Honsa CPA

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Gambling losses: You might miss this deduction Gambling is big business. Take a look a Vegas. Lights everywhere and someone is paying for that. Gambling is a reportable activity for a taxpayer, and casinos are required to issue forms to report the activity. Income is reportable and losses can be claimed. Well, sometimes they can be claimed. Gambling income is always reportable, and usually it will be claimed as miscellaneous income. Professional gamblers actually rep...ort their income on schedule C, but we will get to that in another article. So you’ve perused the internet and Google provided a link to some information on a blog. It seems to indicate that all of your gambling income can be offset by your losses. That’s true, but getting there might be a challenge. A requirement for deducting gambling losses is that you deduct them on Schedule A. This schedule is for itemizing deductions. Interest, taxes, medical expenses, and miscellaneous expenses are recorded on Schedule A. But let’s assume a taxpayer doesn’t own a home and has no medical expenses. And assume she is married. Well, if she files jointly with her husband in 2017, they will have a standard deduction of $12,700. That’s an automatic deduction on the tax return without ever compiling any itemized expenses. Let’s go a step further, shall we? The couple visits Vegas for their honeymoon and gambles. We’ll pretend that only the husband gambled. He spent $8,000 and won a paltry sum of $420. Simple math indicates a loss of $7,580 for the year. Now, the husband wants to deduct it, but because the total amount of potential itemized deductions does not exceed $12,700, the $7,580 will not be reflected on the tax return. By now you want to know what is the good news? Well, it’s the standard deduction. This deduction exists to promote some fairness in the tax system. Everyone has some tax that might be deducted, some charitable giving, and some miscellaneous expenses. While some homeowners with plenty of real estate tax and mortgage interest cross that threshold of $12,700 and pick up their full gambling loss, up to the amount of winnings, others may only have those losses and some bit of income tax, an amount much less than $12,700. The standard deduction levels out the tax playing field, to some extent. To summarize, gambling losses are deductible, up to winnings. If you spend $8,000 and only win $420 you can take up to $420 of the losses on schedule A. Only then will you see an amount for losses appearing on your return. The rest of the losses are gone forever, so you won’t be able to claim them. If you don’t itemize, you won’t actually see a deduction for the losses on your return, but worry not; the losses are built into the standard deduction. So to an extent, you won’t miss them after all.

Hey friends, there are special rules for tax year 2016 if you were affected by Hurricane Irma. Florida and Georgia residents have an automatic extension to file past the October deadline. https://www.irs.gov//help-for-victims-of-hurricanes-irma-a

Taxpayers Should Be Wary of Unsolicited Calls from the IRS Taxpayers who get an unexpected or unsolicited phone call from the IRS should be wary it’s probably a scam. Phone calls continue to be one of the most common ways that thieves try to get taxpayers to provide personal information. These scammers then use that information to gain access to the victim’s bank or other account. When a taxpayer answers the phone, it might be a recording or an actual person claiming to be... from the IRS. Sometimes the scammer tells the taxpayer they owe money and must pay right away. They might also say the person has a refund waiting, and then they ask for bank account information over the phone. Taxpayers should not take the bait and fall for this trick. Here are several tips that will help taxpayers avoid becoming a scam victim. The real IRS will not: Call to demand immediate payment Call someone if they owe taxes without first sending a bill in the mail Demand tax payment and not allow the taxpayer to question or appeal the amount owed Require that someone pay their taxes a certain way, such as with a prepaid debit card Ask for credit or debit card numbers over the phone Threaten to bring in local police or other agencies to arrest a taxpayer who doesn’t pay Threaten a lawsuit Taxpayers who don’t owe taxes or who have no reason to think they do should follow these steps: Use the Treasury Inspector General for Tax Administration’s IRS Impersonation Scam Reporting web page to report the incident. Report it to the Federal Trade Commission with the FTC Complaint Assistant on FTC.gov. Taxpayers who think they might actually owe taxes should follow these steps: Ask for a call back number and an employee badge number. Call the IRS at 1-800-829-1040. Every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are the Taxpayer Bill of Rights. Taxpayers can visit IRS.gov to explore their rights and the agency’s obligations to protect them. IRS YouTube Videos: Tax Scams English | Spanish | ASL Share this tip on social media -- #IRSTaxTip: Taxpayers Should Be Wary of Unsolicited Calls from the IRS. https://go.usa.gov/xnqn4 See more

Beware: IRS sends notices called the CP2000, in which they claim they propose to change your tax return. They are not always right.

Just because you receive a notice from the IRS doesn't mean you necessarily owe them money. If you need assistance with a tax notice, call me.

Filing season is in full swing. Contact me for tax work and get the best price for an accurate return!

Hi friends. It's that time of year. If you need returns prepared, give me a call. You don't need to pay a fortune at the retail tax stores when I can provide an accurate return for a great price. Distance is no issue, technology allows for easy document exchange!

You may need copies of your filed tax returns for many reasons. For example, they can help you prepare future tax returns. You’ll need them if you have to amend a prior year tax return. You often need them when you apply for a loan to buy a home or to start a business. You may need them if you apply for student aid. If you can’t find your copies, the IRS can give you a transcript of the information you need, or a copy of your tax return. Here’s how to get your federal tax ret...urn information from the IRS: Transcripts are free and you can get them for the current year and the past three years. In most cases, a transcript includes the tax information you need. A tax return transcript shows most line items from the tax return that you filed. It also includes items from any accompanying forms and schedules that you filed. It doesn’t reflect any changes you or the IRS made after you filed your original return. A tax account transcript includes your marital status, the type of return you filed, your adjusted gross income and taxable income. It does include any changes that you or the IRS made to your tax return after you filed it. You can get your free transcripts immediately online. You can also get them by phone, by mail or by fax within five to 10 days from the time IRS receives your request. - To view and print your transcripts online, go to IRS.gov and use the Get Transcript tool. - To order by phone, call 800-908-9946 and follow the prompts. You can also request your transcript using your smartphone with the IRS2Go mobile phone app. - To request an individual tax return transcript by mail or fax, complete Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses and individuals who need a tax account transcript should use Form 4506-T, Request for Transcript of Tax Return.

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