Another IRS win, penalty abated $1,560.00

Here is an example of how the IRS is collecting tax in the form of penalties

Pass through entities are businesses that do not pay tax, the returns are reported to the owners.

These returns are generally due a month before the individual tax return is due.

Many partnerships are not aware of the timing differences, and The IRS had recently begun fining late penalties of $195.00 per month per partner.

If each partner filed his own return, and did not elect to be a partner, there would be no return, no pass through.  The return is an election that is intended to "simplify" the reporting process.

This particular business return was due March 15, the return was filed April 17, the fine was $1,560.00

There is a rule to abate these penalties, but only if certain conditions are met.

By Doug Zandstra CPA
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503
616 970 3000
dougzandstra.com
email doug@dougzandstra.com

Seasonal Help Wanted

Seasonal Help Wanted

Looking for a part time person for tax season
January 1 through April 15

2 - 3 days per week
Hours are Flexible
Duties will include:

Answer Phones
Scheduling
Maintain Database

Wage Based Experience

Application can be downloaded at:
<<<HERE>>>

By Doug Zandstra CPA
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503
616 970 3000
dougzandstra.com
email doug@dougzandstra.com

File Cabinet - Copies of Tax Returns and Blank Tax Worksheets

New for 2015 Secure File Cabinet

For All Clients

- Retrieve Copies of your tax returns
- Download blank worksheets

Some worksheets will have the ability to complete online

To request access to your file cabinet, please click <<<HERE>>>

By Doug Zandstra CPA
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503
616 970 3000
dougzandstra.com
email doug@dougzandstra.com

Successful Challenge, Michigan Department of Treasury, Property Tax

Keep track of your property tax information, sometimes even the State gets it wrong.

The State of Michigan will revoke your property tax exemption for a variety of reasons.  This becomes a problem if the taxpayer does not know what the necessary steps are to correct the problem when the taxpayer is rightfully entitled to the exemption.

In this particular example, the process took so long, the taxpayer had to pay the full for an additional year, then file a claim for a recovery after the State conceded.

The taxpayer had a large parcel that had been owned in the family for many years, and had subsequently parceled it out into many smaller pieces.

A relative lives in one of the parcels and claimed the exemption, then Michigan's computer picked it up as if the taxpayer had taken a claim that they shouldn't have.

It took aerial photography, and and lot of colored markers; plus letters from taxpayer's neighbors to show the State that the taxpayer's claim was legitimate.

As you can see the case involved 2009 through 2012 and was not resolved until November 2013.

If the taxpayer did not maintain careful records of his parcel and the subsequent carving it up, as well as maintaining good relations with the neighbors, this would have been a very difficult case, and may not have had a good outcome.

Michigan Scam Alert - Michigan Corporate Services

Doug Zandstra CPA, Grand Rapids, Michigan
Several of my clients have recently received this official looking document.
It is a Scam - see my notes

Documentation of business or medical expenses - What does the CPA Need, What doesn't the CPA need

Basic questions are sometimes the trickiest to answer

Occasionally I am asked "what do I need for my expenses such as medical or work related expenses"

My answer is two-fold

1.  For me to prepare your tax return, I need a summary, or running total of your expenses that are paid.  I do not need the receipts, but if you are audited, you will need to provide them to support your deduction.

2.  For your records, you need to keep the receipts and documentation that support your deduction.  You need to keep these for at least 3 years, I suggest 7 years.

It is important that you do not "double-dip" For example; health insurance paid by your employer is already not taxed (on your) W-2; therefore, do not include this in the running total of your medical expenses, you do not want to double deduct your expense.

As a tax practitioner, I am not required to review every receipt used to substantiate your deduction.  My policy is that if you give it to me, I will review it.  If you are unsure, then either call me for clarification or simply include it with your tax return records, and then I will review it.  This of course will cost you for the time that will be needed to summarize your information for the tax return

If you give me a total without a substantiation, the I assume that you are aware of what is deductible and what is not, and that what you are providing me is accurate.

Quarterly Estimated Tax Payments

When I prepare your tax returns, I include your estimated tax payment coupon vouchers, and envelopes with the returns.

We make it simple and easy, just remember to send in the check. (I am working on an automated reminder system that will hopefully be in place soon for those who are absent minded)

Perhaps you sell some stock at a large gain, or other financial circumstances change during the year, you should contact me to adjust your quarterly estimated tax payments to avoid surprises next April.  

If I have not prepared your tax returns, and you need to know about estimated tax payments, here are the basics:

If you are Self Employed and expect to owe more then $1,000.00, you should make quarterly estimated tax payments

Quarterly Payments are due:

First Quarter - April 15
Second Quarter - June 15
Third Quarter - September 15
Fourth Quarter - January 15

There is a really simple and accurate calculator at the H&R Block website

The calculator does not cover State or Local income taxes.

The coupons you can use to send in your estimated tax are at the IRS Website

If you are planning to become a tax client next year, contact me for additional assistance.