By Saul Goode at Citysearch July 15, 2011
I had a horrible experience working with Mrs. Shew. I mailed in my tax documents 1 month prior to the April 15th deadline. I heard nothing from her for 2 weeks before I called. Her secretary/sister said they were on her desk and she would be getting to them soon. Same story on April 14th and May 10th. On April 14th I called to see what the status was and if there had been an extension filed. The response was they file extensions for all their clients. She however did not call to let me know that and just left me wondering what was going on. After I deployed overseas, my wife called her numerous times to see what the status of our taxes were, we kept getting the run around, she was working on them, or they were almost done, etc. She requested a document that I had sent her 3 times, not sure if she failed to open the attachment or didn't look for the subsequent pages in the attachment or what. Finally at the end of June 2011, she notified us that we needed to pay her for her services as the taxes were done. She however did not register to e-file so she was sending our taxes back to us to sign and mail into the IRS ourselves. She also did not pay attention to detail and spelled my wife's name wrong on the tax forms. After consulting with some co-workers overseas, it seems as though they had a lot of difficulty with her this year as well. They said the same things that it was hard to get a hold of her, their taxes were delyaed, their wives were calling her numerous times to inquire the status of the taxes. One guy even said she messed up his taxes and then had them redone at H&R Block and was able to get a lot more money back. I will never use her or recommend her to anyone. She came highly recommended last year as one of the most knowledgable people about overseas tax returns and a guarantee if you get audited that she will represent you against the IRS. With all the delays and run-arounds that she gave us, I don't want her going anywhere near the IRS in my defense. ...read more
By Swobbows November 20, 2010
Thanks for the connection! ...read more
By Earthwide Webs November 09, 2010
Earthwide Webs highly recommends K.A.B. Certified Public Bookkeepers. ...read more
Article Highlights: Major Tax Changes in 2018 Refund or Tax Due? Underpayment of Taxes Alternative Minimum Tax Minimum Required Distributions Convert into a Roth IRA Review Portfolio for Losses Make the Most of Higher Education Tax Credits Optimize Health Savings Account Contributions Empty Flexible Spending Accounts Bunch Charitable Deductions Remember the Annual Gift Tax Exemption Home Equity Debt • Retirement Savings Divorce in the Future Maximize Business Expenses New Flow-Through Deduction This has been a tumultuous year for taxes, with the tax reform that passed in late 2017 generally becoming effective in 2018, often with significant changes for both individuals and businesses. This is the first major tax reform legislation in more than 30 years, and to implement it, the IRS will have to create or revise approximately 450 forms, publications and instructions and modify around 140 information technology systems to ensure it can accommodate the newly revised or created tax forms, not to mention writing tax regulations for all of these changes – a daunting task for sure. The following are issues that could affect you and that you may need to plan for. Refund or Tax Due?– Most taxpayers are equating the recent tax reform to a larger refund when their 2018 tax return is prepared. However, that may not be the case because your tax refund is the difference between what you prepaid through payroll withholding and estimated tax payments and what you owe. Even if your tax bill is lower, if your prepayments were also lower, then your refund may not be as expected. The passage of tax reform came on December 20, 2017, just days before employers needed Form W-4 – the Employee’s Withholding Allowance Certificate – for 2018 withholding information from their employees, which did not give the IRS time to adjust the form and withholding tables for the new law. It was not until late February that the IRS published revised withholding tables and an updated Form W-4. Even then, there was concern that some employers might be using the old W-4 with the new tables. On top of that, many taxpayers and tax professionals were finding that the revised W-4 and withholding tables did not produce an accurate result. The bottom line is that there is a real concern that many taxpayers are in for an unpleasant surprise at tax time – so much so that the IRS has been issuing almost daily notices warning taxpayers that they may be under-withheld. This is a real concern for 2018 returns, and you may wish to fine-tune your withholding before year’s end. Underpayment of Taxes:Should your liability be greater than your prepayments by $1,000 or more, you may also be subject to underpayment penalties. This could simply be the result of under-withholding on your wages or underpaying estimated tax if you are self-employed, or of out-of-the-ordinary income, such as stock gains, sale of a business or rental or even winning big from the lottery. There are safe harbor prepayments to avoid a penalty, which require prepaying: 90% of the current year’s tax liability, 100% of the prior year’s tax liability, or 110% of the prior year’s tax liability, if the prior year’s AGI was over $150,000. If you are underpaid, there is still time to make adjustments and avoid or mitigate the penalty. Adjusting your payroll withholding is the best option, since withholding is treated as being paid ratably throughout the year, and the penalty is computed on a quarterly basis based on the prepayments through that quarter. However, as the end of the year gets closer, there is less and less time for revised withholding to kick in, so don’t delay in notifying your employer if you need to increase your withholding. Alternative Minimum Tax (AMT):Although Congress had promised to repeal both individual and corporate AMT, they only repealed the corporate AMT. However, even though they didn’t repeal it for individuals, the tax reform act did increase the exemption amounts and phase-out thresholds, and it eliminated certain deductions that triggered the AMT, so that the AMT will impact fewer taxpayers, giving rise to these possible strategies: Exercise Incentive Stock Options– These changes to the AMT may allow larger blocks of incentive stock options to be exercised, and the stock that’s issued can be held long-term and thus enjoy the lower capital gains tax rates without triggering the AMT. Some tax planning may be required, which may be a multi-year endeavor. Recapture AMT– The higher exemptions and phase-outs provide a greater opportunity for taxpayers with AMT tax credit carryover to recapture AMT paid in prior years. If the current year’s regular tax exceeds the AMT, a taxpayer can claim the AMT credit carryover for the difference. Avoid the Minimum Required Distribution Penalties:Once taxpayers reach the age of 70.5, they are required to take what is known as a “required minimum distribution” from their qualified retirement plan or IRA every year. If this is the first year that this rule applies to you and you haven’t taken your money out yet, there’s no need to panic – you don’t have to do so until some time during the first quarter of next year. Of course, if you wait until 2019 to take your 2018 distribution, you’re going to end up having to take two distributions in one year: one for 2018 and one for 2019. For those who fell into this category before 2018, you only have until December 31st to withdraw your 2018 distribution to avoid penalties. Convert into a Roth IRA:If you have a traditional IRA and your income for 2018 has been very low, you may want to consider converting your traditional IRA into a Roth IRA and taking advantage of the tax-free distribution benefits of a Roth IRA in the future, especially if you can do so with little or no tax on the conversions. This will probably require a tax projection to determine an amount to convert and the tax cost, if any, of the conversion. However, the tax reform made conversions permanent, and once made, the conversion cannot be undone. Review Portfolio for Losses:The conventional strategy is to offset as much of your gains as possible with losses from selling other assets in your portfolio. If you have an overall loss, the loss that can be used to offset income other than capital gains is limited to $3,000 ($1,500 for married taxpayers filing separately), and any excess loss carries over to the next year. Keep in mind that losses from the sale of business assets are generally separately allowed in full in the year of sale and are not mixed with the losses from the sale of capital assets. Assets that are sold and not held long-term, referred to as short-term capital gains, do not receive the benefit of the special rates afforded to long-term capital gains. Taxpayers achieve a better overall tax benefit if they can arrange their transactions to offset short-term capital gains with long-term capital losses. Make the Most of Higher Education Tax Credits:Both the Lifetime Learning education credit and the American Opportunity Credit allow qualified taxpayers who prepaid tuition bills in 2018 for an academic period that begins by the end of March 2019 to use the prepayments when claiming the 2018 credit. That means that if you are eligible to take the credit and you have not yet reached the 2018 maximum credit for qualified tuition and related expenses paid, you can bump up your credits by paying early for 2019 now. This may not apply to you if you’ve been paying tuition expenses for the entire 2018 tax year, but it will probably provide you with some additional help if your student just started college this fall. Optimize Health Savings Account Contributions:Did you become eligible to make contributions to a Health Savings Account this year? If so, then you can make deductible contributions into that account up to its maximum amount, no matter when you became eligible. For 2018, the maximum deduction for self-only coverage is $3,450; for family coverage, it is $6,900. Empty Flexible Spending Accounts: If you have a flexible spending account, double-check to see if any remaining account balance can be used for medical expenses, including eyeglasses and/or other health care items covered by the FSA. Remember: funds not used by the account deadline will be forfeited. Bunch Charitable Deductions:Many people who itemize take advantage of the ability to take a deduction for their donation to their favorite charity or house of worship. Did you know that you can choose to pay all or part of your 2019 planned giving in 2018 to increase the amount you deduct in 2018? Though this may not be appealing to those who itemize every year, you may find this to be an effective strategy if you only marginally itemize every year. Implementing this strategy means you will alternate between taking the standard deduction one year and itemizing the next, giving you a big boost in deductions on the year when you itemize. Additionally, those who are required to take a required minimum distribution from their IRA because they are 70.5 or older can have their RMD paid directly to a qualified charity, and instead of getting a charitable deduction, the distribution is tax-free, which in turn might reduce the amount of your taxable Social Security income. If this strategy appeals to you, don’t wait until the last minute to implement it, as your IRA trustee or custodian will need time to process the paperwork and make the distribution to the charity or charities you designate. Deductions– Although the tax reform increased the standard deduction, possibly making it a better choice for the federal return for some, most states did not conform to the federal changes, making it business as usual for itemizing on the state return. Remember the Annual Gift Tax Exemption:One of the best ways to ultimately reduce your estate taxes and at the same time give to those you love is to take advantage of the annual gift tax exemption. Although the gifts are not tax-deductible, for tax year 2018, you are able to give $15,000 to each of as many people as you want without having to report the transfer to the government or pay any gift tax. If this is something that you want to do, make sure that you do so by the end of the year, as you are not able to carry the $15,000 over into 2019. Home Equity Debt:The interest on home equity debt is not allowed as an itemized deduction for years 2018 through 2025. But that doesn’t mean it can’t be deducted somewhere else on your return as investment interest or business interest, if you can trace the use of the loan funds to a deductible use. Retirement Savings:Be sure to maximize your retirement plan contributions before year-end. Once the year is gone, you have forever lost an opportunity to make this year’s annual tax-advantaged addition to your savings for future retirement, which won’t be all that pleasant without a substantial retirement nest egg. If your employer matches some of the amount you contribute to your 401(k) or another eligible retirement plan, be sure to contribute as much as you can to take full advantage of this perk. If the contributions are tax-deductible, such as to a traditional IRA, or made with pre-tax income, maximizing the contributions may also cut your tax bill. Divorce in the Future:If you or someone you know is contemplating divorce, you should be aware of a big tax change related to alimony. For divorces finalized by the end of 2018, alimony payments are deductible by the one paying them and considered income to the one receiving them. However, for divorces finalized after 2018, alimony is no longer deductible by the payer and is no longer taxable for the recipient. This can have a significant impact on the terms negotiated during a divorce. Maximize Business Expenses:Beginning in 2018, business owners are able to write off most business purchases using the very liberal 100% bonus depreciation and the Sec. 179 expensing allowance. But to benefit, the business asset must not only be purchased before year’s end, it must also be placed into service by year’s end. New Flow-Through Deduction:Individuals with taxable incomes (net of capital gains) less than $157,500 and married couples filing jointly with taxable incomes less than $315,000 will enjoy the benefits of the new 20% pass-through deduction from business entities other than C-corporations. Taxpayers with higher incomes will want to determine if any change in compensation structure might increase the deduction. Additionally, S-corporation employee-stockholders will need to make sure their salary meets the “reasonable compensation” requirements, since the wages are a critical factor in determining the flow-through deduction from an S-corporation. Every taxpayer’s situation is unique, not all of the suggestions offered here may apply to you, and by no means does the list include all the changes brought about by tax reform. However, they cover many of the major issues for taxpayers and small businesses. If you had any major business, income, or family changes or if any of the issues discussed affect you, a year-end tax planning appointment may be appropriate. The best way to ensure that you are putting yourself into the best tax-advantaged position is to consider all of your tax options. Please call with questions or to make an appointment. ...read more
By KAB Business Services LLC November 04, 2018
If you have been procrastinating about filing your 2017 tax return or have not filed other prior year returns, you should consider the consequences, including the penalties, interest, and aggressive enforcement actions. Plus, if you have a refund coming for a prior you may end up forfeiting it. If you haven’t filed your return and you owe taxes, you will be subject to both a late payment and a late filing penalty. You should file a return as soon as possible and pay as much as possible to reduce the penalties and interest. The failure-to-pay penalty is one-half of one percent for each month, or part of a month, up to a maximum of 25%, of the amount of tax that remains unpaid from the due date of the return until the tax is paid in full. Should you put off filing, if the IRS issues a notice of intent to put a levy on your property and any amount billed is not paid within 10 days, the interest rate will be increased to a full one percent per month. There is also a penalty for not filing on time. The failure-to-file penalty is five percent of the tax owed for each month or part of a month that your return is late, up to a maximum of 25%. If your return is over 60 days late, there’s also a minimum penalty for late filing; it’s the lesser of $210 or 100 percent of the tax owed. On top of that, in addition to interest and late filing penalties, interest accrues on the unpaid balance at the current federal short-term rate plus 3 percent compounded daily. Even if you have received extension, the late payment penalty and interest will accrue on any balance due, so it’s best to file as soon as possible to minimize them. Of course, there’s no penalty for filing a late return if a refund is due. Penalties and interest only accrue on the unfiled returns of taxpayers who have a balance due and don’t pay by the deadline. However, you can lose your refund and potentially forfeit any tax credits you are entitled by waiting too long to file. In order to receive a refund, the return must be filed within three years of the due date. Taxpayers who continue to not file a required return and fail to respond to IRS requests to do so may be subject to a variety of enforcement actions, all of which can be unpleasant. You are strongly encouraged to bring yourself into compliance with your federal—and state, if applicable—income tax return filings. Please call this office so we can help file back returns and, if necessary, advise you on ways to pay or mitigate any tax liability and, when necessary, assist in establishing a payment plan. ...read more
By KAB Business Services LLC June 25, 2018
With less than two months remaining in the calendar year, it's a great time to double check your federal withholding to make sure enough taxes are being taken out of your pay. The average refund for 2009 was $2,887, up 8 percent from 2008. Even though the Making Work Pay Tax Credit lowered tax withholding rates in 2009 and 2010 for millions of American households, some workers and retirees still need to take steps to be sure enough tax is being taken out of their checks. Certain folks should pay particular attention to their withholding. These include: Married couples with two incomes Individuals with multiple jobs Dependents Some Social Security recipients who work Workers who do not have valid Social Security numbers Retirees who receive pension payments As was the case in 2009, taxpayers who wind up owing tax because too little was taken out of their paychecks during 2010 may qualify for special relief on a penalty that sometimes applies. Depending on their personal situation, some people could have less withheld from their paychecks than they need or want. Failure to adjust withholding could result in potentially smaller refunds or, in limited instances, a taxpayer may owe tax rather than receive a refund next year. An easy way to check how much you'll owe this year is to use the 1040 Tax Calculator on our website. Or just give us a call and we'll figure it out with you. ...read more
By K.A.B. Certified Public Bookkeepers November 08, 2010
Payroll accountants are responsible for tracking the expenditure of money and assets through a company. Their job is to help companies track their income and maintain a timely payment record for expenses and bills. If you are interested in becoming a payroll accountant, you will have to be... ...read more
Computer files can sometimes be deleted by accident, get lost or damaged. This could be a potential nightmare, especially if these are small business accounting files. You have peace of mind by knowing how to use the "Backup and Restore" function in Microsoft Small Business Accounting. With a few keys... ...read more
