The Internal Revenue Service (IRS) reminds employers and small businesses of the new January 31 filing deadline for Forms W-2 and may also hold some refunds until February 15.
Employers – W-2 Deadline
The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, includes a new requirement for employers. They are now required to file their copies of Form W-2 submitted by January 31. The new January 31 filing deadline also applies to certain Forms 1099-MISC reporting non-employee compensation such as payments to independent contractors. The January 31 deadline has long applied to employers furnishing copies of these forms to their employees and that date remains unchanged.
In the past, employers typically had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of these forms. In addition, there are changes in requesting an extension to file the Form W-2. Only one 30-day extension to file Form W-2 is available and this extension is not automatic. If an extension is necessary, a Form 8809 Application for Extension of Time to File Information Returns must be completed as soon as you know an extension is necessary, but by January 31.
The new law requires the IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until February 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC.
Congratulations Kimberly N. Ellison-Taylor: First African American Female Chair at The American Institute of Certified Public Accountants (AICPA)
Mrs. Kimberly Ellison-Taylor
"The American Institute of CPAs has installed Kimberly N. Ellison-Taylor, global accounting strategy director for Oracle America, as the new chairman of the board of directors, making her the AICPA’s first African American female chairperson.
“Being a CPA changed my life,” said Ellison-Taylor during her acceptance speech at the AICPA’s Fall Meeting of Council in Orlando, Florida, on Tuesday. “For many of you—particularly if you’re a first-generation CPA like me—it probably changed yours, as well.”
Ellison-Taylor, 46, talked about the importance of preparation, anticipation, accountability and “taking bold steps” to provide a brighter future for the accounting profession. She remembered how she was attracted to the profession as an 8-year-old student during a career day in third grade.
“It’s our collective responsibility to open up the world of possibilities for the next generation—to recruit, retain, and advance our future leaders—our managing partners, CFOs, deans, agency leaders, and executives of the AICPA and state societies,” she added. “If you have an opportunity, please share your lessons learned, successes and also failures with our next leaders.”
Eric Hansen, chief operating officer of the accounting and advisory firm BKD, was elected vice chair, positioning him to succeed Ellison-Taylor in the volunteer post of chairman next year.
At Oracle, Ellison-Taylor supports the financial and professional services sectors. She has worked as the software company’s global practice team leader for health and human services, involved with cloud migration, fraud detection and prevention, customer experience and finance transformation initiatives. Before joining Oracle, Ellison-Taylor had leadership positions at the NASA Goddard Space Flight Center, Motorola, KPMG, and the Prince George’s County, Maryland, government.
Ellison-Taylor has served on the AICPA board for four years, most recently as vice chairman. She was a member of the AICPA Business and Industry Executive Committee and has worked with the AICPA Finance and Audit Committees. She is a past chair of the Maryland Association of CPAs, and was recognized by Accounting Today as one of the Top 100 most influential people in the profession. She also serves as chapter president of Sigma Gamma Rho-Anne Arundel County, Md., a community service sorority. She is a lifetime member of the National Association of Black Accountants." (Michael Cohn)
"A federal grand jury returned an indictment on Oct. 19 and unsealed today, charging the owners of adult foster care homes located throughout Michigan with 60 counts of failing to account for and pay over employment taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.
According to the indictment, Jeremiah and Nicolette Cheff of Grand Blanc, Michigan, controlled the financial and business operations of 16 foster care homes, including Hunter’s Home, Nico’s Place, Harmony Manor, Hilltop Estates and Deerwood Manor, which cared for individuals with mental illnesses and developmental and physical disabilities. It is alleged that from September 2010 through September 2014, the Cheffs withheld payroll taxes from their employees’ paychecks, failed to timely file employment tax returns, and failed to pay over the funds they withheld to the Internal Revenue Service (IRS).
If convicted, the Cheffs face a statutory maximum penalty of five years in prison for each count charged in the indictment, as well as a period of supervised release and monetary penalties.
An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey A. McLellan and Carl F. Brooker, IV of the Tax Division, who are prosecuting the case. Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Eastern District of Michigan for its substantial assistance." (DOJ).
Improper classification of workers, Employees vs. Independent Contractors, have plagued many businesses over several industries. Essentially, the company hiring these workers will attempt to classify them as Independent Contractors, though some situations warrant these workers to be classified as Employees. The ‘Great Debate’ on whether a worker is an Independent Contractor or an Employee is ongoing, despite the stated IRS guidelines, litigation battles, and other deterrents used to encourage proper classification of workers. The big question ‘Why Pay Taxes?’ that is on the lips of many often comes with different responses. There are many reasons why we should pay taxes. Other than it’s the law to pay taxes on income earned and lack thereof could result in fines, penalties, and/or imprisonment, our tax payments help fund public libraries, parks, and schools.
Why Pay Taxes?
Per the IRS publication 2105 (Rev. 3-2011), taxes are used to pay for:
Also, many arguments have come forth to assert that we do not have to pay taxes, which have been struck down as frivolous. Moreso, many have experienced that not paying their share of taxes could result in civil and criminal sanctions, prosecutions, prison sentences, disbarments, and professional license revocations. Why take that risk? There’s no need to take that risk. Tax Largie, Inc. can assist and help to keep you out of tax trouble.
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The Sixteenth Amendment to the Constitution - Taxes
It’s the law. “The Sixteenth Amendment to the Constitution, ratified on February 3, 1913, states, “The Congress shall have the power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” The Code is found in Title 26 of the United States Code. It is enacted by Congress and enforced by the IRS. Stay out of tax trouble.
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Below is a list of some common self-employed occupations that generally needs an Accounting professional to assist with their bookkeeping, accounting, payroll, and filing of applicable income tax returns – and help them to stay out of tax trouble, such as:
A Simple Solution: Hire Us; We’re Affordable!
If your employer does not pay taxes for you or you receive a Form 1099, then you will need to pay your taxes. Tax Largie, Inc. will be happy to assist you with all your business needs and help keep you out of tax trouble. The above business owners and self-employed professionals may hire us for several services that will help keep you out of tax trouble, which includes:
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The Internal Revenue Service (IRS) is serious about holding people accountable for fraudulent activities, which may have been once overlooked or dealt with by a mere ‘slap on the wrist’ , but now those fraudulent acts are being dealt with by prosecuting them. Those prosecutions eventually lead to steep fines and/or imprisonment. Please note that the IRS will prosecute for Failing to Pay Employment Tax; Failing to File a Tax Return; and Failing to Report Foreign Accounts (FBAR), among other frauds. According to the Department of Justice, Tax Division, cases include the following:
Tax Preparation Fraud / False Tax Returns
Tennessee – Two Women Plead Guilty, Ms. Tracey Brown of Total Tax Services of Nashville, TN & Ms.Michelle Theus of Cole Tax Services in La Vergne, TN.
Utah - Mr. Webber, Business Owner – Dealing in Firearms without a license and filing false tax returns.
Maryland – Mr. Cornell M. Jones, Jr.
Florida – Mr. Renel Herard of Herard Tax Services and Herard Security & Training Inc.
Foreign Bank Accounts (FBAR)
Connecticut – Undeclared Bank Account, Mr. Saul Hyatt
Michigan – Concealing Swiss Bank Account, Mr. Bernhard Rumbold
Tax Refund Fraud Scheme
Mr. Lawrence Collins and Icy Love Martin, and Mystique of Portland, OR
Greensboro, North Carolina - Mr. Henti Lucian Baird
St. Louis, MO – Mr. Semere Tsehaye of Instant Tax Service, A&S Tax Service LLC and ERI Enterprise LLC
Failing to File Income Tax Returns
Massachusetts – Mr. Keith Eaton
Failing to Pay Employment Tax
West Virginia – Mr. Michael Taylor & Ms, Jeanette Taylor of Taylor Contracting Y Taylor Ready-Mix LLC
Alabama - Mr. Kenneth Fearson
The list goes on and on and it’s growing. Fraud is not okay. The price for fraud is much higher than the benefit received from committing the fraud. We encourage you to speak to your CPA or Tax Professional to discuss strategies within the confines of the law about how to take advantage of allowable tax credits, deductions, etc. – the right way. It starts with proper recordkeeping, resulting in proper financials, and eventually correctly prepared tax returns.
Please contact us at (786) 715-6781 or firstname.lastname@example.org for a FREE consultation on your business needs. We'd love to help you organize, grow, prepare and file your financial and tax reports timely.
October is Breast Cancer Awareness Month
Firstly, I would like to extend a huge congratulations to all the breast cancer survivors/winners! You are an inspiration to all of us that are still battling this disease. To all the fighters out there, keep fighting! You’re winning!
“According to the World Health Organization, breast cancer is the most common cancer among women worldwide, claiming the lives of hundreds of thousands of women each year and affecting countries at all levels of modernization.” (National Breast Cancer Foundation). Awareness is one combative way we can all do our part and contribute to writing off this disease – permanently from all our lives. Men – you’re not exempt, because men can get breast cancer too.
In recent years, perhaps coinciding with the decline in prescriptive hormone replacement therapy after menopause, we have seen a gradual reduction in female breast cancer incidence rates among women aged 50 and older. Death rates from breast cancer have been declining since about 1990, in part due to better screening and early detection, increased awareness, and continually improving treatment options. (NBCF)
You may be able to write off some or all of your expenses incurred as a result of treating this disease. Other than bore you with the many ways you could have a benefit on your tax return, please remember to keep records or your receipts, payments, prescriptions, and/or any documentation associated with treating this disease – and inform your CPA.
I also want to say ‘Thank You’ to all the associations, foundations, professionals, family-members, and friends that support the cause to create aware and fight breast cancer – Thank You!
You generally can't deduct amounts paid or incurred for lobbying expenses. These include expenses to:
Covered executive branch official. A Covered Executive Branch Official, for the purpose of (4) above, is any of the following officials.
You can deduct certain lobbying expenses if they are Ordinary and Necessary expenses of carrying on your trade or business, such as:
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The 2016 Olympic winners won again! On Friday, October 7, 2016, President Obama signed into law – without ‘official comment’ - a new tax law aimed at benefiting the U.S. Olympic and Paralympic medalists. Essentially, these Olympic medalists will be able to avoid taxes on their medals and winnings. The new tax law or act is officially named the "United States Appreciation for Olympians and Paralympics Act of 2016.” It’s surely worthy of a gold medal.
To all our Olympic winners filing 2016 taxes in the U.S.A., you won again! Congratulations!
Parts of South Carolina, North Carolina, Florida, and Georgia have been declared disaster areas. Accordingly, individuals and businesses affected in those areas may be eligible to receive assistance from the Federal Emergency Management Agency (FEMA). Additionally, affected parties may be eligible for tax relief and deduction in current and future years.
South Carolina - Federal funding is now available to state and eligible tribal and local governments and certain private nonprofit organizations on a cost-sharing basis for emergency work in Beaufort, Berkeley, Charleston, Colleton, Darlington, Dillon, Dorchester, Florence, Georgetown, Horry, Jasper, Marion, and Williamsburg counties.
North Carolina – Federal funding is available for survivors in Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt, and Robeson Counties.
Florida - Federal funding is available to state and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for assistance for emergency work and the repair or replacement of disaster-damaged facilities damaged by Hurricane Matthew in Brevard, Duval, Flagler, Indian River, Nassau, St. Johns, St. Lucie and Volusia counties for debris removal and emergency protective measures, including direct federal assistance, under the Public Assistance program.
Georgia - Federal funding is available to state and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for assistance for emergency work and the repair or replacement of disaster-damaged facilities damaged by Hurricane Matthew in Bryan, Camden, Chatham, Glynn, Liberty, and McIntosh Counties for debris removal and emergency protective measures, including direct federal assistance, under the Public Assistance program.
Getting Assistance from FEMA
Affected individuals, including homeowners, renters, and business owners, in the above designated counties who suffered loss or damages due to Hurricane Matthew may register for assistance online at www.DisasterAssistance.gov, by downloading the FEMA mobile app, or by calling 1-800-621-FEMA (3362). For those who use 711 or Video Relay Service (VRS), the number is also 1-800-621-3362. For people using TTY, the number is 1-800-462-7585.
Type of Assistance
Grant assistance provided by FEMA for homeowners and renters can include funds to help with rent, temporary housing and home repairs to their primary residences, as well as other serious disaster-related needs, such as personal and necessary items, moving and storage expenses, transportation, medical and dental expenses, or funeral and burial and reinternment costs caused by the disaster. Other relief programs include crisis counseling and legal assistance.
The affected individuals or entities may also qualify for postponement of certain deadlines for taxpayers who reside or have a business in the disaster areas. For instance, certain deadlines falling on or after October 4, 2016, and on or before March 15, 2017 have been postponed to March 15, 2017. This includes the January 17, 2017 deadline for making quarterly estimated tax payments and the 2015 individual returns on extension to October 17. Also included are the Oct 31 and Jan 31 deadlines for quarterly payroll and excise tax returns.
The IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after October 4, as long as the deposits were made by October 19th, 2016.
Note - The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.
Got federal tax debt of $50,000 or more? The IRS now has the power to take away your passport, thanks to a transportation bill passed in December.
The IRS law, titled "Revocation or Denial of Passport in Case of Certain Tax Delinquencies," grants the IRS the ability to revoke passport privileges from taxpayers whose tax debt equals $50,000 or more by sending a message to the State Department. The law takes effect this month.
The IRS already works with the Justice Department to regulate US taxpayers who have foreign accounts through the Foreign Account Tax Compliance Act (FATCA), which was passed in 2010. The FATCA bill has routinely been criticized for unfairly extending the powers of the IRS abroad, placing ties with foreign banks where they are not needed.
The State Department already has the right to either refuse to issue or renew passports to people who owe more than $2,500 in child support or certain other debts, like travel expenses related to helping a passport applicant return to the US.
This new law, which comes out of previous iterations that stalled in Congress, is the first to take direct action in attempting to curb the travel of taxpayers who have outstanding tax debt.
“The [Senate Finance] Committee is aware that the amount of unpaid Federal tax debts continues to present a challenge to the IRS,” a report on the bill reads. “The Committee believes that tax compliance will increase if issuance of a passport is linked to payment of one's tax debts.”
In March of 2011, research done by the Government Accountability Office (GAO) explored the possibility of using passport issuance as a means of collecting taxes. GAO found that of the 16 million passports that were issued in 2008, about 224,000 of those individuals owed a little over 5.8 billion in unpaid federal taxes.