Blog

 Tax Season Opening

 

WELCOME BACK! For another great Tax Season. Here at S & H Accounting we are gearing up for an exceptional season and year. We would like to inform you, our clients, that the 2015 Filing Season is set to begin Thursday, January 15,2015.

For the 2015 Filing Season a lot of you may have questions concerning the Affordable Care Act. We are here to guide you through this very confusing process. Below you will find some helpful information to clear up some of the confusion with understanding the new insurance requirement laws:

The Affordable Care Act, or health care law, contains health insurance coverage and financial assistance options for individuals and families. The IRS administers the tax provisions included in the law. Visit HealthCare.gov for more information on coverage options and financial assistance.

The Individual Shared Responsibility Provision  requires you and each member of your family to have qualifying health insurance (called minimum essential coverage), have an exemption, or make a shared responsibility payment when you file your federal income tax return. If you get your insurance coverage through the Health Insurance Marketplace, you may be eligible for a Premium Tax Credit. Filing electronically is the easiest way to file a complete and accurate tax return. Electronic Filing options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.

Generally, taxpayers may be eligible for the health insurance premium cerdit if the taxpayer:

1. Purchases coverage through the Marketplace;

2. Has household income that falls within a specified range;

3. Is not able to get affordable coverage through an eligible employer plan providing minimum value;

4. Is not eligible for coverage through a government program (Medicaid, Medicare, ect.);

5. Does not file a married-seperate return; and

6. Cannot be claimed as a dependent by another person.

 

 

S&H Accounting, “Where Your Taxes are Our Business.”

highway use tax

Posted by on Aug 26, 2013 in Blog | 0 comments

Reminder: For Most Truckers, Highway Use Tax Return Due Sept. 3

The Internal Revenue Service today reminded truckers and other owners of heavy highway vehicles that in most cases, their next federal highway use tax return is due on Tuesday, Sept. 3, 2013.

This year’s Sept. 3 due date, pushed back three days because the normal Aug. 31 deadline falls on a Saturday, generally applies to Form 2290 and the accompanying tax payment for the tax year that begins on July 1, 2013, and ends on June 30, 2014. Returns must be filed and tax payments made by Sept. 3 for vehicles first used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.

Though some taxpayers have the option of filing Form 2290 on paper, the IRS encourages all taxpayers to take advantage of the speed and convenience of filing this form electronically and paying any tax due electronically. Taxpayers reporting 25 or more vehicles must e-file.

Due to facility maintenance taking place over the Labor Day weekend, the IRS will be unable to accept or acknowledge receipt of any electronically-filed returns from 10 p.m. Eastern Time on Saturday, Aug. 31, to 5:30 a.m. ET on Tuesday, Sept. 3 and should be available for all users at noon on Sept. 3. The IRS asks taxpayers to e-file Form 2290 before 10 p.m. ET on Aug. 31. Paper returns must be mailed and postmarked by midnight on Sept. 3. IRS offices will be closed on Labor Day, Monday, Sept. 2.

The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes trucks, truck tractors and buses. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply, explained in the instructions to Form 2290.

Happy Monday,

S & H Accounting, “Where Your Taxes are Our Business.”

tax reform

Posted by on Aug 19, 2013 in Blog | 0 comments

BEWARE OF TAX REFORM ON RATE CUTS

Two studies released earlier this month show just how hard a time Congress will have trying to slash tax rates without adding trillions of dollars to the budget deficit and producing a massive tax windfall for the highest-income American households.

The congressional Joint Committee on Taxation(JCT) estimated that a tax plan that cuts individual rates to 10 percent and 25 percent and repeals the Alternative Minimum Tax would add almost $3.8 trillion to the budget deficit over 10 years. A plan to cut the corporate rate to 25 percent and repeal the corporate AMT would add another $1.3 trillion to the deficit.

The Tax Policy Center(TPC) has looked at how the individual design would affect households in various income groups. Not only would such a rewrite dig a deep fiscal hole but it would also be extremely regressive. In 2015, it would cut taxes for those households in the lowest 20 percent of income (who will make roughly $25,000 or less) by an average of $3. By contrast, those in the top 1percent (who will make an average of $2.1 million) would get an average tax cut of almost $145,000, a 10 percent boost in their after-tax income.

Middle income households (who will make an average of about $66,000) would get about $700, boosting their after-tax income by about 1.2 percent.

To put it another way, the top 20 percent of households would get nearly four-fifths of the tax cut. The top 1 percent would get more than half.

The TPC estimates use our new expanded cash income measure and thus are somewhat different than earlier estimates of similar proposals.

Keep in mind: No one has proposed a plan exactly like this. While many top congressional Republicans favor a similar rate structure, they also say they’d pay for these rate reductions by curtailing (yet-unspecified) tax preferences.

The JCT revenue estimate and the TPC distributional analysis describe the challenges of enacting such a rate-cutting plan in a way that collects the same amount of money and maintains the same distribution as current revenue law.

The lesson from these two studies is not new, but it bears repeating:  Cutting tax rates is a great idea in theory, but it is very tough to pull off.

Happy Monday,

S & H Accounting, “Where Your Taxes are Our Business.”

irs postponed furlough

Posted by on Aug 12, 2013 in Blog | 0 comments

Postponed Furlough Day

The Internal Revenue Service has announced it will remain open on Friday, August 30, 2013. The agency had been scheduled to close on that day as part of a series of planned furlough days.

The August 30 furlough was to be the last in a series of five furlough days this season. The first three of those days went on as planned on May 24, June 14 and July 5. On those days, the IRS was closed for business. Last month, however, the IRS canceled the previously scheduled furlough day set for July 22, 2013. At the time, the agency did not indicate what plans would be future furlough days.

The furlough days – unpaid days for all IRS employees – were implemented as a result of budget concerns, including the sequester.

Danny Werfel, Acting Commissioner of the IRS, said that “we have made substantial progress in cutting costs.” He added that “we still have more work to do on the budget and cost-savings.”

It’s important to note that the August 30 furlough day was postponed, not canceled. Werfel indicated that the agency “will reevaluate in early September and make a final determination as to whether we will need another furlough day in September.”

Happy Monday,

S & H Accounting, “Where Your Taxes are Our Business.”

tax scofflaws

Posted by on Aug 6, 2013 in Blog | 0 comments

News from New York will this happen in your State

 The state of New York is putting the brakes on tax scofflaws.

Gov. Cuomo plans to announce a program today that allows New York to suspend the driver’s licenses of taxpayers who owe more than $10,000, The Post has learned.

The state estimates it will recoup $26 million this fiscal year and about $6 million a year in future years.

The first round of suspension notices are being sent to 16,000 tax delinquents, who have 60 days to pay the bill or make satisfactory arrangements to cough up the money.

Otherwise, they’ll find themselves walking or taking buses and subways.

“By enacting these additional consequences, we’re providing additional incentives for the state to receive the money it is owed and we’re keeping scofflaws off the very roads they refuse to pay their fair share to maintain,” Cuomo said.

“Our message is simple: Tax scofflaws who don’t abide by the same rules as everyone else are not entitled to the same privileges as everyone else.

“These worst offenders are putting an unfair burden on the overwhelming majority of New Yorkers who are hardworking, law-abiding taxpayers,” he added.

According to tax records, Michael D. Zurawin of Putnam County is the worst offender. He owes a whopping $16.7 million in back income taxes.

Delinquent taxpayers have 60 days from the mailing date to arrange payment with the department.

After that, the Department of Motor Vehicles will send a second letter giving them 15 days to respond.

And if that doesn’t work, scofflaws’ licenses will be suspended until the debts are paid or a payment plan has been agreed to.                               (NewYorkPost)

 S & H Accounting, “Where Your Taxes are Our Business.”

reduce audit risk

Posted by on Jul 29, 2013 in Blog | 0 comments

Ways to Reduce Your Audit Risk 

Except for tax protestors, no one wants to fight with the Internal Revenue Service. That’s why there’s such a mystique about avoiding an audit. While what-triggers-an-audit theories abound there are some basic things you can do to reduce your chances of being picked for an audit or at least to make any interactions with the IRS less traumatic. My advice doesn’t come with a guarantee, but it’s better than a Ouija board.

1. Don’t claim flaky deductions

Uttered by Judge Learned Hand in 1934, this may be the most famous iteration of the taxpayer’s role:

“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934).

2. Use a pro, or use software.

Some argue a return prepared by a professional is less likely to be audited, but there’s little reliable data to support it. Nevertheless, having a professional prepare your return–or at least advise on anything quirky–is a good idea.

3. Account for every Form 1099

The Form 1099 comes in many varieties, including 1099-INT for interest, 1099-DIV for dividends, 1099-G for tax refunds, 1099-R for pensions and 1099-MISC for miscellaneous income. These forms are sent by payers of such funds to both you and the IRS. So regardless of how many 1099s you receive, make sure they all are accounted for on your return.

4. Disclose just enough.

You’d be surprised how many professionals and amateurs alike try to submit too much information. True, if your return is complex, you may need to add explanations or disclosures in footnotes. Be concise, truthful and accurate, but don’t provide copies of sales agreements, settlement agreements, bank statements, etc., unless you are later asked to by the IRS.

5. Assemble your return correctly

Follow the IRS instructions for assembling your return. Usually that means the return itself, followed by schedules in alphabetical order, ancillary forms in numerical order, and plain paper statements and footnotes at the end. Attach Forms W-2 where specified, but don’t attach forms that are not required such as 1099s. This is normally required for mail returns.

I’m required by Treasury Department rules to assume every return will be audited.  In truth, there might be only a 2% chance of audit. But understandably, no matter how sure you are of your return, you don’t want to be audited.  You want your return to look plain vanilla, and nothing prevents you from trying to make it sail through as long as you fully and fairly complete it.

Happy Monday,

S & H Accounting, “Where Your Taxes are Our Business.”