Dec 172016

Tax refund delays are expected due to a new law.

For many taxpayers, a tax refund is often the biggest single amount of money they receive at one time each year, with average refunds around $3,000 in recent years. However, a new federal law will delay tax refunds for thousands of middle- and low-income taxpayers who file early in 2017.

The delay stems from the Protecting Americans from Tax Hikes Act of 2015. Section 201 of this Act states that “no credit or refund for an overpayment for a taxable year shall be made to a taxpayer before February 15 if the taxpayer claimed the Earned Income Tax Credit or Additional Child Tax Credit on the return.” This law takes effect January 1, 2017. In other words, if you are claiming EIC or Additional Child Tax Credit, and you file early, your refund will be delayed.

As the law states, the new rule affects taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS will be holding the entire refund for taxpayers who claim either of these two credits until at least February 15. This will predominantly affect early filers who claim these credits and typically get their refunds within the first three weeks of tax season. They may have to wait longer to get that money back from the IRS this time.

The main reason for the delay is that the IRS is attempting to reduce tax fraud and identity theft. The agency has decided to focus its efforts on giving a second look to returns claiming these two particular tax credits. Along with the refund delay, taxpayers should also be prepared to submit more documentation than usual to prove the validity of these tax breaks.

Jun 202016

The IRS has issued a consumer alert about possible fake charity scams in the wake of last weekend’s mass shooting in Orlando, Fla.

Scam artists commonly try to take advantage of generosity after such a headline tragedy by impersonating charities to get money or private information from taxpayers, the agency warns. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations.

The IRS cautions donors to follow these tips:

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Mar 302016

taxThe April 18 tax deadline is coming up. It is April 18th this year because the 15th is a weekend day. If you need more time to file your taxes, you can get an automatic six-month extension from the IRS. Here are five things to know about filing an extension:

1. Use IRS Free File to file an extension. You can use IRS Free File to e-file your extension request for free. Free File is only available through You must e-file the extension request by midnight April 18. If you do request an extension, come back to Free File to prepare and e-file your taxes for free. You can access the program at any time through Oct. 17.

2. Use Form 4868. You can also request an extension by filling out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. You must mail this form to the IRS by April 18. Form 4868 is available on

3. More time to file is not more time to pay. An extension to file will give you until Oct. 17 to file your taxes. It does not, however, give you more time to pay your taxes. Estimate and pay what you owe by April 18 to avoid a potential late filing penalty. You will be charged interest on any tax that you don’t pay on time. You may also owe a penalty if you pay your tax late. Interest is normally charged on any unpaid tax.

4. IRS helps if you can’t pay all you owe. If you owe taxes and you can’t pay all the tax you owe, the IRS offers payment options. In most cases, you can apply for an installment agreement with the Online Payment Agreement application on You may also file Form 9465, Installment Agreement Request. If you can’t make payments because of financial hardship, the IRS will work with you.

Oct 302015
FS-2015-21, August 2015

The Internal Revenue Service reminds employers to correctly determine whether workers are employees or independent contractors.

Generally, employers must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to employees. Business owners do not generally have to withhold or pay any taxes on payments to independent contractors.

Determining Whether the Individuals Providing Services are Employees or Independent Contractors

Before a business can determine how to treat payments for services, they must first know the business relationship that exists between the business and the person performing the services. The person performing the services may be –

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Oct 302015

IR-2015-122, Oct. 29, 2015

WASHINGTON — The Internal Revenue Service today reminded taxpayers born before July 1, 1945, that they generally must receive payments from their individual retirement arrangements (IRAs) and workplace retirement plans by Dec. 31.

Known as required minimum distributions (RMDs), these payments normally must be made by the end of 2015. But a special rule allows first-year recipients of these payments, those who reached age 70½ during 2015, to wait until as late as April 1, 2016 to receive their first RMDs. This means that those born after June 30, 1944, and before July 1, 1945, are eligible for this special rule. Though payments made to these taxpayers in early 2016 can be counted toward their 2015 RMD, they are still taxable in 2016.

This is the second in a series of weekly tax preparedness releases designed to help taxpayers begin planning to file their 2015 return.

The required distribution rules apply to owners of traditional, Simplified Employee Pension (SEP) and Savings Incentive Match Plans for Employees (SIMPLE) IRAs but not Roth IRAs while the original owner is alive. They also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.

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Jul 222014

Military-TabThere are special tax benefits that members of the military need to be aware of. It is not too early to take note of tax benefits that you qualify for, so you can start planning early. When it comes to prepping for tax filing, there is no such thing as too early. #9 on the list will definitely benefit military members who are job hunting for civilian employment.



1. Deadline Extensions.  Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.

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Mar 022013

For 2013, the standard mileage rates for the use of a car (also vans and pickups) are:

  • 56.5 cents per mile for business miles driven.
  • 24 cents per mile driven for medical or moving purposes.
  • 14 cents per mile driven in service of charitable organizations.

The 2012 rate for business miles was 55.5 cents. So, for 2013, there is a 1 cent increase (do not scoff!). The medical and moving rate is also up 1 cent per mile from the 2012 rate.

When taking deductions for use of a vehicle, you have the option of calculating the actual costs of using  your vehicle instead of the standard mileage. Actual costs include parking, tolls, fuel, and more.

Note: You cannot A use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.


If you have any questions or need some help with tracking vehicle miles, vehicle depreciation or the standard mileage rates, feel free to drop me a note below or find me here.

Feb 222013

When a business first opens, it has to decide what accounting method it wants to use to track its books. Most businesses choose the cash method of recording their finances, but there are businesses that choose the accrual method. Before we delve into their comparisons and contrasts, let’s talk about what they are.

Cash Method: With this method of accounting, you do not count money as income till you have received it (in form of cash, check, direct deposit, etc), and you do not count a purchase as an expense, till you have paid for it.

  • Income Example: You send an invoice to a client in December 2012 for $1500, but they sent you a check in February of 2013. The $1500 is not income in 2012, but in February 2013.
  • Expense Example: You reach an agreement with a newspaper to run $300 worth of ads for your company in December 2012. The newspaper company sends the bill at the end of December, but you paid it via credit card in March 2013. The $300 worth of advertisement is not an expense in December, but in March, because that was when you paid it.

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Feb 152013

Here are five bookkeeping outlines that business owners, in any industry can benefit from:

1. Plan Ahead for Major Expenses

If you plan ahead for upcoming expenses, it reduces the risk of having a cash shortfall when time for the expense rolls around. You can plan months ahead of time for major expenses like a software upgrades/changes and payroll for an additional employee.

Part of planning ahead for expenses is not burying your head in the sand about the seasonal changes in your business. There are times when you are less busier than others, which means less cash is flowing in. If you account for this, you are less likely to take out huge chunks of money during the ‘up’ season, because you are planning for a major expense.

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Feb 032013

Last year, we discussed what can and cannot be claimed on the Schedule E. This year, the IRS has made slight changes to the schedule.  In 2011, the IRS was requiring landlords and rental owners to report rent recieved from credit cards and other merchant payments to be reported on a single line item.

  • For 2012, you are not required to report on line 3a, what total payments you recived from merchant cards and third party payments. In fact, this year, lines 3a and 3b are now a single line 3, which only asks for ‘Rents received.
  • Line 4 is now for total royalties received in 2012.
  • The expenses section of the form remains the same
  • The other change is line 23 — there is no 3a or 3b, so the lines for those totals does not come up.

The changes are slight, but still important to know. Do not forget to look and see what you can and cannot claim as an expense.