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The Latest Tax Developments From The IRS

The government never stops coming up with new things and the subject of taxes is no different. It is always updating and tweaking the laws. The bad news? You are expected to know them inside and out when preparing your returns.

The good news is tax law tends to change in small ways. To the shock of most taxpayers, the fact is most of the changes tend to be designed to solve ambiguities in the laws. Following are the latest changes you should know about.

The IRS is brilliant when it comes to disasters. It acts quickly and smartly. With the fires in California, it is living up to its reputation. All taxpayers living in fire zones have been granted automatic filing extensions till January 2008.

The IRS usually allows no delays whatsoever on employee and excise deposits. It is now. Businesses in the impacted areas can delay all payments till November 5th and pay no penalties. If you have employees, you know this his a huge break.

Many tax changes deal with resolving vague laws. Requirement related to reporting poker earnings is one. As of March of 2008, anyone putting on a poker tournament will be required to submit tax forms for certain winnings to the IRS.

Once the regulation goes into effect, poker tournament sponsors will be required to report winnings of $5,000 or more. Said sponsors will not, however, be required to withhold taxes from the winnings for deposit with the IRS.

On the business side of things, the IRS has taken steps to help small businesses with S incorporation. Many form corporations without realizing they must file the application for an "S" quickly and end up stressing trying to get it done.

Now, the designation timing has been changed to provide some relief to small businesses. You should still follow the rules, but if you don't, you can make the designation up to the time you file your first annual tax return. This can be up to a year and half later.

To say the real estate bubble has burst is a mild statement. More like a nuclear bomb going off. Many homeowners are facing foreclosure and short sales. These have bad tax consequences because the debt relief is often considered income.

Obviously, stacking a huge income tax liability on someone that has just lost a home makes little sense. The IRS is acknowledging so much. More surprising, it has come up with specific solutions to resolve things.

Tax issues surrounding home loss are complex, so the IRS has come up with a variety of solutions for homeowners in trouble. You need to apply the facts specific to your situation to find a solution, so visit the site of the IRS.

Unless the government ever wakes up and eliminates the income tax, it is just going to get more complex. You know the latest changes, but make sure you check each quarter to stay on top of new ones.