IRS cracking down on Companies using Independent Contractors who should be employees. Please Read! March 30, 2008

  Have you ever thought about that question?  Does it really irk you that you pay taxes that your employer should be paying?  Man, do I have the answer for you. This, to me, is one of the most incredible new things the IRS has done.  Starting in 2007 if you feel that your employer should be taking taxes out and they are not, you can file a specific form and it’s completely private. Your employer doesn’t have to know a thing! And the best part is, you don’t have to pay the self employment tax! Yes, you read this correctly.

So, if you have been really trying to stick it to your employer about him/her not paying your taxes and giving you that dreaded 1099. You know you pay that 15.3% tax and it just makes your stomach turn.  Now, you can turn the tables on your boss without them knowing.  Now, if you are the only “subcontractor” that works at your office or business establishment then it may be not in your best interest to play this card but you know what’s best for you. 

Ladies and gentlemen, this is one of the most progressive moves the Internal Revenue Service has made. This will change the landscape of people who misclassify their workers. This has been a pain in the side of IRS for a long time, and this may be one of the smarter moves they have made.

On the flip side, it may be creating unnecessary work for agents of the IRS. They could be reading alot of disgruntled employees who really want to stick it to their employers. Who knows what will become of this? But this is HUGE.

If you think you may truly be an employee and yet your employer won’t do the right thing, you may want this form. Here is the form http://www.irs.gov/pub/irs-pdf/fss8.pdf

ECONOMIC REBATES WILL START COMING on………….. March 24, 2008

   The payout schedule is now set.  The first rebate will be wired on May 2 to taxpayers who had their 2007 refunds deposited directly to their bank accounts.  IRS will finish wiring these rebates by May 16.  The order depends on the last two digits of the social security number of the primary filer. the lower the number, the quicker payment.  Paper checks will go out May 16 to non direct depositors based again on the last two digits of their social security number. If you owe back taxes are owed, the Service will grab a filer’s rebate. 

How much of a tax rebate check am I getting from the economic stimulus package? March 5, 2008

Everybody asks about this tax rebate check thats coming soon because of the signed economic stimulus package. While on paper it looks good, there are some facts you need to know. Sadly, you may think you are getting it and you are not. So, let’s get the facts.

1. The good news. $600 for single persons. $1200 for married couple filing jointly. $300 a child.

2. The bad news. Single people it begins to phases out if your adjusted gross income is $75,000. Marrieds it is $150,000.

To illustrate – You lose 5% of the dollar amount above the applicable cap, such as $50 for each $1,000 over the threshold. For example, a married couple filing jointly with no kids and income for 2007 of $174,000 wouldn’t qualify for a Treasury payment this year. Neither would a single person (with no kids) and income for 2007 of $87,000.

3. For the majority of Americans, all you have to do is file your 2007 taxes.

4. The first payments will be issued in May according to the acting IRS commissioner

5. If you are a low income taxpayer please file your taxes even if you don’t have to or if you aren’t getting a refund. Thats because the IRS says “low-income workers or those who receive Social Security benefits or veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans Affairs in 2007.” These guys will earn $300 (600 if married) if they had 3000.00 in income.

6. The perinnial extension filers read the next sentence. You will not get your refund until you file your taxes.

7. This refund will not be taxed as income.

More to come…