Ways to choose your Income Tax Preparer

Many people hire an independent tax professional or a reputable accounting firm when it’s time to file their tax return. If you pay someone to prepare your federal income tax return, the IRS urges you to choose that person wisely. Even if you don’t prepare your own return, you’re still legally responsible for what is on it.

Here are ten tips to keep in mind when choosing a tax preparer:

1. Check the preparer’s qualifications.  All paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. In addition to making sure they have a PTIN, ask the preparer if they belong to a professional organization and attend continuing education classes.
   
2. Check the preparer’s history.  Check with the Better Business Bureau to see if the preparer has a questionable history. Check for disciplinary actions and for the status of their licenses. For certified public accountants, check with the state board of accountancy. For attorneys, check with the state bar association. For enrolled agents, check with the IRS Office of Enrollment.
   
3. Ask about service fees.  Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account. Taxpayers should not deposit their refund into a preparer’s bank account.
   
4. Ask to e-file your return.  Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically. IRS has safely processed more than 1.2 billion e-filed tax returns.
   
5. Make sure the preparer is available.  Make sure you’ll be able to contact the tax preparer after you file your return - even after the April 15 due date. This may be helpful in the event questions come up about your tax return.
   
6. Provide records and receipts.  Good preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
   
7. Never sign a blank return.  Don’t use a tax preparer that asks you to sign a blank tax form.
   
8. Review your return before signing.  Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
   
9.  Ensure the preparer signs and includes their PTIN.  Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the return.
   
10. Report abusive tax preparers to the IRS.  You can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Tax Tips of the Day

The Internal Revenue Service is warning taxpayers to be sure to notify your accountant or the Social Security Administration before they file their taxes if they have changed their own name or the name of one of their dependents has changed. Otherwise their tax refund could be delayed.
Read more from Accounting Today

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The Internal Revenue Service today announced the release of IRS2Go 4.0, an update to its smartphone application featuring new added features available in both English and Spanish.

The redesigned IRS2Go provides new features for taxpayers to access the latest information to help them in the preparation of their tax returns. In this version, IRS2Go highlights the addition of an innovative new refund status tracker, providing taxpayers an easy-to-use feature to follow their tax return throughout the process.

The newest version of the free mobile app offers a number of safe and secure ways for taxpayers to access other popular tools and the most up-to-date tax information, including:

• Refund Status. Taxpayers can check the status of their federal tax refund through IRS2Go. People simply enter their Social Security number, which will be masked and encrypted for security purposes, then select their filing status and enter the amount of their anticipated refund for their 2013 tax return. A new refund status tracker has been added so that taxpayers can follow their tax return throughout the process. Users can check their refund status 24 hours after the IRS acknowledges receipt of an e-filed return, or four weeks after mailing a paper return. The IRS reminds taxpayers the tool is updated just once a day, usually overnight, so there is no reason to check more than once a day.
• Free Tax Prep Providers. The IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify. This brand new tool on IRS2Go will help taxpayers find the nearest VITA site to their home by simply entering their zip code and selecting a mileage range. By clicking on the directions button within the results, the maps application on the device will load with the address, making it easy to navigate to your desired location.
• Tax Records. Taxpayers can request their tax account or tax return transcript from IRS2Go. The transcript will be delivered via the U.S. Postal Service to their address of record.

It's Tax Season!

The Internal Revenue Service began accepting individual tax returns on Friday. 

The IRS postponed the beginning of tax season this year until January 31 due to the two-week federal government shutdown, which delayed the testing and implementation of some of its computer systems. The IRS is also starting off this tax season with a new commissioner, John Koskinen. Newly approved by Congress, he has been brought in to fix some of the problems that emerged last year, including with the agency’s Exempt Organizations unit, as well as contend with budget cuts that have been reducing taxpayer service.

The IRS is encouraging taxpayers to use electronic filing, noting that last year, nearly 120 million taxpayers opted for IRS e-file. Since 1990, taxpayers have e-filed more than 1 billion Form 1040 series tax returns through e-file.

If you need any help preparing your own personal or business tax returns, contact the accounting professionals at Neikirk, Mahoney & Smith PLLC where you'll be dealing with a real Certified Public Accountant and not someone that will try to sell you a car when tax season is over!

Read the rest of the article here - Thanks to Michael Cohn and Accounting Today!

IRS preparing to muzzle tea party groups

Now that we’re into an all-important midterm election year, the Obama administration is turning up the heat on tea party groups and other conservative organizations, the very people who many say caused the Democrats’ “shellacking” in the 2010 midterms.

The Obama administration is using the ultimate agency of intimidation — the Internal Revenue Service — to give Democrats a leg up in what is predicted to be a difficult year for the party.

The IRS has proposed new rules for 501(c)(4) organizations that strike at the the heart of the tea party’s very existence — political activism. 

The laundry list of provisions the IRS proposes that 501(c)(4) organizations must comply with includes, according to WND:

• Prohibit using words like “oppose,” “vote,” “support,” “defeat,” and “reject.”
•  Prohibit mentioning, on its website or on any communication (email, letter, etc.) that would reach 500 people or more, the name of a candidate for office, 30 days before a primary election and 60 days before a general election.
• Prohibit mentioning the name of a political party, 30 days before a primary election and 60 days before a general election, if that party has a candidate running for office.
•  Prohibit voter registration drives or conducting a non-partisan “get-out-the-vote drive.”

Click Here to Read the Rest of the Article and the Additional IRS Provisions

Article by Michael Dorstewitz - BizPac Review. 

2014 Tax Planning - 5 Tips

Tax planning very rarely makes it on people’s new year’s resolution lists. But perhaps 2014 should be the year you vow to achieve a greater level of understanding about your taxes and to properly organize and plan for your liability, according to Fox Business.

Not only would this pledge make your life easier come tax season, it could also end up keeping more money in your bank account.

Check out some tips to get rolling on fulfilling this resolution:

1. Set up your 2014 tax file. This could be an electronic file in which you scan documents and transactions throughout the year that will affect your tax return, or a folder or bin that holds the information.

The beauty of an electronic file is that at tax time you can simply e-mail it to your tax professional, who will likely also maintain the file in the event of an audit. Just make sure you have adequate back up of your data in case something goes wrong. Adding notes on the tax documents to aid your tax pro in understanding the transaction can help the filing process.

-Click for more-

Obamacare Related Tax Questions Challenge Tax Preparers

BY JEFF STIMPSON

The Affordable Care Act -- along with its accompanying enrollment Web site and new taxes and tax breaks -- has opened up a host of questions for the taxpaying public, ramping up the usual levels of pre-tax season taxpayer confusion.

“Forty of the 500 provisions in the ACA amend or add provision to the U.S. Tax Code,” reads a primer from The Income Tax School. “Most of the changes that are to be implemented in 2014 have to do with healthcare coverage [that] requires that each person either have the minimum essential coverage, qualify for an exemption or make a payment when filing his or her federal income tax return.”

Among the new taxes is a 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single), and a 0.9 percent additional Medicare tax.

Click here to read the rest of the story from Accounting Today

If you need more information, contact Neikirk, Mahoney & Smith CPAs at (502) 896-2999.

Inside the Biggest Insider Trading Case in American History

Palatial mansions, multimillion-dollar artwork and a blockbuster financial scandal for a reclusive Wall Street billionaire

By Sam Gustin

When the FBI showed up at Mathew Martoma’s multimillion-dollar Florida mansion shortly before dawn on a November morning in 2011, the former SAC Capital hedge fund trader fainted on his front lawn. 

Read more: SAC Capital: Former Trader Mathew Martoma Faces Insider Trading Trial | TIME.com http://business.time.com/2014/01/06/martoma-sac-capital/#ixzz2pjo2JJdP

Do you need help with your taxes or other financial matters? Call Neikirk, Mahoney & Smith today at 502-896-2999 or contact us at http://nmscpas.com.