Money Matters

The Internal Revenue Service today upgraded a key online tool to enable families to quickly and easily update their bank account information so they can receive their monthly Child Tax Credit payment.

The bank account update feature was added to the Child Tax Credit Update Portal, available only on IRS.gov. Any updates made by Aug. 2 will apply to the Aug. 13 payment and all subsequent monthly payments for the rest of 2021.

Mileage is a popular business deduction, but taking advantage of it has gotten more complicated as the IRS cracks down on mileage deductions by not allowing estimates to be used in an audit. In fact, unless you provide complete and accurate records, your entire mileage deduction can be rejected, even if you can prove that you drove for business during the year.

When it comes to taxes, enrolled agents are the experts. Enrolled agents are the only federally licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. The enrolled agent profession dates back to 1884 when, after receiving questionable claims for Civil War losses, Congress enacted regulations for people who represented citizens before the US Treasury Department.

Costco is changing its credit card partner from American Express to VISA effective June 20 and cardholders will benefit from the new card’s reward program.

The Citigroup Visa increases most of the reward tiers from the American Express program by one percentage point each. VISA cardholders will earn four percent cash back on fuel purchases instead of three percent up to $7,000 in eligible gasoline purchases per year and one percent on eligible gasoline purchases thereafter.

If you think all of the interest you’ve paid on your home mortgage is deductible on your income tax return, think again.

For many taxpayers, the interest home mortgage lenders report on Form 1098 is not deductible. The IRS has imposed new reporting requirements for lenders that will enable the IRS to identify taxpayers who are deducting more than they should.

All About Numbers wants to make Stockton an even better place by encouraging charity donations and matching them. Are the other businesses of Stockton ready to step up and meet the challenge to do the same?

Beginning with the 2016 tax season, All About Numbers invited our clients to join us in supporting the community. Our firm had chosen four non-profit organizations that make a positive impact in the area, each in a different way. We are asking our clients to round up their tax preparation fees to add a few dollars and All About Numbers will then allocate the extra tax deductible dollars to one or more of the following charities. 

A new year means New Year’s resolutions, cold weather, and tax returns! It’s a good idea to check this item off your to do list as early as possible, so make your appointment with your tax advisor today. Here's a handy checklist of the documents you’ll want to bring to your appointment.

Copies of Prior Year Returns

If you are a new client, please bring copies of your federal and state income tax returns for the last three years.

As reported on Business Wire: :.--(BUSINESS WIRE)---"California is one of the few states that require paid tax preparers to be licensed or registered. Each professional has varying levels of skills and not all of them necessarily deal with preparing tax returns."

New mileage rates went into effect Jan. 1 and they are lower than the 2015 rates. The Internal Revenue Service's "optional standard mileage rates"are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The 2016 standard mileage rates for the use of a car, van, pickup or panel trucks are:

More than 50 tax provisions, covering areas including mortgages, tuition and transportation, expired Jan. 1. Congress routinely extends these tax credits, deductions and other tax saving laws every year. Unfortunately, Congress also has been routinely waiting until later and later in the year to retroactively extend the tax breaks, known as “extenders.” This means tax planning is on hold while taxpayers wait to hear whether or not they can depend on the tax incentives.

Extenders impacting individual filers range from tax savings of a few hundred dollars for teachers and students to thousands that homeowners otherwise might face in taxes if mortgage debt is written off by loan holders.

In many households, some become the care provider of their elderly parents, spouses, and others who become incapable of caring for themselves. Whether you are the sole caregiver or you hire outside help, many of the expenses associated with this care can be deducted from your taxes. 

In most households, the elderly individual is moved into a senior home out of medical necessity or when they are unable to safely live on their own. In these cases the costs of the facility, meals, and medical care are tax-deductible. In other cases the individual will choose to move into a senior home in order to simplify their living arrangements, access activities, or for financial reasons. In these situations, only necessary medical care would be deductible - the costs of the living arrangements fall into the same category as if they were still living at home and are not deductible.

Are you receiving suspicious phone calls? People claiming they are they are the IRS and demanding money? 

The IRS has listed phone scams as one of the most prevalent tax scams underway today. Taxpayers are receiving aggressive and threatening phone calls by criminals impersonating IRS agents. The callers may demand money or even promise a refund to trick you into sharing private and personal information. During filing season, there is an uptick of complaints reporting phone scammers who are threatening arrest, deportation, license revocation, and other things. 

It's a scenario that keeps people up at night: you've discovered that you made a mistake on your taxes. Will the IRS come knocking on your door? Will federal agents sweep into your home and arrest you in the middle of the night?

Fortunately, neither of those scenarios is likely. Every year, thousands of taxpayers make honest mistakes on their forms and file Amended Returns using Form 1040X. Amended returns aren't just limited to mistakes that will cost you money. Often a correction involves claiming deductions that you missed, or additional tax credits, which can mean a larger refund for you.

According to the Federal Trade Commision, there are over 9 million victims of Identity Theft in the US every year. It becomes a stressful challenge for businesses, organizations and government agencies, including the IRS.

In most cases of Identity theft, you may not be aware that someone has stolen your identity. Identity theft happens when someone uses your stolen Social Security Number to file a tax return claiming a fraudulent refund. Luckily, the IRS is the first to detect the the fraud after you try to file your taxes.

It's tax time, and while some people are getting refunds this time of year, others find they owe a balance to the IRS. If you do need to make a payment, you have several options available.

IRS Direct Pay allows you to schedule a payment to be deducted directly from your checking or savings account. There is no registration required, no fees, and you can do it all from the IRS website. Direct pay also gives you instant confirmation after your payment has been made. You can also schedule a payment to be made anytime up until your tax is due.

If you conduct business either partially or in whole at home, you may be entitled to a home office deduction on your taxes. Here are a few things you should know about the home office deduction.

First, the portion of your home you are claiming the deduction must be used regularly and exclusively for business purposes. This area of your home must also be your principal place of business, or a place where you meet clients or customers in the normal course of business. It also applies if the space is a separate structure not attached to your home, like a garage or studio.

If you already filed your taxes and have a refund coming your way, the IRS has an online tool that allows you to check the status of your refund at any time. Where's My Refund? is available on the IRS website and eliminates the need to call the IRS to check on your refund status.

Want to learn more about the people "Behind the Numbers"? Today we'd like to introduce you to Juelie, from our Customer Service team.

Juelie claims that she "fell" into accounting after graduating as an English major. Beginning her career as an office manager, she learned more skills along the way and began to gravitate toward the financial field. She joined All About Numbers in 2008, and manages our customer service efforts. Her job involves everything from scheduling appointments with clients, to reviewing tax returns, to following up with our preparers to ensure that client's needs are being met. Juelie says she enjoys the fact that her days are "varied and never dull."

Want to learn more about the people “Behind the Numbers”? Today we’d like to introduce you to Bryan, one of our accountants who manages tax preparation, bookkeeping and payroll processing for many of our clients. 

With a Bachelor's Degree in Business Administration from CSU, Fresno, Bryan has been at All About Numbers since 2002 and just happens to be married to our owner Laura.

Hi there!

Thanks for coming by! Welcome to the first of what will hopefully become many instructional blogs and corresponding video tutorials (please click the link at the bottom to watch the video tutorial). This blog is about how to earn somewhere around $125.00 per hour tax free! Or, more appropriately titled, how to properly value donated goods, aka, anything that you give to charity and want to claim on your tax return.

If you have a family-owned business, chances are you have likely hired (or are planning to hire) an easily accessible hiring pool: members of your own family. Doing so has its pros and cons; only you know if employing those closest to you will be advantageous to your business. While we cannot tell you whether you should hire your family, we can advise you on how you need to treat them with respect to wages and specifically payroll taxes.

One of the advantages of hiring family members is the exclusion of some payroll taxes on their wages. Depending on what type of business you have (corporation, partnership, or sole proprietorship) and depending on which family member you employ (child, parent, or spouse), you may not need to pay:

• Federal Unemployment taxes (FUTA)
• Social Security and Medicare taxes (FICA)
• State Unemployment Insurance (UI), Employment Training Tax (ETT), and State Disability Insurance (SDI)

The rules for each of these taxes varies, so we advise you to contact your tax preparer to ensure you are paying your family employees correctly and to ensure you are reporting wages and taxes correctly. You can then make a well thought-out decision as to whether these tax breaks will be worthwhile to you and to your family./p>

Sadly, we have become all too familiar with identity theft: someone else using your personal information without permission to commit fraud or other crimes. While most of us are familiar with “traditional” identity theft, such as someone stealing from your bank account or taking out a loan in your name, not many of us consider tax-related identity theft.

Many of my clients ask me about trusts and whether they should have one. Yes, you should! A trust protects your estate for your beneficiaries, reduces or eliminates taxes, provides for managing your estate should you be become incapable of doing so, avoids probate, avoids your will being contested, and protects the privacy of your estate (wills and probate are public proceedings.)

It seems pretty simple: Junior lives under your roof, eats your groceries, drives your car, uses your health insurance, etc. He is your dependent...or is he?

In order to qualify as a qualifying child, Junior must either be under the age of 19 on December 31 and NOT provide over half of his own support, or be under 24 at the end of the year and a ful- time student for any part of 5 calendar months during the year or be any age and totally and permanently disabled.

If Junior fails to be a dependant as a qualifying child, he may still be a qualifying relative. The biggest catch here is that Junior has to have Gross Income of less than $3800 for 2012. That equates to 462 hours at minimum wage, which is not a lot of time spent working during the year.

There are several additional tests to be passed before Junior qualifies as your dependent. The law is also clear that if you can claim Junior, Junior cannot claim himself, even if you chose not to claim him.

Please bring in the W2’s of your possible dependents with you. We will prepare their returns for free if they qualify as your dependent and for a reduced rate if they do not. Every year we amend dozens of returns because parents and kids did not get this right!

This is a challenge, as something as big as your taxes should not be left for last minute for planning. My take on the end of the year is that you should be planning now for how you can do better next year and putting the actions into place to achieve better results. However, there are some things to be aware of as the year comes to a close that will impact the current year’s taxes. The key concept to each of these ideas is timing. Timing really is everything!

Business One: “Fred” is a skilled electrician. He worked 20 years for the same company, and one day realized that he was getting paid $20 per hour but was billing $80 an hour for his time. “This is unfair!” he thought, so he decided to sit for the contractor’s license exam and open his own business. He had $10,000 saved up, and he knew that he would be able to get clients the same way his boss did very easily.

• Create a Business Plan! Have something in writing detailing your business plan. Establish goals, procedures and policies; set deadlines for reevaluating your business, etc. Meet with your financial and business advisors to make sure you’re on the right track. Ensure that you have a budget and projection, at least for your first year in business, preferably for the first two years, and consult with professionals to compare.
• Determine your business structure. What type of organization will you create? Will you operate as a sole proprietor or as a business entity (corporation, partnership, etc.). If you have set up an LLC – elect the tax reporting entity.