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VOL 53; IRS RELEASES UPDATED GUIDANCE ON NEW PASS-THROUGH DEDUCTION

Posted by Admin Posted on Sept 12 2018
IRS RELEASES UPDATED GUIDANCE ON
NEW PASS -THROUGH DEDUCTION


Written by: Marci Gietl, CPA

Under the pass-through deduction implemented with Tax Cuts and Jobs Act (TCJA), eligible taxpayers could be entitled up to a 20% deduction of qualified business income (QBI). This article will address recent IRS guidance on this new deduction but please also refer to our previous article from January 2018 for more details.

The IRS has recently issued proposed regulations working to clarify components related to the pass through deduction. Part of the regulations clarify further what will or will not be considered as QBI in relation to gains and losses, reasonable compensation, guaranteed payments and other items. Additionally, if an individual or applicable pass-through entity conducts multiple trade or businesses directly, some items of QBI may be properly allocated across those multiple businesses. These proposed regs define that those items should be allocated in a reasonable manner that is consistently used from one tax year to the next; reasonable manner should be determined based on facts and circumstances.

The proposed regulations outline rules for how pass-through entities must provide the necessary information for their owners or beneficiaries to be able to determine QBI even though the pass through deduction isn’t claimed at the entity level.

Aggregation rules are included in the proposed regs as well. A taxpayer may, but are not required to, aggregate more than one trade or business and treat as a single trade or business for purposes of calculations related to the deduction if certain criteria are met. These criteria include, but are not limited to: more than 50% ownership in each aggregated business, none of the aggregated trade or businesses can be a specified service trade or business, and the aggregated businesses must meet two of three factors based on facts and circumstances.

The IRS has also issued Frequently Asked Questions (FAQs) in relation to the new deduction. These questions cover basic definitions and scenarios related to the new pass-through deduction so if you would like to further discuss how the pass through deduction may relate specifically to your tax planning, please contact us.

Health Care Reform Bills

In July, the House passed a number of bills aimed at health care reform but which would also have tax impacts. Many of the bills involve the use of Health Savings Accounts (HSA) or affect individuals with HSAs or Flexible Spending Accounts. Other bills are aimed at reforming taxes and credits implemented from the Affordable Care Act’s mandates for health care coverage. Continued monitoring of these developing bills is needed but they could provide great tax planning opportunities.

Please contact us if you would like to discuss further.

 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.

Here is a recap of important dates to keep in mind as 2018 progresses:               

  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

 

VOL 52; SECOND TAX BILL UNDERWAY

Posted by Admin Posted on Sept 12 2018
SECOND TAX BILL UNDERWAY


Written by: Madeline Brinker, CPA

The Tax Cuts and Jobs Act (TCJA), passed last December, includes various tax cuts to consider during 2018 tax planning. But are more changes to come?

Our federal government is working on putting together a second tax bill, to complement the TCJA, which is expected to be introduced in October- perhaps sooner. Below are provisions that may appear in this second Republican tax bill – referred to as “Phase II” or “Tax Bill 2.0”.

  • Reduction in the corporate tax rate from 21% to 20%
  • Individual tax cuts enacted as part of the TCJA made permanent or extended (current provisions are set to expire at the end of 2025)
  • Retirement savings planning provisions
  • Education provisions, including consolidation of college and vocational school education incentives
  • Potential for lower individual income tax rates
  • Increased standard deduction
  • Expanded child tax credit

If the second tax bill gains approval in the House of Representatives, it will need 60 votes to pass in the Senate.

Missouri may also have tax law changes in store for its residents.
In January, Governor Greitens announced his plan to cut Missouri taxes for corporations and individuals. In May, the House passed and presented an individual income tax bill to the Governor. House Bill 2540 includes the following provisions:

  • Reduction of the top individual income tax rate from 5.9% to 5.5% (scheduled to gradually drop to 5.1% over the course of several years if revenue targets are met)
  • Decrease in the maximum business pass-through income deduction from 25% to 20%
  • Disallowance of Missouri personal and dependency exemptions if the federal exemption amount is zero
  • Phase out of the federal income tax deduction for individuals based on adjusted gross income limits (The current $5,000 single and $10,000 MFJ deductions reduced to 0-35% of these amounts)

Greitens’ January announcement included mention of an earned income tax credit for low-income workers. Provision for a credit of this nature did not appear in HB 2450.

In June, the Governor signed Senate Bill 884, enacting a decrease in the corporate tax rate from 6.25% to 4%. The bill also disallows the three-factor apportionment method available to corporations with multi-state income. Both provisions go into effect for tax years beginning on or after January 1, 2020.

If you have any questions about the information above, please contact your tax adviser. We’ll do our best to provide you with updates as the tax laws progress.

 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.

Here is a recap of important dates to keep in mind as 2018 progresses:               

  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

VOL 51; NEW LIMITATIONS ON LIKE KIND EXCHANGES

Posted by Admin Posted on Sept 12 2018

 

NEW LIMITATIONS ON LIKE KIND EXCHANGES


Written by: Michelle Chlebowski, CPA

The Tax Cuts and Jobs Act law enacted in December 2017 includes updated limitations on Like Kind Exchanges available to taxpayers. The previous rules allowing for the deferral of gain on like-kind exchanges of tangible personal property have been modified, in general removing the ability to defer these gains. The primary logic of the new limitations is due to the increased and expanded rules over expensing tangible personal property and certain building improvements.

Under the newly enacted law, no gain or loss is recognized on the exchange of real property if that property is either held for productive use in a trade or business or held for investment. These rules apply if the real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.

Congress intended that real property eligible for like-kind exchange treatment under pre-Tax Cuts and Jobs Act law would continue to be eligible for like-kind exchange treatment. This can include certain partial interests in real property, remainder interests and life estates in real property, leaseholds of at least 30 years, perpetual water rights, coal and oil leases, royalty interests in oil, gas, and mineral rights, interests in certain trusts, and undivided fractional interests in real property.

It is important to note, the updated limitations on Like-Kind Exchanges do not apply if the property is disposed of by the taxpayer in an exchange prior to January 1, 2018 or received by the taxpayer in the exchange received before January 1, 2018. This means that if the first step in either a forward exchange or reverse exchange occurs before January 1, 2018 then the entire exchange can qualify as a tax-free like-kind exchange, assuming all other prior requirements under Code Sec. 1031 are satisfied.


 

 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.

Here is a recap of important dates to keep in mind as 2018 progresses:
                                                      

  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

VOL 50; WHERE'S MY REFUND?

Posted by Admin Posted on Sept 12 2018
WHERE IS YOUR REFUND?


Typically, tax refunds are issued by the IRS for most tax returns in 21 days or less. Did you know you may access up-to-date information about your refund from the Internal Revenue Service online? We have a link to the IRS tool, "Where's My Refund?" on our site:

Helpful links page

There are many other useful tools on our website as well. Explore all the features at http://www.brcpallc.com/ and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 

 
HOURS OF OPERATION FOR THE WEEK OF APRIL 17TH

In celebration of meeting the 2018 tax deadline, the Becker and Rosen offices will be closed:

1:00 pm on April 17, 2018 - All day April 18, 2018

We will reopen for business the morning of April 19, 2018.

We would like to thank our clients for another great tax season and for allowing us to work so hard for you this year. We appreciate your business! 

 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:
                           

  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended    
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 49; IRS RELEASES NEW FORM W-4 AND UPDATED WITHHOLDING CALCULATOR

Posted by Admin Posted on Sept 12 2018
IRS RELEASES NEW FORM W-4 AND UPDATED WITHHOLDING CALCULATOR


Written by: Natasha Swan, Executive Assistant and Payroll Specialist


The IRS has released a new version of Form W-4 and an updated Withholding Calculator on its website, to help taxpayers check their 2018 withholding in light of changes made by the “Tax Cuts and Jobs Act”. The IRS has also issued a series of frequently asked questions (FAQs) on the withholding calculator.

The Tax Cuts and Jobs Act made major tax law changes for individuals, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions, and changing the tax rates and brackets, effective for tax years beginning after December 31, 2017 and before January 1, 2026.

On January 11, 2018, the IRS issued 2018 withholding tables that reflect the Tax Cuts and Jobs Act. Employers were instructed to begin using the 2018 withholding tables as soon as possible, but not later than February 15, 2018.

The updated withholding tables are designed to work with existing W-4s that employers have on file, but many taxpayers (such as those with children or multiple jobs, and those who itemized deductions under prior law) are affected by the new law in ways that can't be accounted for in the new withholding tables. The IRS is encouraging taxpayers to use the Withholding Calculator to make sure they have the right amount of taxes withheld and fill out a new Form W-4 if any changes need to be made to their withholding and submit to their employer.

The withholding changes do not affect taxpayer’s 2017 income tax returns due this April 2018. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year.

 

 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 48; NEW TAX REFORM: TAX CUTS AND JOBS ACT / IRS CLARIFICATION ON HOME EQUITY LOANS INTEREST DEDUCTIONS

Posted by Admin Posted on Sept 12 2018

 

NEW TAX REFORM: TAX CUTS AND JOBS ACT


On December 22, President Trump signed into law the Tax Cuts and Jobs Act, a sweeping tax reform law that will entirely change the tax landscape. We hope you enjoyed our special newsletter releases updating you on some of the biggest new changes. If you missed any of the articles they are linked here for your quick reference:

Individual Tax Changes

Depreciation and Expensing Changes

20% Qualified Business Income Deduction

Corporation and Additional Individual Tax Changes
                      
Employee Parking

Estate and Gift Tax Exemptions

If you have questions about how any of these changes will effect your tax situation please feel free to reach out to us.

 
IRS CLARIFICATION ON HOME EQUITY LOAN INTEREST DEDUCTIONS

Written by: Becker and Rosen Staff

The IRS has announced that in many cases, taxpayers can continue to deduct interest paid on home equity loans under the recently enacted Tax Cuts and Jobs Act.

Taxpayers may deduct interest on mortgage debt that is “acquisition debt.” Acquisition debt means: debt that is secured by the taxpayer's principal home and/or a second home, and incurred in acquiring, constructing, or substantially improving the home. This rule hasn't been changed by the Tax Cuts and Jobs Act.

For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the limit on acquisition debt will be reduced to $750,000 ($375,000 for a married taxpayer filing separately). The $1 million, pre-Tax Cuts and Jobs Act limit applies to acquisition debt incurred before Dec. 15, 2017, and to acquisition debt arising from refinancing pre-Dec. 15, 2017, to the extent the debt resulting from the refinancing does not exceed the original debt amount.

Under the Tax Cuts and Jobs Act, for tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, there is no longer a deduction for interest on “home equity debt.” The elimination of the deduction for interest on home equity debt applies regardless of when the home equity debt was incurred.

IRS said that despite the newly-enacted restrictions on home mortgages under the Tax Cuts and Jobs Act, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC), or second mortgage, regardless of how the loan is labelled.

IRS clarified that the Tax Cuts and Jobs Act suspends the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer's home that secures the loan.

For example, interest on a home equity loan used to build an addition to an existing home is typically deductible, while interest on the same loan used to pay personal living expenses—such as credit card debts—is not. As under pre-Tax Cuts and Jobs Act law, for the interest to be deductible, the loan must be secured by the taxpayer's main home or second home, not exceed the cost of the home and meet other requirements.

For anyone considering taking out a mortgage, the Tax Cuts and Jobs Act imposes a lower dollar limit on mortgages qualifying for the home mortgage interest deduction. The lower limits apply to the combined amount of loans used to buy, build or substantially improve the taxpayer's main home and second home.

 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 47; "TAX CUTS AND JOBS ACT" DOUBLES THE ESTATE AND GIFT TAX EXEMPTION

Posted by Admin Posted on Mar 01 2018
"TAX CUTS AND JOBS ACT" DOUBLES THE ESTATE AND GIFT TAX EXEMPTION


Written by: Patrick Doyle, Staff Accountant

The impact of the tax reform bill, otherwise known as the Tax Cuts and Jobs Act (“TCJA”) which passed at the end of 2017, has yet to be felt by most taxpayers and their advisors. But make no mistake…the TCJA is the most dynamic federal tax legislation passed in the last 30 years. The new law’s provisions affect both business and individual taxpayers, with most changes taking effect for 2018 and expiring after 2025. And while most will eventually feel the impact of the law’s provisions on their business or personal income tax situations, I’d like to take this opportunity to highlight the TCJA’s changes to the U.S. Estate/Gift/GST transfer tax system.

To provide some background, transfer taxes are…surprise, surprise…a tax on your right to transfer property during life or at death. There are three different types of transfer taxes:

  • Estate Tax – tax imposed on right to transfer property at death, assessed against the fair market value of a decedent’s assets less debts and applicable expenses of estate administration. The rate is 40%.
  • Gift Tax - tax imposed on right to transfer property during life, assessed against the fair market value of the transferred property. The rate is 40%.
  • Generation-Skipping Tax (“GST”) – additional tax imposed on both transfers during life and at death to persons (or a trust for the benefit of persons) two generations or more removed from the donor during life or decedent at death. The GST was enacted to catch transfers that were escaping gift and estate tax at the 1st generation i.e. grandparents gift to grandchildren, property escapes estate tax at both grandparents’ and parents’ level. The rate is also 40%

In an effort to mitigate the effect of transfer taxes on a socioeconomic level, since inception, the government put exemptions in place to keep most Americans from being subject to these aforementioned transfer taxes. Before the TCJA, the first $5,000,000 (as adjusted for inflation in years after 2011) of transferred property was exempt from estate and gift tax. For estates of decedent’s dying and gifts made in 2018, this “basic exclusion amount” as adjusted for inflation would have been $5,600,000, or $11,200,000 for a married couple with proper estate planning and a particular tax election made, known as “portability”.

The new law under TCJA temporarily doubles the amount that can be excluded from these transfer taxes. For decedent’s dying and gifts made from 2018 through 2025, the TCJA doubles the base estate and gift tax exemption amount from $5,000,000 to $10,000,000 per person. Indexed for post-2011 inflation, in 2018 that basic exclusion amount is approximately $11,200,000 per person ($22,400,000 for a married couple with portability election). And while language in the TCJA does not mention generation-skipping transfers specifically, because the GST exemption is based on the basic exclusion amount, those transfers will also see an increased exclusion amount equal to the increase in the estate and gift tax exclusion amounts.

These increased exemption amounts are unprecedented and may provide an opportunity for some advanced estate planning to benefit and protect your family’s wealth and legacy. At the very least, it should cause you to take a look at your current estate planning documents (i.e. wills, trusts, beneficiary designations).

Please call me if you would like to discuss how the law change may affect your particular situation, and the planning steps you might consider now or sometime in the near future.

                      

 
IMPORTANT TAX DATES TO REMEMBER


With the beginning of the new year, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 46; EMPLOYEE PARKING CHANGES TAX CUTS AND JOBS ACT

Posted by Admin Posted on Mar 01 2018
MORE TAX CHANGES IN THE " TAX CUTS AND JOBS ACT "


Written by: Renee Vuylsteke, Enrolled Agent

2017 Tax Reform: No deduction allowed for cost of providing qualified transportation fringes benefits

Under the new Tax Cuts and Jobs Act, employer’s deduction for fringe benefit expenses is limited. This article describes the Act’s changes to employer’s parking deduction.

Employee’s Parking

The Act eliminates the tax deduction for employee transportation fringe benefits (e.g. parking and mass transit) for amounts incurred or paid after December 31, 2017. Under the Act, employers can still provide parking and transit passes to employees and the amount of the benefit is still excluded from the employee’s income however the employer will no longer get the deduction as an expense.

Employers looking for a way to be able to provide parking to employees and not lose the tax deduction might consider the following ideas:

  • Renegotiate rental agreements and try to bundle rent and parking
  • Increase employees wage and require them to pay their own parking.
  • Consider establishing a Qualified Transportation Compensation Reduction Plan under IRC 132(f).

If you have any questions or would like to discuss these ideas further, please contact our office and discuss with your tax preparer.

          

 
IMPORTANT TAX DATES TO REMEMBER


With the beginning of the new year, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 45; MORE TAX CHANGES IN THE " TAX CUTS AND JOBS ACT "

Posted by Admin Posted on Mar 01 2018

 

MORE TAX CHANGES IN THE " TAX CUTS AND JOBS ACT "


Written by: Michele Hermann, CPA

On December 22, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”). This article describes some of the Act's changes that would affect C Corporations beginning in 2018 and individuals for tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026.

Drop in Tax Rates

Beginning with the 2018 tax year, the Act makes the corporate tax rate a flat 21%. It also eliminates the corporate alternative minimum tax. C corporations were previously subject to graduated tax rates ranging from 15% to 35%.

Individuals are subject to income tax on “ordinary income,” such as compensation, and most retirement and interest income, at increasing rates that apply to different ranges of income depending on their filing status.

The Act still has seven tax brackets for individuals, but their percentage rates will change to: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These rates were previously 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.

While these changes will lower rates at many income levels, determining the overall impact on any particular individual or family will depend on a variety of other changes made by the Act, including increases in the standard deduction, loss of personal and dependency exemptions, and changes to the child tax credit, to name a few.

Standard Deduction Increased

Taxpayers are allowed to reduce their adjusted gross income (“AGI”) by the standard deduction or the sum of itemized deductions to determine their taxable income. The Act has increased the standard deduction to $24,000 (up from $13,000) for married individuals filing a joint return, $18,000 (up from $9,550) for head-of-household filers, and $12,000 (up from $6,500) for all other taxpayers, adjusted for inflation in tax years beginning after 2018. No changes are made to the current-law additional standard deduction for the elderly and blind.

Personal Exemption Suspended

Under pre-Act law, taxpayers determined their taxable income by subtracting from their adjusted gross income any personal exemption deductions. Personal exemptions generally were allowed for the taxpayer, the taxpayer's spouse, and any dependents. The amount deductible for each personal exemption was scheduled to be $4,150 for 2018, subject to a phase out for higher earners, but the Act has suspended the deduction for personal exemptions by reducing the exemption amount to zero.

Child Tax Credit Increase

The Act increases the child tax credit to $2,000, and other changes are made to phase-outs and refund ability. The income levels at which the credit phases out are increased to $400,000 for married taxpayers filing jointly ($200,000 for all other taxpayers) (not indexed for inflation). In addition, a $500 nonrefundable credit is provided for certain non-child dependents. The amount of the credit that is refundable is increased to $1,400 per qualifying child, and this amount is indexed for inflation, up to the base $2,000 base credit amount. The earned income threshold for the refundable portion of the credit is decreased from $3,000 to $2,500. No credit will be allowed to a taxpayer with respect to any qualifying child unless the taxpayer provides the child's SSN.

New Treatment of Alimony

These changes take effect for divorce agreements and legal separation agreements executed after 2018. It's important to emphasize that the current rules continue to apply to already-existing divorces and separations, as well as divorces and separations that are executed before 2019.

Under the current rules, an individual who pays alimony may deduct an amount equal to the alimony payments paid during the year as an “above-the-line” deduction. (An “above-the-line” deduction, i.e., a deduction that a taxpayer need not itemize deductions to claim, is more valuable for the taxpayer than an itemized deduction.) The alimony payments are taxable to the recipient spouse.
Under the Act rules, there is no deduction for alimony for the payer. Furthermore, alimony is not gross income to the recipient.

Under a special rule, if taxpayers have an existing (pre-2019) divorce or separation decree, and they have that agreement legally modified, then the new rules don't apply to that modified decree, unless the modification expressly provides that the Act rules are to apply.

Moving Expense Deduction Suspended

Under the Act, the deduction for moving expenses is suspended, except for members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station.

Expanded Use of 529 Account Funds

The Act provides that “qualified higher education expenses” include tuition at an elementary or secondary public, private, or religious school up to a $10,000 limit per beneficiary per tax year.
          

 
IMPORTANT TAX DATES TO REMEMBER


With the beginning of the new year, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 44; NEW 20% DEDUCTION FOR QUALIFIED BUSINESS INCOME UNDER NEW TAX LAW

Posted by Admin Posted on Jan 16 2018
NEW 20% DEDUCTION FOR QUALIFIED BUSINESS INCOME UNDER NEW TAX LAW


Written by: Marci Gietl, CPA

Under the new Tax Cuts and Jobs Act law (the Act), there is a significant new tax deduction taking effect in 2018 that may provide substantial tax benefit to individuals with “qualified business income” from a partnership, S corporation, LLC or sole proprietorship. Income from such entities is also referred to as “pass-through” income.

The deduction may be up to 20% of the “qualified business income” (QBI) from these entities. QBI is defined as the net amount of items of income, gain, deduction and loss with respect to the trade or business. The business must be conducted in the U.S. and specified investment-related items are not included [i.e., capital gains or losses, dividends and interest income (unless interest is properly allocable to the business)].

For taxpayers with income from “specified services” trades or businesses and total taxable income over certain levels depending on filing status, there are exclusions phased in that lead up to a level of complete disallowance of the deduction. These “specified services” trades or businesses include the performance of services in the fields of law, health, athletics, consulting, financial or brokerage services, or where the principal asset is the reputation or skill of one or more employees or owners.

Additionally for all taxpayers with incomes above established thresholds based on filing status, there’s a limitation on the deduction that’s tied to the wages of the entity or a combination of the wages and capital investment of the entity. The latter limit could be especially beneficial to real estate entities that have little to no wages but significant holdings.

The complexities of this new deduction are considerable, especially if your taxable income may be at or above the thresholds. If you’d like to learn more about this deduction and the potential impact on your tax situation, please contact us to discuss.

 
IMPORTANT TAX DATES TO REMEMBER


With the beginning of the new year, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 43; 2017 TAX REFORM: "TAX CUTS AND JOBS ACT " DEPRECIATION AND EXPENSING CHANGES

Posted by Admin Posted on Jan 16 2018

 

2017 TAX REFORM: "TAX CUTS AND JOBS ACT "
DEPRECIATION AND EXPENSING CHANGES


Written by: Marc Rosen, CPA and Member

The recently enacted Tax Cuts and Job Act has made numerous changes that impact individuals and businesses. In this newsletter we will address the changes related to depreciation; increased Code Section 179 expensing, temporary 100% depreciation, luxury auto depreciation, and cost recovery period for real property.

Increased Code 179 Expensing

In general, qualifying property is defined as depreciable tangible personal property that is purchased for use in the active conduct of a trade or business, and includes off-the-shelf computer software and qualified real property (i.e., qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property).

Passenger automobiles subject to certain dollar limitations are eligible for Code Sec. 179 expensing only to the extent of these dollar limitations. For sport utility vehicles above the 6,000 pound weight rating and not more than the 14,000 pound weight rating, which are not subject to the dollar limitations, the maximum cost that may be expensed for any tax year under Code Sec. 179 is $25,000.

New law. For property placed in service in tax years beginning after Dec. 31, 2017, the maximum amount a taxpayer may expense under Code Sec. 179 is increased to $1 million, and the phase-out threshold amount is increased to $2.5 million. For tax years beginning after 2018, these amounts (as well as the $25,000 sport utility vehicle limitation) are indexed for inflation. Property is not treated as acquired after the date on which a written binding contract is entered into for such acquisition.

Qualified real property. The definition of Code Sec. 179 property is expanded to include certain depreciable tangible personal property used predominantly to furnish lodging or in connection with furnishing lodging. The definition of qualified real property eligible for Code Sec. 179 expensing is also expanded to include the following improvements to nonresidential real property after the date such property was first placed in service: roofs; heating, ventilation, and air-conditioning property; fire protection and alarm systems; and security systems.

Temporary 100% Cost Recovery of Qualifying Business Assets

Under pre-Act law, an additional first-year bonus depreciation deduction was allowed equal to 50% of the adjusted basis of qualified property, the original use of which began with the taxpayer, placed in service before Jan. 1, 2020 (Jan. 1, 2021, for certain property with a longer production period). The 50% allowance was phased down for property placed in service after Dec. 31, 2017 (after Dec. 31, 2018 for certain property with a longer production period). A first-year depreciation deduction is also electively available for certain plants bearing fruit or nuts planted or grafted after 2015 and before 2020. Film productions aren't eligible for bonus depreciation.

New law. A 100% first-year deduction for the adjusted basis is allowed for qualified property acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023 (after Sept. 27, 2017, and before Jan. 1, 2024, for certain property with longer production periods). Thus, the phase-down of the 50% allowance for property placed in service after Dec. 31, 2017, and for specified plants planted or grafted after that date, is repealed. The additional first-year depreciation deduction is allowed for new and used property.

In later years, the first-year bonus depreciation deduction phases down, as follows:

  • 80% for property placed in service after Dec. 31, 2022 and before Jan. 1, 2024.
  • 60% for property placed in service after Dec. 31, 2023 and before Jan. 1, 2025.
  • 40% for property placed in service after Dec. 31, 2024 and before Jan. 1, 2026.
  • 20% for property placed in service after Dec. 31, 2025 and before Jan. 1, 2027.
    For certain property with longer production periods, the beginning and end dates in the list above are increased by one year. For example, bonus first-year depreciation is 80% for long-production-period property placed in service after Dec. 31, 2023 and before Jan. 1, 2025.


First-year bonus depreciation sunsets after 2026.


For productions placed in service after Sept. 27, 2017, qualified property eligible for a 100% first-year depreciation allowance includes qualified film, television and live theatrical productions. A production is considered placed in service at the time of initial release, broadcast, or live staged performance (i.e., at the time of the first commercial exhibition, broadcast, or live staged performance of a production to an audience).

For certain plants bearing fruit or nuts planted or grafted after Sept. 27, 2017, and before Jan. 21, 2023, the 100% first-year deduction is also available.

For the first tax year ending after Sept. 27, 2017, a taxpayer can elect to claim 50% bonus first-year depreciation (instead of claiming a 100% first-year depreciation allowance). The election to accelerate AMT credits in lieu of bonus depreciation is repealed.

Luxury Automobile Depreciation Limits Increased

Code Sec. 280F (dollar limitations) limits the Code Sec. 179 expensing and cost recovery deduction with respect to certain passenger autos (the luxury auto depreciation limit).

New law. For passenger automobiles placed in service after Dec. 31, 2017, in tax years ending after that date, for which the additional first-year depreciation deduction under Code Sec. 168(k) is not claimed, the maximum amount of allowable depreciation is increased to: $10,000 for the year in which the vehicle is placed in service, $16,000 for the second year, $9,600 for the third year, and $5,760 for the fourth and later years in the recovery period. For passenger automobiles placed in service after 2018, these dollar limits are indexed for inflation. For passengers autos eligible for bonus first-year depreciation, the maximum first-year depreciation allowance remains at $8,000.

In addition, computer or peripheral equipment is removed from the definition of listed property, and so isn't subject to the heightened substantiation requirements that apply to listed property.

For passenger automobiles acquired before Sept. 28, 2017, and placed in service after Sept. 27, 2017, the pre-Act phase-down of the Code Sec. 280F increase amount in the limitation on the depreciation deductions applies.

Recovery Period for Real Property Shortened

The cost recovery periods for most real property are 39 years for nonresidential real property and 27.5 years for residential rental property. The straight line depreciation method and mid-month convention are required for such real property.

Under pre-Act law, qualified leasehold improvement property was an interior building improvement to nonresidential real property, by a landlord, tenant or subtenant, that was placed in service more than three years after the building is and that meets other requirements. Qualified restaurant property was either (a) a building improvement in a building in which more than 50% of the building's square footage was devoted to the preparation of, and seating for, on-premises consumption of prepared meals (the more-than-50% test), or (b) a building that passed the more-than-50% test. Qualified retail improvement property was an interior improvement to retail space that was placed in service more than three years after the date the building was first placed in service and that meets other requirements.

Qualified improvement property is any improvement to an interior portion of a building that is nonresidential real property if such improvement is placed in service after the date such building was first placed in service. Qualified improvement property does not include any improvement for which the expenditure is attributable to the enlargement of the building, any elevator or escalator, or the internal structural framework of the building.

If a taxpayer elected the ADS, residential rental property had a recovery period of 40 years. ADS is principally a straight-line depreciation system under which one depreciation period (generally longer than any other) is prescribed for each class of recovery property.

New law. For property placed in service after Dec. 31, 2017, the separate definitions of qualified leasehold improvement, qualified restaurant, and qualified retail improvement property are eliminated, a general 15-year recovery period and straight-line depreciation are provided for qualified improvement property, and a 20-year ADS recovery period is provided for such property.

Thus, qualified improvement property placed in service after Dec. 31, 2017, is generally depreciable over 15 years using the straight-line method and half-year convention, without regard to whether the improvements are property subject to a lease, placed in service more than three years after the date the building was first placed in service, or made to a restaurant building. Restaurant building property placed in service after Dec. 31, 2017, that does not meet the definition of qualified improvement property, is depreciable as nonresidential real property, using the straight-line method and the mid-month convention.

For property placed in service after Dec. 31, 2017, the ADS recovery period for residential rental property is shortened from 40 years to 30 years.

For tax years beginning after Dec. 31, 2017, an electing farming business-i.e., a farming business electing out of the limitation on the deduction for interest-must use ADS to depreciate any property with a recovery period of 10 years or more (e.g., a single purpose agricultural or horticultural structures, trees or vines bearing fruit or nuts, farm buildings, and certain land improvements).


 

 
IMPORTANT TAX DATES TO REMEMBER


With the beginning of the new year, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 42; 2017 TAX REFORM: INDIVIDUAL TAX CHANGES IN THE " TAX CUTS AND JOBS ACT "

Posted by Admin Posted on Jan 16 2018
2017 TAX REFORM:
INDIVIDUAL TAX CHANGES IN THE " TAX CUTS AND JOBS ACT "


Written by: Natalie Stevenson, Staff Accountant

On December 22, President Trump signed into law the "Tax Cuts and Jobs Act", a sweeping tax reform law that will entirely change the tax landscape. This article describes the Act's changes that would affect individuals with a focus on the Itemized Deductions on Schedule A.

State and Local Tax Deduction

A taxpayer may claim an itemized deduction of up to $10,000 ($5,000 for a married taxpayer filing a separate return) for the aggregate of State and local property taxes not paid or accrued in carrying on a trade or business or activity; and State and local income, war profits, and excess profits taxes (or sales taxes in lieu of income, etc. taxes) paid or accrued in the tax year. Foreign real property taxes may not be deducted.

Mortgage & Home Equity Indebtedness Interest Deduction

The deduction for interest on home equity indebtedness is suspended, and the deduction for mortgage interest is limited to underlying indebtedness of up to $750,000 ($375,000 for married taxpayers filing separately). Treatment of indebtedness incurred on or before Dec. 15, 2017. The new lower limit doesn't apply to any acquisition indebtedness incurred before Dec. 15, 2017. "Binding contract" exception. A taxpayer who has entered into a binding written contract before Dec. 15, 2017 to close on the purchase of a principal residence before Jan. 1, 2018, and who purchases such residence before Apr. 1, 2018, shall be considered to incur acquisition indebtedness prior to Dec. 15, 2017.

Medical Expense Deduction Threshold

A deduction is allowed for the expenses paid during the tax year for the medical care of the taxpayer, the taxpayer's spouse, and the taxpayer's dependents to the extent the expenses exceed a threshold amount. To be deductible, the expenses may not be reimbursed by insurance or otherwise. If the medical expenses are reimbursed, then they must be reduced by the reimbursement before the threshold is applied.

For tax years beginning after Dec. 31, 2016 and ending before Jan. 1, 2019, the threshold on medical expense deductions is reduced from 10% to 7.5% for all taxpayers.

Charitable Contribution Deduction Limitation

For contributions made in tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the 50% limitation for cash contributions to public charities and certain private foundations is increased to 60%. Contributions exceeding the 60% limitation are generally allowed to be carried forward and deducted for up to five years, subject to the later year's ceiling.

Miscellaneous Itemized Deductions

The deduction for miscellaneous itemized deductions that are subject to the 2% floor is suspended; this includes the deduction for tax preparation, safe deposit, and investment expenses and any unreimbursed employee expenses.

Overall Limitation on Itemized Deductions

Higher-income taxpayers who itemized their deductions were subject to a limitation on these deductions (commonly known as the "Pease limitation"). For taxpayers who exceed the threshold, the otherwise allowable amount of itemized deductions was reduced by 3% of the amount of the taxpayers' adjusted gross income exceeding the threshold. The total reduction couldn't be greater than 80% of all itemized deductions, and certain itemized deductions were exempt from the Pease limitation.

For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the "Pease limitation" on itemized deductions is suspended.

 

 
IMPORTANT TAX DATES TO REMEMBER


With the beginning of the new year, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 41; TAX CUTS AND JOBS ACT - YEAREND CHANGES

Posted by Admin Posted on Jan 16 2018
TAX CUTS AND JOBS ACT - YEAREND CHANGES


Written by: Kathleen Keeven, Accountant

The proposed “Tax Cuts and Jobs Act” expected to be approved this week is the largest major tax reform in over 30 years. Becker & Rosen will provide information on relevant issues as tax season approaches. There are two issues, however, affecting individual taxpayers that warrant special attention prior to the end of 2017.

  1. State and Local Tax Deduction
    For tax years beginning after December 31, 2017, the Federal itemized deduction for state and local taxes paid will be limited to $10,000 for married taxpayers filing jointly ($5,000 for a married taxpayer filing a separate return). If you plan to make any state or local tax payments in 2018 for the 2017 tax year, consider making those payments in 2017 instead. Fourth quarter estimated payments due in January can be made in December. If you believe you will owe tax with state and local returns in April, consider tax planning to estimate and pay those taxes now.
  2. Charitable Contributions
    The limitation and elimination of various itemized deductions is expected to result in a sharp increase of taxpayers using the standard deduction instead of itemizing in years beginning after December 31, 2017. Consider making intended charitable contributions prior to year-end rather than waiting until 2018 in order to take advantage of the itemization. If your tax rate decreases next year, you will maximize the benefit from your deductions against the higher rates in 2017.

As always, the best advice depends on your specific situation. Contact Becker & Rosen, CPA’s, LLC for additional information.

 
IMPORTANT TAX DATES TO REMEMBER


With the end of the year ahead, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Vol 40; TIS THE SEASON … FOR SCHEDULE A DEDUCTIONS

Posted by Admin Posted on Jan 16 2018

 

WARM WISHES THIS HOLIDAY SEASON

Happy holidays from everyone at Becker and Rosen CPAs. We hope your holidays will be filled with joy & laughter, and we wish you health & wealth all through the New Year.

           
IMPORTANT TAX DATES TO REMEMBER


With the end of the year ahead, we want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 23th 2018 will receive an extension.

Here is a recap of important dates to keep in mind as 2018 progresses:

  • January 15, 2018 - 2017 4th quarter estimate payment
  • January 31, 2018 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2018 - Form 1065 and 1120-S
  • March 23, 2018 - Deadline to have individual tax prep info to Becker and Rosen
  • April 17, 2018 - Form 1040, 1041, and 1120, unless extended
  • April 17, 2018 - 2018 1st quarter estimate payment
  • June 15, 2018 - 2018 2nd quarter estimate payment
  • September 17, 2018 - 2018 3rd quarter estimate payment
  • September 17, 2018 - Form 1120-S and 1065, if extended
  • October 1, 2018 - Form 1041, if extended
  • October 15, 2018 - Form 1040 and 1120, if extended
  • January 15, 2019 - 2018 4th quarter estimate payment
     
TIS THE SEASON … FOR SCHEDULE A DEDUCTIONS


Written by: Kathleen Keeven, Accountant

It’s probably not a coincidence that some of us are looking for tax deductions before the end of the year as well. Charitable contributions provide more individual choice in timing, amount and use than any other tax deduction. It is the only tax deduction that comes with warm fuzzies. Historically individuals contribute about 75% of giving in the US each year. So it is a good time to review what donations are deductible on your individual tax return.

Charitable contributions are deducted on Schedule A Itemized Deductions on your individual return. If you use the standard deduction and don’t itemize you can stop here and go make some hot chocolate. If you do itemize you may want to continue.

Your donations must be made to an entity that the IRS has designated as a qualified organization. Once an organization goes through the paperwork to get that designation, it will typically cover its website and stationary with that information but you can check the list at irs.gov if you are unsure. (Click on “Charities and Non-Profits” at top right of the IRS home page.)

You must have documentation for any donations over $250. IRS Pub. 526 sets out additional requirements for donations over $500:

  • Written acknowledgement from the donee
  • Acknowledgement must include description of the donation and the value of anything received in return
  • Must have the acknowledgement at the time you file the return
Can you donate some cash to the man collecting on the corner? Absolutely. Though, you just can’t deduct it on your tax return. Even if you infuriated the drivers lined up behind you to have him sign a receipt, he isn’t a qualified entity per the IRS. Can you donate to the Old Newsboys on the corner? Absolutely. You can also deduct the donation because the organization is recognized by the IRS.

While you are deciding the amount and timing of your charitable contributions, take a couple extra minutes to check on how responsibly the organization will use that donation. It won’t change your deduction but it will make the warm fuzzies even better. Many new charity watchdogs and some old-school organizations provide easy online access to information, ratings, reviews, and inside information to help your decision. They also provide the entity’s Form 990 that provides the entity’s asset and income information submitted to the IRS.
 
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 39; 2017 HEALTH CARE REFORM: PRESIDENT TRUMP’S EXECUTIVE ORDER PROMOTING HEALTHCARE CHOICE AND COMPETITION ACROSS THE UNITED STATES AND SEEKING TO EXPAND ACA (OBAMACARE) ALTERNATIVES.

Posted by Admin Posted on Jan 16 2018
2017 HEALTH CARE REFORM: PRESIDENT TRUMP’S EXECUTIVE ORDER PROMOTING HEALTHCARE CHOICE AND COMPETITION ACROSS THE UNITED STATES AND SEEKING TO EXPAND ACA (OBAMACARE) ALTERNATIVES.


Written by: Elsa Fortune, CPA
                      
           

On October 12, 2017, an executive order on health reimbursement arrangement (HRAs) was executed by President Trump directing the Treasury and other federal agencies to consider revising guidance, to the extent permitted by law, to increase the usability of HRAs, expand employers' ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with non-group coverage.

The latest notice provides guidance on three items

  1. The requirements for providing a qualified small employer health reimbursement arrangement (QSEHRA) under IRC 9831(d) which provides that a QSEHRA will not be treated as a group health plan
  2. The tax consequences of the arrangement  
  3. The requirements for providing written notice of the arrangement to eligible employees. 

A QSEHRA is a qualified small employer health reimbursement arrangement that is funded solely by an eligible employer, generally an employer who has fewer than 50 full time employees and who does not offer a group health plan. The QSEHRA does not allow any salary reduction contributions. Eligible full time employees get reimbursed for insurance premiums and medical expenses incurred for themselves and/or their family members, in accordance with the terms of the employers arrangement after the employee provides proof of Minimal Essential Coverage (MEC).

Employers can decide to offer any percentage of reimbursements under the same terms requirement for all eligible employees up to the statutory limits. The amount of reimbursements cannot exceed the statutory limits of $4,950 for individuals and $10,000 for family coverage for 2017 and $5,050 and $10,250 respectively for 2018. This arrangement does allow carryovers but they are subject to limits for that year of the carryover.

The tax consequences of the arrangement are minimal. Generally, The QSEHRA reimbursements are not included in the employee’s gross income if the employee has the minimum essential coverage (MEC). If an employee does not have MEC, he/she may be liable for a shared responsibility payment and some reimbursements will be taxable and includible in gross income. The permitted benefit must be reported on Form W-2 by the employer. We can assist you with the preparation and accurate reporting needed on the W-2. Employers are not required to file Form 1095-B for Health coverage when providing a QSEHRA.

Written notice of the arrangement must be provided to eligible employees. An eligible employer that provides QSEHRA during 2017 or 2018 must comply with the written notice requirement on the date on which an employee becomes eligible or at least 90 days before the beginning of each year being funded.

The notice requires 3 statements: 

  1. A statement of the amount which is the permitted benefit under the arrangement for eligible employees for the year.
  2. A statement that the eligible employee must provide permitted benefit amount to any health insurance exchange to which the employee applies for advance payment of the premium assistance tax credit (PTC)
  3. A statement that if the eligible employee is not covered under MEC for any month, he/she may be subject to tax for that month and reimbursements may be includible in gross income.

An employer that has not yet furnished the written notice must furnish the written notice by February 19th, 2018. Failure to timely provide written notice results in a penalty; it does not cause the QSEHRA to fail.

The guidance in this notice applies to plan years beginning on or after November 20th, 2017.


                                                           

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.
           
Here is a recap of important dates to keep in mind as 2017 progresses:

  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 38; Tax Cuts and Jobs Act

Posted by Admin Posted on Jan 16 2018

 

TAX CUTS AND JOBS ACT


Written by, Cindy Smith, CPA, CFE

House Republican Bill H.R. 1 “Tax Cuts and Jobs Act” was introduced on November 2, 2017. If this becomes law, the majority of the items in the bill would be effective for tax years after 2017. Here are some of the key provisions in the bill:
          

FOR INDIVIDUALS            


 
Reduction of income tax brackets:
The current seven federal income tax brackets of 10%, 15%, 25%, 28%, 33%, 35% and 39.6% would be consolidated into four brackets of 12%, 25%, 35% and 39.6% as follows:
 Tax brackets under current Law
Married filing joint     %  Single          %  Head of Household      % 
 $0 - $18,550  10%  $0 - $9,275  10%  $0-$13,250  10%
 $18,551 - $75,300  15%  $9,276 - $37,650  15%  $13,251-$50,400  15%
 $75,301 - $151,900  25%  $37,651 - $91,150  25%  $50,401-$130,150  25%
 $151,901-$231,450  28%  $91,151 - $190,150 28%  $130,151-$210,800 28%
 $231,451-$413,350  33%  $190,151 - $413,350 33% $210,801-$413,350 33%
 $413,351-$466,950  35%  $413,351-$415,050 35%  $413,351-$441,000 35%
 $466,950+  39.6%  $415,050+ 39.6%  $441,000+ 39.6%
 Tax brackets under H.R. 1
 Married Filing Joint  Single  % Head of Household   %
 $0-$90,000  12%  $0-$45,000  12%  $0-$67,500  12%
 $90,001-$260,000  25% $45,001-$200,000  25%  $67,501-$200,000  25%
$260,001-$1,000,000  35% $200,001-$500,000  35%  $200,001-$500,000  35%
$1,000,000+  39.6% $500,000+  39.6%  $500,000+  39.6%

For high-income taxpayers, the 12% tax bracket will effectively be phased out for individuals with incomes over $1,000,000 and married couples with incomes over $1,200,000. They will pay a tax equal to the difference between what they would pay at the 12% bracket and what they would have paid if that income was taxed at 39.6%. This will be done by adding a surcharge of 6% on each dollar earned from $1,000,000 to $1,207,000 for single people and $1,200,000 to $1,614,000 for married couples.

Increase in standard deduction:

Current Law H.R. 1
The basic standard deduction is $6,350 for individual filers, $9,350 for heads of household, and $12,700 for married filing jointly. The standard deduction is increased to $12,000 for individual filers, $18,000 for single filers with at least one qualifying child, and $24,000 for joint filers.

Elimination of personal exemptions:

Current Law H.R. 1 
Taxpayers are allowed to claim a $4,050 personal exemption for themselves, spouse, and dependents. The bill eliminates personal exemptions.

Maximum rate on business income of individuals:

Current Law H.R. 1
Income from pass-through entities such as sole proprietorships, partnerships, and S Corporations are taxed at the same income tax rates as the individual.  A portion of the net income distributed by a pass-through entity may be treated as “business income” and subject to a maximum rate of 25%. Income from passive activities would be fully eligible for the 25% maximum rate. The calculation of “business income” for owners or shareholders from an active business activity will depend upon several factors

Enhancement of child tax credit and new family tax credit:

Current Law H.R. 1
Under current law an individual may claim a tax credit for each qualifying child under 17 of $1,000 per child. This is phased out for AGI’s over $75,000 for single filers and $110,000 for joint filers. It is also not indexed for inflation. The credit would be increased to $1,600 and would also allow a $300 credit for non-child dependents. The phase out would be increased to $115,000 for single filers and $230,000 for joint filers. In addition, it would be indexed for inflation based on chained CPI.

Repeal of nonrefundable credits:

Current Law H.R. 1 
Current law allows for an adoption tax credit, credit for individuals over 65 and the permanently and totally disabled, credit associated with mortgage credit certificates, and the credit for electric plug-in vehicles. The bill eliminates these credits.

Education credits:

Current Law H.R. 1
The current law allows an American Opportunity Tax Credit (“AOTC”), and as an alternative to the AOTC, it also offers a Hope Scholarship Tax Credit or a Lifetime Learning Tax Credit. The above three education credits would be combined into an enhanced AOTC credit, providing a similar benefit as the original AOTC but expanding it to a fifth year of post-secondary education at half the rate as the first four years.

Other education related provisions:

Current Law H.R. 1
An individual may claim a deduction for student loan interest up to $2,500. This deduction is phased out for joint returns with a modified adjusted gross income (“MAGI”) of over $165,000 and other returns with a MAGI over $80,000. In addition, interest on US Savings bonds is excluded from income if used to pay qualified higher education expenses. Also, $5,250 of employer-provided education assistance is excludable from income, and qualified tuition reductions provided by education institutions to their employees, spouses or dependents are excluded from income. The bill eliminates these provisions.

Limitation on itemized deductions:

Current Law  H.R.1
Under current law, the total amount of most itemized deductions is reduced once adjusted gross income exceeds $313.800 for married filing joint, and $261,500 for single filers. The bill repeals the limitation on itemized deductions.

Mortgage interest:

Current Law H.R. 1
Taxpayers may claim an itemized deduction for mortgage interest for their primary residence and one other residence, on debt up to $1,000,000 in acquisition indebtedness and up to $100,000 in home equity indebtedness. Taxpayers may still claim the itemized deduction for mortgage interest, however, interest would only be deductible on the principal residence, interest on home equity indebtedness would not be deductible, and for new debt incurred after November 2, 2017, the $1,000,000 limitation would be reduced to $500,000.

Charitable contributions:

Current Law  H.R. 1
In general, charitable contributions to public charities, private operating foundations, and certain non-operating private foundations may only be deducted up to 50% of adjusted gross income (“AGI”). In addition, the mileage rate for charitable mileage is 14 cents per mile. The bill increases the the 50% limitation to 60% of AGI. In addition, the charitable mileage rate will be adjusted for inflation.

Various itemized deductions:

Current Law  H.R.1
Currently, taxpayers may claim itemized deductions for medical expenses, casualty and theft losses, moving expenses, employee business expenses, tax preparation fees, and state and local income or sales taxes. The bill repeals all of these itemized deductions. However, regarding itemized state and local income tax deductions, individuals would still be entitled to deductions for these taxes paid or accrued in carrying on a trade or business or producing income. In addition, individuals could still continue to claim itemized real property taxes, but only for amounts paid up to $10,000.

Alimony:

Current Law H.R. 1
 Alimony income is reported as taxable income by the payee and deducted from income by the payor.  Alimony income would not be taxable on the payee’s return or deductible by the payor. This would be effective for any divorce decree or separation agreement executed or modified after 2017.

Exclusion of gain from sale of a principal residence:

Current Law H.R. 1
A taxpayer can exclude the gain on the sale of a principal residence up to $500,000 for joint filers and $250,000 for single filers. The property must have been owned and used by the taxpayer as a principal residence for two out of the previous five years. The taxpayer may use the exclusion once every two years. The exclusion would be phased out by one dollar for every dollar in which their adjusted gross income exceeds the $500,000 for joint filers and $250,000 for single filers. In addition, they would have to own and use the home as their principal residence for five out of the previous eight years and they could only use the exclusion once every five years.

Dependent Care Assistance:

Current Law  H.R. 1
Currently an employee can exclude up to $5,000 per year from taxable income ($2,500 for married filing separately) for employer-provided dependent care assistance to help pay for child care for children under the age of 13 or for dependents who are physically or mentally unable to care for themselves. The bill repeals this exclusion.

Estate and Generation-skipping Transfer Taxes:

Current Law H.R. 1
Property in an estate is subject to a top tax rate of 40% before it passes to the beneficiaries. When property is transferred during the life of a donor, it is subject to a top gift tax rate of 40%, with the first $14,000 being excluded from the gift tax on a per-donee annual basis. Additionally, property transferred beyond one generation is subject to an additional generation-skipping tax. The first $5 million of transferred property is exempt from the estate, gift, and generation skipping taxes, in any combination thereof, and is indexed for inflation ($5.49 million for 2017). The basic exclusion is doubled from $5 million to $10 million (indexed for inflation). Also, after 2023, the estate and generation-skipping taxes are repealed. The gift tax is lowered to a top rate of 35% for gifts made after 2023.

Alternative Minimum Tax (“AMT”):

Current Law H.R. 1
Currently, taxpayers must compute their income for purposes of both the regular income tax and AMT, and their tax liability is the greater of the two. Under the bill, the AMT would be repealed



FOR BUSINESSES


Reduction in corporate tax rate:

Current Law H.R. 1
Under current law, a corporation’s tax rate brackets are $0 - $50,000 at 15%, $50,001-$75,000 at 25%, $75,001-$10,000,000 at 34% and over $10,000,000 at 35%. Personal service corporations are taxed at 35%. The corporate tax rate would be a flat 20%. Personal service corporations would be taxed at a 25% rate.

Bonus depreciation:

Current Law H.R. 1
Currently taxpayers may deduct 50% of the cost of certain “qualified property” in the year it is placed in service. This phases down to 40% in 2018 and 30% in 2019. The original use of the property must begin with the taxpayer. Under the bill, taxpayers would be able to expense 100% of certain “qualified property” in the year it is placed in service for property placed in service after September 27, 2017 and before January 1, 2023. It also repeals the requirement that the original use of the property begins with the taxpayer, and allows for the additional depreciation if it is the taxpayer’s first use.

Section 179 Expensing:

Current Law  H.R. 1
Businesses may immediately expense up to $500,000 of the cost of any “section 179 property” placed in service each taxable year. If the business places in service more than $2 million of section 179 property in a year, the amount available for immediate expensing is reduced. The expense limitation increases to $5 million and the phase-out amount increases to $20 million (and will index for inflation) for years after 2017 and before 2023. It also expands the definition of section 179 property to include qualified energy efficient heating and air conditioning equipment placed in service after November 2, 2017.

Entertainment expenses:

Current Law H.R. 1
A business can deduct up to 50% of expenses related to entertainment, amusement or recreation activities, or facilities (including membership dues with respect tosuch activities or facilities) if directly related to the active conduct of the taxpayer’s trade or business. An item is considered directly related if it is associated with a substantial and bona fide business discussion. No deduction would be allowed for these items. The 50% limitation under current law would apply only to expenses for food or beverages and to qualifying business meals, with no deduction allowed for other entertainment expenses.

Business interest deduction:

Current Law  H.R. 1
Generally speaking, business interest is allowed as a deduction in the year in which it is paid or accrued. The business interest deduction would be limited to no more than 30% of the businesses adjusted taxable income. The amount disallowed would be carried forward to the succeeding five taxable years. Businesses with average gross receipts less than $25 million would be exempt from these interest limitation rules.

Net Operating Loss (“NOL”) Deduction:

Current Law  H.R. 1
 NOL’s may be carried back two years and carried forward 20 years to offset taxable income in such years.  Taxpayers would be able to deduct an NOL carryover or carryback only to the extent of 90% of the taxpayer’s taxable income (determined without regard to the NOL deduction). H.R. 1 also repeals all carrybacks but provides a special one-year carryback for small businesses and farms in the case of certain casualty and disaster losses. Regarding carryforwards, it changes the 20 year limit on carryforwards to an indefinite carryforward period and increases it by an interest factor. The provision would be effective for losses arising in tax years beginning after 2017.

Like-kind exchanges:

Current Law H.R. 1
Under current law, the like-kind exchange rules apply to a wide range or property from real estate to tangible personal property, as long as it is held for productive use in the taxpayer’s trade or business, or for investment purposes. Under the bill, the like-kind exchange rules would only apply to real property.

Domestic Production Activities Deduction:

Current Law H.R. 1
Currently taxpayers can take a deduction related to qualified domestic production activities. The bill repeals this deduction.

           

           

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.
           
Here is a recap of important dates to keep in mind as 2017 progresses:

  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 37; Trump's Tax Plan Revisited

Posted by Admin Posted on Nov 01 2017

 

Special Release: Trump’s Tax Plan Revisited (Update from our May issue)


Written by: Renee Vuylsteke, Enrolled Agent
                        
           

As we are approaching the end of the year it is a good time to revisit the potential 2017 tax reform. The Trump Administration and select members of Congress have released a “unified framework” for the tax reform. This provides more detail than a number of the other tax reform documents that have been released from the administration over the past few months but it still leaves many specifics to be worked out. There is no indication in the framework itself of when the tax reform provisions would go into effect. However Treasury Secretary Mnuchin has reportedly said that President Trump would like the tax reform provisions to be retroactive to January 1, 2017. Let’s take a look at some of the highlights from this “unified framework”.

For Individual Taxpayers

  • Increased standard deduction, elimination of personal exemptions and additional standard deductions for older/blind taxpayers. The framework would increase the standard deduction to $24,000 for married filing jointly and $12,000 for single filers. There also wouldn’t be personal exemptions for dependent children and no provision for heads of household so presumably they would file single.
  • Reduced number of tax brackets. The framework would reduce the number of tax brackets from seven to three – 12%, 25% and 35%. Under current law, the lowest tax bracket is 10% and the highest is 39.6%.                
  • Child tax credit enhanced and non-child credit provided. The framework states that it will increase the child tax credit but doesn’t specify the amount. The income levels at which the credit phases out would be increased as well. The framework also provides a non-refundable credit of $500 for non-child dependents.
  • AMT repealed. The framework calls for repealing of the individual alternative minimum tax.
  • Itemized deductions largely eliminated. The framework would eliminate most itemized deductions but would retain tax incentives for home mortgage interest and charitable contributions.
  • Work, education and retirement benefits retained. The framework would retain tax benefits but make them simpler and more effective.
  • Catch-all. The frameworks notes that many other exemptions, deductions and credits for individuals will be likely repealed in order to make the system simpler and fairer.
  • Estate and generation-skipping transfer taxes repealed. The framework calls for the repeal of both the estate tax and generation-skipping transfer tax.

For Business Taxpayers

  • New top rate for “small” pass-throughs. Under the framework, the maximum tax rate applied to the business income of “small” and family-owned businesses conducted as sole proprietorships, partnerships and S corporations would be 25%.
  • New corporate tax rate. The framework would reduce the corporate tax rate to 20% and aims to eliminate the corporate AMT. Also the committees may consider methods to reduce the double taxation of corporate earnings.
  • Full expensing for five years. The framework would allow business to immediately write off the cost of new depreciable assets other than structures that were made after September 27, 2017.
  • Interest expense deductions. The deduction for net interest expense incurred by C Corporations would be partially limited under the framework.
  • Most deductions and credits repealed but research and low-income housing credits retained. The framework states that because of the rate reduction for businesses, the domestic production activities deduction (DPAD) would no longer be necessary. It also provides that many other special exclusions and deductions would be repealed or restricted but would retain the research credit and low-income housing tax credit.

Kevin Brady, chairman of the tax-writing House of Representatives Ways and Means Committee, said his plan is to turn the framework into legislation to be passed by the end of this year. For now we wait and see if this framework is passed by the end of the year. Until then, if you have any questions or concerns please contact us.

                       

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.
           
Here is a recap of important dates to keep in mind as 2017 progresses:

  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 36; Disaster Relief, Sales Tax and Minimum Wage Updates, Tax Planning for Young Professionals

Posted by Admin Posted on Sept 28 2017

 

DISASTER RELIEF


Written by: Marci Gietl, CPA

Taxpayers in certain counties within Florida and Texas affected by the recent hurricanes or associated flooding may be eligible for additional filing extensions until January 31, 2018. The provisions apply if the individual’s primary residence or the entity’s principal place of business is located in an affected area. The provisions also apply if the records necessary to file are located in such an area. The extensions impact not only filing deadlines of returns, but also provide for late payment penalty relief for certain tax payments. Please contact us to discuss these provisions if you think you may qualify.

UPDATES - Sales Tax on Deliveries and City of St Louis Minimum Wage


Written by: Renee Vuylsteke, Enrolled Agent
                        
           

In July 2016, the Missouri Department of Revenue announced delivery fees were subject to sale tax if they were part of the taxable sale of goods even if separately stated effective July 29, 2016.

On July 5, 2017 the governor signed Missouri Senate Bill 16 which excludes usual and customary delivery charges from sales and use tax. Effective August 28, 2017, delivery charges that are stated separately from the sale price will not be subject to sales and use tax.

On May 5, 2017, the City of St. Louis raised the minimum wage from $7.70 to $10 an hour for covered employers. Effective August 28, 2017, the legislation preempted the City’s law and minimum wage will return back to the State of Missouri’s minimum wage of $7.70 an hour for the City of St. Louis.

           

TAX PLANNING FOR YOUNG PROFESSIONALS AND BUSINESS OWNERS


Written by: Marci Gietl, CPA

As you start and grow in your career or with a new business venture, it’s important to not only consider your tax compliance requirements but also tax planning to reduce your tax obligations.

Employer Benefits:

As an employee, ensure that you have a full understanding of the benefits your employer offers and how you can utilize them as many lead to tax savings. As a business owner, consider these benefits to offer employees that may have maintenance costs associated with them but provide you not only with tax deductions but could have payroll tax savings as well. As a business owner looking to establish any of these plans, ensure you have proper documentation of the plan in compliance with IRS regulations.

  • Cafeteria Plan: Typically cover health costs or dependent care benefits. Withheld pre-tax (before federal and state income tax) and also before FICA taxes.
  • Education: Employers may establish plans to reimburse employees for education related expenses. Expenses for non-job related education up to $5,250 annually can be excluded from federal and state income taxes, FICA and FUTA taxes. Amounts that are job-related are not limited by IRS regulations.
  • Retirement: Pre-tax accounts allow you to save federal and state taxes currently with funds being taxable upon distribution. (Caution: Early distributions may be subject to penalties.) After-tax accounts (Roths) are tax currently but grow tax-free and if proper terms are met, are distributed tax-free. Bonus to the employee may be matching dollars from the employer of part or all of your contributions and depending on your level of income, you may qualify for a retirement savings tax credit! Employer may benefit upon setting up the plan from a tax credit for doing so.

Retirement:

Retirement accounts may be viewed at times as just another source of savings to tap into when funds are needed. However, it’s important to understand the potential consequences of doing so and how some planning may reduce the effects of a distribution. For example, funds withdrawn from a 401(k) plan used for a first-time home purchase would be subjected to a 10% early withdrawal penalty as well as regular federal and state income taxes. A distribution from an IRA for the same purpose up to a maximum of $10,000 would still be subject to regular income taxes but would avoid the 10% penalty. There are other exceptions to the penalty that apply only to IRAs and not 401(k) withdrawals as well. One way to plan for this is to rollover any old 401(k) plans from previous jobs into IRAs before the need arises.   

Additionally, consideration should be given to converting traditional IRAs into Roth IRAs either in a lump sum or over a number of years depending on your tax bracket and ability to pay the taxes. The benefits of then having these funds in the Roth are as mentioned earlier for the funds to grow tax-free and eventually be distributed as such. Tax planning can help you determine if this is the right move for you.

Business Obligations:

Tax planning as a new business owner should not just factor in federal and state income taxes, but should also consider other taxes that your business may generate: self-employment tax, payroll taxes, sales tax, excise tax, etc. The nature of your business will determine your tax obligations, but tax planning can help you understand the differences in these taxes and especially what income is subject to or expenses are deductible against each of these. Documenting all income and expenses thoroughly can allow for better planning to reduce these obligations but also to ensure proper compliance to avoid unnecessary penalties and interest.

Please contact us to further discuss any of this information.

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.

If you have an extended return due in the coming months please have your information to us for tax preparation as soon as possible.

Here is a recap of important dates to keep in mind as 2017 progresses:

  • October 2, 2017 - Form 1041, if extended 
  • October 16, 2017 - Form 1040, if extended 
  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 35; Business Gift - Giving

Posted by Admin Posted on Sept 13 2017

 

BUSINESS GIFT - GIVING


Written by: Cindy Smith, CPA, CFE
                        
           

Since we’re getting closer to the holiday season, a lot of our business clients will be giving gifts to customers, vendors, employees, and other business associates. Before you go shopping, you might want to consider the IRS rules and limitations in the deductibility of gifts. In general, the tax rules limit the deduction for business gifts given directly or indirectly to a person to $25 per person per year — a limitation that hasn’t been raised in decades. There is no limit to how many people you can give business gifts to, nor on how much you spend for those gifts, but your business gift deduction is limited to $25 per recipient. However, there are exceptions to the rules and the most common ones are as follows:

Gifts to a business entity vs. an individual: The $25 limit only applies to gifts directly or indirectly given to an individual. Thus, gifts given to a company for use in the business aren’t subject to the limit. For example, if you give a gift basket to an entire company, you can deduct the full amount. However, if the gift is intended for a particular person or group of people within the company, then it is limited to $25 per person.

Gifts to a married couple: If you have a business connection with both spouses and the gift is for both of them, the $25 limit doubles to $50.

Gifts vs. entertainment expense: If you take a customer to a sporting or theater event, and go with them to the event, the rule is that you must treat the cost as an entertainment expense, subject to the entertainment expense rules. In that case, the $25 limitation doesn’t apply. However, as an entertainment expense, you may deduct only 50 percent of the cost.

However, if you give a customer tickets to a theater or sporting event and don’t go with them, you have a choice. You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. For instance, suppose you gave a customer two tickets to a sporting or theater event for his or her personal use that had a total value of $30, and don’t attend the event yourself. By treating the tickets as a gift, you may deduct $25 of the expense. If you treated it as an entertainment expense, your deduction would be limited to 50% of $30, or $15. However, if you paid $100 for a ticket with a $60 face value, you would be better off treating it as an entertainment expense. This way you would be able to deduct 50% of $60, or $30. If you treated the ticket as a gift, your deduction would be limited to $25.

Gifts to employees: If an employer distributes cash, a check, or a gift certificate to an employee, the value of the gifts is considered additional wages or salary, regardless of the value. You must add the amount of the gift to the employee’s W2.

If, as a means of promoting goodwill, an employer gives an employee a gift of tangible items, such as hams, turkeys or other merchandise, the value of the gift isn't included in the employee’s income. It is, however, subject to the $25 limit.

Incidental expenses: The $25 limit does not include incidental costs, such as packaging, gift-wrapping, engraving, or mailing costs. Costs are considered incidental if they don’t add substantial value to a gift.

Promotional items: Many businesses give customers small promotional items such as key chains, pens, and notepads. Items that cost $4 or less, have your company name clearly and permanently imprinted on them, and are widely distributed may be deducted without limitation, regardless how many you give to an individual.

As you can see, there are several exceptions to the $25 rule, so it’s important that the qualifying expenses be tracked separately (typically by charging them to a separate account in your accounting records) so that the correct deduction can be claimed. Also, to obtain any deduction for a business gift, you must have documentation supporting the gift’s cost and a description of it, the date it was purchased, the business purpose of the gift, and the business relationship to the taxpayer of the person receiving the gift.

If you have any questions regarding the types of gifts or if you need assistance in how to properly account for them in your financial records, please call us for assistance.


 

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.

If you have an extended return due in the coming months please have your information to us for tax preparation as soon as possible.

Here is a recap of important dates to keep in mind as 2017 progresses:

  • September 15, 2017 - 2017 3rd quarter estimate payment 
  • September 15, 2017 - Form 1120, 1120-S and 1065, if extended 
  • September 30, 2017 - Form 1041, if extended 
  • October 16, 2017 - Form 1040, if extended 
  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 34; Tax Savings to Affect Missouri Taxpayers

Posted by Admin Posted on July 14 2017

 

TAX SAVINGS TO AFFECT MISSOURI TAXPAYERS


Written by: Madeline Brinker, CPA
                        
           

Missouri taxpayers should be aware of the changes in state tax law that will benefit them beginning with the 2017 tax year. In 2014, legislature voted to override Governor Nixon's decision to veto Senate Bill 509. This act encompasses four provisions to current Missouri individual income tax law:

Reduction in Missouri Income Tax Rate*

The top income tax rate, applied to taxable income in excess of $9,000, for Missourians has been 6% since the 1970’s. Starting with the 2017 tax year, this tax rate is scheduled to be reduced by one-tenth of a percent each year, until the total reduction reaches one-half of a percent, lowering the top tax rate to 5.5%.

Tax Rate Brackets to be Indexed for Inflation

The $9,000 taxable income threshold for reaching the top tax rate has been in place since 1931. Starting with 2017, the Missouri income tax brackets will be indexed for inflation. Those tax brackets have yet to be released.

Business Income Deduction*

A new deduction will be available to individuals who have business income reported on Schedule C (sole proprietors), Form 1120-S (S-corporations), and Form 1065 (partnerships). The deduction will eventually be 25% of business income, phasing in at a rate of 5% per year. Owners of S-corporations and partnerships will receive a deduction proportionate to their share of the entity’s earnings as reported on their Schedule K-1(s).

Personal Exemption Increase

Missourians with adjusted gross income under $20,000 will see a $500 increase in their personal exemption from $2,100 to $2,600.

*The reduction in the top individual income tax rate and the business income deduction will not go into effect unless the net general revenue collected by the State of Missouri in the previous fiscal year exceeds the amount of general revenue in any one of the three fiscal years prior to such year by at least $150 million.

 

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner.

Here is a recap of important dates to keep in mind as 2017 progresses:

  • September 15, 2017 - 2017 3rd quarter estimate payment 
  • September 15, 2017 - Form 1120, 1120-S and 1065, if extended 
  • September 30, 2017 - Form 1041, if extended 
  • October 16, 2017 - Form 1040, if extended 
  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

 

Volume 33; Health Care Reform Updates

Posted by Admin Posted on July 14 2017

 

ANNUAL FREE SHRED DAY

Free document shredding! 

You are invited:

Saturday, June 24th, 2017 9:00 am - 12:00 pm
In front of our office building located at:
8008 Carondelet Ave., Clayton, MO 63105
Bring any documents you'd like professionally destroyed.

Becker and Rosen will be hosting our annual customer appreciation Free Document Shred Day. We will have an American Document Destruction truck and personnel on site to properly dispose of any and all of your old documents.

Click this link for current IRS document retention directives .

There will be goody bag giveaways and free pastries for your enjoyment.

We look forward to seeing you!
 
 
HEALTH CARE REFORM UPDATES


Written by: Natalie Stevenson, Staff Accountant
            
           

On May 24, the House Ways and Means Committee approved three bills dealing with the premium assistance credit (also called the premium tax credit).

The premium assistance credit is a refundable tax credit provided for eligible individuals and families to subsidize the purchase of health insurance plans through an American Health Benefit Exchange, referred to as "qualified health plans." In general, advance payments with respect to the premium assistance credit are made during the year directly to the insurer. However, eligible individuals may choose to pay their total health insurance premiums without advance payments and claim the credit at the end of the taxable year.

The first bill that was passed was the “Veterans Equal Treatment Ensures Relief and Access Now Act” (VETERAN Act). This bill amends the provisions in the present law and House-passed American Health Care Act (AHCA) to codify the rule that an individual is not considered eligible for coverage under a designated Veterans Affairs health program unless enrolled in the program.

The second bill is the “Broader Options for Americans Act.” This amends the Code definition of a qualified health plan under the AHCA provisions to include unsubsidized COBRA continuation coverage. Unsubsidized COBRA continuation coverage is the payment of the applicable premiums for which is solely the obligation of the taxpayer.

Lastly, the “Verify First Act,” amends the present-law and the proposed AHCA premium assistance credit to specify that no advance payments are to be made with respect to an individual unless the information related to citizenship or immigration status is verified. The Treasury Secretary must receive confirmation from the Secretary of Health and Human Services that the Commissioner of Social Security or the Secretary of Homeland Security has verified the individual's status as a citizen or national of the U.S. or an alien lawfully present.

The proposal relating to the present-law premium assistance credit is effective for taxable years beginning after December 31, 2017. 
      
                       

MISSOURI TAX REFUND UPDATE

Written by: Cindy Smith, CPA, CFE
           
We have received several phone calls inquiring on the status of Missouri tax refunds for 2016 tax returns. There has been a significant delay by the State of Missouri in issuing the refunds. We have recently received correspondence from the Missouri State Auditor’s office stating they have been in contact with The Missouri Department of Revenue regarding the status of the 2016 refunds. The Missouri Department of Revenue indicated they anticipate paying all refunds owed by the end of the fiscal year on June 30th. In addition, the State should pay interest on any refunds issued after 45 days of filing. If you have any questions, please contact us.

 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 24th will receive an extension.

Here is a recap of important dates to keep in mind as 2017 progresses:

  • June 15, 2017 - 2017 2nd quarter estimate payment
  • September 15, 2017 - 2017 3rd quarter estimate payment 
  • September 15, 2017 - Form 1120, 1120-S and 1065, if extended 
  • September 30, 2017 - Form 1041, if extended 
  • October 16, 2017 - Form 1040, if extended 
  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 32; Trump's Tax Plan Revisited

Posted by Admin Posted on June 07 2017
SPECIAL RELEASE: TRUMP'S TAX PLAN REVISITED (UPDATE FROM OUR DECEMBER ISSUE)


Written by: Patrick Doyle, staff accountant
           

With the 2016 tax season officially behind us, now’s a good time to revisit potential tax law reform in 2017, a topic addressed in our newsletter issue following the election. After taking office in January, President Trump’s administration had been primarily focused on repeal of the Affordable Care Act (“Obamacare”). Both the White House and Republican lawmakers have recently turned their attention back to tax reform following the unsuccessful attempt at repeal. On May 3rd, U.S. National Economic Director Gary Cohn and Treasury Secretary Steven Mnuchin, on behalf of the administration, revealed a one page summary listing the “core principles” of the President’s tax reform plan. In short, not much changed from the initial proposal released at the end of the campaign. Both Director Cohn and Secretary Mnuchin emphasized that the details underlying those principles were still to be negotiated. With that in mind, let’s take a look again at the highlights from the original proposal and a summary of the “core principles” revealed May 3rd.

Click here to read the Becker and Rosen December 2016 Newsletter, volume 30 This is the newsletter which provided some narrative on President Trump’s initial proposal following the campaign, as well as some individual tax planning ideas to consider for 2016-2017.
           
Here is a summary of the highlights (“core principles”) from the tax reform plan revealed May 3rd of this year by Director Cohn and Secretary Mnuchin on behalf of the Trump Administration:

For business taxpayers 

  • Tax rate would decrease from 35% to 15% for corporations, and the top rate for pass-through businesses (S-Corporation, LLC, Partnership) would be reduced from 39.6% to 15%
  • There would be a one-time repatriation tax on offshore earnings. The exact percentage of the tax rate is still being negotiated. Note that the proposal on the campaign trail had indicated 10% 
  • There would be a shift from a worldwide system of taxation (under which a U.S. taxpayer is generally taxed on its worldwide income regardless of where earned) to a territorial system (under which income would generally be taxed in the country where it is earned). 
    • The plan did not include a border adjustment tax, which several House Republicans favor as a way to offset revenue losses resulting from other tax cuts. 

For individual taxpayers

  • The current seven individual income tax rates would be reduced to three - 10%, 25%, and 35%. Tax brackets (i.e., income levels at which these rates would apply) have not yet been determined.
  • The standard deduction would be doubled, with the intended result that fewer taxpayers would itemize deductions.
  • The alternative minimum tax (AMT) would be repealed. 
  • There would be some sort of tax relief for child and dependent care expenses, although no specifics were provided. 
  • The 3.8% net investment income tax (“Obamacare tax”) would be repealed. 
  • The estate tax (transfer tax imposed on decedents with gross estates > $5,490,000 in 2017) would be repealed.
  • Most “tax breaks” would be repealed. Exceptions would be made for certain provisions involving home ownership, charitable giving, and retirement savings. In response to a question from the press, Secretary Mnuchin said specifically that the mortgage interest deduction would be retained, and that the deduction for state and local income taxes would be eliminated. 

The plan overview revealed on May 3rd didn’t include any proposals for raising new revenue to offset that lost by the tax cuts. The House Ways and Means Committee (working on its own proposal but in conjunction with the Trump Administration) will unveil the initial tax bill, which still aims for a revenue-neutral package. As for a timeframe, the administration said they were determined to “get it done this year (2017)”.

So where do we go from here? As mentioned above, it’s still a little too early to tell what will happen with reform, a monumental task to say the least. But most advisors agree that there will be a major overhaul to the tax code occurring sometime in 2017-2018. The last major overhaul occurred more than 30 years ago…so stay tuned. Until then, if you have any questions regarding potential reform, or if you’re concerned with a specific issue applicable to your own tax situation, please contact us.          
           

ANNUAL FREE SHRED DAY IN JUNE
Free document shredding this coming in June! 

You are invited:

Saturday, June 24th, 2016 9:00 am - 12:00 pm
In front of our office building located at:
8008 Carondelet Ave., Clayton, MO 63105
Bring any documents you'd like professionally destroyed.

Becker and Rosen will be hosting our annual customer appreciation Free Document Shred Day. We will have an American Document Destruction truck and personnel on site to properly dispose of any and all of your old documents.

Click this link for current IRS document retention directives .

There will be goody bag giveaways and free pastries for your enjoyment.

We look forward to seeing you!
 
 
IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 24th will receive an extension.

Here is a recap of important dates to keep in mind as 2017 progresses:

  • June 15, 2017 - 2017 2nd quarter estimate payment
  • September 15, 2017 - 2017 3rd quarter estimate payment 
  • September 15, 2017 - Form 1120, 1120-S and 1065, if extended 
  • September 30, 2017 - Form 1041, if extended 
  • October 16, 2017 - Form 1040, if extended 
  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

 

Volume 31; What the 21st Century Cures Act Is All About

Posted by Admin Posted on June 07 2017

 

WHAT THE 21st CENTURY CURES ACT IS ALL ABOUT


Written by: Shari McVey

On December 13, President Obama signed into law the "21st Century Cures Act". In addition to providing a medical innovation package that funds medical research, accelerates cutting-edge treatments for rare diseases, and makes significant reforms to the mental health system, the act also allows small employers to provide Health Reimbursement Arrangements (HRAs) to their employees without facing penalties for failing to satisfy certain Affordable Care Act (ACA) requirements. Here we will explore what effects that will have on small business HRAs:


Small Employer HRAs Exempted from Group Health Plan Requirements

HRAs are arrangements under which an employer agrees to reimburse medical expenses (including health insurance premiums) up to a certain amount per year, with unused amounts available to reimburse medical expenses in future years. The reimbursement is excludable from the employee's income.

HRAs generally are considered to be group health plans under provisions of which were incorporated into the ACA code.

Under the new 21st Century Cures Act, a "qualified small employer HRA" is not treated as a group health plan for income tax purposes. A qualified small employer HRA would meet the following requirements: 

  • The employer employs fewer than 50 employees - and does not offer a group health plan to any of its employees
  • The HRA is provided on the same terms to all eligible employees. (Employees may be excluded under these criterions: employees who haven't completed 90 days of service, employees who haven't attained age 25, part-time or seasonal workers, employees covered in a collective bargaining unit, and certain nonresident aliens.)
  • The HRA is funded solely by an eligible employer, and no salary reduction contributions may be made under the HRA.
  • The HRA provides, after the employee provides proof of coverage, for the payment of, or reimbursement of, expenses for medical care incurred by the eligible employee or the employee's family members
  • The amount of payments and reimbursements do not exceed $4,950 ($10,000 in the case of an arrangement that also provides for payments or reimbursements for family members of the employee). For any year beginning after 2016, the above dollar amounts are subject to cost of living increases. For employees who are covered by a qualified arrangement for less than an entire year, the above dollar amounts are prorated.


The exemption of small employer HRAs from the group health plan requirements is generally effective for years beginning after Dec. 31, 2016.

Small Employer HRA Reporting & Notice Requirements

A small employer funding a qualified HRA for any year must, not later than 90 days before the beginning of the year (in the case of an employee who is not eligible to participate in the arrangement as of the beginning of such year, the date on which the employee is first eligible), provide a written notice to each eligible employee which includes: 

  • a statement of the amount of the employee's permitted benefit under the arrangement for the year
  • a statement that the eligible employee should provide the information described in the clause to any health insurance exchange to which the employee applies for advance payment of the premium assistance tax credit 
  • a statement that if the employee is not covered under minimum essential coverage for any month, the employee may be subject to tax for such month, and reimbursements under the arrangement may be includible in gross income. 


Employers also have to report the total amount of permitted benefit for the year under a qualified arrangement on their employees' W-2s.

If an employer fails to provide the required notice (unless the failure is shown to be due to a reasonable cause) the employer will be subject to a $50 per-employee, per-incident-of-failure penalty, subject to a $2,500 calendar year maximum.

The notice and reporting requirements are effective for years beginning after Dec. 31, 2016 

 

IMPORTANT TAX DATES TO REMEMBER


We want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 24th will receive an extension.

Here is a recap of important dates to keep in mind as 2017 progresses:

  • January 17, 2017 - 2016 4th quarter estimate payment
  • January 31, 2017 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2017 - Form 1065 and 1120-S
  • April 18, 2017 - Form 1040, 1041, and 1120, unless extended 
  • April 18, 2017 - 2017 1st quarter estimate payment 
  • June 15, 2017 - 2017 2nd quarter estimate payment
  • September 15, 2017 - 2017 3rd quarter estimate payment 
  • September 15, 2017 - Form 1120, 1120-S and 1065, if extended 
  • September 30, 2017 - Form 1041, if extended 
  • October 16, 2017 - Form 1040, if extended 
  • January 16, 2018 - 2017 4th quarter estimate payment    
                     
CORRECTION: HOW TRUMP'S TAX PROPOSALS MAY EFFECT YOU
 
Please note there has been a correction issued to the article How Trump's Tax Proposals May Effect You that was published in Volume 30 of the Becker and Rosen Newsletter. Feel free to reach out to us with any questions you may have. The graph below reflects the correct filing status dollar amounts for Trump's Proposal in regard to long term capital gain and qualified dividend brackets (The corrections are italicized):
                                                                                                              

INDIVIDUALS
 
CURRENT LAW (2016)

TRUMP PROPOSAL
LT Cap Gain and Qualified
Dividend Brackets


Filing Status Single:
0% ($0 - $37,650)
15% ($37,650 - $415,050)
20% ($415,050 +)


Filing Status MFJ:
0% ($0 - $75,300)
15% ($75,300 - $466,950)
20% ($466,950 +)


 


Filing Status Single:
0% ($0 - $37,500)
15% ($37,500 - $112,500)
20% ($112,500 +)

                     
Filing Status MFJ:
0% ($0 - $75,00)
15% ($75,000 - $225,000)
20% ($225,000 +) 

                       
                       

 

                        
                  
 
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 30; How Trump's Tax Proposals May Effect You

Posted by Admin Posted on June 07 2017

 

HOW TRUMP'S TAX PROPOSALS MAY EFFECT YOU
 
Written by:
                       
Patrick Doyle, staff accountant, and Cindy Smith, CPA, CFE

   
As a result of the 2016 election, Becker and Rosen thought it would be a good time to provide some narrative on potential
tax law changes in store for the foreseeable future. Republicans will retain control of both the House of Representatives and the Senate Majority in Congress effective January 3, 2017. And President-Elect Donald Trump (Republican) will take the oval office on January 20, 2017. With that in mind, let’s take a look at the highlights of his tax reform proposal (as of 11/10/2016) and how you could benefit from proper tax planning under each scenario:
                                                                                                              

INDIVIDUALS
 
CURRENT LAW (2016)

TRUMP PROPOSAL
Ordinary Income Brackets
Filing Status Single:
10% ($0 - $9,275)
15% ($9,275 - $37,650)
25% ($37,650 - $91,150)
28% ($91,150 - $190,150)
33% ($190,150 - $413,350)
35% ($413,350 - $415,050)
39.6% ($415,050 + )

Filing Status MFJ (Married Filing Joint):
10% ($0 - $18,550)
15% ($18,550 - $75,300)
25% ($75,300 - $151,900)
28% ($151,900 - $231,450)
33% ($231,450 - $413,350)
35% ($413,350 - $466,950)
39.6% ($466,950 + )

Filing Status HOH (Head of Household):
10% ($0 - $13,250)
15% ($13,250 - $50,400)
25% ($50,400 - $130,150)
28% ($130,150 - $210,800)
33% ($210,800 - $413,350)
35% ($413,350 - $441,000)
39.6% ($441,000 + )

 

Filing Status Single:
12% ($0 - $37,500)
25% ($37,500 - $112,500)
33% ($112,500 +)





Filing Status MFJ (Married Filing Joint):
12% ($0 - $75,000)
25% ($75,000 - $225,000)
33% ($225,000 +)





Filing Status HOH (Head of Household): Eliminated
LT Cap Gain and Qualified
Dividend Brackets

Filing Status Single:
0% ($0 - $37,650)
15% ($37,650 - $415,050)
20% ($415,050 +)


Filing Status MFJ:
0% ($0 - $75,300)
15% ($75,300 - $466,950)
20% ($466,950 +)


Filing Status HOH:
0% ($0 - $50,400)
15% ($50,400 - $441,000)
20% ($441,000 +)

An individual’s rate on ordinary income (see above) determines rate at which LT cap gains and qualified dividends are taxed (0%, 15%, or 20%)

Filing Status Single:
0% ($0 - $37,500)
15% ($37,500 - $112,500)
20% ($112,500 +)
 

Filing Status MFJ:
0% ($0 - $75,000)
15% ($75,000 - $225,000)
20% ($225,000 +)

                       
Filing Status HOH: Eliminated




Existing structure is maintained, using brackets above to determine rate at which LT cap gains and qualified dividends are taxed (0%, 15% or 20%)

 



Net Investment Income Tax
(3.8% under ACA)

Additional tax of 3.8% imposed under the Affordable Care Act (ACA) for individuals with investment income (interest, dividends, cap gains, rental income, non-qualified annuities, etc.) whose total modified adjusted gross income from all sources exceeds:

-Single (Over $200,000 Modified AGI)
-MFJ (Over $250,000 Modified AGI)
-MFS (Over $125,000 Modified AGI)
-HOH (Over $200,000 Modified AGI)

 





Repealed









Alternative Minimum Tax (AMT)

Alternative method of calculating a taxpayer’s liability. Individuals owe the higher of regular tax or AMT with each year’s return. Under AMT rules, certain income, deductions (both the standard and certain itemized), exemptions, and credits are disallowed or added back to the regular tax calculation. Taxpayers are allowed an AMT exemption which functions as a deduction against AMT income to determine whether AMT tax is due. The exemption amounts are:

-Single ($53,900)
-MFJ ($83,800)
-MFS ($41,900)
-HOH ($53,900)
The AMT brackets/rates are:
26% ($0 – 186,300 of AMTI)
28% (186,300 + of AMTI)

AMTI = Alternative Min. Taxable Inc.

 









Repealed

Standard Deductions

Single - $6,300
MFJ - $12,600
HOH - $9,300

                       

Single - $15,000
MFJ - $30,000
HOH - Filing Eliminated
Itemized Deductions
Deductions allowed for:
-Medical Expenses
-Taxes (income, real estate, pers. prop.)
-Interest (mortgage and investment)
-Charitable Contributions (cash and non)
-Casualty and Theft Losses
-Other Miscellaneous Deductions i.e. unreimbursed job expenses, tax return preparation fees, legal fees related to tax matters, investment advisory fees, etc.

Certain deductions listed above are subject to their own limitations on deductibility. There’s no limitation per se on total itemized deductions allowed for the year. However, the itemized deductions lose value once a taxpayer’s gross income has reached a certain threshold by way of a phase-out. For 2016, those income thresholds are as follows:
-Single ($259,400)
-MFJ ($311,300)
-HOH ($285,350)

 







No indication of major change to the types of itemized deductions allowed against income, however, itemized deductions in total will be capped at the following limits:
-Single ($100,000)
-MFJ ($200,000)
-HOH (Filing Status Eliminated)
Personal Exemptions
Personal exemption amount is $4,050 per taxpayer/dependent. The personal exemption is netted against income after deductions and before tax is computed.

The personal exemption starts to phase out when a taxpayer’s gross income reaches a certain threshold. And it is completely phased out at the top end of the threshold. For 2016, those amounts are as follows:
-Single ($259,400 - 381,900)
-MFJ ($311,300 – 433,800)
-HOH ($285,350 – 407,850)

 







Repealed
Filing Statuses
-Single
-Head of Household (HOH)
-Married Filing Separate (MFS)
-Married Filing Joint (MFJ)
-Qualifying Widower

-Single
-Married Filing Separate (MFS)
-Married Filing Joint (MFJ)
-Qualifying Widower

 
                                                                                   

Items to consider for your 2016-2017 individual income tax planning:
  • Deferring income beyond 12/31/2016 in order to take advantage of potentially lower income tax rates, including potential repeal of AMT and the 3.8% Net Investment Income Tax
    • Commissions or other bonuses through employer
    • Fees billed as a self-employed independent contractor
    • Capital gains on sale of stock or other property
    • Distributions from retirement plans and other tax-deferred plans * (401K, IRA, annuity)
      • Note: taxpayers are required to take minimum distributions annually starting on or before April 1st of the year following the year the taxpayer turned 70 ½. For this purpose, deferring the initial required distribution from 12/31/16 to 4/1/17 may make sense. Excess distributions above the minimum may be deferred.
    • Conversions of Traditional IRA’s to Roth IRA’s (defers tax on conversion income) 
  • Accelerating deductions before 12/31/2016 in order to take advantage of potentially higher rates in the current year, giving more value to these itemized deductions.
    • Additional year-end charitable contributions (cash, stock, used items, etc.)
    • Contact medical/dental/pharmaceutical providers for payment of any outstanding items
      • Note: taxpayers will want to consider the 10% adjusted gross income threshold
    • Send in 4th quarter state estimated tax payments early (actual due date 1/15/17)
      • Note: taxpayers will want to consider AMT implications in doing so
    • Pay real estate and personal property tax bills timely
    • Pre-pay January 2017 monthly mortgage for additional interest deduction 

While we cannot say for certain if tax reform will take place, most advisors agree it’s more a question of when? In that light, if you have any questions regarding potential individual tax reform, or if you’re concerned about your own situation, please contact us. We would be happy to discuss.         

 
IMPORTANT TAX DATES TO REMEMBER

 
We want to remind you of important tax due dates and deadlines that are just around the corner. In addition to these dates please keep in mind that information provided to our firm for 1040 preparation on or after March 24th will receive an extension.

Here is a recap of important dates to keep in mind as 2017 progresses:
           

  • January 17, 2017 - 2016 4th quarter estimate payment
  • January 31, 2017 - All information forms (W2/1099) are due to recipients and must be filed with the government
  • March 15, 2017 - Form 1065 and 1120-S
  • April 18, 2017 - Form 1040, 1041, and 1120, unless extended
  • April 18, 2017 - 2017 1st quarter estimate payment
  • June 15, 2017 - 2017 2nd quarter estimate payment
  • September 15, 2017 - 2017 3rd quarter estimate payment
  • September 15, 2017 - Form 1120, 1120-S and 1065, if extended
  • September 30, 2017 - Form 1041, if extended
  • October 16, 2017 - Form 1040, if extended
  • January 16, 2018 - 2017 4th quarter estimate payment 
                 
                                 
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

 

Volume 29; Tax Saving Tips for the Remainder of 2016

Posted by Admin Posted on Nov 03 2016

 

TAX SAVING MOVES FOR THE REST OF 2016


Written by: Ashley Hoeffken, Staff Accountant
                  
Tax planning before the end of the year can be a great benefit in helping you save on your taxes. The following are some ideas on how to efficiently manage your tax liability.

  • Electing to claim sales and use tax as an itemized deduction instead of state income taxes. Some taxpayers make this election when they purchase “big-ticket” items such as motor vehicles, boats, homes and home building materials. This election can also help lower those who owe AMT taxes.

 

  • Traditional IRA and Roth IRA year-end moves. Taxpayers can covert funds in a traditional IRA to Roth IRAs within 60 days of a distribution. Why would someone want to do this? Traditional IRA distributions are taxed as ordinary income with a few exceptions. However Roth IRA distributions are tax-free if they are “qualified distributions”. To be a “qualified distribution” the distribution would be made after the 5-tax-year period that begins with the first tax year for which the taxpayer made the contribution to a Roth IRA and when the account owners is 59 ½ years of age or older, due to a death, disability or for the purchase of a qualified first time homebuyer. Traditional IRAs are subject to the lifetime required minimum distribution rules that Roth IRAs are not subject to, in addition to many other tax advantages.

 

  • Charitable contributions. Individual taxpayers who are at least 70 ½ years old can contribute to charities directly from their IRAs without having the amount of the contribution included in their gross income. Making this tax move may also reduce their tax liability even more than if they would have just received the distribution and then contributed that amount to a charity.

 

  • Energy tax incentives. Taxpayers may be eligible for a nonbusiness energy property credit when purchasing “qualified energy efficiency improvements” that must be placed in service before 2017. Such improvements include insulation material or systems that are designed to reduce the heat loss or gain of a home, exterior windows, skylights, and exterior doors, metal roofs with appropriate coatings or asphalt roofs with cooling granules. To qualify for the credit, the components must be expected to last for at least five years and can’t include amounts paid for onsite preparation, assembly, or original installation.

 

  • Expensing deductions. Business can elect to expense certain lower-cost business assets rather than capitalizing them. In previous years, assets purchased for $500 or more had to be capitalized; however now that amount has increased to $2,500 or more. To use this many businesses file a “de minimis safe harbor election” to expense those assets in the year that they were bought and placed in service. Businesses can use this to save the Code Sec. 179 allowance for assets that don’t qualify for this election. And unlike the Code Sec. 179 expensing deduction, there is no aggregate annual dollar limit on the amount that can be deducted under the de minimis safe harbor election. Businesses benefit because amounts expensed under the safe harbor won’t eat into their $500,000 Code Sec. 179 expensing limit.

 

Year-end tax planning is so important so you can take advantage of the many temporary “extender” tax provisions that are still in the Code. These provisions such as business tax deductions, tax credits and other tax-saving laws are in effect through 2016 and the continued renewal may be uncertain.  Please let us know if you would like to meet with anyone to discuss what you can do to manage your tax liability for 2016 and future years.

 

SPECIAL REPRINT:
FAIR LABOR STANDARDS OVERTIME REQUIREMENTS


Written by: Natasha Swan, Executive Assistant               

On May 18th the Department of Labor released the Final Rule on overtime that increased the thresholds for overtime rules, expanding the number of employees eligible for overtime pay. Here is an overview of the new mandates:

  • Under the Fair Labor Standards Act (FLSA), employees who work more than 40 hours in a week are entitled to overtime pay, unless they meet the requirements of certain wage and duties tests.
  • The Salary level for exempt employees (non-overtime eligible employees) will increase to $47,476 annually ($913 per week) (from the current $23,660 annually) on December 1st, 2016.
  • To qualify for exemption status, a white collar employee(exempt employee) generally must:
    • Be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed.
    • Be paid more than a specified weekly salary level, which is $913 per week
    • Primarily perform executive, administrative, or professional duties, as defined in the department’s regulations (the duties test)
  • Employers will be required to implement the updated salary level requirements via:
    • Increasing the salary of any employee who meets the duties test to at least the new salary level ($47,476 annually) to retain his or her exempt status
    • Pay an overtime premium of one and a half times the employee’s regular rate of pay for any overtime hours worked
    • Reduce or eliminate overtime hours- Some employers will use this option to reduce the burden of increase wages
    • Reduce the amount of pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) and add pay to account for overtime for hours worked over 40 in the workweek, to hold total weekly pay constant.
  • The FLSA rules encompass businesses with 2 or more employees, however coverage isn’t solely determined based on the number of employees.

    Generally, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by the FLSA. In addition, employees of certain entities are covered by the FLSA regardless of the amount of gross volume of sales or business done. These entities include: hospitals; businesses providing medical or nursing care for residents; schools (whether operated for profit or not for profit); and public agencies.

    Even if an employer is not covered on an enterprise-wide basis, employees may be individually covered by the FLSA if their work regularly involves them in commerce between States (“interstate commerce”). The FLSA covers individual workers who are “engaged in commerce or in the production of goods for commerce.

Companies have until December 1, 2016, to make determinations on which employees to reclassify as nonexempt and implement the changes.

Employers should have documentation on how they determined any status changes and should discuss changes with employees before changes are put into effect.

For more information or further questions please visit the DOL's Final Overtime Rule webpage. Or, feel free to reach out to one of our tax professionals at any time.

 

IMPORTANT TAX DATES TO REMEMBER


The due dates for tax returns on extension are growing near. If you have a return on extension and we will be preparing the return, please have your tax preparation information to us as soon as possible so we may complete in a timely manner for you.

Here is a recap of important tax due dates to keep in mind for the remainder of the year:


January 16, 2017 - 2016 4th quarter estimate payment due              
                 

INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 28; Fair Labor Standards Overtime Requirements

Posted by Admin Posted on Oct 13 2016

 

FAIR LABOR STANDARDS OVERTIME REQUIREMENTS


Written by: Natasha Swan, Executive Assistant               

On May 18th the Department of Labor released the Final Rule on overtime that increased the thresholds for overtime rules, expanding the number of employees eligible for overtime pay. Here is an overview of the new mandates:

 

  • Under the Fair Labor Standards Act (FLSA), employees who work more than 40 hours in a week are entitled to overtime pay, unless they meet the requirements of certain wage and duties tests.

 

  • The Salary level for exempt employees (non-overtime eligible employees) will increase to $47,476 annually ($913 per week) (from the current $23,660 annually) on December 1st, 2016.

 

  • To qualify for exemption status, a white collar employee(exempt employee) generally must:
    • Be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed.
    • Be paid more than a specified weekly salary level, which is $913 per week
    • Primarily perform executive, administrative, or professional duties, as defined in the department’s regulations (the duties test)

 

  • Employers will be required to implement the updated salary level requirements via:
    • Increasing the salary of any employee who meets the duties test to at least the new salary level ($47,476 annually) to retain his or her exempt status
    • Pay an overtime premium of one and a half times the employee’s regular rate of pay for any overtime hours worked
    • Reduce or eliminate overtime hours- Some employers will use this option to reduce the burden of increase wages
    • Reduce the amount of pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) and add pay to account for overtime for hours worked over 40 in the workweek, to hold total weekly pay constant.

 

  • The FLSA rules encompass businesses with 2 or more employees, however coverage isn’t solely determined based on the number of employees.

    Generally, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by the FLSA. In addition, employees of certain entities are covered by the FLSA regardless of the amount of gross volume of sales or business done. These entities include: hospitals; businesses providing medical or nursing care for residents; schools (whether operated for profit or not for profit); and public agencies.

    Even if an employer is not covered on an enterprise-wide basis, employees may be individually covered by the FLSA if their work regularly involves them in commerce between States (“interstate commerce”). The FLSA covers individual workers who are “engaged in commerce or in the production of goods for commerce.

Companies have until December 1, 2016, to make determinations on which employees to reclassify as nonexempt and implement the changes.

Employers should have documentation on how they determined any status changes and should discuss changes with employees before changes are put into effect.

For more information or further questions please visit the DOL's Final Overtime Rule webpage. Or, feel free to reach out to one of our tax professionals at any time.

 

 
IMPORTANT TAX DATES TO REMEMBER


The due dates for tax returns on extension are growing near. If you have a return on extension and we will be preparing the return, please have your tax preparation information to us as soon as possible so we may complete in a timely manner for you.

Here is a recap of important tax due dates to keep in mind for the remainder of the year: 
                                

  • October 17, 2016 - 2015 Form 1040 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due              
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 27; Sales Tax on Deliveries

Posted by Admin Posted on Oct 13 2016

 

IMPORTANT TAX DATES TO REMEMBER


The due dates for tax returns on extension are growing near. If you have a return on extension and we will be preparing the return, please have your tax preparation information to us as soon as possible so we may complete in a timely manner for you.

Here is a recap of important tax due dates to keep in mind for the remainder of the year: 
 

  • September 15, 2016 - 2016 3rd quarter estimate payment due
  • September 15, 2016 - 2015 Forms 1120, 1120-S, 1041, and 1065 due date, if extended
  • October 17, 2016 - 2015 Form 1040 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due              
     
SALES TAX ON DELIVERIES


Written by: Annie Beckel, Staff Accountant

In July 2016, the Missouri Department of Revenue (MO DOR) announced a recent Missouri Supreme Court decision regarding charging sales tax on delivery fees. Many businesses registered with the MO DOR have received letters stating that they may be subject to this new ruling. If your Company charges a delivery fee as part of the normal sale of goods, then you may need to start remitting sales tax on your delivery charges, even if separately stated.

Generally, if you are selling goods and charging delivery fees to Missouri customers as part of your normal course of business, you will need to comply with this new ruling. The MO DOR has clarified this change by explaining that delivery charges are taxable whenever the sale is taxable. If the sale isn’t taxable, then the delivery charge won’t be taxable. These changes were effective July 29th, 2016.

The MO DOR has provided an email address for any entity requiring additional information: salesuse@dor.mo.gov. If you have specific questions, you can direct them to the Department of Revenue or contact our office to discuss.
 
 

WHAT'S NEW WITH US?

A few weeks ago our very own Jon Becker went skydiving for the very first time to raise awareness and funds for an amazing cause, The Angel Band Project. We are so proud! Check out a video and pictures of the whole adventure over on our Facebook page.

 
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 26; Child and Dependent Care Tax Credit

Posted by Admin Posted on Aug 30 2016

 

CHILD AND DEPENDENT CARE TAX CREDIT


Written by: Madeline Brinker, Staff Accountant

Many parents enroll their children in day camps or pay for daycare while school is out for the summer. If you are a working parent, be sure that you are not missing out on the Child and Dependent Care Credit that may be available to you.

A Federal tax credit is available to families who enroll their children under age 13 in day camps or other childcare programs during the summer and throughout the year. In order for the childcare expenses to qualify, there is a set of criteria that must be met:
 

  • You and your spouse if you are married, must work or be looking for work. (The exception to this rule is met if you are a full-time student)
  • If you are married, you must file your return jointly to qualify for the credit. 
  • Overnight camps, summer school tutoring, and care provided by your child under age 19 or someone else you claim as a dependent on your tax return do not qualify as dependent care expenses for purposes of the credit.

Childcare expenses used to calculate the credit are limited to $3,000 for one qualifying child or $6,000 for two or more qualifying children. The credit you receive is calculated as 20-35% of the allowable expenses. Where you fall in the 20-35% range is determined by your income level. If you receive dependent care benefits through your employer, the amount of expenses eligible for the credit are reduced by the benefits received.

If you believe that you qualify for the Child and Dependent Care Credit, be sure to keep all of your records and receipts so that you have them available when you file your 2016 tax return next year. If you have any further questions about this topic or any other tax planning questions, feel free to reach out to one of our tax professionals at any time.  
         

IMPORTANT TAX DATES TO REMEMBER


Here is a recap of important tax due dates to keep in mind for the remainder of the year:  

  • September 15, 2016 - 2016 3rd quarter estimate payment due
  • September 15, 2016 - 2015 Forms 1120, 1120-S, 1041, and 1065 due date, if extended
  • October 17, 2016 - 2015 Form 1040 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due              
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 25; Disaster Releif Iling Date - Handling State Notices

Posted by Admin Posted on Aug 30 2016

 

 

DISASTER RELEIF FILING DATE - HOW TO HANDLE STATE NOTICES

Written by: Natalie Stevenson, Staff Accountant

If you were a resident of one of the many Missouri counties affected by the December 2015 storms and flooding, you qualified to file your 2015 tax return and pay any taxes due by May 16, 2016, rather than the usual due date. The IRS automatically provided filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers did not need to contact the IRS to get this relief. However, the state of Missouri has been sending out notices for late payment if taxpayers used the May 16, 2016 deadline.

If you receive a late filing or late payment penalty notice from Missouri that has an original or extended filing, payment, or deposit due date falling within the postponement period, you should call the phone number on the notice to request penalty abatement. You will need to explain that you are a resident of an applicable county, and that you are seeking relief due to the Missouri flooding (See below for a list of the applicable counties).

The tax relief was part of a coordinated federal response to the damage caused by severe storms and flooding in December 2015 and is based on local damage assessments by the Federal Emergency Management Agency (FEMA). All workers assisting the relief activities who were affiliated with a recognized government or philanthropic organization also qualified for the relief.

The tax relief postponed various tax filing and payment deadlines that occurred starting on December 23, 2015. As a result, affected individuals and businesses had until May 16, 2016 to file their returns and pay any taxes due. This included 2015 income tax returns normally due on April 18, 2016. It also included the January 15, 2016 and April 18, 2016 deadlines for making quarterly estimated tax payments. A variety of business tax deadlines were also affected including the February 1, 2016 and May 2, 2016 deadlines for quarterly payroll and excise tax returns and the special March 1, 2016 deadline for farmers and fishermen who choose to forgo making estimated tax payments. In addition, the IRS waived late-deposit penalties for federal payroll and excise tax deposits normally due on or after December 23, 2016 and before January 7, 2016 if the deposits were made by January 7, 2016.

The disaster declaration for individual assistance was issued by FEMA. The IRS stated that affected taxpayers in Barry, Barton, Camden, Cape Girardeau, Cole, Crawford, Franklin, Gasconade, Greene, Hickory, Jasper, Jefferson, Laclede, Lawrence, Lincoln, Maries, McDonald, Morgan, Newton, Osage, Phelps, Polk, Pulaski, Scott, St. Charles, St. Francois, St. Louis, Ste. Genevieve, Stone, Taney, Texas, Webster and Wright counties would receive the special tax relief.

If you have any questions about a notice or need help responding to one, please send a copy of the notice to us, and we can assist you.


 
IMPORTANT TAX DATES TO REMEMBER


Here is a recap of important tax due dates to keep in mind for the remainder of the year:  

  • September 15, 2016 - 2016 3rd quarter estimate payment due
  • September 15, 2016 - 2015 Forms 1120, 1120-S, 1041, and 1065 due date, if extended
  • October 17, 2016 - 2015 Form 1040 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due              
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 24; Tax Return Acceptance Letter

Posted by Admin Posted on Aug 30 2016

 

 

ANNUAL BECKER AND ROSEN FREE  DOCUMENT SHRED DAY

Free document shredding this coming weekend!

You are invited:

Saturday, June 4th, 2016 9:00 am - 12:00 pm
In front of our office building located at:
8008 Carondelet Ave., Clayton, MO 63105
Bring any documents you'd like professionally destroyed.

Becker and Rosen will be hosting our annual customer appreciation Free Document Shred Day this coming Saturday. We will have an American Document Destruction truck and personnel on site to properly dispose of any and all of your old documents. 

Click this link for current IRS document retention directives .

There will be goody bag giveaways and free pastries for your enjoyment.

We look forward to seeing you! 

 
TAX RETURN ACCEPTANCE LETTER FROM BECKER AND ROSEN

Becker and Rosen now has the ability to supply our clients with formal acceptance letters generated by our tax software for all electronically filed tax returns. As a courtesy to our clients we are able offer these letters, upon request, for previous year's returns if you require copy for your records.

If you would like a copy of an acceptance letter for a previous year's tax return that our firm completed and electronically filed for you please send a request to the following email address:
info@brcpallc.com Please include your name and the year that you are requesting. We will be happy email a password protected copy of the acceptance letter to the main email address tied to your account.


As always, we are thankful to you for your loyal patronage.
 
 
IMPORTANT TAX DATES TO REMEMBER


Here is a recap of important tax due dates to keep in mind for the remainder of the year:

  • June 15, 2016 - 2016 2nd quarter estimate payment due
  • September 15, 2016 - 2016 3rd quarter estimate payment due
  • September 15, 2016 - 2015 Forms 1120, 1120-S, 1041, and 1065 due date, if extended
  • October 17, 2016 - 2015 Form 1040 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due              
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 23; Reducing the Risk of Emezzlement in Your Organization

Posted by Admin Posted on Aug 30 2016

 

Reducing the Risk of Embezzlement in your Organization

 
Written by: Cindy Smith, CPA, CFE

Is your company vulnerable to embezzlement? Do you have adequate controls in place to prevent it?


Most organizations believe embezzlement won’t happen to them. They want to believe all their employees are loyal, hard-working individuals. While most of them are probably honest people working for the benefit of your company, there is still a serious risk they may embezzle from you, especially if you give them the opportunity by not implementing adequate internal controls. While it is important to trust your employees, it does not mean you should turn a blind eye to what they are doing with your finances. As Ronald Reagan said, “Trust but verify.”

In order for an employee to commit fraud, three components need to be in place:

  1. They need to feel some type of pressure (i.e. “I need the money”)
  2. They need to be able to rationalize what they are doing (i.e. “I deserve the money”)
  3. They need to have the opportunity to take the money (i.e. “I don’t think I’ll get caught”)

The third item – opportunity - is where the business owner has the best ability to reduce the chances of embezzlement. This is why internal controls are essential. An employee can feel pressure and be able to rationalize theft, but if they don’t have the opportunity, they can’t take your money.

The following are some useful controls that should be considered in your organization:

  • Separation of duties - splitting up tasks and privileges, especially those related to financial functions, between multiple employees reduces the risk that embezzlement could occur without detection.
  • Bank accounts - Monthly bank reconciliations should be performed by someone who does not make deposits or initiate cash disbursements. Bank statements (including copies of cancelled checks) should be delivered directly to management or reviewed online by management. Bank accounts should be set up so a notification is sent to management if transfers to other bank accounts are made or if transactions are over a certain threshold.
  • Check signing - When management signs checks, the original invoices should be attached so they can verify the payment is valid. Invoices should be marked as “paid” with the check number listed in order to avoid duplication.
  • Physical access - Lock up unused checks, ensure only management has administrative rights in the accounting software, and restrict access to supplies, inventory and petty cash.
  • Payroll - Payroll reports should be reviewed by someone other than the person entering hours, preparing payroll checks, or distributing checks. Look for unusual activity such as excessive hours, unauthorized bonuses, excessive withholdings, or unfamiliar names on payroll.
  • Restrict use of credit cards - Control who has access to your credit card information, require detailed receipts for charges, and review each statement in detail every month. Talk to your credit card company about fraud controls such as specific-use cards and transaction limits.
  • Review Financial Reports - Review your financial statements, sales, collection and/or purchasing reports, as well as your accounts receivable and accounts payable aging reports periodically. Compare them to historical data, budgets, projections, and if applicable, as a percentage of revenues. Investigate any unusual fluctuations or significant changes.
  • Have an “open-door” policy - 50% of all embezzlements are discovered because a co-worker notified management.
  • Be Sensitive to “Red-Flag” Behavior - While certain behaviors don’t necessarily mean someone is embezzling, there are some red-flags that should be explored.
    • Employees not taking full weeks of vacation embezzlers typically don’t take consecutive days off because they don’t want someone else covering their job and potentially discovering theft.
    • Employees working outside of normal hours dishonest employees prefer not to have anyone looking over their shoulder while they are committing their crime or concealing it. In addition, the more they embezzle the more difficult and time consuming it is to alter the records to conceal it, so they work unusual hours so they have the time and opportunity to cover it up.
    • Employees who get defensive when questioned about financial transactions, job performance, or financial reports – It is common for embezzlers to react defensively or give excuses when questioned. They are usually trying to divert attention away from themselves.
    • Employees whose lifestyle doesn’t match their income – It is common for embezzlers to start driving better cars, go on expensive vacations, dress better, or upgrade their homes.
    • Increasing delays in receiving financial reports from staff – It takes extra time to conceal theft in the records, which causes delayed (or missing) financial reports. Plus, embezzlers may not want management to see the figures since the theft may be detected.

It is much easier and more cost-effective to prevent fraud than it is to detect it, and it is absolutely worth the time. Investing the time and resources to analyze controls and implement procedural changes is a small commitment compared to the financial loss, time loss, and emotional effects of embezzlement.

If you have any questions or would like to discuss fraud prevention strategies further, please give us a call.

 

INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 22; Natural Disaster Leads IRS to Extend Tax Due Date

Posted by Admin Posted on Aug 30 2016

 

ALERT: Natural Disaster Leads the IRS to Extend Tax Due Dates


Written by: Shari McVey

An informational note to our clients to preface the following article:

Becker and Rosen will be abiding to the nationally recognized tax due dates for tax returns and will retain our current deadlines of 2 weeks before the original tax due dates for clients to have their tax prep information submitted to our offices for on time tax preparation. Our firm maintains temporary seasonal hours and staff to help with the extra work tax season brings; we are choosing to stick with our pre-planned tax season timelines out of consideration for our clients and our staff. Currently we urge all of our clients to submit their tax prep information to us as soon as possible so we may insure a timely completion of tax work for them. Clients who choose to submit items to Becker and Rosen after the following dates may be subject to having their returns extended.

1120 and 1120-S returns: March 1st, 2016
1040, 1065, 1041 returns: March 31st, 2016

Federal and State Issued Disaster Extension For 2015 Tax Returns

The dramatic weather and flooding that was experienced throughout Missouri at tail end of 2015 left many families and businesses overcome with difficulty. This series of natural disasters has been acknowledged by the IRS. The following counties were considered federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds, and flooding that took place beginning on Dec. 23, 2015:

Barry, Barton, Camden, Cape Girardeau, Cole, Crawford, Franklin, Gasconade, Greene, Hickory, Jasper, Jefferson, Laclede, Lawrence, Lincoln, Maries, McDonald, Morgan, Newton, Osage, Phelps, Polk, Pulaski, Scott, St. Charles, St. Francois, St. Louis, Ste. Genevieve, Stone, Taney, Texas, Webster, and Wright counties

NOTE: St. Louis City is not part of this list. St. Louis City residents must abide by the typical national, state, and city recognized filing dates.

On January 22, 2016, the Internal Revenue Service announced the postponement of certain deadlines for taxpayers who reside or have a business in these disaster areas. Missouri’s tax returns are dependent upon federal returns and the State Department of Revenue has determined that a corresponding extension of time to file corresponding Missouri tax returns and payments is necessary as well.

Due dates for qualifying returns have been postponed to May 16, 2016.

This postponement includes 2015 Individual Income, Corporate Income, and Partnership Income tax returns. Also included are the January 15 Individual Income 4th quarter estimated tax payments and April 18 deadlines for making quarterly estimated tax payments for Individual and Corporate Income. Sales/Use Tax, Employer Withholding, Corporate Income and a variety of business tax deadlines are affected, as well as the deadline for farmers and fishermen who choose to forgo making estimated tax payments.

Qualifying Missouri taxpayers, filing a paper return, need to indicate their eligibility for relief by including the phrase “Missouri Flooding” at the top of their tax forms so the Department may take appropriate action. Taxpayers are still encouraged to continue to file electronically as electronically filed returns have fewer errors than paper returns.

A word about how extensions for postponed due dates will work

If you qualify for the due date postponement and there are extraneous circumstances that would require your return to go on extension after the postponed due date of May 16, 2016, the typical corresponding national IRS due dates will still be applicable to your extended return. For instance:

Scenario 1:

The postponed due date of an Individual Income Tax (1040) exemption form and any payments due will be May 16, 2016 but, there will only be an additional 5 month extension granted instead of the typical 6 months. This will set your extended due date to be the same as it would have originally been based on the original April 18, 2016 tax due date. With your approved extension your due date would be October 17, 2016.

Scenario 2:

The postponed due date of a Corporate Income Tax (1120 & 1120-S) exemption form and any payments due will be May 16, 2016 but, there will only be an additional 4 month extension granted instead of the typical 6 months. This will set your extended due date to be the same as it would have originally been based on the original March 15, 2016 tax due date. With your approved extension your due date would be September 15, 2016.

Scenario 3:

The postponed due date of a Partnership Income Tax (1065) exemption form and any payments due will be May 16, 2016 but, there will only be an additional 4 month extension granted instead of the typical 5 months. This will set your extended due date to be the same as it would have originally been based on the original April 18, 2016 due dated. With your approved extension your due date would be September 15, 2016.

Scenario 4:

The postponed due date of a Trust Income Tax (1041) exemption form and any payments due will be May 16, 2016 but, there will only be an additional 4 month extension granted instead of the typical 5 months. This will set your extended due date to be the same as it would have originally been based on the original April 18, 2016 due dated. With your approved extension your due date would be September 15, 2016.

As always if you have questions about the new due dates please feel free to contact our offices or the IRS for more information.


 
 

Important Tax Due Dates to Remember


Here is a recap of important tax due dates to keep in mind for the coming year:

  • March 1, 2016 - Last day to submit tax materials to Becker and Rosen CPAs for on time completion of returns for the Corporate tax due date
  • March 30, 2016 - Last day to submit tax materials to Becker and Rosen CPAs for on time completion of returns for the Individual, Partnership, and Trust tax due date.
  • April 18, 2016 - 2015 Forms 1040, 1041 and 1065 due date, unless extended
  • April 18, 2016 - 2016 1st quarter estimate payment due
  • May 16, 2016 - POSTPONED DUE DATE FOR QUALIFYING RESIDENTS: 2015 Forms 1040, 1041, 1120, 1120s, and 1065, unless return is extended
  • May 16, 2016 - POSTPONED DUE DATE FOR QUALIFYING RESIDENTS: 2016 1st quarter estimate payment
  • June 15, 2016 - 2016 2nd quarter estimate payment due
  • September 15, 2016 - 2016 3rd quarter estimate payment due
  • September 15, 2016 - 2015 Forms 1120, 1120-S, 1041, and 1065 due date, if extended
  • October 17, 2016 - 2015 Form 1040 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due 

 

INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 21; Reporting of Health Insurance Coverage: Filing Extensions

Posted by Admin Posted on Feb 17 2016

 

 

IMPORTANT TAX DUE DATES AND ORGANIZERS


The early days of tax season are upon us! Becker and Rosen CPAs mailed tax organizers out to our clients the last week of December. Please complete your organizer and return it to our offices with your tax preparation information as soon as possible so we may get to work on your returns. Here are some important tax due dates to keep in mind for the coming year: 

  • February 1, 2016 - W-2s & 1099s must be postmarked and sent to recipients
  • March 15, 2016 - Form 1120 and 1120-S due date, unless extended
  • March 30, 2016 - Last day to submit tax materials to Becker and Rosen CPAs for on time completion of returns for the individual tax due date
  • April 18, 2016 - Form 1040, 1041 and 1065 due date, unless extended
  • April 18, 2016 - 2016 1st quarter estimate payment due
  • June 15, 2016 - 2016 2nd quarter estimate payment due
  • September 15, 2016 - 2016 3rd quarter estimate payment due
  • September 15, 2016 – Form 1120, 1120-S and 1065 due date, If extended
  • October 17, 2016 - Form 1040, 1041 due date, if extended
  • January 16, 2017 - 2016 4th quarter estimate payment due

   

REPORTING OF HEALTH INSURANCE COVERAGE:
FILING EXTENSIONS 


Written by: Natalie Stevenson, Staff Accountant 
 
The IRS has extended the due date for 2015 information reporting requirements (both furnishing to individuals and filing with the Internal Revenue Service) for insurers, self-insuring employers, and certain other providers of minimum essential coverage, and the information reporting requirements for applicable large employers.

Specifically, this notice extends the due date:

  • (1) for furnishing to individuals the 2015 Form 1095-B, Health Coverage, and the 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from February 1, 2016, to March 31, 2016, and
  • (2) for filing with the IRS the 2015 Form 1094-B, Transmittal of Health Coverage Information Returns, the 2015 Form 1095-B, Health Coverage, the 2015 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from February 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically.

The IRS is prepared to accept filings of the information returns on Forms 1094-B, 1095-B, 1094-C, and 1095-C beginning in January 2016. Following consultation with stakeholders, however, the Department of the Treasury and the IRS have determined that some employers, insurers, and other providers of minimum essential coverage need additional time to adapt and implement systems and procedures to gather, analyze, and report this information. Notwithstanding the extensions provided in this notice, employers and other coverage providers are encouraged to furnish statements and file the information returns as soon as they are ready. Employers may be subject to penalties if they do not comply with these extended due dates.

Impact of Extensions for Applicable Large Employers

Applicable large employers now have until March 31, 2016 to furnish Form 1095-C to indi-viduals. In addition, they have until May 31, 2016 (June 30, 2016 if filing electronically) to file the 1095-C and the related transmittal form, 1094-C, to the IRS.

Impact of Extension for Self-Insured Employers

Self-insured employers – that is, employers who sponsor self-insured group health plans – now have until March 31, 2015 to furnish Form 1095-B to individuals. They also have until May 31, 2016 (June 30, 2016 if filing electronically) to file the 1094-B transmittal form to the IRS. (If self-insured employers are also considered an applicable large employer, they would fall under the reporting requirements for applicable large employers and use forms 1095-C and 1094-C.)


Impact of Extensions for Individual Taxpayers

Some individual taxpayers may be affected by the extension of the due date for employers to furnish information on Form 1095-C. If you work for an applicable large employer, generally those with 50 or more full-time employees, then you should be receiving a form. The Form 1095-C includes information on the coverage (if any) offered by the applicable large employer to the full-time employee. The information reported will assist the employee in determining eligibility for the premium tax credit, if applicable. The extension will not affect employees who enrolled in the employer-sponsored coverage or in other coverage that was not offered through the Marketplace; employees who for any other reason would not qualify for a premium tax credit (for example, an employee who qualifies for Medicare or has household income in excess of the limits); employees who enrolled in coverage through the Marketplace and received the benefit of advance payments of the premium tax credit based on a determination by the Marketplace that the employee's offer of employer-sponsored coverage was unaffordable; or employees who did not enroll in any coverage.

Some employees (and related individuals) who enrolled in coverage through the Marketplace but did not receive a determination from the Marketplace that the offer of employer-sponsored coverage was not affordable could be affected by the extension if they do not receive their Forms 1095-C before they file their income tax returns. As a result, for 2015 only, individuals who rely upon other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns need not amend their returns once they receive their Forms 1095-C or any corrected Forms 1095-C. Individuals need not send this information to the IRS when filing their returns but should keep it with their tax records.

Similarly, some individual taxpayers may be affected by the extension of the due date for providers of minimum essential coverage to furnish information on either Form 1095-B or Form 1095-C. Individuals generally use this information to confirm that they had minimum essential coverage. Because, as a result of the extension, individuals may not have received this information before they file their income tax returns, for 2015 only individuals who rely upon other information received from their coverage providers about their coverage for purposes of filing their returns need not amend their returns once they receive the Form 1095-B or Form 1095-C or any corrections. Individuals need not send this information to the IRS when filing their returns but should keep it with their tax records.

If you'd like to learn more about health insurance coverage reporting feel free to contact our offices at (314)725-0324.


 

INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 20; Tax Extender Highlights

Posted by Admin Posted on Dec 23 2015

 

PRESIDENT SIGNS TAX EXTENDERS BILL

On December 18, Congress passed and the President signed into law the “Consolidated Appropriations Act, 2016” and the “Protecting Americans from Tax Hikes (PATH) Act of 2015,” funding the government and providing a number of significant tax changes.

In this special edition Becker and Rosen Newsletter, we are providing you with a recapitulation of the many new tax provisions that these bills will enact or extend. Please find in the sections below the highlights of the acts covering: Individual Tax Breaks, Business Tax Breaks, Depreciation and Expensing Provisions, and Energy Provisions.

If you have any questions about how the new tax extenders may benefit you, or would like more information, please contact our office at (314) 725-0324.

 
INDIVIDUAL TAX EXTENDER HIGHLIGHTS


Written by: Annie Beckel, Staff Accountant

The Child Tax Credit (CTC)

  • This refundable credit has been made permanent at an unindexed $3,000 threshold. The CTC allows a $1,000 tax credit for qualifying children under the age of 17 that are claimed as a dependent. The CTC phases out when taxpayer’s exceed certain income thresholds. (MFJ $110,000, MFS $55,000, all others $75,000 for 2015)

The American Opportunity Tax Credit (AOTC)

  • Allows a taxpayer to claim up to a $2,500 credit to offset expenses for the first four years of post-secondary education. This credit has now been extended permanently. The credit is subject to phase outs of $80,000 for single filers and $160,000 filing jointly.
 Educator Expenses
  • Books, supplies, and other equipment used in the classroom were previously available as an above-the-line deduction, up to $250 per year. The new law permanently extends the deduction. For years beginning after December 31, 2015, the $250 limitation will be indexed for inflation and professional development expenses will also be eligible for the deduction.

The State and Local Sales Tax Deduction

  • This has been made permanent. Taxpayers are allowed to claim an itemized deduction for state and local general sales taxes instead of deducting state and local income taxes. The taxpayer can deduct the amount of sales tax paid during the year or deduct an amount prescribed by the IRS.

Nontaxable IRA Transfers to Eligible Charities

  • These have been extended permanently. Under these provisions, taxpayers who are age 70½ or older are allowed to make tax-free distributions to a charity, up to a maximum of $100,000 per year.

Mortgage Insurance Premiums as Deductible Qualified Residence Interest

  • This has been retroactively extended through 2016. Any mortgage interest premiums paid or accrued before January 1, 2017 in connection with acquisition indebtedness on a taxpayer’s residence are allowed to be deducted as qualified residence interest on schedule A.

Deduction for Higher Education Expenses

  • This has been extended through 2016. A taxpayer whose adjusted gross income (AGI) doesn’t exceed $65,000 ($130,000 MFJ) could take qualified tuition and related expenses as an above-the-line deduction up to $4,000. A taxpayer whose AGI is over $65,000 but under $80,000 ($160,000 MFJ) is limited to a $2,000 deduction. 
     
BUSINESS TAX EXTENDER HIGHLIGHTS


Written by Cindy Smith, CPA
           

Research Credit

  • Allows tax credits based on a percentage of qualified research expenditures. This credit has been retroactively and permanently extended. In addition, beginning in 2016 certain eligible small businesses may claim the credit against alternative minimum tax (AMT) and up to $250,000 per year of the credit can be utilized by certain small startup businesses against the employer’s payroll tax.

Small Business Stock

  • The exclusion of 100% of gain on certain small business stock was permanently extended, and also excepted from minimum tax preference treatment.

Work Opportunity Tax Credit

  • Gives employers a tax incentive to hire veterans, economically challenged individuals, and other members of certain targeted groups. This credit has been extended to apply to eligible individuals who begin work for the employer before January 1, 2019. The credit can be as high as $6,000 and in certain circumstances even higher when hiring certain veterans with service-connected disabilities.

Medical Device Tax

  • The act provided a two-year moratorium on the 2.3% excise tax imposed on the sale of medical devices. The tax will not apply to sales during 2016 and 2017.

W-2, W-3, and 1099 Forms

  • The provision requires forms W-2, W-3 and statements to report non-employee compensation (e.g. Form 1099-MISC) be filed on or before January 31st of the following year. This provision is effective for calendar years after the date of enactment (e.g. beginning with returns filed in 2017.) 

 

DEPRECIATION TAX EXTENDER HIGHLIGHTS

Written by Madeline Brinker, Staff Accountant
           
The PATH Act retroactively extends several depreciation provisions including Section 179 depreciation, bonus depreciation, and the 15-year depreciable life for qualified leasehold improvements.

Code Section 179 Depreciation

The Section 179 expensing limitation has been retroactively, and permanently, extended to be $500,000 for tax years 2015 and beyond. The $500,000 maximum is reduced dollar-for-dollar by the amount of Code Sec. 179 property placed into service over the $2,000,000 investment ceiling. Both the $500,000 maximum expense and the $2,000,000 limit will be indexed for inflation starting in the 2016 tax year. Additional permanent provisions passed under the PATH Act related to Section 179 depreciation include the following:

  • For tax years beginning after December 31, 2015, qualified real property, defined as qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property, is eligible for Section 179 expensing. There is no longer a $250,000 expensing limitation, and there is not a carryover limitation.
  • Air conditioning and heating units are eligible Sec. 179 property in tax years beginning after December 31, 2015.
  • Off-the shelf computer software is eligible for Section 179 expensing.

Bonus Depreciation

The Act temporarily extends 50% bonus first-year depreciation for qualified property placed in service in 2015-2017. Bonus depreciation is extended through 2019, but the expensing allowance decreases to 40% and 30% in 2018 and 2019, respectively. Other provisions of the PATH Act in relation to bonus depreciation include the following:

  • Regardless of whether (a) improvements are done to property subject to a lease and (b) the improvements were placed in service three years after the building was placed in service, bonus depreciation is allowed for qualified improvement property.
  • For businesses with farming activities, bonus depreciation will be allowed for trees, vines, and plants bearing fruits or nuts when the plant is planted or grafted, rather than when it is placed into service. This provision is effective for 2016-2019.
  • Bonus depreciation may be allocated to a long-term contract for tax years 2015-2019.
  • First-year depreciation for passenger vehicles and light trucks & vans (under 6,000 lbs gross vehicle weight) is increased by $8,000 for tax years 2016-2017, $6,400 for 2018, and $4,800 in 2019.

Qualified Leasehold Improvements

Before the PATH Act was enacted, the 15-year straight-line cost recovery for qualified leasehold improvements, as defined under Sec. 179 depreciation, was scheduled to expire after December 31, 2014. The Act has retroactively and permanently extended this cost recovery provision.
           

 
ENERGY TAX PROVISIONS HIGHLIGHTS


Written by Cindy Smith, CPA

Nonbusiness Energy Property Credit

  • This was extended to apply to property placed in service after December 31, 2014 and before January 1, 2017. The provision allows a credit of 10% of the amount paid (up to $500) for certain energy efficient improvements, such as insulation, windows, boilers, fans, and building property.

Wind and Solar

  • In the Consolidated Appropriations Act of 2016 several wind and solar energy tax credits were extended and/or phased down through 2021. 
     
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

 

Volume 19; Year End Tax Planning: Businesses

Posted by Admin Posted on Dec 21 2015

 

WARM WISHES THIS HOLIDAY SEASON
Happy Holidays from everyone at Becker and Rosen CPAs. We hope your holidays will be filled with joy & laughter, and we wish you health & wealth all through the New Year. 



 
 
YEAR-END TAX PLANNING  - BUSINESSES & BUSINESS OWNERS


Written by: Renee Vuylsteke, Enrolled Agent

2015 year end is quickly approaching so now is the time to start thinking about last-minute ways to lower your tax bill this coming tax season. Although the end of the year is close, there are still multiple opportunities to reduce the liability on your 2015 return, many of which need to be taken advantage of prior to December 31.

1. Although the machinery and equipment expensing option is greatly reduced in 2015 (unless retroactively changed by legislation), making expenditures that qualify for this option can still get you thousands of dollars of current deductions that you wouldn’t otherwise get. For tax years beginning in 2015, the expensing limit is $25,000, and the investment-based reduction in the dollar limitation starts to take effect when property placed in service durring the tax year exceeds $200,000.

2. Businesses may be able to take advantage of the "de minimis safe harbor election" to expense the costs of inexpensive assets and materials and supplies purchased before the end of 2015.

3. A corporation should consider accelerating income from 2016 to 2015 if it will be in a higher bracket next year. Conversely, it should consider deferring income until 2016 if it will be in a higher bracket this year.

4. If your business qualifies for the domestic production activities deduction (DPAD) for its 2015 tax year, consider whether the 50%-of-W-2 wages limitation on that deduction applies. If it does, consider ways to increase 2015 W-2 income, e.g., by bonuses to owner-shareholders whose compensation is allocable to domestic production gross receipts. Note that the limitation applies to amounts paid with respect to employment in calendar year 2015, even if the business has a fiscal year.

5. If you own an interest in a partnership or S corporation, consider whether you need to increase your basis in the entity so you can deduct a loss from it for this year.

These are just some of the year-end steps that can be taken to save taxes. We will need to stay in touch in the event Congress revives expired tax breaks to assure that you don’t miss out on any resuscitated tax-saving opportunities.

If you have any questions, or would like to discuss year-end planning, please contact our office at (314) 725-0324.


 

 
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at
www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 18; Year End Tax Planning: Individuals

Posted by Admin Posted on Dec 21 2015
YEAR-END TAX PLANNING FOR INDIVIDUALS


Written by: Colby Schilly, CPA

With the 2015 year quickly coming to a close, now is the time to start thinking about last-minute ways to lower your tax bill this coming April. Although the end of the year is near, there are still multiple opportunities to reduce the liability on your 2015 return, many of which need to be taken advantage of prior to December 31.

1. Sell stock that is currently held at a loss, while maintaining a similar position in that stock. This can be done by selling the stock prior to year-end and re-purchasing the stock at approximately the same value, but not within 30 days of the sale. This strategy is most effective when the value of the stock does not significantly change during the period between the sale and repurchase of the stock. If it is anticipated that the value of the stock will change (either increase or decrease) it may be best to forego this strategy.

2. To the extent possible, postponing income until 2016 and accelerating deductions into 2015 are a great method for reducing tax in the current year. One possible deduction that can be accelerated into 2015 is charitable giving. If you were planning to make a charitable donation in the near future, it may be beneficial to make the contribution before the end of the year.

3. If considering a significant charitable contribution, it may be beneficial to contribute appreciated stock, rather than cash itself. In addition to the deduction, capital gains taxes (which would be due had the stock been sold) can also be avoided when appreciated stock is donated.

4. If you expect your tax rate to be higher in the future than it is now, it may be beneficial to covert a traditional IRA into a Roth IRA. This strategy results in higher taxes being paid in the current year, but allows for tax-free IRA distributions in the future (when a higher tax rate is anticipated).

5. Consider additional deferrals to an employer-sponsored 401(k) or 403(b) plan. The maximum amount that can be deferred in 2015 is $18,000, with an additional “catch-up” contribution of $6,000 allowed for employees over age 50.

The IRS also allows for a few opportunities that do not necessarily need to occur before the end of the year.

1. Consider making additional contributions to an IRA. The maximum amount that can be contributed for the 2015 tax year is $5,500. For individuals aged 50 or older, an additional “catch-up” contribution of $1,000 is also allowed. To be deductible on the 2015 return, IRA contributions must be made prior to the original due date of the return, April 15, 2016. Additional limitations may apply if covered by an employer-sponsored retirement plan.

2. If self-employed, contributions to a SEP-IRA plan can also provide additional tax deductions. The deduction is limited to either 25% of your self-employment earnings or $53,000, whichever is less. Contributions can be made until the due date of the return (including extensions). Taxpayers who extend their personal returns are allowed to make deductible SEP contributions until October 15, 2016.

3. Additional contributions to a Health Savings Account (HSA) may also reduce your tax liability. The 2015 contribution limit for individual plans is $3,350 and $6,650 for family plans. Additional “catch-up” contributions are also allowed for individuals aged 55 and older. The “catch-up” contribution is limited to $1,000 for both individual and family plans. The deadline for contributions to be deductible is the original due date of the return. For 2015, contributions must be made by April 15, 2016.

In addition to these year-end strategies, it is also important to note that many tax deductions have expired for the 2015 tax year, unless Congress chooses to retroactively extend those provisions. Among others, these expired provisions include the deduction for state and local sales taxes in lieu of state and local income taxes, the deduction for qualified tuition expenses, the deduction of mortgage insurance premiums, and the ability to take a tax-free IRA distribution if donated to charity. It is very possible that Congress will extend some, if not all, of these provisions, but the uncertainty adds to the value of year-end planning.

If you have any questions, or would like to discuss year-end planning, please contact our office at (314) 725-0324.

 

 
WE'VE GOT BIG NEWS!
 
Our team of tax professionals is growing. We are proud to introduce our newest addition to the firm: 

Cindy Smith, CPA - Cindy graduated from Kaplan University with a Bachelor of Science in Business: Accounting.  She is a Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE) with over 20 years of experience in public accounting.  Cindy joined the Becker and Rosen team in November 2015 and provides services in the areas of individual and business tax return review, preparation, and planning. She enjoys working closely with her clients and is very passionate about client satisfaction.  She is a member of the AICPA, MSCPA, ACFE, and is a founding member and former board member for the Greater St. Louis Area Chapter of the Association of Certified Fraud Examiners. 
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

 

Volume 17; What is the Missouri State Tax Amnesty?

Posted by Admin Posted on Nov 09 2015

 

MISSOURI STATE TAX AMNESTY - DON'T MISS YOUR CHANCE


Written by: Shari McVey
                             

What is the Missouri Tax Amnesty?

Missouri Tax Amnesty is a one-time opportunity for individuals or businesses that owe back taxes with the state of Missouri to pay those delinquencies without having to pay interest or penalties. Missouri is offering businesses and individuals a one-time opportunity to pay back taxes that were due prior to Dec. 31, 2014, in accordance with House Bill 384 signed in April by Gov. Jay Nixon. The measure is expected to bring in more than $60 million for the state.

Who is eligible?

Individuals and businesses are eligible for tax amnesty if they have delinquent state taxes that were due prior to Dec. 31, 2014.

There are eight tax types eligible for amnesty – consumer’s use tax, corporation franchise tax, corporation income tax, employer withholding tax, fiduciary tax, individual income tax, sales tax and vendor’s use tax.

By participating in the tax amnesty, you must agree to comply with state tax laws for the next eight years and agree to be excluded from future amnesty programs.

When is the deadline?

The period to pay back taxes without having to pay interest or penalties runs from Sept. 1 to Nov. 30 this year. The signed notice or application and all tax amnesty payments must be postmarked by Nov. 30.

Missouri Department of Revenue Officials said it would mail tax amnesty notices to delinquent taxpayers and businesses that will include amounts owed and the amount the taxpayer will save in interest and penalties.


Benefits of participating?

Perhaps the most significant benefit for taxpayers who qualify for the new amnesty program is that unlike many other state tax amnesty programs, they will not be subject to any interest accrued throughout the applicable tax period(s).

More details:

The amnesty program legislation provides the following:

All taxpayers who apply for amnesty must:

• Pay all of their unpaid taxes in full during the amnesty period (September 1 to November 30, 2015), regardless of whether such taxes were previously assessed, except for penalties, additions to tax, and interest paid before September 1, 2015

• In good faith, agree to comply with state tax laws for the next eight years starting from the date of the agreement.

• If the taxpayer fails to comply with all of the state's tax laws at any time during the eight years following the date of the amnesty agreement, all penalties, additions to tax, and interest that were waived under the amnesty agreement will be due immediately.

• Upon election of participation in the amnesty program, the taxpayer agrees to an express and absolute relinquishment of all administrative and judicial rights of appeal. No tax payment received under the election is eligible for refund or credit.

• The amnesty program will not extend to any taxpayer who at the time of payment is a party to any civil or criminal litigation pending in any federal or Missouri court for nonpayment, delinquency or fraud in relation to any tax imposed by Missouri.

• If a taxpayer is granted amnesty, the taxpayer will not be eligible to participate in any future amnesty program for the same type of tax.

• The amnesty program does not prevent the Department from adjusting a taxpayer's tax return as a result of a state or federal audit.

• The Department is authorized to enter into an agreement with a third-party vendor to provide collection services and to assist with the administration of the amnesty program.

• Given the eight-year post-amnesty good-faith provision, the amnesty legislation is scheduled to expire on December 31, 2023.

Call our offices if you have questions on how we can help you to take advantage of this opportunity. 

 

 

WE'VE GOT BIG NEWS!
 
Our team of tax professionals is growing. We are proud to introduce our newest additions to our firm: 

Colby Schilly – CPA, Colby graduated with a Bachelor’s of Science in Accountancy in 2010 and earned a Masters of Accountancy degree in 2012, both from Missouri State University in Springfield, MO. Colby joined the Becker and Rosen team in September 2015, and primarily provides service in the area of tax compliance and consulting for both individuals and businesses. Colby is also a member of the AICPA and MSCPA. 



Megan Lane – Staff Accountant, Megan is currently pursuing a Bachelor of Science in Accountancy from Southern Illinois University at Edwardsville. She is planning on pursuing her Master’s of Business Administration from McKendree University in January 2016. Megan provides services in the areas of individual and business tax preparation, planning, audits, and reviews. She joined the firm in January 2015. 

 


Natalie Stevenson – Staff Accountant, Natalie graduated from St. Louis Community College with an Associate in Applied Science in Accounting in 2012. She is currently pursuing a Bachelor of Science in Accounting from University of Missouri – St. Louis. She will also graduate with a Bachelor of Science in Finance, and a Minor in Business Administration. Natalie provides services in the areas of individual and business tax preparation, general ledger services, audits, reviews and compilations. She joined the firm in January 2015.


 
INTERACT WITH US ON THE WEB

Visit our website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 16; A.B.L.E. Accounts

Posted by Admin Posted on Sept 23 2015

 

UPCOMING TAX DUE DATES TO REMEMBER

The due dates for tax returns on extension are growing near. If you have a return on extension and we will be preparing the return, please have your tax preparation information to us as soon as possible so we may complete in a timely manner for you.    

Here is a reminder of upcoming tax deadlines:

September 15, 2015 - Form 1120, 1120-S and 1065, If extended
September 15, 2015 - 2015 3rd quarter estimate payment
October 15, 2015 - Form 1040, 1041, if extended
January 15, 2016 - 2015 4th quarter estimate payment
 

 
A.B.L.E. ACCOUNTS

Written by: Natalie Stevenson
                       
The tax laws have long encouraged Americans to save for college for their kids and to save for their retirement, but for families of those with disabilities, there was no tax-advantaged way for them to save for those individuals. The recently enacted Tax Increase Prevention Act of 2014 contains an important new provision which changes that.

The new law, which applies for tax years beginning after December 31, 2014, allows for the creation of “Achieving a Better Life Experience” (ABLE) accounts, which are tax-free accounts that can be used to save for disability-related expenses. Here are the key features of ABLE accounts:
  • ABLE accounts can be created by individuals to support themselves or by families to support their dependents.
  • There is no federal taxation on funds held in an ABLE account. Assets can be accumulated, invested, grown and distributed free from federal taxes. Contributions to the accounts are made on an after-tax basis (i.e., contributions aren't deductible), but assets in the account grow tax free and are protected from tax as long as they are used to pay qualified expenses.
  • No federal tax benefits are provided for those who contribute to an ABLE account.
  • Money in an ABLE account can be withdrawn tax free if the money is used for disability-related expenses. Expenses qualify as disability related if they are for the benefit of an individual with a disability and are related to the disability. They include education, housing, transportation, employment support, health, prevention, wellness costs, assistive technology, personal support services, and other expenses.
  • Distributions used for nonqualified expenses are subject to income tax on the portion of such distributions attributable to earnings from the account, plus a 10% penalty on that portion.
  • Each disabled person is limited to one ABLE account, and total annual contributions by all individuals to any one ABLE account can be made up to the gift tax exclusion amount ($14,000 in 2014, which is adjusted annually for inflation). Aggregate contributions are subject to the State limit for education-related Section 529 accounts.
  • ABLE accounts can generally be rolled over only into another ABLE account for the same individual or into an ABLE account for a sibling who is also an eligible individual.
  • Eligible individuals must be blind or severely disabled, and must have become so before turning 26, based on marked and severe functional limitation or receipt of benefits under the Supplemental Security Income (SSI) or Social Security Disability Insurance (DI) programs. An individual doesn't need to receive SSI or DI to open or maintain an ABLE account, nor does the ownership of an account confer eligibility for those programs.
  • ABLE accounts have no impact on Medicaid, but, in certain cases, SSI payments are suspended while a beneficiary maintains excess resources in an ABLE account. More specifically, the first $100,000 in ABLE account balances is exempted from being counted toward the SSI program's $2,000 individual resource limit. However, account distributions for housing expenses are counted as income for SSI purposes. Assuming the individual has no other assets, if the balance of an individual's ABLE account exceeds $102,000, the individual is suspended, but not terminated, from eligibility for SSI benefits but remains eligible for Medicaid.
  • Upon the death of an eligible individual, any amounts remaining in the account (after Medicaid reimbursements) will go to the deceased's estate or to a designated beneficiary and will be subject to income tax on investment earnings, but not to a penalty.
  • Contributions to an ABLE account by a parent or grandparent of a designated beneficiary are protected in bankruptcy. In order to be protected, ABLE account contributions must be made more than 365 days prior to the bankruptcy filing.

    Please contact us at 314-725-0324 if you have any questions. 

     
INTERACT WITH US ON THE WEB

Visit our recently rebuilt website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 15; 2016 Tax Due Dates to Change / IRS Transcript Data Breach

Posted by Admin Posted on Aug 20 2015
UPCOMING TAX DUE DATES TO REMEMBER

The due dates for tax returns on extension are growing near. If you have a return on extension and we will be preparing the return, please have your tax preparation information to us as soon as possible so we may complete in a timely manner for you.    

Here is a reminder of upcoming tax deadlines:

September 15, 2015 - Form 1120, 1120-S and 1065, If extended
September 15, 2015 - 2015 3rd quarter estimate payment
October 15, 2015 - Form 1040, 1041, if extended
January 15, 2016 - 2015 4th quarter estimate payment
 

 
2016 TAX RETURN AND EXTENSION DUE DATES WILL CHANGE

Article written by: Shari McVey

On July 31, 2015, President Obama signed into law P.L. 114-41, the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015." Although this new law was primarily designed as a 3-month stopgap extension of the Highway Trust Fund and related measures, it includes a number of important tax provisions, including revised due dates for partnership and C corporation returns and revised extended due dates for some returns. All of the changes to due dates per the new law will go into effect when 2016 tax returns are being filed.

Tax return due dates that are effected:

Partnerships (1065 tax returns) will be due 1 month earlier.
Partnerships returns will now be due by the 15th day of the 3rd month after the end of their tax year. This will change the tax filing date for returns with a yearend of December 31st to March 15th. Note that due date for these returns will be a full month earlier than in previous years. The IRS made this change in hopes that taxpayers and practitioners will generally not have to extend or scurry around at the last minute to file the returns of individuals who are partners in partnerships because their Schedule K-1s did not arrive until the last minute.

C-Corporations (1120 tax returns) will be due 1 month later. C-Corporations will now be due by the 15th day of the 4th month after the end of their tax year. This will change the tax filing date for returns with a yearend of December 31st to April 15th. Please note that the due date for these returns will be a full month later than in previous years. Furthermore, c-corporations that have yearends of June 30th must still adhere to the current rules in which those returns are due the 15th day of the 3rd month after their yearend. These c-corporation returns with yearends of June 30th will be subject to the due date rule change 10 years down the line in 2025. This is due to a special clause written into the law.

S-Corporations (1120S tax returns) due date will stay the same. S-Corporations will retain the same due date rules. These tax returns are due by the 15th day of the 3rd month after the end of their tax year. 1120 tax returns with a yearend of December 31st will be due March 15th as always.

Foreign Bank and Financial Accounts (114 FinCEN Form) will be due 2 1/2 months earlier. Under the new law, for returns for tax years beginning after Dec. 31st, 2015, the due date of FinCEN Report 114 will be April 15th.

Extension due dates that are effected:

Partnerships (1065 tax returns) will receive 1 extra month of time to file.
Once the partnership successfully files an extension they will have a maximum extension of 6 months. Currently a 5 month extension applies. The extension will end on September 15th for calendar year taxpayers.

Estates and Trusts (1041 tax returns) will receive an extra 1/2 month of time to file. Once the estate or trust successfully files an extension they will have a maximum extension of 5 1/2 months. Currently, a 5 month extension applies. The extension will end on September 30th for calendar year taxpayers.

Annual Return/Report of Employee Benefit Plan (5500 tax returns) will receive 1 extra month of time to file. Once the benefit plan successfully files an extension they will have a maximum automatic extension of 3 1/2 months. Currently a 2 1/2 month period applies. The extension will end on November 15th for calendar year filers.

Foreign Bank and Financial Accounts (114 FinCEN Form) will now be allowed to file an extension. There will now be a maximum extension of 6 months allowed for this form. Once an extension is successfully filed the due date of the form will be October 15th. The new law will also allow the IRS to waive the penalty for failure to timely request an extension for filing the report, for any taxpayer required to file FinCEN Form 114 for the first time.

If you have any questions about the new tax due dates please do not hesitate to call our offices for more details. 

 
THE IRS DATA BREACH

Written by: Tatjana Mrnjavac

In May, 2015, the IRS announced that, via the IRS's “Get Transcript” application, criminals gained unauthorized access to data on approximately 114,000 taxpayers and this week the IRS announced that 220,000 more taxpayers were affected by this breach of data. The data included taxpayers' Social Security information, date of birth, and street address.

The IRS will begin mailing letters in the next few days to the 220,000 taxpayers where there were instances of possible or potential access to “Get Transcript” taxpayer account information. The IRS will also be mailing letters to the 170,000 other households alerting them that their personal information could be at risk even though identity thieves failed in efforts to access the IRS system.

How did this happen? Criminals used taxpayer‐specific data acquired from non‐IRS sources to gain unauthorized access to information on approximately 334,000 tax accounts through the IRS’ “Get Transcript” application. These third parties gained sufficient information from an outside source before trying to access the IRS site, which allowed them to clear a multi‐step authentication process, including several personal verification questions that typically are only known by the taxpayer. The matter is under review by the Treasury Inspector General for Tax Administration as well as the IRS Criminal Investigation unit.

What the IRS is doing. The IRS has temporarily shut down the online version of its Get Transcript service, but it says transcripts may still be ordered using the Get Transcript by Mail service. To use the latter service, taxpayers need Social Security number (SSN) or Individual Tax Identification Number (ITIN), date of birth, and address from their latest tax return.

The IRS will also provide free credit monitoring services for the taxpayers whose accounts were accessed and may provide Identity Protection Personal Identification Number (IP PIN).

What taxpayers can do. The IRS gives the common sense advice that individuals should think twice before posting publicly personal or financial information on social media or the Internet. (It's been reported that scammers can troll through vast amounts of information online, assemble the pertinent data, and then use it to impersonate taxpayers.) The IRS also says individuals should also make sure their computers are up to date with the latest security software.
The IRS urges taxpayers not to call to see if they will be getting a letter, as phone lines remain extremely busy due to staffing limitations and personnel won't have access to additional information. Affected taxpayers will be receiving a letter directly advising them about the attempted or successful unauthorized access to their transcript, therefore, anyone receiving one of the IRS’s letters should take steps to protect their data by taking advantage of the free credit monitoring and IP PIN.

Please contact us at 314-725-0324 if you have any questions. 

 
INTERACT WITH US ON THE WEB

Visit our recently rebuilt website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 14; What is Kiddy Tax?

Posted by Admin Posted on Aug 20 2015

 

       
WHAT IS KIDDIE TAX?

           
Article written by: Megan Lane, Accountant Intern     
           
Kiddie tax is tax on a child’s income, which is taxed at the parent’s rate under certain conditions. Part of a child’s income becomes subject to kiddie tax if they have interest, dividends, or other unearned income that totals more than $2,100 for 2015. A child is subject to kiddie tax if they have not attained age 18 before the close of the tax year, if the child’s earned income doesn’t exceed one-half of his support and the child is age 18 or is a full time student age 19 – 23, and if they have not filed a joint tax return for that tax year.

The child’s parent may be able to elect to include that income on the their return rather than file a return for the child if the child’s gross income is more than $2,100 & less than $10,500 for 2015. In order for the parent to make this election there are certain requirements that must be satisfied. The child’s parent may make the election if the child was over age 18 but under age 23 who is a full time student and if their earned income doesn’t exceed one-half of the of their support. There cannot be any estimated taxes that were paid for the year and no overpayment that was applied to the current tax year from the previous year. In order for the parent to make this election, no federal income tax can be withheld from the child’s income under backup withholding and the child should be required to file a return unless the parent makes this election.

Although the parent may elect to include the child’s income on their own return it only avoids the need for a separate return for the child, but, generally, doesn’t change the tax on the child’s unearned income. It is important to consider that the addition of the child’s income to the parent’s adjusted gross income may affect the various floors and ceilings for the parents’ deductions and limitations.

 
IMPORTANT TAX DATES TO REMEMBER

The 2015 spring tax due dates are just around the corner. Here is a reminder of tax deadlines:

September 15, 2015 - 2015 3rd quarter estimate payment
September 15, 2015 – Form 1120, 1120-S and 1065, If extended
October 15, 2015 - Form 1040, 1041, if extended
January 15, 2016 - 2015 4th quarter estimate payment
 

 
INTERACT WITH US ON THE WEB

Visit our recently rebuilt website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 13; Additional IRS Identity Theft Updates

Posted by Admin Posted on June 25 2015
   
ADDITIONAL IRS IDENTITY THEFT UPDATES   

           
Article written by: Marci Gietl, CPA

MISSOURI DOR COMBATTING IDENTITY THEFT

Due to increased identity theft cases this year, the Missouri Department of Revenue has been delaying some refunds and requesting additional documentation to verify the taxpayer’s withholding or other return items. An agent from the DOR informed Becker and Rosen CPAs this week that the additional documentation is being requested to ensure the proper party is obtaining the refund. After obtaining the additional documents, the refund may take an additional 10-12 weeks to be received.

If you’re affected by this process, you will be contacted via letter by the Missouri DOR requesting additional documents. Please forward these requests to us. If you have not received such a request but feel your refund has been delayed, please contact us or the Missouri Department of Revenue at: (573)751-3505. A direct deposit refund on average is 10-14 days after your return is filed. If you’re receiving a paper check, it may take 6-8 weeks.

 

 
INTERACT WITH US ON THE WEB

Visit our recently rebuilt website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 12; IRS Identity Theft Updates

Posted by Admin Posted on June 18 2015

 

   
IRS IDENTITY THEFT UPDATES  

           
Articles written by: Marci Gietl, CPA

TAXPAYER TRANSCRIPT DATA THEFT

Recently, the IRS announced that over 100,000 taxpayer accounts were compromised utilizing the "Get Transcript" application through the IRS website. The improper usage dated from February to May 2015. The IRS shut down the app in May after noticing unusual activity. The IRS has assured the tax return filing submission systems are secure and were not compromised. Tax return filing systems are separate from the "Get Transcript" application. The thieves who accessed data had to use infromation obtained from outside sources to successfully utilize the app as it requires not just personal information, such as date of birth or social security number, but also 'out of wallet' information. 'Out of wallet' information includes personal facts, like someone’s car payment or other such information, that only that individual should know.

The IRS suspects the thieves may have been working towards committing identity theft during next year’s filing season. The IRS will be contacting all affected taxpayers with additional information, including providing credit monitoring services. The affected accounts have also had alerts placed on them for additional monitoring within the IRS systems through at least the 2016 filing season. The IRS will leave the
"Get Transcript" application off-line until further investigation and potential improvements can be made. If a taxpayer needs a transcript one can be requested through the “Get Transcript by Mail” tool at http://www.irs.gov.

The IRS and we at Becker & Rosen, are reminding you to be very aware of the potential dangers of posting any personal or financial information on line as it increases you’re vulnerability to identity theft. We also recommend that you maintain up-to-date computer security features to minimize your risk of hacking.

IRS, STATES, AND INDUSTRY COMBAT IDENTITY THEFT

The tax preparation industry, the IRS, and state taxing agencies have been working on a collaborative effort since March to improve methods to protect taxpayer data and to combat identity theft. On June 11, 2015, in IR-2015-87, the IRS announced the results of this effort. They have identified several new steps in which taxpayer data will be authenticated, using standardized sharing of data. This will aid in identifying fraud pattern indicators, schemes, and will increase alignment within the cybersecurity framework of the tax software industry with the IRS and the states. The governmental and industry participants have agreed to also work together on increased education to taxpayers concerning protecting of personal financial data. The initial results of this collaboration will be implemented this summer and fall in order to be ready for the 2016 filing season. However, the collaboration participants expect to continue improvements over the long-term to benefit not only the government and industry participants but the taxpayers and tax system as a whole.

 

 
IMPORTANT TAX DATES TO REMEMBER

The 2015 spring tax due dates are just around the corner. Here is a reminder of tax deadlines:

September 15, 2015 - 2015 3rd quarter estimate payment
September 15, 2015 – Form 1120, 1120-S and 1065, If extended
October 15, 2015 - Form 1040, 1041, if extended
January 15, 2016 - 2015 4th quarter estimate payment
 

 
INTERACT WITH US ON THE WEB

Visit our recently rebuilt website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 11; What is use tax?

Posted by Admin Posted on June 01 2015
ANNUAL BECKER AND ROSEN FREE  DOCUMENT SHRED DAY

Free document shredding this coming weekend!

You are invited:

Saturday, June 6th, 2015 9:00 am - 12:00 pm
In front of our office building located at:
8008 Carondelet Ave., Clayton, MO 63105
Bring any documents you'd like professionally destroyed.

Becker and Rosen will be hosting our annual customer appreciation Free Document Shred Day this coming Saturday. We will have an American Document Destruction truck and personnel on site to properly dispose of any and all of your old documents. 

Click this link for current IRS document retention directives .

There will be goody bag giveaways and free pastries for your enjoyment.

We look forward to seeing you! 

WHAT IS USE TAX?          



Article written by, Natasha Swan, Administrative Assistant

                       
Use tax is a form of sales tax designed to distribute the tax burden fairly among consumers and assure fair competition between in-state and out-of-state businesses. Use tax is imposed on the storage, use, or consumption of tangible personal property in the United States by numerous state governments. The Missouri use tax rate is 4.225%. Cities and counties may impose an additional local use tax. The amount of use tax due on a transaction depends on the combined (local and state) use tax rate in effect at the Missouri location where the tangible personal property is stored, used or consumed. Local use taxes are distributed in the same manner as sales taxes.

Use tax is imposed directly upon the person that stores, uses, or consumes tangible personal property in Missouri. Use tax does not apply if the purchase is from a Missouri retailer and subject to Missouri sales tax.

This tax does not apply with respect to the storage, use or consumption of any article of tangible personal property purchased, produced or manufactured outside this state until the transportation of the article has finally come to rest within this state. Missouri cannot require out-of-state companies that do not have nexus or a "direct connection" with the state to collect and remit use tax. If an out-of -state seller does not collect use tax from the purchaser, the purchaser is responsible for remitting the use tax to Missouri.

A purchaser is required to file a use tax return if the cumulative purchases subject to use tax exceed two thousand dollars in a calendar year. A purchaser must file a use tax return even if there is no taxable purchase to report. If a purchaser fails to file their use tax return or pay their use tax late, they will be subject to penalties and interest. 

Give us a call if you have questions about how use tax may effect your tax situation. 

IMPORTANT TAX DATES TO REMEMBER

The 2015 spring tax due dates are just around the corner. Here is a reminder of tax deadlines:

June 15, 2015 - 2015 2nd quarter estimate payment
September 15, 2015 - 2015 3rd quarter estimate payment
September 15, 2015 – Form 1120, 1120-S and 1065, If extended
October 15, 2015 - Form 1040, 1041, if extended
January 15, 2016 - 2015 4th quarter estimate payment
 

 
INTERACT WITH US ON THE WEB

Visit our recently rebuilt website. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 10; Affordable Care Act - Employer Shared Responsiblity

Posted by Admin Posted on May 11 2015
AFFORDABLE CARE ACT - EMPLOYER SHARED RESPONSIBILITY             

 

Article written by, Annie Beckel, Staff Accountant
           
The Affordable Care Act’s employer shared responsibility (ESR) rules are in effect in 2015. An employer with an average of 100 or more full-time employees is required to offer minimum value health coverage to their full-time employees and dependents.

If an employer fails to provide the necessary coverage, they may be subject to a penalty, determined on a monthly basis. To avoid a penalty, the employer must offer affordable coverage that provides a minimum value to at least 70% of its full-time employees and their dependents. If an employee seeks a premium tax credit to help pay for coverage on the Health Insurance Marketplace, the employer will be penalized.

After 2015, the required minimum 70% of full time employees increases to 90%.

Employers who have between 50 and 100 employees and do not qualify for transition relief will also be subject to the ESR rules. If you are an employer with fewer than 50 employees, you are not subject the ESR penalty. 
        

 
WHERE IS YOUR REFUND?

Typically, tax refunds are issued by the IRS approximately 3 weeks for an efiled return and 6 weeks for a paper filed return after the returns have been filed and accepted. Did you know you may access up-to-date information about your refund from the Internal Revenue Service online? We have a link to the IRS tool, "Where's My Refund?" on our site: Helpful links page

There are many other useful tools on our new website as well. Explore all the new features at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

IMPORTANT TAX DATES TO REMEMBER

The 2015 spring tax due dates are just around the corner. Here is a reminder of tax deadlines:

April 15, 2015 - Form 1040, 1041 and 1065, unless extended
April 15, 2015 - 2015 1st quarter estimate payment
June 15, 2015 - 2015 2nd quarter estimate payment
September 15, 2015 - 2015 3rd quarter estimate payment
September 15, 2015 – Form 1120, 1120-S and 1065, If extended
October 15, 2015 - Form 1040, 1041, if extended
January 15, 2016 - 2015 4th quarter estimate payment
 

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

Volume 9; Qualified Tuition Programs

Posted by Admin Posted on May 11 2015
QUALIFIED TUITION PROGRAMS               

 

Article written by, Scott Gordon, Staff Accountant

If you have a child (or a grandchild) who is going to attend college in the future, you have probably heard about qualified tuition programs, also known as 529 plans (for the Internal Revenue Code section that provides for them), which allow prepayment of higher education costs on a tax-favored basis.

There are two types of programs: prepaid plans, which allow you to buy tuition credits or certificates at present tuition rates, even though the beneficiary (child) won't be starting college for some time; and savings plans, which depend on the investment performance of the fund(s) you place your contributions in.

You will not recieve a federal income tax deduction for the contribution, but the earnings on the account will not be taxed while the funds are in the program. You can change the beneficiary or roll over the funds in the program to another plan for the same or a different beneficiary without any income tax consequences.

Distributions from the program are tax-free up to the amount of the student's qualified higher education expenses. These include tuition, fees, books, supplies, and required equipment. Reasonable room and board is also considered a qualified expense if the student is enrolled at least half-time. Distributions in excess of qualified expenses are taxed to the beneficiary to the extent that they represent earnings on the account. A 10% penalty tax is also imposed.

Eligible schools include colleges, universities, vocational schools, or other postsecondary schools eligible to participate in a student aid program of the Department of Education. This includes nearly all accredited public, nonprofit, and proprietary (for-profit) postsecondary institutions. A school's financial aid department should be able to tell you whether it qualifies.

The contributions you make to the qualified tuition program are treated as gifts to the student. Also, the contributions qualify for the annual gift tax exclusion, which is $14,000 for 2015. If your contributions in a year exceed the exclusion amount, you may elect to take the contributions into account ratably over a five-year period starting with the year of the contributions. Thus, assuming you make no other gifts to that beneficiary, you could contribute up to $70,000 per beneficiary in 2015 without gift tax. (In that case, any additional contributions during the next four years would be subject to gift tax, except to the extent
that the exclusion amount increases.) You and your spouse together could contribute $140,000 for 2015 per beneficiary, subject to any contribution limits imposed by the plan.

A distribution from a qualified tuition program is not subject to gift tax, but a change in beneficiary or rollover to the account of a new beneficiary may be. Contact us if you'd like to learn more about qualified tuition programs. 

                 

 
IMPORTANT TAX DATES TO REMEMBER

The 2015 spring tax due dates are just around the corner. Here is a reminder of tax deadlines:

March 16, 2015 – Form 1120 and 1120-S
April 15, 2015 - Form 1040, 1041 and 1065, unless extended
April 15, 2015 - 2015 1st quarter estimate payment
June 15, 2015 - 2015 2nd quarter estimate payment
September 15, 2015 - 2015 3rd quarter estimate payment
September 15, 2015 – Form 1120, 1120-S and 1065, If extended
October 15, 2015 - Form 1040, 1041, if extended
January 15, 2016 - 2015 4th quarter estimate payment
 

 
NEW WEBSITE!


If you haven't gotten the chance, please be sure to checkout the newly updated Becker and Rosen CPAs website. We have enhanced every feature to make it more functional for visitors. These added features put tax assistance and useful information right at your fingertips. 

Explore the new site at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

Volume 8; Tax Increase Prevention Act, 2014

Posted by Admin Posted on May 11 2015

 

EXCITING NEWS - NEW WEBSITE!


Becker and Rosen CPAs, is proud to announce the big reveal of our updated website. We have enhanced every feature to make it more functional for visitors. Newly added features put tax assistance and useful information right at your fingertips. 

Explore the new site at www.brcpallc.com and don't forget to like us on Facebook and LinkedIn to keep up with all the latest tax news.

 
TAX INCREASE PREVENTION ACT OF 2014                     

 

Article written by, Jodi Carlen,
          
In the recently enacted "Tax Increase Prevention Act of 2014," Congress has once again extended a package of expired or expiring individual and business provisions known as "extenders." The extenders are a varied assortment of individual and business tax deductions, tax credits, and other tax-saving laws which have been on the books for years but which technically are temporary because they have a specific end date. Congress has repeatedly temporarily extended the tax breaks for short periods of time (e.g., one or two years), which is why they are referred to as "extenders." The new legislation generally extends the tax breaks retroactively, most of which expired at the end of 2013, for one year through 2014.

The following lists highlight the extenders that we feel most affect our clients. Please call our office for details of how the new changes may affect you or your business. Additional extenders do exist, and we would be more than happy to discuss those with you if you are interested.

Individual extenders

The following provisions which affect individual taxpayers are extended through 2014:

  • The $250 above-the-line deduction for teachers and other school professionals for expenses paid or incurred for books, certain supplies, equipment, and supplementary material used by the educator in the classroom
  • The exclusion of up to $2 million ($1 million if married filing separately) of discharged principal residence indebtedness from gross income
  • The deduction for mortgage insurance premiums deductible as qualified residence interest
  • The option to take an itemized deduction for State and local general sales taxes instead of the itemized deduction permitted for State and local income taxes
  • The above-the-line deduction for qualified tuition and related expenses
  • The provision that permits tax-free distributions to charity from an individual retirement account (IRA) of up to $100,000 per taxpayer per tax year, by taxpayers age 70 and ½ or older
  • The credit for nonbusiness energy property

Business extenders

The following business credits and special rules are generally extended through 2014:  

  • The work opportunity tax credit
  • 15-year straight line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements
  • 50% bonus depreciation (extended before Jan. 1, 2016 for certain longer-lived and transportation assets)
  • The enhanced charitable deduction for contributions of food inventory
  • The increase in expensing (up to $500,000 write-off of capital expenditures subject to a gradual reduction once capital expenditures exceed $2,000,000) and an expanded definition of property eligible for expensing
  • The exclusion of 100% of gain on certain small business stock
  • The reduction in S corporation recognition period for built-in gains tax 

                 

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

 

Volume 7; Retirement Account Contributions

Posted by Admin Posted on May 11 2015
BEAKING NEWS

This good news just in! Late last night, December 16th, 2014, Congress passed the Tax Increase Prevention Act of 2014. This legislation will extend through 2014 over fifty currently expired “extender” provisions.

Look for more information to follow in next month's Becker and Rosen Newsletter and be sure follow us on Facebook or LinkedIn, we will be linking informational articles as they are released from the IRS. Feel free to call us for additional information as well.

HOW TO TAKE ADVANTAGE OF RETIREMENT ACCOUNT CONTRIBUTIONS                       

 

Article written by, Madeline Brinker, Staff Accountant

Not only do retirement accounts provide a vehicle for saving for the future, but they often provide tax savings for those contributing towards their retirement. Be sure that you are taking advantage of all of the retirement options and related tax breaks available to you.

Maximize Employer-provided Plans

With employer-provided plans, your contributions are pre-tax as a result of elective deferrals deducted from your pay. It is also important to note that most employers offer a match on your contributions, so if you are unable to make the maximum contribution, be sure to contribute at least the amount that allows the maximum employer match.

401(k) plan or 403(b) plan The maximum contributions are $17,500 for 2014 and $18,000 for 2015. If you are age 50 or older at the end of the year, you can also make catch-up contributions in the amounts of $5,500 in 2014 and $6,000 in 2015. Since the contributions are pre-tax, no income tax is paid until you withdraw money from the account. To demonstrate the effects, someone who is 50 years old, in the 25% tax bracket, and makes the maximum contributions can save $5,750 in tax in the year of contribution.

SIMPLE IRA’s apply to employers with 100 or fewer employees and allow for self-employed individuals to participate. The maximum contributions are $12,000 for 2014 and $12,500 for 2015. SIMPLE IRA’s also allow for catch-up contributions in the amounts of $2,500 in 2014 and $3,000 in 2015 for individuals who are age 50 or older at the end of the year. Keep in mind that if you participate in both a SIMPLE IRA and 401(k) or 403(b), the combined maximum contribution between the two accounts is limited to $17,500 for 2014 and $18,000 for 2015 for taxpayers under age 50, and it is limited to $23,000 for 2014 and $24,000 for 2015 for taxpayers over age 50.

Self-employed Individuals

SEP IRA’s can be adopted by self-employed taxpayers up until the due date of their tax return, including extension deadlines. Contributions are tax-deductible as an above-the-line adjustment to a self-employed taxpayer’s gross income. The maximum contributions are limited to 25% of the employee’s annual compensation or $52,000 for 2014 and $53,000 for 2015. Contributions also can be made up until the due date of the tax return, including extensions.

Individual Accounts

Traditional IRA’s have a contribution maximum of $5,500 for both 2014 and 2015. The additional catch-up contribution for individuals at least age 50 is $1,000 for 2014 and 2015. If you, and your spouse if applicable, are not covered by an employer-provided plan, your contribution is fully deductible on your tax return. If you or your spouse are covered by a retirement plan at work, your deduction may be limited or disallowed, depending on your filing status and modified adjusted gross income (AGI). Contributions must be made by April 15, 2015 for the 2014 tax year.

Roth IRA’s have the same contribution maximums as traditional IRA’s. However, your allowed contribution could be limited based on your modified AGI and filing status. These limitations set in when your AGI is in excess of $181,000 for taxpayers married filing jointly and $114,000 for taxpayers filing singly or as head of household. Roth IRA contributions are not tax deductible; rather they are tax free when they are withdrawn. Contributions to Roth IRA’s must be made by April 15, 2015 for the 2014 tax year.

Feel free to contact our office with any questions you may have about your retirement account contributions and the related tax savings available.


 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

Volume 6; Tax Fraud Information

Posted by Admin Posted on May 11 2015
IMPORTANT INFORMATION ON TAX FRAUD

 

Article written by, Natasha Swan

Tax Identity theft is on the rise and causing major problems for both CPAs and Clients. To make matters worse, it can take several months for the rightful taxpayer to straighten out the confusion and receive the refund due to them. Most victims of tax fraud do not realize they are a victim until they go to file their personal income tax return. After filing their personal income tax return, the Internal Revenue Service notifies them that a tax return has already been filed with their social security number.

Becker and Rosen Certified Accountants, LLC is committed to protecting our clients’ records and follows several security measures to ensure that sensitive data is carefully guarded.

If you were/are a victim of fraud, the IRS suggests that clients follow the following procedures:

  1. Call the IRS to inform them that there may be possible fraud associated with your Social Security Number (1-800-908-4490).
  2. Call the state or states that you submitted returns in to inform them that there may be possible fraud associated with your Social Security Number (Missouri, 1-573-751-3505).
  3. Complete Form 14039 and attach to a paper copy of the tax return that was rejected. Include and attach copies of two forms of identification (Social Security Card, Passport, or Driver’s License). Mail the return to the address you would normally mail a paper return.

    Mailing addresses:
    Due a refund: Department of Revenue
    P.O. Box 500
    Jefferson City, MO 65106-0500

    Balance due: Department of Revenue
    P.O. Box 329
    Jefferson City, MO 65107-0329
  4. The process takes about 180 days, and if you are expecting a refund, the refund will be delayed. If you have not received any notification in 180 days, you should follow up with the IRS (1-800-908-4490)
  5. Contact all three major credit bureaus to report possible fraud.
        a. Equifax 1-800-525-6285
        b. Experian 1-888-397-3742
        c. TransUnion 1-800-680-7289
  6. Contact your financial institution(s) to report possible fraud with your personal information.
  7. File a report with the local police department to report possible fraud with your personal information.
  8. Report identity theft to the Federal Trade Commission (1-877-438-4338).
  9. Contact Social Security Administration (1-800-772-1213).

If you were/are a victim of tax identity theft, the IRS will monitor your records for three years. Also, the IRS will randomly select victims to receive an identity protection PIN. The IRS Identity Protection PIN (IP PIN) is a unique six digit number that is assigned annually to random victims of identity theft for use when filing their federal tax return. The PIN shows that a particular taxpayer is the rightful filer of the tax return. The IP PIN will allow individuals to avoid delays in filing tax returns and receiving refunds. Previously, IP PINs have been mailed out at the end of December. However, due to the high volume of fraud claims, the IRS is unsure if all victims will receive their IP PIN before December 31st, 2014. The IRS expects to provide more than 1.2 million taxpayers with an IP PIN. If you receive an IP PIN please forward it to our office.

We recommend that you visit the
IRS website for tips on how to prevent becoming a victim of tax identity fraud. Please feel free to contact us with any questions or concerns.
           

 
Becker and Rosen CPAs, LLC Disclaimer

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions. 

Links to Third Party Websites
For your convenience, this newsletter may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

Volume 5; Recordkeeping

Posted by Admin Posted on May 11 2015
RECORDKEEPING FOR TAX PREPARATION

By Marci Gietl, CPA 

As a new year starts, it is an important time to evaluate your tax recordkeeping. Maintaining good records can help you save both time and tax dollars.

Real Estate Activity

If you are involved in any rental activity, it’s important to understand that rental activities are generally treated as passive activities, and therefore, losses incurred from such activities may be limited on an annual basis. However, if you meet the real estate professional exception to the passive activity rules, these losses would not be limited. To meet this exception, you must devote a minimum of 750 hours per year to the rental activity and more than half your time annually spent on trade or business activities must be spent on real estate trade or business activities. You must also materially participate in these activities for the services to be considered. A logbook detailing the time you spent on trade or business activities, including dates, time and general services performed by business activity could support your material participation and ability to fulfill the real estate professional exception.

Business Expenses

Records for expenses are important as well. In order to claim unreimbursed employee business expenses or to support your self-employed business expenses such as mileage, travel and entertainment, your records must include details on date incurred, business purpose, notations of others involved (i.e., clients or colleagues) and receipts or other supporting documentation. Mileage logs should include point of departure and destination as well. A calendar can be a useful tool for tracking mileage.

Charitable Contributions

Charitable deductions may also include mileage and an appropriate logbook should be maintained for such mileage as well. The log should outline the charity served, purpose of trip, mileage incurred and any supporting documentation. For cash charitable donations less than $250, a bank record or written acknowledgment from the charity is required for substantiation. Cash contributions over $250 require a charity’s written acknowledgement. Property contributions totaling over $500 require descriptions and other information to be reported to the IRS and should be supported in your records by a detailed list of the items donated including condition and estimated market value. Motor vehicle, boat and airplane donations exceeding $500 require special substantiation as do other noncash donations in excess of $5,000.

To find out if you qualify for the real estate professional exception or for more information on any of these categories, please call our office at (314)725-0324.

WHAT'S NEW WITH US
 
Shari McVey dropping toys at the Toys for Tots donation site.
  • The Becker and Rosen staff ran and interoffice toy drive benefiting Toys for Tots in the month of December.
  • Our offices will be closed December 25, 2013 and January 1, 2014 in observance of the holiday season. We wish you and your family joy and peace this winter season.
  • Remember to visit our Facebook page and 'Like' us.

Volume 4; Hiring Your Children for Tax Savings

Posted by Admin Posted on May 11 2015
       CONSIDER HIRING YOUR CHILD TO PRODUCE TAX SAVINGS

By Heather Foraker

In this economy, where the unemployment rate is sky-high, parents may struggle to come up with ideas on how to help their children gain that valuable work ethic and experience that we all want our children to have. As a business owner, you can give your child that experience and gain tax savings for your business and yourself.

A parent who operates a sole proprietorship and hires their child who is under the age of 18 does not have to pay the employer nor the employee share of the social security and Medicare taxes (more commonly referred to as “FICA taxes”). In addition, the wages paid to the child will reduce the net income reported on the parent’s tax return, which would reduce the parent’s income tax and self-employment tax. The result could be significant tax savings because not only are the wages taxed at the child’s lower income tax rate; they are also not subject to employment taxes.

For a corporate business owner who hires their child, the wages paid to the child would be subject to FICA taxes, but the corporation would be able to reduce its taxable income by both the wages paid to the child and the employer portion of the FICA taxes on those wages. Again, the tax liability is shifted from the corporation to the child, who presumably would be in a much lower tax bracket.

Other tax benefits that could result from employment of the child are the ability to enroll the child in the company’s retirement plan and/or education assistance program. The child may also be able to contribute to a traditional or Roth IRA.

Although there is the potential for significant tax savings when a parent business owner employs their child, keep in mind that the wages paid must be reasonable in relation to the work performed.

If you are interested in discussing this strategy further, please contact us at (314)725-0324.

What’s New With Us
  • The firm will be celebrating the holiday season by volunteering as a group with the Central Reform Congregation to weather proof and winterize homes in collaboration with the Grace Hill Settlement House.
  • Tax Organizers will be sent out in the coming weeks for clients who have their Individual Income Tax Returns prepared by us. Please watch your mail box for your package soon.
  • Becker and Rosen CPAs, LLC has won the 2014 FIVE STAR PUBLIC ACCOUNTANT award and will be featured in the March issue of St. Louis Magazine.
  • Becker and Rosen CPAs, LLC has been granted the BEST IN QUALITY award Small Business Monthly we will be featured in the January issue of the magazine.
  • Remember to visit our Facebook page and 'Like' us.

Volume 3; Tax Projections

Posted by Admin Posted on May 11 2015
A Tax Projection Can Help Avoid Surprises at April 15th          

By Sophie Beckmann, CPA, CFP

Many individual taxpayers who do not usually require tax projections may want to do the extra planning this year due to the 2012 American Taxpayer Relief Act, which was signed into law by the President in January 2013. The law includes a number of new provisions that will affect individual taxpayers when they file their 2013 tax returns--a new 39.6% tax bracket, a surtax of 3.8% on net investment income or adjusted gross income over certain thresholds, and phase-outs of personal exemptions and itemized deductions for higher income taxpayers, to name a few. The changes may cause your federal income tax to increase significantly for 2013 over your 2012 tax, even at the same income level. Many people will be surprised to learn that they are subject to these additional taxes and reduced deductions. If you think you might benefit from a tax projection, please contact our office so we can help you to avoid a surprise at April 15th, as well as plan for the most efficient way to pay any additional taxes that may be due.
What’s New With Us

Becker and Rosen would like to send out our thanks and gratitude to Renee Vuylsteke who is celebrating her 20 year anniversary with our firm. Thank you Renee for all you do!
 

Volume 2; IRS During a Government Shutdown

Posted by Admin Posted on May 11 2015
What Happens at the IRS During a Government Shutdown           

By Sophie Beckmann, CPA, CFP

On October 16, after a government shutdown that lasted 16 days and almost resulted in national default, Congress passed legislation that provided for government funding at current levels until January 15, 2014, and raised the nation’s borrowing limit through February 7, 2014. The result was the reopening of all government agencies on October 17.

The IRS was one of those government agencies that had been closed for 16 days. So what happened during the IRS shutdown? The IRS accepted the filing of tax returns and tracked the timeliness of those filings, but did not process any of them, resulting in the delay of expected refunds. While IRS computer-generated notices were still sent, the issuance of liens and levies and enforcement actions was limited to only those that could not be postponed without compromising the government’s interest. Even the ability to obtain tax transcripts was limited to only individual taxpayers and no third parties.

And, to top it all off, the IRS just announced that the shutdown came during the peak period for preparing computer filing systems for 2014. Because of the down time, the 2014 tax filing season will be delayed by two weeks, from a start date of January 21 to a date sometime between January 28 and February 4. The result is that tax return processing – and the issuance of refunds – will be delayed.

Because the new legislation is only temporary, we may face another IRS shutdown just as the 2013 tax filing season gets underway, which could affect many more taxpayers than the most recent closure did.

For more information on what happens when the IRS is closed due to a government shutdown, please call our office at 314-726-0324.
What’s New With Us

B&R Team at Crown Candy KitchenBecker and Rosen CPAs, LLC has been granted two awards
from Small Business Monthly:

  • Best in Value, 2013, see us on the list here.
  • Winning Workplace, 2013, find our feature in the November issue of Small Business Monthly  

Our own Jodi Vogt, CPA will be getting married this month. Congratulations Jodi & Curtis!

The firm celebrated the end of our fall tax season rush by lunching at the Crown Candy Kitchen. Delicious treats were enjoyed by all!

Volume 1; Obamacare Marketplaces

Posted by Admin Posted on May 11 2015
Greetings from Becker and Rosen CPAs!

Welcome to Becker and Rosen’s additional monthly publication! Our goal for this publication is to keep you, our valued clients, informed about important topics. You will find the information that is written by our own accountants, in house, will be relevant to your personal tax situation. For our clients who are business owners, there will be content and reminders for you as well. Other highlights will include staff and firm updates that are happening with us internally. We hope you find the information helpful and welcome your feedback.
October 1 Deadline Looming for Many Small Businesses to Notify Employees about Obamacare Marketplaces

By Sophie Beckmann, CPA, CFP

The Affordable Care Act provisions include the opening of health insurance marketplaces on October 1, 2013. Many employers are not aware that they have a responsibility to notify their employees about these health insurance marketplaces before that date. The reason for this is that although offering health insurance coverage to employees under the Affordable Care Act only applies to employers with more than 50 full-time employees, the rules for notification about the marketplaces apply to employers with one or more employees and $500,000 in annual revenue. Although there are no penalties for businesses who fail to comply, there is no guarantee that there will not be adverse consequences. In addition, employees will need the information to make a decision about coverage under an exchange or employer-provided coverage.

For more information on these employer notification requirements, please call our office at 314-725-0324.
What’s New With Us

  • Becker and Rosen CPAs, LLC has been awarded the Best In Quality, 2013 award from Small Business Monthly. The firm will be attending the Best In Business luncheon in October to receive the award. See our name on the award list here.

  • We are proud to announce that we have 2 new team members on board
    • Beth Schulte, CPA. Beth will be performing tax prep and reviews for clients. 
    • Robert Kutten, is our new intern. Robert is currently obtaining his Master of Accountancy degree at Truman State University. Robert is also actively involved in Beta Alpha Psi, The International Accounting Honor Society. 

  • Our offices have had a décor update. Stop in for a visit to see our gorgeous new paint colors and our chic new carpet.

Welcome to Our Newsletter Page!

Posted by Admin Posted on Aug 19 2014

This is the home of our new newsletter. Check back monthly for updates!