NH NATP CHAPTER WEEKLY APRIL 2014

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1 NH NATP CHAPTER WEEKLY APRIL 2014 The Officers and Directors of the NH Chapter of NATP sincerely hope that your tax season has been a relatively smooth one, and that you can now see the light at the end of the tunnel. Busy as we are, April 16 brings a collective sigh of relief that can be heard around the state, even though many still have extensions to deal with. REMEMBER mark your calendars and plan to attend the May 22, 2014 NH NATP Seminar in Concord. Details to follow in an upcoming Chapter News. Now on to Bits and Pieces Name Changes The Social Security Administration wants to remind everyone to be sure to file name changes as soon as possible during the year on Form SS 5 for those whose names have changed due to marriage or divorce. Form SS 5 can be obtained at any Social Security office or by calling For adopted children whose names have changed, and who do not have an SSN, use of a temporary Adoption Taxpayer Identification Number is permitted on the tax form. An ATIN can be obtained by filing Form 7 A, Application for Taxpayer Identification Number for Pending US Adoptions, with the IRS. Get the form at IRS.gov or by calling Fake IRS s and Phone Calls IRS is warning that tax scams using the and phone calls are common these days. These scams use the IRS name and logo or fake websites that look very real. Do not reply to the message, do not open any attachments, do not give out personal and financial information. Forward suspicious s to phishing@irs.gov. Then delete it. As for phone calls, ask for a call back number and an employee badge number, call the IRS at if there might be taxes owed, call the Treasury Inspector General for Tax Administration at to report the incident if no taxes are owed. Be alert to scams that use the IRS as a lure. Reconciliation of the Premium Tax Credit

2 Individuals who chose to receive the Premium Tax Credit in advance will reconcile that advance on their 2014 returns filed in Changes in income or family size will affect the credit. If the credit that was received during the year does not match the "calculated" credit when filing the taxes, the excess advance payment will have to be repaid. A larger refund will result if the credit during the year was too little. It is stressed that policyholders should inform their Marketplace about changes during the year, so the credit can be adjusted as soon as the change happens. Ten things to know about the Taxpayer Advocate Service 1. THE TAS is an independent organization within the IRS and is your voice at the IRS 2. TAS helps taxpayers whose problems are causing financial difficulty. 3. Eligibility for help is available if efforts to resolve the problem through normal channels hasn't worked, or an IRS procedure just isn't working as it should. 4. The IRS must respect the rights of the Taxpayer. 5. Once qualified for help, an advocate will be assigned who with stay with the taxpayer at every turn. The service is free. 6. There is at least one Taxpayer Advocate Office in every state. Publication 1456 is a directory of Taxpayer Advocates, complete with phone numbers., or call The website is 7. The tax toolkit at www. TaxpayerAdvocate.irs.gov has basic tax information, details about tax credits and lots more. 8. TAS also handles large scale or systemic problems that affects many taxpayers. Report these broader issues 9. Updates can be found at: Twitter.com/YourVoiceatIRS TAS is there to help in resolving problems. Use them! Four Facts about Bartering Definition: Barter is the trading of one product or service for another product or service. Often there is no exchange of cash. 1. All organized barter exchanges are required to issue Form 1099 B, Proceeds from Broker or Barter Exchange Transactions. 2. Barter and trade dollars are the same as real dollars for tax purposes and must be reported on a tax return at fair market value of the product or service they received. 3. Bartering is taxable in the year it takes place. Barters may owe income taxes, self employment taxes, employment taxes or excise taxes on their bartering income. 4. Reporting bartering on a tax return varies. A self employed trade or business would report it on Schedule C, Profit or Loss from Business, a corporation on From 1120 or 1120 S and so on. More information can be obtained at Bartering Tax Center in the business section of IRS.gov IRS Refunds Ahead of Last Year as of 3/01/13 and 2/28/ % Change Total Tax Returns Received 58,044,000 58,883, Tax Returns Processed 51,778,000 57,410, Total Tax Returns E Filed 53,612,000 54,942,

3 By Tax Professionals 30,466,000 30,053, By Taxpayers Themselves 23,146,000 24,889, Visits to IRS.gov 180,140, ,204, Number of Refunds 45,862,000 48,429, Amount of Refunds $135,025 Billion $146,918 Billion 8.8 Average Refund $2,944 $3, Number of Direct Deposits 41,137,000 42,380, Amount of Direct Deposits $126,032 Billion $131,203 Billion 4.1 Average Refund Direct Deposited $3,054 $3, (We professional tax preparers all remember the fiasco we endured last year with the late release of, and acceptance of, certain tax forms that it is no surprise to us that the numbers are up this year...ed) Optional Home Office Deduction In tax year 2011, some 3.3 million taxpayers claimed deductions for business use of a home totaling nearly $10 billion. The new optional method for 2013 taxes filed in 2014, based on $5 a square foot for up to 300 square feet, will reduce paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually. Long standing restrictions on the home office deduction, such as the requirement that a home office be used regularly and exclusively for business and the limit tied to income derived from the particular business, still apply under the new option. Moe information can be found in Publication 587. Watch out for the Expired Deductions! The conclusion of 2013 brought the end of 55 tax breaks, including, most notably, enhanced Section 179 and bonus depreciation, the Research and Development Tax Credit, as well as the introduction of the new fixed asset regulations. Small Business Health Care Tax Credit A small employer is eligible for the credit if it has fewer than 25 employees who work full time, or a combination of full time and part time. The average annual wages must be less than $50,000, and the employer must pay a uniform percentage for all employees that is equal to at least 55Z% of the premium cost of the insurance coverage. The maximum credit is 35 percent of premiums paid for small business employers and 25 percent of premiums paid for small tax exempt employers such as charities. More information can be obtained at IRS.gov/aca. The Small Business Health Care Tax Credit Estimator can help determine eligibility and the amount of the credit. Code Letters DD in Box 12 of the Form W 2 The health care law requires certain employers to report the cost of coverage under an employersponsored group health plan. The amount listed is not taxable, nor does it need to be reported on the tax return. It is for information only, and is not included in the Wages, Tips and Other Compensation in B0x 1 of the W 2. More and More Taxpayers Using Free File More than 27 million taxpayers filed their returns from their home computers as of March 13, 2014, which is an increase of almost 6 percent. The free file program is a public private partnership between the IRS and the Free File Alliance, LLC. Alliance is a consortium of 14 leading tax software providers who

4 make their products available exclusively at Seventy percent of taxpayers are eligible for easy to use Free File software because their income was $58,000 or less in People who make more than $58,000 and who are comfortable preparing their own returns can use Free File Fillable Forms, which is similar to completing a paper Form The program performs some math calculations and provides links to some IRS Pubs. These can also be e filed. (Is this trend going to affect our tax practices?...ed) IRS Emerges as Major Tax Season Competitor If you are wondering where some of your tax business went this year, maybe the IRS took it. Professional tax preparers are missing about 769,000 returns, compared to last year as of mid March. This business appears to have gone to former or would be clients now using do it yourself software. At typical rates, that's about $153 million in lost fee income to the industry, enough to support thousands of practitioners, according to CPA Trendlines estimates. (I haven't seen an reduction in my practice. Have any of you?...ed) IRS Revises Guidance on Electronic Signatures The IRS has revised its guidance on electronic signatures, with updated information on the currently acceptable electronic signature methods, identity verification requirements and electronic record requirements. Publication 1345, Handbook for Authorized IRS e file Providers of individual Tax Returns, has been revised with new electronic signature guidance for both the IRS e file Signature Authorized Forms, 8878 and The IRS noted that electronic signatures are optional, and therefore taxpayers can continue to sign these forms with a handwritten signature. The Emotional Side of the Tax Business There are courses and conferences to help tax professionals build the technical skills needed to succeed. But there is no CPE to help with the emotional side, and there are plenty of times on a daily basis that the emotional side of business comes into play: 1. Making a fee increase or setting your fees in the first place 2. Firing a client from you know where 3. Delivering a performance review to an employee 4. Dealing with a week when there is no cash to make payroll 5. Finding the guts to marker 6. Facing the procrastinated project because that's a subtle form of fear 7. Calling a client with a past due payment 8. Giving a speech of any kind to anyone One might be wondering "Are there even skills for these things?" There are. The business world and society has labeled these skills different things: 1. Leadership 2. Communication skills 3.. Supervisory skills 4. Negotiation skills 5. Public speaking skills. It's how we deal with our emotions when we practice these skills that determines greatness or failure. And, of course, that's a different set of skills: 1. Resilience learning to bounce back faster from setbacks 2. Overcoming fears 3. Positivity the study of mastering "happiness"

5 4. Confidence very elusive for many 5. Stress management These skills are just as essential as learning a new tax software program. Few successful entrepreneurs would weather the storms of small business ownership without them. Tax Preparers Assaulted, Shot at This Season and Other Wild Antics In Chicago Heights, IL in mid February, a Liberty Tax preparer pulled a gun on a client's boyfriend who police said threatened to beat him up during a dispute over fees. The boyfriend, 34, has reportedly been charged with assault after confronting the preparer over $500 in additional fees that the girlfriend was charged for her return. Police told reporters that the tax preparer, 45, had a valid firearm owner's ID. A 53 year old man from the Kirkwood, MO area is accused of choking an H&R Block tax preparer after reportedly becoming enraged about his "tax situation". Police told reporters that the assailant knocked the H&R Block tax preparer to the ground and is now charged with misdemeanor assault. The Block preparer sustained minor injuries but did not require hospitalization. In Deerfield, FL a bullet nearly missed the ear of a tax preparer as she sat in her office of Dixie Fast Tax. "I wanted this tax season to be busy with people, not bullets, coming in" she exclaimed. The shooting was connected to a dispute outside her office by clientele that had just left, but police confirmed that the bullet was not intended for the tax preparer. Reports of gunfire and beating of a preparer in the Detroit office of Tax City Tax Service, by a 19 year old local man after the woman he was in the office with couldn't get her refund in cash. Four people were shot in the scuffle and the preparer told reporters she plans tighter security when she re opens the office. (Be safe, my fellow comrades, be safe...ed) New Hampshire DOR Not hearing much from the State DOR, so they must be pretty busy with all the work we are giving them and they must be satisfied with our filings! (If anyone has any items of interest, please contact me. I'd be interested in hearing them and sharing them with our membership...ed) Editor's Note As is always the case, I would like to encourage each and every member of the NH NATP to submit articles for inclusion in the Chapter Weekly. your items to me at NBoyce33@gmail.com. Thank you. (Disclaminer: Editor's Notes "ed" do not necessarily reflect the official position of the NH NATP or of it's individual members.) Norma Boyce, Secretary NH NATP

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