Reminder: Employers face new Jan. 31 W-2, W-3, 1099, 1096 filing deadline. Penalties for failure to file incorrect returns include $50 per Form W-2 and Form 1099 within 30 days of the due date ($100 more than 30 days of the due date and before August 1 and $260 after August 1).
Beginning in 2017, a new federal law requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) until mid-February. This change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent fraud. Iowa Department Revenue will also take time to apply its own fraud checks to EITC refund claims. State EITC refunds will not be paid until early March.
For starters, IRS wants 10% more tax if you do! The only time you can early withdraw your 401k without penalty:
-You have a big out of pocket medical bills.
-You are totally and permanently disabled.
-You are qualified to take regular payments from the your retirement plan already.
-You are divorced.
Federal Reserve Chair Janet Yellen said that the labor market doesn’t need a shot of fiscal stimulus any more. The Trump government will not assist on labor market betterment rather will use fiscal resources to boost productivity and focus on the long-term performance of the economy. It sounds like contract labor vs employee battle will come to an end here soon.
The new annual due date for filing Reports of Foreign Bank and Financial Accounts (FBAR) for foreign financial accounts is April 15. This date change was mandated by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41 (the Act). Specifically, section 2006(b)(11) of the Act changes the FBAR due date to April 15 to coincide with the Federal income tax filing season. The Act also mandates a maximum six-month extension of the filing deadline. To implement the statute with minimal burden to the public and FinCEN, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required. (Please note: The due date for FBAR filings for foreign financial accounts maintained during calendar year 2016 is April 18, 2017, consistent with the Federal income tax due date.)
Beginning Jan. 1, standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be the following:
• 53.5 cents per mile for business miles driven, down from 54 cents for 2016;
• 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016;
• 14 cents per mile driven in service of charitable organizations.
The IRS will begin accepting paper and electronic tax returns on Monday, January 23rd, with deadline day pushed back to Tuesday, April 18th. The due date has been extended from the traditional April 15th, as it falls on a Saturday this year, and because Emancipation Day, a legal holiday in the District of Columbia, is observed on the Monday. The agency also warned that some taxpayer will see delays to refunds this year, due to a new law requiring it to hold back refunds claiming the Earned Income Tax Credit and the Additional Child Tax Credit until February 15th.
The year is quickly coming to an end, but there is still time to take proper steps to reduce your 2016 tax liability. Here are seven last-minute tax-saving tips for everyone to consider, but you must act before December 31st:
1. Pay your 2016 property tax bill that’s due in early 2017.
2. Pay your fourth quarter state income tax estimated payment that’s due in January 2017.
3. Incur deductible medical expenses.
4. Pay tuition for academic periods that will begin in January, February or March of 2017.
5. Donate to your favorite charities.
6. Sell investments at a loss to offset capital gains you’ve recognized this year.
7. Ask your employer if your bonus can be deferred until January.
Keep in mind, however, that in certain situations these strategies might not make sense. If you are in business, your list of “hurry-up” might be much longer. To be absolutely certain about the last-minute savings on taxes, please contact the firm. We can help you maximize your tax savings for 2016.
Q: Does my company still have to do anything by the 1st of December deadline to satisfy the new overtime rule set by the Department of Labor (DOL)?
A: The short answer is NO. For now, the overtime rule will not take effect as planned on Dec. 1, so you, as the business owner, may continue to follow the existing overtime regulations. No change is needed at this time.
Q: Is this a final decision that permanently puts an end to the rule?
A: No, the overtime rule could still be implemented later down the road. A preliminary injunction is not permanent as it simply preserves the existing overtime rule until the court has a chance to review the merits of the case objecting to the revisions to the regulation.
Q: What should I do if my business has already either raised exempt employees' salaries to meet the new threshold or reclassified employees to nonexempt status?
A: It helps to know you are not the only one who had to take this course of action. In fact, you should be commended for your efforts to be compliant with the laws of the government. For the employee you felt you would not have raised the salary if it was not for the DOL rule, then you should go back to discuss this with the employee to retract the wage increase or you can always just leave as it is! Encourage them to work harder and prove their contributions to the company.
Q: I am still just mad and wondering whether the government has any understanding of business owners?
A: The simple answer is NO. But, it is any good business owner's job is to abide by the rules and the regulations of government, educate our law makers, and be involved and invested in the future of our country. Come to Immigrant Entrepreneurs Summit next year on Nov 18, 2017. Better yet, come to the mini event on May 23, 2017 at Ottumwa Indian Hills Community College at 525 Grandview Avenue, Ottumwa, IA 52501. Do not lose your voice and make an effort to be educated, stay relevant, and to be part of the business community and grow with us together.
If the only tax saving tool you have is to spend more before December 31, then we are glad you are looking at this message! The months of November and December are Community CPA’s tax planning season. At Community CPA, we understand spending more is the least efficient way to save taxes. In fact, our tax planning will not run your cash flow to zero. As part of our tax planning service, we will educate you the proper record keeping and accounting procedures so you would be prepared whenever IRS desires to audit you.
Pick up the phone and make an appointment with us before yearend, and you will start a new tax year PLANNED. Call us to setup an appointment at 515-288-3188 (DSM) or 319-208-3712 (Iowa City).
The new due dates affect the corporate tax returns, such as: Partnership (Form 1065), C-Corporation (Form 1120), and most importantly the report for Foreign Bank and Financial Accounts (FBAR or FinCEN Form 114). Please refer to the complete list of due dates shown below:
Community CPA is growing and expanding our team's expertise to help you with your audit, accounting, taxation, business consultation, and not to mention, other special cases related to immigration as well. Click here to see the team of professionals who are dedicated to providing only the best quality of work. We offer expertise with empathy, knowledge with understanding, and powerful technology with a human touch. Our team is here to share our experience and knowledge and to help you succeed, because your success is our success.
Individual Taxpayer Identification Numbers (ITINs) will no longer expire as long as you file your federal income tax return. In the meantime, any ITIN not used for five consecutive years will be deactivated starting 2016. Under the old policy, ITINs issued after Jan. 1, 2013 would have automatically expired after five years, even if used properly and regularly by taxpayers.
ITINs play a critical role in the tax administration system and assist with the collection of taxes from foreign nationals, resident and nonresident aliens. Designed specifically for tax purposes, ITINs are only issued to people who are not eligible to obtain a Social Security Number.
A taxpayer whose ITIN has been deactivated and needs to file a U.S. return can reapply using Form W-7. As with any ITIN application, original documents, such as passports, or copies of documents certified by the issuing agency must be submitted with the form.
Choosing an accountant is more than a business decision; it is also a personal decision. Whether you are an individual who sees an accountant once a year for tax filing, a novice entrepreneur with lots of questions and decisions to make, or the owner of an established business, choosing the right CPA firm is important.
A good accountant is indispensable to the success of every business. And a good accountant is more than just a "numbers" person.
Your CPA should do more than help with tax filings. They should help you be proactive in all of your financial dealings and can also serve as an adviser and sounding board, becoming an invaluable business partner. Experience, credentials, specialized expertise and references need to be factored into your decision, but personality and personal service are also important. And there's peace of mind in knowing who is handling your account.
Good communication, accessibility and service need to be considered. Is the accountant's office open six days a week, does the staff speak many languages, and do clients have 24/7 access to their financial information and online help with managing their books?
Does the staff participate in extensive training and ongoing continuing education, and does the firm subject its work to peer reviews, which are rigorous exams conducted by outside examiners that assure the quality and integrity of the work?
You should not underestimate the value of a Certified Public Accountant. Real value from an accounting firm means superior service, a forward-thinking attitude and a relationship you can rely on. Above all, your primary factor in choosing an accountant should be the value he or she can bring to the relationship. Community CPA & Associates, Inc. will not only meet your expectations, we will exceed them.