Archive for the ‘Personal Finance’ Category

File and Suspend Strategy Suspended

Wednesday, November 18th, 2015
File and Suspend Suspended, Rea & Associates, Ohio CPA Firm

President Barack Obama signed legislation on Nov. 2 to put an end to the file and suspend strategy. But, that doesn’t necessarily mean it’s too late to act. There is a six-month window of opportunity, as long as both spouses were born on or before April 30, 1950. Keep in mind that you are up against a May 1, 2016, deadline.

Deciding when to claim your Social Security benefits is often one of the most significant financial decisions older Americans must make today because, for many, Social Security benefits make up a substantial portion of their retirement income. Unfortunately, Congress recently passed legislation that will put an end to two popular strategies being used to maximize benefits married couples receive in their golden years.

Read Also: Retirement Is Knocking … Are You Ready To Answer The Door?

The strategies that are scheduled to be phased out are commonly known as “File and Suspend” and the Restricted Application for Spousal Benefits. These strategies have made it possible for couples to delay laying claim to their individual benefits based on their earnings while still claiming a spousal benefit based on the other’s earnings – as long as both are 66 or older.

How Does File And Suspend Work?

To receive the spousal benefit, one individual would file for their Social Security benefits – then immediately suspend them. The other spouse would then file a restricted application to collect only the spousal benefit rather than the benefit they earned as an individual, even if their individual would have been higher. By employing this strategy, both could increase their earned benefits by taking advantage of the option to delay retirement credits, which would increase their earned benefit by up to 8 percent for each year the benefit is delayed until the individual reaches 70 years of age.

Is It Too Late To Take Advantage Of This Strategy?

President Barack Obama signed legislation on Nov. 2 to put an end to the file and suspend strategy. But, that doesn’t necessarily mean it’s too late to act. There is a six-month window of opportunity, as long as both spouses were born on or before April 30, 1950. Keep in mind that you are up against a May 1, 2016, deadline.

What About The Couples Who Are Already Receiving Benefits?

Fortunately, the couples already using these strategies will be grandfathered in under the new law and will not be asked to pay back any of the benefits they have received to date. Furthermore, they will continue to receive the benefits they have already been granted. The new law will not impact their current Social Security income, which is why it’s so important for eligible couples to take advantage of this 6-month window.

What Happens After The 6-Month Window Closes?

Moving forward, under the new law, individuals will still have the ability to suspend their benefits, but the Social Security Administration will not allow spousal or dependent child benefits based on the earnings of someone who has suspended their own benefits. In other words, to claim a spousal benefit, the earned benefits have to be paid out as well.

When filing for retirement benefits (other than with a restricted application), spouses will effectively claim their earned benefit and their spousal benefit. They will then receive the greater amount.

Fortunately, there are still opportunities to maximize your Social Security benefits. A financial advisor can you help navigate the terrain. There are also free tools available to help you find out how much you can expect to collect from Social Security when you finally decide to claim the benefit. The Social Security calculator is located here. You can also visit the Social Security website to view your Social Security Account Statement. To discover more retirement strategies, check out one of the articles below or email Rea & Associates and ask to speak with a retirement planning expert.

By David Shallenberger, CPA (Wooster office)

Check out these articles to learn more about the importance of planning for your retirement:

Planning For Uncertainty In Retirement

Five Financial Considerations For Every Age Group

How Can I Make The Most Of My Retirement?

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WARNING: Tis The Season To Practice Safe Online Shopping Habits

Tuesday, November 17th, 2015
Safe Holiday Shopping - Rea & Associates - Ohio CPA Firm

Keep your online Holiday shopping secure with these five tips from KnowBe4.

While it may be the most wonderful time of the year, cyber criminals are looking for ways to stuff their own stockings – at your expense. The holiday season is also a busy time of the year for scammers because, in general, more money is being spent and more people are clicking through cyberspace for the best deals and tracking their purchases. KnowBe4 recently published a blog about the top five scams shoppers should be on the lookout for, and I wanted to pass these on to our readers. Consider the following information to be an early gift from me to you, and hopefully your bank account can welcome the New Year unscathed.

Read Also: Malware Threat Spreads To Smart Phones

1. Post-Thanksgiving Madness (otherwise known as Black Friday and Cyber Monday)

Thanksgiving is just around the corner, which means shoppers are already planning their early-morning shopping strategies. Sure there are great deals up for grabs, but there are also scammers looking forward to feeding on the hype in the hopes that you will let your guard down. Believe it or not, it can be pretty easy to mistakenly fall for those offers that appear to be too good to be true simply because we have become conditioned to believe that these deals are part of the overall allure. Tip: Before completing the transaction, visit the retailer’s actual website to make sure the deal is valid. 

2. Don’t Miss This Deal – Your Facebook Friend Didn’t

Just because one of your friends shared a coupon or voucher on Facebook or another social media site, doesn’t mean it’s legit. In fact, hacked social media accounts are pretty common. Scammers like this approach because they know that you are more willing to take the bait if the scam comes from somebody you trust. If one of your friends is guilty of passing along some of these not-so-helpful posts, give them a call or send them a text to find out more. Chances are, you will be the one helping them out by letting them know that their account has been compromised. 

3. What Do You Mean ‘There’s A Problem’?! 

You’ve shopped, dropped and paid for two-day shipping and it looks like you will have your gifts in time for the next family gathering. But then your inbox gets hit with an urgent message from UPS or FedEx notifying you that there may be a problem with the delivery of your package. Fortunately, the email includes a link for you to click on to get the issue resolved. STOP! This is a common phishing scam. Scammers will often use this tactic in the hopes that you will click on the link. Before you know it, your computer has been infected with a virus … or worse – ransomware.

4. Click Here For A Refund 

Similar to the UPS/FedEx scam identified above, this tactic is another attempt to get the unsuspecting consumer to click on an infected link. In this scenario, you might receive an email from a major online retailer – Amazon, eBay, etc. – with the message that there’s a “wrong transaction,” which requires you to click on a link to secure your refund. Instead of a refund, when you click on the link you will receive the gift of a security breech instead. Clicking on these links simply opens the door for scammers to access to your personal information, which will then be sold to the highest bidder and used against you later.  

5. Use The Force Against Phishing Scams 

Wouldn’t it be nice to win tickets to see Star Wars: The Force Awakens when it is released on Dec. 18? Sure, but given what you know now, would you be willing to take the risk and click on the link in your email to find out if the offer is real? Scammers use a variety of tactics to get you to make a mistake. This scam, for example, is another way popular culture is being used against unsuspecting victims. 

Remember, whether it’s a deal, contest, sale, or any other type of offer, if it looks unbelievable or questionable (even if it appears to have been sent from a trusted source), don’t click on the link or open an attachment. If you have doubt, delete! KnowBe4 also offers readers two other great tips to keep your private information and your bank account safe 365 days a year:

  1. Never use a debit card online. Cyber criminals can (and will) wipe out your bank account in seconds once they gain access. You can protect yourself by using a credit card.
  2. Never use your credit card to shop when your computer is connected to an insecure public Wi-Fi. All online shopping should always be done on over a secure, private internet connection.

By Steve Roth, IT Director (New Philadelphia office)

Want to learn more ways to keep your computer and personal information safe? Check out these articles:

Who Is That Email Really From?

Who’s Phishing Your Data Today?

How Much Is Your Data Worth To Criminals?

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You Can Still Have The Final Say After Death

Friday, October 23rd, 2015
Estate Planning - Ohio CPA Firm

It doesn’t matter if you have a lot of assets to pass on or very few, estate planning is one of the best things you can do for yourself and for those you love.

Life is full of enjoyable experiences. Spending time with family and friends, hiking through the woods, spending the afternoon on the lake, immersing yourself in a hobby – these are the moments we live for. What if you could give yourself the opportunity to make those moments more enjoyable? Would you take that opportunity?

Click To Listen To Episode 6 of Unsuitable on Rea Radio: The Grim Reaper Is Coming … And He Wants Your Money

Every time you avoid the conversation about estate planning you miss out on a chance to make this period of your life even more enjoyable – for you, and for your loved ones. Once you have made your plans with regard to what you want to happen after your death, those thoughts are no longer in the back of your mind. They are decided and you can truly enjoy the moment with your friends and family.

Three Things Everybody Should Know About Estate Planning

  1. Estate planning is for everybody. Estate planning isn’t just dependent on your assets; it’s about identifying what you want to happen after you pass away. Who do you want to take care of your children, for example, and do you want that person to be financially responsible for them as well – they don’t necessarily have to be the same people. When you take control of your estate planning, you are effectively helping to ease the burden that is already felt by your loved ones. Not only will you have already made the difficult decisions, but you can do so in a way that provides additional benefits for your heirs while securing your legacy.
  2. If you have an IRA, don’t forget to name your contingent beneficiary.  It’s common to have an IRA through your employer, but oftentimes naming the IRA’s contingent beneficiary is forgotten. Usually it’s your spouse, but if your spouse has already passed away, you need to make sure to name a new contingent beneficiary. This is just one simple way to plan ahead, but it’s frequently overlooked.
  3. Probate Court isn’t always a bad thing. You hear people say things like: “You want to avoid probate at all costs.” But that’s not necessarily the case. For example, imagine that you’ve made plans to have all your assets go directly to your three children – avoiding the probate process altogether. When it comes time to pay for your funeral, you would hope that your three children would split the cost three ways without much ado. But, without Probate Court to mediate the situation, one child could decide that they don’t want to pay their portion, which would leave the other two children with the bill. When you bring probate into the equation, you help ensure that there is enough money available to cover these necessary funeral expenses.

Find Time To Enjoy More

It doesn’t matter if you have a lot of assets to pass on or very few, estate planning is one of the best things you can do for yourself and for those you love. The sooner you start planning yours, the sooner you can get back to enjoying the moments that truly make life worth living.

By Dave McCarthy, CPA, CSEP (Medina office)

Dave McCarthy Discusses Estate Planning during Unsuitable on Rea RadioLearn more about the importance of estate planning. Listen to “The Grim Reaper Is Coming … And He Wants Your Money” podcast on Unsuitable on Rea Radio at or on iTunes or SoundCloud.

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Debt vs. Taxes: Should You Pay Off Your Loan

Friday, October 9th, 2015
Loan Repayment - Ohio CPA Firm

Without the tax deduction, you will pay a little more in income taxes but you will be left with more money in your bank account at the end of the day.

Have you ever heard someone say they couldn’t afford to pay off their loan because they would lose the interest deduction on their tax return?

Although it’s true that the taxpayer will be able to deduct their loan interest at tax time, there’s a lot more to consider – read on to learn more about the tax treatment of loans and interest to identify a repayment strategy that works best for you.

Read Also: Don’t Let Tax Incentives Determine How You Donate

It Is Worth It To Be In Debt?

Let’s assume that you are in the 25 percent tax bracket, which means that for every dollar you pay the bank in interest, the government will give you 25 cents back in tax savings. BUT – you have to remember that you are still out of pocket 75 cents of every dollar you pay the bank in interest. From an overall cash flow standpoint, that doesn’t really sound like a winning strategy to me.

Even though it would be nice to have a tax break to look forward to in the spring, you will ultimately end up paying more over the duration of your repayment period if you choose not to pay your loan off. That being said, if you have the funds available to pay off the principal loan balance you will save yourself the cost of the interest you are being charged by the bank.

Without the tax deduction, you will pay a little more in income taxes but you will be left with more money in your bank account at the end of the day.

Possible Reasons to Hold On To Your Loan

  • Investment Opportunities

Let’s say your loan balance is $50,000. If you have $50,000 of excess funds available to pay off your loan, you may also want to consider what your investment options are if you didn’t pay that loan off. Could you earn a rate of return greater than the interest rate you are paying on your loan? If so, then you may be better off keeping the loan and investing your excess funds.

  • Liquidity

Another consideration is the liquidity. You may have the funds to pay off the loan but you may want to keep a reserve of funds for an emergency or unknown need that may arise. Everyone has their own comfort level when it comes to maintaining an excess supply of cash reserves and your decision may vary whether you are holding on to a home mortgage loan or a business loan. As a business owner, for example, you might find it to be more beneficial to keep the borrowed money readily available to cover any fluctuations pertaining to your company’s equipment or inventory needs. Or you may want to keep a reserve of funds to get through your slow season.

Depending on where you are with your business or personal finances, you’ll want to consider various factors when deciding if you should pay off your mortgage or business loan. If you are only looking at the tax savings, then paying off the loan is likely your best option. However, it may also be important to consider other factors such as alternative investment options and liquidity. If you have questions about paying off your loan, email your Rea advisor.

By Mark Fearon, CPA (New Philadelphia office)

Are you looking for more tips and tax breaks to maintain your financial security? Check out these articles for more tips and advice.

Become A Brank Reconciliation Warrior

Does Your Vacation Home Provide Tax Relief?

The Birth Of The Taxpayer’s Estate

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Stop The Family Drama With A Buy-Sell Agreement

Thursday, October 8th, 2015
Take control of your future with a buy-sell agreement - Unsuitable on Rea Radio

You don’t know what the future holds, but if you don’t take steps to prepare for the unknown you are leaving your business and your family vulnerable. Click here to listen to How To Ruin Thanksgiving Dinner on Unsuitable on Rea Radio, a new finance and business management podcast.

It seems like when the holiday season comes around everybody does their best to put their best foot forward and to portray the image of “the flawless family.” From the turkey dinner on Thanksgiving, to the Christmas cards featuring happy, loving families – we do all we can just to make sure everything is … perfect.

Listen to the podcast: How To Ruin Thanksgiving Dinner

The holiday season is also notorious for other less-than-perfect qualities, such as family fights, holiday shopping stress and, ultimately, increased depression and anxiety.

Now imagine you are battling the normal holiday stressors while trying to manage a family business. And what if your business is in crisis mode and your life, the future of your family members and the sustainability of your company hangs in the balance?

When you own a business with family or friends you already run the risk of business matters spilling over into your personal affairs. But when you haven’t invested the time and resources needed to plan ahead, you are leaving your business and your family vulnerable. Take control of the future of your business and the general well-being of your family all year long by knowing the true value of your business and investing in a proper buy-sell agreement.

Click here to read the full article.

By Tim McDaniel, CPA/ABV, ASA, CBA (Dublin office)

Business Valuations - Ohio CPA firmLearn more about the importance of securing a custom business valuation and buy-sell agreement. Listen to the How To Ruin Thanksgiving Dinner” podcast on Unsuitable on Rea Radio at or on iTunes or SoundCloud.

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Why would I want to listen to a podcast from an accounting firm?

Wednesday, October 7th, 2015
Unsuitable Podcast - Ohio CPA Firm

Mark Van Benschoten (left) talks with Doug Feller, a principal and financial advisor with Investment Partners, talks about wealth enhancement and investment tactics for an upcoming episode of Unsuitable on Rea Radio, a new financial and business advisory podcast from Rea & Associates. Click here to learn more about Unsuitable on Rea Radio.

I know what you’re thinking – listening to a podcast from an accounting firm is probably about as entertaining and insightful as watching paint dry. But Unsuitable on Rea Radio isn’t your typical accounting podcast, and here’s why.

Real, Simple Solutions

Who doesn’t like a good story? What about one that leaves you with greater insight into the financial wellness of your own company? And if you had a better idea of how other successful entrepreneurs manage their wealth, wouldn’t you try to follow their lead?

The professionals at Rea have seen a lot over the last several decades and they are willing to open the curtain just enough to provide you with the information to forge your own success. And on Unsuitable, they do just that.

An Effective Kick In The Pants

Unsuitable offers a little something for everybody and I am confident that this is a show that will not only help provide you with more clarity, but will motivate you to take the next step as a professional and as a business leader.

Look at what has already been discussed in the first four episodes:

And this is just the beginning. Look for episodes highlighting investment strategies, Affordable Care Act compliance and retirement preparedness – just to name a few.

Accountants Like To Laugh Too

This may come as a surprise to many since those in the accounting profession tend to be thought of as dry, stuffy, number-crunching fanatics, but that’s just not true – well, most of the time. The Rea team consists of some pretty humorous, outgoing folks and I think that the diverse sense of humor of our team shines through. Mark Van Benschoten, the host of the show, helps a lot, of course. He does an excellent job addressing each guest and makes them feel comfortable … then the show gets really good.

Just The Right Length

Our firm has 11 offices throughout Ohio, which means I do a lot of driving. When I’m on the road I like to listen to podcasts – and there are a lot of them out there! What I really like about Unsuitable, is that it’s long enough to be really informative and wraps up nicely before it reaches the point where I am wishing it would end. In fact, when it does end I find myself wanting to start the next one. Mark and his guests get right to the point of the show, provide examples and offer hard-hitting advice in a concise, enjoyable format – all while having a great time and avoiding stuffy accounting jargon.

Go to now and start listening or subscribe to Unsuitable on Rea Radio on iTunes or SoundCloud. I also want to encourage you to use #ReaRadio to join the conversation on Twitter and Facebook.

By Lee Beall, CPA (Dublin office)

Click here and start listening to Unsuitable on Rea Radio now!


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Don’t Get Blown Away By A Cash Windfall

Monday, September 28th, 2015

4 Tips for Managing Sudden Wealth

Manage Sudden Wealth -  Ohio CPA Firm

Before you make a move with your money, take a little time to think about you want to do with your cash and consider getting some advice from a financial professional and review these four tips for managing sudden wealth.

Congratulations – you just won the lottery! Or, in a more realistic scenario, a significant amount of money has landed in your lap through an inheritance or the sale of property.

Now what?

As many who have been in your shoes will attest, it’s important to pause, take a step back, and evaluate your options before making any big financial decisions. Sure, that brand new sports car would look
great in your driveway, but will you regret spending the money down the road? Significant money creates many opportunities. Some? Wonderful. Others? Money pits.

Read Also: Considering Gifting Your Family Owned Business?

Before you make a move with your money, think it through and talk to a pro. The truth is, there’s no right answer, as no two financial situations are exactly alike. But these four steps will help you decide what’s best for you.

  1. SLOW DOWN. It’s easy to get caught up in the excitement of new wealth, and the tailspin that can ensue. But don’t allow yourself to lose your footing and don’t be tempted to make excuses for reckless spending.

    Avoid making any significant or impulsive purchases for at least a month or two. Take a step back from the moment and think long-term … what sort of financial goals do you have for the future? How do you really want to spend this money?

    Begin thinking about this and write down your thoughts. Writing down goals and thoughts is a proven method of helping you achieve your goals. It’s also helpful to have these things in writing when you meet with your advisors.

  2. FAIL FORWARD. Think about some of your past financial blunders. We’ve all made mistakes – but they’re only truly mistakes if you don’t learn something and prevent them from happening again. You know yourself better than anyone, and you owe yourself this honest examination. Use your missteps to your advantage.
  3. DO YOUR HOMEWORK. If your decisions affect others, talk with them before acting. If someone has an investment idea, consider whether it’s too good to be true.

    If you are approached to help a charitable cause, ask yourself if it’s something you’re passionate about. And make sure you have an understanding of the organization. You should also find out if they will publicize your contribution.

  4. CONSULT WITH A PRO. Navigating new wealth is complicated, and it’s imperative you find experts to help guide you through the process.

    Talk with a few people you trust and respect. If an advisor’s name is mentioned more than once, it’s probably someone you should talk to. If you already have an advisor, consider whether or not they are up to the task at hand.

    You’ll want to work with a CPA, attorney and investment advisor. Be prepared to invest some time meeting with each advisor in an effort to decide who to hire. Each one will play a different, but valuable role.

    Depending on your situation, you could lose a chunk of your newfound wealth to income taxes, so be sure to talk to a CPA with a specialty in income tax. You will want to know what you owe and when you owe it. More importantly, you’ll want to learn if you can avoid, reduce or defer any of the tax.

Finally, before selecting the advisors you want to work with be sure you understand all of the fees involved with their services up-front. Be prepared to get what you pay for.


Whatever the reason for your windfall, make sure you take the time to respect it – and your financial future. Email Rea & Associates to learn more about managing sudden wealth.

By Ryan Dumermuth, CPA, CFP (Mentor office)

Want to learn more about managing your sudden wealth? You may like these articles:

Can Your Charity Profit From Instant Bingo?
How Can I Make The Most Of My Retirement?
Estate And Gift Tax Exemptions: New Wealth Transfer Rules

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Like Losing Your Wallet – Only Worse

Friday, July 31st, 2015
Retirement Plan Returns- Ohio CPA Firm

Typically, owners of businesses and their spouses who fail to file their annual retirement plan returns are in full-scale crisis mode – and rightfully so, since missing this deadline results in a penalty that’s about the size of a small fortune.

For most of us, misplacing our keys, losing sight of our shoes and occasionally forgetting to pay the phone bill on time is not a catastrophic phenomenon. It happens; and most likely we will freak out for a minute, find what we were looking for and move on – only to repeat our dysfunctional routine countless times over the course of a lifetime. Forgetting to file your retirement plan returns on the other hand … well, let’s just say that’s typically not a stress-free event.

Read Also: Do You Know What Your Retirement Plan Is Costing You?

Typically, owners of businesses and their spouses who fail to file their annual retirement plan returns (Form 5500-EZ) are in full-scale crisis mode – and rightfully so, since missing this deadline results in a penalty that’s about the size of a small fortune. To be more precise, in years past, those who failed to meet their filing obligation could face a penalty totaling up to $15,000 per return. Fortunately, the IRS recently announced that instead of facing such an extreme late fee, eligible business owners can take advantage of a “low-cost penalty relief program.”

How Much Would You Pay?

The relief initiative, which started as a one-year pilot program in 2014, was tremendously successful, resulting in the collection of about 12,000 late returns. Because of this success, the program secured it’s permanency in May of this year. According to the news release, the program allows eligible business owners and their spouses to file late returns and only pay a $500 penalty for each return submitted with a maximum of $1,500 per plan. Because the IRS caps the maximum penalty at $1,500, applicants are encouraged to include multiple late returns in a single submission.


The IRS says that businesses with plans that cover the owner or the business’s partners (depending on how the business is set up) and their spouses are eligible to take advantage of this low-cost plan. Complete information about the program can be found by clicking here.

Learn More

Remember, your return must be filed annually no later than the end of the seventh month following the close of your plan year. So, for example, if your plan is governed by the calendar-year, as most are, your 2014 return was due today (Friday, July 31, 2015). Did you fail to file your small business’s annual retirement plan returns? Would you like to find out if you qualify for this program? Email a retirement plan expert at Rea & Associates and take control of your IRS debt now.

By Andrea McLane, QKA (Dublin office)

Want to read more about the importance of Retirement Plan Compliance?
Check out these articles:

401(k) Loans and Keeping Your Plan In Compliance
Retirement Roulette
The ‘Van Halen Philosophy’ of Retirement Plan Compliance

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A Fair Assessment?

Tuesday, July 21st, 2015
Back taxes - Ohio CPA Firm

When a taxpayer files a false or fraudulent return, the taxpayer waves their right to statute of limitations protection. And if a taxpayer fails to file their income tax return, the IRS is allowed to undertake collection proceedings at any time and without assessment.

Bob recently received a copy of his account transcripts from the IRS. Upon reviewing the paperwork, he noticed that the government agency made note of a “date of assessment,” which prompted him to wonder how the date of assessment was determined? Moreover, he wanted to know what role one’s date of assessment plays with regard to the time frame the government has to collect back taxes.

If you ever find yourself in a situation similar to Bob’s, with questions about your tax history, in addition to speaking with your tax advisor, you can request that a copy of your tax return transcript and tax account transcript be mailed to you. Fill out the online form here, but make sure you are making the request for the current tax year’s transcript or transcripts for three years prior.

If you are requesting transcripts for older tax years or you need a wage and income transcript or verification of non-filing letter, you’ll need to complete Form 4506-T and send it to the address listed on the form’s instructions. Due to a recent security breach, your transcripts will not be sent electronically.

How Far Back Can The IRS Go To Collect Back Taxes?

If the IRS is attempting to collect past due taxes, the agency will assign a date of assessment to your IRS account transcript.

Read Also: IRS Says You Owe More? Don’t Write That Check Yet!

Like many of the invoices you see every day, every item on your transcript will be assigned a code. Your date of assessment is no different. To identify the date of assessment on your account transcript for the tax year in question, look for Transaction Code “150.” Tip: If you are wondering what the other codes on your transcript mean, you can find a comprehensive list here.

As a general rule, the IRS must assess tax, or file suit against the taxpayer to collect the back taxes, within three years after the original tax return was filed. This three-year period of limitation on assessments also applies to penalties. In fact, this rule continues to apply regardless of whether the return was filed on time or not. In general, the statute of limitations will almost always begin the day after the taxpayer files their income tax return.

The Rules May Not Apply

It seems as though there are always exceptions to the rules we work so hard to uphold – taxes are not excluded from this trend. For instance, when a taxpayer files a false or fraudulent return, the taxpayer waves their right to statute of limitations protection. And if a taxpayer fails to file their income tax return, the IRS is allowed to undertake collection proceedings at any time and without assessment.

Parting Shots

While the statute of limitations for assessment is three years after your return has been filed, the IRS still has 10 years to actually collect the assessed tax. Below is an example of the assessment process in action:

  • April 15, 2015 – you filed your 2014 tax return with the IRS
  • March 31, 2018 – the IRS assesses additional taxes on your 2014 tax return
  • The IRS has until March 31, 2028, to collect the additional tax or file suit against you.

While this information may help to shine some light on IRS assessments and statute of limitations rules, every situation is unique and hinges on several specific variables. Your tax advisor can help you sort through codes and details to get you back on the right track. Email Rea & Associates to learn more.

By Christopher Axene, CPA (Dublin office)

Check out these articles to learn more about your responsibilities as a taxpayer:

How Far Back Can The IRS Go For Tax Auditing?

The Truth About Tax Extensions

If Something Happens To me, What Will Happen With My Financial Matters?

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