Trying to make sense of a new tax bracket isn’t as hard as it seems. Once you understand the IRS tax system, calculating your tax burden becomes a breeze. An unexpected raise at work bumped you into a higher tax bracket. While it elates you to have more money each paycheck, you also worry about what will happen to your taxes. Understanding how a higher salary affects your tax burden will save you many headaches when it comes time to…
Know the truth about online tax calculators before you file your personal taxes this year. Can you trust the results from online tax calculators? Many people find themselves wondering the answer to this question as they prepare their taxes. If you’re like most taxpayers, you don’t have the foggiest idea how much you’ll owe before you finish filing. After all, tax rules and regulations change all the time. Knowing your personal tax burden before the deadline could help get all…
Avoid these common and avoidable tax errors and keep Uncle Sam off your back. Did you know that small and avoidable tax errors are one of the main reasons for the IRS to audit an individual? No one is perfect, but you need to be as precise as possible whenever you file your return. The government isn’t very forgiving if you make a mistake or two on your taxes. In the best-case scenario, the IRS may delay your refund. However,…
How not to make the most common tax errors on your personal taxes this year. Whatever you do, don’t submit your taxes with tax errors! That’s easy to say, but harder to accomplish. This is especially true if you’re trying to tackle your tax prep on your own. But fret not, we are here with some simple ways you can avoid making mistakes when you file your personal taxes. Here are five of the most common tax errors, and how…
Are you making any of these common small business accounting mistakes? It’s time to get on track for 2019! While there’s no shortage of accounting software and applications available for small businesses today. But in many cases, the increase in their use is leading to an upsurge in small business accounting mistakes. Why? Because instead of turning to an accounting expert to handle their finances each year, small business owners are often giving it a go on their own with…
Here’s what you need to know about the accuracy of online tax calculators as you are preparing to file your 2018 personal taxes. Already thinking about filing your 2018 personal taxes and trying to decide if you should use online tax calculators? Maybe you have experienced some changes in your career and salary this year. The tax laws for the upcoming season have certainly changed. Looking to the future and planning ahead never hurt. Curious what your tax bill or…
Avoid these most common personal tax mistakes. Filing your returns every year is often the best way to ensure you get the most back, but there are many tax errors that you can make during this process that will cost you money. These are the most common personal tax mistakes that people like you make every year. Thankfully, they are easily avoidable if you follow the simple advice we discuss with each error. #1: Rounding Up When Making Deductions Have…
Are you at risk for making these common tax preparation errors? At best, tax preparation errors can go undetected. However, at worst, tax preparation errors can result in a rather hefty fine from the IRS or even jail time. In fact, a Cedar Hill couple recently received a conviction leading to 15 years in federal prison for tax preparation fraud. If you want to avoid the consequences associated with tax preparation fraud, make sure to avoid the top 10 tax…
You’re considering using online tax preparation programs. What should you know before you go down that road? If you're thinking about using online tax preparation, be selective and choose carefully. Some less-than-ethical companies recognize taxpayers as easy prey. They can and will take advantage of their own clients. Remember, only you are accountable for your tax return, regardless of who prepares it. There are two types of online tax preparation. You can hire an online company or individual to prepare…
Let's take a look at the world of online tax calculators and gauge whether they are a reliable way to estimate your taxes. Online tax calculators have emerged as a prevalent tool for many people to determine their taxes. As a result, a variety of calculator types have become available over the last few years. But are they as effective and efficient as advertised? Tax Accuracy Varies Depending on the Online Calculator Those who try out these calculators will quickly…
Is using tax software ever a good idea? A flood of new software and apps hit the market each year, all promising to make your tax returns a quick and easy process and to save you oodles of money. You may find the concept of using tax software an interesting idea, especially if you can save as much money as the advertisements claim. Let’s take a closer look at the pros and cons of doing your taxes with the aid…
What is a tax bracket, and what does it mean for you? The United States federal income tax utilizes a progressive - or tax bracket - system to determine how much singles or married couples will pay in yearly taxes. Since the implementation of the American Taxpayers Relief Act, the IRS divided the taxpayer population into seven tax brackets, determined by the amount of personal income earned within the space of a year. The more money you make, the higher…
Why using online tax calculators is a bad idea for your business. Have you considered trying online tax calculators to get an idea of how much your business will pay next year? Don't even consider it. These online tax calculators are seriously problematic for a variety of reasons. In fact, they can be a serious enough problem to impact your business for years. In extreme cases, relying on tax calculators can even lead you right into bankruptcy. What Are Tax…
Do you know how much these common tax errors can cost you? Tax errors are a serious problem that can impact your life for years. They can cost you thousands of dollars and disrupt your financial security. Here is how to avoid these common tax errors and stay free of excessive monetary loss. The Most Common Tax Errors Broken Down While there are dozens of possible tax errors, we've broken down the five most common: Simple filing errors – People…
Are you aware of these common tax preparation scams? As if it's not bad enough you might owe the IRS money, scammers who conduct tax preparation scams are looking to take advantage of you. They want your refund and possibly even your personal information. It's important to know the signs of a dishonest tax preparation practice. Here are three common tax preparation scams to watch out for: 1. Email Advertising for Tax Preparation People impersonate tax preparation professionals and state they're from…
We have been preparing tax returns for thirty years, but we’re much more than tax preparers. Our advisory services encompass the BIG picture to protect our clients through all phases of life. Transitional events, like marriage, building a family, including foster and adoption, divorce, starting a business, aging and death all come with new complexities. Our role is to help our clients have the best possible outcome. Let us be your trusted advisors. Filing status and dependents. Whether you’re single,…
If you adopted or attempted to adopt a child in 2015, you may qualify for a tax credit up to $13,400 for each child legally adopted. The credit is nonrefundable, which means it’s limited to your tax liability for the year. However, any credit in excess of your tax may be carried forward for up to five years or until fully used up, whichever comes first. If your employer reimbursed you for part of the costs of the adoption through…
If you were audited by the IRS, do you think they would be fair to you? Many people believe that if they have receipts and can prove their deductions, the IRS will accept it. That may have been true years ago, but today’s IRS is ruthless. This court case is proof of that. The Story David and Veronda Durden gave money to their church on a consistent basis. Over the course of a year, their contribution totaled about $25,000. During…
Facts: Tax Software Is Cheap. You Get What You Pay For. Tax software is marketed beautifully. TV ads show customers just pushing a button on a smart phone to reduce their taxes. With an IRS code of over 74,000 pages, the idea of tax simplicity is utterly seductive. Tax software is also cheap. It is also a lot quicker answering their fundamental questions than to read instructions on the IRS tax forms. If You Can Handle It, Your Tax Software…
As your income increases, what happens to tax brackets and the percentage the IRS takes? As your income rises, you move into a higher and higher tax brackets and pay a larger percentage of your income in taxes. This system is the progressive taxation design of our U.S. tax system. Today, the tax code has seven separate tax brackets, ranging from the lowest bracket of 10% for low-income earners to the top tax bracket of 39.6% for the highest earners.…
The IRS is auditing more people who deduct employee business expenses. If you work for someone and deduct work expenses, then this report is for you. If you are called in for an audit, do you know how to defend yourself? Many people go into an IRS audit with confidence, believing that their receipts will allow their tax deductions. But when the auditor is done with them, ALL of their work expenses are denied. So, where did they…
The Simpler Tax System—is it Right for You? Many people are frustrated with the complexity of the Tax Code and want it to be simpler. Their reasoning goes something like this: “I am a business owner, not a junior accountant, why do I have to keep all of these records. Why can’t it be simpler?” Well, the government understands your frustration and is here to help. The IRS allows you to elect the Simple Method of accounting. The…
Obamacare and Your Personal Tax Return Although the Obama administration delayed the employer mandate to 2015 (firms with 50 or more full-time employees must provide affordable health insurance to workers or pay a stiff fine) the individual mandate’s start date wasn’t deferred. Beginning January 1, everyone without health insurance for themselves and their dependents will owe a tax penalty if they fail to obtain health insurance after February 15, 2014. You don’t need to worry about this new…
10 IRS Audit Tricks to Take MORE from You The IRS has become more aggressive in collecting taxes and has implemented new methods to balance the federal deficit from your pocketbook, including: More automated Notices (many of them are wrong) The IRS Automated Under-Reporter Program has been very effective in collecting taxes. In 2011 it collected an additional $1,670 per CP2000 letter without the aid of humans based on a mismatch of information reported to the IRS compared…
Instead of hiring tax preparers who simply enter numbers into software, look instead for a true tax professional who prepares taxes and has the following qualifications: Is the tax pro licensed? CPAs and enrolled agents (EAs) are licensed in all types of tax matters. Very few preparers in the big chain tax prep stores are licensed or possess more than a minimal level of tax knowledge. Use only tax pros available year-round. Are you able to contact your tax preparer…
It’s amazing that a large number of people have their taxes prepared by H&R Block, Jackson-Hewitt, Liberty Tax and other large tax preparation chains, when most of their preparers are unlicensed, seasonal and possess a minimal level of tax knowledge. When reviewing tax returns prepared by the big chains, we find obvious errors on many of them. Perhaps it would be understandable, if they charged low fees, but many of them charge as much as the higher skilled licensed firms.…
You may be eligible for a Premium Tax Credit (PTC) to subsidize the cost of your health insurance premiums. The only plans that qualify for the PTC are those acquired through a qualified health insurance exchange (exchange). The exchanges can determine eligibility and the amount of your PTC (if any) based on your family size and projected household income (including spouse and dependents’ income) for the year. People not eligible for the PTC Very low income individuals who are eligible…
Did you know that because of the Affordable Care Act (Obamacare) your tax returns will never be the same? If you, your spouse or your dependents lack health insurance (beginning in 2014) you may owe a penalty on your federal tax return (unless you qualify for an exemption). To avoid the penalty, you must have a qualified health plan that meets the standards under Obamacare. You may be exempted from the penalty if: You already have health insurance provided by…
Many people believe that preparing their own taxes is cheaper than hiring a professional, but saving money on tax preparation (especially for business owners) can cost you more in taxes. And since time is money, you’ll save countless hours by NOT doing it yourself; not needing to learn the new tax rules nor trying to determine which ones apply and which ones don’t. One of the problems with self-prepared tax returns is that the software will actually do what you tell…
At Incompass, we don’t employ seasonal non-licensed tax preparers, like the big chains hire. Our tax professionals are LICENSED Enrolled Agents (EAs) or Certified Public Accountants (CPAs). Most people know what a CPA is or have at least heard the term CPA, but many are not aware of the tax professionals called EAs. One reason is that there are about ten times more CPAs than EAs. EAs are federally licensed by the Dept. of Treasury to prepare tax returns and…
Have you ever wondered why some tax returns are audited by the IRS while most are ignored? Well, there’s a whole host of reasons to this age-old question. The IRS doesn’t have enough personnel and resources to examine each and every tax return filed during a year, so they rely on a variety of systems to target the returns that they believe will generate the most revenue per hour of time for the auditor. Why Lower Incomes are Audited at…
Beware of telemarketers and advertisers on radio and television who make claims that sound too good to be true and who claim that they can settle IRS claims for “pennies on the dollar”. To avoid getting ripped-off in these scams, be sure to use local tax professionals whenever you have IRS problems. Check the company’s website to verify that actual tax resolution professionals are employed, such as Enrolled Agents, CPAs, or tax attorneys in their firms. Most of the scam…
You will receive much more benefit each year, if you have your taxes prepared by a licensed tax professional (an EA or CPA), instead of one of the giant chain tax preparation offices. The giant chains, such as H&R Block, Jackson-Hewitt, Liberty Tax and others, hire unlicensed, low-skilled, seasonal preparers to provide tax preparation services each year. Then, as soon as Tax Season is over, they lay off over 90% of their tax preparers. For about the same tax preparation…
Yes. A qualified tax professional with all of the facts at his or her disposal can determine the appropriateness of the application of any tax law to your given situation. Every year there are numerous changes to the tax laws and the tax code. IRS Code sections now number from 1 to over 9,800 and encompass more than 11,000 pages. Frequently, provisions are added while others expire. Some are indexed for inflation, so they change as well. Still others are…
It is amazing to us that a very large number of people have their tax returns prepared by H&R Block, Jackson-Hewitt, Liberty Tax and other large chain tax preparation offices. Most of the preparers in these offices are unlicensed, seasonal preparers who possess a minimum level of tax knowledge. These big chain tax preparation offices even charge about the same amount for a return as we do here at Incompass. Why settle for drive-through fast food style tax preparation, when…
We believe in developing long-term relationships with our clients. We not only work to find that deduction or credit that is often missed by others, but we want to be there at each phase of your life. Whether you are beginning a career or a business, getting married, having children, or getting divorced; it is important that you have an advisor to help you through the complexities of these events. By building that relationship, we are already there when a…
Don't fall victim to tax scams. Remember that if it sounds too good to be true, it probably is. Watch out for schemes that promise to reduce or eliminate taxes. Involvement with tax schemes can lead to imprisonment and fines. The IRS pursues and shuts down promoters of these and numerous other scams. Anyone pulled into these schemes can also face repayment of taxes plus interest and penalties. The IRS urges people to avoid these common schemes: Misclassifying worker status. …
So, what should you be looking for in a tax preparer? The IRS and many consumer watchdog organizations give advice on how to choose a tax preparer. The following is a summary of some of their points. Take note that the large chain firms do not meet this criterion Tips for Choosing a Tax Preparer Check the Preparer’s credentials Is the preparer licensed? Very few preparers in the large tax preparation offices are licensed. The only individuals that are licensed…
What Are You Going to Buy with Your Tax Savings? We do more than just preparing tax returns. We can actually help you keep more of your hard-earned dollars—money that could have been lost forever to taxes that you did not need to owe. That is money you could buy something with. What are you planning to do with this new-found money? How Are We Able to Reduce Your Taxes? Congress is constantly tinkering with the Tax Code each year,…
