Never Received a W-2

Have you ever had this happen to you? It is the middle of February and you have not received your W-2 from your employer. Many taxpayers have probably been in that situation, but what if you never receive your W-2? What do you do then?

There are a few required steps you should take if it is past January 31, and you have not received your prior year W-2:

1. Contact your employer to find out about its mailing and verify the address they mailed it to.

2. If you have not received the W-2 by February 14^th you are encouraged to call the IRS directly and provide them with the employer’s information, dates of employment, and estimated wage information.

3. You should probably wait until the absolute last minute to file your return, to make sure you will not receive your W-2, but if you have not received your W-2 by the tax filing deadline you should file your personal return as normal, with an additional attachment 4852, or you can ask for a personal extension if you believe the W-2 will be provided to you.

4.  If you receive a W-2 after you file your return, you may have to file an amended return, if the information differs from your previously filed return.

So you do have a few options for taking care of your personal return even if you do not have a W-2 and you do not believe you will receive one for some reason.  

However, if you just lost your W-2, you should be able to ask your employer for an additional copy. They should be able to get you a copy of the original as they are required to maintain certain documents of this type for a long period of time. 

Barter Income

Every other year or so, the IRS releases a tax-tip or memo that covers barter transactions. It seems like when hard times come along, individuals and businesses try different strategies to keep the same level of income. The IRS recognizes the need to get creative in times of need, however, just because you may not receive cash as payment for goods or services does not mean that you have not completed a taxable transaction.

The IRS recently released a Tax Tip related to barter transactions, in which it reminds tax payers that barter transactions are usually reportable as some sort of income on their personal or business return. It also reminds barter exchanges of their 1099-B filing requirement (Tax Tip 2012-33).

If you have a situation whereby you receive property other than cash for goods or services, you have probably engaged in a barter transaction and should report this income on the appropriate income tax return for the year. If you have additional questions related to barter transactions, please consult this IRS publication, or your tax professional.  

Customer Loyalty Programs

Check out this interesting blog entry on the Harvard Business Review website, it talks about customer loyalty programs. It almost makes you question as a business owner if, you really believe in customer loyalty programs, or if you are not creative enough to come up with a better solution to create real customer loyalty...Check out the entry here

Michigan Legislature introduces bill to significantly increase minimum wage

There is an interesting article on M Live this morning about a bill introduced in the Michigan Senate that would significantly increase Michigan's minimum wage, taking it from its current level of $7.40 to $10 by 2015. The Senator that introduced this bill sighted increased inflation and its toll on minimum wage earners as the primary reason for this bill.

I think all legislators should be required to have a college degree with a major in economics if they are going to have the power to influence the economy, maybe that should be the next bill introduced!

Let me know what you think....

Here is a link to the news article on M Live, have a great Friday! 

FBAR Reporting: A simple tool to use

In the last couple of years the Internal Revenue Service has really advanced its fight against offshore income, the initiative called FBAR, or Foreign Bank Account Reporting. In connection with the FBAR, it has implemented a few additional filing requirements for individuals and entities (usually businesses and trusts/estates) that have offshore accounts beyond certain low thresholds. As is usually the case, these additional filing requirements have also given rise to many questions. For this reason, the IRS has created a simple chart that breaks down the similarities and differences between the two new reporting requirements.

For this reason, if you believe you may have a filing requirement for an offshore account, check out this link. After reviewing the FBAR reports, if you still believe you have a reporting requirement, contact your CPA or attorney. 

Great Blog Article!!!

For those of you who do not know, the Harvard Business Review is a great resource for business people. They have interesting articles about a lot of different subjects. Also, for those of us who would like to sample the Harvard Business Review without the cost, you can sign up with them, and gain access to their blog entries, as well as a limited amount of their online content with little more information than your business email (a fair trade indeed)!

This is a great article about the pitfalls associated with always saying yes to your clients and/or taking on projects that do not fit perfectly with your business model...

http://blogs.hbr.org/schwartz/2012/06/the-art-of-letting-go.html

Home Office: Corporations

Please remember that we are answering the following question on this post:

What if I have a corporation that does not have a formal office space, can I take an expense for the business use of my home (office)?

Unfortunately there is not a clear cut yes or no answer to this question. However, there are a few interesting ways to get the same or similar expenses on your personal return (potentially).

Sometimes in the tax code, it seems like we are back in the wild west, for that reason I will introduce you to the good the bad and the ugly...

The Good:

Corporations pay rent to those persons, or entities whom they occupy space from. With that in mind, under the right set of circumstances, it would not be out of the question for the Corporation to pay an individual for the exclusive use of a space for business purposes. There are a few pitfalls in this strategy, so before you go paying yourself rent, please contact your accountant or attorney to go over the legal and business ramifications of this decision. However, if your Corporation uses the space and would like to reimburse you for that use, this may be the best tax position for both the individual and business.

The Bad:

Corporations have employees, often the business owner happens to be an employee of the business entity. For this reason, if the business owner were an employee and had to use his home office exclusively for the needs of the business as an employee and was not reimbursed for this use. This employee may be entitled to a deduction for unreimbursed home office expenses on Schedule A. The amount of the deduction would be limited by 2% of AGI, but sometimes a reduced deduction is better than no deduction at all.

The Ugly:

This plan is not advisable, and has been shot down more times in court than I would be comfortable recommending. But, some Corporations have tried to introduce an expense reimbursement plan that would reimburse employees for specific expenses. One of the expenses they included in this plan was a reimbursement for business use of home office expenses. This plan is riddled with problems, and is not a good idea, but it has been tried in the past.