Ask Bob: Should I Hire an Accountant or Do Taxes Myself? (7 FAQs)
Posted on June 9th, 2020
The big question: Is hiring an accountant to do my tax return really worth it?
At this time of year, we’re all bombarded with ads promoting the simplicity and savings of using online tax software or walk-in tax prep centers. For people with a simple W2 form and maybe an investment account or two, these services will get the job done.
However, there are many situations where hiring an accountant can save you thousands of dollars, help you avoid an audit and fines, and set you up for an even more profitable year ahead. The question is: which category do you fall into?
In our latest edition of “Ask Bob,” we answer frequently asked questions about whether it’s really necessary to hire an accountant, or if you can go it alone. Here’s what Bob had to say… Read More…
Who Can Represent You Before the IRS?
Posted on August 5th, 2019
Many people use a tax professional to prepare their taxes. Anyone who prepares, or assists in preparing, all or substantially all of a federal tax return for compensation is required to have a valid Preparer Tax Identification Number (PTIN). All enrolled agents must also have a valid PTIN.
If you choose to have someone prepare your federal tax return, then you should know who can represent you before the IRS if there is a problem with your return. Here’s what you should know: Read More…
Don’t Miss Out! 7 Tips to Ensure Your Business Earns the 20% QBI Tax Deduction
Posted on December 17th, 2018
What is the 20% QBI Tax Deduction?
In the tax world – and at Robert P. Russo, CPA – everyone is talking about QBI. QBI stands for qualified business income, and it’s the key to unlocking a very nice 20% QBI tax deduction for certain business owners. Read More…
Tax Considerations when Hiring Household Help
Posted on October 4th, 2018
If you employ someone to work for you around your house, it is important to consider the tax implications of this type of arrangement. While many people disregard the need to pay taxes on household employees, they do so at the risk of paying stiff tax penalties down the road. Read More…
Small Business: Budget vs. Actual Reports — Clear About Planning
Posted on July 6th, 2018
What if there were a tool that helped you create crystal-clear plans, provided you with continual feedback about how well your plan was working, and that told you exactly what’s working and what isn’t?
Well, there is such a tool; it’s called the Budget vs. Actual Report, and it’s exactly what you need to be able to consistently make smart business decisions to keep your business on track for success. Read More…
IRS Debuts New Tax Exempt Organization Search Tool
Posted on July 3rd, 2018
As hurricane season gets underway—and with it, the possibility of scam groups masquerading as charitable organizations—taxpayers should know about the new tax-exempt organization search tool. Located on the IRS website, the Tax Exempt Organization Search (TEOS) tool replaces the EO Select Check tool and enables taxpayers to search and access information about tax-exempt organizations quickly. TEOS is mobile friendly as well, accessible on tablets or smartphones. Read More…
Tax Tips: Obtaining Prior-Year Tax Information
Posted on May 2nd, 2018
Tax season may be over, but you still need to hang onto your tax returns and other tax records for at least three years. However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be an indication of fraud they have the authority to go back six years in an audit. Furthermore, some documents including those related to real estate sales should be kept for three years after filing the return on which they reported the transaction. Read More…
Tax Tips for Foreign Taxpayers
Posted on March 1st, 2018
If you are living or working outside the United States, you generally must file and pay your tax in the same way as people living in the U.S. This includes people with dual citizenship.
In addition, U.S. taxpayers with foreign accounts exceeding certain thresholds may be required to file Form FinCen114, known as the “FBAR” as well as Form 8938, also referred to as “FATCA.”
FBAR is not a tax form, but is due to the Treasury Department by April 17, 2018, and must be filed electronically through the BSA E-Filing System website. It may be extended to October 15.FATCA (Form 8938) is submitted on the tax due date (including extensions, if any,) of your income tax return.
Here’s what else you need to know about reporting foreign income: Read More…
Tips for Getting Paid on Time
Posted on March 1st, 2018
For many business owners, collecting on your accounts receivables can be challenging especially as more people switch from established collection procedures to online payment methods. The good news is that you can take positive action to improve collection rates, shorten the aging days of your accounts receivable, help your business improve its cash flow and tighten up its credit and collections policies. While some of the tips discussed here may not be suitable for every business most can serve as general guidelines to give your company more financial stability.
Define Your Policy. Define and stick to concrete credit guidelines. Your sales force should not sell to customers who are not credit-worthy, or who have become delinquent. You should also clearly delineate what leeway salespeople have to vary from these guidelines in attempting to attract customers.
You should have a system of controls for checking out a potential customer’s credit, and it should be used before an order is shipped. Further, there should be clear communication between the accounting department and the sales department as to current customers who become delinquent.
Clearly Explain Your Payment Policy. Invoices should contain clear written information about how much time customers have to pay, and what will happen if they exceed those limits.
Make sure invoices (both paper and electronic) include a telephone number and website address so customers can contact you with billing questions. If you send an invoice via the US mail, also include a pre-addressed envelope.
Federal Tax Forms: Which one should you use?
Posted on February 1st, 2018
U.S. citizens and resident aliens use one of three different forms for filing individual federal income tax returns: 1040EZ, 1040A, or 1040. If you’re wondering which form you should use, keep reading.
Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, is the least complicated federal tax form. however, if you file Form 1040EZ, you should be aware that you can’t itemize deductions or claim any adjustments to income or tax credits other than the earned income credit. Use Form 1040EZ if:
- Your filing status is single or married filing jointly, you claim no dependents, and were under age 65 on January 1, 2018, and not blind at the end of 2017
- Your taxable income is less than $100,000 and is derived only from wages, salaries, tips, taxable scholarship and fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends
- Your taxable interest is not over $1,500
- You don’t owe any household employment taxes on wages you paid to a household employee
Note: You can’t use Form 1040EZ to claim the Premium Tax Credit. You also can’t use this form if you received advance payments of this credit in 2017.
Missing Important Tax Forms? Here’s what to do
Posted on February 1st, 2018
You should receive a Form W-2, Wage and Tax Statement, from each of your employers for use in preparing your federal tax return. Employers must furnish this record of 2017 earnings and withheld taxes no later than January 31, 2018 (allow several days for delivery if mailed).
If you do not receive your Form W-2, contact your employer to find out if and when the W-2 was mailed. If it was mailed, it may have been returned to your employer because of an incorrect address. After contacting your employer, allow a reasonable amount of time for your employer to resend or to issue the W-2.
If you received certain types of income, you may receive a Form 1099 in addition to or instead of a W-2. Payers have until January 31 to mail these to you.
Late-Filing Penalty Relief for Partnerships
Posted on January 5th, 2018
The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Surface Transportation Act) changed the date by which a partnership, real estate mortgage investment conduits (REMICs), or other entity must file its annual return. For calendar year filers, the due date for filing the annual return or request for an extension changed from April 15 (April 18 in 2017) to March 15.
Many entities filed their returns or their extension request for tax year 2016 by the April deadline, and if not for the Surface Transportation Act, these returns and requests for extension of time to file would have been on time.