When Bourke Accounting moved to our current and lovely location, changes were made. Accent walls were painted, pictures were hung and knick knacks were strategically placed around the office. Management transformed impersonal Suite 102 into the welcoming Home of Bourke Accounting that it is today. Whether it’s hanging fuzzy dice from the rearview or putting up a mailbox, we humans tend to mark our territory – thankfully, this is usually done with throw pillows and not bodily fluids like our four-legged pals. However, decorating is not the only way in which we announce ownership of a specific environment; we change tax laws, too.
Every time a new president parks the Presidential toothbrush in the Presidential john, changes to our tax laws follow soon after. Are these modifications used to herald in the new boss in an obvious way? Are these changes part of an agenda near and dear to the prez’s heart? While the motivation is immaterial, the new rules are not.
When looking at President Biden’s proposals, it’s pretty clear that not everyone is going to be happy. Just as the former administration’s plan gave free prizes to the rich, Biden’s plan seems to favor the working masses. For example, in an attempt to protect Social Security, Biden wants to make more “income from wealthier Americans subject to the Social Security payroll tax” (Kiplinger.com). For this year, wages above $142,800 aren’t subject to it, but Biden would like to add those making above $400,000 into the Social Security mix (Kiplinger.com). According to economically inclined Negative Nancies, Social Security will run out by 2035 if we don’t change things up (Investopedia.com). It might not be comfortable for certain segments of the population, but I vote that we change things up.
Besides including the wealthy in Social Security taxes, Biden is also proposing increasing the corporate tax rate from 21% to 28%. In addition, and to stop successful companies from paying no tax, all corporations will be “subject to a 15% alternative minimum tax on book profits of $100 million or more.” These companies would then have to pay whatever is bigger – the regular tax or the AMT (Investopedia.com). For those of us here on the ground, making big business pay a little more doesn’t seem so terrible. It’s not all bad news, though. Corporations will also be offered new tax credits, from “benefits to deal with workforce layoffs to small business incentives to provide retirement savings plans” (Investopedia.com).
In order to help struggling families, there’s chatter about temporarily increasing the child tax credit to $3,000 per child aged 6-17 and to $3,600 for kids under 6. There’s further talk about “expanding the childcare credit to 50% of a family’s childcare costs for children under age 13” (Kiplinger.com). These credits would phase out for folks making between $125,000 and $400,000. Finally, there are about a million permutations regarding student loan debt. Rumors abound from simply forgiving interest and penalties all the way to forgiving total student loans and “excluding the forgiven amount from taxation” (Kiplinger.com). Oddly, there is very little discussion regarding how professors and security guards will be paid if all of this forgiveness happens. Perhaps good, ol’ prof will just take one for the team?
Everyone wants to a make a mark. Some of these marks are nice, like planting a vegetable garden. Some of these aren’t so nice, like encouraging unbalanced people to do illegal things. While some of Biden’s new tax proposals might actually help our country, there is no sense in getting invested until the IRS releases their guidance. They are, after all, the ones we taxpayers have to impress.
Bourke Accounting’s tax preparers are paying attention. Although IRS laws change as quickly as the weather in Kentucky, Bourke’s experts will be prepared. When you have a return done by a Bourke Accounting pro, you know that your return will be completed with the most up-to-date knowledge and care. IRS laws are ever changing, the perfectionism and dedication of a Bourke Accounting tax preparer is not.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
It’s not easy to forget to do your taxes when you work for tax preparers like the ones you’ll find at Bourke Accounting. Between getting your W2 placed right in your hand, mailing out tax organizers and talking about nothing but taxes all day, you would have to deliberately will yourself to neglect your own return. Since Bourke employees don’t wantonly neglect things, we weren’t surprised when we received our stimulus cash.
When the new $900 billion pandemic relief bill was finally passed in late December, struggling Americans exhaled in relief. Up until the last minute, we weren’t sure if any money was going to hit our accounts; while $600 wasn’t the $2,000 amount that had long been rumored, at least it was something. As of right now, though, it would appear that some Americans won’t even be receiving that truncated sum.
During the first round of stimulus payments, it seemed like the Internal Revenue Service had all the time in the world to get the checks out. If a check went to a closed bank account or old address, there was a way to update your information on the IRS’ website and, eventually, the money went to the right place. Now, however, the IRS has decided that you can’t make these changes on their site. And this isn’t the only noticeable difference this time around.
One change is that the IRS has a deadline of January 15th to get checks out. It won’t be like the first time with wiggle room included. If the IRS doesn’t get your check out by the 15th, you won’t be receiving it (CNet.com). This is not to say that you’ll be left totally high and dry, however. If you don’t see that check in your bank account, you can still claim it on your 2020 return with the Recovery Rebate Credit (CNet.com). In addition, if there was a problem with your first payment, you can claim that, as well. This credit, which increases the amount of your refund or lowers the amount you owe (IRS.gov) isn’t as satisfying as receiving a check out of nowhere, but it’s helpful.
Another change is one that will affect those who aren’t required to file a tax return. During the first round of payments, if you didn’t have to file, the IRS’ website offered a way in which non-filers could enter their information and receive their checks. This time, just for kicks, the IRS isn’t bringing the non-filer tool back (Kiplinger.com). This might be because of the deadline, this might be because of spite – either way, filing a 2020 return would be the only way to receive credit if you didn’t submit your information as a non-filer for the last stimulus payment.
Also, the income threshold for this payment has been lowered. For example, for the first round, the phaseout amount for a single filer was $99,000. This time if you earn over $87,000 and file as single, you won’t get jack (CBSNews.com). This is sort of understandable as, let’s face it, we’re hemorrhaging money over here and hard choices have to be made. Of course, if you lost your job in November of ’20, you’re probably not thrilled to take one for the team.
In a shady move that really doesn’t make sense has to do with taxpayers who owe child support. For the first check, those who owed support had their check garnished to cover the past due amounts. However, people who owe will now be receiving their entire second stimulus payment (CNet.com). We can only hope these forgetful parents will send the money for their child’s upkeep, but we wouldn’t suggest any wronged exes to hold their breath.
If you’ve been out of work for a while, $600 doesn’t seem like it could change your life. However, your Bourke Accounting expert is patiently waiting to offer guidance that could. Whether it’s making sure you receive your rebate credit or giving concrete advice during these tumultuous times, Bourke Accounting pros don’t neglect details that could benefit you right now.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
It can’t be stressed enough: tax season is a big deal for your accountant. At Bourke Accounting, we’re busy all year ‘round, but tax season? Tax season is the Big Show, Senior Prom and a heavyweight fight in Vegas all rolled into one. We start preparing for our time to shine way before you even receive your W2s; we send out reminders, buy office supplies and temporarily say “farewell” to our families and friends. Do we dig the busy time? We keep coming back, so we either love the excitement or we’ve lost the directions to the front door. Either way, your Bourke Accounting pros are gearing up from another numerological-fueled adrenaline rush.
Last tax season was confusing. Sadly, extended filing deadlines, delayed tax refunds, stimulus payment issues and noticeably MIA IRS clerks didn’t really foster much confidence during already turbulent times. However, this tax season is going to be smoother than the North Atlantic during the Titanic’s maiden voyage. We can feel it.
Just as Bourke Accounting natives are in the midst of preparations, you, gentle taxpayer, must do some legwork, too. As with normal years, you will need to collect your W2s, your interest statements, deductions (if you itemize), Social Security statements…basically just dump everything finance-related into a big bag and call it good. Keeping up with the chaos, however, you might just find that you have a few new and interesting documents to include in that Kroger bag this year.
Since virus precautions shut down many businesses, a lot of people found themselves furloughed or unemployed this year. All of a sudden, people used to consistently filing returns with only one W2 now have multiple forms to contend with. While this might seem a little self-explanatory, it’s important that you bring all of your W2s to your Bourke expert. Even if you only worked for a few months at a particular job, that W2 is still very important – the IRS already knows what you made and they don’t like asking for clarification regarding missing information. While it’s not a big deal if, after you file, you remember that you worked somewhere else for a few months, it’s an extra step. Remember that it’s always easier to file right the first time than it is to file an amended return.
Speaking of unemployment, if you received benefits after losing your job this year, you can expect to receive Form 1099-G by January 31st. Although your Bourke expert trusts you implicitly, it’s not enough to simply give a ballpark estimate of the compensation you received. Also, if you’re in a state that taxes unemployment, this form lets everyone know how much you paid. If you received unemployment and didn’t ask the agency to withhold 10% to cover your federal taxes (CNBC.com), just bringing your form will be enough to remind you that you very well might owe money this year. It’s a good idea to request withholding when you sign up for unemployment, but if you forget, you can fill out a Voluntary Withholding Request (Form W-4V) at any time to avoid being the recipient of an unhappy surprise at tax time.
Another exciting IRS form you might receive this year is Form 1099-INT, Interest Income. Because of the extended deadline, about 13.9 million taxpayers will get “a check averaging $18 on the interest on their refunds” (AARP.org). Last year, if you filed your return after April 15 but by July 15, you most likely received an interest payment from the IRS. While your $18 won’t even cover dinner and drinks, remember that any interest over $10 has to be reported (IRS.gov). Since the IRS sent you that cash, they’ll consider it a nice “thank you” gesture if you would be so good as to report it this year.
This tax season will be mellow. Everything will work just the way it was designed to work. There will be no bombshells to disrupt our mellow tax season. If we say this often enough, our dream can be reality. After all, positive thinking is the first step to a positive outcome!
If positive thinking doesn’t work, you still don’t have anything to worry about. No matter what the world or the IRS throws at your Bourke Accounting pros, they will lead you to financially safe shores. When you trust Bourke Accounting experts with your return, you can rest easy knowing that they are aware of what changes are transpiring and exactly how to address each one. Don’t forget to wish the accountants in your life a Happy Tax Season!
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
Can you feel that? There, right there! Surely you must have felt that…no? That’s okay, Tax Season is coming whether you’re ready or not!
Last Tax Season disappointed the experts over here at Bourke Accounting. The extended deadline robbed them of the drama and adrenaline-driven urgency they’ve come to crave. There were no last minute, anguished calls from clients, desperately trying to file hours before the11th hour. We didn’t work late – we didn’t even work on weekends! Yes, last Tax Season can be chalked up as an all-around disappointment. Hopefully, this Tax Season will fulfill Bourke Accounting’s expectations.
Thanks to the CARES Act, it seems that this year’s tax returns are shaping up to be a little more interesting than usual. For example, some people have wondered if they’re going to be taxed on that stimulus check we received a few months ago. While taxpayers need to report the stimulus payment on their 2020 return, it’s being treated as a fully refundable tax credit and, therefore, not included in gross income or subject to taxes (Barrons.com). So, for anyone who was worrying: you don’t have to.
Besides stimulus payment questions, taxpayers are also speculating about their Paycheck Protection Program loans. The Paycheck Protection Program was designed to help small businesses attempt to survive in a Covid world by allowing them to borrow 2.5 times their monthly payroll costs (or $10 million, whichever was lower) (SmartAsset.com). As long as the money was used to pay for approved business expenses, such as payroll, rent and utilities, the loans will be forgiven. However, the IRS warns that “any expenses paid with money from those PPP loans cannot be deducted from taxable income” (DaveRamsey.com). In addition, in order for the loan to be forgiven, taxpayers must have a loan forgiveness application approved by the Small Business Administration (DaveRamsey.com). However, with the SBA “processing the applications for $525 billion in loans given to 5.2 million borrowers,” (DaveRamsey.com), authorities suggest getting comfortable, as application approvals are going to take a minute.
Another CARES Act change we’re going to see this year has to do with early distributions from retirement accounts. Usually, if you were to raid the 401(k) cookie jar before your 59 ½ half-birthday, you’d be slapped with a 10% penalty. However, the powers that be realized that it’s not too cool to penalize unemployed people for feeding their families with their own money and have temporarily waived the penalty. In order to avoid paying 10%, the reason for the distribution has to have something to do with the virus; job loss, quarantine, reduction in pay/hours or the closing of your business all count as coronavirus-related reasons for distributions (ConsumerFinance.gov). Remember: if you’re planning on an early, penalty-free distribution, you only have until December 31st of this year to make it happen!
These are just a few of the tax return/Corona-related modifications that we can look forward to this Tax Season. Trust me, there are more. It’s comforting to know that, even though 2020 has gone sideways, the IRS and Congress are still busily working on guidance to help tax preparers and taxpayers get through another bizarre Tax Season!
While Tax Season is far off in the distance to you, Bourke Accounting experts are getting ready. By the time you drop off your important documents, Bourke Accounting pros will already know how to handle any issue that might pop up. Bourke Accounting’s bookkeepers and tax preparers know that, without dedication and education, Tax Season is simply impossible.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
If you’ve spent any time with numerically gifted people, like you’ll find at Bourke Accounting, you’ll notice that they have one universal commonality: they can’t stomach clutter. Unsurprisingly, detail-oriented bookkeepers and tax preparers can’t help that their meticulous natures cross over to the physical. For example, Bill, our fearless leader, nonchalantly checks out our desks each morning. His subtle assessment goes unnoticed until he asks, offhandedly, if you can remember what the surface of your desk looks like. The mathematically inclined like order, pure and simple.
If, out of the blue, Bourke Accounting experts were forced to downsize to smaller homes, they could easily make the transition. However, this is not the case for most of us (normal) people and sadly, getting good at downsizing fast is just what many across the country are attempting to do right now.
In July, CNBC predicted that the coronavirus could lead to up to 40 million Americans losing their housing – which is four times the amount seen during the Great Recession (CNBC.com). Besides the devastation of losing dream homes, this housing catastrophe is also capable of making the pandemic worse; keeping a strict social distance regiment when moving in with family is difficult. While trading a familiar home for a more affordable, scaled-down version is also difficult, it doesn’t have to be the traumatic experience many expect. Although it may be hard to believe, a move, forced or not, could lead to a better life.
One positive aspect to downsizing is letting go of unneeded items. A lot of us tend to include the same boxes of “treasures” with every move we’ve made since high school – most of the time we never even get around to unpacking these things. When you’re moving, you ought to critically look at this stuff and question if you really need to move it again. For example, reading all of your essays from grade school is fun the first time, but how many times do you need to examine your younger self’s take on Sounder? No one is suggesting that you throw away the quilt your great-grandmother made, but not everything in your boxes has such sentimental value. As Chuck Palahniuk wrote, “The things you own end up owning you. It’s only after you lose everything that you’re free to do anything.”
Another good thing about downsizing is that when you decide to let go of an item, you can then reduce your environmental footprint by donating it to someone in need (Home Builders Insights, Issue 2). Your donation could be the finishing touch on a first apartment or give a needy family a feeling of security and home. Never underestimate the power of a good toaster, guys.
Finally, downsizing offers absolute proof that “things” are just that and nothing more. You are not a blend of high-end appliances. Rather, you are a unique entity that is worth more than the aggregated value of your toys. Downsizing or not, it’s a good idea to go through your closets once a year in order to let go of the past. If you haven’t worn or used something in the last 7 months, chances are that you won’t and you also won’t miss it if it’s gone.
Streamlining your environment, whether by choice or by necessity, is difficult. If you keep a positive outlook and acknowledge that some changes, while hard, can mean favorable outcomes, maybe it won’t seem so bad. We can either stoically hang in there or cry in the corner. As we learned in diapers, tantrums very rarely get anything accomplished.
If you want to see some uncluttered offices, stop by Bourke Accounting. Bourke Accounting reps know that a clean workspace makes work, well, easier. Bourke Accounting bookkeepers and tax preparers keep things organized so that they always know what’s going on. Talk with a Bourke Accounting pro and see how their love of order can benefit you.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
The way things are going, wouldn’t it be nice to leave the corporate world behind? Have you ever considered buying a little farm, waking to the sound of roosters each morning and filling your days with the good, honest work of teasing a living from the land. Sure, your muscles will ache, but clean dirt is easier to get off of your hands than cyan ink from exploded printer cartridges. If this is your dream, then you’re in luck; not only do Bourke Accounting experts know their way around corporate tax returns, they also know what to do with a farmer’s return.
As with other businesses, farms are eligible for tax breaks. However, if you think you can just start deducting because you have a few rows of corn in your backyard, please believe that the IRS might get curious. The differences between a “hobby” farm and a business farm are actually the same as any other hobby and self-employed business. For example, you have to show that you’re operating your farm in a businesslike manner, you depend on the income from your farming, you change your methods to make the farm more profitable and the farm makes money in some years (Agfax.com). In addition, the IRS expects you to have a business plan, profit and loss statements, “daily activity logs and financial records” (Chubb.com). Obviously, growing and selling some tomatoes after your office job isn’t quite going to meet these standards.
Also like in other businesses, farmers are allowed to deduct expenses. Wages paid for farm workers, utilities, insurance and equipment are all examples of deductible expenses (IRS.gov). In addition, depreciation regarding equipment is also available for farmers. In an odd turn that makes sense, even livestock are depreciable “assets.” According to Beef Magazine, a cow should be considered a “current asset that is not depreciated” until that cow has her first baby. After that, she is “transferred into the breeding stock as a fixed, depreciable asset” (BeefMagazine.com). The University of Nebraska advises that the number of productive years for most cows is between 3-5 years. If a farmer uses five years for each cow, the general depreciation would be “$250 per head per year” (Beef.unl.edu).
Although some rules benefit farmers, there is one that seriously does not. If farmers suffer crop damage or loss, they can receive insurance payments – which is great. However, that money has to be counted as income on tax returns and the farmer still has to pay taxes on it (Money.com). Also, crop disaster payments, given by the federal government, are counted as income, too (Money.com)! It would seem that some rules make hard times even harder.
And then there are rules that can only be described as shady loopholes. Under the Greenbelt Law in Florida, for instance, land used for agricultural activities are taxed “on the current ‘use’ value…versus its development value” (SaundersRealEstate.com). This amounts to much lower property taxes. What land developers (who aren’t quite ready to build or are in the process of building) do is rent a few cows, let them wander around the property and avoid high property taxes (TheAtlantic.com). Walt Disney World has reportedly saved $1.5 million by employing some of the happiest cows on Earth for this purpose (TheAtlantic.com). Unscrupulous developers save about $1 billion a year in property taxes (UnusualInvestments.com) and it’s completely legal.
When you’re ready to quit your 9-5 and live off the land, remember that there are programs and breaks to help. And let’s all keep in mind that, while technology is amazing, we can’t eat computer code. Love to the Farmers!
As we said above, Bourke Accounting tax preparers and bookkeepers know how to handle a farmer’s return. Your Bourke Accounting pros will do everything they can to help make your hard-working fantasy a reality. With a Bourke Accounting expert on your side, all you have to do is keep an eye on the sky and Bourke Accounting will do the rest.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
You can say a lot of unkind things about the Internal Revenue Service and the assorted financial powers that be. However, you can’t say they’re not thorough and you can’t say they’re not fast (when they want to be). For example, in mid-March, when most of us were searching for toilet paper and looking down the barrel of layoffs, the IRS was busily writing guidance plans regarding the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Minutes after being furloughed, people with Individual Retirement Accounts were, no doubt, uneasily eyeing those accounts and doing some sacrificial arithmetic. Considering house, car and child expenses, looting that IRA would have seemed the only option to keep the bigger wolves from the door. However, if under the age of 59 ½, these folks would have had to resign themselves to not only paying a 10 percent early withdrawal penalty, but then also having these premature funds included in their gross income (IRS.gov). Many reluctant fingers dialed financial institutions intending to cash out – needs must when the Devil drives, after all.
And right about here is where the IRS’ thorough contingency planning comes into play. Even before the virus descended, the IRS wasn’t completely heartless; there were certain situations that allowed for taxpayers to go unpenalized after early withdrawals of retirement money. For example, if a taxpayer became disabled, adopted or gave birth to a child, had to pay for tuition or unexpected medical bills, the IRS was willing to forgo that 10% penalty (IRS.gov). Now that Corona has disrupted day-to-day living, the IRS is offering even more altruism.
For “qualified individuals,” the rules have changed. If you have been diagnosed with COVID-19, have a spouse/dependent diagnosed or have been suffering monetary consequences as a result of the VID (laid off, lost child care, reduced hours, etc.), you count as a qualified individual (EA Journal, Vol. 39, No.5) and are eligible for free prizes! Under the CARES Act, you can now take an early distribution of up to $100,000 with no penalty in sight. This money will be counted as income, but “ratably over a three-year period,” unless elected otherwise. In addition, this money won’t be subject to the mandatory and normal 20 percent withholding rule (EA Journal, Vol. 39, No.5). Of course, you are welcome to voluntarily withhold, which would probably make things more orderly in the long run.
Another neat addition within the CARES Act has to do with required minimum distributions. Before these exciting times, those required to take a distribution (age 72 for 2020), HAD to take a distribution. If you didn’t take that cold, hard cash before December 31 of each year, you got bopped with a “50% excise tax on the amount not distributed” (Mintz.com). Depending on your account, that could be quite a wrist-slap. However, seeing as our stock market has been taken to the woodshed, the CARES Act is waiving RMD requirements for this year. But what if you’ve spent the last year on a tropical island paradise, far away and unaffected by the travails of the virus? That’s all right! You do not have to be a “qualified individual” to make use of this perk – this is available to everyone required to take a distribution.
Whatever your opinion of our financial authorities might happen to be, you must give credit where credit is due. During these desperate times, guidance and safety nets have been constructed. Your house and your retirement are safe for now, so at least that’s one thing you can stop worrying about.
The IRS is quick, but your Bourke Accounting tax preparers and bookkeepers are keeping up. As soon as a new regulation makes the scene, your Bourke Accounting pro knows about it. When you sit down with a Bourke Accounting expert, rest assured that the facts are known and the advice is solid.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
Sometimes, the Universe seems to gently nudge us in the direction it wants us to go. Like, if a flat tire kept you from attending a party where everyone got Salmonella, you’d say, “Whew! The Universe looked out for me.” Whether the Universe was playing favorites or not, you avoided four straight days in the bathroom, so the end result is the same.
Since the IRS might have an inflated view of itself, it engages in these same practices. For example, the IRS insists that citizens who make their money illegally must report it on their returns. The IRS even offers a vague assurance that it won’t tip off other enforcement authorities. More importantly, it’s insinuated that, no matter how tough the DEA is, the IRS bites harder – so be honest, outlaws!
There is no clearer example of the IRS sheepherding us through the corrals of taxes than filing status. If one chooses to file married and jointly, there are a ton of free prizes involved. However, the lack of free prizes associated with married filing separately almost seems like a punishment. Is this because the IRS is lazy and would prefer to process only one return per couple? Is it because the IRS is playing marriage counselor? Either way, separately filing lovebirds get the short end of the stick.
If you’re going through a messy divorce, you’d rather not meet with a Bourke Accounting pro in the same room as that cheating so-and-so. In fact, you’d prefer to forget the whole failed marriage and move on. Obviously, the IRS designed the filing separately option for events such as that. Another motivation not to file with your spouse is if you think the love of your life might be up to some shady dealings. If there’s a suspicion of tax evasion, it will benefit you to steer clear of that return and not be associated with criminality (Investopedia.com). Of course, if you don’t trust your spouse enough to file with her/him, you probably need to reevaluate the relationship.
What about if you’re just an independent person who likes to handle things on your own? That’s cool, but, again, don’t expect the Feds to reward your autonomy. While joint filers are eligible for credits and breaks, separate folks really are left out. For example, the Earned Income Tax Credit is a benefit designed to help working stiffs who aren’t reality tv host “billionaires”. If you meet the requirements, this will reduce the amount of tax owed and might score you a refund. To be eligible to receive this credit, you can file as any status, except – you guessed it – married filing separately. Although you don’t need a child to use this credit, you do need another human being willing to go halfsies on a return with you.
Another example of the IRS’ questionable rule-making is the Premium Tax Credit. This is another program for hard-working folks and it helps people to afford health insurance bought through the Health Insurance Marketplace. When you get your insurance, the Marketplace can either figure out an estimated credit paid to the insurance company to lower your monthly premiums or you can “get all of the benefit of the credit” (IRS.gov) when you file your return. What’s great about this is that if the amount of the credit is larger than what you own in taxes, the difference is a pretty little refund. Everyone’s happy! Everyone but those poor, ignored married citizens with only one name on their 1040.
Perhaps the IRS thinks there is something inherently dishonest about married filing separately filers. Obviously, if your SO makes a million a year and you only make 15 grand, you don’t need help with insurance. Since the IRS doesn’t trust us to voluntarily play by the rules, a little nudge makes everyone honest.
Your Bourke Accounting tax preparer can help you decide which filing status is ideal for you. Bourke Accounting pros can explain the drawbacks and advantages involved and offer your best bet. At Bourke Accounting, understanding your options and making an informed decision is the most important aspect.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
Recently, a reality television host and “billionaire” has been accused of not paying his federal income tax for years. Civilian taxpayers roll their eyes, think “how stupid/greedy can one guy be?” and move on to the next article. Wealthy celebrities in tax trouble aren’t new; we’ve witnessed rich folk like Wesley Snipes and Willie Nelson fall into the same trap with stunning regularity. However, when tax-evading mug shots are splashed across the front page, we rarely think of the repercussions for the professionals behind those erroneous returns.
For example, when you hand over your documents to a Bourke Accounting tax preparer, your expert is reasonably sure that you are an honest person. And although you may be as pure as the driven snow, your tax preparer would be remiss if s/he didn’t double check a few things. If you were to claim a few children for the Child Tax Credit, for instance, it’s second nature for your tax preparer to make sure that each child has a Social Security number. This is not an indictment against your honesty, or the existence of your child, but a due diligence requirement according to the IRS.
Because tax benefits, like the Child Tax Credit, are of particular interest to the IRS, tax preparers must be vigilant. The IRS is so interested, in fact, that they actively seek out returns “with a high chance of errors completed by the same preparer” (EITC.IRS.gov) and might decide to schedule a little audit visit. When the agent meets with the preparer, actual proof that the credits were justified are demanded. These include due diligence records, questions answered by the client, worksheets and client provided documents” (EITC.IRS.gov).
If it is discovered that the preparer didn’t ask the right questions and gave an undeserving person credits/refunds, the preparer is slapped with a penalty of $530 per mistake. Not only that, but these mistakes could also result in a suspension or termination of e-filing privileges (EITC.IRS.gov). As the IRS strongly recommends e-filing, and clients like the convenience, this would put a mildly disgraced preparer at a disadvantage.
In addition to penalties for not obtaining the right back-up documentation, tax preparers also have their noses slapped for carelessness. If your preparer doesn’t sign a return – BAM! – that’s a fine of $50 per return. If the preparer forgot to furnish you with a copy of your return? That’s another $50. And if the preparer didn’t remember to save a copy of your return? Well, that’s $50, too. On a good note, the IRS won’t charge your preparer more than “$26,500 in calendar year 2020” (IRS.gov) for these sorts of infractions.
Besides the little fines for being absent-minded, tax preparers also have to protect your sensitive information. If a preparer is found guilty of “knowingly or recklessly disclosing” (IRS.gov) anything about your return, s/he can be fined $1,000, a year in prison, or both (plus court costs) (IRS.gov). This is why preparers (and their wonderful assistants) keep client records locked up tight and out of sight.
For a preparer like the one the “billionaire” used, the penalties might be a little steeper. If wrongdoing is proven, that preparer could be fined for lovely things like willful or reckless conduct. Basically, if the preparer knew the information was questionable, but created the return anyway, the possibility of total disbarment and heavy prison time could become the reality.
The relationship between a client and a tax preparer is special. The preparer trusts you to furnish legit paperwork and you trust that the preparer won’t getting imaginative with your legit paperwork. All in all, it’s a good, symbiotic relationship for everyone.
Bourke Accounting experts haven’t been disbarred, nor do they plan to be. Your Bourke Accounting specialist makes sure to play by the rules – for their good, as well as yours. When you sit down for a Bourke Accounting appointment, rest assured that everyone in the room is in good standing with the IRS.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.
The year Ruth Bader Ginsburg made it to the Supreme Court, I had a hip, young, Converse-wearing math teacher. He delighted in telling his female students that we could be anything: if a door closed in our faces, we were made to kick it down, no man-made barriers could hold us back, the world was ours. After a particularly frustrating day of algebra, when I had decided to quit school and join the carnival, he put a hand on my should (in a non-sexual harassing way) and said, “It’s all right, Sue, we just gotta get you to a “D”. Girls don’t go in for math and science anyway.”
The saddest part was that he meant well. He tried to ease my angst by pointing out that women just didn’t “get” math, so I shouldn’t be so hard on myself. While he wasn’t mean-spirited, he was thoughtlessly demeaning. And his remark wouldn’t fly today because of the efforts of a dead woman.
Since Justice Ruth Bader Ginsburg’s death last week, we have been inundated with her resume and achievements – at this point, we know if she preferred two-ply or one. Because of this, I’m not going to rehash what she did for women, minorities and the fight for equality. I’m more interested in some very curious reactions to her passing.
It wasn’t surprising that Republican Rep. Doug Collins tweeted a callous sentiment regarding Justice Ginsburg’s history of defending women’s autonomy. Ah, yes, the people who care so much about what’s going on in strange wombs very rarely spare a thought to the sentient individuals once out of the womb (i.e. clinic bombings, doctor murders). No, no, we aren’t shocked when this caliber of person negates a woman’s entire existence simply because he would have preferred her to be quiet, demure and preferably close to the stove. What is passing strange is some other views on the matter.
For example, Erin Monahan, writing for Medium.com, denied Justice Ginsburg’s legacy, as well. Monahan wrote that she felt nothing upon learning of Justice Ginsburg’s death because Ginsburg “failed to advocate for all women.” Monahan continued by intimating that Justice Ginsburg will be responsible for any potential murders or assaults of Indigenous women as a result of a gas pipeline under the Appalachian Trail (J. Ginsburg ruled against environmentalists trying to stop the construction). After Monahan accused Ginsburg of sitting “happily on her capitalist throne,” she railed against the elitist, non-inclusive “white feminism” that was Justice Ginsburg. Furthermore, if you grieved at all for Justice Ginsburg, that simply “reveals internalized white supremacy” on your part. Well, duh! Ginsburg had it so easy! What with being both female and Jewish, she would have just been handed a spot on the Supreme Court.
Hey, Ms. Monahan, without people like Justice Ginsburg, you’d still have articles published, sure, but your editor would have put a “Mr.” in front of your name.
Ruth Bader Ginsburg made mistakes. However, her contributions far outweighed those mistakes. It is disingenuous to denigrate an illustrious life and career over not seeing eye to eye on every matter . Justice Ginsburg will serve as an inspiration and a glimpse into a better, equitable possibility.
Bourke Accounting hires women for positions of authority and responsibility. Bourke Accounting, unlike my math teacher, believes that women can do anything when given the opportunity. Why don’t you sit down with a Bourke Accounting bookkeeper or tax preparer and let them show you how it’s done?
Thanks for everything, Justice Ginsburg. You done good.
Come see us any time. Our number is 502-451-8773 and don’t forget to visit our website at www.bourkeaccounting.com. See you soon!
Written by Sue H.