Category: Taxes
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Quoting fees for tax return preparation
Another accountant proposed the concept that there is significant business value of having a standardized and rehearsed response to an initial call from a potential client asking about tax work. I agree. We presume that a primary motivation of the caller is to push for price information. But giving a price with limited information is risky and,…
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Clear explanation that there are no “1099 employees”
I like this clear simple language in Employee Benefit News: “Employers face an uphill battle in classifying a worker as an independent contractor due to DOL guidance that defines ‘employee’ so broadly that such a classification should only be reserved for a narrow subset of workers.” It is amazing how many employers are oblivious of…
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Most workers are employees
The issue of worker misclassification – where businesses classify workers as independent contractors and local, state and federal authorities call them employees – is a long-standing problem area for small businesses. Federal and state auditors (not just tax but worker’s compensation as well) have been engaged in an aggressive “crackdown” on misclassified workers. This week…
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Tax planning for small business excise tax penalties under IRC 4980D
Tax professionals are looking for the best way to approach clients in this environment of uncertainty surrounding new excise taxes for small business health plans. The excise tax affects two types of plans: 1) those that use individual health insurance, and 2) those that reimburse employee out-of-pocket expenses (often called an “HRA”). Those who say…
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Fixing the problems of financial do-it-yourselfers
New Jersey financial adviser Michael Kay wrote in yesterday’s Wall Street Journal “Do-it-yourselfers often approach advisers as a last resort when they have an especially complex or urgent financial issue, and advisers should proceed carefully with this type of client.” Since the launch of my own practice six months ago, I notice that a high…
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“CPA is too expensive” says this woman
but ignorance is priceless! A professional tax preparer shared this hilarious story: A single woman with a salaried position was looking for help with her “simple” tax return. She also has a side business as an artist. The art work generates minimal income but much larger tax deductions that resulted in losses of at least…
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No double taxation for dual state residents
Can a state or local government tax your income that was earned and already taxed in another state? That was the question before the U.S. Supreme Court over the past few years and an opinion was finally issued this week. “NO” says SCOTUS in a 5-4 decision. The surprise to me was that it was such a close…
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Lessons to be learned from Manco and Manco tax evasion case
Philadelphia area newspapers have been following a high-profile tax evasion prosecution of the owners of South Jersey’s most successful pizza shops. The owners of Manco and Manco pizza are accused of failing to report almost a million dollars of cash receipts over a period of years. I have no intent to comment on the details of…
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Pennsylvania Unreimbursed Expenses (UE) Tax Audits
I noticed that all of my Pennsylvania tax clients who took a deduction for unreimbursed expenses (UE) received an audit response letter from the PA Department of Revenue. The problem is that the cost of responding to the audit exceeds the economic value of the deduction. In that case, the most reasonable economic response is…
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Sales tax on interstate accounting services
The Democrat-led Finance Committee of the Connecticut General Assembly voted yesterday (4/29/2015) to expand its state sales tax to include accounting services. The Senate President Pro Tem said that he supports the changes but there appears to be opposition to the move beyond that. Three states currently tax professional services: New Mexico, Hawaii and South…