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Trump’s Tax Plan?

Today we face a total paradigm shift in our government. Donald Trump is the President-Elect of the United States of America. So, with that in mind, what changes can individuals expect in our tax lives? Don’t worry. This won’t affect your 2016 tax returns.

Eliminate all those annoying tax brackets and knock them down to just three – 12%, 25%, 33%, while expanding the earnings within those brackets.
12% to $37,500 – S ; $75,000 – MFJ (was 0% – 15%)
25% 37,501 – $112,500 – S; $75,001 – $225,000 – MFJ (was 25% – 28%)
33% $112,501 and above –S; $225,001 and above MFJ (was 28% – 39.6%)
Raise the Standard Deduction to $15,000 for singles and $30,000 for joint returns
That should eliminate the need for most people to use any deductions at all, making life a bit easier. Bye, bye Schedule A.
Eliminate personal exemptions altogether
That means, families with lots of children won’t get the extra per-person tax break – in 2016, it’s worth $4,050 per person – or $28,350 for a married couple with 5 children. So this isn’t really helpful for large families
Eliminate the Head of Household filing status altogether.
So, that would mean a single mom with one child would file as single and have no personal exemption for herself or her child.
Current value – Head of Household – $9,300 + 2 exemptions – $8,100 = $17,400. Replaced with the Single Standard Deduction of $15,000
Eliminate the 3.8% Net Investment Income Tax – which affects individuals with incomes in excess of $200,000 or couples in excess of $250,000. That was kind of a marriage penalty for couples, anyway.
Repeal the Alternative Minimum Tax (AMT). Hooray!
It currently affects singles at $53,900 and couples at $83,800. That level of income doesn’t go very far in urban areas, especially if you have children.
Eliminate the estate tax altogether
But along with it, eliminate the step-up in basis at date of death.
Exclusion from capital gains taxes for up to $10 million worth of assets.

There are lots more provisions. The plan is a mixed bag of goodies and sillies. As yet, the cuts are in the trillions of dollars with no offsets to make up the differences. Congress will need to review the concepts and hash out a whole new tax plan in the coming years. Just know there will be changes. Hopefully, some of them will simplify your lives. – TaxMama

How to Avoid Tax Fraud

Avoid Tax Preparation Fraud

Five Easy Ways You Can Prevent Getting Scam by A Tax Preparation Company

Whenever there is money on the line, you can be sure someone is trying to cheat the system. Whether you have been a victim of tax fraud or not, we are all affected indirectly by these unscrupulous acts. The Federal Trade Commission has reported that tax fraud cost Americans $1.6 Billion last year with a whopping 2 million cases. So in efforts to help our clients and our viewers, here are a few tips to avoid tax fraud:
1. Keep your information secure – this goes without saying, but with identity theft on the rise, be sure to keep all documents with your SSN, DOB, and bank account information in a safe place or shred documents that are no longer in use.
2. Watch out for Phishing Schemes – phishing schemes are messages or points of contact that request personal information that could be used to scam or defraud you. Often times the sender will disguise the message to look like it’s from a reputable source. Look very closely and if you are unsure be sure to contact a trusted CPA or tax professional. Remember, the IRS never sends emails to the public!
3. File with a recognized tax preparer – The IRS recognizes different individuals who are either lawyers, CPAs, Enrolled Agents and non-credentialed individuals who have completed the Annual Filing Season Program. Be sure to ask you’re preparer if they are recognized and have a valid PTIN.
4. File in a Private setting – often times people go to pop up shop tax preparers at their local grocery store or strip mall because the promise cheaper rates. Although these companies try to reduce the amount of prying eyes, they cannot control every interaction with sensitive information. With almost everyone having a camera or voice recording app on their phones, is your information really safe? Make sure you visit a preparer who can provide a private and intimate setting to better serve you and keep your information safe.
5. File early – with all the efforts you do to keep your information safe, filing earlier may still help you if somehow these scammers still manage to get their hands on your sensitive information. It is still possible to file an amendment later. A lot of scammers try to file as early as possible so they can be long gone with your money before any conflicts arise. Beating them at their own game could save you thousands and countless hours dealing with the IRS trying to remedy this situation.

Always keep these in mind and remember if you have any questions or have been a victim of identity theft, be sure to contact us for more information!

Are 2015 IRS Refunds Delayed?

Are Tax Refunds Delayed

Don’t be Fooled!

Earlier this week, a panicked customer asked are 2014 Federal Tax Refunds delayed until October 15.

I immediately replied, having no clue of the validity of the statement, “No way they can do that!”. Once I was clear and alone, I picked up my phone to do some research. Having a chance to read through the piece, it was clear that it was a hoax.

The fact that the link was to the National Report, a satirical news website (kind of like The Onion) gave me the first hint. Being I little more assured of my original answer, I wanted to just solidify my convinction I decided to check to verify.

-The Guy in the Third Room

Deductions to Consider as a Small Business Owner

Tax Deductions
Meals are a highly overlooked expense in regards to small business owner’s tax return. Keeping track of all business interactions that are done over meals or during an event, lead to a considerable difference in your overall expenses. Try as much as possible to keep receipts, pay with a company card or at the least mark in a calendar when the events occurred. If you’re not sure what constitutes as a business meal, be sure to contact us.

Entertainment is another great deduction to get while doing business. Meetings with vendor, clients, employee’s or prospects could be done in a fun atmosphere and can be written off at the end of the year. As always, keep good records of these events. Meeting minutes not only remind you of what was discussed but also may cover you in case of an audit!

Planning your trips in accordance with your business could score you a 100% deduction on you return. What can you write-off? Airfare, hotel, rental cars, valet, taxi, trains, tolls, and more. Again make sure to keep records of each expense. Also don’t forget to discuss it with your CPA or trusted tax preparer to make sure you get an accurate picture of what’s acceptable.

Being at Home
Using your home to get work done is another good contribution to your deductions. There are several different ways to claim this on your return. Some calculations or more technical than others but may increase your deduction, maximizing the dollars that stay in your pocket.

There are many other deductions to consider as a small business owner, but the trick is moderation. Get with a CPA or knowledgeable and trusted tax preparer to give you set you up with a good strategy for claiming these deductions.

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