Archive for the ‘Tax’ Category

Ready, Set, Download: IRS2Go Mobile App 2014

Monday, October 20th, 2014

In June, the Internal Revenue Service (IRS) made the 2014 version of IRS2Go available to mobile users. This free app can help you stay on top of your federal income tax refund. You can also request your tax return or account transcript or receive tips and updates from the IRS via the app.

Benefits of IRS2GO App

Compatible with Apple and Android devices, the IRS2Go mobile app has been redesigned and includes several new and updated features, such as:

  • IRS2Go makes it easier for individuals to check their refunds at a time that’s convenient for them. To get there, just click on “Refund Status,” enter your Social Security Number (which is masked for security purposes), then select your filing status and the amount of your anticipated refund. The new “status tracker” allows users to identify where their return is in the tax return process. NOTE: Returns filed electronically can be viewed 24 hours after the return was received by the IRS. Paper returns take longer to process and can take up to four weeks before their status is available to view.
  • Another helpful feature is your ability to request your tax records or your account transcript. While, for security reasons, the records cannot be viewed immediately on your Smartphone or device, the request will be processed and your records will be delivered promptly to the address on record.
  • If you need help preparing your tax return, IRS2Go helps users find IRS Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs by simply entering a ZIP code and mileage range.
  • Users also have the opportunity to stay connected, view more content and interact directly with IRS on Twitter, YouTube, Facebook or by signing up for email updates.

To download the IRS2Go app on your Apple iPhone, iPad or iPod Touch device, visit the iTunes app store. To download IRS2Go on your Android devise, visit the Google Play store.

 
By Kelly Leslie, CPA (Cambridge office)

 

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To Shred Or Not To Shred: That Is The Question … Ask Your Financial Advisor

Monday, October 6th, 2014

Are you wondering what to do with all those tax documents and records you have piling up around your office or in your computer files? Are you thinking about wiping them from your company’s hard drive or sending them to the shredder? Not so fast. The IRS has several rules when it comes to how long your business should keep its records. Make sure you are up to date on the current records retention schedule before you permanently delete something important.

Generally speaking, records that support your income or deduction claims for tax return purposes should be kept until the period of limitations for a particular tax return expires. The “period of limitations” is defined as the period of time the IRS gives you to change information on your return, particularly when the information relates to a refund or credit you have claimed. Also, just because you aren’t planning to make any changes to your tax return doesn’t mean the IRS won’t. Therefore it’s in your best interest to keep your documents until the IRS can no longer assess additional taxes or request additional information from you.

Below is a quick reference guide pertaining to some common records your office has been collecting over the years and how long you should keep them.

Records You Should Keep Permanently:

  • Copyright registration
  • Correspondence (legal and important matters)
  • Deeds, mortgages, bills of sale
  • Depreciation schedules
  • Financial statements (end-of-year)
  • General and private ledgers (and end-of-year trial balances)
  • Insurance records, current accident reports, claims, policies, etc.
  • Minute books for director and stockholder (including bylaws and charter)
  • Property appraisals by outside appraisers
  • Retirement and pension records
  • Tax returns and worksheets, revenue agent’s reports and other documents relating to determination of income tax, sales tax, or payroll tax liability

Records That Should Be Retained For At Least Seven Years:

  • Accident reports and claims (settled cases)
  • Accounts payable/receivable ledgers and schedules
  • Expense analyses and expense distribution schedules
  • Garnishments
  • Inventories of products, materials and supplies
  • Plant cost ledgers
  • Telephone logs/message books
  • Time books/cards
  • Withholding tax statements
  • Employee payroll records (W-2, W-4, annual earnings, etc.)

Records That Can Be Destroyed After Three Years:

  • Bank deposit slips
  • Employment records
  • General correspondence
  • Internal work orders
  • Production and sales reports
  • Sales commission reports

If the records you are looking for aren’t listed above, you can find additional record retention recommendations in our current record retention schedule.

IMPORTANT: The actual amount of time you are required to keep a specific document may be longer depending on your business or what is contained in the document. If you have questions about specific documents or would like some advice on your current record retention practices, email Rea & Associates.

Author: Joe Popp, JD, LLM (Dublin office)

 

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

Tuesday, September 23rd, 2014

Tax season can be rough for any business. Just about the time you allow yourself to move on to something else and breathe a sigh of relief … it happens. You sift through your mail and find yourself staring face-to-face with a letter from the Internal Revenue Service (IRS). In a matter of seconds your adrenaline levels are through the roof. You know that what’s inside the envelope isn’t a simple thank-you note for filing your taxes on time. You carefully tear it open.

Nobody likes to hear that they have to pay more to the IRS than they originally thought. But, before you jump to conclusions and quickly write out a check for the amount the letter says you owe:

  • Stop
  • Take a deep breath
  • Call your financial advisor

4 Tips For Resolving Your Tax Dispute

Believe it or not, the IRS does make mistakes. Agents can accidentally input incorrect information, computers can misread data and tax codes can be inadvertently overlooked or misinterpreted. It happens. If you believe that the IRS was wrong in a decision it made about your business’s tax returns, follow these four steps to reach a resolution.

  1. Follow Instructions. Sometimes the easiest way to resolve the issue is to follow the instructions. Sounds easy enough, but not everybody gets this part right. If the IRS sent you a notice, look for the section that explains what to do if you disagree with their decision and follow directions. Additionally, be sure to attach any supporting documentation and mail it back to the address given by the deadline requested. After the IRS has made its decision, you will be notified via U.S. Mail. When in doubt, opt to send inquiries to the IRS via certified mail and request a receipt.
  2. Make The Call. If your initial challenge was rejected, your next step is to follow up with a phone call. The rejection notice you received should have included another important piece of information: the contact name and number of the IRS employee who rejected your challenge. When you call, in a polite and professional manner, ask to speak to the employee’s manager. Even though you are passing over the employee on the chain of command, take care not to say anything about why you are asking to speak with their supervisor. The last thing you need is to create animosity. When you finally have the opportunity to speak with a supervisor, your case should be laid out in much the same way as your original challenge. You should be clear and concise in your explanation while taking care to address any concerns that were noted by the original employee in their rejection letter. If your letter didn’t include an employee’s name and phone number, send another certified letter to a general supervisor with the agency and request that they reconsider your case.
  3. Appealing To A Higher Office. If you still haven’t convinced the IRS to change its mind, don’t give up – even if you have already mailed several letters and racked up a lot of call time with the agency. Further up the chain of command is the Office of Appeals, an independent office within the IRS. This is just one more step you have to take on your journey to find an IRS employee who agrees with your. To get your case to the Office of Appeals, follow the instructions that were found in the earlier notices. If you are unable to locate these instructions, you can find them on the IRS website.
  4. Welcome to U.S. Tax Court. Sometimes a resolution can’t be achieved in the first three steps of the appeal process. If you find yourself in this situation your final option is to take the case to the U.S. Tax Court. At this point you may be discouraged and may even question whether you should continue on with the fight, but if you still believe that the IRS is wrong it is probably in your best interest to see it out to the end.

If your dispute is less than $50,000 you will have the option to represent yourself. Similar to how a small-claims court operates, there is no jury and the judge will not hold your inexperience against you. Once court is in session you will state your case again, provide evidence and answer any questions a judge may ask about the claim. Be advised, however, that once a decision is made at this phase it is final and cannot be appealed.

Sometimes, even though you have decided that you want to move forward, an IRS attorney may offer to settle out of court for a figure less than what the IRS says you owe. If this happens, you need to decide whether you will accept the settlement or if you will move forward with presenting your case to the judge. The choice is yours.

If you find yourself at odds with the IRS over a tax issue and are not sure how to proceed, email Rea & Associates for more information.

Author: Clayton W. Rose, III, CPA

 

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Getting Back To Business: How Outsourcing May Provide Relief To Your Business

Friday, September 19th, 2014

As a business owner, you have a lot to think about. Your investors, managers, employees and clients depend on you to deliver top notch products and services while keeping overhead costs low in favor of increased revenue. In fact, your business’s success can probably be attributed to your leadership skills and your knack for being able to see the big picture while bringing together all the other elements to reach a profitable conclusion. So why are you still in charge of handling your business’s accounting and bookkeeping needs when you could be so much more effective guiding your business toward further growth? Outsourcing may provide you and your business with the relief you need to get back on track.

Maybe you think your business is just too small to hire an accountant or bookkeeper or that you’re saving money by doing these jobs yourself. Perhaps you just aren’t aware of what options are available to you and your business. When you consider that the most effective solution is the one that effectively addresses your unique needs and budget, it should be no surprise that an outside accounting firm may be the answer you’ve been looking for.

Know Your Strengths And Weaknesses

The cost of hiring a full-time accountant or bookkeeper is a huge concern for many small business owners. To avoid a large expense, many owners or managers will purchase a copy of QuickBooks and try to work through their accounts themselves. Unfortunately, even if they have basic accounting skills, they may not have the patience, expertise and experience to handle the work. If done incorrectly, accounting flaws can be very costly, and could result in catastrophic consequences for your business.

Proper accounting and bookkeeping is essential to the short- and long-term success of your business. Outsourcing your accounting and bookkeeping work can help ensure accuracy and will free you up to focus on future growth, higher efficiency and increased sales. Below are a few examples of how outsourcing can solve your small business challenges.

***

Issue: Your business is relatively small (with a similar budget), and you can’t justify bringing on a full-time accountant.

Solution: Hiring an in-house accountant could turn out to be a hefty expense, especially if the quantity of work is relatively minimal throughout most of the year. Not only do you have to pay the new employee a living wage and benefits, you must be prepared to invest in the software and/or training a new accountant needs. By filtering work to an outsourced controller, you will have access to affordable, ongoing or as needed reporting. As a result, your management team will become more flexible and will have more data – and thus more authority – when making decisions that directly affect the business.

***

Issue: You’ve already invested in QuickBooks to manage your business’s finances. It seems to be working well so far, but you haven’t been formally trained on the software.

Solution: While QuickBooks is easy to use, sufficient supervision by someone who is proficient with accounting skills is essential. Without a QuickBooks expert on hand, you will have no clue as to what is going on “behind the numbers.” A trained and certified accountant can tap into the various capabilities of the software, which include the reconciliation process, accounts receivable tracking and accounts payable, etc. When your bottom line is at stake, you owe it to yourself and to your business to minimize problems that may occur. You can avoid any hiccups with the help of a CPA.

***

Issue: You don’t need all the capabilities an accounting firm offers and you don’t want to pay for a service you may never use.

Solution: Your CPA will work with you to make sure all of your accounting needs are met and that the services that are provided only address the needs of your business. Services that can be outsourced include full accounting services, oversight work and everything in between. You also have the option of expanding services if and when you need them. Outsourcing options available to you include:

  • Working with an accountant several times throughout the year to clean up your accounting and ensure a smoother year-end tax process.
  • Tasking an accountant with filing certain commercial activities and taxes on time to insure accuracy and to avoid overpaying.
  • Hiring an accountant to provide periodic financial statements to banks.
  • Utilizing an accountant as an extra set of eyes on all manner of documents. This provides you with a great system of control when ensuring the accuracy of your books.

Speak to a Rea & Associates CPA to find out how an accounting firm can address your unique accounting and bookkeeping challenges while allowing you to make the best use of your time. Learn more about the services our business accounting professionals offers.

Article: Clayton W. Rose III, CPA (Dublin office)

 

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When Scammers Demand That You Pay Up, IRS Says You Should Hang Up

Monday, August 18th, 2014

More than 1,000 American taxpayers have collectively lost about $5 million as a result of a recent phone scam that has been reported to be active in virtually every corner of the nation. The Internal Revenue Service (IRS) reminds everybody to be vigilant, to never give personal financial information to anybody over the phone, and to report instances of phone scams to the IRS and/or to the Treasury Inspector General for Tax Administration (TIGTA).

According to IRS Commissioner John Koskinen, “Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail. A big red flag for these scams are angry, threatening calls from people who say they are from the IRS and urging immediate payment. This is not how we operate. People should hang up immediately and contact TIGTA or the IRS.”

To date, more than 90,000 complaints regarding the scam have been made to the IRS and TIGTA.

Signs of An IRS Phone Scam

A media release, sent Aug. 13, reports that scammers will use fake names and IRS badge numbers, are able to recite the last four digits of a victim’s social security number, and spoof the IRS’ toll-free number on caller IDs so that the calls appear legitimate. Victims reported that they were threatened with jail time or driver’s license revocation if they refused to comply with demands. After hanging up, scammers call back claiming to be local law enforcement or a DMV representative. The second phone call is supposed to reinforce their original claim and demands.

Don’t Be An IRS Phone Scam Victim

  • If you think you might owe taxes or that there may be an issue with your taxes, call the IRS directly at (800) 829-1040. An authorized IRS representative can help you determine if you have a payment due.
  • If you get a suspicious call from someone claiming to be from the IRS and you know that you have no IRS issues, report the incident to TIGTA at (800) 366-4484. You should also contact the Federal Trade Commission and use its “FTC Complaint Assistant” at FTC.gov. Be sure to add “IRS Telephone Scam” to the comments of your complaint.
  • Don’t let scammers catch you off your guard with questions about your tax history. Call your CPA and be confident about whether you owe money to the IRS or not. When it comes to your financial security, take a proactive approach.

Email Rea & Associates if you’re ever unsure about anything you received from the IRS, whether it is a letter, a phone call or an email. We can help you determine if the inquiry is legitimate.

By Maribeth Wright, CPA (Cambridge office)

 

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