Due to an error, taxpayers are receiving Identity Protection PIN letters with an incorrect year listed. Taxpayers and tax professionals should be advised the IP PIN listed on the CP 01A Notice dated January 4, 2016 is valid for use on all individual tax returns filed in 2016.
Beginning for the 2016 filing tax year, there will new due dates for Partnership, C-Corp, and FBAR returns.
The IRS may be signing new regulations to limit discounts on the transfer of family company interests.
It was generally recognized that “discounts” could be applied in valuing transfers of business interests among family members.
There were two recognized types of discounts:
In March, we put together a post on various IRS scams that are prevalent this year. (If you missed it, view it here) This month’s update is due to the increasing level of identity theft that is occurring throughout the country. Already, a number of our clients have needed to refile their returns by mail due to the IRS rejecting their e-file authorizations. The reason why? A return has already been filed under their Social Security number.
The IRS has issued regulations that change accounting rules for 2014 for certain categories of expenses, including repairs, spare parts, and materials & supplies. For instance, any item that generally costs less than $200 is a material and supplies item, whereas the previous rules set this limit at $100. If you own a building, or have materials and supplies, your preparer may have to prepare an additional form called a Form 3115. This form is separate from your tax return and requires its own signature. The form is then mailed to
How can we save taxes?
Each tax return requires individual attention and a combination of different tax strategies that apply to the given situation. The best way to save taxes is to take a proactive approach during the year. Consult your accountant when making any financial decisions and preparing a projection before year end to determine any last minute steps you can take to maximize your tax savings.
Business owners and their companies can apply a vast array of strategies. Many of the elections made at the entity level will have a significant impact not only on the company’s tax burden, but also on the tax burden of individual shareholders and partners. An example is using a strategy such as Section 179 which expenses the cost of some assets, as opposed to depreciating them over time.
Each year the IRS releases its Dirty Dozen list of tax scams. Though the entire list has 12 scams on it, we want to highlight the three most common that our clients are facing.
Tax season officially kicked off January 20, 2015, as scheduled, even with late tax extender law passage on December 19, and cuts in IRS funding. Those filing paper returns this year, however, will have their refunds delayed an additional week or longer due to the cuts in funding. We are also told the wait times if you call the IRS are expected to be much longer this tax season. This is the lowest level of funding since 2008, and the lowest since 1998 when inflation is considered, according to IRS Commissioner John Koskinen.
While both the President and Congress agree action is needed on corporate tax reform, the two seem far apart on how to bring changes about. The sides seem closer to an agreement to change business taxation rules, but it hard to do that without addressing individual taxation, or disadvantaging sole proprietorships, and pass through entities like LLCs, S-corporations and partnerships. One plan would create a special tax rate for business income of individuals similar to how there are separate rates for dividends and capital gains. The goal is to equalize the top rate f