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Tax

IRS Cracks Down on Tax Preparer Miami

IRS Cracks Down on Tax Preparer Miami

The IRS is sending letters to 21,000 members of the Tax Preparer Miami community to make them aware of their preparer responsibilities and to provide them with information to ensure the accuracy and quality of their clients’ returns in the 2012 filing season. The IRS plans to visit at least 2,100 of the income Tax Preparer Miami during the filing season at their business locations.

Tax Preparer Miami and IRS has provided information regarding the letters to and visits with income tax preparer Miami in a question-and-answer format. The purpose of the letters and visits is to heighten awareness of preparer responsibility, with a focus on income tax preparer Miami who prepare a large number of returns with Schedules A, C and E.

Certain Income Tax Preparer Miami firms have been selected due to the high percentage of attributes that indicate errors in filing Schedules A, C or E during the 2011 filing season. Included with the letters are enclosures addressing areas of concern regarding those schedules. The letters and visits are an integral part of the effort by the IRS to provide oversight of income tax preparer Miami firms, as well as to inform practitioners of their responsibilities.

The Schedule A enclosure is being sent to income tax preparer Miami who have prepared returns that have a high number of attributes typically found to have significant errors on Schedule A, Itemized Deductions. The notice lists the most common issues as unreimbursed employee business expenses and business mileage claimed on Form 2106, travel, meals and entertainment expenses, and charitable contributions. Tax Preparer Miami CPA Viera advises staff to make reasonable inquiries if the information furnished by a taxpayer appears to be incorrect, inconsistent with an important fact, or incomplete.

The Schedule C, Profit or Loss from Business (Sole Proprietorship), enclosure is used to inform income tax preparer Miami who have prepared returns with attributes that indicate a high number of errors on Schedule C. The most common Schedule C issues are: reporting less than all the gross receipts, reporting expenses that are not ordinary and necessary for the business, and reporting the allowable amount of the expenses paid or incurred during the tax year. Income Tax Preparation Miami CPA Viera advises staff to ask clients sufficient questions to ensure that the expenses being claimed are correct. Taxpayers may not fully understand the law and they may believe they are entitled to claim Schedule C deductions for nonqualifying expenses.

The Schedule E, Supplemental Income and Loss, is the third enclosure used by the IRS to indicate that a income tax preparer in Miami has prepared returns that have a high incidence of attributes found to result in error on Schedule E. The most common issues are that rental income and expenses have not been correctly reported, rental depreciation has not been correctly calculated and passive activities, basis and at-risk rules have not been properly considered or calculated. Income Tax Preparation Miami CPA Viera makes the appropriate inquiries to determine the existence of facts and circumstances required as a condition for claiming a deduction or credit.

When it comes to income tax preparation in Miami residents often feel a lot of anxiety. This is for good reason as you need to carefully go line by line and make sure that you are executing your tax preparation the right way. Why not hire a pro?

Tax Preparer Miami Finding a Pro

Really, there is no reason to stress out when tax time rolls around. All you need to do is find a professional Tax Preparer Miami. You can start your search online by typing income tax preparer in Miami into the search engine of your choice and seeing what comes up. Likewise, you can look in the phone book under income tax preparation Miami and see what is available.

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Tax

Income Tax Preparation Miami Medical and Dental Expenses

Income Tax Preparation Miami Eight Things to Know about Medical and Dental Expenses and Your Taxes

If you, your spouse or dependents had significant medical or dental costs in 2011, you may be able to deduct those expenses when you do your Income Tax Preparation. Here are eight things the Tax Preparation Miami wants you to know about medical and dental expenses and other benefits.

1. You must itemize. Tax Preparation Miami want you to know you can deduct qualifying medical and dental expenses if you itemize on Form 1040, Schedule A.

2. Deduction is limited. Tax Preparation Miami remind you that you can deduct total medical care expenses that exceed 7.5 percent of your adjusted gross income for the year. You figure this on Form 1040, Schedule A.

3. Expenses must have been paid in 2012 You can include the medical and dental expenses you paid during the year, regardless of when the services were provided. You’ll need to have good receipts or records to substantiate your expenses, according to Tax Preparation Miami VieraCPA.

4. You can’t deduct reimbursed expenses. Tax Preparation Miami remind you that your total medical expenses for the year must be reduced by any reimbursement. Normally, it makes no difference if you receive the reimbursement or if it is paid directly to the doctor or hospital.

5. Whose expenses qualify.  Income Tax Preparation Miami CPA’s warn that you may include qualified medical expenses you pay for yourself, your spouse and your dependents. Some exceptions and special rules apply to divorced or separated parents, taxpayers with a multiple support agreement or those with a qualifying relative who is not your child.

6. Types of expenses that qualify. Tax Preparation Miami state that you can deduct expenses primarily paid for the diagnosis, cure, mitigation, treatment or prevention of disease, or treatment affecting any structure or function of the body. For drugs, you can only deduct prescription medication and insulin. You can also include premiums for medical, dental and some long-term care insurance in your expenses. Starting in 2011, you can also include lactation supplies.

7. Transportation costs may qualify.  Tax Preparation Miami remind you that you may deduct transportation costs primarily for and essential to medical care that qualify as medical expenses. You can deduct the actual fare for a taxi, bus, train, plane or ambulance as well as tolls and parking fees. If you use your car for medical transportation, you can deduct actual out-of-pocket expenses such as gas and oil, or you can deduct the standard mileage rate for medical expenses, which is 19 cents per mile for 2011.

8. Tax-favored saving for medical expenses Distributions from Health Savings Accounts and withdrawals from Flexible Spending Arrangements may be tax free if used to pay qualified medical expenses including prescription medication and insulin.

 

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Tax

Virtual Tax Audits via Your PC Coming Soon

The only thing worse than tax preparation is the dreaded process of getting a Tax Audits and it could soon take place over a computer screen

The only thing worse than tax preparation in Miami is the dreaded process of getting a Tax Audits and it could soon take place over a computer screen in the comfort of your living room. Better hire a CPA to sit on the couch next to you.

Virtual Tax Audits

CPA’s advises clients in what could be an indication of things to come. Income tax preparation VieraCPA states the IRS launched a pilot program at the end of last year that allows taxpayers to use two-way video conferencing for assistance with tax questions and problems. Tax preparation business having been using this for consultation purposes for year, the IRS has caught on.

The Taxpayer Advocate Service, an independent watchdog arm of the IRS, is already calling for the agency to expand to virtual audits notes VieraCPA a Income tax preparation. The IRS says it needs to evaluate the success of the pilot program before making a decision.

Income tax preparation CPA’s notes theVirtual Tax Audits pilot program is currently being tested in 12 locations, where taxpayers needing assistance can log into a computer enabled with video-conferencing. They can then talk to an IRS agent who pops up on the screen to discuss whatever issues they’re having — whether it’s tax preparation or help with a tax form or a question about a refund.

TAS is also piloting a virtual assistance program. And VieraCPA stated that the tax preparation business and Certified Tax Preparer that this technology has the potential to “radically transform” the current audit process — eventually allowing taxpayers and tax preparers to use their personal computers to video conference with an IRS examiner.

To schedule an Virtual Tax Audits with an Income tax preparation or its client, the IRS would send a taxpayer a sign-in code so they could then log in to the meeting from a home or office computer. Documents could be transmitted by simply scanning them with a computer’s built-in camera notes Tax preparation business or a Certified Tax Preparer.

This could one day replace the need for correspondence audits, which are the letters the IRS currently sends taxpayers in the mail asking questions or requesting more information and their Income tax preparation Miami responding.

To save costs, the IRS has become increasingly reliant on correspondence audits instead of summoning taxpayers for in-person meetings says VieraCPA an Income tax preparation. But TAS says that these Virtual Tax Audits receive fewer responses and that many of the taxpayers dealt with these audits don’t understand how they work, default on payments and get hit with penalties.

Plus, with correspondence audits a specific representative typically isn’t assigned to a case, leaving many taxpayers without a point person to ask questions or to contact with concerns.

Virtual audits could eliminate the confusing paperwork and recreate a face-to-face meeting via computer. Tax preparation business or a Certified Tax Preparer Miami agree it would be easier to explain complex situations.

Doing this would also help taxpayers better understand why they are being audited and what additional information is needed, said Viera. It would also help the IRS obtain the accurate information it needs and help the agency view taxpayers as more than just tax returns.

The IRS’s virtual assistance pilot program is scheduled to continue through the 2012 filing season and end in May. Office locations include Colorado Springs, Colo., Fresno, Calif. and Utica, N.Y.

Once the program is completed, the IRS will evaluate its performance. So far, it said the pilot has allowed it “to maximize our current resources, by expanding hours of service in remote locations and balancing the workload in high-traffic areas.” But it wouldn’t say whether it is considering using this same technology for audits.

“The initial focus of Virtual Tax Audits delivery is on taxpayer service. We’re still in the middle of the pilot and still assessing the results,” the IRS said in a statement. “It’s premature to speculate about future steps.”

Categories
Tax

What Income Tax Preparation in Miami Looks Like Today

What Income Tax Preparation in Miami Looks Like Today

Over the last decade, Tax Preparation in Miami firms ranging in size from small local firms to large international ones have embraced tax outsourcing as a way to improve efficiency, client service, and staff retention. This article will provide an overview of those benefits as well as discuss the workflow, security, and regulatory issues surrounding the Tax Preparation in Miami business process.

Tax outsourcing improves efficiency in at least three ways. First, it increases the annual billable hours per Income Tax Preparer Miami by enabling firms to staff for off-season rather than peak-season workload. Second, tax outsourcing moves Income Tax Preparation in Miami firms toward a paperless tax workflow which streamlines and standardizes the Income Tax Preparation in Miami and review process. Third, when offshore tax outsourcing is used, firms can significantly reduce costs due to the wage differential between U.S. and offshore preparers.

Tax outsourcing improves client service in at least two ways. First, with most tax outsourcing vendors providing a one to three day turn-around time, firms can get tax returns back to their clients days if not weeks earlier. Second, by eliminating mundane data entry and file organization tasks outsourcing enables tax Tax Preparation in Miami to focus on higher level, value-added client services.

Finally, Income Tax Preparation in Miami firms say that tax outsourcing improves their ability to attract and retain qualified staff by “taking the edge” off tax season. Long busy season hours drive many people out of the profession. Tax outsourcing enables firms to get the work done while providing staff some semblance of a normal life during tax season.

Tax outsourcing is enabled by paperless workflow technology that connects a CPA firm with its tax outsourcing service provider. When taxpayer source documents are received, the CPA firms scans and uploads them to the tax outsourcer’s website along with a copy of the proforma tax software file. The tax outsourcer then preparers the tax return along with an organized, indexed, and annotated set of digital workpapers that make review more efficient.

If corrections are needed, CPA firm in Miami can either have the outsourcer make them or do it themselves if the work required is small.

Along with quality, the top concern of most CPA firms that outsource is maintaining the security and privacy of taxpayer information. CPA firm in Miami must adequately vet their service providers to ensure data security is maintained. To do this, CPA firms should consider the security of the location where the work is performed (the service center), the security of the hardware where the data resides (the data center), the security of the software used to provide the service, and the security of the data while in transit.

SurePrep’s onshore and offshore service centers, for example, are designed to prevent its Income Tax Preparation in Miami from removing taxpayer data from the facility. To start with, no hardware in the service center contains taxpayer data. SurePrep Income Tax Preparer Miami work from virtual machines located in world class data centers. So theft of hardware from the service center would not cause a breach of taxpayer data security. Furthermore, SurePrep preparers do not have the ability to send taxpayer data out of the service center via email or the internet.

Because SurePrep maintains a paperless environment there’s no ability to print or write taxpayer data on paper that could be removed from the premises. SurePrep preparers are prohibited from using cell phones at their workstations so that data cannot be removed verbally, by texting, or digital photography. And closed circuit cameras record all work areas to ensure compliance with these security procedures.

Most people that visit their tax outsourcer’s service center comment that the security is beyond that of any CPA firm. In addition to preventing the unauthorized removal of data from the service center, the servers where the data resides need to be physically secure from theft or intrusion. To achieve this, tax outsourcers should maintain servers at data centers with SAS70 Type 2 and SSAE-16 certifications.

Even if the servers are physically secure, firms need to have confidence that outsourcers’ servers cannot be hacked into over the internet. To provide this level of assurance, SurePrep hires a company to try to hack into its systems every year. Vulnerabilities found are remediated after which the security consultant provides its unqualified opinion as to the security of the software. Finally, data must be safe while in motion. This can be achieved by ensuring all data transfers between the CPA firm in Miami and outsourcing provider are done over an encrypted connection.

Tax outsourcing services can be performed onshore or offshore. Using offshore resources reduces costs but requires the CPA firm to obtain a signed and dated Section 7216 consent letter from the taxpayer before tax return information is disclosed to an offshore tax preparer.

Section 7216 consent letters must include the name of the taxpayer, the name of the tax return preparer, the name of the recipient, the intended purpose of the disclosure, and the specific tax return information to be disclosed. The letter may specify the duration of the consent (e.g., 10 years) eliminating the need to get it signed every year. Every firm we know that has requested 7216 consents from their clients has received them without issue enabling them to enjoy cost advantages over most other firms.

Summer is a great time to test tax outsourcing and see if the process can benefit your firm. In addition to the above considerations, firms will want to ensure the tax outsourcer has the experience necessary to prepare high quality returns, and has technology that can add value beyond the tax outsourcing service. SurePrep, for example, streamlines the onscreen preparation and review of tax returns with its SPbinder paperless tax binder.

SPbinder is a workpaper system that integrates PDF, Excel, Word and e-mail documents into a single electronic tax binder. SPbinder provides a common set of tools that allow workpapers of every format to be cross-referenced, tickmarked, annotated, and signed off. SPbinder tracks open items, review notes, and automatically determines missing documents. And SPbinder enables each worksheet or page in a file to be organized separately, providing the same organizational flexibility as with paper (something that can’t be done with any other document management or workpaper system). Each tax outsourcer provides its own flavor of value-added technology. It is up to firms to decide which will provide the most benefit.