Thursday, September 29, 2016

IRS Has a Reminder for Extension Filers



The Internal Revenue Service has an important reminder for taxpayers who filed for an extension and face an Oct. 17 filing deadline: the adjusted gross income (AGI) amount from your 2014 return may be needed to electronically file a tax return.
The IRS reminds all taxpayers that they should keep a copy of their tax returns and supporting documents for a minimum of three years. Going forward, keeping copies of tax returns is even more important as the IRS makes changes to protect taxpayers and authenticate their identity.
The IRS recommends extension filers using a software product for the first time plan ahead. They should locate a copy of their 2014 tax return or alternatively, order a tax transcript, a process that may take five to 10 calendar days. The adjusted gross income (AGI) is clearly labeled on both the tax return and the transcript
Taxpayers who prepare their own electronic tax returns are required to electronically sign their return by using a five-digit, self-selected personal identification number (PIN). In order to authenticate their identities, taxpayers will now also need to enter either of two items: their prior-year AGI or their prior-year self-select PIN and their date of birth. If married filing jointly, both taxpayers must authenticate their identities with this information.
The IRS is phasing out the use of the Electronic Filing PIN, which is no longer available as an alternative except for those taxpayers who had obtained an e-file PIN earlier this year. The IRS emphasizes that those filers may use their e-file PIN for this year only.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Wednesday, September 28, 2016

New Private Debt Collection Program

The Internal Revenue Service announced today that it plans to begin private collection of certain overdue federal tax debts next spring and has selected four contractors to implement the new program.

The new program, authorized under a federal law enacted by Congress last December, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act. The IRS has selected the following contractors to carry out this program:

CBE Group 1309 Technology Pkwy Cedar Falls, IA 50613

Conserve 200 CrossKeys Office park Fairport, NY 14450

Performant 333 N Canyons Pkwy Livermore, CA 94551

Pioneer 325 Daniel Zenker Dr Horseheads, NY 14845


These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working their accounts. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Monday, September 26, 2016

Beware of Fake IRS Tax Bill Notices

The Internal Revenue Service and its Security Summit partners are warning taxpayers and tax professionals of fake IRS tax bills related to the Affordable Care Act.

The IRS has received numerous reports of scammers sending a fraudulent version of a notice- labeled CP2000 - for tax year 2015. The issue has been reported to the Treasury Inspector General for Tax Administration for investigation.

This scam may arrive by email, as an attachment, or by mail. It has many signs of being a fake:

The CP2000 notices appear to be issued from an Austin, Texas, address;
The letter says the issue is related to the Affordable Care Act  and requests information regarding 2014 coverage;
The payment voucher lists the letter number as 105C;
Requests checks made out to I.R.S. and sent to the “Austin Processing Center” at a post office box.

IRS impersonation scams take many forms: threatening phone calls, phishing emails and demanding letters. Learn more at Reporting Phishing and Online Scams. The IRS does not initiate unsolicited email contact or contact by social media.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Friday, September 23, 2016

Newly Married Couples Should Report Marriage to Marketplace


If you’re recently married, you probably have a list of things to do.  There’s one other thing you should add to that list: a health insurance review. This is particularly important if you enrolled in coverage through a Health Insurance Marketplace and you receive premium assistance in the form of advance payments of the premium tax credit.

When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using information you provide. This information includes details about your family composition and your projected household income.

It is important for you to report life changes – known as changes in circumstances – to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace. Be sure to report all changes directly to that Marketplace because they can affect both your coverage and your final credit when you file your federal tax return.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Thursday, September 22, 2016

Six Tax Tips For Independent Contractors


The fact that you are getting a 1099-MISC to report your earnings to the IRS means you are in business for yourself. You need to take full responsibility and treat your business as a business—and do the normal things a business does when filing taxes.

Here are a few ways you can start acting like a business and mitigate issues with the IRS.

1. Stop giving out your Social Security number and get an Employer ID (EIN) number. This accomplishes two things: It protects you from identity theft, and it shows the IRS that you are a business.

2. Open a business bank account, using your new EIN, to separate your personal finances from your business finances.

3. Keep books. If you don’t know how to keep your books, it’s time to either learn or hire a competent bookkeeper.

4. Select accounting software that’s appropriate for your business—don’t just use something that doesn’t really meet your needs just because it’s free. These days, there are sophisticated choices that can not only track your bookkeeping needs but also help you create a business website.

5. Do some tax planning. Read a book on small business taxes to learn how about tax benefits available to business owners of all kinds.

6. Pay your estimated taxes. After you have the numbers and know what they mean, and once you have reduced your profits by taking advantage of tax planning, you can determine your quarterly profits

 Even if your overall taxable income is a loss, you may owe taxes because your Schedule C had a profit. You’ll be paying 15.3 percent as self-employment taxes (Social Security and Medicare) on those profits.

Courtesy of Equifax

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Wednesday, September 21, 2016

IRS Urges Employers to Take Advantage of Expanded Work Opportunity Tax Credit


With a key certification deadline fast approaching, the Internal Revenue Service today urged employers to take advantage of a valuable tax credit designed to help those who hire long-term unemployment recipients, certain veterans, recipients of various kinds of public assistance and other workers who face significant barriers to employment.

The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, retroactively extended the Work Opportunity Tax Credit (WOTC) for nine categories of workers hired on or after Jan. 1, 2015. For the first time, the legislation also added a tenth category for long-term unemployment recipients hired on or after Jan. 1, 2016 who had been unemployed for a period of at least 27 weeks and received state or federal unemployment benefits during part or all of that time. The special Sept. 28, 2016 certification deadline applies to eligible workers hired between Jan. 1, 2015 and Aug. 31, 2016.

Normally, to qualify for the credit, an employer must first request certification by filing IRS Form 8850 with the state workforce agency within 28 days after the eligible worker begins work. But due to the late enactment of the legislation extending the WOTC and its retroactive impact, the IRS is giving employers extra time, until Sept. 28, to make requests related to eligible workers hired any time in 2015 and during the first eight months of 2016. The regular 28-day rule will again apply for any eligible worker hired after Aug. 31, 2016. Other requirements and further details can be found in the instructions to Form 8850, Notice 2016-22 and Notice 2016-40, available on IRS.gov.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Tuesday, September 20, 2016

Basic Bookkeeping tips


For many small businesses, the most common bookkeeping errors are also the easiest to fix. Use these six tips to help keep your business on sound financial footing.

1. Use the right accounting system. Most businesses use either cash-based or accrual-based accounting. If you use the cash method, you count income when you receive it and expenses when you pay them. Under the accrual method, you count income and expenses when they happen, not when you actually receive or pay them.

2. Maintain daily records. This is one of the most basic rules: If you don't keep accurate daily records, you don't have an accurate way to track the financial condition of your business. Different people use different record-keeping systems; what matters is that you have one and use it every day. Once you have a good system set up, accurate record keeping will take just a few minutes a day.

3. Handle and review checks carefully. It's easy to be on autopilot when you're writing checks and tossing canceled ones into a filing cabinet without reviewing them. Remember: Those checks are as good as cash. And if something goes wrong, you — not the bank — will be on the hook. Take the same care with checks as you would with cash. Sign checks using a clear, distinctive signature that won't invite forgery.

4. Get a bank statement with a month-end cutoff. This is another basic tip that can reap big rewards. Synchronizing your bank statement with other monthly records will make it much easier to reconcile your statement and track expenses.

5. Leave an audit trail. Your record keeping will be much more effective if you have a system that allows you to quickly and easily retrace your company's financial activities. This means keeping your invoices and checks in numeric order, not skipping check or invoice numbers, and keeping separate bank accounts for your business and personal funds.

6. Use a computer. Computer bookkeeping software is absolutely essential for all but the smallest businesses. These applications make it easy to track income and expenses, prepare tax documents, summarize your company's financial activities and back up records for safekeeping.

Courtesy of Score