Every year tax law changes ever so slightly. This can affect big payments, what you can and cannot pay on, and goes all the way down to determining how much you can and cannot write off down to the half-cent. As you are preparing for this year's tax season and tax write-offs, you still have to keep 2020 in the back of your mind. The moment you drop off your taxes for 2019, 2020 will be right there ready to become the center of attention.
We are a little over two months into 2020, and inching closer and closer to tax day. How are you feeling? Have you already submitted electronically? Are you still trying to tie up loose ends and gather all of your paperwork? No matter where you are in your tax journey at this moment, it's not hard to admit that tax season can be difficult. It takes time for any size company to gather paperwork and get everything in order, to make sure you have everything to prove your write-offs, and that you're writing off everything you can to hopefully get a good chunk back in return. Just like any tax law, how and what you can write off every year can and does change. It might not be a significant change, but it does indeed change every year. Just like any large or small part of changing tax law, this small dollar and cent change can add up at the end of a fiscal year. You need to stay educated be aware of these changes as best you can. If this is something you can't stay on top of, then please leave it in the hands of a professional. All of us at Pathways Consulting are here to help you with your tax needs in Summerville. Please don't hesitate to contact us!
In this busy and stressful time of tax season, we like to stay as positive as possible, and remind our clients about the incentives taxes can bring to them and their companies. One of these positive factors is reminding our clients of what they can write off every year, and how that can help their company in the long run. One particular and popular write off that has seen some small, but serious, changes is how much in mileage you can write off per mile driven for business use, charitable use, and for medical or moving purposes. In this particular blog, we are going to be discussing the most recent changes in the mileage rate that began on January 1st of this year (2020), as something to look forward to. The mileage rate for the taxes you are currently working on or have already submitted will be a little different from these numbers. But remember, if you haven't already done your taxes, or your tax preparer is still working on them, the 2019 rates are still available and are known by all tax professionals. The importance of this blog is to give all of our clients and future clients something to look forward to and to make sure they are informed of the 2020 tax changes. For some these new milage rates will be a welcome change, for others it might be a little disappointing.
These are the mileage rates for the use of a car, pickup truck, and panel trucks for 2020.
Business use, moving, and medical use saw the biggest changes for 2020. Driving for business went down one half-cent, and driving for medical and moving went down three cents. This might not seem a lot, but if your company has employees driving for hundreds or thousands of miles per year, those half cents or three cents per mile that you can no longer write off can make a difference. But, at least it is still something. The amount that can be written off per mile for charitable reasons did not change between 2019 and 2020. Keep in mind that for 2019 taxes, you still have those whole half cent and three cent differences, so use those to your advantage and don't forget to write them off!
What created and set these new tax rates you might ask? For mileage driven for business reasons, it is determined on the yearly fixed rate of the operation of vehicles. For medical and moving purposes it is based on the variable cost o that tax year. Business owners, please be warned. You can only write off the mileage for five or fewer cars used at one time. If you have more than that, only five of the car's mileage can be written off. Also, if the car has already been claimed under another deduction, then the mileage cannot be claimed as well. It has to be one write off or the other.
While preparing for next year's taxes and planning your write-offs, there are still a few important things that you need to keep in mind. Due to changes from the Tax Cuts and Jobs Acts, taxpayers will not be able to claim a miscellaneous deduction for unreimbursed employee travel expenses any longer. When it comes to the expenses of moving beyond the gas mileage, the only time you can claim moving expenses on your taxes is if you're a member of the military and you are under orders to move. Unless you fit that description, no other write-offs about moving can be included in your taxes.
If it's for your 2019 taxes or your upcoming 2020 taxes, please be very careful and cautious about how and what you're writing off. If this is a grey area for you personally, again, please hire a professional tax preparer to handle this for you. These small changes that happen every year in write-offs are known to them because it's their job to know all of this information. Using a professional tax preparer for any size company could save you more money and get you more in your tax return in the long run. Tax season can be a difficult time, but it doesn't have to be. We are here to give you the best tax service and help in Summerville, and our doors are always open! Keep working hard, and make sure to get your taxes in by April 15th!
Now that Tax Season is officially here, there are so many things on your plate and that of your Tax Preparer. But did you know that there is a very scary potential danger lurking behind the dark doors of the internet that could ruin your life simply by getting access to your tax documents?
Happy February! We are in full swing of Tax Season here in Summerville and have been thoroughly enjoying helping our clients get their taxes prepared and sent off. The IRS has been accepting online tax submissions for over two weeks now, and we are ready for the very busy weeks ahead of us. We are here to help you with all of your tax needs in Summerville, so please don't hesitate to reach out and connect with us so we can help you file appropriately and on time!
Our company, along with many others like us, are in the busiest times of their work year. Tax season can bring the fear of making sure your tax documents are filled out appropriately and on time along with the need of avoiding any penalties and accruing penalties. But the fear of online security attacks on CPA's and Tax Preparers also needs to be added to the list of worries and concerns for everyone this tax season. Cyber crime has sadly become one of the largest and most expensive forms of crimes globally. Banks, shipping companies, medical corporations, and even dating sites have become victims of cyber attacks, causing the leak of some of the most private and personal information that someone can get their hands on to use against the company or to steal someone's identity. It looks like CPA's and Tax Preparer's are starting to inch their way further up the list of those who are attacked most frequently, especially the deeper we head into Tax Season. The reality that Tax Preparers are some of the most attacked and targeted because of the very high profile data they are in charge of is becoming all too familiar. Cyber crime is running rampant through the streets of the internet, and during tax season, the level of crime and danger has become catastrophic.
Why specifically are these cyber criminals going after your CPA's and Tax Preparers? Think about the kinds of information they are privy to and have stored on their hard drives. They have years worth of bank account numbers, social security numbers, years of previous tax returns, your Employee Identification numbers, and plenty of other documents that could lead to your whole life being stolen if taken into the wrong hands. This kind of information is the forbidden candy store that is off-limits to any prying eyes, making it even more appealing to cyber criminals. This kind of information can also be very lucrative for the criminal, as they can use it for blackmail, something they can sell, or simply ruining your credit and stealing your identity. Thankfully this is where the Financial Services Act of 1999 comes into the picture to save you and your Tax Preparers state of mind. This act legally obligated any Tax Preparer to provide protection for their clients' digital documents.
Cyber criminals know that tax season is the most stressful, busy, and difficult times of the year for any Tax Preparer, and they will take advantage of that. As much as we hope this would be common knowledge to our fellow tax preparers, there are still some out there who are not as aware or not as prepared as they should be. Even if cyber attacks have never been an issue for your company or your tax preparer before, that doesn't mean they couldn't be attacked in the future. One of the biggest issues with cyber criminals now is that they are becoming smarter and more dangerous as time goes by. They are starting to figure out how to break in quicker, stronger, and in ways they never have before. Now, many of these attacks can go unnoticed for long periods or go under the radar without ever being caught. No matter the size of a Tax Preparation company, it will be at risk and can still be targeted. To a cyber criminal, any information they can steal is a good opportunity for them, and a horrible loss for you.
We understand how difficult this time of year is for anyone involved in preparing taxes, we are doing it right alongside you. But we could not stress enough that it is past time to take your IT protection seriously. Make sure you are constantly up to date with the programs you use to keep your digital files protected and consider working with a company whose sole job it is to keep you safe from things some software can't even detect. It might seem like overkill, but when it comes to your client's personal information and your reputation as a company, you can't put a price on that! For those looking into working with a Tax Preparation company, make sure to ask about the company's IT security. Do your research and see what protection they have provided their clients. Make sure their track record is strong, and that you feel confident in the protection they offer. Don't be afraid to ask about their security measures. you're handing over your personal information and it needs to stay this way. If they can't provide this information, then they might not be the company for you. We understand that asking these types of questions might be the last thing on your mind during tax season, but asking them and getting a positive response is just as important as filing your tax documents by April 15th!
Be smart this tax season and take your protection seriously. Make sure you are prepared for whatever might come your way. Until next time, we are Pathways Consulting and we are are here for all of your tax needs here in Summerville!
The Pathways Team