Monday, January 27, 2014

Welcome to 2014

 Another year has gone by. And as usual there have been many tax law changes. Remember, we are available year-round to help you find tax and financial solutions to your everyday needs. We are more than number crunchers. We are people who care about you and your desire to improve your tax and financial picture. Our goal is to grow ATS by maintaining a mutually satisfying and long-lasting relationship with you.  We thank you for your continued business. We appreciate and invite new clients through your referrals to friends, family and business associates.  We will continue to reward you for your efforts. We encourage you to promote our services. We, “The Tax Angels”, are here to watch over you and guide you through the vast tax abyss.
For your convenience our website provides helpful information. You can learn about the services and the beginnings of ATS, the Tax Angel staff professional affiliates and key partners. You can also print client information documents necessary for your tax appointment as well as the checklist to help you prepare for your appointment. Under helpful hints you will find items such as guidelines for valuing noncash donations, current mileage rates, recordkeeping requirements and more. Our goal is to keep you informed with up-to-date tax changes via our newsletter or postings on our blog. We welcome your ideas and suggestions to improve this tool. Remember the website is designed for you!
ATS Tax and Financial Solutions now have 8 Angels on its staff: 2 Tax Professionals, 2 Business Accountants, and 4 Office Support Angels. We also have a working relationship with: Estate Trust Attorney, Bankruptcy Attorney, Mortgage Broker, Financial Advisor, Payroll Service Provider and more.
We invite you to communicate via email with Deborah, our Client Relations Specialist, whom everyone adores. You can ask questions, make an appointment or just say hi to brighten her day.  Any Tax questions will be forwarded to the appropriate Tax Angel for a response.
With sincere gratitude and appreciation,
Sylvia Barata, CEO and President
And all the Tax Angels at ATS

Friday, January 24, 2014

Meet The Angels: Deborah Wilson, Client Relations Specialist

Deborah Wilson, Client Relations Specialist
Deborah joined ATS in January, 2008. She earned her "ANGEL" wings by providing professional support, and outstanding service to ATS employees, clients and prospective clients. With Deborah, you are guaranteed enthusiastic support and friendly service with a smile.

Tuesday, January 21, 2014

Meet The Angels: Anne Arms, Enrolled Agent

Anne has been a tax preparer for over 38 years. She brought her considerable skills to the ATS team in 2001. She began her career as a tax preparer, office supervisor, and course instructor for a well-known national tax franchise, then worked as a tax preparer for a private firm before joining ATS. She is also an Enrolled Agent and is very active in the California Society of Enrolled Agents where she served two years as Secretary and four years as chair of the Education Committee. She served the North Bay Chapter of Enrolled Agents as President in 2002-2003. And she was also the Charter President of the newly formed Solano-Napa Chapter in 2006-2007. Her specialty here at ATS is preparing returns for individuals and fiduciary returns for estates and trusts.

Friday, January 17, 2014

Meet The Angels: Sylvia Barata, Owner/President, Enrolled Agent

Sylvia Barata, Owner/President, Enrolled Agent
Sylvia started her tax career with the Internal Revenue Service. While there she answered tax questions, instructed IRS employees, monitored the toll-free line for accuracy, supervised, and made public appearances as the Media Relations tax expert. She was recognized for her expertise with many awards, including "Federal Employee of the Year." After 10 years, she decided to open her own company, Affordable Tax Service, and in 1985 became an Enrolled Agent. For nearly 38 years Sylvia has been preparing both individual and business tax returns. With her extensive knowledge, Sylvia often assists clients with personal finance planning customized to their needs. She is also trained in the special rules for clergy, people with disabilities, foreign tax issues, and small business needs. Sylvia is dedicated to bringing her clients the best service available. She and her staff of Tax Angels work diligently to help clients reach their goals.

Saturday, January 11, 2014

Tax Law Changes for 2014

Just like another year has come and gone, there is a handful of tax laws that will come and go starting on January 1, 2014. Some of the changes are due to expiring laws that were enacted in an attempt to spur economic growth during the most recent recession - others were caused by new legislation, namely the Affordable Care Act, or otherwise known as Obama Care.
The first and by far the most widely discussed tax law change is related to the new health care law. The main component of the law that will effect taxpayers is the individual mandate requiring individuals to purchase health insurance or receive a penalty. First and foremost, you will not be penalized for not carrying insurance until you file your 2014 tax return in early 2015, this goes for all laws that take effect starting in 2014.
But if you do not carrying qualified minimum coverage by March 31, 2014 you will start to incur a penalty that can amount to either $95 dollars per adult + 47.50 per dependent in your household, or 1% of total household income, whichever is greater. The cap of the penalty is annual cost of a bronze rated insurance plan for you or your family. As mentioned earlier, this penalty would be collected when you file your 2014 return in early 2015 - via a refund reduction or an adjusted balance increase if no refund was due.
One common tax deduction that is going away will have an adverse affect on some teachers, this will cause a likely tax increase during 2014 because Congress is not extending the tax deduction that allowed teachers to write off up to $250 dollars of their classroom expenses. Up until now, this deduction was considered above the line, or taking a deduction without itemizing. Since nearly 75% of taxpayers do not have enough deductions to itemize - this could have an impact on a number of teachers nationwide.
Another deduction that is going away is the PMI deduction. Since 2010, homeowners who pay mortgage insurance premiums have been able to deduct them along with the interest they pay on their home loans. This will be no more starting January 1. Homeowners who put down less than 20% during the home purchase process were required to carry this type of mortgage insurance. That being said, mortgage interest and real estate taxes are still deductible in 2014 as an itemized deduction - resulting in homeowners being able to deduct much more than if they rented their home or apartment.
One exemption that is going away but is not getting much attention right now is the primary residence cancellation of debt exclusion. Homeowner's in recent years, who had mortgage debt forgiven by a lender via short sale have been exempted from paying tax on the forgiven debt. This provision was passed to improve liquidity and stabilization in the housing market a few years back, but wasn't extended through to 2014. Going forward, distressed homeowners may possibly have to include forgiven debt as income in that given tax year. This could have a huge impact on the number of distressed properties that change hands nationwide - and will dramatically increase the tax liability of homeowners who have all, or a portion of their debt forgiven.
Robert Waldeck is the owner of Waldeck Tax in Myrtle Beach, SC. He advises his clients on taxes, personal finance, and credit repair. Waldeck Tax can help you with any accounting and personal finance needs that you may have.

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Wednesday, January 8, 2014

Sunday, January 5, 2014

10 Must Keep Tax Documents for Small Businesses

For record keeping, If you want to keep folders with appropriate labels it's fine. Label them neatly in a chosen file storage. But if you want to save some trees and GO GREEN, I suggest purchasing a data storage device such as a USB drive, etc. and the best format to use is Adobe's PDF file format. Some new business owners cannot afford to hire a professional bookkeeper or have no time to take a bookkeeping course so they can do this themselves, either way it's a must. I also suggest reading IRS Publication 583, Starting a Business and Keeping Records. So here you go, the 10 Must Keep Documents for your Small Business - for Tax Purposes:
1. Keep copies of all forms of payments from your clients. Checks, money orders, cashier's checks, etc. including copies of the invoices you've sent out. Make sure you attach payments to all invoices, in case of an IRS audit, it might raise a question if they don't see a payment to an invoice. Also, keep the check payments separate from loan checks, because they are not actually income but a debt.
2. Keep all bank statements, including all pages. For personal, business and investments accounts.
3. Keep all receipts. Everything that you paid for by cash, check or credit card. For all bills paid including utilities, contractors, advertising, marketing, business gifts, inventory, maintenance, professional help, salaries, furnitures, equipments, etc...
4. Keep all purchase contracts for major purchases like trucks, cars, machines and commercial real estate. To be safe, keep them for 10 years to calculate depreciation and in case of audit. The IRS may request for original documents and go back 2, 5, 7 or more years.
5. Loan contracts, promissory notes, etc... for all business debts including business loans and cash advances. It should show pertinent information such as loan term, interest rate, monthly payment, creditor and collateral if there's any.
6. Keep individual and business income tax returns including all schedules and amendments if applicable. ALL state and federal government records such as business license, city and county filings, state tax documents, etc. for 10 years or more, yes I said 10 yrs. Better be safe than sorry.
7. Keep all payroll records, time cards, direct deposits, employee cash rewards, employee expense reports, reimbursements, payments to independent contractors, etc.
8. If you use a cash register for your business, keep the cash register receipts. Most cash registers nowadays has the ability to give you daily, weekly or monthly totals, which is great for your books.
9. Any Financial statements such as Balance Sheets. Profit and Loss, General Ledger, Retirement Summary, and other investments.
10. Bankruptcy papers, if any.
I strongly suggest to keep all of the above items for 7-10 years. For one particular reason: Peace of mind.

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Thursday, January 2, 2014

Tax Preparers Gearing Up for Affordable Care Act Tax Law Changes

Professional tax preparers are busy learning the new laws set in place for January 2014 for the Affordable Care Act. The published updates are filled with technical words and complex explanations and might confuse the average tax payer. Having a trusted tax preparer on your side will make the compliance forms that much easier to fill out.
As a tax payer, you will need to use the rest of the 2013 year to make sure you have health insurance. People who do not have health insurance will be issued a fine unless you fall into one of the groups of people who are exempt from the new law.
*If you belong to a religious group that does not accept health insurance policy benefits.
*Undocumented immigrants
*Those in prison.
*If you are a member of an American Indian tribe and receive your health care from IHS.
*If your family income does not require you to pay taxes ($9,750 for an individual or $12,200 for a family documented for 2012).
*If more than 8% of your income for health insurance is paid by you. This does not count any tax credits or what your employer pays.
If a tax payer does not fit into one of these groups of people and does not have health insurance come tax time, there will be penalties. Beginning in 2014, there will be a $95 penalty for every adult and $47.50 per child.. There will be a $285 penalty limit per family or a 1.0% cap of the household income, whichever is greater.
Come 2015, the penalties will increase. Each adult will now have to pay $325 and $162.50 per family with the limits set at $975 per family or 2.0% of the household income. Once again, the greatest cost between those two will be the penalty requirement. Come 2016 adult penalties will rise to $695, a child $347.50, family limit $2,085 or 2.5% of the household income. After 2016, the penalty amounts will increase annually based on cost of living.
Tax payers will be required to inform the IRS of their health care status on a new form filed with their tax return. This form will require you to name the insurance company, what kind of health care plan it is and list the months out of the past year that you were covered. No health care plan equals a penalty payment which was described above. Prorated amounts will apply if you were not covered for more than three months for the full year; less than three months carries no penalty.
The IRS will receive information from the health care provider in order to confirm the reported information. You must have at least the minimum essential coverage:
*Ambulatory services or outpatient clinic service equivalent
* Emergency services
*Maternity care for mother and newborn care
*Mental health and substance abuse disorder services
*Rehabilitation services and devices. This includes physical and occupational therapy and both hearing and vision aids.
*Laboratory services
*Preventative and wellness service as well as management for chronic diseases.
*Pediatric services including dental and vision.
Health care officials have been notified that the plans they sell must comply with the new standards. You may qualify for government financial assistance for health coverage.

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