Logo
Categories
Professional Tax Articles

VOLUME 03 – SPRING 2014

refundIRS Has $760 Million in Refunds Available for Taxpayers Who Did Not File in 2010 Advises Sigma Tax Pro

The IRS recently announced it has $760 million for taxpayers who did not file a tax return in 2010, but returns must be filed by April 15, 2014.
A recent announcement by the IRS should be of interest to tax professionals across the United States. IRS commissioner John Koskinen advises any taxpayer who has not filed their return for 2010 to do so before April 15th of this year. He notes that it is often students and part time workers who have not filed their returns. Sigma Tax Pro advises tax professionals to check with their clients to ensure they filed a return for 2010 and if not to file before the upcoming deadline.

The law provides taxpayers with a three year window in which to claim refunds, the 2010 tax return deadline was originally April 15th, 2011 for this reason the window will close this year on April 15th marking exactly three years. Often taxpayers who earned relatively small amounts of money do not realize they may be eligible for a refund. However the IRS estimates that half of the outstanding refunds are more than $571 and there are close to one million refunds still waiting to be claimed. Furthermore there is no penalty for claiming a late refund, many taxpayers may be under the impression that they will incur penalties for filing late.

Tax pros should advise their clients that their 2010 refund checks can be withheld if they have not filed returns for 2011 and 2012. Moreover if the taxpayer has unpaid child support, outstanding student loans or other federal debt the refund can also be withheld. For low income taxpayers the potential loss is even greater as they will be unable to claim any Earned Income Tax Credit (EITC) which can be as much as $5,666.

Sigma Tax Pro provides a full range of essential services for tax professionals.This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.

 


 

NEWS AND TIPS

educationSigma Tax Pro Breaks Down IRS Education Tax Credits

Tax professionals are often challenged by the complex nature of education tax credits such as the American Opportunity Credit and the Lifetime Learning Credit.
Many professional tax preparers have run into challenges in recent years when their clients have claimed education tax credits. The IRS reported in 2011 that 72 per cent of education tax credits were claimed incorrectly. In many cases this was due to the student not having actually attended college at all. However these incorrect claims are often attributable to honest mistakes by the tax professional who does not understand which clients are eligible for which credit and which are not eligible at all.

The American Opportunity Credit is worth up to $2,500 per eligible student and is only available for the first four years at an eligible college or vocational school. This means it cannot be claimed for graduate programs but it can it can be subtracted from your taxes and also give you a refund of up to $1,000 if it’s more than your taxes.It must be for students who are earning a degree or other recognized credential and are going to school at least half-time for at least one academic period that started during the tax year. Finally it can be claimed for the cost of tuition, books and required fees and supplies.

The Lifetime Learning Credit is limited to $2,000 per tax return, per year, no matter how many students qualify.However unlike the American Opportunity Credit it is for all years of higher education and includes classes for learning or improving job skills.Another distinction between the two is that the Lifetime Learning Credit is limited to the amount of your taxes.The Lifetime Learning Credit is also applicable to the cost of tuition and required fees, plus books, supplies and equipment, but you must buy them from the school. The two credits are quite similar but tax pros must know how to distinguish the two in order to provide excellent service to their clients. For more information please consult Publication 970 on the IRS website.

Sigma Tax Pro provides a full range of essential services for tax professionals.This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.


SUPPORT

proupdate-v1-w2014_04Here to help you

Get Full 24/7 Support throughout Tax Season

Sigma Tax Pro fully understands the intense workload that tax professionals are under during tax season. We are committed to supporting our clients through even the most stressful days. Our customer service agents are available to take your calls 24 hours a day, 7 days a week. Whatever your tax preparation software needs are, Sigma Tax Pro has the solution.

Categories
Professional Tax Articles

VOLUME 02 – WINTER 2014

regulations - Wolfgang Filser [Jede Nutzung ist honorarpflichtig. Veroeffentlichung nur gegen Honorarzahlung, Urhebervermerk und Belegexemplar. Die Vergütung muß erfolgen gemäß der gültigen MFM Honorarliste an Sparkasse Augsburg BLZ 720 500 00, Konto 250 320 686. Kontakt: e-Mail: WFilser@aol.com; Telefon: 0821 - 543 4603; Belegexemplar bitte an Wolfgang Filser Altes Kautzengäßchen 10 86152 Augsburg]

Sigma Tax Pro reports IRS attempt to regulate professional tax preparers struck down by Supreme Court

A recent attempt by the IRS to introduce a certification exam, annual fees, and 15 hours of continuing education courses each year has been unsuccessful.

Professional tax preparers can breathe a sigh of relief as a federal appeals court struck down the recent attempt by the IRS to increase regulation on the industry. The IRS had proposed sweeping changes in the requirements to become a registered tax preparer; this would have included an initial certification exam, new annual fees and and an annual requirement to complete 15 hours of continuing education. Unsurprisingly the move was met with significant opposition from tax preparer associations and the federal appeals court decision was met with enthusiasm by hundreds of thousands of tax pros nationwide.

CPAs, enrolled agents and attorneys handling IRS audits have long been subject to onerous requirements from the IRS, however the recent attempt to expand this regulation to anyone preparing tax returns for money has been unpopular. Many tax professionals are small local businesses and the proposed regulations would have made it impossible for many of them to continue to operate. The IRS holds that its objective is to ensure that taxpayers get quality service from tax professionals and the regulations would not have been unreasonable.

John Koskinen, IRS commissioner believes that a further appeal is not forthcoming but they are exploring other options. This may include voluntary credentials for tax preparers as well as legislative remedies. Koskinen also recognized the chances of the new regulations being passed by the Supreme Court were slim from the beginning. He did however reject claims that the increased regulation would have unfairly benefited large tax preparation chains such as H&R Block and Jackson Hewitt.

Sigma Tax Pro provides a full range of essential services for tax professionals.This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. The Audit Assistance program is offered to new and existing clients and can provide them with peace of mind in the event their clients are audited by the IRS.

 

 


 

NEWS AND TIPS

proupdate-v1-w2014_03Sigma Tax Pro explains what tax preparers need to know about IRS guidelines on medical and dental expenses

Recent changes to IRS guidelines on medical and dental expenses can have serious implications for tax preparers and their clients
Many taxpayers are unaware of the complex nature of claiming medical and dental expenses on their tax return. The 2014 tax season has seen the advent of many new regulations and it essential that all professional tax preparers are aware of the new guidelines and their implications for their clients. The commonly held assumption by taxpayers that all medical and dental expenses are deductible is certainly not accurate but even seasoned tax professionals may not be aware of some of the recent changes.

The first and perhaps most important change is that medical and dental expenses must exceed 10 percent of AGI before they can be claimed as a deduction. However this is an exception which states that taxpayers over 65 years of age may continue to use the previous threshold of 7.5 percent. Furthermore these expenses can only be claimed if itemized and cannot be claimed if the taxpayer has already claimed the standard deduction. The IRS also mandates that claimed expenses must have been paid in 2013 and must have been paid for the taxpayer, their spouse or their dependents. Only certain expenses are eligible and for guidance IRS Publication 502 should be consulted. Finally while travel expenses incurred while traveling to receive medical care are eligible double deductions are not.

Finally, perhaps the most obvious regulation relates to claiming medical and dental expenses paid from tax free accounts, this is referred to as double benefit. Such accounts include Health Savings Accounts or Flexible Spending Arrangements, any expenses paid from these accounts are not eligible for deductions. In summary it is essential that tax professionals make their clients aware of the new guidelines to ensure they receive the maximum refund with minimum stress.

Sigma Tax Pro provides a full range of essential services for tax professionals.This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. The Audit Assistance program is offered to new and existing clients and can provide them with peace of mind in the event their clients are audited by the IRS.

 


SUPPORT

proupdate-v1-w2014_04Here to help you

Get Full 24/7 Support throughout Tax Season

Sigma Tax Pro fully understands the intense workload that tax professionals are under during tax season. We are committed to supporting our clients through even the most stressful days. Our customer service agents are available to take your calls 24 hours a day, 7 days a week. Whatever your tax preparation software needs are, Sigma Tax Pro has the solution.

Categories
Professional Tax Articles

VOLUME 01 – WINTER 2014

tax-seasonAnnouncing the official beginning of the 2014 Tax Season

The wait is over for taxpayers and tax professionals alike as tax seasons begins today. Americans waiting for their tax refunds can breathe a sigh of relief.

The delay in the beginning of the 2014 tax season caused by the US government shutdown in 2013 was not as bad as initially anticipated. There was some speculation that the tax season would not begin until early in February but the IRS confirmed in December that the official date would be January 31st. This is only one day later than 2013 tax season which began on January 30th.

Although the official date this year is January 31st many tax professionals have been diligently preparing their clients taxes in anticipation of this date. Professional tax software allows them to fully prepare their clients’ returns ahead of time and then submit them electronically when tax season begins. The IRS has also advised taxpayers that there is no advantage to submitting paper returns and recommends filing electronically.

The deadline for filing taxes is set by statute and will remain April 15th, however taxpayers do have the option to file an extension for up to six months. The IRS has also stepped up its efforts to fight identity theft this tax season and has provided extensive resources to help taxpayers on their website. It is important that all individuals take the threat of identity theft seriously whether they have been victims or not.

Sigma Tax Proprovides a full range of essential services for tax pros.This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. The Audit Assistance program is offered to new and existing clients and can provide them with peace of mind in the event their clients are audited by the IRS.


 

NEWS AND TIPS

60gowithAproTaxpayers still prefer to hire a tax professional than file their own taxes

New data from the IRS shows that around 60% of tax returns are filed by a tax professional. Consumers are still unsure of navigating complex IRS guidelines on their own.

While many tax professionals are concerned about software that allows individuals to file their own taxes, data from the IRS shows the majority of Americans prefer to hire a professional. This even applies to more tech savvy high wage earners as they often have to file more complex tax returns. Moreover as IRS guidelines change each year many taxpayers are concerned there may be new deductions they are missing.

The IRS has taken steps to make it easier for individuals to file their own tax returns with Free File. This allows taxpayers to file their taxes for free if they make less than $58,000 per year. However it is still the minority of Americans who take advantage of this service. This may be in large part due to tax credits that are available for low income families, taxpayers want to be sure they are getting the maximum refund available to them.

It is also the fear of IRS audits that drives many people towards tax professionals when it comes time to file their tax returns. Taxpayers are aware of the onerous requirements of an IRS audit and would rather get professional advice than risk making a mistake that might trigger an audit. This combination of factors means that for the foreseeable future the majority of Americans will continue to rely on professionals rather than using their home computer when tax time comes around.

Sigma Tax Pro provides a full range of essential services for tax professionals. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. The Audit Assistance program is offered to new and existing clients  andcan provide them with peace of mind in the event their clients are audited by the IRS.