Average Tax Prep Fee

January 15, 2015 / Taxes

According to a survey by the National Society of Accountants, the average fee for preparing a tax return, including an itemized Form 1040 with Schedule A and a state tax return, will increase a few dollars to $273 this year, a 4.6 percent increase over the average fee of $261 last year.  The figure also represents an 11 percent increase from two years ago when the survey was conducted.

The average cost to prepare a Form 1040 and state return this season without itemized deductions is expected to be $159, also a 4.6 percent increase over the average fee last year, which was $152. It is an 11.2 percent increase from two years ago.

“When you consider that it takes the average taxpayer five hours to complete a tax return, this is a very strong value,” said NSA executive vice president John Ams in a statement. “The tax code continues to become more complex each year, including some new Affordable Care Act reporting requirements. Professional tax preparers may also be able to find tax deductions and credits that may taxpayers might not notice.”

Partner with us to ensure no missed deductions or misstatement of income on your tax return.  We provide personalized service at rates lower than other accounting firms and tax sweat shops.  Call today for your free consultation.

New Rules on Tax-Free IRA Rollovers

December 24, 2014 / Taxes

Through the end of 2014, an individual may rollover each IRA he or she owns into a new IRA one time and avoid paying tax on the rollover(s).  Beginning in 2015, all IRAs owned by the taxpayer will be treated as one IRA for tax-free purposes.  Therefore, only one tax-free rollover will be allowed in future tax years.  Rolling over multiple IRAs will create taxable events.

For full details, visit the IRS website http://www.irs.gov/uac/Newsroom/IRS-Clarifies-Application-of-One-Per-Year-Limit-on-IRA-Rollovers-Allows-Owners-of-Multiple-IRAs-a-Fresh-Start-in-2015

Gifting Limits Unchanged

December 24, 2014 / Taxes

The annual contribution amount excluded from gift tax remains at $14,000 for each designated beneficiary and $28,000 for each designated beneficiary for married couples who elect to split gifts on their gift tax returns.  This applies for both tax years 2014 and 2015.

For more details, visit the IRS website at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes

Whistleblower Incentives

August 11, 2014 / Taxes

Did you know you could get awarded for being a whistleblower?  The Internal Revenue Service is giving more incentives for tipsters by increasing the potential share of the proceeds the IRS collects on extra tax revenue.  More information is available in Section 7623 of the Tax Code.  Claim your incentive on Form 211, Application for Award for Original Information.

IRS Fights Fraud with Direct Deposit Limits

July 26, 2014 / Taxes

In an effort to combat fraud and identity theft, new IRS procedures effective January 2015 will limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three.

The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer.

Taxpayers also will receive a notice informing them that the account has exceeded the direct deposit limits and that they will receive a paper refund check in approximately four weeks if there are no other issues with the return. Taxpayers can track their refunds at Where’s My Refund?

The vast majority of taxpayers will not be affected by this limitation, and we would encourage taxpayers and tax preparers to continue to use direct deposit. It is the fastest, safest way for taxpayers to receive refunds.

The direct deposit limit will prevent criminals from easily obtaining multiple refunds. The limit applies to financial accounts, such as bank savings or checking accounts, and to prepaid, reloadable cards or debit cards.

However, the limitation may affect some taxpayers, such as families in which the parent’s and children’s refunds are deposited into a family-held bank account. Taxpayers in this situation should make other deposit arrangements or expect to receive paper refund checks.

The new limitation also will protect taxpayers from preparers who obtain payment for their tax preparation services by depositing part or all of their clients’ refunds into the preparers’ own bank accounts. The new direct deposit limits will help eliminate this type of abuse.
Direct deposit must only be made to accounts bearing the taxpayer’s name. Preparer fees cannot be recovered by using Form 8888 to split the refund or by preparers opening a joint bank account with taxpayers. These actions by preparers are subject to penalty under the Internal Revenue Code and to discipline under Treasury Circular 230 (also, see Circular 230 Tax Professionals page).

Gifting Limits Increased

October 31, 2013 / Taxes

The annual contribution amount excluded from gift tax has increased from $13,000 to $14,000 for each designated beneficiary and from $26,000 to $28,000 for each designated beneficiary for married couples who elect to split gifts on their gift tax returns.

The special 529 plan gift tax exclusion for contributions made in one year to a designated beneficiary increased from $65,000 to $70,000 for single filers and from $130,000 to $140,000 for married couples who elect to split gifts on their gift tax returns.

2014 Tax Season to Start Later Following Government Closure

October 22, 2013 / Government, Taxes

The 2014 tax season is going to start a little later after the Government closure in 2013.

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The 3.8% Net Investment Income Tax

October 12, 2013 / Investment, Taxes

Originating as a component of 2010 health care legislation and first effective in 2013, the 3.8% NIIT is assessed on the lesser of net investment income or modified adjusted gross income (MAGI) above specific thresholds. The MAGI thresholds are $200,000 for single individuals, $250,000 or joint filers and surviving spouses, and $125,000 for married taxpayers filing separate returns.

Inflation Adjustments Predicted to Fall

October 7, 2013 / Taxes

Although the IRS will not release official details until later in the year, projections for 2014’s inflation adjustments to tax-code provisions put the rate at around 1.6% – much lower than last year’s figure of 2.5%. If the figure proves to be accurate, many taxpayers will find themselves saving money – for instance, a married couple filing jointly on income of $100,000 will owe $145 less in 2014 than 2013.

IRS Suspends Tax Refunds and Tax Court Closes during Government Shutdown

October 2, 2013 / Government, Taxes

The Internal Revenue Service has temporarily stopped sending out tax refunds, and the Tax Court has suspended operations during the federal government shutdown, as lawmakers in Congress continue their battle over delaying or defunding “Obamacare” for a year. However, the IRS has confirmed that Americans must continue to pay their taxes throughout the Government shutdown. Tax audits have also been suspended until the Government reopens.