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Tax

Miami Income Tax Preparers Warn of Further Tax Refund Delay Problems

Miami Income Tax Preparers Warn of Further Tax Refund Delay Problems

Income Tax Preparers are having more problems with delayed 1040 tax preparation tax refunds.

Early in tax-filing season, Income Tax Preparers warned that taxpayers who had filed prior to January 26 might see delays of a week beyond the projected date shown in the online “Where’s My Refund” tool (see Miami Income Tax CPA Warns of Tax Refund Delays).

However, since February 15, the “Where’s My Refund” tool has displayed a message indicating further 1040 tax preparation delays. Income Tax Preparers Gustavo A Viera CPA is aware that some taxpayers who have filed electronically and received an acknowledgement from the IRS are concerned when they visit ‘Where’s My Refund’ and are told that we have no information regarding their return,” said Income Tax Preparers CPA Gustavo Viera. “This is a temporary situation, and we expect to resolve the matter in a few days. At that time, taxpayers will be able to get an expected refund date when they visit ‘Where’s My Refund.’”

Part of the problem appears to be with the new 1040 tax preparation filters that the IRS installed this tax season to combat identity theft fraud, and which were blamed for causing the delays last month (see IRS Steps up Efforts to Combat Identity Theft Fraud).

Income Tax Preparers not to repeatedly call the agency to inquire about their refunds, but apparently many taxpayers are concerned about the delays, especially when they are getting mixed signals from the 1040 tax preparation “Where’s My Refund” tool.

“If a taxpayer received an acknowledgment message that their e-filed tax return has been received, they can be assured that the IRS has the tax return even though ‘Where’s My Refund’ does not reflect that,” said the Tax Services Miami. “Miami Income Tax payers should not call the IRS unless specifically directed by ‘Where’s My Refund,’ as there is no new information to give them.”

The IRS apologized to 1040 tax preparation taxpayers for the situation and said most of the refunds would be issued within 21 days. “We expect the vast majority of tax refunds to continue to be issued within the historical range of 10 to 21 days,” said the Income Tax Preparers. “The IRS is taking steps to update information so that Where’s My Refund has current information. The IRS apologizes for any inconvenience and will provide updated information as soon as possible.”

Income Tax Preparers Firms said that most of the delayed refunds were filed between February 2 and February 7, according to a local ABC News affiliate in Charleston, S.C. Other taxpayers were reporting delays of nearly a month, according to eCreditDaily.com.

When the IRS blocked tax refunds last year, the Taxpayer Advocate Service found that 75 percent of the taxpayers who complained to the service ultimately were found to be eligible for the blocked refunds, but taxpayers had to wait an average of nearly six months to receive them (see IRS Fraud Detection System Leads to Refund Delays). The average amount of the blocked refunds was upwards of $5,600.

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Tax

Tax Services Miami Threatened over Tax Refund Delays

Tax Services Threatened over Tax Refund Delays

Anxious taxpayers awaiting their delayed tax refunds are in some isolated cases taking out their frustrations on their Tax Services.

“Severe taxpayer frustration is generated due to the impact of their 1040 tax preparation delayed refunds and a lack of information on status,” said Bernie McKay, chairman of the Council for Electronic Revenue Communication Enhancement, in testimony on February 28 at a hearing of the IRS Oversight Board. His organization, CERCA, serves as a liaison between the Internal Revenue Service and the electronic filing industry.

“Such intense early season taxpayer frustration at Tax Services is directly related to the fact that significant numbers of early season return filers have the most urgent financial need for receipt of their tax refund to meet pressing household, personal or family bills,” McKay added. “For many of these taxpayers, the receipt of their annual tax refund is a major financial event which they and their families depend upon. Tax Services knows when refunds are delayed and status information is not available or reliable, private sector Tax Services Miami staff suffer widespread verbal abuse from deeply frustrated taxpayers after 1040 tax preparation, while Tax Services have been physically threatened or even sustained personal property damage (e.g., rocks through car windshield).”

“We did not go into detail about specific incidents, but if you talk to any Tax Services Miami, they will say that there were challenges that they had during and after 1040 tax preparation,” said CERCA spokesman Mike Cavanagh.

The IRS informed Tax Services early this tax season that it was experiencing tax refund delays as a result of new anti-fraud filtering software it had put in place to protect taxpayers against identity theft. The “Where’s My Refund” tool Tax Services Miami refer taxpayers to on the IRS Web site was also producing error messages and telling taxpayers different dates for when they could expect their refunds.

In the most recent update on the status of the tax refund delays, the IRS indicated that it was catching up, although it was still about 2 million tax returns behind where it was last tax season.

“The Where’s My Refund online tool needs to be continuously functioning, timely and accurate,” said McKay. “A lack of information, or the repeated unavailability or non-functionality of the tool itself after 1040 tax preparation, adds to the growing frustration of the taxpayer and directly drives growing call volumes for both the public and private sectors alike.”

At one point, when the Where’s My Refund tool was malfunctioning, the IRS asked taxpayers not to keep calling and Tax Services got the calls.

But that put more pressure on Tax Services Miami to answer the question about taxpayer’s 1040 tax preparation for clients, CERCA noted. “The IRS posting of notices asking taxpayers to stop calling because it has no information does not help the problem, and does not produce the desired behavior within the impatient taxpayer population,” said McKay in his testimony. “If the taxpayer does indeed stop calling the IRS, they just start calling, emailing, texting, blogging or tweeting Tax Services. A lack of information or customer service does not result in the taxpayer patiently going away and waiting. It is not a behavior that a dissatisfied consumer of services is accustomed to in the modern 24×7 world of instantaneous communications and constant access to desired information and services. A fundamental customer service paradigm shift has taken place in the commercial world, and the government sector is not immune from its impact.”

Besides the anti-fraud identity theft filters, some of the problems may have also been due to the IRS’s new Modernized eFile system. The IRS told taxpayers that the refunds would be delivered within a 10-21-day window, but many tax refunds continue to be delayed, Tax Services Miami noted Friday.

CERCA had seen this coming. “Despite years of public predictions of significant acceleration in refund cycle times due to major public investments in IRS systems, this year the IRS official guidance, and actual experience, was of a significantly longer refund cycle time than in the past,” said McKay. “Going forward, strategy must either align performance and management objectives back to the long-time predictions and commitments made to the public, or begin a major public re-education program to change public expectations about the timeliness of 1040 tax preparation refund availability from the U.S. income tax system. The IRS Refund Cycle Chart has been out of synch this tax season with actual refund turnaround time, and out of synch as well with the IRS’s own projection posted in January that lengthened the predicted amount of time it might take refunds to be processed to be 10-21 days. The disconnects in these types of critical datapoints add to taxpayer confusion and anxiety, and an objective for future seasons must be a standard of simplicity and consistency and timeliness in information and messaging.”

Even after the system indicated that the refund had been issued, the money oftentimes has not been forthcoming. “Once the IRS does issue the refund, the agency can today provide no further support to the taxpayer when researching where the refund actually is, and what happened, for example, with regard to offsets,” said McKay. “Tax Preparation Miami and electronic service providers need access to [Financial Management Service] information to verify where disbursement is in the process, so that if there’s been a problem with the funds they can be traced. Lack of timely, accurate, accessible information drives negative taxpayer experiences, particularly with early return filers who have the most urgent need to receive their refunds.”

Tax Services Miami wants to work with the IRS to improve the situation for next tax season.

“What we simply wanted to do was suggest solutions,” said Cavanagh. “Next year let’s work harder. The issues this season have happened, but let’s work with the IRS to do better.” He acknowledged that the problems from earlier this tax season are now abating. An IRS spokesman confirmed that the problems are mostly resolved at this point.

Tax Services Miami want to make sure that the situation improves in future tax seasons or else it could upset the delicate balance involved with voluntary tax compliance.

“The role of tax refunds as an incentive for taxpayer voluntary compliance in the United States is foundational to the very high tax compliance rate the U.S. government has come to expect and enjoy over many decades,” said McKay in his testimony. “The role of tax credits as a lever of national economic policy has likewise become central to the role of the U.S. tax system in the American economy. If the timeliness of tax refunds is going to fundamentally change as the ‘new normal’ of American taxation, the taxpaying public must be informed and educated. Changing citizen expectations and behaviors took 10 years to produce a conversion from paper returns to electronic filing and achieving an 80 percent e-file rate. Changing citizen expectations about the timeliness of their access to their tax refund money would likely be a more difficult challenge that would encounter a more a challenging range of taxpayer behaviors and emotions, if this tax season is any indication.”

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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

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.

 

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Tax

Finding a Certified Public Accountant at Tax Time

Six out of ten taxpayers turn to expert Certified Public Accountant for help each year with their 1040 tax preparation.

When talking to your friends about their taxes, they may share a number of stories about how “my Certified Public Accountant helped me save money” or “my Certified Public Accountant got me out of trouble with the IRS.” If you want to rest easy in knowing that your taxes are in proper order, it is worth your while to search for a Miami Certified Public Accountant to help you handle your taxes at tax time and throughout the year.

Ask for recommendations

Generally, the best way to find a Certified Public Accountant is to ask friends and family to provide recommendations. If they have had success with a particular professional, chances are good that you can have success with that person as well.

Check qualifications

After narrowing down your choices to a few different Certified Public Accountant, be sure to check on their credentials. Both the National Society of Accountants and the American Institute of CPAs has an online directory available that you can check.

Fail to ask questions

When meeting with Certified Public Accountant, be sure to ask plenty of questions. Ask questions about the professional’s audit experience, areas of tax specialty, fee structure and availability. This way, you are better able to determine whether or not the professional is able to meet your needs.

Wait until late into the tax season

If you wait until it is late into the tax season, you are likely to have trouble finding a Certified Public Accountant who is available to take on new clients. To get the best results, start looking early in the season, and forge a relationship before things get too hectic.

By following these simple tips, you can join in with your friends as you discuss all that “my accountant” is capable of doing. At the same time, you can rest assured you pay only as much toward your taxes as you absolutely must.

BY THE NUMBERS

IRS tax code keeps expanding. Within a century, it has grown from a mere few hundred pages to contain over five million words and around 75,000 pages. It’s no wonder that approximately six out of 10 taxpayers turn to hired experts for help.