Who’s Who When Dealing with the IRS.

When dealing with the IRS, it can seem challenging to determine who you are corresponding with and what powers they have. However, for the normal taxpayer, it is remarkably simple. Taxpayers will usually correspond with three different players within the IRS. These include revenue officers, revenue agents and special agents.

Revenue officers help the IRS by collecting taxes that have already been assigned. Their civil responsibility is to collect unpaid taxes before they fall further into arrears. This process often involves calling or meeting with taxpayers directly. If taxpayers do not pay, revenue officers have the ability to file liens and levies against property, wages or bank accounts.

Revenue agents serve the IRS by auditing tax returns. They examine returns for unreported income and to search for deductions that cannot be substantiated by taxpayers. If taxpayers cannot support the numbers which they reported, they will be required to pay the full … Read More

Deducting Your Travel Expenses

If you are commuting or traveling for business, the IRS will normally allow you to list travel expenses in your itemizations. Whether the expense was incurred locally or globally, you can still deduct a portion. Nonetheless, knowing when deductions are allowed and how much to deduct can prove difficult.

If your employer is reimbursing your expenses, you are not allowed to deduct them. Employers are also allowed to pay “per diem” rates per month. You cannot deduct more than the per diem rate per day from your taxes. This rate fluctuates based on the city. Current rates are $172 per day for any low-cost locality and $259 for any high cost locality. This includes the cost of lodging, meals and incremental expenses. Instead of reimbursing employees for actual business expenses, employers can choose to reimburse employees for these amounts. The first and last day of the trip are reimbursed at 75% … Read More

Casualty Losses and Income Taxes

A casualty loss is classified as “The damage, destruction or loss of your property”. These losses can be tricky to report and deduct on your taxes. However, we have compiled a few tips to help you.

In Minnesota, both federal and state tax reporting follow the same set of procedures. If you have a casualty or loss relating to real property (your home, household items or vehicles), you are allowed to deduct it on both your federal and state tax return. A casualty event includes unexpected or uncommon events and disasters but does not include normal wear, tear or breakdown from usage.

If your property is not completely demolished you need to find the lesser of the adjusted basis of your property or the decrease in fair market value. This can be difficult to do, so it is recommended that consult an appraiser. Once you have calculated this amount, you must … Read More