Cell Phone Income Tax IRS As Fringe Benefit

The use of company-issued mobile phones could trigger new federal income taxes on millions of Americans as a "fringe benefit."

The Internal Revenue Service proposed employers assign 25% of an employee's annual phone expenses as a taxable benefit. Under that scenario, a worker in the 28% tax bracket, whose wireless device costs the company $1,500 a year, could see $105 in additional federal income tax.

With about 100,000 employees (more than the CIA and FBI combined), the IRS has plenty of people who daydream about new ways of taking money from taxpayers. The latest scheme to emanate from the tax bureaucracy is to classify employer-provided cell phones as a taxable fringe benefit.

IRS tax on company provided cell phones

To be fair, non-pecuniary forms of compensation should be treated the same as cash income, but a bit of common sense should apply. What happens with cell phone plans with unlimited minutes, meaning that a business is not paying extra for personal calls? And if the IRS does go down this path, why harrass individuals when it would be much easier to simply make a portion of cell phone costs non-deductible for companies? It almost seems as if the IRS wants to instigate a tax revolt.

IRS and personal cell phone usage

The IRS, in a notice issued this week, said employees could avoid tax liability if they showed proof they used personal cellphones for nonbusiness calls during work hours. The agency also could decide on a set number of phone minutes as "minimal personal use" that would be untaxed.

Cash for clunkers program 2009

Now that Congress has passed the cash-for-clunkers bill, I'll answer some questions I've been getting about this controversial program.

First some basics: The bill was included in the Supplemental Appropriations Act of 2009 (HR 2346), which provides emergency funding for our wars in the Middle East. President Obama is expected to sign the bill.

The original idea was to reduce greenhouse gas emissions and reduce our dependence on oil. But the concept was carjacked by Detroit and turned into another way to stimulate new-vehicle sales.

Cash for clunkers california program

As passed, people who trade in a vehicle made in 1984 or later that gets 18 miles per gallon or less can get a taxpayer-financed voucher to buy a new vehicle getting slightly better gas mileage.

For passenger cars, the new car must get at least 4 mpg better for a $3,500 voucher or 10 mpg better for a $4,500 voucher.

For light trucks and SUVs, the mileage improvement must be 2 mpg for a $3,500 voucher or 5 mpg for a $4,500 voucher.

United States Senate Bill 247 Cash For Clunkers

For pick-ups and vans weighing between 6,000 and 8,500 pounds, the new vehicle must get at least 15 mpg. The voucher will be for $3,500 if the new vehicles gets at least 1 mpg better than the old one or $4,500 for a 2 mpg improvement.

Different rules apply to work trucks weighing 8,500 to 10,000 pounds.

Mileage requirements are EPA combined city/highway mpg as posted on window stickers or at www.fueleconomy.gov.

List of Cars Qualifying For Cash for Clunkers Program

To qualify, the new vehicle must be purchased or leased between July 1 and November 1, 2009. The trade in must go to a participating dealer. The dealer must agree to scrap the clunker but can sell parts except for engine blocks and drive trains.

Congress only provided $1 billion for the program, but everyone figures that's just a down payment. "The industry is going to come racing back for more money," says Dan Becker, director of the Safe Climate Campaign.

Q: Richard P. asks, "Could you purchase an old car with poor mileage, just to trade it in on a new one. Or does the clunker have to be something you have owned for a period of time?"

A: The trade-in vehicles must be in drivable condition and continuously insured and registered to the same owner for at least one year.

Q: Shula Z. asks: "If I had two qualifying clunkers and turned them in could I combine the vouchers for one new car?"

A: No. There is one voucher per person, and one voucher per trade-in for vehicles with multiple registered owners. Only one voucher can be used toward the purchase of a car.

Q: Craig S. asks, "If you purchase a new car this year (after Feb. 16), you can deduct the sales tax on your 2009 (federal) tax return. Is cash for clunkers something in addition to that tax deduction, or in lieu of?"

A: You could get both incentives, assuming you qualify for both. While the sales-tax deduction has income limits clunkers does not.

Q: Steve S. asks, "I traded in an Explorer earlier this year that would qualify as a clunker. Can I get a voucher retroactively?

A: No. Although previous versions of the bill were retroactive to March 30, the final one is not.

If you have more questions, e-mail me. Some answers might have to wait. After Obama signs the bill, the government has 30 days to publish a Web site that includes guidelines for determining eligible trade-ins, details on participation and a list of new vehicles that meet program requirements.

IRS Stimulus Check Status 2009

Most taxpayers who received the economic stimulus payment last year will not qualify for the recovery rebate credit on their 2008 federal income tax return. However, some individuals who did not get the economic stimulus payment, and a smaller number of those who did, may be eligible for the recovery rebate credit. If you didn't get an economic stimulus payment in 2008, you may be eligible to receive the recovery rebate credit in 2009.

IRS Stimulus Checks 2009

To determine if you are eligible for the recovery rebate credit you will need to know how much your 2008 economic stimulus payment was. Our online tool, How Much Was My Stimulus Payment?, can get you the answer right away.

Visit the Recovery Rebate Credit Information Center for details.
If You Didn't File for a Stimulus Payment

If you didn't file for an economic stimulus payment in 2008 because you weren't sure you were eligible, you may be able to file for a payment in 2009. Find out more if you:

*Receive Social Security retirement or disability benefits
* Receive Veterans Affairs pension, disability or survivor's benefits
* Receive Tier 1 Railroad Retirement benefits
* Are a low-wage worker

Find Out if You're Eligible

You are eligible if:

*You or your family has at least $3,000 in qualifying income from, or in combination with, Social Security benefits, Veterans Affairs benefits, Railroad Retirement benefits and earned income. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.

*You and any family members listed on your tax return have valid Social Security numbers.
*You are not a dependent or eligible to be a dependent on someone else’s federal tax return. (The same must be true of any family members claimed on your return.)

How Much Is It Worth?

*Eligible individuals — between $300 and $600
* Joint filers — between $600 and $1,200
* With eligible children — an additional $300 for each qualifying child

IRS STIMULUS CHECKS SCAMS 2009 - Avoid Them

Identity thieves are using the stimulus payment as bait in their scams. Details can be found in news release IR-2008-11, IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting.

Am I Entitled To Working Family Tax Credits

Working tax credit (WTC), is payment from the Government for people who work on a low income. It is a part of the current tax credits system in the United Kingdom - part of the system of means-tested social security benefits. As well as Working Tax Credit, people may also be entitled Child tax credit (CTC) if they are responsible for a child or children.

Tax credits were introduced in their present form in April 2003. They replaced Working Families Tax Credit (WFTC), which operated from April 1999 until March 2003. WFTC was a transitional system from the earlier benefit for working families known as Family Credit (FC) which had been in operation from 1986.

WFTC shared its assessment of means and period of renewal (6 months) with FC but moved towards a tax credit approach styled on schemes in other countries, which used an annual declaration of income to assess entitlement for a whole year. Tax Credits also replaced the child elements in means tested benefits, the Children's Tax Credit in the tax system, and disabled persons tax credit.

Despite their name, tax credits are not linked to a person's tax bill. WTC can be claimed by working individuals, childless couples and working families with dependent children. WTC and CTC are assessed jointly and families remain eligible for CTC even if where no adult is working or they have too much income to receive WTC.

Does a Single Person claim any Working Family Tax Benefit?

No, a single person with no children needs to be 25 or older and working more then 30hrs a week to claim tax credits and income for previous year or this year needs to be below £12500. If you disabled need to be 16 and work 16hrs income level is much higher as well.

Tax Credit For New Car Purchase

The Internal Revenue Service announced today that taxpayers who buy a new passenger vehicle this year may be entitled to deduct state and local sales and excise taxes paid on the purchase on their 2009 tax returns next year.

“For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year,” said IRS Commissioner Doug Shulman. “This deduction enables taxpayers to buy now and get cash back later on their tax returns.”

Stimulus package tax credit for new car buyers:

The deduction is limited to the state and local sales and excise taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle.

Federal tax credit and new car purchase:

The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

IRS also alerted taxpayers that the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010, to qualify for the deduction.

The special deduction is available regardless of whether a taxpayer itemizes deductions on their return. The IRS reminded taxpayers the deduction may not be taken on 2008 tax returns.

8000 Home Buyer Tax Credit

There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.

A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:

"I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"

8000 tax credit first time home buyer IRS form?

The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:

Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.

Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.

Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

When Are The Child Tax Credit Checks Being Mailed

One good thing about the tax cuts in the new law is that most people didn't have to wait long to start seeing the savings. Employers have generally lowered the amount of federal tax withheld from their workers’ paychecks, reflecting lower tax rates for most people and a larger standard deduction for married couples.

The Treasury mailed checks to most people who claimed the Child Tax Credit last year, as an advance payment of the credit’s increase. And these mailings will continue until the end of the year to eligible taxpayers who filed after April.

If you claimed this credit on your 2002 tax return, you may be eligible for up to $400 for each qualifying child. That’s the difference between the old maximum credit of $600 and the new amount of $1,000.

You don't have to do anything to get these benefits. Your employer adjusts your paycheck withholding based on the W-4 form you had on file. The IRS figures if you’re entitled to any advance Child Tax Credit payment and has it sent straight to your mailbox – automatically! You don’t have to call, apply or fill out another form.

Some other changes aren’t so automatic, but could also mean extra money in your pocket. Lower tax rates for long-term capital gains and qualifying dividends may allow you to reduce your estimated tax payments for the rest of the year.

An increase in the Alternative Minimum Tax exemption may insulate you from that tax computation. Business owners may claim larger first-year depreciation allowances and Section 179 expensing amounts.