Tax Forms - Vyde

How Do I File Last Year’s Taxes Online?

It’s never too late to file overdue tax returns. Of course, filing all of your taxes by the April 15th (April 18 for 2016) deadline is always the best way to keep yourself out of hot water with the IRS. But, if you still haven’t filed a previous year’s tax returns, you still can and should to take care of it as soon as possible.

Here are a few quick steps to file last year’s taxes online:

Gather your documents. Same process as any other year, you’ll need all of your documentation before you can file last year’s taxes online. Gather W-2s, 1099s, and any other tax paperwork you received for the year you missed. If you have deductions you plan to claim, you’ll also need your receipts and documentation of those items. If you’re missing any W-2s or 1099s, you can request them from the IRS by filling out a Form 4506-T. Keep in mind that it can take the IRS up to 45 days to process your request.
Download previous year’s tax forms. In order to file last year’s taxes online, you must use the original tax forms from the year you missed. You can search for and download those from the IRS website.
Prepare back tax returns. As you’re preparing last year’s taxes, you cannot use this year’s tax instructions. Because tax laws change every year, you’ll want to make sure you are following the correct year’s instructions as you’re inputting your data. Online accounting software like Turbotax can walk you through your taxes and help you file last year’s taxes online. Vyde also offers catch up tax preparation and virtual bookkeeping.
Submit your tax forms. Send your forms to the address listed on the Form 1040 instructions. If you’re filing online, most tax softwares can submit your tax forms for you. If you owe taxes, try to send as large of payment as possible to avoid additional penalties and interest. After the IRS receives your taxes, they will notify you of the exact penalty you must pay for being late.

For more information on how to file last year’s taxes online, visit the IRS website.

How to Pay the IRS if You Owe Money on Your Federal Taxes

If you’re not receiving a refund on your federal taxes this year and just found out that you’ll actually owe money to the IRS, you’ll need to get that payment in as soon as possible. This is a common scenario for small business owners, self-employed taxpayers, and those who have held too little money withheld from their regular paychecks for the past year.

If you owe money on your federal taxes and need to pay the IRS, there are a few ways to go about this:

IRS Direct Pay: The simplest and quickest way is to visit the IRS website and choose the Direct Pay option. This will pull money directly from your bank account at no additional cost to you. The Direct Pay option also allows you to pay your federal taxes with a credit or debit card.
EFTPS: You can also use The Electronic Federal Tax Payment System (EFTPS) to pay your federal tax bill. This secure government website allows taxpayers to submit their payments electronically. To enroll, or for more information on enrollment, visit EFTPS or call EFTPS Customer Service to request an enrollment form: 1-800-555-4477

Pay by Check or Money Order: If you choose to mail your federal tax payment, make your check or money order out to the US Treasury. Do not use staples or paperclips to attach the check to your return. You’ll also need to include your name, address, daytime phone number, Social Security number or EIN, tax period and related tax form or notice number on your form of payment. Mail your payment to the address listed on the notice or instructions.
Same Day Wire Payment: Same-Day Taxpayer Worksheet to complete your transaction. If you are paying for more than one tax form or tax period, complete a separate worksheet for each payment.
Auto-Pay through your tax preparation software: Many tax preparation software programs give you the option of making the federal tax payment to the IRS for you. Turbotax and TaxAct both offer this option when you reach the end of your tax forms.

If you are unable to make your payment in full, visit this post for information on setting up a payment plan with IRS.

Still confused? We can help you make your Federal Tax Payment to the IRS if you are unable to use any of the methods listed above. If you owe money to the state, this post will direct you to the proper place to submit your payment.

Do I Have to Send 1099 Forms to Contractors Paid Via Credit Card or PayPal?

The deadline for mailing 1099s to contractors for your small business is February 2nd this year, a few days later than the usual January 31st deadline. Before you prepare all of those forms just yet, you’ll want to read up on the regulations concerning contractors paid by credit card or PayPal.

You actually do not have to send 1099 Forms to contractors paid this way. The IRS does not require you to send a form to independent contractors or unincorporated LLCS, even if you paid them more than $600 last year.

Of course, that money is still accounted for and taxed somewhere, right? In fact, the credit card companies and PayPal will handle all the required reporting for these contractor payments. These companies issue a specific kind of 1099 form, called the 1099-K instead.

Instructions for IRS 1099-MISC form can be found here (PDF).

Should I Send a 1099 Form Anyway?

When in doubt, send it out. You may still want to send a 1099-Misc form for contractors you paid more than $600 last year, and that’s completely fine. Your accountant may encourage you to do so, even though it is not technically required.

What if I am the Contractor or Freelancer Receiving the 1099 Form?

If you’re on the other end of the spectrum, and you receive a 1099 from the employer and a 1099-K from PayPal, things can get tricky. When preparing your income tax return, you’ll need to be careful to not double report the income. If you know payment from a received 1099-Misc form was actually paid through a credit card, you’ll just make sure not to add the total of both forms. If you don’t receive a 1099-K from PayPal or a credit card company, you’ll still need to report the income. The key is to not add your 1099-K income to your 1099-Misc income to avoid any discrepancies.

Income Tax Checklist: What Your Accountant Needs to File Your Income Taxes

It’s everyone’s favorite season! TAX TIME! No more going through your small business bookkeeping and scrambling to find all of the important financial documents you need to file your income taxes, only to have your accountant call and tell you he needs just this one more thing. Here’s a comprehensive checklist of everything you’ll need to take to your accountant to get the job done accurately and on time.

How to Get a Tax ID Number From the IRS For Your Small Business

Any new entrepreneur quickly realizes there is a lot to do to get your business up and going. Between websites and marketing, business licenses and bank accounts, there’s not a lot of time to focus on the tax aspect of your business until…well, tax time. When starting a small business, you’ll need to obtain a Federal Tax ID number from the IRS in order to file taxes and have your business be recognized. This is also referred to as EIN, or Employee Identification Number. Here’s how to get one:

Apply Online. The quickest and easiest way to obtain an EIN is through the IRS website. You must complete the application all at once because you can’t save it and return later. Have your Social Security Number handy, as well as your business information. Apply for your EIN online here.

Apply by Mail. A mail application for an EIN generally takes about four weeks to be processed. You’ll need to send a Form SS-4 as your application. See where to send your application to here.

Apply by Fax. Complete the SS-4 and send to the appropriate fax number found here. The turnaround time for an EIN application through fax is about four business days.

Apply by Telephone. This method is for international applicants only. International applicants may call 267-941-1099 (not a toll-free number) 6:00 a.m. to 11:00 p.m. (Eastern Time) Monday through Friday to obtain their EIN. The person applying for the EIN by telephone must have all information pertaining to the SS-4.

Other Important EIN Information

In order to obtain an EIN, your business must be located in the United States.
Only one EIN can be granted per eligible person per day
If you have misplaced your EIN, do not apply for a new one. Find out what to do if you’ve lost your EIN here.
For more information on obtaining an EIN, visit the IRS website.

Have a question about obtaining your Tax ID number from the IRS? Give us a call, we can help!

Frequently Asked Questions:

Why do I need a Tax ID number (EIN) for my small business?

A Tax ID number, also known as an EIN, is essential for filing taxes and establishing your business’s identity with the IRS.

What information do I need to apply for an EIN online?

To apply online, you’ll need your Social Security Number and your business information readily available.

How long does it take to get an EIN through the mail?

Generally, it takes about four weeks for the IRS to process a mail application for an EIN using Form SS-4.

Can I apply for an EIN by fax?

Yes, you can apply for an EIN by fax using Form SS-4. The turnaround time for fax applications is approximately four business days.

What should I do if I’ve lost my EIN?

If you’ve misplaced your EIN, do not apply for a new one. Instead, follow the appropriate steps outlined by the IRS to retrieve your lost EIN.

4 Ways to Reduce Your Personal Income Tax Bill

As we approach the end of the year (and the beginning of tax season!) it’s time to start thinking about how your year went financially. If you made a little more money than usual or are anticipating a high tax bill for your personal income tax, you still have time to reduce your bill before the end of the year.

Here are four ways to lower your personal income tax obligation before December 31st:

Pay Deductible Expenses Early.

Pay January’s mortgage by end of December
Pay ahead for property taxes due in 2016
Contribute more money to your retirement (IRA & 401K are deductible)

Donate to Charity.

Use a Schedule A to itemize deductions
Keep proof of your charitable donations
You can deduct cash contributions up to 50%of your AGI; 30% for property donations
Use IRS Pub 78 for a list of approved charities for deductible donations

Pay Tuition Early.

Prepay tuition and expenses for academic periods that begin in January through March of next year
See if you qualify for the American Opportunity Credit or the Lifetime Learning Credit

Defer Income.

Deferring income is worthwhile if you expect to be in the same or lower personal income tax bracket next year
Self-employed or cash-basis taxpayers should wait until end-of-year to send out invoices so they won’t receive payment until 2016
Deferring income can be helpful every other year to take advantage of tax breaks

Do you have any other financially-savvy tips for reducing your personal income tax bill? We’d love to hear them! Leave your tips in the comments below.

How to Calculate Self-Employment Taxes for Real Estate Professionals & Agents

Any individual engaged in a trade or business as a sole proprietor, partnership, or part of an LLC must pay self-employment taxes on net earnings. If you’re a real estate professional, you most likely belong in one of these categories and are also subject to this tax.

Self-employment taxes, as referred to by the IRS, include Social Security and Medicare. The term is not all-inclusive and does not include any other taxes that self-employed individuals may be required to file.

Here’s what you need to know:

1. The self-employment tax rate for 2015 is 15.3%.

4% going toward Social Security
9% going toward Medicare
The income limit on this rate is $118,500. If your income as a real estate professional exceeds this amount, you will be required to pay an additional 0.9% in Medicare tax.

2. Deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income.

This means you can subtract ½ of your self-employment tax from your total net earning for the year.
Example: if you owe $3,000 for self-employment tax, you can claim an adjustment of $1,500, which reduces your income tax by $375 if you’re in a 25 percent tax bracket.

3. This is the amount you pay quarterly.

While it may seem like you’re getting taxed in every direction for being your own boss, keep in mind that self-employment taxes are actually the same taxes that are being withheld from a standard employee’s paycheck. You can calculate your own self-employment tax by using a Schedule SE.
If you are operating your real estate business as an individual and have not formed a partnership, you will report your net profit on a Schedule C which can be included on a Form 1040.

These payments should be included in your estimated quarterly tax payments, your small business bookkeeping and paid throughout the year. Federal estimated quarterly tax payment dates are due April 15, June 15, September 15, and January 15 each year.

How Much Should I Set Aside for Taxes as a Real Estate Agent? For Realtors, Real Estate Brokers, and Property Managers

How much should I set aside for taxes as a real estate agent? As a self-employed individuals are required to make estimated quarterly tax payments, a pay-as-you-earn system for federal taxes. Realtors, real estate agents, brokers, and property managers are considered to be self-employed by the IRS and are subject to these payments. If you anticipate, through your small business bookkeeping, that your end of year tax bill to be more than $1,000, you need to make quarterly payments to the IRS.

How to quickly calculate your estimated quarterly tax payment as a realtor, broker or property manager:

Estimate your total commissions and business expenses for the year. If you’re not sure, look back on previous years’ records and make a prediction at what your commission might be and take an average of what your expenses have been in the past. Subtract your business expenses from your predicted commission to determine your net income.
Multiply your net income by the Self Employment Tax Rate. Currently, the self-employment tax rate is at 15.3% (12.4% Social Security + 2.9% Medicare tax). A quick example: if you predict your total commission for the year to be $40,000, multiply that number by .153, which equals $6,120 in self-employment tax due for the entire year.
Divide your self-employment tax amount by two. Using the example in the previous step, take $6,120 divided by 2 and you have $3,060. You are allowed to use half of your self-employment tax as a deduction against your income.
Subtract ½ of your self-employment amount from your net income. In this case, $40,000 minus $3,060 equals $36,940.
Subtract your standard or itemized deduction from your net income from step 4. Estimate your itemized deductions or obtain the standard deduction form from the IRS website. If you estimate $10,000 in deductions, you now have $25,940.
Subtract the personal exemption allowed for the year from the new number in step 5. To see what your personal exemption is, click The amount of personal exemption you’re allowed to claim changes from year to year, so be sure to get the correct number from the IRS website.
Use the most current tax rate table (also found on the IRS website) to calculate the amount of federal tax due on your adjusted gross income (the amount calculated in step 6).
Subtract estimated tax credits from the number calculated in step 7. Be sure to see if you qualify for a child or dependent tax credit.
Add your total estimated federal tax due to the total estimated self employment tax due. Then divide this total by 4.
Make estimated quarterly tax payments of the amount calculated in step 9. Estimated quarterly tax payments are due on April 15, June 15, September 15, and January 18.

Need help filing your estimated quarterly tax payments as a realtor or real estate agent? We can help you out.

Interested in Learning More?

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Top 4 Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

If you’re a real estate agent, you’re putting more miles on your vehicle than most other business owners. Constantly traveling to and from your office and home, real estate properties, home showings, listing appointments, and more; it adds up the miles quickly! In order to be in accordance with the IRS regulations when it comes to driving expenses, there are a few things you have to keep track of for your deductions to count.

Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

Keep a business mileage log. Real estate agents’ routes are unpredictable. Unlike many other business owners, they aren’t simply driving to the office and around town to run errands every day. Some days they are in the car for hours, driving to locations they’ve never been and perhaps will never go to again. The IRS wants to know the total number of miles you drove for your business in a given year. While your commute to and from the office doesn’t count, almost all other business travel does. The best way to have accurate records for the IRS is to keep contemporaneous records—meaning your records are created each day you drive for business or shortly after. While a paper and pencil mileage log works just as well as anything, there are several ways to utilize technology to keep track. Logging the miles on your GPS may provide you with the most accurate record without much maintenance. Apps like Mileage Log+ or Everlance automatically calculate your distances by entering where you’re leaving from and where you’re going. When tax season rolls around, you just export your mileage for the year and hand it over to your account. How easy is that?
No records? No problem. If you haven’t been keeping a mileage log this year, you’re not completely out of luck. While the IRS frowns upon records constructed after the fact, if you can prove you drove to where you said you drove, you can still deduct your mileage. If you maintain a calendar, appointment book, or planner, you can go back through your records and calculate your mileage based on the appointments you attended. While a firsthand record is recommended and the most accurate, you can still deduct miles driven by calculating them this way. However, it is likely less likely to be accurate when looking back through records and trying to remember where you drove.
Calculate the actual expense of your vehicle expenses for business. While this method can be tricky, some real estate agents find that keeping track of all vehicle expenses throughout the year gives them a bigger deduction come tax season. This method requires keeping track of gas, oil changes, tires, repairs, insurance, registration fees, licenses, depreciation, and all other vehicle expenses. At the end of the year, you’ll provide your accountant with all these records to determine how much of a deduction you can take for your car.
Use the Standard Mileage Rate. This method of keeping track of vehicle business expenses is usually the easiest and most effective for a real estate agent. The standard mileage rate generally gives business owners a larger deduction, as long as their car is fairly economical. You still have to track your mileage, but records of other expenses are not quite as critical. Basically, with the Standard Mileage Rate, you are allowed a deduction of 57.5 cents per mile driven in a year. Using this method, you don’t deduct new tires, oil changes, or other expenses—it’s all factored in! If you drove your car 10,000 last year for you real estate agent business, you’re looking at a deduction of $5,750. Cha-ching!

Still have questions about using your car as a real estate agent? Give us a call, we’d love to help you out.

Resources

Category: Tax Forms

How Do I File Last Year’s Taxes Online?

Here are a few quick steps to file last year’s taxes online:

How to Pay the IRS if You Owe Money on Your Federal Taxes

If you owe money on your federal taxes and need to pay the IRS, there are a few ways to go about this:

Do I Have to Send 1099 Forms to Contractors Paid Via Credit Card or PayPal?

Should I Send a 1099 Form Anyway?

What if I am the Contractor or Freelancer Receiving the 1099 Form?

Income Tax Checklist: What Your Accountant Needs to File Your Income Taxes

How to Get a Tax ID Number From the IRS For Your Small Business

Frequently Asked Questions:

4 Ways to Reduce Your Personal Income Tax Bill

How to Calculate Self-Employment Taxes for Real Estate Professionals & Agents

Here’s what you need to know:

How Much Should I Set Aside for Taxes as a Real Estate Agent? For Realtors, Real Estate Brokers, and Property Managers

How Much Should I Set Aside for Taxes as a Real Estate Agent? For Realtors, Real Estate Brokers, and Property Managers

How to quickly calculate your estimated quarterly tax payment as a realtor, broker or property manager:

Other posts that might interest you:

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Top 4 Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

Q&A: Personal and Corporate Business Tax Extensions

Corporate Business Tax Extensions

Personal Tax Extensions

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