Intuit Online Payroll Login On Sale

Stanlo7 for Bubblenews writes: Basically, the Intuit online payroll Login will only be accessible after clients have purchase their order. Normally, there is a 90-day trial time for new users only. They will be given a period to test the properties of the platform they want an order from. During this period, there is always a free login process that new users can envisage on. Since Intuit payroll is liable to tax of the state and other authorities, they have right to charge their clients as well. 

For this reason, after new users have experienced a 90-day trial period, they will be open to pay 9.95 dollar/ month. This will enable new users to apply the Intuit online payroll login procedure to check their account for more information. Though, the normal subscription amount remains 30 dollars/ month.

In case you are planning to make an order after subscription has been confirmed, it is better to cancel it prior to the end of the month. This is only possible when users apply the login idea to their account. For this reason, the federal identification number is given to clients when they apply for an order through Intuit payroll platform as required. 

The essence of the login information and identification details to avoid fraud. It makes people have direct access to their account being different from any other person. The basis of the login process is highly secured with the help of the federal identification number that is given to clients on application. You can also attach your credit card value to this type of payroll account online. This is also a possible way to fund your account whenever it is needed. Clients are given total authority over the creation of their account based on the login details given.

Remember that for any applicant to have access in using the Intuit online payroll login, such will have to submit total information on application. This include applicant address, full name and other required information. The Intuit payroll platform will now creat a user account for clients willing to have it. Though, all users are usually give certain period to access the service of this platform. This will eventually give clients the best idea to understand the value of service rendered. The basic thing to know is how the Intuit online payroll login process is done. You will be given tutor from the service platform based on this issue. 

In case you have finally dashed out of the service, you can simply call the intuit payroll support team to help you get through. They will be able to help clients on how they will successfully login to check their account dealings. On this note, it is now clear to new and old users of this platform that Intuit online payroll login is highly important when accessing their account. It also a good advice from the service platform towards clients on how to safeguard their login details. Once all these are done, clients will enjoy all they paid for while using Intuit payroll service for their use.

The Tax Year Now Closed, Be Wary of IRS’s Dirty Dozen Tax Scams as you Prepare Your Taxes

The Internal Revenue Service issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

"This tax season, the IRS has stepped up its efforts to protect taxpayers from a wide range of schemes, including moving aggressively to combat identity theft and refund fraud," said IRS Acting Commissioner Steven T. Miller. "The Dirty Dozen list shows that scams come in many forms during filing season. Don't let a scam artist steal from you or talk you into doing something you will regret later."

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

The following are the Dirty Dozen tax scams for 2013:

Identity Theft

Tax fraud through the use of identity theft tops this year’s Dirty Dozen list. Identity theft occurs when someone uses your personal information such as your name, Social Security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.

Combating identity theft and refund fraud is a top priority for the IRS, and we are taking special steps to assist victims. For the 2013 tax season, the IRS has put in place a number of additional steps to prevent identity theft and detect refund fraud before it occurs. We have dramatically enhanced our systems, and we are committed to continuing to improve our prevention, detection and assistance efforts.

The IRS has a comprehensive and aggressive identity theft strategy employing a three-pronged effort focusing on fraud prevention, early detection and victim assistance. We are continually reviewing our processes and policies to ensure that we are doing everything possible to minimize identity theft incidents, to help those victimized by it and to investigate those who are committing the crimes.

The IRS continues to increase its efforts against refund fraud, which includes identity theft. During 2012, the IRS prevented the issuance of $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.

This January, the IRS also conducted a coordinated and highly successful identity theft enforcement sweep. The coast-to-coast effort against identity theft suspects led to 734 enforcement actions in January, including 298 indictments, informations, complaints and arrests. The effort comes on top of a growing identity theft effort that led to 2,400 other enforcement actions against identity thieves during fiscal year 2012. The Criminal Investigation unit has devoted more than 500,000 staff-hours to fighting this issue.

We know identity theft is a frustrating and complex process for victims. The IRS has 3,000 people working on identity theft related cases — more than double the number in late 2011. And we have trained 35,000 employees who work with taxpayers to help with identity theft situations.

The IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and an assistance guide. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. Taxpayers can call the IRS Identity Protection Specialized Unit at 800-908-4490. More information can be found on the special identity protection page.

Phishing

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.

If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information that can help you protect yourself from email scams.

Return Preparer Fraud

About 60 percent of taxpayers will use tax professionals this year to prepare their tax returns. Most return preparers provide honest service to their clients. But some unscrupulous preparers prey on unsuspecting taxpayers, and the result can be refund fraud or identity theft.

It is important to choose carefully when hiring an individual or firm to prepare your return. This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs).

The IRS also has created a new web page to assist taxpayers. For tips about choosing a preparer, red flags, details on preparer qualifications and information on how and when to make a complaint, visit www.irs.gov/chooseataxpro.

Remember: Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. Make sure the preparer you hire is up to the task.

IRS.gov has general information on reporting tax fraud. More specifically, report abusive tax preparers to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 and fill it out or order by mail at 800-TAX FORM (800-829-3676). The form includes a return address.

Hiding Income Offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice (DOJ) to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.

Since 2009, 38,000 individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore will become increasingly more difficult.

At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS continues working on a wide range of international tax issues and follows ongoing efforts with DOJ to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.

The IRS has collected $5.5 billion so far from people who participated in offshore voluntary disclosure programs since 2009.

“Free Money” from the IRS & Tax Scams Involving Social Security

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in community churches around the country. These schemes promise refunds to people who have little or no income and normally don’t have a tax filing requirement – and are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.

Scammers prey on low income individuals and the elderly and members of church congregations with bogus promises of free money. They build false hopes and charge people good money for bad advice including encouraging taxpayers to make fictitious claims for refunds or rebates based on false statements of entitlement to tax credits. For example, some promoters claim they can obtain for their victims, often senior citizens, a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college. Con artists also falsely claim that refunds are available even if the victim went to school decades ago. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. The IRS warns all taxpayers to remain vigilant.

There are also a number of tax scams involving Social Security. For example, scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but uses inflated information to complete the return.

Beware: Intentional mistakes of this kind can result in a $5,000 penalty.

Impersonation of Charitable Organizations

Another long-standing type of abuse or fraud is scams that occur in the wake of significant natural disasters.

Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone or email to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds.

They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources. Bogus websites may solicit funds for disaster victims. As in the case of a recent disaster, Hurricane Sandy, the IRS cautions both victims of natural disasters and people wishing to make charitable donations to avoid scam artists by following these tips:

• To help disaster victims, donate to recognized charities.
• Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible.
• Don’t give out personal financial information, such as Social Security numbers or credit card and bank account numbers and passwords, to anyone who solicits  a contribution from you. Scam artists may use this information to steal your identity and money.
• Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.

Call the IRS toll-free disaster assistance telephone number (1-866-562-5227) if you are a disaster victim with specific questions about tax relief or disaster related tax issues.

False/Inflated Income and Expenses

Including income that was never earned, either as wages or as self-employment income in order to maximize refundable credits, is another popular scam. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions. This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution.

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit although they were not eligible. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

False Form 1099 Refund Claims

In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return.

Don’t fall prey to people who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

Falsely Claiming Zero Wages

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Disguised Corporate Ownership

Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.

These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.

Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.

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The tax joys of parenthood

Kay Bell for Bankrate.com writes: Is there a new baby in the house? That's good news in many ways, especially at tax time when the chip off the old block will help you chip away at your tax bill.

A growing family makes you eligible for a variety of tax savings. You get an additional tax exemption, may be eligible for several tax credits, and can use tax-favored ways to save and pay for Junior's college. You might even be able to lower your taxes by shifting some of your higher-taxed income to your youngster, either as an asset gift or as salary if you own your own business.

Here are some common tax matters every new -- and experienced -- mom and dad need to consider.

The first tax-return item a taxpayer encounters is the choice of how to file. For many couples raising kids together, this is easy. The married-filing-jointly option offers a larger standard deduction and allows some tax breaks that are denied unmarried filers.

If, however, you are raising children alone, don't shortchange yourself by choosing the wrong status. You can file as a head of household if, for more than six months, you provided over half the cost of keeping up a home for yourself and your kids. Tax rates and the standard deduction for head-of-household filers are more favorable than those for the single or married-filing-separately categories.

Parents who have lost spouses also have a choice. You may file as a qualifying widow or widower with a dependent child for two years after the year your husband or wife died. This status gives you the same filing consideration afforded married filers.

More child-related tax savings come from the personal exemptions you claim on your return. Each dependent is an exemption. The Internal Revenue Service sets an annually adjusted amount (it's $3,900 on 2013 taxes) that you multiply by the number of your exemptions and subtract from your income.

Determining whether your child is a dependent is not a problem when you have young kids at home. But what about when they earn their money from an after-school job or are off at college? While you may have to do a little figuring, especially to see if your young worker needs to file his or her own tax return, this generally won't invalidate your child's status as your dependent. The key considerations are whether you are the child's primary source of support or if he or she is a full-time student at State U.

Single parents have some other issues to consider. Where a formal divorce decree is involved, be sure you follow the custody rules set out there. They determine who gets to claim the children. When custody is shared, parents must decide who claims the kids.

Your growing family could pay off via several tax credits. The great thing about tax credits is that they reduce your tax liability on a dollar-for-dollar basis. A credit of $500 could cut your $1,000 tax bill in half. If you owe no tax, some credits even will get you a refund.

The easiest child-related credit to claim is called simply that, the child tax credit. There are no records to keep or extra forms to file in order to get a $1,000 credit for each child younger than 17 who's claimed as a dependent on your tax return.

If you claim tax relief for more than one kid, you must fill out Form 8812 to compute the additional child tax credit, but the paperwork could well be worth it. This tax break allows filers who owe little or no taxes to get a refund check from the IRS.

Working parents who put the kids in day care can file for the child- and dependent-care credit to recoup some of those costs. You can use up to $3,000 spent to care for one youngster under age 13, and $6,000 for two or more preteens, to figure your credit amount.
And if your child arrived via adoption, there's a tax credit for that, too.

College costs are skyrocketing, prompting many parents to start saving as soon as the little one arrives. Uncle Sam offers several tax-favored ways to help.

The American opportunity credit, a reformulation of the previous Hope credit, covers costs for the first four years of higher education and is worth up to $2,500. Even better, a portion of the American opportunity credit is refundable, meaning even if you don't owe the IRS anything, you could get some cash back. And the lifetime learning credit, which could cut $2,000 off your tax bill, is still around as well.

Credits usually are more tax beneficial than deductions because credits cut your tax bill dollar-for-dollar. But don't discount the tuition and fees deduction. This tax break lets you subtract up to $4,000 of eligible schooling costs from your income.

And a Coverdell education savings account allows parents (or grandparents or even just friends) to put away up to $2,000 per year (total, not apiece) for a youngster's schooling.

One former child-related opportunity to lower your tax bill, however, has been dramatically reduced. Previously, many parents shifted some of their higher-taxed investment income to their young children so that the earnings would be taxed at a lower bracket; for example, falling from a possible 39.6 percent rate to the youngsters' usually 10 percent or 15 percent bracket.
But the so-called kiddie tax limits this practice. When a young investor's 2013 earnings exceed $2,000, the tax rate applied to those excess earnings is the parents' -- not the child's. The higher tax rate remains in place until the child turns 19 or age 24 if the young investor is a full-time student. For 2014 planning purposes, the child's investment earnings limit remains at $2,000.

So, Mom and Dad, keep an eye on young Jimmy's or Jane's assets because you could be paying the taxes on them.

Tax Court Ruling Clarifies IRA Transactions

Ed Slott for Financial-Planning.com writes: You've been warned: A recent ruling by the U.S. Tax Court holds a costly reminder about the consequences of making inappropriate transactions within a client's IRA.

In a case that centered on two investors' relationship to a company held by their retirement accounts, the court ruled that two business partners' IRAs were disqualified under the prohibited transaction rules when they guaranteed loans to a company owned by their IRAs. As a result, when the stock of the company was later sold inside their disqualified Roth IRAs, they owed taxes on the capital gain.

The court also upheld accuracy-related penalties that the IRS assessed. In doing so it found that, as a result of the disqualification, the taxpayers were negligent for failing to report the sale of stock they owned personally.

The case serves as another reminder for advisors to talk to clients about the potential tax nightmares that can await them should they venture too far off the beaten path with their IRA investments. It is all too easy to run afoul of the prohibited transaction rules.

CASE DETAILS

In 2001, Darrell Fleck was looking to buy Abbott Fire Safety, a company specializing in providing alarms and fire protection systems for businesses. Lawrence Peek, a lawyer who had previously provided Fleck with legal services, was interested in participating, as well.

Fleck was introduced to Christian Blees, a CPA, by the brokerage firm that was offering the fire safety company for sale. Fleck and Peek hired Blees and his firm to structure the purchase of Abbott's assets and to perform due diligence on the transaction.

The CPA presented Peek and Fleck with a strategy for using their IRAs to acquire the fire safety company's assets. The strategy called for them to establish new self-directed IRAs and transfer existing IRA and retirement plan money into those accounts. They would then set up a new corporation, have their self-directed IRAs purchase the shares of that corporation and ultimately use the money from the sale to buy Abbott.

To implement the strategy, Fleck and Peek each set up self-directed IRAs funded by rollovers from existing retirement funds. Fleck and Peek set up a new firm called FP Co., over which they exercised full control as officers and directors.

In September 2001, each IRA bought 5,000 shares of the newly issued FP stock for $309,000. This gave each IRA a 50% share of ownership. It also gave the company more than $600,000 in cash, which Peek and Fleck intended to use to buy Abbott. A few weeks later, FP bought most of Abbott's assets for $1.1 million.

Since the purchase price exceeded the cash that FP had on hand, other sources were needed. Ultimately, the purchase price was satisfied in part with an additional bank loan, a promissory note from a broker and, most important, a $200,000 promissory note from FP that was personally guaranteed by Fleck and Peek. These personal guarantees remained in effect until FP was sold in 2006.

In 2003, both Fleck and Peek converted half of their IRAs to Roth IRAs; they converted the remaining IRA amounts in 2004. These conversions were accomplished by transferring shares of FP stock to the Roth IRA from the IRA. Fleck and Peek properly reported the fair market value of the shares that they converted to their respective Roth IRAs as taxable income for 2003 and for 2004.

Two years later, each of the Roth IRAs sold its FP stake for almost $1.7 million, paid over two years. The holders filed their 2006 and 2007 federal income tax returns, but did not pay taxes on the sale of the FP stock because it was held inside their Roth IRAs - and investments sold inside a Roth IRA are typically not taxable.

IRS OBJECTIONS

Typically is the key word. The IRS examined the pair's respective tax returns for 2006 and 2007 and determined that the personal guarantees of the loans were prohibited transactions. As a result, the IRS increased their personal income to include capital gains from the sale of FP stock; because of the increased income, the IRS also adjusted itemized deductions, exemption amounts and other items.

These adjustments added nearly $250,000 each to the two investors' 2006 tax bills. In addition, the IRS imposed almost $50,000 in accuracy-related penalties to each. Smaller tax liabilities and penalties were added to the men's 2007 tax returns.

The IRS contended that because of Fleck's and Peek's loan guarantees, there were prohibited transactions in 2001 through 2006. As a result of those transactions, the IRA accounts were deemed distributed in 2001 - thus invalidating the Roth IRAs financed with money from those accounts. That in turn made the gain on the sale of FP stock taxable as capital gains in 2006 and 2007.

Not surprisingly, Fleck and Peek disagreed with the IRS, and the issue went to Tax Court.

The crux of the matter was whether their guarantees on the $200,000 promissory note - which FP used to help purchase Abbott in 2001 - were prohibited transactions. The IRS argued that it was an indirect lending of money or other extension of credit between a retirement plan and a disqualified person, and therefore one of the many prohibited transactions.

Fleck and Peek countered that the loan guarantees were not between a retirement plan and disqualified persons. Their position was that although FP was wholly owned by their IRAs, the loan they guaranteed was in the name of FP and not directly connected to their IRAs - and therefore not prohibited.

ADVERSE RULING

The Tax Court disagreed. In ruling in favor of the IRS, the court said that, "given [the tax code's] obvious and intended meaning, [it] prohibited Mr. Fleck and Mr. Peek from making loans or loan guaranties either directly to their IRAs or indirectly to their IRAs by way of the entity owned by the IRAs."

The court also shot down the investors' argument that the IRS notices of deficiency for 2006 and 2007 were beyond the statute of limitations. It reasoned that the loan guarantees were not a one-and-done transaction in 2001, but continued to be ongoing prohibited transactions through 2006, when the loan was paid off.

The pair also tried to get out of the 20% accuracy-related penalty the tax code imposes for, among other factors, underpayment of federal income tax due to negligence or disregard of the rules. Fleck and Peek claimed they had acted with reasonable cause and in good faith, relying on advice from Blees, the CPA - but the court found Blees was not acting as an independent tax professional but as an "active promoter" of a business strategy. The information the two received from Blees, the court concluded, "was not advice so much as a sales pitch."

Advisors should warn clients that directing their IRA to buy shares of their own company or a newly formed corporation is risky, and a prohibited transaction could disqualify the IRA. In addition, clients need to get an independent review by a tax professional who does not have a conflict of interest.

A Tax Deduction for Breastfeeding Supplies

Heidi Murkoff @ What to Expect writes: Question:  

"A friend just told me that my breast pump is tax deductible. Is this true? Are there other tax deductions for newborns?"

Believe it or not, it’s time to show the Internal Revenue Service some love. A recent rule change means nursing mamas can now thank the IRS for doing its part to keep their precious babies healthier and save the family some cash by putting breast pumps on the list of tax-deductible items. The 2010 decision came after years of pressure from the American Academy of Pediatrics and other breastfeeding advocates to define breast pumps and other breastfeeding supplies as medical devices — the same standard that applies to other health-related gear like eyeglasses, diabetes monitors, and hearing aids. The reason:Breastfeeding provides reams of health benefits for baby (fewer infections, reduced risk of asthma and obesity, to name a few) and mom (lower cancer and type 2 diabetes risks).

Before 2010, the IRS lumped pumps in with other nondeductible “feeding devices” like blenders and dishware. By making breast pumps tax deductible, new families can offset some of the cost, which can run as much as $500 to $1,000 a year once you factor in the pump and all its accessories. And the breast pump tax deduction is the same whether you buy a pump or rent one. For some moms, this tax break may be even more incentive to start breastfeeding — and to continue nursing if they return to work.

So how can you take advantage of the new tax deduction for breastfeeding? Here’s the deal:

Tap into pre-tax dollars. If you work, the easiest way to save is to set aside money in your flexible spending account (FSA) to cover your pump and all the extra breastfeeding supplies — pump attachments, nipple cream, bottles and storage bags, pads, and the like. The IRS doesn’t provide a specific list of approved items beyond the pump itself, but if the product was used for a medical reason (e.g., cream on your cracked nipples), it will likely qualify as a tax-deductible item. Don’t have an FSA? Submit the expenses through your partner’s plan. One thing to be aware of: Not every FSA plan covers every IRS-approved item (for the complete list of medical tax deductions, visit irs.gov/publications/p502). Plus, your company can choose to limit the number of eligible deductions, so always check with your benefits department first if you’re unsure.

Itemize your expenses. If neither you nor your partner has an FSA, you may still be able to take advantage of the tax deduction for breastfeeding supplies if your total medical expenses for the year exceed 7.5% of your income. If your pregnancy costs were particularly high this past year, it may be worth your while (or your partner’s) to fill out the longer tax form in which each medical expense is accounted for — instead of filling out the standard tax form.

Take advantage of other tax-deductible items. As new parents, you’re now eligible for a whole host of family-related tax benefits. There’s the child-tax credit, which provides an extra $1,000 deduction for each child under the age of 17. You may also qualify for the dependent-care credit that pays for child care, after-school care, and even day camp so that parents can work or go to school. Need help figuring out what you can claim? Go to the IRS site, or talk to someone in your company’s benefits department or an accountant. Even if you’re able to use just one of these deductions, you’ll probably see a drop in your tax bill this year, which is great news for any family!

The Ten Tax Commandments

Lynn Ebel for H & R Block writes: The Tax Code has been around 100 years and spans nearly 74,000 pages. Although there are many nuances to consider, there are also several overarching rules every taxpayer should know. While the IRS Commissioner isn’t Moses, we will think of these rules as the 10 Tax Commandments.

1. Your income shall be taxed when received.

Most people are “cash-basis” taxpayers. Under the cash-basis method, taxpayers must include, in their gross income, all items of income that are actually or constructively received during the tax year. For example, if you actually received advance rental income for the next five years in this year, it is all taxable now. Or, if your boss allows you to pick up a check on December 31 of this year, it will be still be reported as taxable on your W-2 for 2013. You constructively received this income in 2013 even if you don’t actually cash the check until January 2014.

2. You shall not deduct what you don’t pay.

One myth many people believe is that someone ought to get an itemized deduction for an expense they did not pay. On a jointly-owned property, the taxpayers get to pick which person takes the mortgage and real estate deductions on their personal returns, right? Wrong. If you didn’t pay it, you generally can’t deduct it.

3. You shall honor the last day of the year.

December 31 is an important day for your taxes. Midnight on this day establishes your marital status, which your tax return filing status is based on. You could be unmarried for almost all of 2013 but, if you get hitched on the last day, you could file Married Filing Jointly with your spouse for the whole of 2013.

This day is your very last day to make changes to your return that impact the tax year. Prepaying January expenses (such as Spring tuition or making a mortgage payment) before the end of the year may be beneficial to your 2013 taxes.

December 31 is the also cutoff for many age-sensitive rules. For example, under the Affordable Care Act (ACA), a health insurance plan that provides coverage for a taxpayer’s dependent children is required to continue to offer the coverage to the taxpayer’s adult children who are less than 26 years old as of the last day of the year. Additionally, the qualifying child age test for claiming a dependency exemption (under 19 or under 24 and a full-time student or disabled) is also established on the last day of the year.

4. You shall file timely or you may be punished.

Due to the government shutdown, tax season will begin Jan. 31. But this does not give you additional time to file your taxes. The April 15 deadline is established by law and remains fixed. Interest will accrue on a tax balance due after the April 15 deadline, and there are penalties that could apply.

The IRS charges interest on unpaid tax from the due date of the return until the date of payment, even if you were granted an extension of time to file your return.

If you don’t file timely, the IRS may assess a late filing penalty (also referred to as a failure to file penalty). The penalty is equal to 5% of the balance due on the return, per month (or part of a month), up to a maximum of 25%.

But interest and the failure to file penalty are not the only punishments. A late payment penalty will be applied if you fail to timely pay the balance of tax due reported on the original return by the due date. The penalty rate is 1/2 of 1% per month (or part of a month), up to a maximum of 25% of the tax due.

Basically, if you will owe taxes on your 2013 return, you will want to pay your taxes by April 15 to avoid penalties and interest, even if you file for an extension. The best advice to avoid penalties and interest altogether is to file timely, and, if you owe, pay as quickly as possible.

5. You shall honor past years’ returns.

Do not depend on the IRS to keep copies of your tax returns for you. To get an exact copy of one previously filed return you will need to pay $50 and the IRS will take 75 days to process your request. Even if you can wait that long and pay that much, you are limited to the last 7 years before the IRS is required by law to destroy your returns.

This means these records are your responsibility. Records such as receipts, canceled checks, and other documents that prove an item of income or a deduction appearing on your tax return should also be kept at least until the statute of limitations expires for that return (generally three years from the date the return was filed).

But some records should be kept indefinitely, such as property records, since they may be needed to prove your basis in the property and determine the amount of gain or loss if your property is sold. You may be kicking yourself later for overzealously cleaning out a filing cabinet if there is an IRS letter in the mail next year with your name on it.

6. You shall not ignore the signature line.

This one seems to be self-explanatory. However, your tax return is not a valid one unless you declare under penalties of perjury that you have examined the return and accompanying schedules and statements, and, to the best of your knowledge and belief, they are all true, correct, and complete. The way you do that is to sign it.

If you don’t sign your return, you have not filed a valid return for that year in the eyes of the IRS. In the absence of a valid return, the statute of limitations never starts to run, and the IRS may audit that return at any time. In addition, you could be subject to the failure to file penalty discussed above. Note: If you e-file, there is a way for you electronically sign your return to make the declaration under penalties of perjury without physically signing your tax return.

7. You shall take credit only when credit is due.

The biggest tax credit is generally the earned income credit (EIC). If you have the right adjusted gross income, three or more children, the right filing status, and meet certain requirements, this could mean a check from the IRS in the amount of $6,044.

But the “certain requirements” are super important and won’t apply to all taxpayers who think that they qualify. If the IRS determines that your EIC claim was due to reckless or intentional disregard of the EIC rules, you won’t be able to claim this credit for the next two years, even if you do qualify in those years. If the IRS determines your claim was due to fraud, those two years without the EIC become ten. Of course, interest and penalties could also apply to the incorrectly claimed tax credit. Diligently review the EIC rules in IRS Publication 596.

8. You shall not ignore income.

The United States is one of the two countries in the world to tax by citizenship, not by residence. If you are a U.S. citizen or resident, all of your world-wide income may be taxable on a U.S. tax return, even if it was earned abroad or you didn’t receive a reporting document for it. If you did receive a reporting document, the easiest and fastest way for the IRS to have your return flagged for audit is to have the machines run a comparison of your tax return with third party reporting documents, such as Forms 1099, and find something is missing.

9. Not all income is taxed equally.

Tax rates could depend upon the type of income, your filing status, how long you owned the property you sold, and how much total income you have. The U.S. income tax is a graduated tax, designed so that individuals pay an increasing rate as their income rises through progressive tax brackets. There are seven tax brackets for ordinary income like wages: these different brackets impose taxes at rates of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The 39.6% tax bracket is new this year.

But capital gain tax rates (for gain on the sale of property such as stocks or your home) depend on whether they are long term or short term. If owned long term (usually one year or longer), there are different rates that apply rather than the seven tax brackets above. In fact, there are only three brackets, depending upon your total income: 0%, 15%, and 20%.

Collectibles, such as antiques or a work of art, could have a maximum tax rate of 28%. Additionally in 2013, there begins a new, additional 3.8% Medicare tax on certain types of income for high-income taxpayers.

10. There is opportunity for forgiveness.

Most people choose assistance from a tax preparer for help in complying with all the rules in filing their returns. But if you discover you made a mistake, such as some of the common tax sins mentioned above, it can probably be corrected with an amended return, which is filed using Form 1040X. Talk to a tax advisor about your specific needs.

The IRS Just Won a Tuition-Deduction Case Against an MBA. Are You Next?

Patrick Clark for Bloomberg BusinessWeek writes: Last week, the U.S. Tax Court ruled that a Rollins College MBA named Adam Hart owes the U.S. Internal Revenue Service more than $2,500 in back taxes after he improperly deducted more than $17,000 in tuition expenses from his 2009 tax return. Accountants says that it’s unusual for the IRS to challenge tuition deductions. Still, if you’re an MBA thinking about getting creative with your taxes, you’ll want to take note of a case that could embolden the IRS to go after more students.

The rules for deducting educational expenses sound simple enough: Tuition is deductible when it pays for coursework that enhances skills necessary for an established job or business, as well as any courses required by an employer. That’s about it. What doesn’t make the grade? Enrolling in business school because you’re in the market for a career switch or because you think a mastery of data analysis is going to make you a more complete person.

Even simple rules can get sticky. Does an investment banking analyst who leaves Wall Street for business school after two years to further her career qualify as having an established trade? Is a tax accountant who attends to b-school to become a chief financial officer pursuing a new career or furthering an existing one? “There isn’t a bright line distinction that says, if you’ve worked so many years, making a certain salary, you can claim the deduction,” says David Young, a partner at Young and Co. in Rochester, N.Y.

Hart’s case was decided on the question of whether he was “carrying on a trade or business” before enrolling. Now a sales rep at drug wholesaler McKesson (MCK), Hart cited a four-month stint “promoting sales at Priority Healthcare Distribution as an oncology account specialty” and two months working as “an oncology account manager” at ADP Totalsource (ADP), according to the tax court ruling (PDF). Judge Kathleen Kerrigan decided that this wasn’t enough to define Hart as established in the field. Hart told Reuters that he hopes to present new evidence at a future hearing.

What else should MBAs know about tuition deductions?

Young says that if an auditor challenges the deduction, it falls on the taxpayer to show that an MBA is a business expense. That can be tricky, given the lack of a clear definition, though the tax court has ruled for MBA candidates who claimed tuition deductions in the past.says Jackie Perlman, principal tax analyst at the Tax Institute, the research and analysis division of tax prep company H&R Block (HRB). Other good advice: Consult an expert. If you’re wading into a gray area, ask yourself if you’re making a good-faith effort to comply with the rules.

Two more reasons to take care: The Hart ruling may embolden auditors to pursue cases. “Every time the IRS get a case like this, they become more self-assured,” says Bob Charron, a partner at Friedman in New York. Meanwhile, taxpayers who are seen to have intentionally flouted rules generally face stiffer penalties. As a business school student, it’s going to be hard to claim financial illiteracy.