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Business owners: When it comes to IRS audits, be prepared

May 23, 2017

If you recently filed your 2016 income tax return (rather than filing for an extension) you may now be wondering whether it’s likely that your business could be audited by the IRS based on your filing. Here’s what every business owner should know about the process.

Catching the IRS’s eye

Many business audits occur randomly, but a variety of...

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Real estate investor vs. professional: Why it matters

May 16, 2017

Income and losses from investment real estate or rental property are passive by definition — unless you’re a real estate professional. Why does this matter? Passive income may be subject to the 3.8% net investment income tax (NIIT), and passive losses generally are deductible only against passive income, with the excess being carried forward.

Of course the NIIT is part of...

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Operating across state lines presents tax risks — or possibly rewards

Cassidy DeHart

May 9, 2017

It’s a smaller business world after all. With the ease and popularity of e-commerce, as well as the incredible efficiency of many supply chains, companies of all sorts are finding it easier than ever to widen their markets. Doing so has become so much more feasible that many businesses quickly find themselves crossing state lines.

But therein lies a risk: Operating in another...

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Turning next year’s tax refund into cash in your pocket now

Cassidy DeHart

May 2, 2017

Each year, millions of taxpayers claim an income tax refund. To be sure, receiving a payment from the IRS for a few thousand dollars can be a pleasant influx of cash. But it means you were essentially giving the government an interest-free loan for close to a year, which isn’t the best use of your money.

Fortunately, there is a way to begin collecting your 2017 refund now: You...

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Charitable Donation Documentation

Larry Rosenfeld

February 3, 2016

2-2-16: 2016 Charitable giving record-keeping

If you plan to deduct charitable donations on your income tax return, please make sure that you have all the required documentation available in case you are questioned about their validity.

The law requires that donations require “contemporaneous written acknowledgments” – it must be in hand either by the date...

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2016 Good IRS News

Larry Rosenfeld

January 18, 2016

Last year, almost 2 out of every 3 taxpayers calling the IRS toll-free phone line never reached a person on the other end of the line. In fact, most of those calls resulted in the IRS disconnecting the call (hanging up) after a significant wait time. The government actually named this practice a “Courtesy Disconnect.” Those who did reach someone averaged more than 30 minutes of...

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New 2016 Tax Rules

Larry Rosenfeld

January 13, 2016

1.   Affordable (?) Care Act: People without ACA approved health insurance will see a sharp rise in the penalty for failure to purchase the insurance. Flat assessment is now $695 per person (more than double the 2015 rate) with a household maximum of $2,085. The percentage of income payment increases to 2.5% (from 2% last year) with a household maximum of...

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The IRS and telephone calls

Larry Rosenfeld

January 7, 2016

For the past several years, we have all been told that telephone calls from the IRS were probably scams. The rule was that the IRS does not phone you – they send you a letter which provides a specific way for you to respond to them. The fake “IRS” callers were threatening people that they owed taxes and must pay them immediately or face arrest. And thousands did send money...

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NC vs. Employee/Contractor Classification

Larry Rosenfeld

December 22, 2015

The North Carolina Couse & Senate could not agree on passing legislation to control businesses who classify employees as independent contractors to avoid taxes and benefits, but Governor McCrory has now stepped into the situation. He has ordered the NC Industrial Commission to create a special unit to analyze complaints where employers are categorizing workers incorrectly as...

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Remember the "Kiddie Tax"

Larry Rosenfeld

December 17, 2015

Since 1986, there is a “trap” into which many parents and grandparents fall when they make financial gifts of passive income-generating assets to their children and grandchildren. The IRS recognized that this was primarily being done because young people normally had a lower tax rate than their elders.

Tax law was then changed as follows: a family member, up to the age of...

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IRS Ruling on Identity Theft

Larry Rosenfeld

December 16, 2015

More and more people have been the victims of identity theft in their relationship with the Internal Revenue Service. Previously, when a false tax return was filed under your identity, you were denied access to the false return under the confidentiality guideline. You could not see what data of yours the identity thief has misappropriated or fabricated in your name.

Now, the IRS has...

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Ramifications of Passing On a 529 Account

Larry Rosenfeld

December 15, 2015

Many people have set up 529 Educational Accounts (allowing the money to grow “tax-free”) for their grandchildren. As they reach an advanced age, some people wish to transfer their ownership of these plans to their children (parents of their grandchildren) to avoid the plan perhaps being entangled in their estate when they pass on.

Current tax law allows this transfer to...

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IRS Audit stats

L Rosenfeld

December 7, 2015

The Internal Revenue Service is swamped with work. Aside from their normal tax duties, they are also now overseeing parts of the Affordable Healthcare Act.  All this after years of suffering through budget and personnel reductions.

In fiscal 2014, the IRS audited 1.5% of all tax returns for people with incomes between $200,000 and $400,000, and 12.1% for those with incomes...

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Expired Tax Breaks

December 3, 2015

Year-end federal income tax breaks are still in limbo. At the end of 2014, many major tax breaks officially expired. As usual, Congress is still debating whether to let them die, renew them, or reinstate them in some modified form for calendar 2015.

The small-business capital equipment write-off is at the forefront of business concerns. The expired break allowed companies to write off...

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Our New Website!

Rosenfeld & Company PC is excited to announce the recent launch of our firm’s new website. We’ve been working very hard to enhance our website and give our firm a fresh look. We’ve also continued to research and identify the latest and greatest technologies to improve the services we provide and ensure we continue to meet your needs.

Take a moment to look...

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