Wednesday, December 7, 2016

Tax Records – What to Keep


As tax filing season approaches, the Internal Revenue Service has information for taxpayers who wonder how long to keep tax returns and other documents.

Generally, the IRS recommends keeping copies of tax returns and supporting documents at least three years. Some documents should be kept up to seven years in case a taxpayer needs to file an amended return or if questions arise. Keep records relating to real estate up to seven years after disposing of the property.

Health care information statements should be kept with other tax records. Taxpayers do not need to send these forms to IRS as proof of health coverage. The records taxpayers should keep include records of any employer-provided coverage, premiums paid, advance payments of the premium tax credit received and type of coverage. Taxpayers should keep these – as they do other tax records – generally for three years after they file their tax returns.

Whether stored on paper or kept electronically, the IRS urges taxpayers to keep tax records safe and secure, especially any documents bearing Social Security numbers. The IRS also suggests scanning paper tax and financial records into a format that can be encrypted and stored securely on a flash drive, CD or DVD with photos or videos of valuables.

Now is a good time to set up a system to keep tax records safe and easy to find when filing next year, applying for a home loan or financial aid. Tax records must support the income, deductions and credits claimed on returns. Taxpayers need to keep these records if the IRS asks questions about a tax return or to file an amended return.

Courtesy of IRS

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

Tuesday, December 6, 2016

Interest Rates Remain the Same for the First Quarter


The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning January 1, 2017.  The rates will be:

four (4) percent for overpayments [three (3) percent in the case of a corporation];
1 and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000;
four (4) percent for underpayments; and
six (6) percent for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Courtesy of IRS

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

Monday, December 5, 2016

Tax tips for Businesses


The healthcare tax credit is offered on a sliding scale. Businesses that employ fewer than 10 full-time-equivalent employees with average wages under $25,000 per person get the most benefit. To claim the credit, use form 8941 to calculate your eligibility. If your business did not owe taxes in that year, you may be able to carry the credit forward. If a remainder of the tax premium exists, you can claim business expenses against it.

Deduct section 179 property

Small businesses can opt to deduct the full amount of certain property as expenses in the year the business began using them. This is referred to as section 179 property and can include up to $500,000 of eligible business property in the 2016 tax year. Some eligible deductions include:

Property used in manufacturing, transportation and production
Any type of facility used for business or research
Buildings used to hold livestock or horticultural products
Off-the-shelf computer software
Excluded:

Land
Investment property
Land outside of the U.S.
Buildings that provide lodging
Buildings that are used to store air conditioning or heating units
TurboTax can assist you in choosing what types of property are appropriate deductibles.

Courtesy of TurboTax

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

Friday, December 2, 2016

New Online Tool to Assist Taxpayers


The Internal Revenue Service announced today the launch of an online application that will assist taxpayers with straightforward balance inquiries in a safe, easy and convenient way.

This new and secure tool, available on IRS.gov allows taxpayers to view their IRS account balance, which will include the amount they owe for tax, penalties and interest. Taxpayers may also continue to take advantage of the various online payment options available by accessing any of the payment features including: direct pay, pay by card and Online Payment Agreement. As part of the IRS vision for the future taxpayer experience, the IRS anticipates that other capabilities will continue to be added to this platform as they are developed and tested.

Before accessing the tool, taxpayers must authenticate their identities through the rigorous Secure Access process. This is a two-step authentication process, which means returning users must have their credentials (username and password) plus a security code sent as a text to their mobile phones.

Taxpayers who have registered using Secure Access for Get Transcript Online or Get an IP PIN may use their same username and password. To register for the first time, taxpayers must have an email address, a text-enabled mobile phone in the user's name and specific financial information, such as a credit card number or specific loan numbers. Taxpayers may review the Secure Access process prior to starting registration.

As part of the security process to authenticate taxpayers, the IRS will send verification, activation or security codes via email and text. The IRS warns taxpayers that it will not initiate contact via text or email asking for log-in information or personal data. The IRS texts and emails will only contain one-time codes.

Courtesy of IRS

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

Thursday, December 1, 2016

You Have More Time in 2017 to Provide Information Forms to Covered Individuals


The IRS extended the 2017 due date for employers and coverage providers to furnish information statements to individuals.  The due dates to file those returns with the IRS are not extended. This chart can help you understand the upcoming deadlines.                                  



Action
2017 Reporting Due Dates for…
Applicable Large Employers – Including Those That Are Self-Insured
Self-insured Employers That Are NotApplicable Large Employers
Coverage Providers  – other than Self-Insured Applicable Large Employers*
Provide 1095-B to responsible individuals
Not Applicable**
Mar. 2
Mar. 2
File 1094-B and  1095-B with the IRS
Not Applicable**
Paper: Feb. 28
E-file: Mar. 31*
Paper: Feb. 28
E-file: Mar. 31*
Provide 1095-C to full-time employees
Mar. 2
Not Applicable
Not Applicable
File 1095-C and 1094-C with the IRS
Paper: Feb. 28
E-file: Mar. 31*
Not Applicable
Not Applicable


*If you file 250 or more Forms 1095-B or Forms 1095-C, you must electronically file them with the IRS. Electronically filing ACA information returns requires an application process separate from other electronic filing systems. Additional information about electronic filing of ACA Information Returns is on the Affordable Care Act Information Reporting (AIR) Program page on IRS.gov and in Publications 5164 and 5165.

**Applicable large employers that provide employer-sponsored self-insured health coverage to non-employees may use either Forms 1095-B or Form 1095-C to report coverage for those individuals and other family members.

This chart applies only for reporting in 2017 for coverage in 2016.

Courtesy of IRS

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

Wednesday, November 30, 2016

Remember Donations May Cut Tax Bills


As tax filing season approaches, the Internal Revenue Service reminds taxpayers who give money or goods to a charity by Dec. 31, 2016, that they may be able to claim a deduction on their 2016 federal income tax return and reduce their taxes.

Only donations to eligible organizations are tax-deductible. IRS Select Check on IRS.gov is a searchable online tool that lists most eligible charitable organizations. Churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations even if they are not listed in this database.

Claiming Charitable Donations
Only taxpayers who itemize using Form 1040 Schedule A can claim deductions for charitable contributions.

Monetary Donations
A bank record or a written statement from the charity is needed to prove the amount of any donation of money.

Donating Property
For donations of clothing and other household items the deduction amount is normally limited to the item’s fair market value.

Benefit in Return.
Donors who get something in return for their donation may have to reduce their deduction.

Older IRA Owners Have a Different Way to Give
IRA owners, age 70½ or older, can transfer up to $100,000 per year to an eligible charity tax-free.

Good Records
The type of records a taxpayer needs to keep depends on the amount and type of the donation.

Courtesy of IRS.

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

Tuesday, November 29, 2016

IRS, Partners Warn of Online Threats


The Internal Revenue Service, states and the tax industry remind you that online threats and annoyances abound. There are viruses, worms, Trojans, bots, spyware and adware – all fall under the malicious programs (malware) umbrella.

How do you protect your computer from hackers and identity thieves? You need security software and to keep it turned on. You also need security on all of your digital devices, including laptops, tablets and mobile phones.

The IRS, state tax agencies and the tax professional industry are asking for your help in their effort to combat identity theft and fraudulent returns. Working in partnership with you, we can make a difference.

That’s why we launched a public awareness campaign that we call Taxes. Security. Together. We’ve also launched a series of security awareness tips that can help protect you from cybercriminals.

Tens of thousands of new malware programs launch each day, making the use of security software essential to safe internet use. These malware programs can disable your computer, install viruses that give cybercriminals control, steal your data, track your keystrokes to give criminals your passwords and many other malicious acts.