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Category: Acct/Tax TechTips

News for Your Week Ahead: June 18, 2021

Posted on by Walter Moore

On this weeks’ episode of MSATP TV, Jerry Lotz join Executive Director Bill Feehley to tell us how CostSeg can help and you clients be fiscally fit.

Watch on YouTube.

Coming Up: On Thursday, June 24 at 10 a.m., Michael Ashley of Registered Agents will be joining us to discuss how he can help you and your clients incorporate a business, form a limited liability company, or for other incorporation needs in all 50 states! Like/Follow us on Facebook to see this episode and more!

Update on Mandatory Electronic Filing for Form 4720 by Private Foundations

Section 3101 of the Taxpayer First Act requires certain exempt organizations to file information and tax returns electronically for tax years beginning after July 1, 2019. Private foundations required to file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code, are included in the electronic filing mandate. Pending conversion of Form 4720 to electronic format, the IRS continued to accept the 2019 tax-year version of this return on paper. While software for the electronic version of Form 4720 has been under development, the IRS also continued to accept the 2020 tax-year version of Form 4720 from private foundations on paper. See Notice 2021-01, 2021-2 I.R.B. 315.

For more information, please click here.

IRS Unveils Online Tool to Help Low-Income Families Register for Monthly Child Tax Credit Payments | IR-2021-129

The Treasury Department and the Internal Revenue Service unveiled an online Non-filer Sign-up tool designed to help eligible families who don’t normally file tax returns register for the monthly Advance Child Tax Credit payments, scheduled to begin July 15.

This tool, an update of last year’s IRS Non-filers tool, is also designed to help eligible individuals who don’t normally file income tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed.

For more information, click here.

New FAQs Available to Aid Families and Small Business Under the American Rescue Plan | IR-2021-128

The Internal Revenue Service today posted two new, separate sets of frequently-asked-questions (FAQs) to assist families and small and mid-sized employers in claiming credits under the American Rescue Plan (ARP).

Both the child and dependent care credit as well as the paid sick and family leave credit were enhanced under the ARP, enacted in March to assist families and small businesses with the fallout of the COVID-19 pandemic and recovery underway. The two sets of FAQs provide information on eligibility, computing the credit amounts, and how to claim these important tax benefits.

For more information, click here.

Filing Payroll Taxes Electronically Makes Good Sense | Tax Tip 2021-86

Running a business with employees can be hard work. One way business owners can make things a little easier on themselves is by filing payroll and employment taxes electronically. There are several benefits to filing these forms electronically:

  • It saves time.
  • It’s secure and accurate.
  • The filer gets an email to confirm the IRS received the form within 24 hours

There are two convenient ways businesses can e-file:

  • Employers submitting the forms themselves will need to purchase IRS-approved software. There may be a fee to file electronically. Also, the software will require a signature by one of two ways:
  • The software instructs the user to apply for an online signature PIN.

Taxpayers should allow at least 45 days to receive their PIN.

  • The user can scan and attach Form 8453-EMP, Employment Tax Declaration for an IRS e-file Return.
  • Employers can have their tax professional file the form for them. The Authorized IRS e-file Providers for Individuals and Businesses can help employers locate an Electronic Return Originator near them.

For more information, click here.

Facts to Help Taxpayers Understand Backup Witholding | Tax Tip 2021-85

Backup withholding is a federal tax on income that otherwise typically doesn’t require tax withholding, such as 1099 and W2-G income. Taxpayers who receive this type of income may have backup withholding deducted from their payments.

Here are some basic facts about backup withholding.

Backup withholding is required on certain nonpayroll amounts when certain conditions apply.

The payer making such payments to the payee doesn’t generally withhold taxes, and the payees report and pay taxes on this income when they file their federal tax returns. There are, however, situations when the payer is required to withhold a certain percentage of tax to make sure the IRS receives the tax due on this income.

For more information, click here.

News from the Justice Department’s Tax Division 

The United States has filed a complaint in the U.S. District Court for the Middle District of Georgia, Macon Division, seeking to bar Shondre D. Pitts, an Irwinton, Ga., tax return preparer, from preparing tax returns for others. The civil complaint against Pitts alleges he has a long history of preparing fraudulent returns and, as a result, his customers may face large income tax debts and may be liable for penalties and interest.

Hildares Kinkesha Parker-Greene, a Kinston, N.C., return preparer, was sentenced to 30 months in prison for conspiring to file false tax returns for her clients. In addition to the term of imprisonment, Parker-Greene has been ordered to serve three years of supervised release and pay $442,576 in restitution to the IRS.

Herbert E. Lewis, a Georgia certified public accountant, has been charged with one count of conspiracy to defraud the United States, 24 counts of wire fraud, 32 counts of aiding or assisting in the preparation of false federal tax returns and five counts of filing false federal tax returns. If convicted, Lewis faces a statutory maximum sentence of 20 years in prison for each count of wire fraud, five years in prison for conspiring to defraud the United States, three years in prison for each count of filing a false tax return and three years in prison for each count of aiding and assisting in the preparation of a false tax return. He also faces a period of supervised release, monetary penalties and restitution.

News for Your Week Ahead: May 28, 2021

Posted on by Walter Moore

On this weeks’ episode of MSATP TV Cliff Reiter of National Accounting Sales joins Executive Director Bill Feehley to tell us about how he can help you buy or sell your accounting practice!

Watch on YouTube. 

Coming Up: On Thursday, June 3rd at 10 a.m., we will have our Young Professionals Leadership Program (YPLP) Capstone Project winner on to tell you about themselves and all about our Signature YPLP Program.Tune in on Facebook for this episode and more!

Just a reminder our offices will be closed next week for the Annual Convention & Banquet. We can still be reached via email at info@msatp.com, walter@msatp.org, heather@msatp.org, or kebaugh@msatp.org. Our offices will reopen on June 7th.

There is still time to register for the individual classes virtually or in person at MSATP’s Annual Convention and Banquet. Please use the button below to register!

To learn more about the convention, click here.

Bob Jennings Teaches MSATP’s First In-Person Seminar Since Start of COVID-19 Pandemic

While things in the past year have been very difficult for everyone, we did enjoy a small sense of a return to normalcy this week with our first two in person seminars in Frederick, MD with Bob Jennings! Our seating was still socially distanced and attendees got to enjoy the small round table question and answer sessions throughout the presentation.

Coming this week we have both options, both in person and virtual, for classes during the Annual Convention & Banquet in Ocean City, MD. We hope to see you there.

For more information, please click here.

Interest Rates Remain the Same for the Third Quarter of 2021 | IR-2021-120

The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning July 1, 2021.
The rates will be:

  • 3% for overpayments (two (2) % in the case of a corporation),
  • 0.5% for the portion of a corporate overpayment exceeding $10,000,
  • 3% for underpayments and
  • 5% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

For more information, click here.

Find Unclaimed Property with “The Franchot Bunch” | Annual Campaign Aims to Unite Marylanders with Their Money and Valuables

Using a popular 1970s family sitcom as this year’s theme, Comptroller Peter Franchot launched the annual unclaimed property campaign aimed at reuniting Marylanders with their money and valuable items.

The 2021 Maryland Unclaimed Property insert hits publications statewide beginning Sunday, May 30, and continuing through mid-June. This year, Comptroller Franchot joins with agency employees to form “The Franchot Bunch,” a spoof of the famous television show “The Brady Bunch” about a large, blended family.

“Unclaimed property is all about reuniting Marylanders with money or belongings that have, for various reasons, ended up in the state’s custody,” Comptroller Franchot said. “There may be stocks, rings of gold that were once your mother’s, and other items of quality. Being on the list may seem like a fantasy, but matching owners with their rightful property is truly a family effort in our agency.”

To use the Unclaimed Property database, click here.

The American Rescue Plan Includes Retroactive Tax Benefits That Can Help Taxpayers | COVID Tax Tip 2021-74

The IRS reminds taxpayers who still haven’t filed, that several provisions of the American Rescue Plan affect their 2020 tax returns.

One provision excludes up to $10,200 in unemployment compensation from income. Another provision benefits many people who purchased subsidized health coverage through either federal or state Health Insurance Marketplaces. The law also includes a third round of Economic Impact Payments, currently going out to eligible Americans, that are generally equal to $1,400 per person for most people. The IRS will automatically provide these benefits to eligible filers.

Most taxpayers who have already filed their 2020 returns should not file amended returns, file refund claims, or contact the IRS about obtaining these newly enacted tax benefits.  These actions will not speed up a future refund. In fact, they could even slow down an existing refund claim.

For more information, click here.

Checking Withholding Can Help Taxpayers Decide if They Need to Give Their Employer a New W-4 | Tax Tip 2021-75

All taxpayers should review their federal withholding each year to make sure they’re not having too little or too much tax withheld.

Employees, retirees and self-employed individuals can use the IRS Tax Withholding Estimator to help decide if they should make a change to their withholding. This online tool guides users, step-by-step through the process of checking their withholding, and provides withholding recommendations to help aim for their desired refund amount when they file next year. Taxpayers can check with their employer to update their withholding or submit a new Form W-4, Employee’s Withholding Certificate.

Adjustments to withholding

Individuals should generally increase withholding if they hold more than one job at a time or have income from sources not subject to withholding. If they don’t make any changes, they will likely owe additional tax and possibly penalties when filing their tax return.

Individuals should generally decrease their withholding if they qualify for income tax credits or deductions other than the basic standard deduction.

Either way, those who need to adjust their withholding must prepare a new Form W-4, Employee’s Withholding Certificate. They need to submit the new Form W-4 to their employer as soon as possible since withholding occurs throughout the year.

For more information, click here.

Tips for Troubleshooting Common After-Tax-Day Issues | COVID Tax Tip 2021-73

While the deadline to file and pay federal income taxes has passed for most people, some taxpayers may still be dealing with tax-related issues.

Here are some tips for taxpayers handling some of the most common after-tax-day issues.

Check refund status

Taxpayers can check on their refund using the Where’s My Refund? tool. It is available on IRS.gov and the IRS2Go app. Taxpayers without access to a computer can call 800-829-1954. To use this tool, taxpayers need their Social Security number, tax filing status and the exact amount of the refund claimed on their tax return. The tool updates once daily, so there’s no need to check more often.

Check withholding

All taxpayers are encouraged to check their withholding using the Tax Withholding Estimator on IRS.gov. This will help them make sure their employers are withholding the right amount of tax from their paychecks. Doing this now will help avoid an unexpected amount due and possibly a penalty when they prepare and file their taxes next year.

Taxpayers can use the results from the Estimator to help complete a new Form W-4 and adjust their income tax withholding with their employer. Taxpayers who receive pension income can use the results to complete a Form W-4P and submit to their payer.

For more information, click here.

News for Your Week Ahead: May 14, 2021

Posted on by Walter Moore

On this weeks’ episode of MSATP TV Marc Reibman of USB Payment Processing joins Executive Director Bill Feehley for an exciting new service they are offering to reduce those credit card processing fees!

Watch on YouTube.

Coming Up: On Thursday, May 20th at 10 a.m., MSATP President Barbara Smith will join Bill Feehley on MSATP TV to tell us about the Employee to Entrepreneur meeting coming up on June 15th.Tune in on Facebook for this episode and more!

IRS Extends Deadline to Apply for the 2022-2024 Volunteer Taxpayer Advocacy Panel | IR-2021-109

The Internal Revenue Service has extended the deadline for civic-minded volunteers to apply for membership on the Taxpayer Advocacy Panel (TAP) for 2022. Taxpayers may submit a TAP application online at www.improveirs.org through June 1, 2021.

The TAP is a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns and makes recommendations for improving IRS service and customer satisfaction.

Taxpayers are encouraged to take this opportunity to make a difference in how the IRS delivers products and services. A video is available with information about the TAP and how to contribute to this dynamic group of volunteers.

For more information, please click here.

IRS Offers Overview of Tax Provisions in American Rescue Plan; Retroactive Tax Benefits Help Many People Now Preparing 2020 Returns | IR-2021-106

The Internal Revenue Service today provided an overview of some of the key tax provisions in the American Rescue Plan Act.

Several provisions affect the 2020 tax return people are filling out this filing season, including one exempting up to $10,200 in unemployment compensation from tax and another benefiting many people who purchased subsidized health coverage through either federal or state Health Insurance Marketplaces. In addition, the law also includes a third round of Economic Impact Payments, now going out to eligible Americans, that are generally equal to $1,400 per person for most people, as well as several other key changes for tax-year 2021.

For more information, click here.

IRS Grants Dyed Diesel Fuel Penalty Relief Due to Disruptions of the Fuel Supply Chain | IR-2021-108

The Internal Revenue Service, in response to disruptions of the fuel supply chain, will not impose a penalty when dyed diesel fuel is sold for use or used on the highway in the States of Alabama, Delaware, Georgia, Florida, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and the District of Columbia.

This relief is retroactive to May 7, 2021, and will remain in effect through May 21, 2021.

This penalty relief is available to any person that sells or uses dyed diesel fuel for highway use.  In the case of the operator of the vehicle in which the dyed diesel fuel is used, the relief is available only if the operator or the person selling such fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use.

For more information, click here.

IRS Issues Guidance on Taxability of Dependent Care Assistance Programs for 2021-2022 | IR-2021-105

The Internal Revenue Service today issued guidance on the taxability of dependent care assistance programs for 2021 and 2022, clarifying that amounts attributable to carryovers or an extended period for incurring claims generally are not taxable. The guidance also illustrates the interaction of this standard with the one-year increase in the exclusion for employer-provided dependent care benefits from $5,000 to $10,500 for the 2021 taxable year under the American Rescue Plan Act.

Because of the pandemic, many people were unable to use the money they set aside in their dependent care assistance programs in 2020 and 2021. Generally, under these plans, an employer allows its employees to set aside a certain amount of pre-tax wages to pay for dependent care expenses. The employee’s expenses are then reimbursed from the dependent care assistance program.

For more information, click here.

Filing Season Reminder: Military Members and Their Families May Qualify for Special Tax Benefits | Tax Tip 2021-65

With the filing deadline around the corner, the IRS reminders members of the military that they may qualify for special tax benefits. For example, they don’t have to pay taxes on some types of income. Special rules may lower the tax they owe or allow them more time to file and pay their federal taxes.

Here are some of these special tax benefits:

  • Combat pay exclusion: If someone serves in a combat zone, part or all of their pay is tax-free. This also applies to people working in an area outside a combat zone when the Department of Defense certifies that area is in direct support of military operations in a combat zone. There are limits to this exclusion for commissioned officers.
  • Other nontaxable benefits: Base allowance for housing, base allowance for subsistence and uniform allowances are among several government pay items excluded from gross income, which means they are not taxed.
  • Moving expenses: Some non-reimbursed moving expenses may be tax deductible. To deduct these expenses, the taxpayer must be a member of the Armed Forces on active duty and their move must be due to a military order or result of a permanent change of station.
  • Deadline extensions: Some members of the military – such as those who serve overseas – can postpone most tax deadlines. Those who qualify can get automatic extensions of time to file and pay their taxes.
  • Earned income tax credit: Special rules allow military members who get nontaxable combat pay to choose to include it in their taxable income. One reason they might do this is to increase the amount of their earned income tax credit. People who qualify for this credit could owe less tax or even get a larger refund.
  • Joint return signatures: Both spouses must normally sign a joint income tax return. However, if military service prevents that from happening, one spouse may be able to sign for the other or get a power of attorney. Service members may want to consult with their installation’s legal office to see if a power of attorney is right for them.
  • Reserve and National Guard travel: Members of a reserve component of the Armed Forces may be able to deduct their unreimbursed travel expenses on their return. To do so, they must travel more than 100 miles away from home in connection with their performance of services as a member of the reserves.
  • ROTC allowances: Some amounts paid to ROTC students in advanced training are not taxable. However, active duty ROTC pay is taxable. This includes things like pay for summer advanced camp.

Special filing software. Miltax is free tax resource available for the military community, offered through the Department of Defense. There are no income limits. MilTax includes tax preparation and electronic filing software, personalized support from tax consultants and current information about filing taxes. It’s designed to address the realities of military life – including deployments, combat and training pay, housing and rentals and multi-state filings. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.

Filing Season Reminder: Social Security Benefits May Be Taxable | Tax Tip 2021-66

Taxpayers receiving Social Security benefits may have to pay federal income tax on a portion of those benefits. Social Security benefits include monthly retirement, survivor, and disability benefits. They don’t include supplemental security income payments, which aren’t taxable.

The portion of benefits that are taxable depends on the taxpayer’s income and filing status.

To find out if their benefits are taxable, taxpayers should take half of the Social Security money they collected during the year and add it to their other income. Other income includes pensions, wages, interest, dividends, and capital gains.

  • If they are single and that total comes to more than $25,000, then part of their Social Security benefits may be taxable.
  • If they are married filing jointly, they should take half of their Social Security, plus half of their spouse’s Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable.

Fifty percent of a taxpayer’s benefits may be taxable if they are:

  • Filing single, single, head of household or qualifying widow or widower with $25,000 to $34,000 income.
  • Married filing separately and lived apart from their spouse for all of 2020 with $25,000 to $34,000 income.
  • Married filing jointly with $32,000 to $44,000 income.

Up to 85% of a taxpayer’s benefits may be taxable if they are:

  • Filing single, head of household or qualifying widow or widower with more than $34,000 income.
  • Married filing jointly with more than $44,000 income.
  • Married filing separately and lived apart from their spouse for all of 2020 with more than $34,000 income.
  • Married filing separately and lived with their spouse at any time during 2020.

Revenue Procedure 2021-25, Inflation Adjusted Amounts for Health Savings Accounts

The IRS releases Revenue Procedure 2021-25, which provides the 2022 inflation adjusted amounts for health savings accounts and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements.

Revenue Procedure 2021-25 will be published in Internal Revenue Bulletin 2021-21 on May 24, 2021.

For more information, please click here.

TE/GE Job Announcements

The IRS has announced multiple full-time positions in the Tax Exempt/Government Entities division available across the country. These job announcements close soon, so apply today on USAJOBS.gov to become part of our team.

We’re hosting virtual information sessions for these job openings. Hear from employees currently working in these positions and gain a better understanding of the work they do day-to-day. A representative from HR will also discuss the application process and some of the requirements for the positions.

    • Thursday, May 13 at 2 – 3:30 p.m. ET
    • Monday, May 17 at 4 – 5:30 p.m. ET
    • Thursday, May 13 at 4 – 5:30 p.m. ET

Follow the IRS on social media and sign up for e-News newsletters

Everyone can follow official IRS social media accounts and sign up for e-News newsletters to get the latest alerts and information on a wide-range of tax topics.

These platforms are especially important right now. COVID 19-related relief, changes to filing and payment deadlines, and new business credits and Economic Impact Payments make these free and reliable communication channels crucial for anyone wanting the most current information.

Ransomware?

Posted on by Walter Moore

by Walter Moore

I’m sure everyone has heard about the ransomware attack that has happened to the Colonial Pipeline which has created a frenzy amongst excitable personalities and created a line only Walt Disney himself could appreciate for one of his many amusements at the gas pump. Many ask what is ransomware? Ransomware is usually an attack in which an email or some other means to transfer a file which is in fact malicious software that denies you access to your systems or computer. To regain access you must pay the theives a “ransom” to regain access usually through cryptocurrency as the money cannot be traced. One might ask, well why would anyone click such a link? Well let’s dive into that.

Usually what a criminal will do is hack into an email exchange to gain access to folks emails. They will look and see an email account and attempt to replicate the email server data thus gaining access to your accounts without the actual owner of the account knowing. Usually this is because many do not secure their accounts and systems with 2 factor authentication which would notify you if someone else has attempted to gain access. The attacker will then go through the emails of said victim, spoof the account and send out emails to anyone while attaching a link to their ransomware software which to most will call a virus. When you click this suspicious link and download the software you have given them access to your computer and now they are in control and can lock down your computer and/or systems until you pay a ransom to them.

So one might ask who is suseptible to a ransomware attack? Well as an accountant, you have a lot of valuable information so you’re highly suseptible. To prevent such an attack, never ever click links to an email you don’t trust. If you see a link from someone you do trust, hover over it without clicking to see where it leads and read the link. If it looks even slightly off call that individual to see if they actually sent it. Phishing emails should be deleted and the sender blocked and always have 2 factor authentication on your accounts. At the end of the day slowdown and read an email closely especially if you see any links. Another trick is with fake PDF links that look like attachments. Hover over the attachment and make sure it’s a PDF file and not a link to a malicious website.

An ounce of prevention can keep you safe. If you have any questions, please feel free to reach out by email walter@msatp.org.

USB Issues? There is help with that.

Posted on by Walter Moore

by Walter Moore

You may be one of those that has recently purchased one of those new external disk drives at the Costco sale. 8TB for $100 that was a Black Friday deal come early! Now for some of you with an older computer or laptop you plugged it in and got a message that your USB did not support the USB 3.0 speeds. Well what does that mean you might ask?

Back when USB technology first arrived or USB 1.0, the big rectangular style plugs that we still know today, the transfer rate only went up to 12 megabit per second. At the time, like anything in the 90s including a floppy drive, was state of the art. We even had external hard drives then, you just needed what was called an enclosure and you pretty much made your own external disk drive. Now you may have noticed your new USB plug has changed colors, it is blue. Well what does that mean? That means the usb plug is now either a 2.0 or 3.0 port. You will notice new computers have blue ports for your USBs as well. The latest 3.0 technology tranfers data at a blistering 5 gigabit per second or for comparison 625 megabits per second. That is what allows that new massive disk drive you just bought to quickly transfer data onto the drive.

Now for you older desktop users there may be a USB 3.0 module that you can put into your computer to upgrade your ports IF your motherboard is compatible. For laptop users, you might be able to find a computer repair company that can make the change, but more than likely you will have to put that on your wish list in the next laptop.

I hope this tip helps!

If you have any questions contact me walter@msatp.

News for Your Week Ahead: April 23, 2021

Posted on by Walter Moore

On this week’s episode of MSATP TV, Bob Jennings joins Executive Director Bill Feehley to tell us about his classes TaxSpeaker Security and Preparations, Compilations and Reviews. He will be presenting both of these classes at the MSATP Annual Convention & Banquet in Ocean City, MD on June 2-3, 2021.

Watch on YouTube.

Coming Up: On Thursday, April 29th at 10 a.m., Jim Arnie will join Bill Feehley on MSATP TV to give us a wrap up on the legislative session in Annapolis. Tune in on Facebook for one last up date on the 2021 legislative session.

American Rescue Plan Tax Credits Available to Small Employers to Provide Paid Leave to Employees Receiving COVID-19 Vaccines; New Fact Sheet Outlines Details | IR-2021-90

The Internal Revenue Service and the Treasury Department announced today further details of tax credits available under the American Rescue Plan to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.

The additional details, provided in a fact sheet released today, spell out some basic facts about the employers eligible for the tax credits. It also provides information on how these employers may claim the credit for leave paid to employees related to COVID-19 vaccinations

Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine. For example, if an eligible employer offers employees a paid day off in order to get vaccinated, the employer can receive a tax credit equal to the wages paid to employees for that day (up to certain limits).

For more information, click here.

Second Round of Economic Impact Payments | 2021-04

The Coronavirus Response and Relief Supplemental Appropriations Act Second Round Economic Impact Payment data are now available on SOI’s Tax Stats Web page. The Coronavirus Response and Relief Supplemental Appropriations Act, enacted in December 2020, created a second round of advance cash payments to individuals. These tabulations provide data on the second round of Economic Impact Payments by adjusted gross income, State, and marital status. Data on the third round of Economic Impact Payments from the American Rescue Plan Act of 2021 will be available at a later date.

For more information, click here.

Taxpayer Should File Their Tax Return on Time Even if They Can’t Pay Their Tax Bill in Full | Tax Tip 2021-53

Taxpayers should file their tax return by the deadline even if they cannot pay the full amount due.

If an individual taxpayer owes taxes, but can’t pay in full by the May 17, 2021 deadline, they should:

File their tax return or request an extension of time to file by the May 17 deadline.

  • People who owe tax and do not file their return on time or request an extension may face a failure-to-file penalty for not filing on time.
  • Taxpayers should remember that an extension of time to file is not an extension of time to pay. An extension gives taxpayers until October 15, 2021 to file their 2019 tax return, but taxes owed are still due May 17, 2021.

For more information, click here.

Digital Advertising Gross Revenues Tax and Tobacco Tax Alterations and Implementaion | SB 787

Due to the broad interpretation of what “digital goods” were subject to a new sales tax in HB932 of 2020, the MDCC formed a working group of tax experts to develop a set of recommended amendments providing clarity in the law. After much work, amendments on two major issues were agreed upon and included in SB 787, which passed Monday night and awaiting review from the Governor.

The amendments do two things:

  • Clarify that a taxable “digital product” does not include educational instruction or seminars conducted by educational institutions or professional organizations and business associations.
  • Clarify that certain types of computer software and related services are not taxable, where the purchase involves software that is unusable until it is configured or modified as necessary to perform the required functions and for the software to operate as intended. This is often referred to as “enterprise software” used by businesses.

For more information, click here.

Computer a Little Slow? A Possible Solution!

Posted on by Walter Moore

by Walter Moore

With these new laptops out here, especially the higher end workhorses good can be made better! If you have an older premium end laptop, you probably paid a nice amount money when you purchased it. As time goes on and applications get bigger and more advanced you may notice your computer slowing down. This is due to how much RAM or memory the application uses for the newer and more advanced features.

Most premium end laptops do not come maxxed out on memory as surprisingly as that sounds. So if you find it being slow, if you are into working on your own computer you can open up the computer and take out the “stock memory” and put in a larger and more capable set of memory cards. So if your computer’s motherboard can handle up to 32 GB and you only have 16 GB of memory you have plenty of room for growth. This will not only be a simple upgrade but it will save you from buying a new laptop for another few years.

Be mindful there is a lot of different types of memory cards out there and you will need to see the capacities of your motherboard. The best place to start is to look up your computer’s model number so you can see what type of memory card you need and what the maximum is. Another resource is your IT support company as they will be able to do the research and possibly the install.

I hope this tip saves you money and helps you to get a little more life out of your current computer before replacement.

If you’d like to reach out to me, please do so a walter@msatp.org.

 

Don’t Forget Those Updates!

Posted on by Walter Moore

by Walter Moore

Recently I was asked about issues with a co-workers laptop regarding functionality. We were trying to figure out why the webcam quality was low, and the device was having glitches with ethernet connectivity. The first thing that came to mind was the ethernet cord itself. Simple solution first right? Then thinking back to my career prior to joining MSATP I remembered “the drivers!”

One thing that I noticed in the past, was even the IT tech support companies people hire for small office seem to forget the drivers especially for Dell computers. Most simply do the Windows updates and consider it done in the initial setup phase. The drivers will simply be missed and you might have 5 or more on a brand new laptop! What I found especially in my time dealing with Dell computers is Dell will release their own patch updates for the various components in their own computers. This relates to the webcam, docking station, USB drivers and whole host of other components in your laptop. If you do not update the drivers you can have a list of uncorrected “bugs” on your machine that have probably been driving you nuts. If you’re like me and have a machine with graphics capabilities utilizing a GeForce brand graphics card then there are routine updates for that component as well.

If you are a Dell owner simply type “Dell updates” in the search bar next to the windows icon in the bottom of your screen to bring up the driver updating software and click check for updates. There will also be a a read out there to tell you if and when the last Dell updates were installed. Give it a try, you might install a solution for that glitch you thought you needed a new laptop or computer for.

If you have any questions please contact walter@msatp.org!

#TechTips – Epistemology, or, How Do You Know What You Know?

Posted on by Walter Moore

A wise accountant once taught me that opinions are like a… certain part of one’s body. Everyone has this particular part, and everyone else’s smells. (It’s your nose, at least for this publication.)

What’s the point of opening this post with a crass depiction of an opinion? Because, in our profession, and in our world, we must have a handle on facts.  The truth is what the facts arei. Period.

The previous post, about logic, relied heavily on facts. If there are no facts, there can be no logic. If there are no facts and no logic, there can be no accounting.

Of course, those of us that still practice in the field of attestation might argue that accounting can’t exist without opinions either, but that is a fool’s errand because in the aggregate, opinions don’t actually exist. Ok, they exist. In the same way that a fist or one’s lap exists.  What happens to your fist when you straighten your fingers, or your lap when you stand up?  Wherever the fist and the lap goes, that’s where the opinion goes.

In all seriousness, one cannot render a professional opinion without first determining the facts of the matter.

Ahem.

Epistemology then, is a field of knowledge that seeks to distinguish fact from opinion. We are all entitled to our own opinions, but not our own facts.  As far as those opinions, we’ll just be sure to keep a window opened 😉

As in all fields of study, it’s important to start with some definitions and that is certainly true in Epistemology. The term is relatively new, about 200 years old, give or take, though the pursuit of this knowledge and its debates radiate throughout history back to Plato’s and Socrates’ time.

Here are a few terms of art in this branch of philosophy – and it’s just a few because this is meant to be a short blog post. As stated previously, the purpose of these posts is to spark your imagination and interest into learning something new.

Belief – an attitude held by an individual regarding anything they take to be “true.”

Truth – The property of being in accord with facts or reality. (“The truth is what the facts are.”ii)

Justification – The reason that someone holds a rationally admissible belief; the assumption that it is a good reason for holding something to be true.

Apriori – Knowledge obtained without experience, through reason only. Views that rely on apriori knowledge are classified as rationalist.

Aposteriori – Knowledge obtained through experience and/or is empirical in nature. Views that rely on aposteriori knowledge are classified as empiricist.

The problem of regression – one’s proposition relies on premises that themselves must be justified by other premises in an infinite loop.  Revisiting the proposition about Socrates and mortals; All men are mortal. Socrates was a man. How do we know that Socrates was a man?  Do we define a man as someone born of human parents? Can we know this about Socrates? Do we simply accept this premise as factually correct apriori?

Let’s link this concept to our profession.

If any of us have been in public practice for any length of time, you will undoubtedly encounter a taxpayer who has a gripe about their current tax preparer. Often, they will say things like, “I owe a lot in taxes and it’s all their fault.”

Really?

How do we know that this is true?

If the person in question can produce their returns, a careful examination of said returns…cannot tell us definitively whether the person paid too much, or too little in tax.  We’d need to see the source documents and the preparer’s work papers. BUT, we can intuit some information from the returns to get a sense of the situation. For example, if a person is a sole shareholder of a corporation and that person works out of their house, and that they are also the sole employee of that corporation, it’s a relatively safe bet that spending $1,500 a month in telephone expenses is probably a bunch of hooey. (That’s the technical term in the IRC.)(No…no it isn’t.)

When pressing said taxpayer on this bit of…oddness, and said taxpayer blames their accountant, you can direct the person to the taxpayer signature line and ask if that’s their signature there.

Upon their inevitable acceptance of that barest of responsibilities, we can then come to understand the following:

  1. 1. It is the taxpayer’s opinion, and not a fact, that the accountant messed up the return.
  2. 2. It is our third-party observation that the return itself is most likely not correct.
  3. 3. It is not possible to know if the accountant intentionally messed up or if the client provided the accountant with faulty information.
  4. 4. It is not possible to know if the taxpayer is being truthful, though the signs would indicate that the taxpayer is not being truthful. Though it is possible that the taxpayer misheard or misinterpreted their accountant’s advice or questions, such a mismatch isn’t likely to be unintentional.
  5. 5. It is a weakness of our tax laws that allows such scenarios to not only exist, but to fester to the point where taxes, penalties, and interest accrue such that the taxpayer will never be clear of them.
  6. 6. You’d be an absolute fool to take that taxpayer on as a client. (That’s a fact.)  (Ok, that’s an opinion, but it’s still true.)

We relied on apriori and aposteriori knowledge to analyze this situation. We couldn’t know all the underlying facts of the matter. We had to draw from experience to reason out what was likely true and what was likely not true.

Let’s face it. We are lied to for a living. Sometimes those are little lies and sometimes they are big ugly lies. Sometimes they are oversights and mistakes. Other times they are intentional.

And we need to be able to spot these lies and use our logic (couched in empathy) to persuade people to get back on the straight and narrow.

As Herman Wouk once said, “Income tax returns are the most imaginative fiction being written today.”

Well, with all due respect to Mr. Wouk, when it comes to my tax returns, I’m in the non-fiction section, and I know that you are all there with me.

As we continue our journey through the various branches of philosophy, we’ll close this post with a nod to two philosophers. One, a famous personage from history who gave us a famous quote, and the other, a veteran tax jockey from within our Society’s ranks.

Borne out of a desire to craft a proposition that did not require any justification or reliance on other statements, Renee Descartes stated, “I think, therefore, I am.”

To which my father (it’s a family firm) replied, “I am, therefore, I must pay.”

We accountants are the philosophers that Einstein spoke of. Embrace it!

Our next installment will cover the topic of Aesthetics.

If you think, then you are, then you should join us!

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Thanks, and catch you next time!

i https://en.wikiquote.org/wiki/Aron_Ra
ii Ibid. See also: http://www.aronra.com/

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