All posts by Shams Khan CPA, CFP

How to be “Tax Prepared” for Storm Season

We have gathered some helpful tax preperation tips  for you ahead of this Storm Season.  Preplanning on what to do in the event of a disaster is an important part of being prepared.

1. Always take advantage of paperless recordkeeping for Financial & Tax records. The best way is to save all records via your email in an individual folder, so they are available at anytime at your fingertips. 

2.  Compile a Room-By-Room list of all of your belongings and/or Business equipment.  Insure that this list is saved paperless ( Via your email) and will be helpful to you for Market value, Insurance and Casualty loss claims. 

3.  For your Business,  create an Emergency Plan of Action that best suits your business needs and works efficiently so that you and your employees may get back on your feet as soon as possible. Communicate and practice your Plan of Action with your employees regularly, so that when and if a disaster should strike- everyone is on the same page.  Also keep in mind that this Plan of Action should be up to date on checked on a regular basis. Assign employees to be specific on accurate record keeping during this time.

4. In the event of a power outage, as always, insure you have batteries, Walkie Talkies and a NOAA Weather Radio, so you can anticipate when the storm / Disaster has neared the end.  Also be sure to regularly back up any and all files, so when  your business  reopens, you are up to date and current with recordkeeping. 

5. IRS.gov is the best resource for information as you prepare/recover from a disaster. 

IRS Scam Warnings

Taxpayer Scams

With hurricane season underway, the Internal Revenue Service is reminding taxpayers that criminals and scammers often try to take advantage of the generosity of taxpayers who want to help victims of major disasters.

Impersonation scams;

With tax season completed, the Internal Revenue Service warned taxpayers to remain vigilant for phishing emails and telephone scams. Summertime tends to be a favorite period for scammers because many taxpayers have recently filed a return and may be waiting for a response from the IRS.

IRS, Security Summit Partners warn of new twist on phone scam; crooks direct taxpayers to IRS.gov to “verify” calls

The IRS warns of a new twist on an old phone scam as criminals use telephone numbers that mimic IRS Taxpayer Assistance Centers to trick taxpayers into paying non-existent tax bills

 Don’t be a victim of ‘ghost’ tax return preparers

A ghost preparer is paid to prepare a tax return but does not sign it as the paid preparer. These phantom preparers who won’t put their name on the tax return are a warning sign for taxpayers of a potential scam.

 IRS Urges Taxpayers to Watch Out for Erroneous Refunds; Beware of Fake Calls to Return Money to a Collection Agency

After stealing client data from tax professionals and filing fraudulent tax returns, criminals use the taxpayers’ real bank accounts for the deposit. Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve.

What to Expect for Refunds in 2018

The IRS issues more than 9 out of 10 refunds in less than 21 days. However, it’s possible your tax return may require additional review and take longer. Where’s My Refund? has the most up to date information available about your refund. The tool is updated no more than once a day so you don’t need to check more often.

Our phone and walk-in representatives can research the status of your refund  if it’s been 21 days or more since you filed electronically, more than 6 weeks since you mailed your paper return or if Where’s My Refund? directs you to contact us.

You can use Where’s My Refund? to start checking on the status of your return within 24 hours after we have received your e-filed return or 4 weeks after you mail a paper return. Where’s My Refund? has a tracker that displays progress through 3 stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent.

You will get personalized refund information based on the processing of your tax return. The tool will provide an actual refund date as soon as the IRS processes your tax return and approves your refund.

Direct Deposit

Join the eight in 10 taxpayers who get their refunds faster by using e-file and direct deposit. It’s the safest, fastest way to receive your refund and is also easy to use. Just select it as your refund method through your tax software and type in the account number and routing number. Or, tell your tax preparer you want direct deposit. You can even use direct deposit if you are one of the few people still filing by paper. Be sure to double check your entry to avoid errors.

Your refund should only be deposited directly into accounts that are in your own name; your spouse’s name or both if it’s a joint account. No more than three electronic refunds can be deposited into a single financial account or pre-paid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund.

Whether you file electronically or on paper, direct deposit gives you access to your refund faster than a paper check.

Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding

If you requested a refund of tax withheld on a Form 1042-S by filing a Form 1040NR, we will need additional time to process the return. Please allow up to 6 months from the original due date of the 1040NR return or the date you actually filed the 1040NR, whichever is later to receive any refund due.

“Where’s My Refund?”

What information is Available on Where’s My Refund?

Refund information for the most current tax year you filed will generally be available within 24 hours after we acknowledge receipt of your e-filed return. If you filed a paper return, please allow 4 weeks before checking the status.

What information is Not Available on Where’s My Refund?

  • Amended Tax Return (Form 1040X) Information
    Information regarding refunds for Form 1040X, Amended U.S. Individual Income Tax Return is not available. Amended/corrected returns are processed as quickly as possible. However, it may take 12 weeks or longer to process the return. The Where’s My Amended Return? tool provides the status of Form 1040X Amended Tax Return for the current year and up to three prior years.
  • Business Tax Return Information
    If you need refund information on federal tax returns other than U.S. Individual Income Tax (Forms 1040, 1040A, and 1040EZ) please call us, toll free, at 800-829-4933. From outside the U.S., call 267-941-1000. TTY/TDD: 800-829-4059.
  • Prior Year Refund Information
    Information on Where’s My Refund? will be for the most recent tax year we have on file for you.

Example: You filed your 2012 tax return on January 1, 2013 and then filed your 2011 tax return on February 1, 2013. The information available on Where’s My Refund will be for the 2012 tax return even though you filed your 2011 return after your 2012 return.

How Long Will My Refund Information be Available?

  • For U.S. Individual Income Tax Returns filed before July 1:
    Your refund information will remain available on Where’s My Refund? until around the second or third week in December.
  • For  U.S. Individual Income Tax Returns filed on or after July 1:
    Your refund information will remain available throughout the following year until you file a tax return for a more current tax year.

If your refund check was returned to us as undeliverable by the U.S. Post Office, your refund information will remain available on Where’s My Refund? throughout the following year until you file a tax return for a more current tax year.

What if my refund was lost, stolen, or destroyed?

Generally, you can file an online claim for a replacement check if it’s been more than 28 days from the date we mailed your refund. Where’s My Refund? will give you detailed information about filing a claim if this situation applies to you.

How to Pay Taxes When You Just Can’t

Whether you ended up owing a massive amount of money to the IRS or simply don’t have the means to pay an unexpected bill, having a negative balance on your taxes can be a scary thing.

The very first commandment of owing taxes is to address the problem head-on; each month that you don’t pay the full amount comes with a penalty fee and interest added to your balance.

There are, however, several payment options provided by the IRS to help you out of the bind as soon as possible. Here’s how to pay your taxes owed, even if you can’t afford the full amount right now.

Online Payment Agreements

If your tax bill is more than you can pay off in a couple months, consider applying for an Online Payment Agreement installment plan. The agreement allows you to set a monthly amount and a day each month to make your payment. So long as the combination of your taxes owed and any penalties and interest is $50,000 or less, you’re good to go for a long-term payment plan up to 72 months. You may even be able to qualify for a short-term agreement of 120 days if your balance is under $100,000.

Online Payment Agreements are pretty easy to apply for. All the information you need should be on your most recent tax return: filing status, Social Security Number, address and so on. Just know that there will be a fee to set up the agreement that can range from $31 to $225, which will be added to your total bill and paid over time.

How do you pay?

There are several ways to pay electronically. The IRS provides a portal to pay directly from your bank account, or you can use a credit or debit card for a small fee charged by the card processor. If you’re on your phone, you can use either of those methods on the IRS2Go app.

You can also pay with cash or wire transfers if you have the time to do so. To pay cash, you’ll need to find the nearest PayNearMe retail partner through the Official Payments site. For wire transfers, make sure you’re aware of your financial institution’s availability and cost per transfer.

No matter what you use, budget as much as possible for your taxes owed out of each paycheck. The sooner you pay your taxes due, the more you’ll reduce those interest and penalty amounts.

Offers in Compromise

If your tax debt is too high to pay back, even in installments, you may qualify for an Offer in Compromise. An Offer in Compromise is an agreement between you and the IRS to settle for a smaller amount than the tax debt you owe. This is to suit the best interest of you and the IRS, but the trick is finding that amount: You must make an appropriate offer based on what the IRS considers your true ability to pay, given factors like your income, expenses and any assets.

Filing an Offer in Compromise should be more of a last resort than a first choice. You have to pay an application fee of $186 per offer, and if the IRS doesn’t think it’s fair, they’ll reject it and you have to start over. Luckily, the IRS provides an Offer in Compromise pre-qualifier tool to calculate whether you’d qualify before you apply.

However you settle your tax bill, remember to set aside time early in the year so you’re in better shape for next tax season. Whether you adjust your W-4, pay more toward quarterly estimated taxes, or simply open a savings account to prepare for a large bill, be actively involved with your finances to prevent panic over your taxes next year.

Relocating? How to Notify the IRS About a Change of Address

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In the event that you are moving out of your home to a new place, it is a good thing to notify the IRS (Internal Revenue Service) and any other state tax organizations if you eventually move.

Notifying the IRS about a change of address is not a difficult thing to do. Simply download and fill Form 8822, Change of Address. This one-page form is simple to fill out (all necessary instructions are added on the second page, in the same file).

One of the advantages of applying for a change of address is that, whenever the IRS needs to send you a notice or message, the mail will go directly to the new address.

Whenever the IRS agency gets information about a new address, they will revise their records to reflect an individual’s new address, even if the individual didn’t file a Form 8822. This can occur, for instance, whenever a taxpayer files a return indicating a new address, or whenever the IRS gets information from the USPS (United States Postal Service) showing a new address.

Generally the IRS updates their records in 45 days of receiving the information about a new address, though this phase can be delayed all through the hectic filing season.

 

Tips for guaranteeing an easy change of address with the IRS

  • Ensure that you fill a change of address form for every single type of tax return you wish to file: for instance, gift tax, estate tax, personal income tax, or business tax returns.
  • Try as much as possible to delay the filing of an income tax return should in case you plan to relocate sooner than later. With this means, you can file your tax returns making use of your new address, and then your refund check will be delivered to your new address.
  • Couples who are thinking about separating should individually file a change of address form even if it is only one individual that is moving to a new address. By doing this the IRS will be able to find each taxpayer in person.
  • Ensure that you let the United States Postal Service know of your change of address so that every refund check or letter from the IRS are sent to your new mailing address.

Tax Tips

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The Forthcoming Tax Season – Tips on How to Get Prepared

The tax season is fast approaching and consider yourself lucky if you’ve already filed your previous taxes. So, why then should you still consider your present taxes? The fact is that, whatever you do all through 2017 will only reflect in your tax refund whenever you file your tax in 2018.

We are not expecting you to jump into the forthcoming tax season without adequate planning, so we have outlined 6 useful tips to help you get prepared for the forthcoming tax season and make certain that you get your biggest tax refund by next year.

6 Useful Tips To Get You Prepared For The Forthcoming Tax Season

  • Stay Organized:

As you have filed your taxes, don’t make it difficult on yourself and stay organized for the coming year. Create a folder of important records and financial documents for today, which would help you have a quick nice start during the forthcoming tax season. In the event that you’re self-employed you can make use of QuickBooks Self-employed to track your earnings, expenses, mileage easily and also take record of your receipts throughout the whole year.

  • Think About Reviewing your W-4 Withholding:

Did you receive a huge tax refund? You might want to consider regulating your withholding. What is withholding? This is the tax deducted from your salary by your employer. In order to update them, just re-file your W-4 form with the division in charge of your payroll. You can decide on when to review it anytime you want all through year.

  • Reduce Taxable Income by Donating to your Retirement Funds:

Lower your possible tax liability for the forthcoming tax season by setting up plans and preparing for your future retirement. Should it be that you donate to a 401K or a Traditional IRA, you’ll be entitled to have a dollar back for tax dollar reduction in your income.

  • Donate to Charity Organizations Before the Year Ends:

Reaching out to charity organizations or donating items can lower your tax burden in the forthcoming tax season. There are many ways you can value and keep track of your charitable contributions or donated goods all through the year, one of them is TurboTax. This app will help you track and value your donations accurately and easily transfer the pertinent information into TurboTax whenever the time comes for you to file.

  • Register for Healthcare if you Faced a Tax Punishment the Previous Year:

Should it be that you faced a tax punishment last year because you don’t have health insurance, you should quickly signup for a Marketplace plan before the deadline (January 31st) unless you’re faced with a serious life event. Only this way will you be able to avert a tax penalty by next year.

  • Update financial details in the Health Insurance Marketplace:

In the event that you bought a Marketplace insurance this year in this Open Enrollment period and got a tax credit to assist you pay for coverage, always remember to update your financial details in the Marketplace all through the year. This will make certain that you are receiving as much support as you are entitled to get and also assist you to avert any kind of additional tax credits (which you are not entitled to) next tax season.

The Scariest IRS Scams – Learn How to Avoid Them

 

We’ve started to consider income taxes as those 1099 and W-2 forms move in. The criminals out there have also started to think about upgrading their scam techniques. This article would serve as a guide on how to determine if the person calling is truly an IRS agent or a criminal, as this happens to be the most common means of scamming people.

  • First assume it is a scam: The IRS does not call people asking them to immediately pay their taxes, instead they will send a message to you via mail. In the event that you truly have taxes due for payment, it’s best you call the IRS with this number: 800-829-1040.
  • Quickly end the call: Try as much as possible not to connect with the caller. Don’t give out any form of detail; doing this will only expose you to additional fake calls. The best thing to do is to end the call.
  • Report the occurrence to the IRS: If you were contacted via phone call, quickly report the event to this number: 800-366-4484 (United States Treasury Inspector General of Tax Administration). If you were contacted via email, you should forward the message straight to the IRS using this link: phishing@irs.gov

We believe these few simple tips will help you stay safe from the criminals.

The Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) continue to receive reports from taxpayers saying they got false calls from people ordering payment while deceitfully claiming to be an IRS agent.

Statistically TIGTA has recorded over 90,000 complaints via their telephone hotline, till this very moment, TIGTA has recorded about 1,100 victims of scam who have mislaid an estimated $6M.

John Koskinen, an IRS Commissioner stated that “there are obvious signs that warn about these scary scams which persist at high levels all through the country. He went ahead to add that “taxpayers should not forget that their first IRS contact will never be a call from nowhere, but via official e-mail messages sent to your mail. Flag off all angry and threatening calls from individuals claiming they are IRS agents and demanding quick payment. This is never how the IRS operates! You should quickly end the call and contact the IRS or TIGTA”.

In addition, it is very essential for taxpayers to understand how the IRS operates. Take note that:

  • The IRS will never demand that you use a certain payment system to make tax payments
  • The IRS will never ask for information of your debit card, credit card, or prepaid card over the phone
  • The IRS will never demand instant payment over the phone and will not immediately take any enforcement action after a phone call. Taxpayers normally get early notifications of IRS enforcement actions.

 

Potential victims of phone scam may perhaps be reminded of their overdue taxes that must be paid to the IRS immediately or they’re entitled to huge refunds. In the event that they failed on the first try, oftentimes the criminals call back using a new technique.

Other features of these scams consist of:

  • Scammers might be able to narrate the last 4 digits of your Social Security Number.
  • Scammers make use of false IRS badge numbers and names. They usually make use of a common name and surname to identify them.
  • Scammers manipulate the IRS toll free number to make it look like it is the IRS truly calling.
  • Scammers from time to time send out false e-mail messages to few victims to assist their fake calls.
  • Victims sometimes hear noise of other ongoing calls on the background being conducted to imitate a call site.
  • After intimidating and frightening victims with license revocation, arrests, jail time and so on, scammers end the call and soon someone else calls back claiming to be from the police and the caller ID backs their claim.

You should be careful with the fraudsters! In case of any call or message that appears false, you should contact the IRS or TIGTA immediately.

Don’t fall victim! Help the IRS and TIGTA apprehend these crooks!

IRS Extends Tax Deadlines for Hurricane Irma Victims in Florida

 

 

 

 

The IRS (Internal Revenue Service) is extending the tax deadline for victims of Hurricane Irma in Florida up until January 31st to file certain business and personal tax returns and also to make their tax payment.

The IRS stated Friday that contains an added filing extension for the taxpayers with applicable extensions that ends on October 16th, and also businesses with extensions that ended just few weeks ago which was on September 15th. The IRS stated that it is giving the extended deadline to any county selected by the Federal Emergency Management Agency, as being eligible for either public assistance or individual assistance in Florida.

The tax release program will hold back a number of tax payment and tax filing deadlines starting from September 4th, 2017 in Florida. Due to this, the IRS is offering individuals and organizations that are involved in the hurricane disaster until January 31st, 2018, to have their returns filed and pay up any taxes that are due within this period.

Are you aware that:

  • Without the extended deadline, victims of hurricane Irma who pay their taxes quarterly would have been confronted with the deadline last week Friday which was September 15.
  • The new date, approved to victims of Harvey as well, applies to inhabitants of declared disaster counties.
  • People rendering relief efforts and those who depend on documents found in affected places should call the IRS if they’ll make effort to file on time.

 

This exercise is simply giving taxpayers that are affected by Hurricane Irma an official pardon from meeting some filing deadlines.

In addition, in the event that you filed your returns for an extension in 2016, the due date for receiving your paperwork is pushed back to January 31st rather than October 16th. If you’re in debt to the IRS, you will still be faced with a late-payment consequence and interest, because the 2016 payments were expired few months back, on 18th April. The deadline extension also applies to persons and businesses affected by Hurricane Irma.

 

Places within Florida Affected by the Hurricane Irma

The Internal Revenue Service (IRS) stated that areas within Florida that are affected by the Harvey will benefit from this program. These areas include:

  • South Bay
  • Moore Haven
  • Lake Harbor
  • Clewiston
  • Pahokee
  • Canal Point
  • Pahokee
  • Brevard
  • Monroe
  • Palm Beach
  • Lucie
  • Pinellas, etc.

These and many more counties are currently qualified for deadline and tax payment reprieve. Check the Federal Emergency Management Agency list updates for added areas that are qualified for disaster support, taxpayers residing in those areas will also be added in the IRS action.

If you are a taxpayer residing outside the affected area but you depend greatly on paperwork coming from the area affected by Hurricane Irma, you should call the IRS immediately and you can also get an official pardon on future deadlines.

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TOP 10 BEST SMALL BUSINESS FIELDS TO BE IN FOR FLORIDA

Are they any lucrative business opportunities to begin with small capital in Florida? Florida happens to be a state in America. It’s a very big state with a large number of inhabitants which makes it an ideal place for business because of its population. You can find more than enough business fields in Florida which you can invest in with small capital.

 

Top Fields and Investment Ideas to Start in Florida with Small Capital

Among the many things that makes business ideas unique in Florida is that there’s no state or local revenue tax, it has a strong and operational local economy, and also there’s a considerable amount of tourists that visits Florida every year.

 

  1. Visitors/ Tourist guide

There are over 10,000 tourists per year visiting Florida, this is a large number, in the event that you completely understand your way around the city, and can embark on this nice business idea with profitable returns in Florida, you have to be a friendly and sociable person. In Southern Florida, this business is counted among the best part-time businesses [if you’re starting alone], however, if it’s a venture, you can startup full-time immediately.

 

  1. Transport Service

Florida is a busy area due to the amount of tourists that visits. Therefore, much transport service will be required to move both locals and tourists from place to place. You can make good daily income if you own a car plus a valid driving license.

Should in case you’re considering starting as a company, you’ll need to register as a transport company in order to start up this trending business.

 

  1. Translation

Florida is a multicultural and multilingual state similar to most states in America. As a result of this, translation of language is regularly needed and because thousands of tourists visits Florida yearly, a translator is often required to assist translate the language of tourists to the locals and vice versa. Therefore, locals that want to sell to tourists must employ a translator that will assist with the translation for effective communication.

  1. Export Business

Florida has a very big port from where goods can be exported effectively to anywhere in the world. So, whether you’re into food processing, or agricultural practices, and you have knowledge of the strategies involved, you can start up this resourceful small business idea.

 

 

  1. Errand Service

Nowadays, most people are unable to do what they wish on a daily basis because of their tight schedule, due to this fact, they require the help of someone, things like – school pickups, walking the dog, babysitting, etc. Florida is just the right place to get into the errand service business.

 

 

  1. Smartphone Repairs

Statistically, 9 out of 10 individuals who live in Florida have a Smartphone. However the requirement for starting up this business is that you ought to have technical knowledge about Smartphone and how to repair them. Having this number of people, you must agree with me that a day won’t pass by without having to repair at least 10 phones.

 

 

  1. Baby Sitting

The residents living in Florida would cheerfully pay for babysitting job because they do not always have time to stay with or care for their babies. Make sure you don’t have any criminal record before applying to take up this job, because many people run a background checkup before employing you to cater for their child. This creative offline business idea is trending in Key West Florida and is appropriate for women.

 

 

  1. Restaurant/food vendor

Food intake is certain by every living thing and because many of them are tourists and they have a very busy schedule, they don’t find time to prepare some food, so they would gladly pay to eat good food. In case you have a nice cooking skill, you should try operating a mobile food vendor or restaurant.

 

 

  1. Event organizing

As mentioned earlier, because of the busy schedule, many individuals do not always have time to care for themselves, or planning their occasion, and oftentimes people do not have planning skills. So in case you’ve got planning skills, you should put it to test. This wouldn’t cost much, only a few bucks to get your business card ready.

 

 

  • Tutoring

Being a tutor, you’ll have to lecture people on different subjects and topics related to academics. Lectures can be planned during holidays or after school period to assist students do better with their grades. You can offer tutoring service to students physically or online.

 

Note: All these resourceful businesses in Florida are only suggestions; you need to be really dedicated in order to make money choosing any of these 10 top fields.