The tuition and fees deduction expired last year. Fortunately, you may still be able to benefit from other education tax benefits, including the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit.

Take a look at the highlights below to better understand these benefits:

*   The AOTC is per student, while the Lifetime Learning Credit is per tax return.

*   Either the parents or their dependent child can claim the credit each year, but not both.

*   You can't use these credits to pay expenses for room and board, health costs or transportation. While book expenses required for enrollment can be deductible, other book expenses are excluded from the credits.

*   If you received scholarships, grants and other tax-free assistance, or have used educational expenses for one of these credits, you may not reuse that expense for other tax benefits.

 

In some cases, it may be more beneficial to let your dependent claim an educational credit rather than including him or her on your tax return. We can help you figure out what's best for your situation. Contact us today at 203-468-8133.

When it comes to taking qualified deductions on your federal tax return, three things must happen:

  • Recognize that an expense might be deductible on your tax return.
  • Keep a record of the expense in an organized fashion.
  • Obtain the proper (and timely) documentation to support your deduction.

 

This might be obvious to most people, but here are some typical areas where taxpayers often fall short. In the long run, these items could end up costing you plenty during tax filing season, and trigger IRS audits.

  1. Cash donations to charity. To deduct and support your deduction to a qualified charity you must have valid support. Donations of cash are no longer deductible if they are not supported by a canceled check or written acknowledgement from the charity.

A donation deduction of $250 or more needs to be supported by documentation created at the time of the donation. A canceled check and bank statement are not sufficient. If you get audited, having the charity issue documentation after the fact may not be enough.

  1. Non-cash contributions. You need documentation for these donations as well. This includes a detailed list of items donated, the condition of the items and their estimated fair market values. While this level of detail is not required for small donations, keeping good records and taking photos is a good practice.
  2. Investment purchases and sales. If you bought or sold an investment you will need to know your cost basis. Today's regulations require brokers to report to the IRS the cost basis of investment sales. Review your broker accounts and correct any errors. It's very difficult to defend yourself in an audit when records reported to the IRS are in error.
  3. Copies of divorce decrees, alimony and child support agreements. There are often conflicts between two taxpayers taking the same child as a deduction. Do you have the necessary proof to defend your position? The same is true with alimony and child support. Keep these documents in a safe place and be ready to use them if necessary.
  4. Copies of financial transactions. Keep copies of documents from any major financial transaction. This includes real estate settlement statements, refinancing documents and any records of major purchases. These documents are necessary to ensure your cost basis in the property is properly recorded. The documents will also help identify any tax-related items like mortgage insurance, property taxes and possible sales tax paid.
  5. Mileage logs. Lack of tracking deductible miles is probably one of the most commonly overlooked documentation requirements. Properly recording charitable, medical and business miles can really add up to a large deduction. If the record is not available, the IRS is quick to disallow your deduction.
  6. If you are not sure whether a document is needed, retain it. Then you can always retrieve it if needed.


 

Health Savings Accounts (HSAs) are a great way to pay for medical expenses, and since unused funds roll over from year to year, the account can also provide a source of retirement funds in addition to other plans like 401(k)s or IRAs.

 

But be aware HSAs can also come with significant disadvantages and less flexibility when compared to other retirement investment tools.

 

The Good

HSAs work best when they are used for their designed purpose: to pay for qualified medical expenses. Neither your original contributions to an HSA nor your investment earnings are taxed when used this way.

 

This makes HSA funds valuable, given that medical costs are one of our largest expenses as we age. The Employee Benefit Research Institute estimates the average 65-year-old couple will need $264,000 to pay for medical care over the course of their retirement. Being able to cover that amount with pre-tax dollars greatly extends the value of retirement savings.

 

In addition, unlike other retirement plans, there is no required distribution of funds after you reach age 70½.

 

The Bad

First, you can only contribute to an HSA if you have a high-deductible health insurance plan. That means you will pay more out of pocket each year when you need to use health services, which could make it difficult to build a balance within your HSA.

 

Second, contributions are limited. Annual contributions to HSAs are limited to $3,400 a year for individuals and $6,750 a year for families. These limits get bumped up by $1,000 for people aged 55 and older. You also may only contribute to an HSA until your retirement age.

 

Finally, HSAs typically have fewer investment options compared with other investment tools, including 401(k)s and IRAs. The accounts often have high management and administrative fees. All this makes building HSA earnings tough to do.

 

The Ugly

Before you reach age 65, non-medical withdrawals from HSAs come with a whopping 20 percent penalty, plus they are taxed as income. Even after age 65, both contributions and earnings are taxed when they are withdrawn for non-medical expenses.

 

In this way, HSAs compare unfavorably with 401(k)s and IRAs, which end their early withdrawal period earlier, at age 59½, and also have lower early withdrawal penalties of just 10 percent.

 

HSAs are a powerful tool to help manage the ever-rising costs of health care. Knowing the rules and the costs associated with using these funds outside of medical expenses can help you position an HSA with your other retirement options. 

Now that summer has arrived, you may find opportunities to combine business activities with pleasure, which could result in tax breaks. Here are five of those potential breaks.

1. Organize a company outing. Normally, deductions for business entertainment and meals are limited to 50 percent of the expenses. However, you can write off 100 percent of the cost of a company picnic or other get-together. Note that you can't restrict the outing to only a select few employees.

2. Take a mini-vacation. If you're traveling on business, you might extend the trip a few days to get in some sightseeing. Generally, you can deduct your travel expenses — including airfare and 50 percent of your meals — if the primary purpose of the travel is business related. But you can't deduct expenses for your side trips.

3. Send the kids to camp. When you send your children who are under age 13 to day camp so you and your spouse can work in the summer, you may claim the dependent care credit for the expense. Usually, the maximum credit is $600 for one child and $1,200 for two or more children. The cost of overnight camp doesn't qualify.

4. Lease your vacation home. If you rent out your vacation home when you're not using it, you often can deduct your rental expenses in full. Deductions are limited to rental income if your personal use for the year exceeds the greater of 14 days or 10 percent of the rental time. Note: There are no tax consequences for a rental of two weeks or less.

5. Fish for deductions. Although you can't claim deductions for an entertainment facility, like a boat, you may still write off 50 percent of entertainment expenses relating to the facility. For instance, if you take a client deep sea fishing after a substantial business meeting, you can deduct the fuel, food, and drinks — even the fish bait.

These are just five possibilities, but it's important to be aware of exclusions and limitations that may apply to your situation.

Burzenski and Company, P.C. 

 

Summertime usually makes us think of vacations, backyard barbecues, and general relaxation. Tax planning may not be on the top of your summertime to do list, but this year you may want to consider making time for it.

Major tax reform is being considered in Washington for the first time in thirty years. Current proposals include changes to the tax bracket structure, personal deductions, exemptions, and childcare credits. Potential changes could create pitfalls or opportunities that can make a difference in the taxes you pay. You can't control what happens in Washington, but you can prepare for what's ahead by considering moves that could minimize your tax bill for 2017.

This year tax planning is more important than ever. Call today at 203-468-8133 to schedule a midyear tax review. We'll discuss your situation and find the strategies that are most beneficial to you.

 

Each year the IRS produces its "Dirty Dozen" list of tax scams. As criminals become savvier at stealing personal information and scamming people out of their money, taxpayers must be more vigilant than ever. Here are some of the more common scams you may encounter.

Identity theft: The IRS continues to receive fraudulent returns filed with someone else's social security number each year. While the agency is making progress in finding and prosecuting these criminals, taxpayers must be extremely cautious with their personal information to avoid becoming a victim.

Phishing: Phishing is a scam where criminals try to steal your financial information through the use of legitimate-looking emails or websites. Knowing that the IRS does not initiate contact with taxpayers via email regarding bills or refunds should help you avoid this scam. If you receive a suspicious email, don't click on it; forward it to phishing@IRS.gov.

Phone scams: This ongoing scam involves criminals who call taxpayers and impersonate IRS agents. Their attempts to get taxpayer information often include threats of police arrest, deportation, and license revocation. The IRS reminds taxpayers that they never demand immediate payment, require a specific form of payment, request card payment over the phone or threaten to involve law enforcement.

Charities: Taxpayers should be aware of a scam where groups pose as charitable organizations to attract donations from contributors. These groups sometimes choose names similar to nationally known organizations so contributors are more apt to open their pocketbooks. Before you donate, check Exempt Organizations Select Check, a tool offered by the IRS that allows you to verify the legitimacy of organizations to which you are considering donating funds.

Awareness is often your best defense to protect yourself from these popular scams.

https://henryscheinvet.com/…/partnering-for-better…/articles

Taking Stock of Your Practice's Most Valuable Assets 


Read the expert advice in these articles by Burzenski's own Gary I. Glassman, CPA.

 

This is the a series of articles that discuss the insightful viewpoints of four of the most respected and well-known financial experts in the veterinary business today, including our very own Gary I. Glassman, CPA. These experts came together at the invitation of Henry Schein Animal Health, Ceva, Elanco, Merck, Merial, Purina, and Virbac to share their expertise and informed opinions in the areas of pharmacy, nutrition and data.
The mission of the “Veterinary Pharmacy Diets and Data Solutions Workshop” is to bring expert advice and actionable business solutions to increase the practice success of the veterinary customers we serve while reinforcing the veterinarian to the pet owner as the best source of healthcare and product choices for longer healthier lives of the pet family member.

Here's everything we know about the Google mobile-first index.

 

http://searchengineland.com/faq-google-mobile-first-index-262751

Here is a post by Charles Hall.

http://cpa-scribo.com/25-ways-fraud-occurs/

 

To prevent fraud, we must know how it happens.

Common Frauds

Here’s a list of common company thefts:

  1. Collection clerk steals cash prior to recording it
  2. Collection clerk steals cash after recording a customer receipt; he voids the receipt and adjusts (writes down) the customer’s account
  3. Collection clerk places a personal check (for $5,000) in the cash drawer and takes an equivalent amount of cash; the clerk leaves the check in the drawer for months—in effect the clerk has an unauthorized loan
  4. The cash collections supervisor steals cash after receiving funds from collection clerks but before the money is deposited; she adjusts the related bank reconciliation by the amount stolen
  5. The person opening the mail steals checks before they are receipted; these amounts had not previously been recorded as a receivable
  6. Employees steal capital assets (knowing that no one performs periodic inventories)
  7. Employees use company credit cards for personal purchases but code the transactions as company expenses
  8. Accounts payable clerks cut checks to themselves (or to an accomplice) but record the check as company expenses; the check signatures are forged
  9. Accounts payable clerks establish fictitious vendors using their own addresses, a P.O. Box, or that of an accomplice; payments are made to the fictitious vendor and covered up with fictitious invoices; the checks are signed electronically as they are printed
  10. Accounts payable employee intentionally double-pays an invoice, then requests that the vendor refund the extra payment (with the refund going directly to the payable clerk)—check is converted to personal use
  11. Payroll personnel increase the pay rate—in the master pay rate file—for themselves or for friends working in the company
  12. Payroll personnel pay themselves (or friends) twice for each payroll
  13. Payroll personnel purposefully overpay withholding taxes and inflate the withholding amount on their own W-2, resulting a tax refund that includes the excess payments
  14. Purchasing department personnel are bribed by a vendor; the vendor recoups the bribe costs by inflating its subsequent invoices
  15. State, city, county elected officials are bribed; the vendor recoups the bribe costs by inflating its subsequent invoices
  16. Vendors give favors (e.g., free vacations) to those with the power to buy—commonly called a gratuity; vendor recoups the cost of the favors by inflating its subsequent invoices
  17. CEO orders accounts payable staff to make payments to himself (with an implied threat); payments are coded in a manner that hides the payment
  18. Money is wired by the CFO to the CFO but is recorded as a legitimate expense using a journal entry
  19. Money is wired to the CFO who then leaves the country without trying to cover up the theft
  20. The CEO or CFO makes payments to someone who is threatening their life or is blackmailing them; the expense is coded as legitimate
  21. A secret bank account is opened in the name of the business by the CFO but the sole authorized check signer is the CFO; checks are made from a legitimate business bank account to the secret bank account; the CFO writes checks to himself from the secret account
  22. A sales person steals rebate checks that belong to the company; she deposits the checks into her personal bank account by writing “pay to the order of…” on the back of the check
  23. The payables clerk writes a manual check to himself and then records the check with a journal entry that reflects a legitimate vendor
  24. The CFO inflates revenue at year-end with fictitious journal entries; stock prices go up; the CFO sells personally-owned company stock, then the CFO reverses the year-end accruals
  25. The inventory clerk steals stock and covers the theft by altering the inventory records

Fraud Brainstorming for Auditors

In performing your fraud brainstorming, consider printing out this list and seeing if any of these thefts are relevant to your audit.

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