Author: Accu-Tax Services

I am a baby-boomer, semi-retired, who began public accounting and tax prep services in late 1985. In assisting clients, I strive to take the stress out of necessary paperwork and tax reporting, whether clients are individuals or businesses.

Forget to file your 2014 tax return? Money could be waiting for you!

Could you lose your money by April 17, 2018?

About 1 million taxpayers are eligible for about $1.1 billion in unclaimed federal income tax refunds for their 2014 federal income tax returns. The problem? The refund cash has gone unclaimed because the taxpayers did not yet file a tax return for 2014.

In Michigan, about 34,100 individuals may be due $36.5 million in unclaimed 2014 federal income tax refunds. Other states: In New York, about 53,600 taxpayers are owed $60.1 million in unclaimed 2014 federal refunds. In Texas, about 108,100 taxpayers are owed nearly $122 million.

“This is money that you may be owed but never filed a return to claim,” said Luis D. Garcia, a spokesman for the IRS in Detroit. The Internal Revenue Service figures are an estimate and reflect W-2 withholding information. The IRS estimates that about half the refunds nationwide could be worth more than $847. About half the refunds due in Michigan would be worth more than $845.

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IRS clarifies 3 big tax myths regarding refunds & unpaid taxes

Here are three of the most persistent public myths the IRS encounters.

Myth 1: All refunds are delayed
No. The IRS issues more than 9 out of 10 refunds in less than 21 days. However, while most refunds are issued in less than three weeks, some may be delayed. “By law, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit before mid-February.” Filing on-line and opting for direct deposit [vs. mailed paper] refunds are still the quickest options. E-filing is “the safest, fastest way to receive a refund.”

Myth 2: You should call the IRS
No. A call to the IRS likely won’t help you find out any new information about your refund. Instead, the IRS suggests using the official website or mobile app to check your status. The IRS website offers the same information as its telephone operators do, “so there is no need to call unless requested to do so by [our] refund tool.” Also, the website “provides many self-service tools for individuals, businesses and tax professionals,” the IRS notes.

Myth 3: The IRS will call or email you
No. If you receive a call, text or email from someone claiming to be from the IRS, it’s probably a scam. “The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Generally, the IRS will first mail a bill if taxes are owed.”

The IRS also won’t threaten to immediately bring in law enforcement to arrest you for not paying taxes, demand taxes be paid without giving you an opportunity to question or appeal the amount owed, nor would the IRS ask for credit or debit card numbers over the phone.

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Excerpt from CNBC article. Read full article here:
https://www.cnbc.com/2018/02/13/3-tax-myths-the-irs-wants-to-clear-up-for-you.html

Let’s Talk 2018 Deadlines

Grab your calendar, or put date alerts on your phone! Deadline for submitting 2017 Federal Income Tax Returns is April 17, 2018 [because of a weekend, and a Monday holiday in Washington DC].

Due dates for State Income Tax Returns vary by state. Due date for New Mexico state income tax returns is April 17, 2018. Date to file NM State Income Tax Extension is also April 17, 2018, at which time income tax return then becomes due by October 15, 2018.

** NOTE: Extension of time to file is NOT an extension of time to pay. If certain amounts due on 2017 tax returns (both Federal and New Mexico State returns) have not been paid by April 17, penalties may apply. E-Filing deadline and due date for Federal Income Tax Returns is from early January to October 15, 2018. E-Filing is suspended as of that date.

Corporations (C-corp, LLC, S-corp, partnerships, and other entities similarly-structured) business owners are required to file their income tax returns on the 15th day of the third month after the end of the tax year. For calendar-year corporations, the return is due by March 15. Think of this deadline as required of entities who must issue Schedule K-1 to various individuals, so that those individuals have time to include the K-1 in their personal tax returns.

And then there are Non-Profits returns, completed on Form 990, 990-EZ, or 990-PF. These entities must file by the 15th day of the 5th month after the end of the organization’s accounting period. Thus, for a calendar year NP taxpayer, these forms are due by May 15 following year-end 2017.

How Do I File a Previous Year Tax Return?
Electronic filing is no longer available for Tax Years 2016 and earlier. Download, complete, print out, sign, and mail the tax forms to the IRS for the appropriate Tax Year.

About “Injured Spouse” Allocation

Have you, or someone you know, been denied an income tax refund because it was funneled away by the IRS to pay toward an existing debt of one or the other persons filing a joint tax return? A little-known fact you may have missed is that if ONE spouse in the filing owns the debt [but the other person does NOT], only the portion of the refund belonging to the debtor spouse should be applied to the debt. A portion of the tax refund would be payable by the IRS.

Whether it’s for a student-loan outstanding, or other government liability [such as back income taxes unpaid], if the debtor spouse later married an “innocent” spouse (ie., a person who was not involved with incurring the original debt), then any joint income tax refund should be apportioned between the two earners’ incomes. The joint (married) taxpayers would then receive an equitable refund amount, as determined by their incomes for the year and the amount of the debt.

IRS description:
The injured spouse on a jointly-filed tax return files a form to get back their share of the joint refund when the joint overpayment is applied to a past-due obligation of the other spouse.

Employer Reminder: Reporting Tips vs. Service Charges

Reporting Tips of Directly- and Indirectly-Tipped Employees

Employees must report to their employer all cash tips received — except for the tips from any month that total less than $20:

  • Cash tips include tips received from customers, charged tips (for example, credit and debit card charges) distributed to the employee by his or her employer, and tips received from other employees under any tip-sharing arrangement.
  • Noncash tips (that is, tips received by an employee in any other medium than cash, such as passes, tickets, or other goods or commodities) from customers are not reported to the employer.

All cash tips and noncash tips should be included in an employee’s gross income and are subject to federal income taxes.

Both directly- and indirectly-tipped employees must report tips to their employer.

A “directly-tipped employee” is any employee who receives tips directly from customers, including one who, after receiving the tips, turns all of them over to a tip pool. Examples of directly tipped employees are waiters, waitresses, bartenders, cosmetologists and hairstylists.

An “indirectly-tipped employee” is a tipped employee who does not normally receive tips directly from customers. Examples of indirectly tipped employees are bussers, service bartenders, cooks and salon shampooers.

Key Differences Between Categories Affect Both Employees and Tax Reporting

The Internal Revenue Service reminds employers that so-called “automatic gratuities” and any amount imposed on the customer by the employer are service charges, NOT tips.

Service charges are generally wages, and they are reported to the employee and the IRS in a manner similar to other wages. On the other hand, special rules apply to both employers and employees for reporting tips. Employers should make sure they know the difference and how they report each to the IRS.

What are tips?

Tips are discretionary (optional or extra) payments determined by a customer that employees receive from customers. Tips include:

  • Cash tips received directly from customers.
  • Tips from customers who leave a tip through electronic settlement or payment. This includes a credit card, debit card, gift card, or any other electronic payment method.
  • The value of any noncash tips, such as tickets, or other items of value.
  • Tip amounts received from other employees paid out through tip pools or tip splitting, or other formal or informal tip sharing arrangements.

Four factors are used to determine whether a payment qualifies as a tip. Normally, all four must apply. To be a tip:

  • The payment must be made free from compulsion;
  • The customer must have the unrestricted right to determine the amount;
  • The payment should not be the subject of negotiations or dictated by employer policy; and
  • Generally, the customer has the right to determine who receives the payment.

If any one of these doesn’t apply, the payment is likely a service charge.

What are service charges?

Amounts an employer requires a customer to pay are service charges. This is true even if the employer or employee calls the payment a tip or gratuity.

Examples of service charges commonly added to a customer’s check include:

  • Large dining party automatic gratuity
  • Banquet event fee
  • Cruise trip package fee
  • Hotel room service charge
  • Bottle service charge (nightclubs, restaurants)

Generally, service charges are reported as non-tip wages paid to the employee. Some employers keep a portion of the service charges. Only the amounts distributed to employees are non-tip wages to those employees.

IRS Urges Travelers Requiring Passports to Pay Their Back Taxes or Enter into Payment Agreements

Some taxpayers rely upon their passport for various reasons, such as in the normal course of transacting business. If you are one of these taxpayers, please be aware of the following, which could affect issuance, renewal or revocation of your U.S. passport.

WASHINGTON ─ The Internal Revenue Service strongly encourages taxpayers [who are seriously behind on their tax debt] to pay what they owe, or enter into a payment agreement with the IRS, to avoid putting their passports in jeopardy.

This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. The FAST Act also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport.

There are several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt. They include the following:

  • Paying the tax debt in full
  • Paying the tax debt timely under an approved installment agreement,
  • Paying the tax debt timely under an accepted offer in compromise,
  • Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice,
  • Having requested or have a pending collection due process appeal with a levy, or
  • Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

A passport won’t be at risk under this program for any taxpayer:

  • Who is in bankruptcy
  • Who is identified by the IRS as a victim of tax-related identity theft
  • Whose account the IRS has determined is currently not collectible due to hardship
  • Who is located within a federally-declared disaster area
  • Who has a request pending with the IRS for an installment agreement
  • Who has a pending offer in compromise with the IRS
  • Who has an IRS-accepted adjustment that will satisfy the debt in full

For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the State Department and the individual’s passport is not subject to denial during this time.

In general, taxpayers behind on their tax obligations should come forward and pay what they owe, or enter into a payment plan with the IRS. Frequently, taxpayers qualify for one of several relief programs, including the following:

  • Taxpayers can request a payment agreement with the IRS by filing Form 9465.
  • Some taxpayers can use the online payment agreement to set up a monthly payment agreement for up to 72 months.
  • Some financially-distressed taxpayers may qualify for an offer in compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to determine the taxpayer’s ability to pay.

2018 Tax Filing Season Begins Jan. 29, Tax Returns Due April 17; Help Available for Taxpayers

The Internal Revenue Service announced today that the nation’s tax season will begin Monday, Jan. 29, 2018 and reminded taxpayers claiming certain tax credits that refunds won’t be available before late February.

The IRS will begin accepting tax returns on Jan. 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers will have two additional days to file beyond April 15.

Many software companies and tax professionals will be accepting tax returns before Jan. 29 and then will submit the returns when IRS systems open. Although the IRS will begin accepting both electronic and paper tax returns Jan. 29, paper returns will begin processing later in mid-February as system updates continue. The IRS strongly encourages people to file their tax returns electronically for faster refunds.

The IRS set the Jan. 29 opening date to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns.

The IRS reminds taxpayers that, by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) before mid-February. While the IRS will process those returns when received, it cannot issue refunds related to these credits prior to mid-February. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018, if they chose direct deposit and there are no other issues with the tax return.

The IRS also reminds taxpayers that they should keep copies of their prior-year tax returns for at least three years. Taxpayers who are using a tax software product for the first time will need their adjusted gross income from their 2016 tax return to file electronically. Taxpayers who are using the same tax software they used last year will not need to enter prior-year information to electronically sign their 2017 tax return. Using an electronic filing PIN is no longer an option.

Accu-Tax Services offers a new option for its clients this year who wish to learn to file their income taxes using low-cost electronic software in order to do so.  ATS will prepare your income taxes, as usual, this year, so that your relevant information is entered correctly. You then may log into this same software in 2019, recall the data stored there for this year, and complete new entry of required information yourself.  And, as always ATS is here, if you have questions during your self-entering process.

Am I Required to File a Form 1099 or Other Information Return?

If you made or received a payment during the calendar year as a small business or self-employed (individual), you are most likely required to file an information return to the IRS.

Do not file Copy A of information returns downloaded from the IRS website. The official printed version of the IRS form can be scanned, but the online version of it [printed from the website] is not. A penalty may be imposed for filing forms that cannot be scanned.

Made a Payment

If, as part of your trade or business, you made any of the following types of payments, use the link to be directed to information on filing the appropriate information return.

  • Payments, in the course of your trade or business: (1099-MISC) (Note: It is important that you place the payment in the proper box on the form, as shown below.) 
    • Services performed by independent contractors or others (not employees of your business) (Box 7)
    • Prizes and awards and certain other payments (see Instructions for Form 1099-MISC, Box 3. Other Income, for more information)
    • Rent (Box 1)
    • Royalties (Box 2)
    • Backup withholding or federal income tax withheld (Box 4)
    • Crewmembers of your fishing boat (Box 5)
    • To physicians, physicians’ corporation or other supplier of health and medical services
      (Box 6)
    • For a purchase of fish from anyone engaged in the trade or business of catching fish (Box 7)
    • Substitute dividends or tax exempt interest payments and you are a broker (Box 8)
    • Crop insurance proceeds (Box 10)
    • Gross proceeds of $600 or more paid to an attorney (generally, Box 7, but see instructions as Box 14 may apply)
  • Interest on a business debt to someone (excluding interest on an obligation issued by an individual. (1099-INT)
  • Dividends or other distributions to a company shareholder. (1099-DIV)
  • Distribution from a retirement or profit plan or from an IRA or insurance contract. (1099-R)
  • Payments to merchants or other entities in settlement of reportable payment transactions, that is, any payment card or third party network transaction. (1099-K)

Received a Payment and Other Reporting Situations

If, as part of your trade or business, you received any of the following types of payments, use the link to be directed to information on filing the appropriate information return.

  • Payment of mortgage interest (including points) or reimbursements of overpaid interest from individuals. (1098)
  • Sale or exchange of real estate. (1099-S)
  • You are a broker and you sold a covered security belonging to your customer. (1099-B)
  • You are an issuer of a security taking a specified corporate action that affects the cost basis of the securities held by others. (Form 8937)
  • You released someone from paying a debt secured by property or someone abandoned property that was subject to the debt, (1099-A)  or otherwise forgave their debt to you. (1099-C)
  • You made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment. (1099-MISC)

Not Required to File Information Returns

You are not required to file information return(s) if any of the following situations apply:

  • You are not engaged in a trade or business.
  • You are engaged in a trade or business and
    • the payment was made to another business that is incorporated, but was not for medical or legal services, or:
    • the sum of all payments made to the person or unincorporated business is less than $600 in one tax year.

SINCERE ADVICE: START EARLY

Accu-Tax Services strives to SIMPLIFY your income tax filing experience. Ensure smooth processing for 2017, in 2018, by following three things you, as taxpayer, can do early:

1) Locate and set aside your previous year’s income tax return

If you are a new client, one step that is easily overlooked or forgotten is this:

For a tax preparer to have the least questions, be sure to bring your last year’s [2016] tax return to your appointment. If you cannot find the return, let us know early. A copy of last year’s tax return can be requested from the IRS.

Having your last-year’s return readily available is time-saving, and stress-saving … but also, by creating an accurate flow of your information from year to year, any confusion on the part of federal and state agencies is greatly reduced, once your current year’s return preparation is submitted. (Relieving stress tip #1).

2) It’s important to gather documents

Together with your previous year’s return, make sure you have all the needed documents for 2017 before filing. This includes:

  • Forms W-2 from employers.
  • Forms 1099 from banks and other payers.
  • Forms 1095-A from the Marketplace (for those claiming the Premium Tax Credit).

Usually these forms begin arriving in your mail in January. Be sure to check them over carefully – and if any of the information shown is wrong, contact the payer right away for a correction. Keep them all together, in one place, until you are sure you’ve received everything.


3) Taxpayers with expiring ITINs should renew promptly

If you’ve been issued an Individual Taxpayer Identification Number, you may need to renew it before the end of the year to avoid a refund delay and possible loss of key tax benefits.

These [ITINs] expire Dec. 31, 2017:

  • ITINs not used on a tax return in the past three years.
  • ITINs with middle digits 70, 71, 72 or 80.

Contact ATS if you think you need to file for an ITIN renewal prior to completing your tax return in 2018. If you need to renew, a form must be completed and mailed, along with original identification documents or copies certified by the issuing agency. Once done, it takes about seven weeks to receive an ITIN assignment letter from the IRS.

Welcome to our new blog

This is the post excerpt.

Over the last 35 years, Accu-Tax Services has existed as a personal service company [at one time or another, in three different states!] offering accounting, bookkeeping, payroll and income tax services to individuals and small businesses. Owner Deborah Bilyew has enjoyed assisting people just like you, and learning from many different situations along the way.

This year we’re introducing a new service. You can choose to have us file your tax return each year, OR you can choose to have us file your income taxes THIS YEAR, and next year we’ll turn it over to you. We show you how to “recall” your information and data stored in 2018, for use in preparing your income taxes in 2019 yourself.  This saves you time, stress and money!

Imagine!  You could file your future income tax returns, complete with electronic filing and direct deposit of your refund, for as little as $15. Because your previous years’ data is stored for recall when you’re ready to finish this year’s filing, you save time. Because you choose the time you want to sit down and do it, you can experience less stress. Accu-tax Services gets you started. And if you need assistance, we’re here for you.

Personal assistance

Accu-Tax Services Is Your Personal Tax Adviser

We’re here when you need us! Accu-Tax doesn’t close just because the current tax filing season is over.  We’re available to you, whether you need:

  • to file an extention
  • to file a previous year’s return
  • to file business returns
  • accounting or payroll services using Quickbooks
  • answers for your questions on your tax return filings in future years

IMPORTANT!  Also be aware that, unlike many service bureaus, Accu-Tax Services does NOT use Internet-based accounting or payroll processing, and your data is NEVER stored “in the cloud.”  ATS processes your paperwork in-house to local files stored and backed-up, right here in the office. Your information is never on the Web, in any form.