Tax Feed

Form 1040 income tax return

The AICPA provides tax practice tools to help members elevate their practices and maintain the highest ethical standards. The AICPA also advocates sound tax policy and effective tax administration.

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Text Me Not: Hidden Perils of Modern Communication for CPAs

Woman on iPhoneTweets. Likes. Posts. Not so long ago, those three words were not only unrelated, they had nothing at all to do with communication. But as communication methods and strategies have advanced, the speed of information has approached infinity. As a result, expectations have grown that responses will be similarly fast and, in many cases, extremely concise. There’s an old saying about the kind of person who is incapable of a simple answer: ask them what time it is, and they’ll tell you how the watch works. Today, tolerance for that trait is at an all-time low.

But while pithy responses can be good for personal communication, they might not always be suitable for business. For CPAs in particular, there can be consequences for choosing an inappropriate means of communication with clients on certain matters. Text messaging in particular is fraught with perils. I recently spoke with Gerard Schreiber Jr., CPA, principal at Schreiber & Schreiber in Metairie, LA, to discuss how communicating with clients has changed over the years, especially with regard to texting.

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5 Scary Tax Characters to Watch Out For

ZombieHalloween is my favorite holiday, bar none. Once a year, we all have license to use our imagination and be someone or something else. And beyond the goblins, pumpkins, ghosts and black cats, there is the absurd amount of candy floating around the stores and office. 

The late Vincent Price, an actor who unquestionably had the best horror movie voice in the world, said, “It’s as much fun to scare as to be scared.” Vincent, wherever he is, may be pleased to know something can spook the unwary taxpayer in the same way his voice could invoke fear and trembling: tax creatures like the ones listed below. The good news is that you can avoid or at least minimize these horrors if you start thinking about these things now.

  • Count AMT (aka Line 45 on Form 1040) – Dracula could not have devised a better way to suck the money or refund out of your life than the alternative minimum tax. If your income reaches a certain amount, you must recalculate the tax you owe based on a higher income, one that does not have some of the deductions that helped to lower it. Devised as a tool to ensure that wealthy taxpayers could not use loopholes to avoid paying taxes entirely, the AMT now preys on taxpayers who are not so wealthy. The current AMT exemption is $59,900 for single taxpayers and $83,800 for joint filers. Talk to your CPA about ways to soften the impact and be aware that certain deductions act as triggers for the AMT.

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Tax Due-Diligence Checklist for Sharing-Economy Clients

UberPeople have been sharing services and property, and generating money from it, for years. For example, someone with a spare bedroom might have posted a note on a bulletin board at the local grocery store or advertised in the local paper to find a tenant. But do we understand the tax implications of the shared economy? That’s where CPAs come in.

Today’s technology allows for easier publishing and access to a wider pool of people for matching offers and acceptances. Using Airbnb or similar sharing websites, the owner with a spare bedroom will find that short-term rentals are relatively simple to arrange. Yet that same owner is unlikely to know the full tax consequences of this convenient rental, so it will be up to the tax preparer to ask the right questions.

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7 Key Communication Points for Your Clients with Extended Returns

SevenAs the final extension deadline of October 15 (for individual clients) approaches, it is hard to believe it is almost time to flip the calendar to another year. Although finalizing your client’s 2015 Form 1040 is the most pressing item on the agenda, it’s important to focus on year-end planning. The good news is that with the tax legislation signed last December, tax planning should be easier since many provisions were extended through 2016 (or longer) or made permanent.  However, this is a presidential election year, and there is uncertainty about how a political change might impact tax reform and/or legislation.

Let’s focus on the good news (and what we can do for our clients). Here are seven topics to discuss with your clients as you wrap up their 2015 returns that will provide them the extra client service that they expect and deserve.

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Partnership Audits –Be Careful what You Wish For?

CrossroadsFor years, everyone involved with audits of partnership tax returns (tax professionals, the IRS and the taxpayers themselves) have complained about the often complicated and unclear Tax Equity and Fiscal Responsibility Act (TEFRA) rules. Disputes between the IRS and partnerships, as well as between the various partners, often dragged on for years. 

That is  if the IRS even bothered to start an audit – audit rates for partnerships were historically low compared to similar size corporate entities. Once an audit finally was completed, the IRS would face the onerous task of tracking down and collecting the assessments from each partner, often having to dive through dozens of tiers to find these ultimate taxpayers. Naturally, this resulted in difficulty collecting the additional tax, making the whole exercise seem futile to some. A better way was needed. TEFRA had to die.

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