Paldino Company CPA - Tax and Accounting Sense for Mamaroneck

Taxpayers guide to identity theft -- what you should know

2012-02-21T15:11:00.000-05:00

The IRS is very serious about protecting you against identity theft. In the past few weeks the Justice department tax division has issue over 200 indictments in 23 states. The following information was taken from the IRS website. For a more information on what the IRS is doing and how to protect yourself visit www.irs.gov.

What is identity theft?

Identity theft occurs when someone uses your personal information such as your name, Social Security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes.

How do you know if your tax records have been affected?

An identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund. Generally, the identity thief will use a stolen SSN to file a forged tax return and attempt to get a fraudulent refund early in the filing season.

You may be unaware that this has happened until you file your return later in the filing season and discover that two returns have been filed using the same SSN.

Be alert to possible identity theft if you receive an IRS notice or letter that states that:

More than one tax return for you was filed,
You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return, or
IRS records indicate you received wages from an employer unknown to you.

What to do if your tax records were affected by identity theft?

If you receive a notice from IRS, respond immediately. If you believe someone may have used your SSN fraudulently, please notify IRS immediately by responding to the name and number printed on the notice or letter. You will need to fill out the IRS Identity Theft Affidavit, Form 14039.

For victims of identity theft who have previously been in contact with the IRS and have not achieved a resolution, please contact the IRS Identity Protection Specialized Unit, toll-free, at 1-800-908-4490.

How can you protect your tax records?

If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost/stolen purse or wallet, questionable credit card activity or credit report, etc., contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

How can you minimize the chance of becoming a victim?

Don’t carry your Social Security card or any document(s) with your SSN on it.
Don’t give a business your SSN just because they ask. Give it only when required.
Protect your financial information.
Check your credit report every 12 months.
Secure personal information in your home.
Protect your personal computers by using firewalls, anti-spam/virus software, update security patches, and change passwords for Internet accounts.
Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

Important note: The IRS Does not initiate contact with taxpayers by email to request personal or financial information. For more information visit:

The IRS is Taking Action

2012-02-04T15:29:00.000-05:00

Identity Theft Crackdown Sweeps Across the Nation; More than 200 Actions Taken in Past Week in 23 States

WASHINGTON – The Internal Revenue Service and the Justice Department today announced the results of a massive national sweep cracking down on suspected identity theft perpetrators as part of a stepped-up effort against refund fraud and identity theft.
Working with the Justice Department’s Tax Division and local U.S. Attorneys’ offices, the nationwide effort targeted 105 people in 23 states. The coast-to-coast effort took place over the last week and included indictments, arrests and the execution of search warrants involving the potential theft of thousands of identities and taxpayer refunds. In all, 939 criminal charges are included in the 69 indictments and informations related to identity theft.
In addition, IRS auditors and investigators conducted extensive compliance visits to money service businesses in nine locations across the country in the past week. The approximately 150 visits occurred to help ensure these check-cashing facilities aren’t facilitating refund fraud and identity theft.
“This unprecedented effort against identity theft sends a strong, unmistakable message to anyone considering participating in a refund fraud scheme this tax season,” said IRS Commissioner Doug Shulman. “We are aggressively pursuing cases across the nation with the Justice Department, and people will be going to jail. This is part of a much wider effort underway at the IRS to help protect taxpayers.”
“The Justice Department is working closely with the IRS to investigate, prosecute, and punish tax refund crimes committed through the theft of identities,” said Principal Deputy Assistant Attorney General John A. DiCicco of the Tax Division. “Now, more than ever, we must remain vigilant against the unauthorized use of identification information to defraud the U.S. government.”
The national effort is part of a comprehensive identity theft strategy the IRS has embarked on that is focused on preventing, detecting and resolving identity theft cases as soon as possible. In addition to the law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued as well as working to help victims of the identity theft refund schemes.
The law-enforcement sweep started last week across the country, reflecting investigative efforts stretching back months and even years.
The nationwide effort by the Justice Department and the IRS led to actions taking place in 23 locations across the country with 105 individuals. The actions included 80 complaints/indictments and informations, 58 arrests, 19 search warrants, 10 guilty pleas and four sentencings. A map of the locations and additional details on the actions are available on IRS.gov, the IRS Civil and Criminal Actions page and the Department of Justice Tax Division page.
Beyond the criminal actions, the IRS enforcement personnel conducted a special sweep last week and on Monday to visit 150 money services businesses to help make sure these businesses are not knowingly or unknowingly facilitating identity theft or refund fraud. The visits occurred in nine high-risk places identified by the IRS covering areas in and surrounding Atlanta, Birmingham, Ala., Chicago, Los Angeles, Miami, New York, Phoenix, Tampa and Washington, D.C.
In addition, the IRS has more than 250 check-cashing operations under audit across the country and will be looking for indicators of identity theft as part of the exam effort.
The information from these audits and compliance visits will be used to assist continuing IRS investigations into refund fraud and identity theft.
The IRS also is taking a number of additional steps this tax season to prevent identity theft and detect refund fraud before it occurs. These efforts includes designing new identity theft screening filters that will improve the IRS’s ability to spot false returns before they are processed and before a refund is issued, as well as expanded efforts to place identity theft indicators on taxpayer accounts to track and manage identity theft incidents.
To help taxpayers, the IRS earlier this month created a new, special section on IRS.gov dedicated to identity theft matters, including YouTube videos, tips for taxpayers and a special guide to assistance. The information includes how to contact the IRS Identity Protection Specialized Unit and tips to protect against “phishing” schemes that can lead to identity theft.
Identity theft occurs when someone uses another’s personal information without their permission to commit fraud or other crimes using the victim’s name, Social Security number or other identifying information. When it comes to federal taxes, taxpayers may not be aware they have become victims of identity theft until they receive a letter from the IRS stating more than one tax return was filed with their information or that IRS records show wages from an employer the taxpayer has not worked for in the past.
If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.
Taxpayers looking for additional information can consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website.

What is the right business structure for me?

2012-01-14T14:15:00.000-05:00

I get this question a lot. The following post will explain the different choices available to you and the pro and cons. It is a good starting point.

Four Basic Forms

C Corporation (and PSC or Professional Service Corporation)
S Corporation
General Partnership
Limited Partnership

Recently Developed Alternatives

LLC (Limited Liability Corporation)
LLP (Limited Liability Partnership)
LLLP (Limited Liability Limited Partnership)
And the very basic form, Sole Proprietorship

Two Most Important Factors

Tax rates imposed on enterprise’s income and appreciation (after factoring double taxation)
The investor’s potential personal liability for the enterprise’s obligations and actions. Note that owners and officers are liable for fraud and taxes regardless of the business form.

Three Fundamental Questions

First – Will the enterprise benefit from the double tax that might occur using a C corporation or from the one time pass-through tax offered by non-C corporation alternatives.
Second – If a pass-through entity is preferred, would the enterprise benefit more from the use of the S corporation or the partnership taxation rules.
Third – If the partnership rules are preferred, which business form is most suitable: general partnership, limited partnership, LLC, LLP or LLLP.

Tax advantages of an S corporation over a C corporation for closely held Corporations

Single Taxation – taxable income is passed to the owners. Note that C corporations use tax planning to avoid double taxation, which includes bonus and salary distributions to eliminate taxable income at the corporate level.
No accumulated earnings taxes.
Losses pass though to shareholders subject to the passive loss and at risk rules.
Accrual Method of Accounting - C corporations must use the accrual rules when gross receipts exceed $5,000,000, while S corporations do not.

Tax advantage of a C corporation over an S corporation

C Corporation - Tax rate is 34% up to $10,000,000
Individuals – Top tax rate is 39.6%
Alternative Minimum Tax – AMT is determined at the shareholder level for S corporations and at the corporate level for C corporations. Currently the corporate AMT rate is 20% while the individual rate can be as high as 28% if AMT exceeds $175,000. An AMT credit for individuals does not allow a credit for exclusion preference items, while a C corporations generates AMT credit against regular tax for all items causing AMT. C corporations with average gross receipts less than $5,000,000 for the first test year and $7,500,000 or less in subsequent years are totally exempt from AMT.
Fringe Benefits – partners in S corporations with more than a 2% ownership are treated as partners in partnerships for fringe benefit purposes.

Partnership versus S Corporation Taxation

Background

In a partnership, general partners are liable for partnership liabilities while limited partners have limited liability. Also, in many states, the limited partners cannot participate in the partnership’s business operations and retain limited liability. A Limited Liability Company (“LLC”), with proper planning, will be taxed as a partnership while giving the owners limited liability similar to corporate stockholders. Moreover, unlike limited partners, LLC owners can materially participate in the LLC business activities without incurring personal liability.

General Information

LLCs and are created by statutes. The LLC’s principal competitor for choice of a business entity for small businesses is the S corporation. This is because both entities are the only entities that offer all of the following:

Pass-through tax treatment to all owners
Limited liability to all owners
Material participation by all owners without losing limited liability

However, following are tax differences between a partnership and an LLC (taxed as a partnership):

Formation. Tax-free formation of an S Corporation requires the stockholders to satisfy an 80% control test, and the stockholder’s must avoid gain by excess debt under f357(c), while an “LLC” has no control requirement upon formation and it is much less likely that a contributing member will trigger gain from excess debt upon formation.
Capital Structure. An LLC can allocate cash flow in the same flexible manner as a partnership, while S corporations’ single class of stock requirement prohibits any non-pro rata allocation except by salaries for services performed.
Income Allocation. An LLC can allocate income, gain, loss, and deductions as agreed to by the partners so long as the allocations have ‘substantial economic effect.” S corporation income and losses must be allocated pro rata based strictly on stock ownership.

Limited Liability Partnerships (LLP)

An LLP is a registered partnership that offers partners liability protection from malpractice, errors, and omissions of the other partners, but not from commercial or contract liability of the partnership.

Although LLPs offer less liability protection than LLCs, professional organizations that have multi-state practices opt for this business entity form because some states prohibit “professionals” from operating as LLCs and many states require that all members of a LLC be members of the same profession.

Limited Liability Limited Partnerships (LLLP)

An LLLP is a registered partnership that offers general partners liability protection from malpractice, errors, and omissions of the other general partners, but not from commercial or contract liability of the partnership.

Sole Proprietorship

There are no requirements to form a sole proprietorship. Taxable income of the business is the taxable income of the Sole Proprietor. There is no liability protection. If there are no employees, there is no payroll reporting. A tax deduction of up to 60% of health plan benefits is available.

DISCLAIMER
THIS SUMMARY IS DESIGNED AS A GUIDE TO UNDERSTANDING OF THE VARIOUS RETIREMENT PLANS AVAIABLE AND THEIR TAX BENEFITS AND CONSEQUENCES. THIS SUMMARY IS NOT INTENDED TO PROVIDE LEGAL, ACCOUNTING OR OTHER PROFESSIONAL SERVICES.

Paldino Company CPA Files and Uploads - Mamaroneck, NY 10543 - 914-253-6857 - AmericanTowns.com

2011-08-09T12:54:00.000-04:00

Paldino Company CPA Files and Uploads - Mamaroneck, NY 10543 - 914-253-6857 - AmericanTowns.com

IRS Urges Taxpayers to Avoid Becoming Victims of Tax Scams

2011-07-14T14:24:00.000-04:00

WASHINGTON — The Internal Revenue Service today encouraged taxpayers to guard against being misled by unscrupulous individuals trying to persuade them to file false claims for tax credits or rebates.
The IRS has noted an increase in tax-return-related scams, frequently involving unsuspecting taxpayers who normally do not have a filing requirement in the first place. These taxpayers are led to believe they should file a return with the IRS for tax credits, refunds or rebates for which they are not really entitled. Many of these recent scams have been targeted in the South and Midwest.
Most paid tax return preparers provide honest and professional service, but there are some who engage in fraud and other illegal activities. Unscrupulous promoters deceive people into paying for advice on how to file false claims. Some promoters may charge unreasonable amounts for preparing legitimate returns that could have been prepared for free by the IRS or IRS sponsored Volunteer Income Tax Assistance partners. In other situations, identity theft is involved.
Taxpayers should be wary of any of the following:

Fictitious claims for refunds or rebates based on excess or withheld Social Security benefits.
Claims that Treasury Form 1080 can be used to transfer funds from the Social Security Administration to the IRS enabling a payout from the IRS.
Unfamiliar for-profit tax services teaming up with local churches.
Home-made flyers and brochures implying credits or refunds are available without proof of eligibility.
Offers of free money with no documentation required.
Promises of refunds for “Low Income – No Documents Tax Returns.”
Claims for the expired Economic Recovery Credit Program or Recovery Rebate Credit.
Advice on claiming the Earned Income Tax Credit based on exaggerated reports of self-employment income.

In some cases non-existent Social Security refunds or rebates have been the bait used by the con artists. In other situations, taxpayers deserve the tax credits they are promised but the preparer uses fictitious or inflated information on the return which results in a fraudulent return.
Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file with little or no documentation, have been appearing in community churches around the country. Promoters are targeting church congregations, exploiting their good intentions and credibility. These schemes also often spread by word of mouth among unsuspecting and well-intentioned people telling their friends and relatives.
Promoters of these scams often prey upon low income individuals and the elderly.
They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected or the refund barely exceeds what they paid the promoter. Meanwhile, their money and the promoters are long gone.
Unsuspecting individuals are most likely to get caught up in scams and the IRS is warning all taxpayers, and those that help others prepare returns, to remain vigilant. If it sounds too good to be true, it probably is.
Anyone with questions about a tax credit or program should visit www.IRS.gov, call the IRS toll-free number at 800-829-1040 or visit a local IRS Taxpayer Assistance Center.
For questions about rebates, credit and benefits from other federal agencies contact the relevant agency directly for accurate information.

BEWARE OF IRS EMAIL SCAMS

2011-06-29T09:51:00.000-04:00

Beware of e-Mail Scams about Electronic Federal Tax Payments

Consumers should be aware of a scam e-mail about an electronic federal tax payment the e-mail claims they tried to make or which specifies the Electronic Federal Tax Payment System (EFTPS). The e-mail states that tax payments made by the e-mail recipient through EFTPS have been rejected.
The e-mail then directs recipients to a bogus link for a transaction report that, when clicked, downloads malicious software (malware) that infects the intended victim’s computer. The malware is designed to send back to the scammer personal and financial information already contained on the taxpayer's computer or obtained through capturing keystrokes. The scammer uses this personal and financial information to commit identity theft.
To avoid malware, do not click on any links, open any attachments or reply to the sender for this or any other unsolicited e-mails you may receive about your tax account which claims to come from the IRS or EFTPS.
If you responded to this scam and believe you may have become the victim of identity theft, find out what steps you can take.
The IRS and the Financial Management Service (the Treasury bureau that owns EFTPS) do not communicate payment information through e-mail.
A scam that tricks someone into revealing their personal and financial data is identity theft. A scam that attempts to do this through e-mail is known as phishing. Find out more about IRS-impersonation phishing scams and how to recognize and report them to the IRS.
EFTPS is a tax payment system that allows individuals and businesses to pay federal taxes electronically via the Internet or phone. It is committed to taxpayer privacy and uses industry-leading security practices and technology to protect taxpayer data.

Nine Facts on filing an Amended Return

2011-06-01T22:37:00.002-04:00

An amended tax return generally allows you to file again to correct your filing status, your income or to add deductions or credits you may have missed.

Here are nine points the IRS wants you to know about amending your federal income tax return.

Use Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended income tax return.
Use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. An amended return cannot be filed electronically, thus you must file it by paper.
Generally, you do not need to file an amended return due to math errors. The IRS will automatically make that correction. Also, do not file an amended return because you forgot to attach tax forms such as W-2s or schedules. The IRS normally will send a request asking for those.
Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.
If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS campus. The 1040X instructions list the addresses for the campuses.
If the changes involve another schedule or form, you must attach that schedule or form to the amended return.
If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.
If you owe additional 2010 tax, file Form 1040X and pay the tax before the due date to limit interest and penalty charges that could accrue on your account. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.
Form 1040X was recently redesigned. Previously the form consisted of three columns; Column A-Original amount, Column B-Net change, and Column C-Correct amount. The redesigned form now has just one column where the Correct Amount is the only figure entered, making it easier to make changes to previously filed returns.

Eight Facts on Penalties

2011-05-25T22:36:00.000-04:00

When it comes to filing a tax return – or not filing one - the IRS can assess a penalty if you fail to file, fail to pay or both. Here are eight important points the IRS wants you to know about the two different penalties you may face if you do not file or pay timely.

If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and explore other payment options in the meantime. The IRS will work with you.
The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
If you timely filed a request for an extension of time to file and you paid at least 90 percent of your actual tax liability by the original due date, you will not be faced with a failure-to-pay penalty if the remaining balance is paid by the extended due date.
If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.
You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

Link: Avoiding Penalties and the Tax Gap

2011-04-02T13:43:00.001-04:00

Are You Missing Out on Your 2007 Tax Refund?
If you, a member of your family or a friend has a refund coming from a 2007 return that has yet to be filed, you only have until Monday (April 18) to claim your refund. The IRS reports that it has refunds totaling approximately $1.1 billion for the nearly 1.1 million people who did not file a federal income tax return for 2007.
Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.
By failing to file a return, people stand to lose more than a refund of taxes withheld or paid during 2007. In addition, many low- and moderate-income workers may not have claimed the Earned Income Tax Credit (EITC). The EITC helps individuals and families whose incomes are below certain thresholds, which in 2007 were $39,783 for those with two or more children, $35,241 for people with one child, and $14,590 for those with no children.
For 2007 returns, the window closes on April 18, 2011. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.
The IRS reminds taxpayers seeking a 2007 refund that their checks will be held if they have not filed tax returns for 2008 and 2009. In addition, the refund will be applied to any amounts still owed to the IRS, and may be used to offset unpaid child support or past due federal debts such as student loans.

2011-03-26T12:31:00.001-04:00

Check out our new website design at www.jpalcpa.comwhile you are there review our latest tax tips for self-employed persons.

Tax Tips for Self-Employed Individuals

2011-03-26T12:27:00.000-04:00

If you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you generally would consider yourself self-employed, and you will need to include on your tax return your income and allowable business expenses to determine your net profit. Your net profit is subject to both income tax and self-employment tax.

Here are some things you should know about self-employment:

• If you provide services as an independent contractor, each business that engages you will ask you to complete and provide them with a copy of IRS Form W-9. This is the way you provide and certify your contact information and Social Security number to the business that hired you. The hiring company will issue you an IRS Form 1099-MISC and provide a copy to the IRS for the amounts paid to you during the year.

· If you are self-employed and have a net profit of $400 or more, you have to pay self-employment (SE) tax. SE tax is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. However, since you have no employer, you are required to pay both the employer’s and the employee’s share of the social security and Medicare taxes, thus making the SE tax double what an employee would pay. However, you are allowed to deduct half of your self-employment tax in figuring your adjusted gross income.

· Since you do not have an employer to withhold taxes from your pay, you generally will be required to make estimated tax payments to cover your income and SE tax liabilities from your self-employment. Estimated tax is the method used to pay tax on income that is not subject to withholding. If you end up owing taxes when you file your tax return after the end of the tax year, you may be penalized for underpayment. If your taxes from self-employment are small and you have other income from employment on which tax is withheld, it may be possible to adjust the withholding to cover the taxes from the self-employment.

· You can deduct the costs of operating your business including expenses, cost of goods sold, and depreciation on capital assets used in business. Temporary liberal expensing and depreciation rules mean that most small business owners can fully deduct the purchase costs of nearly all capital assets placed in service during 2010 and 2011. However, careful tax planning is needed to maximize the benefits of the write-offs.

· To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.

· If you also resale products, you probably will be required to obtain a resale permit from your state, and collect and remit sales tax to the state on a periodic basis.

· Depending upon the location of your business, you may also be required to obtain a business tax permit, which is really a way for the local government entity to collect tax on your sales. In addition, if you have fixed assets that you use in your business, the local government entity will probably assess a personal property tax based on the value of the assets.

Setting up a self-employment business can be complicated and you are urged to contact this office for assistance.

Stop wasting time marketing on social media like EVERYONE else. - Marketing & Sales

2011-03-24T14:13:00.000-04:00

Stop wasting time marketing on social media like EVERYONE else. - Marketing & Sales

2011-03-05T14:45:00.001-05:00

TAX EDUCATION

Whether you prepare your own taxes or pay a tax professional, you are ultimately responsible for the information in your tax return. Make sure you understand this information before you sign the tax return. I have talked with many taxpayers (YOU) who were unaware of the information in their return. If your tax preparer is not taking the time to explain to you what is or “isn’t” in your return they are not serving your best interest. GET EDUCATED, ask questions. I would strongly recommend that you keep your tax advisor’s phone number on speed dial. Effective tax reduction requirers planing and review through out the year. Tax filing season January through April 15 is “report card” time. This is when you get to see how effective you tax planning was, this is not the time to try to lower your tax liability.

The IRS website (www.irs.gov) has many links to various tax topics which will assist you in paying the least amount of tax that you are legally obligated to pay. One of my personal favorites is the IRS Daily Tax Tip. You can subscribe to this newsletter and each day you will receive a bit of useful tax information that may help to lower your taxes. You can then discuss this information with your tax advisor (by the way his fees are deductible). They are short (3 – 4 paragraghs) and easy to read. Below is a recent posting:

Six Facts about IRS Publication 17
Starting with “What’s New for 2010” IRS Publication 17, Your Federal Income Tax, takes you step by step through each part of your individual Federal Income tax return. This comprehensive booklet explains the tax law in a way that will help you better understand your taxes so that you pay only as much as you owe and no more.
Here are the top six things the IRS wants you to know about Publication 17.
1. Publication 17, Your Federal Income Tax, is available on the IRS website at http://www.irs.gov and contains a wealth of information for individual taxpayers.
2. The online version of Publication 17 contains electronic links that make finding your answer simple. Both the downloadable PDF and online 2010 Publication 17 have thousands of helpful hyperlinks.
3. Publication 17 is packed with basic tax-filing information and tips on what income to report and how to report it.
4. Publication 17 also includes information on figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions, and how to claim valuable tax credits.
5. Publication 17(SP) El Impuestos Federal sobre los Ingresos is available in Spanish.
6. You can get a hard copy of Publication 17 for free. To get a copy, visit http://www.irs.gov or call 800-TAX-FORM (800-829-3676).

Links:
• Publication 17, Your Federal Income Tax
• Publication 17, Your Federal Income Tax (PDF 2085K)

2011-02-23T11:47:00.002-05:00

----KNOW YOUR REFERRAL SOURCES----
A good referral is priceless. When you give a referral there is an implied endorsement. I am stating that "I believe enough in this person to recommend them to you". GET TO KNOW YOUR REFERRAL SOURCES! I recently recommended an A-Client to a referral Source. Accordingly to the Client the work was less than expected. Once the defects were uncovered the provider agreed to make good. While it is appreciated that the provider agreed to FIX their defective work, the point is it should have never happened. So the moral of the story is GET to know the people you refer to.

2011-02-17T08:26:00.001-05:00

To all the Mes Amis members who participated last night thank you for making it a wonderful event. To Ettie Shapiro thank you for giving us so much to think about. There was certainly a lot of useful information.

2011-02-12T09:27:00.001-05:00

Attention Veterans - Paldino Company CPA is a participant in the Westchester County "Favor" (Find and Assist Veterans of Record) program. Registered Vets receive discounts for tax and accounting services provided by us. For a list of participants visit http://ping.fm/C2S83 . For information on the program contact the Westchester County Veterans Service at (914) 995-2145 or email FAVOR@westchestergov.com.

Thank you for all you have given us.

2011-02-10T18:37:00.001-05:00

Yippie I O Ki Yea Mother ........... After four days of constant emailing, blog posting and blog commenting i-Contact has found a way to refund my fees. Thank you to Mr. Shawn Hawkins for your understanding and assistance.

2011-02-07T19:02:00.001-05:00

So now iContact is willing to give me an additional 20% off but still no refund. To add insult to injury I created a blog on their website explaining that they do not give refunds and they shut it down. If they weren't practicing deceptive practices why would they hide what I had to say.

2011-02-07T11:21:00.001-05:00

DO NOT FALL PREY TO i-contact rip off scam.

iContact does not allow refunds on one year contracts. They do not pro-rate the contact if you decided to cancel. Even if you decided to cancel your service in less that 48 Business hours. I would recommend that you seek the service of another company that provides similar services.

2011-02-04T11:58:00.001-05:00

Taxable or Non-Taxable Income?

Generally, most income you receive is considered taxable but there are situations when certain types of income are partially taxed or not taxed at all.

To help taxpayers understand the differences between taxable and non-taxable income, the Internal Revenue Service offers these common examples of items not included as taxable income:

* Adoption Expense Reimbursements for qualifying expenses
* Child support payments
* Gifts, bequests and inheritances
* Workers' compensation benefits
* Meals and Lodging for the convenience of your employer
* Compensatory Damages awarded for physical injury or physical sickness
* Welfare Benefits
* Cash Rebates from a dealer or manufacturer

Some income may be taxable under certain circumstances, but not taxable in other situations. Examples of items that may or may not be included in your taxable income are:

* Life Insurance If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds, which were paid to you because of the insured person’s death, are not taxable unless the policy was turned over to you for a price.
* Scholarship or Fellowship Grant If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify.
* Non-cash Income Taxable income may be in a form other than cash. One example of this is bartering, which is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included as income on Form 1040 of both parties.

All other items—including income such as wages, salaries, tips and unemployment compensation — are fully taxable and must be included in your income unless it is specifically excluded by law.

These examples are not all-inclusive. For more information, see Publication 525, Taxable and Nontaxable Income, which can be obtained at http://www.irs.gov or by calling the IRS at 800-TAX-FORM (800-829-3676).

Link:

Publication 525, Taxable and Nontaxable Income

How to Get Your Prior Year Tax Information from the IRS

2011-01-24T17:55:00.002-05:00

Taxpayers who need certain prior year tax return information can obtain it from the IRS. Here are nine things to know if you need federal tax return information from a previously filed tax return.

There are three options for obtaining free copies of your federal tax return information – on the web, by phone or by mail.
The IRS does not charge a fee for transcripts, which are presently available for the current tax year as well as the past three tax years.
A tax return transcript shows most line items from your tax return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes made after the return was filed.
A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data – including marital status, type of return filed, adjusted gross income and taxable income.
To request either transcript online, go to http://www.irs.gov and look for our new online tool called Order A Transcript. To order by phone, call 800-908-9946 and follow the prompts in the recorded message.
To request a 1040, 1040A or 1040EZ tax return transcript through the mail, complete IRS Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses, partnerships and individuals who need transcript information from other forms or need a tax account transcript must use the Form 4506T, Request for Transcript of Tax Return.
If you order online or by phone, you should receive your tax return transcript within 5 to 10 days from the time the IRS receives your request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail using Form 4506T or Form 4506T-EZ.
If you still need an actual copy of a previously processed tax return, it will cost $57 for each tax year that you order. Complete Form 4506, Request for Copy of Tax Return, and mail it to the IRS address listed on the form for your area. Copies are generally available for the current year as well as the past six years. Please allow 60 days for actual copies of your return.
Visit http://www.irs.gov to determine which form will meet your needs. Forms 4506, 4506T and 4506T-EZ can be found at http://www.irs.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

Links:

Form 4506-T, Request for Transcript of Tax Return (PDF 45.3K)
Form 4506, Request for Copy of Tax Form (PDF 42.3K)

Four Tax Tips about Tip Income

2011-01-21T15:07:00.002-05:00

If you work in an occupation where tips are part of your total compensation, you need to be aware of several facts relating to your federal income taxes. Here are four things the IRS wants you to know about tip income:

Tips are taxable. Tips are subject to federal income, Social Security and Medicare taxes. The value of non–cash tips, such as tickets, passes or other items of value, is also income and subject to tax.
Include tips on your tax return. You must include in gross income all cash tips you receive directly from customers, tips added to credit cards, and your share of any tips you receive under a tip–splitting arrangement with fellow employees.
Report tips to your employer. If you receive $20 or more in tips in any one month, you should report all of your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes.
Keep a running daily log of your tip income. You can use IRS Publication 1244, Employee's Daily Record of Tips and Report to Employer, to record your tip income.

For more information see IRS Publication 531, Reporting Tip Income and Publication 1244 which are available at http://www.irs.gov or can be ordered by calling 800-TAX-FORM (800-829-3676)

2010-12-20T15:58:00.001-05:00

Tax Credit Fraud Investigation Saves The State Millions
Highlights The Need For Taxpayers To Check The Credentials Of Their Preparer
FOR RELEASE:
IMMEDIATE, Thursday
December 16, 2010
New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward today issued a warning to taxpayers about a scheme involving a growing number of tax preparers filing claims for the Special Additional Mortgage Recording Tax credit on behalf of taxpayers who are not entitled to the credit.
The Department, through its audit processes has disallowed more than 3,600 claims for this tax credit, which has resulted in $28.5 million in savings to the state. The Department has an ongoing criminal investigation regarding the alleged fraud.

"Claims of fraudulent credits are growing significantly," Acting Commissioner Woodward said. "This case, and others we have investigated, highlights the need for taxpayers to perform their due diligence when choosing a preparer and to scrutinize their returns for accuracy."

The investigation concerns taxpayers who have claimed this credit for residential properties using Form IT-256, "Claim for Special Additional Mortgage Recording Tax Credit." In general, very few taxpayers are legitimately entitled to this credit, which generally involves large commercial properties. Typically the personal income tax claims come from partners in a real estate investment partnership.

The scheme generally involves reporting all costs associated with a residential property closing as Special Additional Mortgage Recording Tax. Unscrupulous preparers are reportedly charging fees in the range of 25-40 percent of the credit.

Acting Commissioner Woodward advises taxpayers that caution should be exercised when choosing a preparer and that they should be especially wary of refund scams or fraud when using a preparer for their tax returns.

The taxpayer is the responsible party when the Department disallows fraudulently claimed credits or deductions. The taxpayer is responsible not only for the actual tax obligation, but may face additional interest, penalties and possible criminal sanctions associated with fraudulent activity.

The Tax Department has published a Consumer Bill of Rights brochure which provides helpful information on choosing a preparer.

The brochure can be found at the Department's web site: http://ping.fm/N51ta

The Tax Department advises those seeking a preparer to:

•obtain references from the preparer's clients;
•ask about service fees in advance and avoid preparers who guarantee a refund or base their fees on a percentage of the refund or credit;
•make sure they can contact the preparer after the return is filed; and
•research the preparer's credentials through the Better Business Bureau, State Bar Association, or licensing authority for CPAs.

NYS on watch for tax fraud.

2010-12-20T15:55:00.002-05:00

Tax Credit Fraud Investigation Saves The State Millions
Highlights The Need For Taxpayers To Check The Credentials Of Their Preparer

FOR RELEASE:
IMMEDIATE, Thursday
December 16, 2010

New York State Department of Taxation and Finance Acting Commissioner Jamie Woodward today issued a warning to taxpayers about a scheme involving a growing number of tax preparers filing claims for the Special Additional Mortgage Recording Tax credit on behalf of taxpayers who are not entitled to the credit.

The Department, through its audit processes has disallowed more than 3,600 claims for this tax credit, which has resulted in $28.5 million in savings to the state. The Department has an ongoing criminal investigation regarding the alleged fraud.
"Claims of fraudulent credits are growing significantly," Acting Commissioner Woodward said. "This case, and others we have investigated, highlights the need for taxpayers to perform their due diligence when choosing a preparer and to scrutinize their returns for accuracy."
The investigation concerns taxpayers who have claimed this credit for residential properties using Form IT-256, "Claim for Special Additional Mortgage Recording Tax Credit." In general, very few taxpayers are legitimately entitled to this credit, which generally involves large commercial properties. Typically the personal income tax claims come from partners in a real estate investment partnership.
The scheme generally involves reporting all costs associated with a residential property closing as Special Additional Mortgage Recording Tax. Unscrupulous preparers are reportedly charging fees in the range of 25-40 percent of the credit.
Acting Commissioner Woodward advises taxpayers that caution should be exercised when choosing a preparer and that they should be especially wary of refund scams or fraud when using a preparer for their tax returns.

The taxpayer is the responsible party when the Department disallows fraudulently claimed credits or deductions. The taxpayer is responsible not only for the actual tax obligation, but may face additional interest, penalties and possible criminal sanctions associated with fraudulent activity.
The Tax Department has published a Consumer Bill of Rights brochure which provides helpful information on choosing a preparer.
The brochure can be found at the Department's web site: http://www.tax.state.ny.us/pdf/publications/income/pub135.pdf
The Tax Department advises those seeking a preparer to:

obtain references from the preparer's clients;
ask about service fees in advance and avoid preparers who guarantee a refund or base their fees on a percentage of the refund or credit;
make sure they can contact the preparer after the return is filed; and
research the preparer's credentials through the Better Business Bureau, State Bar Association, or licensing authority for CPAs.

2010-12-17T11:05:00.001-05:00

Sorry I would help if I included the blog site address - Duh

http://ping.fm/MrABQ