TAX TIP OF THE DAY... today is Salvation Army day!
Don't fold it, don't sort it, don't count it-- just bag it and go. These are my suggestions to put an extra $25 in your pocket per Hefty bag: 1) Go today. Tomorrow (12/31) will have long lines and some drop off centers close early 12/31. 2) Avoid drop boxes... full tax deduction is not available. 3) Get a receipt to take home and fill out... # of bags and condition is required. If you have the patience, find a free web site calculator to help you calculate value. Easy less accurate way... $100 per Hefty bag. Discuss the reisks of this shortcut with your tax preparer. 4) Take a photo with your phone to demonstrate quantity and condition of donations. You gave some nice stuff! Make sure your photo makes it look that way. 5) Salvation Army on Trindle Road in Camp Hill offers hassle free drop offs with easy receipts. 6) avoid chit chat with the donation center workers... they are tired and not in the mood to appreciate your cashmere sweater that you received as a gift, only wore once and put on a wooden hanger that goes with it. He's going to throw it in the box with the $2 sweat shirt. Sorry. He is not the one getting it, so don't expect a huge thank you. Keep the line moving for the sake of taxpayers behind you. You never know when this guy may explode... it may be drop off #157 that day... it may be with the guy behind you who used 15 small Giant supermarket bags... it might even be with you. Just get your receipt, smile, pass GO and collect your $200 at tax time. SHARE WITH A FRIEND. If you need any help... www.baboiancpa.com TAX TIP OF THE DAY... 12/31 Last chance, last dance.
Last minute ideas to turbo charge your 2016 REFUND: 1) Don't forget to deduct your New Year's Eve celebration! Will you be with co-workers, business contacts, business customers or business advisors? Discuss how great 2017 will be and you may satisfy the MEALS & ENTERTAINMENT rules. Pay your tab before midnight to count for 2016!!! Alcohol is allowed for this deduction. If you stay in, use grocery store receipts. Document attendees and business discussion topics on the back of the receipt. 2) Make a monetary DONATION by 12/31... in person or via credit card. I don't suggest mailing a check today because the charity will post as 2017. Get a 2016 receipt! 3) Clothing donations... see yesterday's post. 4) Mail your 4th quarter state & local QUARTERLY ESTIMATED TAX payments today... Federal payment can wait. If you don't know what these are, then this does not apply to you. 5) If 2016 was a significant MEDICAL expense year and your tax pro indicated that you have enough to use... mail a check to pay medical, dental, glasses, contacts, hearing aids... or charge on credit card today. 2016 may be your only year to use these expenses. This strategy is called medical expense "bunching". 6) Business owners... purchase or trade up a VEHICLE over 6k lbs by 12/31. Call your tax pro first since there are some very cool tricks! 7) Business owners... set up a SOLO 401K today; fund it next year and it still counts for 2015. 12/31 is the set up deadline. You can change your mind later and not fund it. You would need to go in person to a financial advisor to get it done today by midnight. This is not an online DIY project. 8) Rental property owners... last chance for HOME DEPOT run. Stock up on tools, supplies, etc. New rules allow full deduction without depreciation. Safe celebrations everyone! SHARE WITH A FRIEND. If you need any help... www.baboiancpa.com We are accepting new clients and appreciate your referrals! TAX TIP OF THE DAY... deduct your Christmas tree?
These are the different ways that clients have suggested that we deduct their home Christmas trees: 1) Donate the dried out tree as fire wood to a qualified charity. 2) Plant the dried out tree in the backyard to start your tree farm business. Failed business expenses go on schedule D. 3) Burn the dried out tree in the fireplace and deduct as home office "heating utilities". 4) Take photos of yourself with the dried out tree and post on your business web site... deduct as advertising. 5) Invite business associates over Christmas Eve/Day and discuss business around the dried out tree... deduct as business decorations. 6) When all else fails... bury in "Miscellaneous" expense and cross your fingers for 3 years. Bah Humbug! IRS says none of these ideas work... unless you are Jewish. Merry Christmas friends and taxpayers across America!!! SHARE WITH A FRIEND. http://www.baboiancpa.com/blog TAX TIP OF THE DAY... 2017 IRS mileage rates
Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
http://www.baboiancpa.com/blog TAX TIP OF THE DAY... Stay out of jail.
Everyone jokes about the IRS and their inefficiency. However, the IRS Criminal Investigation (CI) unit is very successful at prosecuting tax cheats. Their main targets are small businesses under reporting sales. If they knock on your door, you need a criminal attorney because you are going to jail. They watch you for months and collect evidence. By the time they knock on your door, they have the evidence to convict you. Small business owners... blatant cheating may put you behind bars. Don't do it. It's not worth it. USE THE MANY LEGITIMATE TAX DEDUCTIONS INSTEAD! I can help you with that part. This is how tax cheats get caught: 1) bank tellers are required to report certain high dollar cash deposits to the IRS. 2) bank tellers sometimes report lower dollar cash deposits to the IRS on a "Suspicious Activity Report" 3) an anonymous tip from the IRS Fraud hotline 4) IRS under cover operation... posing as one of your customers. 5) your lifestyle (cars, house, vacations) does not match the income reported on your tax returns. 6) IRS is contacted by former spouse, former co-worker, former neighbors... lots of people know. 7) Your reported income and expenses don't align with similar businesses in your industry. 8) You are in an industry known for cash transactions, but you report very little income in excess of credit card transactions. Hopefully this post scared you a bit. SHARE WITH A FRIEND. If you need any help... www.baboiancpa.com TAX TIP OF THE DAY... beware of IRS tax scammers.
For all of 2016 there have been telephone scammers calling innocent taxpayers and demanding unpaid taxes. Sometimes the caller ID actually says IRS. They usually threaten that you will be arrested if you don't comply within that same day. Unfortunately millions of dollars have been paid to these scammers by people just like you! WHAT TO DO IF YOU ARE CONTACTED: Tell the caller that you are aware of their scam and will be reporting them to the IRS. HANG UP. CALL YOUR TAX ADVISOR. If you are a very patient person, contact the IRS to report. But the unfortunate truth is that the IRS already knows about this scam and the scammers are too quick... they disable the phone line and replace it with another before the IRS can track. Remember... The IRS's first communication with you regarding unpaid taxes will not be a phone call. They send several letters first usually followed by an in person visit. SHARE WITH A FRIEND. If you need any help... www.baboiancpa.com TAX TIP OF THE DAY... Don't spend just to get a tax break.
A tax-deductible purchase generally gives you back an average of 25% in tax savings. So a $100 purchase really cost you $75. But you still had to spend $75 on that tax-deductible goat statue! SHARE WITH A FRIEND. If you need any help... www.baboiancpa.com TAX TIP OF THE DAY... Put your kids to work.
If you have a small business or rental property, hire your young children to help out. Pay them now for work they performed all year long. Children are in a much lower tax bracket and their first $6,300 may not be taxable at all for Federal income tax purposes. S-corps and LLCs can also gift ownership shares to a child to shift taxable income to a child's lower tax bracket. This issue is much more complicated than it appears and can impact college financial aid, workers compensation insurance and more... so talk to your tax advisor in advance to discuss the pros and cons. Note: There are special payroll tax rules for sole proprietors hiring heir own children under age 18. SHARE WITH A FRIEND. If you need any help... www.baboiancpa.com |
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AuthorDavid S. Baboian, CPA Archives
February 2018
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