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Tax Tip of the Week | No. 473 | “When To Step In With An Older Parent” August 15, 2018

Posted by bradstreetblogger in : General, Tax Planning Tips, Tax Tip, Taxes, Uncategorized , add a comment

Tax Tip of the Week | Aug 15, 2018 | “When To Step In With An Older Parent”

I have been in denial most of my adult life. I never wanted my awesome parents to ever get older. They were like Superman and Superwoman to me – totally invincible. I really believed that if I ignored that fact that they were aging – it wouldn’t happen. But alas, once again, denying and ignoring what was happening in front of me – didn’t save the day. If you find yourself in a similar situation, perhaps what you read below may be of value.

Glenn Ruffenach of the WSJ on May 4, 2018 shares some of his thoughts that follow in his article with us:

…that 92% (that is a HUGE number) of “caregivers” provide some type of financial assistance for a family member such as handling insurance claims, filing taxes, paying bills, etc.

As for “when,” I would broach this topic as soon as possible. If anything, many families are too slow to act. Denial plays a big part in this. Older parents, hoping to stay independent, are quick to minimize difficulties; adult children, reluctant to meddle, may ignore red flags. (And few families, of course, enjoy talking about money.) As such…everyone waits. But the consequences of waiting can be dire: closed accounts, damaged credit, money lost to scam artists—even foreclosure.

The simplest approach is usually the best: pointing out to your mother (or parent) that all of us, as we age, need help, whether its yard work or home repairs or transportation. And household finances are no exception. I began talking with my mother when she was in her early 70s (and still in good health) about the importance of having a family member on “standby”—someone who knew about her bills, credit cards, insurance, investments, etc.

We already had her estate plans in order, and I had power of attorney. But we took two additional steps: We added my name to her checking account, and I filled out a separate set of power-of-attorney forms with the custodian of her individual retirement account, her biggest asset. (Many financial institutions have—and require that you complete—their own documents if you wish to give, say, your spouse or an adult child access to an account.) The latter proved to be invaluable when my mother suffered a stroke and I needed to tap her IRA quickly to help pay for long-term care.

For anyone acting as a financial caregiver, the following resources are invaluable:

•    The federal Consumer Financial Protection Bureau
•    The National Caregivers Library
•    AARP

And if the person who needs help is at some distance from you, you might want to hire a daily money manager. These professionals can sit with a person at home and help pay bills, balance checkbooks and decode medical bills. Start with the American Association of Daily Money Managers (aadmm.com). Be sure the manager you choose is insured, bonded and willing to include other family members in his or her work.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.

This week’s author – Mark Bradstreet, CPA

–until next week.

Tax Tip of the Week | No. 472 | The Tax Cuts and Jobs Act August 8, 2018

Posted by bradstreetblogger in : Deductions, General, tax changes, Tax Tip, Taxes, Uncategorized , add a comment

Tax Tip of the Week | Aug 8, 2018 | No. 472 | The Tax Cuts and Jobs Act

We have shared information on various aspects of the Tax Cuts and Jobs Act in several previous tax tips. The following is a nice refresher brought to us by our Western CPE sponsors which we wanted to share this week.

Tax Reform and What it Means for Your Personal Taxes 

President Trump, when he was on the campaign trail, promised that he would push for tax reform legislation. On Dec, 22, 2017, he signed The Tax Cuts and Jobs Act into law, the first major tax reform in 31 years. The new law makes many changes to the tax code. Every taxpayer is impacted. A highlight of the changes follows:

Tax rates.  Tax rates are reduced. The top rate is reduced from 39.6% to 37%. Lower rates are also reduced.

Exemptions and the child tax credit.  The deduction for personal exemptions is eliminated. An expanded child tax credit will help make up for the loss of personal exemptions for some families. The credit is increased to $2,000 (from $1,000) for qualifying children under 17. For children 17 and older and for other dependents, the credit is $500.

Standard deduction.  The new tax reform law doubles the standard deduction. The higher standard deduction ($12,000 for singles, $18,000 for heads of household, and $24,000 for married filing joint) means that fewer taxpayers will benefit from itemizing deductions.

Itemized deductions.  Itemized deductions for all state and local taxes, including property taxes, are capped at $10,000. The limit on mortgage debt for purposes of the mortgage interest deduction is reduced from $1,000,000 to $750,000 for loans made after Dec. 15, 2017. Loans made before Dec. 15, 2017 are grandfathered at the $1,000,000 debt limit. The interest on home equity borrowing is no longer deductible in most cases. The threshold for medical expense deductions is lowered to 7.5% of adjusted gross income (from 10%) for tax years 2017 and 2018. Miscellaneous itemized deductions subject to the 2% of AGI limitation are not allowed. Miscellaneous itemized deductions lost because of the new law include employee business expenses, investment adviser fees, union dues, and tax preparation fees. Personal casualty losses are not allowed unless the losses were suffered in a federally declared disaster area.

Alimony.  The new tax reform law eliminates the alimony deduction for agreements signed after Dec. 31, 2018. Alimony income is not taxable for agreements signed after Dec. 31. 2018. There is no change to the law for agreements signed before Jan. 1, 2019.

Moving expenses.  The new tax reform law eliminates the moving expense deduction and makes employer reimbursement of moving expenses taxable to the employee beginning in 2018.

AMT.  The new tax reform law temporarily increases the alternative minimum tax (AMT) exemption for tax years 2018 through 2025. The increase in the exemption, as well as the elimination of major tax preferences (exemptions, state taxes above $10,000 and miscellaneous itemized deductions) means that fewer people will be subject to AMT under the new law.

Education.  The new tax reform law modifies qualified tuition programs – §529 plans. Funds in the 529 plan can now be used to pay for grades K to 12 private school tuition. The above-the-line deduction for college tuition expenses was renewed in later legislation, but only for 2017. The American Opportunity and the Lifetime Learning credits continue to be available.

Roth IRA conversions.  The new tax reform law repeals the special rule permitting recharacterization of Roth IRA conversions. A conversion of a traditional IRA to a Roth IRA may still be advisable, but once the conversion is completed, it can’t be undone.

These are just a few of the changes included in the Tax Cuts and Jobs Act. Your 2018 taxes will be affected. That’s guaranteed by the scope of the changes. The degree of impact depends on your personal situation.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Norman S. Hicks, CPA

–until next week.

Tax Tip of the Week | No. 471 | Ohio Worker’s Compensation August 1, 2018

Posted by bradstreetblogger in : Deductions, General, Tax Deadlines, Tax Planning Tips, Tax Tip, Taxes, Uncategorized , add a comment

Tax Tip of the Week | Aug 1, 2018 | No. 471 | Ohio Worker’s Compensation

To Start: Having a business in Ohio requires you to obtain Worker’s Compensation insurance for your employees and possibly your subcontractors. The application, payments and returns are all filed through the Ohio Bureau of Workers’ Compensation (OBWC) website at https://www.bwc.ohio.gov.

For new employers an application form U-3 requires a $120 non-refundable application fee. Based on your estimated payroll for the following 12 months and the type of work that your employees do (manual number), OBWC will set your annual fee. It is very important that you are specific in the type of work being done and the equipment being used to accurately assign the manual numbers and rates.

Reporting & Paying: Depending on the amount set for your annual fee, you will either need to pay the entire amount up front or it will be broken down into 6 equal payments. You can make these payments online or pay the installments through the mail. Once a year, you can elect to make your 6 payments monthly, quarterly or annually. BWC runs on a fiscal year of July 1- June 30. A true-up report is due annually on August 15 and is required to be filed on their website reporting the actual payroll for the prior fiscal year. Depending on the actual versus the estimated, either an overpayment will be refunded or a balance will be due. If you have a significant increase in your payroll, you may want to increase your payments during the year so that you don’t owe a large sum with the true up.

Rebates: In 2018 OBWC is issuing rebates for the 2016-2017 fiscal year of 85% of the premiums paid for that year. Checks were mailed out in July. Rebates have also been issued in 3 of the past 4 years.

Lowering your rates:  There are various methods to help lower your rates including: belonging to a group, participating in safety programs, i.e. Policy Activity Rebate (PAR) and training through Better You, Better Ohio! as well as other rating programs. Various rules apply to these, including claim history and some may not be combined.

Let us help answer any of your questions about Workers’ Compensation or other tax matters.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Linda J. Johannes, CPA

–until next week.

Tax Tip of the Week | No. 470 | The Offer In Compromise – IRS Debt Relief For Those Who Are Eligible July 25, 2018

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Tax Tip of the Week | July 25, 2018 | No. 470 | The Offer In Compromise – IRS Debt Relief For Those Who Are Eligible

Do you owe a huge tax bill to the IRS? If you meet certain conditions, you might be eligible to file for an Offer in Compromise (OIC), and if successful, to eliminate thousands of dollars in tax, penalties and interest – permanently! An OIC is not a payment plan, although there will undoubtedly be some payments involved. Some OIC’s will require payments for 24 months, others for 5 or 6 months, and some will require only one or two payments, depending on the “offered” terms, and / or the “accepted” terms.

There is a multitude of paperwork involved in applying for an OIC. Forms that will have to be submitted will include Collection Information Statements and the Offer in Compromise packet itself. These are not easy forms to fill out. They require information on all of your assets, liabilities, and income and expenses. You will also have to provide at least three months of bank statements, any mortgage statements, pay stubs and other personal information. If you want to see if you qualify for an OIC before filling out all of the paperwork, you can go to IRS.gov and use the Offer in Compromise Pre-Qualifier tool.

An OIC is an agreement between the taxpayer and the IRS that settles a tax debt for less than the full amount owed. It can provide the taxpayer with a fresh start for tax purposes. In order to get an offer accepted, the offer must be appropriate based on what the IRS considers your true ability to pay, but there are conditions. For example, you must have filed all tax returns legally required to be filed. You must also be receiving notices from the IRS for your tax debts. And you cannot be in an open bankruptcy proceeding. Generally, the IRS will not accept an offer if they believe you can pay your tax debt in full, either currently with cash or equity in assets, or through an installment agreement.

The IRS will look at your situation extensively before accepting your OIC. They will only agree to proceed if they believe one of the following situations exists: there is Doubt as to Collectibility, Doubt as to Liability, or it will help with Effective Tax Administration. Doubt as to Collectibility is the reason used most often.

In the application for an Offer in Compromise, you have to name the terms of the offer you are submitting, and 24 months is the default time span for payments. For example, you might offer to pay $100 per month for 24 months on a $50,000 debt, thereby saving over $47,000. And there is generally an application fee of $186. So there will be a payment due with the submission of the OIC of the application fee plus the first payment as offered in your application. Both of these payments can be waived if you meet the Low-Income Certification.

As you might suspect, submitting an Offer in Compromise can be a very long and drawn out process. After submission of the application and any payments due, it might take a few months for the IRS to get back with you. And undoubtedly, they will want more information. However, the end result can be very rewarding if the offer is accepted. Rules continue to apply though, even after acceptance. You must stay current on your tax returns and any taxes due after acceptance, and any refunds on returns filed while the offer is being considered or while it runs its course are applied toward your tax debt, and are not considered payments toward your offer. Other rules might also apply and remember, this is a negotiation, so you should probably have a professional on your side.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Norman S. Hicks, CPA

–until next week.

Tax Tip of the Week | No. 469 | Medicare Costs Set to Rise for the Wealthy (ANOTHER Sneak Attack) July 18, 2018

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Tax Tip of the Week | July 18, 2018 | No. 469 | Medicare Costs Set to Rise for the Wealthy (ANOTHER Sneak Attack)

The federal government is becoming sneakier and sneakier about getting the wealthy to pay an even greater share of Medicare costs. Many of these “sneaky” taxes already exist on your income tax return. These include phase-outs of this and that, various floors and ceilings, tax bracket triggers, the alternative minimum tax, the net investment income tax, the additional Medicare tax, and so forth and so on.

Beginning in 2019, individuals with incomes of $500,000 or more and couples with earnings of more than $750,000 will be required to pay 85% of the costs of Medicare Parts B and D – up from 80% now. This increase in premium is called the income-related monthly adjustment amount. In contrast, Medicare beneficiaries with incomes of less than $85,000 and less than $170,000 for couples – pay only 25% of the costs.

Some of our clients (and their accountants) have been surprised by this extra Medicare tax which may be triggered by increased income levels from events such as selling their business and/or farm, etc. This extra tax is not on your income tax return but appears as additional Medicare withholding from your social security benefits. If your social security benefits are less than the Medicare tax deductions, you have the luxury of sending a check to the Social Security Administration each month and helping to reduce their current deficit.

Certain appeal rights are available if a spike in your income has resulted from a “once in a lifetime” event. If such an event has occurred in your life, there is an actual form titled “Medicare Income-Related Monthly Adjustment Amount – Life Changing Event” that can be filed to help reduce your premium costs.This form may also be filed to report a decrease in your income.

In addition, because the Social Security Administration bases their computations on your modified adjusted gross income, if you file an amended return that lowers your income, you should provide a copy to the SSA along with your acknowledgment receipt from the IRS, as this may help to reduce your premiums.

One final option, if you disagree with the income-related monthly adjustment amount, is to file an appeal. You may file online, or in writing by completing a Request for Reconsideration, or contact your local Social Security office.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Mark Bradstreet, CPA & Norman S. Hicks, CPA

–until next week.

Tax Tip of the Week | No. 468 | New Tax Laws and Buying Your Dream Vacation Home July 12, 2018

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Tax Tip of the Week | July 11, 2018 | No. 468 | New Tax Laws and Buying Your Dream Vacation Home

Vacation-home buyers are impacted by the Tax Cuts and Jobs Act of 2017, passed by Congress in December of last year. Aside from a few exceptions the new laws are effective on January 1, 2018. The new laws that impact vacation homes generally revolve around the deductibility of mortgage interest and property taxes. This tax tip will not delve into any tax aspects of a second home rental.

Let’s chat first about the property taxes on your dream vacation home.
These property taxes are still deductible. But, like the property taxes on your personal residence there are now more hoops to jump through and they are higher. Being able to itemize now is more difficult since all of your taxes, a part of your itemized deductions, may not exceed $10,000.

Moving on to the deductibility of mortgage interest whether it be from home-equity loans, home-equity lines of credit (HELOCS) or second mortgages have also been adversely affected by the new tax laws.

Generally, mortgage interest is no longer deductible unless the loan proceeds are used to purchase, construct or significantly improve the home that secures the loan. Often, in the past, prior to the passage of the new tax laws – vacation-home buyers of ski chalets and oceanfront homes were using mortgages on their primary residence to purchase the second home. IRS now says that this interest is no longer deductible since the mortgage is on another home. However, it is okay to use a first mortgage on your vacation home for its purchase. But you must keep in mind that you can only deduct the interest on a grand total of $750,000 in mortgage loans. Any “excess” interest is not deductible.

First mortgages on your vacation home or on your primary residence will typically bear similar interest rates. However, unlike a HELOC on your primary residence used for the purchase of a vacation home, lending institutions will ask for at least a 15% down payment for mortgages placed on your vacation home. Be sure to factor this possibility into your cash planning forecast.

Of course, the best work around for managing the mortgage interest deduction on your dream home is not to have any debt. PAY CASH! NOW THAT WOULD BE A DREAM!

Credit given to Robyn A. Friedman, Wall Street Journal, Friday, May, 11, 2018

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Mark Bradstreet, CPA

–until next week.

Tax Tip of the Week | No. 467 | Hmmm…Behind on Filing Your Income Tax Returns and/or Paying Your Income Taxes? July 4, 2018

Posted by bradstreetblogger in : General, Tax Deadlines, Tax Planning Tips, Tax Tip, Taxes, Uncategorized , add a comment

Tax Tip of the Week | July 4, 2018 | No. 467 | Hmmm…Behind on Filing Your Income Tax Returns and/or Paying Your Income Taxes?

You can run but you can’t hide. Delinquent tax return filing or failure to pay your income taxes is not a problem that ever goes away. In fact, the longer you wait to address this problem, the worse it becomes.

The highlights that follow are specific to the Internal Revenue Service. Other taxing entities have their own rules and regulations for past due returns and past due tax balances.

The “failure to file” IRS penalty is typically 5% per month and the “failure to pay” IRS penalty is an additional 5% per month. These two penalties may each be up to 25% of your unpaid taxes. To add insult to injury, interest expense to the IRS also accrues until the balance is paid in full.

The IRS may waive these penalties if you have reasonable cause for not filing your return or paying your taxes. Criminal charges may be sought against a taxpayer if the IRS believes you are evading taxes.

Some people won’t file a return with a balance due if funds are lacking to pay the IRS. In these cases, one may be in a better position to file the return without payment to avoid the “failure to file” penalty.  In this scenario, the “failure to pay” penalty would be the only penalty assessed, along with the interest expense of course.

If paying your return balance is not an option, an installment agreement may be applied for. If eligible, this agreement sets-up a monthly payment. Warning: These installment agreements are typically null and void if a payment is missed.

Another option, although far from easy to obtain, is to request an “offer in compromise.” This permits you to pay, under certain conditions, less then the full overdue balance.

Another possibility exists, if the IRS agrees you cannot pay your past due balance and your living expenses, your account may be moved to “currently not collectible.” Usually, in this situation, the IRS collection efforts will ratchet down. However, the debt remains with penalties and interest continuing to grow.

The moral of the story is not to ignore any IRS correspondence (or any tax correspondence for that matter) and be proactive in dealing with it. Your tax professional can help you come up with a workable plan. They have been down this road before and most likely will have a working rapport with the tax agency in question.

Credit to Sarah Skidmire Sell, The Associated Press, Sunday April 29, 2018, Dayton Daily News

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Mark Bradstreet, CPA

–until next week.

Tax Tip of the Week | No. 465 | IRS Penalties – DON’T PAY Just Out of Frustration June 20, 2018

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Tax Tip of the Week | June 20, 2018 | No. 465 | IRS Penalties – DON’T PAY Just Out of Frustration

Is it a big-time hassle to deal with the IRS in any fashion? That is a big Y E S! In fact, it has never been more difficult. Maybe that is the IRS’s fault and perhaps it is the inevitable result of their budget being slashed. Regardless, attempting to communicate with them can make you crazy!

To give you some idea of the amount of civil penalties (via notices) assessed; in 2016, the IRS assessed 39.6 million taxpayers and abated 5.2 million of these. Considering the number of taxpayers in the USA, thusly, you have a relatively high chance of receiving a tax notice.

It is not uncommon for IRS notices to show balances due in the tens of thousands of dollars and to be very threatening. If you receive IRS correspondence – try not to overreact. Many people upon receiving IRS tax correspondence have a tendency to simply write them a check; they assume the IRS is always right. In fact, more than half of their notices are incorrect and only computer generated. Writing them a check without any further research probably makes sense if the IRS only wants a few bucks. Aside, from a few bucks being due, a quick telephone call to the IRS by your tax professional (not that the call hold time is quick) may be all that is necessary. Other times, a one-page letter to the IRS may be all that is needed to save the day and have the tax, interest and/or penalty abated. Other times, three or four letters, over an extended period of time, may be needed to receive a “yea” or “nay” to your request from the IRS. To avoid digging a deeper hole I would prefer that you do not call or correspond with the IRS on your own. A power of attorney is needed for your tax professional to have meaningful conversations and correspondence with the IRS.

One of the methods available for abatement includes the use of “administrative relief” under the “first-time penalty abatement policy.” The name “first time” is a misnomer, it doesn’t mean first time ever, just means you have been “clean” in the last three years… and yes, they do verify that.

Many other methods are available for potential abatement. But, remember, if your notice demands big dollars – get help.

Credit to… Tom Herman, Wall Street Journal “It May Pay to Fight IRS Penalties,” Monday, March 26, 2018

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Mark Bradstreet, CPA

–until next week.

 

Tax Tip of the Week | No. 464 | Ohio’s Commercial Activity Tax (CAT) – General Information June 13, 2018

Posted by bradstreetblogger in : General, Tax Deadlines, Tax Tip, Taxes, Uncategorized , add a comment

Tax Tip of the Week | June 13, 2018 | No. 464 | Ohio’s Commercial Activity Tax (CAT) – General Information

The commercial activity tax (CAT) was enacted in Ohio House Bill 66 and first applied to taxable gross receipts received on and after July 1, 2005. The CAT is a successor tax to Ohio’s general business property and corporate franchise taxes, both of which were phased out. The CAT is an annual privilege tax measured by gross receipts on business activities in Ohio. This tax applies to all types of businesses: e.g., retailers, service providers (such as lawyers, accountants, and doctors), manufacturers, and other types of businesses including rentals. The CAT also applies whether the business is located in Ohio or is located outside of Ohio if the taxpayer has enough business contacts with this state. The CAT applies to all entities regardless of form, (e.g., sole proprietorships, partnerships, LLCs, and all types of corporations). A person with taxable gross receipts of more than $150,000 per calendar year is subject to this tax.

Taxable Gross Receipts – Gross receipts subject to CAT include most business types of receipts. Some examples of receipts that are not subject to the CAT include interest, dividends, capital gains, wages and gifts. Receipts from sales to out-of-state purchasers are not subject to the CAT.

Registration – Taxpayers having over $150,000 in gross receipts from sales to customers in Ohio for the calendar year are required to file returns for the CAT. In order to file returns, a taxpayer must first register for the CAT with the Ohio Department of Taxation.

Annual and Quarterly Filers – Annual CAT taxpayers (those taxpayers with taxable gross receipts between $150,000 and $1 million in a calendar year) must pay an annual minimum tax. The annual minimum tax is due on May 10th of the current tax year.

Taxpayers with annual taxable gross receipts in excess of $1 million must file returns on a quarterly basis. Quarterly taxpayers pay a rate component for taxable gross receipts in excess of $1 million. The annual minimum tax is paid with the filing of the first quarter return, which is due on May 10th.

Consolidated Elected Taxpayer Groups and Combined Taxpayer Groups – A consolidated elected taxpayer group is a taxpayer that has elected to file as a group including all entities that have either 50 percent or more common ownership or 80 percent or more common ownership. A major benefit of making this election is that receipts received between members of the group may be excluded from the taxable gross receipts of the group. This election is binding for eight calendar quarters.

Annual Minimum Tax –   The annual minimum tax is calculated as follows:
•    $150 for taxpayers with taxable gross receipts of $1 million or less in the previous calendar year;
•    $800 for taxpayers with taxable gross receipts between $1 million and $2 million;
•    $2,100 for taxpayers with taxable gross receipts between $2 million and $4 million; or
•    $2,600 for taxpayers with more than $4 million in taxable gross receipts in the previous calendar year.

Tax Credits – Some credits that taxpayers can claim against the CAT include:
•    the nonrefundable jobs retention credit;
•    the nonrefundable credit for qualified research expenses, or, the nonrefundable credit for a borrower’s qualified research and development loan payments;
•    the refundable motion picture production credit;
•    the refundable jobs creation credit, or the refundable job retention credit;
•    the Ohio historic preservation tax credit (on a temporary basis).

Some Issues We’ve Seen – From the beginning of enactment, and even through the present, many taxpayers are simply unaware that the tax exists, or that they are subject to it. Another issue is that some taxpayers file CAT returns that include all gross receipts and not just those to Ohio customers. And some do not take advantage of credits that can be applied to the tax. Also, we have seen many cases where the taxpayer computes the tax, then goes online and makes the payment, but never files the return. And, it usually takes Ohio over a year to send out a notice for the unfiled return, and by then, they have sent the taxpayer to collections, and filed liens. And finally, we have noticed that audits in this area are on the rise.

As you can see, this simple tax is not always so simple.

Note: most of this information is available on the Ohio Department of Taxation’s website.

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Norman S. Hicks, CPA

–until next week.

Tax Tip of the Week | No. 463 | Employing Youth June 6, 2018

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Tax Tip of the Week | June 6, 2018 | No. 463 | Employing Youth

Each June, millions of youth begin their search for a summer job. Before hiring any summertime help, it’s a good idea to be aware of the Federal and State laws governing youth in the workplace. The Fair Labor Standards Act (FLSA) youth employment provisions are designed to protect young workers by limiting the types of jobs and the number of hours they may work, based on the age of the minor. The following provisions apply to nonagricultural occupations:

18 Years of Age. Once a youth reaches 18, the Federal child labor provisions no longer apply to them – they can work any job for any number of hours.

16 & 17 Years of Age. Under the FLSA 16 and 17-year-olds may work on any day for any number of hours. However, individual states may limit the hours or the times of day that anyone under the age of 18 may work. Also, all youth under the age of 18 are prohibited from working any non-farm jobs deemed hazardous.

14 & 15 Years of Age. 14 and 15-year-olds may work:

•    Non-school hours;
•    3 hours on a school day;
•    18 hours in a school week;
•    8 hours on non-school day;
•    40 hours in a non-school week; and
•    Between 7 a.m. to 7 p.m. (except June 1-Labor Day when hours are extended to 9 p.m.)

Full Credit to…Padgett Business Services June 2018 SmallBiz Builder

Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We may be reached in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.

This week’s author – Mark Bradstreet, CPA

–until next week.