<![CDATA[Spolar And Associates, Ltd. (708) 744-7423 - Resource Center]]>Thu, 16 Apr 2020 06:49:05 -0500EditMySite<![CDATA[Guard Against Taxpayer Identity Theft With These Five Steps.]]>Wed, 13 Jan 2016 17:18:48 GMThttp://www.spolarandassociatesltd.com/resource-center/guard-against-taxpayer-identity-theft-with-these-five-stepsIf your IRS tax filing goes smoothly every year, consider yourself lucky.  An April 14, 2015, article in the Chicago Tribune (Identity Thefts Grow, Complicating Tax Filings, Delaying Refunds) reported that in 2013 incidents of tax-related identity thefts were at 2.9 million, up from 1.8 million the year before.  While the IRS continues the battle on tax-related identity theft, such identity theft continues to soar.

Your personal and financial information needs protection, and you play a big part in this.  Here are five steps to keep in mind to help protect you at tax time and during the year.

First and foremost, e-file your Form 1040.  When your tax documents are e-filed, you get direct, immediate acknowledgement from the IRS that your return was accepted and filed.  If your return is rejected, as the IRS indicates a return was already filed with your social security number, you know this upfront and can take immediate action.

The action on a rejected return in this instance is to notify the IRS by the completion of an IRS ID Theft Affidavit Form 14039.  Other action steps include filing a police report (as identity theft is a crime) and contact with the credit bureaus to protect your credit.

Second, e-file your Form 1040 as early as possible.  The sooner you e-file and your return is accepted by the IRS, the better.

Third, if you change your address during the year, be sure that your W-2s, 1099s, and other tax documents follow you to your new location.  Don't allow your tax-related documents to end up where you are not.  

Also confirm that the address on your Form 1040 is correct and current.  The IRS uses your address on Form 1040 in the event they need to contact you.

Fourth, use a trustworthy and secure method to file your returns.  If you prepare your own returns, be sure your method is secure.  Avoid the use of a public WiFi connection to electronically file your return.  Avoid the use of work-related computers or networks to file your return or save your taxpayer information.  You have no control over how secure a public WiFi connection or work-related resources are.  If you use another person or firm to prepare and file your return, be sure the person is trustworthy.  A good source to use to understand how to select a trustworthy tax preparer is the website of your State CPA society.

Fifth, be skeptical of contact from the IRS via the phone, e-mail, text or social media.  Especially if the contact requests your social security number or bank-related information.  The IRS initiates contact via the U.S. Postal Service (another reason to have a current address on file with the IRS).  

If you receive contact from a person that claims to be from the IRS, I recommend my clients to simply say follow up on this matter will be done by my CPA.   If you don't have a CPA, bluff, find out what information the caller wants, and find a friendly, local CPA to assist you with this matter.

In the future, when it comes to tax-related identity theft, luck is no longer on your side.  Keep in mind the above five steps, and you are well on your way to protecting your taxpayer identity.

Diane M. Spolar is a CPA with Spolar and Associates, Ltd.  ]]><![CDATA[2015 Tax Alerts Newsletter for Individuals]]>Fri, 20 Nov 2015 16:42:21 GMThttp://www.spolarandassociatesltd.com/resource-center/2015-tax-alerts-newsletter-for-individualsAs we head into the last few weeks of 2015, take some time to think about your activities in 2015 which could impact your taxes.  If you had a life event in 2015 or a change in circumstances from 2014, there could be an impact on your 2015 taxes.
 
The outline below, while general in nature, has some key tax items to be aware of.

Contact me (or your regular local CPA) on questions related to your specific circumstances for the 2015 tax year.

Important!!!   Watch out for Affordable Care Act (ACA) tax document!!!
Based on how you received your health care coverage in 2015, be on the look-out for the tax form noted below.  You should receive the form by January 31, 2016.  Keep the form with your other 2015 tax documents (W-2s, 1099s, etc.), as the form is needed to finalize your 2015 tax return.  

  • Healthcare coverage provided by your employer, look-out for Form 1095-C Employer Provided Health Insurance Offer and Coverage
  •  Healthcare coverage provided by an Insurance Company, look-out for Form 1095-B Health Coverage  
  • Healthcare coverage purchased from healthcare exchange/market place, look-out for Form 1095-A Health Insurance Marketplace Statement
Several tax incentives expired in 2015, still waiting on word from Congress
The budget impasse and the upcoming election have kept the folks in D.C. busy.  Numerous tax incentives expired in 2015 (a few key ones are listed below).  If history is our guide, Congress will extend the incentives for 2015.  It is hard to say when (or if) Congress may extend the incentives.  The good news is the majority of Schedule A deductions and tax credits are intact for 2015.  Keep receipts and records of expenses and costs for 2015 as normal, and keep your fingers crossed.  
 
A few tax incentives which expired in 2015.  Caution - not all are listed.
​
  • Deduction of state and local sales tax in lieu of deduction for state and local income taxes (on Schedule A).
  • Majority of the energy tax incentives, such as 10% credit for qualified nonbusiness energy property.  
  • Deduction of qualified tuition and related expenses (university, etc.) from income (phased out at income levels). 
Itemized Expenses in 2015 (Schedule A Itemized Deductions)   
For 2015, the standard deduction amounts by taxpayer filer status are as follows:  Single $6,300, Head of Household $9,250, and Married Filing Jointly $12,600.  As a reminder, in order to itemize, and deduct an amount more than your standard deduction, proper substantiation is needed and kept with your tax return copy. 
 
A reminder on a few major categories:   

Medical and dental expenses that exceed 10% of adjusted gross income on Form 1040.(If you are over 65, the threshold is 7.50%.)  Keep receipts of payments made to/for doctors, hospital care, prescription medicines, insurance premiums, as well as car mileage to medical care.  In general, payments related to medical care or a medical condition, are deductible, keep receipts in order to determine if the deduction is allowed.

Real Estate taxes are deductible, both on the primary home and a second home (based on threshold amounts).  Keep receipts for taxes paid during 2015.  

Home mortgage interest and points are deductible (based on threshold amounts).  Look out for tax document Form 1098, which reports interest paid during 2015.  

Charitable donations to an IRS-recognized charitable organization are deductible. Proper support of the donation is important.  Several items to keep in mind: 
  • If you received a benefit in return, such as a meal or merchandise, your donation is reduced by the value of the benefit.
  • For donations of cash money, a bank record, cancelled check, or document from the charitable organization is needed to substantiate.
  • For each separate monetary donation of $250 or more, a written letter from the charitable organization is needed that includes the organization's name, amount of contribution, contribution date, and the value of goods/services provided in return if applicable.  
  • For each separate noncash donation of $250 or more, a formal written letter from the charitable organization is needed that includes the organization’s name, details on the property, contribution date, and the value of goods/services provided in return if applicable.
Casualty and theft losses are deductible, such as losses from fire, storms, theft, and accidents.  Amounts paid over $100 per loss are deductible.  Keep records of amounts paid and insurance reimbursements received.
 
Unreimbursed work-related expenses, i.e. your employer did not reimburse you for, that exceed 2% of your adjusted gross income on Form 1040.  Examples of job expenses include safety equipment, dues to professional organizations, training costs, and costs to look for a new job.  
 
Mandatory reporting of foreign financial accounts, assets, and interests
Foreign-based transactions or interests may be subject to reporting independent of your Form 1040 annual filing.    Foreign-based transactions/interests include:

  • Financial interest or signature authority over a foreign financial account that totals more than $10,000.  The financial accounts are defined as a bank account, mutual fund account, trust account or other type of financial account.   
  • Foreign, non-financial account assets in excess of threshold amounts.    
  • Interests in a foreign corporation as a shareholder, director, or officer, based on applicable IRS-defined categories. 
Identity Theft is a growing problem, be vigilant!!!
Taxpayer-related identity theft continues to be a growing problem.  The IRS will NEVER contact you via the phone to attempt to collect taxes.  The IRS will NEVER email or text you with a link to click on to attempt to collect taxes.   The IRS uses the U.S. Postal service to contact you for follow up on tax questions.
 
Any contact you get via the phone, email or text from a person identified with the IRS, hang up or do not reply.   
 
Watch out for your 2015 tax organizer
Does your CPA send you out a tax organizer early in the year to help with the preparation of your tax return?  Take the time to review and complete the document, as the items could jog your memory about an activity in 2015 that might impact your return. 
  
Follow me on Twitter for tax updates
As I mentioned earlier, Congress may extend several tax incentives for 2015.  Depending on when, this may impact the tax filing season.  Follow me on Twitter, @SpolarCPA, and on my website, www.spolarandassociatesltd.com, for current updates on taxes and the tax filing season.   

​Diane M. Spolar is a CPA with the firm Spolar and Associates, Ltd.  Diane's background includes 10 years with the CPA firm Arthur Andersen, as well as Director of Finance level positions with national not-for-profit organizations.  Diane is a member of the Illinois CPA Society.   

]]><![CDATA[Example of Big Data Use for Small Biz Owners:]]>Mon, 26 Oct 2015 17:47:08 GMThttp://www.spolarandassociatesltd.com/resource-center/example-of-big-data-use-for-small-biz-ownersPicture
Activity area selected - Cash Flow:

1. Identity the objective for the activity area.  For our example our objective is to determine if current incoming cash is at least at last year's level, to determine if outgoing cash needs adjustment for the balance of the year.

2. If last year was not a good business year, rethink of a prior year, maybe 2013 or 2012, that was a good business year to use for the example.

3. Collect total, overall monthly incoming and outgoing cash totals from the related monthly bank statements for the calendar year selected. Enter the totals into an excel spreadsheet.  You will have 12 monthly totals for incoming cash and 12 monthly totals for outgoing cash. 

​4. For the current year, 2015, enter into the same spreadsheet the total monthly incoming and outgoing cash for January through April.

5. Compare your 2015 incoming monthly cash totals to the prior year you selected.  Is your incoming cash for the first four months of 2015 the same, lower or higher than the same period from the prior year.  If incoming cash was significantly lower, can you determine why it was lower?  Do you see a related decrease in outgoing cash?  If you don't see a related decrease in outgoing cash, you may need to adjust your outgoing cash for the balance of the year to keep positive cash flow for year end.
]]><![CDATA[For the Small Biz Owner - Big Data Explained in 5 Steps:]]>Fri, 16 Oct 2015 17:39:19 GMThttp://www.spolarandassociatesltd.com/resource-center/blog-post-titles-here

BIG DATA IS...

  1. A short story about your business that gives insight into your current business activity as well as helps with decision making for the future.
  2. Information collected on your business from historic and current activity. 
  3. Entered into a document, usually excel spreadsheet software.  Excel can easily create graphs, charts and ratios from data entered into the spreadsheet.
  4. Collected to meet an objective and a story you want told.  Don't collect data just for the sake of data collection alone. 
  5. Limited by only your imagination.  The story and the data collection can cover many different aspects of your business.  Some examples include financial info, operational data, service quality, and customer demographics just to name a few. 
]]><![CDATA[Welcome to our new website! Newsletters and Identity Theft Coming Soon!]]>Thu, 15 Oct 2015 17:56:50 GMThttp://www.spolarandassociatesltd.com/resource-center/welcome-to-our-new-websiteWe are excited to release our new website, and hope that you will find it helpful. Please feel free to browse our pages, and let us know how we can best help you!]]>