Ryan Walsh Returns to Mitz & Rozansky

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Ryan Walsh is returning to Mitz & Rozansky as a Manager.

Ryan began his career at MRSC in 2008 and worked closely with small to mid-size businesses and individuals, helping them with their accounting and tax planning/compliance needs. Ryan left MRSC to broaden his education and experience base in a wide range of accounting related activities. Each step along the way was a step forward in responsibility and encompassed substantial growth of his knowledge base. Those steps included:

Ernst & Young, Senior Tax Consultant
Tax compliance and audit provisions for large corporations

Quad Graphics, Employment Tax Manager
Employment tax compliance for 30+ entities, with roughly 25,000 employees

Monster Worldwide, Inc., Senior Accountant
Established and maintained monthly accounting procedures for several of their large European markets

Ryan stayed in regular contact with the principals at MRSC throughout his career advancement with the idea that one day he would return to our organization. Early this year Ryan met with Steve Rozansky and Sandy Mitz to discuss a possible return to MRSC. Everyone agreed that the time was fast approaching for Ryan’s return. Now that he has fulfilled his obligations to his previous employer and honed his skills, Ryan is returning to MRSC as a Manager effective August 15. We are all extremely excited to have him back and look forward to introducing him to our clients and integrating him into our account services group.

What should I do if I am contacted by the IRS?

What should I do if I am contacted by the IRS?
First of all, please note that the IRS sends notices by mail, they will not contact you initially by phone or email. If you receive a phone or email inquiry, do not give the person any information as they are likely not with the IRS.

If you receive a letter or notice from the IRS consider the following:
It is never a good idea to disregard and IRS letter or notice. The issue in question needs resolution and will not go away if you ignore it. In fact, you may be subject to more severe penalties if you do not respond in a timely manner.

So first determine the nature of the inquiry. Then find the stated deadline for a response and determine if you will need additional time to respond. It is often possible to get additional time to respond to a notice, and you might even be able to resolve the issue by simply calling the telephone number provided on the notice.

It is a good rule of thumb to contact your tax professional for advice whenever you have dealings with the IRS. Mitz & Rozansky clients should call (414)352-3200 and speak to a member of our staff. We will assist you in compiling the necessary tax related information information and then guide you in properly responding to the IRS. If legal advice is required, we can even refer you to a qualified legal counsel specializing in dealing with the IRS on tax matters.

Here are three helpful tax return filing tips

Get a free copy of your tax return
You can request a Tax Return Transcript free of charge using Form 4506-T rather than pay $50 per return to request a copy from the IRS by using Form 450: Request for Copy of Tax Return, Go to www.irs.gov and click “Get a Tax Transcript” to utilize the automated self-help service. You can also call 800-908-9946. If you are a Mitz & Rozansky tax client we will also supply you with a free copy of your return, if it was prepared by our firm.

Electronic Fund Transfer
The fastest way for you to receive your refund is to combine e-file with Direct Deposit. About 8 in 10 taxpayers use direct deposit likely because the IRS issues 9 out of 10 of these refunds in less than 21 days. If money is to flow the other direction because you owe taxes, the best way make the payment is with IRS Direct Pay. This free service can transfer money using the client’s checking/savings account, debit/credit card or Electronic Funds Withdrawal. Refer to the “Payments” tab at www.irs.gov for further guidance on transferring money electronically. If you are a Mitz & Rozansky tax client we assist you with electronic fund transfer procedures.

File your return even if you have a payment issue
By all means, file your tax return even if you are unable to pay some or all of the taxes you owe. If you owe money to the IRS and cannot make the entire payment, you should pay as much as possible to reduce interest and penalties for late payments. You need to file a Form 9465: Installment Agreement Request, with your tax return to request to pay in installments. You may also use the Online Payment Agreement tool to request more time to pay. If you are a Mitz & Rozansky tax client we assist you with instituting a payment plan.

Mitz & Rozansky will guide you every step of the way. Please contact us at (414)352-3200 for assistance with these and any other tax filing procedures.

Business Accounts Are Vulnerable Targets for Cyberattacks

Business accounts are vulnerable targets for cyberattacks. The owner of a small business discovers someone has stolen thousands of dollars from the company checking account. Turns out it was a hacker. Unfortunately, it’s a scenario that happens every day.

According to a survey of owners by the National Small Business Association, cybercriminals took an average $32,000 from small business accounts. Sadly, unlike consumers, businesses don’t have the same legal protection from bank account fraud.

Passed in 1978, the Electronic Funds Transfer Act is designed to protect individual consumers from bank account theft, but is silent about businesses. A business’ protection depends on the agreement it signs with a bank which generally requires strict compliance with the banks’ security requirements.

Small companies are usually more vulnerable because of a lack of internal safeguard and seldom have resources to recover from such an unprotected theft. Not to mention the time and money spent installing new safeguards.

How it happens
As quickly as companies and banks change their practices, cybercriminals find new ways to infiltrate bank accounts. A popular scam is to trick companies into bogus wire transfers where an unwitting employee responds to an email from another employee to make a payment via wire transfer to an external account. Too often employees comply without checking the legitimacy of the request.

According to the government there has been a 270% increase in such activity in the first 8 months of 2015 and organized crime groups in Eastern Europe, the Middle East and Africa are most often responsible.

Planting malicious software or “malware” on a company computer, often via an email containing a link or attachment that, when opened, embeds a program that can record the company’s bank login and password and send it back to the criminals, who then can withdraw funds. Using a computer or smartphone in a public place that has a Wi-Fi environment can also be risky, Some Wi-Fi spots may have weak security, and savvy hackers know how to steal information that someone keys into their device.

Thankfully many banks today have procedures designed to protect against stolen logins. If bank computers don’t recognize a device trying to log in, the bank will send a one-time access code to the account holder on a separate device like a phone. Without that code, a fraudster can’t log in.

What you can do
Sophisticated banks have software that flags emails or attempted logins from unfamiliar Internet service providers and use what’s known as two-factor authentication, requiring unfamiliar account users or devices to supply additional information like one-time access codes.
Additional steps owners can take:

* Everyone in the company must be hypervigilant about emails, being wary about clicking on links and attachments and checking the addresses that emails came from. Criminals often create email addresses that look similar to your companies’ format but have an extra character like an “I” or “i” which is not readily apparent.

* Initiate or strengthen procedures so several managers must sign off before a transfer can made.

* Check your bank balance daily and initiate a text alert system whenever there’s a withdrawal.

* Avoid logging into your bank from public spaces like coffee shops, airports, hotel lobbies, basically anywhere that offers free Wi-Fi. It is a sound practice to safely log in when you have access to a secure Internet connective such as in your home or office.

Update: Scam – Requests for Information Returns

There are multiple phishing scams being reported of requests of employees, employers, and HR departments to submit copies of information returns (W-2s and 1099s) by email to resolve tax issues. The Department of Revenue (DOR) does not make requests for copies of information returns by email and does not request that information returns be submitted to it via email due to the personally identifiable information they contain.

DOR is currently reconciling millions of information returns (e.g., W-2s, 1099s) it received in January and February with the withholding reported by payers on Form WT-7 and individuals on income tax returns. In doing so, DOR may request copies of information returns it has not received or needs to verify. DOR makes such requests by letter though the U.S. Mail – not by email.

DOR is currently reconciling millions of information returns (e.g., W-2s, 1099s) it received in January and February with the withholding reported by payers on Form WT-7 and individuals on income tax returns. In doing so, DOR may request copies of information returns it has not received or needs to verify. DOR makes such requests by letter though the U.S. Mail – not by email.

For more information on this and other topics affecting your finances and taxes, please contact a member of our staff at (414)352-3200 or at info@mrsc.com.

 

Protecting Americans from Tax Hikes Act of 2015

Prior to recessing for the holidays, the House and Senate passed the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The President signed the Act and a FY 2016 omnibus on December 18. The Act goes well beyond the typical tax extenders legislation seen in prior years.

Listed below are overviews of several of the key provisions impacting businesses and individuals. Please contact us for a complete rundown of all of the changes and specifically those that apply to your particular tax returns.

Businesses
Code Sec. 179 Expensing
The dollar limit for Code Sec. 179 expensing for 2015 had reverted to $25,000 with an investment limit of $200,000. The Act permanently sets the Code Sec. 179 expensing limit at $500,000 with a $2 million overall investment limit before the phase out (both amounts are indexed for inflation beginning in 2016).

The Act also makes permanent the special Code Sec. 179 expensing for qualified real property. The Act also removes the $250,000 cap related to this category of expenditure beginning in 2016.

Bonus depreciation
The Act extends bonus depreciation (additional first-year depreciation) under a phase-down schedule through 2019:
• at 50 percent for 2015-2017
• at 40 percent in 2018
• at 30 percent in 2019
The Act also continues the election to accelerate the use of AMT credits in lieu of bonus depreciation and increases the amount of unused AMT credits that may be claimed in lieu of bonus depreciation. In addition, the Act modifies bonus depreciation to include qualified improvement property, and permits certain trees, vines and plants bearing fruits or nuts to be eligible for bonus depreciation when planted or grafted.

Certain longer-lived and transportation property may qualify for an additional one-year placed in service date.

Research tax credit
The research and development (R&D) tax credit is available to taxpayers with specified increases in business-related qualified research expenditures and for increases in payments to universities and other qualified organizations for basic research. The Act permanently extends and modifies the credit. This provision is likely the result of complaints that research investment requires years to realize potential and short extensions of the research credit were counterproductive.

Individuals
American Opportunity Tax Credit
The Act makes permanent the American Opportunity Tax Credit (AOTC), an enhanced version of the Hope education credit. The AOTC has been available at an increased level of $2,500, with adjusted gross income (AGI) phase-out amounts of $80,000 (single) and $160,000 (married filing jointly). The AOTC had been scheduled to expire after 2017.

Tuition & Fees Deduction
The Act extends through 2016 the above-the-line deduction for qualified tuition and fees for post-secondary education.

Child Tax Credit
The Act makes permanent the reduced earned income threshold amount of an unindexed $3,000. This provision had been scheduled to expire after 2017. Under the Act, the child tax credit, available up to $1,000 for qualifying dependents under age 17, may be refundable to the extent of 15 percent of the taxpayer’s earned income in excess of $3,000.

Charitable Distributions Direct from IRA
The Act permanently extends the provision for individuals age 70 1/2 and older to be allowed to make tax-free distributions from individual retirement accounts (IRAs) to a qualified charitable organization. The treatment continues to be capped at a maximum of $100,000 per taxpayer each year. Amounts in excess of $100,000 must be included in income but may be taken as an itemized charitable deduction, subject to the usual AGI annual caps for contributions. The Act also includes a provision on the deductibility of charitable contributions to agricultural research organizations.

Please note that the Internal Revenue Service will begin accepting individual tax returns on Tuesday, Jan. 19, 2016.

Tax Deductible Donations

The IRS allows tax deductible donation expenses from your federal income taxes for donations made to charity. These donations can reduce your taxable income and lower your tax bill. Not everyone will be able to deduct their charitable contributions, however. You will need to itemize your tax deductions in order to claim any charity.

Any deduction for items donated is based on the fair market value of those items. In order to ensure a proper paper trail, be sure to get a receipt from the charitable organization to authenticate your donations. Consider taking a picture of your donations. In the rare event you are audited, the IRS may distrust your written documentation. Having a picture handy of what you donated may be useful, especially if you are donating lots of items.

The government provides guidance on various categories of donated items that can be deducted. Click here to view the document. In addition, the Salvation Army has published a helpful valuation guide for donated items. Click here to view the guide.

The Biz Times Features Valuation Article

BizTimes_10-19In the Oct. 19th issue, the Biz Times features a valuation article by Steve Rozansky. It highlights the importance of valuation for business owners and people with property divisible during distribution of an estate.

Determining the worth of a business is critical to establishing fair market value of estates for gift tax or succession planning, buying and selling of businesses, family law property division, and to support various forms of litigation.

In most cases, the process begins with an in-depth exchange of information often facilitated by a comprehensive questionnaire and in person interviews. The amount of research and calculations that goes into valuations is most often driven by the desired outcome. In many cases an extensive report detailing all of the supporting research, background material, risk factors, industry comparisons and assumptions that were used to come to the value conclusion is required. In other cases, such as a business owner wanting to have an idea of what their business is worth, a shorter, more focused report can be requested.

The outcome of the valuation process is an understanding of the factors that determine worth and a qualified opinion upon which to base critical financial decisions.

Steve Rozansky has earned the Accredited in Business Valuation (ABV) credential from the American Institute of Certified Public Accountants and has provided numerous valuations for over 10 years. For more information, Steve may be reached at Mitz & Rozansky, SC, (414)352-3200 or visit www.mrsc.com.

Alert! New Credit Card Processing Rules

New credit card processing rules have been established for businesses. For some time now, new credit and debit cards have been issued with embedded computer chips designed to decrease fraud. New equipment for reading either magnetic strips or embedded chips is currently available.

As of October 1st, the rules regarding retailer responsibility will change and may affect the equipment you choose to use to process credit card transactions. We urge you to contact your credit card processor and/or point-of-sale equipment representative to get a better understanding of your equipment options and how this will affect your business going forward.

Protect Your Identity and Beware Of Scam Artists Posing as IRS Agents

Protecting Your Identity
The need to protect your identity online has become increasingly important with the growing number of social networking and blogging sites available. Personality profiles and blogging about personal experiences creates a public record of your personal information.

Please protect your passwords. Use firewalls to protect your computers. There is a well known email scam from the International Monetary Fund (IMF) either claiming they need your help to get money from long lost chiefs of funds, or to confirm a power of attorney for you. Delete these emails. Do not bother to open them. Stay abreast of security breaches to minimize your risk of becoming a victim.

Identity theft is unfortunate, but does happen. There are several trust worthy web sites that have valuable information. If you should find yourself in this situation, please feel free to contact our office for guidance and also to research these sites:
https://www.identitytheft.gov/
http://www.consumer.ftc.gov/features/feature-0014-identity-theft

Beware of Scam Artists Posing as IRS Agents
Our office has received numerous calls from clients wondering why the IRS is calling them about money they owe, or a federal lawsuit. First, the Internal Revenue Service will not call you to tell you there is a problem with your taxes or that you owe them money. The initial contact from the Internal Revenue Service is via US Postal service mail. Second, there is no federal lawsuit that the Internal Revenue Service would initiate without proper solid physical paperwork that would have been sent to you or your attorney.

Please do not confirm your social security number, bank account or date of birth with any one over the phone.

Here is the directive published by the IRS:
“Callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request.
The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:
• Call to demand immediate payment, nor will we call about taxes owed without first having mailed you a bill.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
• Require you to use a specific payment method for your taxes, such as a prepaid debit card.
• Ask for credit or debit card numbers over the phone.
• Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:
• If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.
• If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.
To read the complete IRS alert go to http://www.irs.gov/ and type “scam” in the search box.”
The staff at Mitz & Rozansky is available to discuss any tax related concerns you may have. Give us a call at (414)352-3200.

New IRS Guidelines for Tax-advantaged Retirement Savings

For 2015, there are several important new IRS guidelines for tax-advantaged retirement savings. For many individuals, there are several opportunities to increase contributions but due to new restrictions, proper planning of your IRA contributions and Flexible Spending Account rollovers is essential. The changes include:

1. Higher Income Limits for IRA Contributions
The income limits for deductible contributions to IRAs have been raised and vary based on whether the taxpayer and/or his or her spouse are eligible to participate in an employer-sponsored retirement plan. The traditional IRA contribution tax deduction has been phased out for investors who have a workplace retirement plan and a modified adjusted gross income of more than $61,000 but less than $71,000 for individuals, and more than $98,000 but less than $118,000 for couples in 2015. For individuals who don’t have a workplace retirement plan but are married to someone who does, the tax deduction for an IRA contribution is phased out if the couple’s income is more than $183,000 but less than $193,000 in 2015. The maximum contribution for an IRA remains at $5,500 for people under 50, with an additional catch-up of $1,000 for those 50 and older for a total of $6,500.

2. Higher Roth IRA Contributions Income Limits
For 2015, the income limits for Roth IRA contributions will increase in 2015 by $2,000. The new limits are $116,000 or more but less than $131,000 for individuals, and $183,000 or more but less than $193,000 for married couples.

You can have both a traditional and Roth IRA, but you can only contribute a maximum of $5,500 (or $6,500 if you’re 50 or older) across both accounts each year.

Please note: Based on the Roth IRA income limitations, if a taxpayer is not sure whether he/she will qualify due to higher income, they should wait until 2015 is over and their income tax return has been prepared to make the contribution. If they make the contribution in 2015 and then find out their income precludes them from making the contribution, they will be subject to a penalty tax.

We will gladly guide you through this decision process by consulting with you, including making a tax projection, during the year tax year. Please contact us to set up an appointment.

3. Higher Contribution Limits for Employer Plans
Contributions to taxpayer’s 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan in 2015 will increase to $18,000. There is also a $6,000 increase in the catch-up contribution limit in 2015 for a total contribution limit of $24,000 for employees age 50 and older.

4. IRA Rollovers Limitations
Beginning on Jan.1, 2015, there is essentially a limit on what has been typically called an ‘indirect rollover’—where an IRA owner takes a distribution of all or part of the account and moves it into a new IRA. Investors are limited to one rollover from one IRA to another in any 12-month period. A second IRA-to-IRA rollover in a single year could result in income tax becoming due on the rollover plus a 10% early withdrawal penalty, and a 6% per year excess contributions tax, as long as that rollover remains in the IRA.

There is, however, no limit on trustee-to-trustee transfers between IRAs or conversions from traditional to Roth IRAs in the same year. This direct rollover transfer method allows you move IRA funds between accounts without taking control of the money, similar to how you would roll a 401(k) into an IRA.

5. Changes in Health Expense Accounts
Health Flexible Spending Accounts (FSAs) are used to save pre-tax dollars to pay for healthcare expenses. They must be used within a plan year. If you want to set up a Health Savings Account (HSA) for 2015, it may actually be better not to carry forward unused FSA amounts (up to $500), even if it means that you will lose them.

Previously, you have been allowed to roll over $500 from an FSA into the next plan year. However, there is a change for 2015 that may restrict the benefit for those who are considering contributing to a HSA. If you had a balance in your FSA at the end of 2014 and you decide to carry over $500 of it into 2015, you will be ineligible to participate in an HSA in 2015. This restriction does not apply to FSAs for specific uses, such as dependent care or dental expenses. You should plan ahead and balance the benefit of each option.
The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) rises to $2,550, up $50 from the amount for 2014.

Key Takeaways
* The maximum amount you will be able to contribute to your 401(k) plan, starting in 2015 has increased to $18,000.

*  ‘Indirect’ IRA rollovers are limited to one every 12 months starting in 2015. However, you can still do unlimited IRA ‘direct’ rollovers between trustees.

* If you are planning to set up an HSA in 2015, consider forfeiting the unused portion of your 2014 FSA if it precludes your HSA eligibility.

If you have any questions on these new IRS guidelines, please contact Mitz and Rozansky, SC at 414-352-3200.