Helpful Hints when choosing a Return Preparer to ensure you don’t hire an Abusive Return Preparer
IRS Criminal Investigation (CI) reminds you;
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Taxpayers are responsible for the accuracy of all entries made on their tax returns, which include related schedules, forms and supporting documentation. This remains true whether the return is prepared by the taxpayer or by a return preparer.
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Be careful in selecting the tax professional who will prepare your return. Some basic tips and guidelines to assist taxpayers in choosing a reputable tax professional are:
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Avoid return preparers who claim they can obtain larger refunds than other preparers.
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Avoid preparers who base their fee on a percentage of the amount of the refund.
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Use a reputable tax professional that signs your tax return and provides you with a copy for your records.
- Consider whether the individual or firm will be around to answer questions about the preparation of your tax return, months, even years, after the return has been filed.
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Never sign a blank tax form.
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Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
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Tax Evasion is a crime, a felony, punishable up to 5 years imprisonment and a $250,000 fine.
When in doubt, check it out! Taxpayers hearing claims from preparers offering larger refunds than other preparers are encouraged to check it out with a trusted tax professional or the IRS before getting involved.
January 2010- Bookkeeping and Tax News From Patriot Tax and Bookkeeping
NEW YEAR’S TAX RESOLUTIONS
1. If you are currently a C corporation, consider converting to a Subchapter S Small Business corporation. This will avoid the double taxation of a C corporation and will allow you to deduct any losses on your personal tax return. If you are a sole proprietor consider forming an LLC or S corporation as a “veil” against personal liability.
2. If you have cash left over from last year or excess cash consider making a contribution to your 401K or SEP IRA. You can contribute until March 15, 2010 for 2009 if you are a partnership or corporation. For sole member LLC’s and sole proprietorships you have until April 15, 2010 for 2009.
3. 2009 1099’s are due February 1, 2010 to employees. 1099′s and the 1096 summary are due by February 28,2010. 2009 W-2’ are due to employees on February 1, 2010. W-3’s ,if filed electronically, are due at the Social Security Administration by March 31,2010 otherwise they are due on paper by February 28,2010.
4. Estimated tax deposits for the quarter ended December 31, 2009 are due by January 15, 2010.
5. All bank, loan, and credit card accounts should be reconciled by the 15th day of the following month. Timely processing reduces errors, which you won’t regret later in the year when you’re too busy to spend time doing bookkeeping, or when you get “one of those” notices from the IRS or DOR.
6. Don’t lose those little hard to handle receipts. Consider NeatReceipts:
http://bit.ly/7rvYN9
The IRS and DOR will accept tax deductions from you without receipts, but if your records are not done by a third party who actually saw them and accounted for them they probably won’t.
7. It doesn’t hurt to look at timely financial statements throughout the year. Everyone looks at the profit and loss statement from both an accrual and cash standpoint. But don’t forget the balance sheet. How much do you have “invested” in accounts receivable? This type of investment (yes, it is an investment) earns a zero to negative return. If you have no debt and your cost of capital is sweat equity then you get zero. If you have debt just multiply the interest rate on your debt by negative one (-1) and there is your “return” on your receivables. For example if you have a line of credit of 7% your receivables are earning you a -7% “return”.
8. Corporate and partnership return extensions are due March 15, 2010. Sole proprietorship, one member LLC, and personal requests for extensions to file 2009 taxes are due April 15, 2010. All tax liabilities are due to be paid with the extension. You should know what you owe, and any extension request should be only filed as a tax audit hedge. Ask us why.
9. The IRS audits taxpayers reporting more than $200,000 in adjusted gross income three times more than those making less (3% of those make more than $200K, 1% of everyone making less). Their focus this year is on wealthy taxpayers with offshore investments. If you have not yet accepted their amnesty program you should go to Las Vegas and gamble on the odds of not getting audited and prosecuted:
href=”http://www.irs.gov/newsroom/article/0,,id=216678,00.html?portlet=7″>http://www.irs.gov/newsroom/article/0,,id=216678,00.html?portlet=7
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10. If you closed or sold a business you in 2009 will still have to file all returns. In addition you must mark the returns as “final” returns. You must also report the capital gain or loss on the sale of the business. (Yes, this is your second reminder).
Call Blaine at (978) 604-4253 if you wish a consultation on any of these matters, or email him at patstax@gmail.com.
Patriot Tax and Bookkeeping, Inc. Now Offers Credit and Collections Management
Sammy “The Bull” Gravano, Notorious “Collector”
The problem is he didn’t keep his customers.
Patriot Tax and Bookkeeping Now Offers Credit Management
Did you ever have a customer that was always slow in paying their bills? Did they start getting behind? Were you surprised because they seemed like a reputable company in a stable industry? Were they a big customer that you didn’t want to alienate? Then one fine day did you discover that you couldn’t get in touch with them because they had literally disappeared leaving you with a substantial loss in income possibly thousands or tens of thousands of dollars?
Patriot Tax and Bookkeeping, Inc. can insure that this will never happen with our credit management services. We will track your customers’ payment patterns and with our proprietary analysis tools we can spot troubled accounts before they become troubled.
We will perform credit assessments and draw up ironclad contracts.
Our friendly but firm staff will represent themselves as YOUR credit department. This will in effect separate you from collection activities, so that the customer does not identify you with anything but the great products and service you provide.
Call Blaine at (978) 604-4253 or email us at patstax@gmail.com if you want to learn more.
Our Services in A Nutshell
We provide superior economical service in the areas of bookkeeping, business and personal income tax returns, sales/use taxes, automatic tax payments, full payroll, accounting, and financial reporting of all types.
We have a broad bandwidth in that we can reconcile your accounts and provide full financial reporting including profit and loss statements, balance sheets, and cash flows. We can also provide budgeting, projections, and management reporting customized to your financial information needs that will aid you in decision making and help you increase profitability.
Our customers include retailers, software developers, health care providers, salons, staffing agencies, home remodelers, web developers, private equity managers IT outsourcers, hedge fund managers and traders, real estate brokers, SEO consultants,and, yes, even dog walkers.
Call Blaine at (978) 604-4253 or email us at patstax@gmail.com.
We provide high quality friendly services. We answer phone calls and emails on a real time basis.
We have economical standard rates that allow you to choose the services you need without being saddled with ones you don’t. Our rates average $150 per month for full services.
How To Structure Your Business
So you’re starting a new business? The structure you choose has serious tax and legal implications. The following are the most common business structures:
Sole Proprietorship
You need not do anything unless you have employees. If you have employees you must obtain a federal employer identification number. This may be obtained easily online at www.irs.gov. You will be subject to a self employment tax of 15.3% on any profits. The effective rate is less since you may deduct this tax as a business expense. The rate matches the FICA rate.
As a sole proprietor you have no “corporate veil” to protect your personal assets should you incur a legal judgment. Also this is a SOLE proprietorship. Only one person may have ownership interests and this does NOT include your spouse.
Corporation
There are two types of corporations. There is a C corporation and an S Corporation. You become a C corporation once you file as a corporation with your Secretary of State. The C corporation has its own tax rates separate from your personal tax rates. This means that any profit you make in this entity is taxed before you receive any dividends. You may elect to become a Subchapter S Small Business corporation by filing a form with the IRS in a timely manner. This allows your profits to be taxed at your personal tax rate and to avoid the double taxation of a C corporation. There are restrictions in the amount of revenue you may earn and how many shareholders you may have and what type of shareholders (they must be individuals).
Limited Liability Company (LLC)
This type of business organization as its name implies limits your personal liability for business actions in much the same way as the corporation does with its “corporate veil”. If an LLC has a sole member then it is treated as a sole proprietorship subject to self employment taxes. If it has more than one owner then it is treated as a partnership.
Partnerships
The most common types of partnerships are multiple member limited liability companies (LLC’s) and limited partnerships (LP’s). A limited partnership contains limited partners and a general partner, which is most commonly an LLC. The general partner manages the partnership and charges the limited partners management fees. This structure is what one typically sees in hedge funds, private equity funds, venture capital funds, and other types of private investment companies.
Let Patriot Tax and Bookkeeping, Inc. guide you as to the most advantageous structure for your business enterprise. We will obtain tax identification numbers, perform filings with your Secretary of State, and file all tax returns with the IRS, your state DOR, and local authorities. Do not attempt this by yourself!
Filing Massachusetts Payroll Taxes
Your business has to be registered with the state to file and pay payroll taxes electronically. Returns you will have to file with the Department of Revenue include monthly or quarterly withholding taxes depending upon how much or little your liability is, new hire reporting, and quarterly wage reporting.
One must withhold 5.3% of salaries and wages payable on the 15th of any month that is not the end of a quarter if you are withholding $1,200 or more per year. You must report and pay weekly if you are withholding $25,000 or more per year. If you are withholding less than $1,200 the tax is reportable and payable the last business day of the quarter. If you are withholding less than $100 you may pay annually by January 31st of the following year.
If you have paid $1,500 in wages in any quarter you must file and pay online for state unemployment taxes to the Division of Unemployment Assistance one month after the end of every quarter. The contribution rates vary from 2.83% to 12.27% on the first $14,000 in wages paid per calendar year. The rates are dependent upon employer claims experience and how much the employer has paid into the fund. You are also required to pay into the Workforce Training fund at a rate of .06% on the first $14,000 of wages.
If you employ six or more people you will also be liable for the Massachusetts Unemployment Insurance fund contribution of .12% on wages under $14,000.
Fines for non compliance can be substantial. You may be fined over $1,000 in some cases for non filing of payroll tax returns.
Patriot Rax and Bookkeeping, Inc. can register you for taxes and file and pay your Massachusetts payroll taxes, excise, and sales/use taxes in a timely manner avoiding interest and penalties along with audit flags.