Tag Archives: Accounting

New IRS & NYS Requirements

In order to reign in tax fraud new procedures have been imposed on taxpayers and tax professionals. Please understand that the CPA community was informed late in the process nor did they participate in the drafting of these new procedures. They are:

– IRS requires certain questions be answered in order to receive the following tax credits: Earned income credit, Child tax credits and education credits.

– New York State now requires authentication of the taxpayer by providing their drivers license’s document number, identification number, issuance date, expiration, and state of issuance or a state identification card if they do not have a valid drivers license.

Phishing: Are you the next target?

A client of ours contacted us regarding a suspicious phone call she had received. A woman claiming she was from the IRS told our client she owed the federal government money for tax payments she hadn’t payed. What makes this case especially interesting? Our client happens to be a foreign national, and was threatened with possible deportation from the Country if she didn’t pay the amount owed to the federal government.

We’ve seen these scammers target certain demographics most vulnerable to these types of tactics, and in todays world, personal information such as your address, name, social security number are going to be the pieces of information that these scammers are going to try and use to convince you of who they are. REMINDER: The IRS will NEVER call or email you, always and only through written correspondence should you owe them any sort of payment.

Should you receive one of these calls, and you are being spoken to in a threatening manner, take down their number & hang up. To help the proper authorities deal with these scammers please click the link below to report the incident. https://www.irs.gov/uac/report-phishing

Thinking of Divorce? Here’s some Advice:

Untangling the affairs of a failed marriage is full of financial & tax pitfalls. It is prudent to speak to an impartial professional before either party engages in the service of an attorney. The major items of concern are whether divorce is the only option, what do both parties really want?

8 Important things to consider when going through this process:

•Timing of the divorce

•Payment of Alimony

•Custody if minor children & child support

•Property Settlement

•Health Insurance

•Qualified Retirement plans & IRA

•Business Interests

•Filing of back, current and future tax returns

Attention to tax and financial issues helps the parties involved create certainty and avoid problems later on.

How long to keep your tax return and why

How long should I keep my tax documents for? This is a common question we encounter quite often.

We suggest that you keep copies of all of your old income tax returns as well as w2’s, as there may be many unanticipated issues such as documentation of social security wages.

However it does not seem necessary that all the supporting documentation be kept no more than 7 years.

Keeping a tax return permanently provides support if the IRS contends your client did not file a return or filed a fraudulent return. Furthermore, you may need to refer to an old return to obtain information about:

  • Home purchases and sales
  • Depreciation of a home office, rental property, or business equipment
  • Individual retirement account (IRA) contributions
  • The purchase price of stocks, bonds, and mutual funds
  • The taxability of pensions and annuities

Please note that it is recommended that you review your earnings and benefit statement on file with social security, as this will affect any Social Security benefits you may be entitled to. Also a current Earnings and Benefit Statement can be requested on the internet at www.socialsecurity.gov

 

Another filing season has come and gone

If there is one season that we observe as a whole in this nation, it’s tax season. We accountants see our clients information flooding in along with handling many frantic phone calls as to how we arrived at their tax bill. All the while trying to pay attention to the immediate and fine  details that are demanded of tax preparers.

What most taxpayers don’t understand, is the environment in which accountants must navigate their clients through. It is impossibly complex and drastically changes so much that the IRS itself can barely keep up. Another filing season has come and gone, and we still are baffled by why congress can’t devise a fairer and more logical tax scheme.

Quite a few of our clients have gotten sticker shock due to the ever-changing tax landscape and the lateness of the changes implemented by the Tax Prevention Act of 2014. Why congress took three hundred and sixty two days to enact their bill which made changes retro-active to the beginning of 2014 should concern everyone.

This year we are likely to see more of the same as they did not even have the foresight to pass 2015 tax changes before the year began. We are again working blindly. Everyone talks about fairness in the tax code but, if the rules are ever-changing and proper planning cannot be done, there will never be fairness in the system.

The changes that most affected our clients this year were the accelerated phase out of personal exemptions; the child tax credit and itemized deductions. Unfortunately, all of the aforementioned phase outs occurred at different levels of income in some cases making the marginal tax rates of fifty percent. We could not advise our clients of how to properly modify their estimated tax payments as “The Act” was passed three days before year end.

What will it take for congress to live up to their responsibility and stop using the tax code as a political pawn?