Elite Bookkeeping & Tax Services

Thursday, September 3, 2015

Tax Tips and News Compilation

Wednesday, September 2, 2015

10 Tax Tips Regarding Amended Returns

If you made a mistake on your tax return, don't panic. We can help you with filing an amended return if you need to fix any errors. You can also amend your tax return if you forgot to claim a tax credit or deduction. Here are ten tips from the IRS if you need to amend your federal tax return.

1. When to amend. You should amend your tax return if you need to correct your filing status, the number of dependents you claimed, or your total income. You should also amend your return to claim tax deductions or tax credits you did not claim when you filed your original return.

Note: If, as allowed by recent legislation, you plan to amend your tax year 2014 return to retroactively claim the Health Coverage Tax Credit, contact our office first for more information.

2. When NOT to amend. In some cases, you don't need to amend your return. The IRS usually corrects math errors when processing your original return. If you didn't include a required form or schedule, the IRS will send you a notice via U.S. mail about the missing item.

3. Form 1040X. This form is used to amend a federal income tax return that you filed before. Since amended returned may not be filed electronically, this form must be filled out and mailed to the IRS.

4. More than one year. If filing an amended return for more than one year, a separate form for each year is required. They should not be mailed together.

5. Other forms or schedules. If your changes have to do with other tax forms or schedules, they'll need to be attached to Form 1040X to prevent delays in processing.

6. Amending to claim an additional refund. If you are waiting for a refund from your original tax return, you should wait to receive it before any amendments are filed. Amended returns typically take 16 weeks to process.

7. Amending to pay additional tax. If an amendment is being filed because you owe more tax, Form 1040X should be filed as soon as possible. This will limit interest and penalty charges.

8. Corrected Forms 1095-A. If you or anyone on your return enrolled in qualifying health care coverage through the Health Insurance Marketplace, you should have received a form 1095-A, Health Insurance Marketplace Statement. You may also have received a corrected Form 1095-A. If you filed your tax return based on the original Form 1095-A, you do not need to file an amended return based on the corrected Form 1095-A. This is true even if you would owe additional taxes based on the new information. However, you may choose to file an amended return.

In some cases, the information on the new Form 1095-A may lower the amount of taxes you owe or increase your refund. You may also want to file an amended return if:

You filed and incorrectly claimed a premium tax credit, or
You filed an income tax return and failed to file Form 8962, Premium Tax Credit, to reconcile your advance payments of the premium tax credit.

Before amending your return, if you received a letter regarding premium tax credit or Form 8962, you should follow the instructions in your letter.

9. When to file. To claim a refund Form 1040X must be filed no more than three years from the date you filed your original tax return. You can also file it no more than two years from the date you paid the tax, if that date is later than the three-year rule.

10. Track your return. You can track the status of your amended tax return three weeks after you file it with "Where's My Amended Return?".

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. As Enrolled Agents we are authorized by the IRS to serve as a taxpayer advocate on your behalf.

Read more about Enrolled Agents and how we can help you.
What is an Enrolled Agent
Expertise of the Enrolled Agent

For additional tax tips see our other recent posts. Our blog is here to help you and anyone you know. Feel free to share any information you find and by all means, call us if we may be of assistance.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Friday, August 28, 2015

IRS Waives Penalties for Colleges, Universities or Other Educational Institutions

The IRS is waiving penalties assessed against any college, university or other educational institution for Forms 1098-T that were filed with an incorrect or missing taxpayer identification number (TIN). The IRS is granting this relief for tax years 2012, 2013 and 2014.

Relief for these three years is being given in light of recent legislation that provides relief to educational institutions from future penalties for missing or incorrect TINs if the educational institution certifies under penalty of perjury that it has complied with regulations governing solicitation of payee TINs. Although this legislation permits this certification, it does not remove the requirement to properly solicit payee TINs.

For tax year 2012, each educational institution that was previously assessed such penalty will receive a letter from the IRS informing them of the IRS' decision. Affected institutions that do not receive a letter by October 1, 2015, should respond to the IRS using the original penalty assessment notice. The IRS is not assessing penalties for incorrect or missing TINs for tax years 2013 and 2014.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Wednesday, August 19, 2015

Gift Tax Information

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Tuesday, August 18, 2015

History of Enrolled Agents (EAs)

After the Civil War, many citizens had problems settling claims with the government for horses and other property confiscated for use in the war effort. After many petitions and much pleading, Congress, in 1884, endowed enrolled agents with the power of advocacy to prepare claims against the government and to seek equitable justice for the citizenry. For many years, the purpose of the enrolled agent was to act in this capacity.

In 1913, when the income tax was passed, the job of the enrolled agent was expanded to include claims for monetary relief for citizens whose taxes had become inequitable. As the income tax, estate, gift and other sources of tax collections became more complex, the role of the enrolled agent increased to include the preparation of the many tax forms that were required. Additionally, as audits became more prevalent, their role evolved into taxpayer advocacy and negotiating with the Internal Revenue Service on behalf of their clients.

In 1972, EAs united to form a national association to represent the needs and interests of EAs and the rights of taxpayers. That association is today called the National Association of Enrolled Agents (NAEA). Through their national association and state affiliates, enrolled agents have successfully defended their rights to practice and furthered the passage of legislation and administrative rules that benefit both tax practitioners and ordinary citizens.

Read more about:
What is an Enrolled Agent
http://elitebookkeepingtaxservices.blogspot.com/2013/05/what-is-enrolled-agent.html

Expertise of Enrolled Agents
http://elitebookkeepingtaxservices.blogspot.com/2014/06/expertise-of-enrolled-agent.html

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz

Monday, August 17, 2015

Deductions for Moving Expenses

Per the IRS, if you move your home you may be able to deduct the cost of the move on your federal tax return next year. This may apply if you move to start a new job or to work at the same job in a new location. In order to deduct your moving expenses, your move must meet three requirements:

1. Your move must closely relate to the start of work. In most cases, you can consider moving expenses within one year of the date you start work at a new job location. Additional rules apply to this requirement.

2. Your move must meet the distance test. Your new main job location must be at least 50 miles farther from your old home than your prior job location. For example, let's say that your old job was three miles from your old home. To meet this test, your new job my be at least 53 miles from your old home.

3. You must meet the time test. You must work full-time at your new job for at least 30 weeks for the first year after you move. If you're self-employed, you must also meet this test. In addition you must work full-time for a total of at least 78 weeks during the first two years at the new job site. If your tax return is due before you meet the time test, you can still claim the deduction if you expect to meet it.

If you qualify for this deduction, here are a few more tips:

Travel. You can deduct certain transportation and lodging expenses while moving. This applies to costs for yourself and other household members while moving from your old home to your new home. You may not deduct your travel meal costs.

Household good and utilities. You can deduct the cost of packaging, crating and shipping your property. This may include the cost to store or insure the items while in transit. You can deduct the cost to disconnect or connect utilities at your old and new homes.

Expenses you can't deduct. You may not deduct:

Any part of the purchase price of your new home.
The cost of selling your home.
The cost of breaking or entering into a lease.

Reimbursed expenses. If your employer later pays you for the cost of the move that you deducted on your tax return, you may need to include the payment as income. You must report any taxable amount on your tax return in the year you get the payment.

Address change. When you move, make sure to update your address with the IRS and the U.S. Post Office.

Thursday, August 13, 2015

Important! Revised Due Dates for 2016 Tax Reporting Year

Contributed by Robyn Yelton, EA

On July 31, 2015, President Obama signed into law P.L. 114-41, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.” Although this new law was primarily designed as a 3-month stopgap extension of the Highway Trust Fund and related measures, it includes a number of important tax provisions, including revised due dates for partnership and C corporation returns and revised extended due dates for some returns. This letter provides an overview of these provisions, which may have an impact on you, your family, or your business.

Revised Due Dates for Partnership and C Corporation Returns

Domestic corporations (including S corporations) currently must file their returns by the 15th day of the third month after the end of their tax year. Thus, corporations using the calendar year must file their returns by Mar. 15 of the following year. The partnership return is due on the 15th day of the fourth month after the end of the partnership's tax year. Thus, partnerships using a calendar year must file their returns by Apr. 15 of the following year. Since the due date of the partnership return is the same date as the due date for an individual tax return, individuals holding partnership interests often must file for an extension to file their returns because their Schedule K-1s may not arrive until the last minute.

Under the new law, in a major restructuring of entity return due dates, effective generally for returns for tax years beginning after Dec. 31, 2015:

Partnerships and S corporations will have to file their returns by the 15th day of the third month after the end of the tax year. Thus, entities using a calendar year will have to file by Mar. 15 of the following year. In other words, the filing deadline for partnerships will be accelerated by one month; the filing deadline for S corporations stays the same. By having most partnership returns due one month before individual returns are due, taxpayers and practitioners will generally not have to extend, or scurry around at the last minute to file, the returns of individuals who are partners in partnerships.
C corporations will have to file by the 15th day of the fourth month after the end of the tax year. Thus, C corporations using a calendar year will have to file by Apr. 15 of the following year. In other words, the filing deadline for C corporations will be deferred for one month.

Keep in mind that these important changes to the filing deadlines generally won't go into effect until the 2016 returns have to be filed. Under a special rule for C corporations with fiscal years ending on June 30, the change is deferred for ten years — it won't apply until tax years beginning after Dec. 31, 2025.

Revised Extended Due Dates for Various Returns

Taxpayers who can't file a tax form on time can ask the IRS for an extension to file the form. Effective for tax returns for tax years beginning after Dec. 31, 2015, the new law directs the IRS to modify its regulations to provide for a longer extension to file a number of forms, including the following:

Form 1065 (U.S. Return of Partnership Income) will have a maximum extension of six-months (currently, a 5-month extension applies). The extension will end on Sept. 15 for calendar year taxpayers.
Form 1041 (U.S. Income Tax Return for Estates and Trusts) will have a maximum extension of five and a half months (currently, a 5-month extension applies). The extension will end on Sept. 30 for calendar year taxpayers.
The Form 5500 series (Annual Return/Report of Employee Benefit Plan) will have a maximum automatic extension of three and a half months (under currently law, a 2½ month period applies). The extension will end on Nov. 15 for calendar year filers.

FinCEN Report Due Date Revised

Taxpayers with a financial interest in or signature authority over certain foreign financial accounts must file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Currently, this form must be filed by June 30 of the year immediately following the calendar year being reported, and no extensions are allowed.

Under the new law, for returns for tax years beginning after Dec. 31, 2015, the due date of FinCEN Report 114 will be Apr. 15 with a maximum extension for a 6-month period ending on Oct. 15. The IRS may also waive the penalty for failure to timely request an extension for filing the Report, for any taxpayer required to file FinCEN Form 114 for the first time.

I hope this information is helpful. If you would like more details about these changes or any other aspect of the new law, please do not hesitate to call.