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04/13/2017

Taxes on Tips

While tips are discretionary and reflect a happy customer, taxes on tips are not optional and, if overlooked, can cause unhappy headaches for both taxpayers and their employers.

Tip jar picAll cash and non-cash tips are considered income and are subject to Federal income taxes. Tips include cash left by a customer, tips added to debit or credit card charges, and tips received from other employees or employer through tip sharing, tip pooling or other arrangements.

Employees who receive tips regularly are responsible for keeping a daily tip record and reporting all tips on their individual income tax return.  They must report tips that total $20 or more in any month by the 10th of the following month regardless of total wages and tips for the year.

If an employee doesn’t have or isn’t assigned a tip-tracking and reporting tool, the IRS provides a Daily Record of Tips (Form 4070) that an employee may use to document tips in the manner which is considered sufficient proof of tips received. Reliable proof of tip income would include copies of restaurant bills and credit card charges that show the amounts customers added as tips.

Automatic service charges that are often added onto bills are not considered tips, but rather are treated as regular wages so any taxes owed would be withheld by an employer on an employee’s next paycheck. Examples of service charges include things like bottle service charges, gratuity that is automatically added to a bill for large parties, delivery charges, and room service charges.

Employers must withhold income, social security and Medicare taxes on tips just as they would on other income earned by their employee.  If tips are not reported to an employer as required, an employee may face a penalty of 50% of the unpaid social security and Medicare taxes due.

If there are any unreported tips, a taxpayer must file a report of the income through another Form 4137 "Social Security and Medicare Tax on Unreported Tip Income" which helps the employee figure the amount that is subject to tax and how much is owed.

It can be a tedious process especially for workers who make money through a predetermined hourly wage with unpredictable tip income added to the total.  Workers who receive their tips at the end of each shift must make certain they record the tip amounts on their monthly tip report to their employers.  The taxes owed would then be deducted from their next paycheck. It’s possible that hourly wages may not cover the taxes owed. When this happens, any remaining taxes owed can paid out of the next paycheck through an employer agreement. This is the area where most problems occur as tax obligations on tips for one month may impact several paychecks.  It’s up to the employee to keep track of required tax payments so that there are no outstanding payroll taxes owed at year’s end.

If you need more help understanding how to record and report tip income, please contact one of our tax preparation experts at McRuer CPAs.

02/10/2017

W-2 Scam Targets Small Business

Question-yikA5pBiEThe IRS has issued a new tax-related identity-theft scam warning to small businesses and human resources professionals.  The email phishing scam uses a business owner’s, corporate officer’s or human resource professional’s name in what looks like company or even official tax agency emails. The emails request copies of employee Forms W-2 from company payroll, internal accounting or human resources departments.

This is the second time the email scam has been identified as attacking businesses nationwide. The IRS urges business owners, internal accountants and company payroll officials to double check any executive-level requests for lists of Forms W-2 or Social Security Numbers.

The W-2 scam first appeared in early 2016. The IRS reports that cybercriminals tricked payroll and human resource officials into disclosing employee names, SSNs and income information. The thieves then attempted to file fraudulent tax returns to create fraudulent income tax refunds in a tax-related identity theft scheme.

This phishing variation is known as a “spoofing” e-mail.  It will contain, for example, the actual company chief executive officer’s name.  In this variation, the “CEO” sends an email to a company payroll office or human resource employee requesting a list of employees and information including their SSNs.

Crime investigators say some of the wording used in actual scam emails included:

  • “Kindly send me the individual 2016 Forms W-2 (PDF) and earnings summaries of our company staff for a quick review.”
  • “Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary).”
  • “I want you to send me the list of Form W-2 copies of employees’ wage and tax statement for 2016.  I need them in PDF file type, and please send it as an attachment.  Kindly prepare the lists and email them to me asap.”

Working together in the Security Summit, the IRS, states and tax industry representatives have made progress fighting against tax-related identity theft.  However, cybercriminals continue developing more sophisticated tactics to impersonate taxpayers in their effort to steal even more data.

For more information about tax-related identity theft and other tax scams, click here to link to The Security Summit’s national taxpayer awareness campaign called “Taxes. Security. Together.

03/09/2016

State-Managed Retirement Savings Accounts Now in 27 States

Retirement jar 1Several states are working on plans to help workers save for retirement. The Bureau of Labor Statistics shows that only about half of full-time workers employed by small businesses or organizations have access to an employer-based retirement plan. By comparison, the numbers show 85 percent of Americans who work for employers with 100 or more employees do have access to an employer-provided retirement plan or benefits program.

To help close the gap, some states are providing access for eligible workers to state-managed individual retirement accounts funded by automatic deductions from the worker’s paychecks.  For example, in 2017 Illinois will launch the Secure Choice Retirement Savings Program, which gives workers a retirement plan option. Full-time employees working for qualified businesses (who do not already provide retirement benefits) will be automatically enrolled into a direct deduction retirement savings plan with a minimum three percent deduction each paycheck.  The employee can choose to have more withheld or to opt out of the program entirely. The money is deposited into a Roth IRA.

The Pension Rights Center in Washington, DC has been monitoring the development of state-administered retirement plans for private-sector workers. It shows that currently 27 states have already approved or are debating proposals to launch state-based retirement plans including: Arizona, California, Colorado, Connecticut, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.

Last September, the Government Accountability Office (GAO) published a report detailing how “half of private sector workers, especially those who are low-income or employed by small firms, lack coverage from a workplace retirement savings program primarily because they do not have access.” The GAO is recommending ways that the federal government can make it easier for states to manage such plans, while not placing a financial or administrative burden on small business.

01/15/2016

Tax Extenders & The Deficit Dilemma

Though Congress has received some applause for reviving a set of more than 50 tax breaks, called “tax extenders,” there is as much dismay-driven head shaking over the fact that the bipartisan agreement and the now signed budget bill dig the federal deficit hole even deeper.

The new tax law, entitled the Protecting Americans from Tax Hikes (PATH) Act of 2015, and the newly signed funding bill provide $1.1 trillion to cover spending for most government agencies to the end of fiscal year 2016, perhaps coincidentally past the upcoming presidential election. The defense sector, NASA, the Food and Drug Administration and the National Institutes of Health received a bit of a boost with most other agency funding remaining flat. ENews 2016 pic tax-credit3

IRS funding restrictions remain, so it’s expected that taxpayers will continue experiencing communication and customer service problems and an increase in computer-generated correspondence audits throughout 2016 and 2017. The new National Taxpayer Advocate Annual Report to Congress blasts the IRS for planning to “substantially reduce telephone and face-to-face interaction with taxpayers,” turning that job over to tax return preparers and tax software companies.

Meanwhile, the good news for taxpayers is that the PATH Act makes permanent several charitable tax provisions, indicating that lawmakers support using tax incentives to encourage charitable giving. For example, those 70 ½ or older may contribute up to $100,000 from an IRA directly to a charity with the contribution qualifying for their required minimum distribution (also known as Qualified Charitable Distribution (QCD) rules).

Other permanently renewed tax provisions include the American Opportunity Tax Credit for college expenses and the deduction for state and local sales taxes. The schoolteacher expense deduction has been enhanced and made permanent, as has the child tax credit.

The mortgage insurance premiums and qualified residence interest deductions have been extended for another year. Taxpayers who suffered losses from selling their home for less than the outstanding mortgage will also be able to avoid the tax consequences from debt cancellation under the Mortgage Debt Relief Act for another year.

Companies that utilize bonus depreciation like those involved in the telecommunications industry or who invest in capital-intensive projects will continue enjoying this helpful tax provision for a few more years. The tax law also makes permanent the research and development tax credit, which encourages important business R&D like that in the pharmaceutical and defense sectors.

The solar investment tax credit (ITC) and the wind production tax credit (PTC) are being phased out but will remain active through 2019 and 2021 respectively. The energy industry overall has received both tax incentives and funding resources, adding a boost of confidence to alternative energy producers.

Tax increases levied on individuals and businesses to pay for the Affordable Care Act (Obamacare) continue to be unpopular, and some were not enacted. Now it’s possible the two most controversial taxes may be repealed. These are the proposed tax on medical devices and the 40% excise “Cadillac” taxes on higher-priced employer-sponsored health plans that compete with government-sponsored plans.

The 2015 year-end budget battle, which starts our new tax year without delays, was a fistfight compared to the combative, destructive delay-causing 2014 debate. Yet, even as lawmakers are cooling to budget debates, the looming budget deficit has not disappeared and continues to grow. Our 2016 budget will add to the deficit, rather than reduce it. The Congressional Budget Office reports that overall US Treasury debt has grown to 74% of GDP that “could have serious negative consequences for the nation, including restraining economic growth in the long term ... and eventually increasing the risk of financial crisis.”

Overall, the bipartisan tax bill was passed with the understanding that Congress is committed to comprehensive tax reform that will simplify the tax code, eliminate temporary provisions and lower tax rates by broadening the tax base. Lawmakers who supported the PATH Act stated in a news release, “Americans deserve a simpler, fairer and flatter tax code that’s built for growth, and this bill will help make that possible.” The 2016 election year will likely determine how far that ship will sail.

If you have any questions about how the current tax law affects your individual and/or business tax obligation, please contact us now at McRuer CPAs for a tax planning session.

03/13/2015

IRS Cuts Affect Tax Refunds and Audits

As we file 2014 individual tax returns and pay federal income taxes, it’s hard to imagine the IRS having on-going budget troubles. Yet, IRS Commissioner John Koskinen is requesting an additional $2 billion to keep up with service requests, timely refunds and enforcement actions such as tax audits on individuals and businesses.

1040 form with glasses and penniesIn a previous edition of The ReSource, we have given details of the delays and complaints associated with the decline in IRS customer service responses as the IRS has cut its staff and switched to more automated systems.  Now, political payback is cutting deep as the agency faces ongoing heat for mixing politics with taxes due to allegations of targeting conservative groups and paying for expensive “training” retreats.

Last month, Congress approved a $10.9 billion budget for the IRS for fiscal year 2015, which ends in June.  It is the lowest level of funding for the embattled agency since 2008 with total budget amounts declining $1.2 Billion in the last 5 years. 

Whether a taxpayer thinks there should be more or less of the IRS, the budget push-me-pull-you debate is affecting the taxpayer’s experience in a number of ways.  Commissioner Koskinen describes it as “changes” in how the IRS will do business with taxpayers this tax season.

Here are some of the issues that may impact you directly:

Refund Delays:  Nearly 8 out of 10 tax filers receive a federal tax refund. The average amount paid is close to $2,800, according to the most recent filing statistics.  Refunds from electronically filed returns are usually processed in about 3 weeks, but the IRS warns staff cutbacks have increased processing time up to an average of 5 weeks. Taxpayers who file paper returns are now being told their refund check might not be processed for 7 weeks.

Audit Declines:  The number of audits in 2014 declined 6% overall from the previous year while experts cannot agree on what the audit numbers will be in 2015.  The audit predictions range from roughly 1% to 6% of total individual and business tax returns. 

Some taxpayers may be relieved that the risk of being audited has decreased slightly, but the conclusions are based on the percent of audits compared to the number of tax returns filed.  More fraudulent tax returns are being filed each year due to tax-related identity theft.  Fewer audits may mean it will be more difficult to detect this kind of tax fraud just as new enforcement agencies are gaining steam.

Audit Hassles: Even though last year’s audit numbers report a decline, taxpayers complain they are receiving more correspondence audits, which are computer-generated letters triggered by an automated tax form-matching program.  The correspondence letters request timely answers, but there are mounting frustrations due to the inability to connect with a “live” IRS auditor.

Hiring Freeze:  IRS officials say budget cutbacks and the resulting hiring freeze will result in nearly 4,000 fewer full-time employees at the agency by the end of June.  When those numbers are added to the headcount losses in the last 6 years, the IRS has lost nearly 17,000 full-time workers.

Less Taxpayer Help:  Officials’ statements warn that fewer than half the taxpayers that call the agency for help will be able to get through to an actual person.

Technology Timing:  Updates that were in line for streamlining IRS internal and processing systems are being delayed to avoid taking up staff time for training and testing the new systems.  Among the updates included the latest taxpayer protection tools against identity theft.

Possible Shutdown:  Commissioner Koskinen says the agency may implement a money-saving temporary shutdown as a last resort.  To minimize disruptions, he says the agency may close for two days after the main tax-filing season, possibly in May or June.

The best taxpayer defense is to make certain your federal income tax return and necessary documentation is mistake-free to avoid audits and delays. 

If you have questions about how the IRS cuts may affect your federal income tax filing, contact us at McRuer CPAs for more information.

03/09/2015

Tax-Related Identity Theft on the Rise

New statistics released by the Law Enforcement Assistance Program show progress is being made in the discovery of tax-related identity theft cases, but they also indicate that these cases are on the rise.  Warning: Know who you are dealing with when it comes to sharing your personal information as well as who you choose to prepare your tax return.

Tax identity theft graphic

In most cases, the identity thieves are using stolen social security numbers and other taxpayer information to file fake tax returns in order to receive fraudulent tax refunds.  They are using information stolen from government, organization and business databases and some even claim to be tax preparers and accountants to collect personal information.

Now due to an increase in criminal activity, more small businesses are being notified to protect their clients’ personal data and to monitor more closely for data breaches.

The newly released IRS Top Ten Identity Theft Prosecutions list shows tax-related identity thieves are working all across the country.  The number one case involves a 2 small business owners in North Carolina who used stolen names, birth dates and social security numbers, some collected by their business store fronts, to file more than 1,000 false returns to collect nearly $4 million dollars in fraudulent tax refunds.

The good news is that new laws have given rise to more efficient joint criminal investigations between federal, state and local law enforcement officials.  They are now able to discover the tax-related crimes sooner and share information to result in more prosecutions.

In fiscal year 2014, federal agencies report a 75% increase in the success of law enforcement cases with 748 convictions and sentencings in FY 2014 compared to 438 in FY 2013. 

New laws also allow courts to impose higher sentences resulting in a rise in incarceration rates last year from 7.1% of convictions to 87.7% of convictions.  The amount of time convicted offenders must serve in jail is also increasing from an average 38 months in jail (3.2 years) to 43 months (3.6 years). The longest prison sentence handed out in 2014 was 27 years.

How do you protect your personal information from this kind of tax-related crime?  Stay alert and ask more questions.

  1. The IRS never communicates with a taxpayer by email, text or social networking to collect personal or financial information.
  2. The IRS does not make phone calls to taxpayers to collect information nor to demand payments.
  3. If you receive notice that more than one tax return has been filed under your social security number, contact the IRS right away.
  4. If you receive a notice that you received wages from an employer unknown to you, this could be a sign that someone is filing a fraudulent return using your social security number.
  5. If you receive a notice that a government benefit has been cancelled because of an income change and you have not had an income change, your information may have been used to file for a fraudulent refund.
  6. Ask more questions to be confident that your tax preparer is certified and working for a real company with a good track record.

You can find out more information in the Taxpayer Guide to Identity Theft, which explains what to do to prevent identity theft as well as what to do if you believe you have already been a victim of this kind of crime.

Our tax preparation experts at McRuer CPAs are trained and experienced professionals ready to help you.  If you have any questions about tax-related identity theft, contact us for more information.

02/24/2015

Forms 1099 - Delayed Delivery to Taxpayers

Many taxpayers who must report investment income from information they receive on Forms 1099 and Schedules K-1 are learning their investment companies and investment account custodians will be sending them these forms later than usual.

Important-notice-hi1A major investment company has issued an information update warning investors they may not
receive their final 2014 IRS Forms 1099 (B, DIV, INT, OID and MISC) until mid-March. 

Not long ago, these forms were due in taxpayers’ hands by January 31st, with fines for issuers who sent them late.  Now, investment advisors may send a “Pending 1099 Notice” as a temporary substitute to meet the IRS deadlines for sending Forms 1099.

These Pending 1099 Notices inform investors that more information may be coming, but do not provide investors the information necessary to file their returns. The notices instead provide a date when a final tax Form 1099 is supposed to be mailed.  This year, IRS regulations state Forms 1099 must be mailed no later than March 16, 2015 for the 2014 income tax year.

All of this means taxpayers who need information from Forms 1099 to properly complete their income tax return may face several weeks of delays.  Nevertheless, as our clients’ tax advisor, we are encouraging our clients to gather and send us their personal income tax information as soon as they can.

We will begin preparing their returns, then update their information to reflect information from Forms 1099 and other tax documents once they arrive.  This way we may sooner identify and inform clients about any remaining tax-saving opportunities, or notify them about any additional tax payments due.

This approach may reduce a client’s overall tax obligation, and will reduce exposure to late filing penalties and/or tax underpayment penalties associated with not meeting the April 15th tax filing deadline.

Should you have any questions about this issue or possible delays, please call us at 816.741.7882 or contact us online at McRuer CPAs.  

02/21/2015

How to Know When You Need a CPA

The DIY (Do It Yourself) industry is flourishing these days.  This trend also extends to accounting and income tax services.  The availability of affordable computing power, improved entry-level accounting and income tax software, and cloud-based applications and storage options are attractive because they may help you save money by doing it yourself.  Added to that is some very effective advertising claiming that at the push of a button your business accounting and income tax filings will be worry free.  However, be warned; our clients often turn to us when their experience with DIY solutions show the ease and efficiency of using these products has been oversold.

In today’s highly regulated environment, innocent omissions and mistakes from simply not knowing An-accountant-helping-clientshow transactions should be recorded, or how to properly comply with new federal, state or local tax
law, can be costly, and sometimes devastating.  Instead of spending time increasing sales, improving processes and growing their businesses, some business owners say they grow frustrated and waste time trying to learn to use and update the latest software as well as keep up with filing deadlines and regulations by themselves.  That’s when they call us.

Let’s consider how engaging professional help with your business accounting and finances can pay big benefits that will help your bottom line both short-term and long-term. 

For those business owners who have a solid accounting or bookkeeping background and a good understanding of business finances, with McRuer CPAs’ MyMcRuer/BackOffice service offering you may benefit by a combination of some DIY and some professional on-demand services.

MyMcRuer/BackOffice helps business owners control costs by personally managing their business’s books.  In addition, when a difficult issue or a question arises, they have access to a local experienced accounting professional who will view the issue real time to identify the problem and quickly provide a solution.  Then as the business grows and its operations need more of an owner's or manager’s time, a smooth transition can be made to full-time professional accountants and bookkeepers who already know the business.

If you intend to grow your business, the benefits of professional accounting services cannot be overestimated.  Is it time that you utilized a professional for your combined personal and business tax preparation?  When is it cost effective to hire an accounting firm’s experts to help with your business accounting and bookkeeping needs?

Consider the following as a mental checklist to help you find an answer to the question: 

How Do I Know When I Need a Professional Accountant or CPA?

You know you need a professional accountant or CPA when…

(circle the sentence numbers that apply to you and when finished add up the total number of sentences that describe your financial situation)

  1. You are considering investing significant time, money and passion into a business idea. Before you “take the leap” you want input about your business plan from an independent professional who will review the numbers and help you analyze your idea’s future growth potential.
  2. You are starting a new business and want to select the best business structure that fits the marketplace, your proficiency and your goals.  You have been told there are different types of business entities that may limit your personal liability for your business activities, but you don’t understand the tax consequences of this decision.
  3. Your income and deductions have changed and you no longer file a simple tax return, or you suspect you must make quarterly estimated tax payments.
  4. You need new or additional business financing, and your lender or insuror is requesting financial information that must be provided by a third party.
  5. You want to better understand your business’s financial information, and use it to improve profitability, inventory management, and cash flow.
  6. You need more information in order to prepare to sell your business.
  7. You are shutting down your business.
  8. You hire other people to help you, and you need information about employees versus independent contractors.
  9. You have become responsible for another person’s affairs, either during their life or after their passing.
  10. The IRS or another regulatory agency has contacted you about an upcoming audit or other collection actions.
  11. You wish to develop and act on a plan to provide for your financial future, including saving for retirement, your childrens’ education, and/or other obligations.
  12. You want to ensure you have the best estate plan in place by understanding the tax, financial and time-based consequences of that plan.
  13. You want to create a succession plan for passing your business on to the next person when you’re ready to retire or sell.
  14. You want to take responsibility for your business and personal financial affairs, and want a trusted advisor to help you succeed.
  15. You must prepare and file Forms W2 and 1099 annually.
  16. You need to understand your best choices on property purchase versus equipment leasing.

How many of the above statements apply to you?

These are just a few of the practical reasons that you need a professional accountant on your business’ financial team.  If you circled 3 to 5 of the above business and personal accounting points, it’s probably time you considered using an upgraded business accounting tool that provides a live accountant when you need one.  If you circled more than 5, it’s time you connect with a professional accountant long-term with comprehensive services and experience to ensure business success.

Accountant over shoulderConsider using a CPA (Certified Professional Accountant) that is experienced and trained specifically to be your business and personal financial planner, management consultant, management information specialist, business consultant and more. 

Yet, don’t forget to consider whether the professional you bring on board is someone you get along with personally.  Financial decisions are a reflection of the production and goals of real people like you who are working to make profits in order to enjoy the life you love.  It’s important to find an accountant who will work well with your business team and shares your concerns about accuracy, reliability, efficiency, and long-term effectiveness.

When you know you need an accountant, we’re here.

At McRuer CPAs, we know business “numbers” are personal and we make the extra effort to match the personalities of our professional accountants with you and your business team.  You may discover the latest online tools with the on-demand help of a CPA are the best choice for you and your business.  Maybe it's time to have a full-time accounting professional join your team?  How do you what to do?

Let’s find out what will work best for you.  Contact us for a strategic planning session by calling 816.741.7882 or contact us through our confidential online resource.  We’ll review your goals and help you make the best choice.

02/19/2015

Tax Software vs Professional Accountants

As we enter into the peak of tax preparation season, we are often asked about the difference between using tax preparation software and using the services of a professional accountant.  Today there are dozens of preparation software options online and in software packages that can help a taxpayer complete their tax return.  This as today's tax liabilities and concerns are growing more complicated than they've ever been. 

1040 form with glasses and penniesA recent Wall Street Journal article revealed as taxpayers try out new tax software tools, they are making more and more mistakes.  Often, it has to do with not knowing the right questions to ask to discover their best options.  Many times, incorrectly entered numbers cause automatic equations to produce the wrong totals.  

Don't misunderstand, there are good reasons to choose tax software to help you complete your income tax return on your own.  There are also good reasons to choose a professional accountant.  We came across an interesting and concise article online on Investopedia that explains your options clearly.

Here is that article for your consideration as you choose the best steps to take regarding the preparation of your federal and state income tax returns. 

Tax Software Vs. An Accountant: Which Is Right For You?    By Jason Steele | Updated January 29, 2014

""With every important job comes the question of whether or not individuals should do it themselves or hire a professional. While the ever-improving selection of tax preparation software certainly makes it easier to do your own taxes, it has hardly put Certified Public Accountants (CPAs) and other personal tax preparers out of business. 

The Advantages of Using Tax Software
Price
There is no way around the fact that you will pay less for a software package than you will to hire a CPA or another qualified tax professional. The price of tax preparation software ranges from the $10 to $120 range to websites that offer the service for free. On the other hand, the least expensive tax preparers will cost at least $100 and a CPA is likely to charge at least twice that amount. The upfront savings of using tax software over an accountant is one of the most attractive benefits of filing your own taxes. 

The Advantages of Using Tax Software
Price
There is no way around the fact that you will pay less for a software package than you will to hire a CPA or another qualified tax professional. The price of tax preparation software ranges from the $10 to $120 range to websites that offer the service for free. On the other hand, the least expensive tax preparers will cost at least $100 and a CPA is likely to charge at least twice that amount. The upfront savings of using tax software over an accountant is one of the most attractive benefits of filing your own taxes. 

The Benefits of Hiring a Professional Accountant
Better Software
Accountants pay around $1,000 to $6,000 for their software, which is far more sophisticated than the products sold to consumers. These more advanced programs have the ability to quickly scan your information and organize line items and forms correctly. By automating much of the data entry and organization, there's less chance for human error to hurt your tax return.

Human Touch
Like a good family doctor that knows your medical history, you can develop a relationship with an accountant so that he or she understands your family's financial situation and future goals. According to Wehner, who has been preparing taxes for 45 years, "A tax professional is often able to make valuable tax savings suggestions that a software program just can't anticipate." The value of this advice can easily exceed the additional cost of consulting with a professional. For example, a tax accountant can provide you advice on tax-friendly ways to save for your children's education, or how to reduce taxes on your capital gains.

Accountants Can Answer Your Questions Year Round
As a trusted professional, a good accountant will be able to answer important questions that arise not just during your annual consultation, but at other times during the year.

Calculator help and form 1040A CPA Saves You Time When Handling Complicated Issues
Taxpayers who find themselves at the center of complicated business and investment matters may even have the skill to sort through their taxes on their own, but is it worth their time? A professional tax preparer is so familiar with the system; he or she can quickly and easily accomplish tasks that might take even skilled taxpayers hours of research. For busy non-tax professionals, their time can generally be better spent earning money in their area of expertise. Even if your tax situation is straightforward, hiring a professional will save you the time and stress of doing your taxes.

The Bottom Line
Ultimately, there is no universally correct answer to the question of hiring a tax professional or doing your taxes yourself with software. Your comfort and familiarity with IRS rules will be part of your decision, but the complexity of your finances should be the key deciding factor. Those with a single employer and few investments may save hundreds of dollars by preparing their own taxes, while those with business income or rental properties will find the expense of hiring an accountant to be worth their peace of mind and potential tax saving.""

##  So, as we add one final thought to the article above, consider that the more complicated your taxes are, the more likely you need comprehensive accounting services and an accounting professional to help you make the best decisions. For us at McRuer CPAs, it's all about making certain you pay no more taxes than you owe.

If you have any questions, or would like to review your income tax situation with an accountant, contact us at McRuer CPAs to set up a consultation.  We'll take a look and provide you options so you can make the best choice.  Call us:  816.741.7882 or contact us online.

 

02/10/2015

What is Minimum Essential Coverage Under the Affordable Care Act?

The IRS has issued new information on how to interpret "Minimum Essential Coverage" under the Affordable Care Act.

Many individuals and businesses have been concerned about having the right kind of "qualifying" health care coverage for themselves and their employees.  Here is the latest notice about Minimum Essential Coverage from the IRS that may be helpful as 2014 federal income tax returns are being prepared and tax plans are being implemented for the 2015 tax year.  If it sounds complicated, it can be. If you have any questions or need to design a tax plan to cover this and many more important issues as you prepare your tax return, contact us and we'll help you with a confidential consultation to review all your options.  You may also consider using the services of a professional team like ours for your tax preparation needs.

 

Accountants workingIRS Release:

Individual Shared Responsibility Provision - Minimum Essential Coverage

The individual shared responsibility provision requires you and each member of your family to have qualifying health care coverage (known as minimum essential coverage), qualify for an exemption from the responsibility to have minimum essential coverage, or make an individual shared responsibility payment when you file your federal income tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to report your coverage.

The chart shows some types of coverage that qualify as minimum essential coverage and some that do not.

Coverage TypeQualifies As Minimum Essential CoverageDoesn't Qualify As Minimum Essential Coverage

Employer-sponsored coverage:

  • Group health insurance coverage for employees under –
  • A governmental plan, such as the Federal Employees Health Benefit program
  • A plan or coverage offered in the small or large group market within a state
  • A grandfathered health plan offered in a group market
  • A self-insured group health plan for employees
  • COBRA coverage
  • Retiree coverage

 

Yes
 

Individual health coverage:

  • Health insurance you purchase directly from an insurance company
  • Health insurance you purchase through the Health Insurance Marketplace
  • Health insurance provided through a student health plan
  • Health coverage provided through a student health plan that is self-funded by a university (only for a plan year beginning on or before December 31, 2014, unless recognized as minimum essential coverage by HHS)
  • Catastrophic plans
Yes  

Coverage under government-sponsored programs:

  • Medicare Part A coverage
  • Medicare Advantage plans
  • Most Medicaid coverage
  • Children’s Health Insurance Program (CHIP)
  • Most types of TRICARE coverage
  • Comprehensive health care programs offered by the Department of Veterans Affairs
  • State high-risk health insurance pools (only for a plan year beginning on or before December 31, 2014, unless recognized as minimum essential coverage by HHS)
  • Health coverage provided to Peace Corps volunteers
  • Department of Defense Nonappropriated Fund Health Benefits Program
  • Refugee Medical Assistance
Yes  

Other coverage:

  • Certain foreign coverage
  • Certain coverage for business owners
Yes  

Certain coverage that may provide limited benefits:

  • Coverage consisting solely of excepted benefits, such as:
    • Stand-alone dental and vision insurance
    • Accident or disability income insurance
    • Workers' compensation insurance
  • Medicaid providing only family planning services*
  • Medicaid providing only tuberculosis-related services*
  • Medicaid providing only coverage limited to treatment of emergency medical conditions*
  • Pregnancy-related Medicaid coverage*
  • Medicaid coverage for the medically needy*
  • Section 1115 Medicaid demonstration projects*
  • Space available TRICARE coverage provided under chapter 55 of title 10 of the United States Code for individuals who are not eligible for TRICARE coverage for health services from private sector providers*
  • Line of duty TRICARE coverage provided under chapter 55 of title 10 of the United States Code*
  • AmeriCorps coverage for those serving in programs receiving AmeriCorps State and National grants
  • AfterCorps coverage purchased by returning members of the PeaceCorps

*In Notice 2014-10, the IRS announced relief from the individual shared responsibility payment for months in 2014 in which individuals are covered under one of these programs. See the instructions for Form 8965, Health Coverage Exemptions, for information on how to claim an exemption for one of these programs on your income tax return.

 

 

Yes

 

 

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