Telecommuters' tax- NY/NJ

Telecommuting has grown in popularity. It's cheap and convenient for both employers and employees. However, it can produce some significant and unpleasant income tax surprise. For states such as NY and NJ, all income earned from an employer are allocated to their respective state unless it is necessary for the non-resident to perform the work out of their state. There is a convenience vs necessity test. If work is being performed by the non-resident employee for their convenience rather than because it is necessary, then their income will be allocated and subject to income tax.

Do you owe money to the IRS?

Instead of receiving the refund that you were anticipating, did you get a tax bill from the IRS stating that you owe moeny to them? Here are some approaches to handle this matter.

1. You should consider taking out a loan and pay off the debt first rather than go into an installment plan with the IRS.
2. If you have a low rate on your credit card, it may be more feasible to pay the amount due with the credit card.
3. If you need to go on an installment plan with the IRS, you need to file all your respective tax returns and complete Form 9465- Installment Agreement Request form.
4. Once your request is approved, a payment plan is setup between you and the IRS.

source: http://www.irs.gov/newsroom/article/0,,id=172694,00.html

Gambled this summer and not sure how to report your winnings and/or loss?

1. All income received from gambling is taxable income
2. You should receive a Form W-2G which states your earnings form the payor> Regardsless of whether you receive a Form W-2G or not, it must be reported on your tax return.
3. You are allowed to deduct your gambling losses up to your winnings. You would need to have keep receipts and supporting documents of losses.

source: http://www.irs.gov/newsroom/article/0,,id=172190,00.html

Does the IRS owe you money?..

The IRS has about $1.3 billion in unclaimed tax refunds.

1. Some people made little income and did not file their tax return because of income threshold, they were not required to. However, if you worked for a company where taxes were withheld from you, then you should file and may be entitled to a refund.
2. Many people's refunds were mailed to incorrect addresses. Check if you are owed some money. https://sa2.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp

First Time Homebuyer Credit Fraud

Are you a 1st time Homebuyer?.. Beware of 1st Time Homebuyer Credit Fraud

http://www.irs.gov/newsroom/article/0,,id=211429,00.html

Several tax facts before selling a home

1. If you own your home and is your primary residence for at least 2 of 5 years, then you can exclude up to $250K for individuals and $500K for married filing jointly for any capital gains on the sale of the home.
2. If you don't meet the requirements for the full $250K or $500K capital gains exclusions, you amy still be able to qualify for reduced gain exclusions.
3. Loss on the sale of a home are not deductible.
4. For taxpayers who have more than one home, you can exclude the gain for only 1 home.

source: http://www.irs.gov/newsroom/article/0,,id=173359,00.html

NYC increased sales tax from 8.375% to 8.875% effective 8/1/09

The new sales tax of 8.875% is comprised of:
4.500% NYC local tax
4.000% NYS tax
0.375% Metropolitan Commuter Transportation District tax