Earlier in the year, the IRS announced that they would officially start the tax filing season on January 30 due to extensive form and processing systems changes. They also warned that many taxpayers would not be able to electronically file returns until February or March.
As of February 14, the IRS has been accepting tax returns that include Form 4562, Depreciation and Amortization, and Form 8863, Education Credits. Form 4562 is filed by taxpayers claiming a deduction for depreciation or amortization, making an election under Section 179 or reporting information on the business or investment use of automobiles and other property. Form 8863 is filed by those claiming the American opportunity and the lifetime learning tax credits.
There are still 29 forms that cannot be electronically filed; however, the IRS hopes to start accepting returns with these delayed forms in the first week of March.
For more information on when the IRS will begin accepting the additional 29 forms, please contact a Bergan Paulsen team member or visit our blog and website for updates.
Thursday, February 21, 2013
Monday, February 4, 2013
What is Consumer's Use Tax?
Iowa defines consumer’s use tax as the tax on the use of a taxable good or service in Iowa when sales tax has not been paid. Some people confuse use tax with sales tax; however, they aren’t the same and a taxable good or service is subject to only one of the taxes, never both.
The majority of the time, consumer’s use tax is due when purchases are made out-of-state or from an online or mail order distributor. If no sales tax was paid during these transactions, and the service or good was used in Iowa, the buyer is responsible for paying a 6% use tax to the state of Iowa. If sales tax was paid during the transaction, the buyer is only responsible for additional use tax when the other state’s sales tax is lower than 6%. In this case, the buyer owes the state of Iowa the difference. One note: consumer’s use tax is not subject to any local option sales tax.
For example, if a business purchases office supplies from a vendor in a state that isn’t required to collect Iowa tax, and the Iowa business uses the supplies, the business owes the state of Iowa a 6% consumer’s use tax. In addition, a service can be subject to the consumer’s use tax. For example, if a business has a vehicle repaired in another state, consumer’s use tax would be owed if the vendor didn’t charge it since vehicle repair is a taxable service in Iowa.
If you are a business that makes purchases requiring a use tax payment on a regular basis, you should apply for a consumer’s use tax permit. There is no cost to apply. If your purchases are less frequent, you can report the purchases on line 2 Goods Consumed of your quarterly sales tax return.
Hint: If you make regular purchases using the same vendor, you can ask them to start adding sales tax to your purchases. Some vendors will accommodate your request while others won’t, but it never hurts to ask.
The majority of the time, consumer’s use tax is due when purchases are made out-of-state or from an online or mail order distributor. If no sales tax was paid during these transactions, and the service or good was used in Iowa, the buyer is responsible for paying a 6% use tax to the state of Iowa. If sales tax was paid during the transaction, the buyer is only responsible for additional use tax when the other state’s sales tax is lower than 6%. In this case, the buyer owes the state of Iowa the difference. One note: consumer’s use tax is not subject to any local option sales tax.
For example, if a business purchases office supplies from a vendor in a state that isn’t required to collect Iowa tax, and the Iowa business uses the supplies, the business owes the state of Iowa a 6% consumer’s use tax. In addition, a service can be subject to the consumer’s use tax. For example, if a business has a vehicle repaired in another state, consumer’s use tax would be owed if the vendor didn’t charge it since vehicle repair is a taxable service in Iowa.
If you are a business that makes purchases requiring a use tax payment on a regular basis, you should apply for a consumer’s use tax permit. There is no cost to apply. If your purchases are less frequent, you can report the purchases on line 2 Goods Consumed of your quarterly sales tax return.
Hint: If you make regular purchases using the same vendor, you can ask them to start adding sales tax to your purchases. Some vendors will accommodate your request while others won’t, but it never hurts to ask.
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