How to Find Unclaimed Money from the Government

How to Find Unclaimed Money from the Government
If the government owes a person money and that person does not collect it, the money is considered unclaimed money. This may also happen with pensions, credit unions, banks and other companies. While there are legitimate sources of unclaimed money for some people, it is also important to be aware of scams relating to unclaimed funds. Many people pretend to be from the government or other companies claiming a person is owed money but must pay a fee to collect it. A government agency will never call about unclaimed money or ask for a fee to recover it. Every consumer should know how to look for unclaimed money and how to avoid scams.

Where To Find Unclaimed Money Online
There is no central site where all types of unclaimed funds are listed. To find different types of unclaimed money, a person must visit several sites. A name, social security number or state of residence may be required for the search.

State Funds
Start by using a search engine to find state listings of unclaimed funds. Tax refunds and other tax money that is unclaimed can be found by contacting the IRS.

Federal Funds
The United States Treasury Department, USA.gov and the FDIC are some good places to start when searching for federal funds. Most of these sites have search features where people can find their unclaimed money by entering a state of residence, a first name and a last name.

Pensions And Retirement
For any retirement accounts or pensions from companies that went out of business, try to find unclaimed funds by searching the company’s name and “unclaimed funds.” These may also be listed in other places. For help locating such funds, discuss concerns with an agent.

Banking And Investments
In some cases, banks fail and owe people money for their accounts. Some people forget they have accounts with these banks. Try searching the FDIC first for any funds from failed financial institutions. This is also the best place to start when searching for funds from a credit union. For any funds from SEC claims, try searching the Securities and Exchange Commission site first. There are typically lists that specify when one party owes another money. People who have mutilated coins and bills can exchange them with the Treasury Department under the damaged money provision.

Mortgages
For people who had mortgages insured by FHA, there may be refunds owed from the Department of Housing and Urban Development. This agency is commonly referred to as HUD.

Savings Bonds
A useful site for finding savings bonds that are no longer accruing interest is Treasury Hunt. If a bond was issued during 1974 or later and has matured, it should appear on this site. There are also resources for calculating the value of a savings bond and replacing stolen or lost paper bonds.

For any foreign claims, the Bureau of Fiscal Service provides a search tool to locate these funds. To learn more, discuss concerns with an agent.

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Ten Social Security Tax Questions

Ten Social Security Tax Questions

There were several programs established by the Social Security Act to ensure individuals with disabilities and people who retire have supplemental income. It also established a program for survivors to receive a death benefit. Supplemental income from Social Security keeps more than 40 percent of the elderly population out of poverty. With all of the changes and amendments made since 1935, the tax implications are complicated for individuals and employers. The following are 10 common tax questions related to Social Security.

1. Are Social Security benefits taxed? In some cases, benefits may be subject to federal income tax. If the benefits are a person’s only source of income, they are not likely to be taxed. However, people who have additional income will usually be subject to the federal income tax.

2. Are there base amounts for benefits? The base amounts are determined by a person’s filing status. The base amount for a married couple filing jointly is $32,000. For married couples filing separately who live together, it is $0. The base amount is $25,000 for all other taxpayers.

3. What percentage of benefits is subject to income tax? If an individual adds his or her income to half of the total received benefits and it exceeds more than the base amount, up to 50 percent of that individual’s benefit will be counted as gross income. The base amounts are the same as those listed in the previous paragraph. However, if the person’s income exceeds $40,000 for married filing jointly status, $0 for married filing separately status or $25,000 for all other taxpayers, up to 85 percent of the total amount of benefits must be counted as gross income.

4. Are workers’ compensation benefits counted as Social Security on tax forms? Yes, workers’ compensation benefits are counted as Social Security since they cause a reduction in the tier I category for disability benefits.

5. Why does adjusted gross income include nontaxable interest? This is done to limit the chances of manipulation on tax liability benefits.

6. What are the reporting requirements from the Social Security Administration? Information must be sent to each beneficiary every year that shows any repayments from the beneficiary and any reductions of benefits.

7. How are lump-sum retroactive benefits and over-payments taxed? Any benefits paid to an individual are reduced by over-payments that are repaid. Retroactive lump-sum payments are treated as payable during the year when they were received. Any benefits received before 1984 are not taxable.

8. Are income taxes withheld from Social Security benefits? Withholding is allowed but it is voluntary. Benefit recipients can submit a Form W-4 if they wish to have federal income taxes taken directly out of their benefits. Withholding can be chosen at several different percentage rates up to 25 percent of the total benefit payment.

9. How are Social Security taxes reported for domestic help? The 2015 threshold for coverage of a domestic worker was $1,900 in 2015. Always check current rules for updated threshold amounts. Any wages paid to domestic workers under the age of 18 are exempt from Social Security taxes. Being a student is classified as an occupation.

10. If a person receives wages as an employee but is also self-employed, how much income is subject to self-employment income tax? The difference between the base of maximum earnings and the wages earned as an employee is the amount that is subject to taxation as self-employment income. If the net earnings from self-employment income are more than $434, no self-employment tax is due. However, the amount that is considered taxable may be less than $400 in some cases.

There are many other common concerns related to Social Security taxes and benefits. To learn more or for answers to other questions, discuss concerns with an agent.

From the IRS: Bartering Income: The Value of Property or Services You Receive

Bartering is the trading of one product or service for another. Often there is no exchange of cash. Some businesses barter to get products or services they need. For example, a gardener might trade landscape work with a plumber for plumbing work.

If you barter, you should know that the value of products or services from bartering is taxable income. This is true even if you are not in business.

Here are a few facts about bartering:
• Bartering income. Both parties must report the fair market value of the product or service they get as income on their tax return.
• Barter exchanges. A barter exchange is an organized marketplace where members barter products or services. Some 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. Exchanges must give a copy of the form to its members who barter each year. They must also file a copy with the IRS.
• Trade Dollars. Exchanges trade barter or trade dollars as their unit of exchange in most cases. Barter and trade dollars are the same as U.S. currency for tax purposes. If you earn trade and barter dollars, you must report the amount you earn on your tax return.
• 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.
• 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.
For more information, see the Bartering Tax Center on IRS.gov.

Additional IRS Resources:
• Tax Topic 420 – Bartering Income
• Publication 525, Taxable and Nontaxable Income
• Filing Your Taxes
• IRS Tax Map

IRS YouTube Videos:
• Miscellaneous Income – English | Spanish | ASL

Are You Self Employed? Check Out These IRS Tax Tips

Are You Self Employed? Check Out These IRS Tax Tips

Many people who carry on a trade or business are self-employed. Sole proprietors and independent contractors are two examples of self-employment. If this applies to you, there are a few basic things you should know about how your income affects your federal tax return. Here are six important tips about income from self-employment:

• SE Income. Self-employment can include income you received for part-time work. This is in addition to income from your regular job.

• Schedule C or C-EZ. There are two forms to report self-employment income. You must file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business, with your Form 1040. You may use Schedule C-EZ if you had expenses less than $5,000 and meet other conditions. See the form instructions to find out if you can use the form.

• SE Tax. You may have to pay self-employment tax as well as income tax if you made a profit. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, to figure the tax. If you owe this tax, make sure you file the schedule with your federal tax return.

• Estimated Tax. You may need to make estimated tax payments. People typically make these payments on income that is not subject to withholding. You usually pay this tax in four installments for each year. If you do not pay enough tax throughout the year, you may owe a penalty.

• Allowable Deductions. You can deduct expenses you paid to run your business that are both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and proper for your trade or business.

• When to Deduct. In most cases, you can deduct expenses in the same year you paid for them, or incurred them. However, you must ‘capitalize’ some costs. This means you can deduct part of the cost over a number of years.
Visit the Small Business and Self-Employed Tax Center on IRS.gov for all your federal tax needs. You can also get IRS tax forms on IRS.gov/forms anytime.

Additional IRS Resources:
• Form 1040-ES, Estimated Tax for Individuals
• Publication 505, Tax Withholding and Estimated Tax
• Publication 334, Tax Guide for Small Business
• Publication 535, Business Expenses
IRS YouTube Videos:
• Estimated Tax Payments – English | Spanish | ASL
IRS Podcast:
• Estimated Tax Payments – English | Spanish

IRS Grants Tax Relief to Drought-Stricken Farmers and Ranchers in 30 States

If you’re a farmer or rancher and drought forced you to sell your livestock, special IRS tax relief may help you.

The IRS has extended the time to replace livestock that farmers were forced to sell due to drought. If you’re eligible, this may help you defer tax on any gains you received from the forced sales. The relief applies to all or part of 30 states affected by drought. Here are several points you should know about this relief:

If the drought caused you to sell more livestock than usual, you may be able to defer tax on the extra gains from those sales.

You generally must replace the livestock within a four-year period. The IRS has the authority to extend the period if the drought continues. For this reason, the IRS has added one more year to the replacement period in 30 states.

The one-year extension of time generally applies to certain sales due to drought.
If you are eligible, your gains on sales of livestock that you held for draft, dairy or breeding purposes apply.

Sales of other livestock, such as those you raised for slaughter or held for sporting purposes and poultry, are not eligible.

The IRS relief applies to farms in areas suffering exceptional, extreme or severe drought conditions. The National Drought Mitigation Center has listed all or parts of 30 states that qualify for relief. Any county that is contiguous to a county that is on the NDMC’s list also qualifies.

This extension immediately impacts drought sales that occurred during 2010.

However, the IRS has granted previous extensions that affect some of these localities. This means that some drought sales before 2010 are also affected. The IRS will grant additional extensions if severe drought conditions persist.

Get more on this relief in Notice 2014-60 on IRS.gov. This includes a list of states and counties where the IRS relief applies. For more on these tax rules see Publication 225, Farmer’s Tax Guide on IRS.gov. You can get a copy of it by calling 800-TAX-FORM (800-829-3676).

Tablet Safety 101 – Making Your Tablet Safer for Public Use

Tax Tips are not a substitute for legal, accounting, tax, investment or other professional advice. Always consult with your trusted accounting advisor before acting upon any Tax Tip.

Tablet Safety 101 – Making Your Tablet Safer for Public Use

People are relying on tablet devices more and more every day. You use them for work and some for play. Tablets provide users with many of the benefits a laptop delivers, but in a format that’s even easier to take on the go. But, is your information safe when you use your tablet?

As with most things in life, there are things you can do to make your tablet a safer choice to use for business or pleasure while on the go.
•Install anti-virus software for your tablet device. You should only use trusted anti-virus names for this though as some savvy hackers have taken to creating fake anti-virus programs that actually install viruses on your devices.
•Be cautious when installing apps. Apps are notorious for not safeguarding your privacy.
•Enable capabilities to remotely wipe your device if it stolen and notify your provider (if applicable) right away if you have not installed those capabilities.
•Don’t click on advertisements on your tablet. Many ads automatically download viruses onto your device without your notice.
•Lock your screen when you’re not using your device.
•Don’t store log-in data on your tablet device. This makes it too easy for people who “find” your tablet to access your passwords, private, and financial information. The harder you make it for them to do, the less likely it becomes that they’ll go to the effort.
•Backup your data routinely. Some people do this daily. Depending on how often you use your tablet and what kind of data is stored on your tablet, this is a wise move to make.

The Dangers of Public Wi-Fi

Public Wi-Fi connection present very specific dangers to your tablet device. Many hackers disguise themselves as legitimate Wi-Fi connections and hang out in hot spots hoping someone will choose their connection to attempt a logging on. Once you’re connected to their device, bad things can happen. Look for secure Wi-Fi connections and be cautious when using public Wi-Fi.

It’s best to avoid it whenever possible though – especially when using your tablet for business or personal financial matters. Tablet devices are somewhat risky to use – especially for personal and financial information like reviewing tax returns or balancing your checkbook in public. However, the steps above will make your tablet safer for limited use in public.

TAX ADVICE DISCLAIMER: In accordance with IRS Circular 230, any tax advice included in this communication, including attachments, is not intended or written to be used, and cannot be used by you or any other person or entity, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions, nor may any such advice be used to promote, market or recommend to another party any transaction or matter addressed within this communication. If you would like such advice, please contact us.
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TLC Financial, Inc. (TLC TAX) is a Minneapolis accounting firm that provides a wide variety of accounting, tax and financial management services. Our clients are located in Minneapolis, Saint Paul, Midway, Minnehaha, Como Park, Summit Hill and surrounding communities.

Four Things to Know about Net Investment Income Tax

Starting in 2013, some taxpayers may be subject to the Net Investment Income Tax. You may owe this tax if you have income from investments and your income for the year is more than certain limits. Here are four things from the IRS that you should know about this tax:

1. Net Investment Income Tax. The law requires a tax of 3.8 percent on the lesser of either your net investment income or the amount by which your modified adjusted gross income exceeds a threshold amount based on your filing status.

2. Net investment income. This amount generally includes income such as:

interest
dividends
capital gains
rental and royalty income
non-qualified annuities
This list is not all-inclusive. Net investment income normally does not include wages and most self-employment income. It does not include unemployment compensation, Social Security benefits or alimony. Net investment income also does not include any gain on the sale of your main home that you exclude from your income.

After you add up your total investment income, you then subtract your deductions that are properly allocable to this income. The result is your net investment income. Refer to the instructions for Form 8960, Net Investment Income Tax for more on how to figure your net investment income or MAGI.

3. Income threshold amounts. You may owe the tax if you have net investment income and your modified adjusted gross income is more than the following amount for your filing status:

Filing Status Threshold Amount
Single or Head of household $200,000
Married filing jointly $250,000
Married filing separately $125,000
Qualifying widow(er) with a child $250,000

4. How to report. If you owe this tax, you must file Form 8960 with your federal tax return. If you had too little tax withheld or did not pay enough estimated taxes, you may have to pay an estimated tax penalty.

For more on this topic visit IRS.gov/aca. You can also get tax forms on IRS.gov or by mail by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

Questions and Answers on the Net Investment Income Tax
Tax Topic 559 – Net Investment Income Tax