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  • Did You Forget to Claim the Earned Income Credit? - Published: 02-9-2013
    You may qualify for the Earned Income Credit (“EIC”) from the IRS if you worked last year and earned limited income. The recent recession caused many people to lose their job or have their hours drastically cut last year. You too may be eligible for the first time in 2012.
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  • Home Office Deduction – New Simplified Method - Published: 01-30-2013
    Many people today work out of their house. According to IRS records, over 3 million taxpayers claimed a deduction for the business use of their home in 2010. In the past, taxpayers had to file Form 8829, Expenses for Business Use of Your Home, to claim the deduction. Form 8829
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  • Expansion of Employee Reclassification Program - Published: 01-6-2013
    Employers often misclassify actual employees as independent contractors. The government wants these employers to pay employment tax (Social Security, Medicare and unemployment taxes) related to worker misclassification.  The IRS initiated a voluntary program to facilitate resolution of worker classification issues and increase tax compliance. The Voluntary Classification Settlement Program (VCSP)
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  • Hiring Independent Contractors? – Cause for Alarm - Published: 12-29-2012
    Businesses who hire independent contractors avoid extra costs associated with employees: payroll tax and liability insurance, compliance with labor and employee benefit regulations, etc. Hiring workers as an independent contractor may seem like an easy option, and many business owners can properly make this classification. However, you could have many
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  • First Time Penalty Abatement (FTA) – Do You Qualify? - Published: 12-21-2012
    The IRS imposes penalties to discourage noncompliance. The late filing assessment is 5% of the unpaid balance for each month or partial month the return is late, up to a maximum of 25%; if the return is more than 60 days late, the minimum penalty is the smaller of 5
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  • 1099-Ks and Merchant Card Receipts - Published: 12-11-2012
    The IRS expanded its matching program to business tax returns starting with the 2011 tax year. Payment settlement entities (“PSEs”) such as credit/debit card companies (ex. Visa) and third-party payers (ex. PayPal) are now required to report payment card transactions made to merchants for goods & services. PSEs report on
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  • IRS Collection Procedures – Are They Really Followed for Business Taxpayers? - Published: 11-18-2012
    If a taxpayer doesn’t file required tax returns, or files false tax returns, the IRS has the authority to prepare returns for the taxpayer and assess taxes. This authority applies to both individual and business tax returns. The IRS has specific programs for each type of taxpayer. The program for
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  • Foreign Financial Asset Report – Know These Terms - Published: 11-8-2012
    The IRS began new reporting requirements for certain individuals filing their 1040 income tax returns. Unless an exception applies, you must file Form 8938, Statement of Foreign Financial Assets, if you are a specified person that has an interest in specified foreign financial assets, and the value of those assets
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  • TFRP Payroll Tax Penalty – What If This Happens To You - Published: 10-26-2012
    The Internal Revenue Code requires employers to withhold federal income tax and Social Security & Medicare tax from employee’s wages. These payroll taxes are considered “trust fund taxes” because the employer holds this money in trust, for the exclusive use of the United States government. Cash-strapped businesses sometimes use trust
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  • Who Can Use Taxpayer Advocate Service? - Published: 10-11-2012
    The Taxpayer Advocate Service (“TAS”), an independent office of the Internal Revenue Service, was formed to help taxpayers resolve problems with the IRS. TAS consists of approximately 2,000 employees; about 1,400 of these are Case Advocates who personally assist taxpayers. But according to a recent TAS notice, “…we can’t possibly
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  • Independent Contractor or Employee? - Published: 10-1-2012
    Making the right classification for workers performing services has become more important than ever for a business. Let’s look at two different categories: Employee status imposes significant tax and legal obligations on an employer. The employer is responsible to withhold and remit the employee’s share of Social Security & Medicare
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  • Responsibilities for Tax Errors & Omissions - Published: 09-22-2012
    Errors and omissions frequently occur in prepared tax returns. They can range from an incorrect number accidentally entered, to a misinterpretation of a law, to a misstatement of the client’s facts. Tax preparers also often “inherit” tax mistakes made by the client’s former preparer. The errors on a prior return
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  • Foreign Bank Accounts – The IRS Gets Tough on Reporting - Published: 09-14-2012
    The U.S. government is cracking down on income tax evasion through use of offshore bank accounts.  The IRS has initiated strict reporting requirements, and the consequences for noncompliance are ominous. These rules apply to any “United States person”; that includes citizens or residents of the U.S., as well as domestic
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  • Tax Identity Theft - Published: 09-2-2012
    The IRS may have given out over billion in refunds to the wrong people for 2011. So far the IRS has detected about 940,000 fraudulent tax returns filed by identity thieves last year, with potentially over 1 million more false tax returns as yet unidentified. Usually an identity thief
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  • Can You Take Depreciation Expense For Artwork? - Published: 08-28-2012
    Most businesses place decorative artwork around the office. After all, it makes both customers and an employee feel more upbeat and gives a positive impression about the business. It could be said that artwork contributes to the overall success of your company. The issue is: can artwork be claimed as
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  • S Corporation Owners – How To Treat Medical Insurance Premiums - Published: 08-20-2012
    Corporations owned by less than 100 non-corporate shareholders can elect to be treated as a Subchapter S Corporation (“S Corp”) for tax purposes. We’ve previously talked about reasonable compensation for business owners (see our November 16, 2011 blog article). We’ll now focus on an important change in reporting that many
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  • Who Needs A Cancelled Check Anyway? - Published: 08-12-2012
    Can you even remember the last time a bank sent back your cancelled checks? That’s because banking law known as the Check 21 Act went into effect late 2004. This allowed bank to provide their checking account customers bank statements that include either the original cancelled check, or a “substitute
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  • Protecting Tax Documents From Disaster - Published: 08-8-2012
    Mother Nature seems to be increasingly punishing – more hurricanes, flooding, earthquakes and natural disasters are in the news more often than ever. Man-made fires and catastrophes are adding to the mix. Planning what to in case of a disaster has now become an important individual and business taxpayer responsibility.
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  • What If Tax Cuts Expire? - Published: 07-30-2012
    Tax laws originally passed in 2001 and 2003 (known as the “Bush tax cuts”) are going to expire on December 31, 2012. There is a lot of uncertainty right now whether Congress will pass new legislation for 2013. It nothing is done, most of us are going to see higher
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  • Health Care Reform Act: Is it a Tax or a Penalty? - Published: 07-2-2012
    On June 29, 2012 the U.S Supreme Court made a historic decision to uphold most of the Health Care Reform Act passed by Congress in 2010. Much controversy has emerged from Chief Justice John Robert’s opinion that Congress has the power to tax, and provisions under the Act are in
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  • More “Fresh Start” Ways to Pay Delinquent Taxes - Published: 06-22-2012
    The IRS just announced new policies and programs to help taxpayers pay back taxes. The IRS feels these changes will give people facing tough times an easier way to meet their tax obligations. This latest phase of the IRS Fresh Start program includes these major changes to its collection process
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  • Tax Liens – What You Need To Know - Published: 06-3-2012
    The thought of a tax lien frightens most people. You’ll want to understand the basics should you ever face a tax lien from the IRS: What exactly is a lien? It is a legal claim against your property to pay a debt. A lien does not change the ownership of
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  • Estimated Tax Payments – Do Not Underestimate Their Importance! - Published: 05-7-2012
    The U.S. tax collection system is based on a pay-as-you-go policy. This is why employees have income tax withheld and paid to the IRS throughout the year by their employer. But if you have income from other sources that either doesn’t withhold any income tax or not enough tax, you
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  • Tips for Amending Tax Returns - Published: 05-2-2012
    When getting your tax records in order this year, you may have discovered a mistake on a prior tax return. We know, April 17th is over and you want to forget about taxes, but it may be to your advantage to file an amended tax return. These are some common
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  • Using A Tax Professional Is Advantageous When You Receive An IRS Audit By Mail - Published: 04-22-2012
    In recent years the IRS has made a dramatic shift from in-person examinations to “audit by mail”.  There are several reasons for the change to mail. It requires less labor than one-on-one meetings (today even the IRS has to deal with a downsized workforce).  Besides being cheaper, it’s faster and
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  • IRS Red Flags - Published: 04-6-2012
    The IRS audits for a good reason – They want everyone to pay their fair share. The IRS assigns a numeric score to every income tax return based on specific criteria. The higher the assigned score, the more likely you will be selected for audit. Here are some of the
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  • Avoid These Tax Errors - Published: 03-23-2012
    Don’t pay more tax than you are required to. We think your legal income tax liability is big enough already, and the IRS will not be in any rush to tell you about money you could have saved! Here are some common areas where taxpayers let money slip through the
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  • New Help If You Owe Money to the IRS - Published: 03-21-2012
    The IRS finally realized many financially distressed taxpayers are struggling to pay their bills – including their tax bills. So the IRS recently released new “Fresh Start” initiatives to provide some relief to qualified taxpayers most affected by the economic downturn. Penalty Relief Failure-to-pay-tax penalties can add up to 25%
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  • Cost Basis – It’s Getting Better, But… - Published: 03-20-2012
    Selling a stock, mutual fund or bond is a taxable event to the IRS. It should be an easy thing to calculate: net sales – cost = gain or loss.  But what if you’ve reinvested dividends in stocks for the past few years and decide to sell all your stock?
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  • Cancellation of Debt – What’s Taxable, What’s Not - Published: 03-11-2012
    The IRS general rule is discharged debt is considered as taxable income. For example, credit card debt is generally treated as taxable income. But there are many exceptions where you may not pay any tax on cancellation of debt income such as: You filed for bankruptcy and the debt is
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  • What happens if I do not file a tax return with the IRS? - Published: 03-2-2012
    There are many who wonder, what happens if I do not file a tax return with the IRS? Many wait to see what occurs but, in reality there are many consequences that can occur if a tax return is not filed with the IRS. The IRS begins by detecting if
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  • Importance of Accounting When Starting a Business - Published: 03-1-2012
    As economic conditions fluctuate, many individuals are considering choosing to become an entrepreneur instead of simply looking for another job. As an entrepreneur it is important to see that there is more than simply starting a business and collecting revenues. If you do not account for your revenues, inventory, and
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  • How to Effectively Implement an Accounting Information System - Published: 02-8-2012
    There are six main components to an accounting information system. Those who understand these components and implement the system properly will do it only once. Those that attempt to take shortcuts end up redoing the process. The components include: • The users of the system • The instructions and procedures
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  • Employee Business Expenses - Published: 12-24-2011
    In some situations, employees are able to deduct their work-related expenses as itemized deductions. There are limitations on employee business expense deductions, and you will need to follow all requirements. What Qualifies? Some of those that you may be able to claim include the following: Transportation expenses that are incurred
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  • Should I Itemize Deductions or Not? - Published: 12-23-2011
    You usually have two choices on your tax return: Itemize: You can either choose to list your specific, “itemized” deductions to reduce your taxable income, or Take a standard deduction (a set, minimum amount.) This amount depends on your filing status, and will be larger if you, or your spouse,
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  • Business Use of Home - Published: 12-21-2011
    If you are self-employed or an employee and use your home for business, you may be able to deduct some expenses. There are very specific requirements. In order to deduct these expenses, part of your home must be used regularly as well as exclusively for business in one of the
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  • Alternative Minimum Tax – What Does It Mean to You? - Published: 12-10-2011
    The IRS wants to make sure that anyone able to benefit from the various tax advantages available will still pay a minimum amount of tax. In short, it creates a secondary method of calculating taxes called the Alternative Minimum Tax (AMT). With this method of calculating taxes, the goal is
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  • The IRS Examination or Audit Process - Published: 12-9-2011
    The IRS audits, or examines, the tax returns of thousands of people each year. The process helps ensure that individuals and businesses are reporting accurate information – and paying the correct amount of tax. Those selected for an audit have not necessarily done anything wrong. In many situations, the audit
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  • What to Expect from a Florida Tax Audit - Published: 12-8-2011
    Taxpayers in Florida are selected for a tax audit for many reasons, and often for no specific reason at all!  Computers randomly pick individuals to audit while in other cases, an analysis of your tax return is what will lead to the audit. If you are selected, you will receive
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  • Tips for Starting a New Business - Published: 12-4-2011
    In a world where there are dozens of informational websites, programs to help would-be entrepreneurs start a business and plenty of other resources for the taking, why do so many new businesses fail? Lack of planning, skill and knowhow are only a few of the reasons behind the failures. Before
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  • IRS Appeal: When You Need to File an Appeal - Published: 11-24-2011
    There are many times when taxpayers will not agree with the decisions the IRS makes regarding their tax repayments or other factors. There is a solution when this occurs. The IRS appeals process is not simplistic, but it can be the best route to take when you believe the decision is not accurate or is otherwise unfair.

  • Tax Season: A Quick Checklist to Get You Started - Published: 11-22-2011
    Preparing for the tax season is something you should do now. The sooner you take the time to get organized and make key decisions, the less likely you are to run into problems when April 15th rolls around. The following checklist will help you to get started. Make this an ongoing process and it will be easier than you think.

  • Reasonable Compensation for an S Corporation Officer - Published: 11-16-2011
    According to Form 1120S United States Income Tax Return for an S Corporation, individuals paying an officer of that corporation must do so through a salary. As such, the IRS states that the salary amount should be considered reasonable compensation. While the tax code itself does not outline what reasonable is defined as, the US’s regional courts have created some guidelines for S Corporations to follow in this regard.

  • I received a letter from the IRS, now what? - Published: 10-10-2011
    When you receive the “letter” from the IRS, you must not panic and you must not ignore it.
    You may ask, “Why me”? Let’s look at some reasons the IRS may question you:
    Income – The IRS knows every 1099 you’ve received for interest, dividends, non-employee compensation and other sources of income. Their computers check that all 1099 income is properly included on your tax return. If their system can’t “match up” the amounts they think you should report, you will most likely get an IRS letter.

  • Top 5 Tips for the Upcoming Tax Season - Published: 09-17-2011
    The next tax season is coming and are you prepared? I felt that it would be beneficial for everyone to post my top 5 tips for the upcoming tax season. Tip #1: Gather all your appropriate documents. You will need to start gathering the appropriate documents for any deductions you plan to claim on your tax return. This includes any receipts, property tax records, car registration, etc.