Start Planning Now for Next Year's Tax Return

The tax deadline may have just passed but planning for next year can start now. The IRS reminds taxpayers that being organized and planning ahead can save time, money and headaches in 2013. Here are eight things you can do now to make next April 15 easier.

1.     Adjust your withholding - Why wait another year for a big refund? Now is a good time to review your withholding and make adjustments for next year, especially if you'd prefer more money in each paycheck this year. If you owed at tax time, perhaps you'd like next year's tax payment to be smaller. Use IRS's Withholding Calculator at www.irs.gov or Publication 919, How Do I Adjust My Tax Withholding?

2.     Store your return in a safe place - Put your 2011 tax return and supporting documents somewhere secure so you'll know exactly where to find them if you receive an IRS notice and need to refer to your return. If it is easy to find, you can also use it as a helpful guide for next year's return.

3.     Organize your recordkeeping - Establish a central location where everyone in your household can put tax-related records all year long. Anything from a shoebox to a file cabinet works. Just be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time.

4.     Review your paycheck - Make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions and other items. These payroll adjustments can make a big difference on your bottom line. Fixing an error in your paycheck now gets you back on track before it becomes a huge hassle.

5.     Shop for a tax professional early - If you use a tax professional to help you strategize, plan and make financial decisions throughout the year, then search now. You'll have more time when you're not up against a deadline or anxious for your refund. Choose a tax professional wisely. You are ultimately responsible for the accuracy of your own return regardless of who prepares it. Find tips for choosing a preparer atwww.irs.gov.

6.     Prepare to itemize deductions - If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2012 may pay off. An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings. See the Schedule A instructions for expenses you can deduct if you're itemizing and then prepare an approach that works best for you.

7.     Strategize tuition payments - The American Opportunity Tax Credit, which offsets higher education expenses, is set to expire after 2012. It may be beneficial to pay 2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500, before it expires. For more information, see IRS Publication 970, Tax Benefits for Education.

8.     Keep up with changes - Find out about tax law changes, helpful tips and IRS announcements all year by reading ABA Tax Accounting blogs. The ABA Tax issues tips regularly throughout during the tax season and outside the tax season.

 The IRS emphasizes that each household's financial circumstances are different so it's important to fully consider your specific situation and goals before making large financial decisions. Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!

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IRS Increases Tax-Deductible Limits for Health Savings Accounts

The Internal Revenue Service has increased the tax-deductible annual contribution limitation for health savings accounts. To Read More click the link. We are available to help. For no obligation free consultation contact us today!
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Cost-Effective Employee Motivation

Praise be to praise. It doesn't cost a dime and yet when you pat employees on the back for their good work, they feel like a million bucks.

A heartfelt thank you often motivates employees to perform better and work harder than any other kind of incentive, even very costly ones. It may well be the best business investment a small business operator can make, because the payback can be enormous.

In this climate of corporate layoffs, outsourcing, and steep disparities between executives' and frontline employees' salaries, it is no wonder rank-and-file workers increasingly question their loyalty to companies. Which means that retaining and motivating employees is a constant challenge. Fortunately for budget-minded small enterprises, there are still cost-effective ways to energize their work force.
Start with thanking them. It sounds impossibly obvious, but it's surprising how many managers neglect this simple action. In many cases, there's a discrepancy between what employees perceive as praise and managers' belief that they have dished out plaudits.

Praise can come in many forms, but it should always be genuine, clear, sincere, and offered for specific performances. A Wichita State University professor reported that employees prefer instant and personalized recognition from their immediate boss more than any other kind of workplace motivation. Ironically, the professor's studies showed that manager-initiated praise - whether delivered in person, a handwritten note, or electronically - was the least common form of recognition. Too often an employee's individual accomplishments are folded into or overshadowed by department or company tributes. Since singling out employees is so important, managers may find it fruitful to formalize programs whereby they regularly hand out commendations.

Public acknowledgement of exemplary work is also ranked as one of the top ways to honor employees, according to research done by Bob Nelson, Ph.D, author of 1,001 Ways to Reward Employees. Many employees are jazzed by the public recognition, whether it appears on a bulletin board or outdoor billboard, in company-wide emails, newsletters and meetings, or at awards banquets or other mediums. Some firms supplement this overt gratitude with inexpensive gift certificates, movie tickets, or other informal tokens of appreciation. An idea: give employees a say in how they would like to be publicly rewarded.

Employees are also more likely to become engaged in their work if they know their bosses are listening to them. In today's hurly-burly, get-it-done-yesterday business world, harried managers might be excused for not spending more time hearing the on- and off-the-job gripes, challenges, and successes of the rank and file. But workers notice and appreciate this personal connection. It demonstrates a caring and concern many require for a fulfilling job.

A bonus: workers whose bosses actively listen are more likely to produce suggestions benefiting the company. Unfortunately, according to Nelson, the average American employee offers only about one suggestion annually, one of the lowest rates among industrialized countries. It's ironic that many companies pride themselves on their sophisticated customer feedback systems but have flawed mechanisms for listening to their own employees.

Soliciting suggestions, including from brainstorming sessions, is an equalizer of sorts, underscoring to all workers their ideas are valued. And the more valued they feel, the more likely they will energetically plunge into projects and freely contribute their time and effort. A caveat: if you do invite employee suggestions, ensure they are all reviewed. Respond to recommendations quickly, try to use as many as possible, and personally thank or publicly recognize the employees.

Along with listening, small companies should frequently communicate with their employees. Regular correspondence helps workers better understand departmental and company actions, increasing efficiency and encouraging team building. When there's little or sporadic communication, employees tend to fill in the blanks and assume the worst. The result: damaged morale.

Ideally, managers should regularly escape from behind their desks and chat with employees. That personal interaction could be supplemented with other communications transmitted via emails, newsletters, small- and large-group meetings, videotapes and audiotapes, “snail mail,” bulletin boards, white boards, and so on. Whatever medium is chosen, the most effective messages are straightforward, sincere, and succinct.

Another cost-effective way to energize employees is offering them lots of autonomy and authority. This freedom fosters creativity, resourcefulness, and a sense of ownership, and it establishes a foundation of trust and respect that many workers treasure. Managers who offer this latitude must be very clear about job assignments and their expectations, while remaining open and flexible as to how workers achieve results.

For many employees, this independence extends to a flexible work schedule. If you can, consider offering staggered hours, work-at-home opportunities, compressed workweeks (for example, four 10-hour days), and other options. Of course, it's easier to make such accommodations for your high-performing employees.

Finally, small employers have learned that formalizing fun often enhances morale. Inexpensive fun activities - for instance, creating friendly competitions between employees and departments, joke breaks, Bring Your Pet to Work Day, and interactive, get-to-know-your-colleague exercises - enable workers to tap into their inner playfulness. The upshot: a more relaxed and comfortable workplace, which often translates into increased esprit de corps and productivity. We are available to help. For no obligation free consultation contact us today!
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Small Businesses Not Fully Utilizing Accountants

A majority of small businesses only look to their accountant for specific services and support in areas such as bookkeeping and taxes, instead of engaging the accountant as a full partner, according to a new survey. Click the link to read more. Looking for an IRS licensed and experienced tax accountant? We are available to help. For no obligation free consultation contact us today!
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Amended Tax Returns Offer a Second Chance

In case you missed a pivotal tax deduction that could have saved you some serious cash, or you need to fix something on an old return to make sure your clients are in compliance with the IRS, filling out the Amended U.S. Individual Income Tax Return (Form 1040X) gives taxpayers and preparers another opportunity for an additional refund and potentially avoid headaches triggered by omissions and mistakes. Click the link to read more. Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!

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Proposed law would limit delinquent taxpayers' overseas travel

International Tax Services - A proposed law would give the Internal Revenue Service more latitude in starting a process that would result in a U.S. citizen's passport being revoked or denied if he or she owes a substantial amount in back taxes. There are exceptions under the law, including if the taxpayer is repaying the debt under a payment plan. Forbes (4/24) To read more click here. Looking for an experienced and IRS licensed tax preparer? For no obligation free consultation contact us today!
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Missed the Income Tax Deadline – IRS Offers Help for Taxpayers

The IRS has some advice for taxpayers who missed the tax filing deadline.

•   Don’t panic but file as soon as possible. If you owe money the quicker you file your return, the less penalties and interest you will have to pay.
• E-file is still your best option.  IRS e-file programs are available for most taxpayers through the extension deadline – October 15, 2012.
•  Pay as much as you are able. Taxpayers who owe tax should pay as much as they can when they file their tax return, even if it isn’t the total amount due, and then apply for an installment agreement to pay the remaining balance.
• Installment Agreements are available.  Request a payment agreement with the IRS. 
• Penalties and interest may be due.  Taxpayers who missed the filing deadline may be charged a penalty for filing after the due date. Filing as soon as possible will keep this penalty to a minimum.  And, taxpayers who did not pay their entire tax bill by the due date may be charged a late payment penalty. The best way to keep this penalty to a minimum is to pay as much as possible, as soon as possible. Although it cannot waive interest charges, the IRS will consider reductions in these penalties if you can establish a reasonable cause for the late filing and payment.
• Refunds may be waiting. Taxpayers should file as soon as possible to get their refunds. Even if your income is below the normal filing requirement, you may be entitled to a refund of taxes that were withheld from your wages, quarterly estimated payments or other special credits. You will not be charged any penalties or interest for filing after the due date, but if your return is not filed within three years you could forfeit your right to the refund. 

Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!

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What You Need to Know about the Small Business Health Care Tax Credit

Small Business Tax Accounting - For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014. Additional information about the enhanced version will be added to IRS.gov as it becomes available. In general, on Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively.

Here’s what this means for you. If you pay $50,000 a year toward workers’ health care premiums – and if you qualify for a 15 percent credit, you save … $7,500. If you save $7,500 a year from tax year 2010 through 2013, that’s total savings of $30,000. If, in 2014, you qualify for a slightly larger credit, say 20 percent, your savings go from $7,500 a year to $12,000 a year.

Even if you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That’s both a credit and a deduction for employee premium payments.

There is good news for small tax-exempt employers too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.

And finally, if you can benefit from the credit this year but forgot to claim it on your tax return there’s still time to file an amended return. Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!
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Tax-evasion deals gain approval from European Commission

International Tax Services - The European Commission approved agreements that Germany and the U.K. reached with Switzerland regarding tax evaders. The deals would force Swiss banks to tax clients' money and transfer proceeds to the German or U.K. government. "These revised agreements are in full compliance with EU law, and the work on these agreements demonstrated what is possible with cooperation," EU Taxation Commissioner Algirdas Semeta said. To read more click the link. Reuters (4/17) Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!
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IRS Issues FATCA Guidance on Reporting Interest Paid to Nonresident Aliens

Tax Preparation Services – The Internal Revenue Service has issued final regulations and guidance on reporting interest paid to nonresident aliens, along with a revenue procedure listing the countries with which the U.S. has a bilateral exchange of information agreement. To read more click the link. Looking for an experienced and licensed by IRS tax preparer? As always we are available to help. For no obligation free consultation contact us today!

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Facts to know Failure to File or Pay Penalties

Tax Preparation Services – The number of electronic filing and payment options increases every year, which helps reduce your burden and also improves the timeliness and accuracy of tax returns. When it comes to filing your tax return, however, the law provides that the IRS can assess a penalty if you fail to file, fail to pay or both.

Here are eight important points about the two different penalties you may face if you file or pay late.

1.  If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you.
3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
6. If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.
7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect. 

As always we are available to help.

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Facts to Know if You Receive an IRS Letter or Notice

Tax Preparation Services – The IRS sends millions of letters and notices to taxpayers for a variety of reasons. Many of these letters and notices can be dealt with simply, without having to call or visit an IRS office.
Here are eight things to know about IRS notices and letters.
1. There are a number of reasons why the IRS might send you a notice. Notices may request payment, notify you of account changes, or request additional information. A notice normally covers a very specific issue about your account or tax return.
2. Each letter and notice offers specific instructions on what action you need to take.
3. If you receive a correction notice, you should review the correspondence and compare it with the information on your return.
4. If you agree with the correction to your account, then usually no reply is necessary unless a payment is due or the notice directs otherwise.
5. If you do not agree with the correction the IRS made, it is important to respond as requested. You should send a written explanation of why you disagree and include any documents and information you want the IRS to consider along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left of the notice. Allow at least 30 days for a response.
6. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right of the notice. Have a copy of your tax return and the correspondence available when you call to help the IRS respond to your inquiry.
7. It’s important to keep copies of any correspondence with your records.
8. IRS notices and letters are sent by mail. The IRS does not correspond by email about taxpayer accounts or tax returns.
For more information about IRS notices and bills, see Publication 594 or contact us today. As always we are available to help.
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Managing Your Tax Records After You Have Filed

Tax Preparation Services – Keeping good records after you file your taxes is a good idea, as they will help you with documentation and substantiation if the IRS selects your return for an audit. Here are five tips from the IRS about keeping good records.

• Normally, tax records should be kept for three years.

• Some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.

• In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.

• Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return

• More information on what kinds of records to keep, see IRS Publication 552.

Still looking for a tax preparer to help you with prior years or this year’s tax return? We are available to help. Contact us today.

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Amended Returns: Facts

Tax Preparation Services – If you discover an error on your federal income tax return after you e-filed or mailed it, you may want or need to amend your return. Perhaps you are eligible for a deduction or credit and you missed it the first time?

Here are key points the IRS wants you to know about when considering whether to file an amended federal income tax return.

• Use Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended income tax return.
• Use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. An amended return cannot be e-filed; you must file it by paper.
• Generally, you do not need to file an amended return to correct math errors. The IRS will automatically make that correction. Also, do not file an amended return because you forgot to attach tax forms such as W-2s or schedules. The IRS normally will send a request asking for those.
• Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.
• If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS campus. The 1040X instructions list the addresses for the campuses.
• If the changes involve another schedule or form, you must attach that schedule or form to the amended return.
• If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.
• If you owe additional 2011 tax, file Form 1040X and pay the tax before the due date to limit interest and penalty charges that could accrue on your account. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

Still looking for a tax preparer to help you with prior years or this year’s tax return? We are available to help. Contact us today.
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Last-Minute Tips for Individuals Still Working on Their Tax Returns

Tax Preparation Services – The tax filing deadline is just around the corner. The IRS has some tips to help taxpayers still working on their tax returns:
• File electronically most taxpayers file electronically.
• Check the identification numbers carefully.
• Double-check your figures
• Check the tax tables
• Sign your form you must sign and date your return. Both spouses must sign a joint return, even if only one had income.
• Send your return to the right address
• Pay electronically electronic payment options are convenient, safe and secure methods for paying taxes.
• Follow instructions when mailing a payment People sending a payment should make the check payable to the “United States Treasury”
• File or request an extension to file on time By the April 17 due date, you should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.

Still looking for a tax preparer to help you with prior years or this year’s tax return? We are available to help. Contact us today.
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Last-Minute Reminder to Parents and Students; Don’t Overlook College Tax Benefits

Tax Preparation Services – The Internal Revenue Service today reminded parents and students rushing to meet this year’s April 17 deadline to be sure and check out several college-related tax benefits before filing their 2011 returns.

Two tax credits and a tax deduction are available to taxpayers who paid tuition and other expenses for an eligible student during 2011. Because an eligible student can be the taxpayer, spouse or dependent, these benefits can, for example, help workers taking continuing education courses and people returning to school, as well as parents paying for their children’s college education.

Given the number of different higher education credits and deductions, the IRS reminds taxpayers to carefully review eligibility requirements so they don’t overlook these important college benefits. Tax benefits include the following:

• The American Opportunity Tax Credit helps pay for the first four years of post-secondary education. Tuition, required enrollment fees, books and other required course materials generally qualify, and eligible students must be enrolled at least half time. Qualifying expenses of $4,000 or more in 2011 can earn a taxpayer the maximum credit of $2,500 per student per year. Even taxpayers who owe no tax can get a payment of the credit of up to $1,000 for each eligible student. The credit is claimed on Form 8863. But the IRS warns taxpayers to avoid an often-costly tax scam, currently being promoted widely to senior citizens, low-income families and church members falsely claiming that refunds based on the credit are available, even if they’re not currently enrolled in college and even if they went to school decades ago. In addition, some international students, normally considered nonresident aliens for tax purposes, have been improperly advised that they qualify for the credit.
• The Lifetime Learning Credit, limited to $2,000 per taxpayer per year, can be claimed based on tuition and required enrollment fees paid for any level of post-secondary education. Because of differences between the two credits and the fact that the American Opportunity Tax Credit usually yields greater tax savings at the undergraduate level, the Lifetime Learning Credit may be particularly helpful to graduate students, students taking only one course and those who are not pursuing a degree. The Lifetime Learning Credit is also claimed on Form 8863.
• The tuition and fees deduction is available for both full-time and part-time students at all levels of post-secondary education. The deduction of up to $4,000 is claimed on Form 8917. 

Each year, a student normally receives a Form 1098-T from their college showing tuition payments and other information.

Though a taxpayer often qualifies for more than one of these benefits, he or she can only claim one of them for a particular student in 2011. Income limits and other special rules apply to each of these benefits.

Often, tax credits are more valuable, because they reduce the amount of tax owed, whereas deductions reduce the income on which tax is figured.

Besides these tax benefits, parents, students and former students who made student loan payments during 2011 can deduct up to $2,500 of student loan interest. Normally, borrowers receive from their financial institution Form 1098-E showing student loan interest paid for the year. This deduction is claimed on Form 1040 Line 33 or Form 1040A Line 18. Income limits and other special rules apply.

The student loan interest deduction, the tuition and fees deduction and both tax credits can be claimed by eligible taxpayers, regardless of whether they itemize deductions on Schedule A. As always we are available to help. Contact us today.
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Advice for transferring family businesses

Small Business Self Employed Tax Accounting - Advisers can help clients figure out the best way to transfer interests in a family business to the next generation, writes Heidi Bolger, CPA/ABV. Factors to consider include family members' activity and contribution to the business, as well as the amount of time they've been involved. Older family members may want to start by transferring minority stakes to test an ownership arrangement before handing over control. To read more click HERE.  As always we are available to help.  Contact us today.
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Less than 7 days left to file tax returns

Tax Preparation Services – More than $1 billion in refunds waits for people who did not file a federal income tax return for 2008. The IRS estimates that half of these potential 2008 refunds average $637 or more. If you failed to file a return, you could be missing out on a potential refund.

However, it’s not too late if you file your 2008 tax return by April 17. Many people don’t file because they feel they didn't have enough income to require filing a tax return. However, if taxes were withheld from those wages you may be entitled to a refund. You have a three year window to claim a refund. If you don’t file a return within three years, your refund will become property of the U.S. Treasury.

How to claim your 2008 refund?

• Your 2008 return must be properly addressed, mailed and postmarked by midnight April 17, 2012. There is no penalty for filing a late return that qualifies for a refund.
• If you have not filed tax returns for 2009 and 2010, your 2008 refund may be held. In addition, your refund will be applied to any balance due owed to the IRS, and may be used to offset unpaid child support or past due federal debts such as student loans.
• If you are missing Forms W-2, 1098, 1099 or 5498 for 2008, you should request copies from your employer, bank or other payer. If these efforts are unsuccessful, contact us.

Still looking for a tax preparer to help you with this year’s tax return? We are available to help. Contact us today.
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Need More Time to File? ABA Tax Accounting offers Free File to request a six-month extension

Tax Preparation Services – The Internal Revenue Service today reminded anyone unable to meet next week’s tax deadline that they can easily get an automatic six-month tax-filing extension.

To get the extra time, taxpayers must estimate their tax liability on Form 4868 and should pay any amount due. Taxpayers can e-pay what they owe using the Electronic Federal Tax Payment System (EFTPS), by electronic funds withdrawal or with a credit or debit card. Those who choose to pay by check or money order should make the payment out to the “United States Treasury.”

By properly filing Form 4868, a taxpayer will avoid the late-filing penalty, normally five percent per month based on the unpaid balance that applies to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 17. The current interest rate is three percent per year, compounded daily, and the late-payment penalty is normally 0.5 percent per month.

Some taxpayers get more time to file without having to ask for it:

• Members of the military on duty outside the U.S., as well as U.S. citizens and resident aliens living and working abroad have until June 15 to file and pay, though interest still applies to payments made after April 17.
• Members of the military and others serving in Iraq, Afghanistan or other combat zone localities can typically wait until at least 180 days after they leave the combat zone to both file returns and pay any taxes due.
• People in parts of Indiana, Kentucky, Tennessee and West Virginia, affected by tornadoes, severe storms, floods and other recent natural disasters, have until May 31 to file and pay.

To take advantage of our Free File to request six-month extensions please feel free to contact us today! We are available to help.
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Offshore asset reporting becomes more complex under new law

International Tax Services - The Foreign Account Tax Compliance Act has added a new layer of complexity for taxpayers with foreign assets -- and it is backed up by new penalties that start at $10,000. This article discusses the significant challenges FATCA's disclosure requirements present to taxpayers and tax practitioners. To read more information click the link. Still looking for a tax preparer to help you with this year’s tax return? As always we are available to help.  Contact us today.
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Deadline Looming for Unclaimed Refunds - $1 B in Tax Refunds May Wind Up in the US Treasury

Tax Preparation Services – The three-year window of opportunity for non-filers to claim a tax refund for 2008 is about to expire. After Tuesday, April 17, 2012, this year’s federal tax filing deadline, the unclaimed funds will become the property of the US Treasury. Given that IRS is sitting on more than one billion dollars in unclaimed refunds from 2008, the refunds could be substantial.

“IRS estimates that over half of the potential refunds are for $637 or more,” and there is no penalty for filing a late return qualifying for a refund. Those who did not file a return in 2008 and are planning to file now in hope of seeing the refund need to keep in mind that IRS requires them to have filed in 2009 or 2010, or else the check may be held.

Non-filers are not necessarily breaking the law; they may have had so little income that year that they were not required to file a return. If taxes were withheld from a paycheck, or quarterly estimated payments were made, a refund could be waiting at IRS. However, if the taxpayer owes back child support or is behind on federal loans, such as student loans, IRS may use the funds to offset those debts.

Not filing taxes can also cause taxpayers to miss out on other government funds. Those who didn’t file in 2008 may now be eligible for some or all of the Recovery Rebate Credit, a one-time payment for taxpayers who didn't receive the full economic stimulus payment in 2008 and whose circumstances have changed.  Low-to-middle income taxpayers could also be missing out on the Earned Income Tax Credit (EITC), which helps individuals and families whose incomes are below certain thresholds.

If you didn’t file in 2008, you can start this process by heading to the IRS website (IRS.gov), where you’ll find past year’s tax forms and instructions. Those who no longer have 2008 tax documents can request a free transcript from IRS, or hire a licensed tax practitioner to take this on. An enrolled agent, a tax specialist licensed by the US Department of Treasury, can go to the IRS on your behalf – as your “agent” – prepare your return, and represent you before IRS if there is trouble, such as an audit or collection action.

About Enrolled Agents

Enrolled agents (EAs) are America’s tax experts. They are the only federally-licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. While attorneys and certified public accountants are also licensed, only enrolled agents specialize exclusively in taxes. Enrolled agents are required to complete many hours of continuing education each year to ensure they are up-to-date on the constantly changing tax code and must abide by a code of ethics. As always we are available to help. Contact us today.

ABA Tax Accounting

Amare Berhie, Enrolled Agent

amare@abataxaccounting.com

Direct 612-282-3200

Toll free 866-936-0430

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Everything You Need to Know About Making Federal Tax Payments

Tax Preparation Services – If you need to make a payment with your tax return this year, the IRS wants you to know about its payment options. 

Here are some important facts to help you make your tax payment correctly.

1. Never send cash!

2. If you file electronically, you can file and pay in a single step by authorizing an electronic funds withdrawal via tax preparation software or a tax professional.

3. Whether you file a paper return or electronically, you can pay by phone or online using a credit or debit card.

4. Electronic payment options provide an alternative to checks or money orders. You can pay taxes or user fees 24 hours a day, seven days a week. 

5. If you itemize, you may be able to deduct the convenience fee charged for paying individual income taxes with a credit or debit card as a miscellaneous itemized deduction.

6. If you file on paper, you can enclose your payment with your return but do not staple it to the form.

7. If you pay by check or money order, make sure it is payable to the “United States Treasury.”

8. Always provide on the front of your check or money order your correct name, address, Social Security number listed first on the tax form, daytime telephone number, tax year and form number.

9. Complete and include Form 1040-V, Payment Voucher, when mailing your payment to the IRS. Double-check the IRS mailing address. This will help the IRS process your payment accurately and efficiently.

As always we are available to help. Contact us today.

ABA Tax Accounting

Amare Berhie, Senior Tax Accountant

amare@abataxaccounting.com

Direct 612-282-3200

Toll free 866-936-0430

http://abatax81.blogspot.com

The IRS may have money waiting for you

Tax Preparation Services – More than $1 billion in refunds waits for people who did not file a federal income tax return for 2008. The IRS estimates that half of these potential 2008 refunds average $637 or more. If you failed to file a return, you could be missing out on a potential refund.  However, it’s not too late if you file your 2008 tax return by April 17.

Many people don’t file because they feel they didn’t have enough income to require filing a tax return. However, if taxes were withheld from those wages you may be entitled to a refund. You have a three year window to claim a refund. If you don’t file a return within three years, your refund will become property of the U.S. Treasury. 

How to claim your 2008 refund? 

Your 2008 return must be properly addressed, mailed and postmarked by midnight April 17, 2012. There is no penalty for filing a late return that qualifies for a refund. 

If you have not filed tax returns for 2009 and 2010, your 2008 refund may be held. In addition, your refund will be applied to any balance due owed to the IRS, and may be used to offset unpaid child support or past due federal debts such as student loans.

If you are missing Forms W-2, 1098, 1099 or 5498 for 2008, you should request copies from your employer, bank or other payer. If these efforts are unsuccessful, contact us.

YouTube Videos – Haven't Filed a Tax Return in Years?

Still looking for a tax preparer to help you with this year’s tax return? We are available to help. Contact us today.

ABA Tax Accounting

Amare Berhie, Senior Tax Accountant

amare@abataxaccounting.com

Direct 612-282-3200

Toll free 866-936-0430

http://abatax81.blogspot.com

Congress Passes JOBS Act for Small Business

Small Business Self Employed Tax Accounting – Congress approved legislation Tuesday intended to spur investment in small businesses and help them access the capital markets, despite criticisms that it would weaken audit safeguards and investor protections. Read full article... Still looking for a tax preparer to help you with this year’s tax return? We are available to help. Contact us today.
ABA Tax Accounting
Amare Berhie, Senior Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

IRS May Allow Virtual Face-to-Face Audits via Videoconference

Tax Preparation Service - The Taxpayer Advocate Service at the Internal Revenue Service is beginning to pilot test a way for taxpayers to engage in face-to-face teleconferences with case workers to help them deal with their tax problems, and the program may expand to audits as well. To read the full story click here. Still looking for a tax preparer to help you with this year’s tax return? We are available to help. Contact us today.

ABA Tax Accounting

Amare Berhie, Senior Tax Accountant

amare@abataxaccounting.com

Direct 612-282-3200

Toll free 866-936-0430

http://abatax81.blogspot.com

Tips for People Who Pay Estimated Taxes - IRS Tax Tip 2012-65

Tax Preparation Services – You may need to pay estimated taxes to the IRS during the year if you have income that is not subject to withholding. This depends on what you do for a living and the types of income you receive.
These six tips from the IRS explain estimated taxes and how to pay them.
1. If you have income from sources such as self-employment, interest, dividends, alimony, rent, gains from the sales of assets, prizes or awards, then you may have to pay estimated tax.
2. As a general rule, you must pay estimated taxes in 2012 if both of these statements apply: 1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and tax credits, and 2) You expect your withholding and credits to be less than the smaller of 90 percent of your 2012 taxes or 100 percent of the tax on your 2011 return. Special rules apply for farmers, fishermen, certain household employers and certain higher income taxpayers.
3. For Sole Proprietors, Partners and S Corporation shareholders, you generally have to make estimated tax payments if you expect to owe $1,000 or more in tax when you file your return.
4. To figure your estimated tax, include your expected gross income, taxable income, taxes, deductions and credits for the year. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, for this. You want to be as accurate as possible to avoid penalties. Also, consider changes in your situation and recent tax law changes.
5. The year is divided into four payment periods, or due dates, for estimated tax purposes. Those dates generally are April 15, June 15, Sept. 15 and Jan. 15 of the next or following year.
6. Form 1040-ES, Estimated Tax for Individuals, has everything you need to pay estimated taxes. It includes instructions, worksheets, schedules and payment vouchers.
For more information on estimated taxes feel free contact us today. As always we are available to help.
ABA Tax Accounting
Amare Berhie, Senior Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Tips for Taxpayers Who Can't Pay Their Taxes on Time - IRS Tax Tip 2012-64

Tax Preparation Services – If you owe tax with your federal tax return, but can't afford to pay it all when you file, the IRS wants you to know your options and help you keep interest and penalties to a minimum.

Here are five tips:
1. File your return on time and pay as much as you can with the return. These steps will eliminate the late filing penalty, reduce the late payment penalty and cut down on interest charges.
2. Consider obtaining a loan or paying by credit card. The interest rate and fees charged by a bank or credit card company may be lower than interest and penalties imposed by the Internal Revenue Code.
3. Request an installment payment agreement. You do not need to wait for IRS to send you a bill before requesting a payment agreement.
4. Request an extension of time to pay. For tax year 2011, qualifying individuals may request an extension of time to pay and have the late payment penalty waived as part of the IRS Fresh Start Initiative. But hurry, your application must be filed by April 17, 2012.
5. If you receive a bill from the IRS, please contact us immediately to discuss these and other payment options. Ignoring the bill will only compound your problem and could lead to IRS collection action.

If you can’t pay in full and on time, the key to minimizing your penalty and interest charges is to pay as much as possible by the tax deadline and the balance as soon as you can. For more information on the IRS collection process contact us today. As always we are available to help.
ABA Tax Accounting
Amare Berhie, Senior Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

GAO: Foreign Account Reporting Makes Extra Work

International Tax Services - FBAR and Form 8938 have confusing overlaps. Read the Full Story Click Here. As always we are available to help. Contact us today.
ABA Tax Accounting
Amare Berhie, Senior International Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Mailbox rule doesn't apply where taxpayer shows no record of mailing

Tax Preparation Services – A medical center's refund claim was dismissed by the First Circuit Court of Appeals after the taxpayer failed to show evidence that it had mailed the claim on time. The court dismissed the timely mailing as timely filing mailbox rule as inapplicable and would not allow the taxpayer to question the Internal Revenue Service on its handling of the claim when it could not prove it had mailed the claim. The court also refused to allow extrinsic evidence to prove mailing. For more information click the link- JournalofAccountancy.com (4/2). Still looking for a tax preparer to help you with this year’s tax return? As always we are available to help. Contact us today.
ABA Tax Accounting
Amare Berhie, Senior Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

IRS Transfer Pricing Agreements Declined Last Year

International Tax Services - The Internal Revenue Service reported Monday that the number of completed Advance Pricing Agreements, in which the IRS and multinational corporate taxpayers work out voluntary agreements on transfer pricing, fell last year as the agency coped with reorganization and personnel shifts. For more information click the link. As always we are available to help. Contact us today.

ABA Tax Accounting

Amare Berhie, Senior International Tax Accountant

amare@abataxaccounting.com

Direct 612-282-3200

Toll free 866-936-0430

http://abatax81.blogspot.com

Some tax-exempt organizations are receiving erroneous penalty notices; relief available

Some tax-exempt organizations are receiving erroneous penalty notices; relief available


Relief available for exempt organizations that receive erroneous penalty notices
Nonprofits Tax Preparation Services – The Internal Revenue Service has sent erroneous penalty notices to some exempt organizations that e-filed their Forms 990 in March. These organizations had automatically received filing extensions when the IRS e-file system was taken down in January and February. The IRS has advised practitioners how to get the penalty abated. For more information click the link. – Still looking for a tax preparer to help you with this year’s tax return?  As always we are available to help. Contact us today.
ABA Tax Accounting

Amare Berhie, Senior Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Tips on tax documents to keep, for how long, and what to discard

Tips on tax documents to keep, for how long, and what to discard - National Public Radio
For more information click the link. Still looking for a tax preparer to help you with this year’s tax return? As always we are available to help. Contact us today.
ABA Tax Accounting
Amare Berhie, Senior Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Can't pay taxes by April 17 deadline? Relief may be available

Can't pay taxes by April 17 deadline? Relief may be available

For more information click the link. As always we are available to help. Contact us today.
ABA Tax Accounting
Amare Berhie, Senior Tax Accountant
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com