Category: Taxes
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Why are taxpayers so angry this year?
We are exactly one week into the first tax filing season under the new rules of the Tax Cuts and Jobs Act and I’ve already heard or read more than a hundred complaints from individual taxpayers about their federal income tax results. All but one of my clients so far are frustrated with the amount…
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Should I convert from an S Corp to C corp?
The majority of my business-oriented blog posts here take on a complex topic and re-frame the subject it in more simplistic terms for the purpose of opening a discussion from the perspective of small business management. This is exactly the purpose of this blog post. There is no attempt here to capture or even summarize…
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Four taxpayer reactions as the realities of new tax law hit home
Of the first 5 individual income tax returns that I prepared this week, 4 had unexpected problems and complications. Other tax preparers report unexpected and disturbing taxpayer reactions. Income tax filing season opened four days ago on January 29. Day by day now the real impact of the new federal tax law is hitting home…
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Six basic rules for handling a tax audit
Everyone hopes to avoid a tax audit but sometimes it happens anyway. An audit always starts with a written notification by mail from the IRS, state, or local tax authority. It might just be triggered by a simple computer-generated “mismatch” error or it might be the beginning of one of the more rare types of…
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Five tax deductions you will miss this year
The Tax Cuts and Jobs Act eliminated some of the tax deductions that helped some taxpayers reduce their taxable income. These are the five you are most likely to notice when you file your 2018 return: Personal exemptions Employee business expenses Tax preparation fees Investment advisor fees Mortgage interest and property taxes above $10,000 Talk…
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A quick peek at 2018 income tax results
Here is an interesting observation of an early filer, a married client with about $170,000 total income: This chart shows marginal and effective overall tax rates for 2016, 2017 and 2018. Note the steady decline in tax rates, first in 2017 due to tax planning and then in 2018 due to the change in tax…
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What is your chance of being audited by the IRS?
Audit rate based on 2017 IRS data: Form 1040 taxpayer types, in descending likelihood of audit Returns audited International taxpayers 1 in 19 Taxpayers with gross income before deductions of over $1 million 1 in 23 Sole proprietors with gross income before deductions between $100,000 and $200,000 1 in 48 Sole proprietors with gross income…
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LAST CALL for Form 1099 filings for small businesses and nonprofits.
LAST CALL for Form 1099 filings for small businesses and nonprofits. The cost of filing these is small compared to the penalty for not filing a single one of these forms. The deadline is January 31 and we typically request at least 24 hours notice to complete and file the forms correctly. Instructions from IRS are…
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When do I get my tax refund?
The IRS begins accepting tax returns and processing refunds next Tuesday January 29. I can prepare and submit your tax return for e-file acceptance before then but it essentially sits in an electronic waiting list until the 29th. See tonynovak.com/taxes for information on getting started with an early tax return filing. The first tax returns…
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How to refer me for income tax services
At this time of year I often receive questions like: “Do you handle individual taxes?“ “How much would it cost?“ “How do I get more information to get started?“ “Do I have to come to your office?“ YES, we welcome new individual tax clients and we make…