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Tax Tip of the Week | No. 402 | Filing for an Extension April 12, 2017

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

Tax Tip of the Week | April 12, 2017 | No. 402 | Filing for an Extension

If you haven’t filed your tax return by now, you should probably consider filing for an extension. It is a lot easier to file for an extension than it is to amend a return later for a mistake you made trying to rush your return to completion. Even more costly is if the IRS finds a mistake you made and assesses underpayment penalties and interest.

To file for an extension, you simply need to submit Form 4868. After submitting this form, you now have until October 16, 2017 to timely file your return.  Note, however, an extension of time to file is not an extension of time to pay.  If you suspect you will owe some taxes, you must send a payment along with the extension.  This is true for your federal, state and city returns.

Ohio will automatically accept the federal extension. Some cities, however, require a special city extension form. Also, some cities will not allow extensions if you only have W2 income.  Be sure to check with your work and/or resident cities before April 15th.

Another reason to file for extension is that some speculate your chances for an audit decreases for extended returns. How?  One of the methods the IRS uses to select a return for audit is to select a random sample of returns filed by April 17th.   If your return is not in that sample—then you don’t get picked!

Editor’s Note:  One of the pledges I make to all my clients is that my personal return will be the last one filed each year. When my most procrastinating client’s return is filed on October 16th —-mine is right behind it!  And has been that way for nearly 20 years!

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW…until next week.

Tax Tip of the Week | No. 391 | 2017 Tax Filing Deadlines January 25, 2017

Posted by bradstreetblogger in : tax changes, Tax Deadlines, Tax Preparation, Taxes , add a comment

Tax Tip of the Week | January 25, 2017 | No. 391 | 2017 Tax Filing Deadlines

Keep the following dates in mind while filing your 2016 tax returns in 2017:

March 15, 2017   Partnership/Form 1065 – This is a new due date for partnerships, changed from April 15.

March 15, 2017   S-Corps/Form 1120S – This deadline remains the same as prior years.

April 18, 2017*    Individual Tax/Form 1040, Estates, Trust/Form 1041 – *Not a typo! 4/15/17 is a Saturday and 4/17/17 is a holiday in Washington D.C.

April 18, 2017      Individual Extension/Form 4868 – Remember, if you owe taxes for 2016, a tax payment is due with the extension.

April 18, 2017      C-Corps/Form 1120 – C-Corps were previously due by March 15.

Sept 15, 2017       Extended Partnerships/Form 1065, S-Corps/Form 1120S, C-Corps(calendar year)/Form 1120,  – Any extended return that contains a K-1 is due prior to individual deadlines.

Oct 2, 2017           Extended Estates, Trust/Form 1041 – These were previously due October 15.

Oct 16, 2017         Individual Tax/Form 1040 – Last day to file individual returns that were placed on extension.

April 15, 2020      2016 Amended Return/Form1040X – You can file an Amended Return to pay taxes anytime, but you only have 3 years from the original due date to claim a refund.

Please Note:  This is not a comprehensive list of all due dates for all tax forms and does not include due date changes for fiscal year-end C-Corps.

Also Note:  Ohio generally follows all federal due dates as do most cities. Please contact us regarding your particular filing due dates.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 387 | Happy New Year! December 28, 2016

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

Tax Tip of the Week | December 28, 2016 | No. 387 | Happy New Year!

And get ready for the tax filing season.

Hopefully, you followed some of the suggestions we outlined a few years ago in TTW # 21 to organize your records.  If you did, great!  This will make filing your tax returns a lot easier this year. It also means that you and your tax advisor can spend more time on tax and financial planning issues for 2017 vs. looking back to 2016.

If you are new to our Tax Tip of the Week series, or didn’t follow our suggestions from a few years ago, now would be a good time to review TTW #21.   You might want to make getting organized your 2017 New Year’s Resolution!

This week we will look at some of the more common forms that you should be watching for in the coming weeks and months:

W-2:    Employers should mail these by 1/31/17.  If you have moved during the year, make sure former employers are aware of your new address.

W-2G:    Casinos, Lottery Commissions and other gambling entities should mail these by 1/31/17 if you have gambling winnings above a certain threshold. Note:  Some casinos will issue you a W-2G at the time you win a jackpot.  Make sure you have saved those throughout the year.

1096:    Compilation sheet that shows the totals of the information returns that you are physically mailing to the IRS. The check box for Form 1099-H was removed from line 6, while a check box for Form 1098-Q was added to line 6. The spacing for all check boxes on line 6 was expanded. The amounts reported in Box 13 of Form 1099-INT should now be included in box 5 of Form 1096 when filing Form 1099-INT to the IRS.

1098-C:    This form is for contributions of motor vehicles, boats, and airplanes. A donee organization must file a separate Form 1098-C with the IRS for each contribution of a qualified vehicle that has a claimed value of more than $500. All filers of this form may truncate a donor’s identification number (social security number, individual taxpayer identification number, adoption taxpayer identification number, or employer identification number), on written acknowledgements. Truncation is not allowed, however, on any documents the filer files with the IRS.

1099-MISC :    This form reports the total paid during the year to a single person or entity for services provided. Certain Medicaid waiver payments may be excludable from the income as difficulty of care payments.  A new check box was added to this form to identify a foreign financial institution filing this form to satisfy its chapter 4 reporting requirement.

1099-INT:    This form is used to report interest income from banks and other financial institutions. Box 13 was added to report bond premium on tax-exempt bonds. All later boxes were renumbered.  A new check box was added to this form to identify a foreign financial institution filing this form to satisfy its chapter 4 reporting requirement.

1099-DIV:    This form is issued to those who have received dividends from stocks. A new check box was added to this form to identify a foreign financial institution filing this form to satisfy its chapter 4 reporting requirement.

1099-B:    This form is issued by a broker or barter exchange that summarizes the proceeds of transactions. For a sale of debt instrument that is a wash sale and has accrued market discount, enter code “W” in box 1f and the amount of the wash sale loss disallowed in box 1g.

1099-K:    This form is given to those merchants accepting payment card transactions.  Completion of box 1b (Card Not Present transactions) is now mandatory.

K-1s:    If you are a partner in a business or a limited partner in some investments, your income and expenses will be reported to you on a K-1. The tax returns for these entities are not due until 3/15/17 (if they have a calendar-year accounting). Sometimes, you may not receive a K-1 until shortly after the entity’s tax return is filed in March.

If you are a beneficiary of an estate or trust, your share of the income and expenses for the year will also be reported on a K-1. The timing of when you may receive your K-1 is the same as outlined above.

NOTE:  Many times partnerships, estates and trusts will put their tax returns on extension.  If they do, the due date of the return is not until 9/15/17.  We often see client’s receiving K-1s in the third week of September.

If you receive, or expect to receive, a K-1 it may be best if you place your personal return on extension.  It is a lot easier to extend your return then it is to amend your return after receiving a K-1 late in the year.

So start watching your mailbox and put all of these statements you receive in that new file you created!

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 381 | New W-2 Reporting Requirements November 16, 2016

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

Tax Tip of the Week | November 16, 2016 | No. 381 | New W-2 Reporting Requirements

New W-2 and 1099-MISC Filing Deadlines to Have a Significant Impact on Businesses

This change adds an extensive amount of work for filers in January.

Every tax year brings a variety of changes, whether forms are updated or regulations have changed. This year marks a particularly important year for filers, as the deadline for submitting Form W-2 to the SSA and Form 1099-MISC to the IRS has changed significantly.

Beginning in 2017, for the 2016 reporting year, filers must send W-2 and 1099-MISC recipient copies and submit to the SSA/IRSIRS/SSA by January 31, regardless of method (paper or e-file). In many cases, this is months earlier, increasing workload and stress for filers.

To further complicate matters, the new filing deadline, as it relates to Form 1099-MISC, only impacts filers reporting nonemployee compensation payments in box 7. Although the overwhelming majority of 1099-MISC filers will report information in box 7, there is bound to be some confusion.

Historically, filers were required to provide W-2 and 1099-MISC forms to recipients by January 31; however, they were not required to submit the forms to the SSA/IRS until February 28 (paper) or March 31 (e-file).

With three months of work being condensed into 30 days, this change adds an extensive amount of work for filers in January. In addition, Forms 1095-B and 1095-C filing deadlines also fall at the end of January for recipient delivery. This schedule means businesses will face a huge time crunch when planning for wage, income, and ACA reporting for the 2016 year.

In the past, some businesses would file W-2 and 1099-MISC recipient copies first and wait to find out if any changes were needed prior to filing to the SSA/IRS, which lessened the risk for possible corrections. Due to the earlier deadline in 2017, businesses may need to abandon this strategy and consider filing to recipients and the SSA/IRS concurrently.

To further complicate January’s filing deadlines, the IRS recently eliminated the automatic 30-day extension of time to file W-2 forms. Previously, filers could obtain an automatic 30-day extension by submitting Form 8809 to the IRS on or before January 31. Filers could also request an additional 30-day extension, pushing their e-file deadline to the end of May. These automatic extensions will no longer be available when filing W-2 forms for tax year 2016.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 362 | One Million Fewer Taxpayers Asked to Take ID Quiz July 6, 2016

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

Tax Tip of the Week | July 6, 2016 | No. 362 | One Million Fewer Taxpayers Asked to Take ID Quiz

Here is a recent press release from the Ohio Society of CPAs……..

The Ohio Department of Taxation said about 1 million fewer taxpayers had to take its ID Confirmation Quiz to get their refunds this past tax season.

This was the result of more experience in fighting tax fraud and better targeting of suspicious income tax returns, Tax Commissioner Joe Testa said.

“The analysis we’ve done and modifications we’ve made have allowed us to dramatically reduce the number of taxpayers being asked to take the quiz and still remain among national leaders in aggressively combating these fraud schemes,” he said. “We will continue to refine our defenses to keep the state treasury safe and work to make the process more user-friendly.”

Last year, nearly 1.7 million taxpayers were asked to take the ID Quiz; this season that number was reduced by nearly two-thirds, to about 665,000.

Last year, taxpayers complained about the questions and Gov. Kasich vetoed a budget provision that would have limited the questions to information obtained from the previous five years. Testa told OSCPA such a limit would have hamstrung his department’s ability to examine tax returns.

Testa said taxpayers this year told the department the quiz was quick and easy to take, a view supported by its 98.8% passage rate. In addition, as identity theft and attempted tax fraud have become more prevalent issues, taxpayers said they understood and appreciated the extra steps ODT has taken to protect their identity and tax dollars. Security measures were also expanded this year to protect the identity of minors as well as adults.

Since 2014 more than $526 million in fraudulent income tax refund claims have been blocked, the department said, and that number is expected to increase. Final data for the recent filing season is not yet available.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 361 | Don’t Ignore That IRS Notice June 29, 2016

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

Tax Tip of the Week | June 29, 2016 | No. 361 | Don’t Ignore That IRS Notice

According to a 2016 report from the Treasury Inspector General for Tax Administration, the IRS mailed more than 188 million notices and letters to taxpayers during 2014. There’s no reason to believe the number of notices will be any less this year. If you’re one of those taxpayers on the IRS mailing list, here’s what to do.

Scan the heading. The first line, generally printed in bold type and centered beneath your name and address, will tell you why the IRS is contacting you. Questions about missing information, additional taxes owed, or payments due mean you’ll want to take prompt action to avoid more notices or assessments of interest and penalties.

Review the discrepancy. You’ll find the tax form and the year to which the notice applies printed in the upper right corner. Pull out your copy of the corresponding tax return, along with the supporting documents, and compare what you filed with what the IRS is questioning.

Prepare your explanation. Are the proposed changes correct? Did the IRS misapply a payment? Whatever the issue, there’s usually no need to file an amended return. However, the IRS typically wants a response, by either phone or mail, in order to clear the notice from your account.

Do not delay. Ignoring IRS correspondence will not make it go away. Reply to the IRS in a timely manner even if you don’t have all the information being requested.

Please contact us as soon as you receive a notice from the IRS or state or local taxing authority. We’re here to set your mind at ease by helping you resolve the matter as quickly as possible.  Many times, we can make the problem “go away” with a properly written response.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 350 | It is Better to Extend vs. Not Filing on Time April 13, 2016

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

Tax Tip of the Week | April 13, 2016 | No. 350 | It is Better to Extend vs. Not Filing on Time

Filing for Extensions

If you haven’t filed your tax return by now, you should probably consider filing for an extension.  It is a lot easier to file for an extension than it is to amend a return later for a mistake you made trying to rush your return to completion.  Even more costly is if the IRS finds a mistake you made and assesses underpayment penalties and interest.

To file for an extension, you simply need to submit Form 4868. After submitting this form, you now have until October 17, 2016 to timely file your return.  Note, however, an extension of time to file is not an extension of time to pay.  If you suspect you will owe some taxes, you must send a payment along with the extension.  This is true for your federal, state and city returns.

Ohio will automatically accept the federal extension. Some cities, however, require a special city extension form.  Also, some cities will not allow extensions if you only have W2 income.  Be sure to check with your work and/or resident cities before April 15th.

Another reason to file for extension is that some speculate your chances for an audit decreases for extended returns.  How? One of the methods the IRS uses to select a return for audit is to select a random sample of returns filed by April 15th (April 18th this year).   If your return is not in that sample—then you don’t get picked!

Editor’s Note:  One of the pledges I make to all my clients is that my personal return will be the last one filed each year. When my most procrastinating client’s return is filed on October 17th —-mine is right behind it!  And has been that way for nearly 20 years!

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 349 | IRS Holds $950 Million for 2012 Non-Filers April 6, 2016

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

Tax Tip of the Week | April 9, 2016 | No. 349 | IRS Holds $950 Million for 2012 Non-Filers

Federal income tax refunds totaling $950,349,000 are waiting for an estimated 1 million taxpayers who did not file a federal income tax return for 2012.

To collect, these taxpayers must file a 2012 federal return no later than this year’s April deadline.

“We especially encourage students and others who didn’t earn much money to look into this situation because they may still be entitled to a refund,” said IRS Commissioner John Koskinen.

The IRS estimates that the median refund is $718. If no return is filed to claim a refund within three years, the money becomes the property of the U.S. Treasury. The window closes on April 18 (April 19 for taxpayers in Maine and Massachusetts). A 2012 refund check may be held if the taxpayer hasn’t filed tax returns for 2013 and 2014.

The states with the most taxpayers potentially due 2012 refunds are Texas (96,400 non-filers due a potential median refund of $771), California, (94,900 non-filers, median refund $656), Florida (64,700 non-filers, $721) and New York (57,600 non-filers, $796).

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

TaxTip of the Week | No. 343 | Filing Status February 24, 2016

Posted by bradstreetblogger in : Electronic Tax Filing, General, tax changes, Tax Deadlines, Tax Planning Tips, Tax Preparation, Tax Tip, Taxes , add a comment

Tax Tip of the Week | February 24, 2016 | No. 343 | Filing Status

How Are You Going to File?

Some tips are worth repeating—-a reminder we offer every year:

If you were legally married on 12/31/15, the IRS considers you married for the entire year of 2015.

You now must decide if you are going to file as Married Filing Jointly (MFJ) or Married Filing Separately (MFS). Note, however, if you file MFJ it is an irrevocable election—you cannot go back and amend a MFJ return to a MFS return.

The primary reason to file MFS is to pay less tax.  This is particularly beneficial to save on the amount of Ohio taxes paid.  Another reason to file separately is to avoid joint liability. Each spouse who signs a joint return is responsible for the accuracy and tax liability on the return.

Many times, for example, in a second marriage situation we see couples who have a desire to maintain separate financial responsibilities.  While this is understandable, it could lead to paying several thousand dollars in additional taxes.  If you file MFS, you will lose the following:

–    Lost credits for child care, education credits, adoption credits and EIC
–    Student loan interest deduction, tuition and fees deduction, savings bond interest deduction
–    If one spouse itemizes, or takes the standard deduction, the other spouse must do the same.  (That is, one cannot itemize and the other take the standard deduction.)
–    A greater percentage of your Social Security benefits may be taxable
–    Your ability to contribute to traditional or Roth IRA will be greatly limited
–    Capital losses will be limited to a maximum of $1,500
–    Passive losses will be limited

Before filing your return you need to look at both MFJ and MFS to see which lowers your tax burden the greatest.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 342 | 2016 Filing Deadlines February 17, 2016

Posted by bradstreetblogger in : General, tax changes, Tax Deadlines, Tax Preparation, Uncategorized , add a comment

Tax Tip of the Week | February 17, 2016 | No. 342 | 2016 Filing Deadlines

The tax season is a little bit longer this year…

As you know, your federal and state tax returns are generally due on April 15th of each year.  For 2015 returns, however, you get a few extra days.

The deadline for 2015 returns is April 18, 2016.  This is because Washington, D.C. will celebrate their Emancipation Day holiday on Friday April 15, 2016. This pushes the deadline to the following Monday for most of the nation. (Due to Patriots Day, the deadline will be Tuesday, April 19, for Maine and Massachusetts residents.)

(The change from the normal Friday deadline date to the following Monday also means our office will be open one additional weekend—we will so look forward to that!)

In addition to observance of these local holidays, 2016 is also a Leap Year. This adds another day in February.

So use your four extra days wisely in 2016 to meet your filing deadline on time!
You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.