Have you thought about using direct deposit for your tax refund? Here are some benefits to consider. First it makes receiving your tax refund much quicker. The refund is the most efficiently received when you electronically file and select direct deposit. Second it is secure, the funds go directly to the account you specify and there is no chance of it getting lost in the mail. It is easy to provide your preparer with the bank information and then double check to make sure the bottom of the … [Read more...]
Are you passive or non-passive in regards to the K-1 you receive?
Are you passive or non-passive in regards to the K-1 you receive? First of all, why is it important to know which you are? Making this determination can determine if a loss is allowed or if it is a suspended loss. It also determines if the income is subject to the Net Investment Income Tax. Depending on your tax situation this determination can change your tax due and you should prepare for the effect it has on your tax when you become involved in an entity that you receive a K-1 from. Now … [Read more...]
Do You Have a Hobby Loss?
If the IRS determines you have a hobby loss, they can disallow the losses on your return. In this case you would not only owe more taxes, but you would also owe penalties and interest. In addition, if you have taken these losses for more than one year, the IRS can review more than just one year and assess more taxes, penalties, and interest for each year that you took the loss. In determining if a loss is from an activity engaged in for profit or for hobby the IRS looks at the following … [Read more...]
What to do if You Receive a Tax Notice
When I have an initial meeting with clients I try to stress what to do if you receive a tax notice. Many times I will receive the tax information to prepare a return and a tax notice will be included that was either never addressed or was just paid. While the IRS website does give some guidance on what to do with a notice at https://www.irs.gov/Individuals/Understanding-Your-IRS-Notice-or-Letter; I always recommend you send them as soon as you get them to your tax professional. In my case I … [Read more...]
Are you receiving phone calls from the IRS?
Have you been receiving phone calls from the IRS? There have been a number of clients who have received phone calls from somebody claiming to be the IRS however these are scams that you should be aware of. Please do not provide payment information to these individuals. The IRS released a list of things they will not do that have been a part of the scam: The IRS will not call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a … [Read more...]
Is your tax return information safe?
Each day we hear something about identity theft, a new scheme or another company hacked. So the question becomes "Is your tax return information safe?" The IRS recently published a scheme that allowed criminals to access 104,000 tax return transcripts. This was done by collecting personal information about the individual from other sources then using it to gain tax information. According to the IRS, the items needed to verify identity are social security number, date of birth, address, filing … [Read more...]
