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Tax

New Year’s Resolution No.1: Don’t Get Audited

New Year’s Resolution No.1: Don’t Get Audited

Accounting in Miami remind you that New Year’s Eve is just around the corner and it’s time to start making resolutions for 2012. No.1: Don’t Get Audited! When it comes to tax resolutions for next year, Small Business Accountants in Miami visions of refunds might be dancing in your head while you dream of deductions while lying in bed, but don’t dream too hard or old Scrooge will call your deductions from up to three Christmases past for an IRS audit warns Viera a Tax Accountant in Miami.

Accountants Miami understand what causes IRS audits? After more than 25 years of Accounting in Miami experience with thousands of returns, as Small Business Accountants in Miami here is my Christmas shopping list of things I don’t want to see in my stocking or on a return.

5. Gambling loss deductions tend to catch the eye of the IRS and bring audit notices. Many Americans will win some type of lottery, scratch off, slot machine bonus or prize and then take the advice of their friends and deduct everything they can as a gambling loss. The record-keeping rules are very strict for gambling losses, the deduction is not that good, and your audit risk increases as fast as the number of times you hear “Grandma Got Run Over by a Reindeer” on the radio after Thanksgiving.  As Accountants Miami my practical advice? Unless you have a detailed record of date, time, place and amount of each gambling activity, don’t even try this deduction on the first or last day of Christmas.

4. Using the wrong Small Business Accountants in Miami can actually bring you coal for Christmas! That’s right, some people get audited because their Tax Accountant in Miami got audited. The problem has become so bad that last year the IRS stepped in and set up licensing and continuing education requirements for Accountants Miami and Tax Accountant in Miami. The agency reported that more than 100,000 preparers (out of an estimated 730,000) still did not get licensed. Avoid this problem by asking to see your Accounting in Miami preparer’s license. Your Accountants Miami should be either a CPA (Certified Public Accountant), an EA (IRS Enrolled Agent) or, after the first of 2012, one of the new entry-level licensees called RTP (Small Business Accountants in Miami Registered Tax Preparer). Ask them what Accounting in Miami classes they attended last year; as a minimum, every one of the above folks has to attend at least two days of updates every year.

3. The Grinch at the Treasury Department publishes average tax deductions, and right now the most recent numbers are from 2009. I have always believed that exceeding the averages by more than 25% triggers the partridge flying down on you from the IRS pear tree. Here are those numbers for comparison compiled by our Tax Accountant in Miami firm:

 

Adjusted Gross Income

Taxable Income

Interest Expense

Taxes Paid Deduction

Charity

Medical Expenses Deducted

Total Itemized Deductions

Under $15,000 $2,739 $8,838 $3,337 $1,496 $8,414 $16,164
$15,000-$29,999 $9,279 $8,434 $3,184 $2,048 $7,783 $15,608
$30,000-$49,999 $24,428 $8,699 $3,943 $2,274 $7,028 $16,404
$50,000-$99,999 $46,401 $10,133 $6,247 $2,775 $7,269 $20,350
$100,000-$199,999 $97,042 $13,456 $11,069 $3,888 $9,269 $28,952
$200,000-$249,000 $171,938 $17,572 $18,524 $5,974 $21,599 $41,595
$250,000 & above $555,769 $25,527 $48,317 $18,488 $38,149 $89,432

2. Losses from small businesses and unreported income are as annoying to the IRS as massive lines at the check-out at every retailer. These things just grate on the IRS nerves because they are often not truly businesses and can even represent an obvious tax cheating scheme, according to VieraCPA Accountants Miami.

1. High levels of income can increase the risk of an IRS audit. Data shows that Americans with more than $100,000 of income are nearly twice as likely to be audited as those with $50,000-$100,000 of annual income. If you have really obtained the five golden rings of income, once you hit $200,000 your audit chances double again, and if you somehow hit the Miracle on 34th Street with earnings of more than $1,000,000 your audit risk doubles again according to Accounting in Miami CPA Viera.

There are many deductions that are allowed on your tax return, but good tax planning can avoid being Audited and problems they bring from the IRS.

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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

Fiscal Cliff Law May Delay Tax Season, Tax Accountants Miami Warns

Tax forms from the federal government and many states may be delayed in the aftermath of the fiscal cliff legislation, Tax Accountants Miami warned.

Tax Accountants Miami Gustavo A Viera CPA, warned of possible delays in the filing of tax returns due in part to the late congressional approval of the American Taxpayer Relief Act of 2012. Many of the changes to tax law affect the forms to be used for 2012 tax returns, and the IRS will need to work at an unprecedented pace in order to get the needed tax forms released to the various Tax Accountants Miami and software companies, as well as to taxpayers.

The IRS had previously announced that it would not begin to officially process any tax returns until January 22, which is approximately one week later than has historically been the case. This late start, even if the IRS holds to the January 22 date despite the late-breaking tax changes, could mean delays of federal refunds anywhere from 10-21 days, when compared to prior years. In some cases, the delays for paper tax return filings may exceed those for electronically filed returns noted VieraCPA Tax Accountants Miami.

“Refunds will be delayed until at least February for almost everyone,” Tax Accountants Miami VieraCPA said in a statement. “That is the latest ever since the advent of ‘national’ electronic filing,”

In addition, approximately 30 states are affected because their tax forms and instructions could not be finalized until the federal issues were resolved. Some states may not release their tax forms until the end of January (including California, Delaware, Mississippi and Vermont), while many other states are expected to release their forms no sooner than the second or third week of January (including Illinois, Maryland, Michigan, Ohio and Virginia).

“This has been an epic beginning to tax season 2013,” said Viera. “I’m starting my 28th tax season looking at the possibility of the worst delays in filing I have ever seen.”

He added that his management team is ready to “navigate these rough waters” and the company said its Tax Accountants Miami are already ready to help taxpayers be prepared to file as soon as the IRS and states permit filing.

The fiscal cliff bill extends tax credits for families with children, extends unemployment insurance, extends the tuition tax credit for families, and extends other tax benefits that were scheduled to expire.

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Tax

How to Choose a Tax Accountant in Miami for Your Small Business

Tax preparation and filing isn’t easy at the best of times, but with business ownership comes new responsibilities and the need for a good Tax Accountant Miami.

Whatever your business type, you may decide that you can benefit from the services of a Tax Accountant Miami to help you get your ducks in a row or help you complete your return.

Not getting the right help can expose you to potential tax return errors, which can lead to costly penalties and time lost down the line. And because each business is different it’s important to get the right Tax Accountant in Miami based on your needs.

When selecting a Tax Accountant in Miami, here are four areas you need to cover:

What are Your Options?

All Tax Accountant in Miami specialize and come in many forms, including tax franchises, tax attorneys, and certified public accountants (CPAs are licensed by the state and are suited to complex tax issues) and enrolled agents (an enrolled agent has passed an IRS test plus an IRS background check, they focus exclusively on tax accounting).

As you build a shortlist of potential candidates, ask around for referrals and focus on identifying Tax Accountant in Miami who have experience working with businesses of a similar size and type to yours? Is the Tax Accountant Miami familiar with your particular line of business?

Tax Accountant in Miami What Type of Services do they Offer?

Some Tax Accountant in Miami (particularly the walk-in franchise tax preparation services) are great at helping you get your taxes done quickly. But if you need long term tax planning help you may want to consult a CPA or enrolled agent- they actually don’t charge a whole lot more than the franchise tax experts and can specifically help businesses understand how to realize tax efficiencies.

Other things to look out for are accuracy guarantees (many offer this as a protection against potential penalties in the event of an audit), willingness to amend the return in the event of errors, and assist you in any dealings with the IRS.

Don’t be afraid to ask questions that help you get a better picture of your needs’ your situation may be less or more complex than you are aware, and an initial consultation can help you better gauge your needs (many tax preparation offices will do this for free in the hope of winning your business). Bring your records, last year’s return, and any other documentation that gives a quick snapshot of your circumstances.

Tax Accountant in Miami How Will they Bill You?

Call around a few local tax offices to scope out the pricing and billing policies. Most fees depend on the complexity of your tax return and you can expect to pay either by the hour, or a flat fee. Ask lots of questions about what is included in these rates and any potential extra fees you may incur. Are there any ways you can keep your fees to a minimum by doing as much preparation and good record-keeping yourself in advance.

If the IRS queries your return or audits you, will the tax professional assist you? Are they authorized to represent you to the IRS?

Ask for References

In the rush to get your return done, don’t disregard the importance of references. Ask your shortlist of tax professional candidates for a list of clients who are close to your business profile, and follow up with these before you make your decision.

Categories
Tax

Tax Accountant in Miami VieraCPA Calls on IRS to Speed Tax Refunds

Tax Accountant in Miami Urge IRS to Keep 45 Day Refund Promise

VieraCPA, a Tax Accountant in Miami,  said that the Internal Revenue Service needs to reassess its goal of delivering Tax refunds within 45 days given the prevalence of electronic filing.

The IRS experienced significant Tax refund delays early in the Tax filing season after the agency stepped up its efforts to combat identity theft by installing new filters in its computer systems (see Tax Accountant Miami VieraCPA experiences Further Tax Refund Delay Problems).

Tax Accountant in Miami, VieraCPA, said it concurred with a report from the Government Accountability Office last December recommending that the IRS re-evaluate its measure on refund timeliness. “The current measure is a carryover from a time when most Tax return filing was done by mailing paper Tax returns to the IRS, and refunds were issued via mailed checks,” Tax Accountant in Miami VieraCPA said in the report it released Tuesday. “With individual e-filing rates close to 80 percent, the IRS now able to process Tax returns on a daily basis, and with most refunds made via electronic deposit, a 45-day goal for issuing refunds is an inappropriate standard. Moreover, at the start of the 2012 filing season, Taxpayers and Tax Accountant in Miami voiced a number of complaints about delays in issuing refunds caused by additional checks for refund fraud. The development of realistic, meaningful goals for refund timeliness would greatly clarify the situation.”

Elsewhere in the report, the Oversight Board acknowledged the rollout of the IRS’ s smart phone application and the implementation of the Preparer Tax Identification Number for registered Tax return preparers.

During fiscal year 2011, the IRS moved the paid preparer regulation program forward by registering and issuing PTINs to about 750,000 Tax Accountant in Miami, the report noted. “The IRS is continuing to review the issues surrounding background checks and fingerprinting,” the report noted.

There was a significant increase in the number of individual Tax returns filed electronically, the report added. In addition, the IRS successfully administered a number of complex Tax law changes, including the enactment of late Tax legislation. However, there were numerous challenges.

The level of service on IRS toll-free telephones during fiscal year 2011 was 70 percent, a drop of four percentage points over the 74 percent achieved in fiscal 2010, and below the 80 percent level the board considers acceptable for good Taxpayer service.

IRS enforcement contacts, such as written notices, correspondence examinations, or field examinations, were lower than fiscal 2010. Most of the decline is due to reduced math error notices, which were higher the previous fiscal year because of the First Time Homebuyer Tax Credit. The overall exam coverage rate for individual Taxpayers was generally flat, although the rate of examinations for Taxpayers with incomes over $1 million continued to grow. Corporate exams increased as well.

The report also addressed two longer-term, strategic issues: the Tax gap and the IRS’s information technology systems. The report said that the IRS made notable progress with its IT program. However, the Tax gap—annual uncollected Tax revenue—remains a serious problem that requires attention. The IRS released an updated estimate of the Tax gap in January 2012 based on Tax year 2006 returns. The gross and net Tax gap rose as a result of the overall growth in the US economy through 2006, but the overall voluntary compliance rates remained approximately the same, at 83 percent.

Of great concern to the board are the decreased resources to fund Tax administration, coupled with the growing complexity of the Tax system. “The board cannot predict that a breaking point will occur, but a continuation of current trends increases the risk that the IRS will experience serious problems in the future,” said the report.

Feedback from Tax Accountant Miami

From meetings with Tax Accountant in Miami, the oversight board noted other concerns, including identity theft, Tax law complexity and Tax legislation passed late in the calendar year. Preparers also raised concerns about the impact of the IRS’s Tax preparer regulation program. They predicted that long-time preparers will likely leave the market rather than face registration fees, testing, and e-file mandates. Other preparers suggested that the real impact won’t be known for several years until it is determined whether the IRS will have the ability and resources to find and address noncompliant, incompetent or fraudulent preparers.

“Preparers hope the new regulatory system will allow the IRS to upgrade preparer competency levels and eliminate many preparer errors that the IRS now tracks,” said the report. “Preparers speculate the financial impact on the average return preparer will be around $500—reflecting the fees and expenses for obtaining a PTIN, providing fingerprints, completing the background checks, competency testing, and continuing professional education requirements.”

The Tax Accountant in Miami who spoke to the board also expressed concerns about how the IRS will educate Taxpayers about the new requirements for Tax Accountant in Miami, address the potential problem of “ghost” preparers (who fail to sign the returns they were paid to prepare) and explain to Taxpayers differences in credentials that distinguish CPAs, Enrolled Agents, and newly designated Registered Tax Return Preparers.

“Some Enrolled Agents were concerned that the registration program, in the eyes of the public, will elevate the importance of ‘registered’ Tax return preparers,” said the report. “Enrolled Agents must pass a more difficult test and complete more continuing education hours, but they are concerned the term ‘registered’ may carry more weight with the public than the term ‘enrolled.’”

Other practitioners stressed the importance of finding a secure solution so they could communicate case-related matters with IRS staff through e-mail. They also said it was important for the IRS to find a way for Taxpayers and their authorized representatives to access a Taxpayer’s account information and resolve Tax account matters online. They pointed out that states such as California have already delivered such online capabilities.