scltaxservices-blog

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Congress Moves Towards Granting IRS Authority To License Tax Preparers So what does this mean for taxpayers? http://ow.ly/Vr6rw

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"The business man has few idle visitors; to the boiling pot, the flies come not"

-Benjamin Franklin 

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Now is no time to think what you do not have. Think of what you can do with what there is

-Ernest Hermingway

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Let all your things have their places, let each part of your business have its time

Benjamin Franklin

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#tbt Another one of @scltaxservices Old Business Cards #maximizeYourRefund #scltaxservices #scl (at SCL TAX Services)

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Tax Question? Ever have a Question and couldn't find a Answer yourself, Contact us with your question and we'll give it a go.

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The clock is ticking for those who filed an Extension to File 2014 Tax Return #irs #2014 #taxreturn #extension #filing #scltaxservices (at SCL TAX Services)

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Don't be a prisoner to the IRS Learn ways to make sure you never owe the IRS Follow us & let us help Www.scltaxservices.com Www.facebook.com/scltaxservices (at SCL TAX Services)

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Subject of the Day: TAX LIENS

What are Tax Liens? How do we prevent them? What can I do once I’m being Garnished? 

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Understanding-a-Federal-Tax-Lien

http://scltaxservices.com/

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“Not Charity”

-says IRS 

Do you know that the IRS can disallow any amount of charity is they have the slightest doubt 

Few things you should keep in mind when making Non-cash Contributions

Make sure you have the right Documentations....Do not think because you are doing a good deed that you need no paper work. If you have no receipts, pictures, no documentation to back up the contribution; NO DEDUCTION

So lets say you donate a bag of used clothing, all in good condition; you take it to your local church and the worth of the Bag is $250 or More, DO NOT just leave the bag there, GET WRITTEN ACKNOWLEDGMENT from the DONEE. 

Now what, if during the entire year you dropped off small bags of clothing and toys here, there and their total value was less thank $250, under the Subscribe Share Past Issues Translate, you are not subject to have documentation even if the worth of the contributions equals $250 or more.

Now lets imagine you did a complete and total Spring cleaning of your home and now you have bags bags of clothing, furniture, toys, house hold items; just a whole lot of stuff. You want to see all this stuff go to great use so you plan on donating to your local church’s thrift shop.This is where we get into the what you can call “sticky” part of Non-Cash Contributions; substantiate amount of evidence would be needed. If the worth of all the contribution is $5000 or more, some of the items may need to be “appraised”. This is where “Similar items of property” must be aggregated in determining whether the contribution exceed the $500 and $5000 thresholds. 

So if you have No Appraisals and No Receipts Equals No Deduction

Be smart and get a Little for all the Stuff you give Away!

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2016 Tax Rates, Brackets & Exemption Amounts May Result In Lower Bills

Bloomberg BNA released their predictions for the coming tax year and they’re betting on the idea that most taxpayers will find a little bit of relief in 2016. According to Bloomberg  BNA, taxpayers whose income is the same compared to last year may enjoy a lower effective tax rate – and a lower tax bill – because of the inflation adjustments.

How does that translate into real life dollars? Here’s what you need to know…

The slightly higher annual CPI means that brackets (not rates) will nudge upward. Together with increases in the standard deduction and exemption amounts, taxes should decrease for many taxpayers.

For 2016, the personal exemption amount is projected to be $4,050, up from $4,000 in 2015.

For 2016, the amount of the standard deduction is up slightly for Head of Household only. About 2/3 of all taxpayers will file using the standard deduction: those taxpayers who have more in itemized deductions than the standard deduction amount will file a Schedule A.

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“EA”

Sounds odd just saying “EA”, doesn't it ?

Today we congratulated our Accountant for becoming an “EA”,

 I think we’ve said “EA” a million times today. 

But “EA” does stand for something non the less

Our Accountant now is considered an Enrolled Agent. 

Enrolled Agents “EA’s” are America’s Tax Experts. They are federally licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. They are licensed to take away the IRS headache. 

A little background in the meaning of Enrolled Agent.

“Enrolled” means to be licensed to practice by the federal government and “Agent” means authorized to appear in the place of the taxpayer at the IRS

Only enrolled agents, attorneys, and CPAs have unlimited rights to represent taxpayers before the IRS

Now some EAs offer a wide range of services, while others specialize & limit their practice to representing only certain clients

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Are you wondering why you owe so much in taxes this year? Want to make sure you never owe a big tax bill – or any bill at all – when you file your income taxes?

Judging by the amount the average American has over withheld from his or her pay, we’re scared to death of owing the IRS even the smallest amount at tax time.

Overpaying by thousands of dollars “just to be sure” is not the answer. The average tax refund is about $3,000.

That’s a lot of money to be tied up all year, when you could be putting it to better use.

You wouldn’t overpay your electric bill by that much and then think you really scored when you got the excess back.

Why do that with your taxes?

Here are 5 of the most common reasons people find themselves owing extra tax:

1.  Too little withheld from their pay

2.  Extra income not subject to withholding

3.  Self-employment tax

4.  Difficulty making quarterly estimated taxes

5.  Changes in your tax return

How to fix this? 

visit www.scltaxservices.com 

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Back-to-School Reminder for Parents and Students: Check Out College                               Tax Credits for 2015 and Years Ahead

With another school year just around the corner, the Internal Revenue Service today reminded parents and students that now is a good time to see if they will qualify for either of two college tax credits or other education-related tax benefits when they file their 2015 federal income tax returns.

In general, the American Opportunity Tax Credit or Lifetime Learning Creditis available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the taxpayer, spouse and dependents. The American Opportunity Tax Credit provides a credit for each eligible student, while the Lifetime Learning Credit provides a maximum credit per tax return.

Though a taxpayer often qualifies for both of these credits, he or she can only claim one of them for a particular student in a particular year.  To claim these credits on their tax return, the taxpayer must file Form 1040 or 1040A and complete Form 8863, Education Credits.

The credits apply to eligible students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions. The credits are subject to income limits that could reduce the amount claimed on their tax return.

To help determine eligibility for these benefits, taxpayers should visit theEducation Credits Web page or use the IRS’s Interactive Tax Assistant tool. Both are available on IRS.gov.

Normally, a student will receive a Form 1098-T from their institution by Jan. 31 of the following year. (For 2015, the due date is Feb. 1, 2016, because otherwise it would fall on a Sunday.) This form will show information about tuition paid or billed along with other information. However, amounts shown on this form may differ from amounts taxpayers are eligible to claim for these tax credits. Taxpayers should see the instructions to Form 8863 andPublication 970 for details on properly figuring allowable tax benefits.

Many of those eligible for the American Opportunity Tax Credit qualify for the maximum annual credit of $2,500 per student. Students can claim this credit for qualified education expenses paid during the entire tax year for a certain number of years:

The credit is only available for four tax years per eligible student.

The credit is available only if the student has not completed the first four years of postsecondary education before 2015.

Here are some more key features of the credit:

Qualified education expenses are amounts paid for tuition, fees and other related expenses for an eligible student. Other expenses, such as room and board, are not qualified expenses.

The credit equals 100 percent of the first $2,000 spent and 25 percent of the next $2,000. That means the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualified expenses for an eligible student.

Forty percent of the American Opportunity Tax Credit is refundable. This means that even people who owe no tax can get an annual payment of up to $1,000 for each eligible student.

The full credit can only be claimed by taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less. For married couples filing a joint return, the limit is $160,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $180,000 or more and singles, heads of household and some widows and widowers whose MAGI is $90,000 or more.

The Lifetime Learning Credit of up to $2,000 per tax return is available for both graduate and undergraduate students. Unlike the American Opportunity Tax Credit, the limit on the Lifetime Learning Credit applies to each tax return, rather than to each student. Also, the Lifetime Learning Credit does not provide a benefit to people who owe no tax.

Though the half-time student requirement does not apply to the lifetime learning credit, the course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills. Other features of the credit include:

Tuition and fees required for enrollment or attendance qualify as do other fees required for the course. Additional expenses do not.

The credit equals 20 percent of the amount spent on eligible expenses across all students on the return. That means the full $2,000 credit is only available to a taxpayer who pays $10,000 or more in qualifying tuition and fees and has sufficient tax liability.

Income limits are lower than under the American Opportunity Tax Credit. For 2015, the full credit can be claimed by taxpayers whose MAGI is $55,000 or less. For married couples filing a joint return, the limit is $110,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $130,000 or more and singles, heads of household and some widows and widowers whose MAGI is $65,000 or more.

Eligible parents and students can get the benefit of these credits during the year by having less tax taken out of their paychecks. They can do this by filling out a new Form W-4, claiming additional withholding allowances, and giving it to their employer.

There are a variety of other education-related tax benefits that can help many taxpayers. They include:

Scholarship and fellowship grants — generally tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.

Student loan interest deduction of up to $2,500 per year.

Savings bonds used to pay for college — though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years old.

Qualified tuition programs, also called 529 plans, used by many families to prepay or save for a child’s college education.

Taxpayers with qualifying children who are students up to age 24 may be able to claim a dependent exemption and the Earned Income Tax Credit.

The general comparison table in Publication 970 can be a useful guide to taxpayers in determining eligibility for these benefits. Details can also be found in the Tax Benefits for Education Information Center on IRS.gov.

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Don’t Fall for New Tax Scam Tricks by IRS Posers

Though the tax season is over, tax scammers work year-round. The IRS advises you to stay alert to protect yourself against new ways criminals pose as the IRS to trick you out of your money or personal information. These scams first tried to sting older Americans, newly arrived immigrants and those who speak English as a second language. The crooks have expanded their net, and now try to swindle virtually anyone. Here are several tips from the IRS to help you avoid being a victim of these scams:

Scams use scare tactics.  These aggressive and sophisticated scams try to scare people into making a false tax payment that ends up with the criminal. Many phone scams use threats to try to intimidate you so you will pay them your money. They often threaten arrest or deportation, or that they will revoke your license if you don’t pay. They may also leave “urgent” callback requests, sometimes through “robo-calls,” via phone or email. The emails will often contain a fake IRS document with a phone number or an email address for you to reply.

Scams use caller ID spoofing.  Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legit. They may use online resources to get your name, address and other details about your life to make the call sound official.

Scams use phishing email and regular mail.  Scammers copy official IRS letterhead to use in email or regular mail they send to victims. In another new variation, schemers provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. All in an attempt to make the scheme look official.

Scams cost victims over $20 million.  The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of about 600,000 contacts since October 2013. TIGTA is also aware of nearly 4,000 victims who have collectively reported over $20 million in financial losses as a result of tax scams.

The real IRS will not:

Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.

Demand that you pay taxes and not allow you to question or appeal the amount that you owe.

Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.

Ask for credit or debit card numbers over the phone.

Threaten to bring in police or other agencies to arrest you for not paying.

If you don’t owe taxes or have no reason to think that you do:

Do not provide any information to the caller. Hang up immediately.

Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.

You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.