Accounting Tips for the Fall

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Accounting for Petty Cash

Petty cash accounts are convenient when a business makes regular small purchases or needs cash available to reimburse the business expenses of staff. But petty cash still needs fully accounting for in business records.

You’ll need to have a policy which states what items can be charged to petty cash, then set up a separate section in your accounting system which records the movement of cash. Keep all receipts for petty cash within that system. 

  • Have a petty cash book and balance it regularly to make sure all transactions are accounted for.
  • Whoever authorises petty cash should not be the person in receipt of the money.
  • Decide how much petty cash you’ll hold, and then top up from the main bank account when necessary to maintain this amount.

Review Your Accounts Regularly

When someone else handles your finances, you as the business owner come to trust that individual implicitly. That said, this does not mean that you should stay in the dark about any aspect of your business. To understand the operational status of your business, it’s important to review your books regularly. This will give you a clearer picture on how your business functions, where it can improve and where resources need to be allocated. While it is a good practice to review accounts at regular intervals, you should also review your accounts at unscheduled times to ensure that your books are properly maintained at all times.

Track your expenses

The foundation of solid business record keeping is learning to track your expenses effectively. It’s a crucial step that allows you to monitor the growth of your business, build financial statements, keep track of deductible expenses, prepare tax returns, and support what you report on your tax return. Right from the beginning, you should establish a system for organizing receipts and other important records.

Establish sales tax procedures

The world of ecommerce has shaken up sales tax regulations and they are admittedly a bit confusing due to location issues. When a customer walks into a brick and mortar retail shop, they pay the sales tax of whatever state or province they make the purchase in, no matter if they live in that city, or they’re visiting from across the world. However, when you sell online, you’re often selling to customers who live in different states/provinces, and even countries.

Accounting Tips to Wrap up the Summer

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1. Keep Accurate Records

Consider investing in an easy accounting software, such as a simple solution, where you can track money in and out daily. Everything you track will only help your accountant later on down the road — which is good news for you and your bottom line!

2. Never Combine Personal and Business Finances

This is one of the most important bookkeeping tips you need to keep in mind. Even if you’re the sole employee in your small business, mixing personal and business-specific transactions can make it much harder to organize and track your records. You must treat your business as a viable entity. This means maintaining separate checking accounts, open a business credit card, and consider establishing an LLC for your small business. In the event of an audit, this tip will keep you out of hot water with the IRS.

3. Don't Allow Clients to get Away with not Paying Balances

Seeing a large amount in the receivables column is a good thing, but the money doesn’t really count until it is in your bank account. Don’t let clients avoid regular payments. Stand firm and insist you receive payment for past orders before letting them have more materials or services. The receivables department is crucial in keeping your company afloat.

4. Keep a Cash Reserve

In business and in life you should always have a contingency plan. It’s common for small business owners to dump excess cash back into their business to scale. This is a good practice only if you’re putting a small portion into cash reserves. Most financial analysts suggest having at least three months of runway (basic operating expenses) on hand at all times. However, I suggest having at least six months of runway since things never go exactly as planned. You should check your reserves quarterly and make sure your reserves can keep you afloat for six more months. If not, it’s time to start putting a bit more away.

 

4 Ways to Use Your Tax Refund Wisely - Part 2

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3. Donate to Charitable Causes. If you're on a tight budget, making charitable donations can be on the lower end of your list of priorities. Your refund gives you a chance to give a little back.

4. Make Home Improvements. Take a look around the house. Do you need a new roof? Is your kitchen outdated? Could new energy-efficient appliances lower your utility bills? Home improvement projects can immediately increase the value of your property.

4 Ways to Use Your Tax Refund Wisely - Part 1

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1. Start or Increase Your Emergency Fund. Just one surprise major expense can send you on a debt spiral toward financial trouble. Your fund should contain about three to six months worth of savings. Using your refund can make a significant deposit to your emergency fund.

2. Pay Off High-Interest Debt. The next best thing after establishing an emergency fund that you can do with your tax refund is to reduce or eliminate any high-interest debt. Start paying down your debt whether it be payday loans, title loans, debt consolidation loans, high-interest private student loans, car loans, or credit card debt.

 

Tax Season is Here!

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Tax season is here! Here are some tips to prepare your tax information for this tax season.

1. Evaluate Your 2017 Returns. Reviews of your previous tax return. Remember important details and changes they may have occurred during the past year, especially marital status, child adoption cases and work location. Any changes on this information can change your tax return.

2. Organize Your Files. It’s important to organize the necessary documents that you have, especially the ones you’ll be receiving such as:

  •          Form 1099-MISC
  •          W-2 earning statements
  •          Form 1095-A
  •          W-2Gs Form
  •          1098 Forms
  •          Schedule K-1 Form

Also check your inventory products to be sold before the year ends, you want to monitor costs in factors such as labor, raw materials, etc. You should also organize your receipts, which are important especially when it comes to standardized deductions.

Review your books for any unreconciled transactions, so that they can be easily explained to your tax preparer.

3. Hire A Tax Preparer. If you think that there’s a problem with your books, or you’re having difficulties in preparing the documents that you need, then it is highly recommended that you hire someone who can help you fix any kinds of tax dilemmas.

4. Justify Your Expenses. If ever you’re running a startup business, it’s best recommended that if you want to claim items as business expenses, then you need to justify this with the IRS.

5. Stay Updated with Tax Laws and Deadlines. Stay updated with the latest tax news, especially changes in tax laws that may or may soon affect your tax return. These involve factors such as state tax regulations, eligibility as well as limits in contribution.

 

6 Things to Get Organized Before Meeting with Your Accountant Part 3

Tax season is upon us, now is the time to get prepared and organized. Getting your taxes done is already stressful enough, being organized can ease some of the stress for you and your accountant. Make sure to bring these things to your accountant when preparing your taxes.

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5. Real Estate Documents. Bring your accountant documents relating to a recent home purchase, proof of paid mortgage or home equity loan interest, or proof of paid real estate and personal property taxes paid. Real estate holding can yield many different deductions, so make sure to bring these to your accountant.

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6. Proof of Expenses. Keep a folder especially for receipts, invoices, medical bills, charitable contributions, IRA contributions, job-hunting expenses, mileage logs, education expenses, self-employment expenses, and any other papers that prove expenses paid. If you start a folder at the beginning of the year then you won’t be scrambling at the end of the year to get all of these papers together. These papers are a must if you want to get your deductions and credits.

6 Things to Get Organized Before Meeting with Your Accountant Part 2

Tax season is upon us, now is the time to get prepared and organized. Getting your taxes done is already stressful enough, being organized can ease some of the stress for you and your accountant. Make sure to bring these things to your accountant when preparing your taxes.

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3. Wage Statements. Company employees will receive a W-2 wage and tax statement from their company. If you do not receive your W-2 form from your employer, make sure to call and figure out why you didn’t receive it. Independent contractors and freelancers will receive a Form 1099-MISC from each client they worked that year. Bring all forms to your accountant.

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4. Additional Income Statements. These statements include interest and dividend income from investments, unemployment income, or social security income. If you receive these statements, make sure to add them to the other forms you are taking to your accountant.

6 Things to Get Organized Before Meeting with Your Accountant Part 1

Tax season is upon us, now is the time to get prepared and organized. Getting your taxes done is already stressful enough, being organized can ease some of the stress for you and your accountant. Make sure to bring these things to your accountant when preparing your taxes.

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1. Identification Information. Identification information is needed for you and all of your dependents. Make sure to bring social security cards for everyone that is being claimed on the tax return. Social security numbers, names and dates of birth are all needed for tax returns. Also, bring a second form of id such as a driver’s license, military ID, or any state-issued picture ID card.

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2. Copy of Last Year’s Tax Return. This helps your accountant access information and calculate certain deductions easily.  Your accountant could find possible discrepancies and guide you in the right direction to get them cleared up.

3 Big Mistakes To Avoid For SMALL Business

The top 3 Small Business Accounting Mistakes Are:

1.) Failure To Reconcile Bank Accounts On a Regular Basis

2.) Failure to Apply Payments to Open Receivables 

3.) Failure to Back Up Data

Skipping routine accounting tasks sounds like it would save time, but in fact, they can actually end up costing you time later when errors force you to stop everything and unsnarl all the nightmare accounting tangles that you have piled up. 

Call us to help keep your books error free!

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Predictions for 2017: Unemployment, Auto and Home Sales

 

  • Unemployment Won’t Go Far, Finishing Around 5%

At 4.6% as of November 2016, the unemployment rate was far below the historical average of 5.8%, according to Bureau of Labor Statistics data since 1948. In fact, unemployment was at the lowest point since 2007, indicating there is little room for further improvement.

“It is unlikely to fall much further,” said Bruce E. Hansen, distinguished chair of economics at the University of Wisconsin-Madison. “It may either stay roughly constant, as it has recently, or increase slightly.”

With that in mind, we expect the unemployment rate to settle around 5% during 2017.

  • U.S. Auto Sales Will Surpass 17M For The Third Straight Year

Total light-vehicle sales have risen consistently since September 2009, reaching a record high of 17.4 million units in 2015 that we might narrowly surpass this year. And 2017 is shaping up to provide more of the same, with expectations for another 17+ million units sold and the potential for a new annual record, depending on how well consumers manage rising debt levels and increased interest rates.

“Auto sales will remain robust,” said Scott E. Hein, chair of the Texas Tech School of Banking and co-editor of the Journal of Financial Research. “But growth will not accelerate since this has been the one area that has done well in the weak economic growth environment experienced over the last half dozen year.”

With such headwinds in mind, however, it is unlikely that the U.S. auto industry’s boom can continue much beyond 2017. So we can expect sales volume to begin regression toward the historical mean of just over 15 million vehicles sold per year.

  • Existing Home Sales Will Rise To 6M, Despite Higher Rates
  • We expect existing home sales to reach 6 million in 2017, increasing by roughly 200,000 units from the 5.8 million forecast for year-end 2016 by the National Association of Realtors. Interestingly enough, higher rates might actually be the reason for the growth.

“If interest rates rise slowly, we may see a nice bump in home sales and mortgage availability as buyers see low interest rates slowly fading and banks have higher rates to buffer against risk,” said Dr. Robert Eyler, director of the Center for Regional Economic Analysis at Sonoma State University.

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6 Weekly Steps to Manage your Business Finances

Managing your business finances does not have to be eat-your-spinach drudgery. The key, of course, is to create a realistic plan with a budget, record your transactions correctly, review your results regularly and always keep good records. The following weekly check-list will help you stay on track and understand exactly where your business is excelling and where it needs improvement.

Weekly Accounting Tasks

1. Record Transactions

Record each transaction (billing customers, receiving cash from customers, paying vendors, etc.) in the proper account daily or weekly, depending on volume. Although recording transactions manually or in Excel sheets is acceptable, it is probably easier to use accounting software like QuickBooks. The benefits and control far outweigh the cost.

2. Document and File Receipts

Keep copies of all invoices sent, all cash receipts (cash, check and credit card deposits) and all cash payments (cash, check, credit card statements, etc.).

Start a vendors file, sorted alphabetically, (Staples under “S”, Costco under “C,”etc.) for easy access. Create a payroll file sorted by payroll date and a bank statement file sorted by month. A common habit is to toss all paper receipts into a box and try to decipher them at tax time, but unless you have a small volume of transactions, it’s better to have separate files for assorted receipts kept organized as they come in. Many accounting software systems let you scan paper receipts and avoid physical files altogether.

3. Review Unpaid Bills From Vendors

Every business should have an “unpaid vendors” folder. Keep a record of each of your vendors that includes billing dates, amounts due and payment due date. If vendors offer discounts for early payment, you may want to take advantage of that if you have the cash available.

4. Pay Vendors, Sign Checks

Track your accounts payable and have funds earmarked to pay your suppliers on time to avoid any late fees and maintain favorable relationships with them. If you are able to extend payment dates to net 60 or net 90, all the better. Whether you make payments online or drop a check in the mail, keep copies of invoices sent and received using our accounting software.

5. Prepare and Send Invoices

Be sure to include payment terms. Most invoices are due within 30 days, noted as “Net 30” at the bottom of your invoice. Without a due date, you will have more trouble forecasting revenue for the month. To make sure you get paid on time, always use an invoice template the contains the right details such as payment terms, itemized charges, and your payment address.

For a complete guide to creating invoices, managing vendors and ensuring you get paid on time, check out our Ins and Outs of Invoices.

6. Review Projected Cash Flow

Managing your cash flow is critical, especially in the first year of your business. Forecasting how much cash you will need in the coming weeks/months will help you reserve enough money to pay bills, including your employees and suppliers. Plus, you can make more informed business decisions about how to spend it.

All you need is a simple statement showing your current cash position, expected cash receipts during the next week/month and expected cash payments during the next week/month. To download a free customizable cash flow statement template, click here.

Information gathered from: http://quickbooks.intuit.com/r/bookkeeping/small-business-accounting-checklist-10-things/

We would love to help manage your small business finances for you!  Give us a call!

AMJ Bookkeeping  

919-368-1877 

amjbookkeepingllc@yahoo.com 

Mid-Year Review: What to Look For

As we reach June and July, this is the perfect time to take a look at your financial footing and assess where you are exceeding and where you can improve. How are you tracking against those goals set in early January? Is there an opportunity to save more money, contribute to a cause, and/or minimize your tax obligation? 

Surprisingly, this mid-year financial check-up is often overlooked. Yet, reviewing the past six months’ worth of activity can do wonders for achieving your financial goals by year-end.

If unsure what to look for, start by examining the financial goals set earlier in the year, and focusing on each major aspect of your financial plan. Below are a few tips to help streamline the process and ensure all bases are covered:

Review To-date 401(k) Contributions. Take a look at your to-date numbers to ensure you are on track to maximize your yearly contributions. In addition to helping increase your account balance, maxing out those contributions can also reduce your taxable income. Win/Win.

Boost Your Savings. With less than six months to go, it’s a good idea to review your current savings and consider boosting your recurring contribution, even if it’s a small amount. And, while summer can be a drain on your finances—trips, kids out of school, additional entertainment—challenge yourself to spend less and save more. It could be as simple as one less cup of coffee per day, or opting for a home-cooked meal instead of an expensive dinner out.

Cut More Fees. You may have examined all of the pesky credit card and bank fees earlier in the year. Note that banks are often changing their rules and you might be surprised to learn you are now paying a fee for something you previously received for free. And every fee you pay means less money in your pocket. See how many fees you can reduce or remove before the end of the year. Consider re-investing the dollars saved into a savings or retirement account to really maximize those returns.

Taxes Already? Yes, we aren’t quite ready to talk about taxes yet. But just because we’re not talking about them, doesn’t mean you shouldn’t be putting yourself in the best position for when the time comes. If you aren’t already doing so, get in touch with your CPA and discuss your tax estimate. There’s still plenty of time left in the year to mitigate tax consequences, enabling you to have a healthier bottom line.

Information gathered from: http://www.kiplinger.com/article/investing/T023-C032-S000-tips-for-an-effective-mid-year-financial-check-up.html

AMJ Bookkeeping  

919-368-1877 

amjbookkeepingllc@yahoo.com 

Tips to Reduce Your Debt

As we are coming out of tax season and you are receiving those tax refunds, the time is now to start thinking about reducing your debt.  Below are 33 tips from blog, "Becoming Minimalist".  The writer put together these tips after going through a financial program called Dave Ramsey's Financial Peace University and paying off $66,000.00 in personal debt.

 

33 Proven Ideas to Get Your Debt Under Control:

  1. Re-shop auto, home and life insurance to see if you can bring down your payments.
  2. Downgrade your cable package, or get rid of it entirely.
  3. Disconnect your home phone if you have adequate cell service at your home. Or downgrade to a cheaper package.
  4. Buy and sell clothes at your local consignment or shop at Goodwill.
  5. Have a massive garage sale. (If you’d rather be out of debt than have an item, choose to sell it to help you get you there.)
  6. Advertise higher quality items on Craigslist, Facebook, or your local newspaper to get better prices.
  7. Focus on buying mostly sale items at grocery store or generic brands to reduce your cost.
  8. Use a grocery store awards program to earn money off gas.
  9. Cancel unnecessary expenses like magazine subscriptions, newspapers, manicures, pedicures etc. Anything that could be considered a “want” instead of a “need” should go until you are out of debt or greatly decrease your debt.
  10. Go to the matinee movies instead of paying full price (and skip the concessions).
  11. Or better yet, use the Red Box for at-home movie entertainment.
  12. Get temporary work or seasonal part time work to boost your income.
  13. Read books from the library.
  14. Buy your most expensive groceries in bulk at Coscto: meats, breads, cheese, produce, paper products. Establish a monthly grocery budget for the additional needs at regular grocery stores.
  15. When eating out, skip the soft drinks and stick with water. Skip the extras too (dessert, etc.).
  16. When eating out, share a large entrée or have small appetizers instead of the costly meal.
  17. Plan your errands more efficiently to conserve gas.
  18. Find friends that you can trade services with…haircutting, handyman, photography, babysitting, pet-sitting.
  19. Give home-made gifts, baked goods, or service IOU’s rather than expensive presents.
  20. Boxed cereals are expensive; switch to oatmeal, eggs or fruit for more nutritional and financial bang.
  21. Call the utility companies and get on a budget plan to give you more consistency with expenses each month.
  22. Set a spending limit with family at Christmas and/or draw names.
  23. Use exercise videos, walking or hiking instead of paying for the gym.
  24. If your haircut is too expensive, find a less expensive stylist or see if your hairdresser will cut you a break on price temporarily—ours did.
  25. Say “no” to hosting and/or attending in-home parties where you feel pressure to purchase.
  26. Does your family live nearby? Once a week dinners with mom or dad saved us a meal out of our shopping budget. Additionally, it usually led to leftovers and our parents looked forward to our visit each week.
  27. Make your coffee at home instead of buying it each day.
  28. Pack your lunch—not once a week, but regularly.
  29. Make extra dinner servings on purpose to have leftovers for lunch.
  30. Our dentist advised us we could skip the fluoride treatments if we were using a daily dental rinse—which we did… and bought on sale.
  31. Program your thermostat for savings on heating/cooling when you’re not at home.
  32. Tempted by certain retail stores? While digging out of debt, avoid window shopping these places where you’ve failed to control your impulses before.
  33. Give**.

****Many wonder about Number 33 (Give) because it seem counter intuitive to most of us. One thing we never stopped doing – even in the worst of times—was giving. We always gave money to our church, our favorite charities, and foundations that we believe in. 

Read more: http://www.becomingminimalist.com/33-proven-ways-to-reduce-personal-debt/ 

While these tips are simple, put into practice they will radically help you cut lifestyle expenses.  As you shift where your money is going, you will be able to actively reduce your debt over time!

AMJ Bookkeeping  

919-368-1877 

amjbookkeepingllc@yahoo.com 

10 Tips for Maximizing your Tax Benefits

At AJMBookkeeping, we want to make sure you are ready this tax season.  Read these tips below to make sure you are utilizing everything possible before you file!

1. Maximize retirement plan contributions

If your employer offers a 401(k) or other type of deferred pension plan, make every effort to contribute the maximum amount allowable -- especially if your employer matches your contribution. Otherwise you are leaving money on the table that could benefit you in your retirement. Think of the employer match as an immediate 100 percent return on your money. Even if there is no match, all of the funds are tax-deferred and grow tax-free.

If your employer does not offer a retirement plan, then consider making a contribution to a traditional individual retirement account or a Roth IRA. The former potentially offers a tax deduction for the year the contribution is made, but both offer tax-deferred gains.

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2. Adjust your withholding

Check your year-to-date withholding and consider changing the taxes withheld if you are expecting a large refund.

This is especially important if you are claiming the earned income tax credit, or EITC, or the additional child tax credit. Why? The IRS is now required by law to hold all refunds on those returns until Feb. 15. The new law was put into place to allow the agency additional time to detect and prevent tax fraud.

IRS Commissioner John Koskinen said in a statement: "It's a personal choice if you want to have extra money withheld to get a bigger tax refund, but you have options available if you prefer to have a smaller refund next year and more take-home money now." You will need to complete Form W-4, Employee's Withholding Allowance Certificate, to adjust the amount of taxes withheld and submit it to your employer.

3. Protect your identity

Speaking of tax fraud, if you received an Identity Protection PIN, or IP PIN, in the past, then you must provide this number on your tax return not only this year but on all future tax returns. An IP PIN is a six-digit number assigned to eligible taxpayers that helps prevent fraudulent returns from being filed under your Social Security number. Remember, the IP PIN is your friend in getting the IRS to accept your tax return. However, this is no ordinary IP PIN, as it changes every year. You read that correctly: every year! If you do not receive the notification in the mail, you will need to go to the IRS website to retrieve it.

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4. Get what's yours

According to the IRS, one out of every five workers fails to claim the very valuable earned income tax credit. If you worked and earned less than $53,505 in 2016 (the limit will be $53,930 in 2017), then use the EITC Assistant tool to determine if you qualify for the credit. You must file a return in order to receive the credit. Don't miss out on this!

5. Declutter and reap a tax break

If one of your New Year's resolutions is to simplify and declutter your life, now is the time to get going. You can make money by donating all of those things you no longer need or want in your life. There are many charitable organizations that accept items other than cash such as clothing, books, electronics and other household items. The deduction is limited to the item's fair market value, and the items must be in good condition or better to be deductible. If the value of the noncash items is more than $500, then you must file Form 8283, Noncash Charitable Contributions, and fill it in with some details. But it is well worth the effort.

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6. Cash in on scholarly tax breaks

If you, your spouse or dependents had higher education costs in 2016, there may be some tax savings for you. In fact there are multiple benefits available. The only difficult part is figuring out which one works best in your situation.

Basically there are three different benefits: the American opportunity credit, the lifetime learning credit and the tuition and fees deduction. There are various requirements that may limit the benefit, but the IRS once again offers a useful tool: the Interactive Tax Assistant tool to help you find your way through the maze. You should receive Form 1098-T, Tuition Statement, from your school with the information required by the IRS to complete Form 8863, Education Credits.

7. Get health coverage in order

Make sure you know what you need to report to the IRS on your health insurance. The shared responsibility provision requires that you and your family have minimum essential coverage or qualify for a health coverage exemption. Otherwise, you must make an individual shared responsibility payment for all months that you didn't have coverage or an exemption.

Most taxpayers just need to do one thing: Check the box that indicates you had health care coverage for all of 2016. If that is not the case or you received advance payments of the premium tax credit on the marketplace, then you may need to fill out Form 8965, Health Coverage Exemptions, and Form 8962, Premium Tax Credit, to complete your tax return. For more information, visit the IRS page on the Affordable Care Act.

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8. Know the rules about foreign accounts

Have a foreign bank account? Was the balance in the account(s) greater than $10,000 total? If the answer is yes to both, then you need to file what's commonly referred to as an "FBAR," a foreign bank account reporting form. The new name is FinCEN Report 114, FinCEN being an acronym for Financial Crimes Enforcement Network. As the name has the word "crime" in it, that should light a fire under your seat to make sure you're in compliance as the penalties are very high for failing to report.

The requirements don't stop there. If you maintain very high balances in your foreign accounts, you'll have to file IRS Form 8938, Statement of Specified Foreign Financial Assets.

Also, if you meet certain thresholds of ownership in any foreign corporations or partnerships, or if you are the beneficiary of a foreign trust, you should be aware of the complex reporting requirements in those instances. Just a few of the pertinent forms are: Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations; Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund. All are available at the IRS website.

9. Be generous without tax repercussions

Every so many years, the IRS changes the annual exclusion for gifts that you can give without having to file a gift tax return. If you gave more than $14,000 in cash, property or gifts to anyone, you must report the gift on Form 709. If you are married, you can give a combined $28,000 and remain under the radar.

Note that this applies to the person giving the gift; if you are receiving a gift, congratulations -- you don't have to do anything. That is, unless you receive a gift from a non-U.S. person. If you happen to receive such a gift that is greater than $100,000, you will have to report this on the IRS Form 3520.

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10. Be smart when you file

When filing your return, the quickest and easiest way to receive your refund is to electronically file your return and use direct deposit. If you owe money, use IRS direct pay from your checking or savings account. And whatever else you do, please make sure you keep a copy of your filed tax return. Believe me, it saves so much trouble in so many ways in the event you do happen to need it.


All information gathered from Bankrate:

Read more: http://www.bankrate.com/finance/taxes/tax-tips/#ixzz4bVDsZAMr 
 

If you are an individual seeking a reliable company to file your tax return, please consider AMJ Bookkeeping and give a call to set up your appointment or email us today. 

 

AMJ Bookkeeping  

919-368-1877 

amjbookkeepingllc@yahoo.com 

Tax Return Identity Theft Steps to take to avoid becoming a victim.

Here are tips to ensure you are not a victim.

 

Individual Tax Identification Numbers

Processing delays are likely for filers with expired Individual Tax Identification Numbers. (ITIN)

There are two reasons an ITIN would expire December 31, 2016:

  • If you have not used your ITIN on a U.S. tax return at least once for tax years 2013, 2014 or 2015   -OR- 
  • If your ITIN has the middle digits 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN)

What You Need to Do

  • You can renew your ITIN now if it expired and you plan to use it on your 2016 U.S. tax return. 
  • No action is needed by expired ITIN holders who don't need to file a tax return for year 2016. 
  • There are new documentation requirements when applying for or renewing an ITIN for certain dependents. 
  • To avoid delays, ensure accurate W-7 and valid ID documents are submitted. 
  • Find more information at  IRS.gov/ITIN

Refunds

Expecting a refund? Some refunds must be held until February 15.

According to a new tax law change, the IRS cannot issue refunds before February 15 for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit.

    • This applies to the entire refund, even the portion not associated with these credits.
  • The IRS will begin to release EITC/ACTC refunds starting February 15. However, the IRS cautions taxpayers that these refunds likely won't arrive in bank accounts or on debit cards until the week of February 27

 

What You Need to Do

  • Be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations.
  • You don't need to wait until February 15 to file your tax return. While the IRS must hold the refund until February 15, it will begin taking the steps it normally does to process your tax return once the filing season starts.  
  • File a complete and accurate return and include all known refundable credits with your original return.
  • Check Where's My Refund on IRS.gov or the IRS mobile app, IRS2Go, after February 15 for your personalized refund status.

Adjusted Gross Income

Some taxpayers using a software product for the first time may need to know their 2015 Adjusted Gross Income, or AGI, to e-file their 2016 tax return.

  • When self-preparing your taxes and filing electronically, you must sign and validate your electronic tax return by entering your prior-year AGI or your prior-year Self-Select PIN. Using an electronic filing PIN is no longer an option.

What You Need to Do

  • If you have a copy of your 2015 federal income tax return, your AGI is on line 37 of the Form 1040; line 21 on the Form 1040-A or line 4 on the Form 1040-EZ.x 
  • Learn more about how to verify your identity and electronically sign your tax return at  Validating Your Electronically Filed Tax Return.


Protecting Taxpayers

To better protect taxpayers, the IRS recently upgraded its identity verification process for certain online self-help tools. The purpose is to prevent taxpayer impersonations and account takeovers by identity thieves.

  • All IRS Taxpayer Assistance Centers (TAC) now operate by appointment only. 
  • Many questions can be resolved on the IRS.gov website without visiting a TAC.

What You Need to Do

  • Start with IRS.gov for help including tools, filing options and other services and resources. 
  • If you believe your tax issue cannot be handled online or by phone, always check IRS.gov for days and hours of service as well as services offered at the IRS TAC location you plan to visit. For most services you must call to make an appointment.

(All information listed above was gathered from the IRS.gov website.)


For all AMJ Bookkeeping existing tax clients, we will ensure your return is as safe as we can make it.  We will take all necessary steps to expedite the return safely and effectively. 

If you are an individual seeking a reliable company to file your tax return, please consider AMJ Bookkeeping and give a call to set up your appointment or email us today. 

 

AMJ Bookkeeping  

919-368-1877 

amjbookkeepingllc@yahoo.com 

Bookkeeping and Accuracy

The two go hand-in-hand, so you need to hire AMJ Bookkeeping to keep your books.

Sometimes, business owners feel hiring someone to manage their books is an unnecessary cost, or some may be uncomfortable giving a third party access to this privileged information. While these concerns are valid, there are many advantages to hiring AMJ Bookkeeping to take bookkeeping off your hands that surely outweigh any minor drawbacks.