Summer Jobs!

Summer Job Tax Information for Students

When summer vacation begins, classroom learning ends for most students. Even so, summer doesn’t have to mean a complete break from learning. Students starting summer jobs have the opportunity to learn some important life lessons. Summer jobs offer students the opportunity to learn about the working world – and taxes.

Here are six things about summer jobs that the IRS wants students to know.

1. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal income tax to withhold from workers’ paychecks.

2. If you’ll receive tips as part of your income, remember that all tips you receive are taxable. Keep a daily log to record your tips. If you receive $20 or more in cash tips in any one month, you must report your tips for that month to your employer.

3. Maybe you’ll earn money doing odd jobs this summer. If so, keep in mind that earnings you receive from self-employment are subject to income tax. Self-employment can include pay you get from jobs like baby-sitting and lawn mowing. 

4. You may not earn enough money from your summer job to owe income tax, but you will probably have to pay Social Security and Medicare taxes. Your employer usually must withhold these taxes from your paycheck. Or, if you’re self-employed, you may have to pay self-employment taxes. Your payment of these taxes contributes to your coverage under the Social Security system.

5. If you’re in ROTC, your active duty pay, such as pay received during summer camp, is taxable. However, the food and lodging allowances you receive in advanced training are not.

6. If you’re a newspaper carrier or distributor, special rules apply to your income. Whatever your age, you are treated as self-employed for federal tax purposes if:

• You are in the business of delivering newspapers.
• Substantially all your pay for these services directly relates to sales rather than to the number of hours worked.
• You work under a written contract that states the employer will not treat you as an employee for federal tax purposes.

 

Non Profit Filing Deadline approaching!

Many Tax-Exempt Organizations Must File with IRS By May 15 to Preserve Tax-Exempt Status

 A key deadline of May 15 is facing many tax-exempt organizations that are required by law to file annual reports with the Internal Revenue Service. Organizations will see their federal tax exemptions automatically revoked if they have not filed reports for three consecutive years.

The Pension Protection Act of 2006 mandates that most tax-exempt organizations file annual Form 990-series informational returns or notices with the IRS. Under this law, organizations that fail to file reports for three consecutive years automatically lose their federal tax-exempt status.  Churches and church-related organizations are not required to file annual reports.  Form 990-series information returns and notices are due on the 15th day of the fifth month after an organization’s fiscal year ends. Organizations that need additional time to file may obtain an extension.
 

Many organizations use the calendar year as their fiscal year, which makes May 15 the deadline for them. Organizations that fail to file annual reports for three consecutive years will see their tax exemptions automatically revoked as of the due date of the third required filing.

Small tax-exempt organizations with average annual receipts of $50,000 or less may file an electronic notice called a Form 990-N (e-Postcard), which asks organizations for a few basic pieces of information. Tax-exempt organizations with average annual receipts above $50,000 must file a Form 990 or 990-EZ, depending on their receipts and assets. Private foundations file a Form 990-PF.

The IRS began to publish the names of organizations identified as having automatically lost their tax-exempt status for failing to file annual reports for three consecutive years. Organizations that have had their exemptions automatically revoked and wish to have that status reinstated must file an application for exemption and pay the appropriate user fee.

If your Non Profit needs help filing a 990, don't hesitate to call!  Also, if your Tax-Exempt organization has lost its status due to non filings, please contact us immediately.  We have helped organizations who lost their tax exempt status to regain their tax exempt status.

 

Kids off to Summer Camp?

Summer Day Camp Expenses May Qualify for a Tax Credit !
Along with the hot, lazy, hazy days of summer come some extra expenses, including summer day camp for working parents. But, there’s some good news. If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your federal income tax by claiming the credit for child and dependent care expenses on your tax return.
This credit is available to people who, in order to work or to look for work, have to pay for childcare
services for dependents under age 13. The credit is also available if you paid for the care of a spouse
or a dependent, of any age, who is physically or mentally incapable of self-care.
The Child and Dependent Care Credit is available for childcare expenses incurred during the summer
and throughout the rest of the year.

Here are five facts to remember about this credit:
1) The cost of day camp may count as an expense toward the Child and Dependent Care Credit.
2) Expenses for overnight camps do not qualify.
3) Whether your childcare provider is a sitter at your home or a daycare facility outside the home,
you may get some tax benefit if you qualify for the credit. You will need the name of the childcare
provider, the address, the identification number (i.e. Social Security number or employer
identification number) and the total amount paid.
4) The credit can be up to 35 percent of your qualifying expenses, depending on your income.
5)You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying
individual or $6,000 for two or more qualifying individuals to figure the credit.