tag:blogger.com,1999:blog-71716798574140337962023-12-15T04:41:55.486-05:00Patient CPA & AssociatesPatient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.comBlogger302125tag:blogger.com,1999:blog-7171679857414033796.post-81924714469277276782022-05-05T10:59:00.003-04:002022-05-05T10:59:31.490-04:00<p>We are less than a month removed from tax season, which
means that we have recently spent a lot of time talking about planning and how
it can help you avoid surprises. This week, though, I wanted to write a little
bit about the surprises that you can’t do much about, and how planning even
helps with those.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">These thoughts occurred to me when I saw a Forbes article
musing on whether the increased amount of people working from home would hurt
city budgets. I won’t get into the minutiae of what the article says here, for
the premise is obviously sound enough to at least warrant thinking about (and
dare I say some planning). <o:p></o:p></p>
<p class="MsoNormal">From there I started to think not only about the budgets of
the city themselves, but what about various shops and restaurants located in
(what were at least once) areas saturated with businesses. And simply, once
there are less people frequenting the area, that is less potential business for
those establishments. <o:p></o:p></p>
<p class="MsoNormal">That is one of those types of surprises that could not have been
planned for. One would have to possess some mystical level of clairvoyance to
have predicted the pandemic, the increase of work-from-home situations, and calculate
numbers of how that would look for businesses.<o:p></o:p></p>
<p class="MsoNormal">If one had already been doing general planning, though, then
your books would have been in good enough shape to be make some reasonable
general estimates. And from there, you are in a better position to realize when
such unforeseen circumstances start affecting your business and can combat it
as early as possible.<o:p></o:p></p>
<p class="MsoNormal">I am not writing with any actual answers to such a situation
here. I am not even saying that every situation like this would have potential
answers. Surely there were businesses so affected by what happened over the
last couple years that saving things was impossible. What I am saying, though,
is that planning – and the state you must keep your books and knowledge of your
business in to be able to do so – will at least give you an opportunity. <o:p></o:p></p>
<p class="MsoNormal">Because even now when things have achieved some sense of
normalcy, the ideas we are imagining involve situations where its effects will
continue to trickle into the future. So one must maintain some vigilance, never
think that all storms have been weathered, and remain in a position to see
problems while there is still time to react to them. And as always, if there is
anything we can do to help you get to that space, let us know. <o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-18378729508489687862022-04-27T09:15:00.003-04:002022-04-27T09:15:33.256-04:00<p>Once the regular tax filing season passes, we here take a
deep breath of relief as the deadline pressure eases and a much is taken off
our plates. This is not the case for everyone, though, as those who did not
file can feel the pressure and worry of what happens now since they did not.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">Well let’s start off with really good news – if you are owed
a refund, there generally will be no penalty for not having filed on time. For
people in that situation, the IRS is largely happy if you don’t file, for then it
doesn’t have to send you that refund money. So, if you think you may be getting
a refund and you just didn’t file, you should, for that money can still be
yours. <o:p></o:p></p>
<p class="MsoNormal">Of course, most who do not file their taxes on time are not
in this position. A lot of people who do not file neglect to do so because they
fear they will be unable to pay what they owe at the end of the process. First,
know that if you are in this situation, you are only setting things up to
snowball. You will face penalties for not filing, interest for not paying on
time, and once you ignore this once, it becomes easier to push it off in future
tax years – further snowballing the penalties, interest, and total you owe to
the IRS. <o:p></o:p></p>
<p class="MsoNormal">Not filing your taxes is likely not going to help you avoid the
bill, either. If you owe taxes, it’s because you did not pay what you owe on
money you received – and all those forms you got that say you received this
money, the IRS has those, too. Failing to file is not going to keep those
powers-that-be from knowing that you should have done so and what you should
have paid.<span style="mso-spacerun: yes;"> </span><o:p></o:p></p>
<p class="MsoNormal">In fact, without filing you are only going to owe more in
taxes because the IRS may know of all the money you received, but it will not
know about all the deductions for which you could be eligible to lower your
burden. <o:p></o:p></p>
<p class="MsoNormal">Beyond that, there may be payment options that you are
unaware of that will enhance your ability to pay beyond what you think it is.
We cannot guarantee some wonderful solution to whatever issue you are fearing,
but we can guarantee more concrete numbers and possible solutions. <o:p></o:p></p>
<p class="MsoNormal">If you are reading this after having not filed your taxes,
not filed an extension, hiding, and just hoping that this doesn’t come back and
bite you in the future, well, we can’t make you act differently.<span style="mso-spacerun: yes;"> </span>But we can offer the opportunity for more
clarity and help you get a better grip on where you really do stand. So please
reach out if you would like to gain this.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-27060034689749738042022-04-13T09:03:00.004-04:002022-04-13T09:03:31.243-04:00<p>As we rapidly approach the end of tax season, it is
inevitable that many people have questions about audits. Even if someone has
never had to undergo one, it feels like a big, scary thing that everyone wants
to avoid. And although there is no way to ensure that you will be forever
‘audit-proof,’ there steps you can take to remain confident your return will
hold up to an audit.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">The first step here is to be honest. If you report all your
income and only claim legitimate deductions, then you have followed the rules
and there is nothing to catch you on. The next step, though, is to make sure
that you can document all of this, too. It is one thing to have legitimate
deductions, it is another to have the receipts and/or paperwork that back it
up. Just know as a rule, anything that you cannot back up will be disallowed by
an auditor.<o:p></o:p></p>
<p class="MsoNormal">I am not going to be so naïve as to pretend that I don’t
know people are fudging some numbers on their returns. I even believe that a
lot of fudging is genuine as in – “I made this purchase but don’t have the
receipt” or “I made a donation in cash at an event.” That is where the
deductions can be legitimate but cannot be proven.<span style="mso-spacerun: yes;"> </span>At that point, you are kind of playing the
audit lottery, assuming you’ll slide under the radar and not be called out to
prove the numbers. <o:p></o:p></p>
<p class="MsoNormal">And of course, an overwhelming majority of tax returns are
not audited, so much of this passes the without special notice. A lot of this
is done with smaller numbers, which makes it easier to slip by. Once numbers
start to get beyond the norm, though, that is when they can start to raise some
flags.<span style="mso-spacerun: yes;"> </span>And if you want a little more
view into that process, you can read <a href="https://www.cnbc.com/2022/04/04/these-are-the-top-reasons-why-your-tax-return-may-be-flagged-by-irs.html">this
recent article from CNBC</a>.<o:p></o:p></p>
<p class="MsoNormal">Before I leave here, though, I want to mention the income
side of the equation a little more. For sure, deductions can easily be
transactions that take place outside the purview of tax forms, which is where a
lot of that fudging exists. The money you have earned, though, is essentially
already reported to the IRS. If you receive a 1099 for money you didn’t realize
was going to be taxed, a form also went to the IRS. It is going to be more
difficult to get away with thinking you can simply not report that to avoid the
taxes.<o:p></o:p></p>
<p class="MsoNormal">In closing, remember the best way to feel comfortable when
thinking about an audit is to do things the right way when you file your return.<span style="mso-spacerun: yes;"> </span>And if you need any help with that, please do
not hesitate to contact us.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-16376506334366657202022-04-06T09:16:00.001-04:002022-04-06T09:16:14.211-04:00<p class="MsoNormal">There are times when we must discuss things that we have
discussed before. It is part of the cyclical nature of much of what we do.
Things happen year after year and they are big enough to warrant discussion
and/or reminding. Now, as we approach the end of tax season, we are reaching
one of those conversations again. <o:p></o:p></p>
<p class="MsoNormal">The start of the conversation is a bit new (or back to
normal), though, for after two wacky years, there is not an extended tax
deadline. This means that the regular deadline is fast approaching – less than
two weeks away – on April 18. <o:p></o:p></p>
<p class="MsoNormal">Of course, with that always comes talk of extensions. And
these can be great things for many reasons. There are plenty of legitimate situations
that will cause people to not be able to file their taxes on time. Maybe you
are having issues with some forms, maybe serious life issues got in the way, or
maybe you fit in one of dozens of other stories as to why that deadline has
become unmanageable. No matter which one
it is, it is not difficult to get yourself another six months of leeway to get
that tax return filed.<o:p></o:p></p>
<p class="MsoNormal">Now comes the part that we have to drive home whenever
speaking about this, though. When you receive an extension, you are getting an
extension to file, NOT an extension to pay any taxes you owe. So of all those
legitimate reasons why someone may need an extension, getting more time to pay
what you owe is not one of them. <o:p></o:p></p>
<p class="MsoNormal">For even if you get an extension and do not file this month,
penalties and interest will start accruing on any money you owe once the
original deadline is missed. This means
that not only is needing more time to pay not a good reason to get an
extension, but it will only result in you owing more money. <o:p></o:p></p>
<p class="MsoNormal">No matter where you find yourself in the process, though,
know that we are willing to help where we can. Do you need assistance in
getting an extension, let us know. Do
you need some guidance on how to handle a tax debt, let us know. <o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>Now, keep in mind that we are in that crunch time and our
availability may be limited. So we may need to ask for a little more patience
than usual, but know that with a little understanding from both sides we will
work to see that you receive what you need. </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-59761069813801417192022-03-30T11:33:00.000-04:002022-03-30T11:33:01.297-04:00<p>Next time I put something in this spot it will be April. We
are already that far through tax season and it seems a little hard to believe.
But see, this is why I started telling you a couple months ago that it really
does serve you well to get a start on prepping for tax filing season before it
gets away from you.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">So yes, to file on time, you are now into the crunch period
when any snags you hit become immediate difficult hurdles. This means that you
need to start checking in with yourself and what you have done so far (even if
what you’ve done so far only involves looking at a pile of mail on a desk).<o:p></o:p></p>
<p class="MsoNormal">Do you not remember if you got that one form that you were
expecting? Go look and make sure. Many people have digital access to such forms
as a W2s, but you probably don’t have that immediate access to everything (or
at least would have to work to set it up). You want to be sure you have left
yourself some time to get those forms before we reach zero hour.<o:p></o:p></p>
<p class="MsoNormal">Beyond that, though, actually open up and look at the forms
you have received. Chances are really good that they all look exactly like they
should and like you are expecting them to. That doesn’t mean that all the
thousands and thousands of pieces of paper sent to taxpayers every year are
correct, though, and it is better to find out if there is some discrepancy now
than in two weeks. <o:p></o:p></p>
<p class="MsoNormal">Both of those are situations that occur every year, but as
you have heard a lot during the past two years, we are currently living in
unprecedented times. This has trickled down to your tax return, so there is
going to be some information you need to have that you have not before. This
includes knowing if you received any economic impact payments last year and how
much if so. This is not the most difficult information to track down, but it’s
going to simply feel better to do now than in two weeks.<o:p></o:p></p>
<p class="MsoNormal">Finally, many taxpayers with children also received advance
payments of their child tax credit. If so, you are also going to need to know
the total number of that money received. <o:p></o:p></p>
<p class="MsoNormal">And if this feels like a lot, well, depending on your
situation it could be. And when things feel like a lot, that is when we don’t
always want to deal with them, but it is also exactly why we should. So
consider this a little confidence boost telling you that you still have time to
do this if you can get on it now and a promise that you will feel better once
you do.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-6328258398558846482022-03-23T07:39:00.000-04:002022-03-23T07:39:11.131-04:00<p class="MsoNormal">Last week, I took what I thought would be a quick detour
into the workings of the IRS as the agency set out to hire thousands of new
workers. This is just a piece of what’s going in that organization, though, to
the point where I feel I have to continue this week to give a more complete
picture.<o:p></o:p></p>
<p class="MsoNormal">So first, there is <a href="https://www.accountingtoday.com/news/irs-plans-to-hire-thousands-more-employees-likely-to-fall-short">this
negative look</a> at how difficult it may be for the IRS to fulfill its goal of
hiring 10,000 workers. But hey, even if they only meet 2/3 of the goal (as the
article intimates), that would still be more than 6,000 new hires, and that can
only still help in the end, right?<o:p></o:p></p>
<p class="MsoNormal">Then when it comes to further help, we also got <a href="https://www.irs.gov/newsroom/irs-information-technology-looking-for-over-200-technologists-to-focus-on-modernization-job-openings-posted-with-more-to-come">word
last week from the agency itself</a> that it is looking for around 200 new
technologists to help with its trend to modernization. This is an inevitable
push that will only have to continue, so it is heartening to see the IRS
putting some muscle behind its words claiming that it is looking to modernize.
One could certainly argue that it is still far behind where it should be in
this arena based on how the current world works, but again, let’s give some
credit for moving in the right direction.<o:p></o:p></p>
<p class="MsoNormal">And then there was also <a href="https://www.accountingtoday.com/news/irs-plans-to-improve-taxpayer-service-with-budget-increase?position=editorial_1&campaignname=V2_ACT_Daily_20210503-03182022&utm_source=newsletter&utm_medium=email&utm_campaign=V2_ACT_Daily_20210503%2B%27-%27%2B03182022&bt_ee=FKYq9ZQTiTR64oGi7JvYTqaI4F6u9Pr%2B3u13t3fDHyw%3D&bt_ts=1647597748945">news
of a funding increase</a> for the IRS last week. And no matter how negative
your view of the entity is, it would be really difficult to imagine it doesn’t
do SOMETHING good with new hundreds of millions of dollars, right? <o:p></o:p></p>
<p class="MsoNormal">Now again, I know that such stories are not exactly rare
(last week, remember?) and dealing with the IRS since the pandemic started has
been quite a bear. I am certainly not giving continued space to such news to
absolve the agency in any way. I do, however, think that it’s important to know
that issues are at least being acknowledged and steps taken to hopefully fix
them. And the more that we do know such things, the more we can set reasonable
expectations for what dealing with the IRS will involve. <o:p></o:p></p>
<p class="MsoNormal">Nothing is currently fixed and nothing has a date on when it
will be fixed. But now you know the lay of the land. And if you need to
traverse any of that land because of issues you are currently having, do not
hesitate to reach out to us.<o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>And now on to hopefully something different next week … </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-41852340344484575782022-03-09T08:03:00.001-05:002022-03-09T08:03:19.464-05:00<p class="MsoNormal">Every tax season comes with us delivering surprises to tax
clients. Granted, some of these can be nice ones when people find out they will
be receiving money they were not expecting. But some of them are unpleasant
when people find they must pay money they were not expecting. Sometimes this
happens because people didn’t know that money they received was going to be
taxed and did not plan for it. So this week, I just wanted to give a little
rundown of some of these types of income.<o:p></o:p></p>
<p class="MsoNormal">Of course, probably the biggest is freelance work for which
one receives a 1099. This may not always
be so much of a surprise, but it can be something that people did not plan for.
After all, when you get paid, one can see many places where that money would be
helpful that aren’t into an account where it waits for an eventual tax bill. This
is also a type of income that an increasing number of people is receiving.<o:p></o:p></p>
<p class="MsoNormal">If this is a situation you are still working through and
have questions about, I will point you to <a href="https://www.cpapracticeadvisor.com/tax-compliance/news/21258991/uber-taxes-yes-gig-job-income-is-taxable">this
recent article</a>, which gives a very good overview. It also has a strong
conclusion that warns how easily the IRS can know you made some of this money
even if you choose not to report it on your taxes.<o:p></o:p></p>
<p class="MsoNormal">Also in the realm of “the new” is virtual currency. The IRS
asks about it right on Form 1040. Of course, this is also something that people
are dabbling in more and more, many of them for the first time. And if you
dabble well, you can make some money from it. As it always does, though, the
IRS wants to know about all money that you earn. And with this being such a new
area where people do earn, the agency is working to try to find ways to make
sure that it is captured and makes it something else that you cannot avoid
reporting.<o:p></o:p></p>
<p class="MsoNormal">Finally, this is nowhere near as new a concept, but any
money received through tips should also be reported on your tax return. Now
granted, this is an area that can get a little grayer, because it can be more
difficult for others to track money received in cash. But if this is something
that is coming to your attention as an area you are not handling well, then the
sooner you work on turning that around (instead of just hoping it never catches
up to you), the better.<o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>For overall, the better you are at keeping track of all
monies you receive – and assume you will be taxed on it – the better handle you
will have on your overall situation and the better chance you have at not
receiving any bad surprises when tax time comes. </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-65442342425047889602022-03-02T09:36:00.002-05:002022-03-02T09:36:07.956-05:00<p>As I write this, it is march.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">March!<o:p></o:p></p>
<p class="MsoNormal">When we start talking about tax season as soon as the
calendar turns to a new year, April feels so far away. But then it is like,
well, January hardly counts. And then February is still early. Suddenly,
though, it’s March and now April is just next month. <o:p></o:p></p>
<p class="MsoNormal">And this is how procrastination builds. Few people start by
saying they are going to put things off until the last minute. No one really wants
to subscribe to that as a life rule. But when you have ‘enough’ time to take
care of something whose deadline is in the future, it moves to the bottom of
the to-do list and then the longer something lives there, the easier it is to
keep it there.<o:p></o:p></p>
<p class="MsoNormal">At some point, you become acclimated to how much it doesn’t
have to get done yet. Then each time something else comes up that is more
important (or more fun), it receives priority and gets done first. <o:p></o:p></p>
<p class="MsoNormal">But now suddenly, it is already March.<o:p></o:p></p>
<p class="MsoNormal">So this week, I am not writing about big, surprising news
(we knew the way the calendar worked when this season started) or any tips,
tricks, knowledge, etc. Instead, this is just a call to put thought into when
you are <i>ACTUALLY</i> going to get this stuff done.<o:p></o:p></p>
<p class="MsoNormal">I am not casting predictions of impending doom if you don’t
get everything in order and complete this weekend. It is still <b>EARLY</b>
March even, so there is time. But I am going to say it’s time to no longer
leave your tax prep chores on the bottom of the list and start to carve out
time for it. In fact, I will push this a little further and say that you should
have it all done by the end of this month and leave April as your buffer.<o:p></o:p></p>
<p class="MsoNormal">If you are the type of person who needs a little more of a
push to really get this done, though, then why not make your appointment to get
your taxes done. If you have that on the calendar staring at you, you will be
forced to complete what you need done beforehand. <o:p></o:p></p>
<p class="MsoNormal">For if you do get all this done, if you stop the
procrastination spiral, then you can ease the stress that you feel next month.
And how good a deal is that? Wouldn’t you choose to do what is needed now to
give yourself peace in the future?<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-41427948165283351012022-02-23T08:07:00.002-05:002022-02-23T08:07:10.743-05:00<p>Accounting firms do not always garner headlines, and when
they do, it tends not to be for good reasons. Things changed a little bit in
this realm over the last week, though, as Mazars USA LLP ended its association
with former president Donald Trump and his business interests while saying that
it could no longer vouch for a decade’s worth of business statements.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">Whether this accounting firm getting such attention is for
good reasons or not, well, that can be (and is being) spun in both ways. I will
try not to cast any such judgment in this space. Instead, I just want to look
at this from the accounting perspective. <o:p></o:p></p>
<p class="MsoNormal">What seems clear is that Mazars received some information
that led it to believe what was reflected in their financial statements for the
Trump Organization was not a complete, accurate portrait. This speaks to a key
cog in the accounting machine that the numbers reflected must be honest if they
are to reflect anything of value. There are many key questions here that still
need to be answered, though, before declaring how egregious any actions
surrounding these statements may be.<o:p></o:p></p>
<p class="MsoNormal">The obvious first big one is what did Mazars discover that
affected how it views that decade of statements?<span style="mso-spacerun: yes;"> </span>Some still large questions follow that one, however,
as to whether this was information that Mazars knew (or suspected), if they
were given outright false information, or if there was information that should
have been shared with them that was withheld.<o:p></o:p></p>
<p class="MsoNormal">This is because the reports that Mazars did are
compilations, which essentially means that they are largely based on
information provided to them by the client. They were not audited in any
meaningful way by Mazars itself. <o:p></o:p></p>
<p class="MsoNormal">What may be key to figuring out what is going on here is
that Mazars did not simply retract (and then presumably follow up by
correcting) the compiled statements. It also ended its relationship with the
Trump Organization. This would seem to imply that there was a breaking of
trust. It’s possible that in conversations with a client, an accounting firm
could discover that an honest mistake was made, but it can then be fixed and be
correct moving forward. That is not what happened here.<o:p></o:p></p>
<p class="MsoNormal">So even in this quick summation of what is happening, we
have hit upon honesty and trust, both pretty strong concepts. Again, I don’t
want to cast any judgment on what may or may not have happened here or cast
blame. For it is certainly plausible that this situation may just have become
too much for Mazars and it wants to step away. Instead, we will wait to see how
this is judged by those whose job it is to do so. I will, though, state how
important those concepts are to what we do and that clients, accountants, and
any third parties observing the work done between those two, deserve to have
things be clear and not lay in gray areas, and we commit ourselves to
accomplishing this.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-60649738416633979072022-02-16T07:50:00.001-05:002022-02-16T07:50:44.687-05:00<p>It is unfortunate that we are a couple weeks into the
current tax season and still must talk about how the IRS is handling the last
one. The numbers vary a bit depending on where you look, but the truth is that
the IRS is still dealing with a significant amount of tax returns (and other
issues) from 2020. There are various reasons for this, the most obvious being
the nature of the pandemic, so we can understand how it happened. At the same
time, however, it is also easy to understand how this is frustrating for those
dealing with the situation’s ramifications.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">For one, this is hopefully something you have not had to
deal with often but getting the IRS on the phone is never a fun task. Take our
word for it that doing this over the last year has been an even less fun task
than usual. <o:p></o:p></p>
<p class="MsoNormal">Another effect that you have a better chance of having seen,
though, is the number of notices the IRS has sent out that it did not have to. For
example, people are seeing collection notices for taxes from a return that the
IRS has received but not yet processed. Thankfully over the past week, the IRS
has stopped sending many of these until it catches up on its backlog. <o:p></o:p></p>
<p class="MsoNormal">Most of the time, we file our taxes, and assume it is just
taken care of. To then get these notices for something you thought was taken
care of, and then taking the work (and more of it than usual) to determine that
your return was received but just not processed, adds to the frustration.<o:p></o:p></p>
<p class="MsoNormal">Of course, this backlog of unprocessed returns means that
some people are still waiting to receive refunds, too. And we are about to the
point where this wait could be going on for about a year. That is quite a
holdup for money due to you.<o:p></o:p></p>
<p class="MsoNormal">The IRS has said that it is shifting some employees around
in an effort to play catch-up. This is great, but at the same time, so many
people can only do so much work, and if it has gone on this long already, it is
not going to be magically solved in a week. <o:p></o:p></p>
<p class="MsoNormal">So the purpose of my writing here is twofold. First, if you
are still waiting on resolution from filing last year, know you are not alone.
This is a real problem the agency is dealing with and is taking action to see
that progress is made. Second, when it comes to filing this year, it will be
beneficial to have everything in order as soon as possible to ease your way
into the current year’s pipeline of returns. <o:p></o:p></p>
<p class="MsoNormal">And as always, if you have questions about any of these
situations, we will be happy to help you address them.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-3950468464018144522022-02-09T07:25:00.001-05:002022-02-09T07:25:17.146-05:00<p class="MsoNormal">When it comes time to file taxes, that means it’s also time
for something else – Super Bowl snacks! So here is to hoping you are using this
weekend as an excuse to eat a treat you probably shouldn’t.<o:p></o:p></p>
<p class="MsoNormal">It is also time, however, to make mention of how one should
be a little more wary of scams than usual. When people’s minds are a little
more tuned in to the idea of taxes than usual, scammers can use that to try to
take advantage of us a little more than usual. So here are a few things to keep
in mind to try to protect yourself.<o:p></o:p></p>
<p class="MsoNormal">Even though not directly related to taxes, I recently have
had a couple text messages pass my screen saying there are problems with
accounts that I don’t even have. And this comes with a ‘friendly’ link to a
webpage where you can fix this. Now with this coming from an institution I have
no relationship with, it Is quite a bit easier to ignore and realize it is a
phishing scam trying to collect information from me. It will be much easier to
click, however, if it comes from an institution you recognize. This still
teaches the right lessons on how to deal when scammers reach out, though.<o:p></o:p></p>
<p class="MsoNormal">First, if you have any reason to suspect something is not
genuine, treat it as if it’s not genuine. Whether this be a text or email with
a link or an actual phone call, you can halt the interaction and contact or
access the institution by yourself. This way, you will know you are on a real
website or talking to an actual employee. And if there is an actual issue, you
can actually deal with it. <o:p></o:p></p>
<p class="MsoNormal">Next, be aware of what people are actually asking for. As
soon as it feels like they are asking for personal information they should not
need (like why does someone on the phone need the expiration date and
three-digit code from your credit card?), let that trickle of unease burn
brighter and remove yourself from the interaction. <o:p></o:p></p>
<p class="MsoNormal">This can be difficult as scammers are good at easing you into
giving some more innocuous information before asking for the more crucial
pieces. There are lots of little tip-offs to be aware of, however, such as:
calling from a blocked number; demanding payment through prepaid cards or wire
transfers; threatening to bring in law enforcement; or even saying you are to
receive money of which you are unaware of. <o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>A lot of these things are not necessarily new tactics, but
scammers evolve new ways (like those text messages) to get in touch with you. So
in this time when scammer activity is only bound to increase, remain vigilant
and listen to those voices that tell you something if wrong. Those things are
your friends. </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-44420006368716407012022-02-02T07:26:00.002-05:002022-02-02T07:26:52.019-05:00<p class="MsoNormal">We are barely into tax season and are already seeing some
people experience surprises when they start to see what their tax return is
going to look like. As always, we don’t want to say, “I told you so,” but it is
not as if any of these surprises had to be surprises. <o:p></o:p></p>
<p class="MsoNormal">One of the biggest of those surprises is going to continue
to be the advance payments of the Child Tax Credit that people received in
2021. Many just took the money not realizing how it could affect the final
number on their tax return. For many, this does not even mean that they are
receiving less back as a tax refund, it is just some that some of it was
received earlier.<o:p></o:p></p>
<p class="MsoNormal">This is also the time of year when everyone is looking at
their W2, though, and only now taking stock of what taxes were withheld from
their pay last year. Granted, I don’t know if this was ever something that
people tracked on a week-to-week basis, but it is even easier to not think
about now when so many now get paid digitally and may not even look at a
paystub during the year.<o:p></o:p></p>
<p class="MsoNormal">Of course, this is also a time when many people are making
money outside of their main job, too, which can only further complicate tax
matters. To return to the original point, though, none of this has to be a
surprise. <o:p></o:p></p>
<p class="MsoNormal">Many people may not have filled out a W-4 in years, but the
form was revamped a couple years ago to account for many different situations.
It is no longer just a few spaces that largely only record if you are married
or not and have dependents. Instead, now you can indicate if you have another
job, how much money you expect to make outside of W2 jobs, how much you expect
to be able to take in deductions, and any additional money you would like
withheld from your paycheck.<o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>As with most things tax-related, doing this can feel
daunting and difficult. The IRS has a pretty powerful tool in its tax
withholding estimator, though, which can help you make sure you are withholding
the amount you wish from your paycheck. This tool can be reached via a website
(<a href="https://www.irs.gov/individuals/tax-withholding-estimator">https://www.irs.gov/individuals/tax-withholding-estimator</a>)
although it is currently down until sometime early this month. If it is
something that will benefit you, though, tuck the information away for a little
bit and don’t be afraid to use it. After all, it will keep the surprises at
bay. </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-83996817018691653432022-01-26T09:12:00.002-05:002022-01-26T09:12:27.589-05:00<p>This week’s writing needs to come with a disclaimer. I like
to write in a more conversational manner here but that may not be possible
today, for it is difficult to discuss shareholder basis and a new tax form for
it that is showing up this year for S Corporations in a light and breezy manner.
So to that end, if you know that does not apply to you, come back next week.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">At its most, well, base level, basis is the amount a
shareholder has invested in an S Corporation. This is important because it
determines whether distributions are taxable and whether losses can be deducted
on a personal tax return. The new tax form that will deal with this is Form
7203. The form itself can viewed in a draft form <a href="https://www.irs.gov/pub/irs-dft/f7203--dft.pdf">here</a> and a draft of
instructions for the form can be visited <a href="https://www.irs.gov/pub/irs-dft/i7203--dft.pdf">here</a>. If this is
something your business has been tracking all along, filling this form out may take
some time, but is not overly complicated. If you have not, though, be thankful
it is early in the year and you can start to get your books and recordkeeping
in order to complete the task. <o:p></o:p></p>
<p class="MsoNormal">So you need to be sure that your bookkeeping is properly
tracking this – making sure that any money contributed to the business from,
and distributions to, individual shareholders are being recorded.<o:p></o:p></p>
<p class="MsoNormal">This form is going to be necessary if you are claiming a
deduction for your share of a loss in an S corporation. The IRS wants to see
that it is really your money that paid the expenses of the business that
resulted in that loss.<span style="mso-spacerun: yes;"> </span>After all, you
should not get to claim a deduction for expenses that you did not help pay for.
<o:p></o:p></p>
<p class="MsoNormal">Call it coincidence or not, but this increased reporting is
coming at a time when many businesses may be reporting a loss. There are few
businesses that have not been affected by the COVID-19 pandemic and many
industries were so affected that they saw some big losses. At the same time,
however, there was a lot of money available from many different programs whose
purpose was to help businesses weather those difficult times. This means there
are businesses that will not be showing a profit, but at the same time, their
shareholders did not see what they had invested in the business evaporate.
Rather, those businesses were paying expenses with money that came from
elsewhere. And in that situation, its shareholders should not then get to
deduct losses on their personal returns.<o:p></o:p></p>
<p class="MsoNormal">So as promised, that is a bit more explanation and actual
accounting talk than we usually put here. But as something new, it deserved the
space and hopefully will help some of you out there be more prepared for
handling the new requirements. <o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-25836648821338755322022-01-19T10:32:00.002-05:002022-01-19T10:32:32.655-05:00<p>Recently, I been writing about how it will do you good to be
on top of tax season early. You likely have now already received some tax
documents, so here is to hoping you know where they are instead of burying them
somewhere that you will find eventually (hopefully). That is a simple way to
help tax season go well, but today, let’s talk about some ways it could go
wrong.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">The last two tax seasons came with new complications and
challenges. They were so challenging that there are a significant number of
paper returns from last year still being processed as we sit days away from the
start of the 2021 tax season. So this year already promises to have its own
challenges, but maybe we can stay out ahead of a couple of them.<o:p></o:p></p>
<p class="MsoNormal">Over the pandemic, many people paused their student loan
payments. I do not want to cast any aspersions on this plan, for I am sure
there are people who were greatly helped by not having to pay that bill during
a time of diminished income. When you made those payments, though, it came with
a tax deduction for paying the interest. Without that, it’s possible that some
people could see a smaller refund than in the past, or possibly even owe some
money. Again, getting ahead of things will get you that answer earlier and give
you more of a chance to figure out how to handle it.<o:p></o:p></p>
<p class="MsoNormal">What could turn out to be even more of a difference for
some, though, were the advance payments of the Child Tax Credit. I don’t think
it’s right to go in depth on what it is here, but if you were getting money from
the government on the 15<sup>th</sup> of the month for the second half of last
year, yeah, it’s that money. And that money isn’t like the three stimulus
payments many received during the pandemic, which was essentially free money
handed to you. Instead, the Child Tax Credit money consisted of prepayments of
a credit that you may have already been receiving on your tax return. Granted,
this credit was larger than it was in the past, but there are still many
situations when getting some of it ahead of time will affect the amount of a refund,
or again, leave a taxpayer owing some money. And yet again, this is where being
out ahead of things and having this answer early could be beneficial.<o:p></o:p></p>
<p class="MsoNormal">Of course, there are a lot of people who have had little
change in their lives over the last couple years and their tax situation will
likely not be a big surprise. These interesting times, though, mean there are more
people than usual who are going to be surprised, so don’t let that happen to
you and make those times even more harrowing.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-20468257439221520812022-01-05T20:12:00.002-05:002022-01-05T20:12:21.538-05:00<p class="MsoNormal">So it is here – the new year. Hopefully this writing finds
you full of the promise this can come with and feeling the strength necessary
to make it all come true.<o:p></o:p></p>
<p class="MsoNormal">In these parts, it is impossible to move to a new year
without feeling like it is time to gear ourselves up for the coming tax season.
Now I know few others out there get personally excited by this, but I will be
so bold as to say that this is something you should start giving some thought
to, as well.<o:p></o:p></p>
<p class="MsoNormal">Many of the most important tax forms are required to be
mailed to you by the end of this month. This means you will be seeing them hit
your mailbox (be it real or electronic) soon and you should have a plan for
what to do when this happens. This does not have to be an elaborate scheme, for
now you can just gather them in a safe, predetermined place. Have a folder
(again, be it real or electronic) where you just put them when they are
received. There is rarely anything you have to do with these forms other than
look at them, confirm they are reasonable, and turn them over to your tax
preparer. Keeping them in one location, though, means you don’t have to
scramble through a pile of mail (yep, real or electronic) that has been growing
for a couple months to find the forms you need.<o:p></o:p></p>
<p class="MsoNormal">And then, of course, you’re going to question whether you
really got them all, because you kind of remember possibly getting one that
didn’t look exactly like the ones you have now …<o:p></o:p></p>
<p class="MsoNormal">Taxes are never really fun. I mean they involve looking at
how much money you have paid out to receive things that are not always the most
tangible. This makes it really easy to push off for as long as possible. Then
they get pushed off and become something that places a time crunch on you, thus
becoming even less fun. This means that next year, you’ll be looking forward to
it even less …<o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>Hopefully this early in January, though, you are not
dreading the process that much yet. Use the current mood to get a head start on
things. So you know that place where you’re going to keep all of this
information? Put something in there that you know you’re going to need but will
not necessarily come via a form in the mail. This way you won’t have to worry
about it at the end of March, instead tackling it now when things still feel
full of promise. </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-46821125556908499682021-12-22T11:59:00.001-05:002021-12-22T11:59:48.485-05:00<p> Our heads aren’t so big here that we think you want to read
anything long or in-depth from us this week. After all, if you are actually even
present at work this week, you are spending half the time looking at the clock
and the other half daydreaming about not being there.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">So just let this be a call to make them good daydreams,
then. After all, this is our second straight year where the holidays may not be
being fully celebrated in the ways that we like. Even the best-case scenario
involves them coming with some extra concerns and considerations. No matter
then where you fall on that spectrum of celebration, this is a wish that you
craft something good from it, find joy, and get special time to enjoy yourself,
your friends, and your family. <o:p></o:p></p>
<p class="MsoNormal">We can all use some propping up during difficult times, and
the start of the 2020s certainly has qualified as difficult times. Everyone
deserves whatever solace and comfort they can find within it. So if that comes
in the form a holiday-week daydream (even if you’re supposed to be working),
then go ahead and enjoy it. We promise not to tell anyone.<o:p></o:p></p>
<p class="MsoNormal">Happy Holidays!<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-1374676197401471482021-12-15T09:02:00.002-05:002021-12-15T09:02:14.507-05:00<p>At the end of 2020, it would have been disheartening to
think that a similar level of uncertainty would still be present at the end of
2021. But … here we are, and questions still abound. Have we gone through the
worst of a pandemic or are we still in the middle of it? Where will the midterm
elections bring us in 2022? Are we sitting on as much of a political powder keg
as it sometimes feels?</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">During times when so much feels uncertain, it becomes ever
more important to check in with yourself, to see how you are really doing. This
is also applicable to your business if you happen to own one. So this week, I
wanted to implore those of you in that situation to take a moment and do that
check in with your yourself and your business. <o:p></o:p></p>
<p class="MsoNormal">One reason this is a good idea is because you can’t really
move forward without knowing where you have been. If you don’t take the time to
do that check-in, then you aren’t learning. You will be making choices based on
whims and that is never going to lead to long-term success. When you think
about the last year, be sure to look at both successes and failures. Did you
not complete everything you had hoped to? If so, why? And even if outside
circumstances are to blame, how could you have handled and/or prepared for them
better? But also, where did you shine despite those circumstances?<o:p></o:p></p>
<p class="MsoNormal">If there is unfinished business that you hoped to complete,
how can you still get there moving forward? And don’t just answer such
questions with vague assurances and promises. Saying you’ll get there
eventually means you can keep kicking your definition of ‘eventually’ down the
road. Be sure to set very distinct goals with definite timeframes.<o:p></o:p></p>
<p class="MsoNormal">And do not only commit yourself to finishing what remains
unfinished. Be sure to ask yourself new questions, too. What would you still
like to change about yourself or how you behave in your business? What are you
looking forward to learning or implementing? Where can you continue to improve?
What is a big risk you are willing to take?<o:p></o:p></p>
<p class="MsoNormal">A way to deal with a time of uncertainty is to just kind of
move along, be tossed around by the waves, and just keep your head above water.
And you may ‘just survive’ for a while with that attitude, but things will never
improve. And then when times get more certain, you will not be ready to adapt
to them because you haven’t been looking forward the whole time. So may this
moment of reflection serve you well, help you find solace, and let you derive
strength from where you are even in tumultuous times.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-49042548896581558922021-12-08T13:34:00.002-05:002021-12-08T13:34:11.688-05:00<p>If you started a business before March of 2020, the
landscape of your industry is most likely nothing like it was when you started.
The pandemic changed nearly anything in some way. One of the biggest results of
this was an increase in technological advances and how much they were embraced.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">We clearly are not yet through this global sea change, so it
is impossible to give any definitive conclusions about its fallout. It is
naïve, however, to think that everything is going to go back to just how it was
in February 2020. So this is a call to business owners out there to embrace any
new technologies your industries have moved toward during this time.<o:p></o:p></p>
<p class="MsoNormal">I started to think of this when word came out that the IRS
was going to be accepting more digital signatures through Oct. 31, 2023. This
is something that had already been extended a few times by the agency, and is
looking like one of those things that they probably won’t be able to take back.
<o:p></o:p></p>
<p class="MsoNormal">And why can’t things go back to how they were here? Convenience.<o:p></o:p></p>
<p class="MsoNormal">The key with a lot of the new technologies that have been
being embraced is that they are designed to take less time and less work. If we
can collaborate on a task in different locations at different times, it removes
a lot of obstacles. There is no need to set up meeting times or possibly sit
around while you watch someone complete one part of their task before doing
yours. <o:p></o:p></p>
<p class="MsoNormal">And of course I can understand why some have reluctance to
embrace some of these technologies. I mean, I just talked about things taking less
time but there is clearly a time commitment involved in learning how to use and
implement anything new. And of course, as with most new things, there can be a
reluctance to look at it because you already know how to do what you’re doing,
and likely do it very well, so why could you change?<o:p></o:p></p>
<p class="MsoNormal">Well the reason to change is that others are. How can you
draw in new people to your business if a competitor is offering them more
services with less hassle and it takes less time from them? I foresee many
businesses that don’t adapt with the times being left behind by these times.<o:p></o:p></p>
<p class="MsoNormal">And if even a Luddite like the IRS is looking at new ways to
make things easier, shouldn’t you?<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-11810878420086583272021-12-01T15:38:00.002-05:002021-12-01T15:38:11.768-05:00<p>It happened. We are actually in the final month of the year.
We have already talked a bit here about getting to the end of the year and your
last chances to make moves that can affect your tax picture. And now, it is
December, the chances are decreasing, and it will be 2022 almost before we know
it.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">So consider that another little warning about timing. <o:p></o:p></p>
<p class="MsoNormal">But there’s no need to be all doom and gloom here, for there
can be good news when it comes to taxes. (I know, I know, that sounds utterly
impossible.)<o:p></o:p></p>
<p class="MsoNormal">First, last month the IRS released <a href="https://www.irs.gov/newsroom/irs-provides-guidance-on-per-diem-rates-and-the-temporary-100-percent-deduction-for-food-or-beverages-from-restaurants">some
guidance</a> over a 100% deduction for food and beverage from restaurants. That’s
right, 100%! Now, can you even get more good news than that?<o:p></o:p></p>
<p class="MsoNormal">You can! It applies to next year, too!<o:p></o:p></p>
<p class="MsoNormal">Hyperbolic exclamation points aside, this is something that
will be a pretty good benefit for many. The actual IRS news about this is full
of boring notices and procedures, but what they represent is not complicated. The
meals deduction is usually 50%, so when you double what you are eligible for,
that’s a good thing. Granted, this isn’t something so huge that I’m
recommending planning some more end-of-year work dinners, but it is still a
benefit worth highlighting. So just remember to keep those receipts after you
have finished eating.<o:p></o:p></p>
<p class="MsoNormal">And yes, it is now time for the return of excessive
punctuation! For did you know that teachers were also eligible for some
deductions?!?!<o:p></o:p></p>
<p class="MsoNormal">This essentially is a deduction for classroom expenses that teachers
paid out of their own pockets. Again, there is some hyperbole involved here,
though, for this deduction caps out at $250 for an individual. The IRS sent out
<a href="https://www.irs.gov/newsroom/teachers-can-deduct-out-of-pocket-classroom-expenses-including-covid-19-protective-items">another
notice</a> about it last month, though, so I figured it was worth highlighting
it here, too.<o:p></o:p></p>
<p class="MsoNormal">These may be only small bits, but they call attention to a
bigger point about timing. The more prepared you are for your tax return, the
more deductions you will have time to find out about, document, and claim. Each
individual deduction may not be the difference between owing money and getting
a hefty refund, but enough of them could shift things in a significantly better
direction. And sure, the things we most look forward to this month aren’t tax
preparation, but don’t forget about how good it can be to be on top of things before
it is too late and time gets away from you.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-51437497064596818122021-11-17T10:30:00.001-05:002021-11-17T10:30:48.564-05:00<p class="MsoNormal">It is a good general rule to know that if anyone receives
money for a good or service, the IRS wants to know about it. Income is taxable,
no matter how it is received. This basic tenet is reasonable and
understandable, but as more people use more money in new ways, it can take a
while for some of the rules around that to make complete sense.<o:p></o:p></p>
<p class="MsoNormal">This has been most noticeable in recent years when it comes
to cryptocurrency. No matter whether you think of it as an investment or
another type of currency, if it is worth more than you paid for it, there’s an
amount in there that is taxable and the IRS has been working on cracking down
on getting its share of that. Beginning next year, it will start to have its
hands deeper in payment apps, as well.<o:p></o:p></p>
<p class="MsoNormal">Your first question may be just what is a payment app? The
answer is probably simpler than you realize, for most of us have used something
along the lines of PayPal or Venmo to send and/or receive money. At the same
time, you may be surprised to think that this could affect your tax picture if
you mainly use it to pay someone back when they go pick up coffee. If that is
all you use such platforms for, though, then don’t worry, you will not be
affected by this. What will be changing is payment app providers will have to
start reporting if a user’s business transactions total $600 or more a year. If
you want to get into the weeds on this, you can read <a href="https://www.cnn.com/2021/11/09/success/payment-app-tax-reporting-feseries/index.html">this
recent article from CNN</a>.<o:p></o:p></p>
<p class="MsoNormal">This isn’t the space to get into deep details, but I do want
to highlight a couple takeaways from this:<o:p></o:p></p>
<p class="MsoNormal">The biggest thing is that this is not making any sort of
transaction newly taxable. Rather, this is being put in place because the IRS
is trying to track down transactions that are already taxable and may be
slipping through the cracks. So if you are already paying taxes on everything
you should be, this is not increasing your tax burden.<o:p></o:p></p>
<p class="MsoNormal">The next thing to know about this, though, is that it might
be making things messier for some and placing the burden on the taxpayer to
find a way through that mess. First, it’s possible that one could receive a
1099 from a payment app for transactions that should not be taxable. It could
then fall to the taxpayer to have to explain that to the IRS. It’s also
possible that you will receive a 1099 from a payment app and also a 1099 from a
client for the same transaction. Again, it would then fall to the taxpayer to
explain to the IRS that they are not covering separate events and reflect the
same money. <o:p></o:p></p>
<p class="MsoNormal">So don’t be afraid that this is going to increase your tax
obligation in any way, but be aware that you may need to be vigilant to ensure
that this reported on your tax return in the right way. Even if this isn’t
going into action until next year, I wanted to mention it now so that we can be
ready to help you handle this in the right way.<o:p></o:p></p>
<p> </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-85607182452680578772021-11-10T09:10:00.000-05:002021-11-10T09:10:31.133-05:00<p class="MsoNormal">I have written a lot recently about this being the time when
you must start thinking about big moves you can make if you still want to
really affect your tax picture. Granted, this is a discussion that is not for
everyone. You need to have a certain amount of money (and possibly in the right
places) for some of that to really matter. For this week, though, I want to
talk about a smaller thing that everyone can do.<o:p></o:p></p>
<p class="MsoNormal">Tax laws are currently set up that you usually cannot claim
a deduction for charitable contributions unless you are itemizing your
deductions. Legislation passed during the coronavirus pandemic, however,
allowed for everyone to claim some of that deduction for tax year 2020 and it
will now continue through the 2021 tax year. This allows an individual to claim
up to $300, with married people filing a joint return qualifying for up to
$600.<o:p></o:p></p>
<p class="MsoNormal">Now sure, as I intimated above, this is not a huge amount of
money and not being taxed on a few hundred dollars isn’t going to result in you
getting some massive windfall of a tax refund. I do still want to highlight the
availability of this deduction, though, as an extra little impetus to do an
extra little good during this time of year when many could use it. <o:p></o:p></p>
<p class="MsoNormal">First, I don’t want this to be such a push as to be asking
those who cannot afford it to donate money they do not have. Your obligation
then is to take care of yourself and any family depending on you. Beyond that,
though, if you can give, please do. Chances are really good that you will feel
better about putting the money there than in your next few coffees. <o:p></o:p></p>
<p class="MsoNormal">So if you do have enough to give, give to something
meaningful to you. Is there an organization doing something in your local area
that you admire? Have you or someone in your family personally benefitted from
the work of a charitable group? Do you feel a pull to a cause every time you
hear about it but have never actually donated to it? No matter where you fall,
no matter how you feel, there are connections that can be found which will leave
you feeling happy and satisfied with where a donation goes.<o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>And all of that is even before you get that little tax
benefit at the end of it. So how can you lose? </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-62472352489531782492021-11-04T11:07:00.001-04:002021-11-04T11:07:07.527-04:00<p>Over the past couple of weeks, I have been writing about
looking forward to next tax season and getting a hold on your situation while
there is still time. This week, I wanted to change the focus a bit to those who
may be paying taxes for the first time.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">I first started thinking about this group because of <a href="https://www.accountingtoday.com/news/college-athletes-face-new-tax-obligations?position=editorial_5&campaignname=ACT%20Daily-10252021&utm_source=newsletter&utm_medium=email&utm_campaign=V2_ACT_Daily_20210503%2B%27-%27%2B10252021&bt_ee=k%2FgC652nwLZRjtMxa%2FL8anxBm51OFg1e4%2FIXrR5gzbQ%3D&bt_ts=1635156141493">this
recent article</a>, which discusses how some NCAA athletes may be receiving
payments for the first time. We are still in the early stages of seeing how
(and how much) these athletes are going to be paid, but I am sure the tax
implications of what they receive are going to be a surprise for some. Ideally,
their institutions would provide some guidance on this, but how much of it, how
good it is, and how well people listen are certain to vary.<o:p></o:p></p>
<p class="MsoNormal">Now this may feel like a small group of people, and the
high-profile ones certainly will be a limited batch. The amount of people who
have to pay taxes for the first time each year, though, is still pretty vast.
As we get older, paying taxes (and having them withheld from our paychecks) just
becomes part of the process and many do not give it a second thought. I think many
of us, though, can still remember when we were younger and had to enter that so
very ‘adult’ world.<o:p></o:p></p>
<p class="MsoNormal">Traditionally, this was not necessarily a trying experience.
You filled out a form when you got your first job, some amount of money was
taken out of your pay, and then when it came tax filing, you found someone who
could help you with that part of it. With more and more people making money in
new ways, though, this can get complicated. After all, it’s not only the NCAA’s
‘real’ sports that come with payouts, others are making money in Esports, as
well. Add in delivery drivers and other types of ever more available freelance
work and you build a larger and larger group of younger people with a cloudier
and cloudier tax picture than the one seen by previous generations.<o:p></o:p></p>
<span style="font-family: "Calibri",sans-serif; font-size: 11.0pt; line-height: 107%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Let this then be a call to not only give some
thought to your tax picture as we approach the end of the year, but to also
think if there are people in your life who may not have had to have these
thoughts before. And if there are, give them a nudge to do so. For to them,
those potential unpleasant surprises at filing time may be even more surprising
if they didn’t appreciate that they were even possible</span>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-44123471776541607842021-10-27T09:56:00.003-04:002021-10-27T09:56:58.756-04:00<p>Last week I wrote a little bit about how time was running
short to make moves that can affect your tax picture by the end of the year. A
lot of that was aimed at the individual taxpayer, but this is also the case for
small businesses.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">So if you are a small business owner, you may want to look
at <a href="https://www.forbes.com/sites/davidrae/2021/10/14/6-year-end-tax-planning-moves-for-small-business-owners/?sh=5e2fdb2a6772">this
recent article from Forbes.com</a> that goes a list of things you may want to consider
as you look ahead to tax planning. In this spot, I want to highlight only one
part of this, though, and that is to keep on top of your bookkeeping.<o:p></o:p></p>
<p class="MsoNormal">I completely understand how this falls to the bottom when it
comes to the to-do list for your business. You want to be much more involved in
what you do for your clients and/or customers. You want to be doing what you
started your business to do, and that wasn’t to go home at the end of the day and
categorize your banking transactions.<o:p></o:p></p>
<p class="MsoNormal">But then it becomes something that suffers from
procrastination. It’s not something that HAS to be done for your business to
operate. You then think you can do it at the end of the week, which becomes the
end of the month, the end of the quarter, and suddenly, Eek!, it’s tax season.
This snowballs into many problems.<o:p></o:p></p>
<p class="MsoNormal">First, operating in this manner makes it impossible to
really know how your business is doing. Sure, you may be doing okay enough
since there is money in the bank and you are paying your bills, but you don’t
have really any idea how much money you are making – and how you can make more.<o:p></o:p></p>
<p class="MsoNormal">Second, operating in this manner is going to make the task
feel unbearable when you finally come around to the bookkeeping. You will be
scrambling from behind, won’t remember what every transaction was for, and will
potentially be missing out on deductions. When it then comes back around to
just how much money you are making, this could again mean it is not going to be
as high as it could be.<o:p></o:p></p>
<p class="MsoNormal">Lastly, this is going to result in you losing a sense of
control. It can feel great when you have enough things to do while working <i>in</i>
your business, you feel successful when your schedule is full. But it will feel
awful when things catch up to you and you realize you have spent no time
working <i>on</i> your business. <o:p></o:p></p>
<p class="MsoNormal">Let this be a call to catch up on the things you need to
catch up on. This puts you in the best position to have the most success. And
remember that we are always here to help you reach that spot in any way that we
can.<o:p></o:p></p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-35595020129209370622021-10-20T09:23:00.002-04:002021-10-20T09:23:35.069-04:00<p class="MsoNormal">It has been less than a week since the deadline passed for
filing your taxes if you received an extension. That may seem like it must be
much too early to discuss next year’s filing, but it means we are in the final
quarter of 2021, and that means the time to make moves that can affect your tax
picture for this year is running short. <o:p></o:p></p>
<p class="MsoNormal">If you are someone who just filed and were surprised at your
final numbers, let that be the kick you need to seek the answers that will move
things closer to where you need them to be. That kick can be more difficult if
you filed six months ago, however, for the sting wears off. But let this be a
call to remind you that back then you wanted to investigate what you could do
to improve things and better enjoy how your tax picture looks come filing
season.<o:p></o:p></p>
<p class="MsoNormal">The trick with these situations is that there is no
one-size-fits-all solution. If there was some simple action everyone could do
to pay less taxes, it would be well known and you would have already done it.
Instead, everyone’s personal situation is different and the answers and
strategies that are best for you may not be best for your neighbor, and vice
versa. <o:p></o:p></p>
<p class="MsoNormal">We are always happy to provide this personal touch. And
sure, when it comes time to file, maybe we can make you aware of some deductions
that you did not know you were eligible for. But at that time, we may also see
things that you could have done six months previously but is too late to do
then. Time is an ally in these situations.<o:p></o:p></p>
<p class="MsoNormal">So do not be afraid to reach out at this unorthodox time. We
clearly cannot make any promises that doing so will result in future savings
but can guarantee that you will have a clearer vision of your tax picture. Even
if the answer isn’t the best, and even if there are no ways to make a big
difference to it, you will at least be prepared and can plan for it. For again,
time is your ally in these situations.<o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>For not only is time a help in this area, so is knowledge.
The bad times happen when you find out something you didn’t know at a time when
you can’t do anything about it. This is your chance to not end up there. </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0tag:blogger.com,1999:blog-7171679857414033796.post-68450546344442531942021-10-13T09:11:00.002-04:002021-10-13T09:11:33.064-04:00<p class="MsoNormal">I have recently tried to communicate just how difficult it
can be to deal with the IRS. This is not a straight criticism of the agency as
an institution, it simply does not have the manpower to properly address all
the things it should be able to properly address. <o:p></o:p></p>
<p class="MsoNormal">The IRS has given indications that things will improve, but
that doesn’t seem to be happening, or at least not very quickly. <a href="https://www.accountingtoday.com/news/service-levels-hit-new-lows-at-swamped-irs?position=editorial_1&campaignname=V2_ACT_Daily_20210503-10062021&utm_source=newsletter&utm_medium=email&utm_campaign=V2_ACT_Daily_20210503%2B%27-%27%2B10062021&bt_ee=cNqSVDMiuWbc8gg%2BA2vPfu0jV%2BnRrrJYeFV1sPjw3OM%3D&bt_ts=1633514435686">This
recent article</a> showcases some of the ways and some of the reasons the IRS
is falling behind and how a fix doesn’t appear to be imminent. With this all
happening at a time when even some who filed their taxes on the original
deadline back in May are waiting for their returns to be processed, the
frustration can be strong.<o:p></o:p></p>
<p class="MsoNormal">With this growing frustration then, I thought it could be
helpful to look at what rights you have as a taxpayer, a list that Is very simply
labeled, <a href="https://www.irs.gov/taxpayer-bill-of-rights">the Taxpayer
Bill of Rights</a>. Of course, when you look at this, it may seem more than a
little ironic that the second thing on the list is the right to quality service
(where even the IRS includes the word ‘prompt’ in the definition of this type
of service).<o:p></o:p></p>
<p class="MsoNormal">Furthermore, I can completely appreciate a cynic’s view of
this list. It may look like a lot of platitudes that do not do you a lot of
good if you are actually facing the IRS. Add in the increased tension that can
be caused by the difficulty experienced in attempting to contact the agency,
and a list of rights can feel empty.<o:p></o:p></p>
<p class="MsoNormal">You do not have to just throw up your hands, though. If you
receive a letter from the IRS, it does not mean that you are automatically
wrong. Sure, some people make mistakes when filing their taxes. But the IRS
also makes mistakes when looking at those filed returns. And even more often
lately, the agency makes mistakes when sending out notices – some of which have
not been actually applicable to its recipients. <o:p></o:p></p>
<p class="MsoNormal"><o:p></o:p></p><p>And it is frightening to receive such a letter, especially
since they sometimes come in the form of a large bill that you did not expect.
But one of the rights on the list is ‘The Right to Challenge the IRS’s Position
and Be Heard,” so if it is their mistake, you have a chance to set it right.
You want to act quick (especially when receiving a response to such action can
be delayed) but you can do so. And if you need assistance from those with a
greater understanding of how those things work, then do not hesitate to find
it. </p>Patient CPA and Associateshttp://www.blogger.com/profile/02148162054535688740noreply@blogger.com0