Arizona and Georgia consider accepting bitcoin as payment for state taxes

Where's the rest of your tax refund? Being used to pay delinquent federal and state debts

How companies have or plan to share their tax cut wealth

Shortly after the Tax Cuts and Jobs Act (TCJA) was signed into law on Dec. 22, 2017, the Republican lawmakers who wrote and fast-tracked it into law pointed to the measure's immediate effects.

The most immediate indicator was the many companies that gave their workers year-end bonuses.

Some corporate execs acknowledged that the law, which gives big businesses a dramatic 14 percentage points cut on their tax bills (from a 35 percent to 21 percent rate), played a part in the bonus decision.

But as 2018, the first year that the tax cuts will be in effect, other companies are not so sure how they'll share corporate tax savings with employees. Or whether they'll do so at all.

Benefits get a boost: Since passage of the TCJA, 20 percent of the 300 companies polled by the New York-based executive compensation consulting firm Pearl Meyer said they have provided employees with some enhanced benefits.

More than a third of those who boosted benefits, added that they are considering further changes to their benefits package.

Other employee welfare changes: While the year-end bonuses got a lot of attention, most of the changes — 95 percent — according to the poll, were structural changes to compensation.

Bonuses were handed out by 65 percent of the companies. Most of this added income was in the form of one-time year-end payments of $1,000.

Forty-six percent of employers decided to use their corporate tax savings to raise the minimum wage they pay some of their workers.

Retirement benefits got a bump at 12 percent of the businesses. Another quarter or so of companies is considering making changes here.

Another 15 percent of employers said in the online survey that they considering reducing healthcare costs.

Other actions that companies also have taken in the wake of the corporate tax cut law don't directly affect immediate compensation, but could in the future.

This includes such things as increasing capital investment, bolstering employee training and hiring more workers.

More wait and see: A majority of the polled execs, however, are biding their tax savings time.

More than half of employers, 52 percent, are not planning any immediate changes to their benefits packages.

The reason? They're unsure of just how much the tax changes will mean to their bottom lines.

Others say they are not anticipating significant enough tax benefits to share.

In cases where company brass expects to eventually see tax savings sufficient enough to pass along, things like profit sharing plans and equity awards top the consideration list.

Share info if not the wealth: Regardless of how any tax savings are or aren't used, keeping employees is the loop is imperative.

"Given the recent wave of announcements and news coverage, companies who are not planning to make changes [should] be prepared to answer employee questions by developing a solid communication plan to explain their rationale," said Pearl Meyer.

You also might find these items of interest:

• Bonuses comes with tax baggage
• Is Amazon's second HQ worth the tax incentive price?
• Buffett's Berkshire gets $29 billion boost from GOP tax bill

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source http://www.dontmesswithtaxes.com/2018/02/how-companies-are-or-plan-to-share-their-tax-cut-wealth.html

Buffett's Berkshire gets $29 billion boost from GOP tax bill

Alabama kicks off 2018's hurricane sales tax holidays

Make sure you call the correct IRS phone help line

IRS now accepting returns claiming 3 renewed tax extenders

Guide to Start and Grow Your Successful Tax Business Named Top Product

Good News!  My new book, “Guide to Start and Grow Your Successful Tax Business”, has been featured for Honorable Mention in the February 2018 Accounting Today magazine among The 2018 Top New Products.  

 

According to Accounting Today, “It’s worth remembering that not all the tools accountants use are software applications, and the Honorable Mention in the Tax Category is a good example of that: “Guide to Start and Grow Your Successful Tax Business” is a book by Chuck McCabe of Peoples Income Tax and The Income Tax School that offers a comprehensive discussion of everything you need to know to build a practice from scratch – or take an existing one to the next level.”

I wrote the book to be used as a “go-to guide” and tool for tax preparers looking to go out on their own and tax business owners who could use some additional guidance. I am excited and proud to see it get recognition.

In my 30 plus years of tax business ownership, I have learned a lot and am very passionate about spreading that knowledge to other tax pros – especially tax business owners. Being self-employed is challenging, but it can also be very rewarding. In today’s economy, self-employed people often have the greatest job security. I am a big proponent of entrepreneurship and hope this book helps guide tax professionals in that direction.

Learn more about the book and/or purchase it on our website here: Guide to Start and Grow Your Successful Tax Business.

 

source https://www.theincometaxschool.com/blog/top-tax-product-accounting-today/

Combat-injured vets due refunds of wrongly collected taxes

5 (for now) pet-related tax breaks

Guest Post - Tax Practitioners and Marijuana Business Clients

Presidential taxes, personal & for us all, on Presidents' Day

Know, and make sure IRS follows, the Taxpayer Bill of Rights

Mail thief gets roaches instead of tax refund, filing data

Where's your refund? Still in the works for ACTC, EITC filers

Getting IRS tax help gets a bit more complicated

Who Is Your Ideal Tax Client?

Tax business owners who are just starting out often get fatigued when it comes to acquiring new clients. When asked who their ideal client is, the answer tends to be “everyone!” While it’s true that everyone has to pay taxes, casting that wide of a net is not the best practice. Here are some guidelines to follow that I’ve learned from my 30+ years as a tax business owner.

Reach out to Family and Friends

If you’ve just opened your business, start with people you know. Announce it on Facebook and LinkedIn, and reach out to family and friends who may need your services and feel comfortable going to someone they know. From there, ask for referrals. This is always the first place we suggest you start.

Target Businesses 

While it’s great to offer tax services to the general public, it may be more profitable to gain business clients with more complicated returns. Target small business that are profitable (so they will be able to pay you), but not large enough to employ their own bookkeeper.  The type of business doesn’t matter much, but a sole practitioner (with no employees) might not have enough complexities to justify hiring you.  However, almost all small businesses will need tax preparation services even if they don’t need bookkeeping help.   

Look Our for These Industries

If you want to get more specific, the following industries generally have 1 to 10 employees and do not have a in-house professional bookkeeper.

• Restaurants
• Contractors
• Professionals
• Fully funded startups

Offer More Than Tax Preparation

Providing accounting services (bookkeeping and payroll) is also a great way to provide value and gain year-round income. You should be Proficient in Quickbooks since it is the standard used by most small businesses, and, ideally, you should become a Quickbooks Certified ProAdvisor. Being a one-stop shop for tax preparation, bookkeeping and payroll services, will ensure that your clients stick with you – and not leave you for a competitor that offers a service that you do not.

Consider Specializing 

As you learn and develop your skills, consider specializing in a specific area of tax law. Finding a niche market like retiree taxes, hospitality, military, C-Corp, returns for low-income taxpayers, or returns for resident aliens and then focusing your marketing efforts there, can help growth tremendously. Rather than marketing to a wide audience, focus on one specific niche and push for referrals. Learn more about that here.

Learning tax preparation is one thing. Navigating the ins and outs of being a business owner is another. If you’re looking for more guidance on building your tax practice, check out my new book, Guide to Start and Grow Your Successful Tax Business. It was recently named a 2018 Top New Product by Accounting Today.

source https://www.theincometaxschool.com/blog/ideal-tax-client/

Marriage penalties & bonuses remain under new tax laws

Latest tax scam twist: crooks deposit fraudulent refunds into real taxpayers' bank accounts

IRS fiscal 2019 budget proposal substantially the same, both in dollars and recommended tax priorities

Tax system now 3 pages more complex; yet more will claim standard deduction

Annually, the Joint Committee on Taxation releases a report entitled - "Overview Of The Federal Tax System As In Effect For [current tax year]." The report for 2018 (JCX-3-18) was released February 7, 2018 and is 38 pages long. The last report for 2017 (JCX-17-17; 3/15/17) was only 35 pages long! And the 2018 report was issued two days before more tax legislation was enacted that mostly affects 2017 - the Bipartisan Budget Act of 2018 (H.R. 1892; P.L. 115-123 (2/9/18)). This new legislation mostly is the concurrent budget resolution but also extends 33 tax items that expired at 12/31/16, mostly through 12/31/17 (retroactively that is!). These expiring provisions are generally not covered in these 30+-page overview reports by JCT. P.L. 115-123 also includes some disaster relief tax provisions and several miscellaneous items such as regarding whistleblower awards and the user fee for installment agreements to pay taxes.

Why is the 2018 report longer? It appears to be due to brief descriptions of new items added by the Tax Cuts and Jobs Act P.L. 115-97; 12/22/17) such as half a page for new Section 199A on the qualified business income deduction that is a 7-page long, temporary provision in the law, plus a few more data tables. These overview reports include interesting data and graphs, such as on sources of revenue, the make-up of income reported by individuals, and distribution of income and taxes.

A few interesting items from the reports:

• Projected for 2018, 1% of individual filers have income over $500,000. For this purpose, AGI is increased by tax-exempt interest, employer contributions for health insurance, employer share of FICA tax, worker's comp, nontaxable Social Security benefits, AMT preference items, Section 911 foreign earned income exclusion and a few other items.

• For 2017, JCT estimates that 31.7% of individual filers will itemize deductions rather than claim the standard deduction. For 2018, their estimate is that 13.1% will itemize.  This is a significant drop due to the increase in the standard deduction by the TCJA as well as removal of several itemized deductions.

What do you think?



source http://21stcenturytaxation.blogspot.com/2018/02/tax-system-now-3-pages-more-complex-yet.html

IRS criminal agents had another good year

IRS cops going after tax evading cryptocurrency accounts

Filing 1040X if you now can claim an unexpectedly renewed 2017 tax break

Some 2017 expired tax breaks are back!

8 Ways to Gain New Clients This Tax Season

 

It’s the start of a new tax season. Is your marketing plan in place and ready to go? Do you how you’re going to get new clients this year? Marketing plan or not, here are some ideas to help you get clients through the door.

It Pays to Pay Attention 

Do you keep an eye on the business news in your area? Have you kept tabs on new businesses in the area? Reach out to those business owners and offer your services. Better yet, look up the owner on LinkedIn and see if you have any mutual connections. If you do, reach out to that person and ask for an email introduction. It’s always better to be referred than to cold call or email.

Speak Up!

This is the time of year people have taxes on their minds. And with all the changes to the tax code, people are confused and anxious. Reach out to the associations you are a member of – or even associations you are not a member of – and offer to speak at their next meeting or event. It’s a great way to show your expertise and a good networking opportunity.

Sponsor

Sponsoring a local association meeting or event is also a great way to get the word out about your business. Look for opportunities where you can have a booth, have your logo visible, and/or provide hand-outs to participants.

Direct Mail

Direct mail is a great way to reach people in the surrounding neighborhood. Post cards are good because they cost less to produce and the recipient will get the message without having to open an envelope.  However, a letter could have a “teaser” printed on the front, such as “Tax Reform Information Inside!”  This year, the letter approach would be especially effective. 

The ad you produce should also include a unique and compelling offer or proposal and not necessarily another discount like every other tax firm.  

Host a Seminar at Your Office

Another good approach to getting people in the door is to host a seminar at your office. Choose a topic you know is of interest to people – like the changes to the tax bill, or specific changes that will affect your core demographic. You could even host one for individuals and one for businesses.

Partner with a Charity

Another great way to promote your business is to partner with a charity. For example, our sister company, Peoples Tax, has been working with a non-profit called Connor’s Heroes for several years. Each year we host a supply drive that incentivizes people to drop off supplies. This year, we’re holding the drive on Valentine’s Day and giving out candy and coupons for everyone who participates.

Offer a Referral Program

Your current (happy) clients can be your biggest advocates and source of new business. So why not incentivize them by offering a referral program? At Peoples Tax, we offer a 25% discount for referrals. Decide on how you will incentivize your clients and then reach out to them via email to encourage referrals. You should also keep referral flyers on your desk and give them out to clients when they come to have their taxes prepared.

Be a Source of Information

This year is our year to shine as tax pros. With so much change coming, you really want to establish that 1. You know the new law and 2. Taxpayers need you. Reach out to local reporters who are writing about these topics and offer quotes, tips, and advice. Write about the new laws on your blog, in your newsletter and on your social media channels. You should also share your most informative blog posts with associations you are a member of for consideration in their newsletters, their blog, or social media sites.  

Want more ideas and an easy to execute marketing plan? Check out our Tax Business Marketing Manual.  

 

source https://www.theincometaxschool.com/blog/gain-clients-tax-season/

6 tax refund myths busted

FBAR and Describing Return Due Dates

In 2015, due dates for a few types of tax returns were changed. This included for the foreign bank or financial account reporting if you have over $10,000 in foreign accounts (FBAR, or Report 114). For a long time, it was due by June 30 - an odd date in the tax filing world). It was changed to April 15 with possible extension to October 15. Thus, it matched the Form 1040 due dates. 

When the financial crimes division of the US Treasury Department, (FinCEN) explained how to get the extended due date, it told us that if we didn't get the form filed by April 15, we automatically got until October 15 to file the form.

So, wouldn't it be easier to have written the law to say the due date is October 15.  And then when FinCEN provides us the instructions (online, and the form must be filed electronically), it could just say it is due by October 15, but it is recommended to file the form at the same time you e-file your Form 1040 so you don't forget to file it.

FinCEN recently announced that when April 15 falls on a weekend or holiday, as it does for 2018, the form is due the next day - so April 17, 2018. But, if you miss that date, you have until October 15, 2018.

For IRS information on FBAR - click here.

What do you think? What would be the simplest way to describe the due date for any return?

source http://21stcenturytaxation.blogspot.com/2018/02/fbar-and-describing-return-due-dates.html

As Tesla heads toward solar orbit, Senators seek expanded path for terrestrial electric vehicle tax credits

Capital gains taxes for 2017 returns, under the new law and in light of the crazy stock market

How to report Super Bowl & all gambling wins to the IRS

TCJA - Many areas in need of guidance

The Tax Cuts and Jobs Act enacted December 22, 2017 includes a lot of new provisions. For example, Section 199A, is seven pages long in single space! It allows a deduction for owners of business activity (other than as a C corporation). The purpose is to also provide some rate reduction for businesses other than only a rate reduction for C corporations. The new rule is lengthy because it involves a lot of definitions and special rules. Now, while many business owners have income below the thresholds where they must deal with the complexity, just understanding the basics might be complete for many.

The AICPA Tax Section volunteers and staff have identified 39 areas in need of guidance (as an initial list). Most of these will require IRS work, such as to define terms. Some might be clarifications from Congress or the Joint Committee on Taxation as to what was intended by language that is not completely clear.

Here is the AICPA's January 29, 2018 letter listing various items. And the AICPA also noted in a letter to Congress on January 30, 2018 that IRS needs resources to provide timely guidance.

What do you think? Where do you think guidance is most needed?

source http://21stcenturytaxation.blogspot.com/2018/02/tcja-many-areas-in-need-of-guidance.html

Restaurant tips rule change could short-change wait staff

Hungry for some football watching food? Your Super Bowl party budget better include party snack taxes

It's Super Bowl prop bet (and tax) time again!

Tax Scams Abound This Tax Season – Tips to Stay Incident Free

Tax season is officially here! In addition to the start of the season, this week is Tax Identity Theft Awareness Week. Despite all of the safeguards the IRS has put in place to stop cybercriminals, it’s still our duty as tax preparers to educate clients, and follow strict online security procedures to protect sensitive data.

Communicate with Clients

Have you sent out information to clients about the importance of cybersecurity? Do they know the best practices? Here are some resources to consider.

IRS Identity Theft Information for Taxpayer

Tax Scam Roundup: Know What You’re Up Against

4 Things to Know About Tax Fraud and Identity Theft (this blog post from our sister company, Peoples Tax is a great example of information you should be providing to your clients)

Cybersecurity Best Practices

Just like previous years, it’s important that tax pros and taxpayers are vigilant against identity thieves. In addition to targeting taxpayers, cybercriminals have started targeting tax pros. They do this through phishing scams that seem to come from entities you would normally trust.

Do you know the best practices? Here’s a handy infographic from Lifelock.

 

Be sure to also check out our blog post that outlines the IRS Don’t Take the Bait Series.

Top Scams

There are a lot of scams out there right now, but some are more prevalent that others. Overall, you should watch for requests to reauthorize your account; sensitive information like bank account numbers, social security numbers, or passwords; or requests to download a file or click on a link. All of these are signs that your are being phished. Here are some of the top scams that the IRS has identified so far this year.

W2 Phishing Scam

Back to haunt us in 2018! This scam prays upon payroll department employees as an attempt to gain access to the payroll information for entire companies. Details can be found on Accounting Today here.

IRS Agent Impersonation

This scam has been going on for years and is used often by cybercriminals. The scammer calls the taxpayer and poses as an IRS agent. They demand payment or information over the phone and threaten everything from steep fines to jail time.

Tax Professional Phishing Scams

Like we said, scammers are targeting tax professionals as well as taxpayers. You will be contacted by someone who is posing as your tax software provider, cloud-based storage provider, or IRS e-services. The email address and website you are directed to will look VERY close to the real thing but alas it will be a fake. Once you enter your username and password, they gain access to all of your information.

Learn more here: https://www.theincometaxschool.com/blog/tax-preparer-scams/

Here are a few resources to know about to stay in the know about current tax scams:

1. The IRS List of Dirty Dozen Tax Scams (a general overview of schemes)
2. Our Tax Scam Roundup – which is updated as we learn about new scams.

What to do in the Event of a Data Breach

If you do fall victim to a data breach, it’s important that you follow these steps immediately.

• Contact IRS local stakeholder liaison.
• Contact the local office of the FBI
• Contact the Secret Service
• File a police report with local police
• In the states in which the tax professional prepares state returns, contact the State’s Attorney General
• Email the Federation of Tax Administrators (StateAlert@taxadmin.org)
• Get a security expert to determine the cause and scope of the breach, to stop the breach & to prevent future breaches.
• Contact insurance companies to report the breach.
• Contact the Federal Trade Commission (idt-brt@ftc.gov).
• Get Credit/identity theft protection
• Notify the Credit bureaus of a compromise.
• Notify all victims to inform them of the breach.

You should also look into Data Breach Insurance.

Education and vigilance is crucial this tax season! Inform your clients, and train your employees. Have a safe, easy, incident free tax season.

source https://www.theincometaxschool.com/blog/tax-scams-abound-this-tax-season-tips-to-stay-incident-free/

3 tax moves to make in February 2018