McCullough & Associates Blog

Feb 13, 2013

IRS to Accept Tax Returns with Education Credit and Depreciation This Week

The Internal Revenue Service announced on Friday, February 8th that taxpayers will be able to start filing two major tax forms this week covering education credits and depreciation.

Starting Sunday, February 10th, the IRS will start processing tax returns that contain Form 4562 (Depreciation and Amortization). On Thursday, February 14th, the IRS plans to start processing Form 8863 (Education…

Feb 12, 2013

Taxable and Nontaxable Income

Most types of income are taxable, but some are not. Income can include money, property or services that you receive. Here are some examples of income that are usually not taxable:

  • Child support payments;
  • Gifts, bequests and inheritances;
  • Welfare benefits;
  • Damage awards for physical injury or sickness;
  • Cash rebates from a dealer or manufacturer…

Feb 11, 2013

Don’t Fall for Phony IRS Websites

The Internal Revenue Service is issuing a warning about a new tax scam that uses a website that mimics the IRS e-Services online registration page.

The actual IRS e-Services page offers web-based products for tax preparers, not the general public. The phony web page looks almost identical to the real one. The IRS gets many reports of fake websites like this. Criminals use these sites…

Feb 08, 2013

American Opportunity Tax Credit

The American Opportunity Tax Credit replaces the Hope Scholarship Credit for 2012.  The credit is 100% of the first $2,000 of qualifying higher education costs, plus 25% of the next $2,000 of such costs, for a maximum credit of $2,500.  The credit now covers the first four years of a student’s post-secondary education (increased from two years).  Eligible expenses have been expanded to include course…

Feb 06, 2013

Child and Dependent Care Credit

The child and dependent care tax credit was permanently extended for taxable years beginning in 2013. If you pay someone to take care of your dependent (defined as being under the age of 13 at the end of the tax year or incapable of self-care) in order to work or look for work, you may qualify for a credit of up to $1,050 or 35 percent of $3,000 of eligible expenses. For two or more qualifying…

Feb 01, 2013

IRS Provides “Where’s My Refund” Tool

After taxpayers file a return, they can track the status of the refund with the “Where’s My Refund?” tool available on the website. New this year, instead of an estimated date, Where’s My Refund? will give people an actual personalized refund date after the IRS processes the tax return and approves the refund.


Jan 22, 2013

What To Keep?

Don't be too aggressive when removing clutter from your desk or office. The IRS insists records of employment taxes be kept for at least FOUR YEARS, and files should include:

  1. Amounts and dates of all wage, annuity and pension payments.
  2. Names, addresses, Social Security numbers and occupations of employees, as well as their dates of employment.
  3. Employee…

Jan 18, 2013

FUTA Credit Reduction

For a second year, Missouri is classified as a credit reduction state for FUTA. A credit reduction state has taken loans from the federal government to meet its state unemployment benefits liability and has not repaid the loans within the allowable time frame. A reduction in the usual credit against the full FUTA tax rate means that employers paying wages subject to UI tax in…

Jan 17, 2013

Missouri Use Tax - Are You at Risk?

The State of Missouri imposes a use tax on Missouri businesses and individuals for the privilege of storing, using, or consuming tangible personal property in Missouri. While Missouri has imposed the use tax since the late 1950s, many purchasers are not aware of their responsibilities to report transactions and remit the appropriate tax. The purpose of this letter is to make you aware of your responsibilities…

Jan 16, 2013

Auto Mileage Expense Deduction

If you use your vehicle for business use, or your business owns its own vehicle, you are allowed to deduct some of the costs for up keep of the vehicle. You can either use the actual expense method or the standard mileage rate method. 

Under the actual method, you must keep track of all of your actual business related expenses related to the vehicle. 

Under the standard mileage rate,…