Author: Leon Clinton

Tax

Moving Soon? Let the IRS Know

If you changed your home or business address, notify the IRS to ensure that you receive any refunds or correspondence. Although the IRS uses the postal service’s change of address files to update taxpayer addresses, notifying the IRS directly is still a good idea.

There are several ways to do this.

  • On your tax return. You may correct the address legibly on the mailing label that comes with your tax package or write the new address in the appropriate boxes on your tax return when you file.
  • Form 8822. You may use Form 8822, Change of Address, to submit an address or name change at any time during the year.
  • Verbal Notification. If an IRS employee contacts you about your account, you may verbally provide a change of address.
  • Written Notification. To give written notification, write to the IRS center where you file your return and provide your new address. The addresses for the IRS centers are listed in the tax instructions. In order to process an address change, the IRS will need your full name, old and new addresses, your Social Security number or employer identification number, and signatures. If you filed a joint return, you should provide the same information for both spouses. If you filed a joint return and have since established separate residences, you each should notify the IRS of your new addresses.

It’s a good idea to notify your employer of your new address so that you can get your W-2 forms on time.

If you change your address after filing your return, don’t forget to notify the post office at your old address so your mail can be forwarded.

You should also notify the IRS if you make estimated tax payments and you change your address during the year. You should mail a completed Form 8822, Change of Address, or write the IRS center where you file your return. You can continue to use your old pre-printed payment vouchers until the IRS sends you new ones. However, do not correct the address on the old voucher.

Tax

Are you a student with a summer job?

Are you a student with a summer job? Here are seven things you should know about the income you earn during the summer months.

1. All taxpayers fill out a W-4 when starting a new job. This form is used by employers to determine the amount of tax that will be withheld from your paycheck. Taxpayers with multiple summer jobs will want to make sure all their employers are withholding an adequate amount of taxes to cover their total income tax liability. To make sure your withholding is correct, call our office.
Whether you are working as a waiter or a camp counselor, you may receive tips as part of your summer income. All tip income you receive is taxable and is therefore subject to federal income tax.
Many students do odd jobs over the summer to make extra cash. If this is your situation, keep in mind that earnings you receive from self-employment are subject to income tax. This includes income from odd jobs like baby-sitting and lawn mowing.

2. If you have net earnings of $400 or more from self-employment, you also have to pay self-employment tax. (Church employee income of $108.28 or more must also pay.) This tax pays for your benefits under the Social Security system. Social Security and Medicare benefits are available to individuals who are self-employed just as they are to wage earners who have Social Security tax and Medicare tax withheld from their wages. The self-employment tax is figured on Form 1040, Schedule SE.
Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.
Special rules apply to services you perform as a newspaper carrier or distributor. You are a direct seller and treated as self-employed for federal tax purposes if you meet the following conditions:
You are in the business of delivering newspapers.
All your pay for these services directly relates to sales rather than to the number of hours worked.
You perform the delivery services under a written contract which states that you will not be treated as an employee for federal tax purposes.
Generally, newspaper carriers or distributors under age 18 are not subject to self-employment tax.
A summer work schedule is sometimes a patchwork of odd jobs – which makes for confusion come tax time. Contact us if you have any questions at all about income your child earned this summer season.

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