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10/06/2017 IMPORTANT CHANGES AHEAD (Refresh with f5 key to see more current posts)
With the 2017 tax season approaching, we want to bring you up to date on significant changes. Many of you know I am transitioning from full time tax preparation to part time retiree. This transition started with the 2016 tax year and continues this coming tax season.
Some of you know Lori Gordon, who has been an important associate with me during most of the past seven tax years. As I move into retirement, Lori is doing many of your returns under her business name of Gordon Tax Associates. For the 2016 tax year, she completed one-third of former PMS01 returns. This year, she will be doing two-thirds of your returns and I will continue doing the remaining ones.
There is also a personal transition for Mary and me. We have moved from Charlotte and expect to be established in Belmopan, Belize by the end of October. During a trip to Belize this summer, I was able to connect to high speed internet and have the assurance that the quality of tax services can continue, whether from Lori’s location south of Charlotte or from mine in the capital of Belize.
More information will come from Lori and me as we move into tax time. In the meantime, please contact me by email with questions, comments or concerns.
01/23/2017 BEHIND THE SCENES -- START OF 2016 TAX SEASON (Refresh with f5 key to see more current posts)
[Note: If you didn’t receive a copy of our Constant Contact newsletter of 12/24/16, please send an e-mail to request it.]
This year we offer Link and Cloud Cabinet as secure client portals to upload your tax information. We are still learning how Link operates but believe it will prove to be the easier of the two portals to use.
We regret that internet security issues have caused most financial sites to require “Two Factor” (2FA) or “Multi Factor” (MFA) authentication. These are designed to use in conjunction with a smart phone to send a 6 digit authorization code to complete the sign-in to the portal. This creates a problem for Americans abroad who do not have a U.S. telephone number to receive the code. See the blog below, dated 12/22/2016 for help with this.
Today is the first day IRS accepts 2016 tax returns. W-2s must be issued by employers no later than January 31. Many of you will receive these electronically. When submitting these to us, use Link or Cloud Cabinet. If you must use e-mail, at least black out the social security number.
01/11/17 TAX ORGANIZER AND OTHER FORMS (Refresh with f5 key to see more current posts)
[Note: If you are seeing this article but have not received our newsletter of December 24, let us know. It is important for you to have that information.]
Our intent to have both Cloud Cabinet and Link forms ready for release on the 10th hasn’t happened. In our attempt to synchronize the two applications, more time than expected is needed for typing, transferring, proofing, etc.
As we work with the new Link program, we are impressed with its versatility and believe it should be your first choice of the two applications. Because it requires an e-mail invitation from our software program to you, it may be near the end of January when your invitation arrives.
If you must get information to us before then, use the Shared folder In the Cloud Cabinet to choose the forms you want to submit early.
12/22/16 CODE ACCESS FOR TWO-FACTOR AUTHENTICATION (Refresh with f5 key to see more current posts)
Significant security changes are taking place within the IRS and many other businesses and organizations in the U.S. In addition to a password, a second authentication is required to reduce the possibility of illegal access to your information.
Accountants World, the software we use for the Cloud Cabinet, has provided the following instructions for requesting and receiving the required six-digit numeric code to type into the login screen.
Below are two methods to receive the code:
Method 1: By Smart Phone using a U.S. phone number
Method 2: Using and Authenticator app:
12/05/16 IRS SECURITY ADVICE (Refresh with f5 key to see more current posts)
Internet security is a major concern; especially for tax returns which contain social security numbers and other sensitive information. Unless information is encrypted or uploaded to a computer site using 256 bit encryption, do not expose SSNs and birthdates in an unencrypted file.
The link here provides specific information from the IRS. https://www.irs.gov/uac/irs-and-security-summit-partners-remind-taxpayers-to-protect-themselves-online
12/05/16 2017 TAX SEASON OUTLOOK (Refresh with f5 key to see more current posts)
Preparation for the 2016 tax year is underway. We expect to provide the same quality service as we have for the past ten years. There are several significant changes, though, that will affect you:
At the end of the tax season, Mary and I plan to move from Charlotte to either Florida or Belize. High speed internet is available from both locations, making it possible to provide tax service for tax year 2017 and future years. More information will be provided during the coming months.
Most dates related to the tax season remain the same as in previous years. We suggest you return to this blog page every week or so to make sure important information or changes are not overlooked.
9/7/16 IMPORTANT CHANGE TO FAFSA SUBMISSION DATES (Refresh with f5 key to see more current posts)
If a member of your family is applying for financial aid and completing a FAFSA application, the information in the link here is very important:
Copy and paste the link address in your browser to read the information.
5/9/16 TAX SERVICE WHILE WE ARE AWAY (Refresh with f5 key to see more current posts)
Thanks for your contact. Extensions are in effect for all uncompleted tax returns. We are away until May 31 with uncertain internet reliability.
Mary and I are traveling to Florida to celebrate our granddaughter Vanessa’s college graduation and spending time with other friends and relatives. Then on the 19th we fly to Belize for 10 days. I am taking my laptop along and hope to learn how well the tax office can function from there.
Myriam Segura, whom you may know, has agreed to provide some backup in my absence. She can look up tax returns and reference the Cloud Cabinet and e-mails. She will not have copy, scan and print available.
Subject to internet issues, you may e-mail me at firstname.lastname@example.org.
On this website, go to Tax Center for federal and state refund information. Most returns have been completed, but many are still waiting on my review before we contact you. With the extensions we filed, there shouldn’t be any penalties for non-filing or late filing.
I appreciate your patience for completion of your return, if you are among that waiting group. With less than 100 days from mid-February to April 15, I and most other preparers must rely on extensions to spread the work over a longer period.
If you use Facebook or Linked In, I enjoy keeping up with many of your prayer needs or life’s adventures. Please stay in touch.
2/02/016 URGENT for SIM USA, Inc clients: (Refresh with f5 key to see more current posts)
As you know, SIM now provides tax information electronically instead of via paper copies. We are dependent on you to provide important tax information to us. The forms we must receive from you, if applicable, are:
To properly prepare federal and state income tax returns, we must have W-2s and the detailed PUM report available before we input tax information.
In addition to these documents from SIM, be reminded that we must receive the three page Tax Organizer. This form is available in the “Shared” folder of your Cloud Cabinet portal.
1/27/2016 IMPORTANT UPDATE (Refresh with f5 key to see more current posts)
The Tax Organizer, W-2s and, for SIM USA, Inc. employees, your 2015 detailed PUM (Personal Use of Ministry report) should be sent ASAP. We expect these by February 15. These must be received before we can seriously begin your tax preparation. It isn't necessary to tell us about other outstanding documents unless we ask. We know you will send those when available. On the other hand, we welcome your questions and comments on unusual or problematic matters.
For most of you, your portal on the encrypted Cloud Cabinet is the best way to get your forms and documents to us. We download your new uploads daily. If you can see and open the document on your computer, be assured we can also open and see the file on ours. Some files transmitted as jpeg images have presented download and printing challenges for us. Files with pdf, doc and xls extensions are preferred.
01/13/2016 TY2015 FOLDER AVAILABLE (Refresh with f5 key to see more current posts)
Several clients alerted our office that they didn't find a TY2015 folder to upload documents. The folder is now available and able to accept your documents. Within the ClCab, they have 156 bit encryption.
12/29/2015 PREVIEW OF 2015 TAX YEAR
This tax season is expected to progress much as last year. Congress passed legislation in time to allow the IRS to complete forms and instructions on a timely basis. Tax returns will be accepted for processing by the IRS on January 19. The first due date for filing this year is Monday, April 18.
The employer, SIM USA, Inc, is not providing us with paper copies of W-2 forms for 2015. We are currently working with them to learn whether these might be electronically transmitted from Paychex, their payroll processing company, directly to us (Personal Management Services, LLC). If this becomes possible, we will request your authorization for the transmittal. Until then, upload W-2s to the Cloud Cabinet. We cannot be responsible for security of forms sent by regular e-mail.
If you have signing authority on non-US bank or other financial accounts, be sure you understand the FBAR Form 114 filing requirements. The potential penalties for non-filing are VERY severe.
We expect to have the Shared Folder uploaded to the Cloud Cabinet portal by January 9. This will include the Tax Organizer, Household Data Sheet, and Financial Information form.
Our first priority is to prepare tax returns for families applying for college financial aid or other urgent reasons. Our understanding is that it is good to provide estimated financial information on the FAFSA application now. Then, edit the on-line application as soon as your tax return has been filed with the IRS.
12/02/2012 IRS SECURITY AWARENESS (Refresh with f5 key to see more current posts)
The IRS and other organizations show increasing concern about identity theft, hacking, malware and other security threats. To see a good article on this subject from the IRS Click here. (If you have resisted clicking, you can go to the IRS website at www.irs.gov to search for the Security Awareness article.)
This PMS01 website has 156 bit encryption, but only after you have logged in with your User ID and password.
11/16/2015 END OF YEAR TAX
PLANNING (Refresh with f5 key to see more current posts)
Now is the time to take end-of-year steps that may lower your 2015 tax liability. Several that come to mind:
Caution: Most of the suggestions above have conditions that may prohibit their use or make one appropriate in one situation but not another. Use “google” and the IRS website to study your situation. Our office is glad to help, but charges for research and responses may apply. I don’t charge for an initial e-mail inquiry or phone call of less than 10 minutes.
04/08/2015 APRIL 15 TAX FILING (Refresh with f5 key to see more current posts)
April 15, the first of three filing dates is just a week away. Starting today, our first priority is to file both federal and state tax extensions for all currently unfiled tax returns. By the 13th or 14th, we will return to regular tax preparation.
A few things to note:
03/25/2015 PRIORITIES OF TAX PREPARATION (Refresh with f5 key to see more current posts)
Each year our office is faced with decisions of which returns we complete by April 15 and which will be extended beyond that date. From our perspective this tax season is going well, but as usual the whole season up to April 15 is condensed into about 85 days.
We appreciate the well wishes from many of you as we work extended hours and juggle various demands for our time. Besides my full time hours of 85 to 90 a week, Gloria Yanes and Myriam Segura are again assisting part-time. My wife, Mary, is available to help with administrative work. There is about a 10% increase in the number of overseas taxpayers who have asked for our assistance this year.
Because some returns will not be complete and filed by April 15, you may be interested to know how we decide on preparation priorities from day to day:
1.Families with college age children who are applying for financial aid.
2.Taxpayers who must have the current year's return to apply for a home mortgage or another type of loan.
3.Taxpayers with a special need for priority.
4.Taxpayers who are likely to owe a balance as of April 15. In most cases these are those home on furlough for an extended time and likely to owe federal or state income taxes.
5.Remaining returns where refunds are expected. With the proper extension, these taxpayers are not subject to either interest or penalties. We try to handle these as "first come, first served".
We request receipt of the Tax Organizer by February 15. This form and W-2s are essential to begin any work on the return. This season many Tax Organizers were not received on time and many are still outstanding.
3/1/15 ESTIMATED INCOME TAX PAYMENTS (Refresh with f5 key to see more current posts)
Keep in mind that estimated payments must be made for both income taxes and social security taxes. If you have non-wage income from services you have provided as a contractor, a personal business, clergy member, etc., social security taxes are usually not withheld. These must be paid by including the tax of 14.13% with any other estimated payments you may make for income tax.
If you must make estimated income tax payments, January 15 is the IRS's stated date to receive payment for the fourth quarter. Taxpayers face a potential late payment penalty for later payments. Individuals are required to pay in the lesser of: (1) 100% of the prior year's taxes (line 63 on your 2008 Form 1040), or (2) 90% of the current year's taxes. If your Adjusted Gross Income in the last tax year was greater than $150,000 ($75,000 if married filing separately), then you must pay in 110% of your prior year's taxes.
More information is available at http://www.irs.gov/. Search for Form 1040-ES.
2/13/15 FINANCIAL REPORTING ALERT FOR AMERICANS ABROAD [Edited 12/29/2015]
The U.S. Treasury Department and IRS have increased compliance enforcement for Americans who own or have signing authority on certain financial accounts in countries outside the U.S. The FBAR (e-Form 114) reporting requirement has been in effect for many years and affects all U.S. taxpayers with interest in or control over certain accounts with an aggregate value of $10,000 or more at any moment during a tax year.
Another (FATCA) filing requirement for Form 8938, "Statement of Specified Foreign Financial Assets", may affect U.S. resident or foreign resident U.S. taxpayers with financial assets valued in excess of $50,000.
Penalties for non-filing of several of these reports are VERY severe. Make sure you know if you are required to file any of these. If you have neglected to file during the past three years, or if you need help to assess your filing requirement, we invite you to contact our office at email@example.com.
2/4/15 END OF JANUARY UPDATE (Refresh with f5 key to see more current posts)
The deadline set by the IRS for mailing W-2s was January 31. For those who are employed by SIM, firstname.lastname@example.org delivered most of your W-2s on the 30th. Exceptions were employees who had not given a continuing authorization in previous years or for the first time this year.
Gloria and I started return preparation last Saturday for families who must meet requirements for financial aid using the FAFSA form. February 1 to 17 is also filled with answering e-mails, receiving and recording your documents and waiting for 1099 forms from investment companies. These companies have until February 15 to mail those forms. If a K-1 is expected for revocable trust accounts, we will likely not receive those until about February 24. Most returns are not started until we believe all information is in hand.
For most of you, the encrypted Cloud Cabinet is the best way to get your forms and documents to us. We download your new uploads daily. If you can see and open the document on your computer, be assured we can also open and see the file on ours. Some files transmitted as a jpeg images have presented download and printing challenges for us. Files with pdf, doc and xls extensions are preferred.
The Tax Organizer and and outstanding W-2s should be sent ASAP. Those must be received before we can seriously begin your tax preparation. It isn't necessary to tell us about outstanding documents unless we ask. We know you will send those when available. On the other hand, we welcome your questions and comments on unusual or problematic matters.
1/23/15 IRS TAXPAYER ADVOCATE SLAMS FBAR PENALTIES
A significant number of those reading this have signing authority or own bank accounts outside the U.S. Each year a question on our Tax Organizer reminds clients of the Form 114 (FBAR) filing requirement. If you are a taxpayer who must report (or think you might be required to do so) on "foreign" financial accounts, you will likely be interested in this link describing the IRS Tax Advocate's concern about penalties.
12/14/14 ESTIMATED INCOME TAX PAYMENTS
If you must make estimated income tax payments, the fourth quarter installment is due January 15, 2015. To avoid late payment penalties, individuals are required to pay in the lesser of: (1) 100% of the prior year's taxes (line 63 on your 2013 Form 1040), or (2) 90% of the current year's taxes. If your Adjusted Gross Income in 2013 was greater than $150,000 ($75,000 if married filing separately), then you must pay in 110% of your 2013 taxes rather than 100%.
If you itemize your deductions, consider making your state estimated tax payment on or before December 31, 2014, even though it is not due until January 15, 2015. You are allowed to deduct your state tax payments on your federal return in the year you make your payment.
Keep in mind that estimated payments must be made for both income taxes and social security taxes. If you have non-wage income from services you have provided as a contractor, a personal business, independent sales agent, clergy member, etc., social security taxes are usually not withheld. These must be paid by including the tax of 14.13% with other estimated payments for income tax.
4/6/2014 INFORMATION ABOUT EXTENSIONS FOR TAX FILING [The following is an edited excerpt from an IRS Tax Tip from www.irs.gov.]
IR-2014-43, April 3, 2014
Tax-filing extensions are available to those who need more time to finish their returns. Remember, this is an extension of time to file; not an extension of time to pay.
Taxpayers abroad get more time to file without having to ask for it. U.S. citizens and resident aliens who live and work abroad have until June 16 to file. Tax payments are still due April 15. Taxpayers will avoid penalties if they file either a regular income tax return or a request for a tax-filing extension by this year's April 15 deadline.
Those who haven't finished their return can get an automatic six-month extension. Filing Form 4868 gives taxpayers until Oct.15 to file a return. Any tax due should be estimated and paid with the extension or paid separately prior to April 15 to avoid penalties.
An extension allows a taxpayer to avoid the late-filing penalty, normally 5% per month based on the unpaid balance on returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 15. The interest rate is currently 3% per year and the late-payment penalty is normally 0.5 percent per month, equivalent to 6% per year.
07/31/2012 WHAT IS THE
"CLOUD". [Updated 12/29/2015]
Today I'm connected to Intuit webinar training about Cloud technology and how to use it with friends and clients. I've learned that “The Cloud" isn't new. It is really just the Internet.
The use of attachments is a good example of using the cloud. When the sender makes the attachment, the attached document is actually uploaded to a remote server, where it stays until it is deleted by the sender and the receiver.
A newer example is the use of internet services provided by banks. Many of us use these applications for manage our bank records and to “auto-pay" our bills. Because the banks must be super sensitive to security issues, having information on their servers is probably safer than having it on our local C:\ drives.
For our Personal Management Service office, we subscribe to the Accountant's World, Cloud Cabinet. Names of similar Cloud services you may hear about are Google Docs, Google Drive, OneDrive, ShareFile and DropBox.
As time passes, it appears we will all be forced to use these new technologies.
12/16/2011 U.S. INCOME TAX RETURN FILING REQUIREMENT
As a United States citizen, you must file a federal income tax return for any tax year in which your gross income is equal to or greater than the applicable exemption amount and standard deduction. For information about whether you must file a federal income tax return for a particular tax year, including exemption amounts and standard deductions, see Publication 501(Exemptions, Standard Deduction, and Filing Information) for that year. Generally, you are required to report your worldwide income on your federal income tax return. This means that you should report all income, regardless of which country is the source of the income. Generally, you only need to file returns going back six years. From IRS FS-2011-13, December 2011