There are few events that cause a business owner or individual to cringe more than receiving a dreaded IRS tax audit notice in the mail. For those lucky enough to have never been through a tax audit before, a quick tax audit definition is in order. Essentially, an IRS tax audit is a review of an individual’s or organization’s tax return(s) to ensure that the financial information being provided is correct. If you have received a tax audit notification, it’s best to enlist the aid of a qualified tax professional who understands the tax code. However, there are some steps you can follow that will not only help your CPA, but also allow you to survive the tax audit unscathed, if you choose to proceed alone.
News and Events
The tax season is upon us once again, and with it comes the emergence of tax schemes both old and new. New tax scams in 2018 are as numerous and innovate as in previous years. Tax refund scams are so numerous, that the Internal Revenue Service issues an annual list of the twelve most prevalent tax scams in a list it calls the “dirty dozen”. As in previous years, several of the same tax scams have returned, but with new twists to keep them one step ahead of both authorities and unsuspecting taxpayers.
Here’s a list of actual tax scams to be on the lookout for and how you can protect yourself against them. Read More
With its effect being immediate and unanswered questions lingering, the Tax Cuts and Jobs Act largely eliminates the deduction for entertainment expenses, and businesses should incorporate this change without delay.
Under the prior law, taxpayers were able to deduct 50% of expenses incurred for entertainment, amusement, or recreation directly related to the active conduct of a taxpayer’s business or trade. The new law, however, generally eliminates the deduction for expenses paid or incurred after December 31, 2017. Although there are a few exceptions, entertainment expenses are non-deductible as of January 1, 2018. It has been made clear that a deduction is not permitted for a client entertaining at sporting events, on the golf course, or any similar entertainment expense. What is less clear, though, is how food and beverage expenses or meals are affected. The Joint Committee on Taxation (JCT) stated “taxpayers may still generally deduct 50% of food and beverage expenses associated with operating a trade or business;” however, the JCT did not define what expenses are associated with “operating a trade or business” other than it would include meals provided to employees traveling for work. It is still unclear whether food and beverage expenses incurred in connection with an entertainment event will remain 50% deductible.
With the recent government shutdown and the opening of the 2018 tax season coming soon, did you wonder how that would affect the filing your 2017 taxes? Maybe, or maybe not. Thing is, a government shutdown would affect the IRS and its plan for tax filing season. Luckily, the latest shutdown was over with a few days to spare before tax season opened. With another possible shutdown looming, here’s what you need to know.
With the most extensive overhaul of the U.S. tax code in more than three decades having now been passed by both Houses of Congress, and officially signed by President Trump to enact it into law, tax reform is here. These changes will require businesses and individuals to re-evaluate their long-term tax strategies starting in the 2018 tax year, but also means taking immediate year-end tax planning strategies for the final days of 2017 into consideration.
A while back I held a Lunch & Learn presentation at our office in Knoxville, relating to controlling accounting costs. I know…I bet you didn’t know that was possible! Well, this is the 21st century, and it is definitely possible.
A Brief History of Traditional Professional Service Billing Practices
For many years, financial professionals have billed by the hour. Someone might charge $200 per hour for however long it takes to get it done. But, what does this method of billing lack? It certainly lacks any incentive to be efficient or effective in achieving the result. If you’re going to pay me $200 per hour, then what is my incentive to get to the end result quickly and without sacrificing quality for preparing, let’s say, a tax return? Not much. The only risk I run if I take my sweet time to prepare the tax return is that you are unhappy with a high bill. Your risk in being billed in this manner is that I could be inefficient and cause your accounting fees to rise as a result of my inefficiency or lack of urgency, either of which is or should be unacceptable. Acceptable use for this method of billing would include when you are being represented by a professional in front of a government body (think IRS) or for face-to-face meeting time. There are other similar services, but these are the two most common examples of a service that cannot readily be quantified and would be billed by the hour.
It’s officially summer!
Fun for time on the beach and fun making mid-year tax moves.
With five months left in the tax year, it’s the perfect time to make some tax moves that could reduce your 2017 tax bill. Here are five easy ones to take care of in July.
A couple of weekends ago I had the pleasure of heading down to the Farmer’s Market on Market Square in downtown Knoxville. It’s been awhile since I’ve been and it really seemed much larger than I remembered. There are definitely more stands of all kinds to visit and now there are FOOD TRUCKS!
Time. It’s the one universal thing we all share, no one person gets anymore or any less. Every night at midnight we are given 24 hours, how we treat them is what makes us diverse.
You know the saying “Time is on my side” well for me time is never on my side. I never have enough of it and I usually try to steal it, let me explain. I always set my clocks 10 minutes ahead, same with my alarms. I say alarms because I set one for just about everything. Picking up kids…alarm is set 10 minutes before it should be so I can be extra ready, waking up…same thing, alarm is set with a 10 minute “cushion”. Heck the ring tone for my alarm is the theme song for the 80’s classic Back to the Future, “Back in Time”, by Huey Lewis and the News.
A few years ago, I attended the Winning is Everything conference put on by the Advisory Board in Las Vegas, NV. A fitting place for a conference about winning! There are so many topics to consider when choosing a conference, and I end up attending several a year to stay up with professional trends, pronouncements and the latest in technology for my profession: Accounting, of course. Though truth be told, I don’t consider myself much of an accountant in the traditional sense. Not to worry, I’m not having a crisis of identity. I just believe that there is a better description out there for what I do and what we do as a firm.