Posted by Administrator Account on 7/21/2015 8:55 AM

mid-year tax checkup 2015We are halfway through 2015 and it’s a good time to make some planning adjustments for tax purposes before year-end. Consider these:

1.       Per the U.S. Supreme Court ruling in June, every state must recognize same-sex marriages. Employers in states that did not previously recognize same-sex marriage should revise state income tax withholding for affected employees and review any other benefit changes per the ruling.

2.       Examine your financials for the first half of the year and ask: Do you/will you have enough cash to pay your estimated tax bill? Should you increase or decrease estimated taxes to avoid underpayment or overpayment?

3.       Do you offer a 401(k) or other qualified retirement plan? Remember to file your 5500 forms by July 31, 2015 for the 2014 calendar-year plan.  (SEPs and SIMPLE-IRAs are exempt)

4.       Meet with your tax advisor for current year and big picture planning. Your advisor can help determine ways to save on your tax bill, clarify any regulation requirements (e.g., tangible property regs, Affordable Care Act), and how to implement any changes before year end. Starting or reviewing your big picture plans now will provide you time for needed budget or business plan adjustments.


Posted by Administrator Account on 7/8/2015 7:32 AM

Ggift taxes iving a cash or other higher-value gift to family or friends is a generous way to share your wealth. However, there are specific federal tax rules you should be aware of before gifting.

  • The IRS defines a gift as “any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.”  Money or money’s worth is considered as Fair Market Value by the IRS under Regulation §20.2031-1.

Posted by Administrator Account on 6/29/2015 12:59 PM

capital gains and lossesWhen you sell a ‘capital asset,’ the sale usually results in a capital gain or loss. A ‘capital asset’ includes most property you own and use for personal or investment purposes.

Here are 10 facts from the IRS on capital gains and losses:

Posted by Administrator Account on 6/17/2015 1:42 PM

summer tax write offsWhile you're enjoying the warmer weather, you can also remain diligent about business and personal tax planning. Take advantage of these summer tax-planning tips:

1: Entertain Top Business Clients
You may be eligible to write off 50% of the cost of business meals and entertainment if you entertain clients before or after a substantial business discussion. For instance, after you hammer out a business deal, you might treat a client to a round of golf and then dinner and drinks at a restaurant. The 50% limit applies to all the qualified expenses, including the amounts you pay for the client, yourself and your significant others.

Posted by Administrator Account on 6/9/2015 9:42 AM

living trusts and willsEach decade of age brings new and different life situations for each of us. Marriage, divorce, children, wealth, and even relocation all affect our financial situation. Revocable living trusts, which allow heirs to avoid expensive and time-consuming probate court proceedings, have become increasingly popular in recent years. But unlike a will, a living trust cannot simply be signed and filed away.


If you have a living trust, or are considering one, keep in mind these seven life events requiring an update to your living trust or will.

 

Posted by Administrator Account on 6/2/2015 8:31 AM

donate-giving-backSlow-moving inventory is easy enough to discount or liquidate, but there's another option that can give you more of a benefit: donate that stock or computer equipment to charity.

A special tax rule lets C corporations take an additional tax break for donating inventory and computer gear to certain charities.

In general, when you donate inventory or property used in your business, your write-off is limited to the cost of the items or property. But under a special provision, corporations are allowed a higher deduction for gifts to organizations that serve the "ill, needy or infants."

In this case, a C corporation can deduct the cost of the donated inventory, plus half the difference between the cost and the selling price. The limit under this provision is a deduction of up to twice the cost of the items. In some cases, the deduction is worth more to a corporation than what could be gained through liquidation or discounting. (S corporations, partnerships and sole proprietorships are limited to a straight cost deduction.)

In addition to the inventory tax break, another law provides similar benefits for donations of computer technology to primary and secondary schools.

For more details about this tax break, contact your Dalby Wendland tax advisor.

Posted by Administrator Account on 5/27/2015 8:50 AM

IRS breachThe IRS announced thieves stole tax information from approximately 100,000 taxpayers using their “Get Transcript” online application.  In response, the IRS will provide free credit monitoring services for those taxpayers whose accounts were accessed. In total, they have identified 200,000 total attempts to access data and will be notifying all of these taxpayers via mail about the incident. For more on this, visit http://www.irs.gov/uac/Newsroom/IRS-Statement-on-the-Get-Transcript-Application.

 

Posted by Administrator Account on 5/21/2015 7:38 AM

Terri Sassano, CPA, CGMATechnology definitely makes our lives easier and more convenient.  With email, texting, internet, computers, smart phones, only to name a few, we have everything we need at our fingertips.  These items allow us ease and convenience for our personal and business lives.  Unfortunately, all of this wonderful and useful technology also provides new opportunities for thieves. 


Terri Sassano, CPA, CGMA
Grand Junction Office

Posted by Administrator Account on 5/14/2015 8:22 AM

health savings accountsThe IRS recently announced inflation-adjusted amounts for Health Savings Accounts (HSAs)  and high deductible health plan (HDHP) minimum deductible amounts and maximum annual out-of-pocket expenses for the 2016 calendar year.

  • The annual HSA contribution limit for self-only coverage under a HDHP is $3,350 and an individual with family coverage is $6,750. (self-only is unchanged from 2015; family is up slightly over 2015)
  • The annual deductible for a HDHP is a minimum of $1,300 for self-only coverage and $2,600 for family coverage. (unchanged from 2015)
  • The annual maximum out-of-pocket expenses (excludes premiums) for a HDHP is $6,550 for self-only coverage and $13,100 for family coverage. (up slightly over 2015)

For eligible individuals, HSAs offer a tax-favorable way to set aside funds (or have their employer do so) to meet future medical needs. Here are the key tax-related elements:


  • contributions you make to an HSA are deductible, within limits,
  • contributions your employer makes aren't taxed to you,
  • earnings on the funds within the HSA are not taxed, and
  • distributions from the HSA to cover qualified medical expenses are not taxed.

In addition, using and HSA as part of your retirement planning strategy may be beneficial. Supplementing tax-free HSA withdrawals with other sources of retirement income might allow you to take less taxable income out of vehicles such as an IRA or 401k, thus allowing you to manage your tax bracket and reduce your overall tax burden.

Consult your trusted Dalby Wendland tax advisor to further discuss the tax aspects and benefits of saving in an HSA.

Grand Junction: (970) 243-1921
Glenwood Springs: (970) 945-8575
Montrose: (970) 249-7701

Posted by Administrator Account on 5/12/2015 8:24 AM

vacation home rental taxes



Many communities in western Colorado have second homeowners in which the home is vacant for most of the year. Renting out your vacation home may help pay its mortgage or bring in some additional income. However, you should know the tax rules when doing so. Here are the basics.

Posted by Administrator Account on 5/7/2015 10:12 AM

chapter 11 bankruptcyIt is unfortunate when individuals and organizations wind up filing for Chapter 11 bankruptcy. Even more so, some of their names will likely appear on your accounts receivable list.


Depending on the details, if you act fast, you may be able to recoup your shipment of goods, or at least part of the money your company is owed. How much can you collect? If you're a secured creditor, the average is 77 cents on the dollar. Unfortunately, unsecured creditors often collect only two cents on the dollar, so whether or not you decide to take action obviously depends on the size of the receivable. Assuming it's enough to pursue, here's what you need to do.

Posted by Administrator Account on 4/29/2015 10:32 AM

amending tax returnsYou may have discovered you made an error after filing your personal tax return. Some errors warrant an amended return, others may be corrected by the IRS with no further action on your part. Here are some basic tips for amending an individual return:

  • You must use Form 1040X to correct your tax return and it must be filed by paper (cannot e-file).
  • Typically the IRS will correct math errors for you. Changes in your filing status, correcting your income, deductions, or credits may require an amended return.
  • Don’t sweat it if you forgot to attach tax forms or schedules with your return. This circumstance does not require amending your return. The IRS will most likely contact you via mail to request the missing forms.
  • Other IRS forms/schedules you use to support the amended return should also be attached to the Form 1040X.
  • If you are amending more than one tax return, you will need to prepare a separate Form 1040X for each. Mail them in separate envelopes.

If you need help, talk with a professional Dalby Wendland tax preparer or find more information online at www.irs.gov.

Posted by Administrator Account on 4/23/2015 9:51 AM

anti-fraud controls
Many small businesses (defined here as less than 100 employees) will experience some type of fraud over the course of their business’s lifecycle. The Association of Certified Fraud Examiners (ACFE) reports, “many organizations still suffer from an ‘it can’t happen here’ mindset.”

Posted by Administrator Account on 4/14/2015 8:22 AM

estate planning, willsA will is a written document detailing how you want your assets distributed after death. It serves as a blueprint for distributing your assets the way you want. However, there are some things that cannot legally be done in a will. In general, one spouse cannot disinherit another. No matter what a will states, a surviving spouse can elect to claim a certain amount of a deceased spouse's estate, which is determined by state law.

Posted by Administrator Account on 4/9/2015 7:25 AM

tax records retentionBefore shredding your old tax records, consider what may still be needed in case the IRS ever comes calling.

Read on for some basic guidelines for various tax documents.


Posted by Administrator Account on 4/8/2015 7:45 AM

Top Accounting FirmsDalby, Wendland & Co., P.C., was again honored as a 2015 Top Regional Firm in the “Mountain Region” by Accounting Today. The Mountain Region encompasses Colorado, Idaho, Montana, Utah, and Wyoming. This year, 15 firms made the list and of those, six were in Colorado. Dalby Wendland was the only Colorado firm outside of Denver to be recognized.

Accounting Today reported that services to oil and gas companies and other beneficiaries of the energy boom have helped post above average growth for many firms in this region. Dalby Wendland President Steve Carver said, “Growth and contraction in our local economies related to oil and gas is nothing new to western Colorado. We are seeing increased comfort in business growth and activity across most industry sectors we serve, especially real estate, construction, and health care. Many individuals are also putting their retirement plans back on track with trust and estate tax planning, and business succession planning.”

Carver also spoke on some specific issues the Firm is helping clients with this year, “Continuous complexities in the tax code and legislative rulings, like the Affordable Care Act and Tangible Property Regulations, are significantly altering the internal capabilities of businesses and organizations to respond. We are seeing increased involvement and consulting with our clients just to stay on top of the current regulatory environment and compliance requirements.” 

Posted by Administrator Account on 4/2/2015 8:28 AM

deducting moving expenses
If you move because of your job, you may be able to deduct the cost of the move on your tax return. In order to deduct moving expenses, your move must meet three requirements. Read on for write-off rules and which items may qualify for a deduction...

Posted by Administrator Account on 3/26/2015 9:29 AM

Chris West, CPAYou have worked hard, lived below your means and have now accumulated some hard-earned savings.  What is the most effective savings vehicle to use?  Should you fund your IRA, your 401k plan at work or use a Health Savings Account (HSA)?  Most people don’t think about an HSA as an alternative to an IRA or 401k plan, but it should be considered, if anything, as a savings vehicle to use in conjunction with other types of accounts. I will explain why, but first let’s cover a few of the basics of an HSA.

 

Christopher L. West, CPA
Grand Junction Tax Office

Posted by Administrator Account on 3/19/2015 8:39 AM

Job Hunting and TaxesMany people change their job in the summer. If you look for a new job in the same line of work, you may be able to deduct some of your job hunting costs.

Here are some key tax facts you should know about if you search for a new job:

  • Same Occupation.  Your expenses must be for a job search in your current line of work. You can’t deduct expenses for a job search in a new occupation.

  • Résumé Costs.  You can deduct the cost of preparing and mailing your résumé.

  • Travel Expenses.  If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.

  • Placement Agency. You can deduct some job placement agency fees you pay to look for a job.

  • First Job.  You can’t deduct job search expenses if you’re looking for a job for the first time.

  • Work-Search Break.  You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.

  • Reimbursed Costs.  Reimbursed expenses are not deductible.

  • Schedule A.  You usually deduct your job search expenses on Schedule A, Itemized Deductions. You’ll claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than two percent of your adjusted gross income.

As always, consult your local Dalby Wendland tax professional if you have questions.

Posted by Administrator Account on 3/11/2015 8:21 AM

new business open signStarting your own business can be exciting! In addition to your business plan, you’ll need to consider your federal tax obligations, including income and payroll taxes. Here are five basic tax tips that can help get your business off to a good start.

Posted by Administrator Account on 3/5/2015 11:28 AM
farming and ranching

The IRS defines farming as being in the business of cultivating, operating, or managing a farm for profit, either as owner or tenant. Farms include plantations, ranches, ranges and orchards and farmers may raise livestock, poultry or fish, or grow fruits or vegetables.

If you farm, consider these income and expense points from the IRS for tax time.

Posted by Administrator Account on 2/25/2015 1:20 PM

IRS auditWhat are your chances of being audited? For individuals, it depends on your income. In fiscal year 2013, returns reporting income of under $200,000 stood a 0.88 percent chance of an audit. Those with incomes of $200,000 and more had a 3.26 percent chance. And if your income was $1 million or more, you had a 10.85 percent chance. While audit rates were generally down in 2013 from the previous couple of years, they're still much higher than in earlier years.

While the IRS isn't about to publish a list, there are a number of items that are known to raise the IRS's interest in a return. In addition to income, here's a list of items some tax preparers believe trigger an audit:

Posted by Administrator Account on 2/18/2015 8:24 AM

Business Records RetentionRecords retention is important for businesses and organizations for many reasons including legal disputes, employee issues, and in the case of audits. You should have an established record retention policy for the retention and destruction of documents and other records you maintain. Below are a few guidelines for keeping important business records:

  • Employee earnings: Maintain for at least four years, to meet various state and federal requirements. (However, don't throw away records that might involve unclaimed property, such as a final paycheck not claimed by a former employee.)
  • Employee time cards: Keep for at least three years if your business is subject to the Fair Labor Standards Act (engaged in interstate commerce). It is a best practice for all businesses to keep the files for several years in case questions arise.
  • Personnel records: Retain three years after an employee has been terminated.
  • Employment tax records: Keep four years from the date the tax was due, or the date it was paid -- whichever is longer.
  • Employee business expenses: For travel and transportation expenses (supported by mileage logs), expense reports, and other receipts, keep supporting documents for the three-year statute of limitations.
  • Sales tax returns: State regulations vary. Colorado is four years.
  • Business property: Records used to substantiate the cost and deductions (such as depreciation, amortization and depletion) associated with business property must be maintained to determine the basis and gain (or loss) on the sale. Keep these for as long as you own the asset, plus seven years, according to IRS guidelines.

When the time comes to destroy sensitive documents, remember to do so safely by shredding them.

Posted by Administrator Account on 2/11/2015 10:53 AM

Form 1099-C Cancellation of DebtCancellation of all or part of a debt that is secured by property may occur because of a foreclosure, a repossession, a voluntary return of the property to the lender, abandonment of the property, or a principal residence loan modification.

Typically, if you are liable for a debt that is canceled, forgiven, or discharged, you will receive a Form 1099-C, Cancellation of Debt, and you must include the canceled amount in gross income unless you meet an exclusion or exception. If you receive a Form 1099-C but the creditor is continuing to try to collect the debt, the creditor may not have canceled the debt. You should verify with the creditor which arrangement they mean.

Read on to learn more about which debt cancellations/reductions qualify for inclusion or exclusion in your gross income...


Posted by Administrator Account on 2/5/2015 9:37 AM

taxable incomeQ: Which Income Types are Taxable and Nontaxable?

A: All income is taxable… unless the law specifically excludes it.

It is true that some do not pay taxes, however most of us have income from taxable sources such as wages and tips. Taxable income can also include noncash income from property or services (e.g., both parties in a barter exchange must include the fair market value of goods or services received as income on their tax return).

Here are some types of income not taxable except under certain conditions:

  • Life insurance proceeds paid to you are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.
  • Income from a qualified scholarship is normally not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable. However, amounts you use for room and board are taxable.
  • If you got a state or local income tax refund, the amount may be taxable. You should receive a Form 1099-G from the agency that made the payment to you. You should report any taxable refund you got even if you did not receive Form 1099-G.
  • Gifts and inheritances
  • Child support payments
  • Welfare benefits
  • Damage awards for physical injury or sickness
  • Cash rebates from a dealer or manufacturer for an item you buy
  • Reimbursements for qualified adoption expenses

If you are unsure whether a certain income type is taxable, speak with your tax advisor or visit IRS.org to review Publication 525 for more on this topic.

Posted by Administrator Account on 1/28/2015 9:13 AM

Melissa Hoaglund, CPASince the implementation of the Affordable Care Act (ACA), many small businesses have been intrigued by the possibility they may be able to discontinue offering group health insurance and instead offer their employees a stipend to purchase individual health insurance policies on their own. However, employers and small business owners need to be aware that implementing such a plan after December 31, 2013, could cause the company to be in violation of the ACA market reform requirements. Such a violation under the ACA could subject the company to penalties equal to $100 per day per employee. Ouch!        

Read on to learn more...

Melissa Hoaglund, CPA
Grand Junction Office

Posted by Administrator Account on 1/20/2015 8:53 AM

FAFSA formMany graduating high school seniors and other college applicants will be applying for federal student aid in the next few months using the Free Application for Federal Student Aid (FAFSA) form.  The 2014 tax year, however, may pose some interesting and complicated income calculation challenges, particularly for business owners, with the implementation of the Tangible Property Regulations and issues yet to be resolved with the Affordable Care Act.

As we await further guidance from the IRS on these issues, it may be beneficial to file for extensions of your 2014 tax returns to ensure you receive the best income tax advantages, avoid penalties and report correct income information on your tax returns and FAFSA form.

   Some points to remember regarding the FAFSA form:

Posted by Administrator Account on 1/6/2015 9:18 AM

The IRS recently announced annual inflation adjustments for more than 40 tax provisions, including the tax rate schedules, and other tax changes. Revenue Procedure 2014-61 provides details about these annual adjustments.

The tax items for tax year 2015 of greatest interest to most taxpayers include:

Tax Item

2015

2014

Highest tax rate of 39.6 percent

Affects singles whose income exceeds $413,200 ($464,850 for married taxpayers filing a joint return)

Affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return)

Standard deduction

$6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly. The standard deduction for heads of household rises to $9,250

$6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly. The standard deduction for heads of household rises to $9,100.

Limitation for itemized deductions

Begins with incomes of $258,250 or more ($309,900 for married couples filing jointly).

Begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).

Personal exemption

$4,000

$3,950

Alternative minimum tax exemption

$53,600 ($83,400, for married couples filing jointly)

$52,800 ($82,100 for married couples filing jointly)

Maximum Earned Income Credit

$6,242 for taxpayers filing jointly who have 3 or more qualifying children.

$6,143 for taxpayers filing jointly who have 3 or more qualifying children.

Estates

Decedents who die during 2015 have a basic exclusion amount of $5,430,000.

Decedents who die during 2014 have a basic exclusion amount of $5,340,000.

Gifts to non-U.S. citizen spouse

The exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000.

The exclusion from tax on a gift to a spouse who is not a U.S. citizen is $145,000.

Foreign earned income exclusion

$100,800

$99,200

Annual exclusion for gifts

$14,000

$14,000

Kiddie Tax

The amount used to reduce the net unearned income reported on a child's return that is subject to the Kiddie Tax is $1,050

The amount used to reduce the net unearned income reported on a child's return that is subject to the Kiddie Tax is $1,000.

Flexible spending arrangements (FSAs)

The annual dollar limit on employee contributions to employer-sponsored healthcare FSAs is $2,550.

The annual dollar limit on employee contributions to employer-sponsored healthcare FSAs is $2,500.

Small business health care tax credit

The maximum credit is phased out based on the employer's number of full-time equivalent employees in excess of 10 and the employer's average annual wages in excess of $25,800 for tax year 2015.

The maximum credit is phased out based on the employer's number of full-time equivalent employees in excess of 10 and the employer's average annual wages in excess of $25,400 for tax year 2014.

 

Information and details about these inflation adjustments, including others not listed above, can be found at IRS.gov in  Revenue Procedure 2014-61. As always, consult with your tax professional for guidance and planning to discuss the least tax burden your situation allows.

 

Posted by Administrator Account on 12/23/2014 1:43 PM

IRA remindersIf you have an IRA or may open one soon, there are some key year-end rules that you should know. Here are the top four reminders on IRAs from the IRS:

 

1.  Know the limits.  You can contribute up to a maximum of $5,500 ($6,500 if you are age 50 or older) to a traditional or Roth IRA. If you file a joint return, you and your spouse can each contribute to an IRA even if only one of you has taxable compensation. In some cases, you may need to reduce your deduction for traditional IRA contributions. This rule applies if you or your spouse has a retirement plan at work and your income is above a certain level. You have until April 15, 2015, to make an IRA contribution for 2014.

2.  Avoid excess contributions.  If you contribute more than the IRA limits for 2014, you are subject to a six percent tax on the excess amount. The tax applies each year that the excess amounts remain in your account. You can avoid the tax if you withdraw the excess amounts from your account by the due date of your 2014 tax return (including extensions).

3.  Take required distributions.  If you’re at least age 70½, you must take a required minimum distribution, or RMD, from your traditional IRA. You are not required to take a RMD from your Roth IRA. You normally must take your RMD by Dec. 31, 2014. That deadline is April 1, 2015, if you turned 70½ in 2014. If you have more than one traditional IRA, you figure the RMD separately for each IRA. However, you can withdraw the total amount from one or more of them. If you don’t take your RMD on time you face a 50 percent excise tax on the RMD amount you failed to take out.

4.  Claim the saver’s credit (retirement savings contribution credit). You may qualify for this credit if you contribute to an IRA or retirement plan. The saver’s credit can increase your refund or reduce the tax you owe. The maximum credit is $1,000, or $2,000 for married couples. The credit you receive is often much less, due in part because of the deductions and other credits you may claim.

Posted by Administrator Account on 12/17/2014 10:36 AM

congressJust in time for tax season! Congress passes tax extender legislation through 2014: http://www.journalofaccountancy.com/news/2014/dec/tax-extender-legislation-201411490.html

Posted by Administrator Account on 12/15/2014 10:25 AM

charity tax write offsAs you remember those less fortunate this holiday season, there are a few things to consider if you want to write-off your contributions:

  1. To claim a tax deduction for your gifts, you must itemize your deductions.
  2. You can only deduct gifts you give to qualified charities. You can find qualified groups at irs.gov and search for organizations eligible to receive tax-deductible charitable contributions.
  3. Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return, regardless of the amount of the gift. The statement must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, or bank, credit union and credit card statements. If you give by payroll deductions, you should retain a pay stub, a Form W-2 wage statement or other document from your employer. It must show the total amount withheld for charity, along with the pledge card showing the name of the charity.
  4. Household items include furniture, furnishings, electronics, appliances and linens. If you donate clothing and household items to charity they generally must be in at least good used condition to claim a tax deduction. If you claim a deduction of over $500 for an item it doesn’t have to meet this standard if you include a qualified appraisal of the item with your tax return.
  5. You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements.
  6. You can deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2014. This is true even if you don’t pay the credit card bill until 2015. Also, a check will count for 2014 as long as you mail it in 2014.
  7. Special rules apply if you give a car, boat or airplane to charity. For more information, speak with your tax professional or visit IRS.gov.
Posted by Administrator Account on 12/10/2014 2:38 PM

2015 Standard Mileage RatesThe IRS announced today the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 57.5 cents per mile for business miles driven, up from 56 cents in 2014
  • 23 cents per mile driven for medical or moving purposes, down half a cent from 2014 
  • 14 cents per mile driven in service of charitable organizations
Posted by Administrator Account on 12/4/2014 12:20 PM
Jaime Martinez, CPA

Creating an effective retirement program that meets the needs of employees and owners is a complex issue. Not only are business strategies involved, such as attracting and retaining qualified employees, but a host of complex tax rules are present. To complicate matters even more, there is often a significant need for the business owner to maximize their own savings in preparation for retirement.

While there are many different retirement plan choices out there, there are some specifically designed for small businesses. Here are a few of the more common options to get you started:

 

Jaime Martinez, CPA
Grand Junction Office

Posted by Administrator Account on 12/2/2014 9:48 AM

IRS Form 1099 Reporting ManualRecently, Dalby Wendland professional, Terri Gallegos, CPA, taught an IRS Form 1099 Reporting class in Grand Junction. The seminar, hosted by Lorman Education Services, provided attendees with the latest information on best practices and processes in complying with 1099 filing requirements, forms, and IRS reporting guidelines.

The quick reference manual used in the class is now available for purchase at 50% off for interested persons/businesses. Included in the manual are current copies of the forms, completion information, and due dates. The manual is good through 2015.

For more information, or to purchase the manual, visit, http://www.lorman.com/bookstore/393567MAN?discount_code=R1543511&p=13389.

 

Posted by Administrator Account on 11/6/2014 9:26 AM

QuickBooks 2015If you have not heard yet, QuickBooks 2015 (QB 2015) has a built-in feature that allows Intuit to collect information about you and how you use their product. It’s called the QuickBooks Usage & Analytics Study and they collect your data by tracking your usage online.

While Intuit will most likely use the collected information for marketing and product development purposes, you DO have the option to “opt-out” of being in the study if you prefer.

Posted by Administrator Account on 10/22/2014 9:10 AM

Melissa Hoaglund, CPA

As the need for a college degree has increased, the cost of going to college has also increased.  According to the College Board, for the 2013 - 2014 academic year, the average annual in-state tuition and fees at a public four-year college is $8,893, and the average out-of-state tuition and fees is $22,203.  The average annual tuition and fees at a private nonprofit college is $30,094.  These costs do not include room and board, books or supplies.  Because of this, parents should seriously consider saving towards these costs while their children are young.  Parents may choose from an array of tax-favored savings options.  Here is a rundown of what is available...

Melissa Hoaglund, CPA
Grand Junction Office
Posted by Administrator Account on 10/16/2014 9:02 AM

early retirment tax consequencesThe rules for retirement plans can be complex. Withdrawing money too early from your retirement plan may trigger additional taxes.  Consider these points before you decide to take money prior to reaching to age 59½:

  • If you make a withdrawal, you must report the amount you withdrew to the IRS. You may have to pay income tax as well as an additional 10 percent tax on the amount you withdrew.
  • The additional 10 percent tax does not apply to nontaxable withdrawals. Nontaxable withdrawals include withdrawals of your cost to participate in the plan. Your cost includes contributions that you paid tax on before you put them into the plan.
    • A rollover is a type of nontaxable withdrawal and is a distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. You usually have 60 days to complete a rollover to make it tax-free.
    • There are exceptions to the additional 10 percent tax. Some of the exceptions for retirement plans are different from the rules for IRAS.
  • If you make an early withdrawal, you may need to file additional tax forms with your federal return.

Because everyone’s situation is unique, consult your local DWC tax professional about your tax exposure when looking to retire and withdrawing income from your retirement plan or investments. A certified tax professional can help you plan for the least amount of tax exposure. DWC professionals can also assist with estate and gift tax planning to help protect your assets.

Posted by Administrator Account on 9/30/2014 8:12 AM

medical and dental deductionsIf you plan to claim a deduction for your medical expenses, there are some rules that may affect your tax return. Here’s what you should know:

1. AGI threshold.  The amount of allowable medical expenses you must exceed before you can claim a deduction is 10 percent of your adjusted gross income.

2. Exception for age 65.  The AGI threshold is still 7.5 percent of your AGI if you or your spouse is age 65 or older. This exception will apply through Dec. 31, 2016.                                                                   


Posted by Administrator Account on 9/23/2014 9:13 AM

IRS Form 1099 classDalby, Wendland & Co., P.C. (DWC) is pleased to be a part of an upcoming educational opportunity, IRS Form 1099 Reporting: What You Need to Know, hosted by Lorman Education Services. This continuing education event will take place on Wednesday, October 22nd at the Grand Vista Hotel in Grand Junction. A portion of the agenda will be taught by DWC professional Terri Gallegos, CPA.

This seminar aims to provide attendees with the latest information on best practices and processes in complying with 1099 filing requirements, forms, and IRS reporting guidelines. Attendees can also obtain CPE credits by attending.

A 50% discount is available to DWC clients. Please contact our Grand Junction office at 970-243-1921 to receive the registration discount code.

Space is limited! To learn more, or to sign up, visit https://www.lorman.com/training/393567.

Posted by Administrator Account on 9/23/2014 9:05 AM

Colorado Department of Labor and EmploymentThe Colorado Department of Labor and Employment (CDLE) is requiring all employers to complete a new mandatory Affirmation of Legal Work Status Form for all new hires working in Colorado starting on or after October 1, 2014.

The form should be completed within 20 calendar days of hiring the employee and it should be kept with the hiring documentation/employment documents of that employee for the duration of their employment with that employer.

The CDLE is allowing employers to start using the form as early as September 1, 2014, however, it is required for all employers to start using on October 1, 2014.

For more information or to access the new Mandatory Affirmation Form visit the CDLE website, https://www.colorado.gov/cdle/evr.

Posted by Administrator Account on 9/10/2014 7:45 AM

Lisa Thon-Kollar, CPAOwning commercial or residential rental real estate is a common investment for many Americans.  Most rental properties will produce net positive cash flow.  However, even with net positive cash flow a loss can occur, but in some cases this loss can not be deducted.   

This is because in general a rental activity falls into the category of a "passive" activity. This means that rental losses you incur in a tax year can only be deducted against passive income and not deducted against nonpassive income, such as your wages or investment income.

Continue reading to learn about active participation and its benefits...


Lisa Thon-Kollar, CPA
Grand Junction Office

Posted by Administrator Account on 9/4/2014 8:55 AM

2012 Tax SOI Report Key Points

 

The IRS recently released the 2012 Statistics of Income (SOI) for Individual Income Tax Returns report. The Report provides evidence of an improving national economy.

Key points for the 2012 tax year include:

      • Adjusted gross income (AGI)reported on individual returns increased by $726 billion to  $8.4 trillion—an 8.7% increase over 2011
      • U.S. taxpayers filed 145.9 million individual income tax returns for the 2012 tax year, a decrease of 0.4 million (down 0.3%) from 2011
  • The total tax liability increased $1.3 trillion (up 13%)
  • A few components of AGI showed decreases from 2011 and 2012:
    • Unemployment compensation (down 22.9%)
    • Cancellation of debt (down 9.9%)
    • Taxable interest (down 6.9%)
  • On the other hand, several components showed large increases for 2012:
    • Net capital gain s were up 65.4%
    • Ordinary dividends were up 33.8%
    • Rents, royalties, partnerships, estates, trusts, etc. were up 26.2%

For details and the full report, visit www.irs.gov/pub/irs-soi/12inalcr.pdf.

 
Posted by Administrator Account on 8/20/2014 7:32 AM

earned income tax creditThe IRS has provided the Earned Income Tax Credit for nearly 40 years! This credit was established to help low- to moderate-income workers by giving them a boost to their income by reducing federal tax. Currently, four out of five eligible workers claim EITC.

Because an individual or family’s financial situation can change, it’s recommended you review the EITC eligibility rules each year. You might qualify for EITC even if you didn’t in the past.

Here are some details in qualifying for EITC:

Posted by Administrator Account on 8/13/2014 7:25 AM

fake irs scam alertFake IRS scams are on the upswing again and are being reported across Colorado and the nation. Fraudsters are either calling or emailing individuals and businesses and will either threaten the person/business saying they owe taxes, or they tell the potential victim they are due a tax refund.

Phone scammers are calling with a toll-free number that appears to be from the IRS. They are threatening people with deportation, arrest, having their utilities shut off, or having their driver’s license revoked. The caller is oftentimes insulting or hostile to scare their victims into giving them personal information, including credit/debit/prepaid card numbers. They use fake names, IRS badge numbers, and may even be able to recite the last four digits of a victim’s Social Security number.  

Likewise, legitimate-looking emails are being sent stating individuals or businesses can get a tax refund on their credit/debit/prepaid card. The email asks you to follow a link to solicit personal information and credit card information. DO NOT open any link or attachments as they may contain malicious code that will infect your computer.

The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for PINs, passwords or similar confidential access information for credit card, bank or other financial accounts. You should forward the email to phishing@irs.gov.

If you are unsure as to whether you owe taxes, have tax payment issues, or want to determine if the IRS is trying to contact you regarding a refund, call the IRS direct at 1-800-829-1040. You can also find more information at http://www.irs.gov/uac/Tax-Scams-Consumer-Alerts.

Posted by Administrator Account on 8/12/2014 12:51 PM

home office tax deductions

If you work from home, you should learn the rules for how to claim the home office deduction. This year, the IRS provided a new, simpler option to figure the deduction for business use of your home.

Here are six facts from the IRS about the home office deduction:

Posted by Administrator Account on 8/5/2014 10:17 AM

Foreign Income Reporting, Tax FormsIf you live or work outside of the U.S. or receive income from foreign sources and you are a U.S. citizen or resident, you must report income from all sources within and outside of the U.S. The rules for filing income tax returns are generally the same whether you’re living in the U.S. or abroad.

Here are five IRS tips that U.S. taxpayers with foreign income should know:

Posted by Administrator Account on 7/29/2014 7:35 AM

Dalby, Wendland & Co., P.C. is pleased to announce the following staff promotions. We congratulate these exemplary professionals as they represent our core values of trust, respect, and responsibility in client, employee, and community relationships.

Steve D. Hovland, CPA, Certified Forensic AccountantSteve D. Hovland, CPA, Certified Forensic Accountant
Steve Hovland, a certified public and forensic accountant, is promoted to principal. He brings 13 years of experience in audit and accounting services as well as forensic investigations, litigation support, and single audits. He specializes in several industries including construction, financial institutions, government, non-profit organizations, and employee benefit plans. Steve is a member of the Colorado Society of CPAs, American Institute of CPAs, Financial Managers Society, Healthcare Financial Management Association, and American College of Forensic Examiners Institute. He also serves as treasurer on the boards of Grand Junction Business Incubator and River Technology Corporation, and the finance committee of First Presbyterian Church. He holds a bachelor’s degree from Colorado Mesa University.

Cont'd...

 

Posted by Administrator Account on 7/23/2014 10:19 AM

house sale taxesTo pay or not to pay taxes on capital gains from your home sale can be confusing. If you are selling your home this year, keep these facts in mind come tax time.

  • If you have a capital gain on the sale of your home, you may be able to exclude your gain from tax. This rule may apply if you owned and used it as your main home for at least two out of the five years before the date of sale.
  • There are exceptions to the ownership and use rules. Some exceptions apply to persons with a disability, certain members of the military, and certain government and Peace Corps workers.
  • The most gain you can exclude is $250,000. This limit is $500,000 for joint returns. The Net Investment Income Tax will not apply to the excluded gain.
  • If the gain is not taxable, you may not need to report the sale to the IRS on your tax return.
  • You must report the sale on your tax return if you can’t exclude all or part of the gain. And you must report the sale if you choose not to claim the exclusion. That’s also true if you get Form 1099-S, Proceeds From Real Estate Transactions. If you report the sale you should review the Questions and Answers on the Net Investment Income Tax page on IRS.gov.
  • Generally, you can exclude the gain from the sale of your main home only once every two years.
  • If you own more than one home, you may only exclude the gain on the sale of your main home. Your main home usually is the home that you live in most of the time.
  • If you claimed the first-time homebuyer credit when you bought the home, special rules apply to the sale.
  • If you sell your main home at a loss, you can’t deduct it.

Always consult your tax advisor if you have questions or are unsure as to how your home sale may affect your tax situation.

Posted by Administrator Account on 7/17/2014 7:52 AM

Sarah Fischer, CPA

When an employer advances or reimburses an employee for business expenses, there must be appropriate documentation to support the deduction as a business expense. Otherwise, these types of payments are considered additional wage paid to the employee and thus subject to payroll and income taxes.

The savings from properly structured reimbursement arrangements can have a valuable impact on businesses and their employees. Read on for details of "accountable plans"...

 

Sarah J. Fischer, CPA
Grand Junction Office

Posted by Administrator Account on 7/7/2014 9:55 AM

got investments

Last year, some taxpayers became subject to the Net Investment Income Tax (NIIT) - a new tax for those that have investment income and total yearly income exceeding certain limits. If you have investment income, or are planning future investments, keep these four things in mind...

 

Posted by Administrator Account on 7/1/2014 7:39 AM

PCORI fee deadlineDoes your company maintain a self-insured health plan? If you answered “yes,” you may be required to pay the Affordable Care Act PCORI fee.

Under the Affordable Care Act, insurers of specific health insurance policies and plan sponsors of applicable self-insured health plans are due an annual fee. The fee, which helps fund the Patient-Centered Outcomes Research Institute (PCORI) is required to be reported annually on the second quarter Form 720. Fees due must be paid by July 31st.

Contact your tax advisor for questions, or to see if your self-insured health plan qualifies, how to calculate the fee, and how to report/pay it, visit the PCORI fee page at IRS.gov.

Posted by Administrator Account on 6/25/2014 8:33 AM

is bartering taxableBartering is the trading of one product or service for another. Often there is no exchange of cash. Small businesses sometimes barter to get products or services they need. For example, a plumber might trade plumbing work with a dentist for dental services.

If you barter, you should know that the value of products or services from bartering is taxable income.

1. Barter exchanges.  A barter exchange is an organized marketplace where members barter products or services. Some exchanges operate out of an office and others over the Internet. All barter exchanges are required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions. The exchange must give a copy of the form to its members who barter and file a copy with the IRS.

2. Bartering income.  Barter and trade dollars are the same as real dollars for tax purposes and must be reported on a tax return. Both parties must report as income the fair market value of the product or service they get.

3. Tax implications.  Bartering is taxable in the year it occurs. The tax rules may vary based on the type of bartering that takes place. Barterers may owe income taxes, self-employment taxes, employment taxes or excise taxes on their bartering income.

4. Reporting rules.  How you report bartering on a tax return varies. If you are in a trade or business, you normally report it on Form 1040, Schedule C, Profit or Loss from Business.

The IRS provides information in their Bartering Tax Center in the business section on IRS.gov.

Posted by Administrator Account on 6/19/2014 8:18 AM

Denise Distel, QuickBooks ProAdvisorThe security breach like the one that occurred with Target in December 2013 is another reminder that we are all vulnerable to thieves who will do anything they can to steal your personal information.  The Federal Trade Commission reported that nearly 15 million Americans have been victims of identity theft, and on average, it costs a victim $1,173 and 175 man-hours to get their credit report straightened out.

I recently attended an identity theft webinar presented by Frank Abagnale. You may remember him – he is the real life imposter the best-selling book and movie Catch Me If You Can is based on. A clever fraudster in his younger years, Mr. Abagnale is now one of the world’s most respected authorities on forgery, embezzlement, and secure documents.

As a QuickBooks ProAdvisor working with financials, I found Mr. Abagnale’s presentation very informative. Read on for a few of his recommendations...

 

 

Denise Distel, QuickBooks ProAdvisor
Montrose office

 

Posted by Administrator Account on 6/11/2014 9:31 AM

tip incomeVarious industries today allow their employees to collect tips. If you have tip income, the IRS expects you to report it for taxes. Here are some reminders:

  • Tips are taxable.  You must pay federal income tax on any tips you receive. The value of non-cash tips, such as tickets, passes or other items of value are also subject to income tax.
  • Include all tips on your return.  You must include the total of all tips you received during the year on your income tax return. This includes tips directly from customers, tips added to credit cards and your share of tips received under a tip-splitting agreement with other employees.
  • Report tips to your employer.  If you receive $20 or more in tips in any one month, from any one job, you must report your tips for that month to your employer. The report should only include cash, check, debit and credit card tips you receive. Your employer is required to withhold federal income, Social Security and Medicare taxes on the reported tips. Do not report the value of any noncash tips to your employer. 
  • Keep a daily log of tips.  If you prefer not to keep a hand-written log via notebook, there are various  free smartphone apps available for Android and iPhone users.
Posted by Administrator Account on 6/5/2014 7:45 AM

no dumping employees

Some employers are opting to reimburse employees for the premiums they pay for health insurance—i.e., health insurance through a qualified health plan in the health insurance exchange or outside the exchange —rather than establishing a health insurance plan for its own employees. Known as “dumping,” this strategy has been proposed as an inexpensive way to shift the expense of providing employee health care away from the employer, requiring only that the employer provide its employees with what was assumed would be tax free cash contribution to their employees towards paying their health insurance premiums. While under such arrangements an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation, these arrangements are considered to be group health plans subject to the market reforms provisions under the Affordable Care Act (ACA) and the penalty for failure to meet those provisions.

Read on to learn more about the rules and consequences of this issue... 

Posted by Administrator Account on 6/3/2014 2:49 PM

Colorado FlagIf you have employees, please keep in mind that it is critical to make sure you have all proper employee forms on file.  The Colorado Department of Labor is issuing notices of random audit for compliance with the Colorado Employment Verification Law (§ 8-2-122, C.R.S.).  The notice requests copies of Colorado affirmation forms on file for all current employees as well as copies of forms of identification.  Penalties due for violation of the law may result in fines up to $5,000 for a first offense.

Colorado employers are required to complete an affirmation form for all employees hired on or after January 1, 2007. For additional information on the Colorado Employment Verification Law and for copies of the affirmation form, please visit www.colorado.gov/cdle/evr.

Posted by Administrator Account on 5/13/2014 8:52 AM

home energy tax creditsCertain energy-efficient home improvements may benefit your tax and utility bills. The federal government provides energy tax credits for some improvements.

While the Non-Business Energy Property Credit expired at the end of 2013, you can still utilize the Residential Energy Efficient Property Credit… for now.

Here are the details:

  • This tax credit is 30 percent of the cost of alternative energy equipment installed on or in your home.
  • Qualified equipment includes solar hot water heaters, solar electric equipment and wind turbines.
  • There is no dollar limit on the credit for most types of property. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return.
  • The home must be in the U.S. It does not have to be your main home.
  • This credit is available through 2016.
  • You must file a special form (Form 5695) to claim the credit.

As always, contact your tax professional for questions, including if you can receive state tax credits.

 


Posted by Administrator Account on 5/8/2014 7:44 AM

Sarah Menge, CPA

In today’s modern business environment, technology is a critical tool for production, marketing, accounting, and financial reporting; and the ability to anticipate and react to changing technology needs is essential. Upgrading or changing software can be a time consuming and expensive investment, but there are some ways to ease the transition period and make sure that you select the right product for your business. When upgrading or changing accounting software it’s important to consider the business’ current and expected future needs for financial reporting and the testing and timing of implementing changes. Read on for more details...

 

Sarah L. Menge
Grand Junction Audit Office

Posted by Administrator Account on 4/22/2014 8:32 AM

Spring clean your finances

 

As you declutter and organize your home this spring, consider doing the same for your personal financial statement and important documents.  Doing so can make tax return prep, estate planning, calculating your net worth, and applying for a loan much easier.  Here are some recommendations:

Posted by Administrator Account on 4/15/2014 7:57 AM

tax deadline

TODAY is the deadline to file your taxes, or an extension!  If you are just now finishing up your taxes, make sure to avoid these common errors:

            • Take a close look at the tax tables to be sure you are using the correct column for filing status
            • Review your figures – it is easy to transpose numbers or make math errors
            • Review your forms to be sure you completed all of the appropriate boxes
            • Remember to attach all required forms (i.e., W-2s, etc.) to the front of your return (if filing by paper)
            • Sign and date your forms
            • Double check the routing and account numbers on your form for direct deposit of refunds
  • If you are not e-filing, check IRS.gov or your form instructions to mail your paper return to the correct address
  • Keep a copy of your signed form and all records pertaining to them

For additional information, visit IRS.gov.

Posted by Administrator Account on 4/2/2014 8:00 AM

investment income for childrenTypically, it is required that you pay income tax on investment income, and the same is true for a child who must file a federal tax return (parents/guardian is responsible to file for child if child cannot do themselves). There are special tax rules for certain children with investment income that may affect the tax rate and the way you report the income.

Here are four facts from the IRS that you should know about your child’s investment income:

Posted by Administrator Account on 3/25/2014 9:12 AM

deducting medical and dental expensesThere are some new rules this year for claiming medical and dental expense deductions that may affect your tax return.

Here are eight things you should know:

1. AGI threshold increase.  Starting in 2013, the amount of allowable medical expenses you must exceed before you can claim a deduction is 10 percent of your adjusted gross income (up from 7.5 % in prior years).

2. Temporary exception for age 65.  The AGI threshold is still 7.5 percent of your AGI if you or your spouse is age 65 or older. This exception will apply through Dec. 31, 2016.

3. You must itemize.  You can only claim your medical and dental expenses if you itemize deductions on your federal tax return. You can’t claim these expenses if you take the standard deduction.

Posted by Administrator Account on 3/11/2014 9:30 AM

Chris West, CPAThe IRS and taxpayers have always battled over whether the purchase of tangible property is currently deductible or must be capitalized and recovered through depreciation over time.  The struggle over this often-encountered matter has existed since the inception of the Internal Revenue Code.  The distinction between deductible repairs and capital improvements has been determined largely through case law and is based on facts and circumstances.  The U.S. Supreme Court has even weighed in on the matter.

The IRS has issued final regulations on the matter.  Read on to see how it may affect your business...

 

Christopher L. West, CPA
Grand Junction office

CWest@DalbyCPA.com

Posted by Administrator Account on 3/4/2014 8:52 AM

2014 HSA Maximum Contributions

 

While the true impact and effects of the Affordable Care Act is yet to be seen, more people are turning to a Health Savings Account (HSA) to help offset high-deductible health plan costs. Contributions to the accounts are made on a pre-tax basis. The money can accumulate year after year tax free, and be withdrawn tax free to pay for a variety of medical expenses such as doctor visits, prescriptions, chiropractic care and premiums for long-term-care insurance.

Participating employers can also contribute to accounts, on behalf of their employees.

 

Here are the 2014 limits for individual and family coverage:

 

  • Self-only coverage annual minimum deductible  $ 1,250
  • Self-only coverage maximum out-of-pocket expenses (deductibles, co-payments, and other amounts,
    but not premiums)  $ 6,350        
  • Self-only coverage maximum HSA contribution  $ 3,300 
  • Family coverage annual minimum deductible (family coverage can include a spouse and any
    dependents)  $ 2,500 
  • Family coverage maximum out-of-pocket expenses (deductibles, co-payments, and other amounts,
    but not premiums)  $12,700 
  • Family coverage maximum HSA contribution$ 6,550

For more than 65 years, Dalby, Wendland & Co, P.C. (DWC) has been a leader in the public accounting and business
consulting profession. With Firm offices in Aspen, Glenwood Springs, Grand Junction, Montrose, Rifle, and Telluride,
DWC is the largest public accounting firm headquartered in Western Colorado.

 

Posted by Administrator Account on 2/26/2014 12:39 PM

April 15 tax deadlineThe Personal Exemption is up slightly this year due to inflation adjustments.  The exemption is available for taxpayers and the dependents they claim on their tax returns, and helps to reduce taxable income and the resulting tax bill.

In addition to the Personal Exemption, taxpayers also have available a Standard Deduction.  Taxpayers can claim the Standard Deduction when it is greater than the total of their itemized deductions, such as mortgage interest and property taxes. Here are the standard deductions for 2013 tax filings:

  • Single or Married Filing Separately – $6,100 (up $150)
  • Head of Household – $8,950 (up $250)
  • Married Filing Joint and Qualifying Widow/Widower – $12,200 (up $300)
  • Qualifying Dependent –$1,000 (up $50) OR $350 plus dependent’s earned income up to $6,100  (whichever is greater)

Also new this year, legally married, same-sex couples can benefit by claiming Married Filing Joint status for federal tax purposes, whether or not the couple lives in a jurisdiction that recognizes same-sex marriage.  These couples can also claim Married Filing Joint status for prior years by filing amended returns for years 2010, 2011, and 2012. Due to certain complexities with this new law (sorting out withholdings, pre- and after-tax benefits, refund opportunities, etc.), it is recommended couples seek professional guidance on state and federal tax return preparation.

Some final things to be aware of this filing season… the IRS has guidelines for qualifying children and qualifying relatives who may be claimed as dependents, so dependents who are claimed by another taxpayer are not eligible for a personal exemption. You may, however, qualify for additional tax credits related to your qualified dependents, such as the child and dependent care tax credit.

Posted by Administrator Account on 2/19/2014 3:18 PM
American Care Act

 

With a one-year delay until 2015 in the employer pay-or-play penalty, the availability of small business "SHOP" plans, and the higher standards for health insurance benefits in the individual market, all this might lead business owners and individuals to believe not much change will actually be felt in 2014. Be assured, this is a false notion.

Here is a summary of what key provisions are now in effect...

Posted by Administrator Account on 2/6/2014 8:36 AM

Sales & Use TaxOnline shopping may provide convenience and cost savings at times, however it generally doesn't allow you to avoid paying sales tax. Paying taxes on online purchases is the law in most jurisdictions -- whether it's collected at the time of purchase or later.

It's true that five states (Alaska, Delaware, Montana, New Hampshire and Oregon) don't charge sales or use taxes. This tax-free status applies to in-store and online purchase.

Purchases in the remaining 45 states and the District of Columbia incur combined state and local sales tax rates that generally range from 6 to 10 percent. If you don't pay sales tax at the time of purchase, you're supposed to track your sales-tax-free purchases and pay use tax on those purchases along with your state income tax return.

Use tax applies to businesses and individuals, but many buyers are unaware of (or ignore) it. Some states are reinforcing their collection efforts, however. If you make large, tax-free purchases online, it's increasingly possible that state taxing authorities could find out, audit you and impose back taxes and penalties. 

Posted by Administrator Account on 1/21/2014 8:34 AM

The following table provides some important federal tax information for 2014, as compared with 2013. Some of the dollar amounts change due to inflation. Other amounts are changing due to legislation.


 

Posted by Administrator Account on 1/15/2014 10:19 AM

Chris West, CPAWith the advent of a new year comes the opportunity to critically assess the financial data underlying your business.  As the national and local economies work through the economic recovery, it is critical to make sure you are staying on top of your business finances.  As a small business owner, it is imperative to have sound accounting and financial management which will allow you to focus more time and energy on growing the business and less time and energy worrying about whether or not the numbers are right. 

Following are four simple, time-honored tips every business owner should follow to improve their accounting and financial management skills and, therefore, improve business profitability.

 

Christopher L. West, CPA
Grand Junction office

 

Posted by Administrator Account on 1/8/2014 9:50 AM

2014 Small Business Resolutions

Like many individuals, you might want to make resolutions for your business for the New Year. Here are some considerations:

Inventory fixed assets. Physically tag and record identification numbers for all fixed assets. Missing or damaged items may be revealed when you compare your physical inventory to your computerized fixed asset ledger from your accounting records.

Write off uncollectible accounts and obsolete equipment. Your balance sheet may contain assets that are unlikely to be converted into cash. Write these items off now - you'll have a cleaner balance sheet going forward.

Perform a physical inventory count. This is part of a CPA's required audit procedures. You can do this in-house, hire an outside firm to oversee your inventory counting procedures, or you can ask your CPA to perform its own independent count.   

Evaluate business insurance coverage. The types of coverage that worked last year may be insufficient today.

Obtain a business appraisal. Knowing what your business is worth can guide short- and long-term business strategy decisions, such as accepting a purchase offer, buying out minority shareholders, modifying insurance coverage, filing for bankruptcy or requesting credit lines.

Plan an exit strategy. Every business eventually sells (or liquidates). Exit strategies outline how owners will someday get cash out of the business.

Consult with professional advisers. Accountants and lawyers know the latest developments that affect your local market and industry niche. They can customize a more comprehensive list of administrative tasks to whip your company into shape in 2014 and beyond.

 

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Posted by Administrator Account on 12/19/2013 8:48 AM

Sabrina Hoyt, CPA

Each year, the holiday season opens our hearts and we become more giving. There are so many nonprofit organizations established, how can you choose which one you want to support? First let’s begin with the difference between some of the more common nonprofit types. IRS Publication 557 defines the following tax-exempt status as follows...

 

Sabrina J. Hoyt, CPA
Grand Junction Office

Posted by Administrator Account on 11/21/2013 8:33 AM

Tax Updates

 

Many Dalby Wendland clients will be receiving our annual year-end tax update letters in the mail in the next couple of weeks.  As a preface to the more in-depth information in the letters, here is a “hit list” of new developments the letters will cover that may affect you:

Posted by Administrator Account on 11/5/2013 8:24 AM

Erin Duckworth, CPAAudited financial statements are needed by companies and organizations for various reasons. An audit of a company’s financial statements may be required by an external third-party such as a regulator, lender, or potential investor, or requested internally from either the board of directors or management.

An auditor is engaged to give an opinion as to whether the stated financial position and results of the operations are fairly stated and free from any material misstatement. In addition to the audit opinion there are many other benefits of an audit. 

Read on for tips and benefits of having a financial statement audit.

 

Erin L. Duckworth, CPA
Grand Junction Audit Office

Posted by Administrator Account on 9/24/2013 7:53 AM

Jay T. Sanfield, CPA

When people hear the term accounting, there tends to be an involuntary reaction of the brain to shut down, and the sleep mode is activated.  This is unfortunate because accounting, especially to a small business owner, can actually be very interesting.  It is one of the primary tools by which business owners and other interested parties can gauge the success of their business, as well as identify areas that require attention and need improvement.  To understand accounting, business owners need to have a basic understanding of how the process works (debits and credits) and its results (financial statements).  Read on for what to look for in a good accounting system.

 

Jay T. Stanfield, CPA
Grand Junction Audit office

Posted by Administrator Account on 9/5/2013 11:10 AM

oil and gas wellIf you own land that contains valuable natural resources and you arrange for the development of the resources by means of a lease, there are tax consequences. Being in Western Colorado, we see many clients needing this type of tax guidance. Landowners may enter into complex financial agreements to receive royalty, bonus, or other income in exchange for granting access to the resources on their land, such as natural gas and oil.

Here are some important facts regarding these transactions.

Posted by Administrator Account on 8/22/2013 9:28 AM

business trip tax rulesTaking a business trip outside the U.S.? Learn the tax loopholes to add a bit of personal R & R to your trip.

If your business travels often take you abroad, you may want to add a few extra days to a trip for relaxing and sightseeing.  Keep in mind, however, business travel deductions for foreign travel are different from those for domestic. 

The general rule says you must allocate all your travel expenses –- including transportation costs -- between business and personal days.  Yet, there are two loopholes you may be able to take advantage of that may allow you to deduct all of your foreign transportation expenses.

Here's what you need to know...

 

Posted by Administrator Account on 8/15/2013 7:37 AM

The Grand Junction office is offering one-on-one QuickBooks classes. 

To learn more or sign up, call Michelle at 970-243-1921, or email her at MMeaher@DalbyCPA.com.

QuickBooks classes, Michelle Meagher

 

Posted by Administrator Account on 7/26/2013 9:24 AM

Lisa Thon-KollarHigher education costs are rising fast.  You may be able to turn part of these expenses that you pay for yourself, your spouse, or your dependents into tax savings. You can do this by claiming the American Opportunity tax credit or the Lifetime Learning credit for tuition and related expenses.

The maximum American Opportunity tax credit you can claim is $2,500 per student for the first four years of undergraduate education at an eligible educational institution (The credit is 100% of the first $2,000 of qualifying expenses and 25% of the next $2,000, so the maximum credit of $2,500 is reached when a student has qualifying expenses of $4,000 or more).  Since the limit is per student and not per taxpayer, if you incur qualifying expenses for yourself and two children your credit may be as high as $7,500 ($2,500 × 3).

Lisa Thon-Kollar, CPA

Posted by Administrator Account on 7/26/2013 7:16 AM

Tax CourtIn the first part of our casualty and theft tax court lesson, we outlined a true case of one homeowner’s plight to recoup some of their money given to a general contractor for their home construction project. 

We left the story with the IRS disallowing the homeowner’s reported loss due to the IRS stating the general contractor’s actions were not “theft” as defined under Illinois State Law, and the deductions were not timely.  Let’s pick up with how the Tax Court ruled.

Posted by Administrator Account on 7/24/2013 12:34 PM

tax courtWhen casualty or theft strikes, the law allows businesses and individuals to claim a tax deduction for the resulting loss. For individuals, you can generally deduct the amount of your unreimbursed loss to the extent the loss exceeds 10 percent of your adjusted gross income for the year. Before applying the 10 percent limit, you must subtract $100 for each casualty or theft occurrence.

It is common for the IRS to challenge such deductions, particularly for individuals, on the grounds a theft or casualty has not occurred -- or that it was claimed in the wrong year. This was illustrated in a recent Tax Court case...
Posted by Administrator Account on 7/11/2013 12:01 PM

Jeremy R. Lederer, CPA, CVADalby, Wendland & Co., P.C. is pleased to announce Certified Public Accountant (CPA) Jeremy R. Lederer has successfully completed the certification process with the National Association of Certified Valuators and Analysts (NACVA) to earn his designation of Certified Valuation Analyst (CVA).

In his announcement of Jeremy’s certification, NACVA Chief Executive Officer, Parnell Black, MBA, CPA, CVA, noted, “The designation is an indication to the professional community that Mr. Lederer has met the Associations’ rigorous standards of professionalism, expertise, objectivity, and integrity in the field of business valuation, litigation support, and related consulting disciplines.  He can be proud of the fact that NACVA’s CVA designation is the only valuation credential accredited by the National Commission for Certifying Agencies (NCCA).”

Posted by Administrator Account on 7/9/2013 7:34 AM

wedding rings, DOMA tax Per the Supreme Court's recent decision, same-sex couples who are married and reside in states that recognize same-sex marriages are to be treated as married for federal tax purposes. In some cases, filing amended returns for previous years may result in federal tax refunds.

Tax results of being married are mostly favorable to filing as individuals, with one big exception. Here are the ways that the individual tax situations of some same-sex couples will change in the wake of the Supreme Court rulings.

Posted by Administrator Account on 6/25/2013 8:17 AM

caution IRS tax scamsn 2013The IRS issued its list of the most common tax scams.  Be wary of these common schemes that can happen at any time of the year.

Identity Theft:  ID theft marks the top of the list for 2013.  Oftentimes an ID thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund

Phishing:  Here, scammers send unsolicited email or a fake website to lure you into providing valuable personal and financial information.  The IRS does not initiate contact with taxpayers by email to request personal or financial information.  If you receive a suspicious email that appears to be from the IRS, report it by sending it to phishing@irs.gov

 

Posted by Administrator Account on 6/21/2013 7:29 AM

Katherine Fraser, CPAIf you are considering starting a business or wonder if the current structure of your business is the most advantageous for you and/or your company, consider the following: the business structure you choose will have legal and tax implications.  There are a variety of business structures to consider when determining which structure would best suit your business. 

Read on to learn which structure may benefit you the most and how best to support it with proper management.

Katherine Fraser, CPA
Grand Junction Audit

Posted by Administrator Account on 5/28/2013 2:28 PM

 

Attention businesses!  Stay ahead of monthly federal tax and reporting deadlines via our at-a-glance online calendar. Visit our Resources page, then click on the Federal Tax Calendar link.

Posted by Administrator Account on 5/21/2013 10:53 AM

utensils, tax free mealsWhat constitutes a 100% tax deduction for a tax-free meal versus a 50% tax deduction as an entertainment designation when providing meals to your employees for office meetings?  Here are some tips to help you maximize your tax deductions for required attendance meetings:

Posted by Administrator Account on 5/17/2013 12:13 PM

IRS data book,, IRS audit statsThe IRS has released its annual data book providing statistical data on its fiscal year (FY) 2012 and enforcement activities.  The data provides a map of what the IRS is focusing their resources on. 

We’ve pulled some interesting facts for individual, business, and other enforcement activities. Here we look at other interesting facts relating to IRS filing and enforcement activities:

Posted by Administrator Account on 5/15/2013 8:31 AM

IRS audit flagsThe IRS has released its annual data book providing statistical data on its fiscal year (FY) 2012 and enforcement activities.  The data provides a map of what the IRS is focusing their resources on. 

In our 3-part series, we’ve pulled some interesting facts for individual, business, and other enforcement activities. Part 2 looks at where the IRS is focusing its resources on business returns and they compare to the prior year:

Posted by Administrator Account on 5/14/2013 12:08 PM

Region 10 SBRCRegion 10 Small Business Resource Center (SBRC) and Dalby, Wendland & Co., P.C. (DWC) are partnering to provide QuickBooks classes for the tri-county area.  The classes will be offered in Montrose and Delta throughout May and June.  Details are as follows:

Posted by Administrator Account on 5/13/2013 11:19 AM

IRS AuditThe IRS has released its annual data book providing statistical data on its fiscal year (FY) 2012 activities.  The data provides a map of what the IRS is focusing their resources on. 

In our 3-part series, we’ve pulled some interesting facts for individual and business filings, as well as other enforcement activities. 

Read on here to preview where the IRS is focusing its resources on individual returns and how they compare to the prior year...

Posted by Administrator Account on 5/7/2013 11:31 AM

Sarah Menge, CPAAn employer sponsored 401(k) plan is a great tool to help employees save for the future, but it is important to understand your plan, and play an active role in monitoring your benefits to make sure you achieve your retirement goals.

The first step towards utilizing your 401(k) plan is understanding the key provisions of the plan and how it is managed. Once you have enrolled in the plan, your employer is required to provide you a copy of the Summary Plan Description (SPD), within 90 days. You should read through the SPD to gain an understanding of the main provisions of the plan. If you are unsure about any of the features in your plan, ask your plan manager right away.

Sarah Menge, CPA
Audit, Grand Junction Office

    

 

Posted by Administrator Account on 4/8/2013 8:54 AM

Chris West, CPASo, the deadline for filing your 2012 tax return is fast approaching and you are beginning to feel overwhelmed with the pile of tax documents and receipts sitting on the dining room table. You start to wonder if you will even meet the April 15th deadline. The good news is you are not alone. The IRS says between 25% and 30% of all U.S. taxpayers wait until the last two weeks before the deadline to file their personal income tax returns (or file for an extension). Here are several last minute tax tips that will hopefully make your tax preparation experience much more enjoyable: 

Chris West, CPA
Grand Junction Office

 

Posted by Administrator Account on 4/2/2013 11:00 AM
employees vs contractorsBusinesses have for years attempted to save on payroll taxes by classifying employees as independent contractors.  However, the IRS is aware of this and has recently rolled out a new initiative to identify and correct misclassification of employees.  In those instances where the IRS is successful in “reclassifying” independent contractors as employees, the bill for the employer is substantial: employers have to pay both the employer and employee payroll taxes as well as penalties and interest.

 

The IRS estimates that one in seven U.S. employers is guilty of misclassifying some of its employees, resulting in a loss of more than $4.1 billion a year in tax revenues. 

Posted by Administrator Account on 3/29/2013 9:40 AM

2013 taxes, tax deadineHere we wrap up our three-part series of important information for those just now contemplating 2013 taxes:

Some Things Stay the Same: These Breaks Were Restored

The tax breaks listed below expired at the end of 2011, but the fiscal cliff legislation retroactively restored them for 2012 tax returns (filed in 2013):

Deduction for Higher Education Tuition - This write-off can be as much as $4,000 or $2,000 for higher-income folks.

Option to Deduct State and Local Sales Taxes - If you paid little or no state income tax in 2012, you have the option of instead claiming an itemized deduction for general state and local sales taxes. The deduction is claimed on Schedule A of Form 1040.

 

Posted by Administrator Account on 3/27/2013 7:25 AM

Just starting your taxes?  Read on for Part 2 in our series of important information that may affect your filing outcomes:

 

Special Drill If You Did a 2010 Roth Conversion:

If you were among the many who converted a traditional IRA into a Roth account in 2010, the conversion was treated as a taxable liquidation of your traditional IRA followed by a contribution to the Roth account.

Posted by Administrator Account on 3/25/2013 7:54 AM

tax deadlineThis week we are focusing on those who are just now starting this year's taxes.  In our series of three parts, we highlight some important information you may need to know.

Part 1

The Due Date:

Monday April 15 is the filing deadline for your 2012 Form 1040. Last year, the deadline was Tuesday April 17 because April 15 was a Sunday and Monday April 16 was Emancipation Day, a District of Columbia holiday that postponed the filing deadline for the whole nation.

 

It's okay if your return won't be ready by April 15. You can extend the filing deadline all the way out to October 15 by submitting an extension request to the IRS, using Form 4868, on or before April 15. Your request will be automatically approved.

 

Remember: An extension to file is not an extension to pay. You should pay whatever remaining federal income tax you owe for 2012 with the extension request.

Posted by Administrator Account on 3/20/2013 8:11 AM

IRS, Form 1099-KIn an effort to help close the "tax gap," the IRS has launched a new compliance program targeting the underreporting of income by business taxpayers that receive Form 1099-K information returns from credit card companies and third-party transaction networks.

The IRS will notify certain taxpayers who may have underreported their gross receipts be sending letters and notices. If your business receives a Form 1099-K because it accepts payment cards from customers, you may receive one of these letters.

Posted by Administrator Account on 3/14/2013 2:31 PM
The IRS has extended the time employers who want to claim the work opportunity tax credit (WOTC) have to file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit (Notice 2013-14).

Under the extension, employers who hire a member of a targeted group on or after January 1, 2012, and up to March 31, 2013, will be considered to have timely filed Form 8850 if it is filed with the designated local agency (a state employment security agency established under 29 U.S.C. §§49-49n) by April 29, 2013.

For additional information, contact your local Dalby Wendland tax professional.



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Posted by Administrator Account on 3/13/2013 1:43 PM

U.S. Citizenship and Immigration Services (USCIS) has issued a long-awaited revision of Form I-9, Employment Eligibility Verification.  This new form has grown from one to two pages, while the instructions have expanded from four to seven pages.  The form has a revision date of March 8, 2013, and an expiration date of March 31, 2016, and is available on the APA website at http://info.americanpayroll.org/pdfs/fpi/13c08-fi-9.pdf.