change in method of accounting

V. Amounts Paid to Acquire or Produce Tangible Property Under §1.263(a)-2

VI. Amounts Paid to Improve Property Under §1.263(a)-3A. OverviewB. Determining the unit of propertyC. Unit of property for leasehold improvementsD. Special rules for determining improvement costs1. Costs incurred during an improvement2. Removal CostsE. Safe harbor for small taxpayersF. Safe harbor for routine maintenance1. Buildings2. Other Changes3. Reasonable Expectation that Activities Will be Performed More than Once4. Amounts Not Qualifying for the Routine Maintenance Safe HarborG. Betterments1. Overview2. Amelioration of Material Condition or Defect3. Material Addition or Increase in Productivity, Efficiency, Strength, Quality, or Output4. Application of Betterment Rule5. Retail Store Refresh or RemodelsH. Restorations1. Overview2. Replacement of a Major Component or Substantial Structural Parta. Definition of major component and substantial structural partb. General rule for major component and substantial structural partc. Major component and substantial structural part of buildings3. Casualty Loss Rule4. Salvage Value Exception5. Rebuild to Like-New ConditionI. Adaptation to a new or different use

VII. Optional Regulatory Accounting Method

VIII. Election to Capitalize Repair and Maintenance Costs

IX. Applicability Dates

X. Change in Method of Accounting

Special AnalysesStatement of Availability for IRS Documents

Adoption of Amendments to the Regulations
PART 1—INCOME TAXESPART 602—OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

US Tax Court Decision – Shea Homes, Inc.

SHEA HOMES, INC. AND SUBSIDIARIES, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 29271-09, 1400-10,

Filed February 12, 2014.

Full text of court decision:

Shea Homes, Inc – U.S. Tax Court Decision full text in .pdf

Conclusion:
SHI, SHLP, and Vistancia are permitted to report income and loss from the
sales of homes in their planned developments using the completed contract
method of accounting as consistent with this Opinion.24