Author Archives: Pat Michael

January 19, 2017 What You Need to Know About IRS Audits (Mission Valley)

Come join us on Thursday evening, January 19, 2017 from 6:30pm – 8:30pm, in Mission Valley!  You could win free tax prep services!

The Business of Family Child Care:  What You Need to Know About IRS Audits

  • Get valuable tax preparation & record-keeping advice!
  • Learn about allowable deductions that most tax preparers miss!
  • Ask questions – get answers!
YMCA Childcare Resource Service
3333 Camino del Rio South, Suite #400,  San Diego, CA 92108

Cost:  $15.00 per person

Space is limited so register today!  Call now 1-800-481-2151  or go online to mytraining@ymca.org

YOU COULD BE THE WINNER…

FREE 2017 INCOME TAX PREPARATION!

If you attend a YMCA CRS sponsored tax workshop you could be the LUCKY WINNER and receive FREE tax preparation services for 2017 Federal/State 1040/540 Forms.  All other attendees will receive 25% off 2017 tax preparation services.  Presentation & offer provided by R. Patrick Michael, EA and applies to new clients only.

Continue reading

January 14, 2017 Tax & Recordkeeping Workshop (Mission Valley)

Come join us on Saturday morning, January 14, 2017 from 9:00am – 12:00pm, in Mission Valley!  You could win free tax prep services!

The Business of Family Child Care:  Tax & Recordkeeping

  • Get valuable tax preparation & record-keeping advice!
  • Learn about allowable deductions that most tax preparers miss!
  • Ask questions – get answers!
YMCA Childcare Resource Service
3333 Camino del Rio South, Suite #400, San Diego, CA 92108

Cost:  $15.00 per person

Space is limited so register today!  Call now 1-800-481-2151  or go online to mytraining@ymca.org

YOU COULD BE THE WINNER…

FREE 2017 INCOME TAX PREPARATION!

If you attend a YMCA CRS sponsored tax workshop you could be the LUCKY WINNER and receive FREE tax preparation services for 2017 Federal/State 1040/540 Forms.  All other attendees will receive 25% off 2017 tax preparation services.  Presentation & offer provided by R. Patrick Michael, EA and applies to new clients only.

January 5, 2017 Tax & Recordkeeping Workshop (Escondido)

Come join us on Thursday evening, January 5, 2017 from 6:00pm – 9:00pm, in Escondido!  You could win free tax prep services!

The Business of Family Child Care:  Tax & Recordkeeping

  • Get valuable tax preparation & record-keeping advice!
  • Learn about allowable deductions that most tax preparers miss!
  • Ask questions – get answers!

Palomar Family YMCA, 1050 N Broadway, Escondido, CA 92026

Cost:  $15.00 per person

Space is limited so register today!  Call now 1-800-481-2151  or go online to mytraining@ymca.org

 YOU COULD BE THE WINNER…

FREE 2017 INCOME TAX PREPARATION!

If you attend a YMCA CRS sponsored tax workshop you have a chance to be the LUCKY WINNER to receive FREE tax preparation services for 2017 Federal/State 1040/540 Forms.  All other attendees will receive 25% off 2017 tax preparation services.  Presentation & offer provided by R. Patrick Michael, EA and applies to new clients only.

New Jan 31 Deadline for Employers

A new federal law, aimed at making it easier for the Internal Revenue Service (IRS) to detect and prevent refund fraud, will accelerate the W-2 filing deadline for employers to January 31.

For similar reasons, the new law also requires the IRS to hold refunds involving two key refundable tax credits until at least February 15. Here are details on each of these key dates.

The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, includes a new requirement for employers. Employers are now required to file their copies of Form W-2, submitted to the Social Security Administration, by January 31. The new January 31 filing deadline also applies to certain Forms 1099-MISC reporting non-employee compensation such as payments to independent contractors.

In the past, employers typically had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of these forms. In addition, there are changes in requesting an extension to file the Form W-2. Only one 30-day extension to file Form W-2 is available and this extension is not automatic. If an extension is necessary, a Form 8809 Application for Extension of Time to File Information Returnsmust be completed as soon as you know an extension is necessary, but by January 31. Please carefully review the instructions for Form 8809, for more information.

The new accelerated deadline will help the IRS improve its efforts to spot errors on returns filed by taxpayers. Having these W-2s and 1099s earlier will make it easier for the IRS to verify the legitimacy of tax returns and properly issue refunds to taxpayers eligible to receive them. In many instances, this will enable the IRS to release tax refunds more quickly than in the past.

The January 31 deadline has long applied to employers furnishing copies of these forms to their employees and that date remains unchanged.

Some Refunds Delayed Until at Least February 15

Due to the PATH Act change, some people will get their federal refunds a little later. The new law requires the IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until February 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC.

Even with this change, taxpayers should file their returns as they normally do. Whether or not claiming the EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. Though the IRS issues more than nine out of 10 refunds in less than 21 days, some returns are held for further review.

Canceled Debt – Is It Taxable or Not?

 

Canceled DebtIRS Answers,  ‘Canceled Debt – Is It Taxable or Not?’

US-TaxLaws.com has published the most recent writing from the IRS on the subject of canceled debt.

Cancellation of a debt may occur if the creditor cannot collect, or gives up on collecting, the amount you are obligated to pay. 

If you own property subject to a debt, cancellation of the debt also may occur because of a foreclosure, a repossession, a voluntary transfer of the property to the lender, abandonment of the property, or a mortgage modification.

To read the full article.  


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For more than 30 years R. Patrick Michael has been preparing tax returns for individuals, small businesses, cottage industries and in-home child care providers. Pat is a recognized child care provider tax expert, and has been providing educational seminars for child care providers in San Diego County for the YMCA Child Resource Services for more than 18 years. bluehost india coupon Pat and his team have built a following that is comprised of long-term clients, new relationships and word-of-mouth referrals. Child Care Tax Specialists take care of their clients year-round with tax preparation, business entity creation and support, as well as tax planning for retirement, and estate planning.

 

 

Update on Earned Income Credit

Box of ReceiptsIncrease to Earned Income Credit

The earned income credit applies to working taxpayers that have income falling below certain thresholds.  The qualification threshold depends on the number of persons in each family.  The thresholds in 2014 to qualify for this credit include:

  • No Children:  earnings must be less than $14,590, or $20,020 if Married Filing Jointly.
  • One Child:  earnings must be less than $38,511, or $43,941 if Married Filing Jointly.
  • Two Children:  earnings must be less than $43,756, or $49,186 if Married Filing Jointly.
  • Three or More Children:  earnings must be less than $46,997, or $52,427 if Married Filing Jointly.

The tax credits themselves have also increased in 2014, with the maximum received as indicated below:

  • No Children:  $496
  • One Child:  $3,305
  • Two Children:  $5,460
  • Three or More Children:  $6,143

 

Source: http://www.money-zine.com/financial-planning/tax-shelter/income-tax-changes-2

So, You Are Being Audited. Now what?

FINAL October 2014 Audit Seminar FlyerJust finished an article in Entrepreneur Magazine.  It is a columnist sharing his experience and *lessons learned* going through an audit.  He thought he kept good records, but discovered there is always room for improvement.

Every year I give seminars exclusively for the child care provider community through the YMCA Child Resource Services.  The entire purpose of these seminars is to give providers the best tools and tips that will help maximize their deductions, and improve their record keeping skills.This year the Audit Seminar is on Wednesday, October 22, and includes a free workbook handout of our  “Secrets to Survive an IRS Audit”. Continue reading

10 Tips for Beginning Child Care Providers

EARLY CHILDHOOD NEWS PROVIDES LOTS OF GOOD STUFF1 Green Checkmark

Whenever we come across a site that can give our clients additional resources to help them, we are more than happy to share the information. “Early Childhood News is an online resource for Teachers and Parents of children, from infants to age 8 years. Read articles about child development, developmentally appropriate practices, health and safety, behavior and guidance, assessment and much more.

Early ChildHood News

 

Critical IRS Deadlines in the Year 2014 – June through December

300X250 Focus Blurb AdNow is a good time for you to do a mid-year health check on your record keeping and tax status.

Give us a call at 619-589-8680 and let’s set up a time for you to come in.

June 2, 2014

Deadline for financial institutions to send out Form 5498 to report balances in an individual retirement account for the year 2013.

June 16, 2014

2nd quarter estimated tax payments due for the 2014 tax year. (The normal deadline is June 15th, which falls on a Sunday, so the deadline is pushed to the next business day.)

Deadline for US citizens living abroad to file individual tax returns and to pay any tax due. You can request an additional 4-month extension (Form 4868). (You can request an automatic extension by April 15th instead if you want to.) Two tax breaks important for Americans working abroad are the Foreign Earned Income Exclusion and the Foreign Tax Credit, .

June 30, 2014

Deadline to file Foreign Bank Account Report for the year 2013. This report is required if you have over $10,000 (in aggregate) held in foreign bank accounts. Foreign Bank Account Reports have a new form number (FinCEN Form 114) and must be filed electronically. Extensions of time to file are not available.

September 15, 2014

3rd quarter estimated tax payments due for the 2014 tax year.

Final deadline to file corporate tax returns for the year 2013 if an extension was requested. (Forms 1120, 1120A, 1120S).

Final deadline to file trust income tax returns (Form 1041) for the year 2013 if an extension was requested.

Final deadline to file partnership tax returns (Form 1065) for the year 2013 if an extension was requested.

October 1, 2014

Final deadline for self-employed persons or small employers to establish a SIMPLE-IRA for the year 2014.

October 15, 2014

Final deadline to file individual tax returns (with extension). (Forms 1040, 1040A, 1040EZ.)

Last day the IRS will accept an electronically filed tax return for the year 2013. If filing after October 15th, you’ll need to mail in your tax return for processing.

Final deadline to fund a SEP-IRA or solo 401(k) for tax year 2013 if you requested an automatic extension of time to file.

November 2014

Start planning any year-end tax moves.

December 1, 2014

If you are covered by an HSA-compatible health insurance policy as of December 1st, you’ll be eligible to contribute the full amount to a Health Savings Account for the year.

December 31, 2014

Last day to make any tax moves for the year 2014. Last day to set up a solo 401(k) for self-employed persons.

Marital status on this date determines your marital status for the whole year.

Source: Income Tax Deadlines; Critical IRS Deadlines in the Year 2014