New IRS Taxpayer Tool

New IRS Taxpayer Tool

The IRS has announced the introduction of a new online tool to help taxpayers. This new IRS.gov  feature allows taxpayers to view their tax account balance online. The balance includes any amount owed for tax in addition to penalties and interest for each tax year. Once you look at your balance, you can take advantage of online payment options. These include direct pay, pay by debit or credit card and Online Payment Agreement.

But you don’t have to rush. The service won’t disappear overnight. The tool is available Monday through Friday, 6 a.m. to 12:30 a.m. ET; Saturday, 6 a.m. to 10 p.m. ET; and Sunday, 6 p.m. to midnight ET. The balance will update no more than once every 24 hours, usually overnight.

Safety Steps

However, remember, before using this tool, you must authenticate your identity through the Secure Access process. This is a two-step authentication process, which means that returning users must have their info (username and password) plus a security code sent as a text to their mobile phones. Good news: taxpayers who have previously registered using Secure Access for Get Transcript Online or Get an IP PIN can use the same username and password as before.

For taxpayers who are brand new to the system, you will need the following to get started with Secure Access:

  • A readily available (and valid) email address
  • Social Security number
  • Your filing status and address from your last filed tax return
  • Your personal account number from a credit card, home mortgage loan, home equity (second mortgage) loan, home equity line of credit (HELOC), or car loan
  • A readily available mobile phone

As part of the security process to authenticate taxpayers, the IRS will send verification, activation or security codes via both email and text. Remember that the IRS will not (and very rarely does) initiate contact via text or email asking for log-in information or personal data. You won’t be asked to click through links or input additional information with authentication contacts. Those IRS texts and emails will only contain one-time codes.

Please call Harvey and Caldwell today in Overland Park, KS to schedule an appointment and learn about more ways to save money on your taxes.

Source: Forbes

Year-end is a good time for gift planning

Are you ready for the gift-giving season? The time may already have arrived, at least from a tax perspective. Between now and December 31, you can take advantage of this year’s gift tax rules as part of your year-end planning.

Here are two ways to transfer assets.

The annual exclusion. The annual exclusion is the amount you can give to anyone, free of gift tax, each year. For 2016, the annual exclusion is $14,000. You and your spouse can combine your individual annual exclusions and make gifts of up to $28,000 to a single recipient.

Some gifts have special rules. For instance, education and medical expenses that you pay directly to the respective providers do not reduce your annual exclusion.

As the name suggests, the annual exclusion is a use-or-lose tax break that expires on December 31 of each year. For 2017, the annual exclusion remains $14,000.

The lifetime exemption. The lifetime exemption is the total amount you can give away during your lifetime without paying gift tax. For 2016, the lifetime exemption is $5,450,000. When you’re married, you can double the exemption, to a maximum of $10,900,000. Note that the lifetime exemption is “unified” with the estate tax exemption. That means the amount you use for gifting will reduce your estate tax exemption.

Gift-giving is a valuable estate planning tool. Please call to schedule an appointment for discussing these or other types of giving, including charitable gifts and gifts made in

What’s New: Avoid phony charities this holiday season

Are you planning to make donations to charitable organizations as part of your holiday celebrations? Be aware of fake charities set up by scam artists. This type of fraud routinely lands on the “Dirty Dozen” list of tax scams prepared each year by the IRS.

Here are two simple tips to protect yourself.

Don’t be fooled by names that sound like established charities but really aren’t. The IRS maintains a searchable list of qualified charities on the official irs.gov website.

Make donations by check and spell out the full name of the payee instead of using initials. In addition to providing documentation for deducting your contribution, writing a check avoids the need to supply your credit card data, favored information for thieves who want steal your identity.

Need Help? Click here to Contact Us

Tax Planner Update Dec 2016

As 2016 winds down, a lame-duck Congress is unlikely to take action on tax legislation. The pace of activity may change next year, with a new Administration and ongoing talk of tax reform, and 2017 could bring welcome and needed improvements. Whatever happens, we’re here to keep you updated as events unfold in the tax world.

Until political clarity emerges, however, you’re smart to make the most of established rules in your year-end tax planning. Evaluate your financial situation, select what moves will provide the most savings, and execute your plan in a timely manner. Currently available deductions, credits, and other tax benefits will reduce your 2016 tax burden and put you on track to accommodate new planning opportunities as they arise in the future.

This Letter offers suggestions and strategies to help you achieve your tax-saving plans. Contact us for answers to questions you may have, and to arrange a year-end tax review. As always, feel free to share this Letter with friends or associates who are interested in minimizing taxes.

6 Things Small Business Owners Should Do Now to Reduce Headaches at Tax Time

6 Things Small Business Owners Should Do Now to Reduce Headaches at Tax Time

Guest Post Julie Morris – www.JulieMorris.org

A mention of taxes results in a groan from most adults, but few groan louder than small business owners. Often working without the benefit of an in-house accounting department, many small business owners are left to sort out the complexities of tax prep alone. Of course, smart business owners at least outsource the preparation of their actual tax returns, but there’s much work that goes into preparing for tax season long before the looming April 15th deadline.

  1. If you don’t have an accountant, get one.

Professional accounting help costs money, but you’ll save hours of time and possibly hundreds to thousands of dollars in taxes. An accountant or tax prep professional can help you maximize your tax deductions and take advantage of all the credits you qualify for.

  1. Go digital.

Stop letting receipts accumulate in piles, folders, and shoeboxes. It may seem easier to simply save your receipts throughout the year, but using an accounting software solution such as FreshBooks or QuickBooks will make it easy to monitor your cash flow over time and quickly generate profit and loss statements and other reports when you need them. Plus, you don’t have to worry about losing receipts and missing out on deductions when you store everything digitally. Consider tools that streamline the filing process such as W-2 and 1099 software.

  1. Document everything, immediately after it happens.

Once you’ve decided on a software solution for tracking your income and expenses, get into the habit of entering all expenses, payments, and other transactions immediately as they occur. Again, this habit will save you many hours – and many headaches – next tax season when you don’t have to look up your transactions, sort through piles of receipts, and enter everything at one time.

  1. Maximize retirement savings contributions.

Reducing your taxable income is one of the best ways to reduce your tax bill and start building a nest egg for your future at the same time. In most cases, you can contribute thousands of dollars to a retirement savings account such as a 401(k) or an IRA, deferring the payment of taxes on this income until you remove those funds. The contribution limits are subject to change each year and begin to be phased out at higher income levels, so check the IRS website to find out where you stand.

  1. Take advantage of other savings options and donations to charitable causes.

Other options for reducing taxable income include contributions to a qualified college tuition savings plan (such as a state-sponsored 529 college savings plan) or a health savings account (HSA). Finally, keep track of all the contributions you make to charitable causes, including the expenses you incur while doing these good deeds. If you bake cookies for a bake sale raising funds for a qualified charity, for instance, you can deduct the cost of the ingredients as a charitable contribution.

  1. Take a second look at last year’s tax returns.

Looking over your past years’ tax returns will help you remember questions from previous years that you didn’t have time to ask prior to filing those returns, which can help you make better decisions when it’s time to file again. If you’re questioning whether you missed out on deductions or paid too much in taxes, you can always have an accounting professional review prior returns for a second opinion, as well. You can file amendments to tax returns for up to three years.

Tax season isn’t something most people look forward to – even accountants, who often find themselves pulling all-nighters to help clients file last-minute returns – but it’s a necessary evil. By starting to plan today (and all year long) for next tax season, you can take the stress out of filing.

New Partnership Rules

Gear up for new partnership rulesnew-partnership-rules

No one likes to hear “audit” and “IRS” in the same sentence. But when the rules change, you need to be prepared — and change is definitely what has happened to IRS partnership audit rules. Here’s an overview.

Under the old rules, the IRS audited partnerships using three sets of procedures based primarily on the number of partners. Those procedures have been replaced with a single set of rules that apply to all partnerships. The major change: Under this new approach, adjustments made by the IRS during an audit of a partnership will be applied to the partnership instead of the individual partners. That means your partnership will have to pay any amount due related to the adjustment. Since the tax will be payable in the year the audit is completed, the current partners will bear the burden.

If your partnership is made up of 100 or fewer partners, you can elect out of the new rules when you meet certain requirements. Once you opt out, your partnership and partners will be audited under the rules that apply to individual taxpayers.

The new rules take effect for returns you file for your partnership beginning after 2017, though you can choose to apply many of them for tax years beginning after November 2, 2015.

What do you need to do now? One smart move is to update your partnership agreement to reflect the changes.

Contact us for information. We’ll work with your attorney to make sure you’re in compliance with the new rules.

Mobile Banking Requires Vigilance

According to a Federal Reserve Board study, over the course of a year, 43% of mobile phone owners with a bank account used mobile banking. Of smartphone owners, 53% used mobile banking. At the same time, 24% of all mobile phone users believed personal information was “somewhat unsafe” when using mobile banking. If you’re one of them, you understand that no system is perfect, and you’re wise to be vigilant. How can you protect yourself against mobile banking fraud? Here are tips.

Secure your device. Don’t provide an opportunity for thieves. Aside from physical safeguards to keep your phone or tablet safe, use password protection that prevents access to the device itself. Customize your privacy preferences and set your keypad to lock when you’re not using your phone. Consider restricting location-tracking apps.

Beware of bogus apps. Before downloading and installing a banking application to your smartphone, make sure it’s genuine. Confirm that the developer’s name matches the name of your financial institution. Beware of unauthorized third party applications.

Make use of defensive measures. Update and use your anti-virus software. Install a security app so you can locate, disable, and erase a phone that’s stolen. Make secure backups of your phone’s data to online storage or your home computer.

Protect your logins. Don’t share user IDs, passwords, or banking account numbers. Keep such information in a secure place. Don’t respond to text messages or emails asking you to provide or confirm confidential data.

Monitor your accounts. Review all mobile banking transactions on a regular basis to detect suspicious activity. If something seems amiss, give your financial institution a call. And if your smartphone is lost or stolen, have the device’s number removed from your mobile banking profile.

Need more fraud prevention suggestions? Contact us for assistance.

Save on Business Travel Costs

While nurturing relationships

You may view corporate travel as a necessary evil. But you also know that successful companies thrive on relationships, and nurturing those relationships can require face-to-face contact with clients, vendors, and potential customers. So when you have to cut travel costs, you may struggle with a balancing act. If you cut too much, business relationships may deteriorate. Cut too little and profits may suffer. Here are five ideas that can help bridge the gap.

  • Video conferencing. You may remember early issues with this technology, including hardware and software glitches and slow internet connections. However, today’s advanced systems and networks have reduced the incidence of low-quality graphics and choppy audio and video feeds. You don’t need your own video conferencing studio to take advantage of high-definition systems. Look into pay-by-the-hour rental options instead.
  • Discounts. Investigate price reductions for corporate customers offered by hotels, car rental companies, and airlines. The savings can be significant when your staff regularly travels to the same destinations. Make sure your employees know about and use these vendors.
  • Cost-cutting ideas. If your travel plans are flexible, take advantage of mid-week flights and less-frequented airports. In some cases, train transportation may be a viable alternative. When possible, purchase tickets at least two weeks in advance to get better deals. Research hotels at your destination, and book rooms at those that offer complimentary breakfasts and free internet service.
  • Employee surveys. Employees who spend a lot of time on the road tend to develop definite opinions about everything travel-related. Your sales staff and other travelers can be a valuable resource when you’re reworking travel policy.
  • Travel audits. Don’t cut costs or change policies haphazardly. First make sure you understand how much you’re spending and where the money’s going. Get a firm grasp on the details behind the numbers. Then act.

Need more business cost-saving and budgeting advice? Contact our office for suggestions.

Tax Tip | Claiming Education Benefits

Track your tuition expenses for the most benefit under new rules

Do you have the receipt for your fall semester tuition? Keeping track of your tuition and other qualified education costs may be more important than ever. That’s because several laws enacted over the past few years, including the PATH Act from last December, made changes to the requirements for claiming education benefits such as the American Opportunity Credit. One change to note: In order to claim an education tax credit or deduction when you file your 2016 federal income tax return, you’ll generally need a copy of the information statement sent by your school.

You may be familiar with Form 1098-T, Tuition Statement. If you’re a student, you’ve probably received this information form from a college or other school. In the past, schools could choose to report amounts you actually paid or amounts that were billed to you. Beginning with your 2016 return, schools are generally required to report only the tuition and qualified expenses that you actually paid.

While the new reporting requirement may make claiming the credit easier, you’ll still want to track your actual expenses. Why? In some cases, you may buy books and credit-eligible materials from a supplier other than your school. Those costs would not be on the Form 1098-T that you receive. To include the expenses in the calculation of your tax benefit, you need to have proof of your payments.

If you have questions about what costs are considered qualified educational expenses and how the rule changes will affect you, please contact us.