Author Archives: Pat Michael

About Pat Michael

US-TaxLaws.com is your best source for professional tax preparation services with more than 30 years experience and thousands of satisfied clients.

Important Tax Deadlines for 2017

January 15, 2017 : 4th Quarter 2016 Estimated Tax Payment Due  If you are self-employed or have other fourth-quarter income that requires you to pay quarterly estimated taxes, get them postmarked by January 15, 2017.

April 18, 2017:  Individual Tax Returns Due for Tax Year 2016  If you haven’t applied for an extension, e-file or postmark your individual tax returns by midnight April 18, 2017.

ALSO due on April 18, 2017:

     Individual Tax Return Extension Form Due for Tax year 2016  Need more time to prepare your tax return?  File your request for a tax extension by April 18 to push your deadline back to October 17, 2017.

     1st Quarter 2017 Estimated Tax payment Due  If you are self-employed or have other first-quarter income that requires you to pay quarterly estimated taxes, get your Form 1040-ES postmarked by April 18, 2017.

Last Day to make a 2016 IRA Contribution  If you haven’t already funded your retirement account for 2016, do so April 18, 2017.  That’s the deadline for a contribution to a traditional IRA, deductible or not, and a Roth IRA.  However, if you have a Keogh or SEP and you get a filing extension to October 17, 2017, you can wait until then to put 2016 money into those accounts.

June 15, 2017:  2nd Quarter 2017 Estimated Tax Payment Due  If you are self-employed or have other second-quarter income that requires you to to pay quarterly estimated taxes, make sure your payment is postmarked by June 15, 2017. 

September 15, 2017: 3rd Quarter 2017 Estimated Tax Payment Due  If you are self-employed or have other third-quarter income that requires you to pay quarterly estimated taxes, make sure your third quarter payment is postmarked by September 15, 2017. 

October 17, 2017:  Extended Individual Tax Returns Due  If you got a filing extension on your 2016 tax return, you need to get it completed and postmarked by October 17, 2017.

ALSO due October 17, 2017:  Last Chance to Recharacterize 2016 Roth IRA Conversion  If you converted a traditional IRA to a Roth during 2016 and paid tax on the conversion with your 2016 return, October 17, 2017 is the deadline for recharacterizing (undoing) the conversion.  Doing so could save you money if the IRA has lost money since the time of the original conversion.

January 15, 2018:  4th Quarter 2017 Estimated Tax Payment Due  If you are self-employed or have other fourth-quarter income that requires you to pay quarterly estimated taxes, get them postmarked by January 15, 2018.

New Jan 31 Deadline for Employers

A new federal law, aimed at making it easier for the Internal Revenue Service (IRS) to detect and prevent refund fraud, will accelerate the W-2 filing deadline for employers to January 31.

For similar reasons, the new law also requires the IRS to hold refunds involving two key refundable tax credits until at least February 15. Here are details on each of these key dates.

The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, includes a new requirement for employers. Employers are now required to file their copies of Form W-2, submitted to the Social Security Administration, by January 31. The new January 31 filing deadline also applies to certain Forms 1099-MISC reporting non-employee compensation such as payments to independent contractors.

In the past, employers typically had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of these forms. In addition, there are changes in requesting an extension to file the Form W-2. Only one 30-day extension to file Form W-2 is available and this extension is not automatic. If an extension is necessary, a Form 8809 Application for Extension of Time to File Information Returnsmust be completed as soon as you know an extension is necessary, but by January 31. Please carefully review the instructions for Form 8809, for more information.

The new accelerated deadline will help the IRS improve its efforts to spot errors on returns filed by taxpayers. Having these W-2s and 1099s earlier will make it easier for the IRS to verify the legitimacy of tax returns and properly issue refunds to taxpayers eligible to receive them. In many instances, this will enable the IRS to release tax refunds more quickly than in the past.

The January 31 deadline has long applied to employers furnishing copies of these forms to their employees and that date remains unchanged.

Some Refunds Delayed Until at Least February 15

Due to the PATH Act change, some people will get their federal refunds a little later. The new law requires the IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until February 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC.

Even with this change, taxpayers should file their returns as they normally do. Whether or not claiming the EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. Though the IRS issues more than nine out of 10 refunds in less than 21 days, some returns are held for further review.

File Your Own Taxes?

7 Reasons Why You ShoulFried-Clockd (and Shouldn’t) File Your Own Taxes

This article was printed back in 2013, but the same challenges and issues exist today with a few extras.  April 18th is only 2 weeks away, so if you are undecided, and think you need some advice, give us a call at 619-589-8680.  If you want to read this article in its original format, click here.


“Unless your income and filing status remain the same year after year, your tax situation is always changing. The question,“should I file my own taxes or hire a pro?” is a dilemma that should be revisited every year. As my hobbies and passions have grown over the years, I’ve needed more and more guidance to help file my income taxes. I eventually decided to build on to my accounting skills by taking two years of income tax classes to increase my knowledge.

You are probably in the same situation: As we get older, add more people to our lives and increase our business, we need to evaluate when/if we need tax advice.

WHEN IT’S BETTER TO FILE YOUR OWN TAXES: There are important factors to consider once you decide to file your own taxes. This is definitely not a decision you should make hastily. You can confidently file your own taxes if…

You’re a numbers kind of person If you enjoy keeping track of all the numbers, transactions and receipts, then by all means you’re the best person for the job. You know the ins-and-outs of your situation the best and can accurately control everything.

Your tax situation is simple or unchanged If you only have one job, don’t have any dependents and have no other investments or sources of income, you can easily file your taxes yourself. The IRS even offers free e-filing for taxpayers who have simple returns.

You don’t own property or investments Once you acquire property, investments or retirement accounts, it can be difficult to stay up-to-date on everything. Each type comes with deductions and credits that can be very beneficial to your taxes. Having a professional to help in the case, is probably the best idea.

You can understand tax laws If you can browse the IRS website, comprehend their tax jargon and stay up-to-date with changing tax laws, then go for it. Some of the forms and laws are simple and can be interpreted with a little research.  [If you are not fluent in tax law and all the changes that have been affect returns, we strongly recommend you consult with a tax professional.]

WHEN IT’S BETTER TO HIRE A PROFESSIONAL:  While I’m slightly partial to hiring a professional for help — being a tax consultant myself and the fact that I like having an expert in my corner — it’s really only necessary for certain people. Hire a CPA or tax professional if…

You can’t get a handle on your money If doing the books and tracking the numbers just isn’t your forte, please hire someone to help. There is no reason to get yourself into trouble, or get in over your head. Hiring a tax preparer is like finding the right tool for the right job, the whole thing can be done correctly from the beginning and potentially save you a lot of money in the long run.

You started a new business Starting a new business or hobby venture takes expert knowledge. You wouldn’t jump off a diving board without swimming lessons, so you shouldn’t try to do your business taxes without some guidance.

Tax experts can help you find lots of deductions and prevent you from getting into trouble. Those savings and peace of mind alone can pay for themselves.

You got married, divorced or had a child If you got married/divorced, had another child or lost a spouse, you might need help finding the best filing status for that year. Some of them are easy but others, (like being a widow) have time-sensitive dates.

Also, as your children get older, tax credits and deductions might expire depending on their ages. If your child goes to college full-time, you can still claim them — and any education expenses — until they’re 24. Determining these situations accurately takes someone who is knowledgeable.

Benefits to doing your own taxes:
-It’s less expensive
-Takes less time
-You know all the details

Benefits to hiring someone:
-They stay updated on changing tax laws
-You get expert and experienced advice
-An extra set of eyes to catch mistakes
-They become your advocate
-Find little known tax deductions
-They give tax guidance throughout the year

The Bottom Line In the end, it’s completely up to you and what you’re most comfortable with. You can always find an expert to help and then phase them out if you don’t need the advice. But in the event you’re not able to keep up, having a trustworthy tax professional in your corner can make all the difference.”

If you want to read it in its original format, in the Huffington Post, click here.
Source:  http://www.huffingtonpost.com/carrie-smith/tax-advice_b_2638785.html
A version of this post originally appeared onCareful Cents.


ABOUT US-TAXLAWS

We do more than just tax preparation. We are your best source for professional tax preparation and/or financial consulting services. We give clients a total solution that can include:

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services
Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & TrustsEstate Planning   Bookkeeping   Payroll

 

 

IRS Offers 10 Tax Tips

Tax Tips WHO WANTS A FREE TAX TIP?  

If you haven’t filed yet, the IRS has these 10 tax-time tips to help you. The April 18 deadline to file your federal tax return is less than two weeks away. Don’t wait until the last minute.

1.Gather your records. Make sure you have all your tax records. This includes receipts, canceled checks and other records that support income, deductions or tax credits that you claim. If you purchased health insurance through the Marketplace, you will need the information in Form 1095-A to file.

2.Report all your income. You will need to report your income from all of your Forms W-2, Wage and Tax Statements, Forms 1099 and any other income – even if you don’t receive a statement – when you file your tax return.

3.Try IRS Free File. Free File is available only on IRS.gov. If you made $62,000 or less, you can use free name-brand tax software to file your federal tax return. If you earned more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. If you need more time to file, you can also use IRS Free File to get an automatic six-month extension to file your taxes. Remember, an extension to file your tax return is not an extension to pay taxes you owe, which are due April 18.

4.Try IRS e-file. Electronic filing is the best way to file a tax return. It’s accurate, safe and easy. If you owe taxes, you have the option to e-file early and pay by April 18 to avoid penalties and interest.

5.Use Direct Deposit. The fastest and safest way to get your refund is to combine e-file with direct deposit. The IRS issues more than nine out of 10 refunds in less than 21 days.

6.Visit IRS.gov. IRS.gov is a great place to get what you need to file your tax return. Click on the “Filing” icon for links to filing tips, answers to frequently asked questions and IRS forms and publications. Get them all at any time. The IRS Services Guide outlines the many ways to get help on IRS.gov.

7.Use IRS online tools. The IRS has many online tools on IRS.gov to help you file. For instance, the Interactive Tax Assistant tool provides answers to many of your tax questions. The tool gives the same answers that an IRS representative would give over the phone. If you want to find a tax preparer with the qualifications and credentials that you prefer, use the IRS Directory of Federal Tax Return Preparers. IRS tools are free and easy to use. They are also available 24/7.

8.Weigh your filing options. You have different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free help at a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site.

9.Check out number 17. IRS Publication 17, Your Federal Income Tax, is a complete tax resource that you can read on IRS.gov. It’s also available as an eBook. It can help you with many tax questions, such as whether you need to file a tax return, or how to choose your filing status.

10.Review your return. Mistakes slow down your tax refund. If you file a paper return, be sure to check all Social Security numbers. That’s one of the most common errors. Remember that IRS e-file is the most accurate way to file.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

 

Tax Tibits: Do I have to issue my landscaper and housekeeper a 1099?

1099 and the lawYou are required to issue a 1099 to anyone you pay $600 or more in the course of your trade or business who is not incorporated.

Typical payments requiring a 1099 include services performed by independent contractors, such as gardeners and housekeepers for your business, as well as rents your business pays.

Received a Payment and Other Reporting Situations

Per the IRS, if, as part of your trade or business, you received any of the following types of payments, you will have to file a specific form.

  • 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, or
    • the sum of all payments made to the person or unincorporated business is less than $600 in one tax year (unless the recipient is an attorney or law form, see specific instructions for 1099-MISC for further details).

If you need to issue a 1099, and haven’t, we can prepare the 1099 forms if you would like.  Just contact us. We can be reached at 619-589-8680.


We do more than just tax preparation at US-TaxLaws.com. We are your best source for professional tax preparation and/or financial consulting services. We give clients a total solution that can include:

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services
Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & TrustsEstate Planning   Bookkeeping   Payroll

 

Canceled Debt – Is It Taxable or Not?

Yellow CAUTION signIRS Answers,  ‘Canceled Debt – Is It Taxable or Not?’

If you borrow money and are legally obligated to repay a fixed or determinable amount at a future date, you have a debt. You may be personally liable for a debt or may own a property that is subject to a debt.  If you see yourself in this article, and are unsure of what to do, call us at (619) 589-8680. 

Cancellation of a debt may occur if the creditor cannot collect, or gives up on collecting, the amount you are obligated to pay. If you own property subject to a debt, cancellation of the debt also may occur because of a foreclosure, a repossession, a voluntary transfer of the property to the lender, abandonment of the property, or a mortgage modification. Continue reading

Phishing and Scams

Caution : Phishing and ScamsHOW TO IDENTIFY PHISHING AND SCAMS BEFORE THE DAMAGE IS DONE.  

The scammers are out there still.  In fact, you may receive an email today from someone claiming that your business information was entered incorrectly for 2014 and to avoid costly fines, penalties, etc.,  click here, open this, do that. STOP!  DON’T DO IT.

THE IRS DOES NOT CONTACT  YOU BY EMAIL – OR PHONE OR SOCIAL MEDIA.  PERIOD.  

The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.  PERIOD.

What is phishing? 

Phishing is a scam typically carried out through unsolicited email and/or websites that pose as legitimate sites and lure unsuspecting victims to provide personal and financial information.

Report all unsolicited email claiming to be from the IRS or an IRS-related function to phishing@irs.gov. Recent scams have used the Electronic Federal Tax Payment System (EFTPS) to attract potential victims. Also, if you’ve experienced any monetary losses due to an IRS-related incident, please report it to the Treasury Inspector General Administration (TIGTA) and file a complaint with the Federal Trade Commission (FTC) through their Complaint Assistant to make the information available to investigators.

What you need to do if you receive a suspicious IRS-related communication

 

Baby Boomers & Retirement Planning

Retirement Planning & InvestmentsFacebook, GE,  Johnson & Johnson and other stocks that Baby Boomers love.

If you are a Baby Boomer, and have investments in your retirement planning, you’ll enjoy this article.  Forbes writer, Samantha Sharf, looks at the stocks that the different generations favor.  “Johnson & Johnson JNJ -0.59% is the tenth most popular stock among Baby Boomers — the generation born between 1946 and 1964 — making up 0.9% of the average Boomer’s stock portfolio, according to TD Ameritrade. Two key facts make a strong case for why the healthcare giant ranks with this group but not their younger counterparts.

First fact: Boomers are turning 65 at a rate of about 10,00 per day. That trend is expected to continue until around 2030, according to Pew Research.

Second: Last year Fidelity Benefits Consulting estimated a 65-year-old couple will need an average of $220,000 to pay for medical expenses throughout retirement. That’s a lot.”

“The healthcare giant ranks 14th for Millennials’, the youngest adult generation, and 22nd for Gen Xers, the generation just behind Boomers. Johnson & Johnson, however, is even more popular with people over 70 making up 1.1% of a Senior’s portfolio on average.”

Stocks Baby Boomers Love Most:
Apple
General Electric
Microsoft
Facebook
Bank of America
Intel
AT&T
Exxon Mobil
Berkshire Hathaway
Johnson & Johnson

Read original article Johnson & Johnson and the 9 other stocks Baby Boomers Love Most.


We do more than just tax preparation. US-TaxLaws is your best source for professional tax preparation and/or financial consulting services that include:

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services
Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & TrustsEstate Planning   Bookkeeping   Payroll 

 

Are you 50+? Ready to get serious about retirement?

What Do You Need To Consider When Planning Retirement?
Planning Retirement

When is the best time to get serious about retirement planning?  Some say it’s the 50’s. And guess what, it’s not all about you. It’s about your parent’s too. “It’s important to talk openly with your parents about their financial position and plans,” said Matthew Saneholtz, a certified financial planner with Tobias Financial Advisors. “Be sure your parents have an estate plan in place and long-term care coverage, or at least a picture of their final stages of life, because it might affect you,” he said. “If you know your parents don’t have the money to pay for care on their own, are you willing to use your own savings to help them? Will they rely on Medicaid? Will you take care of them in your own home? These are questions you need to think about, as they could become your dependents.”

Source:  Your 50s Is the Time to Get Serious About Retirement Planning“.

Individual Retirement Arrangements (IRAs)
Roth IRAs

401(k) Plans
403(b) Plans

SIMPLE IRA Plans (Savings Incentive Match Plans for Employees)
SEP Plans (Simplified Employee Pension)
SARSEP Plans (Salary Reduction Simplified Employee Pension)
Payroll Deduction IRAs

Profit-Sharing Plans
Defined Benefit Plans
Money Purchase Plans
Employee Stock Ownership Plans (ESOPs)

Governmental Plans

457 Plans
409A Nonqualified Deferred Compensation Plans

Help with Choosing a Retirement Plan


We do more than just tax preparation. US-TaxLaws is your best source for professional tax preparation and/or financial consulting services that include:

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services
Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & Trusts, Estate Planning   Bookkeeping   Payroll 

 

Identity Theft Alert – IRS Security Breach

 

Identity Theft AlertIRS Issues An Identity Theft Alert To Taxpayers

Over 100,000 taxpayers at risk.  IRS issued an Identity Theft Alert resulting from the security breach on the “Get Transcript” Application portal.

The IRS announced today that criminals used taxpayer-specific data acquired from non-IRS sources to gain unauthorized access to information on approximately 100,000 tax accounts through IRS’ “Get Transcript” application. This data included Social Security information, date of birth and street address. Continue reading

Budgeting & Financial Planning

 

Budgeting & Financial PlanningWhy You’re Thinking About Your Budget All Wrong 

Maggie McGrath of Forbes decided to tackle the subject many of us dislike intensely.  BUDGETING. Activities that include budgeting & financial planning are almost painful.

She writes, “Does the thought of tracking your spending every month or living according to a budget sound so torturous that you just… don’t do it? If so, you’re not alone: more than 60% of Americans don’t keep a budget. But while you may not be alone, but you are likely thinking about budgeting in the wrong way.” Maggie sat down with financial expert and author Patrice Washington to talk about why it is that so many people don’t like to budget.

“When I would tell someone to track their spending, they would lie!” Washington told me, recalling some of the clients she’s worked with over the years. “When you’re tracking your spending, you don’t want to look bad. So you stop doing whatever it is you do on Friday nights and you want to look your best.” But, if these are the numbers that you’re going to base your budget on, your budget will be based on a lie.

To see more of Washington’s tips on building a budget — plus how to find things to cut from your spending list even if it feels like there’s nothing you can possibly cut — check out the video and the rest of the article Why You’re Thinking About Your Budget All Wrong in its original format. .

And, if you want to learn more about budgeting, including the popular 50-30-20 rule (it recommends spending 50% of your take home pay on needs, 30% to wants and 20% to savings), check out this article here or this one, here.

Why You’re Thinking About Your Budget All Wrong in its original format.


We do more than just tax preparation. US-TaxLaws is your best source for professional tax preparation and/or financial consulting services that include:

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services
Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & TrustsEstate Planning   Bookkeeping   Payroll 

Cancer Charity Scam Targeting Our Soft Spots

Types of charityCancer Charity Scam Targeting Our Soft Spots

This was a well-orchestrated, insidious, cancer charity scam targeting our soft spots.  Did you contribute to The Cancer Fund of America, Cancer Support Services, the Children’s Cancer Fund of America or the Breast Cancer Society?  All are registered in Arizona and Tennessee and operated by James Reynolds Sr. and his family. This scheme goes back to 1987 and is one of the biggest charity fraud cases to ever occur in the U.S. Continue reading

Suspend Benefits? Social Security FAQ

#1 Suspend Benefits To Increase Them?

How close are you to retirement?  Have you really given it thought? Like now, do you know when you plan on retiring or are you winging it, as many are?  The 60’s are being called the new 40’s, so for many of us – working another 10 years isn’t out of the question, especially if you enjoy working.  But let’s say you’ve already started social security… did you know you can suspend benefits to increase them?  That’s right.  This post is about something called Start Stop Start. If you want to read this in its original format, chick FORBES article Continue reading

Social Security Spousal Benefits

The 3 Secrets to Maxing out Social Security Spousal Benefits

Social Security Spousal Benefits is not something many of us look into, until necessary.  Philip Moeller  in his Money.com, Ask The Expert column takes a close look at this benefit, and what you have to do to protect yourself.  “If there’s one set of rules worth understanding, it’s spousal benefits.”  Social Security Spousal Benefits and Investments

Q: My wife was born in 1950 and will be 65 this year; I was born in 1953 and will be 62. As I have earned more in my lifetime, my Social Security benefit is estimated to be larger than hers at full retirement age. But her spousal benefit would be less than half of her individual retirement benefit. When the younger spouse has a higher estimated benefit, what are some strategies to explore? —Jack

 

Every year, couples leave literally billions of dollars on the table because they make the wrong claiming choices. Here are three secrets to getting this claim right, and how they apply to your situation:

  1. To get spousal benefits, the primary earner must file for retirement benefits first. Spousal benefits can equal as much as half of the amount the person would receive in individual Social Security benefits at full retirement age (FRA). For anyone born in 1943 through 1954, FRA is 66; it will gradually rise to 67 for people born in 1960 or later.
  2. If you file for a spousal benefit before your FRA, you will end up with a smaller amount. You can file as early as age 62 but if you do, you will be hit with benefit reductions. Retirement benefits will rise each month they are deferred between FRA and age 70. Spousal benefits peak at FRA, so there is no reason to defer claiming them past that point.

An early filing will also trigger a Social Security provision called deeming—this means the agency considers you to be filing both for your individual retirement benefit and you spousal benefit. You will be paid an amount roughly equal to the greater of the two benefits. But you lose the opportunity to get increases for delayed claiming on your individual benefits. This is a bad deal.

  1. Use a file-and-suspend strategy. If both spouses defer claiming until FRA, the higher-earning spouse can file and suspend benefits then. This way, the lower-earning spouse can file for spousal benefits, allowing his or her individual retirement benefit to grow due to delayed retirement credits. Then you can each file for maximum retirement benefits at age 70.

So what’s the right approach for you? If you both defer filing, you can file and suspend your benefit at age 66. This will enable your spouse, who will have turned 69, to file for her maximum spousal benefit. Meanwhile, she can continue to allow her individual benefit to grow due to delayed credits up to age 70

Alternatively, your wife can file and suspend at 69, allowing you to file for your maximum spousal benefit at 66 and collect it for four years, while deferring your own retirement benefit until 70. Even though you are the higher earner. this strategy seems likely to maximize your family’s total benefits.

There’s another advantage to waiting until 70: if you die before your wife, she will receive a widow’s benefit that will equal your maximum retirement benefit. (She can only collect the greater of her retirement or widow’s benefit.)

Of course, choosing the best spousal claiming strategy for a couple depends on many factors, including relative ages, finances and health. This is something married partners need to talk about.

To read Philip Moeller’s answer to Jack and other questions, read the full article in its original format: http://time.com/money/3735837/social-security-spousal-benefits-secrets/

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. 

Tax Reform 2015

Tax Reform 2015 Updates

The American Taxpayer wants tax reform and we’ll publish updates on what is going on inside the Senate Committee on Finance.  We’ll begin by looking at the newly formed bipartisan Tax Working Groups.

Each of the bipartisan groups will work directly with the nonpartisan Joint Committee on Taxation (JCT) to produce an in-depth analysis of options and potential legislative solutions within its assigned area, with the goal of having one final comprehensive report featuring recommendations from each of the five categories completed by the end of May.  The report recommendations, which will be delivered to Chairman Hatch and Ranking Member Wyden, will serve as a foundation for the development of bipartisan tax reform legislation.

US Committee on Finance and Tax ReformJANUARY 2015 : On January 15, five bipartisan groups were launched to analyze challenges of Tax Code, develop policy recommendations for comprehensive Tax Reform. The groups will analyze current tax law and examine policy trade-offs and available reform options within the group’s designated topic areas. Each group will be co-chaired by one Republican and one Democrat member. Continue reading

How Much Do Americans Pay in Taxes

Types of taxesHow much do Americans pay in taxes?

Some $1.4 trillion in individual income taxes are due to the IRS on April 15. But for many Americans, that’s only the half of it.

A new report from the U.S. Congress’s Joint Committee on Taxation shows that looking only at income taxes misses most of what we pay to the federal government each year.”
Want to read the 32 page Joint Committee on Taxation Report, click here. To read the the original article, click here.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source:  Bloomberg

 

 

Why the IRS Won’t Tell Fraud Victims What Identity Thieves Stole

The IRS, TurboTax and A Taxpayer’s Identity Theft

A taxpayers’s identity theft is a worst case scenario for any taxpayer, and especially when the IRS won’t tell fraud victims what identity thieves stole. Tim Loo learned early this year that his name and Social Security number had made their way onto a fraudulent tax return, and immediately wondered whether the identity thief might also have his bank-account details or his kids’ Social Security numbers.To survey the extent of the damage, Loo asked the Internal Revenue Service for a copy of the bogus return. It refused. TurboTax, whose tax-filing software the criminals had used, told him they couldn’t share the fake return with him either, for “privacy reasons.”

The Boston-based physician wondered: Whose privacy? Continue reading

Tax Professionals Survive 2015 Tax Season

Seal of US Treasury IRSTax Professionals Survive 2015 Tax Season

Commissioner John Koskinen sent a message of thanks to tax professionals and their partners for managing to get through a “challenging” tax season, as reported in Accounting Today.

“As the April 15 deadline approaches, I want to thank all the tax professionals and other partners who have helped to make a challenging filing season run as smoothly as we could have hoped,” Koskinen wrote in an email Wednesday. “Every filing season is busy and presents unique issues. This tax season saw hurdles ranging from the tax extender legislation in December to putting in place new provisions of the Affordable Care Act. The work of attorneys, Certified Public Accountants and Enrolled Agents as well as the software industry and payroll community has been extremely helpful—and essential—to running the tax system and helping the nation.”

Koskinen—who has faced his own challenges this tax season dealing with steep budget cuts that sharply reduced IRS customer service hours and personnel—also thanked tax pros for their patience.

“I just wanted to let you know how much we appreciate your hard work and continued dedication—as well as your patience,” he added. “I know tax professionals—as well as taxpayers—have faced long wait times when calling the IRS for assistance. I want you to know it’s frustrating for me as well as IRS employees. This remains a major area of concern for the IRS.”

Koskinen also looked beyond tax season. “While the April 15 milestone will quickly pass, please remember we appreciate the work you do throughout the year helping individual and business clients with extensions, amended returns and compliance issues,” he said. “We look forward to continuing to work with tax professionals and all of our partners in the tax community in the year ahead. Thanks again for your hard work, and congratulations on reaching April 15.”

To view article in original format go to Accounting Today.

Authors Note: We selected the title Tax Professionals Survive 2015 Tax Season because we know – first hand – the number of hours reputable tax professionals devote to their clients.


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Millennials Are First To File Early Taxes

Millennials picMillennials Are Planning to Save Tax Refund

Read an interesting article in Accounting Today,

“The Millennial generation is the most diligent when it comes to filing their taxes early, according to a new survey. Ninety percent of Millennials filed at least one month ahead of the tax deadline, compared to an average of 77 percent for all other age groups, according to a poll of 500 U.S. adults by the consumer insights firm Instantly. 

The survey also found that 33 percent of Millennials plan to save their federal and state tax refunds, compared to only 18 percent of non-Millennials, who are more likely to use their refunds to pay down debt and bills. The study also found that 17 percent of Millennials feel a sense of civic pride when filing their taxes, while the majority of non-Millennials feel that taxes are just something they have to do.”Media buzz around tax season tends to focus on last-minute filers, but the study found that most people file early, with Millennials leading the charge,” said Instantly chief marketing officer Andy Jolls in a statement.Instantly also found that more than 82 percent of Americans said they have filed their taxes a month ahead of deadline, while only 4 percent of U.S. adults reported they will wait until April 15 to file their taxes 

The survey also revealed that nearly 50 percent of Americans use online tax programs over other filing methods, citing ease of use as the main reason. Twenty percent of respondents said they use a tax preparation service such as H&R Block, while 18 percent still file themselves on paper, and 14 percent rely on an accountant.

In addition, 75 percent of those polled expect to receive less than the average national tax refund of $3,120, or to owe money. Despite the tools and increased convenience available today, there is still plenty of hesitation around filing.

The survey found that 79 percent of respondents were apprehensive about the outcome of filing their taxes. Concerns about filing incorrectly and not getting all the money back that they deserve topped their fears. The biggest usage of tax refund money is paying down bills and debts for 36 percent of Americans.

To read the article in its original format in Accounting Today. To see the complete survey results, click here.”