Tag: taxpreparation

Family Tax Issues, General Information, TAXES

5 Steps To Take When Someone Illegally Uses Your Child’s Social Security Number On A Tax Return.

Howard Tax Prep LLC

police money finance funny

Author Trudy M. Howard

It’s the end of tax season, you’ve finally gotten all of your documents together, and then it happens; your electronically filed tax return is rejected. Here in our South Loop Chicago Tax Preparation office, I work with many Chicago tax preparation clients that receive the dreaded IRS Reject Codes R0000-507-01 and F1040SSPR-507 .   Rejected electronic file codes R0000-507-01 and F1040SSPR-507  mean that the IRS system recognizes the child’s social security number as being claimed on another return. While it may be frustrating, if you are truly entitled to file the child/dependent in question, there are steps you can take to claim your child on your refund after someone filed them. 

Step 1: Complete a paper tax return claiming all of your rightful dependents.

Step 2: Complete an IRS Identity Theft Affidavit (IRS form 14039)

Step 3: Locate the IRS mailing address for your state, and mail your paper tax return along with the completed form 14039.

Step 4: Wait on acknowledgment letter that form 14039 was received, and allow the IRS from 120-180 days to resolve your case.

Step 5: The IRS may determine that you need to placed into the PIN program, which means that on an annul basis you will receive a 6 digit Identity Protection pin number that has to be entered on your tax returns.

Also per the IRS Website: “If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Protection Specialized Unit at 800-908-4490 (Monday – Friday, 7 a.m. – 7 p.m. local time; Alaska and Hawaii follow Pacific time).”

Although we’ve given you the basics, this is not an all-inclusive article. Should you have tax debt help questions, need Chicago business tax preparation, business entity creation, business insurance, or business compliance assistance please contact us online, or call our office toll free at 1-855-743-5765 or locally in Chicago or Indiana at 1-708-529-6604. Make sure to join our newsletter for more tips on reducing taxes, and increasing your wealth.

Schedule-button-nb

Never miss another tip again! Join our newsletter, to receive tax reduction/wealth building tips delivered right to your inbox!

newsletter

BUSINESS CREDIT, General Information

BUSINESS CREDIT TIP!

Howard Tax Prep LLC

business credit
Schedule-button-nbA lot of business owners like #smallbiztaxlady want to establish credit in the name of the business without using their personal social security number. This method of obtaining business credit is often referred to as “obtaining business credit with no PG.” No PG (personal guarantee) simply means obtaining business lines of credit without using your social security number. The driving force behind no PG can be low personal credit scores, to business owner(s) wisely looking to protect their personal credit, and avoid personal liability of business debts.

Like personal credit, a businesses credit history is given a score. Business credit scoring is called a Paydex score, and your goal should be to keep your score at or above 80. Listed below the Paydex scores and what they mean.

PAYDEX SCORING
100 – Pays before invoice is generated
90 – Pays during discount period
80 – Pays when invoice is due
70 – Pays 15 days beyond terms
60 – Pays 22 days beyond terms
50 – Pays 30 days beyond terms
40 – Pays 60 days bevond terms
20 – Pays 90 days beyond terms
UN – Unavailable

Although we’ve given you the basics, this is not an all-inclusive article. Should you have questions, or need business tax preparation, business entity creation, business insurance, or business compliance assistance please contact us online, or call our office at 855-743-5765. Make sure to join our newsletter for more tips on reducing taxes, and increasing your wealth.

 

Never miss another tip again! Join our newsletter, to receive tax reduction/wealth building tips delivered right to your inbox!
newsletter

General Information, REAL ESTATE

Act Now! Get Your 2019 Safety Net Expensing in Place.

Howard Tax Prep LLC

safety net

Schedule-button-nb For 2018, you can elect the de minimis safe harbor to expense assets costing $2,500 or less ($5,000 with audited financial statements or something similar).

The term “safe harbor” means that the IRS will accept your expensing of the qualified assets if you properly abide by the rules of the safe harbor.

Here are four benefits of this safe harbor:

  1. Safe harbor expensing is superior to Section 179 expensing because you don’t have the recapture period that can complicate your taxes.
  2. Safe harbor expensing takes depreciation out of the equation.
  3. Safe harbor expensing simplifies your tax and business records because you don’t have the assets cluttering your books.
  4. The safe harbor does not reduce your overall ceiling on Section 179 expensing.

Here’s how the safe harbor works. Say you are a small business that elects the $2,500 ceiling for safe harbor expensing and you buy two desks costing $2,100 each. On the invoice, you see the quantity “two” and the total cost of $4,200, plus sales tax of $378 and a $200 delivery and setup charge, for a total of $4,778.

Before this safe harbor, you would have capitalized each desk at $2,389 ($4,778 ÷ 2) and then either Section 179 expensed or depreciated it. You would have kept the desks in your depreciation schedules until you disposed of them.

Now, with the safe harbor, you simply expense the desks as office supplies. This makes your tax life much easier.

To benefit from the safe harbor, you and I do a two-step process. It works like this:

Step 1. For safe harbor protection, you must have in place an accounting policy—at the beginning of the tax year—that requires expensing of an amount of your choosing, up to the $2,500 or $5,000 limit. I can help you with this.

Step 2. When I prepare your tax return, I make the election on your tax return for you to use safe harbor expensing. This requires that I attach the election statement to your federal tax return and file that tax return by the due date (including extensions).

If you want to use this safe harbor in 2018, we need to get this set up so that it is in place on January 1. Contact me at 855-743-5765, or email me at help@howardtaxprep.com

Never miss another tip again! Join our newsletter, to receive tax reduction/wealth building tips delivered right to your inbox!
newsletter