Paldino Company CPA - "Success Starts with a Handshake"

Welcome to my blog page the purpose of which is to provide you with timely and relevant tax and accounting information. I intend to bring you information which you can use now to assist you in lowering you income taxes. I will when appropriate give you links to tax related web-sites, worksheets and check-list to assist you in meeting you recording keeping requirements and provide you with the information you need to prepare an accurate return and pay the least amount of tax you are legally required to pay. Please check back often and feel free to post your questions and comments















Saturday, February 4, 2017



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180 E. Boston Post Road  | Mamroneck, NY 10543
Phone:  (914) 253-6857
www.jpalcpa.com |  joe@jpalcpa.com
Rejected!
What to do if your e-filed tax return is rejected by the IRS
Category:
Miscellaneous
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More than 90% of individual tax returns are now filed electronically, and usually the process goes smoothly. However, when an e-filed tax return is rejected, e-filing can become more complicated.

Common causes for rejected tax returns

Simple filing errors. Most rejections are caused by things such as misspellings, typos on Social Security numbers, or missing forms. When an e-filed tax return is rejected the IRS e-filing system sends back reject codes. These codes are specific to lines on the tax return and descriptions of the problem are readily available. Most of these errors can easily be corrected.
Dependent Errors. This error occurs when someone else has claimed a dependent on a previously filed tax return. This often occurs with divorced and unmarried couples each claiming the same child on their tax return. The IRS does not take sides in this situation, they simply take the earlier filed return and reject any subsequent returns.
Identity Fraud. Someone else has already filed a tax return using your Social Security number.

What to do

Most errors are simple, are easily corrected, and your tax return is resubmitted for e-filing without much additional delay. However there are two instances that require your immediate attention. When either of these occur, you will need to file your tax return via the mail and work to correct the error for future tax filings.
1. Dependent Errors. A dependent can only be claimed on one tax return. If a dependent is already claimed on another individual's tax return you will need to provide proof that the dependent belongs on your return. If this happens, contact the other party who claimed your dependent and ask them to amend their return. Let them know that you’re filing your tax return correctly claiming the dependent. Your filing will target both tax returns for a potential IRS audit. This audit risk often is enough motivation to correct the problem.
2. Identity Fraud. Criminals using stolen information submit tax returns electronically in an effort to steal your tax withholdings. Fraudulently claimed refunds are then automatically deposited into thieves' bank accounts. Unfortunately, you may discover the theft when your e-filed tax return is rejected. If this happens to you:
File a paper tax return.
Include form 14039: Identity Theft Affidavit with your tax return.
Confirm your identity using the IRS Identity Verification Service or by calling the IRS.
Mail your tax return using Certified Mail with Return Receipt Requested so you are certain of timely delivery.
Immediately take steps to protect your financial information. The following link will take you to the Federal Trade Commission's identity theft area for recommended steps to protect yourself.

FTC Identity Theft Assistance

While solving the cause for a rejected e-filed tax return can be a headache, the sooner the problem is addressed the sooner your refund can be received.

Monday, January 16, 2017

There's Still Time to Fund Your IRA



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Category: Retirement
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Remember that you have until you file your tax return to make a contribution to a Traditional IRA or Roth IRA for the 2016 tax year. The annual maximum contribution amount is $5,500 or $6,500 if you are age 50 or over.
However, if you or your spouse are an active participant in an employer's qualified retirement plan, you may not be able to contribute the maximum amount. It depends on whether your modified adjusted gross income (MAGI) exceeds certain income thresholds. The limits for both Traditional and Roth IRAs are:

2016

2016 IRA
Contributions
Note: Married IRA limits depend on whether either you, your spouse or both of you participate in a qualified employer provided retirement plan. If married filing separate and either spouse participates in an employer's qualified plan, the income phaseout to contribute is $0 - $10,000.
How does the phase out work?
If your income is below the "full contribution" amount noted above, you can contribute up to the maximum annual contribution. If your income is above the "phase out complete" amount, you cannot make tax-advantaged contributions separate from your employer plan.
If your income falls between these ranges, this is how you calculate the reduced amount you can contribute:
  1. Subtract your income from the higher (phase out complete) amount to get your contribution income potential.
  2. Next calculate the phase-out range.
  3. Divide your contribution income potential by the phase-out range.
  4. Take the result times your maximum annual contribution amount.
Example: Roth IRA contribution limit for a single person, age 40 with MAGI of $122,000; $10,000 contribution income potential (132,000-122,000); divided by phase-out range of $15,000 ($132,000 – 117,000); 10,000/15,000= .666 x $5,500 = $3,663 2016 ROTH IRA contribution limit. Rounding rules apply.
If it's too late for you to make a 2016 contribution, it’s not too late to plan for 2017. Here are the limits for 2017.

2017

2017 IRA Contributions
A final thought
If your income is too high to take advantage of these IRAs you can always make non-deductible contributions to a retirement account. While the contributions are taxed, tax on the earnings is deferred until they are withdrawn.

Monday, August 15, 2016

Justice in the Name of Caleb


I have become so affected by the story of this little puppy. No creature should have to had endure the suffering he went through. I am pleading with all of you please sign the petition that the Fulton county DA's office investigate this and give us justice for the poor boy. Please don't let him die in vain.

https://www.change.org/p/da-s-office-at-fulton-county-justice-in-the-name-of-caleb-65834706-271b-4f8e-87fb-cb882e4ebde6


Friday, May 13, 2016

IRS Confirms Audit Notification Policy




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It was revealed in a recent Taxpayer Advocate Forum in Iowa that in some cases the IRS initiates contact with taxpayers via a phone call. This initial phone call is causing confusion and potential identity theft scam concerns with taxpayers. It is now being reported that the IRS will no longer be making initial taxpayer contact via phone.

Phone Scams

While the vast majority of IRS notifications are via mail notice, in a few cases the IRS auditor was calling to set up an appointment. The conversation would include the scope of the audit and a request for records to have available for the auditor. The IRS would then send a follow-up confirmation of the interview via mail.
Because of the increase in the number and sophistication of IRS phone scams, the telephone contact practice is being stopped.

What you need to know

Assume initial calls are scams. If you receive a phone call from the IRS without prior notice, treat it as a scam. Never give or confirm your personal information over the phone.
Hang up and initiate independent contact. If someone representing the IRS calls you, get their information (name, ID number, and location) and then hang up.Then call for assistance. Consider contacting the IRS directly so you can determine if there is audit activity on your tax account with the IRS. Remember, do not use the contact information provided to you by the person calling you.
Never ignore mail notices. If you receive a mailed notice of an audit from the IRS, open the envelope and determine what they are requesting. Immediately call for assistance.
While this policy change at the IRS only impacts a few taxpayers, the mail notification consistency helps all of us more readily identify potential scams.

Friday, January 22, 2016

Extension for Form 1095 Reporting


What everyone needs to know
Category:
What's New
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For 2015 tax returns, everyone employed by a company with 50 or more employees will receive a new Form 1095. This form is in addition to the Form 1095’s received by other taxpayers using the Marketplace to purchase their health insurance. You need this form to file your taxes as it provides the necessary proof that you have adequate health insurance for the year.
A recent announcement by the IRS provides a delay for the issuing of this form due to complications in creating the proper form by employers and insurers.

What is happening

You need Form 1095 to file your income taxes for 2015. Without the form, you could be subject to the uninsured tax penalty called the shared responsibility payment. Unfortunately, many businesses do not have enough time to get the correct health insurance information and transfer the data into their other systems to generate the form. So the IRS has granted an extension for Form 1095 B and 1095 C. Here are the old and new dates.
Form
Purpose
Originalduedate
Newduedate
1095 B & 1095 C
Report to employees of adequate health insurance coverage by month
2/1/2016
3/31/2016
Summary forms 1094 B & 1094 C
Summary forms sent to the government confirming employee health care coverage
2/29/2016
(3/31 if filing electronically)
5/31/2016
(6/30 if filing electronically)
Note: This delay does not impact the timing of Form 1095 A, Health Insurance Marketplace Statement. 1095 A is the form you receive if you purchase your health insurance through the Marketplace and not through your employer. Nor does this impact those who have their health insurance through other programs like Medicare.

What it means to you

Since the IRS understands that taxpayers do not wish to wait to file their 2015 tax returns, the service is allowing for you to file your 2015 tax return without receiving this form. Here are some suggestions.
Check with your employer. If you work for an employer with more than 50 employees, check with your human resources to find out when you expect to receive the 1095 form. If there is no delay, then wait for Form 1095.
Look for other supporting documents. For 2015, the IRS will allow you to support your insurance coverage with means other than Form 1095. Simply collect this proof of insurance and save it in case of a future audit.
Wait. If you changed jobs or have a situation that suggests there may be a gap in insurance coverage you may wish to wait until you receive your documents. Please remember there is no corresponding delay granted to file your tax return. So if you still wish to wait, either file your tax return in April or file an extension. Taxes owed are still due on or before April 18th.
Considering the Affordable Care Act requires health insurance information to be transferred from insurance carriers into payroll reporting, it is understandably a complex reporting change. Since the shared responsibility tax payment is increasing substantially in 2015 and beyond, you will want to ensure you have adequate proof of qualified health insurance.