New Rules in the IRS

The recently signed “Taxpayer First Act” will benefit anyone dealing with the IRS in several ways. The upgrades outlined in the bill will modernize the agency, as well as improve operations in communication and collections, which will be outlined in this article.

The main category to discuss is communication. The IRS can be a troubling agency to deal with, as taxes can be confusing, and no one wants to deal with a collection agency. With the new bill, communication should become much clearer. This will happen through directly communicating why a claim is rejected, upgrading the efficiency of IRS infrastructure, making it easier to report identity theft, and informing of common scams rather than using hold music. These changes will make the tax paying process more transparent and less intimidating.

The second category of changes is in collection practices. These changes include accepting direct payments for filing, rather than using a … Read More

Avoid an Audit

Facing an audit by the IRS can be a daunting situation for any individual or business. Even if all your taxes are in order, audits can take a lot of time and energy. Fortunately for the taxpayer, the IRS Restructuring and Reform Act of 1998 resulted in kinder and gentler practices from the IRS. Unfortunately, due to extremely low audit rates in years following, resulting in political embarrassment, audit rates have begun to climb back up. Everyone should make sure to file their tax return properly each year, but there are some people who should be warier of an audit than others. These people include high income earners, people filing a business tax form (especially large corporations), and people claiming the earned income tax credit (EITC). To avoid being audited, it may benefit you to treat the situation like a battle with the IRS, where the first defense is a strong … Read More

Saving on business meals

Under the recently enacted Tax Cuts and Jobs Act (TCJA), there has been a crackdown on which meal and entertainment expenses are tax deductible. Under the previous law, 50% of all business-related meal and entertainment expenses were tax deductible at the end of the year, but the TCJA has cut this discount down to solely meal related expenses. This change initially caused confusion, but a recent notice sent out by the IRS was able to make light of the new rules. In order to make to proper deductions and fully utilize the law for your business, it is important to understand the rules of what can be deducted and how to record it.

Under the TCJA meal expenses are still 50% tax deductible

The most important part of getting the full deduction for your business is making sure to obtain receipts that denote separate charges for food bought in connection with … Read More