May 30, 2013

Diary of a Young Tax Accountant: My Long Journey to Become a Successful Entrepreneur (Entry #2)




C'mon Daddy!!!

Okay, taxes and entrepreneurship are very complex things to handle. However, nothing compares to the complexity of dealing with your first child. I have a two-year old son named Jairel. All my life, I avoided being around toddlers. They seemed just to only cry and eat. Now, I'm a father and everything is brand new to me. Just when I think I understand him, he changes on me the very next day. However, he is the joy of my life and I wouldn't change anything about him (except changing diapers).

Having my first son taught me how to become a better tax professional and entrepreneur. Before becoming a father, I never had any patience. I wanted everything my way and on my time. This type of attitude probably destroyed many of my past personal and professional relationship. Let me tell you a secret; a toddler is not trying to deal with your selfishness. Sometimes I would try to "reason" with my son and he will look at me like I'm crazy. Through my son, I learned that is not always about me. I have become a better listener. Sometimes a client would just absolutely annoy me. Now, I'm a little more understanding to my clients needs. I even learn how to be more understanding with the IRS. The IRS agent take a lot of crap from many people. Even if you come across an IRS agent with a bad attitude, take a step back and be understanding.

Entrepreneurship honestly kicks my a**. I wouldn't recommend starting a business if your are not mentally ready for the unavoidable ups and downs. The ups feel like straight heaven on earth. The downs of entrepreneurship feels like you just lost the Powerball lottery by one number.  However, if I wasn't an entrepreneur, I probably wouldn't have the great relationship that I currently have with my son. My whole work schedule resolves around him. There are time that I even took him with me to business meetings. Due to my selfish ways, it took me a long time to accept that I have to base my schedule around my son. There are many events or meetings that I simply couldn't attend. Especially since my wife is a RN that works the night shift. Now, there are times that I complete work as early as 5am or as late as 11pm. Some times I even complete work during his nap times.

No matter what you want to achieve in life, there are no room for excuses. Yeah, my son limits my ability to go out at any given time. However, God doesn't put us in situations that we can't handle. Everyday, I'm trying to find ways to make it happen. Starting out, I will continue to get more closed doors and rejections. I believe the trick is to keep on moving. Soon, people will wonder how I did it.

Until next time....

Keep the faith and keep on moving

May 29, 2013

Tax Preparers' Hall of Shame: The Family Edition



The New Inductees of the Tax Preparers' Hall of Shame goes to.....two cousins!!!

 Roberto Olivares, 35, and his 31-year-old cousin Rojelio Martin have been sentenced to prison for a scheme that defrauded taxpayers out of $50,000 in refunds. According to court documents, Olivares and Martin prepared personal returns for clients of Success Income Tax Services, a business the cousins formed and operated. Between January and May of 2008, Martin and Olivares prepared and provided their clients with completed returns that fraudulently under-stated refunds due, then filed the correct returns reflecting the actual refunds due. Unbeknownst to the clients, Olivares and Martin fraudulently directed the IRS to deposit a portion of each client’s refund into the defendants’ own bank accounts. As a result of the fraud, some 75 taxpayers lost approximately $50,000. Olivares received 30 months’ prison and his cousin two years and nine months, and both were also ordered to pay $44,860 in restitution.

Well boys, welcome to the Tax Preparers' Hall of Shame. Maybe the next family reunion will be near your prison complex!

People, please choose your tax preparers wisely. All tax preparers are not created equal!

May 28, 2013

Keep the Child Care Credit in Mind for Summer




Here is a word from the Goodfellas at the IRS:

 IRS Special Edition Tax Tip 2013-11

If you are a working parent or look for work this summer, you may need to pay for the care of your child or children. These expenses may qualify for a tax credit that can reduce your federal income taxes. The Child and Dependent Care Tax Credit is available not only while school’s out for summer, but also throughout the year. Here are eight key points the IRS wants you to know about this credit.

1. You must pay for care so you – and your spouse if filing jointly – can work or actively look for work. Your spouse meets this test during any month they are full-time student, or physically or mentally incapable of self-care.
 
2. You must have earned income. Earned income includes earnings such as wages and self-employment. If you are married filing jointly, your spouse must also have earned income. There is an exception to this rule for a spouse who is full-time student or who is physically or mentally incapable of self-care.
 
3. You must pay for the care of one or more qualifying persons. Qualifying children under age 13 who you claim as a dependent meet this test. Your spouse or dependent who lived with you for more than half the year may meet this test if they are physically or mentally incapable of self-care.
 
4. You may qualify for the credit whether you pay for care at home, at a daycare facility outside the home or at a day camp. If you pay for care in your home, you may be a household employer. For more information, see Publication 926, Household Employer's Tax Guide.
 
5. The credit is a percentage of the qualified expenses you pay for the care of a qualifying person. It can be up to 35 percent of your expenses, depending on your income.
 
6. You may use up to $3,000 of the unreimbursed expenses you pay in a year for one qualifying person or $6,000 for two or more qualifying person.
 
7. Expenses for overnight camps or summer school tutoring do not qualify. You cannot include the cost of care provided by your spouse or a person you can claim as your dependent. If you get dependent care benefits from your employer, special rules apply.
 
8. Keep your receipts and records to use when you file your 2013 tax return next year. Make sure to note the name, address and Social Security number or employer identification number of the care provider. You must report this information when you claim the credit on your return.
 
For more details about the rules to claim this credit, see Publication 503, Child and Dependent Care Expenses. You can get both publications at IRS.gov or have them mailed by calling 800-TAX-FORM (800-829-3676).

May 24, 2013

Diary of a Young Tax Accountant: My Long Journey to Become a Successful Entrepreneur (Entry #1)




God wants us not to be scared to show our weaknesses. Throughout history, millions of people became inspired by other great peoples' weakness. If you believe that you are invincible, then I feel very sorry for you. For years, I kept my weaknesses and failures to myself and a few other people. However, over the last six years I have found that people really appreciate when I do share my experiences. God has motivated me to share my experiences on a weekly basis through my blog. It is my hope that readers become inspired.

On paper, it appears that I have a perfect life. I have no student loans, two great parents, a supportive older sister, a beautiful wife and son, a Master's degree in Taxation, I'm in a fraternity, I'm a Junior Steward at my church and I started my own company (www.jstaxcorp.com). In reality, the list is even longer but I think you get the point. However, I have this great fear of failure. This fear doesn't hold me back from taking risk. Matter of fact, all of my greatest accomplishments were after major failures. This fear puts great and unnecessary pressure on myself to achieve. Even though I know a lot of supportive people, I often feel alone. I just got over a three-year period of having intense nightmares every single time that I went to sleep (including short naps). Now, my intense nightmares happen every other night.

Before you throw me a pity-party, listen to what I have to say. Life is hard and unfair. We can either give up or keep on fighting. Just like dealing with the IRS. Instead of complaining about the IRS, learn how to deal with them. At the age of 33, I'm already used to getting rejected and being misunderstood. As a young black male, my journey to grow an successful and respectable accounting will be extremely hard and frustrating. My personality is that I rather fail then not have tried at all.

This past week, I spoke to about twelve different people about working together. To be honest, I received twelve unfavorable outcomes. Some outcomes included unreturned calls, fake smiles and flat out rejection. The past couple of days, I felt like no one takes me seriously. This feeling has affected my interaction with my family. Thankfully, I have a great wife and she usually snaps me out of my funk. If my wife doesn't snap me out of it, I have a energetic two-year old son that shows me unconditionally love.

I encourage you to follow my weekly diary posts. Entrepreneurship and taxes are a killer combination. As I mentioned before, the goal is not to have you feel sorry for me. The goal of the weekly posts are to let you know that you are not alone. Believe me when I say that "in the end, I will not lose!" So follow me on my journey to become a successful entrepreneur. You won't be disappointed!

Until next time.....don't stop believing!

May 22, 2013

Tax Relief for Victims of Severe Storms, Straight-line Winds and Flooding in Illinois



Victims of severe storms, straight-line winds, and flooding that began on April 16, 2013 in parts of Illinois may qualify for tax relief from the Internal Revenue Service.

The President has declared Cook, DeKalb, DuPage, Fulton, Grundy, Kane, Kendall, Lake, LaSalle, McHenry and Will counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after April 16, and on or before July 1, have been postponed to July 1, 2013. This includes the June 17 deadline for second quarter estimated tax payments.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after April 16, and on or before May 1, as long as the deposits are made by May 1, 2013.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

May 21, 2013

Summer Job Tax Information for Students



Here is a word from the Goodfellas at the IRS

IRS Special Edition Tax Tip 2013-10

When summer vacation begins, classroom learning ends for most students. Even so, summer doesn’t have to mean a complete break from learning. Students starting summer jobs have the opportunity to learn some important life lessons. Summer jobs offer students the opportunity to learn about the working world – and taxes.

Here are six things about summer jobs that the IRS wants students to know.
1. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal income tax to withhold from workers’ paychecks. It is important to complete your W-4 form correctly so your employer withholds the right amount of taxes. You can use the IRS Withholding Calculator tool at IRS.gov to help you fill out the form.

2. If you’ll receive tips as part of your income, remember that all tips you receive are taxable. Keep a daily log to record your tips. If you receive $20 or more in cash tips in any one month, you must report your tips for that month to your employer.

3. Maybe you’ll earn money doing odd jobs this summer. If so, keep in mind that earnings you receive from self-employment are subject to income tax. Self-employment can include pay you get from jobs like baby-sitting and lawn mowing.

4. You may not earn enough money from your summer job to owe income tax, but you will probably have to pay Social Security and Medicare taxes. Your employer usually must withhold these taxes from your paycheck. Or, if you’re self-employed, you may have to pay self-employment taxes. Your payment of these taxes contributes to your coverage under the Social Security system.

5. If you’re in ROTC, your active duty pay, such as pay received during summer camp, is taxable. However, the food and lodging allowances you receive in advanced training are not.

6. If you’re a newspaper carrier or distributor, special rules apply to your income. Whatever your age, you are treated as self-employed for federal tax purposes if:
  • You are in the business of delivering newspapers.
  • Substantially all your pay for these services directly relates to sales rather than to the number of hours worked.
  • You work under a written contract that states the employer will not treat you as an employee for federal tax purposes.
If you do not meet these conditions and you are under age 18, then you are usually exempt from Social Security and Medicare tax.

Visit IRS.gov, the official IRS website, for more information about income tax withholding and employment taxes.

May 20, 2013

2nd IRS Official to Leave Amid Tea Party Scandal







Heads are rolling at the IRS!!!
As second top Internal Revenue Service official has announced plans to leave the agency amid the controversy over the targeting of tea party groups.
 
An internal IRS memo says Joseph Grant, commissioner of the agency’s tax exempt and government entities division, will retire June 3. Grant joins Steven Miller, who was forced to resign as acting IRS commissioner on May 15th.
 
As part of his duties, Grant oversaw the IRS division that targeted tea party groups for additional scrutiny when they applied for tax-exempt status.
 
Grant joined the IRS in 2005.
 
Lets not fool ourselves, we know the government has been targeting groups for decades. I won't be one of these guys acting surprised. This will not be the last time that the IRS targets an organization. Please be open-minded and listen to both sides of the story. Both political parties are equally corrupt.

 

May 17, 2013

IRS To Be Closed Five Days Due to Budget and Sequester



Prepare for some changes this summer with the IRS.

The Internal Revenue Service announced details about the closures planned for May 24, June 14, July 5, July 22 and Aug. 30, 2013.

Due to the current budget situation, including the sequester, all IRS operations will be closed on those days. This means that all IRS offices, including all toll-free hotlines, the Taxpayer Advocate Service and the agency’s nearly 400 taxpayer assistance centers nationwide, will be closed on those days. IRS employees will be furloughed without pay. No tax returns will be processed and no compliance-related activities will take place.

The IRS noted that taxpayers should continue to file their returns and pay any taxes due as usual. So don't try to be slick and not file your taxes.

Taxpayers needing to contact the IRS about their returns or payments should be sure to take these furlough dates into account. In some instances, this may include taxpayers with returns or payments due soon after a furlough day, such as the June 17 deadline for taxpayers abroad and those making a second-quarter estimated tax payment as well as the Sept. 3 deadline for truckers filing a highway use tax return.

Because none of the furlough days are considered federal holidays, the shutdown will have no impact on any tax-filing deadlines. The IRS will be unable to accept or acknowledge receipt of electronically-filed returns on any day the agency is shut down.

Well, I guess everyone hurts sometimes including the IRS.