Wednesday, October 31, 2018
Tuesday, October 30, 2018
Monday, October 29, 2018
Sunday, October 28, 2018
Saturday, October 27, 2018
Friday, October 26, 2018
Thursday, October 25, 2018
October Tax News
This year sure is flying by! While we’re about to slow down and engage in a series of family holidays that all seem to involve eating large quantities of food, the IRS doesn’t seem to be slowing down. We’ve got a lot to cover in this month’s Tax News Recap!
PTINS 
First and foremost, have you renewed your PTIN? You need to before the end of the year!
Delayed Start to the Season
I’m sure this comes as no surprise, but due to the high volume of tax law changes, the 2019 tax season will likely be delayed. The Treasury Inspector General for Tax Administration warned of this in a new report released at the beginning of the month.
According to Accounting Today, “The IRS estimates that implementation of the law will require creating or revising approximately 450 forms, publications and instructions, and modifying around 140 information technology systems to ensure it can accommodate the newly revised tax forms.”
If that does happen, bookmark this oldie but goodie blog post about financing operations while you wait for the tax season to start.
Guidance on the Meals and Entertainment Deduction
The Tax Cuts and Jobs Act was supposed to eliminate deductions for expenses pertaining to activities generally considered entertainment, amusement or recreation. However, it looks like the IRS will allow taxpayers to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the business) is present at the meal, and the food or beverages aren’t considered to be “lavish or extravagant.” You can read the IRS guidance on meals and entertainment here.
The First Federal Sentencing of a Legal Cannabis Business Owner for Tax Crimes
As you know, cannabis has been legalized in some states. This month, we saw the first sentencing for tax crimes related to a “Cannabusiness”. The owner pleaded guilty to willfully failing to file income tax returns in connection with his cannabis stores. Let that be a lesson to the cannabis entrepreneurs out there! If you prepare taxes in a state where it’s legal, you may want to get to know your local Cannabusinesses to recruit them as clients. Accounting Today has the full story.
Tax Relief for Victims of Hurricane Michael
The IRS recently announced an extended deadline for taxpayers affected by Hurricane Michael. They now have until February 28, 2019, to file individual and business tax returns and make certain tax payments.
Reminder: Time to Reach Out for Year End Planning
Have you reached out to clients yet about year end planning? With the looming Tax Cuts and Jobs Act, it’s going to be important for clients to make appointments with you. Some clients may not even be aware of the changes. Time to reach out!
Get Out the Vote
Finally, here’s your reminder to get out on November 6th and vote! Every election is important and every vote counts. Here’s some information about election day.
Now that you’ve got the rundown, mark your calendars to join Ty on Wednesday, October 31st for our Tax News Today LIVE! She’ll be covering these topics and more AND she’ll be answering your questions. Join us on our Facebook page at 1pm EST.
source https://www.theincometaxschool.com/blog/october-tax-news/
Wednesday, October 24, 2018
Talking about tax reform tax planning
Today was one of those days where personal stuff took precedence over work and tax matters. As a freelancer, I'm usually able to plan things so the I can do both without too much trouble.
Not today. Personal issues won.
That meant I missed out on a #TaxBuzzChat. This is a regular Twitter conversation among online tax folks on various, topical tax matters.
Today a bunch of my Twitter pals — including, but not limited to @beanna_whitlock, @BrettNealCPA, @bstonercpa, @cbriancpa, @DebFoxFinancial, @MelindaNCPA, @RobergTax and @ShaunHunley — discussed year-end tax planning in light of the changes wrought by the Tax Cuts and Jobs Act.
Among the tax reform tax planning topics were how the new law affects alimony, reasonable compensation, the viability of state and local taxes (SALT) workarounds, crypto currency disclosures to the Internal Revenue Service and the ever popular how tax professionals are helping pass-through entity clients deal with the new 199A business deduction.
See why I was so disappointed I couldn't be a part of this tax reform tax planning mastermind conclave?
But all is not lost!
Lee Reams II of CountingWorks and TaxBuzz — or @leereams2 as he's known in the Twitterverse — has compiled highlights of today's chat exchange of tax information.
And since I'm just now getting around to blogging today, my special Wednesday Shout Out (and thanks for making today's post easier!) goes to Lee's recap of the tax chat.
Thanks, Lee and all who participated in today's online tax talk. And for all the tax geeks who, like me, couldn't make it, enjoy the synopsis!
You also might find these items of interest:
- IRS issues implementing new tax laws could delay 2019 filing season
- Small businesses' many new tax considerations, plus some new tax law tips
- 5 things to consider if the new tax law has you thinking about becoming an independent contractor
Advertisements
source https://www.dontmesswithtaxes.com/2018/10/taxbuzzchat-talk-about-tax-reform-tax-planning.html
Tuesday, October 23, 2018
Wednesday, October 17, 2018
Tuesday, October 16, 2018
Monday, October 15, 2018
Sunday, October 14, 2018
More on Wayfair
One post was on SalesTaxSupport.com where I asked the question - what if the parties were not billion dollar vendors? I think it is too bad the vendors in the case were so large. After the case, Wayfair issued a press release noting that it was already collecting tax on 80% of sales that that figure was growing as its logistics footprint was growing (that is, it was setting up distribution or other operations in more states).
Wayfair's 2017 10-K also indicates it has over 1,300 engineers and data scientists! Well, that makes it a lot easier to create a logistics system to collect sales tax from all customers and remit it to the state. What about a vendor who sold 200 $1 items to customers in the state?
Additional examples of small vendors I came across recently in doing research on taxes and crowdfunding are small vendors raising money on crowdfunding sites such as Kickstarter. In fact, I gave $30 to a party trying to raise funds to create and distribute calendars. And they are not alone. There are similar sites where someone is trying to raise funds to create a comic book, artwork and more calendars. If the party I gave the money to hits his target (and he did), I'll be sent a printed calendar. The party says they will ship to anywhere in the world. Well, 200 or more of these sales in any state will create sales tax collection costs too in a growing number of states, despite being what appears to be a small vendor.
I see that some of the sellers of calendars and calendars are providing a pdf of the item. While that is not taxable in all states, the seller needs to check the law in each state to be sure and for states that find sales tax nexus with 200 or more transactions in the state, whether that figure includes taxable and non-taxable transactions in that count.
Some states and likely more will enact legislation making the "marketplace facilitator" such as Etsy and eBay collect tax. I think Kickstarter and other crowdfunding sites will likely fall under this definition, but states should be sure (see Pennsylvania's definition here). Unlike eBay and Etsy, Kickstarter does more than help people sell products. Also, the funders might be providing more than needed to receive the product. That raises more issues on the sales tax collection side. Also, when must the sales tax be remitted because on many sites, the party doesn't get the funds if their target is not met.
What do you think?
source http://21stcenturytaxation.blogspot.com/2018/10/more-on-wayfair.html
Saturday, October 13, 2018
Friday, October 12, 2018
Get Out and Vote on November 6th
We have a very important election coming up on Tuesday, November 6, 2018! This election will involve Congressional, general and special elections that should concern everyone. Are you registered to vote? You have until Monday, October 15th to register! Here’s a link with more information on how to register in various states.
Why is your vote important? 
- Voting is a hard-earned privilege, right, duty, and responsibility of every eligible American citizen.
- Every vote DOES count as demonstrated in the past two Presidential Elections.
- Your vote is an investment in your future.
- If you want your voice heard, your thoughts and opinions are not enough. You must vote to have your thoughts and opinions heard.
Why is the upcoming election important to us as a business?
As you know, the Tax Cuts and Jobs Act (TCJA) was voted into law by Congress in December 2017. TCJA provided benefits for small businesses; one of which is a lower tax bracket for businesses such as The Income Tax School and our sister company, Peoples Tax.
We need Congressional leaders who support small business growth, tax benefits, tax credits, and tax cuts. These benefits allow small businesses to continue to operate, grow, and the funds to offer employment opportunities. Leaders who are small business oriented will enact policies that foster growth for small businesses, which benefits our economy and decreases unemployment rates.
The Congressional leaders who are voted into office, in the next election, have the power to make the most recent small business tax cuts permanent or to eliminate them completely. A vote in either direction will have a direct impact on you as an employee and consumer.
Make an Informed Choice
While it’s important for everyone to exercise their right to vote, it’s equally important that every voter does their due diligence to research before voting. Don’t waste your precious vote!
- Know the candidate choices
- Decide what you want in a candidate
- Watch debates when they are available
- Research their views and positions
- Evaluate the candidate’s opinions on issues that matter to you
- Research the candidate’s leadership abilities
- Evaluate public support or opposition for the candidates.
- Research the candidate’s voting history
Election Day
Here are some things to know for election day.
- Polls open at 6 a.m. and close at 7 p.m. on Tuesday, November 6th.
- Know the location of your polling precinct. Here’s a great tool for that.
- Vote early to avoid crowds.
- Be sure to bring one of the following forms of identification.
- State driver’s license
- State DMV-issued photo ID
- United States passport
- Employer-issued photo ID
- Student photo ID issued by a school, college, or university located in Virginia
- Other U.S. or State government-issued photo ID
- Tribal enrollment or other tribal photo ID
- State Voter Photo ID card
- Before casting your vote, read over your ballot completely.
- Cast your vote, confidentially
- Wear your “I voted” sticker with pride!
Your voice matters and your vote counts. Be sure to share this with employees and colleagues and lets “Get Out the Vote”!
source https://www.theincometaxschool.com/blog/vote-november-6th-2018/
Thursday, October 11, 2018
Wednesday, October 10, 2018
Tuesday, October 9, 2018
Monday, October 8, 2018
IRS issues implementing new tax laws could delay 2019 filing season
As 2018 winds down, we're all looking at tax moves we need to make. (Need some ideas? Check out the suggested October tax tasks to tackle.)
In addition to us individual and business filers, "we" also includes the Internal Revenue Service.
And the tax agency could have some added trouble this year, thanks to all the changes made late last year by the Tax Cuts and Jobs Act.
In fact, some folks are warning that the hassles the IRS must handle in connection with the new tax law could mean we taxpayers will face a delayed filing season.
Lots to cover: The TCJA is the first major tax reform bill in more than 30 years.
The IRS has estimated that implementing all of the bill's changes will require creating or revising about 450 forms, publications and instructions.
We've seen some of those suggested form changes already, like the technically shorter but realistically longer from many new Form 1040. And we've seen the IRS punt when it comes to one document, the proposed new W-4, that isn't needed file an annual tax return.
In addition, Uncle Sam's tax collector also must modify around 140 information technology systems to ensure that it can handle all the newly revised tax forms.
That's a lot for the IRS to take care of even before it gets to processing around 140 million tax returns in 2019. And some are worried the agency might not be up to the task.
Bad timing for IRS IT: The Treasury Inspector General for Tax Administration (TIGTA) is among the concerned.
In a report issued late last month, the tax watchdog noted that the timing of the TCJA immediately put the IRS behind when it comes to getting ready for an upcoming tax year.
The IRS' Information Technology (IT) group normally has a Jan. 31 deadline for business units requesting information technology products and services for the next filing season.
With the passage of the new tax law in mid-December 2017 (and formal enactment not until Dec. 22, 2017), the IT organization established several interim deadlines to help implement the changes on a timely basis.
However, says TIGTA, the business units missed the deadlines for submitting work request notifications and business requirements. Subsequently, IT set a new deadline of June 1. That shortened the time frame for making system changes for the 2019 tax filing season by four months.
As of July 5, notes the report, IT had not received all final work request notifications and business requirements.
"Delays in receiving this information will result in less time for modifying and testing systems and increases the risk of a delayed start of the 2019 Filing Season," according to the report.
Staffing adds to worries: IRS starring is another area that TIGTA says could affect the 2019 filing season running as regularly scheduled.
The IRS must fill what TIGTA calls critical positions that were vacated by employees or contractors. That' won't be easy.
The IRS, as with all government agencies, must use a lengthy process in hiring employees or bringing contractors onboard. That means the positions might not be quickly filled, causing risk to the timeliness of the information technology updates.
As of June, the IRS had 117 current and new employees on the job to meet its TCJA preparation needs.
In addition, the TIGTA review found that IRS IT is planning to identify any potential negative impact on existing programs and projects caused by implementing the new tax law.
As of mid-July 16, the IRS had not provided documentation of any ongoing projects or programs that will be negatively affected by the implementation of the TCJA changes.
TIGTA says it will keep an eye on the IT group's efforts, but says the IRS' full resource needs and the scope and impact of changes the agency must make will remain unclear until all the requirements are finalized.
That's why TIGTA's report doesn't suggest any ways that the IRS can get up to speed so that the 2019 filing season starts on time.
More money needed: Of course, one thing that the IRS says would help greatly in its efforts to implement TCJA changes in a timely fashion is funding.
Specifically, the IRS says Act would cost approximately $397 million to take care of the new tax law changes.
Congress apparently listened.
This time.
And probably in large part because the Republicans in charge want to make sure that the public doesn't get negative feedback from voters taxpayers when they comply with the tax law changes at return filing time next year.
In March, the Consolidated Appropriations Act of 2018, authorized $320 million for the IRS to handle its new tax law needs. Another $291 million was allocated by Congress in May specifically for information technology requirements.
Now it's up to the IRS to take that money and put it use. Quickly. So that when January 2019 arrives, we can start filing our 2018 new 1040 forms on time.
You also might find these items of interest:
- Tax-writing duo wants to remake the IRS. Again.
- IRS watchdog finds problems with armed tax agent training
- New IRS commissioner begins work amid lingering Democratic tax policy questions
source http://www.dontmesswithtaxes.com/2018/10/new-tax-law-issues-at-irs-could-delay-2019-filing-season.html
Sunday, October 7, 2018
Saturday, October 6, 2018
Friday, October 5, 2018
5 Tips (and 4 Warnings) for Starting Your Own Business While Holding Down a Job
It’s the age-old dilemma: How are you supposed to start your own business (a full-time job itself) while holding down another job already? It’s hard to take that leap of faith knowing that if you leave your current job, you may struggle to pay your bills until your business starts bringing in enough income.
It’s also hard sometimes to find the time and energy to do the responsible things while also following your passion. As an entrepreneur myself, I’m passionate about encouraging others to take the leap. Here are 5 tips (and 4 warnings) that will help give you some direction and much-needed focus. They can help spark the motivation and practical organization you need to make progress towards owning your own successful business.
Identify your MISSION and COMMIT to it
Why do you want to start your own business? Write down ALL the reasons – personal, professional, financial, and anything else you can think of. Keep these reasons handy to motivate you on tough days (and there will be plenty of tough days). These are your motivators.
Then, from your motivators, create your mission and vision for your business. Your mission should be your purpose. What does your business help you do for people? What do you want to create from your business? Your vision is how you carry out your mission. For example, maybe collaboration is really important to you. Write it into your vision. Perhaps having the latest technology will play an important role. Maybe it has to do with how you relate to and treat your clients. Decide what’s important to you about HOW you’ll do business and write it into your vision.
Finally, COMMIT. Commit to making your mission happen. Committing will strengthen your resolve to make it happen. Your vision and your motivators will provide the guidance to make it happen.
Do market research to establish a need for your business – and to differentiate yourself
How will your local market react to another tax business? Is there a need in your area? Is there a niche you can specialize in? For example, I once knew a woman who specialized in helping people with at-home daycare businesses prepare their taxes. Many people I’ve known focus on helping small business owners with their specific tax needs. Perhaps you want to focus on individuals and families. Do some market research to find out what kind of tax services people are looking for and use that information to guide how you’ll tailor your tax business.
To be clear, specializing in one area of tax preparation doesn’t mean you have to exclude others. If you work primarily with small businesses, that doesn’t mean you can’t help families with their tax forms. However, having a specialty or two can help differentiate you in your market.
Assess what you are good at (realistically) and what you need help with
Know your strengths and weaknesses. You may think you don’t have the money or the favors to call in to get help with certain aspects of your business. However, how much more will it cost you if it takes you two to three times as long to complete a task or if you do it wrong? Be realistic about where you need help and then find a way to get it. (And get creative! If cash is short, barter services with local business contacts.)
Build your own strategy and timeline
Now that you have assessed your strengths and weaknesses and have a mission and a vision to guide your way, it’s time to create a strategy – a sort of step-by-step road map that you can refer to as you build your business.
Build your road map by outlining specific, attainable goals that you want to knock out. Then, work backwards from the goal. For example, if your goal is to set up an office where you can see clients, go back and create a mini-timeline and directions for attaining that goal. (Example: 1. Run cost-benefit analysis to see if office space is worth it. 2. Secure financing and set budget. 3. Explore real estate options. Etc. all the way through closing.) That way, if you get a little off course somehow, you’ll have your list to anchor you and remind you what the next steps should be.
Your timeline will be a mix of short-term and long-term goals with long-term goals being broken down into smaller, attainable chunks. Some goals will be a one-time or infrequent activity, such as securing and renewing your business license. Other goals will be recurring. For example, you might set a weekly goal for yourself to complete X hours of coursework or to make X numbers of phone calls to clients and prospects.
Having short-term goals in your timeline along with long-term ones will help you see the progress you’re making and keep you from getting discouraged. At the same time, completing the short-term goals will support your long-term goals.
Get serious about time management
Since time and energy are going to be your two most precious resources as you ramp up your own business, you’ll need to get serious about how you manage both.
Sleep. What is the minimum amount of sleep you need to function well? Some people have to have a full eight hours of sleep. Are you one of them? Or, could you scale it back to seven, maybe six and a half, or even six hours, in order to maximize your waking hours and devote a little extra time to your new business? I’m not saying skip sleep. Do NOT do that. However, what I suggest doing, at least temporarily, is figure out what your magic minimum amount of sleep is. That way, you can still rest your body and your brain and gain an extra hour or so for the extra work of starting a business. Then, and this is very important, stick to that schedule. Don’t get four hours of sleep one night only to crash and sleep for ten the next night. You’ve gained nothing. Find the right schedule for you and stick to it.
Give your most productive hours to your new business. You may have come across a popular saying, “Give your passion project the best part of your day.” If you’re a night owl, stay up late and spend time building your business. If you come home from work wiped out, go to bed early and then get up early so you’re fresh and ready to devote quality time to your business road map and actions. Find the schedule that works best for you, so you can go at your project with a fresh, alert, motivated mind.
Evaluate your current time commitments. Make a list of what you’re already committed to doing. How much time do you devote to each? Are you able to shift any time away from these activities and apply them to your new business activities?
4 Warnings
As motivated as you may feel about having an action plan for getting your new business started, remember the importance of balance and keep these four points in mind.
- Don’t let starting your business interfere with your current, income-generating job. Not only will you put your job and income at risk before you’re ready to leave them behind – it’s disrespectful and unethical.
- Remind yourself that the sacrifices you make now will pay off in the future when you have more free time and more income stability.
- Limit contact with people who are negative about your new endeavor.
- Limiting contact with negative people doesn’t mean avoiding honest feedback. Find people who can really challenge your ideas and give you honest, objective observations. Friends and family are great, but if they’re afraid of hurting your feelings, they may not tell you what they’re really thinking. Seek out objective critiques to make sure you’re not way off base with any of your goals or your strategy.
Want more advice on getting your tax business off the ground and being successful? Check out CEO Chuck McCabe’s Guide to Start and Grow Your Own Tax Business – a great read with a ton of advice from his decades of experience.
source https://www.theincometaxschool.com/blog/starting-your-own-business-while-holding-down-a-job/
Thursday, October 4, 2018
Wednesday, October 3, 2018
Tuesday, October 2, 2018
Monday, October 1, 2018
Student loan repayment help soon could be part of more companies' benefit packages
October's here! In addition to making some general fourth quarter tax moves, this month is when many employees get to reassess and choose coming-year workplace benefits, many of which also offer tax advantages. And tax-free help paying off student debt could soon be part of those packages.
Millennials have overtaken Baby Boomers as the largest generation in the U.S. labor force. That's why today's employers are trying to figure out exactly what these younger workers want.
The traditional worker wishes still apply. All employees want decent pay, regular raises and promotion possibilities. But today's twenty- and mid-thirty-somethings want more, and different, workplace benefits, including on-the-job flexibility, organizational transparency and help in paying off their massive student loans.
It looks like the Internal Revenue Service soon could help companies provide their workers that college debt assistance.
One company gets official OK: In August, the IRS issued a private letter ruling that allowed a company to tie its benefit plan's 401(k) contributions to student loan repayments.
Some companies have provided their workers a direct student loan benefit. But that workplace assistance in reducing college debt has been considered by the IRS as taxable income to the employees.
This letter ruling, however, allows the requesting (and redacted in the document) company to put equivalent pretax funds tied to employees' student loan payments into those worker's 401(k) accounts.
Under the letter ruling specifics, the employer would make a 401(k) contribution on a worker's behalf if the worker was making a student loan payment of at least 2 percent of the worker's salary for a given pay period. The company contribution would be made regardless of an employee's contribution to a 401(k).
This essentially sanctions company reimbursement via pretax money in a retirement plan of the amounts that an employee paid on his/her own toward college debt.
More 401(k)/student loan plans on the way? Some companies have already set up similar student loan arrangements even before the IRS announced its position on this particular case, according to Employee Benefit News (EBN).
And more could soon follow.
At least one employer organization is urging the IRS to broaden the letter ruling's 401(k)/student loan repayment option to all qualified plans.
Explicit tax agency action is needed since letter rulings are specific to the requesting entity and the IRS always notes in its decisions that they are "directed only to the taxpayer requesting it." Still letter rulings give others in similar situations and the tax world in general an idea of the IRS' thinking on the tax topic.
That's why the ERISA Industry Committee (ERIC) wrote the IRS soon after the tax agency's private letter ruling was made public.
ERIC, which lobbies on behalf of large employers on health, retirement and compensation matters, wants the IRS to issue a revenue ruling that would broaden the reach of the letter ruling to all sponsors of 401(k) plans that want to make similar student loan repayment contributions.
In the letter, Will Hansen, ERIC's senior vice president for retirement polity, told the IRS:
"Many employers recognize the burden that student loan debt can have on their workers' ability to save for retirement and would like to help these workers. However, while we believe that current law allows employers to make contributions to their retirement plans on behalf of workers who repay student loan debt, the IRS has yet to clearly articulate that such contributions will not affect the tax-qualified status of an employer’s retirement plan. The recently issued PLR [private letter ruling] is a significant step in this direction, but we believe that more employers would be encouraged to implement programs similar to the one described in the PLR if the IRS would issue a revenue ruling or other guidance of general applicability on this issue."
Student loan and other workplace perks: Even before the letter ruling, EBN notes that the number of companies adding student loan perks to their benefits package was growing.
Still, only 4 percent of employers currently offer their employees some form of assistance or incentive to repay student loans, according to the Society for Human Resource Management.
That could change if the IRS follows ERIC's urging. If it does, it would add yet another tax-favored worker benefit to the mix.
In addition to 401(k) plans, which show up in benefits packages as either a traditional tax-deferred defined contribution plan or tax-free Roth 401(k) account, many employees benefit tax-wise from such employer-provided fringe benefits as:
- assistance in taking even more classes once you're on the job,
- health care coverage, including high-deductible medical insurance plans for which you can establish a health savings account (HSA), and
- child care and medical flexible spending accounts (FSAs).
Regardless of what benefits your company offers, shop carefully during your annual open enrollment season that, for many, starts this month. My earlier post suggesting 5 things to consider in choosing workplace benefits can help.
Other tax actions to consider during the month that effectively ushers in fall include filing your 2017 return if you got an extension, preparing for the seemingly never-ending hurricane season and, once you're finished with last year's taxes, brush up on how the new tax law will affect your 2018 taxes.
You can find more about these and other October Tax Moves under the bright red heading of the same name in the ol' blog's right column. Check them out once you've taken care of open season benefits enrollment.
You also might find these items of interest:
- 8 ways the new tax law does — and doesn't — affect paying school costs
- Tapping retirement accounts early is a dangerous trend among young savers
- Millennials' participation in tax-favored workplace retirement plans improves, but still lags other generations
source http://www.dontmesswithtaxes.com/2018/10/student-loan-repayment-help-soon-could-be-part-of-more-workplaces-benefits-packages.html