Latest News on Denver Accounting & Taxes

Refund Down? Denver Tax Specialist Discusses Withholding Adjustmen


March 14, 2019

As tax season marches on many Americans have already filed their required returns but the results have been somewhat surprising. With new tax laws many anticipated getting a sizeable return this year but that hasn’t been the case - although it isn’t necessarily the result of less money in your pocket because many people received far more through their regular paychecks during the calendar year.

There is no denying the tax rate is down and this change caused many individuals to receive more weekly, bi-weekly, or monthly - depending on how they receive payment. The result, especially for those who have grown accustomed to receiving sizeable refunds in the spring, was less money from a tax refund because more was received throughout the prior year. These changes could lead individuals to consider making an adjustment on their W-4 withholding, but should you? First, don’t rush to judgement, examine the differences before making a decision.

REDUCED REFUND

While the reason for a smaller refund may be the result of a reduced tax rate, withholding more during the year may not be in your best interest. A refund, although maybe not what one has grown accustomed to, is still a benefit and due because of the amount paid in throughout the year. Changing your withholdings could give you a slight boost in the spring but it may not be as sizeable as the difference between receiving your prior amount throughout the year. 

Even with average refunds down almost 17-percent, any changes would essentially only be beneficial to the federal government instead of its citizens. By voluntarily providing more money for the government during the year, the payday back at the end may change due to a variety of other factors. For few, are the tax implications identical from year to year - hence the need for professional assistance with many filings.

OWE

Opposite, if you find yourself owing money when you may have previously received a sizeable refund, making a change to the W-4 could make a difference. Ask questions to find out what or how much you need to plan for withholding to avoid ending the year still owing the federal government. 

Tax refunds are shrinking and individuals who have grown accustomed to relying on a refund in the spring to help boost a savings account, pay down other bills, fund a vacation, or make a purchase are instead having to pay. This change typically occurs for people who may have had smaller refunds the year prior but the truth is a variety of different factors contribute to the tax footprint of individuals throughout the year. By evaluating your expected tax imprint for the next year, a good plan can be developed in order to avoid any surprises next season.

The tax experts at Bloch Rothman and Associates are ready and willing to assist with all of your questions and filing needs, including help with any questions you may have regarding the new tax laws and how they have had an effect on your annual tax filing. Serving Denver and the surrounding area for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us today. Available for all of your tax needs and filings there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!
 
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Denver Tax Specialist Talks Standard Deduction Changes


March 6, 2019

As Americans begin filing their taxes from the 2018 calendar year, many are noticing a significant change in their refund or amount owed. As with any change in administration, the new tax laws evoked and changes to the current system seemingly always take a few years to register. It is during this time period that the changes administered become accountable in full effect and take place as deemed necessary.

This year is no different and while many individuals expected a significant boost in their refund from one year to the next, many are seeing a slight decrease in this amount or end up owing the federal government - unlike their past returns. While the overall tax rate is reduced, there are still deductions and other filings which take place in order to determine the individual impacts of the associated tax law.

It is here where many are struggling with the changes. From the 2017 tax year until last year there has been a significant amount of changes with the new tax laws being implemented. One of the most evident involves the standard deduction and its appropriations.

The standard deduction appropriates for many deductions and taxpayers typically have two options when filing. They can either account for their tax related expenses - donations, medical, and work related costs or take the appropriated amount given to nearly every taxpayer. These have changed significantly from years prior under the new tax laws as detailed below.

SINGLE FILING

If filing a single return, the standard deduction was $6,350 for the last filing period. New changes to the deduction and law have increased the amount to $12,000 for tax year 2018. This increase of almost double the amount allows for a more generous deduction but coupled with the lower tax rate, many individuals are finding out the differences are significant when filing. 

While the change doesn’t appear to be extreme, the differences are significant. While there aren’t any more of the typical deductions, these are “accounted” for with the increase in the deduction.

MARRIED FILING JOINTLY

Married couples filing together are also the beneficiaries of an increase in their standard deduction from years prior. For those who are filing a joint return, the deduction was $12,700 last year and has also increased - near double - for the 2018 filing period.

Those filing a joint return can account for a $24,000 deduction this year. This amount includes many of the deductions individuals had grown accustomed to taking but instead, are accounted for in the standard deduction this tax filing period.

The tax experts at Bloch Rothman and Associates are ready and willing to assist with all of your questions and filing needs, including help with any questions you may have regarding the standard deduction or changes to your typical refund because of new tax laws. Serving Denver and the surrounding area for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us today. Available for all of your tax needs and filings there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!
 
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Denver Tax Specialist Reveals Potential Travel Deductions


February 20, 2019

Traveling for work? Being asked to attend a meeting in another city? If you’re racking up numerous expenses incurred because of business while traveling, then some of your cost may potentially be deducted on your tax return. Depending on your business status and the reason for your travel, some of the most common expenses may be deducted from your return with proper documentation and explanation.

Remember to keep all of your receipts when issued and track your expenses from the time you leave until you return. If you do any personal exploring while away then these costs will not be deductible but the following could help to reduce your tax liability when filing each year.

Airfare
Whether traveling for business or to entertain a potential client, the cost of your airfare could be deductible. If you have to personally pay for expenses, remember to keep all records of travel and if not reimbursed by the business or your company, then the trip can likely be taken. Your specific type of business and the travel incurred will go a long way in determining what the specific deduction capabilities are for the trip(s) in question.

Uber/Lyft/Taxi Cab
If you believe your Uber ride counts as a tax deduction, you may be right. Just as with the airfare, if you’re traveling for business purposes and having to pay out of pocket for travel around a city, to meet clients, or to get from one business venture to the next, then these expenses could be tax deductible.

All similar modes of transportation - Uber, Lyft, Taxi Cabs, etc. - are all available so ensure that you are tracking your expenses while traveling and keeping up with the proper paperwork to verify any and all travel related expenses associated with car services.

Rental Cars
If the use of cabs or another transportation service isn’t available and a rental car is used, the same may apply. Should one not be provided or reimbursed, then any personally paid transactions associated with a rental car may also be claimed when filing taxes.

Parking
Don’t forget about parking. Both fees incurred while having to park wherever you are located for business and at the airport, should you have to fly, each is an available option to potentially be used as a business expense.

The tax experts at Bloch Rothman and Associates are ready and willing to assist with all of your questions and filing needs, including help with determining which expenses apply to your specific tax return. Serving Denver and the surrounding area for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us today. Available for all of your tax needs and filings there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!
 
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Audit Help From A Denver Tax Specialist


February 13, 2019

During an annual tax filing season the Internal Revenue Service (IRS) receives an enormous amount of information from every citizen filing taxes. They analyze the data collected and depending on the amounts owed and received, either get or distribute funds for the preceding calendar year. While there is a reporting deadline, options do exist for those who may not be able to file on time, although if they owe then payment remains due by the specified date. Either way, if you file on time or via an extension, the IRS can still select you for the possibility of an audit.

The word itself often invokes fear into business owners or individuals but there are varying degrees of audit responsibility. Some involve only correspondence via a letter, potentially due to a simple mathematical error, yet others include an IRS agent visiting your home or place of business, and even a line-by-line analysis of your return may be executed. 

PROBLEM

Reasons behind auditing a tax return are directly associated with the ways people try to cheat on their taxes. Although many discrepancies may be the result of “honest mistakes,” others effectively attempt to navigate the tax laws and arrange the filing of their return in such a method to benefit them in the best ways possible.

By failing to report earned income, especially when receiving cash, or paying for services in the same manner, many hope to reduce their true earnings which effectively lowers the amount of taxes owed. Other red flags include excessive deductions, donations, or applying phony credits. 

AUDIT SOLUTION

The IRS Audit System is designed to effectively eliminate these types of actions and limit both individuals and businesses from being able to cheat on their responsibility. By implementing random screenings and double-checking all of the received information, a general analysis can typically be quickly determined if obvious discrepancies exist.

VERDICT

If you have been selected for an audit, locating professional assistance should be your first line of defense. While the reasoning for a closer look at your tax return may be a simple mathematical error or accidental reporting, the failure of everyone to effectively file has given cause for the audits to take place.

Once you have determined the extent to which the IRS is going to evaluate your return, getting the help needed is critical. Professionals have been through the audit process and are trained to assist in the best way possible while actively working on your behalf at onset and throughout the entire process. Depending on the style of audit you have been chosen for this process could last anywhere from a few weeks, to months, or even years down the line.

The tax experts at Bloch Rothman and Associates are ready and willing to assist with all of your questions and filing needs, including help with an IRS initiated audit. Serving Denver and the surrounding area for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us today. Available for all of your tax needs and filings there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!
 
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Denver Tax Return: Child Tax Credit Qualifications


February 6, 2019

As is often the case, many tax details change somewhat as the administration in Washington D.C. lays the groundwork for their particular agenda. Many of these tweaks and changes take some time to be put into full effect and staying up to date on all of the ins and outs can be a daunting task. Thankfully, there are professionals available whose responsibility it is to know the proper filing procedures and ensure that your tax return is completed appropriately.

One such change for the current filing season involves the child tax credit. While many assume of parents, or those who have children, that they are able to automatically deduct the number of children from their taxes owed, this is not entirely the case. While partially true, there is much more to the story than meets the eye. In the past, each qualifying child deduction was $1,000. This has changed to allow for deductions up to $2,000 per qualifying child during the 2018 year, 2019 filing season.

Coupled with other changes to know about for 2019, there are certain factors to determine if a child is eligible to be claimed for the credit. Not all kids are automatically eligible and taxpayers must ensure that their children meet the requirements laid forth by the Internal Revenue Service (IRS) in order to claim the credit on their taxes.

Following are six factors which must be met in order to claim the child tax credit.

CITIZENSHIP
Child being claimed must possess their own unique social security number administered by the Social Security Administration. These numbers are tied to all citizens, nationals or resident aliens of the United States of America.

AGE
In order to qualify, the child cannot exceed 17 years old at the conclusion of the tax year in question. For example, the individual cannot turn 17 prior to December 31, 2018.

RELATION
There must be a relationship present. According to the IRS website this includes, “son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.”

RESIDENCY
In addition to providing support, the child must have lived with claimant for over half of the year in question.

SUPPORT
Child in question did not provide any or less than half of their own expenses used to live.

DEPENDENT
Responsible party must claim the child as their own dependent. While this figures to be common knowledge, there are sometimes issues involving custody which require dependency establishment.  

The tax experts at Bloch Rothman and Associates are ready and willing to assist with all of your questions and filing needs, including any unknowns regarding the new child tax credit and filing responsibilities. Serving Denver and the surrounding area for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us today. Available for all of your tax needs and filings there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!
 
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