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Do you have a complaint about your taxpayer experience? Good news. Now, you can do something about it.
The IRS is partnering with the Mortgage Bankers Association (MBA) to host a design competition to improve the taxpayer experience. After all, if you are required to pay taxes every year, there should be a way to make doing so more enjoyable. The competition is a crowdsourcing challenge, running from April 17 to May 10. Crowdsourcing is a foreign concept to the IRS. Rather than seeking out and hiring specific designers and developers to come up with a system that works, the IRS wants to know what the taxpayers have to say, and what we think might be more useful; hence the MBA's involvement. The competition focuses primarily on the online platform through which taxpayers can view tax information and data, with the intent to allow taxpayers to increase their understanding of personal finance information so as to make more informed decisions. MBA's primary goal is financial literacy and understanding for clients, and helping clients make informed financial decisions, according to MBA president David H. Stevens. The hope is that the collaboration of an organization that specializes in client understanding and crowdsourced points of interest will synthesize a cohesive, easy-to-navigate platform that makes personal finance and tax data accessible and understandable to taxpayers across a wide range of literacy and education levels. Pathways Consulting wants to wish the best of luck to all competitors! May the best design win. If you would like to submit a design, you can do so by clicking here. To view the article published by the IRS, click here.
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The tax deadline is almost here...just a little over two weeks before your return or an extension on your return must be filed. Every year, clients come in nervous about whether they are going to breakeven or end up owing a large sum of money. One way to help you work towards a breakeven (or possibly earning a little bit back!) is to retrieve documentation of charitable donations. According to the IRS Publication 1771: Charitable Contributions Substantiation and Disclosure Requirements, any single charitable donation worth more than $250 requires documentation from the agency to which it was given or a bank record including the charity's name and sum of donation. For non-cash donations, a physical description is required. For multiple donations to the same agency, the donations may be recorded on one annual summary or as individual acknowledgements for each contribution. Charitable organizations typically postmark these annual summaries or individual acknowledgements no later than January 31 following the tax year (i.e., an annual summary for the 2015 tax year would be sent out no later than January 31 of 2016). If you made a donation to a charitable 501(c)3 certified organization during the 2015 tax year and did not receive an acknowledgement, you may want to contact the organization to ensure that your donation was accounted for and can be applied toward your tax return. Unreimbursed business expenses, such as out-of-pocket travel expenses, can also be considered charitable donations.
Another important thing to note is compensation for a donation for more than $250; some organizations may provide you with a good or service in exchange for a large donation, including but not limited to cash, services, property, benefits, or privileges. A donor should make a good faith estimate of the value of this compensation, and reduce his contribution by that amount. For example, if you were to donate $1,000 to any given organization, and receive a compensatory gift worth $200, your deductible donation would be $800. There are three exceptions to this rule: 1. Token Exception: a compensatory gift of "insubstantial" value. The IRS has very specific dollar amounts as to what "insubstantial" means, but a good rule of thumb is a gift that could be ordered in bulk--rubber bracelets, calendars, mugs, buttons or pins, typically bearing the company name or logo. 2. Membership Benefits Exception: benefits included in an annual membership valued at less than $75. This could include free or discounted parking, discounted gift shop or food court purchases, and free or discounted admission. 3. Intangible Religious Benefits Exception: typically admission to a religious event or de minimis tangible benefits. Not sure if your donation falls under one of these categories? Looking for more specific information? You can view the IRS's publication PDF here, or contact a Pathways consultant today! Being a member of the United States Armed Forces can make completing a tax return even more difficult than the average tax return—some income is taxable, some is not taxable; some income is partially taxable due to deployments, types of orders and changes in orders. This particular article deals with combat zone tax provision, as per the Internal Revenue Service regulations.
Combat zone tax provisions are made for service members currently serving on the ground or in the airspace above the following geographical locations:
For more information about specific circumstances, visit the IRS webpage here, or give Pathways Consulting a call! 11 things you and your clients will want to start thinking about for next tax season by accountingtoday.com
Day #11 Tangible Property Regulations These regs caused a number of headaches last tax season. Under the final regs, all costs that facilitate the acquisition or production of such property must be capitalized. Improvements to property that better a unit of property, restore it, or adopt it to a new and different use must also be capitalized. Exceptions: De minimis safe harbor (annual election required); routine maintenance safe harbor; (no election required); per building safe harbor form small businesses (annual election required). 11 things you and your clients will want to start thinking about for next tax season by accountingtoday.com
Day #10 New Filing Deadlines In observance of Emancipation Day on Friday, April 15, 2016, taxpayers will have until April 18, 2016, to file their 2015 individual returns and make their first 2016 estimated tax payment. Taxpayers in Maine and Massachusetts will have until April 19, 2016, to file their returns so they can observe Patriots Day on April 18. 11 things you and your clients will want to start thinking about for next tax season by accountingtoday.com
Day #9 Proposed Salary Threshold for Overtime Pay Under new rules proposed by the Obama administration, the Department of Labor would require most salaried workers earning less than $50,440 annually to be paid 1.5 times their normal pay for time worked beyond 40 hours. This is slated to take effect, if passed, on Jan. 1, 2016. 11 things you and your clients will want to start thinking about for next tax season by accountingtoday.com
Day #8 Trade Legislation Tax Changes The Trade Preferences Extension Act of 2015 contains a number of tax provisions in addition to its trade measures. Taxpayers who exclude foreign earned income under Code Section 911 cannot claim the child tax credit; taxpayers must receive a payee statement (1098-T) before they can claim an American Opportunity, Hope, or Lifetime Learning Credit or take the deduction for qualified tuition and related expenses. This is effective for tax years beginning after the TPEA’s date of enactment. 11 things you and your clients will want to start thinking about for next tax season by accountingtoday.com
Day #7 Supreme Court Ruling on Same-Sex Marriage All states must now recognize all married couples in the same way for state income tax purposes, regardless of gender. This will impact the ability to file join income tax returns, the ability to transfer property to each other tax-free, the ability to leave an estate to the spouse without gift tax implications, and spousal treatment of inherited IRAs. 11 things you and your clients will want to start thinking about for next tax season by accountingtoday.com
Day #6 Extenders Despite efforts to get ahead of schedule, Congress looks likely to pull its usual wait-until-the-last-minute trick for extending things like the Section 179 deduction, the R&D credit, and host of other credits and deductions that expired at the end of 2014. If not extended to cover 2015 before year’s end, this will make tax planning difficult, and result in delays in tax forms and software releases 11 things you and your clients will want to start thinking about for next tax season by accountingtoday.com
Day #5 Increase in Identity Theft Under new policies announced by the IRS, taxpayers may receive a letter when the service stops suspicious tax returns that have indications of involving identity theft but contain legitimate taxpayer’s name and/or Social Security number. The IRS has agreed to reverse its policy and provide identity theft victims with copies of the fraudulent tax return that has been filed under their name by scammers, so they can take the proper steps to secure their personal information. |
AuthorThe Pathways Team Archives
September 2019
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