Tuesday, June 14, 2016
The Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the Fair Labor Standards Act (FLSA) was announced by the U.S. Department of Labor (DOL) on May 18, 2016 and goes into effect on December 1, 2016.
The Final Rule includes the following changes:
- The weekly salary threshold will double from $455 ($23,660 annually) to $913 ($47,476 annually), for bona fide executive, administrative and professional white-collar exemptions under the FLSA.
- The annual compensation requirement for highly compensated employees (HCE) will increase from $100,000 to $134,000.
- The minimum salary level and the guaranteed annual salary for HCEs will automatically update every three years beginning on January 1, 2020.
- For the first time, the DOL will now permit employers to attribute a small portion of nondiscretionary bonuses, incentive pay and commissions toward the minimum salary level (up to 10 percent). However, these additional payments must be made at least quarterly.
For additional information see:
© 2016 orwcpa
Monday, June 6, 2016
The second quarter estimated tax payments are due to the Internal Revenue Service on or before June 15th. Your payment vouchers should have been included with your tax package or emailed to you with your Federal income tax return. If your tax return has been extended and you would like our assistance in calculating your 2nd quarter estimated tax liability, please do not hesitate to contact us.
© 2016 orwcpa
Friday, June 3, 2016
Reminder that our office is currently observing summer work hours. We are open from 8am to 5pm Monday through Thursday, and 8am to 12pm on Friday. Summer office hours are observed from Memorial Day through the Labor Day holiday.
© 2016 orwcpa
Tuesday, March 1, 2016
WASHINGTON — The Internal Revenue Service renewed a consumer alert for e-mail schemes after seeing an approximate 400 percent surge in phishing and malware incidents so far this tax season.
The emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. E-mails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.
Variations of these scams can be seen via text messages, and the communications are being reported in every section of the country.
“This dramatic jump in these scams comes at the busiest time of tax season,” said IRS Commissioner John Koskinen. “Watch out for fraudsters slipping these official-looking emails into inboxes, trying to confuse people at the very time they work on their taxes. We urge people not to click on these emails.”
This tax season the IRS has observed fraudsters more frequently asking for personal tax information, which could be used to help file false tax returns.
When people click on these email links, they are taken to sites designed to imitate an official-looking website, such as IRS.gov. The sites ask for Social Security numbers and other personal information. The sites also may carry malware, which can infect people’s computers and allow criminals to access your files or track your keystrokes to gain information.
The IRS has seen an increase in reported phishing and malware schemes, including:
•There were 1,026 incidents reported in January, up from 254 from a year earlier.
•The trend continued in February, nearly doubling the reported number of incidents compared to a year ago. In all, 363 incidents were reported from Feb. 1-16, compared to the 201 incidents reported for the entire month of February 2015.
•This year’s 1,389 incidents have already topped the 2014 yearly total of 1,361, and they are halfway to matching the 2015 total of 2,748.
(Numbers provided are for phishing and malware incidents combined.)
“While more attention has focused on the continuing IRS phone scams, we are deeply worried this increase in email schemes threatens more taxpayers,” Koskinen said. “We continue to work cooperatively with our partners on this issue, and we have taken steps to strengthen our processing systems and fraud filters to watch for scam artists trying to use stolen information to file bogus tax returns.”
As the email scams increase, the IRS is working on this issue through the Security Summit initiative with state revenue departments and the tax industry. Many software companies, tax professionals and state revenue departments have seen variations in the schemes.
For example, tax professionals are also reporting phishing scams that are seeking their online credentials to IRS services, for example the IRS Tax Professional PTIN System. Tax professionals are also reporting that many of their clients are seeing the e-mail schemes.
As part of the effort to protect taxpayers, the IRS has teamed up with state revenue departments and the tax industry to make sure taxpayers understand the dangers to their personal and financial data as part of the “Taxes. Security. Together” campaign.
If a taxpayer receives an unsolicited email that appears to be from either the IRS e-services portal or an organization closely linked to the IRS, report it by sending it to firstname.lastname@example.org. Learn more by going to the Report Phishing and Online Scams page.
It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online that can help protect taxpayers from email scams.
Phishing and malware schemes again made the IRS “Dirty Dozen” tax scam list this year. Check out the last IRS Phishing Scam news release for more info.
What to look for in these scams
Taxpayers receive an official-looking email from what appears to be an official source, whether the IRS or someone in the tax industry.
The underlying messages frequently ask taxpayers to update important information by clicking on a web link. The links may be masked to appear to go to official pages, but they can go to a scam page designed to look like the official page. The IRS urges people not to click on these links but instead send the email to email@example.com.
Recent email examples the IRS has seen include subject lines and underlying text referencing:
•Numerous variations about people’s tax refund.
•Update your filing details, which can include references to W-2.
•Confirm your personal information.
•Get my IP Pin.
•Get my E-file Pin.
•Order a transcript.
•Complete your tax return information.
© 2016 IR-2016-28, Feb. 18, 2016
Tuesday, February 2, 2016
Are you aware of the nature of all your investments, domestic and international? Do you know if you have foreign accounts with an aggregate value higher than $10,000 at any time during the calendar year? U.S. taxpayers (including individuals and business entities) are required to report on foreign assets or investments they hold in offshore accounts. Under the Bank Secrecy Act, you may be required to e-file what is known as the FBAR directly with the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department. Given the diversity of assets that many people hold, we advise against assuming that the FBAR rules don’t apply to you. If you’re not sure, we can help you determine the answers.
As is often the case with tax laws, there are some exceptions and intricacies to the FBAR rules, so be sure to contact our office for more details. We can help you understand whether the rules apply to you and what you need to do to comply with them.
© 2016 American Institute of Certified Public Accountants
Tuesday, December 22, 2015
WASHINGTON — The Internal Revenue Service today issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
•54 cents per mile for business miles driven, down from 57.5 cents for 2015
•19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
•14 cents per mile driven in service of charitable organizations
The business mileage rate decreased 3.5 cents per mile and the medical, and moving expense rates decrease 4 cents per mile from the 2015 rates. The charitable rate is based on statute.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
© 2015 IRS Tax Tips @ www.irs.gov
Wednesday, December 2, 2015
The Internal Revenue Service, the states and the tax industry urge you to be safe online and remind you to take important steps to help protect yourself against identity theft.
Taxes. Security. Together. Working in partnership with you, we can make a difference.
Scammers, hackers and identity thieves are looking to steal your personal information – and your money. But there are simple steps you can take to help protect yourself, like keeping your computer software up-to-date and giving out your personal information only when you have a good reason.
We all have a role to play to protect your tax account. There are just a few easy and practical steps you can take to protect yourself as you conduct your personal business online.
Here are some best practices you can follow to protect your tax and financial information:
1. Understand and Use Security Software. Security software helps protect your computer against the digital threats which are prevalent online. Generally, your operating system will include security software or you can access free security software from well-known companies or Internet providers. Other options may have an annual licensing fee and offer more features. Essential tools include a firewall, virus/malware protection and file encryption if you keep sensitive financial/tax documents on your computer. Security suites often come with firewall, anti-virus and anti-spam, parental controls and privacy protection. File encryption to protect your saved documents may have to be purchased separately. Do not buy security software offered as an unexpected pop-up ad on your computer or email! It’s likely from a scammer.
2. Allow Security Software to Update Automatically. Set your security software to update automatically. Malware – malicious software – evolves constantly and your security software suite is updated routinely to keep pace.
3. Look for the “S” for encrypted “https” websites. When shopping or banking online, always look to see that the site uses encryption to protect your information. Look for https at the beginning of the web address. The “s” is for secure. Unencrypted sites begin with an http address. Additionally, make sure the https carries through on all pages, not just the sign-on page.
4. Use Strong Passwords. Use passwords of at least 10 to 12 characters, mixing letters, numbers and special characters. Don’t use your name, birthdate or common words. Don’t use the same password for several accounts. Keep your password list in a secure place or use a password manager. Don’t share your password with anyone. Calls, texts or emails pretending to be from legitimate companies or the IRS asking you to update your accounts or seeking personal financial information are generally scams.
5. Secure your wireless network. A wireless network sends a signal through the air that allows you to connect to the Internet. If your home or business wi-fi is unsecured it also allows any computer within range to access your wireless and steal information from your computer. Criminals also can use your wireless to send spam or commit crimes that would be traced back to your account. Always encrypt your wireless. Generally, you must turn on this feature and create a password.
6. Be cautious when using public wireless networks. Public wi-fi hotspots are convenient but often not secure. Tax or financial Information you send though websites or mobile apps may be accessed by someone else. If a public Wi-Fi hotspot does not require a password, it probably is not secure. If you are transmitting sensitive information, look for the “s” in https in the website address to ensure that the information will be secure.
7. Avoid phishing attempts. Never reply to emails, texts or pop-up messages asking for your personal, tax or financial information. One common trick by criminals is to impersonate a business such as your financial institution, tax software provider or the IRS, asking you to update your account and providing a link. Never click on links even if they seem to be from organizations you trust. Go directly to the organization’s website. Legitimate businesses don’t ask you to send sensitive information through unsecured channels.
© 2015 IRS Tax Tips - www.irs.gov
Wednesday, October 21, 2015
WASHINGTON — Farmers and ranchers who previously were forced to sell livestock due to drought, like the drought currently affecting much of the nation, have an extended period of time in which to replace the livestock and defer tax on any gains from the forced sales, the Internal Revenue Service announced today.
Farmers and ranchers who due to drought sell more livestock than they normally would may defer tax on the extra gains from those sales. To qualify, the livestock generally must be replaced within a four-year period. The IRS is authorized to extend this period if the drought continues.
The one-year extension of the replacement period announced today generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes due to drought. Sales of other livestock, such as those raised for slaughter or held for sporting purposes, and poultry are not eligible.
The IRS is providing this relief to any farm located in a county, parish, city, borough, census area or district, listed as suffering exceptional, extreme or severe drought conditions by the National Drought Mitigation Center (NDMC), during any weekly period between Sept. 1, 2014, and Aug. 31, 2015. All or part of 48 states and Puerto Rico are listed. Any county contiguous to a county listed by the NDMC also qualifies for this relief.
As a result, farmers and ranchers in these areas whose drought sale replacement period was scheduled to expire at the end of this tax year, Dec. 31, 2015, in most cases, will now have until the end of their next tax year. Because the normal drought sale replacement period is four years, this extension immediately impacts drought sales that occurred during 2011. But because of previous drought-related extensions affecting some of these localities, the replacement periods for some drought sales before 2011 are also affected. Additional extensions will be granted if severe drought conditions persist.
Details on this relief, including a list of NDMC-designated counties, are available in Notice 2015-69, posted today on IRS.gov. Details on reporting drought sales and other farm-related tax issues can be found in Publication 225, Farmer’s Tax Guide, also available on the IRS web site.
© 2015 IRS Tax Tips @ www.irs.gov
Thursday, June 18, 2015
The Internal Revenue Service is ramping up efforts to prevent identity theft. As part of those efforts, the IRS is reminding taxpayers who receive requests from the IRS to verify their identities using the Identity Verification Service website at idverify.irs.gov.
If the IRS has a concern about a suspicious tax return with a real taxpayer’s name and/or Social Security number, they will send you a letter. It’s a specific letter: Letter 5071C. The letter gives taxpayers two options to contact the IRS and confirm whether or not they filed the return. If you receive Letter 5071C, you should follow the directions as stated and can access idverify.irs.gov.
On the IRS Identity Verification Service website, you will be asked questions that only you can answer. Once you verify your information, you can confirm whether you filed the tax return the IRS finds to be suspicious. If you did not file the return, the IRS will help you with the next steps. If you did file the return, your return will be processed and you will be issued a refund, if one is due.
You can also follow the instructions in the letter to call a toll-free number. You should have copies of your current and prior year tax returns, and any supporting documents, like your forms W-2 and 1099.
Opportunities for fraud are plentiful these days so be careful. Use caution when replying to correspondences. The IRS emphasizes that it does not request such information via email, nor will the IRS call a taxpayer directly to ask this information. If you have received a 5071C letter from the IRS, please do not hesitate to contact our office and we can assist you through the process.
© 2015 IRS Tax Tips @ www.irs.gov
Monday, June 8, 2015
If you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. The second quarter due date is due June 15th.
If you have any questions, please feel free to contact our office.
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