The theory behind the plan

The main theory behind PPACA is that a larger pool of buyers has more buying power and can lower prices. While that may be true, more buying power does not address underlying causes of high US health care costs. The other problem is that the penalty for not carrying health insurance is not as much as the actual cost of health insurance, so the penalties do not provide much of an incentive to jump in the insured pool.

A flaw in the pre-existing condition insurance plan

Consider the part of the plan that was gap insurance for uninsured individuals with pre-existing health conditions who could not get coverage until 2014. Congress funded a pool with $5 billion that was supposed to cover these people who could not get insurance until PPACA’s pre-existing condition coverage stuff activated. Around 134,000 people out of the estimated 1/3 of the under-insured and uninsured US population got coverage under the Pre-existing Condition Insurance Plan before the plan ran out of money. The plan ran out of money because these people did not have to get the insurance; many people waited until they were really sick before forking over the money to get covered; as a consequence their care cost much more than it otherwise would have.

Health insurance premiums will rise again in 2014

Expect to see your health insurance premiums to rise, not only because of the general trend of rising premiums, but also because of PPACA. Health care insurance companies now have a list of things that they must cover, like pre-existing conditions, maternity, substance abuse treatment, and mental health care services. Some people who have certain plans created before PPACA may be able to continue with a more restricted plan for a time, and if your plan renews before the end of 2013, you may see some continuance of current coverage until the plan renews again in 2014. However people using insurance plans created after 2014 will likely suffer some sticker shock, especially if your health insurance previously excluded things that now must be part of your coverage, such as maternity care and substance abuse treatment.

Penalties not sufficient to ensure participation

There is a mandate for employers with more than 50 full-time employees, or equivalent, to provide affordable health care to their employees. Full-time for the purposes of PPACA is 30 hours per week not 40. If an employer with 50 full-time employees chooses not to provide health insurance, they face a tax penalty of $40,000 ($2,000 per full-time employee above 30). Alternatively, if they do not purchase insurance that meets certain minimum essential requirements, or if the insurance payment is more than 9.5% of an employee’s household income, the employer may face a penalty of $3,000 per affected employee. If a person owns more than one business, they add the employees from all their businesses together to see if they have 50 or more full-time employees. Needless to say, $2,000-$3,000 per employee is very likely less than the annual cost of health insurance for many employers.

The individual tax penalties are also less than the cost of health insurance coverage; right now they are 1/20th or less than the cost of the health insurance itself.. A minimum individual penalty of $95 per adult and $47.50 for each child under 18  in 2014, $325 per adult in 2015, and rising to 2.5% percent of income or $2,085 maximum per family in 2016. These penalties can change, but right now if healthy individual strapped for cash has little incentive to participate.

The non-existent safety net

Under PPACA, state and the federal government are supposed to create health insurance exchanges. There are several problems with these exchanges.

• Most people do not understand the cost of health insurance obtained through an exchange may not be the bargain they hope for. Check it out using the following online calculator from the Kaiser Family Foundation: http://healthreform.kff.org/subsidycalculator.aspx Yikes. Right?
• There is supposed to be a temporary subsidy in the form of a health insurance credit for individuals and families with income under 400% of the federal poverty level IF these individuals use the health insurance exchanges to buy their insurance. Congress has to fund the tax subsidy. Do you actually believe Republican controlled US House of Representatives will fund the credit?
• Assuming the US House of Representatives does fund the health insurance credit, the next problem is implementing how that credit will be paid.  It is supposed to automatically reduce insurance premiums on a monthly basis but currently there is no design for how this is going to work.
• If a person’s income changes during the year, and they have been receiving the monthly health insurance credit, will they owe a penalty and interest on their overpaid credit?
• People who wish to obtain insurance on an exchange will be paying money out-of-pocket for their health care; their coverage is NOT free. Out-of-pocket payments can range from 40% for the least expensive coverage to 10% for the “premium” coverage available on an exchange.  The law limits people who use the tax credit to the plans with 40% or 30% out-of-pocket.
• Then is a problem with finding health insurance providers to participate on the exchanges; many carriers are not stepping up.  If no health insurance carrier agrees to operate within an a given state’s exchange, then the exchange does not exist.
• There are no professional advisers on these health exchanges.  The law prohibits them.  There will be navigators certified by the US Department of Health and Human services, but these navigators cannot be health insurance professionals. Do you want health insurance advice from your handyman or hairdresser? OK, that might be a little bit of hyperbole, but not as much as you might think.

Go Oklahoma!

Some states have not decided to create health insurance exchanges and are defaulting to the Federal one. Once again, there must be insurance companies willing to participate in the federal exchange for it to exist. Arizona is one of 34 states that has opted to default to the federal health insurance exchange, as is Oklahoma.

In response to the potential penalties and the cost of health insurance plans many small employers are laying people off and cutting hours trying to get below the 50 equivalent full-time employee threshold. Clearly this is not good for employers, employees or the economy.

After a careful reading of the PPACA, Oklahoma alleges that PPACA allows the federal subsidies (health insurance credits) to be paid only through exchanges built by states and that the law says tax penalties against employers who don’t offer insurance can be levied only if the subsidies (health insurance credits) are paid. If Oklahoma doesn’t build an exchange, neither the subsidies (health insurance credits) nor the penalties can come to the state. Of course the US Department of Health and Human Services has responded by saying the federal exchange is the same as a state exchange. The case is not even docketed yet so who can say where this challenge will sort itself out.

Recommendations going forward

As you can see there may be many potential side effects of the upcoming changes to health care insurance because of the Patient Protection and Affordable Care Act AKA Obamacare. People with pre-existing conditions will be covered, and everyone will have better minimum coverage, but it comes with a price. Employees could lose their jobs or see their hours reduced. Health insurance rates will go up.  The exchanges are not all they are cracked up to be in terms of affordability; indeed these exchanges may not even exist in some places. The temporary tax subsidy to pay for part of the insurance premiums obtained through these exchanges may not come to fruition. In addition, if you use an exchange you will not be able to get experienced professional advice regarding your health insurance.

So here are some general recommendations and comments from Phoenix, AZ Art & Business Consulting LLC

• If you have an affordable grandfathered health insurance policy, you may want to keep it.
• Before you jump on one of the state or federal exchanges, consult a knowledgeable health care insurance professional about other options. Who knows? They may be able to put together a package that is by far better than the health care insurance exchanges.
• Know there may be tax consequences to your health insurance decisions.

We at Art & Business Consulting LLC hope you find this information useful.

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As always Phoenix, AZ Art & Business Consulting LLC  is here to help.  We can help you organize your business, your business finances and keep the taxman at bay. Give us a call to sched­ule an appoint­ment, we would love to engage you as a client.

(602) 717‑0763

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art & Busi­ness Consulting LLC

Here are the top 10 things that can trigger an audit.

Not reporting all your income

Somebody, somewhere usually has reported your income so they can use it as an expense on their tax return.  The IRS does income matching.  If they do not see income attributed to you on your tax return, they will ask about it.  Always report all of your income.  There may be ways to offset part of that income with expenses.

Income in general

It is no secret that making a pile of money makes the IRS take an interest.  The more money you make the more likely you are to be audited. The auditors just want to make the audit worth their time; the more money they go after, the more they are likely to get.

Cash businesses

If your income comes from a primarily cash business, the IRS will take an interest.  The IRS is sure to think some cash is slipping under the table.  What you may not know, is that the IRS has performed detailed business audits of some cash businesses involved in fraud exchange for leniency; auditors know where to look, and what kinds of expense ratios to expect. Always report all of your income, including all cash your receive in your trade or business.

Any sort of large cash transaction

The IRS requires institutions and businesses to report any cash transaction involving more than $10,000. Do not think making random deposits of a little less than $10,000 will save you either.  The IRS is on to that one too; institutions and businesses are supposed to report a series of transactions under $10,000 totaling more than $10,000 as suspicious activity.  Just know that if you buy something big for a lot of cash, the IRS is going to be curious about your affairs and do not even try to disguise the transaction.

Charity

The IRS has always known people inflate their charitable deductions.  So its a perennial favorite on their audit hit parade.

Large deductions in general

If your deductions dramatically change year over year and become a significant part of your income, it is sure to trigger an audit.  Just be prepared to prove your deductions.

The Home Office deduction

Most people lose the deduction by NOT using it “regularly & exclusively” for business, or by failing to establish the business need. If you use your dining room table as your office, it is not going to qualify because you fail the exclusively test. However, just because this deduction routinely gets audited is no reason not to take advantage of it if you are entitled to do so.  Just follow the rules and be prepared to show your home office qualifies.

Meals & Entertainment

This one has always been a favorite of tax cheats, so naturally the IRS will check on it.  Follow the rules, keep good records; be sure to save your receipts and write down on the receipt who was there and what business you discussed.  The meal or entertainment must serve a business need, like you expect to create a connection leading to sales and income.  Alternatively if you travel more than 50 miles from your tax home, overnight, for your business, your meals may also be deductible.  The deduction is usually limited to 50% of the cost.  NOTE: If you and your buddies get together and round robin lunch, that is not deductible, nor are meals taken during a trip that is primarily for pleasure (and no, your vacation to France is not deductible).

Automobile Expenses

When you use your personal vehicle for business you are supposed to keep a mileage log detailing business use, as well as keep track of your overall mileage so a percentage of business use can be computed.  Even big corporations require employees to keep mileage logs so they can add personal use of a corporate vehicle as a taxable fringe benefit to their employee’s pay.  The point is whether the car is your vehicle or belongs to your company, it is highly unlikely the car is being used 100% for business.  Be sure to keep a mileage log that you write in when you use your car for business purposes.   The IRS requires good written records of an automobile’s mileage and expenses in order to sustain the deduction. Do NOT even try to deduct 100% of your vehicle’s use as a business expense.

Hand written tax returns with math errors

A sloppy hand-written tax return can trigger an audit, especially if you make mistakes.  The IRS has been pushing for years to get taxpayers to e-file.  Most software does the math for you and lowers the risk of making a mathematical error, however many programs will happily let you double deduct things, which is forbidden. Whether you complete your tax return by hand and mail it, or use tax software or a tax preparer and e-file, be sure to check a tax return over very carefully before you file.  It is your signature on the bottom line saying the tax return is true, correct and complete to the best  of your knowledge.

As always Art and Busi­ness Con­sult­ing is here to help.  We can help you prepare your taxes and get the maximum deduction you deserve. Give us a call and schedule an appointment now. We would love to engage you as a client.

(602) 717‑0763

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art and Busi­ness Consulting LLC

What is sales tax? 

It is a consumption tax, usually calculated as a percentage of the total sale usually at the point of sale.

What is a use tax?

It is a complement of sales tax; when a consumer buys something out of state, or online and does not pay sales tax they are supposed to pay a use tax equal to the amount of sales tax they would have paid, had they purchased locally. Yes, really, you are supposed to pay the taxing authorities sales tax on that laptop you purchased on the internet to save on paying the sales tax. Anyone who has purchased a car or boat out of state only to find they have to pay use tax to register their new car or boat in their state of residence knows the painful truth of use tax. Internet sales are NOT “tax-free.” They never have been. However, collecting use tax is notoriously difficult and so states have been trying to find a way to get internet retailers to collect tax for them.

What gets taxed?

What is a sales taxable sale and what is a nonsales taxable sale is a political decision, therefore what gets taxed does not have to make sense.  The only way to figure out on what to charge sales tax is to visit your local taxing authority and get the information from them.  How silly can the rules be?

• In Maryland hot buttered popcorn is tax differently than buttered popcorn
• In New York food eaten on the premises of a restaurant is taxed differently than takeout
• In California ostrich steaks are exempt from sales tax
• In some states, products are taxed, or not taxed, based on the amount of wheat, corn syrup, or other ingredients they contain.
• In Arizona, the contractor pays a percentage of sales tax on the finished product, rather than on the building materials at the point of sale.
• Most states do not tax groceries, but many states do tax prepared food.
• In the online arena many states do not tax electronically delivered products (software downloads & e-books) but do tax the physical analogs (software on disk, books).

How many places charge sales tax?

There are more than 17,000 sales tax jurisdictions in the United States, not only do states charge sales taxes, but so do counties and cities.  If you have business locations in different places, each different jurisdiction may require you to get a license or permit and collect a different amount of tax.  The sales tax rules and licensing procedures vary wildly. For this reason it is not economically feasible for a small business to obtain sales tax licenses or permits from all these jurisdictions, then keep the sales tax records on all these different sales, as well collect and pay sales tax to every conceivable jurisdiction.

Does everybody pay sales tax?

Some customers may be exempt from sales taxes, but in order for you to provide the exemption, they must produce a current sales tax exemption certificate. Furthermore, many of these exemption certificates expire, often on an annual basis, so you need to make sure an exemption certificate is still valid before each sale, otherwise your business may be liable for the uncollected sales tax, penalties and interest.

What is nexus?

In Quill Corp. v. North Dakota, the Supreme Court said that a business selling stuff online, should collect sales tax if it has a substantial physical presence in that state, the so-called nexus rules. In the case of Quill, the Supreme Court did not think the sale of a few diskettes constituted a substantial physical presence in North Dakota. But the court did not define nexus. So what is nexus? In general if your internet business

• holds a license in the state,
• establishes a headquarters in that state, or
• owns tangible property in that state,

your internet business has nexus in that state, and your internet business should collect and pay sales tax in that state.  Therefore, your internet business most likely has nexus in the state where you reside for starters.

What is affiliate nexus? 

Let’s face it, since the housing market crashed and property taxes plummeted, states are hard up for cash, which has lead to many states defining nexus much more broadly. Some states are now invoking nexus via your business affiliates such as an independent broker under contract to make sales for you in that state, or a representative performing services for you in that state (think click through affiliates).  Some states say if you deliver products on your own trucks in that state, nexus exists.  These rules are changing all the time.  As of this writing AR, CA, CO, CT, IL, NC, NY, OK, PA, RI, SC, SD,  VT, and WI, have some sort of modified nexus rules.  Are these states coming after the little guy? It depends, some states have a threshold amount of commerce before they invoke there nexus rules, some don’t.  If this concerns you, then you need to do your own due diligence and make a decision.

Do I collect sales tax on brick and mortar retail sales to people from out of state?

States treat Brick and mortar retail sales differently than internet sales. In general any sale where the customer picks up a sales taxable product at the point of sale, the sale is considered a sales taxable sale regardless of the origin/destination rules. However, when you ship to the customer, origin or destination rules come into play.

In origin states (AZ, CA, IL, MS, MO, NM, PA, TN, UT, and VA) retail sales are taxed at the point of origin, which is the point of sale, regardless of their destination and so ALL brick and mortar retail sales are sales taxable sales, whether shipped to the customer, or pick up by the customer.

In destination states (AL, AR, CO, CT, DC, FL, GA, HI, ID, IN, IA, KS, KY, LA, ME, MA, MS, MI, MN, NE, NV, NJ, NY, NC, ND, OH, OK, RI, SC, SD, VT, WA WV, WI, and WY), if a customer picks up a product is it considered a delivery and is taxable, but when you ship, the destination matters.

For my Arizona brick and mortar readers, you must always collect sales tax on brick and mortar sales  even when you ship out of state; AZ is an origin state. FYI, In Arizona we don’t actually call our sales tax, “sales tax”, we have a “transaction privilege tax” and we get a license for the privilege of collecting it (You say to-MAH-to, and I say to-MAY-to…).

What happens in a sales tax audit?

Given the sheer volume of taxable transactions, an auditor will probably take a representative sample and see what issues they can find.  If the auditor finds one mistake in 20 transactions, they might just assume that 5% of your transactions have similar problems and they could assess taxes, penalties and interest based on this result. That can really add up quickly. Every member of your team in accounting, sales, and IT needs to be aware of the need for sales tax documentation and accuracy.

As always Art and Business Consulting is here to help.  We can assist you with your sales tax reporting needs. Give us a call and schedule an appointment now. We would love to engage you as a client.

(602) 717‑0763

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art and Busi­ness Consulting LLC

…or maybe it was just the champagne and fireworks.

What is NOT in the the 2012 American Taxpayer Relief Act is as important as what was in it.

First off, if you think your taxes did not go up, they did.  It does not matter who you are.

More Taxes

Obamacare has several new taxes that kicked in with the New Year.

• A 0.9% tax increase on people earning over $200K ($250K MFJ) — employees pay this tax.
• A 3.8% tax on modified adjusted gross income (including unearned income) on $200K ($250MFJ), individuals pay this on their investment income, which includes the dividends of a S-corporation, and potentially part of the proceeds from the sale of your home.
• A 2.3% tax on medical appliances; your kids braces just got more expensive.
• In addition the amount you can itemize for medical expense deduction now has to exceed 10% of your Adjusted Gross Income (AGI); people over the age of 65 get a pass on this one until 2017.
• The amount you can stash in a Flexible Spending Account (FSA) is capped at $2,500 per year;  you still have to use it or lose it.
• Some changes went into effect in preceding years, and there is more to come. As employers and insurance companies ramp up for the changes coming in 2014 you can expect to see “surcharges” and increases in insurance costs in 2013 as well.

The 2% reduction in Social Security Tax that was part of  the 2010 Tax Relief Act did not get extended.  Employees will pay 2% more Social Security Tax on their earned income below $113,700.  Self-employed individuals also pay 2% more.

FYI, There is NO cap on the Medicare tax.

We had a little holiday from phaseouts for personal exemptions (PEP)  and limitations on itemized deductions (Pease), but no more.  PEP and Pease have returned, phaseouts begin at $250K ($300K MFJ).

The tax rate on an estate’s value over $5 Million dollars increased from 35% to 40%. The $5 Million dollar Unified Credit and 40% tax is permanent.

Taxes increased from 15% to 20% on dividends for people with more than $400K ($450 MFJ) income and you still have to add that 3.8% Obamacare tax on top of that.

Although certain Bush era tax cuts were made permanent, people earning over $400K ($450 MFJ) saw the top rate increase from 35% to 39.6%.

The Good

Congress made several items permanent. The AMT fix is in and it includes annual inflation adjustments. Congress made relief from the marriage penalty, the liberalized child and dependent care rules, expanded adoption credit, employer provided child care credit, the exclusion of employer provided education assistance, and the expanded above the line student loan interest deduction permanent as well.

Congress froze their pay a little longer.

The Bad

A whole bunch of kick-the-can down the road happened. Although its good news for some, realize we will be seeing this material again.

For low to middle income earners, Congress extended the American Opportunity Credit, along with expansion of the refundable child tax credit, and earned income credit for 5 years. Congress extended unemployment benefits for a year.  Congress reinstated income tax deduction for employer-provided transit benefits at $240 per month or equal to the parking benefits. And Congress extend the above the line deduction for certain educators as well.

For businesses, Congress extended the the the R&D tax credit, the Work Opportunity credit & increased section 179 & accelerated depreciation through 2013. Congress also extended the “Farm Bill” for 9 months and put off scheduled cuts in physician payments under Medicare. Congress extended the 15-year amortization for leasehold improvements as well.

For investors, Congress extended the temporary 100 percent exclusion (subject to per-issuer limitations) from gross income of gain derived from qualified small business stock.

Congress extended a number of corporate tax breaks and loopholes, including the “active financing” tax exemption for major corporations, a rum tax supporting Puerto Rico rum industry and a tax benefit for NASCAR racetrack owners.

The Ugly

Congress punted the vote on sequestration for 2 months to March 1. If you don’t know what this is, think of it as a suicide pact undertaken by our legislative leadership, with us being caught in the crossfire.  In 2011 Congress, in an effort to get budget talks moving, made up a package of across-the-board spending cuts so harsh, that it would force them to deal with the issue at hand.  It didn’t and so here we are.

We hit the debt ceiling as many of us were ringing in the new year, right now we are in a suspension period, which will last until February 28. Basically our government has run out of money to pay its bills.  If it does not increase the debt limit then it will default on its loans.  The last time happened in 2011, Congress messed around so long the Standard & Poors  downgraded US government’s credit rating. We all now pay more interest on the money the government borrows.

A double whammy is waiting in the wings. We are not out of the woods yet.

So that is where we are with respect to Taxmaggedon and the Fiscal Cliff.

Congress waited until the last minute to decide this stuff, so the IRS announced it will not begin accepting tax returns until January 30, 2013 as it needs time to program its computers. The IRS listed 30 forms that will NOT be ready as of that date. For individuals, the IRS will not be able to process certain credits relating to some American territories, as well as the Qualified Adoption Expenses Credit, the Mortgage Interest Credit and Residential Energy Credits. The Passive Income Loss Limitation Form will not be ready. For businesses the IRS will delay processing of tax returns using Form 4562 (Depreciation), Form 3800 and a bunch of other business credits.   The IRS says they may not begin accepting these kinds of returns until mid to late February or even March.  Farmers and Fishermen are in a pickle because of the Form 4562 thing as they are supposed to make estimated tax payments for 2012 in 3 days.

There is NO advantage in filing a paper return in advance of January 30, 2013.  It will just sit in a pile until the IRS begins processing on January 30 and might even delay the processing of your tax return. However, you can and should met with your tax preparer so you will be ready to file as soon as possible.  Identity theft in the form of fraudulent tax returns is rising dramatically; your best defense is to file before an identity thief does.

Art & Business Consulting is making tax appointments now.

We also do year-end payroll Forms W2/W3, Form 941 Quarterly Tax Withholding reporting,  Form 940 Federal Unemployment reporting, Form 943 Federal Withholding for Agricultural Employees, and various information returns Forms 1099/1096 if you need that. In general information return Forms W2 are due to employees and Forms 1099 are due to vendors on January 31.

(602) 717‑0763

Give us a call and Sched­ule your 2013 tax appoint­ment now. We would love to engage you as a client.

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art and Busi­ness Consulting LLC

Why you need a bookkeeper

Books, records and the appropriate choice of entity are the backbone of a business that is prepared to be profitable and grow.  If you are saying “I can’t afford a bookkeeper, what do I do?”  Then you already know you need a bookkeeper. Your real question is, “How do I pay for a bookkeeper?”

As an Phoenix, AZ Enrolled Agent, too often I find people wait until tax time to get their records together.  January of the following year is too late to plan to do anything. You will owe what ever you owe.  As a bookkeeper I know a proper set of books will allow me to forecast your taxes. As a Phoenix,  AZ tax adviser I know given time and the right information such as a proper set of books, you might be able to make some moves to lower your tax bill.  That bag of receipts you are collecting in the corner does not accomplish either task.

The problem with doing your own books

Sometimes I hear, “My brother-in-law’s uncle does my books”, or  “I do my own Quickbooks,” which causes the bookkeeper in me to cringe. Far too often, the Quickbooks DIY attitude is not a good thing, as I know from real life experience that sometimes business owners know just enough about QuickBooks to do themselves real harm.

I see people who put both their business and personal expenses in the QuickBooks; their rent, utilities and other expenses in their Quickbooks reports is a mix of both personal and business stuff and there is no way to separate them. Another thing I see, for lack of a better word, is business owners “playing” Quickbooks. Either way, these DIY Quickbooks have no financial value;  I have to start from scratch, which usually costs more than if they had just let my firm perform bookkeeping services for them throughout the year.

Sometimes business owners know enough to “sort of” get their books right, but in these cases I often find items the owner classified as current expenses, that aren’t; these business owners wind up owing more taxes than they thought they would.

If you use your bookkeeper correctly, they need to be involved in your day to day business,

• Your bookkeeper can track when things need to be paid,
• Your bookkeeper can do revenue projections so you can see how much you need to grow,
• Your bookkeeper can set it up so you pay yourself regularly (otherwise why are you doing this?)
• Your bookkeeper can project your tax liability,

If you get your bookkeeper “most” of your source documents three months later, any information that might be gleaned from your books is outdated, maybe even too outdated to use. If you are missing something, the longer it takes to find out a record is missing, the harder for you to  obtain a copy that record.

There is so much information you can learn from a proper set of books prepared in a timely fashion,

• Where is your profit?
• Do you need to bring on additional product?
• Do you need to hire more employees and team? Can you even afford them?
• Are all of your customers paying?
• Are you joint ventures working, or not?
• Are costs going up? Why?
• Do you have an embezzler?

A lack of books is keeping your business small.

If you do not have a set of books, you are operating off of emotion, not facts.  You have no idea what is going on with your business.  You do not have the numbers that will tell you if something you are doing is really working. You cannot manage what you cannot track. How are you going to grow?

If you are looking for venture capitol you need to prove that you can run a business, you need to demonstrate leadership, you need to demonstrate team, you need to demonstrate management.   What do you think a disorganized bag of receipts says about your leadership, your team, your management skills, and your ability to run a business? It is not good.

You need numbers to tell you what works, what doesn’t, what you should stop doing, what you should continue doing and maybe even what you should start doing.  You should not be waiting until you reach some magical number to get organized.  As the entrepreneur, you are the rainmaker, and you should set things up correctly to begin with so you can grow.

Your job is to fill the bank accounts, not to waste your valuable time learning to do busy work someone else can do better.

Stop  trying to organize your receipts and let it go.  Your bookkeeper should organize this stuff for you. Drop your receipts in a envelope and ship it off.

Start 2013 off on the right foot, with a proper set of books.

Please give Phoenix Art & Busi­ness Con­sult­ing a call for your bookkeeping service needs.  We would love to engage you as a client.

(602) 717‑0763

Tax sea­son is almost here.  There is still a little time to engage in some last minute tax plan­ning.  Sched­ule your 2013 tax appoint­ment now.

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art and Busi­ness Consulting LLC

1. Your tax preparer has complaints registered against them.
2. Your tax preparer’s business vanishes after April 15^th.
3. Your tax preparer does not belong to any professional societies.
4. When asked who will actually be preparing your tax return, you find out they are a salesperson who will NOT actually be preparing your tax return.
5. Your tax preparer does not have a Preparer Tax Identification Number (PTIN).
6. Your tax preparer bases their fee on how large a refund they get for you.
7. Your tax preparer promises they can get you a larger refund than other tax preparers can.
8. Your tax preparer does not require documentation, or they do not seem concerned if you are missing something.
9. Your tax preparer does not sign your tax return in the tax preparer spot.
10. Your tax preparer asks you to sign a blank tax return.

All of these are signs you have a tax preparer who is interested in getting a large payday for themselves, and perhaps helping themselves to your identity, and they do not care if you will get in trouble with the IRS later on.

• You are trusting your tax preparer with a lot of personal information; you really should check them out before hand. And just like a contractor or doctor, their reputation counts. Phoenix AZ Art & Business Consulting LLC has an A rating with the Better Business Bureau.
• Fly-by-night tax preparers will not be around to answer questions, help you with the IRS, or engage in tax planning after they take your money and vanish. Use a tax preparer who has office hours after April 15th. Art & Business Consulting LLC has been in business since 2006.
• True tax professionals belong to associations, indicating they follow a code of ethics and receive continuing education. An ethical tax preparer understands nobody likes paying taxes, but every one should pay what is fair.  Also, a tax professional understands that tax laws are changing all the time so they need continuing education to keep up.  Tax professionals know no one knows everything and they rely on other professionals within their societies for expertise from time to time. Jake Beckman, EA is a member of the NAEA, AZSEA, and the CACEA, all professional societies of tax pros.
• If your tax return preparer outsources your return preparation, someone with less experience, or even worse, someone in a foreign country with different privacy and information protection laws could be preparing your tax return, and you have no recourse if something goes wrong.  Art & Business Consulting uses Enrolled Agents, America’s tax experts for your income tax preparation needs.
• As of 2011, all paid tax preparers must have a PTIN. The IRS requires all Enrolled Agents to renew their PTINs every year.
• It is illegal for a tax preparer to charge a contingency fee for tax preparation services. Phoenix AZ Art & Business Consulting LLC uses form-based tax preparation fees, and hourly fees for other additional services related to your preparing your taxes.
• In general there really is only one right answer to your tax return problem; someone who gets you a much larger refund may be playing loose with the tax rules. If your refund seems too good to be true it probably is; you will pay a lot more later.
• In general, the IRS does require you to have evidence of your income, expenses, deductions and credits.
• The IRS requires all paid tax preparers to sign tax returns they prepare. If a paid tax preparer is unwilling to sign on the dotted line, you should be very suspicious.
• Never sign a blank tax return.  Remember, you are signing the information on that tax return is true and correct, how could you possible know that with a blank tax return?  This con works because you usually do get a large refund, but what you don’t know is the tax preparer has pocketed an even larger one. When the IRS catches up, you will be on the hook for the entire refund and Mr. or Ms. FlyByNightTaxPrep is long gone.

Tax season is almost here.  There is still time to engage in some last minute tax planning.  Schedule your 2013 tax appointment now.  As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help with taxes, or other ser­vices,  Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

(602) 717‑0763

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art and Busi­ness Consulting LLC

How much does your tax preparer really know?   

The IRS rolled out RTRP exam some time ago, and once the exams started the IRS stopped issuing provisional PTINs. Only people who pass the exam can use the RTRP designation.  Just like Enrolled Agents (EAs), the IRS maintains a list of people who hold the RTRP designation as well, so you can check to see if your preparer is licensed. Right now there is no searchable online database, but the IRS says one is coming soon.

The RTRP exam only covers series 1040 tax returns.  Those PTIN holders who swear they will not prepare series 1040 tax returns will still be able to prepare other kinds of tax returns with out demonstrating their competency to prepare those other kinds of tax returns, as the IRS has not created exams for those other kinds of tax returns and may not do so for some time to come.

How many RTRPs are there now? The Member Connect portion of the National Society of Accountants Web site reported that as of late September 2012, the Return Preparer Office of the IRS had issued 20,514 certificates to new RTRPs and the total number of people who still needed to pass the competency exam was 327,000. Those provisional PTIN holders are not breaking down the doors to prove they know what they are doing; since licensing started, only 6% of provisional PTIN holders have bothered to get licensed.

What do you need to know to protect yourself?

If your paid tax preparer does not have a PTIN and refuses to sign with one, you need to be very suspicious; they are breaking the law.

Even if your paid tax preparer has a PTIN, but they do not have a license, such as an EA, or RTRP, they have not demonstrated their competency to prepare your individual tax return. All provisional PTIN holders can prepare any tax return through 2013; sure, they are supposed to know what they are doing, and can lose their PTIN if they wind up in front to the IRS for doing a bad job, but that will not help you, after the fact.

Remember, if you have other kinds of tax returns you need prepared, and if you want to be sure the tax preparer has demonstrated some competency to prepare that kind of tax return, you will want to hire an EA, the tax specialists, or CPA or attorney who specializes in tax issues.  An RTRP or unlicensed PTIN holder has not demonstrated competency to prepare these other kinds of tax returns can still do so; again, even an unlicensed tax preparer is supposed to know what they are doing, and can lose their PTIN if they wind up in front to the IRS for doing a bad job, but that will not help you, after the fact.

You are the one signing that the tax return is true and correct to the best of your knowledge; you will be responsible for whatever your tax preparer does with your tax return.

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help with taxes, or other ser­vices,  Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

(602) 717‑0763

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art and Busi­ness Consulting LLC

Who gets relief? Any individual whose home is in a disaster area. A business whose principal place of business is in a disaster area. Any individual who is a relief worker assisting in a covered disaster area. Any individual whose records are located in a disaster area, even if they actually live elsewhere. Any business whose records are located in  disaster area, even if their business is located elsewhere. Any estate or trust that has tax records necessary to meet a filing or payment deadline in a disaster area. Any spouse of an affected taxpayer.

What may be postponed?  Filing deadline, payment deadline and late payment penalty abatement, the IRS gives affected taxpayers until the extended date specified by county, to file most tax returns: individual, estate, trust, partnership, C corporation, and S corporation income tax returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns. The IRS may give affected taxpayer until the extended date specified by county to make tax payments, including estimated tax payments. The tax filings and tax payments must have either an original or extended due date falling on or after the onset date of the disaster, and on or before the extended date.

IRS also gives affected taxpayers until the extended date to perform other time-sensitive actions, that are due to be performed on or after the onset date of the disaster, and on or before the extended date.

The postponement of time to file and pay does NOT apply to information returns in the W-2, 1098, 1099 or 5498 series, or to Forms 1042-S or 8027. However, penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause.  Likewise, the postponement does not apply to employment and excise tax deposits, however the IRS, will abate penalties for failure to make timely employment and excise deposits, due on or after the onset date of the disaster, and on or before the deposit delayed date specified by county, provided the taxpayer made these deposits by the deposit delayed date.

Affected areas and dates for storms, floods and other disasters in 2012 that are federal disaster areas qualifying for individual assistance, as published on IRS’s website.

Alabama: For tornadoes, floods and severe weather damage, the following are federal disaster areas: Chilton, Jefferson and Perry counties. For these Alabama counties, the onset date of the disaster was Jan.  22, 2012, the extended date was Mar.  22, 2012.  The deposit delayed date was Feb. 6, 2012.

Connecticut: for Hurricane Sandy, the following are federal disaster areas: Fairfield, Middlesex, New Haven, and New London counties and the Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation located within New London county.  For these Connecticut areas, the onset date of the disaster was Oct.  27, 2012, the extended date is Feb.  1, 2013 (which applies to the fourth quarter individual estimated tax payment, normally due Jan.  15, 2013; payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct.  31, 2012 and Jan.  31, 2013, respectively; and tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period).  The deposit delayed date is Nov.  26, 2012.

Florida: For tropical storm Debby, the following are federal disaster areas: Baker, Bradford, Citrus, Clay, Columbia, Duval, Franklin, Gilchrist, Hernando, Highlands, Hillsborough, Lafayette, Manatee, Nassau, Pasco, Pinellas, Polk, Sarasota, Suwannee, Taylor, Union, and Wakulla counties. For these Florida counties, the onset date of the disaster was June 23, 2012, the extended date was Aug.  22, 2012.  The deposit delayed date was July 9, 2012.

Indiana: For tornadoes and severe weather damage, the following are federal disaster areas: Clark, Jefferson, Ripley, Scott, Warrick and Washington counties. For these Indiana counties, the onset date of the disaster was Feb.  29, 2012, the extended date was May 31, 2012.  The deposit delayed date was Mar. 15, 2012.

Kentucky: For tornadoes and severe weather damage, the following are federal disaster areas: Bath, Campbell, Carroll, Grant, Grayson, Johnson, Kenton, Larue, Laurel, Lawrence, Magoffin, Martin, Menifee, Montgomery, Morgan, Ohio, Pendleton, Rowan, Russell, Trimble and Wolfe counties. For these Kentucky counties, the onset date of the disaster was Feb.  29, 2012, the extended date was May 31, 2012.  The deposit delayed date was Mar. 15, 2012.

Louisiana: For Hurricane Isaac, the following are federal disaster areas: Allen, Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston, Morehouse, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St.  Charles, St.  Helena, St.  James, St.  John the Baptist, St.  Martin, St.  Mary, St.  Tammany, Tangipahoa, Terrebonne, Washington, West Baton Rouge, and West Feliciana parishes. For these Louisiana parishes, the onset date of the disaster was Aug.  26, 2012, the extended date is Jan.  11, 2013 (which includes corporations and businesses that previously obtained an extension until Sept.  17, 2012, to file their 2011 returns and individuals and businesses that received a similar extension until Oct.  15).  The deposit delayed date was Sept.  10, 2012.

Mississippi: For Hurricane Isaac, the following are federal disaster areas: Adams, Amite, Clarke, Copiah, Forrest, Franklin, George, Hancock, Harrison, Hinds, Jackson, Jefferson, Jones, Lamar, Lincoln, Marion, Pearl River, Pike, Stone, Walthall, Warren and Wilkinson counties. For these Mississippi counties, the onset date of the disaster was Aug.  26, 2012, the extended date is Jan.  11, 2013 (which includes corporations and businesses that previously obtained an extension until Sept.  17, 2012, to file their 2011 returns and individuals and businesses that received a similar extension until Oct.  15).  The deposit delayed date was Sept.  10, 2012.

New Jersey: For Hurricane Sandy, the following are federal disaster areas: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren counties. For these New Jersey counties, the onset date of the disaster was Oct.  26, 2012, the extended date is Feb.  1, 2013 (which applies to the fourth quarter individual estimated tax payment, normally due Jan.  15, 2013; payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct.  31, 2012 and Jan.  31, 2013 respectively; and tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period).  The deposit delayed date is Nov.  26, 2012.

New York: For Hurricane Sandy, the following are federal disaster areas: Bronx, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Sullivan, Suffolk, Ulster and Westchester counties For these New York counties, the onset date of the disaster was Oct.  27, 2012, the extended date is Feb.  1, 2013 (which applies to the fourth quarter individual estimated tax payment, normally due Jan.  15, 2013; payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct.  31, 2012 and Jan.  31, 2013 respectively; and tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period).  The deposit delayed date is Nov.  26, 2012.

Oklahoma: For the Freedom and Noble Wildfires, the following are federal disaster areas: Creek and Cleveland counties.For these Oklahoma counties, the onset date of the disaster was Aug.  3, 2012, the extended date was Oct.  2, 2012 (including the quarterly estimated tax payment due on Sept.  17, 2012).  The deposit delayed date was Aug.  20, 2012.

Rhode Island: For Hurricane Sandy, the following are federal disaster areas: Newport and Washington counties. For these Rhode Island counties, the onset date of the disaster was Oct 26, 2012, the extended date is Feb.  1, 2013.  The deposit delayed date is Nov. 26, 2012.

Tennessee: For tornadoes, flooding and severe weather, the following are federal disaster areas: Bradley, Claiborne, Cumberland, DeKalb, Hamilton, Jackson, McMinn, Monroe, Overton and Polk counties. For these Tennessee counties, the onset date of the disaster was Feb.  29, 2012, the extended date was May 31, 2012 (the postponement thus applies to the normal April 17 deadline for filing 2011 individual income tax returns, making income tax payments, and making 2011 contributions to an individual retirement account (IRA)).  The deposit delayed date was Mar.  15, 2012.

West Virginia: For tornadoes, mudslides and severe weather damage, the following are federal disaster areas: Harrison, Lincoln, Marion, Preston, Taylor and Wayne counties. For these West Virginia counties, the onset date of the disaster was Feb.  29, 2012, and the extended date was May 31, 2012 (the postponement thus applies to the normal April 17 deadline for filing 2011 individual income tax returns, making income tax payments, and making 2011 contributions to an IRA).  The deposit delayed date was Mar.  15, 2012.

West Virginia: For tornadoes, mudslides and severe weather damage, the following are federal disaster areas: Lincoln, Logan and Mingo counties. For these West Virginia counties, the onset date of the disaster was Mar.  15, 2012, and the extended date was May 31, 2012 (which includes the April 17 deadline for filing 2011 individual income tax returns, making income tax payments and making 2011 contributions to an IRA).  The deposit delayed date was Mar.  30, 2012.

West Virginia: For severe weather damage, the following are federal disaster areas: Boone, Cabell, Clay, Greenbrier, Fayette, Jackson, Kanawha, Lincoln, Mason, McDowell, Mercer, Mingo, Monroe, Nicholas, Pocahontas, Raleigh, Roane, Tyler, Webster and Wood counties. For these West Virginia counties, the onset date of the disaster was June 29, 2012, and the extended date was Aug.  28, 2012.  The deposit delayed date was July 16, 2012.

As always, Phoenix, AZ small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help with indi­vid­ual taxes, busi­ness taxes, employ­ment taxes, or other busi­ness ser­vices,  Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

(602) 717‑0763

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver
Art and Busi­ness Con­sult­ing LLC
Phoenix, AZ tax specialists

Congress has a lot on its plate and if it gets even half of it done, it will be more than they have done in the rest of the year.  Of course, one of the most important issues the US Congress needs to address before the end of the year is the expiring tax cuts, tax deductions, tax credits and other provisions relating to income taxes, business taxes and employment taxes.

From a tax planning standpoint, what does all this mean? Well, for starters, don’t be expecting your tax refund early in 2013.

The longer it takes the US congress to figure out what our taxes will be for 2012, and going forward, the longer it is going to take for the IRS to make the changes in their systems.  Last year tax preparers had to stockpile tax returns until the IRS was ready to accept tax returns.  Will this year be any different? Probably not.

So what tax cuts, tax deductions, & tax credits expired last year (2011)? Understand, as things stand now, these tax breaks are already gone; you will not be able to take these deductions & credits for 2012, unless congress acts to change things.

• The Tuition deduction,
• The Educator deduction,
• Personal Residence Energy Credits for insulation, storm windows, doors etc.,
• The homebuilder credit
• The Sales Tax deduction,
• Home Mortgage Insurance,
• Alternative Minimum Tax (AMT) exemption, and
• use of personal credits against AMT,
• 15-year depreciable life for qualified leasehold improvements, qualified restaurant property, and qualified retail establishments,
• The refundability feature of the adoption credit,
• Tax-free transfers of IRAs to charity,
• The research credit
• The maximum Section 179 (a provision that lets taxpayers deduct assets currently instead of depreciating them over time) drops to $139,000 in 2012

What tax breaks, deductions & credits are set to expire at the end of this year (2012)? These affect taxes for 2013 and going forward, unless congress acts to change things.

• The child tax credit which is at $1,000 per child now, will return to $500 per child in 2013,
• Bonus depreciation,
• The extra Earned Income Tax Credit for the 3rd child,
• The lower earned income level for the Additional Child Tax credit,
• The current higher Dependent Care credit levels and percentages,
• The Child Care Tax credit for employers,
• The American Opportunity credit,
• The unlimited student loan repayment period,
• Many Coverdell Education Savings Account Provisions
• Higher Gift & Estate Tax Unified credit
• The lower employee portion of Social Security tax withholding,
• The current lower tax-brackets,
• The current lower long-term capital gains rates,
• The Married Filing Joint standard deduction equal to twice the Single rate,
• The Married Filing Separate standard deduction equal to the Single rate,
• The maximum Section 179 drops to $25,000 in 2013

Other tax law changes relating to Obamacare, beginning in 2013

• Any taxpayer under age 65, will see the medical expense deduction floor rise to 10% of Adjusted Gross Income from 7.5%
• There will be extra 3.8% Medicare surtaxes on some taxpayers’ net investment income
• There will be an extra 0.9% Medicare surtax on Single taxpayers earning more than $125,000 and Married Filing Joint taxpayers earning more than $250,000
• Medical FSAs will have a statutory $2,500 contribution limit

As you read through this list I am sure you will realize Taxmageddon does affect you, as you will see more than one expired or expiring tax break, tax credit or tax deduction that directly affects you.

For some issues, the only tax planning move is to save a bit more money now to pay 2012 taxes, and get ready to pay even more taxes in 2013-especially if Taxmaggedon and Sequestration occur. For other tax issues there are tax planning moves you can make NOW, before the end of the year, that could save you big, especially if tax rates go up, or certain tax credits and deductions are not extended.

As always, Phoenix, AZ small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help with individual taxes, business taxes, employment taxes, or other business ser­vices,  Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver
Art and Busi­ness Consulting LLC
Phoenix, AZ tax specialists

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, cer­ti­fied finan­cial plan­ner or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to anyone else.

1. Your first line of defense against any scammer is vigilance and awareness.

Since there is no real  way to stop these scammers from contacting you, you need to be vigilant and aware. These scammers lurk in the same places where legitimate businesses do.  Scammers may claim to be representatives of well-known charities. They may masquerading as authorities such as the IRS claiming they can help individuals file claims for refunds.  They may claim to be insurance representatives saying they can help victims file  claims for their loss. Be suspicious of anyone contacting you that you do not know and that should have no reason to be contacting you. “Stranger Danger” is not just for kids.

2. Do not be so nice.

Scammers count on your co-operation.  So do petty bureaucrats and telemarketers.  Regardless, YOU are the first line of defense in protecting your hard-earned money and your identity. A stranger who is contacting you unexpectedly is NOT your friend.  Do not feel any obligation to respond at all.  You do not owe them your name. You do not owe them “yes” (one scam requires they get you to say, “yes” on a recording, which the scammer uses to “show” you ordered something when you did not). If the stranger contacting you does not even know who you are, you do not even owe them, “Hello.” Let them make the first move so you can assess the situation and decide if you wish to continue the contact at all.  You may just want to hang up without saying anything.

3. Never Give Out Personal Information

NEVER give out your social security number, bank account number, birthday and other information critical to your identity to anyone who is soliciting for a charity. There is no reason for them to ask for it.

4. Never Verify Information With A Stranger

NEVER verify information when a stranger unexpectedly contacts you and asks you do so.  If they do not know it, then they should not know it and you must not give it to them. Stranger Danger, it is not just for kids.

5. Only donate to recognized charities. 

Some scammers assume a name similar to a well known charity. Pay attention to where you are online and when you are on the phone.  You can find listings of legitimate volunteer organizations at the National Voluntary Organizations Active in Disaster (VOAD).  You can check  to see if a charity is tax deductible by searching for it via the Internal Revenue Service. 

6. Know Who You Are Dealing With

When you decide to give, initiate the contact  yourself.

Do not give out credit card numbers to an unexpected caller. A legitimate organization will understand a person who is wary of giving out credit card numbers and other information over the phone to a stranger. Advise unexpected callers that you will find their website or phone number yourself. Do NOT use any information an unexpected caller gives you, because if they are a scammer they will always send you to their fraudulent website or their fraudulent phone numbers. Know who you are dealing with.

Similarly, do NOT follow links contained in emails. Some scammers park on domains that are misspellings of legitimate websites, or are similar to legitimate websites. Type in the website addresses yourself, and check the URL to make sure you typed it in correctly, before you enter information & click “donate.” Know who you are dealing with.

Indeed be careful of even opening emails from people and organizations that you do not know, an email that is not addressed to you, an email that contains misspellings, an email that does not make sense, and email that does not contain to or from email address or  a subject line, or body text. Know who you are dealing with.

7. Do not donate cash.

Use a credit card or check. You need a receipt of some kind to deduct donations, but if you donate cash you might not have any evidence you paid. Again legitimate charities understand these things, so be wary of someone requiring you to donate cash.

8. If any offer sounds too good to be true it probably is. 

This statement should go without saying, but people in desperate situations really wish conditions were otherwise, and scammers will prey upon that desperation. When you find yourself confronted by a disaster or other bad event, do not let your desires over-ride your common sense.

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help with taxes, or other ser­vices,  Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

Jake Beck­man, EA & Chief Small Busi­ness Prob­lem Solver at Art and Busi­ness Consulting LLC

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, cer­ti­fied finan­cial plan­ner or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to anyone else.