Major Tax Deadlines for February 2014

* February 18 – Deadline for brokers to provide 2013 Forms 1099-B and 1099-S to customers.

* February 28 – Payers must file 2013 information returns (such as 1099s) with the IRS. (Electronic filers have until March 31 to file.)

* February 28 – Employers must send 2013 W-2 copies to the Social Security Administration. (Electronic filers have until March 31 to file.)

Note: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business.

Payroll tax deposits: Employers generally must deposit Form 941 payroll taxes (income tax withheld from employees’ pay and both the employer’s and employees’ share of social security taxes) on either a monthly or semiweekly deposit schedule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less.

* Monthly depositors are required to deposit payroll taxes accumulated within a calendar month by the fifteenth of the following month.

* Semiweekly depositors generally must deposit payroll taxes on Wednesdays or Fridays, depending on when wages are paid.

For more information on tax deadlines that apply to you or your business, contact our office at (630) 665-4440.

Will Your Tax Return Trigger An Audit? Elgin Accountants Weigh In

If you’ve never been audited by the IRS, consider yourself fortunate. Even if you’ve done nothing wrong and your tax return filings have all been done properly, going through an audit by the Internal Revenue Service can be grueling. That’s one reason why our Elgin accountants work closely with both individuals and companies to ensure that potential triggers are avoided and the paperwork is done correctly and filed in a timely manner. But even with the best possible preparation, you may be subjected to an audit at some point because something on your return triggered the government’s curiosity.

Common Audit Triggers

The IRS reviews millions of returns every year looking for signs that an individual or company may be inaccurately reporting income or taking advantage of loopholes. The following are a few common red flags they look for.

Increased Income

If your income suddenly jumps up or your salary passes the $250,000 mark, the IRS will take notice and is more likely to scrutinize your return carefully, particularly if there was a dramatic upturn in your income versus previous years.

Income That Isn’t Salaried

If you are paid basic wages or earn a salary, chances are you won’t be investigated as long as you have the appropriate W-2s filed with your return, but income that comes from freelance or contract work will be scrutinized, so be sure you have all the necessary 1099’s and that you’ve paid the appropriate quarterly taxes.

Questionable Itemized Deductions

If you operate a home business, there are plenty of acceptable deductions you can take, but if your deductions seem high in comparison to your profits, it’s a red flag. Be sure you don’t overstate how much of your house is used solely as a home office and don’t deduct excessive amounts for meals and entertainment. Another deduction that is often questioned is excessive use of a car for business purposes. Talk to Dugan & Lopatka‘s accountants in the Elgin area to determine what the appropriate deduction guidelines are for deducting items like a home office or an automobile you use for business.

Investment Income That’s Not Accounted For

If you receive a 1099 listing how much you made from your investments or even from winning at the casino, you can be sure that the government received the same information. If you forget to report that income, the IRS will be happy to remind you. It’s better to be up front in the first place.

Large Charitable Donations

If you donate anything over $250 to a charity, you’ll need to produce a cancelled check or a dated, signed receipt if you are audited. The higher your charitable donations, particularly relative to your income, the higher your odds of being audited. Non-cash contributions in general are suspect, particularly if they are valued at more than $5000, so be sure you have the item appraised by a professional before donating it.

Healthcare Expenses

Healthcare or medical expenses can be deducted only if they are equal to or greater than 10% of your gross income. If you do have high medical expenses, make sure you keep copies of every receipt, every bill and any other documentation of what you’ve spent. Over-the-counter medications and health club fees are just a few of the items that can’t be included in your deductions, so be sure you confer with one of our accountants in Elgin if you’re considering deducting medical expenses. We can determine what can and can’t be included.

Our Accountants In Elgin Can Help You During An Audit

If you’re worried about the possibility of an audit, it may be time to talk to one of our Elgin accountants at Dugan & Lopatka. Just fill out our simple contact page and one of our accountants will call you.

The IRS Will Never Use eMail to Initiate Contact: Watch for Scams

Criminals are not only filing bogus tax returns using other people’s identification, they are also stealing the “look” of the IRS to phish for additional financial information from taxpayers.

The IRS has made numerous announcements in the past to help protect taxpayers from these scams. It repeats the message that it will never use an e-mail, text message, or social media to initiate a contact about your tax information.

If you receive what looks like an official IRS e-mail, you should forward it to phishing@irs.gov. Do not reply to the sender, and do not open any attachments.

Next Government Shutdown Dates

Early in the morning of October 17, President Obama signed a bill into law reopening the federal government and extending U.S. borrowing authority. But the law contains deadlines that could leave the country facing the same issues again. Here are the important dates in the law –

* December 13, 2013 – Report required from Congressional budget negotiators on how to solve long-term budget issues.

* January 15, 2014 – Date after which federal government funding runs out.

* February 7, 2014 – Debt limit extension expires.

“Tip” or “Service Charge” Rule

Restaurant owners and employees will be affected by an IRS rule going into effect this coming January. The “automatic gratuity” that many restaurants add to the bill for larger parties will be treated as a “service charge” rather than as a “tip.” Service charges are treated as regular wages subject to withholding by the employer. Tips, on the other hand, are reported as income by the restaurant employees receiving them. The ruling is likely to complicate bookkeeping and reporting for both restaurant employees and employers.

Dugan & Lopatka: Beyond Tax Preparation In Naperville, IL

Important Services That Help Dugan & Lopatka Go Beyond Tax Preparation for Businesses In Naperville, IL

Here at Dugan & Lopatka, we often surprised to learn that some accounting firms in Naperville, IL work with clients strictly for tax preparation. Whether it’s to offload a year’s worth of receipts or to carefully go through their annual revenues and expenditures, these particular clients initially assume that our specific usefulness to their business is only relevant until tax season is over. After we’ve completed their tax preparation in Naperville, IL, they think that they won’t need our services again until the next time their tax deadline looms before them.

Tax preparation accounting firm Dugan & Lopatka, CPAs shares a wonderful image of the Naperville carillon in early fall.

Dugan & Lopatka Offers Far More Than Services For Traditional Tax Preparation In Naperville, IL

Our clients tell us that the team at Dugan & Lopatka delivers superior services for traditional tax preparation in Naperville, IL. From annual tax filings to tax audits and everything in between, our team of highly trained and skilled tax accountants has the experience needed to help your business successfully navigate through the tax preparation process. However, it’s important to note that, as a leading accounting firm in Chicago’s suburbs, Dugan & Lopatka offers far more than just high quality tax preparation in Naperville, IL. We also offer an extensive range of specialized core competencies designed to help Naperville business owners position their company for maximum financial growth.

Naperville accountants Dugan & Lopatka, CPAs shares a wonderful image of the Naperville Riverwalk fountain in Summer.

What You Can Expect When You Partner With Dugan & Lopatka

If you’re ready to partner with a team of accountants who specialize of closely-held small and mid-size businesses, the team at Dugan & Lopatka can help. We proudly offer an wide range of services that can mean the difference between your business just getting by or thriving.

Our specialized services include:

Succession/Ownership Transition Planning: Are you at the point in your business life where you’re considering your exit strategy? The team at Dugan & Lopatka can work with you during each phase of your successful plan so you know everything you’ll need for a seamless, stress-free business ownership transition.

Cost Segregation: If you just purchased a building in Naperville, remodeled or built a building, you may be entitled to accelerate the depreciation of the building and reap the tax rewards by doing so through a process called Cost Segregation. If you’re not partnered with a team who understands cost segregation’s specific nuances. Dugan & Lopatka has the expertise and experience you’ll need to get the tax savings out of your building that you’re entitled to.

Business Valuation Services: Having a clear understanding of exactly what your company is worth is important. Dugan & Lopatka can take all the guesswork out of your business valuation.

Bank/Lender Covenants: In today’s tighter banking regulatory environment, the lending rules are constantly evolving leaving debtors overwhelmed with various bank covenants attached to their loans. Partnering with Dugan & Lopatka means that you’ll have a highly skilled team of experts working with you to understand the terms of all your loans and help you monitor your compliance with those terms so can avoid accidently breaking a covenant.

Want to hear more about Dugan & Lopatka’s extensive list of specialized accounting services? Visit our website at http://www.duganlopatka.com today.

Employers Have New Withholding Obligations

Employers have a new withholding obligation

The Medicare tax that employees pay on their wages increases this year from 1.45% to 2.35% on earnings over $200,000 for singles and $250,000 for married couples.

Employers are required to withhold the additional tax from wages exceeding $200,000, regardless of the individual’s marital or filing status. They are not required to inform employees when they begin the additional withholding, nor are they required to match the additional withholding. Employers who fail to do the required withholding may be subject to penalties, in addition to the tax.

 

Don’t Fall for Bogus IRS e-Mails

Don’t fall for bogus IRS e-mails

Crooks wanting to steal your identity are using bogus e-mails and websites designed to look like genuine IRS communications. You might expect the April 15 filing deadline to mark the end of these scams, but they, in fact, are expected to continue for months.

An example of these bogus e-mails: You receive a message confirming IRS receipt of your tax return, but the IRS needs more information to process your return. The e-mail looks official and completely legitimate. But it isn’t. The IRS does NOT contact taxpayers asking for personal and financial information. These e-mails should be deleted immediately. Fake IRS websites are also created by scammers to lure victims into filling out forms providing information that results in identity theft.

Major Tax Deadlines for June 2013

Major Tax Deadlines For June 2013

* June 17 – Second quarter 2013 individual estimated tax is due.

* June 17 – Due date for calendar-year corporations to pay second installment of 2013 estimated tax.

* June 17 – Due date for calendar-year trusts and estates to pay second installment of 2013 estimated tax.

* June 28 – Report on foreign financial assets and accounts (FBAR) must be received by the Treasury Department.

NOTE: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business.

Payroll tax deposits: Employers generally must deposit Form 941 payroll taxes (income tax withheld from employees’ pay and both the employer’s and employees’ share of social security taxes) on either a monthly or semiweekly deposit schedule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less.

* Monthly depositors are required to deposit payroll taxes accumulated within a calendar month by the fifteenth of the following month.

* Semiweekly depositors generally must deposit payroll taxes on Wednesdays or Fridays, depending on when wages are paid.

For more information on tax deadlines that apply to you or your business, contact our office.