The tax planning season is just around the corner. Most small businesses are more focused on the end of summer and gearing up for the fall season. What they should focus on is getting their ducks in a row for the year end and beyond. Here's a reason why small business owners should avoid the SALY (Same As Last Year) and start planning now.
Showing posts with label IRS. Show all posts
Showing posts with label IRS. Show all posts
Wednesday, August 20, 2014
Thursday, August 18, 2011
Washington Changes Challenge the IRS
Challenges are currently occurring at the IRS. No I am not referring to the time it takes for taxpayers to get assistance from the IRS or even the TAS (Taxpayer Advocate Service). I am talking about the problems the IRS is having with implementing many of the new tax law changes that have been enacted in recent legislation.
I had a chance to review a report from the Treasury Inspector General for Tax Administration and there are currently about 100 new tax provisions that the IRS will have to implement.
Did you know that the IRS is currently dealing with one of the largest tax law changes in the past 20 years? With all the changes on the horizon, the IRS has increased their collection and enforcement personnel (one would think that IRS would increase their efforts to implement the tax changes) and not in enforcement.
What does this mean? Basically that IRS is increasing their collection and enforcement efforts on taxpayers and small businesses (the number of tax returns examined increased for individual, corporate and S-Corps over the past 5 years). Bottom line, the IRS is getting tough on the taxpayer.
The best thing for taxpayers to do is to take a proactive approach to their tax planning and know what to expect in the future. Many of the tax changes can swing in favor of taxpayers and small business owners so now is the time to start thinking about tax savings and not getting caught in any IRS traps.
The Tech Accountant
I had a chance to review a report from the Treasury Inspector General for Tax Administration and there are currently about 100 new tax provisions that the IRS will have to implement.
Did you know that the IRS is currently dealing with one of the largest tax law changes in the past 20 years? With all the changes on the horizon, the IRS has increased their collection and enforcement personnel (one would think that IRS would increase their efforts to implement the tax changes) and not in enforcement.
What does this mean? Basically that IRS is increasing their collection and enforcement efforts on taxpayers and small businesses (the number of tax returns examined increased for individual, corporate and S-Corps over the past 5 years). Bottom line, the IRS is getting tough on the taxpayer.
The best thing for taxpayers to do is to take a proactive approach to their tax planning and know what to expect in the future. Many of the tax changes can swing in favor of taxpayers and small business owners so now is the time to start thinking about tax savings and not getting caught in any IRS traps.
The Tech Accountant
Saturday, July 16, 2011
The IRS Gives Notice
In an effort to collect on the 300 billion plus tax gap, the IRS will be ramping up the amount of notices they send to everyone. Currently there are about seven different kinds of notices that the IRS will send to taxpayers and small business owners and most of designated with the initials "CP" and a number. The CP stands for Collection Process meaning that the taxpayer' account is in collections with the IRS. Get more details of the different notices here:
If a taxpayer receives any of the notices outline in the audio, the first step is to get a copy of the tax return in question and review it. If there is a discrepancy, be sure to contact the IRS as soon as possible to get the issues resolved. There may be a chance that interests and penalties have accrued on the taxpayer's account, so be sue to speak with your tax professional on ways to have the penalties abated.
Be on the lookout in your mailbox taxpayers and small business owners, there may be a chance that the IRS notices you.
The Tech Accountant
If a taxpayer receives any of the notices outline in the audio, the first step is to get a copy of the tax return in question and review it. If there is a discrepancy, be sure to contact the IRS as soon as possible to get the issues resolved. There may be a chance that interests and penalties have accrued on the taxpayer's account, so be sue to speak with your tax professional on ways to have the penalties abated.
Be on the lookout in your mailbox taxpayers and small business owners, there may be a chance that the IRS notices you.
The Tech Accountant
Sunday, July 10, 2011
IRS will take students money
That's right students. If you get a summer job, the IRS is sure to take a chunk of your hard earned cash. If you have not already gotten your first paycheck from your summer job, then you will really want to know who that guy FICA is and why he (and the rest of his friends Fed, State and SS) are taking your money.
Here is a quick podcast to explain the what a student should be aware of when they start that summer job.
I hope these tips help you this summer students. Have a great summer.
The Tech Accountant
Here is a quick podcast to explain the what a student should be aware of when they start that summer job.
I hope these tips help you this summer students. Have a great summer.
The Tech Accountant
Thursday, June 23, 2011
IR-2011-69: IRS Increases Mileage Rate to 55.5 Cents per Mile
IR-2011-69: IRS Increases Mileage Rate to 55.5 Cents per Mile
The IRS has increased the standard mileage rate for the rest of the year starting on July 1st to %55.5 cents a mile. The standard rate is used to deduct the costs of operating a vehicle for business or other purposes. The IRS attributes the increase to the rise in gas prices and their effort is to offset taxpayers costs.
The IRS also increased the rate for deducting medical and moving expenses to $23.5 cents per mile. The rate for charitable mileage remains the same.
Taxpayers who use their automobiles for business purposes may also want to track actual mileage to ensure that they are reaping the most tax benefit. There are special rules regarding actual versus standard mileage rates so be sure to speak with your tax professional for additional guidance.
The Tech Accountant
The IRS has increased the standard mileage rate for the rest of the year starting on July 1st to %55.5 cents a mile. The standard rate is used to deduct the costs of operating a vehicle for business or other purposes. The IRS attributes the increase to the rise in gas prices and their effort is to offset taxpayers costs.
The IRS also increased the rate for deducting medical and moving expenses to $23.5 cents per mile. The rate for charitable mileage remains the same.
Taxpayers who use their automobiles for business purposes may also want to track actual mileage to ensure that they are reaping the most tax benefit. There are special rules regarding actual versus standard mileage rates so be sure to speak with your tax professional for additional guidance.
The Tech Accountant
Thursday, May 26, 2011
9 Factors to Legitimize Your Biz
Recently I was privileged to speak at the Atlanta Professional Business Network (APBN) event celebrating National Small Business Week and the topic was how entrepreneurs can legitimize their businesses and minimize the chances of an IRS audit. We went over quite a bit of material that evening, but here are the major points:
According to the IRS, whether or not an activity is presumed to be operated for profit requires an analysis of the facts and circumstances of each case. Deciding whether a taxpayer operates an activity with an actual and honest profit motive typically involves applying nine non-exclusive factors contained in Treas. Reg. § 1.183-2(b). Those factors are:
1. the manner in which the taxpayer carried on the activity,
2. the expertise of the taxpayer or his or her advisers,
3. the time and effort expended by the taxpayer in carrying on the activity,
4. the expectation that the assets used in the activity may appreciate in value,
5. the success of the taxpayer in carrying on other similar or dissimilar activities,
6. the taxpayer's history of income or loss with respect to the activity,
7. the amount of occasional profits, if any, which are earned,
8. the financial status of the taxpayer, and
9. elements of personal pleasure or recreation.
No one factor controls, other factors may be considered, and the mere fact that the number of factors indicating the lack of a profit objective exceeds the number indicating the presence of a profit objective (or vice versa) is not conclusive. A profit objective in an earlier year does not automatically provide a taxpayer a blank check with regard to losses incurred in later years.
The bottom line for small business owners is to keep good records, operate in a businesslike manner and have a profit motive as your goal.
The Tech Accountant
According to the IRS, whether or not an activity is presumed to be operated for profit requires an analysis of the facts and circumstances of each case. Deciding whether a taxpayer operates an activity with an actual and honest profit motive typically involves applying nine non-exclusive factors contained in Treas. Reg. § 1.183-2(b). Those factors are:
1. the manner in which the taxpayer carried on the activity,
2. the expertise of the taxpayer or his or her advisers,
3. the time and effort expended by the taxpayer in carrying on the activity,
4. the expectation that the assets used in the activity may appreciate in value,
5. the success of the taxpayer in carrying on other similar or dissimilar activities,
6. the taxpayer's history of income or loss with respect to the activity,
7. the amount of occasional profits, if any, which are earned,
8. the financial status of the taxpayer, and
9. elements of personal pleasure or recreation.
No one factor controls, other factors may be considered, and the mere fact that the number of factors indicating the lack of a profit objective exceeds the number indicating the presence of a profit objective (or vice versa) is not conclusive. A profit objective in an earlier year does not automatically provide a taxpayer a blank check with regard to losses incurred in later years.
The bottom line for small business owners is to keep good records, operate in a businesslike manner and have a profit motive as your goal.
The Tech Accountant
Wednesday, May 18, 2011
IRS Marks Small Business Week by Showcasing Tools, Resources; Spotlights Tax Benefits Available in 2011
IR-2011-54: IRS Marks Small Business Week by Showcasing Tools, Resources; Spotlights Tax Benefits Available in 2011
Get the assistance you need from the IRS. Also sign up for the webinar today at 2pm ET titled "Small Business Advantage"
The Tech Accountant
Get the assistance you need from the IRS. Also sign up for the webinar today at 2pm ET titled "Small Business Advantage"
The Tech Accountant
Saturday, May 07, 2011
3 Ways to Fight Identity Theft & Tax Fraud
As many taxpayers continue to get over the tax filing season, there are quite a few still waiting to hear from the IRS regarding their tax refunds. Most of the time the refund claim can be tracked by using the IRS’s “Where’s My Refund” system on their site but for those taxpayers that have been the victim of identity theft; locating their refund may be a bit more challenging.
Recently in the Tampa Bay area, there were numerous cases of identity theft where someone had used the taxpayers’ names and social security numbers to file fraudulent tax returns claiming refunds. Typical cases of identity theft and tax return information include complex schemes that either intercept taxpayer information via the mail or online email phishing communication that tries to get the taxpayer to enter their personal information on what appears to be an IRS site. Currently the IRS and the Postal Service investigate any cases of identity theft and tax information.
So what’s a taxpayer to do if they think they are a victim of identity theft and tax return information? Here are 3 Steps one should take:
1. If the IRS contacts you that your identity has been used for tax fraud, respond to the correspondence ASAP. Identity theft and tax issue notices will outline if more than one return has been filed with your information or that you have wages from an employer that you do not know.
2. If you have not been contacted by the IRS, and you think that you have been a victim of identity theft and tax fraud, submit a copy of your identification, a police report detailing the incident, and Form 14039 to the IRS.
3. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490
Identity theft and tax fraud are on the rise currently and taxpayers must do everything they can to protect their personal information from getting in the hand of unscrupulous persons. By taking a proactive approach, the risk of losing one’s identity can be minimized.
The Tech Accountant
Recently in the Tampa Bay area, there were numerous cases of identity theft where someone had used the taxpayers’ names and social security numbers to file fraudulent tax returns claiming refunds. Typical cases of identity theft and tax return information include complex schemes that either intercept taxpayer information via the mail or online email phishing communication that tries to get the taxpayer to enter their personal information on what appears to be an IRS site. Currently the IRS and the Postal Service investigate any cases of identity theft and tax information.
So what’s a taxpayer to do if they think they are a victim of identity theft and tax return information? Here are 3 Steps one should take:
1. If the IRS contacts you that your identity has been used for tax fraud, respond to the correspondence ASAP. Identity theft and tax issue notices will outline if more than one return has been filed with your information or that you have wages from an employer that you do not know.
2. If you have not been contacted by the IRS, and you think that you have been a victim of identity theft and tax fraud, submit a copy of your identification, a police report detailing the incident, and Form 14039 to the IRS.
3. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490
Identity theft and tax fraud are on the rise currently and taxpayers must do everything they can to protect their personal information from getting in the hand of unscrupulous persons. By taking a proactive approach, the risk of losing one’s identity can be minimized.
The Tech Accountant
Wednesday, March 30, 2011
IRS helps you save for retirement
Here’s a great way to save for retirement and the IRS is helping you do it. Typically if you contribute funds to an IRA, a taxpayer can claim an above the line deduction for their contribution. A contribution may also make a taxpayer eligible for the retirement savings contribution credit. Listen below for details on how a contribution to an IRA will save you money on taxes.
So how is the IRS helping the taxpayer with IRA contributions this year?
Due to Emancipation Day (a holiday in the District of Columbia) taxpayers have a few extra days to make contributions to an IRA. The holiday falls on April 15th, and the IRS will be closed that day thus moving the date for making contributions to an IRA (and filing your tax return). Be sure to speak to your tax advisor to see how an IRA contribution can benefit you.
The Tech Accountant
So how is the IRS helping the taxpayer with IRA contributions this year?
Due to Emancipation Day (a holiday in the District of Columbia) taxpayers have a few extra days to make contributions to an IRA. The holiday falls on April 15th, and the IRS will be closed that day thus moving the date for making contributions to an IRA (and filing your tax return). Be sure to speak to your tax advisor to see how an IRA contribution can benefit you.
The Tech Accountant
Tuesday, March 22, 2011
5 Taxpayers the IRS is Targeting
There was a great deal of news that occurred over this past weekend but one of the more important stories was probably the deal between AT&T and T-Mobile to merge pending government approval. This will make AT&T the largest mobile provider and will affect a great deal of customers. There is however a little bit of other news that many tax payers may want to know regarding a new list out from the IRS.
According to the IRS, they are targeting specific groups of taxpayers for audits this year and taxpayers need to ensure that their return will not be flag by the IRS’s “Discriminant Function”. The 5 areas where the IRS is putting more focus is:
1. Schedule A Filers – Those that itemized their deductions
2. Schedule C – Those solo entrepreneurs that are not corporations
3. Schedule E – Those that own rental properties
4. Cash Basis Businesses – Those businesses that only use cash and not credit
5. Sales of Assets and other investments – Those taxpayers that have investments or assets for investments
What’s a taxpayer to do to ensure that their return is not flagged by the IRS? The most important factor is keeping good records that proved your deductions or credits are valid and that you qualify for them. Keeping good records can also help if your tax return is selected for an audit. Audits go a bit more smoothly when your paperwork is organized and typically result is no change or maybe even a little more money back for you.
The Tech Accountant
According to the IRS, they are targeting specific groups of taxpayers for audits this year and taxpayers need to ensure that their return will not be flag by the IRS’s “Discriminant Function”. The 5 areas where the IRS is putting more focus is:
1. Schedule A Filers – Those that itemized their deductions
2. Schedule C – Those solo entrepreneurs that are not corporations
3. Schedule E – Those that own rental properties
4. Cash Basis Businesses – Those businesses that only use cash and not credit
5. Sales of Assets and other investments – Those taxpayers that have investments or assets for investments
What’s a taxpayer to do to ensure that their return is not flagged by the IRS? The most important factor is keeping good records that proved your deductions or credits are valid and that you qualify for them. Keeping good records can also help if your tax return is selected for an audit. Audits go a bit more smoothly when your paperwork is organized and typically result is no change or maybe even a little more money back for you.
The Tech Accountant
Thursday, March 17, 2011
IRS Videos for All
As the IRS continues toward a more technology focused operation, taxpayers will be glad to know that the IRS recently added videos to their tools to assist taxpayers with a myriad of tax issues. Topics include disaster information, education, filing and paying taxes, IRS Audits, IRS Liens, post filing issues, recordkeeping, retirement plans and scams & fraud. The videos are broken down by individuals, small businesses, tax professionals, and governments. The IRS has also provided a section for those taxpayers that speak Spanish. The videos can be found here and typically run from 3 to 15 minutes.
This is another resource for taxpayers (and tax professionals) to use to understand their tax situations.
The Tech Accountant
This is another resource for taxpayers (and tax professionals) to use to understand their tax situations.
The Tech Accountant
Monday, March 07, 2011
Is the IRS "Lien"ing on You?
The IRS recently announced changes to the lien filing process and OIC (Offer in Compromise) changes that are suppose to help taxpayers meet their tax obligations. The changes are the following:
1. The dollar threshold for when liens are generally issued is being increased, to at least $10,000 in back taxes. The previous threshold was $5,000.
2. The IRS will make it easier to withdraw a lien once a person pays off their tax debt. However, the withdrawal is not automatic. Once full payment is made, you will have to request the lien be removed. To speed up the withdrawal process, the IRS will streamline its procedures to allow collection personnel to withdraw liens.
3. The IRS will withdraw liens in most cases where a taxpayer signs up for a direct debit installment agreement, which means the IRS will pull the money directly out of your bank account. If you currently have an installment agreement but switch to a direct debit agreement, you can request that the lien be withdrawn. There is a catch. The IRS says liens will be withdrawn after a probationary period to make sure the direct debit is working.
4. Small businesses with $25,000 or less in unpaid taxes can now get an installment agreement over 24 months. It used to be that only small businesses with under $10,000 in liabilities could participate.
5. The IRS will revise the Offer in Compromise rules to allow participation by taxpayers with annual incomes up to $100,000. In addition, those with a tax liability of up to $50,000 may now submit an offer, double the old limit of $25,000 or less.
The Tech Accountant
1. The dollar threshold for when liens are generally issued is being increased, to at least $10,000 in back taxes. The previous threshold was $5,000.
2. The IRS will make it easier to withdraw a lien once a person pays off their tax debt. However, the withdrawal is not automatic. Once full payment is made, you will have to request the lien be removed. To speed up the withdrawal process, the IRS will streamline its procedures to allow collection personnel to withdraw liens.
3. The IRS will withdraw liens in most cases where a taxpayer signs up for a direct debit installment agreement, which means the IRS will pull the money directly out of your bank account. If you currently have an installment agreement but switch to a direct debit agreement, you can request that the lien be withdrawn. There is a catch. The IRS says liens will be withdrawn after a probationary period to make sure the direct debit is working.
4. Small businesses with $25,000 or less in unpaid taxes can now get an installment agreement over 24 months. It used to be that only small businesses with under $10,000 in liabilities could participate.
5. The IRS will revise the Offer in Compromise rules to allow participation by taxpayers with annual incomes up to $100,000. In addition, those with a tax liability of up to $50,000 may now submit an offer, double the old limit of $25,000 or less.
The Tech Accountant
Wednesday, March 02, 2011
Want a Big Tax Refund...Here's How
Thanks to a fellow tax colleague of mine, here is a funny video that will hopefully educate many about how taxes work and why your tax refund is your money to begin with. Enjoy
The Tech Accountant
The Tech Accountant
Thursday, February 24, 2011
Form 1099 Repealed Update
Well Congress has been working hard debating on how they will repeal the Form 1099 reporting requirements that were enacted last year, but the details currently are rather confusing for small business owners and landlords.
Just to give you an update on what's going on, there are two bills in the House and one in the Senate that are attempting to address the repeal of the Form 1099 reporting requirements and here is a brief overview of each:
For more details regarding the Form 1099 laws that were passed last year and how they currently affect small business owners and landlords be sure to watch the video on our website.
The Tech Accountant
Just to give you an update on what's going on, there are two bills in the House and one in the Senate that are attempting to address the repeal of the Form 1099 reporting requirements and here is a brief overview of each:
For more details regarding the Form 1099 laws that were passed last year and how they currently affect small business owners and landlords be sure to watch the video on our website.
The Tech Accountant
Friday, February 18, 2011
10 Crazy Tax Deductions
Here's a little humor from an article that I came across yesterday while going through my e-mails for the day. I would hope that it brings a little light to your Friday during this busy, stressful tax season with all the electronic filing delays.
Here is the usual disclaimer of not trying any of these tax deductions at home. Enjoy
10 Crazy Tax Deductions
The Tech Accountant
Here is the usual disclaimer of not trying any of these tax deductions at home. Enjoy
10 Crazy Tax Deductions
The Tech Accountant
Wednesday, February 02, 2011
You Can't File Your Tax Return Yet
After notifying taxpayers recently that many tax forms would not be ready for filing until February 14th, the IRS added some more forms to the list and these have an indefinite date for filing. Here are 6 tax forms that the IRS said will be delayed until a later date for filing.
Hopefully the IRS will give a specific date when these forms can be file in the near future.
The Tech Accountant
Hopefully the IRS will give a specific date when these forms can be file in the near future.
The Tech Accountant
Sunday, January 30, 2011
2010/2011 Tax Outlook -What happen and what to do in the future
The lame duck session of Congress is behind us and the new Congress is in session. So what happen at the end of 2010 and what can taxpayers expect going forward?
Here's is a brief overview of what the lame duck session did and how you can plan for your future taxes now.
The Tech Accountant
Here's is a brief overview of what the lame duck session did and how you can plan for your future taxes now.
The Tech Accountant
Wednesday, January 26, 2011
Form 1099's are EZ with Peachtree
It's that time of year again. The wonderful tax filing time for small biz's and this year is the start of some of the many changes that will affect processing of Form 1099's for payments to vendors. One way for a small biz owner to make the process a bit less stressful is to use small biz accounting software in their business. Here is a quick video on how easy it is to file and complete your Form 1099's using accounting software.
The Tech Accountant
The Tech Accountant
Monday, January 10, 2011
Late Gift from the IRS
Thursday, January 06, 2011
Tax Relief and Your Small Biz
For most small business owners, the year 2010 was a continuation of hard economic times felt during the past two years. The economic indicators now state that there are signs that the economy is starting to recover, however many small business owners are still waiting to feel the effects of the recovery. In an effort to assist the small business owners, Congress passed and the President signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 on December 17. The multi-billion dollar tax package includes a great deal of modifications to current tax law affecting small business owners and extends many tax provisions that expired at the end of 2009.
Small Businesses Modifications
The 2010 Tax Relief Act provides businesses with better incentives for investing in property that will help them run their businesses more efficiently. The Act increases the bonus depreciation limit from 50-percent to 100-percent for property purchased during periods September 8, 2010 thru December 31, 2011. The Act also extends 50-percent bonus depreciation on property purchased from December 31, 2011 thru December 31, 2012. Small business owners that have certain long lived property or transportation property may be eligible for 100-percent expensing for property placed in service before January 1, 2013.
The depreciation incentives for small business owners do not stop there, in addition to bonus depreciation; Code Sec. 179 Expensing (named after the IRS Code) has been modified. The investment limits were increased under previous legislation and the 2010 Tax Relief Act grants a $125,000 limit and a $500,000 limit on investment for tax years beginning in 2012. Depreciation allows small business owners to expense property purchased against their taxable income. The modifications to the tax law allow small business owners to recover the cost of property used in the businesses fast than traditional depreciation methods.
Small Business Extensions
There were quite a few extensions of previous tax law that were set to expire or expired in 2009. Among those extensions includes:
• 100 percent exclusion of gain from qualified small business stock
• Transit benefits parity
• Work Opportunity Tax Credit (with modifications)
• New Markets Tax Credit (with modifications)
• Differential wage credit
• Brownfields remediation
• Active financing exception/look-through treatment for CFCs
• Tax incentives for empowerment zones
• Special rules for charitable deductions by corporations and other businesses
Keep in mind that many of the 2010 Tax Relief Act’s provisions are temporary. It is important to plan early to maximize your tax savings. Be sure to speak with your tax professional to get all the details regarding the tax law changes.
The Tech Accountant
Small Businesses Modifications
The 2010 Tax Relief Act provides businesses with better incentives for investing in property that will help them run their businesses more efficiently. The Act increases the bonus depreciation limit from 50-percent to 100-percent for property purchased during periods September 8, 2010 thru December 31, 2011. The Act also extends 50-percent bonus depreciation on property purchased from December 31, 2011 thru December 31, 2012. Small business owners that have certain long lived property or transportation property may be eligible for 100-percent expensing for property placed in service before January 1, 2013.
The depreciation incentives for small business owners do not stop there, in addition to bonus depreciation; Code Sec. 179 Expensing (named after the IRS Code) has been modified. The investment limits were increased under previous legislation and the 2010 Tax Relief Act grants a $125,000 limit and a $500,000 limit on investment for tax years beginning in 2012. Depreciation allows small business owners to expense property purchased against their taxable income. The modifications to the tax law allow small business owners to recover the cost of property used in the businesses fast than traditional depreciation methods.
Small Business Extensions
There were quite a few extensions of previous tax law that were set to expire or expired in 2009. Among those extensions includes:
• 100 percent exclusion of gain from qualified small business stock
• Transit benefits parity
• Work Opportunity Tax Credit (with modifications)
• New Markets Tax Credit (with modifications)
• Differential wage credit
• Brownfields remediation
• Active financing exception/look-through treatment for CFCs
• Tax incentives for empowerment zones
• Special rules for charitable deductions by corporations and other businesses
Keep in mind that many of the 2010 Tax Relief Act’s provisions are temporary. It is important to plan early to maximize your tax savings. Be sure to speak with your tax professional to get all the details regarding the tax law changes.
The Tech Accountant
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