Need last minute help with business taxes?

Is there something about your taxes that have you confused? Join the club.
You have some options - search endlessly through IRS documentations, tips, etc. or you can do it the smart way and that is by contacting Neikirk, Mahoney and Smith CPAs.
at 502-896-2999.

Tips for Claiming Home Office Deduction

The Internal Revenue Service today reminded people with home-based businesses filling out their 2015 federal income tax returns that they can choose a simplified method for claiming the deduction for business use of a home.

In tax year 2013, the most recent year for which figures are available, more than 3.4 million taxpayers claimed deductions totaling just over $9.6 billion for business use of a home, commonly referred to as the home office deduction.

Introduced in tax year 2013, the optional deduction is designed to reduce the paperwork and record keeping burden for small businesses. The optional deduction is capped at $1,500 per year, based on $5 a square foot for up to 300 square feet.

Normally, home-based businesses are required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Instead, taxpayers choosing the simplified method need only complete a short worksheet in the tax instructions and enter the result on their tax return. Self-employed individuals claim the home office deduction on Schedule C, Line 30; farmers claim it on Schedule F, Line 32 and eligible employees claim it on Schedule A, Line 21.

Though homeowners using the simplified method cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees, are still fully deductible. Long-standing restrictions on the home office deduction, such as the requirement that a home office be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the simplified method.

If you'd like to discuss home office deductions with an income tax professional, contact Neikirk, Mahoney and Smith today.

Are You Ready for Tax Season?

According to the Internal Revenue Service, nearly a third of Americans wait until the last minute to file their taxes. And once again  this year, with the April 15 deadline looming, millions of Americans still aren't ready to file their tax returns.

Business taxpayers are no different. The process for filing business taxes can always be counted on to add a little bit of a dark cloud to even the prettiest spring morning! And no matter how carefully you documented expenses and reported earnings, every business owner secretly frets over the liklihood of an IRS Audit!

The tax professionals at Neikirk, Mahoney & Smith, understand what you're going through and they stand ready to help you get through the process intact!

Need some help filing your business taxes? Give us a call today at 502-896-2999. Visit our website to learn more and we look forward to being of service!

The Individual Shared Responsibility Provision and Your 2015 Income Tax Return

From Neikirk, Mahoney & Smith, the IRS has published some information on your upcoming 2015 income tax returns. 

The Affordable Care Act requires you, your spouse and your dependents to have qualifying health care coverage for each month of the year, qualify for a health coverage exemption, or make an Individual Shared Responsibility Payment when filing your federal income tax return.   If you had coverage for all of 2015, you will simply check a box on your tax return to report that coverage.

However, if you don’t have qualifying health care coverage and you meet certain criteria, you might be eligible for an exemption from coverage. Most exemptions are can be claimed when you file your tax return, but some must be claimed through the Marketplace.

If you or any of your dependents are exempt from the requirement to have health coverage, you will complete IRS Form 8965, Health Coverage Exemptions and submit it with your tax return. If, however, you are not required to file a tax return, you do not need to file a return solely to report your coverage or to claim an exemption.

For any months you or anyone on your return do not have coverage or qualify for a coverage exemption, you must make a payment called the individual shared responsibility payment. If you could have afforded coverage for yourself or any of your dependents, but chose not to get it and you do not qualify for an exemption, you must make a payment. You calculate the shared responsibility payment using a worksheet included in the instructions for Form 8965 and enter your payment amount on your tax return.

Whether you are simply checking the box on your tax return to indicate that you had coverage in 2015, claiming a health coverage exemption, or making an individual shared responsibility payment, you or your tax professional can prepare and file your tax return electronically.  Using tax preparation software is the best and simplest way to file a complete and accurate tax return as it guides individuals and tax preparers through the process and does all the math. Electronic filing options include IRS Free File for taxpayers who qualify, free volunteer assistance, commercial software, and professional assistance.

You can use the IRS's interactive tax assistant to determine if you are eligible for a coverage exemption or responsible for the Individual Shared Responsibility Payment. You can contact Neikirk, Mahoney & Smith by phone at 502-896-2999, or through our website contact form.

Keeping Your Passwords Protected

From Neikirk, Mahoney & Smith, the IRS has published tips on the topic of protecting your passwords. Much of the public uses the same password over and over again on their different accounts online. This is partially why a single successful phishing scam can be so devastating, because when they get a password for one of your accounts it is likely that password will work on another.

For this reason, new stronger standards are being implemented in tax software products for 2016. Those standards include:

• A password that has eight or more characters, including upper case, and lower case letters as well as numbers and a special character.
• New features include a timed lockout and limits on unsuccessful log-in attempts.
• You must complete three security questions.
• Tax software partners must verify email addresses. In many cases, this means a PIN will be sent to your email or text that you must use to verify your address before you can proceed with your tax software.

These are just a few of the new protections that will be in place for the 2016 tax season to protect you from identity thieves. Most of the protections we are taking may not be visible to you, but they will add layers of protection nonetheless, adding new and stronger protections during tax time.

While these are changes that are being implemented in tax software, it would be a good idea to think about these standards with all passwords that you create.
You can contact Neikirk, Mahoney & Smith by phone at 502-896-2999, or through their website contact form

Seven Steps for Making Identity Protection Part of Your Regular Routine

From Neikirk, Mahoney & Smith, the IRS has recently published seven steps for making identity protection part of your routine. Identity theft can be incredibly traumatic and frustrating. And in this day and age, it's always best to be on your guard against it.

Here are their seven tips on keeping yourself protected:

1. Regularly read your credit card and banking statements. Keep and eye out for anything that looks remotely suspicious. Keep in mind that neither your credit card nor bank – or the IRS – will send you emails asking for sensitive personal and financial information such as asking you to update your account.

2. Review and respond to all correspondences and notices from the IRS. Warning signs of tax-related identity theft can include IRS notices about tax returns you did not file, income you did not receive or employers you’ve never heard of or where you’ve never worked.  

3. Review each of your three credit reports at least once a year. Visit annualcreditreport.com to get your free reports.

4. Review your annual Social Security income statement for excessive income reported. You can sign up for an electronic account at www.SSA.gov.

5. Read your health insurance statements; look for claims you never filed or care you never received.

6. Shred any documents with personal and financial information. Never toss documents with your personally identifiable information, especially your social security number, in the trash.

7. If you receive any routine federal deposit such as Social Security Administrator or Department of Veterans Affairs benefits, you probably receive those deposits electronically. You can use the same direct deposit process for your federal and state tax refund. IRS direct deposit is safe and secure and places your tax refund directly into the financial account of your choice.

To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together. You also can read Publication 4524, Security Awareness for Taxpayers.

You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.

IRS: Five Common Questions from Taxpayers

From Neikirk, Mahoney & Smith, the IRS has released five common questions that they receive from taxpayers, along with the answers.

1. What is included in household income?
"For purposes of the PTC, household income is the modified adjusted gross income of you and your spouse if filing a joint return, plus the modified AGI of each individual in your tax family whom you claim as a dependent and who is required to file a tax return because their income meets the income tax return filing threshold. Household income does not include the modified AGI of those individuals you claim as dependents and who are filing a return only to claim a refund of withheld income tax or estimated tax."

2. The IRS is asking to see my 1095-A. What should I do?
"You should follow the instructions on the correspondence that you received from the IRS.  You may be asked for a copy of Form 1095-A in order to verify information that has been entered on your tax return."

3. If I got advance payments of the PTC, do I have to file even if I never had a filing requirement before?
"Yes. If you received the benefit of advance payments of the premium tax credit, you must file a tax return to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit.  You must file a return and submit a Form 8962 for this purpose even if you are otherwise not required to file a return."

4. Marketplace says I did not file, but I did file before the extended due date.  What should I do?
"In advance of the open enrollment period that runs through January 31, 2016, the Marketplace sent Marketplace Open Enrollment and Annual Redetermination letters to individuals who might not have filed a tax return. Follow the instructions in the letter you received."

5. What are my options to receive help with filing a return and reconciling?
"Filing electronically is the easiest way to file a complete and accurate tax return as the software guides you through the filing process. Electronic filing options include free Volunteer Assistance, IRS Free File, commercial software, and professional assistance."

For more information from the IRS, check out their website at irs.gov
You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.