What To Do If You Cannot Pay Your Taxes On Time

If you find yourself in a situation where you are unable to pay your tax bill in full on time, the following options will be helpful.

 

1-File on time and pay as much as you can. File on time to avoid a late filing penalty. Pay as much as you can to reduce interest charges and a late payment penalty. You can pay online, by phone, or by check or money order. Visit IRS.gov for electronic payment options.

 

2-Get a loan or use a credit card to pay your tax. The interest and fees charged by a bank or credit card company may be less than the IRS interest and penalties. For credit card options, visit IRS.gov.

 

3-Borrow from a family member, friend or co-worker. It is always possible to ask someone you know to lend you the money to pay your tax bill. To protect all parties, have a formal written loan agreement prepared to avoid potential problems in the future.

 

4-Use the IRS Online Payment Tool. You don't need to wait for the IRS to send you a bill before you ask for a payment plan. You can use the IRS Online Payment Agreement tool at IRS.gov. You can even set up a direct debit agreement. With this type of payment plan, you won't have write a check and mail it each month. It also means you won't miss payments that could lead to more penalties and interest charges.

 

5-File Form 9465, Installment Agreement Request, with your Tax Return. File you tax return on time along with Form 9465 to set up a monthly payment plan with the IRS.

 

BOTTOM LINE:

 

Don't ignore a tax bill. The IRS may take collection action if you ignore your bill. Penalties and interest charges will continue to accrue until your tax bill is paid in full. Contact the IRS right away to talk about your options. If you a suffering a hardship, the IRS will work with you.

 

 

This article was written by Donald M. Scherzi, CPA, CFP, LLC

Mike Lupo, SCORE Counselor

Visit us at: www.scoresouthflorida.net

Life or Death

I recently came across a business article that hit me square in the face. Among other things it said: Business owners failing to put a few hours a week into education can make the difference between “life and death”.  WOW that can be a rude awakening for many small business owners! How about these subjects: Business Strategy; Planning; Financials; Marketing; Sales; Purchasing; Production; Facilities, Personnel; Capital, Contracting; Presentations: and the list can go on. 

 

How about you and your business?

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

New Tax Return Due Dates-Effective for 2016 Tax Returns

There are new filing deadlines applicable to tax returns for tax years beginning after December 31, 2015.

For calendar year taxpayers, these new deadlines will be effective for 2016 tax returns that are due in 2017.

Partnerships: The due date for partnerships to file Form 1065, and Schedule K-1 will move from April 15 to March 15 (or the 15^th day of the 3^rd month after the end of its tax year).

C Corporations: The due date for C Corporations to file Form 1120 will move from March 15 to April 15 (or the 15^th day of the 4^th month after the end of its tax year).

S Corporations: The due date for S Corporations to file Form 1120S, and Schedule K-1 will remain unchanged (due date will be March 15^th, or the 15^th day of the 3^rd month after the end of its tax year).

Individuals: The due date for Individuals to file Form 1040 and Schedule C will remain unchanged (due date will be April 15^th).

^NOTE:

^{An extension of time to file a tax return IS NOT an extension of time to pay any tax due. Failure to pay tax due could result in various IRS penalties and interest charges.}

This article was written by Donald M. Scherzi, CPA, CFP, LLC

Mike Lupo, SCORE Counselor

Visit us at: www.scoresouthflorida.net

Cybersecurity Awareness

Forewarned is Forearmed:

Florida Small Business News reported on Symantec’s 2016 Internet Security Threat Report (ISTR), 

Spear-phishing attacks targeting employees increased by 55 percent in 2015.

Over the last five years, there has been a steady increase in attacks on small businesses. 43 percent of all attacks were targeted at small businesses last year.

Small business owners need to educate their employees on how they can avoid these types of attacks.

A new zero-day vulnerability was discovered.

Zero-day vulnerabilities are security holes in browsers and website plugins that groups exploit before a vendor can be aware of and fix the problem.

The number of zero-day vulnerabilities in 2015 more than doubled, a 125 percent increase from 2014.

There are major security vulnerabilities in three-quarters of popular websites.

Cybercriminals take advantage of vulnerabilities in legitimate websites to infect and scam users. Being wary of security holes while browsing websites—even popular ones—can help your information stay secure.

500 million personal records were stolen or lost.

There were nine mega-breaches in 2015.

Ransomware increased by 35 percent.

In ransomware attacks, hackers usually encrypt stolen data and demand ransom for its release. In 2015 the focus shifted from PCs to smart phones, Mac, and Linux systems. 

Symantec, recommends that companies do not pay ransom when they are attacked because it funds subsequent attacks.

Now you Know!

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

Why ALL Business Owners Must Keep Accurate & Complete Records

As a business owner, there are many reasons your must keep accurate and complete records for your business operations.

1-The IRS Requires Business Owners to Keep Proper Business Records - In order to file timely, accurate, and complete tax returns, the IRS requires all business owners to keep proper business records.

2-Minimize Taxes & Audit Protection - With accurate and complete business records, taxes can be minimized, IRS penalties can be avoided, and the business owner will maximize their chance of success in the event of an IRS Audit.

3-Preparation of Financial Statements - Proper business records let you prepare a complete set of financial statements.           

4-Obtain Financing - Lenders will generally require business owners to provide a complete set of financial statements when applying for a business loan.

4-Monitor Business Operations & Progress - Up to date business records can help a business get started, run efficiently, and grow. Potential problems can be identified early on and opportunities can be taken advantage of.

5-Avoid Potential Legal Issues - Proper business records will help avoid potential problems with both customers and suppliers should a dispute arise.

6-Selling Your Business - Should the time come when you wish to sell your business, buyers will generally want to see prior tax returns and financial statements.

 

This article was written by Donald M. Scherzi, CPA, CFP, LLC

Mike Lupo, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

Businesses Booming for Women

 

A recent article in the Sun Sentinel reported that South Florida ranks First in growth of Women-Led Businesses according to an American Express study.

 

That is good news..

 

Steve Koenig, SCORE Counselor

Visit us at: www.scoresouthflorida.net

 

 

Nondeductable Expenses

 

Certain business expenses are subject to very specific tax rules (and often to misinformation among taxpayers). Below are a few such expenses and the tax rules that apply.

 

Uniforms:

 

For work uniforms to be tax deductible, the clothing must not be suitable for personal use outside the workplace. It doesn't matter that the employer requires the employee to wear the clothing while on the job. If the clothing is suitable for personal use outside the workplace, it is a nondeductible personal expense. Examples of deductible work uniforms would be a police uniform, a firefighter's uniform, and a medical professional's doctor and nurse work scrubs since these are not suitable for personal use outside the workplace.

 

Club Dues:

 

Membership dues paid to various types of clubs (airline, athletic, country, hotel, social, sporting) are not a tax deductible business expenses in and of themselves. Meals and entertainment expenses incurred at the club are deductible business expenses, provided the various rules for meals and entertainment are met by the business owner.

 

Business Gifts:

 

Business gifts to clients, customers, and potential prospects are tax deductible up to a limit of $25 per recipient per year. Any amount in excess of the $25 maximum is a nondeductible business expense.

 

Fines and Penalties:

 

Fines and penalties incurred in a business are not tax deductible.

 

Federal Income Taxes:

 

Federal Income Taxes are not tax deductible.

 

Interest on Car Loans:

 

Interest paid by an “employee” on a car loan is nondeductible personal interest even if the auto is used for business purposes.

 

A “self-employed taxpayer” may claim the interest paid on the business use portion of a car as a deductible business expense.

 

 

This article was written by Donald M. Scherzi, CPA, CFP, LLC

Mike Lupo, SCORE Counselor

Visit us at: www.scoresouthflorida.net