‘Glitch’ Blamed for Davidson County Overcharging Property Tax Bills

 

Davidson County officials have announced that a glitch is to blame for some county residents being overcharged on their vehicle tag tax bill. A new tag and tax law was started in July 2013 in North Carolina that made it mandatory for vehicle owners to pay vehicle property taxes when they purchase or renew a license tag. The glitch occurred due to the new software, which pulls addresses from the state system. If the addresses do not match exactly, by default the highest municipal tax rate in the county will be assessed on the vehicle tax bill. Prior to the new law, the county was averaging about 10 errors per month out of approximately 13,000 monthly bills. But now the county is averaging 60 refund requests each month due to the glitch. This glitch only affects vehicle property tax bills. Davidson county residents are urged to look at their bills, and contact the Davidson County Tax Office at 336-242-2160 as soon as possible if they notice the wrong tax rate listed.

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

The Importance of Keeping SSNs and TINs Secure

In 2012, the Internal Revenue Service identified more than 1.8 million incidents of identity theft, and the numbers for 2013 are expected to be even higher as the IRS increased investigations of tax-related identity theft by 66%. The most common situation that occurs during tax season is that a thief will use a stolen Social Security Number of Tax Identification Number to file a fake tax return and then subsequently claim a refund on that return. Your Social Security Number is the most important piece of your personal information, and should be protected.

Identity thieves can steal your Social Security Number by stealing your wallet or purse, going through your mail, hacking into your accounts on websites, rummaging through your trash, and conducting scams, such as impersonating legitimate businesses to retrieve personal information from you. To avoid the theft of your Social Security Number or Tax Identification number, store all personal information in a locked safe in your home, shred all mail and correspondence that has your personal information on it rather than throwing it away, and do not ever give out personal information over the phone unless you are the one contacting the company. If you believe that someone has stolen your identity, contact the Internal Revenue Service through this link. If you have any questions about keeping your Social Security Number or Tax Identification Number secure, please contact us!

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

When to Expect your Income Tax Refund

Between mid-February and April, everyone is thinking the same thing: “When will I get my tax refund?” Although there are many factors that can affect when you will receive your income tax refund, the chart below gives a general estimate of when to expect your refund.

*Please note that every return is different, therefore the delivery of each refund will vary greatly. The chart below is only listed to provide a general estimate.*

IRS accepts your return (by 11:00 am) between…					Estimated Direct Deposit Sent	Estimated Paper Check Mailed
January 31		and		Feb 08 2014	2/12/2014	2/14/2014
Feb 09		and		Feb 15 2014	2/19/2014	2/21/2014
Feb 16		and		Feb 22 2014	2/26/2014	2/28/2014
Feb 23		and		Mar 01 2014	3/5/2014	3/7/2014
Mar 02		and		Mar 08 2014	3/12/2014	3/14/2014
Mar 09		and		Mar 15 2014	3/19/2014	3/21/2014
Mar 16		and		Mar 22 2014	3/26/2014	3/28/2014
Mar 23		and		Mar 29 2014	4/2/2014	4/4/2014
Mar 30		and		April 05 2014	4/9/2014	4/11/2014
April 06		and		April 12 2014	4/16/2014	4/18/2014
April 13		and		April 19 2014	4/23/2014	4/25/2014
April 20		and		April 26 2014	4/30/2014	5/2/2014
April 27		and		May 03 2014	5/7/2014	5/9/2014
May 04		and		May 10 2014	5/14/2014	5/16/2014
May 11		and		May 17 2014	5/21/2014	5/23/2014
May 18		and		May 24 2014	5/28/2014	5/30/2014
May 25		and		May 31 2014	6/4/2014	6/6/2014

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

IRS Proposes Penalties for Non-Coverage under Obamacare

The Internal Revenue Service has recently outlined Affordable Care Act regulations that detailed the monetary penalties for individuals who do not sign up for health care coverage in 2014. IRS officials have detailed what will be considered the “minimum essential coverage” under the Affordable Care Act, as well as a breakdown of the fines that will be incurred. If taxpayers do not enroll in available health care programs, they will incur monetary fines as a penalty. Under the shared responsibility provision of the act, individuals who do not have the minimum required coverage in a specific month could incur the following proposed annual fees:

·         $95 in 2014

·         $325 in 2015

·         $696 in 2016

After 2016, the fees will be readjusted according to the current cost-of-living amounts. For more information about the Affordable Care Act regulations, visit the websites linked below. If you have any questions, please contact us!

http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions

http://www.accountingtoday.com/news/IRS-Proposes-Obamacare-Penalties-Noncoverage-69375-1.html

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

Self-Employed Workers Less Likely to Save for Retirement

Although one of the best aspects of being self-employed can be the independence it allows, that same independence applies to saving for retirement. Self-employed workers usually do not have the same access to 401(k) savings plans and automatic contribution plans that traditional employees of a company have, so individuals must practice greater control over their own retirement planning. A survey from TD Ameritrade indicates that nearly 70% of entrepreneurs, contractors and other self-employed individuals were not saving for retirement on a regular basis, if they were even saving for retirement at all. Additionally, 28% percent of self-employed workers did not have retirement savings accounts, which is in contrast to the 10% of traditionally employed workers who did not have retirement savings accounts.

Self-employed jobs have increased by more than 14% since 2001, and today more than ten million Americans are self-employed. There are many benefits to being your own boss, but a major disadvantage is that there are less options for retirement savings accounts. No matter how you are employed, opening and contributing regularly to a retirement plan is both beneficial and necessary to prepare for the future. If you are self-employed, research your options and set up a plan the same way you would if you had an employer who offered a retirement plan. Although account options might be limited and a bit more complicated to open, self-employed workers should still open a retirement plan and begin saving immediately. If you have any questions about retirement plans, please contact us.

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

Amazon to Begin Collecting Sales Tax in NC

Amazon.com began collecting sales tax in North Carolina as of February 1^st this year. This move makes North Carolina the 20^th state in which the online retailer collects sales tax. Amazon’s decision to claim sales tax made local retailers happy, as many complaints have been issued stating that Amazon received an unfair advantage by not having to pay sales tax. According to the CPA Practice Advisor, “Under the current system in North Carolina, taxpayers are supposed to pay a "use tax" on online purchases and declare them on their state tax returns. Few do. One 2010 estimate said failure to pay the taxes costs the state, its cities and counties $190 million a year in lost revenue”. What are your thoughts on Amazon collecting sales tax?

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

 

 

Why Form W-9 is Important

The Internal Revenue Service is increasing their efforts to ensure Forms 1099 are being filed as required.  In order to be in compliance with IRS regulations, you must file a Form 1099 for payments of $600 or more in a calendar year to all individuals, sole proprietorships, partnerships, and LLCs for rent, interest, dividends, royalties or services.  Entities that are incorporated, unless they are an attorney, are exempt from the 1099 filing requirements.  Purchases of tangible property such as inventory, fixed assets, office supplies, etc., are also exempt from the 1099 filing requirements. In order to file complete and accurate Forms 1099, certain information is required from your vendors and service providers, which includes their taxpayer identification number. 

Form W-9 is generally used to obtain all the necessary information from vendors and service providers. If the Recipient does not have a federal I.D. number, we recommend that you request the Recipient to apply for one. The federal I.D. number helps to protect you the payer from possible reclassification of an independent contractor to a company employee. If an independent contractor is reclassified to an employee, your company (the payer) is responsible for back taxes including penalties and interest on any payments made to the recipient. For more information on protection from reclassification please call us. If the Recipient has an ITIN (Individual Taxpayer Identification Number) please contact us for additional information. An ITIN will always begin with the number nine (ex. 989-99-7452). There are certain withholding and reporting requirements required specifically for Recipients with an ITIN. It is imperative that you obtain the necessary information.  Failure to file complete and accurate Forms 1099 on an annual basis could result in severe civil penalties assessed by the IRS.  We strongly encourage you to provide a Form W-9 and letter to all of your vendors and service providers to request the necessary information.  Continued contact with some may be necessary to obtain the Form W-9.  Please be persistent in obtaining the Forms W-9 from all of your vendors and service providers.

If you have any questions or need additional information, please contact us!

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

 

 

Planning and Saving for Retirement

There is no better time than the present to begin planning and saving for retirement. In order to be able to retire without a worry, you will need a source of income that will cover your expenses such as rent, medical expenses, transportation and general living expenses when you are no longer employed. To reach your full retirement savings potential, follow these steps:

1.      Review your retirement savings options. If you do not have a retirement plan or savings account, open one as soon as possible. Think ahead to the future and the kind of lifestyle you want to have, and calculate your monthly expenses, plus general living expenses that you will need to fulfill that lifestyle. Have a goal in mind of how much you want to have set aside by retirement age.

2.      Maximize contributions to your retirement plan. If your employer offers a retirement plan, join the plan and contribute as much as you are able to. Many employer-sponsored retirement plans (Simple IRAs, 401ks) provide that your employer will match the amount that you contribute monthly (up to a certain amount). If your employer offers 5% matched contributions, maximize the saving potential and contribute at least 5% monthly.

3.      Once you have a savings and/or retirement account set up, review your retirement plan regularly to be sure that you are taking full advantage of all of your options and contributing enough to your accounts. What you save now will fund your lifestyle later, so reviewing the amount you have saved will keep you aware of how close or far away you are from your retirement goals.

For more information on how to plan save for retirement, visit these links below:

http://www.irs.gov/Retirement-Plans/Retirement-Saving-Tips-for-Individuals

 http://www.irs.gov/Retirement-Plans/Retirement-Plans-Frequently-Asked-Questions-(FAQs)-1

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).