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Eligibility for business expense deductions for business-related meals

Earlier this month, the IRS gave guidance to businesses planning to deduct expenses for meals and entertainment which was at first thought to be eliminated by the Tax Cuts and Jobs Act.  Tax professionals may have originally understood this to mean the elimination of any business expense deductions that would be considered to be entertainment, amusement, or recreation related.  Tax professionals and business owners alike should know that this is not necessarily the case when it comes to deducting meals.

Before the new tax overhaul, businesses were able to deduct up 50% of entertainment expenses related to trade or business conduct that have occured before/after a legitimate business discussion or transaction. This has now changed, according to Section 274 of the new tax code.  The new code does not generally allow deductions for expenses related to entertainment, amusement, or recreation.  With that said however, the new act does not mention anything about deducting expenses in relation to business meals.

More specifically, the IRS has confirmed that taxpayers may in fact deduct 50% of expenses in relation to the cost of business meals under certain conditions.  Firstly, the taxpayer or an employee of the taxpayer’s business must be present at the meal. Furthermore, the food and/or beverages must not be considered to be a lavish or extravagant expense.  Meals that are deductible in this sense, can involve business contacts that are either current or potential customers, clients, or consultants.

Through written proposed regulations yet to be published, both the Treasury Department and the IRS plan to make clear what exactly constitutes a deductible meal expense as well as an entertainment expense. Until this happens, Mitch Elbarki of Sigma Tax Pro advises tax professionals “…to keep on the lookout for proposed regulations about business deductions to be posted by IRS…and in the meantime use the information currently issued by the IRS in Notice 2018-76, and advise clients accordingly.”

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Sigma Tax Pro provides information on tax relief offered by the IRS to victims of Hurricane Florence

Sigma Tax Pro sheds light on extended deadlines provided by the IRS for victims of Hurricane Florence in certain locations throughout North Carolina and other affected areas.

Delray Beach, FL (PRUnderground) September 21st, 2018

Areas designated by the Federal Emergency Management Agency for individual assistance because of Hurricane Florence have been granted relief by the IRS to file tax returns and make certain tax payments.  The IRS has granted an extension to taxpayers in these affected areas until January 31st, 2019. This extension applies to parts of North Carolina and some parts across the East Coast.  Sigma Tax Pro also advises that other areas will also receive the same relief if later added to designated disaster areas, as stated by the IRS.

Tax filing and payment deadlines originally set to begin on Sept. 7, 2018 in North Carolina, now have several more months to file.  The relief covers quarterly estimated income tax payments, as well as payroll and excise tax returns that would have otherwise been due this month.  Businesses and taxpayers that have already filed for extensions that would normally run until Sept. 17 and Oct. 15 accordingly, will also be given more time to file.

Hurricane Florence has claimed the lives of an estimated 17 people as of Monday morning.  The storm is still making its mark, moving up the East Coast, increasing the number of recognized disaster areas of which the IRS will provide taxpayer relief.  Taxpayers do not have to contact the IRS to get this extension as disaster areas are automatically recognized by the IRS. Sigma Tax Pro strongly encourages taxpayers andtax professionals alike to visit the IRS website for an updated list of areas eligible for the relief.

For any questions or concerns about the relief, taxpayers can contact the IRS at (866) 562-5227.

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Sigma Tax Pro Reminds Tax Professionals to Close Out Tax Season Correctly

Sigma Tax Pro Reminds Tax Professionals to Close Out Tax Season Correctly

 

Posted:  Apr. 18, 2018, 07:30 AM

DELRAY BEACH, Fla.April 18, 2018 /PRNewswire-iReach/ — As tax season comes to a close this week many offices are in a mad dash to file extensions, while others have already gradually slowed to a stop. For those tax offices that stay open year round, the official end of tax season is nothing more than a date on a calendar, but for the seasonal offices that close their doors after April 17th, this date is a finish line.

For those seasonal offices it is not just as simple as locking the doors and waiting for next January. There are certain things that need to be done to ensure the office remains compliant throughout the off-season, as well as maintains a high level of service for their customers. Circular 230 requires all preparers keep a copy of clients records on file for a minimum of three years. Offices using bank products are required by the banks to keep records on file for five years. Individual states may have certain regulations as well which should be consulted on a case by case basis.

Another step to take for the seasonal offices using bank products is to inform the bank that the office will be closing. Each bank has a slightly different process, but basically what they will do is stop the flow of taxpayer checks to the preparers software, and instead print the checks at their headquarters and mail them out to the taxpayers directly. Since they will be using the taxpayers address on file from the return, it is a good idea for taxpayers to review the list of unfunded clients who have requested a check disbursement option, then reach out to them and verify their address. If it has changed, tax pros can be proactive and complete an Address Update Form, which they can then send to the bank with the appropriate supporting documentation. Ian Gardner, of Sigma Tax Pro reminds tax pros that “Any time you can anticipate a problem and be proactive, rather than reactive, means you’re providing great service for your clients, and they will see that and reward you with referrals and loyalty.”

One final step is to make sure that the contact information for the tax office is checked regularly. This means if there is an office phone that would normally ring inside the office, then it should be forwarded to a personal cell phone, or answering service that is checked regularly. Update the outgoing message on the phone to ensure realistic expectations. For example, if messages are checked once a week on Tuesdays, make that clear so a client doesn’t call on a Wednesday and expect a callback right away. Also be sure to continue to check email, and have that forwarded accordingly.

Sigma Tax Pro provides 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. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

 

Press Contact

Name: Ian Gardner
Phone: 561-450-6422
Email: [email protected]
Website: https://sigmataxpro.com

For the original version on PRWeb visit: http://markets.businessinsider.com/news/stocks/sigma-tax-pro-reminds-tax-professionals-to-close-out-tax-season-correctly-1021493583

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Sigma Tax Pro Urges Tax Professionals To Follow Up Now With Outstanding Accounts

Sigma Tax Pro Urges Tax Professionals To Follow Up Now With Outstanding Accounts

 

Posted: Mar 28, 2018 10:06 AM EDT

Many preparer write off unpaid preparation fees as a loss, but that is not always the case

Delray Beach, FL (PRUnderground) March 28th, 2018

When taxpayers elect to use a refund transfer product, and then the refund is offset by the IRS or garnished for any reason before being funded, most preparers count those prep fees as lost, since they weren’t paid by the bank product. However, that’s not the case and those fees can and should still be collected.

Each professional tax software and refund transfer bank offers reporting to see which clients have funded, and which clients are still unpaid. This is a good time of year to reach out to those clients who have not funded and find out if there is anything that can be done to rectify the situation. Some clients may have gotten a letter from the IRS that scared them and they never reported it, which can be fixed easily and allow the refund to come in which means the prep fees come in as well. Also, if the taxpayer purchased audit assistance then they can contact their audit protection company and they will have specialists that can walk the taxpayer through the case.

It’s also prudent to keep in touch with clients around this time since scammers are very active when they know that the IRS will be sending letters. Often times they will copy the format of correspondence which can be difficult to identify. Ian Gardner, of Sigma Tax Pro reminds preparers that, “You are the one they trust with their taxes and they should know you’re not just there for them one month a year, but even after the season is over.” By making yourself available, clients are more likely to use the knowledge and training of a professional to prevent unwanted scams.

Another reason to attempt to get unfunded clients funded is to raise the preparers funding rate, which is a calculation used by refund transfer banks to determine eligibility for certain programs. In addition to funding rate, banks also consider the amount of prep fees earned by an office, which is increased when additional returns are funded. These programs include pre-season loans, in-season fee assistance, and taxpayer refund advances.

Sigma Tax Pro provides 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. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

 

Press Contact

Name: Ian Gardner
Phone: 561-450-6422
Email: [email protected]
Website: https://sigmataxpro.com

 

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Sigma Tax Pro Urges Tax Preparation Professionals to Prepare for Upcoming IRS Funding

With a large amount of returns containing EITC and ACTC expected to fund shortly, it is important to be prepared

 

DELRAY BEACH, Fla.Feb. 16, 2018 /PRNewswire-iReach/ — After being introduced last tax season, the PATH Act ensures all taxpayer returns containing Earned Income Tax Credit or Additional Child Tax Credit will not be reviewed until February 15th, and funding for these returns is expected to begin around February 27th. The goal is to allow the IRS more time to review the returns and prevent fraud that is sometimes associated with these types of files. That date may still feel far off, but it will be here soon. Every year, tax preparers face the same issues around expected large funding dates, so it is best to expect and prevent those issues.

The largest issue affecting tax preparers using bank products is accounting for the repayment of any pre-season or taxpayer loan programs. Many tax pros forget that all the banks take payment for taxpayer advances from the first available funds, and do not wait for each taxpayer to fund before charging the tax pro for that client. This means EROs can expect to see significantly lower deposit amounts than expected, if not entirely wiped out deposits. Each bank has reporting available on their website to track the total debt, and how much remains after each funding cycle.

Another major that affects clients every year is offset refunds. This occurs when the taxpayer has a past due debt obligation on their account, and either a portion or their whole refund is garnished to pay that debt. This surprise can be mitigated by having the client contact the Treasury Offset Hotline at 800-314-3107. Ian Gardner, of Sigma Tax Pro, reminds tax pros that, “Even if a client’s whole refund is offset, the taxpayer still owes the tax pro their preparation fees for their services. You did the work, make sure you’re paid for it.” Many tax professionals automatically count these funds as lost and end up missing out on available profits.

For additional details about the Upcoming IRS Funding or to learn more about the Sigma Tax Pro software, visit https://sigmataxpro.com.

About Sigma Tax Pro

Sigma Tax Pro provides a full range of essential tax software services for tax professionals. This includes industry leading professional tax 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.

Media Contact: Ian Gardner, Sigma Tax Pro, 561-450-6422, [email protected]

News distributed by PR Newswire iReach: https://ireach.prnewswire.com

For the original version on PRWeb visit: https://www.bizjournals.com/southflorida/prnewswire/press_releases/Florida/2018/02/16/MN16522

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Sigma Tax Pro Advises Tax Preparers To Use Taxpayer Cash Advances This Tax Season

Taxpayer cash advances are a big incentive to bring in new clients, tax professionals must have this option available to ensure they do not lose business to competitors

 

As the IRS delays the funding of returns again this year for millions of American taxpayers, the option of receiving a cash advance on a refund is very attractive. Most of the major players in the tax preparation industry are offering this product including, H&R Block and Jackson Hewitt. Independent tax professionals will want to be able to compete and have their own cash advance available to taxpayers. Fortunately it is quite simple to offer this option and requires tax pros to sign up with an IRS approved refund transfer provider such as TPGRefund AdvantageEPSRepublic Bank or Refundo.

The refund transfer provider will advance the taxpayer anywhere from $500 to $2,500 depending on their underwriting guidelines. Ian Gardner from Sigma Tax Pro notes an important distinction, “These advances are not based on the taxpayer’s credit but on the information submitted in the tax return”. The advance will be given to the taxpayer on debit card or a check. Once the tax refund is funded the IRS transmits the refund to the refund transfer provider who will then pass on the balance of the refund minus the advance to the taxpayer. In the event that the IRS does not fund the refund there is no recourse to the tax professional or the taxpayer.

Many tax professionals already use refund transfer providers as a way to collect their preparation fees directly from the taxpayer’s refund. There are many advantages to working with refund transfer providers including pre-season loans for tax professionals, in-season advances on preparation fees and a variety of disbursement options for taxpayers.

Sigma Tax Pro provides 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. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

For the original version on PRWeb visit: http://www.prweb.com/releases/2018/01/prweb15102478.htm

 

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Sigma Tax Pro Announces That The Funding of Pre-Season Loans Will Begin Shortly

DELRAY BEACH, Fla.–(BUSINESS WIRE)–

Every year thousands of seasonal tax offices rely upon a small loan, usually in December, to help get their office up and running for tax season. This loan can cover anything from paying employees to funding a marketing campaign. Each of the major refund transfer banks offer their own variation, but the idea is the same all around.

The requirements to be approved for one of these loans is based mainly on the number of funded refund transfer products processed by an individual tax office or group in the previous tax season. Additionally, the banks want to check an office’s “funding ratio” which analyzes how many of the submitted refund transfer products actually funded. This means it’s not just about quantity, but more about quality. The third deciding factor is usually the total amount of prep fees that an office received. The reason for this metric is to ensure that the lender will receive back their funds with little risk. Ian Gardner, of Sigma Tax Pro reminds tax professionals that, “The banks aren’t underwriting these loans in the traditional way. Rather, they’re looking at a snapshot of the office to make sure they are going to get their money back, and not risk too much.”

Applying for the loans is simple and easy. If the tax office was using the RT bank the prior year, all they has to do is apply through their banks login portal. If the tax office used a different RT bank than the one through which they are applying in the current year, the new RT bank will normally request some records from the tax office, such as earning reports, and prior year RT reports. Once the requested documents have been submitted and decisioned, money is disbursed automatically via direct deposit. Repayment of these loans is automatic as well, by the RT bank taking a portion of the tax offices incoming preparation fees.

Sigma Tax Pro provides 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. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171129005361/en/

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Sigma Tax Pro Warns That Tax Returns Will Not Be Processed Without Health Coverage

This will be the first tax season where a tax return will not be processed without addressing the Affordable Care Act requirements.

 

Last year, taxpayers were penalized for not having the required health care coverage. They were penalized by experiencing longer than normal delays in processing their refunds, as well as being forced to pay an individual shared responsibility payment if they did not qualify for an exemption. However, this year any return that does not address the ACA requirements will not be processed. Taxpayers can still indicate whether they qualify for an exemption, or have decided to make the individual shared responsibility payment, but they cannot simply skip the question.

While President Trump and fellow Republicans have attempted to repeal the Affordable Care Act, it will still be in place for the 2018 filing season. The IRS have reviewed the law and their stance is that “this process reflects the requirements of the ACA and the IRS’s obligation to administer health care law.” Last year, they would accept returns in which the taxpayer was silent on the issue, and would follow up after filing if needed. Ian Gardner, of Sigma Tax Pro reminds tax pros that “Handling the issue at the time of filing can save you and the taxpayer a significant amount of time and money that would have otherwise been spent attempting to resolve the issue.”

The IRS is still behind on handling this issue from prior years, and in fact didn’t start sending out letters for the 2014 and 2015 season until this past September, in which they requested info from around 130,000 taxpayers. This shows the system as it existed was clearly flawed, so they have taken steps to proactively improve the process. With the delays experienced last year due to the PATH Act, tax professionals need to ensure they’re doing everything they can to get their clients refunds processed as quickly as possible.

Sigma Tax Pro provides 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. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

For the original version on PRWeb visit: http://www.prweb.com/releases/2017/10/prweb14840387.htm

 

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Sigma Tax Pro Warns Summer Doesn’t Mean Scammers Take Time Off

Sigma Tax Pro warns taxpayers that the scammers have recently redoubled their efforts to cheat innocent victims out of their hard earned dollars.

 

In a recent press release from the IRS, taxpayers are warned of a new scam targeting American taxpayers. As described, the scammers call the taxpayers and angrily demand a tax payment be made using a prepaid debit card. What sets this recent scam apart is that the taxpayer is told the IRS has attempted to send them notification via certified letters which have been returned as undeliverable. The culprits then go on to warn the victim that they will be arrested if the payment is not made immediately. They place increased pressure as well by specifically warning the taxpayer not to contact the IRS, their tax preparer, or an attorney before making the payment.

While it may seem obvious that this is a scam to some, many can fall victim to a high pressure call and threat of jail time. IRS Commissioner John Koskinen reminds taxpayers that “People should remember that the first contact they receive from the IRS will not be through a random, threatening phone call.” Ian Gardner, of Sigma Tax Pro also notes that, “While some state offices have outsourced their collection attempts, those private companies tasked with the job have multiple levels of verification available to ensure the taxpayers feel comfortable.”

If any tax preparers are confronted by their clients with issues like this, they can verify through a number of means. If a bank product was used on the return then the bank can help to verify that no refund was received. To verify any calls without the help of a tax professional, taxpayers are urged to consult the Electronic Federal Tax Payment System, which is a free service offered by the Treasury Department for paying taxes. The IRS also reminds taxpayers that since the system is automated, they will not receive any phone calls. The IRS also allows for multiple options for paying an authentic tax bill, and would never be required to use a specific method.

Taxpayers and tax pros alike are reminded to be wary of anyone posing as an IRS agent, and should always report any suspicious activity. If you suspect fraud, contact the Treasury Inspector General for Tax Administration to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.

Sigma Tax Pro provides 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. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

For the original version on PRWeb visit: http://www.prweb.com/releases/tax/software-for-professional/prweb14458454.htm

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Sigma Tax Pro Advises Tax Pros To Check For IRS Validation Letters

The IRS is continuing its battle against identity theft, an issue that has affected tax professionals and taxpayers for some years now. It will begin sending letters in December to some users of the e-Services portal informing them they have to either go online or call the e-Help Desk to validate their identities. The goal is to verify that individual tax professionals’ identities have not been stolen.

Mitch Elbarki, CEO of Sigma Tax Pro advises tax professionals to be on the lookout for these letters, “It’s easy during the pressure of tax season to overlook or put these letters to the side but tax pros must respond immediately to these requests to avoid issues during season.” The IRS suffered a serious breach last year through the online Get Transcript service which was recently restored. They want to avoid any further issues next year and will continue to increase security for this reason.

Sigma Tax Pro provides 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. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.

View source version on businesswire.com:http://www.businesswire.com/news/home/20161209005112/en/