You know summer is turning the corner when NFL football is back on the air. (This past Sunday night, the first pre-season game was aired.)
Well, perhaps that is a mere shrug of the shoulders for many, but regardless of how we feel about it, soon Saturday’s and Sunday’s will be full of tailgates and (in most cities where I have clients) autumn colors. Many children are already back in school across the country, and Labor Day is hurtling toward us.
Around here, we’re investing ourselves in continuing education so that we can take advantage of every available (and ethical) tax move on behalf of our clients, and gearing up for what already promises to be a very full final quarter with our client family.
Thanks again for your trust, and for allowing us to stay connected as we have. It means a great deal.
Now … to the tax stuff: We’ve got scams, deadlines and audits. Yum.
“Real World” Personal Strategy Note
Three Tax Updates To Know Right Now
“It is not a daily increase, but a daily decrease. Hack away at the inessentials.” – Bruce Lee
I’ll start with the one that could potentially impact all of my clients:
1) Tax Scammers Getting Smarter (And Scammier)
Because we’ve all gotten smarter about phishing emails, it is becoming much more common for the scammers to try two “new” (but very old) approaches: phone and mail.
Talk about the IRS phone impersonation scam started exactly two years ago, but now the Treasury Department is calling it “the largest, most pervasive impersonation scam in history” (at least as far as the Treasury Dept. is concerned).
Recent reports (see: http://www.tampabay.com/news/business/personalfinance/tax-scams-heat-up-this-summer/2239716) are also saying that taxpayers are receiving MAIL that looks like it came from the IRS. This has been a topic of conversation among tax professionals at the IRS Tax Professional Forums all summer.
So: some rules of thumb about getting contacted by the IRS…
* Real correspondence (by phone or mail) will NEVER demand that you send payment by a specific format. Pre-paid debit cards seem to be the flavor of the month for scammers, so make sure you are aware of that.
* ALWAYS check with a tax professional if you are contacted by the IRS about any kind of “overdue” tax. We will help you to navigate through whether or not it is of legitimate concern. And the better news: if it is, we can help you get it sorted out.
2) Deadline Changes
Switching gears now, from scams to legitimate tax law changes for you to be aware of: For some reason, Congress just loves to cram things into highway spending bills.
That’s exactly what happened with H.R. 3236, popularly known as “The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (yes, that’s how these things are named) brought some tax-law-related changes.
Regular tax returns are still due on April 15th — and a six month extension period is still available. But …
* Partnership tax returns will be due March 15, NOT April 15 as in the past beginning the tax year 2016. If your partnership isn’t on a calendar year, the return is due on the 15th day of the third month following the close of your tax year.
* C corporation tax returns are due April 15, NOT March 15 for the tax year 2016. For non-calendar years, it is due on the 15th day of the fourth month following the close of the tax year.
* S corporation tax returns remain unchanged–they are still due March 15, or the third month following the close of the taxable year.
3) IRS Now May Have Six Years To Audit (Instead Of Three)
Taxes are complex enough as they are without having to worry about whether or not you did them correctly. (Which, of course, is just one reason why it pays to use a pro.)
The general rule of thumb is that the IRS usually has three years to audit you.
But crammed into that same highway bill referenced above was a move by Congress intended to clarify some language that the Supreme Court had used to justify a shorter limitation time. Now, essentially, if you withhold reporting of 25% or more of your income, the IRS has six years to figure it out.
They often do.
These three things (and, of course, many more) are just more bricks in the wall for why it’s important to use a professional that you know, like, and trust.
Can you think of who that might be? 🙂
Warmly (and until next week),
Valerie McLaughlin, EA