The document provides urgent tax filing advice as the April 15 deadline approaches for U.S. taxpayers, emphasizing the importance of including all sources of income, filing on time, and understanding both taxable and non-taxable income. It covers key points about reporting tips, bartering income, and the tax implications of unemployment benefits due to job loss. Additionally, it highlights the significance of good record-keeping for charitable contributions and introduces a simplified option for home office deductions.

1. What Income is Taxable?
Five Last Minute Tax Tips for 2015
Are you one of the millions of Americans who hasn't filed (or even started) your taxes yet? With the
April 15 tax filing deadline less than a week away, here is some last minute tax advice for you.
1. Stop Procrastinating. Resist the temptation to put off your taxes until the very last minute. It takes
time to prepare accurate returns and additional information may be needed from you to complete
your tax return.
2. Include All Income. If you had a side job in addition to a regular job, you might have received a
Form 1099-MISC. Make sure you include that income when you file your tax return because you may
owe additional taxes on it. If you forget to include it you may be liable for penalties and interest on
the unreported income.
3. File on Time or Request an Extension. This year's tax deadline is April 15. If the clock runs out,
you can get an automatic six-month extension, bringing the filing date to October 15, 2015. You
should keep in mind, however, that filing the extension itself does not give you more time to pay any
taxes due. You will still owe interest on any amount not paid by the April deadline, plus a late-
payment penalty if you have not paid at least 90 percent of your total tax by that date.
Call the office if you need to file an extension or file for late-filing penalty relief.
4. Don't Panic If You Can't Pay. If you can't immediately pay the taxes you owe, there are several
alternatives. You can apply for an IRS installment agreement, suggesting your own monthly payment
amount and due date, and getting a reduced late payment penalty rate. You also have various
options for charging your balance on a credit card. There is no IRS fee for credit card payments, but
processing companies generally charge a convenience fee. Electronic filers with a balance due can
file early and authorize the government's financial agent to take the money directly from their
checking or savings account on the April due date, with no fee.
5. Sign and Double Check Your Return. The IRS will not process tax returns that aren't signed, so
make sure that you sign and date your return. You should also double check your social security

2. number, as well as any electronic payment or direct deposit numbers, and finally, make sure that
your filing status is correct.
Remember: To avoid delays, get your tax documents to the office as soon as you can.
What Income is Taxable?
Are you wondering if there's a hard and fast rule about what income is taxable and what income is
not taxable? The quick answer is that all income is taxable unless the law specifically excludes it. But
as you might have guessed, there's more to it than that.
Taxable income includes any money you receive, such as wages and tips, but it can also include non-
cash income from property or services. For example, both parties in a barter exchange must include
the fair market value of goods or services received as income on their tax return.
Nontaxable Income
Here are some types of income that are usually not taxable:
Gifts and inheritances
Child support payments
Welfare benefits
Damage awards for physical injury or sickness
Cash rebates from a dealer or manufacturer for an item you buy
Reimbursements for qualified adoption expenses
In addition, some types of income are not taxable except under certain conditions, including:
Life insurance proceeds paid to you because of the death of the insured person are usually not
taxable. However, if you redeem a life insurance policy for cash, any amount that is more than the
cost of the policy is taxable.
Income from a qualified scholarship is normally not taxable. This means that amounts you use for
certain costs, such as tuition and required books, are not taxable. However, amounts you use for
room and board are taxable.
If you received a state or local income tax refund, the amount may be taxable. You should have
received a 2014 Form 1099-G from the agency that made the payment to you. If you didn't get it by
mail, the agency may have provided the form electronically. Contact them to find out how to get the
form. Be sure to report any taxable refund you received even if you did not receive Form 1099-G.
Important Reminders about Tip Income
If you get tips on the job from customers, that income is subject to taxes. Here's what you should
keep in mind when it comes to receiving tips on the job:

3. Tips are taxable. You must pay federal income tax on any tips you receive. The value of non-cash
tips, such as tickets, passes or other items of value are also subject to income tax.
Include all tips on your income tax return. You must include the total of all tips you received during
the year on your income tax return. This includes tips directly from customers, tips added to credit
cards and your share of tips received under a tip-splitting agreement with other employees.
Report tips to your employer. If you receive $20 or more in tips in any one month, from any one job,
you must report your tips for that month to your employer. The report should only include cash,
check, debit and credit card tips you receive. Your employer is required to withhold federal income,
Social Security and Medicare taxes on the reported tips. Do not report the value of any noncash tips
to your employer.
Keep a daily log of tips. Use the Employee's Daily Record of Tips and Report to Employer (IRS
Publication 1244), to record your tips.
Bartering Income is Taxable
Bartering is the trading of one product or service for another. Small businesses sometimes barter to
get products or services they need. For example, a plumber might trade plumbing work with a
dentist for dental services. Typically, there is no exchange of cash.
If you barter, the value of products or services from bartering is taxable income. Here are four facts
about bartering that you should be aware of:
1. Barter exchanges. A barter exchange is an organized marketplace where members barter
products or services. Some exchanges operate out of an office and others over the Internet. All
barter exchanges are required to issue Form 1099-B, Proceeds from Broker and Barter Exchange
Transactions. The exchange must give a copy of the form to its members who barter and file a copy
with the IRS.
2. Bartering income. Barter and trade dollars are the same as real dollars for tax purposes and must
be reported on a tax return. Both parties must report as income the fair market value of the product
or service they get.
3. Tax implications. Bartering is taxable in the year it occurs. The tax rules may vary based on the
type of bartering that takes place. Barterers may owe income taxes, self-employment taxes,
employment taxes or excise taxes on their bartering income.
4. Reporting rules. How you report bartering on a tax return varies. If you are in a trade or business,
you normally report it on Form 1040, Schedule C, Profit or Loss from Business.
If you have any questions about taxable and nontaxable income, don't hesitate to contact the office.
Lost Your Job? There Could Be Tax Consequences
Given current economic conditions, you may be faced with tax questions surrounding a job loss and
unemployment issues. Here are some answers:
Q: What if I received unemployment compensation in 2014?

4. A: Unemployment compensation you received under the unemployment compensation laws of the
United States or of a state are considered taxable income and must be reported on your federal tax
return. If you received unemployment compensation, you should receive Form 1099-G showing the
amount you were paid and any federal income tax you elected to have withheld.
Types of unemployment benefits include:
Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
Railroad unemployment compensation benefits
Disability payments from a government program paid as a substitute for unemployment
compensation
Trade readjustment allowances under the Trade Act of 1974
Unemployment assistance under the Disaster Relief and Emergency Assistance Act
You must also include benefits from regular union dues paid to you as an unemployed member of a
union in your income. However, other rules apply if you contribute to a special union fund and your
contributions are not deductible. If this applies to you, only include in income the amount you
received from the fund that is more than your contributions.
Q: Can I have federal income tax withheld?
Yes, you can choose to have federal income tax withheld from your unemployment benefits by filling
out Form W-4V, Voluntary Withholding Request. If you complete the form and give it to the paying
office, they will withhold tax at 10 percent of your payments. If you choose not to have tax withheld,
you may have to make estimated tax payments throughout the year.
Q: What if I lost my job?
A: The loss of a job may create new tax issues. Severance pay and unemployment compensation are
taxable. Payments for any accumulated vacation or sick time are also taxable. You should ensure
that enough taxes are withheld from these payments or make estimated tax payments to avoid a big
bill at tax time. Public assistance and food stamps are not taxable.
Q: What if I searched for a job?
A: You may be able to deduct certain expenses you incurred while looking for a new job, even if you
did not get a new job. Expenses include travel, resume preparation, and outplacement agency fees.
Moving costs for a new job at least 50 miles away from your home may also be deductible.
Q: What if my employer went out of business or into bankruptcy?
A: Your employer must provide you with a 2014 W-2 Form showing your wages and withholdings by
February 2, 2015. You should keep up-to-date records or pay stubs until you receive your Form W-2.
If your employer or its representatives fail to provide you with a Form W-2, contact the IRS. They
can help by providing you with a substitute Form W-2. If your employer liquidated your 401(k) plan,

5. you have 60 days to roll it over into another qualified retirement plan or IRA.
If you have experienced a job loss and have questions, please call. You need to be prepared for the
tax consequences.
Estimated Tax Payments - Q A
Question: How do I know if I have to file quarterly individual estimated tax payments?
Answer: If you owed additional tax for the prior tax year, you may have to make estimated tax
payments for the current tax year.
If you are filing as a sole proprietor, partner, S corporation shareholder, and/or a self-employed
individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or
more when you file your return.
If you are filing as a corporation you generally have to make estimated tax payments for your
corporation if you expect it to owe tax of $500 or more when you file its return.
If you had a tax liability for the prior year, you may have to pay estimated tax for the current year;
however, if you receive salaries and wages, you can avoid having to pay estimated tax by asking your
employer to withhold more tax from your earnings.
There are special rules for farmers, fishermen, certain household employers, and certain higher
taxpayers.
The first estimated payment for 2015 is due April 15, 2015. Contact us if you are unsure whether you
need to make an estimated tax payment.
Good Records Key to Claiming Gifts to Charity
Keeping good records is key to qualifying for the full charitable contribution deduction allowed by
law. In particular, this includes ensuring that they have received required statements for two
contribution categories--each gift of at least $250 and donations of vehicles. Therefore, taxpayers
planning to claim charitable donations should make sure they have the records they need before
filing their 2014 tax returns.

6. First, to claim a charitable contribution deduction, donors must get a written acknowledgment from
the charity for all contributions of $250 or more. This includes gifts of both cash and property. For
donations of property, the acknowledgment must include, among other things, a description of the
items contributed.
In addition, the law requires that taxpayers have all acknowledgements in hand before filing their
tax return. These acknowledgments are not filed with the return but must be retained by the
taxpayer along with other tax records.
Second, special reporting requirements generally apply to vehicle donations, and taxpayers wishing
to claim these donations must attach any required documents to their tax return. The deduction for a
car, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This
rule applies if the claimed value is more than $500. Form 1098-C or a similar statement, must be
provided to the donor by the organization and attached to the donor's tax return.
Only donations to eligible organizations are tax-deductible so taxpayers must also be sure that any
charity they are giving to is a qualified organization. Select Check, a searchable online tool available
on IRS.gov, lists most organizations that are eligible to receive deductible contributions. In addition,
churches, synagogues, temples, mosques and government agencies are eligible even if they are not
listed in the tool's database.
Only taxpayers who itemize their deductions on Form 1040 Schedule A can claim gifts to charity.
Thus, taxpayers who choose the standard deduction cannot deduct their charitable contributions.
This includes anyone who files a short form (Form 1040A or 1040EZ).
A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable
contributions, state and local taxes, etc.) exceed the standard deduction. Use the 2014 Form 1040,
Schedule A to determine whether itemizing is better than claiming the standard deduction.
Besides Schedule A, taxpayers who give property to charity usually must attach a special form for
reporting these noncash contributions. If the amount of the deduction for all noncash contributions
is over $500, a properly completed Form 8283 is required.
Additionally, there are special rules that apply to charitable contributions of used clothing and
household items, monetary donations, and year-end gifts. These include:
Rules for Charitable Contributions of Clothing and Household Items
This includes furniture, furnishings, electronics, appliances and linens. Clothing and household
items donated to charity generally must be in good used condition or better to be tax-deductible.
Clothing or household item for which a taxpayer claims a deduction of over $500 does not have to
meet this standard if the taxpayer includes a qualified appraisal of the item with the return.
Guidelines for Monetary Donations
A taxpayer must have a bank record or a written statement from the charity in order to deduct any
donation of money, regardless of the amount. The record must show the name of the charity and the
date and amount of the contribution. Bank records include canceled checks, and bank, credit union
and credit card statements. Bank or credit union statements should show the name of the charity,
the date, and the amount paid. Credit card statements should show the name of the charity, the
date, and the transaction posting date.

7. Donations of money include those made in cash or by check, electronic funds transfer, credit card
and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2
wage statement or other document furnished by the employer showing the total amount withheld for
charity, along with the pledge card showing the name of the charity.
Year-End Gifts
Contributions are deductible in the year made. Thus, donations charged to a credit card before the
end of 2014 count for 2014, even if the credit card bill isn't paid until 2015. Also, checks count for
2014 as long as they were mailed in 2014.
Need help? Call the office today to set up an appointment with a tax and accounting specialist.
Simplified Option for the Home Office Deduction
If you're one of the more than 3.4 million taxpayers claimed deductions for business use of a home
(commonly referred to as the home office deduction), don't forget about the simplified option that is
now available for taxpayers.
The optional deduction is capped at $1,500 per year based on $5 a square foot for up to 300 square
feet. It is expected to reduce the paperwork and recordkeeping burden on small businesses by an
estimated 1.6 million hours annually.
Currently, taxpayers claiming the home office deduction are generally required to fill out a 43-line
form (Form 8829) often with complex calculations of allocated expenses, depreciation and
carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a
significantly simplified form.
Though homeowners using the new option cannot depreciate the portion of their home used in a
trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses
on the home as itemized deductions on Schedule A. These deductions need not be allocated between
personal and business use, as is required under the regular method. Business expenses unrelated to
the home, such as advertising, supplies and wages paid to employees are still fully deductible.
Current restrictions on the home office deduction, such as the requirement that a home office must
be used regularly and exclusively for business and the limit tied to the income derived from the
particular business, still apply under the new option.
If you need more details about the new simplified home office deduction for tax year 2014 (or 2015),
don't hesitate to call.
Top Ten Facts about Adoption Tax Benefits
If you adopted or tried to adopt a child in 2014, you may qualify for a tax credit. If your employer
helped pay for the costs of an adoption, you may be able to exclude some of your income from tax.
Here are ten things you should know about adoption tax benefits.
1. Credit or Exclusion. The credit is non-refundable. This means that the credit may reduce your tax

8. to zero. If the credit is more than your tax, you can't get any additional amount as a refund. If your
employer helped pay for the adoption through a written qualified adoption assistance program, you
may qualify to exclude that amount from tax.
2. Maximum Benefit. The maximum adoption tax credit and exclusion for 2014 is $13,190 per child.
3. Credit Carryover. If your credit is more than your tax, you can carry any unused credit forward.
This means that if you have an unused credit in 2014, you can use it to reduce your taxes for 2015.
You can do this for up to five years, or until you fully use the credit, whichever comes first.
4. Eligible Child. An eligible child is under age 18. This rule does not apply to persons who are
physically or mentally unable to care for themselves.
5. Qualified Expenses. Adoption expenses must be directly related to the adoption of the child and be
reasonable and necessary. Types of expenses that can qualify include adoption fees, court costs,
attorney fees, and travel.
6. Domestic Adoptions. For domestic adoptions (adoption of a U.S. child), qualified adoption
expenses paid before the year the adoption becomes final are allowable as a credit for the tax year
following the year of payment (even if the adoption is never finalized).
7. Foreign Adoptions. For foreign adoptions (adoption of an eligible child who is not yet a citizen or
resident of the U.S.), qualified adoption expenses paid before and during the year are allowable as a
credit for the year when it becomes final.
8. Special Needs Child. If you adopted an eligible U.S. child with special needs and the adoption is
final, a special rule applies. You may be able to take the tax credit even if you didn't pay any
qualified adoption expenses.
9. No Double Benefit. Depending on the adoption's cost, you may be able to claim both the tax credit
and the exclusion. However, you can't claim both a credit and exclusion for the same expenses. This
rule prevents you from claiming both tax benefits for the same expense.
10. Income Limits. The credit and exclusion are subject to income limitations. The limits may reduce
or eliminate the amount you can claim depending on the amount of your income.
Questions? Contact the office today. Help is just a phone call away.
Tax Due Dates for April 2015
April 10
Employees who work for tips - If you received $20 or more in tips during February, report them to
your employer. You can use Form 4070.
April 15
Individuals - File an income tax return for 2014 (Form 1040, 1040A, or 1040EZ) and pay any tax due.
If you want an automatic 6-month extension of time to file the return, file Form 4868, Application for
Automatic Extension of Time To File U.S. Individual Income Tax Return or you can get an extension
by phone if you pay part or all of your estimate of income tax due with a credit card. Then file Form

9. 1040, 1040A, or 1040EZ by October 15.
Household Employers - If you paid cash wages of $1,900 or more in 2014 to a household employee,
file Schedule H (Form 1040) with your income tax return and report any employment taxes. Report
any federal unemployment (FUTA) tax on Schedule H if you paid total cash wages of $1,000 or more
in any calendar quarter of 2013 or 2014 to household employees. Also report any income tax you
withheld for your household employees.
Individuals - If you are not paying your 2015 income tax through withholding (or will not pay in
enough tax during the year that way), pay the first installment of your 2015 estimated tax. Use Form
1040-ES.
Partnerships - File a 2014 calendar year return (Form 1065). Provide each partner with a copy of
Schedule K-1 (Form 1065), Partner's Share of Income, Credits, Deductions, etc., or a substitute
Schedule K-1. If you want an automatic 5-month extension of time to file the return and provide
Schedule K-1 or a substitute Schedule K-1, file Form 7004. Then file Form 1065 by September 15.
Electing Large Partnerships - File a 2014 calendar year return (Form 1065-B). If you want an
automatic 6-month extension of time to file the return, file Form 7004. Then file Form 1065-B by
October 15. March 16 was the due date for furnishing the Schedules K-1 to the partners.
Corporations - Deposit the first installment of estimated income tax for 2015. A worksheet, Form
1120-W, is available to help you estimate your tax for the year.
Employers - Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for
payments in March.
Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies,
deposit the tax for payments in March.
April 30
Employers - Social Security, Medicare, and withheld income tax. File form 941 for the first quarter
of 2015. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full
with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until
May 11 to file the return.
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