ACA COMPLIANCE REQUIREMENTS HAVE NOT CHANGED

NSTPAffordable Care Act

The press, and some software vendors, has incorrectly reported the announcement from the IRS regarding the shared responsibility payment.  In order to facilitate the processing of tax returns, the IRS has deactivated the error codes (IND69 and IND70) that would prevent a tax return from being e-filed if the health insurance question is not answered on the return. The ACA, however, is still fully in effect and you should continue to help taxpayers comply within the full extent of the law (while also complying with Circular 230 rules when representing taxpayers before IRS). The IRS’s announcement on silent returns simply means that they will accept e-filed tax returns that are “silent” on whether or not a taxpayer was insured under employer coverage, met the personal mandate requirement or paid the personal shared responsibility payment (for the 2016 tax year—the penalty is equal to 2.5 percent of your adjusted gross income … Read More

FIVE TAX MYTHS EXPOSED

NSTPIRS

Here are five tax refund myths the Internal Revenue Service says are making the rounds, along with the truth about the situation. Myth 1: All Refunds Are Delayed Yes, some refunds are delayed, but not every single one. The Protecting Americans from Tax Hikes (PATH) Act has a provision that prohibits the IRS from issuing refunds connected to two refundable tax credits until February 15th.The Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) are two popular refundable credits, and claims of these tax breaks are the ones that PATH has mandated will delay refunds each filing season. Note that this is not a one-time only delay, since this was included in Congressional legislation it is mandated for this tax season and all that follow. The IRS says that more than 90 % of federal tax refunds are issued in the normal time frame, which is less than 21 … Read More

FEDERAL TAX DAY – TAXPAYERS ENCOURAGED TO USE IRS WEBSITE FOR HELP:

NSTPIRS, Online Tool

The IRS urges taxpayers to use a variety of tools and services available on the IRS website to obtain quick answers to their most pressing questions during the peak filing season. While the IRS provides toll-free telephone service, the Service anticipates the next couple of weeks, especially around Presidents’ Day, to be the busiest time of year for IRS toll-free phone providers. The IRS Services Guide provides a quick overview of online services and resources available on the IRS website. Taxpayers can use the following tools available on the IRS website to obtain faster and easier access to information during the peak filing season: Where’s My Refund? Taxpayers can use the Where’s My Refund? tool to check the status of their refund. By law, the IRS must hold Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) refunds until February 15. Taxpayers will begin to see refunds claiming EITC/ACTC the week … Read More

FILING STATUS AND DEPENDENTS – DO YOU KNOW THE RULES?

NSTP501, 8867, Appropriate Filing Status, Publication

Lately, the NSTP Hotline has been receiving numerous calls on the appropriate filing status and who is a dependent.  It is important to be aware of the regulations as the due diligence penalties can be assessed for multiple credits on the tax return. Be sure you start with Publication 501, Exemptions, Standard Deduction, and Filing Information for flow charts, worksheets and explanations of who is a qualifying child or a qualifying relative.  We are receiving many questions regarding who qualifies as a dependent. Can a child be a qualifying dependent for more than one person? The answer is yes – and Pub 501 has examples to help you make this determination. Your due diligence requirements are outlined in the instructions for the Form 8867, Paid Preparer’s Due Diligence Checklist for the Earned Income Credit (EIC), the Child Tax Credit (CTC)/Additional Child Tax Credit (ACTC), and/or the American Opportunity Tax Credit … Read More

THINGS TO REMEMBER WHEN CHOOSING A TAX PREPARER

NSTPTax Professionals

Following are guidelines that the IRS is distributing for choosing a qualified tax professional. How many of these practices are you following in your tax business? If you are a licensed professional eligible to be listed in the Directory of Federal Tax Return Preparers be sure to verify that the information listed is correct. If not, then go into your PTIN account to update your information. If you are not listed, but have taken the continuing education to qualify for the Annual Filing Season Program then be sure you have attested that you agree to comply with Circular 230 which also can be found in your PTIN account. Taxpayers should choose their tax return preparer wisely – with good reason. Taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return. Here are ten tax tips to keep in mind: Check … Read More

TAX PREPARATION FEES AVERAGE $273 FOR FORM 1040 AND ONE STATE

NSTPForm 1040

How much does your firm charge to prepare a 1040? How about other forms? What about the accounting and business advisory services you offer? Business Mix and Revenue Surveyed firms reported that on average 57.3% of gross income comes from tax-return preparation, 15.4% from write-up work, 8.9% from payroll services, 7.0% from tax services, 3.6% from QuickBooks/bookkeeping, 2.6% from financial statement presentation, and 5.2% from other services. Firms split fairly evenly regarding billing methods for accounting services, with about a third billing by fixed fee (35.3%), hourly (31.2%) or a combination of the two (31.8%). Most bill for tax preparation by form (39.5%), hourly (8.4%), by a combination of fixed and hourly fees (25.0%) or by fixed fee only (23.2%). Fees The average fee charged to prepare an itemized Form 1040 with Schedule A and a state tax return is $273, and the cost for a Form 1040 without itemized … Read More