How does the Affordable Care Act impact your tax return?

The Affordable Care Act contains comprehensive health insurance reforms and includes tax provisions that affect individuals, families, businesses, insurers, tax-exempt organizations and government entities. These tax provisions contain important changes, including how individuals and families file their taxes. The law also contains benefits and responsibilities for other organizations and employers. For more information call Neikirk, Mahoney and Smith at 502-896-2999.

Are you running out of time?

Need more time to prepare your federal tax return? This page provides information on how to apply for an extension of time to file. Please be aware that an extension of time to file your return does not grant you any extension of time to pay your taxes. April 18 is the deadline for most to pay taxes owed and avoid penalty and interest charges.

If you have last minute questions talk to a real person at Neikirk, Mahoney and Smith at 502-896-2999.

New Email Phishing Scam

The IRS has been alerted to a new email phishing scam.

The emails appear to be from the IRS Taxpayer Advocate Service and include a bogus case number and the following message:

“Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”

The recipient is directed to click on links that supposedly provide information about the "advocate" assigned to their case or that let them "review reported income."  The links lead to web pages that solicit personal information.

Taxpayers who get these messages should not respond to the email or click on the links. Instead, they should forward the scam emails to the IRS at phishing@irs.gov. For more information, visit the IRS's Report Phishing web page.

The Taxpayer Advocate Service is a legitimate IRS organization that helps taxpayers resolve federal tax issues that have not been resolved through the normal IRS channels. The IRS, including TAS, does not initiate contact with taxpayers by email, texting or any social media.

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.