A Guide to Avoiding Financial Crimes in Small Business Ownership

Running a successful small business can be a difficult but rewarding experience. Unfortunately, it can also put you at risk of financial crimes. To help ensure the safety of your business and your reputation, it's important to understand the rules and regulations surrounding financial compliance. This guide will provide you with the knowledge and resources you need to stay on the right side of the law and avoid the risk of financial crimes.

Understanding the Importance of Compliance for Small Business Owners

Running a small business comes with many challenges, but one that should never be overlooked is the importance of financial compliance. As a small business owner, it is crucial to understand the rules and regulations surrounding compliance to protect both your business and your reputation.

Compliance ensures that your business operates within the boundaries of the law, preventing potential financial crimes such as fraud, money laundering, and tax evasion. It promotes corporate transparency and ethical behavior, which are essential for building trust with your customers, investors, and stakeholders.

Failing to comply with financial regulations can have severe consequences for your business. It can result in hefty fines, legal disputes, damage to your reputation, and even the closure of your business. By understanding and prioritizing compliance, you can mitigate these risks and create a secure and sustainable business environment.

In addition to legal obligations, compliance also offers benefits for your business. It helps you establish a robust internal control system, streamline your financial operations, and improve accountability within your organization. Compliance can also attract potential investors who value businesses that prioritize integrity and transparency.

Common Financial Crimes that Small Businesses Fall Victim to

Running a small business is not without its risks, especially when it comes to financial crimes. Small businesses are often seen as easy targets by criminals due to their limited resources and lack of sophisticated security measures. Understanding the common financial crimes that small businesses fall victim to is crucial in order to protect your business and mitigate potential risks.

One common financial crime that small businesses fall victim to is fraud. This can include identity theft, invoice fraud, or fraudulent transactions. Fraud can result in significant financial losses and damage to your business's reputation.

Another financial crime that small businesses may encounter is money laundering. Money laundering involves the illegal process of making illicit funds appear legitimate. Criminals may use small businesses as a front to funnel illegal money through legitimate financial channels. This can result in legal consequences for your business and damage to your reputation.

Tax evasion is another financial crime that small businesses should be aware of. Failure to comply with tax regulations can lead to hefty fines, legal disputes, and even the closure of your business.

By understanding the common financial crimes that small businesses fall victim to, you can take proactive steps to protect your business and ensure its financial integrity. Implementing robust security measures, educating yourself and your employees about potential risks, and staying up-to-date with the latest regulations can help safeguard your business from financial crimes. Remember, corporate transparency is key in building trust with customers, investors, and stakeholders, so prioritize compliance and ethical behavior in your small business operations.

How to Stay Compliant with Anti-Money Laundering (AML) Regulations

When it comes to staying compliant with Anti-Money Laundering (AML) regulations, small business owners need to take proactive steps to protect their business and maintain financial integrity. AML regulations are in place to prevent criminals from using businesses to disguise the origins of illegally obtained funds. By implementing effective AML measures, small businesses can help prevent money laundering activities and safeguard their reputation.

One crucial step in staying compliant with AML regulations is to conduct thorough due diligence on customers and business partners. This includes verifying their identities, conducting risk assessments, and monitoring transactions for suspicious activities. Implementing robust Know Your Customer (KYC) procedures can help identify potential red flags and mitigate the risk of unknowingly facilitating money laundering.

In addition, small business owners should educate themselves and their employees about AML regulations and provide training on recognizing and reporting suspicious transactions. It's essential to create a culture of corporate transparency and ethical behavior within the organization.

Furthermore, implementing effective internal controls, such as regular audits and strong financial record-keeping, can help identify and prevent potential money laundering activities. Small business owners should also stay informed about the latest AML regulations and adapt their compliance measures accordingly.

By prioritizing AML compliance, small business owners can protect their businesses from becoming unwitting participants in financial crimes. By maintaining corporate transparency and ethical behavior, small businesses can build trust with customers, investors, and stakeholders, ultimately contributing to their long-term success and sustainability.

Tips for Preventing Fraud in Small Business Operations

Running a small business comes with its fair share of risks, one of the biggest being fraud. Small businesses are often targeted by criminals due to their limited resources and lack of sophisticated security measures. However, there are steps you can take to prevent fraud and protect your business.

First and foremost, establish a strong system of internal controls. This includes segregating duties among employees, conducting regular audits, and implementing strict financial record-keeping practices. By keeping a close eye on your business's finances, you can quickly identify any suspicious activities and take action.

Secondly, educate yourself and your employees about the different types of fraud that can occur. Train them to recognize common red flags, such as invoices from unknown vendors or unauthorized transactions. Encourage a culture of skepticism and ensure that everyone feels comfortable reporting any suspicious activity.

Thirdly, implement robust cybersecurity measures to protect your business's sensitive data. This includes using strong passwords, regularly updating your software, and encrypting sensitive information. Stay up-to-date with the latest cybersecurity trends and invest in reliable security systems to safeguard your business.

Lastly, consider implementing whistleblower programs or anonymous reporting channels. By allowing employees, customers, and stakeholders to report suspicious activities anonymously, you create an environment that discourages fraudulent behavior and encourages accountability.

By following these tips, you can significantly reduce the risk of fraud in your small business operations and safeguard your financial well-being. Stay vigilant, stay informed, and stay one step ahead of the criminals.

Navigating Tax Compliance as a Small Business Owner

Navigating tax compliance as a small business owner can be a daunting task, but it is crucial for maintaining financial integrity and avoiding potential legal consequences. Taxes are an essential aspect of running a business, and understanding the rules and regulations surrounding tax compliance is key to ensuring your business's success.

First and foremost, it is important to determine the appropriate tax structure for your business. This could be a sole proprietorship, partnership, corporation, or limited liability company (LLC). Each structure has its own tax obligations and benefits, so it's important to consult with a tax professional or accountant to determine which option is best for you.

Once you have determined your tax structure, you will need to obtain the necessary tax identification numbers, such as an Employer Identification Number (EIN) or a state tax identification number. These numbers are required for reporting taxes and conducting business transactions.

Next, it's crucial to keep accurate and organized records of your business's income and expenses. This includes maintaining receipts, invoices, bank statements, and other financial documents. By keeping detailed records, you can accurately report your income and deductions, which will help you minimize your tax liability and avoid potential audits.

It's also important to stay informed about changes to tax laws and regulations. Tax laws are constantly evolving, and it's important to stay up-to-date to ensure compliance. Consider consulting with a tax professional or attending tax seminars to stay informed about changes that may affect your business.

Lastly, consider seeking the help of a tax professional or accountant. They can provide expert advice and assistance with tax planning, preparation, and compliance. While it may be an additional expense, their expertise can save you time, stress, and potential penalties in the long run.

Navigating tax compliance as a small business owner can be complex, but with careful planning, organization, and professional guidance, you can ensure that your business remains compliant and financially secure. Stay proactive, stay informed, and prioritize tax compliance to avoid any financial pitfalls that may come your way.

Takeaways for Maintaining Compliance & Avoiding Financial Crimes in Small Business Ownership.

Maintaining compliance and avoiding financial crimes is crucial for small business owners. By understanding the importance of compliance and the common financial crimes that small businesses fall victim to, you can take proactive steps to protect your business. Prioritizing compliance helps to establish corporate transparency, ethical behavior, and build trust with customers, investors, and stakeholders.

To stay compliant with Anti-Money Laundering (AML) regulations, conduct thorough due diligence on customers and business partners, implement robust Know Your Customer (KYC) procedures, and educate yourself and your employees about AML regulations. Stay updated on the latest AML regulations and adapt your compliance measures accordingly.

To prevent fraud, establish strong internal controls, educate yourself and your employees about the different types of fraud, implement robust cybersecurity measures, and consider implementing whistleblower programs.

Navigating tax compliance requires determining the appropriate tax structure for your business, obtaining necessary tax identification numbers, keeping accurate and organized records, staying informed about changes to tax laws, and seeking the help of a tax professional or accountant.

By following these key takeaways, you can maintain compliance, mitigate risks, and ensure the financial integrity of your small business. Stay proactive, informed, and prioritize compliance to protect your business and its long-term success.

Filing deadline for individual Tax Returns coming soon.

 The federal tax return due date for 2022 is October 16, 2023. This applies to all taxpayers who live and file taxes in the United States.

If you live in a designated disaster area you will have up to Jan. 16, 2024 to file.

Please note that an extension to file is not an extension to pay taxes. You are still required to pay any taxes that you owe by the original tax filing deadline.

If you miss the tax filing deadline, you may be subject to penalties and interest. The IRS may assess a failure-to-file penalty of 5% of the unpaid tax for each month or part of a month that your return is late, up to a maximum of 25%. You may also be charged interest on any unpaid taxes.

To avoid penalties and interest, it is important to file your tax return on time. If you need help filing your taxes, you can contact a tax professional.

Upgrade Your Tax Planning Game with Traditional Techniques

 

Tax planning can be a tricky business, but it doesn't have to be. To give yourself the best chance of success when preparing for your 2023 tax returns, it pays to get familiar with some of the traditional techniques that can help you make the most of your finances. From strategies for reducing your tax burden to taking advantage of certain deductions, there are several traditional methods you can use to upgrade your tax planning game. In this blog post, we'll take a closer look at how you can utilize these tried-and-true methods to get the best results when filing taxes.

Start Planning Early

When it comes to tax planning, the early bird truly does get the worm. By starting your tax preparations early, you give yourself ample time to gather all the necessary documents and make informed decisions. 

One of the first steps in starting early is to prepare all the relevant documents you'll need for filing your taxes. This includes W-2 forms, 1099s, and any other income-related documents. By organizing and reviewing these documents well in advance, you can ensure that you have all the necessary information and avoid any last-minute scrambling.

Another advantage of starting early is that it allows you to take advantage of any tax-saving opportunities that may arise throughout the year. By staying updated on changes in tax laws and regulations, you can make strategic financial decisions that will benefit you come tax season.

In addition to these practical benefits, starting your tax planning early also reduces stress. You won't be rushing to meet deadlines or frantically searching for missing documents at the last minute. Instead, you can approach tax season with confidence, knowing that you've given yourself enough time to prepare and optimize your tax strategy.

So, don't wait until the last minute. Start planning early and set yourself up for a smoother, more successful tax season.

Review and Analyze Last Year’s Returns

Reviewing and analyzing last year's tax returns is an important step in upgrading your tax planning game. By taking the time to carefully review your previous returns, you can identify areas where you may have missed deductions or made mistakes. This allows you to make adjustments and ensure that you're maximizing your tax savings moving forward.

Start by gathering all the necessary documents from your previous tax return, such as your Form 1040 and any supporting schedules. Take a close look at your income sources, deductions, and credits. Are there any deductions you may have overlooked? Did you miss out on any tax credits that you were eligible for?

In addition to reviewing your previous return for potential missed deductions, it's also important to analyze any changes in your financial situation that may impact your tax planning for the upcoming year. Have you had any major life events, such as getting married or having a child? These changes could impact your tax liability and may require adjustments to your withholding or estimated tax payments.

By thoroughly reviewing and analyzing last year's returns, you can set yourself up for a more successful and tax-efficient year ahead. Don't overlook this important step in upgrading your tax planning game.

Consider Contributing to Tax-Friendly Retirement Accounts

When it comes to upgrading your tax planning game, one traditional technique that can provide significant benefits is contributing to tax-friendly retirement accounts. By making regular contributions to retirement accounts like a 401(k) or IRA, you not only save for your future, but you also reduce your taxable income in the present.

To get started, take the time to prepare your documents and determine how much you can contribute to your retirement accounts. This includes reviewing your current financial situation and evaluating your budget to see what you can comfortably contribute. Keep in mind that there are annual contribution limits for these accounts, so make sure you stay within those limits to maximize your tax benefits.

Contributing to tax-friendly retirement accounts not only helps reduce your taxable income, but it also allows your investments to grow tax-deferred. This means you won't pay taxes on your earnings until you withdraw the funds in retirement when you may be in a lower tax bracket. By taking advantage of these accounts, you can effectively lower your tax liability while saving for the future.

Consider reaching out to a financial advisor or tax professional to discuss the best retirement account options for your specific circumstances. They can provide guidance on the contribution limits, eligibility requirements, and the tax benefits associated with different types of retirement accounts. Taking the time to explore and contribute to tax-friendly retirement accounts can be a valuable strategy for upgrading your tax planning game.

Itemize Deductions Instead of Standard Deduction

When it comes to tax planning, one traditional technique that can make a significant difference is itemizing deductions instead of taking the standard deduction. While the standard deduction is a simple and easy option, itemizing deductions allows you to potentially reduce your taxable income even further.

To take advantage of itemized deductions, you'll need to prepare your documents and gather all the necessary information. This includes keeping track of expenses such as mortgage interest, property taxes, medical expenses, and charitable contributions. By carefully documenting these expenses throughout the year, you can determine if itemizing deductions will result in greater tax savings for you.

Itemizing deductions may require more time and effort compared to taking the standard deduction, but it can be worth it if you have significant deductible expenses. It's important to note that you can only choose one option – either itemize deductions or take the standard deduction – so it's essential to compare the potential benefits of each before making a decision.

Consider consulting a tax professional to determine which option is most advantageous for your specific financial situation. They can help you navigate the complexities of itemizing deductions and ensure that you're maximizing your tax savings. Don't overlook this traditional technique as it can potentially upgrade your tax planning game and result in significant savings on your tax bill.

Take Advantage of Charitable Donations

When it comes to upgrading your tax planning game, don't forget about the benefits of charitable donations. Making donations to eligible charitable organizations can not only make a positive impact on causes you care about, but it can also provide tax benefits.

To take advantage of charitable donations, start by preparing the necessary documents. Keep records of your donations, including receipts and acknowledgments from the organizations. These documents are crucial when it comes to claiming deductions on your tax returns.

By making charitable donations, you may be able to lower your taxable income. This is because donations to eligible charities are generally tax-deductible. However, it's important to note that there are specific rules and limitations when it comes to deducting charitable contributions, so make sure you understand the guidelines before claiming deductions.

To maximize your tax benefits, consider making your donations strategically. For example, if you have a large donation to make, you might consider "bunching" multiple years' worth of donations into one year to exceed the standard deduction threshold. This can help you itemize deductions and potentially increase your tax savings.

In addition to monetary donations, you may also be able to deduct the value of non-cash items, such as clothing, furniture, or even a vehicle. Just make sure to keep detailed records and follow the appropriate guidelines for valuing and deducting these types of donations.

Donating to charitable organizations not only allows you to support causes you care about but also provides you with potential tax benefits. So, when it comes to upgrading your tax planning game, don't forget to take advantage of charitable donations and make a positive impact while reducing your tax liability.

Explore State-Specific Credits and Deductions

When it comes to upgrading your tax planning game, it's important to explore state-specific credits and deductions. Each state has its own set of tax laws and regulations, which means there may be additional opportunities for savings beyond the federal level. 

To take advantage of these state-specific credits and deductions, you'll need to prepare your documents and familiarize yourself with the specific requirements. This includes researching the tax laws in your state and understanding what credits and deductions you may be eligible for. 

For example, some states offer credits for things like renewable energy installations, historic property renovations, or even contributions to college savings plans. By taking the time to explore these opportunities and prepare the necessary documents, you can potentially lower your tax liability and increase your tax savings.

Don't overlook the potential benefits of state-specific credits and deductions. They can be a valuable strategy for upgrading your tax planning game and maximizing your tax savings. Take the time to research and prepare your documents, and you may be pleasantly surprised by the additional savings you can achieve.

Keep Track of Medical Expenses

Medical expenses can quickly add up, but keeping track of them can provide significant tax benefits. To upgrade your tax planning game, make sure to keep detailed records of all your medical expenses throughout the year. This includes keeping receipts for doctor's visits, prescriptions, hospital stays, and any other medical services or treatments you receive. By documenting these expenses, you may be eligible for a tax deduction if they exceed a certain percentage of your adjusted gross income.

In addition to traditional medical expenses, don't forget to track expenses related to alternative treatments, therapy sessions, and even travel expenses for medical purposes. Every little bit counts when it comes to reducing your taxable income.

Remember to also keep track of health insurance premiums, both for yourself and your dependents. These premiums may be eligible for deduction if you meet certain criteria.

By diligently keeping track of your medical expenses, you can maximize your tax savings and ensure that you're taking full advantage of the deductions available to you. So, upgrade your tax planning game by staying organized and keeping a close eye on your medical expenses.

Utilize Tax Preparation Services

Navigating the complex world of taxes can be overwhelming, but you don't have to go it alone. One traditional technique that can upgrade your tax planning game is utilizing tax preparation services. These services are specifically designed to help individuals and businesses maximize their tax savings and ensure compliance with tax laws and regulations.

By working with a tax preparation service, you can benefit from the expertise of professionals who are well-versed in tax laws and regulations. They can guide you through the process, helping you navigate deductions, credits, and any changes in tax laws that may impact your filing. They can also ensure that your tax returns are accurate and complete, reducing the risk of audits or penalties.

Tax preparation services can also save you valuable time and energy. Instead of spending hours trying to decipher complicated tax forms and calculations, you can leave it to the experts. This allows you to focus on other important aspects of your life or business, knowing that your tax filings are in capable hands.

So, don't hesitate to utilize tax preparation services. They can provide the support and expertise you need to upgrade your tax planning game and achieve the best results when filing your taxes.

Familiarize Yourself with Changes in Tax Laws and Regulations

Tax laws and regulations are constantly changing, which means it's important to stay up-to-date to upgrade your tax planning game. Familiarizing yourself with these changes can help you maximize your tax savings and ensure compliance with the latest rules. 

One way to stay informed is by regularly checking the IRS website for updates and resources. The IRS provides helpful publications, forms, and instructions that can guide you through the latest tax laws and regulations. Additionally, you can consider subscribing to newsletters or following reputable tax websites and blogs that provide updates on tax changes.

Another helpful resource is a tax professional or accountant. They have expertise in tax laws and regulations and can provide personalized advice based on your specific situation. They can help you understand how recent changes may impact your tax planning and suggest strategies to optimize your savings.

By staying informed about changes in tax laws and regulations, you can ensure that your tax planning is effective and up-to-date. Take the time to familiarize yourself with these changes, and you'll be better equipped to navigate the complexities of tax season.

Federal Trade Commission Alert- Yahoo Phone

Federal Trade Commission Alert

Yahoo customer service scam

January 3, 2017

by Andrew Johnson

Consumer Education Specialist, FTC

Need to contact Yahoo customer care? There are a few ways to do so — but, Yahoo warns that phone is not an option. That’s right: any phone number you come across in an internet search, claiming to connect you with Yahoo customer care, is fake.

Here at the FTC, we’ve gotten reports that consumers who called these fake customer care numbers were offered “Yahoo customer care services” for a fee.

But the truth is, Yahoo customer support is always free of charge. That means you should never pay to have your Yahoo password reset, for technical support, or help with security concerns. Also, Yahoo won’t ask to remotely connect to your computer for any support-related request.

This is not Tumblr so don't tell the IRS.

IRS is now on Tumblr, where you can get all of your sexual perversions and tax information. This is coming from someone who is still using blogger to well, kind of blog.

Anyway here is the link (IRS:Tumblr)  

If you found this, let me know and I will post more. That is a threat not a promise. 

Thank you Mr. President

I want to let as many people know that our President has helped small businesses!

Let that sink in.

I didn't think he had it in him, when in 2010 the affordable care act was passed, I didn't realize that this simple act of demanding that everyone have health care insurance, would lead to such a complicated trail of paper work that they would need the IRS to manage it.  In managing that paper work the IRS has doubled the complexity to a point were return preparers like myself will have to increase our rates thus adding to our bottom line.  Thank you Mr. President.

You see when you prepare your income tax return you will need to prove you have health insurance.  Not so easy for 2014 as only those who applied through the healthcare.gov website and are eligible for a credit will have the forms necessary. The rest of us will have to wait another year.  But don't worry the penalty is here waiting for you.

Oh, you didn't apply for health care and think your penalty will be $95.  Think again, your penalty might be as much as 1% of your household income.  I say it that way because you have to include the income of anyone one you can claim as a dependent.  Have an adult child that isn't in school but has 5,000 in income? Have to add it in. Plus the $95 is per adult ($47.50 for under 18).

Now the government has exemptions.  Did you apply for them? No. Well if you do so on healthcare.gov it will take 60-90 days to get an answer and if you don't like it there is an appeals process.  Or you can file for the exemption with your tax return. (Ah, I can hear the money in your pockets rolling my way for assistance)

You will just need proof of things like evictions, bankruptcy, high unpaid medical bills, foreclosures, incarceration, death of a close loved one. (Not sure if that uncle that lives in Washington State counts).

There are a few other ways to see if you are eligible for a hardship exemption buy you will have to pay me to find out.

Thank you and good night.

Representation is the best way to protect your rights

The IRS has issued a “Taxpayer Bill of Rights” unlike the constitution this is not about limits on the IRS but basic processes you have access to. (Publication 1) Dept. of Treasury IRS.gov

1. The Right to Be Informed

Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

2. The Right to Quality Service

Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.

3. The Right to Pay No More than the Correct Amount of Tax

Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

4. The Right to Challenge the IRS’s Position and Be Heard

Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

5. The Right to Appeal an IRS Decision in an Independent Forum

Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals' decision. Taxpayers generally have the right to take their cases to court.

6. The Right to Finality

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

7. The Right to Privacy

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law

and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.

8. The Right to Confidentiality

Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer return information.

9. The Right to Retain Representation

Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.

10. The Right to a Fair and Just Tax System

Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.

Medical and Dental Expenses

If you itemize your deductions on Form 1040, Schedule A, you may be able to deduct expenses you paid in 2010 for medical care – including dental – for yourself, your spouse, and your dependents. Here are six things the IRS wants you to know about medical and dental expenses and other benefits.
1. You may deduct only the amount by which your total medical care expenses for the year exceed 7.5 percent of your adjusted gross income. You do this calculation on Form 1040, Schedule A in computing the amount deductible.
2. You can only include the medical expenses you paid during the year. Your total medical expenses for the year must be reduced by any reimbursement. It makes no difference if you receive the reimbursement or if it is paid directly to the doctor or hospital.
3. You may include qualified medical expenses you pay for yourself, your spouse, and your dependents, including a person you claim as a dependent under a multiple support agreement. If either parent claims a child as a dependent under the rules for divorced or separated parents, each parent may deduct the medical expenses he or she actually pays for the child. You can also deduct medical expenses you paid for someone who would have qualified as your dependent except that the person didn't meet the gross income or joint return test.
4. A deduction is allowed only for expenses primarily paid for the prevention or alleviation of a physical or mental defect or illness. Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure or function of the body. The cost of drugs is deductible only for drugs that require a prescription except for insulin.
5. You may deduct transportation costs primarily for and essential to medical care that qualify as medical expenses. The actual fare for a taxi, bus, train, or ambulance may be deducted. If you use your car for medical transportation, you can deduct actual out-of-pocket expenses such as gas and oil, or you can deduct the standard mileage rate for medical expenses. With either method you may include tolls and parking fees.
6. Distributions from Health Savings Accounts and withdrawals from Flexible Spending Arrangements may be tax free if you pay qualified medical expenses.

Call us for an appointment 515.285.5544

W-2 Scam - Do not respond to that E-mail!

"We would like to inform you that as of the 21th of January you are late in updating your W-2 form submition with the new updated version. Please send us your completed W-2 update form by 02/01/2011. The updated version of the W-2 form please click on the link below:"

- They are "Phishing" for your personal information. Contact your Human Resources department if you think there might be a real issue and not this fake one.

Make your appointment today - 515.285.5544

IRS Announces date for returns

The IRS announced that they will accept itemized returns (Sch. A) on February 14th. This does not mean that your return can not be completed, just not e-filed.

Our software is up to date and will calculated your return correctly. It is the slow IRS that is having committee meetings on changing software to match last years software.

Call now for your appointment.

2010: Your filing Status is

Here are eight facts about the five filing status options the IRS wants you to know so that you can choose the best option for your situation.

1. Your marital status on the last day of the year determines your marital status for the entire year.
2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
3. Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.
4. A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
5. If your spouse died during the year and you did not remarry during 2010, usually you may still file a joint return with that spouse for the year of death.
6. A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.
7. Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.
8. You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2008 or 2009, you have a dependent child and you meet certain other conditions.

Call us for an appointment 515.285.5544

Facts about Dependents and Exemptions

1. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2010 tax return.

2. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

3. Exemptions for dependents. You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the social security number of any dependent for whom you claim an exemption.

4. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether you must file a return depends on several factors including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and any advance Earned Income Tax Credit payments you received.

5. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.

6. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

IRS 5 Tax Time Tips

It’s that time of the year again, the income tax filing season has begun and important tax documents should be arriving in the mail. Even though your return is not due until April, getting an early start will make filing easier. Here are the Internal Revenue Service’s top 5 tips that will help your tax filing process run smoother than ever this year.

1. Start gathering your records Round up any documents or forms you’ll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you’re claiming on your return.

2. Be on the lookout W-2s and 1099s will be coming soon; you’ll need these to file your tax return.

3. Consider Direct Deposit If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a paper check.

4. Remember this number: 17 Check out IRS Publication 17, Your Federal Income Tax on the IRS website. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return.

5. Don’t panic! If you run into a problem, remember the IRS is here to help. Try http://www.irs.gov or call toll-free at 800-829-1040.

Call us now for your tax appointment 515.285.5544

ALERT – Congress to grab your cash!

Initial reports from the commission to cut the deficit would seem to want to fix things on the backs of the middle class.

1. No apparent cuts in funding to welfare programs or Earned Income Credits.
2. No apparent desire to make the Federal budget smaller.
3. Wants to limit or eliminate mortgage interest deductions (home owners)
4. Deductions for Child Care (Mostly effects lower and middle income and single parents)
5. Eliminate tax breaks for capital gains (investors)
6. Reduced Military Spending
7. Gas Tax (regressive for lower income earners)

Things that won’t really help the budget now or in the near future

• Limiting malpractice suites (has nothing to do with government deficits)
• Raise the Retirement age for Social Security to 68 by 2050. Currently you have to be almost 67 to be “fully” retired under Social Security.

You need to write to your congressman and Senator today. Just because the election is over, it doesn’t mean your responsibility is done.

Source: Bloomberg.com

15 Signs You'll Be Rich

1. Attractive men earn 9 percent more money than unattractive men; attractive women earn 4 percent more money than unattractive women.

2. Individuals with above-average IQs are only 1.2 times as likely as individuals with below-average IQs to have a high net worth.

3. People who were popular in high school earn 10 percent more than people who weren't.

4. Graduates of Princeton University and Dartmouth College earn salaries 162 percent higher, on average, than graduates of East Texas Baptist University.

5. For every three inches taller than average they are, women earn 5 to 8 percent more money than women of average height; men earn 4 to 10 percent more for every extra three inches in height.

6. Being married and staying married increases your net worth by 77 percent.

7. Drinkers earn 10 to 14 percent more money than abstainers.

8. Those who earned undergraduate degrees in petroleum engineering earn salaries over four times as high as those who earned undergraduate degrees in child and family studies.

9. Each one-unit increase in a typical young person's body mass index is associated with an 8 percent reduction in wealth.

10. 22 percent of American households headed by persons of Russian ancestry have a net worth of $1 million or more.

11. 21 percent of white Americans and only 2 percent of African Americans and 8 percent of Hispanics buy real estate or make other investments at young ages, which economists consider a key predictor of future wealth.

12. Blond women earn 7 percent more money than non-blonds.

13. Nonsmokers' net worth is about 50 percent higher than that of light smokers, and more than twice as much as that of heavy smokers.

14. 36 percent of American children born to parents in the uppermost economic bracket remain there as adults.

15. 54 percent of American children who are born to parents in the uppermost economic bracket and who then earn college degrees remain at the top.

Source (thedailybeast.com)