Category: NONPROFIT ORGANIZATIONS

November 12th, 2020 by Oscar

Las tarjetas de regalo son un regalo popular y conveniente para todas las ocasiones. También son una herramienta que usan los estafadores para robar dinero a las personas.

Los estafadores suelen atacar a los contribuyentes pidiéndoles que paguen una factura de impuestos falsa con tarjetas de regalo. También pueden usar una cuenta de correo electrónico comprometida para enviar correos electrónicos que solicitan compras de tarjetas de regalo para amigos, familiares o compañeros de trabajo. El IRS les recuerda a los contribuyentes que las tarjetas de regalo son para obsequios, no para pagar impuestos.

Así es como suele ocurrir esta estafa:

  1. La manera más común en que los estafadores solicitan tarjetas de regalo es por teléfono, a través de una estafa en la que se hacen pasar por el gobierno. Sin embargo, también solicitarán tarjetas de regalo al enviar un mensaje de texto, correo electrónico o a través de las redes sociales.
  2. Un estafador que se hace pasar por un agente del IRS llamará al contribuyente o le dejará un mensaje de voz con un número de teléfono informándole que está vinculado a alguna actividad delictiva. Por ejemplo, el estafador le dirá al contribuyente que su identidad ha sido robada y usada para abrir cuentas bancarias falsas.
  3. El estafador amenazará o acosará al contribuyente diciéndole que debe pagar una multa tributaria ficticia.
  4. El estafador le indica al contribuyente que compre tarjetas de regalo en varias tiendas.
  5. Una vez que el contribuyente compra las tarjetas de regalo, el estafador le pedirá al contribuyente que proporcione el número de la tarjeta de regalo y el PIN.

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

September 24th, 2020 by Oscar

Organizations that meet specified requirements under Section 501(c) of the Internal Revenue Code may qualify for tax-exempt status. These include charities, social welfare organizations, civic leagues, social clubs, labor organizations and business leagues.
Most organizations are required to apply for recognition as tax-exempt.

Here are some key things that charities should know about the application process:

  1. Application includes a fee
    The application must be complete. It must also include a user fee.
  2. Step-by-step review process available
    The application process on IRS.gov includes a step-by-step review of what an organization needs to know and what to do in order to apply for tax-exempt status.
  3. Organizations that don’t need to apply
    There are a few types of organizations that do not need to apply for 501(c)(3) status to be tax-exempt. These are churches and their integrated auxiliaries, and also public charities whose annual gross receipts are normally less than $5,000.
  4. Employer identification number required
    An employer identification number is an organization’s account number with the IRS and is required for the organization to apply for tax exempt status. Every tax-exempt organization should have an EIN, regardless of whether the organization has employees. Organizations may apply for an EIN online, by fax or by mail. International applicants may apply by phone.
  5. Timeframe to notify the IRS
    Generally, a charitable organization that is required to apply for recognition of exemption must notify the IRS within 27 months from the date it was formed to be recognized as exempt from formation.
  6. Classification as a private foundation or public charity
    When the agency determines an organization qualifies for exemption under Section 501(c)(3), it will also be classified as a private foundation, unless the organization meets the requirements to be treated as a public charity.
  7. Documents available to the public
    A charitable organization must make certain documents available to the public. These include its approved application for recognition of exemption with all supporting documents and its last three annual information returns.
  8. Requests for documents
  9. The organization must provide copies of these documents upon request. The organization may charge a reasonable fee for reproduction and copying costs. Organizations that fail to comply may face penalties.

Posted in NONPROFIT ORGANIZATIONS

April 9th, 2020 by Oscar

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Who Can Apply

The following entities affected by Coronavirus (COVID-19) may be eligible:

  1. Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
  2. Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of 500 employees, or that meets the SBA industry size standard if more than 500
  3. Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
  4. Sole proprietors, independent contractors, and self-employed persons

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of 1%.

The Paycheck Protection Program will be available through June 30, 2020.

Posted in NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

June 7th, 2019 by Oscar

Although the IRS often finds and corrects errors during processing, there are certain situations in which a taxpayer may need to file an amended return to make a correction. Here are some quick tips for anyone who discovered they made a mistake or forgot to include something on their tax return.

Don’t amend for math errors or missing forms. Taxpayers generally don’t need to file an amended return to correct math errors on their original return. The IRS may correct math or clerical errors on a return and may accept it even if the taxpayer forgot to attach certain tax forms or schedules. The IRS will mail a letter to the taxpayer, if necessary, requesting additional information.

Wait until receiving refund for tax year 2018 before filing. Taxpayers who are due refunds from their original tax year 2018 tax return should wait for the IRS to process the return and they receive the refund before filing Form 1040-X to claim an additional refund. It may take the IRS up to 16 weeks to process amended returns.

File Form 1040-X to amend. Taxpayers must file on paper using Form 1040-X, Amended U.S. Individual Income Tax Return, to correct their tax return. While taxpayers can use software to prepare Form 1040-X, they can’t file Form 1040-X electronically. Taxpayers should indicate the year of the original return and explain all changes made by attaching any forms or schedules. Taxpayers then sign and mail the Form 1040-X to the address listed in the instructions. Taxpayers filing Form 1040-X in response to an IRS letter should mail it to the address shown on the letter.

Amend to correct errors. Taxpayers should correct their return if they find that they should have claimed a different filing status or didn’t report some income. Taxpayers who claimed deductions or credits they shouldn’t have claimed or didn’t claim deductions or credits they could have claimed may need to file an amended return.   Changes made on a federal return may also affect state taxes. The taxpayer should contact the state tax agency to see if this is so.

Pay additional tax. Taxpayers who will owe more tax should file Form 1040-X and pay the tax as soon as possible to avoid penalties and interest. They should consider using IRS Direct Pay to pay any tax directly from a checking or savings account for free.

File within three-year time limit. Taxpayers generally have three years from the date they filed their original tax return to file Form 1040-X to claim a refund. They can file it within two years of the date they paid the tax, if that date is later.

Use separate forms if amending more than one tax year. Taxpayers must file a Form 1040-X for each tax year and mail each year’s form in a separate envelope to avoid confusion. They should check the box for the calendar year or enter the other calendar year or fiscal year they are amending. The form’s instructions have the mailing address for the amended return.

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

March 6th, 2019 by Oscar

The IRS warns taxpayers to avoid unethical tax return preparers, known as ghost preparers. By law, anyone who is paid to prepare or assist in preparing federal tax returns must sign the return and include their Preparer Tax Identification Number.

‘Ghost’ preparers, however, avoid signing the tax return. Instead, they often inflate any potential refund and print the return and instruct the taxpayer to sign and mail it to the IRS. Or, for e-filed returns, they prepare but do not digitally sign it as a paid preparer to avoid scrutiny.

Taxpayers can report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS

December 18th, 2017 by Oscar

Employers face a January 31, 2018, due date for filing 2017 Forms W-2 and W-3 with the Social Security Administration. This date applies to both electronic and paper filers. 

Form 1099-MISC is due to the IRS and individuals by January 31 when reporting non-employee compensation payments in box 7. 

Penalties for failure to file correct information returns or furnish correct payee statements have increased and are now subject to inflationary adjustments. These increased penalties are effective for information returns required to be filed after December 31, 2015. 

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

October 18th, 2017 by Oscar

When a hurricane or other disaster strikes, the IRS wants taxpayers to know they can count on the agency for help.

Here are six resources taxpayers can access on IRS.gov:

Tax information about federally declared disasters. Special tax law provisions apply when the federal government declares a major disaster area. This relief can help victims recover financially after a disaster. For instance, the IRS may grant more time to file tax returns and pay tax.

Information about faster refunds. Taxpayers may be able to get a faster refund from losses suffered in a federally-declared disaster area. Taxpayers can claim losses related to the disaster on the tax return for the previous year. They claim the loss by filing an amended return in most cases.

Disaster declarations. Taxpayers can visit the Tax Relief in Disaster Situations page on IRS.gov. This page has a list of the latest disaster declarations and any related disaster tax relief.

Disaster relief resources. The IRS has many resources to help those who provide disaster relief. The Disaster Relief Resources for Charities and Contributors.

Around the Nation. The Around the Nation page provides local tax news, including disaster relief information that applies to specific areas.

Making a plan. Taxpayers can check out the Preparing for a Disaster page on IRS.gov for information about prepping for a possible disaster in the future.

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

September 22nd, 2017 by Oscar

“Best practices” aren’t enforceable rules. They’re simply guidelines businesses commonly follow in one area or another. If you’re in retail, for example, one best practice might be to always ask customers checking out if they found everything they were looking for. This serves two purposes: It conveys a feeling of concern for the customer’s shopping experience, and it may also lead to increased sales.

QuickBooks Online has many best practices, some of which may serve multiple purposes, including these:

    • They keep your company data safe and clean.
    • They provide insight on your financial status.
    • They save time.
    • They can lead you to better relationships with customers and vendors.

Are any or all the following common practices for your business?

Reconcile accounts regularly.

One of QuickBooks Online’s most useful features is its ability to connect to your financial institution’s websites and download cleared transactions. QuickBooks Online also offers tools to help you keep your accounts reconciled online, like you used to do every month when your paper statement came. Reconciling accounts can help you uncover errors. It gives you a truer picture of your cash flow, and it improves the accuracy and timeliness of some reports.

Clean up your lists.

Some lists in QuickBooks Online aren’t overly long. You don’t have to worry about, for example, Payment Methods, Terms, or Classes. Your lists of customers and vendors, products, and services, on the other hand, can grow unwieldy over the years. This means it can take more time than it should to scroll through lists when you’re using those entities in transactions. It also puts unnecessary stress on your company file. If you can’t delete any, at least make them inactive.

Never leave QuickBooks Online open when you leave your work area.

This goes for everyone, even people who work alone and don’t access their company files away from their work areas. The obvious reason is to keep someone else from getting in and authorizing payments, for example, or otherwise compromising your financial information. It also protects the integrity of your data file in case your internet connection suffers some kind of outage.

Keep track of 1099 vendors.

Whether your company uses 10 vendors or a hundred or more, you may have to supply at least some of them with an IRS Form 1099 at about the same time you’re preparing W-2s for employees. Your 1099-related tasks will be much easier if those individuals and/or companies are earmarked. If you think vendors might need 1099s when you create their records in QuickBooks Online, click in the box to the left of Track payments for 1099 in the lower right corner. Not sure? Ask us.

Classify everything with care.

Every time you have to create a record or transaction where categories are involved (i.e., Classes, Customers and Vendors, Territories), check and double-check that you’ve assigned them the correct classification. Errors here can result not only in problems with daily workflow, but your reports will not be accurate. A related best practice: Create a meaningful group of Classes, and use them faithfully. They’ll help you make better business decisions.

View reports on a regular basis.

There are some advanced financial reports in QuickBooks Online that we should be creating for you on a regular basis, either monthly or quarterly. These include Profit and Loss, Balance Sheet, and Statement of Cash Flows. The mechanics of creating them aren’t difficult, but analyzing them is. You should be running reports on your own at frequencies that you think would be helpful, like A/R Aging Detail, Unpaid Bills, and Sales by Class Detail.

If you’ve been using QuickBooks Online for a while, you could probably come up with your own list of best practices. If you’re new to the site, consider scheduling some time with us to go over more of them. Develop good habits from the start, and there won’t be nearly as much need for troubleshooting down the road.

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

September 7th, 2017 by Oscar

After the devastation of Hurricane Harvey and with the looming threat of Hurricane Irma, IRS has issued a news release offering taxpayers tips on how to prepare for hurricanes, floods, and other disasters.

Specifically, IRS advised taxpayers to:

Create a duplicate set of key documents. Taxpayers should create a duplicate set of documents, such as bank statements, tax returns, identifications, and insurance policies, and keep them in a safe, dry place (i.e., one not likely to be affected by a threatening storm). As an alternative to hard copy, IRS encouraged taxpayers to provide electronic copies of their documents, which can be downloaded to a storage device or burned to a CD.

Document valuables. IRS encouraged taxpayers to photograph or videotape the contents of their homes—especially high-value items—to make it easier to claim any available insurance and tax benefits. This documentation of the home’s contents should similarly be kept in a safe place not likely to be affected by a storm.

Check on fiduciary bonds. Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place, which could protect the employer in the event of default by the payroll service provider.

IRS also noted that, in the case of a federally-declared disaster, affected taxpayers can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

August 10th, 2017 by Oscar

Identity theft happens when someone steals personal information for financial gain. Tax-related identity theft happens when someone uses another person’s stolen Social Security number (SSN) or Employer Identification Number (EIN) to file a tax return to obtain a fraudulent refund.

Many people first find out they are victims of identity theft when they submit their tax returns. That’s because the IRS lets them know someone else already used their SSN to file.

The IRS continues to work hard to stop identity theft with a strategy of prevention, detection and victim assistance. So far, the agency has stopped millions of dollars from getting into the hands of thieves.

Check out these eight tips on how to protect against identity theft:

Taxes. Security. Together. The IRS, the states and the tax industry need everyone’s help. The IRS launched The Taxes. Security. Together. awareness campaign in 2015 to inform people about ways to protect their personal, tax and financial data.

Protect Personal and Financial Records. Taxpayers should not carry their Social Security card in their wallet or purse. They should only provide their Social Security number if it’s necessary. Protect personal information at home and protect personal computers with anti-spam and anti-virus software. Routinely change passwords for online accounts.

Don’t Fall for Scams. Criminals often try to impersonate banks, credit card companies and even the IRS hoping to steal personal data. Learn to recognize and avoid those fake communications. Also, the IRS will not call a taxpayer threatening a lawsuit, arrest or to demand immediate payment. Beware of threatening phone calls from someone claiming to be from the IRS.

Report Tax-Related ID Theft. Here’s what taxpayers should do if they cannot e-file their return because someone already filed using their SSN:

  • File a tax return by paper and pay any taxes owed.
  • File an IRS Form 14039, Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. Include it with the paper tax return and/or attach a police report describing the theft if available.
  • File a report with the Federal Trade Commission using the FTC Complaint Assistant.
  • Contact Social Security Administration at www.ssa.gov and type in “identity theft” in the search box.
  • Contact financial institutions to report the alleged identity theft.
  • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on the affected account.
  • Check with the applicable state tax agency to see if there are additional steps to take at the state level.

IRS Letters. If the IRS identifies a suspicious tax return with a taxpayer’s stolen SSN, that taxpayer may receive a letter asking them verify their identity by calling a special number or visiting an IRS Taxpayer Assistance Center.

IP PIN. If a taxpayer is a confirmed ID theft victim, the IRS may issue them an IP PIN. The IP PIN is a unique six-digit number that the taxpayer uses to e-file their tax return. Each year, they will receive an IRS letter with a new IP PIN.

Report Suspicious Activity. If taxpayers suspect or know of an individual or business that is committing tax fraud, they can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

Service Options. Information about tax-related identity theft is available online. The IRS has a special section on IRS.gov devoted to identity theft and information for victims to obtain assistance.

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES