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A Little Pre-Tax Season Tax Planning Can Go a Long Way

A Little Pre-Tax Season Tax Planning Can Go a Long Way

Some may tell you that it’s too late to do some Tax Planning; that you’ve done all you can do. That it’s time to just hunker down and wait for tax season to start, hoping it will be over before you know it. In truth, it may be too late to drastically change the course of your tax season. However, some relatively easy workflow strategies can help you realize timesaving efficiencies and help you better weather the storm.

By polling firms formally and informally, Tax Preparation Miami uncovered five tried-and-true strategies for a smoother busy season, Tax Planning. Not surprisingly, most agree that a little pre-season Tax Planning and preparation can go a long way.

Tax Return Preparation easier with Tax Planning

1. Communication

This is critical. It won’t eliminate unexpected kinks in your busy season plan, but it will help to minimize them. Your Tax Preparation Miami firm should have a clear communication strategy for clients, staff and any third-party resources you plan to utilize during busy season. Don’t assume that everyone is already on the same page.

Depending on the size of your Income Tax practice and your relationship with individual clients, communication may be in person or in an engagement letter. Key elements should include the following:

Clearly state when, how and where to submit tax information.

  • Give the deadline for tax data, making it clear that failure to meet that deadline results in an automatic extension
  • Provide disclosure and consent forms.
  • Use this as an opportunity to manage expectations, emphasizing constraints on your time.
  • If you have people going into the field, arm them with the list of information needed for tax season so they can address it in person with the client. Make it part of your year-end planning to tell your client when their work is scheduled and get their buy-in. This gives them an opportunity to alert you to scheduling conflicts such as vacations, board meetings, etc.

It’s important to clearly articulate your expectations for your staff – hours, weekend work, opportunity to work remotely, contingency plans in the event of an unexpected absence due to illness, weather, or personal matters (if this varies from your normal HR policy).

Additionally, if you’re using temporary or seasonal workers, or outsourcing, now is the time to inform that resource of what to expect in terms of a time commitment in order to avoid misunderstandings or over-commitments later.

Finally, set a staff schedule for when you will meet during busy season. Allow some flexibility, but lock in key dates for things like determining when to extend clients to avoid wasting time trying to schedule management discussions on the fly. If you’re planning to meet once a week to review workloads and schedules, do it the same day and time every week and set a standing, manageable agenda that will allow participants to get what they need quickly to balance work and address potential resource issues.

2. Capacity Tax Planning

Two important themes to Tax Planning pre-season preparation: Use what you learned last year as a guide, and do as much as possible before the season really gets going. For example, you might want to run last year’s extension report and prepare these same extensions in early January.

Look at how you handled the larger, more complex client returns last year to see exactly when the return was prepared and reviewed, and build it into your scheduling for this year. Research major tax law changes in advance, and add that intelligence into the appropriate client tasks within your workflow software. For example, you might do a data scan to identify all the clients that will be impacted by the new tax legislation this year, then flag them and add instructions to those tasks universally so the preparer and reviewer have the information at their fingertips.

Tax Planning should coordinate scheduling and client responsibility early. This tip goes back to communicating expectations and creating a plan of accountability. Utilize software tools like workflow and scheduling to enforce your plan. Mail your completed organizers in early January, and utilize available technology resources for your client data (i.e., Goldman Sachs provides online access to clients’ 1099s, etc.).

3. Prepare for Problems

Let’s face it – there will be glitches, so it’s best to expect them and prepare for how you will handle them when they arise. Create a schedule that carves out time to plan for and address potential workload and bottleneck issues. Use real-time scheduling and workload management tools to get an up-to-the-minute view of all work in progress by person and status to see who’s buried in preparation or review, who’s overbooked and who’s under-booked so you can make those on-the-fly capacity planning decisions.

For example, one firm has a weekly meeting between the scheduler, the audit team leader and the tax team leader during which they review issues, identify chunks of time and conflicts, discuss new unexpected business, and locate additional resources. This allows them to gain a seven-week outlook and move work dynamically within the workflow system. Part of the purpose of this meeting is pre-emptive problem solving. It’s possible that you can schedule tax season well in advance, but there will always be issues that come up.

Tax Planning relies on its workflow software to see clients with 3/15 and 4/15 filing deadlines to quickly view and proactively address any missing information or other issues holding up the client return. Armed with that view, this firm can proactively work with clients and staff to address the bottlenecks.

Of course, having a real-time view of the work also empowers accounts receivable to stay on top of billing for all the returns that went out that week.

4. Digital Work Environment

The specific software application’s your firm employs varies according to the size of your firm, the Tax Planning services you offer and perhaps even your culture. I think we can all agree that, in addition to some software basics (MS Office, Adobe), the following tools enable you to work digitally: dual monitors, scanners, workflow system, electronic file storage (DMS or shared network filing tree) and a portal.

Some of these you can still put in place before the upcoming busy season. You don’t have to make a career out of picking a scanner; just get started. Use the resources available to help you make a good selection quickly: consultants, technology-focused publications, networks and associations, peers, AICPA and state society resources, and websites like TotallyPaperless.com.

Now is the time to make sure that your staff knows how to properly use the tools at their disposal. An Adobe refresher and a plug-in toolbar can empower partners and managers to review online.

5. Process Improvement

Adopting paperless technologies and understanding workflow is at the heart of process improvement to attain greater efficiency throughout your practice. In an ideal scenario, you would have time to create a committee, document current processes, identify best practices, optimize for technologies used, map your new workflow, standardize and train across the firm, and automate workflow for a digital environment.

This late in the game, you may have to settle for focusing on your 1040 process or whatever your firm does most and, if time allows, move onto smaller processes. The key here is to question every step so you’re not just doing what you did last year. Your processes should evolve over time. I know one firm that created teams of employees tasked with flow-charting existing processes and recommending improvements. Involving staff members gives you greater insight and gives them ownership of new processes.

Now is not the time for fundamental changes (you’ll have to make that a priority after busy season), but you can address simple modifications that allow you to eliminate redundant loops, valueless steps, and the ever-wasteful search for information. Tightening your process so that you save even 10 to 20 minutes per return (a very conservative goal) can have a real impact on your season if you’re preparing hundreds or even thousands of 1040s.

Although preparing for the coming season in January is not ideal, a little preparation and planning can help your season run a lot smoother. These steps can serve as the foundation from which you build for next season. Do a post-season review to see what worked well, what didn’t, and what can be improved so that you can build some of those bigger changes into your strategy.

Reviewing and refining your Tax Planning strategy in May allows you to take lessons from the just finished season while they’re still fresh. Then, you can implement process improvements and new technologies during the more relaxed summer months and use the fall filing deadlines to test them in a live situation that’s not quite as stressful as the real deal.

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Tax

Tax Accountant in Miami Exempt from IRS New Continuing Education Requirements

Tax Accountant in Miami Exempt from IRS New Continuing Education Requirements

The Internal Revenue Service today reminded certain NON Tax Accountant in Miami that they must complete 15 hours of continuing education (CE) annually beginning in 2012 and the programs must be taken from IRS-approved providers. Tax Accountant in Miami CPA’s are exempt, other preparers can now find a list of IRS-approved providers on the agency’s web site.

The new CE requirement is part of an IRS return preparer oversight effort and applies to the same individuals who are required to pass a new Registered Tax Return Preparer competency test.

Tax Accountant Miami

Certified public accountants, Tax Accountant in Miami, attorneys and enrolled agents are exempt from this 15-hour CE requirement and test requirement because they already meet separate requirements. Non-signing Tax Accountant in Miami supervised by CPAs, Tax Accountant in Miami, attorneys or enrolled agents in law, accounting and recognized Tax Accountant in Miami firms (see Notice 2011-6) also are exempt from the continuing education and test requirements, as are Tax Accountant in Miami who do not prepare any Form 1040 series returns.

The 15 hours of continuing education must include 10 hours of federal tax law, three hours of federal tax law updates and two hours of ethics each calendar year. Tax Accountants Miami have already been issued a PTIN, other preparers must provide their Preparer Tax Identification Numbers to the CE providers so their continuing education can be properly reported to the IRS.

Completion of the CE requirement for these preparers is a condition for the annual renewal of the PTIN, which is required to prepare federal tax returns. The requirement is prorated for preparers who obtain a PTIN during the year.

All individuals with an IRS continuing education requirement, including enrolled agents and enrolled retirement plan agents, can access a listing of IRS Approved Providers at www.IRS.gov/taxpros/ce. The list is updated regularly. For CPA’s or Tax Accountant in Miami you can visit http://www.myfloridalicense.com/dbpr/cpa/.

Tax Accountant in Miami IRS Approved Providers

To date, 163 providers have applied and been approved through the new provider application process launched in December 2011 (see IR-2011-115). Providers must be one of the following:

•             An accredited educational institution,

•             Recognized for continuing education purposes by the licensing body of any state or U.S. territory,

•             Approved by an IRS Accrediting Organization [at this time, the National Association of State Boards of Accountancy (NASBA) is the only IRS Accrediting Organization] as a provider of CE to registered tax return preparers, enrolled agents and enrolled retirement plan agents, or

•             Any other professional organization, society or business recognized by the IRS as a provider of CE to registered Tax Accountant in Miami, enrolled agents and enrolled retirement plan agents.

Accredited educational institutions must now register for their programs to qualify for IRS CE credit. Previously, enrolled agents and enrolled retirement plan agents could obtain IRS CE credit for completing qualified continuing education at an accredited educational institution even if the educational institution did not register with the IRS.

Instructions for individuals and organizations interested in becoming an IRS approved CE provider or IRS Accrediting Organization are available on the IRS Continuing Education Providers page.

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Tax

1040 Tax Preparation How To Calculate and Make Estimated Tax Payments

1040 Tax Preparation How To Calculate and Make Estimated Tax Payments

As a 1040 Tax Preparation Tax Return Preparation CPA Firms will tell new business owners, understanding your tax obligations is critical and one of the first requirements you’ll need to understand are estimated tax payments prior to your 1040 tax preparation.

1040 tax preparation

What are estimated taxes? Who must pay them and how? Below are some facts from Tax Services Miami Guide to help new small business owners understand their estimated tax obligations.

What Are Estimated Taxes?

1040 Tax Preparation CPA Firms remind you that the IRS and your state’s treasury department require that individuals and businesses pay taxes almost as quickly as they earn income. If taxes aren’t withheld from wages or other payments, then you will likely need to pay estimated tax payments each quarter prior to your 1040 tax preparation.

Tax Services Miami would like you to think of estimated taxes as a “pay-as-you-go” tax. Four times a year (quarterly), you are required to send Uncle Sam enough of your revenues to cover your income tax and your self-employment tax (Social Security and Medicare) obligations prior to Tax Return Preparation time.

If you don’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax when you get to your 1040 tax preparation. However, Tax Services Miami knows that calculating earnings isn’t easy, so it offers a safe harbor rule – if you pay at least as much as your previous year’s liability or pay within 90 percent of your actual liability, there’s no penalty for underpayment.

1040 Tax Preparation Tax Return Preparation Who Pays Estimated Taxes?

If you are self-employed and expect to owe $1,000 or more when you do your 1040 Tax Preparation, then you must pay estimated taxes on income.  If it’s not through withholding, then it has to be done by quarterly estimated taxes. If your business is structured as a corporation, you’ll need to pay estimated taxes if you expect to owe $500 when you file.

How Much Should You Pay in Estimated Taxes?

1040 tax preparation and calculating what you owe each quarter requires figuring out your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year. Each business situation is different, especially if you are a new business owner, so it’s worth spending some time with a Tax Services Miami tax advisor to understand the best calculation method for your situation.

You have a number of options when it comes to calculating what you owe each quarter:

•Use Form 1040-ES – You can calculate your quarterly estimated tax payment using Form 1040-ES (the same form used to pay estimated taxes), which includes a worksheet that helps you estimate how much you owe for the current year. Corporations should use Form 1120-W to calculate estimated taxes.

•Refer to Last Year’s Return – If you have been in business for a while, you can refer to your previous year’s federal tax return. Include all the income and deductions you expect to take on your current year’s tax return and refer to the total tax you paid so that your estimated tax payments are in the same range as last year’s taxes (100-110 percent is the range to shoot for to avoid underpayment problems).

•Make a Quarterly Calculation – If you are a freelancer or independent contractor and face fluctuating or cyclical income, you might prefer to calculate your estimated taxes on a quarterly basis.

Tax Return Preparation CPA Firms offers more advice in its Estimated Taxes Guide on how to calculate your payment and adjust estimates if you think you are paying too much – or too little – as the year progresses.

When Are Payments Due?

For estimated tax purposes, the year is divided into four payment periods. Payments for each year are due on the 15th day of April, June, September and the following January. You should try to pay at least the minimum owed by the due date (with the remainder paid on April 15), or risk incurring penalties from the IRS or your state.

How To Pay Estimated Taxes

Paying your estimated taxes is an easy process. If you are filing as a self-employed individual, use Form 1040-ES, which includes quarterly payment vouchers to submit with your payment. Corporations can deposit the payments by using the Electronic Federal Tax Payment System for deposit coupons (Forms 8109). Once you are in the system, the IRS will send you payment vouchers at the end of each tax year so you won’t have to worry about downloading the latest forms.

Paying Estimate Taxes to Your State?

You need to pay your estimated state income taxes at the same time you pay your federal taxes. Find links to your state’s tax office for the appropriate forms here.

Talk to a 1040 Tax Preparation Specialist

Spend an hour with a Tax Return Preparation CPA Firms to help you understand what the best calculation methods are, how to appropriately track and deduct expenses, and how to maintain good records. Many will provide this initial consultation for free simply because they hope you will return and use them come filing season.

 

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Tax

Income Tax Preparers in Miami Want Territorial System for Taxing Foreign Income

Income Tax Preparers in Miami Want Territorial System for Taxing Foreign Income

Nearly half of Income Tax Preparation in Miami CPA’s favor changing how corporate income earned outside the United States is taxed, according to a Income Tax Preparers in Miami VieraCPA, although many don’t expect much progress on the issue of corporate tax reform before the 2012 elections.

Income Tax Preparers in Miami Firm Gustavo A. Viera CPA surveyed clients and business leaders followed the release of a recent congressional proposal that would overhaul international tax laws by creating a territorial system (see Congressional Republicans Propose International Tax Reforms). Income Tax Preparation in Miami CPA Viera found that 49 percent of the respondents said they favor a territorial system of international taxation, under which almost all foreign income of U.S. multinational companies would be taxed where it is earned and could be brought back to the United States without incurring additional tax.

Income Tax Preparers in Miami reiterate what many multinational companies have been advocating for some time—a move toward a system of international taxation that matches the approach of most other countries and ends the residual U.S. taxation of active business income earned outside the United States.

Income Tax Preparers in Miami

Income Tax Preparers in Miami respondents expressed overall skepticism about quick action on the issue of taxing business income earned outside the United States and on corporate tax reform in general.

According to Income Tax Preparers in Miami clients, most respondents (61 percent) predicted it would take two years before the United States would adopt a territorial system, and only 27 percent believe there would be corporate tax reform in the next 12 months.

In addition to the 49 percent of Income Tax Preparers in Miami CPA’s who said they favor a territorial system, 16 percent of the respondents preferred the U.S.’s current worldwide tax system, which requires U.S. multinationals to pay taxes on profits on active business income earned outside the country, while receiving tax credits for payments to other governments and deferring residual U.S. tax until they bring the money home. Eight percent said they favored a worldwide system that made corporate overseas profits immediately taxable, and 27 percent said they weren’t sure what system they preferred.

The territorial taxation proposal, released Oct. 26 as part of a comprehensive discussion draft by House Ways and Means Committee Chairman David Camp, R-Mich., assumes the top corporate rate will be lowered to 25 percent from its rate of current 35 percent and would be revenue neutral. The proposal is part of a broad plan that Camp is seeking to rewrite individual and corporate U.S. tax laws.

“Chairman Camp’s proposal is a bold and comprehensive discussion draft that could drastically alter the playing field,” Viera said. “Companies need to pay close attention to this important issue and how the end result could affect them.”

While nearly half the Income Tax Preparers in Miami Firms favor a territorial system, only 39 percent said they favor exempting overseas corporate income permanently from U.S. taxation. Thirty-two percent opposed such an exemption and 29 percent were unsure.

Income Tax Preparers in Miami state this finding highlights the concerns of multinationals versus domestic companies on the topic and shows how difficult it will be to arrive at an acceptable solution to this and other issues related to business tax reform.

Forty-eight percent of the survey respondents believe a change in the territorial taxation system would open the door for a cut in the corporate tax rate. Only 15 percent of those surveyed said they thought the United States would adopt a territorial system without broad corporate tax reform. A vast majority (64 percent), though, felt broad corporate tax reform was necessary for such a move.

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Miami Accounting CPA List of 9 Top Tax Scams

Miami Accounting CPA issues a list of 9 Top Tax Scams on how to reduce tax liability 

Miami Accounting firms and taxpayers are to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to fraud.

The list of 9 Top Tax Scams, compiled by Miami Accounting Tax Services each year, lists a variety of common scams taxpayers can encounter on how to reduce tax liability and other matters. But many of these schemes peak during Miami Accounting filing season as people are in the process of Income Tax Preparation in Miami.

“Miami Accounting Taxpayers should be careful and avoid falling into a trap with the Miami Accounting CPA today issued a list of 9 Top Tax Scam,” said Miami Accounting VieraCPA. “Scam artists (including some Miami Accounting Tax Preparers) will tempt people in-person, on-line and by e-mail with misleading promises about how to reduce tax liability and false refunds. Don’t be fooled by these scams.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shutdown scams and prosecute the criminals behind them.
Hiding Income Offshore

Miami Accounting CPA’s are very cautious of individuals who have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and Income Tax Preparation in Miami Accounting Firms suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution, according to Miami Accounting CPA Gustavo A Viera.

Since 2009, 30,000 individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to bring their money back into the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore will become increasingly more difficult.

At the beginning of this year, the Miami Accounting Firms warned clients IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion.  This program will be open for an indefinite period until otherwise announced.

The IRS has collected $3.4 billion so far from people who participated in the 2009 offshore program, reflecting closures of about 95 percent of the cases from the 2009 program. On top of that, the IRS has collected an additional $1 billion from upfront payments required under the 2011 program.  That number will grow as the IRS processes the 2011 cases.

“Free Money” from the IRS & Tax Scams Involving Social Security

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can do their Income Tax Preparation in Miami with little or no documentation, have been appearing in community churches around the country. These schemes are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.

Miami Accounting Tax Service Scammers prey on low income individuals and the elderly. They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. The IRS warns all taxpayers to remain vigilant.

There are a number of tax scams involving Social Security. For example, Miami Accounting Tax Service scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but uses inflated information to complete the return.

Beware. Intentional mistakes of this kind can result in a $5,000 penalty.

False/Inflated Income and Expenses

Including income that was never earned, either as wages or as self-employment income in order to maximize refundable credits, is another popular scam. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions when doing your Income Tax Preparation in Miami.  This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution.

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit when their occupations or income levels make the claims unreasonable. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

False Form 1099 Refund Claims

In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS.

Don’t fall prey to Miami Accounting Services who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. Miami Accounting CPA’s have a list of frivolous tax arguments that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

Falsely Claiming Zero Wages

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Abuse of Charitable Organizations and Deductions

IRS examiners continue to uncover the intentional abuse of 501(c)(3) organizations, including arrangements that improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or the income from donated property. The IRS is investigating schemes that involve the donation of non-cash assets –– including situations in which several organizations claim the full value of the same non-cash contribution. Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and set new standards for qualified appraisals.

Disguised Corporate Ownership

Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.

These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering, and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.

Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.

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Tax

Tax Services TaxMasters Bankruptcy Shows Why Not To Get Help From TV Pitchmen if You Owe The IRS

Tax Services TaxMasters Bankruptcy Shows Why Not To Get Help From TV Pitchmen if You Owe The IRS

Tax Services Miami CPA Firm Gustavo A Viera says if you’ve got problems paying the Internal Revenue Service, don’t look for help from the ads on late night cable television from TV Pitchmen promising to reduce tax liabilityReducing tax liability, that’s one of the lessons from an SEC filing Friday by TaxMasters Inc., disclosing the publicly-traded company will file for voluntary bankruptcy.  As ABC reported last April, even after Tax Services Houston-based TaxMasters had been accused of deceptive business practices by the attorneys general of Texas and Minnesota, it continued to buy millions of advertising on CNN, FoxNews and other cable channels Pitchmen promising to reduce tax liability for pennies on the dollar. The ads featured Patrick Cox, the red-bearded TaxMasters CEO, assuring potential clients that his staff of tax pros, including former IRS agents, had helped “many good people just like you.”

According to TaxMaster’s three page filing in the Southern Texas bankruptcy court, it has less than $5,000 in assets and up to 5,000 creditors.

Tax Services Miami VieraCPA notes this is just the latest bankruptcy by a “tax resolution” Tax Services that advertised heavily—and made allegedly exaggerated claims–on cable TV.  JK Harris & Co., a South Carolina-based firm which once operated hundreds of locations in dozens of states, filed for bankruptcy last October after being sued by both states and unhappy customers. Last December, it ceased operations and went into liquidation, leaving 5,400 active clients in the lurch.   Harris’ former clients, including those who won legal judgments against it, aren’t likely to see any money from the liquidation. (Another firm, Resolute Tax Services, has purchased access to JK Harris’ customer list; according to the privacy terms set by the bankruptcy court, customers must contact Resolute and agree to the transfer of their files, at which point Resolute says it will offer them a “credit of up to 50%” of the fees they paid JK Harris.)

In 2010, California Attorney General (now Governor) Jerry Brown  sued “Tax Lady” Roni Deutch, who also had a big presence on TV, claiming she “engaged in a scheme to swindle taxpayers” by overstating the ability of her tax services firm to gain concessions from the IRS. Deutch called the charges politically motivated. But last year, she  filed for bankruptcy and  surrendered her law license.

If you’ve got problems with the IRS, here are a few pointers—that you won’t get from a Tax Services cable pitchman.

• Tax Services CPA Firm Gustavo A Viera says some people do win “offer in compromise” deals from the IRS allowing them to settle what they owe for “pennies on the dollar”—but only those who genuinely can’t pay, when all their assets and future earnings are taken into account. In fiscal 2010, the IRS received 57,000 applications for OICs and granted only 14,000 of them, according to its annual data book.

• CPA VieraCPA notes that if you can pay what you owe the IRS over time, you may be able to work out a deal without paying big bucks to a tax pro. Earlier this month, as part of a bid to help strapped taxpayers, the IRS announced that taxpayers owing up to $50,000 in back taxes, interest and penalties (up from $25,000) can enter into a streamlined installment agreement to pay over up to 72 months–without supplying the IRS with a detailed financial statement. Be careful, however, not to sign an installment agreement unless you’re reasonably certain you can live up to.

•If you believe you are being treated unfairly by the IRS and can’t get anyone to listen to you, there is an independent office within the IRS —known as the Taxpayer Advocate Service—that may be able to intervene or call Tax Services CPA Firm Gustavo A Viera

•If you need professional help, choose carefully.  If you’re in deep trouble with the IRS, you’ll generally want to hire a lawyer, a CPA or an enrolled agent, who is licensed to practice before the IRS.

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Fisco de EU extendió el plazo para la declaración anual

Fisco de EU extendió el plazo para la declaración anual

Tendrán hasta el 30 de marzo para realizarlaContador Publico en Miami Gustavo A Viera CPA comenta que el Servicio de Impuestos Internos (IRS por sus siglas en inglés) de Estados Unidos extendió un mes el plazo para que las organizaciones exentas de impuestos presenten su declaración anual.De acuerdo con el contaodr Viera, las organizaciones que entran en este concepto son las que tienen que presentar esta declaración entre enero y febrero del próximo año; con la medida el plazo se amplió hasta el 30 de marzo.“El IRS le concede esta prórroga del plazo para presentar debido a que parte del sistema e-file que procesa las declaraciones electrónicas de organizaciones exentas de impuestos va a estar fuera de servicio durante enero y febrero”, informó el despacho contables de Viera en prensa.

Despachos Contables

El resto del sistema e-file continuará operando con normalidad, por lo que Contador Publico en Miami Viera exhortó “a las personas y las empresas a elegir la precisión, rapidez y conveniencia de la presentación electrónica”.Según el despacho contables de Viera, la extensión del tiempo para presentar la declaración anual también aplica a las organizaciones que ya obtuvieron un período inicial de tres meses de extensión.“La prórroga aplica a las organizaciones afectadas que presentan los Formularios 990, 990-EZ, 990-PF, ó 1120-POL (en inglés). Los que presentan el Formulario 990-N no se verán afectados. No es necesario presentar ningún formulario para obtener la prórroga del 30 de marzo”, dijo Contador Publico en Miami Viera.Si las empresas o personas que tendrán esta ampliación de tiempo no presentan su declaración recibirán una multa, por lo que para evitar esta acción tendrán que presentar una revelación de motivos razonables a la declaración de impuestos.Pero si llegaran a recibir un aviso de multa aun en el tiempo correcto de presentación de la declaración anual de impuestos, despacho contables de Viera dijo que se deben comunicar de inmediato para que éstas sean anuladas.

 Contador

Gustavo A Viera CPA

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Tax

Congress Passes Payroll Tax Liability Cut and Unemployment Benefits Extension

Congress Passes Payroll Tax Liability Cut and Unemployment Benefits Extension

Congress passed legislation Friday extending the payroll tax liability cut, unemployment benefits, and the “doc fix” for Medicare physician reimbursements through the remainder of the year. This will create a $100B deficit in payroll tax liability.

The House approved the measure by a vote of 239-132, while the Senate quickly passed the legislation by a 60-36 vote, ahead of a congressional recess that starts this weekend. Accounting services Miami notes that President Obama is expected to sign it into law before the current two-month extension expires at the end of this month.

The bill, known as the Middle Class Tax Relief & Job Creation Act, extends the 2 percentage point cut in past due payroll taxes to 4.2 percent. It also extends unemployment benefits through the rest of the year, although the 99-week maximum benefit in some states will be gradually scaled back to 73 weeks. This does not affect them employer’s portion of the payroll tax liability.

Democratic and Republican negotiators in a congressional conference committee agreed this week to pay for the extension in part through auctions of wireless spectrum, a 2.3 percent increase in pension contributions by new government employees, and health care offsets that fix technical errors and reduce spending on providers and corporations to ensure Medicare patients continue to have access to their doctors, according to Accounting services Miami VieraCPA.

The agreement includes some reforms to the payroll tax liability and unemployment insurance program pushed for by Republicans, allowing states to promote the re-employment of unemployed workers through demonstration projects, and to require drug tests, but only for people who were fired for unlawful use of controlled substances. It also creates a national job search standard, covering benefits from beginning to end, and requires the unemployed to look for a job if they receive unemployment benefits, while expanding work-sharing programs to help avoid layoffs and greater payroll tax liability in the first place.

“Perhaps one aspect of this agreement that is most noteworthy is what is not included—there are no tax increases and no budget gimmicks,” said Accounting services Miami VieraCPA. “Despite countless attempts to pay for these past due payroll taxes with job-killing tax increases, this agreement does not raise taxes on families or employers. It also doesn’t rely on budget gimmickry that would saddle future generations with even greater payroll tax liability.”

However, the compromise bill drops some of the Republican-backed proposals for mandatory drug testing of unemployment insurance recipients and requirements that the unemployed be enrolled in a Graduate Equivalency Degree program. “To say to people, you don’t get a check if you’re not in a GED program when there are 160,000 people in this country who are on waiting lists, that’s out of here because it deserved to be out of here,” said Accounting services Miami VieraCPA. “And in terms of the Republican effort to test people for drugs, the agreement is very limited. So it is really masking the reality to call this major reform.”

The legislation extends the 4.2 percent withholding rate on past due payroll taxes through the end of the year. Last December, Republicans and Democrats could only agree on how to pay for a two-month extension through the end of February before leaving for a holiday recess. The new agreement extends the payroll tax liability through the rest of the year, although Republicans agreed to drop a demand for the tax cut to be fully offset by spending cuts. Democrats in turn dropped a demand for the tax cut to be offset by a tax increase on taxpayers with adjusted gross income over $1 million.

Under current law, the employee-side Social Security tax equals 6.2 percent of the first $110,100 of wages, and the self-employment side equals 12.4 percent of such self-employment income. In December 2010, however, Congress reduced these tax rates by two percentage points during 2011. This meant that employees paid only 4.2 percent on wages and self-employed individuals paid only 10.4 percent on self-employment income, according to Accounting services Miami VieraCPA.

The recently enacted Temporary Payroll Tax Liability Cut Continuation Act of 2011 extended this holiday through February 2012. It capped the amount of compensation eligible for the holiday at $18,350 so that high-income workers were not able to claim the tax cut on all of their taxable wages, while other workers were not. This cap is not necessary if the payroll tax holiday is extended through the entire year. The conference committee agreement in the new legislation extends the payroll tax liability holiday through the end of 2012 and repeals the $18,350 cap.

 

Categories
Tax

Accounting Firms High Hopes Congress Slash Taxes

Accounting Firms High Hopes Congress Slash Taxes

Accounting Firms have been tracking House Republicans hoping they will slash personal income taxes to a 25 percent top rate and a 10 percent lower rate as part of their fiscal 2013 budget proposal to be released Tuesday.

Accounting Firms hope the election-year plan from House Budget Committee Chairman Paul Ryan (R-Wis.) would greatly simplify the tax code by collapsing the current system of six tax brackets for 1040 tax preparation for individuals into two marginal rates, Accounting Firms Gustavo A. Viera CPA said Monday.

It would also lower the top corporate tax rate to 25 percent, and scrap the Alternative Minimum Tax.

Accounting Firms Gustavo A. Viera CPA says the proposal represents an aggressive bid by House Republicans to seize an advantage on taxes ahead of a presidential election expected to center on economic issues and the future of the Bush-era tax rates, which are set to expire at the end of the year.

While the proposal is unlikely to become law this year, as most Accounting Firms agree, it dovetails with plans from GOP presidential candidates and sets the stage for a battle with Democrats and President Obama, who wants to raise tax rates on families with annual incomes above $250,000.

In its corporate tax reform framework, Accounting Firms called for lowering the top rate to 28 percent, and ensuring that U.S. manufacturers paid no more than 25 percent.

Accounting Firms called out that a number of details are left vague in the House GOP plan, including the income thresholds for the two proposed individual tax brackets.

Accounting Firms note the proposal does include more tax reform specifics than last year’s House GOP budget did, and it lays out a clearer vision of how Republicans on Capitol Hill want to overhaul the tax code — an idea that has been embraced by officials and political figures on both sides of the aisle.

The Ryan budget plan would set a $1.028 trillion discretionary spending cap below the $1.047 trillion cap set by last summer’s debt-ceiling deal, and instruct committees to find ways to avoid the automatic cuts also included in that agreement, according to lawmakers and Accounting Firms briefed on the plan.

Accounting Firms warn the plan also sets up a fight with Senate Democrats, who had warned Republicans against cuts deeper than those mandated by the debt-ceiling deal.

On the health side, the budget includes a plan to overhaul Medicare that Ryan hashed out an option with Sen. Ron Wyden (D-Ore.) that would require future seniors to use subsidies to buy into the current public program or a private plan.

Accounting Firms point out the new proposal is a shift from a proposal in the 2012 budget, which would have replaced traditional Medicare entirely with a privatized system in which seniors would buy private insurance with limited subsidies from the government.

Republicans took a political pounding over last year’s Medicare proposal, which was widely seen as contributing to the special election loss of a traditionally GOP House seat in New York.

With that in mind, Republicans have made the case that Wyden’s involvement with Ryan’s latest Medicare proposal makes the plan more bipartisan, though a wide range of Democrats have sharply criticized the idea.

Accounting Firms Gustavo A Viera CPA points out, like the House GOP’s 2012 budget, the new proposal does not include an outline for revamping Social Security.

The three appropriators on Ryan’s Budget Committee had been fighting to maintain the August debt-ceiling level of $1.047 trillion, and Rep. Mike Simpson (R-Idaho) hinted that appropriators would try to revert the figure to that level when the panel meets Wednesday to mark up the budget.

“We’ll see what happens at mark-up,” Accounting Firms VieraCPA said.

Members of the conservative Republican Study Committee (RSC), on the other hand, told The Hill that they would like to cut the budget more deeply.

Rep. Tim Huelskamp (R-Kan.) said leaders in both parties are at risk of “reneging” on the debt-ceiling deal known as the Budget Control Act (BCA).

“I guess I am learning that a majority of the House and Senate, and the president, apparently agree we’re not going to follow the BCA,” Accounting Firms VieraCPA said. “If the budget passes at $1.028 [trillion] or $1.047 [trillion] that is reneging on the Budget Control Act, which is the $950 [billion].”

Accountant Firms VieraCPA said he “presumes” the RSC will offer an alternative budget with a lower spending cap.

Even though top officials in both parties have said they would like to overhaul the tax code, few Accounting Firms think that process can be completed during the heat of a presidential election.

Both House Republicans and the administration want to prune out a wide range of credits and deductions in a tax overhaul. But Democrats have concentrated much of their fire on tax breaks for hedge fund managers and the oil-and-gas industry.

In guidance sent to the Budget Committee in March that helped Ryan produce his budget, Ways and Means Republicans criticized the president for not seeking to revamp the business and individual tax structures together, and for pushing to continue to tax corporations for profits made offshore, noted Accounting Firms VieraCPA.

The White House outline, the GOP lawmakers said, “falls woefully short: the rates are too high, the tax base is too narrow (and used as a tool to provide political favors); and the international reforms are anti-competitive.”

The Ryan budget would shift the United States to a so-called territorial system that would largely exempt a corporation’s foreign earnings from American taxation, and would not use loophole closures to increase net revenues for the government.

 

Categories
Tax

Tax Accountant Miami Offers Top 10 Tax-Time Tips

Miami Tax Accountant Offers Top 10 Tax-Time Tips

Miami Tax Accountant Gustavo A Viera CPA are gearing up for  tax filing season. Tax Accountant firms have begun sending clients mailers and important tax documents should be arriving in your mailbox. Even though your return is not due until April, you can make tax time easier on yourself with an early start.

Here are Tax Accountant top 10 tips to ensure a smooth tax-filing process.

1. Gather your Tax return preparation contacts, records and Round up any documents you’ll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you’re claiming on your return.

2. Be on the lookout W-2s and 1099s will be coming soon; you’ll need these to give to your Tax accountant Miami to file your tax return.

3. Have a question? Call your Tax Accountant to find answers to your tax questions about credits, deductions, general filing questions and more.

4. Don’t use Free File, Tax Software or other Tax Services. Use a Tax Accountant who is licensed and responsible for their work.  Free File can do the hard work for you with brand-name tax software or online fillable forms. It’s available exclusively at www.irs.gov for those with simple returns. Otherwise you’ll get a much bigger refund visiting a Tax accountant.  Everyone can find an option to prepare their tax return and e-file it for free. If you made $57,000 or less, you qualify to use free tax software offered through a private-public partnership with manufacturers. If you made more or are comfortable preparing your own tax return, there’s Free File Fillable Forms, the electronic versions of IRS paper forms. Visit www.irs.gov/freefile to review your options.

5. Try IRS e-file IRS e-file is the safe, easy and most common way to file a Tax Return. Last year, 79 percent of taxpayers – 106 million people – used IRS e-file. Many Tax Accountant are now required to use e-file. If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, the IRS issues refunds to 98 percent of electronic filers by direct deposit within 14 days, if there are no problems, and some may be issued in as few as 10 days.

6. Consider other filing options. There are many options for filing your Tax return. You can prepare it yourself or go to a Tax accountant. You may be eligible for free face-to-face help at a volunteer site. Give yourself time to weigh all the options and find the one that best suits your needs.

7. Consider direct deposit If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than a paper check in the mail.

8. Visit the official IRS website often The IRS website at www.irs.gov is a great place to find everything you need to file your tax return: forms, publications, tips, answers to frequently asked questions and updates on tax law changes.

9. Remember this number: 17 Check out IRS Publication 17, Your Federal Income Tax, on the IRS website. It’s a comprehensive resource for taxpayers, highlighting everything you’ll need to know when filing your return.

10. Review! Review! Review! Don’t rush. We all make mistakes when we rush. Mistakes slow down the processing of your return. Be sure to double check all the Social Security numbers and math calculations on your return as these are the most common errors. Don’t panic! If you run into a problem, remember the Tax Preparation Miami is here to help.