Archive for Federal

Cash Flow: The Pulse of Your Business

Cash flow is the lifeblood of any small business. Some business experts even say that a healthy cash flow is more important than your business’s ability to deliver its goods and services! While that might seem counterintuitive, consider this: if you fail to satisfy a customer and lose that customer’s business, you can always work harder to please the next customer. If you fail to have enough cash to pay your suppliers, creditors, or employees, then you’re out of business!

What is Cash Flow?

Cash flow, simply defined, is the movement of money in and out of your business; these movements are called inflow and outflow. Inflows for your business primarily come from the sale of goods or services to your customers but keep in mind that inflow only occurs Read More

Written by | Posted in Corporate • Federal • Income Tax • Individual • Small Business

Tax Tips For Students With A Summer Job

Is your child a student with a summer job? Here’s what you should know about the income your child earns over the summer.

1. All taxpayers fill out a W-4 when starting a new job. This form is used by employers to determine the amount of tax that will be withheld from your paycheck. Taxpayers with multiple summer jobs will want to make sure all their employers are withholding an adequate amount of taxes to cover their total income tax liability. If you have any questions about whether your child’s withholding is correct, please call our office.

2. Whether your child is working as a waiter or a camp counselor, he or she may receive tips as part of their summer income. All tip income is taxable and is therefore, subject to Read More

Written by | Posted in Federal • Income Tax • Individual • United States

The Home-Based Business: Basics to Consider

More than 52 percent of businesses today are home-based. Every day, people are striking out and achieving economic and creative independence by turning their skills into dollars. Garages, basements, and attics are being transformed into the corporate headquarters of the newest entrepreneurs–home-based business people.

And, with technological advances in smartphones, tablets, and iPads as well as a rising demand for “service-oriented” businesses, the opportunities seem to be endless.

Is a Home-Based Business Right for You?

Choosing a home business is like choosing a spouse or partner: Think carefully before starting the business. Instead of plunging right in, take the time to learn as much about Read More

Written by | Posted in Federal • Income Tax • Individual • Small Business

The President Signed Into Law The Trade Preferences Extension Act of 2015

On Monday, June 29th of 2015 President Obama signed into law H.R. 1295 entitled “The Trade Preferences Extension Act of 2015” (hereinafter “TPEA”) which not only extended a trade deal between the U.S. and sub-Saharan Africa but also included a number of tax-related provisions within the bill in connection to the Health Coverage Tax Credit (e.g., claimed on IRS Form 8885); the American Opportunity and Lifetime Learning Tax Credits (e.g., claimed on IRS Form 8863); and the Hope Scholarship Tax Credit (e.g., claimed on IRS Form 8863).

As a legislative synopsis from the Hill, the Senate approved TPEA by unanimous consent on June 24th of 2015 and within twenty four hours the House of Representatives on June 25th approved TPEA by a 286-to-138 margin. “I thought I’d start off the week with Read More

Written by | Posted in Federal • International

The House of Representatives Passes the Protect Medical Innovation Act of 2015

On Thursday, June 18th The House of Representatives passed H.R. 160 entitled “The Protect Medical Innovation Act of 2015” (hereinafter “PMIA”) by a vote of 280 to 140 in an attempt to repeal the medical device excise tax that was introduced in H.R. 3590 entitled “The Patient Protection and Affordable Care Act of 2010” (hereinafter “PPACA”).

PMIA was introduced by Republican Erik Paulsen, R-Minn., a member of the tax-writing House Ways and Means Committee. PMIA aims to repeal the 2.3 percent excise tax on medical devices, such as pacemakers and operating-room monitors. The legislation now heads to the Senate floor for deliberations where repealing the medical device tax also has bipartisan support. Republican Erik Paulsen indicated in a statement “as a country, we take great pride in our ability to create, invent, and innovate—especially when it comes Read More

Written by | Posted in Federal • Tax Policy

Revenue Magic (That Should Be Avoided)

H.R. 1891 (114th Congress), the African Growth and Opportunity Act Extension and Enhancement Act of 2015, sponsored by Congressman Paul Ryan, extends the “African Growth and Opportunity Act, the Generalized System of Preferences, the preferential duty treatment program for Haiti, and for other purposes.” It is a revenue loser, but has a supposed revenue offset. That offset is really a fake in that it doesn’t raise any revenue, it just accelerates revenue into an earlier year that falls within the 5-year budget measurement period for the bill.

The shifting of tax revenues is accomplished by accelerating corporate estimated tax payments. H.R. 1891 proposes to modify IRC Section 6655 as follows: Read More

Written by | Posted in Federal • Specialty Tax Incentives • Tax Deductions

Some Taxes You Pay Are Deductible

Certain taxes you have paid can be allowable as itemized deductions. To be deductible, these taxes must have been imposed on you personally, and you must have paid them during the year.

The following taxes you paid during the year are deductible on Schedule A:

• State and local income taxes (from your W-2).
• Real estate taxes (deductible in the year you paid them).
• Personal property taxes charged on the value of personal property.
• Foreign income taxes paid.

Note carefully, however, that the following taxes are not deductible: Read More

Written by | Posted in Federal • Gift Tax • Individual • IRS • Tax Deductions

Hillary Clinton Proposes Tax Increases

Here we go again! It is campaign season and some candidates just cannot wait to say how they are going to penalize business. Hillary Clinton is proposing a new scheme where businesses that manufactured things will be tax differently than businesses that are “trading” items. I am not exactly sure what this means but it sounds to me like a tax increase on service businesses and for people who invest in business.

Let us face it, manufacturing has been on a continual decline in this country for the past 60 years. The US is known for producing intellectual property and services that are the envy of the world. Hillary Clinton, as well as some of her tax and spenders just do not get it! If you increase taxes on something you will get less of it. Increase tax on business and you will have less business in the US. Read More

Written by | Posted in Corporate • Federal • Small Business

Facing The Music

When I was a young, fresh-faced criminal defense attorney, there was an aged judge on one of the local benches. Courthouse rumor persisted that this gentleman, whose name I cannot recall, was a finalist to serve as Alf Landon’s running mate in 1936. The judge would occasionally say that his particular fiefdom should be called “County Dumb Court” instead of “County Criminal Court.” While his rhetoric was a bit overblown, at least in my humble opinion, his underlying point was valid. Almost all the defendants who approached the bench were there not because they had done something malicious, but because they had made a poor decision under pressure, misunderstood the law or been trapped on a technicality.

In a way, tax court is much the same. The petitioners are certainly not “dumb” in any way, Read More

Written by | Posted in Federal • Income Tax • IRS • Tax Fraud/Evasion/Crimes

Checking Status of Your Federal Tax Refund Is Easy

Article Highlights

• 24/7 access
• How quickly posted
• Direct deposit
• Information needed to use

If you filed your federal tax return and are due a refund, you can check the status of your refund online. Where’s My Refund? is an interactive tool on the IRS web site. Whether you split your refund among several accounts, opted for direct deposit into one account, or asked the IRS to mail you a check, Where’s My Refund? will give you online access to Read More

Written by | Posted in Federal • Income Tax • IRS

What Is The Statute of Limitations On An IRS Audit?

The Statute of Limitations on an IRS Audit

Generally, the IRS can include returns filed within the last three years in an audit.  According to information contained on the IRS website, the IRS tries to audit tax returns as soon as possible after they are filed. This means that most IRS audits will be of returns filed within the last two years.

The IRS can choose to add additional years to an audit if a substantial error is identified.  In those cases, the IRS will not go back more than the last six years.

How Long Do I Have to Claim a Refund?

Just as the IRS must audit a tax return within a certain period of time, taxpayers also have Read More

Written by | Posted in Audit • Federal • IRS

Receive Your Refund Faster With Direct Deposit

Don’t wait around for a paper check. Have your federal (and state, if applicable) tax refund deposited directly into your bank account. Selecting Direct Deposit is a secure and convenient way to get your money into your pocket more rapidly.

Speed – When combining e-file with direct deposit, the IRS will likely issue your refund in no more than 21 days.

Security – Direct deposit offers the most secure method of obtaining your refund. There is no check to lose. Each year, the U.S. Post Office returns thousands of refund checks to the IRS as undeliverable mail. Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund check stolen. Read More

Written by | Posted in Federal • Income Tax • Individual
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