SBS CPA Group, Inc.

Income Tax Season is Almost Here

Tue, 06 Jan 2026 17:56:00 GMT

Income tax season is almost here!

2026 will be an amazing year at SBS CPA Group!

If you have signed up for TaxDome we will send you an electronic tax planner on January 20th, 2026. This is the last year TaxDome/Online clients will be mailed a tax planner.

If you do NOT have your tax planner by the end of the day January 23rd, 2026, please call Nikkie Reyes at 260-407-5000 or email her at Admin@sbscpagroup.com.

Normally we mail you 6 pages; this year it is 10 pages due to all of the new tax laws and the complications the new laws bring. One nice feature of the TaxDome planner is as you answer questions, it hides irrelevant questions saving you time.

We prefer everyone use TaxDome since it secure, efficient, and saves you trips back and forth to our office. The regular mail in our area has been just awful with mail lost and frequent delays. If you are not setup to use TaxDome, please call Nikkie Reyes at 260-407-5000 and she will ensure everything is setup.

You are either a PAPER client or an online/TaxDome client for your income tax preparation, you CANNOT be both.

It is EXTEMELY IMPORTANT that you do ONE of the following when you give us everything for your income tax preparation:

Paper clients: You fill out the paper tax organizer completely and please wait until you have every single document we need to prepare your income tax returns before you give us any documents! Please do NOT drop anything off until you have everything we need. We must have it all at once; additional fees will be charged to anyone who does not follow this important rule.

Online/TaxDome clients : You shred the paper tax planner we sent you and do not fill it out, please do not upload it to us as a pdf, etc. Instead, you start the process by filling out the online/TaxDome tax planner we send you via TaxDome on January 20th, 2026. You can upload source documents to TaxDome anytime; however, we prefer you upload them all at once immediately after you fill out the online/TaxDome tax planner. There will be a task you have in TaxDome to tell us that all of your documents are uploaded after you complete the organizer. We will not start your returns until you mark that task complete. For online/TaxDome clients there will be additional fees charged if you give us more documents after telling us we have everything.

For all clients, we have always asked you to drop everything off at once; however, this last tax season most of our clients did not do this and it added several hundred hours to preparation time and all of this time will be charged to you moving forward. We cannot be efficient unless you give us everything at once.

Please remember for income tax preparation, you are either a paper client or an online/TaxDome client and cannot be both.

We look forward to another great tax season handling our clients' income tax returns efficiently and accurately!

SBS CPA Group is Hiring a Tax Manager

Thu, 18 Sep 2025 17:26:09 GMT

SBS CPA Group is hiring!

Best Tax Manager position in Fort Wayne, Indiana.

We are looking for an amazing Tax Manager! We are looking for our next rockstar employee! We have a lot to offer, and we want to hear from you quickly! We are looking for a CPA with five or more years of experience. The right person could quickly become a partner.

The main item that sets us apart from other CPA firms is how few hours per year each of us works. We have an amazing work life balance, our employees work (NOT bill) 1904 hours per year. Note this includes training, CPE, etc.

We have an extremely flexible work schedule and our employees all have either Mondays or Fridays off the last 37 weeks of the year. In fact, our employees work (NOT bill) an average of 27 hours per week for the last 37 weeks of the year.

We do NOT have a second busy season. We pay overtime for all hours worked over 40 hours in a week to ensure no one is taken advantage of.

We will encourage applicants to talk to all of our employees, our employees can verify the hours they work, the number of three-day weekends they take, and the fact that we do not have a second tax season. Our firm is very different than a typical CPA firm and we are proud of that fact.

You can work a hybrid schedule with some days in the office and some days at home once training is completed. We have amazing benefits.

You must be a CPA with experience in Public Accounting.

Experience preparing individual and corporate income taxes is a must as is experience reviewing those returns.

If you are tired of working crazy hours, please reach out to us today!

Please reach out to Mike Sylvester at Mike@SBSCPAGroup.com with your resume!

Mike Sylvester, CPA

SBS CPA Group is Hiring a Senior Staff Accountant

Tue, 16 Sep 2025 13:46:06 GMT

SBS CPA Group is hiring and looking for a great Senior Staff Accountant!

Our full-time employees work 1904 hours per year. Our employees work significantly less than is typical at public accounting firms.

We allow a hybrid work schedule after initial training is complete.

Our pay is in the top 25%; our benefits are in the top 25%.

We are looking to hire someone with a four-year degree who is a CPA or CPA eligible. The more experience the better!

Experience preparing a wide variety of income tax returns is a must. The ability to use technology is a must.

Please reach out to Mike Sylvester at Mike@SBSCPAGroup.com with your resume!

Mike Sylvester, CPA

SBS Staffing Changes

Thu, 11 Sep 2025 17:47:53 GMT

Nathan Skinner, one of our four Senior Staff Accountants, is moving back home to Dayton, Ohio. Nathan has been with us for four years since he graduated college in 2021. We wish Nathan success in all of his future endeavors, and we will miss him greatly! His entire family is in Dayton, and we think this move will be great for his family. Nathan's last day at SBS will be either September 18 ^th or 19 ^th .

If you normally work with Nathan, you will get an email from us letting you know who you will be working with moving forward! If you need something before you get the email; please call Nikkie Reyes at 260-407-5000 and she will connect you to the right person!

SBS CPA Group is hiring, and we will be posting our job opening on Indeed and on our company blog in the next few days.

If you know someone looking for a great job in public accounting in Fort Wayne, Indiana, please reach out to Mike Sylvester at Mike@sbscpagroup.com!

New Gambling Loss Rules

Wed, 27 Aug 2025 18:44:37 GMT

The gambling rules for tax year 2026 have changed due to the new tax bill. One Big Beautiful Bill Act (OBBB), was signed into law on July 4, 2025 by President Trump. These changes will affect both casual gamblers and professionals beginning in the 2026 tax year. Those who gamble should understand the new rules.

The Old Rule (Through 2025)

Historically, the IRS has allowed taxpayers to deduct gambling losses—but only to the extent of their gambling winnings. If you won $10,000 but lost $15,000, you could deduct $10,000 in losses, effectively zeroing out your taxable gambling income.

The New Rule (Starting 2026)

Beginning with the 2026 tax year, gambling losses will be deductible at only 90% of the amount of winnings. While this may sound like a minor adjustment, the impact is significant.

Example:

You win $100,000 and lose $100,000 during the year.
Under the old rule: You would report $100,000 of income and deduct $100,000 of losses, resulting in zero taxable gambling income.
Under the new rule: You can deduct only $90,000 of those losses on your federal income tax returns. That means you’ll still be taxed on $10,000 of “phantom income,” even though you truly broke even.

This rule applies to all gamblers, whether you buy the occasional lottery ticket or operate as a professional gambler.

How Itemized Deductions Work

It’s important to understand that gambling losses are deductible only if you itemize deductions on your tax return. Here’s what that means:

Standard vs. Itemized Deduction

Every taxpayer can take the standard deduction—a fixed amount based on filing status. For 2025, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly.

Alternatively, you can choose to itemize deductions if the total of your eligible deductions (mortgage interest, charitable contributions, state and local taxes, medical expenses, and gambling losses, among others) is higher than the standard deduction.

Where Gambling Losses Appear

Gambling losses are reported on Schedule A, Itemized Deductions, not directly against gambling winnings.

You must report all gambling winnings in full as income. Losses are deducted separately on Schedule A, up to the allowable limit (100% through 2025, 90% starting in 2026).

Recordkeeping Requirements

To claim these deductions, you must keep meticulous records—receipts, tickets, player’s club statements, and a diary of gambling activity.

Without proper documentation, the IRS may disallow your deduction even if you had genuine losses.

Why It Matters

The IRS projects that this change will raise more than $1 billion in revenue over the next decade, but it comes at the expense of fairness. Many taxpayers will now find themselves paying tax on income they never actually earned. Professional gamblers, in particular, may feel the heaviest impact, as their livelihoods often involve large swings of wins and losses.

Additionally, because gambling losses are only deductible for those who itemize, some taxpayers may find that the standard deduction provides a bigger benefit—even if it means their gambling losses go unused. This makes strategic planning even more important.

Planning Ahead

For 2025, the old rules remain in effect. If gambling is part of your financial life, I strongly recommend:

Evaluating whether itemizing makes sense in your situation.
Keeping meticulous records of all winnings and losses.
Budgeting for higher tax liability in 2026 and beyond, even if you expect to break even.
Consulting with a tax professional to explore potential strategies for minimizing the impact.

At SBS CPA Group, we’re here to help clients navigate these changes with confidence. If you’d like to review your individual situation and discuss strategies for 2025 and beyond, please reach out to your CPA and we’d be glad to assist.

Mike Sylvester, CPA

Energy Tax Credits

Wed, 27 Aug 2025 18:30:09 GMT

Valuable tax credits are expiring at the end of this year. Our clients have claimed hundreds of thousands of dollars of federal energy tax credits the last few years!

The One Big Beautiful Bill that passed in July changed the expiration date for the Residential Clean Energy Credit and the Energy Efficient Home Improvement Credit to December 31, 2025. Originally designed to expire in 2032, these credits can lead to substantial tax savings.

To meet the Residential Clean Energy Credit requirements, you must install one of the following items in your main home or second home. The home can be new or existing. Homes you rent out do not qualify, but renters who improve the property do qualify. The credit is 30% of the expenditure, including labor. The item must be brand new; used items do not count.

-Geothermal Heat Pumps

-Wind Turbines

-Solar Electric Panels

-Solar Water Heaters

-Fuel Cells (credit limited by the amount of kilowatt hours and only for main homes)

-Battery Storage Systems (with equal to or greater than three kilowatt hours)

You can claim all of these in the same year if you qualify for them. There are no limits on the amount of credit you can claim, except for Fuel Cells as noted above.

To qualify under the Energy Efficient Home Improvement Credit rules, you would need to install one or more of the following items in a house that you live in that already exists. New homes do not qualify and neither do rental houses. The amount of the credit is 30% of the expense, with maximum limits listed below:

-Exterior Doors (up to $250 per door, $500 total; must be main home; cannot include labor costs; for homeowners only-not renters)

-Certified Home Energy Audit (up to $150; must be main home; for homeowners only-not renters)

-Exterior Windows and Skylights (up to $600; must be main home; cannot include labor costs; for homeowners only-not renters)

-Insulation and Air Sealing Materials (up to $1,200; must be main home; cannot include labor costs; for homeowners only-not renters)

-Central Air Conditioners (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim)

-Natural Gas, Propane, or Oil Water Heaters (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim)

- Natural Gas, Propane, or Oil Furnaces and Hot Water Boilers (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim)

-Electric Panel Upgrade (up to $600; can be main or second home; you can include labor costs; homeowners or renters can claim)

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-Electric or natural gas heat pumps (up to $2,000; can be main or second home; you can include labor costs; homeowners or renters can claim)

-Electric or natural gas heat pump water heaters (up to $2,000; can be main or second home; you can include labor costs; homeowners or renters can claim)

-Biomass stoves and boilers (up to $2,000; can be main or second home; you can include labor costs; homeowners or renters can claim)

The maximum credit per year is $3,200. You can claim up to $1,200 for anything above the line and $2,000 for anything below the line. Also, new for 2025, it must be from a qualified manufacturer with a PIN or QM Code. (Insulation and Air Sealing Materials are exempt from needing a PIN.)

As you can see, the credits can provide substantial savings for you at tax time. You can claim both credits on the same tax return and they do not affect each other’s limits. All items for either credit must meet certain standards-just calling themselves energy efficient is not sufficient. Installation of the improvement needs to occur on or before December 31, 2025-simply ordering it or prepaying for it does not count.

Both credits are nonrefundable, which means if the credits are bigger than your tax liability, you will not receive the excess as a refund. In the case of the Residential Clean Energy Credit, any unused credit will carry forward to use in future years. The Energy Efficient Home Improvement Credit does not carry forward. If you have already installed energy efficient improvements this year, make sure to let your tax preparer know. If you still plan to install energy efficient improvements, you may want to consult your tax advisor before making your purchase to make sure you maximize your tax savings.

Mike Sylvester, CPA

Clean Vehicle Credit

Tue, 26 Aug 2025 17:56:47 GMT

If you have been planning to buy a clean vehicle, you will want to act soon. Right now, there are tax credits for both individuals and businesses that can make buying an electric vehicle more enticing. However, the One Big Beautiful Bill will end these tax credits as of September 30, 2025!

What is a clean vehicle? The IRS says that a clean vehicle is one that gets plugged in (aka an electric vehicle) or a fuel cell electric vehicle.

Currently, if you buy a new clean vehicle for personal use, it can qualify you for the Clean Vehicle Credit. If you purchase a new car, the credit can be up to $7,500. Certain used electric vehicles can earn you a credit of up to $4,000. Tax credits are a dollar-for-dollar savings on your tax bill, so these are substantial savings!

To qualify for the credit, the vehicle must meet several guidelines. To see if your vehicle qualifies, you can go to fueleconomy.gov. Also, the following income thresholds must be met:

For new vehicles:

-Modified AGI in the year of delivery (or the year before delivery) is no more than:

-$150,000 if single,

-$225,000 if head of household,

-$300,000 if married filing jointly

-Vehicle cost no more than

-$55,000 if a sedan,

-$80,000 if a SUV, pickup, or van

For used vehicles:

-Modified AGI is no more than:

-$75,000 if single,

-$112,500 if head of household,

-$150,000 if married filing jointly

-Vehicle cost no more than $25,000

In the case of businesses and tax-exempt organizations, the Commercial Electric Vehicle Credit allows a credit up to $7,500 for vehicles under 14,000 pounds and up to $40,000 for vehicles weighing 14,000 pounds or more. There are no income limits or price caps for businesses to qualify, but there are several eligibility requirements that must be met. You can go to fueleconomy.gov to see if your vehicle qualifies.

Before taking these credits, you must make sure you did not get a point-of-sale rebate. Instead of waiting to get the tax credit when you file your taxes, you could have taken the option to take the credit at the time you purchased the vehicle which would have reduced the price you paid for the vehicle. You cannot have both a tax credit and a point-of-sale rebate for the same vehicle.

Remember, these credits end September 30 ^th , 2025 so you must purchase and take delivery of your vehicle by then.

Ensure you fill out your tax planner correctly so we can ensure you get these tax credits on your 2025 income tax returns.

Mike Sylvester, CPA

The Tax Professional Industry Is Shrinking

mike@sbscpagroup.com (Mike Sylvester) — Thu, 31 Jul 2025 16:17:46 GMT

The Tax Professional Industry Is Shrinking

The number of Certified Public Accountants in the United States is shrinking, and this trend is only expected to continue—and likely get worse.

Three hundred fifty thousand more people have left the accounting industry than have joined it since 2020, and this has been caused by:

75% of CPAs are at or nearing retirement age

Fewer people are taking and passing the CPA exam

Further, many employees are leaving because they do not like the insane hours and want to focus on improving their quality of life.

In our area, one or two firms close each and every year. A lot of firms are consolidating and becoming larger. The total number of firms in our area is half of what it was back in 2008. This is expected to continue.

Things are very difficult in our industry, and 530 different potential new clients called our firm last year—and we spent nothing on advertising. Realize we have a total of 950 clients today. Considering we do not advertise, this honestly tells you everything you need to know about our industry. A majority of CPA firms today are not taking on any new clients because they are full—or, more likely, overfull. The three most common reasons why new clients contact us are:

Prior CPA retired or died

Prior firm got bought out and they dislike the new firm

They cannot get questions answered

We are still taking on new clients; however, we are being choosy who we onboard.

Our firm is fortunate. The average age of the ten people at our firm is 41 years old. Compared to other CPA firms, that is extremely young. We already have four CPAs. We have two employees who we expect will be CPAs within the next year and another who will be an Enrolled Agent.

It is a great time to be a CPA!

We look forward to working with you for many years!

Mike Sylvester, CPA

The Internal Revenue Service is in Trouble

mike@sbscpagroup.com (Mike Sylvester) — Wed, 30 Jul 2025 18:36:54 GMT

The Internal Revenue Service will lose 25% of its total workforce in early and mid-2025. Many in Congress want to cut the IRS workforce even more next year.

The IRS was already struggling to do its job before so many people were let go. For example:

The Fort Wayne office was closed, along with many other offices around the country.

The phone system is terrible. It is hard to get an agent on the phone, and disconnections are very common.

They are issuing a record number of notices to taxpayers. Most of the notices are wrong. Worse, they have removed much of the information that used to be listed on the notices. This makes it much harder to deal with those notices and requires us to call them more and write them more letters.

Their computer systems are, in some cases, 40 years old and slowly failing.

The IRS has to deal with the newly passed tax laws, which are extremely complicated and will require many new forms and instructions.

We have several clients who have had to wait well over a year for items to be resolved, and we expect that to get worse.

The IRS has its fifth Commissioner already this year, and the current Commissioner is completely unqualified for the job.

The Indiana Department of Revenue (INDOR) is also declining; however, it is more functional than the IRS.

INDOR is issuing more notices and has removed a lot of information from their notices as well.

INDOR’s budget has been cut by 5% this year and another 5% the following year. It looks as if they will not be allowed to hire anyone for 27 months.

Further, the IRS and INDOR both have an aging workforce, and a large number of employees will retire over the next few years.

The taxing agencies are getting harder to deal with, and we expect the IRS will be very difficult to deal with.

All of this will be difficult for both you and our firm to deal with it.

That being said, we are developing a plan to deal with it!

Mike Sylvester, CPA

One Big Beautiful Bill

mike@sbscpagroup.com (Mike Sylvester) — Tue, 29 Jul 2025 18:09:12 GMT

Congress passed and President Trump signed into law major changes to the federal income tax code. These changes are very complicated and provide tax planning opportunities.

Most of these changes are beneficial to taxpayers.

Please ensure you read our email newsletters as we will be discussing many of the major provisions over the next few months.

The changes are very complicated and:

Some only affect certain years

Most of them phase out at specified income levels

Some require new forms

Many require guidance from the IRS to be issued

We will attend a large amount of training on these new provisions and do not expect much of the IRS guidance to be available until October 2025.

Karena, Brent, and I can be hired to provide tax planning and help you minimize your income taxes. Please reach out to us in October of 2025.

Mike Sylvester, CPA

Why You’re Getting More Tax Notices

mike@sbscpagroup.com (Mike Sylvester) — Wed, 25 Jun 2025 14:21:04 GMT

Summer has arrived in Fort Wayne, Indiana.

Both the Internal Revenue Service and The Indiana Department of Revenue are sending more incorrect tax notices. Worse both have changed their notices to provide little, or any information, forcing us to reach out to them and talk to them to find out what their notice means.

Both agencies are struggling due to budget cuts. We expect this to get worse over the next couple of years.

We are happy to help you with tax notices; however, they currently take a long time to resolve, and we charge separately for resolving tax notices.

The Internal Revenue Service is in complete disarray due to DOGE cuts and some reports show that the IRS may only answer 16% of phone calls they receive next tax season.

Further, we are seeing it take the IRS years in some cases to respond to notices, and it now often takes them 6 to 12 months to process amended returns, old year returns, and returns for those who are deceased.

The tax agencies are much harder to deal with than they were five years ago; and we expect this to get worse due to budget cuts.

TaxDome Implementation

mike@sbscpagroup.com (Mike Sylvester) — Wed, 25 Jun 2025 14:17:28 GMT

SBS CPA Group implemented TaxDome this year. Our clients really like the easy-to-use portal, and more than half of our clients are using this platform. We expect that number to grow significantly. We like TaxDome and have received great feedback from our clients.

A copy of your tax returns is in TaxDome. You can retrieve them yourself any time. If you need help please reach out to Nikkie Reyes at Admin@sbscpagroup.com or call her at 260-407-5000 and she can help you retrieve a copy of your tax returns from TaxDome or, if needed, she can get them to you in another way.

If you have not opted into TaxDome, please opt in. Just email Nikkie or call her and she will help you opt in.

If you are married and file a joint return both of you need to opt into TaxDome.

Opting into TaxDome is not required for current clients next year.

We really like TaxDome, and you will too. Please give it a chance.

Mike Sylvester, CPA

Social Security And Retirement: What You Should Know In 2025

mike@sbscpagroup.com (Mike Sylvester) — Tue, 17 Jun 2025 15:02:21 GMT

The Original Purpose of Social Security: A Three-Legged Stool

Social Security is a cornerstone of the United States' social safety net. Many Americans depend on this program to fund their retirement. The most recent data available from the Social Security Administration highlights the program's critical role in retirement planning.

Social Security benefits account for approximately 30% of the income for individuals ages 65 and older. Retirement income was envisioned as a three-legged stool consisting of pensions, personal savings, and Social Security, each contributing one-third. The program was never intended to serve as the primary source of retirement income.

Many Lower-Income Retirees Rely Heavily On Social Security

51.8% of individuals ages 65 and older depend on Social Security for half or more of their income.

24.7% of people in this age group rely on it for 90% or more of their income.

Statistics Regarding Which Retirees Depend On Social Security

The extent of reliance varies significantly by income quintile ; note the first quintile is the lowest 20% of taxable income and the fifth is the highest 20%:

In the 1st quintile, 64.1% rely on Social Security for 90% or more of their income in retirement.

In the 2nd quintile, 47.8% rely on Social Security for 90% or more of their income in retirement.

All the way up to the 5th quintile, none of whom rely on Social Security for 90% or more of their income in retirement.

Can Social Security Survive Beyond 2033?

The program faces significant challenges. Without reform, Social Security will not be able to pay full benefits by 2033 . This presents a critical issue for Congress, as reductions in benefits are politically and socially untenable. Many changes are being made to the program via the Department of Government Efficiency. Further The Social Security Fairness Act was passed into law on January 5 and this brought more changes to the program.

How Social Security Benefits Are Calculated

Despite its importance, many people are unaware of how their Social Security benefits are calculated. Since the Social Security Administration ceased mailing statements in 2011, individuals must proactively set up an online account to access this information.

The benefit formula is intentionally progressive, favoring lower-income earners by replacing a higher percentage of their income.

For higher-income earners, Social Security becomes less significant as a percentage of their total retirement income.

Terminology For Calculating Your Social Security Benefit

1. Credits: To qualify, individuals must earn 40 credits. In 2025, one credit is earned for every $1,810 in covered earnings (most often wages), with up to four credits given annually.

2. Average Indexed Monthly Earnings: The AIME figure is based on a worker's 35 highest-earning years, adjusted for inflation. If fewer than 35 years of earnings exist, zeros are averaged in.

3. Primary Insurance Amount: This is the monthly benefit a person receives at full retirement age. PIA is calculated using a formula adjusted annually for inflation.

2025 Social Security Payout Example: How The Formula Works

Bend points are critical to the calculation and can be used to ensure you draw as much as possible in retirement.

For a retiree with an AIME of $7,391 (This is annual wages of $88,692 in 2025 dollars):

• 90% of the first $1,226 = $1,103.40

• 32% of the amount between $1,226 and $7,391 = $1,972.80.

• Total PIA = $3,076.20 (before Medicare premiums).

Strategies To Maximize Your Social Security Benefits

To optimize benefits:

• Aim for an AIME of at least $1,226, as the first tier yields a 90% replacement rate.

• Understand that amounts above $7,391 are replaced at only 15%.

Reviewing your lifetime earnings is crucial to ensure accuracy. Errors are far easier to correct early on than later on, when reconstructing decades-old income records may be challenging.

Will Your Social Security Be Taxed? What Retirees Should Know

Since 1983, up to 85% of Social Security income has been subject to federal taxes, depending on other income sources. This makes the program more progressive but also adds complexity to retirement planning. Consider discussing this with your tax professional and financial planner.

When Should You Start Collecting Social Security?

When to begin drawing Social Security benefits is a critical decision, particularly for married couples. Meeting with a qualified financial planner may be appropriate. Starting benefits early results in reduced monthly payments, while delaying up to age 70 increases them. Careful analysis and planning are essential to maximize lifelong benefits.

Final Thoughts: Why Understanding Social Security Matters More Than Ever

Social Security is a vital program for most Americans. Understanding its mechanics and planning effectively can significantly impact your retirement security and should be carefully considered before retirement.

I do some consulting on this topic and if you want to hire me to do some Social Security planning please send me an email at Mike@sbscpagroup.com .

Mike Sylvester, CPA

Tax Season Hours

Sat, 01 Feb 2025 19:46:13 GMT

Tax Season hours at SBS CPA Group (Feb 2 ^nd -April 15 ^th )

Monday thru Friday 8:30am to 6:00pm

Saturday 9:00am to 4:00pm

Tax Season is here!

Fri, 31 Jan 2025 17:13:17 GMT

Tax season is here! We’re ready to start filing returns and need your documents all at once . Please provide:

Your completed tax planner
All source documents

How to Send Your Documents

Please choose one method:
✅ TaxDome – Upload all documents, name them , and click “done uploading” so we know you're finished.
✅ Drop off – Bring them to our office.
✅ Mail – Send them to our office.
✅ Email – Send everything to your CPA.

Why Use TaxDome?

If you activate your TaxDome account, you can:
✔️ Download copies of your tax returns
✔️ Upload documents easily
✔️ Sign returns electronically (if both spouses have emails on file)

Important: TaxDome emails come from notifications@taxdome.com . If you didn’t get an invitation, check your spam folder. Still no email? Contact Nikkie Reyes at admin@sbscpagroup.com or call 260-407-5000 .

We look forward to another great tax season!

 SBS CPA Group Team

Health Care Sharing Ministry

Sun, 26 Jan 2025 15:30:00 GMT

Starting in 2024, members of qualifying health care sharing ministries will be able to deduct their health care sharing expenses on their Indiana tax returns. Qualified health care sharing expenses are defined as the amount paid by a qualified individual for membership in a health care sharing ministry. You must be a resident of Indiana and have been a member of a health care sharing ministry for at least a month during the year to receive the deduction.

But what is a health care sharing ministry? A health care sharing ministry is a type of nonprofit organization where members share healthcare expenses based on mutual faith and commitment. It is not insurance-members help cover each other's medical costs. While they can be quite beneficial, they also have drawbacks. If you are considering switching to a health care ministry, do your research to decide if it is right for you.

Let your tax preparer know if you are a member of a health care sharing ministry. Keep track of your qualified health care sharing ministry expenses and make sure you give them to your tax preparer, along with all of your other documents, at tax time.

Jennifer Thonert, CPA

Indiana Military Pay

Sat, 25 Jan 2025 15:30:00 GMT

If you are an active member of the military, get ready to pay less state income tax to Indiana. Starting in 2024, Indiana will no longer tax any active-duty military pay. In prior years, Indiana would allow up to $5,000 of active military pay to be non-taxable, but a new law has passed making the entire amount exempt for those that qualify.

To qualify, you must be a resident. To make sure you are considered an Indiana resident, confirm the following to be true:

1) Indiana is listed as your “home of record” on your military documents.

2) A DD Form 2058 is on file saying Indiana is your legal residence.

3) Your permanent address with the military is an Indiana address.

4) You have a current Indiana driver’s license.

5) You are registered to vote in Indiana.

6) You file an Indiana tax return.

7) You have ties to Indiana, such as a bank account.

Once you determine that you are a resident, the next step is to file an Indiana tax return. Even if it is the only income you have, you must still file the return in order to claim the exemption. You do not have to attach proof to the return that you have active-duty status, but you are required to substantiate it if it ever gets called into question. Keeping a copy of your orders is advised. Also, make sure at tax time that your tax preparer knows you qualify for this exemption.

Jennifer Thonert, CPA

Indiana Income Tax Free Nonresident Employee Wages

Fri, 24 Jan 2025 15:15:32 GMT

Are you someone, or do you have an employee, who is not from Indiana but works here for short periods? Beginning in tax year 2024, Indiana has an income tax exemption for some nonresident employees. If they work in the state for 30 days or less, the state of Indiana will not collect income taxes on their wages. Employers do not need to withhold state income tax from these employees. However, it is only a state exemption-not a local one-so local income taxes will still need to be withheld, if applicable.

In order for the nonresident to qualify for the exemption, the following circumstances must be met:

1) They must have been a nonresident for the entire year.

2) They must have worked in Indiana for 30 days or less. A workday counts as an Indiana workday if more than 50% of the hours that were worked that day were in Indiana (transit time does not count in the calculation).

3) They must not have the following professions: professional athlete, professional entertainer, or public figure that gets paid per event. These professionals will still be subject to income tax no matter how many days they work.

Anyone who is exempted does not have to file an Indiana tax return, unless their employer withheld Indiana income tax. In that case, a tax return will need to be filed to get a refund.

If the employee happens to cross the 30-day threshold, their entire year’s Indiana income then becomes taxable to the state, unless they are residents of a reciprocal state. Indiana has reciprocal tax agreements with six states: Illinois, Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. People who live in those states but work in Indiana already do not pay Indiana state taxes, so the new rule does not affect them.

Make sure to let your tax preparer know if you are, or have, one of these employees.

Indiana Attainable Homeownership Tax Credit

Thu, 16 Jan 2025 17:30:01 GMT

In 2023, Indiana introduced the Attainable Homeownership Tax Credit, which is designed to encourage contributions to affordable housing initiatives in Indiana. If you are looking to contribute to a meaningful cause, while benefiting from a significant tax incentive, this credit could be a fantastic opportunity.

Currently, the only organization approved by the Indiana Economic Development Corporation (IEDC) to receive credit-eligible contributions is Habitat for Humanity of Indiana (including its local affiliates). The tax credit equals 50% of your contributions to Habitat Indiana, with a maximum credit of $10,000 per taxpayer per year. For married couples filing jointly, the maximum credit is also $10,000 per couple.

Contributions can include cash, checks, stocks, and bonds. These contributions are valued at their fair market value at the time of the donation. The value of services, labor, or reduced-cost equipment is not eligible for the credit. To claim the credit, Habitat Indiana will provide a certifying number (PIN) that must be listed on Schedule IN-OCC.

The program has an annual statewide credit cap of $4 million per fiscal year (July 1 – June 30). Credits are allocated on a first-come, first-served basis, based on when returns are received. If the annual cap is reached, any credits claimed afterward will be permanently disallowed, though carryovers will remain valid. Credits are limited to your Indiana state tax liability after applying other nonrefundable credits. For example, if you qualify for a $10,000 credit but your state tax liability is only $8,000, the unused $2,000 can be carried forward to future years.

This tax credit is a win-win: it supports Habitat Indiana’s mission to provide affordable housing while offering a substantial incentive for taxpayers. Whether you are an individual, a couple, or a business, contributing to this program can make a meaningful impact on Indiana communities.

If you are considering contributing to Habitat for Humanity of Indiana, ensure your donation meets the eligibility criteria and plan to claim the credit promptly to avoid missing out due to the annual cap. For further questions about the Attainable Homeownership Tax Credit, feel free to reach out to the partner in charge of your account.

Thank you for reading!

Nathan Skinner

Happy Holidays from SBS CPA Group

Fri, 20 Dec 2024 20:28:12 GMT

SBS CPA Group will be closed Dec. 24th thru Dec. 26th, allowing our staff time to spend with family.

We will also be closed New Year Day, Jan. 1st.

How to Review and Understand Your Social Security Benefits

mike@sbscpagroup.com (Mike Sylvester) — Wed, 18 Dec 2024 17:11:44 GMT

Social Security: A Vital Program for Americans

Social Security benefits account for approximately 30% of the income for individuals ages 65 and older. This aligns with the program’s original intent in 1935. Retirement income was envisioned as a three-legged stool consisting of pensions, personal savings, and Social Security, each contributing one-third. It was never intended to serve as the primary source of retirement income.

Unfortunately, reliance on Social Security has increased significantly:

51.8% of individuals ages 65 and older depend on Social Security for half or more of their income.
24.7% of people in this age group rely on it for 90% or more of their income.

Income Quintile Reliance on Social Security

The extent of reliance varies significantly by income quintile:

1st Quintile (lowest 20% of taxable income):
86.6% depend on Social Security for at least half their income.
64.1% rely on it for 90% or more.
2nd Quintile:
82.3% depend on it for at least half.
47.8% rely on it for 90% or more.
3rd Quintile:
62.7% depend on it for at least half.
13.8% rely on it for 90% or more.
4th Quintile:
24.8% depend on it for at least half.
Only 1% rely on it for 90% or more.
5th Quintile (highest 20% of taxable income):
2.2% depend on it for at least half.
None rely on it for 90% or more.

Challenges Ahead

The program faces significant challenges. Without reform, Social Security will not be able to pay full benefits by 2035. This presents a critical issue for Congress, as reductions in benefits are politically and socially untenable.

Understanding Social Security Benefits

Despite its importance, many people are unaware of how their Social Security benefits are calculated. Since the SSA ceased mailing statements in 2011, individuals must proactively set up an online account to access this information.

The benefit formula is intentionally progressive, favoring lower-income earners by replacing a higher percentage of their income. For higher-income earners, Social Security becomes less significant as a percentage of their total retirement income.

Key Components of Benefit Calculations

Credits: To qualify, individuals must earn 40 credits. In 2024, one credit is earned for every $1,730 in wages, with up to four credits given annually.
Average Indexed Monthly Earnings (AIME): The AIME figure is based on a worker's 35 highest-earning years, adjusted for inflation. If fewer than 35 years of earnings exist, zeroes are averaged in.
Primary Insurance Amount (PIA): This is the monthly benefit a person receives at full retirement age. PIA is calculated using a formula adjusted annually for inflation.

An Example Calculation for 2024

For a retiree with an AIME of $6,000:

90% of the first $1,174 = $1,056.60
32% of the amount between $1,174 and $6,000 = $1,544.32
Total PIA = $2,601 (before Medicare premiums).

Planning Considerations

To optimize benefits:

Aim for an AIME of at least $1,174, as the first tier yields a 90% replacement rate.
Understand that amounts above $7,078 are replaced at only 15%.

Reviewing your lifetime earnings is crucial to ensure accuracy. Errors are far easier to correct early on than later on, when reconstructing decades-old income records may be challenging.

Social Security and Income Taxation

Strategic Decision-Making

When to begin drawing Social Security benefits is a critical decision, particularly for married couples. Starting benefits early results in reduced monthly payments, while delaying up to age 70 increases them. Careful analysis and planning are essential to maximize long-term benefits.

Conclusion

Social Security remains a vital program for most Americans. Understanding its mechanics and planning effectively can significantly impact retirement security. Set up your Social Security account today to review your earnings and plan for the future.

Year-Round Tax Planning Can Help You Avoid Costly Errors

mike@sbscpagroup.com (Mike Sylvester) — Wed, 18 Dec 2024 17:05:35 GMT

Year-Round Tax Planning Can Help You Avoid Costly Errors

The federal tax code is extremely complicated and difficult to understand. Each state (and the District of Columbia) with an income tax has its own tax code. These tax codes change most years, and retroactive tax changes have become more frequent. The difficulty of the tax code makes year-round tax planning essential.

I have been preparing U.S. income tax returns for 20 years. I have filed returns in at least 30 states and the District of Columbia. I have signed more than 7,000 federal income tax returns and a similar number of state income tax returns.

I enjoy researching the income tax code and preparing income tax returns. What breaks my heart is performing what I call a "tax autopsy." This is when a client commits an unforced error and does something with major tax consequences that an accountant discovers only when preparing the person’s income taxes for the prior year.

For many Americans, and a strong majority of my clients, income taxes are the single highest expense they have over their lifetime. Tax planning involves minimizing the income taxes you owe over your lifetime in a legal and controlled fashion. It’s a year-round activity that is separate from completing and filing your annual income taxes. Proper tax planning eliminates surprises as well as underpayment penalties and interest.

Across the couple of tax autopsies I do every year, in each case, the taxpayers likely would have benefited from discussing the matter with a professional to ensure they understood the tax ramifications of the event or events in question.

The Consequences of Tax Autopsies

Tax autopsies often result in a large amount of income tax being owed, and the amount owed is often unexpected. This can cause stress and angst. It may also cause financial hardship. In some cases, it can lead to underpayment penalties and interest. In the worst cases, liens and levies can be put into place by taxing agencies.

The key to avoiding tax autopsies is communication. The tax code is so complicated, and it changes so often, that few people have a strong understanding of how income taxes are calculated.

Events That Require Tax Planning

There are many different items taxpayers should discuss with professionals. Examples include:

Retirement, which can create issues due to lack of withholding
Retirement distributions
Roth conversions
Selling a property with a taxable gain
Bonuses
Equity compensation
Gains realized from the stock market or cryptocurrency
Legal settlements in certain circumstances
Profits from one or more businesses

One item that can create a serious tax autopsy for lower-income families is worth a longer discussion. The Centers for Medicare & Medicaid Services (CMS) is the federal agency that provides health coverage to more than 160 million people through Medicare, Medicaid, the Children's Health Insurance Program, and the Health Insurance Marketplace. Per CMS, in February 2024, 20.8 million people received health insurance through the Marketplace. In February 2024, 19.3 million Marketplace enrollees—or 93% of total Marketplace enrollees—received Advanced Premium Tax Credits (APTC).

When enrollees sign up for Marketplace coverage, generally between November 1 and December 15 of the prior year, the enrollee must estimate income (known as Modified Adjusted Gross Income or MAGI) for the next calendar year. This is extremely challenging. For example, people signing up today are estimating their 2025 MAGI, and their actual 2025 MAGI will not be known until the 2025 income tax returns are filed in 2026.

The federal government directly pays a portion of the monthly premium for the 93% of enrollees who choose to get the advanced subsidies based on the enrollee’s MAGI estimate. When the enrollee’s income tax returns are filed, their actual MAGI is calculated, and the subsidy is reconciled on the Form 1040. You can change your estimated income throughout the year through the Marketplace.

If the enrollee’s MAGI is less than the estimated amount given to the Marketplace, life is good. The taxpayer was not paid enough APTC, and they will get credit for this underpayment on the Form 1040. The worst case is when a taxpayer’s MAGI is higher than the estimated amount they provided to the Marketplace. This means the enrollee received too much money in subsidies, and this amount is added to that person’s federal tax liability in most cases.

In this situation, the tax autopsy happens when the enrollee has more taxable income than previously estimated. This can happen for a wide variety of reasons. Beyond what was mentioned earlier, the one I see most often in this circumstance is taxable retirement distributions. The amount of money that must be repaid depends on the exact circumstances; however, I have seen quite a few taxpayers have to repay several thousand dollars in subsidies they were not due. This is difficult because taxpayers who receive health care subsidies are low-income taxpayers.

Year-round tax planning can help prevent tax autopsies and save taxpayers a significant amount of their hard-earned money!

Beneficial Ownership Reporting Requirements

mike@sbscpagroup.com (Mike Sylvester) — Wed, 18 Dec 2024 17:00:45 GMT

Beneficial Ownership Reporting Requirements

The Financial Crimes Network has put the Corporate Transparency Act (CTA) on hold following a ruling by a Federal judge in Texas. Despite this, filings are still being accepted. As of now, companies are not required to:

File an initial report, which was originally due by January 1, 2025, for companies formed before January 1, 2024.
Moving forward, file an updated report within 30 days if the beneficial owners change, move, or if the company relocates.
Companies formed in 2025 were going to be required to file their initial report within 30 days of formation.

Legal Uncertainty and Appeals

The Financial Crimes Network is appealing the decision, and there are now court cases in multiple Federal jurisdictions. This issue may ultimately be decided by the Supreme Court. Further, in the last 24 hours, it looks like Congress might delay the reporting requirement for companies formed prior to January 1, 2024, by a year.

In short, this is a mess.

Client Requirements

Despite the current uncertainty, all of our clients will be required to:

Sign and date an engagement letter, choosing to opt into or opt out of us providing this service.

Our Position

We believe there is a strong possibility that the Corporate Transparency Act will be upheld, requiring companies to comply with the law. However, we will not know for certain until the pending court cases are resolved. If the law is reinstated, there is no clear guidance on how long firms will have to become compliant.

All of our clients who require an updated report or an initial report will meet with Brent Bracht, CPA, and opt into or out of us providing this service. Clients will fill out the paperwork so we can file the forms depending on the outcome of the various court cases. Additionally, we are uncertain how the incoming Trump Administration and Congress will handle this matter.

Penalties for Non-Compliance

If compliance is ultimately required, the penalties for non-compliance include:

Civil penalties of $591 per day, up to a maximum of $10,000.
Criminal penalties of up to an additional $10,000 in fines and up to 2 years imprisonment.

Client Options

Clients have two options:

Opt into us handling the service, and we will file the required forms now.
Opt out of this service and handle the reporting requirements independently.

We are here to provide support and ensure compliance should the law be upheld.

Special SBS CPA Group Newsletter

mike@sbscpagroup.com (Mike Sylvester) — Mon, 16 Dec 2024 15:10:58 GMT

Happy Holidays!

At SBS CPA Group we are preparing for winter and tax season!

New this tax season, we are rolling out a new platform for all things taxes – TaxDome!

Be on the lookout for emails from TaxDome. You will be able to set up an online portal where you will be able to drop in documents for SBS and be able to print off your tax returns. We will also be able to accept electronic signatures for this upcoming tax season.

We love to see our clients’ smiling faces, but if dropping by our office is not convenient for you, we can now do everything online. We think TaxDome will be a wonderful upgrade this tax season!

If you have questions specific to TaxDome; please call Nikkie Reyes at 260-407-5000 or send her an email at Admin@sbscpagroup.com . She will answer your questions or direct you to an employee who can assist you.

We are excited about TaxDome and another amazing tax season at SBS CPA Group.

Please have an amazing Holiday Season!

Corporate Transparency Act and Beneficial Ownership Information

mike@sbscpagroup.com (Mike Sylvester) — Wed, 30 Oct 2024 20:40:05 GMT

The Corporate Transparency Act (CTA) and Beneficial Ownership Information (BOI) reporting rules are important, and you need to take them seriously.

The rules are new this year and apply to those of you with an LLC or a corporation registered with The Secretary of State.

The Financial Crimes Network (FinCEN) can charge you up to $591 a day in civil penalties, up to two years in prison, and another $10,000 in criminal penalties.

Brent Bracht is the partner overseeing this, and Michelle Felger and Josie Ross have been working hard to file these forms for our clients who hired us to handle this.

We have almost 300 of these filed and billed to our clients. We have another 50 in the process. We have another 75 clients from whom we are waiting for information.

We have many clients to whom we mailed multiple packages via the USPS. We need to hear back from you very quickly.

If you own a corporation or an LLC and have not worked with us to get your forms filed or provided us with a signed and dated engagement letter option out of us providing this service, we need to hear from you very quickly. Please reach out to the partner who handles your account today.

Mike Sylvester, CPA

It is tax planning season at SBS CPA Group!

mike@sbscpagroup.com (Mike Sylvester) — Tue, 29 Oct 2024 18:03:53 GMT

It is very hard to believe October is almost in the books.

It is tax planning season at SBS CPA Group!

Many of our clients hire us to prepare tax projections and meet with us to plan on how to lower their income taxes over the next couple of years. We enjoy this type of work, and it is important to ensure you have paid in enough taxes to avoid penalties and interest. Further, many people really want to minimize the income taxes they pay to various government organizations.

If you want to hire us to handle this, please reach out to the partner overseeing your account and we will get moving on this.

Mike Sylvester, CPA

Indiana529 Plan: Save for College and Get a Tax Credit

mike@sbscpagroup.com (Mike Sylvester) — Wed, 28 Aug 2024 17:30:10 GMT

Many of our Indiana clients take advantage of the Indiana CollegeChoice 529 plan. Note, the plan recently changed names and is now called the Indiana529.

The Indiana529 plan is beneficial for those clients who:

Have Indiana income tax liability.
Want a tax-advantaged way to save for college.

The maximum amount of Indiana tax credit allowed is 20% of the contribution, and for tax credit purposes, the maximum annual contribution is $7,500.

From a tax perspective, the advantage of an Indiana529 plan is that you can qualify for an Indiana tax credit of up to $1,500 per year. Please note, you must have at least $1,500 of Indiana income tax liability each year in order to qualify for a tax credit of $1,500.

Please remember, tax credits are superior to tax deductions. A tax credit lowers your tax liability dollar for dollar.

You do NOT receive an Indiana tax credit if you contribute to a 529 plan run by a state other than Indiana.

Please contact the partner handling your account if you want to learn more about the tax advantages of contributing to an Indiana529 plan. As always, there are a lot of rules, and the money needs to be used for specific purposes, generally through an accredited college.

Mike Sylvester, CPA

Tax Planning Season Starts Soon

mike@sbscpagroup.com (Mike Sylvester) — Wed, 28 Aug 2024 17:27:25 GMT

The largest expense Americans pay is taxes. We pay federal income taxes, Social Security taxes, Medicare taxes, sales taxes, and the list goes on and on.

The income tax code grows larger every year. Indiana has really made its income tax code more complicated, and I remember when Indiana had a very simple tax code; that is no longer the case. Indiana adds 10-25 new tax provisions every year.

We file your income taxes each year. The tax code becomes more complicated each year, and the amount of time we spend doing your taxes increases due to the complications and the fact that the rules are constantly changing. We are not focusing on tax planning when we complete your annual income tax returns; instead, we are filing the necessary forms to keep you compliant with the current tax code and to calculate the taxes you owe or the refunds you are due for the prior year.

More of our clients should be trying to lower their income tax burden over the course of their lives. More of our clients should hire us to assist them with tax planning.

Please reach out to the partner who handles your account if you want to hire us to work with you to minimize your income taxes. Of course, we charge separately for this! September 16th is the corporate deadline this year, and we will be busy between now and September 16th.

Tax planning season is September 17th – December 15th, 2024. Please reach out to the partner who handles your account if you want to hire us to help you minimize your tax burden.

Mike Sylvester, CPA

FINCEN BOI Reports Due by 12/31/2024

mike@sbscpagroup.com (Mike Sylvester) — Wed, 28 Aug 2024 17:26:00 GMT

If you own an LLC or a corporation, you likely have to file an initial report with the Financial Crimes Enforcement Network (FINCEN) before December 31, 2024. This new Federal report covers Beneficial Ownership Information (BOI) and applies to almost all of our clients.

This law was passed by Congress and is intended to combat money laundering. The new rules are complicated and will require businesses to file initial reports with the Financial Crimes Enforcement Network and to further update those reports in certain circumstances.

The penalties for not filing the required reports by December 31, 2024, are severe:

Penalty of up to $591 per day, capped at a total penalty of $10,000, and
Up to two years in prison

All of our clients must sign and date a separate engagement letter for each LLC and corporation they own. Due to the seriousness of the fines and jail sentences, all our clients must either sign and date the engagement letter hiring us to file the initial report or sign and date an engagement letter certifying they will handle the report or hire a third party, such as an attorney, to file these reports for them. Further, we will only file these reports for Indiana companies, and we will either handle both the Indiana Secretary of State entity renewals and the FINCEN BOI reports, or we will handle neither.

We will be spending hundreds of hours filing these reports for most of our clients who own businesses between now and November 30, 2024. We charge a minimum of $250 per report, and if you sign up for our BOI service, please remember we will also be renewing your entities with the Indiana Secretary of State before they expire, which incurs its own separate charge.

We have approximately 100 reports completed, and we will complete about 300 more. When we reach out to you by email, please read everything carefully and send us everything we need quickly. Michelle Felger is working on initial BOI reports for our clients, and we are collecting driver’s license information from you so we can file your required initial reports.

The only people we need anything from now are those we are contacting.

The Federal Government expects 32.6 million initial reports to be filed in 2024 and projects that it will take business owners and the professionals they rely on well over 119 million hours in 2024 to deal with these far-reaching new requirements.

Mike Sylvester, CPA

Employee Retention Credit claims and the IRS

mike@sbscpagroup.com (Mike Sylvester) — Mon, 24 Jun 2024 13:28:12 GMT

The Internal Revenue Service (IRS) announced new information regarding the Employee Retention Credit (ERC).

Please talk to the partner handling your account if you hear from any salesperson trying to convince you that your business qualifies for the ERC or any other tax credit. You almost assuredly do NOT qualify. In fact, most of the Promoters will tell you NOT to talk to your CPA because CPA’s do not understand the credit, and this is laughable.

The June 20 ^th , 2024, announcement from the IRS updates all of us on what is going on and you can learn more here:

https://www.irs.gov/newsroom/irs-employee-retention-credit-compliance-effort-tops-1-billion-threshold-since-fall-voluntary-disclosure-program-suspended-after-march-22-special-withdrawal-program-remains-open-as-audits

In summary:

The IRS has analyzed about one million ERC claims that it received by 9/14/2023 and it feels that:

10% - 20% are very high risk and likely fraud.

60% - 70% have unacceptable risk and the IRS needs to do more due diligence to verify.

10% - 20% are low risk and currently these are the claims the IRS will process next. Further, the IRS says they will process these claims at a dramatically slower case than before.

The IRS is promising to go after those who sold and promoted fraudulent ERC claims and is focusing on the Promoters of these schemes.

The IRS has received another 400,000 ERC claims since 9/14/2023. It is currently not going to work on any of those claims and will focus on the oldest claims received first.

Please contact your partner if anyone tries to sell you on a tax credit or free money that sounds too good to be true.

Mike Sylvester, CPA

Email scams are everywhere

mike@sbscpagroup.com (Mike Sylvester) — Mon, 24 Jun 2024 13:17:32 GMT

Email scams are everywhere. Please be careful. Please take the time and effort to protect yourself and educate yourself. I get multiple scam emails every week. Most of them claim to be from potential new clients.

Email providers and virus protection programs are more and more often flagging valid emails as spam or junk mail; because they are trying to prevent scams. It is very important that you check your junk mail and spam once a day.

This is so important; that everyone at SBS CPA Group, Inc does this once a day!

Email is our primary means of communication with clients; however, we will call you if an email from you is suspicious and you should call us at 260-407-5000 if you think one of our emails looks suspicious.

We cannot emphasize enough how important this is!

Please take this very seriously!

Mike Sylvester, CPA

Life insurance for business owners

mike@sbscpagroup.com (Mike Sylvester) — Thu, 20 Jun 2024 20:05:55 GMT

This is a complicated topic and one best discussed with the partner handling your account.

There are many times a business should have life insurance on owners. The rules are complicated, and this post is discussing the general rules only.

We most often see life insurance with companies with more than one owner. The company often takes out life insurance on all owners as part of a buy/sell agreement. It is important the buy/sell agreement has a detailed method for valuing the business in the event of the death of one of its owners. Seriously, ensure this is well written and part of your legal agreements.

For example, maybe the business has three equal owners. Maybe the business value is determined to be cash basis revenue over the last 365 days. Maybe the owners want to make sure that if one owner dies:

Their estate receives a fair and pre-determined amount for their business interest.

AND

Then the deceased owner no longer owns any of the company.

Each situation is different; often what is done is the business takes out some type of level term life insurance (level term means even payments over the course of the policy) and the company is named the beneficiary of at least enough of the policy to cover the value of the business. Sometimes over time the beneficiaries change, and you need to check your beneficiaries and make sure they are correct on everything you own. Sometimes the amounts paid to the business change as a business grows. Sometimes the business outgrows the amount of life insurance you have and more must be put into place.

Please remember life insurance becomes far more expensive as you age and as you age you may have a health event that makes you uninsurable.

In most cases, the life insurance premiums are a non-deductible business expense. Again, this is complicated.

Most of the clients we have with life insurance have life insurance only for the owners and it is for the reasons outlined above. This is a non-deductible business expense. That being said, if you follow all of the rules, the life insurance proceeds paid out to the company upon death are also not taxable. This is a big deal!

To make the proceeds not taxable on life insurance proceeds:

The business must treat the premiums as a non-deductible business expense AND

The business must annually report the life insurance to the IRS on Form 8925 AND

Various consent forms and disclosures must be made in writing.

Life insurance is a big deal.

If you have questions, please reach out to the partner handling your account.

Mike Sylvester, CPA

Scam Emails and Junk Mail

mike@sbscpagroup.com (Mike Sylvester) — Mon, 27 May 2024 21:05:03 GMT

Email has become the primary form of communication for many people. We use email at SBS CPA Group, Inc. for much of our communication with clients.

Unfortunately, there are a very large number of scammers who are using email as a means of scamming people. We have seen a growing number of email scams targeting all the employees at SBS CPA Group, Inc.

Everyone really needs to educate themselves and understand phishing scams. Phishing is when criminals use scam emails, text messages or phone calls to trick their victims. The aim is often to make you visit a website, which may download a virus onto your computer, or steal bank details, or steal other personal information.

The number of email scams has risen dramatically. This in turn, has caused email service providers to identify even more email as junk email. When your email service provider identifies something as spam, it diverts the email into a separate junk email folder.

Sometimes your email service provider identifies good emails as junk email. This seems to be happening more and more often.

You really need to check your junk or spam email regularly. In fact, in our office, all of us check our junk email daily.

We have recently seen cases where we sent emails to our IT service provider that have gotten captured in their junk email. If this can happen to an IT company, it can happen to anyone.

I recently had a client who was corresponding with one of our staff via email. The second email we sent this client on the same day was captured by the client’s spam filter and placed in the junk email. We have no idea why and there were no attachments.

The moral of the story is this, please check your junk email regularly and please be wary of scammers.

Mike Sylvester, CPA

Social Security is a critical program in the United States

mike@sbscpagroup.com (Mike Sylvester) — Mon, 27 May 2024 14:29:58 GMT

This post will talk about who relies on Social Security, how your benefits are calculated, how much income the program is designed to replace, and the financial condition of social security.

It saddens me that Congress cannot act like adults and make bipartisan changes to this important program. I am pretty sure they will come together 3-6 months before the program cannot pay full benefits and do something very similar to what was done in

1983 and it will again be very unpopular.

Who relies on Social Security in retirement?

The most recent data I have seen is from the Social Security Administration (SSA) itself. It was published in 2021 based on 2015 data. Per the SSA using 2015 data:

Social Security Benefits represent about 30% of the income for people over age 65. Note this means the program is working as expected since a lot of people are working after 65 due to increases in life expectancy.

51.8% of those aged 65 or older rely on Social Security for half or more of their income.

24.7% of those aged 65 or older rely on Social Security (SS) for 90% or more of their income. This is a very serious problem.

The percentage of reliance on Social Security by IRS income quintile is terrifying. The 1st quintile is the lowest income 20% of income tax returns filed.

For the 1st quintile, 86.6% rely on SS for half or more of income and 64.1% rely on it for 90% or more of income.

For the 2nd quintile, 82.3% rely on SS for half or more of income and 47.8% rely on it for 90% or more of income.

For the 3rd quintile, 62.7% rely on SS for half or more of income and 13.8% rely on it for 90% or more of income.

For the 4th quintile, 24.8% rely on SS for half or more of income and 1% rely on it for 90% or more of income.

For the 5th quintile, 2.2% rely on SS for half or more of income and none rely on it for 90% or more of income.

There is zero chance Congress can allow Social Security benefits to be cut unless it is only for the very wealthy and I do not think they should even do that. Instead, taxes and the retirement age will be raised and this will likely happen in 2035 because Congress never plans and waits until we are in crisis to fix anything like this. Their fix will be wildly unpopular. Note if fixed today the results would be less draconian…

How are Social Security benefits calculated?

It saddens me how few people understand this. This should be emphasized in K-12, in college, by employers, and by the government itself.

I am very angry the Social Security Administration largely stopped mailing statements in 2011. I really think this was criminal. Everyone should know what their expected social security benefits are and I think annual statements should be mailed. Further the statements should emphasize the long-term fiscal insolvency of the program. Please go and setup an online account and check it every year on your birthday.

First off, the social security benefit formula is progressive, meaning those who make less have a much higher percentage of their income replaced in the form of benefits. The Social Security program was designed to benefit lower income individuals and it does that. Further in 1983 up to 85% of social security income became taxable to the Federal government depending on other income and this makes the program even more progressive. Note I have clients who complain about this every year and the law was passed 41 years ago.

You qualify for Social Security benefits if you accumulate enough credits. The amount needed for a credit in 2024 is $1,730. You can earn up to a maximum of 4 credits per year. The amount needed to earn 1 credit automatically increases each year when average wages increase.

Your benefits are calculated based on your average indexed monthly earnings (AIME), your primary insurance amount (PIA), and the age at which you choose to receive benefits.

Your AIME is a calculation based on your 35 best years of income subject to social security tax. The SSA indexes your income subject to social security tax and adjusted each year for inflation. You get credit for your best 35 years indexed to inflation. Any additional years of income are lost and not included in the calculation. If you do not have 35 years of income then zeros are averaged in. AIME is your average MONTHLY earnings subject to social security tax, indexed for inflation, over your best 35 years of earned and best is best in inflation adjusted terms.

Note this calculation covers your entire life. It is very difficult to change these numbers.

Those of you who own Subchapter S Corporations may well have less in benefits at retirement depending on how much you are paid in wages each year. That is OK as long as you invest the savings due to being an S Corporation.

If you are retiring this year, and your average annual income subject to social security tax is $72,000 in 2024 dollars your AIME is $6,000.

The next part of the calculation is what benefits low-income earners and makes the program progressive. Note with the demise of defined benefit retirement plans the program needs to be progressive.

Next your Primary Insurance Amount (PIA) is calculated and the formula changes every year due to inflation.

For 2024, your PIA will be the total of: 90% of the first $1,174 of your AIME Plus, 32% of any amount over $1,174 up to $7,078, Plus15% of any amount over $7,078. This is rounded to the nearest dollar.

If you retire in 2024 and your AIME is $6,000, your PIA is: 1056.5 + 1,544.32 = $2,601. So, you are paid $2,601 if you retire at full retirement age minus what you pay for Medicare premiums.

For planning purposes in 2024 you clearly want an AIME of at least $1,174 since you get 90% of this amount in the PIA calculation. Next you might want to have an AIME of $7,078 because above $7,078 you only get 15%.

You should go online, setup a social security account and look at your lifetime earnings. Make sure they are correct. Far easier to fix now rather than later.

Remember income subject to social security tax is not all income. Interest, dividends, S corporate profits, etc. is NOT subject to social security tax and does not count in this calculation.

Your PIA is the benefit you will receive if you are at full retirement age. If you start drawing benefits early you will get less and if you wait until age 70 you will get more. This is something you need to consider carefully and it is more complicated if you are married. Please analyze this carefully when you start drawing benefits. It is extremely important. Too many people draw benefits too early.

Social Security has great calculators online and you really should setup a social security account today.

How much income is Social Security designed to replace?

Social Security was passed into law in 1935. The program was designed to replace 1/3 of a worker’s income in retirement. The life expectancy in the United States in 1935 was 62. Today it is 79. This is the primary reason the Social Security program is in financial trouble. Life expectancy has increased by 17 years!

The original Social Security documents talk about a three-legged stool where 1/3 comes from SS, 1/3 from employer defined benefit plans, and 1/3 from savings.

Defined benefit plans are no longer common. The government did a terrible job ensuring companies properly funded them. Further, private businesses realized they were expensive and switched to plans where employees contribute. This shifted a significant amount of retirement planning onto individuals.

Note I do a lot of tax returns for retirees with defined benefit pension plans. Each year fewer and fewer people will receive retirement benefits from defined benefit plans.

The last major changes to Social Security were made in 1983 and were very bipartisan. Further they were very unpopular. Social Security could not have paid full benefits in late 1983 and changes were made that will extend the program solvency to about 2035.

The Social Security funding formula was changed in 1983 and the program was changed to replace 40% of income subject to social security tax rather than 1/3 of total income. Note, actuarily the program is designed to replace as much as 55% of income for the working poor and 20-25% for those who earn close to the annual Social Security wage cap. Note the program replaces far less than 20% for very high earners.

Note many financial planners say that you need to replace 80% of your total income in retirement (Not income subject to social security taxes). Social Security is designed to replace 40% of your income that was subject to social security taxes. For people at the lower end of the income spectrum a much higher percentage of their income is subject to social security taxes.

The financial position of Social Security is grim and projected to get a little worse over time. According to the 2024 Social Security Trustees Report with no changes to the program the following benefits will be paid out:

Through 2034 100% of benefits paid

2035 83% of benefits paid

2098 73% of benefits paid

Under current law if changes are not made benefits are cut across the board. This is built into existing law and would take an act of Congress to change.

There are many ways to fix the solvency of Social Security program; however, Congress will not get off their behinds and come up with a bipartisan solution to fix the problem until 2035. Anything Congress does will be deeply unpopular and that is why they will do nothing until the crisis is at hand.

What irritates me is Social Security is a very necessary program and the sooner it is brought into solvency the better. The sooner changes are made the less drastic they need to be. Yet Congress does nothing except both sides bring up extreme ideas and attack each other.

Per this report, the easiest way to fix the solvency of the program for the next 75 years is to increase Social Security payroll taxes from the current 12.4% (Half paid by employer) to 15.8% (Half paid by employer). If this change was made as of 1/1/25 the Social Security program would be solvent and able to pay full benefits through 2098.

This would increase employer payroll costs by 1.7% on all wages up to the Social Security cap. Further it would decrease employee pay by 1.7% on all wages up to the Social Security cap. The self-employed would have to pay 3.4% more since they pay both sides. This will never happen because members of Congress have no spine.

Younger Americans are convinced they will not receive Social Security benefits when they retire or at least think they will get less than the promised amount.

Older Americans vote. All members of Congress care about is getting re-elected. There is zero chance Congress is going to allow benefits to be cut. That being said, the changes Congress has to make will be very unpopular.

If I had to guess, and this is a total guess, I think something like the following will happen in 2035, and which major political party is in power will influence this and this guess assumes divided government which is what we generally have.

I think the retirement age to collect Social Security will be increased. Life expectancy is up 17 years from when the program was started. I think early retirement age will be slowly increased to 65 from 62. I think full retirement age will be slowly increased from 67 to 70. Note these changes will be deeply unpopular and the AARP will go berserk. The Democrats will oppose this and the Republicans will insist on it. Note this change would fix 45% of the 75-year funding shortfall. In the end, this is cutting benefits.

Payroll taxes honestly need to be increased. Back in 1983 Social Security taxes were 10.8% (Half employee and half employer) and over the next seven years they were slowly increased to 12.4%. They have been 12.4% since 1990. I might guess they increase them by another 1.6% in total, half employee and half employer. Likely done over an 8-year period. The Chamber of Commerce and NFIB will go berserk. Republicans will oppose this and Democrats will insist on it. Note this change would fix 45% of the 75-year funding shortfall. In the end this is raising taxes.

Note the above two paragraphs are very reasonable compromise.

The other 10% of the funding shortfall would be fixed by a large number of minor changes. Maybe instead of making Social Security income 85% taxable they will just make it taxable 100%. Maybe they will adjust the benefits formula so the annual benefit increases are less. Maybe they will increase the social security wage cap.

If we do not have divided government then the fixes will be more extreme with the Republicans cutting benefits more if they are in power and the Democrats raising taxes more and means testing benefits.

Social Security benefits are vital. Congress has failed entirely to ensure this program is sufficiently funded.

We highly suggest our clients communicate with their CPA before they draw social security benefits.

If you have specific questions about Social Security benefits you can talk to your CPA! Plenty of our clients hire us to help with Social Security planning and I particularly enjoy doing it.

Mike Sylvester, CPA

Indiana 529 Plan

mike@sbscpagroup.com (Mike Sylvester) — Mon, 20 May 2024 16:58:36 GMT

Indiana Department of Revenue Income Tax Bulletin #98 covers the Indiana 529 plan.

This tax bulletin has been changed many times over the last few years.

Indiana 529 plans can be a good idea for Hoosiers with tax liability who want to save for college.

Be warned though, if you received Indiana tax credits for contributions to an Indiana College Choice 529 plan, and then decide to roll amounts from the Indiana 529 plan to another qualified 529 plan, Indiana claws back the Indiana tax credits!

This can result in a significant amount of tax being paid to Indiana just for rolling funds over from the Indiana 529 plan to another states 529 plan!

New Overtime Rules

mike@sbscpagroup.com (Mike Sylvester) — Wed, 24 Apr 2024 20:33:27 GMT

The rules for who is paid overtime have just been changed by The Department of Labor.

This matters to you if you or someone you know is an employee. This matters to you if you own a business and pay payroll.

There are specific rules regarding which employees are exempt from overtime pay. Employees are often exempt from the rules forcing the employer to pay overtime and time and a half if they are employed in a bona fide executive, administrative, or professional (EAP) capacity.

1/1/20 – 6/30/2024 the EAP employee could only be exempt from overtime pay if their annual salary was $35,568 or more per year.

On 7/1/2024 this annual salary increases to $43,888 per year.

On 1/1/2025 this annual salary increases to $58,656 per year. This is a very significant increase.

Further these thresholds will be increased once every three years.

What this means is roughly four million more workers will be required to be paid overtime pay when they work more than 40 hours per week at time and a half, unless their annual salaries are increased above the thresholds listed above!

If we handle your payroll and you wish to discuss this with us, please reach out to the partner overseeing your account!

Mike Sylvester, CPA

Back to Normal Hours

Mon, 15 Apr 2024 19:48:26 GMT

April 16th , SBS will go back to normal hours: Monday - Friday 8:30am to 5:00pm.

Tax season is in full swing at SBS CPA Group!

mike@sbscpagroup.com (Mike Sylvester) — Tue, 05 Mar 2024 21:33:07 GMT

Our turnaround time for tax returns is four weeks or less from when you drop everything off.

Please gather all your information; then drop everything off all at once. Please do not drop anything off until you have everything. In all cases you must completely fill out the first two pages of the tax planner. There are four ways you can drop off:

1. You can drop off a package to our office during business hours. We are open Monday – Friday 8:30 AM – 6 PM and Saturdays 9 AM – 4 PM through April 13th.

2. We have a 24-hour drop box.

3. You can mail them to us.

4. You can send the partner who handles your taxes an email and they can send you a link to our secure portal.

All three partners in our firm file extensions for our own income tax returns every year. There is nothing wrong with filing extensions and per IRS statistics a record number of people will file extensions this year. Filing an extension does not increase your chances of being audited and is honestly not a big deal.

As is normal, any returns for which we do not have everything dropped off by 6 PM on 3/15/2024 will be extended and done after the April 15th deadline.

The time to drop off your income tax returns, only if you have everything, is now.

If you know you will need an extension, please send the partner who handles your account an email.

Mike Sylvester, CPA

Tax season is here!

mike@sbscpagroup.com (Mike Sylvester) — Sat, 10 Feb 2024 13:28:10 GMT

Tax season is in full swing!

Please gather all of your important tax documents! After you are certain that you have everything, please send us everything via our secure web portal or drop it off to our office (We do have a 24 hour drop box you can use). Please remember, all clients must completely fill out the first two pages of our tax planner.

There is still time to beat the rush!

Please make sure you drop off complete copies of all brokerage statements. Please do not drop anything off until you have all brokerage statements. Those of you that have accounts with TD Ameritrade and E*TRADE please read the next part carefully. TD Ameritrade was purchased by Charles Schwab, and you will get one 1099 from each company for each account. E*TRADE was bought by Morgan Stanley, and you will get one 1099 from each company for each account.

Mike Sylvester, CPA

Tax Season Hours

Tue, 30 Jan 2024 20:59:23 GMT

Tax Season | February 1st - April 15th

Monday through Friday: 8:30am to 6:00pm

Saturday: 9:00am - 4:00pm

Sunday: Closed

Augusta Rule gone WRONG

mike@sbscpagroup.com (Mike Sylvester) — Sun, 21 Jan 2024 13:53:10 GMT

The Augusta Rule is one of the most talked about “Tax Secrets of the Rich!” I see from non-tax influencers on social media. Most of what these "influencers say is flat out wrong!

It’s the Augusta Rule - which allows you to not claim rental income on a property you own if you rent it out for 14 days or less during the year.

Apparently, what the wealthy do, is they will have their business rent their property under this rule, thus getting a rental expense on the business side, and not have to claim income on the personal side.

Let’s be clear - this is a legitimate tax strategy when implemented correctly. This involves renting the property at a reasonable FMV, transferring the expenses in question, issuing a 1099-Misc for the rental payments made to the business owner, and reporting the income and Augusta Rule deduction appropriately on your Schedule E, which is part of your personal 1040 tax filing.

A recent tax court case that deals directly with the August Rule was Sinopoli v. Commissioner . In this case, the taxpayers used the Augusta Rule to expense $290,000 worth of rental expenses over three years through having monthly shareholder meetings in their homes.

The courts ruled against the taxpayers and disallowed the majority of the deduction for the following reasons:

1. The defendants couldn’t produce record of what business was discussed during these meetings

2. The FMV of the meeting spaces were much lower than the taxpayers claimed

The IRS adjusted the rent down to $500 for each meeting where they could produce evidence of what business was discussed - bringing the actual deduction to $10,500 for the three tax years in question, down from $290,000.

For the IRS - this case was a slam dunk. The rent charged was so egregious and the evidence the taxpayers had was so minimal, it makes me wonder why they even tried contesting it in the first place.

If you have tax planning questions, please reach out to the partner handling your account!

Mike Sylvester, CPA

Yes - Staking is Taxable Income

mike@sbscpagroup.com (Mike Sylvester) — Fri, 19 Jan 2024 14:41:45 GMT

In a surprise to no-one who works in tax - the IRS has ruled that cryptocurrency received for staking is taxable when received.

Staking is when users pledge (I call it loaning) crypto they own, to help others (usually computers) verify transactions that are happening on the blockchain.

Crypto Bros do this in order to earn rewards (interest and dividends) on the crypto they are staking (loaning).

The IRS has now issued clear guidance and staking is taxable income.

Cryptocurrency is something the Internal Revenue Service and the Securities and Exchange Commission are taking a hard look at. If you have cryptocurrency please talk to us about it so we can ensure your tax returns are correct.

Mike Sylvester, CPA

The basics of a 1031 exchange

mike@sbscpagroup.com (Mike Sylvester) — Fri, 19 Jan 2024 14:34:29 GMT

A 1031 Exchange is an exchange of property you can do when trading one investment property for another, and allows you to defer any gain you would have had upon the sale of the first investment, and roll it forward into the new investment.

But - the key here is, it has to be an INVESTMENT property - a primary residence or a vacation home are not eligible for a 1031 Exchange. If you try and do this - that gain is taxable.

Additionally, there are strict timelines associated with it - the property with which the exchange is occurring has to be identified within 45 days of the sale of the first property, AND you have to close within 180 days of the sale of the first property. If you don’t - yep, now that gain is taxable.

Last - you need to use a QUALIFIED intermediary - meaning the funds from closing on the first property that are going toward the second property, are not allowed to touch the taxpayer's hands. If they do? You guessed it - that’s now a taxable gain.

A 1031 exchange can be a powerful tool to defer taxable gain, if you are considering this please contact the CPA in charge of your account well in advance.

Mike Sylvester, CPA

Parking at SBS CPA Group

mike@sbscpagroup.com (Mike Sylvester) — Fri, 19 Jan 2024 14:28:57 GMT

We look forward to everyone dropping off their taxes. Please drop nothing off until you can drop off everything including a completed tax planner. If you are claiming energy credits you must carefully fill out and sign and date page five of the tax planner.

The office park we reside in is full and has no vacancies. The parking lots have more cars than previously and it is harder to park. It is possible you will not be able to park in the parking lot next to our building and you can park in another parking lot in the complex.

Please remember, we have a 24 hour drop box and you can drop things off to us using this drop box anytime. The office complex is not busy outside of normal office hours. Some of our clients mail everything to us to avoid a trip to our office.

If you are concerned about parking, the best times to drop things off between February 1st, 2024 and April 15th, 2024 are:

Saturdays between 9 AM and 4 PM.
Monday - Friday, 9 AM - 11 AM OR 2 PM - 4 PM
You can always email us using our secure portal, just send the partner handling your account an email!

Mike Sylvester, CPA

FinCEN's Beneficial Ownership Reporting Requirements

mike@sbscpagroup.com (Mike Sylvester) — Wed, 17 Jan 2024 21:19:36 GMT

Congress passed a sweeping new law that will affect most businesses in the United States in 2024. The Financial Crimes Enforcement Network (FINCEN) will be the Federal Agency administering this new law. This sweeping new law was passed to fight money laundering.

You will fill out our tax planner before we do your personal income taxes. This new reporting regime is such a big deal it is the first question on our tax planner this year. “Are you an owner of an LLC or Corporation?” It is extremely important that you fill this out correctly and give us a list of all companies that you own, and all companies owned by anyone listed on your personal income tax returns.

The new rules are complicated and will require businesses to file new initial reports with the Financial Crimes Network and to further update those reports in certain circumstances.

This is something we will discuss when we finish your 2023 income tax returns in 2024. This is a big deal and the penalties for non-compliance are a fine of up to $10,000 and up to two years in jail.

All of our clients will have to sign and date a separate engagement letter for each business they own. Due to the seriousness of the fines and jail sentences; all of our clients will either sign and date the engagement letter hiring us to file the initial report OR our clients will sign and date an engagement letter certifying they will handle the report or hire a third party, such as an attorney, to file these reports for them. Further, we will only file these reports for Indiana companies, and we will either handle both the Indiana Secretary of State entity renewals and the FINCEN BOI reports, or we will handle neither.

SBS CPA Group has been open for over 22 years and this is the first time we are going to have our clients sign an engagement letter opting into us providing an add-on service or opting out of SBS CPA Group providing this service for you. These new laws are a very big deal, and the initial reports will require valid photo identification to be uploaded to the FINCEN website for certain owners and a few managers of certain companies.

The engagement letter is a full three pages long and has a lot of very important information that business owners will need to understand. When you come in to pick up your income taxes, please set aside the time needed to read this engagement letter!

We will NOT be filing FINCEN reports until after tax season. Instead, we are collecting engagement letters from our clients, and we will deal with this after tax season is over! We do not have time to deal with new programs like this during our busiest time of the year!

The Federal Government expects 32.6 million initial reports to be filed in 2024 and projects that it will take businesses owners and the professionals they rely on well over 119 million hours in 2024 to deal with these far-reaching new requirements.

Many accounting firms and some attorneys will not be filing these reports for their clients. We plan on providing this service based on the current rules.

Mike Sylvester, CPA

It is Tax Season!

mike@sbscpagroup.com (Mike Sylvester) — Wed, 17 Jan 2024 20:19:10 GMT

It is tax season at SBS CPA Group!

It is tax season, and we are looking forward to getting your 2023 income taxes prepared!

All of our individual income tax clients MUST fill out a 2023 tax planner.

Please gather everything we need in order to prepare your 2023 income taxes and, only when you have everything, please drop off or securely send us a completely filled out 2023 tax planner and all of your source documents! Please remember, only drop off when you have everything.

If you need a 2023 tax planner please email Nikkie Reyes at: admin@sbscpagroup.com and let her you know you would like one emailed to you or mailed to you.

Many people receive their tax documents by email; however, if they are mailed to you, they are generally mailed to you by January 30 ^th , 2024, and you should have everything by Monday February 5 ^th , 2024. Brokerage statements can take longer, and your custodian can let you know when you will receive those.

We expect this to be a great tax season and look forward to doing your 2023 income taxes!

Mike Sylvester, CPA

SBS is Closed on Monday 12/25/2023 and Tuesday 12/26/2023

Fri, 22 Dec 2023 22:14:17 GMT

SBS will be closed on Monday 12/25/2023 and Tuesday 12/26/2023 for the Christmas Holiday.

We will be back in the office on Wednesday 12/27/2023.

Merry Christmas!

New Beneficial Ownership reporting rules will apply to businesses starting on 1/1/24

mike@sbscpagroup.com (Mike Sylvester) — Tue, 28 Nov 2023 19:51:23 GMT

Starting January 1, 2024, a significant number of businesses will be required to comply with the Corporate Transparency Act (“CTA). The CTA was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the beneficial ownership information (otherwise known as “BOI”) of certain entities from people who own or control a company.

It is anticipated that 32.6 million businesses will file initial reports in 2024 and another 6.6 million updated reports will be filed in 2024. The intent of the BOI reporting requirement is to help US law enforcement combat money laundering, the financing of terrorism and other illicit activity.

The CTA is not a part of the tax code. Instead, it is a part of the Bank Secrecy Act, a set of federal laws that require record-keeping and report filing on certain types of financial transactions. Under the CTA, BOI reports will not be filed with the IRS, but with the Financial Crimes Enforcement Network (FinCEN), another agency of the Department of Treasury.

Are there any exemptions from the filing requirements?

There are 23 categories of exemptions and few, if any, of our clients will qualify for them other than the large operating entities exemption. To qualify for this exemption, the company must:

a) Employ more than 20 people in the U.S.;

b) Have reported gross revenue (or sales) of over $5M on the prior year’s tax return; and

c) Be physically present in the U.S.

Who is a beneficial owner? Any individual who, directly or indirectly, either:

Exercises “substantial control” over a reporting company, or

Owns or controls at least 25 percent of the ownership interests of a reporting company

An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title or if they have no ownership interest in the reporting company.

When must companies file?

There are different filing timeframes depending on when an entity is registered/formed or if there is a change to the beneficial owner’s information.

New entities (created/registered after 12/31/23) — must file within 30 days

There is proposed rulemaking allowing for new entities created in 2024 only to extend the 30-day timeframe to 90 days.

Existing entities (created/registered before 1/1/24) — must file by 1/1/25 · Reporting companies that have changes to

previously reported information or discover inaccuracies in previously filed reports — must file within 30 days

What sort of information is required to be reported?

Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).

Additionally, information on the beneficial owners of the entity and for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document.

Risk of non-compliance

Penalties for willfully not complying with the BOI reporting requirement can result in criminal and civil penalties of $500 per day and up to $10,000 with up to two years of jail time.

What does this mean for clients of SBS CPA Group?

We will be putting more information about this in future blog posts and in future email newsletters.

It means if you have a corporation or an LLC registered with The Secretary of State and you are not using it, you should

strongly consider closing this business entity with the Secretary of State prior to the end of 2023. Otherwise, you will have to

file a report with the Financial Crimes Enforcement Network.

Unfortunately, some states will likely consider this the realm of lawyers; however, we are almost certain Indiana will not be

one of those states.

All of our clients who own a corporation or LLC will be signing and dating an engagement letter hiring us to handle this for

them or certifying they are handling it without hiring us.

This is a law that according to the Financial Crimes Enforcement Network itself will take business owners and the professionals they rely on well over 119 million hours to deal with, just to file the initial reports in 2024. The updates will take even more time.

SBS CPA Group will put out more information on this law in early 2024.

Mike Sylvester, CPA

Have Some Fun with Your HSA Account this Winter

mike@sbscpagroup.com (Mike Sylvester) — Tue, 28 Nov 2023 19:32:53 GMT

As winter begins, don’t let a health emergency ruin your fun! Did you sprain your knee playing tennis? You can deduct the Ace Bandage and ibuprofen from your HSA. Did you get sunburnt playing at the beach? You can deduct after-sun gel or lotions with Aloe with your HSA. And next time you can even pay for sunscreen with your HSA. Or maybe it is just your allergies going haywire. You can deduct your allergy medicine with your HSA. And let’s not forget all the scraped knees. You can also deduct Band-Aids from your HSA account.

The IRS has expanded the eligible costs that are allowed to paid out of your HSA account. They include:

· Telehealth and other remote care services.

· Over the counter medicines such as allergy medicine, heartburn medicine and aspirin.

· Medical equipment like heating pads, ice packs, blood pressure machines, and thermometers.

· Mental health counseling services

· Dental, vision, and chiropractic services

· Acupuncture

· Transportation to and from doctor’s visits

· Feminine Hygiene products

· Anything prescribed by a doctor

What is not deductible:

· Vitamins

· Personal hygiene items such as tooth paste and deodorant

· Weight Loss Programs (unless prescribed by a doctor)

· Health Clubs

Remember you get to deduct your contributions to your HSA and you do not have to pay tax on any contributions made by your employer. All the money in your HSA account will grow tax free just like a Roth IRA. When you take money out of your HSA as long as it is for Medical expenses or anything listed above, it is not taxable to you.

Max out your HSA account ($7,750 for family plans and $3,850 for an individual plan) and go out there and have some fun in the sun!

Karena J. Sylvester, CPA

Why an HSA is better than a Roth IRA

mike@sbscpagroup.com (Mike Sylvester) — Tue, 28 Nov 2023 19:31:00 GMT

If you are eligible to contribute to an HSA account, you should try to max it out every year because it is better than a Roth IRA. Unlike a Roth, you do get a tax deduction for it in the current year. And like a Roth that money will grow tax free for you. And like a Roth IRA you will not pay any tax on any withdraws that are for medical expenses.

The HSA has contribution limits every year. For 2023 if you are in a family plan you can contribute $7,750 or if you are in a single plan you can contribute $3,850. If you are over 55 there is an additional $1,000 make up contribution allowed.

You do not need to wait until you retire or you are over 59 ½ to withdraw the money. You can withdraw the money at anytime as long as you have eligible medical expenses. Eligible medical expenses include: doctor’s visits, co-pays or out of pocket expenses that you owe. You can count items such as prescriptions or over the counter medicines such as Aspirin, Allergy medicines, or heart burn medicines; any medical supplies you may need such as a thermometer, a heating pad, or crutches, and even Band-Aids. You can use it for dental or vision exams, chiropractors or even mental health visits. You can pay for eye glasses, contacts, dentures and hearing aids. You can even get reimbursed for transportation costs to your doctor visits. Anything that is prescribed by a doctor including smoking cessation or weight loss programs are deductible as long as you have a recommendation from your doctor.

And there is no time limit on when you get reimbursed for your legitimate medical costs. I have created a file for of all the medical costs that I have paid out of pocket that have not been reimbursed from my HSA account. I am holding on to those expenses so when I retire, I can supplement my income with reimbursements from my HSA account – tax free!

Many HSA accounts have the opportunity to invest your funds in mutual funds to grow your account even more. The HSA Authority, HSA Bank, UMB bank and even Fidelity all have HSA account options.

If you have a high deductible insurance plan that is HSA eligible you should be at least contributing what you are going to pay this year anyway, and at best start building a savings account for your medical expenses!

Karena Sylvester, CPA

SBS Closed for Thanksgiving

Wed, 22 Nov 2023 13:22:41 GMT

SBS CPA Group with be closed on Thursday, 11/23 and Friday, 11/24 in observance of the Thanksgiving holiday.

IRS shares information with Google?

mike@sbscpagroup.com (Mike Sylvester) — Tue, 21 Nov 2023 17:32:13 GMT

Well this is… terrible. Allegedly, Google Analytics is receiving information from the IRS website in relation to specific, confidential transactions the taxpayer performs. It has been reported that Google Analytics was able to pick up taxpayer sign in information, the fact he clicked to make a payment, and that a payment was submitted.

Obviously this data being transmitted from the IRS website is incredibly concerning and raises a lot of privacy concerns. If you are on the IRS website and would like to protect any transmission, you’ll need an analytic blocker - such as Ublock Origin, which will keep the data transmission from occurring.

SBS CPA Group is hiring a Tax Manager!

mike@sbscpagroup.com (Mike Sylvester) — Mon, 23 Oct 2023 17:33:07 GMT

We are hiring a Tax Manager! The ad will be published on Indeed in the next couple of hours.

This is NOT a remote only position.

Please feel free to go to Indeed and apply OR you can email Mike@sbscpagroup.com your resume and rest assured we will keep you interest confidential.

Best Public Accounting Tax Manager position in Fort Wayne, Indiana

We are looking for an amazing Tax Manager! We have a lot to offer, and we want to hear from you quickly!

The main item that sets us apart from other CPA firms is how few hours per year each of us works. We have an amazing work life balance and over the last 7 years our average full-time employee has worked (NOT billed) 1934 hours per year. Note this includes training, CPE, etc.

We have always had an extremely flexible work schedule and our employees all have either Mondays or Fridays off the last 37 weeks of the year. In fact, our employees work (NOT bill) an average of 28 hours per week for the last 37 weeks of the year.

We do NOT have a second busy season.

Our office is located in northwest Fort Wayne. All employees have their own office. Most of us work in the office; however, people can work from home part-time as well. Our part-time employee works primarily from home and two of our full-time employees work 10% - 30% from home.

We pay our employees well and we have a great benefits package.

We have three partners ranging in age from 45 to 56 years old. We have six employees and are looking for our seventh amazing employee.

We have had little employee turnover in the last twenty years. We treat our employees right and we have a wonderful team.

We are looking for someone who wants an amazing work/life balance.

You must be a CPA with experience in Public Accounting.

Experience with QuickBooks Desktop and/or QuickBooks Online is a plus.

Experience with payroll and payroll taxes is a plus. Experience preparing individual and corporate income taxes is a plus. Experience with Lacerte is a plus. Someone who is well versed in using technology is a plus.

If you are tired of working crazy hours, please reach out to us today!

If you are a CPA and want a better work life balance, please reach out to us today!

Job Type: Full-time

Salary: $90,000.00 - $125,000.00 per year

Benefits:

401(k)
401(k) matching
Cell phone reimbursement
Continuing education credits
Flexible schedule
Health insurance
Health savings account
Life insurance
Mileage reimbursement
Opportunities for advancement
Paid time off
Paid training
Parental leave
Referral program
Retirement plan
Work from home

Experience level:

5 years

Work Location: Hybrid remote in Fort Wayne, IN 46825

Commercial Office Space available in NW Fort Wayne, Indiana

mike@sbscpagroup.com (Mike Sylvester) — Wed, 11 Oct 2023 12:19:36 GMT

We hope everything is going well with you and yours.

We have an awesome commercial office space available to be purchased or possibly rented. The unit is connected to our two suites by a stairway and the door at the top is locked and alarmed.

The unit in question is in Dawsons Creek. The Unit is 10351 Dawsons Creek Blvd, Suite D.

The unit is 1864 square feet. You can see the floorplan below. The unit is available 4/1/2024.

If you would like to learn more about this unit please call Mike Sylvester at 260-407-5000.

IRS going after more illegal trust schemes

mike@sbscpagroup.com (Mike Sylvester) — Mon, 25 Sep 2023 12:39:41 GMT

$100M in tax fraud, offshore trusts, international DJ’s, and a scheme to defraud the government. No, it’s not the plot of a Hollywood blockbuster, but the design of a Frank Butselaar, a citizen of the Netherlands. Butselaar worked with both individuals in the music and fashion industry to set up a series of off-shore trusts with client family-members named as beneficiaries in order to hide income, then filed incorrect 1040s, to the tune of $100M in unowned taxes.

Trust schemes like this unfortunately aren’t uncommon - in fact, the IRS has put out a lot of information on abusive trust tax evasion schemes. Normally, anytime someone says you can make earned income disappear with the right trust structure, it’s tax fraud. These schemes seem to cycle through about every 10-15 years, with a lot more popping up recently on Facebook, Instagram and TikTok promoting these type-of setups. Most also come with a $5k-$20k price tag attached to them.

Do not fall prey to these unethical scams. If in doubt call your CPA!

Mike Sylvester, CPA

The Internal Revenue Service is going after fraudulent ERC claims

mike@sbscpagroup.com (Mike Sylvester) — Sat, 23 Sep 2023 14:03:09 GMT

If you are a client of SBS CPA Group and you filed an Employee Retention Credit Claim (ERC) and it was filed by any company other than us, please stop what you are doing and immediately call your CPA at 260-407-5000. This is IMPORTANT.

The IRS is pursuing fraudulent ERC claims and they are finally going after the companies (Known as ERC Mills) who spent hundreds of million dollars in advertising and filed a large number of fraudulent claims on behalf of small businesses.

The IRS has said that they will not process any new claims received 9/15/23 or after until at least 2024. They currently have 600,000 claims to process and they are going to slow down processing because they feel that 95% of them are fraudulent. The IRS is expected to announce a program in the next week or two that will allow small businesses to withdraw their claims. In the next month or two the IRS is expected to announce a program to allow people who received ERC claim money based on a fraudulent claim to return that money.

It is hard to believe; however, the Internal Revenue Service believes 30,000 ERC claims they have are valid and 570,000 are fraudulent.

The IRS has already opened 252 Criminal Investigations into ERC claims based on 2.8 billion dollars worth if ERC claims. They have already identified several thousand ERC claims for audit and these numbers will increase substantially moving forward.

It has been just over a week since the IRS announced they would not process new claims until at least 2024 and that the IRS is going to look at the 600,000 claims they have much harder because they expect fraud at a level the IRS has never encountered.

The response to the September 14th, 2023 IRS announcement from the companies that formed to process large numbers of ERC claims (ERC Mills) has been swift. The ERC Mills know that many of fraudulent ERC claims the IRS is currently processing will not be paid; meaning the ERC Mills will not continue getting 10-30% contingent fees on each payment. Their revenue stream is drying up. Further since the IRS will not process new claims until at least 1/1/24 this further effects the ERC Mill revenue streams. Marketing by these companies has disappeared quicker than I thought possible. You used to see 2-3 TV ads during each major supporting event, those have been pulled and now there are no ads about the ERC during major sporting events. Some Mills are still advertising; however, their advertising has been cut by 75% or more in just a few days. Further one of the largest ERC Mills has laid off half of its work force and another has pulled their entire website down.

Books will be written about the ERC program and the staggering amount of fraud that occurred. The IRS will be pursuing this fraud and bad actors for many years.

Mike Sylvester, CPA

How to avoid an IRS audit

mike@sbscpagroup.com (Mike Sylvester) — Sat, 23 Sep 2023 13:39:27 GMT

IRS audits are increasing, and this one simple step can help protect you from being audited by the Internal Revenue Service

The IRS is always warning taxpayers to carefully choose their tax preparers. Unfortunately, there are shady tax preparers out there who will falsify client’s tax returns to get the clients larger refunds and justify charging them a higher price. If the IRS comes across a particularly questionable return that’s signed by a preparer, that can open up other reviews and audits to returns that practitioner has prepared - so you could inadvertently get pulled into an audit because your tax preparer was horrible. Note this happened in Fort Wayne, Indiana with a particularly bad tax preparer who was a CPA.

Here are some precautions you as a client can take to help mitigate the risk of this:

Make sure AT MINIMUM they have a Preparer Tax Identification Number (PTIN): ( There is a public directory here )

Preferably active tax-preparer credentialing (CPA, EA, Tax Attorney) and verify with appropriate state or federal directory.

Make sure they SIGN the return (sometimes there are “ghost preparers” who will prepare the return but not actually sign it).

Ask questions so you understand the numbers being reported on the return (One year I asked a new client if they had done a large charitable donation like they had on the prior year return of $24k, they responded with, “We didn’t donate $24k that year.”

If they tie their fee at all to the amount of refund they can get you, run the other way as fast as you can. This is a contingent fee, and the Internal Revenue Service is continually warning the public to avoid anyone charging a contingent fee. For example, there is a large industry of companies that popped up to “help” businesses file for the Employee Retention Credit (ERC). Many of these companies charge a contingent fee of 20% or more.

Mike Sylvester, CPA

The Internal Revenue Service (IRS) is expanding audits of the wealthy

mike@sbscpagroup.com (Mike Sylvester) — Thu, 21 Sep 2023 20:25:25 GMT

The IRS has been granted more funding and is trying to modernize itself.

The IRS now plans on expanding its enforcement division in order to audit the wealthy more often and more effectively. The IRS current definition of wealthy is someone earning $400,000 or more per year. Currently, the IRS is trying to hire well over 3000 employees for their enforcement arm. They are trying to hire experienced accountants in four different Indiana offices including Fort Wayne, Indiana.

Based on recent announcements from the IRS we expect:

The IRS is going to look at cryptocurrency much harder moving forward. Please make sure you tell us about all cryptocurrency you own. It may not be worth having very small investments in cryptocurrency.

The IRS has decided to go after 75 very large Partnerships. These are very large Partnerships with 10 billion or more in assets. You may own a small fraction of some of these partnerships; however, we expect this to have little or no effect on our clients.

The IRS is gearing up its efforts or go after companies that were formed to help businesses file Employee Retention Credits (ERC). Please talk to your CPA in our office and please do not respond to the aggressive marketing of these promoters. If you filed for the ERC and did not use SBS CPA Group, please stop what you are doing and contact your CPA immediately.

The IRS is going to audit significantly more tax returns with $400,000 or more of income. You can prepare for this by keeping great records and being ready for an IRS audit if one occurs. If you get a notice of audit, please contact your CPA immediately.

It will take the IRS a couple of years to gear up and expand its enforcement division; however, we do expect it to happen. Currently IRS audit rates are extremely low; we expect them to increase to more historically normal levels over the next couple of years.

Mike Sylvester, CPA

IRS and Employee Retention Credit Fraud

mike@sbscpagroup.com (Mike Sylvester) — Tue, 19 Sep 2023 14:22:30 GMT

IRS is pursuing Employee Retention Credit Fraud

The IRS issued a historic press release and announced that new Employee Retention Credit (ERC) applications will not be processed until at least 1/1/24.

Further the IRS stated:

The IRS has noticed that a large number of claims are fraudulent.

The IRS and Justice Department are pursuing companies (Sometimes called ERC Mills) who aggressively market to businesses regarding ERC credits.

The IRS is concerned that many business owners have been scammed by unscrupulous actors.

The IRS specifically is suggesting that businesses seek out the advice of a “trusted tax professional” rather than ERC promoters.

The IRS released a new checklist to help businesses determine if they are eligible for the ERC.

You can read the entire IRS press release here .

If you are a client of SBS CPA Group please contact the partner that handles your account immediately if you have received ERC money and the claim was handled by someone other than SBS CPA Group. Remember in this case you are required to amend 2020 and 2021 income tax returns and those returns will cause you to owe tax and interest and possibly penalties.

If you are a client of SBS CPA Group and you think you might qualify for the ERC please discuss the matter with the partner who handles your account!

If you are a client of SBS CPA Group and you are talking to an ERC promoter, please contact the partner who handles your account today.

Mike Sylvester, CPA

Student Loan rules are changing

mike@sbscpagroup.com (Mike Sylvester) — Wed, 30 Aug 2023 15:05:41 GMT

Student Loan Payments Restart in October 2023

If you have student loans you should read this carefully. Per the Congressional Budget Office (CBO) 2/3 of those with student loans should apply for the new income-driven repayment plans.

Due to the Covid pandemic, student loan payments have been paused since March of 2020 and no interest has accrued. Interest starts accruing again September 1 ^st , 2023, and payments will begin again in October of 2023. There will not be another delay in monthly payments.

Here is what you should do:

Update your contact info on studentaid.gov and your loan servicer’s website.

Look into the new income-driven repayment plans (SAVE plans). You could get a much lower payment by applying for the new income-driven repayment plans. You can find more information here. You can choose between the fastest payoff, lowest monthly payment, and lowest total paid. Note this is discussed a lot; further in this article.

Consider enrolling in autopay. Enrolling in autopay will save you 0.25% on your interest rate. You can sign up on your loan servicer’s website.

Check your loan servicer’s website for your payment amount. Some have payment information available now.

The new SAVE plans (Income-driven repayment plans) are extremely generous as compared to the old plans!

Parent loans do not qualify for the SAVE plans, and this is another reason to not take out parent loans. Private loans do not qualify for the new SAVE plans.

SAVE plans for undergraduate loans span 20 years unless the July 2024 changes apply to your smaller loan. SAVE plans for graduate loans span 25 years.

Remember, a normal student loan repayment plan spans only 10 years, this must be considered…

Benefits that start for SAVE plans now include:

The amount of income protected from payments increased from 150% of the poverty line to 225% of the poverty line. The following amounts in 2023 are excluded from income based on family size under the new rules:

Individuals $32,805

Family of 2 $44,370

Family of 3 $55,935

Family of 4 $67,500

Note the Department of Education expects well over a million student loan borrowers will see their payments under the SAVE plan go to zero.

If the minimum monthly payment is paid, and if it does not pay all of the interest accrued that month, the interest will not accrue and will not be added to the loan balance. The Department of Education feels this will benefit 70% of the borrowers in the current income-driven repayment plans.

Married borrowers who file their taxes separately (MFS) will no longer be required to include their spouse’s income in their payment calculation for the new SAVE program. These borrowers will have their spouse excluded from the family size calculation. Note this will cause more taxpayers to file married filing separately rather than married filing jointly.

Starting July of 2024 more changes will be implemented:

Payments on undergraduate loans will be cut from 10% of remaining income to 5% of remaining income. This is a huge deal.

Borrowers whose original principal balances were $12,000 or less will receive forgiveness after 10 years of repayment, with an additional year of repayment required for each additional $1,000 borrowed. So those borrowers with $23,000 or less in undergraduate student loans will have a repayment period of less than 20 years and this is a big deal as well.

Borrowers are in a temporary “on-ramp transition period” until September of 2024. This means that payments are still due, and interest will continue to accrue, but you will not be reported as delinquent to credit agencies. Further; all student loan borrowers have been given a completely fresh restart and can apply for the new SAVE plan regardless of delinquency status.

Under current law, unpaid student loan balances that are forgiven by the Federal government are taxable income starting on 1/1/2026. Each State handles this differently.

Note the new SAVE income-driven repayment plans are so generous that the Congressional Budget Office (Nonpartisan budget arm of Congress) projects:

The number of Americans in income-driven repayment plans will increase to 66% of all borrowers from 50%.

The CBO expects the program to cost about 26 billion dollars a year for the next ten years and for the cost to increase after that. This is because the CBO expects those borrowers who use the new SAVE program to only repay 61% of the amount borrowed; under previous plans, the CBO projected 110% of the amount borrowed would be repaid due to interest. Think about this! This will cost the Federal Government hundreds of billions of dollars and it will save borrowers the same amount!

Further, the CBO expects colleges to increase costs more than they are now since students will not have to repay the full amount.

The CBO also expects students to borrow more in the future since 2/3 of borrowers will only have to repay 61% of what they borrow under the new SAVE plans. The CBO projects 2/3 of borrowers to sign up and benefit from the SAVE plans.

Who should sign up for the new SAVE plans? It is extremely complicated and the following variables are some of the variables that must be considered: What will your income be over the length of the SAVE plan? What will your family size be over the life of the SAVE plan? Can you write off student loan interest on your income tax returns? What is the interest rate on the student loans? If you are married, will you be filing jointly or separately and you also have to consider what those different filing statuses will mean to each tax return filed and the cost to file those tax returns. If married, does your spouse have student loans? How much will the Federal poverty limit change. Will how AGI is calculated change? Anything that affects your AGI over the life of the SAVE plan must be considered including, side jobs, business income, rental income, accelerated depreciation, capital gains, capital losses, interest, dividends, taking taxable retirement distributions and on and on.

In very general terms, I think the following situations likely mean you should strongly consider signing up for the SAVE plan:

Anyone already on another income-driven repayment plan.

Anyone currently in default or forbearance since if you are financially struggling you might have zero or very low monthly payments.

Anyone who just cannot pay the normal 10-year repayment plan amount. Note in some situations this may cause you to pay more if you sign up for a SAVE plan!

The undergraduate SAVE plans are much better than the graduate SAVE plans. This means more with undergraduate loans will benefit from choosing a SAVE plan.

This is extremely complicated and best shown with examples:

Susan graduates from college with an undergraduate degree in July of 2024. Her student loan repayments begin in January of 2025. Susan has a student loan balance of $30,000 in January of 2025. At current student loan interest rates, if Susan does not apply for an income-driven repayment plan; her student loan payments are $326 a month for 10 years. Let’s assume Susan is paid $59,000 in wages in 2025.

Susan applies for a SAVE plan. Susan is an individual and she has no children. She is a family of one. 225% of the Federal poverty level for an individual will be about $35,000 in 2025. Under the Save plan Susan’s monthly payment is Susan’s Adjusted Gross Income (AGI) of $59,000 minus poverty limit of $35,000 = $24,000. $24,000 divided by 12 means Susan has $2,000 per month of discretionary income. $2,000 x 5% = $100. Susan will pay $100 a month 2025. Note Susan saves money on monthly payments in 2025 by signing up for a SAVE plan in this example.

Susan’s financial situation will change every year. Her income as reported on her 1040 will change. Her family size might change. Inflation will change the Federal poverty limits. This means Susan’s student loan payments will change annually under the SAVE plan. The more borrowers earn, the higher amounts the SAVE plan will make them pay every month. The SAVE plan will benefit low- and middle-income borrowers a lot. The SAVE plan will benefit high-income borrowers significantly less and often not at all. Remember, the SAVE calculation is made annually and will change every year.

Susan summary:

Susan can pay $326 a month for ten years and she might be able to write off the student loan interest on her personal income tax returns.

Susan can sign up for a SAVE plan, pay $100 per month for 2025, recalculate the payment annually for the next 20 years, and then have debt forgiveness income on the balance remaining when forgiven that may or may not be taxable to the Federal Government and the state, she lives in.

Next example.

Tonya graduates from college with an undergraduate degree in July of 2024. Her student loan repayments begin in January of 2025. Tonya has a student loan balance of $30,000 in January of 2025. At current student loan interest rates, if Tonya does not apply for an income-driven repayment plan; her student loan payments are $326 a month for 10 years. Let’s assume Tonya is paid $107,000 in wages in 2025. She is a computer science major.

Tonya applies for a SAVE plan. Tonya is an individual and she has no children. She is a family of one. 225% of the Federal poverty level for an individual will be about $35,000 in 2025. Under the Save plan Tonya’s monthly payment is Tonya’s Adjusted Gross Income (AGI) of $107,000 minus poverty limit of $35,000 = $72,000. $72,000 divided by 12 means Tonya has $6,000 per month of discretionary income. $6,000 x 5% = $300. Tonya will pay $300 a month 2025. Note Susan saves $26 a month on monthly payments in 2025 by signing up for a SAVE plan in this example.

Tonya’s choice is much simpler that Susan’s choice. Paying $326 a month for ten years is generally going to be a better choice and Tonya very likely should not sign up for a SAVE plan.

The final section is a broad overview of the politics and ramifications of the SAVE plans. Most people (Not all) think this plan will survive challenge at The Supreme Court.

Winners:

President Biden and Democrats. They wanted to lower the student loan burden for low- and middle-income individuals with undergraduate student loans and this program will accomplish that.

Colleges, they will be able to charge even more for the same services per the non-partisan CBO.

Student loan borrowers that are lower and middle income. Those who sign up for the SAVE plans will repay 61% of what they borrowed rather than 110% under current rules per various studies.

The economy in the short run. As many as 30 million borrowers will see lower monthly student loan repayments, largely this means they will spend the money on other things and which helps the economy in the short run.

Private colleges. They already charge a lot more than public colleges and students who graduate with a lot of undergraduate debt and are lower or middle income will have a lot more of their student loan debt forgiven.

Losers:

Taxpayers, this adds 261 billion to the deficit over the next ten years and the CBO projects that to increase in following years.

Student loan borrowers who paid off their debt in full under the old rules.

The military; because this makes the GI Bill a little less valuable.

Current and future student loan borrowers who are high income since they will have to repay the normal 110% of the amount borrowed.

The economy in the long run. The Federal Government already is on an unsustainable path per the CBO and this makes that path a little worse.

Further increasing the future cost of college helps no one other than colleges.

Our clients can hire us to do a consulting engagement to determine if someone should sign up for SAVE plans or not. If you want to hire us to do this; please send your CPA an email and let us know all of the following in one email:

That you want us to help you determine if someone should sign up for a SAVE plan or not.

Who the calculation is for.

How much they have in undergraduate student loans rounded to the nearest thousand dollars.

How much they have in graduate student loans rounded to the nearest thousand dollars.

Please verify the loans are NOT parent loans or private loans.

These five items will get us started!

Mike Sylvester, CPA

We are small business experts

mike@sbscpagroup.com (Mike Sylvester) — Thu, 20 Jul 2023 19:22:06 GMT

We are small business tax experts!

SBS CPA Group handles the tax, accounting, bookkeeping, and payroll needs of over 500 businesses! We are small business experts. Small business is what we do!

Our office is conveniently located in Fort Wayne, Indiana. Our staff consists of:

3 Partners who are CPAs with 56 years of combined experience as CPA’s.

3 Senior Staff Accountants, one of whom is a CPA. They have over 25 years of combined experience.

1 Staff Accountant with over 2 years of experience.

1 Bookkeeper with over 29 years of experience.

1 Administrative Assistant with over 20 years of experience.

We have an amazing team and we are well suited to help your business grow and prosper!

We provide a wide range of services including:

Individual income tax return preparation

Business income tax return preparation

Intuit QuickBooks and QuickBooks Online training

Business bookkeeping

Payroll and payroll taxes

Advisory services

Tax planning and tax minimization

Entity Selection

CFO services

Trust and Estate income tax returns

Sales tax

Annual tangible business personal property tax returns

If you are a business owner and you are looking for a new CPA, please give us a call at 260-407-5000 and let the person who answers the phone know that you are a potential new client. We have a quick and clean onboarding process so that we can determine if you are a good fit for our firm and more importantly, so that you can determine if we are a good fit for your needs!

We look forward to hearing from you!

Mike Sylvester, CPA

Employee Retention Credit Fraud

mike@sbscpagroup.com (Mike Sylvester) — Wed, 19 Jul 2023 13:35:53 GMT

Employee Retention Credit Fraud

The Employee Retention Credit (ERC) is a Federal tax credit that some businesses qualify for. The rules governing this tax credit are complicated. In some cases, these tax credits are extremely large. The tax credits are so large a number of companies have formed specifically to assist, and I use this term broadly, taxpayers in claiming the ERC.

Unfortunately, many of these companies are filing fraudulent claims for ERC credits and the Internal Revenue Service (IRS) has noticed:

· The IRS Taxpayer Advocate, Erin Collins, speaking at the AICPA national conference, said: It was clear businesses were

“duped” by these companies just trying to make a quick buck.

· The IRS has issued press releases stating: “The IRS is urging people to beware of ads that promise big money by claiming

the employee retention tax credit. This is a real tax credit that helps businesses that were affected by the pandemic – but

scammers are telling people they qualify when they do not. The scammer takes a fee and your personal information. If

you are not eligible for the credit, getting conned by this could cost you a lot. The IRS does not want that to happen to

you, so check out the official information at IRS.gov/erc.”

· On May 25th, 2023 the IRS issued another warning and you can read more here .

· Every year the IRS issues the “Dirty Dozen” which is a list of twelve tax scams it wants the public to be aware of. “The IRS

spotlighted Employee Retention Credits following blatant attempts by promoters to con ineligible people to claim the

credit.” You can read more here .

· The IRS has taken issue with companies that charge a contingent fee that is often 20% to 30% of the businesses ERC

claim. I have personally seen fraudulent ERC claims where the fee charged by the ERC promoter ends up being $3,000

per hour.

The ERC companies are making billions of dollars and their advertising is everywhere. I personally receive five advertisements a week telling me that my business qualifies for a credit of $26,000 per employee; note my business certainly does not qualify for this credit.

If you hire a company to amend 941’s and file an ERC claim for your business and you are a client of ours please talk to your CPA first! If you have filed an ERC claim through another company, please pick up the phone and call your CPA today because there are many actions we need to take immediately.

If you are not currently a client of SBS CPA Group and you want to hire someone to analyze an ERC claim you made or are thinking about making; please give our office a call at 260-407-5000 and let them know you are a potential new client and we can proceed from there.

Mike Sylvester, CPA

New rules for the Indiana CollegeChoice 529 Plan

Tue, 18 Jul 2023 15:53:06 GMT

Many of our Indiana clients take advantage of the Indiana CollegeChoice 529 plan. The Indiana 529 plan is good for those clients who:

· Have Indiana income tax liability.

· Want a tax advantaged way to save for college.

From a tax perspective, the advantage of an Indiana 529 plan is you can qualify for an Indiana tax credit of up to $1,500 per year. Note you must have at least $1,500 of Indiana income tax liability each year.

Indiana just raised the tax credit limit from $1,000 to $1,500 per year starting in 2023. In order to qualify for the maximum tax credit, you need to contribute $7,500 in a calendar year; the Indiana tax credit is 20% of the contribution capped at $1,500 for someone filing other than married filing separately. If you file married filing separately, the maximum credit is $750.

In order to receive the Indiana 529 plan tax credit, you must:

· Contribute to the CollegeChoice Indiana 529 plan.

· The contribution must be deposited into your account by December 31 ^st ; there is no reason to wait until the end

of the year to make this payment.

If you are one of our clients, please contact your CPA at 260-407-5000 or via email if you wish to discuss this increased tax credit for 2023.

If you are not yet a client of SBS CPA Group we are onboarding new clients, just give our Fort Wayne office a call at 260-407-5000 and let whoever you talk to know that you are a potential new client!

Mike Sylvester, CPA

Be aware of phishing and other scams!

Thu, 29 Jun 2023 21:38:17 GMT

We wanted to take the time to remind all of our clients to be diligent in protecting your personal information when it comes to phishing and other email and text message scams.

Scammers use links in emails and text messages to try to trick you into entering login information, social security numbers, payment information, and other sensitive information by pretending to be reputable businesses. Most of the time these scams are easy to spot due to misspellings and poor grammar, but some scammers are very clever and can make their communication look like the real deal.

Below is an example of an email I received where a scammer was pretending to be Intuit, wanting me to enter payment information. The content of the email looks exactly like an email Intuit would send (images are blocked automatically due to Outlook’s safety features). However, looking closely at the sender, it is from “Quickbooks Intuit Team” rather than “Intuit Quickbooks Team” and the email address is from an unfamiliar sender.

Below is an example of a text message phishing attempt that I received. I get messages like this all the time. This one tries to make you click the link to enter your account information, and likely will bring you to a webpage that looks very similar to Amazon.

You should always be wary of unsolicited emails and text messages asking for login information, social security numbers, payment information, and other sensitive information. Never click the hyperlinks contained in them. If in doubt, contact the company using a phone number or website you know is real — not the information in the email.

If you do make a mistake and fall victim to a phishing scam, you should immediately change your login information and, if you are not already, use two-factor authentication for that account in the future. If you gave up information like your social security number or payment information, visit https://www.identitytheft.gov/Info-Lost-or-Stolen for information on what steps to take.

Thank you for reading!

Nathan Skinner

Non-Tax Season SBS CPA Group Hours

Tue, 18 Apr 2023 15:07:28 GMT

Hello,

Tax Season is finally over. As such we are changing our hours of operation:

Monday through Friday: 8:30am to 5:00pm

Saturday & Sunday: Closed

Have a fantastic day and don't be shy with questions.

The failure of Silicon Valley Bank (SVB)

Sun, 12 Mar 2023 15:47:24 GMT

Silicon Valley Bank is the 16 ^th largest bank in the United States. SVB failed and was taken over by the Federal Deposit Insurance Corporation (FDIC) on Friday March 10 ^th . This is the second largest failure in US history. The bank failed quickly due to a bank run where investors withdrew their deposits at a very rapid rate late last week.

The failure of SVB has had little effect on our clients so far; however, it is possible this spreads to other banks and related companies this next week.

There are several bill pay companies affected including Melio, Bill.com, and Airbase. Tax compliance software Avalara is affected. Payroll companies including Patriot Software, Rippling and Wrapbook are affected.

Most of the companies using SVB bank were startup companies; especially technology startup companies. Coincidentally many of these companies also used some of the software listed above. Further, a fair number of crypto companies are being affected by the failure of SVB.

The SVB failure will affect geographic areas where there are a lot of technology startups. Further it will put more pressure on many technology startups.

Any of our clients using software affected by the SVB failure should give your partner a call and we can help you work through the problem.

The truth of the matter is this is very unlikely to affect many of our clients in Fort Wayne, Indiana unless there is a lot of contagion next week. Our clients in ecommerce and tied to the technology startup community are likely to be the clients most affected.

We will watch what happens this upcoming week.

Mike Sylvester, CPA

Failure to File Penalty

Wed, 01 Mar 2023 15:30:00 GMT

With the tax deadline coming up, we think we should remind you about the penalty for not filing your taxes or filing late… If you do not file your taxes on time, the IRS charges a 5% penalty for the unpaid taxes they believe you will owe if you file the return. That 5% penalty is accumulated for each month without filing, but the total penalty will not exceed 25% of your unpaid taxes.

If you believe that you are missing information that needs to be on your tax return, you can always get a little more time by filing an extension for your tax return and get six more months to find the information you need. Just be aware that by doing this, you are not extending your time to pay your tax liability, only your time to file the tax return. Your taxes will still be due on April 15 ^th .

There is no penalty if you are due a refund on your tax filing and file your taxes late. The IRS might even give you some interest.

Michael Salazar

S-Corp/Partnership due dates

Wed, 15 Feb 2023 21:45:00 GMT

Most people are only aware of the due date of April 15 ^th for their income tax returns. If you have a business, though, you might need to know that there is another due date for which you should be submitting a return. March 15 ^th is the due date for all business tax returns. If you have a business that is not on a schedule C, you are someone that needs to submit a tax return for the company a month before your return is filed.

Before worrying about the March 15 ^th deadline, businesses will also need to worry about having all year-end payroll and contractor statements out by the end of January. W-2 and 1099s must be filed and sent out to the recipients by the end of January. After that, business owners will need to gather all the information for their business taxes to be filed. Things like mileage, home office use, personal use of assets, new assets, and more important things need to be thought of and given to your tax preparer for an accurate return.

If you are not prepared and have all the necessary information to file the return by March 15 ^th , then an extension for your business tax return can be filed, and you can get six more months to submit that return.

Michael Salazar

Is Income Tax Unconstitutional

Fri, 03 Feb 2023 19:00:00 GMT

In 1916 the supreme court upheld the constitutionality of income tax. That means that accountants started to make a lot more money in 1916 by helping everyone find ways to reduce their tax liability and successfully file their income tax returns. It is the 16 ^th amendment that gives congress the power to collect taxes on income.

Our income taxes are not just for the government and its project expenses. They are used to cover our old age “retirement” pay, our Medicare coverage, and then yes, it goes towards costs for the U.S. Government. Social security taxes are saved to cover our expenses when we get older and cannot work anymore. It is supposed to be a blanket if people do not put money aside for retirement. Medicare is also something taxes go towards. When we get older, we need to have coverage for medical expenses, and the tax we are paying now is supposed to cover us when we get older. Other things that our taxes go towards are governmental expenses like our military, roads, police, firefighters, etc.

Some people deem the taxes they are paying unconstitutional. Other people see them as something that is helping our economy. No matter how you see it, we are here to help you with as much information as possible to submit your yearly returns successfully and with the most benefits.

Michael Salazar

Are you ready for taxes?

Wed, 01 Feb 2023 13:00:16 GMT

Tax season has officially started, and we are always here to help with your filings! We are glad you are choosing us as your tax accountants, and we will do everything we can to submit your taxes successfully. We want to try and have the smoothest process for receiving, working through, and completing the tax returns. To do that, we will need your help!

The very first step for a tax return begins with all of you! You are the ones that give us all the information we need to be able to complete a tax return. You would make our lives A LOT easier if you wait until you have all your tax information for the year to give us your year-end package for us to complete. By doing this, we know that your return is ready to be entered into the system, and the turnaround time will be much less than if you were to drop off information as you receive it.

We hope to have a successful tax season, and we look forward to helping you with your needs!

Michael Salazar

2023 Mileage Rates

Tue, 17 Jan 2023 15:09:55 GMT

The IRS has announced the highly anticipated 2023 mileage rates! They are the following:

65.5 cents per mile for business use (this is 3 cents higher than the rate at the end of 2022)
22 cents per mile for medical purposes
14 cents per mile in service of charitable organizations

Mileage can only be taken as a business expense if you are not taking actual costs such as gasoline, repairs, depreciation, etc.

To comply with the IRS, you must keep records showing the following information:

the mileage for each trip
the total mileage for the year
the time (date will do), place (your destination), and purpose of each trip
odometer readings at the start and end of the year

To assist your tax preparer at tax time, let them know the total mileage you drove for the year and the number of miles for business purposes. You do not need to provide your tax preparer with your mileage log. Just keep it in a safe place at home if the IRS ever questions it.

Jennifer Thonert

Indiana Sales Taxes

Mon, 02 Jan 2023 12:57:22 GMT

It is annual sales tax filing time again! Any company that sells products (excluding most foods) must collect a sales tax of 7% on its sales. But even though the company collects it, it is the state’s money and must be paid to the state. Not collecting sales tax and remitting it to the government when required leads to penalties and interest on top of the amount already owed.

In Indiana, all companies that are required to collect sales tax (whether they collected any sales tax or not) have a filing requirement. The states set the different frequencies of when you must file. Those companies with higher sales have more frequent than those with fewer sales. You must still file a zero return if you had zero sales during any particular period.

Since you are assisting the state by collecting its tax, you will get something in return. It is called a collection allowance. Your sales tax must be sent in on time to qualify. While the amount varies based on your total sales tax, you will receive anywhere from 0.26%-0.73% of the amount collected as your allowance.

Please consult your tax advisor if you have questions about sales tax calculations or payments. They can help you through the process.

Thank you!

Jennifer Thonert

1096/1099s

Mon, 02 Jan 2023 12:56:54 GMT

It’s 1096 and 1099 filing season again!

Included in all the forms businesses may have to file are 1099s and their sidekicks, the 1096s. It is essential to know what these forms are and if you should be filing them.

1096 is the summary form of all the 1099s you have filled out. Even if you only fill out one 1099, you must attach a 1096. 1096, along with the 1099(s), are sent to the IRS. The individuals you send 1099s to do not get a copy of 1096.

There are many types of 1099s. All 1099s report financial transactions that have not been reported on another form. Listed below are some of the more familiar 1099s businesses must file:

1099-NECs: If you have paid a person who performed services for you and paid them $600 or more during the year, you must issue them a 1099-NEC. This form shows them the amount of compensation you paid them. This form must be mailed to the person and the IRS by January 31.

1099-INT: If you paid interest to anyone during the year if it amounted to $600 or more. It must be sent to the person by February 15. These forms must be mailed to the IRS by February 28 or filed electronically by March 31.

1099-MISCs: This form is given to anyone who paid money that was not for services performed, such as rent. The dollar threshold for filing this form is also $600. These must be mailed out to the person by January 31. These forms must be mailed to the IRS by February 28 or filed electronically by March 31.

The IRS can penalize you if you do not issue a 1099 on time.

Thank you!

Jennifer Thonert

Tax Differences Between Sole Proprietorships, Single-member LLCs, and LLCs taxed as S-Corporations

Mon, 02 Jan 2023 12:56:29 GMT

All small businesses face a lot of questions. If you are the only business owner, one of the most critical questions is whether you should be taxed as a sole proprietorship or as an LLC taxed as an S corporation (S corp). Both have advantages and disadvantages. Keeping these in mind can help you decide which business structure is best for you.

A sole proprietorship can be a great option because they are straightforward to form and operate. All business income and expenses are reported on your tax return on Schedule C, and you are treated as the owner. You do not need a separate EIN or bank account for the business. Many businesses begin as sole proprietorships.

There are two main drawbacks to having a sole proprietorship.

First: You have unlimited liability. Since you and the business entity are seen as one legal entity, you are personally responsible for any business debts and subject to lawsuits. This can make it difficult to obtain financing and require you to put your assets at risk.

Second: Your income is also subject to self-employment taxes (Social Security and Medicare taxes).

Instead of a sole proprietorship, you could form a Limited Liability Company (LLC). You will need to obtain an EIN and business bank account. The default tax position of a single-member LLC is just like that of a sole proprietorship. Taxes are filed on Schedule C on the owner's tax return. The benefit is that the business is now a disregarded entity (separate from the owner)—the owner is more protected from business debts and lawsuits.

You could also form an LLC and file an S corporation election with the IRS. This new entity is responsible for all of its debts, and if the money runs out, creditors cannot come after your assets. LLCs taxed as an S Corps are allowed to have more than one owner, so if the ownership of your company changes in the future, your formation does not have to change.

S Corps do have to file paperwork to establish themselves, and more rules must be followed. More record-keeping is involved. S corps have their tax returns. Each owner will receive a K-1 from the S corp showing their share of income, which gets reported on the owner's 1040.

Another consideration is that sole proprietorships and owners of LLCs without the S Corp election cannot be on the payroll. With the S-Corp election, the owners must be on payroll and pay themselves a "reasonable salary" on a W-2. Once the reasonable salary has been paid, no further employment taxes (Medicare and Social Security taxes) need to be paid.

If you are having trouble deciding which business you would like your business to be or if you think changing formations may be a good idea, consult your tax advisor.

Thank you!

Jennifer Thonert

Gifting Rules

Fri, 23 Dec 2022 20:15:00 GMT

Your child has graduated. They are on their own, looking for a house. As a parent, you want them to start on the right foot, and you offer to pay half of the 20% down payment, so they can avoid paying mortgage insurance premiums. To your horror, they move to a Brooklyn, NY, and the house costs $450,000.00. You and your spouse give them half the 20% down payment, $45,000. You have done a nice thing, but now you must consider the Gift Tax implications.

The 2022 annual gift limit is $16,000. You can give $16,000, and your partner can also give $16,000 for a total of $32,000 without incurring a filing requirement.

However, If you give over $16,000 to any individual, you must file a gift tax return. A gift tax return is generally filed by the donor (who gave the money) to report the amounts more significant than the annual allowance against your lifetime exemption. Most people will never use up their $11.7 million exemption, so this formality needs filing.

There are circumstances where the annual limit does not apply:

· Tuition you pay for someone else (paid directly to the education organization)

· Medical expenses you pay for someone else (paid directly to the medical facility)

· Gifts to your spouse

· Gifts to political organizations

It may be better to help pay tuition than help with housing later.

Thank you!

Shane Lengerich

SBS Holiday Hours

Thu, 22 Dec 2022 20:15:00 GMT

From everyone at SBS CPA Group, we wish you happy holidays and safe travels! Our office will be closed on December 24 and December 25 in observance of the holiday. We will resume regular business hours on December 26.

Thank you!

Shane Lengerich

Qualified Charitable Distributions and You

Fri, 16 Dec 2022 20:15:00 GMT

Suppose you are at the age where your IRAs are starting their required minimum distribution (RMD), but you are concerned about the tax implications. In that case, there is some relief in the form of qualified charitable distributions (QCD). Individuals who are 70 ½ years old can have the custodian of their eligible retirement account make a direct transfer to the charity of their choice. By doing that, they exclude the entirety of the directly transferred funds from their income. This can be significant tax savings, but concrete steps must be followed.

· Eligible IRAs are Traditional, Rollover, Inherited, Inactive SEP, and Inactive SIMPLE.

· It MUST be a direct transfer from the retirement account to the charity. You cannot withdraw the money yourself and contribute it.

· The annual maximum is $100,000. If you are filing jointly, you and your spouse may contribute $100,000.00 this way.

· The QCD cannot be greater than your RMD.

· The funds must be transferred by your RMD deadline, likely December 31.

If you follow these guidelines and work with your financial advisor or account custodian, you can have a significant amount of money excluded from taxes and help a great cause!

Thank you!

Shane Lengerich

Work Opportunity Tax Credit

Mon, 12 Dec 2022 19:43:46 GMT

Please consult your tax advisor if you have questions about sales tax calculations or payments. They can help you through the process.

Thank you!

Jennifer Thonert

Charitable Giving and Bunching

Fri, 09 Dec 2022 20:15:01 GMT

Since the 2018 Tax Cuts and Jobs Act, fewer people can itemize their tax returns. The standard deduction is more straightforward and much bigger than it was in the past. The biggest plus is not having to hunt down the excise tax you paid on your vehicle. Significant negative many people noticed was they lost their deduction for charitable giving. This was somewhat rectified on the 2020 return, where you could take up to $300.00 of contributions even if you took the standard deduction. This was increased to $600.00 in 2021.

Is there a way to get more tax savings from your charitable giving? The answer is yes; with some tax planning, you can get more benefits for your generous contributions. The concept is called bunching or grouping. Instead of giving $5,000.00 to the local food bank in a year, you wait and donate $10,000.00 in one year. Combined with other itemized deductions, that can help go over the standardized conclusion. Following this strategy gives you a greater return on your charitable contributions. Nothing stops you from contributing at least $600 to a charity every other year to get that small benefit on years you are not grouping. It is a best-of-both-worlds situation in that case.

Please note, however; we do not live our lives to minimize taxes. If there is a charity you are genuinely passionate about and you still want to give to them, do so.

Thank you!

Shane Lengerich

4Q Estimated Tax Payment

Sun, 04 Dec 2022 20:19:20 GMT

It is a new year again already! It is a time for fresh starts and new beginnings; for some of us, it means making sure to pay our 4th quarter estimated taxes. The 4Q 2022 tax payment due date is January 17, 2023.

How do you know if you should be making estimated tax payments? Some people regularly pay estimated taxes, such as the self-employed or those with a large amount of investment income from stock sales or business investments. This is because these types of income rarely have taxes withheld from them. But anyone who has any significant income during the year should consider making estimated tax payments if taxes were not already withheld from it. (Do not worry! The $100 Aunt Sally gives you every year for Christmas is a gift. It is not taxable income.) Remember that some types of income, such as retirement benefits, may have federal taxes withheld from them but not state taxes. In such cases, you may want to make estimated tax payments to your state, not the federal government. Contact your tax preparer for advice if you are concerned about falling into this category.

Remember that this is your last chance to pay what you owe for this quarter and to pay any amounts from past quarters that you may have forgotten about. While Aunt Sally might give you money, Uncle Sam wants to take it, and he wants it on time. Paying estimated taxes late can result in penalties. If your tax preparer told you the amount of estimated tax you should be paying, but your situation has changed, let them know, and they can advise you if you should pay a different amount. Keep good records of all estimated payments made, including dates and amounts. These will be important to report at tax time.

Thank you!

Jennifer Thonert

Health Insurance Deductibles

Sun, 04 Dec 2022 20:11:55 GMT

Health Savings Accounts (HSAs) are a great way to reduce your taxable income, but another type of savings account can help you. A Flexible Spending Account (FSA) works similarly to the HSA. The one key difference between FSAs and HSAs is that HSAs let you roll over any unused contributions in the account. FSAs do not let you roll over annual amounts (it's use it or lose it), so you need to think about how much you contribute annually. In 2022, the max contribution to an FSA is $2,850.

FSA contributions also reduce your taxable income with the contributions you make to them. Employers also might have this instead of an HSA and will contribute to it using pretax dollars to help you save on your taxes at year-end.

Another critical difference between HSA and FSA accounts is that FSA accounts do not let self-employed individuals open an account. Only employees are allowed to do that. No high-deductible health insurance plan is needed to open an FSA account, unlike the HAS.

FSA accounts are supposed to be for certain medical expenses, much like the HSA. Just like the HSA account, you will need your receipts to prove distributions from the account were for qualified medical expenses.

Another thing to note is that just like with an HSA account, the medical expenses paid with the FSA account are not allowed to be itemized on your schedule A since the benefit is already being taken.

Thank you!

Michael Salazar

Flexible Savings Accounts: FSAs

Sun, 04 Dec 2022 20:11:07 GMT

As tax season approaches, we are all looking for ways to reduce that tax liability. We’ve discussed different ways to get tax credits and pay less tax, but we have not discussed HSA tax benefits. An HSA is a “Health Savings Account,” and if you do not already have one, you might go over it with your banker. Some employers already have an HSA setup for their employees and are already giving them that tax advantage by contributing money to that HSA account. If your employer does not provide this great incentive to you or does not maximize the contribution, then please, please, please! KEEP ON READING!

The money contributed to HSA accounts reduces the taxable income on your tax return. Another tax benefit is that the money put into HSA accounts earns interest TAX-FREE! Finally, when you use the money in the HSA account for the specified purposes mentioned above, it is also TAX-FREE!

HSA accounts are something that only people with high-deductible health insurance plans can get. HSA accounts for 2022 are allowed a $3650 contribution for individual coverage and $7300 for family coverage. The great thing about HSA accounts is that it rolls over every year, so if you do not spend the total amount that was contributed, you get it transferred into the following year, and you can keep contributing for the new year.

HSA accounts are supposed to be used for medical purchases. That includes ER visits, doctor appointments, copays, deductibles, etc. You can use http://hsatore.com to review other permissible options.

If HSA money is used for something other than a medical purchase, you will not only get taxed on that amount spent, but you will also get a penalty added to your tax return for improper Health Savings Account use. Banks will issue you an HSA form at year-end that lets you know how much money was put into it and how much money came out of it. That form is a 1099-SA. You or your exceptional accountants will need that form to complete an accurate tax return; you will also have to know how much of that money was spent for medical purposes, so it is best to keep receipts.

The last thing to remember is that any medical expenses paid from your HSA account are not allowed to be itemized since the reward for having it has already been taken.

Thank you!

Michael Salazar

Health Savings Accounts: HSAs

Sun, 04 Dec 2022 20:10:26 GMT

To allow our staff time to enjoy with their families, SBS CPA Group will be closed Thanksgiving Day 11/24 and Friday 11/25.

SBS Thanksgiving Closure

Tue, 22 Nov 2022 21:35:33 GMT

To allow our staff time to enjoy with their families, SBS CPA Group will be closed Thanksgiving Day 11/24 and Friday 11/25.

Tax consequences of student loan forgiveness, October 24th, 2022

Mon, 24 Oct 2022 20:43:02 GMT

We are not student loan experts and if you want to learn more about student loans and student loan forgiveness you should go to the Department of Education website.

If you are eligible for Student loan forgiveness, we highly suggest you apply today. The application form takes two minutes or less to fill out. You can fill out the form here https://studentaid.gov/debt-relief/application .

Who qualifies:

Forgiveness is for loans you had June 30 ^th , 2022 or prior

All Federal loans other than FFEL or Perkins loans unless the FFEL or Perkins loans were consolidated by Education Department prior to Sep 29 ^th , 2022.

Does not apply to private student loans.

If you were a dependent the loan forgiveness is based on parents’ income. They are saying you should apply based on your own income and they will let you know if you need to do something else.

If you are not a dependent you qualify if your Adjusted Gross Income (AGI) was less than the following in 2020 or 2021:

Single or Married Filing Separately (MFS) $125,000

Married Filing a Joint return (MFJ) or Head of Household $250,000

Parents with PLUS loans qualify.

How much do I qualify for:

$10,000 minimum if you qualify.

$20,000 if you ever got a Pell Grant. Note if you setup a FinanciaAid.gov account you can see Pell Grants going back to 1994. The Department of Education says they will look at if you ever had a Pell grant when they process your forgiveness application.

You and your parents can both qualify if you have separate loans.

Can I get a refund for payments I made from March 2020 through December 2022?

Maybe.

If you qualify for forgiveness based on the above items

And if you received less than the maximum forgiveness

Then they will refund the payments you made from March 2020 – Dec 20222 up to the maximum forgiveness amount.

Example.

You qualify for $20,000 in loan forgives due to getting a Pell Grant any time in your past.

You apply for forgiveness and you had $15,000 in student loans outstanding.

You paid in $4,000 from March 2020 through the end of 20222.

They will:

Forgive the $15,000

They will refund you $4,000

What happens after I apply?

You get an email confirmation you have applied.

They review the application.

They will contact you if they need more information.

Department of Education will notify you once application is approved.

Loan Servicer will apply debt relief and notify you.

Do I pay taxes on student loan relief?

You will not pay Federal income taxes on Student Loan forgiveness.

You will pay Indiana and County income taxes on loan forgiveness. Roughly speaking you should expect to pay Indiana/County income taxes on 5% of the amount forgiven.

If $10,000 is forgiven you will pay about $500 in Indiana/County income taxes

If $20,000 is forgiven you will pay about $1,000 in Indiana/County income taxes

Note you will pay Indiana and county income tax on loans forgiven and any payments you made between March 2020 and December 2022. Be ready for this.

What do I need to turn in with my completely filled out tax planner next year if myself, my spouse, or any dependents on my income tax returns have student loans forgiven.

You will let us know the amount of loan forgiveness and the amount of payments refunded to you. You will give us all paperwork on this from your student loan service provider.

Note public service applications close on October 31 ^st , 2022. You must move quickly. Tool available online. All loans will be forgiven if you have 10 years of public service including people working for federal, state, local, tribal government, military, or not for profit organizations can get all debt forgiven and service need not be consecutive.

Mike Sylvester

When is a Dependent no longer a Dependent?

Fri, 21 Oct 2022 04:00:04 GMT

Taking care of our loved ones is a nice thing to do. It can be a financial strain, though. The IRS and most states (including Indiana) recognize this and allow you to claim credits and/or exemptions for those you financially support. Especially when claiming children, since they can be claimed for so long, we can take for granted the lower amount of taxes we pay as a result of our dependents. It is essential to understand when dependency status is about to be lost so we can do proper tax planning.

There are two types of dependents: qualifying children and other qualifying relatives.

When does a child lose its qualifying child dependency?

A child ceases to be your dependent once they reach the age of 19 unless they are still a student. If the child is a student at the end of the year, they can continue to be your dependent until they are 23. Once the child reaches 24 years old or will no longer be a student at year-end, they will not be able to be claimed as a dependent on your tax return.

If the child no longer lives with you for at least half the year, they can no longer be your dependent. This does not apply to college students-they can live on campus but still count as living with you.

They are no longer dependent if your child can provide half or more of their financial support.

Even if your child loses their qualifying child dependency, they may still qualify as a relative.

When does a qualifying relative lose their dependency?

If your relative is your child, sibling, parent, grandparent, niece or nephew, or aunt or uncle, they are not required to live with you. Anyone else you are claiming, such as your cousin, must live with you the entire year. If that is not the case, they will lose dependency status.

If your relative has $4,300 in gross income, they will cease to be your dependent.

If you provide less than half of your relative’s financial support, they will cease to be your dependent.

Just keep in mind that as your children age or your situation changes, your tax liability may be affected. You may need to fill out a new W-4 to change your income tax withholdings or adjust the amount of money you pay in estimated taxes. Make sure to discuss any changes to your dependents with your tax advisor.

Dependent Care Credit

Fri, 14 Oct 2022 16:00:00 GMT

It is nice to be needed. Unfortunately, we can’t always be there for those that depend on us. Sometimes we enlist the help of someone else. While that can be costly, there is a ray of light. The IRS has provided some of us with a tax break to help cover some expenses. It is called the Dependent Care Credit.

How do you know if you qualify for the Dependent Care Credit? If all of these are true, you qualify:

1) You have a qualifying dependent. A qualifying dependent includes:

a. Your dependent child who is under the age of 13 when the care was provided

b. Your spouse who was physically or mentally incapable of self-care and who lived with you for more than half of the year

c. An individual who was physically or mentally incapable of self-care who lived with you for more than half of the year, and either:

i. was your dependent

ii. could have been your dependent, except that they received a gross income of $4,300 or more

2) You paid expenses to have your dependent cared for so that you could work or look for work

3) You and your spouse, if married, filing jointly, had earned income. This rule does not apply to disabled adults. Also, if you or your spouse attended college full-time for at least five months of the year, this rule does not apply.

4) You are the custodial parent if it is a child (even if your spouse is claiming the child this year, you may still be eligible for this credit)

5) You are not filing a married filing separately return

Examples of places that can provide dependent care are daycares, preschools, babysitters, summer camps (excluding overnight camps), before and after school care, in-home care workers, or other care providers. The key is that the parent (or both parents if married filing jointly) were working or looking for work when the care took place.

If you qualify for the credit, give your tax preparer the name and address of the person(s) or organization(s) that provided the care and how much it cost. Also include their Social Security number or Employer Identification Number.

Child Tax Credit

Fri, 07 Oct 2022 04:00:00 GMT

Aren’t kids great? They keep us young, make us laugh, and give us the best hugs. Plus, they make many of us eligible for the Child Tax Credit at tax time! Anyone with an income of $2,500 and a qualifying child may be eligible.

The Child Tax Credit underwent a significant change in 2021. In 2020 and earlier years, it was a credit of up to $2,000 per child and was claimed on your tax return. But in 2021, the credit amount was increased, and you could get up to half of it before filing your taxes. As it stands, the 2022 credit goes back to pre-2021 rules and will cap out at $2,000 per child again and can only be received by claiming it on your tax return.

Which adorable bundles of joy qualify for the Child Tax Credit? You must be claiming the child on your return, and the child must have a valid Social Security number and must be:

1) Age 16 or under during the tax year

2) Related to you in one of the following ways:

a. son, daughter, or step-child

b. eligible foster child

c. brother, sister, stepsibling, or half-sibling

d. a descendant of one of the above such as a grandchild, nephew, or niece

3) dependent on you for at least half of their financial support

4) living with you over half the year-children who were born or passed away during the year automatically count

5) a U.S. citizen, U.S. national, or U.S. resident alien

The amount of Child Tax Credit you qualify for is based on your income. Taxpayers filing as married filing jointly or qualified widower who make $400,000 or less receive the full amount. All other filers who make $200,000 or less get it. The credit begins to phase out over those income thresholds.

Be sure to let your tax preparer know if there are any changes to your children. If you had a new child added to your family, congratulations, and provide their full name, birthdate, and Social Security number to ensure you get the entire credit you are entitled to get. After all, that child is valuable!

October 17th – The filing deadline for extended individual returns

Sat, 01 Oct 2022 04:00:10 GMT

Aah, October! Autumn is in the air and cooler days are here. But October also ushers in the end of tax season for extended returns. That’s right-extended 1040s are due October 17 ^th (since October 15 ^th is a Saturday this year).

If you have an extended return and it has not been filed yet, let your tax preparer know as soon as possible. All information needed to complete your return must be received in a timely manner or your return may be filed late. Late returns may be subject to interest and penalties. If you file late and owe money then penalties can be as high as 25% of what you owe, plus interest. Let your tax professional know if you are having trouble filing your taxes on time; don’t just ignore the problem and hope it goes away.

So, before you go apple picking and cider tasting do yourself a favor and make sure your income taxes are all taken care of for the year.

$100 Indiana Credit for Teachers

Fri, 30 Sep 2022 15:15:03 GMT

We told you before about a federal deduction that teachers can take, but there is also an Indiana credit they can take! Eligible educators can take up to a $100 credit for unreimbursed expenses for classroom supplies.

The requirements for this credit are similar to those for the federal deduction, with the main difference being that the Indiana credit is for Indiana public school teachers only. Eligible educators include Indiana public school teachers, librarians, counselors, principals, and superintendents. The same expenses, besides development courses and coronavirus supplies, qualify as a federal deduction.

If you meet the requirements listed, be sure to provide your tax preparer with your list of expenses. Also, reach out if you have any questions about your eligibility.

$250 Federal Deduction for Teachers

Fri, 23 Sep 2022 15:15:00 GMT

This blog post informs our outstanding teachers of a deduction they can take advantage of on the federal level!

You can deduct up to $250 for unreimbursed teaching expenses if you are an eligible educator. Eligible educators include K-12 teachers, instructors, counselors, principals, or aides who worked at least 900 hours in the school year for a school that provides elementary or secondary education.

Expenses that qualify for this deduction include development courses, books, supplies, computer equipment, other equipment, and supplementary materials you use in the classroom. This can also include PPE, disinfectant, and other supplies used to prevent the spread of coronavirus. For health and PE classes, only expenses for athletic supplies can be used.

If you meet the requirements listed, provide your tax preparer with a list of these deductible expenses. You can also reach out if you have questions on whether or not you qualify.

Thank you!

September 15th – The filing deadline for extended partnership and S-corporation returns

Thu, 08 Sep 2022 22:31:11 GMT

This is just a friendly reminder that Partnership and S-Corporation income tax returns that have been extended are due September 15th.

If your return has not yet been completed, please reach out to your tax preparer to make sure they have all the necessary information from you.

The penalties for not filing by the due date are most severe.

Thank you!

Nathan Skinner

3Q Estimated Tax Payments are Due!

Thu, 01 Sep 2022 22:30:01 GMT

For those who make estimated tax payments, it is that time again! September 15th is the due date for the third quarter estimated tax payments.

Paying your estimated taxes on time is essential, as you can be subject to underpayment penalties if these payments are not made promptly. Keep track of the amount paid and the date it was paid so it can be reported accurately when we prepare your tax return.

If your tax situation has changed and you believe the estimated payments we gave you are no longer accurate, let your tax preparer know, and they can advise you on the correct amount to pay.

Thank you!

Nathan Skinner

2021 Advanced Child Tax Credit

Thu, 11 Aug 2022 17:57:55 GMT

Parents Claiming Minor Children

If you do not or will not have children under the age of 18 listed on your 2019, 2020, or 2021 tax returns, please ignore this letter. For parents claiming minor children (children under age 18) this email is VERY IMPORTANT!

The first part of this email lets you know our advice and the second part provides a little more information for those of you interested in the rules; currently the advanced child tax credit payments are only for 2021.

Our advice to our clients with minor children:

There are some very recent changes to the tax code, with one of the most significant changes being the advance child tax credit. Families with children under age 18, will receive a monthly “advance” of their child tax credit from July 15th 2021 through December 15th 2021.

We are worried that many people who typically receive refunds will instead owe money with their 2021 tax returns or they will get smaller refunds than they are used to because they already received the tax credit via the new monthly IRS deposits. Also, in certain circumstances, you will have to repay the advance payments if you received more than you were entitled to.

It is IMPOSSIBLE to summarize every scenario in laymen’s terms; thus, we strongly advise people to do 1 of 2 things and we really want all of you to choose Option 1:

Option 1 (Most Preferred): When you get the monthly advance money, SAVE IT until the 2021 tax return is complete. This way, IF you have to pay it back, you’ll have the funds handy. If you don’t need to pay it back, no harm, no foul, and you can then use the funds at your leisure.

Option 2: Opt-out of the advance payments by going to www.irs.gov/childtaxcredit2021. Realize that in certain circumstances, opting out could cause you to lose money.

Again, it is impossible to lay out every example—Option 1 keeps you safe, and it’s what we most strongly advise.

Remember when we do your 2021 income taxes in 2022, we must know exactly how much you were paid July – December 2021 in advanced child tax credits. Please keep careful track of these payments.

A little more about the details relating to the advanced child tax credit payments:

The 2021 child tax credit is for dependent children claimed in 2021 that are under the age of 18 on 12/31/2021. This is for 2021 only.

As long as you are below the income limits the child tax credit is increased to $3,000 per child, note if the child is under six years old on 12/31/2021 the child tax credit increases to $3,600 per child. Income limits are based on filing status. Married filing a joint return gets the full increase of the child tax credit as long as adjusted gross income is less than $150,000 in 2021, note the additional credit phases out from $150,000 to $182,000. Head of Household phases out from $112,500 to $144,500. Single phases out from $75,000 – $107,000.

The IRS is required to pay out 1/12 of the child tax credit July through December of 2021 if:

They look at your last filed income tax return and see if you received a child tax credit on that return.

They will assume that you will get that same amount again and pay 1/12 of this to you each month UNLESS your income is below the previously mentioned thresholds and if your income on the last return is below those thresholds, they will pay you 1/12 of the higher amounts you are due.

They will pay to the parent who claimed them on last filed return.

Remember in all cases we recommend that all of our clients follow option 1 above with no exceptions. Option 1 protects you in all cases. Under the current law you cannot lose by following option 1 and a few of you will win by choosing this option. Option 1 means you do not opt out and you save the money from the advanced child tax credit payments until after we have filed your 2021 taxes in 2022.

By receiving advanced child tax credits most of you will see lower refunds since half of your child tax credits are being paid to you in advance; please expect a lower tax refund if you receive advanced child tax credit payments.

Here is a quick example:

Married couple filed a joint 2020 return in April of 2021 for 2020. Adjusted Gross income was $200,000 and they have two children they claim each year ages 8 and 10. They received a child tax credit of $2,000 per child and received a total child tax credit of $4,000. When they file their 2021 returns, they again made $200,000 of adjusted gross income. They make too much money to get the increase child tax credit amount for 2021 and instead they will get the same $4,000 child tax credit for 2021. That being said it will be paid to them as follows:

They will get a payment of $333.33 from the IRS around July 15th, August 15th, September 15th, October 15th, November 15th, and December 15th 2021.

When we file their 2021 income tax returns, they will only get a child tax credit of $2,000 instead of $4,000 because they already were paid half by the IRS.

If all else is the same their Federal refund will decrease by $2,000 since they already were paid this money.

This client will have to fill out our planner and tell us exactly how much they were paid for the 3rd Stimulus and also how much each advanced child tax credit was and when they received it. All of our clients need to keep great records of these payments.

Have a great summer!

Mike Sylvester, CPA, MBA

College Planning – IN Private/Homeschool Education

Sat, 06 Aug 2022 22:28:06 GMT

Sending your children to private school or homeschooling your children can be expensive. But there is good news! If you are a resident of Indiana and either homeschool your children or send them to private school, you are eligible for a tax deduction on your Indiana tax return. Each qualifying child gets you a $1,000 deduction each year.

Who does Indiana consider a qualifying child? There are a few rules: 1) This deduction only applies to dependents in grades K-12. 2) You must be the biological or adoptive parents or court-appointed guardian to claim the deduction. 3) The child’s school year must last 180 days or more. 4) There were no reimbursements made to you for the children’s education expenses (such as tuition, fees, books, or supplies).

Unfortunately, preschool children do not qualify for the deduction. (However, keep track of preschool expenses because they may be able to be used to get you a federal tax credit.) Also, any child enrolled in a public or charter school and simply taking classes from home does not qualify.

No income limits exist for claiming this deduction; people in all income brackets can qualify.

So, ensure your tax preparer is aware of any private or homeschooled children you may have next time tax season rolls around.

Jennifer Thonert

College Planning – Lifetime Learning Credit

Fri, 05 Aug 2022 22:26:19 GMT

So, you read the American Opportunity Tax Credit (AOTC) blog and feel bummed. There is a student in your household, but they do not qualify for the AOTC. Well, put on your happy face because there is yet another education credit that you may be able to take advantage of! This credit can be taken as many years as you qualify for it and does not factor in how many years of education you already have. What is this excellent credit? It is the Lifetime Learning Credit (LLC). 1098-Ts will be sent out to all people who may be eligible.

If you, your spouse, or your dependent child incurs expenses related to higher education, then you could be eligible. The (LLC) can be taken by anybody who is paying expenses for pursuing higher education. Unlike the American Opportunity Credit, it can be taken for any number of years and can be taken by undergraduates or people seeking education beyond their undergraduate degree. This includes people who are obtaining graduate degrees, educational credentials, or job skill improvement.

The LLC is 20% of the first $10,000 qualified education expenses. That means it can be worth up to $2,000. This limit is per student, not per tax return. Qualified expenses that can be claimed are tuition, fees, or course materials. Room and board do not count. Also, any expenses paid for with grants or scholarships do not count.

The LLC has stricter income limits than the AOTC. Those making $59,000 or less can receive up to the maximum of $2,000. It phases out between $59,000 and $69,000. Once you make $69,000, you no longer qualify for the credit. If you are married and filing jointly, these income limits double.

Always keep your tax preparer informed of any higher education expenses anyone on your tax return pays. They will ensure you get whichever credit(s) will be most advantageous for you.

Jennifer Thonert

College Planning – American Opportunity Tax Credit

Thu, 04 Aug 2022 17:54:44 GMT

Is someone in your household pursuing higher education? Good for you! If you, your spouse, or your dependent child incurs expenses related to higher education, then you could be eligible for the American Opportunity Tax Credit (AOTC).

The AOTC is available to anyone pursuing a degree, who is enrolled at least half time, has not finished the first four years of higher education, has not claimed the AOTC for more than four years, and does not have a felony drug conviction. 1098-Ts will be sent out to all people who may be eligible.

The amount of the credit is 100% of the first $2,000 in qualified expenses and then 25% of the next $2,000 of expenses. This means it caps out at $2,500. This limit is per student, not per tax return. It is a partially refundable credit. This means that $1,000 of the credit can be refunded to you even if your tax liability is zero. Qualified expenses include tuition, fees, books, supplies, and equipment. Room and board do not count for the AOTC. Also, any costs paid for with grants or scholarships do not count.

There are income limits for the AOTC. Those making $80,000 or less can receive up to $2,500. It phases out between $80,000 and $90,000. Once you make $90,000, you no longer qualify for the credit. If you are married and filing jointly, these income limits double.

Make sure to let your tax preparer know if you or anyone else included on your tax return is pursuing higher education and keep track of all your receipts. This is a great tax credit to take advantage of!

Jennifer Thonert

College Planning – Indiana 529 Plans

Thu, 28 Jul 2022 17:53:34 GMT

If you have children, the idea of having to pay for their education can be a daunting one. There is one tax advantageous way to do so. It is called the 529 plan.

A 529 plan is an investment account whose funds are used to pay for higher education. It works similarly to a Roth IRA. You invest your after-tax dollars, and then when the money is ready to be used, you pay no taxes on any of the earnings as long as you use it for higher education expenses or up to $10,000 of private school expenses for grades K-12. The account is in your name, even though you are not the beneficiary, and you retain control over how the money is invested and used, even when your child becomes an adult. Also, your child’s grandparents, relatives, or friends can also contribute to the account.

Most states in the country have at least one 529 plan. You can invest in any state’s 529 plan; you do not need to be a resident. And each state’s 529 plan can be used for higher education in 50 states. However, in most cases, it makes much more sense to invest in your home state’s 529 plan.

What is so great about your home state’s 529 plan? Almost every state offers a tax incentive for each year you contribute to your 529 plan. For instance, Indiana has the CollegeChoice 529 Savings Plan, which gives you a 20% credit, up to $1,000, each year you contribute to the plan. So, if you contribute $5,000 to your children’s 529 plans, you can get a $1,000 credit on your tax return. Those other friends and family who contributed can also get this credit. (They will need the plan number(s) to be able to claim the credit, so please provide them to anyone generous enough to contribute to your 529 plan.) While you do not have to be a resident of Indiana to claim the credit, you must have an Indiana tax liability to make the Indiana credit beneficial. Other states work similarly but with different credit amounts to be earned.

Of course, there can be drawbacks to the 529 plan. Since it is an education savings vehicle, it must be used for higher education or private school. If it is not, the earnings are taxed, and a 10% penalty applies (though there are exceptions to this penalty); additionally, you have to pay back the IN credit. Acceptable expenses to use a 529 plan include tuition and fees for a private K-12 school, tuition and fees at a college, vocational or trade school, room and board fees, meal plans, and books and supplies.

Make sure to let your tax preparer know if you begin investing in a 529 plan. It is a great way to save money now and provide a bit of peace of mind for the future.

Jennifer Thonert

Are You the Victim of Identity Theft?

Thu, 21 Jul 2022 16:44:00 GMT

If you have ever been a victim of identity theft with the IRS, you will automatically receive in the mail every year a one-time PIN # to use when you file your tax return. Several clients give me the PIN letters yearly, and I use that number when I file their tax returns. It is a simple process that adds a layer of security when you file your tax return.

You can now opt into the IP PIN program to avoid being a victim of identity theft. Simply go to get an IP PIN on the IRS website at https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin . You can use the same account if you set up an ID.me account last year to print off your IRS letters. If not, you can create one by clicking on the create an id.me account or come into the SBS office and ask Michelle or Nathan to help you create an account to verify your identity.

Once you have an id.me account, you can register for an IP PIN. Next year when you bring in your tax documents, include the letter you received from the IRS. You will be given a new number every year.

You can access your IP PIN anytime on the id.me website. The six-digit number is only valid for one year, and a new number will be issued yearly. This unique number adds a layer of protection when you file your tax return; we can never be too careful! Several years ago, there was a big scam going around where people would steal your identity and file a fraudulent tax return using your name and social security number and collect your refund for themselves.

The IRS encourages all taxpayers to opt into the IP PIN to help keep their information secure.

Karena Sylvester

The post Are You the Victim of Identity Theft? appeared first on SBS CPA Group, Inc. .

Indiana College Donation Credit

Fri, 15 Jul 2022 18:41:00 GMT

Here we go again, letting you know one more time that there is another way to receive tax credits towards your Indiana tax return liability. If SGOs or NAPs tax credits seem too complicated to contribute or complete, then the Indiana college contribution credit is the one for you.

The Indiana college contribution credit, just like the NAP and SGO credits, gives you a 50% tax credit to apply towards the tax liability at year-end. Unlike the other two, this tax credit does cap your tax credit at $100 for single filers and $200 for MFJ. As long as you contribute to an eligible Indiana college/university, you will be able to receive the tax credit for this. You can download a list of eligible institutions here: List of eligible organizations

Tuition paid is not a contribution and does NOT qualify for this credit.

Organizations that you might not know which qualify:

The main difference that this credit has compared to the two credits in other blogs is that you can also make a non-cash donation and still receive the same tax credit for Indiana state tax liability.

Once the donation is made to the college, the college should send a letter, usually just thanking you for the contributions, and they will include the amount donated and the date it was given to them. You need this letter to prove your contribution when you complete your tax return.

Michael Salazar

The post Indiana College Donation Credit appeared first on SBS CPA Group, Inc. .

Scholarship Granting Organization Tax Credit (SGO Credit)

Fri, 08 Jul 2022 18:40:00 GMT

If you are keeping up with our blog posts, you might have seen that we mentioned one way Indiana payers could save on their state taxes. In the last post, we talked about Neighborhood Assistance Program Tax Credits and what benefits come from that. In this blog, I will be explaining the Scholarship Granting Organizations tax credit.

An SGO is an organization that awards school scholarships to eligible students. Qualified SGOs receive funding for school scholarships from private, charitable donations.

Contributing to an SGO gives you a 50% tax credit for your donated amount. This credit works precisely like the NAP tax credits we covered before, but for the SGO, no minimum amount is required to be donated to receive the credit.

Please remember that this results in a state income tax; it cannot be used to offset your local county income tax.

You MUST contribute your funds to participating SGO. A list of organizations and more specifics regarding the program can be found here: https://www.in.gov/doe/students/indiana-choice-scholarship-program/school-scholarships/ .

You must tell the organization that this contribution is for the SGO credit. They MUST give you the appropriate donor contribution form, including certification codes.

Michael Salazar

The post Scholarship Granting Organization Tax Credit (SGO Credit) appeared first on SBS CPA Group, Inc. .

Indiana Neighborhood Assistance Program Credit (NAP Credit)

Fri, 01 Jul 2022 18:21:00 GMT

Saving on your year-end taxes can sometimes be confusing and hard to figure out. People think that the more money you make, the more taxes you will have to pay, but that is not always the case. Many Hoosiers do not know they can save on taxes by having tax credits apply to them. One credit that Indiana taxpayers can take advantage of is the Neighborhood Assistance Tax Credit.

Funds are used for affordable housing, counseling, child care, educational assistance, emergency assistance, job training, medical care, recreational facilities, downtown rehabilitation, and neighborhood commercial revitalization. All projects must benefit economically disadvantaged areas and persons.

The Neighborhood Assistance Tax credit gives you back 50% of any dollar amount in tax credits to use towards your IN state tax liability. The minimum contribution amount is $100.00, which results in a $50 credit. The maximum contribution amount is $50,000, which results in a $25,000 credit.

Please remember that this results in a state income tax; it cannot be used to offset your local county income tax.

You MUST contribute your funds to participating organizations with the NAP program. A list of organizations and more specifics regarding the program can be found here: https://www.in.gov/ihcda/program-partners/neighborhood-assistance-program-nap/ .

You must tell the organization that this contribution is for the NAP credit. They MUST give you the appropriate donor contribution form.

Michael Salazar

The post Indiana Neighborhood Assistance Program Credit (NAP Credit) appeared first on SBS CPA Group, Inc. .

SEP IRA for the Self-Employed

Fri, 24 Jun 2022 19:58:00 GMT

Imagine living the good life; being your own boss and business is good. But even after you retire, you still want the good life. Investing in a SEP IRA is one way you may be able to keep the good times rolling.

SEP stands for Simplified Employee Pension. It allows self-employed people to invest up to 25% of their adjusted wages in a SEPl IRA. It is great because you can invest far more money in good years than a regular traditional IRA (for 2022, the limit is $61,000), and in leaner years, you can feel free to invest less or even nothing. You also get a dollar-for-dollar tax deduction on your return.

Like other retirement plans, a SEP can be used to help lower your income tax liability. The due date for contributions is the same as for that year’s tax return. You can determine your tax liability before making any contributions and then decide what you want to contribute based on how much you owe.

Withdrawals from SEPs are treated just like traditional IRA distributions. As long as you leave the money in the account until retirement, it will grow tax-free. And you can invest in almost any type of stock, bond, or mutual fund you want. But because you receive an immediate tax benefit when you invest the money, the distributions are taxable. If the owner is not age 59 ½ at the time of the withdrawal, there will be a 10% penalty.

So if you are a self-employed individual with money to invest, consider investing in a SEP as part of your long-term plan.

Jennifer Thonert

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Backdoor Roth IRAs

Sat, 04 Jun 2022 20:13:00 GMT

The backdoor Roth IRA-its name makes it sound sneaky. It sounds stealthy. It sounds like a way to beat the system. But what is it really?

High-earning taxpayers are not allowed to contribute to a Roth IRA—why? That’s an excellent question for the government. Backdoor Roths are a legal way to circumvent this. There is nothing sneaky about it!

To do complete a backdoor Roth, you:

You have to be careful; the above only works when you have 0 funds in:

If you complete a backdoor ROTH and have money in these types of accounts, the backdoor Roth WILL have tax consequences.

Why, oh why, would anyone go through all the trouble to create a backdoor Roth? For one thing, Roth IRAs give you tax-free distributions. This is desirable if you think you will have a higher income in the future. They also do not have required minimum distributions (RMDs). All of your money can stay invested for as long as you want.

If you would like to do this, keep in mind that all transactions are considered to occur in the year they happened. Unlike regular contributions to IRAs, which may be done by April 15 ^th of the following year, all backdoor Roth activity must be done by the end of the calendar year.

While there is nothing sneaky about the backdoor Roth IRA, it is under fire as it does provide wealthy taxpayers with potentially significant tax savings. Had the Build Back Better Act been signed into law, it would have significantly changed the rules regarding backdoor Roth IRAs. If you are interested in creating a backdoor Roth IRA, you may want to keep this in mind.

Jennifer Thonert

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Roth IRAs

Sat, 04 Jun 2022 19:52:00 GMT

Just like Britney Spears, Roth IRAs have been popular since 1998. But with all the different types of IRAs out there, you could go crazy trying to figure out which one is right for you. Read on to help yourself decide if Roth IRAs are right for you.

A Roth IRA is retirement savings account that you put after-tax dollars into. With a Roth, there is no immediate tax benefit. Instead, it is delayed gratification. The tax savings occur when you retire.

Like a traditional IRA, a Roth IRA can be used as a tax planning tool. The filing deadline to contribute to either type of IRA is April 15 of the following year. For example, a contribution for 2022 must be made by April 17, 2023 (April 15, 2023, is on a Saturday). .

Another way Roth and traditional IRAs are the same is that they both require you to have earned income to invest. Earned income comes from working for someone or working for yourself. It does not include interest or any other form of investment income.

To calculate the IRA contribution limits that apply to both traditional and Roth IRAs, you must look at all your contributions in total. For 2022, each individual can contribute up to $6,000 ($7,000 if you are 50 or older) before income limitations. So, if you contribute $4,000 to a traditional IRA, you may only contribute $2,000 to a Roth IRA. Income limitations begin at $109,000 for married couples and $68,000 for single or head of household filers.

One of the perks of Roth IRAs is that if you need the money you invested in it before you reach retirement age, you can take it out without incurring any taxes or penalties. This only applies to the amount of money you put in the account, not the money earned. If you pull out more than the principal that you put in, the funds will be taxed, and a 10% penalty will apply in most cases.

Where the Roth shines, though, is after you retire. As long as you own the account for at least five years and reach 59 ½, all the withdrawals are tax and penalty-free! In addition, Roth IRAs are not subject to required minimum distributions, so your money can stay invested for as long as you like.

Jennifer Thonert

The post Roth IRAs appeared first on SBS CPA Group, Inc. .

Traditional IRAs

Sat, 04 Jun 2022 19:47:00 GMT

So, you have some extra money, and someone told you that you should put it in a traditional IRA. But what exactly is a traditional IRA, and why would you want to invest in one?

A traditional IRA is a retirement savings account that allows you to contribute pre-tax money to it. If you contribute to an IRA through your job, your contributions will not be subject to income tax. If you contribute to one personally, the contribution amount is deductible from your taxable income on your tax return. Therefore, it is a tax break for the year you contributed to it.

A traditional IRA can be used as a tax planning tool. The filing deadline to contribute to a traditional IRA is April 15 of the following year. For example, a contribution for 2022 must be made by April 17, 2023 (April 15, 2023 is on a Saturday). If you find that once your tax return is prepared, you are paying more income tax than you would like to be, contributing to an IRA and designating it as being for 2022 can reduce how much you owe.

To contribute to a traditional IRA, you must have earned income. Earned income comes from working for someone or working for yourself. It does not include interest or any other form of investment income.

IRA contribution limits apply and change based on how much income you make. For 2022, each individual can contribute up to $6,000 ($7,000 if you are 50 or older) before income limitations. Income limitations begin at $109,000 for married couples and $68,000 for single or head of household filers.

As long as you leave the money in the account until retirement, it will grow tax-free. And you can invest in almost any type of stock, bond, or mutual fund you want. However, if you need the money sooner than you thought, a 10% early withdrawal penalty will usually apply to any amount you take out before age 59 1/2.

And as we know, what goes up must come down, and frequently in the tax world, what is not taxed now is taxed later. This means that withdrawals from a traditional IRA will be taxed during retirement. But for most people, their income is less during retirement than during their working years, so that the income will be taxed at a smaller tax rate. So, if you are expecting to make more money now than you will in retirement, a traditional IRA may be right for you. If you invest in one, make sure to let your tax preparer know that you did so and the dollar amount when they get ready to prepare your next tax return.

Jennifer Thonert

The post Traditional IRAs appeared first on SBS CPA Group, Inc. .

2Q Estimated Tax Payment are Due

Wed, 01 Jun 2022 19:38:00 GMT

For those who make estimated tax payments, it is that time of year again! June 15 ^th is the due date for second-quarter estimated taxes.

Anyone who makes significant amounts of money that do not have taxes withheld from it should consider making estimated payments. This usually occurs when people are self-employed or have considerable investment income from stock sales or business investments. But it can be caused by any taxable event, such as winning at the track.

It is essential to pay your estimated taxes on time, or Uncle Sam can get upset. Even if you pay all the taxes you owe before the end of the year, you can still be hit with underpayment penalties if the taxes were not paid promptly. If you owe $5,000 in income taxes for the year, you can’t just pay it all on December 31 ^st . (Income taxes withheld from W-2s are always considered paid on time.) Keep track of the amount and date of your payment to be reported accurately when your tax return is prepared.

So, use this time to make sure that you paid your first quarter taxes (and if not, pay them now) and pay your second-quarter estimates. You will be thanking yourself when you get your tax return back next year. And if your tax situation has changed and you believe the estimates given to you are no longer accurate, let your tax preparer know, and they can advise you on what you should pay.

Jennifer Thonert

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Memorial Day

Fri, 27 May 2022 17:09:00 GMT

In observance of Memorial Day, SBS will be closed Mon., May 30th.

The post Memorial Day appeared first on SBS CPA Group, Inc. .

Series I Savings Bonds

Mon, 16 May 2022 19:09:00 GMT

I cannot believe I just bought Series I Savings Bonds (I Bonds); however, my wife Karena and I just each purchased I Bonds. I Bonds are a safe way to save during years inflation is high. Had I known about I Bonds back in December of 2021, we would have bought some then as well as now.

I Bonds have not been popular over the last twenty-five years since inflation has been low. Now that inflation is extremely high, I Bonds make sense for many people who have money in bank accounts and are not earning much interest.

I Bonds are bought through US Treasury Direct. They are currently accumulating 9.62% interest and can be purchased at this rate through October 2022. Interest is accumulated semiannually. The new rates are calculated semiannually. You can only buy $10,000 per year per person. There is a way you can purchase an additional amount with your Federal tax refund; however, the IRS is struggling to get this done efficiently right now. I would recommend against using your Federal refund to purchase I Bonds.

When paid, the interest is taxable from a Federal standpoint and not by Indiana or Allen County. There are restrictions on when you can sell I Bonds, and you should carefully consider the restrictions. I Bonds earn interest for 30 years unless you cash them first. You must wait at least one year to cash out I Bonds. You lose the previous three months of interest if you cash them out before five years. Unless inflation continues to be this high, we will likely sell our I Bonds sometime between the one and five-year point.

Right now, high-yield savings accounts in Fort Wayne, Indiana, pay .8% interest or less. Certificates of Deposit (CDs) pay 1.75% – 2.25% if you purchase 2 – 5 year CDs.

You may want to consider purchasing I Bonds if you have the money you want to keep in a safe place similar to a bank and you are sure you will not need the money for a year or longer.

Those of you with Financial Planners should discuss this with your Financial Planner. Those of you with a regular banker should discuss this with your banker.

Mike Sylvester, CPA

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IN Automatic Refunds – $125 ($250 MFJ)

Wed, 11 May 2022 17:35:00 GMT

Are you one of the many Hoosiers that does not know why you received a refund of $125? You probably just saw the deposit or check and did not question it since money coming into your account is always good. Don’t worry! That was not a mistake! Every taxpayer in Indiana should have received $125 through direct deposit or check. Here’s why…

At the end of Indiana’s fiscal year, it had almost $4 billion in reserves. A law in this state requires Indiana to pay back some of that money if its reserves are 12.5% of the general fund or higher. This year IN is returning $545 million to Hoosiers.

Every taxpayer that filed a 2020 tax return should receive a $125 ($250 if MFJ) refund from IN. If bank information was provided on the return, you should expect a direct deposit. If no bank information was provided, then a check will be issued. These refunds should be coming around May-June (checks could probably take longer). This is NOT a refund for your tax return, and you should definitely still file your 2021 tax return if you have not done so.

There might be a chance your refund does not get to you and will be withheld for some reason. Maybe you owe child support or have unpaid taxes to the federal or state, but if that is the case, IN will send you a letter explaining why you did not receive the refund.

Michael Salazar

The post IN Automatic Refunds – $125 ($250 MFJ) appeared first on SBS CPA Group, Inc. .

Mike Sylvester, CPA quoted in Forbes article regarding potential Married Filing Separately savings!

Tue, 26 Apr 2022 13:02:00 GMT

Our very own Mike Sylvester was quoted in another national news article, this time in a Forbes article by Peter J Reilly. Many of our married clients were encouraged to split their returns this year that never had before. This is largely due to the recovery rebate and child tax credits. As Mike says “Does one idiot in Congress (either party) have any idea that this is going on?”.

According to Peter, “Mike gets the prize for the largest reported savings from going separate”. At the time of writing our largest MFS savings was $13k. Big commercial preparers are not checking for this. Peter reached out to H&R Block and is still waiting on them to get back to him.

We are proud to be one of the small local firms that are putting in the time and effort to calculate whether or not you will benefit from filing your returns separately. We did firmwide training on this and are checking it on every return!

Read the article from Forbes here if you are interested: https://tinyurl.com/ypbsw5ex

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SBS will be returning to normal business hours

Mon, 18 Apr 2022 13:48:00 GMT

As of April 19th, 2022, SBS will be returning to normal business hours. Hours of operation are Monday – Friday, 8:30am to 5:00pm.

The post SBS will be returning to normal business hours appeared first on SBS CPA Group, Inc. .

Michael Sylvester, CPA quoted in national Bloomberg article concerning new IRS International K2/K3 reporting rules!

Sat, 12 Feb 2022 16:09:00 GMT

Bloomberg is a leading international news agency and Mike was very happy to share his thoughts on these reporting rules with Michael Rapoport, the author of this article. The Bloomberg article with Mike’s quotes highlighted is linked here.

Bloomberg

The post Michael Sylvester, CPA quoted in national Bloomberg article concerning new IRS International K2/K3 reporting rules! appeared first on SBS CPA Group, Inc. .

Tax Season Hours

Fri, 28 Jan 2022 19:39:00 GMT

Tax season begins!

If you have everything please stop by the office and drop everything off to Nikkie.

Our tax season hours will start on Monday January 31 ^st , 2022. We will be open 8:30 AM to 6:00 PM Monday through Friday and 9:00 AM to 1:00 PM on Saturdays. These hours will remain in place until April 15 ^th , 2022.

We are looking forward to helping all of our amazing clients this year and we hope to see you soon.

SBS CPA Group

The post Tax Season Hours appeared first on SBS CPA Group, Inc. .

Tax Season Hours

Fri, 28 Jan 2022 19:32:00 GMT

Starting Jan. 31st thru April 18th, our hours will be Mon.-Fri. 8:30am to 6pm and Sat. 9am-1pm.

The post Tax Season Hours appeared first on SBS CPA Group, Inc. .

How to see if you have Indiana unclaimed property

Wed, 29 Dec 2021 14:24:00 GMT

The State of Indiana has over $800 million in unclaimed funds that come from over 8 million accounts! Any financial asset with no activity by its owner for an extended period of time is considered unclaimed property.

Many of our clients have unclaimed property and I think it is worth ten minutes of your time to search for you, your friends, and your family.

To check and see if you have unclaimed property, follow these steps.

Step 1

Go to this link:

https://bit.ly/32DqeCG

This is the website where you can go and search for unclaimed property. There are different fields provided to make your search easier. You can claim any unclaimed property from this website.

Step 2

Once you do so, you will receive an email that looks like this:

Claim #####

Dear Claimant:

Thank you for contacting the Office of the Indiana Attorney General Unclaimed Property Division.

You recently initiated a claim ###### with our office. In order for us to process your claim, we must receive additional documentation. Please refer to the attached claim form for details.

Please upload all documentation listed on the form via our secure website by clicking on a link they will email you. Please note, at this time we are not accepting claims submitted to our office via email. If you are unable to upload the documentation, you may mail it to the address listed on the claim form.

If you have any questions, you may contact our office at 1-866-462-5246.

Sincerely,

Unclaimed Property Division

Office of the Indiana Attorney General

You will also receive an attachment with the email that tells you what documentation is required

Using the link in the email, you upload the requested documentation to their website.

I believe they will send you a check once your claim is processed. Their website says to allow up to 90 days for the processing of your claim.

If you have questions about this process, you should contact the Office of the Indiana Attorney General at 1-866-462-5246.

Mike Sylvester, CPA, MBA

The post How to see if you have Indiana unclaimed property appeared first on SBS CPA Group, Inc. .

Christmas Eve and New Year’s Eve

Wed, 22 Dec 2021 17:06:00 GMT

SBS CPA Group will be closed Dec. 24th and Dec. 31st to allow our staff time to spend with their families.

We wish our clients and their families a very Merry Christmas and a Happy New Year!

The post Christmas Eve and New Year’s Eve appeared first on SBS CPA Group, Inc. .

Update on Karena Sylvester, CPA

Mon, 13 Dec 2021 18:04:00 GMT

Karena Sylvester, our founding Partner, experienced multiple strokes the morning of October 13 ^th , 2021. The information we put out previously was based on the most likely case, but her recovery has been amazing and close to best case. It has been exactly two months and she is working in the office in a very limited capacity as you read this email. Karena’s clients will be handled by a combination of Mike Sylvester, Brent Bracht, Jennifer Thonert, and Karena herself. If you send us an email, we will let you know which of us is assisting you.

Karena does NOT want to talk about what happened and we ask all of our clients to respect her wishes. As is common with most stroke victims Karena is more emotional than normal and thinking about what happened can make Karena cry and is not good for her recovery and it is not good for Karena herself. Please respect Karena’s wishes and do not discuss her recovery with her; instead, just discuss business.

We are hoping that she will be handling most or all of her own clients by the end of April 2022. This will be a process and most of you will deal with Mike or Brent through at least the end of March, 2022.

Many of you sent flowers, gifts, get well cards and sent her emails and Karena and I appreciate all of them. In fact, almost 150 emails were sent asking about her condition and wishing her well.

Karena wants to do as many of her own client’s tax returns as possible between April 16 ^th and July 31 ^st , 2022. We are hoping many of our clients will be willing to have their income tax returns extended this year and if you are willing to have your tax returns extended, please send Mike Sylvester an email at Mike.Sylvester@sbscpagroup.com and please send me that email as soon as possible.

This has been a difficult time for all of us at SBS CPA Group and we appreciate your patience and support.

Mike Sylvester, CPA

The post Update on Karena Sylvester, CPA appeared first on SBS CPA Group, Inc. .

Happy Thanksgiving

Mon, 22 Nov 2021 14:12:00 GMT

SBS CPA Group with be closed Thursday, November 25th and Friday, November 26th to allow our staff time to spend with their families.

The post Happy Thanksgiving appeared first on SBS CPA Group, Inc. .

Update regarding Karena Sylvester, CPA

Fri, 22 Oct 2021 21:13:00 GMT

This is hard for me to write; however, everyone needs to know what is going on with Karena Sylvester, CPA. She has worked with some of you for over twenty years.

I took Karena to the Parkview Emergency Room at 5 PM on Sunday October 10 ^th because she had stroke symptoms. On Wednesday October 13 ^th she suffered additional strokes. Parkview did emergency brain surgery on Wednesday, October 13 ^th . This surgery was very successful and the clot was removed. Karena has shown noticeable improvements since the surgery was performed.

Karena’s condition can and will likely change. I am going to do everything I can to ensure the best possible outcome for my wife. We cannot predict the long-term future; however, here is what I am expecting based on conversations with a dozen people after Parkview redid all of the tests while Karena is in the ICU on Thursday October 14 ^th .

I think she will be moved to The Randallia Rehabilitation Center Saturday October 16th.

I expect her to undergo three hours of physical, occupational, and speech therapy every day. I think she will be there 7-10 days.

I expect her to recover from home through April 15th, 2022.

Karena will not be working until April 16th, 2022. She may or may not be able to return to work and I will keep you updated on her status. There is just no way to tell at this point but there is a good chance she will be able to work again somewhere between the 6- and 12-month point.

Our Partner Brent Bracht as well as all of our staff did an amazing job and they managed to get everything handled that needed to be handled by the October 15 ^th deadline. They worked a lot of hours and they are awesome!

Karena’s Doctor and Therapists have told me that Karena will be overwhelmed in the first portion of her recovery and that she needs to be left alone.

We ask the following:

Karena has a long road to recovery; however, she is a very determined woman and I have faith that she will fully recover in 6-12 months. Karena puts a lot of value in her work and she loves her clients. She will work very hard to recover fully and return to work.

If you need something from us and you regularly work with a member of our staff (Shane Lengerich, Michael Salazar, Michelle Felger or Nathan Skinner) please call us at 260-407-5000 and ask for them or email them. If you only work with Karena then please call us at 260-407-5000 and ask for Brent or Mike. You can also email us:

Mike@sbscpagroup.com

Brent@sbscpagroup.com

Mike Sylvester, CPA

The post Update regarding Karena Sylvester, CPA appeared first on SBS CPA Group, Inc. .

Labor Day

Fri, 03 Sep 2021 16:20:00 GMT

SBS will be closed on Monday, 9/6 in observance of Labor Day.

The post Labor Day appeared first on SBS CPA Group, Inc. .

2021 Advanced Child Tax Credit

Wed, 30 Jun 2021 00:30:00 GMT

Parents Claiming Minor Children

Our advice to our clients with minor children:

There are some very recent changes to the tax code, with one of the most significant changes being the advance child tax credit. Families with children under age 18, will receive a monthly “advance” of their child tax credit from July 15 ^th 2021 through December 15 ^th 2021.

It is IMPOSSIBLE to summarize every scenario in laymen’s terms; thus, we strongly advise people to do 1 of 2 things and we really want all of you to choose Option 1:

Option 1 (Most Preferred): When you get the monthly advance money, SAVE IT until the 2021 tax return is complete. This way, IF you have to pay it back, you’ll have the funds handy. If you don’t need to pay it back, no harm, no foul, and you can then use the funds at your leisure.

Option 2: Opt-out of the advance payments by going to www.irs.gov/childtaxcredit2021. Realize that in certain circumstances, opting out could cause you to lose money.

Again, it is impossible to lay out every example—Option 1 keeps you safe, and it’s what we most strongly advise.

Remember when we do your 2021 income taxes in 2022, we must know exactly how much you were paid July – December 2021 in advanced child tax credits. Please keep careful track of these payments.

A little more about the details relating to the advanced child tax credit payments:

The 2021 child tax credit is for dependent children claimed in 2021 that are under the age of 18 on 12/31/2021. This is for 2021 only.

The IRS is required to pay out 1/12 of the child tax credit July through December of 2021 if:

They look at your last filed income tax return and see if you received a child tax credit on that return.

They will pay to the parent who claimed them on last filed return.

Remember in all cases we recommend that all of our clients follow option 1 above with no exceptions. Option 1 protects you in all cases. Under the current law you cannot lose by following option 1 and a few of you will win by choosing this option. Option 1 means you do not opt out and you save the money from the advanced child tax credit payments until after we have filed your 2021 taxes in 2022.

Here is a quick example:

They will get a payment of $333.33 from the IRS around July 15th, August 15 ^th , September 15 ^th , October 15 ^th , November 15 ^th , and December 15 ^th 2021.

When we file their 2021 income tax returns, they will only get a child tax credit of $2,000 instead of $4,000 because they already were paid half by the IRS.

If all else is the same their Federal refund will decrease by $2,000 since they already were paid this money.

This client will have to fill out our planner and tell us exactly how much they were paid for the 3 ^rd Stimulus and also how much each advanced child tax credit was and when they received it. All of our clients need to keep great records of these payments.

Have a great summer!

Mike Sylvester, CPA, MBA

The post 2021 Advanced Child Tax Credit appeared first on SBS CPA Group, Inc. .

Memorial Day

Tue, 25 May 2021 20:39:00 GMT

SBS CPA Group will be closed 5/31/21 in observance of Memorial Day.

The post Memorial Day appeared first on SBS CPA Group, Inc. .

Returning to normal business hours

Fri, 16 Apr 2021 17:59:00 GMT

Starting May 3rd, SBS will be returning to normal business hours – Monday through Friday, 8:30 – 5:00.

The post Returning to normal business hours appeared first on SBS CPA Group, Inc. .

February 9, 2021 Update

Fri, 12 Feb 2021 16:02:00 GMT

February 9, 2021

A few quick thoughts from SBS CPA Group

This is the second email of 2021 and it is a much shorter email. The prior emails were much longer and explained various new tax law changes.

Individuals

Once you have everything gathered for your 2020 income taxes please drop everything off including a filled-out tax planner (You have to fill out at least page one of the tax planner). Please do not drop anything off until you have everything. Once you have everything please drop off fairly quickly because if you drop off now you can still beat the rush.

The largest problem we are having is in regards to the stimulus payments. We need you to tell us exactly how much you were paid for round 1 and then we also need you to tell us exactly how much you were paid in round 2, and round 2 was received in January of 2021. We must have both numbers and they cannot be combined into one number. The 2 ^nd stimulus payment paid in January of 2021 is reported on your 2020 income tax returns.

If you collected unemployment, please download your 1099-G form from the Department of Workforce Development website, and give it to us.

Businesses

Please make sure you tell your CPA when the SBA tells you that your round 1 PPP loan was forgiven, we must have this information.

Far fewer businesses qualify for the 2 ^nd round of PPP loan funding; however, about 25% of our business clients might qualify for this funding. Please contact your CPA if you have questions about this 2 ^nd round of PPP loan funding. Congress does not expect the 2 ^nd round of PPP loan funding to be used; however, some of the banks are saying the money is going fast. About 73 billion dollars in round 2 PPP loans have been distributed and the program has about 202 billion dollars left in it. If you want to apply for a 2 ^nd round PPP loan please contact your CPA this week. If you get a 2 ^nd round PPP loan please tell your CPA the amount of the loan and exact date you got the money.

As discussed in prior emails the rules surrounding the 2020 Employee Retention Credit (ERC) have changed. This is a complicated program and only a few of our clients will qualify for the 2020 ERC. That being said, we have a few clients who will be eligible for hundreds of thousands of dollars of ERC credits. If you have any quarter in 2020 where your gross receipts (business revenue not counting PPP loans and EIDL advances) decreased by more than half please contact your CPA. If your business was shut down for an extended period due to the Covid-19 lockdown and you paid your employees wages contact your CPA.

There is an expanded ERC for 2021 that will be easier to qualify for and is a much larger credit. Our business clients really need to look at their 1 ^st quarter 2021 gross receipts in early April. You will qualify for a much larger Employer Retention Credit if either of the following is true for your business for Q1 2021:

Your Q1 2021 gross receipts are more than 20% less than your Q1 2019 gross receipts OR

Your Q4 2020 gross receipts are more than 20% less than your Q4 2019 gross receipts

You will qualify for the ERC for Q2 2021 if:

Your Q2 2021 gross receipts are more than 20% less than your Q2 2019 gross receipts OR

Your Q1 2021 gross receipts are more than 20% less than your Q4 2020 gross receipts

We are currently working on income taxes primarily; however, we are also looking at our clients as we do their income taxes to see if they qualify for the 2020 ERC. Most of our clients do NOT qualify for the 2020 ERC; however, the few who do will get hundreds of thousands of dollars of credits.

Please watch your gross receipts in the first 2 quarters of 2021 and contact your CPA if you think you qualify for ERC 2021. This credit can be as high as $7,000 per employee in both the 1 ^st and 2 ^nd quarters of 2021. Currently the program ends June 30 ^th , 2021. Businesses that qualify could get as much as $14,000 per employee just for the 1 ^st two quarters of 2021.

If you know other business owners please feel free to forward this email to them and feel free to forward our prior emails to them. There is a lot of help available for businesses due to Covid-19.

Mike Sylvester, CPA

The post February 9, 2021 Update appeared first on SBS CPA Group, Inc. .

Tax Season Hours

Thu, 04 Feb 2021 12:43:00 GMT

From February 1 through April 15, SBS office hours will be:

Mon-Fri 8:30-6:00

Sat 8:30 – 12:00

The post Tax Season Hours appeared first on SBS CPA Group, Inc. .

Message Regarding Individual Tax Returns and Brief Update on More PPP Loans

Wed, 20 Jan 2021 16:51:00 GMT

Dear clients,

We sent out an important email back on December 29 ^th , 2020. We attached our tax planner and client letter. We believe this went into the junk email of some of our clients. This was a long and detailed email concerning tax law changes made on December 27 ^th , 2020. We suggest you go back and retrieve this email and read it; further, we recommend you white list us so that you get all future emails.

This email is split into two different sections. The first section is for individual clients and this section is by far the larger section of this email. The second section is for business owners.

Individuals

When should you drop off your tax return information to us?

We hope you drop everything off as soon as you have everything we need to prepare your taxes. Please do not send us anything until you have everything we need. You can drop everything off to our office (we have a 24 hour drop box), you can mail it to us, or your can send your CPA an email and they can send you a link so you can send us information via our secure web portal.

Stimulus payments.

There were two rounds of Stimulus payments and the most recent round came out in January of 2021. We must know exactly how much you received in Stimulus payments for each round. The IRS says they have sent each of you a Notice 1444 for the 1 ^st round payment and a Notice 1444A for the 2 ^nd round payment. Please be very sure you give us these notices and if you do not have them that you make it very clear on your tax planner exactly how much you received in both 1 ^st and 2 ^nd round Stimulus payments.

If you did not receive the amount of round 1 and round 2 Stimulus you were supposed to please make that very clear on your tax planner. If you returned a stimulus payment to the IRS due to a death please make sure we know that as well.

What if I did not get enough in Stimulus Payments?

If the IRS did not pay you enough in Stimulus payments this will be handled on the 2020 income tax returns we handle for you.

Unemployment.

Many of our clients received unemployment payments in 2020. This is taxable income. If you received unemployment income you must give us your 1099G form. You can print this off from your Indiana Department of Workforce Development Uplink account or they will mail you one on or before January 31 ^st , 2021.

When will the IRS process your income tax returns?

The IRS is not going to start processing income tax returns until February 12 ^th , 2021. This is by far the latest the IRS has started processing tax returns in modern history. We can and need to electronically file a lot of returns before then; however, the IRS is not going to start processing them until February 12 ^th , 2021. Please drop everything off as soon as you have everything.

Will you get a tax refund in 2021?

We will not know until we do your income taxes; however, we are sure that fewer of our clients will get refunds this year for two reasons. The first and largest reason is many of our clients collected unemployment and unemployment is taxable income. The second reason is a lot of our clients either did Roth Conversions or pulled extra money out of retirement. We expect more of our clients to owe than normal.

If you are due a refund when will you get it?

The IRS is telling people that refunds will be much slower this year since the IRS is not going to start processing returns until February 12 ^th , 2021. This year it is more important than ever that you get your refunds through direct deposit; remember if you want direct deposit you must fill out your bank information on our tax planner or give us a voided check when you drop everything off. You will get your refunds faster through direct deposit and I am sure most of us have experienced mail delays over the last few weeks.

When you pick up your returns ask whoever gives them to you when they expect you to get your refunds. If you do not get your refund when expected the only way you can determine when you should get the refund is for you to go to the IRS website and use the “Where is my Payment” tool. To use this tool you need:

The first Social Security number listed on the return (Taxpayer).

Your filing status, for example Married Filing Joint, Single, Head of Household, Married Filing Separately.

Your exact refund amount.

You should not use this tool unless a week has passed since you signed all of our forms. You can only call the IRS if it is 21 days after we e-filed your returns and you should expect very long delays if you call the IRS. We suggest you use the “Where is my Payment” tool on the IRS website.

90% of taxpayers receive their refunds within 21 days of e-filing their returns if they use direct deposit. If you have your refunds mailed to you most of you should expect the IRS to put the checks in the mail within 28 days of us e-filing your returns.

Very few people will get IRS refunds even through direct deposit before March 5 ^th , 2021. If you get everything to us early you may be able to get your refund on February 27 ^th , 2021 if you use direct deposit.

Businesses

PPP Loans Round 1.

If you applied for one of these loans please make very sure your CPA knows that you received one and exactly when it was forgiven and how much was forgiven.

PPP Loans Round 2.

The second round of PPP loans opens on Tuesday January 19 ^th , 2021. This loan is intended for struggling businesses and we discussed the qualifications in detail in the December 29 ^th email.

If you need more information about this please call your CPA or better yet send them an email.

Covid-19 sick pay.

If you or an employee is sick with Covid-19 or self-quarantining with Covid-19 please give your CPA a call or better yet send them an email.

Mike Sylvester, CPA, MBA

The post Message Regarding Individual Tax Returns and Brief Update on More PPP Loans appeared first on SBS CPA Group, Inc. .

December 28th, 2020 New Legislation Update

Tue, 19 Jan 2021 22:49:00 GMT

December 28th, 2020

Important email sent to all clients of SBS CPA Group, 8 ^th and final email of 2020

Merry Christmas and Happy Holidays:

The newest legislation that just became law will affect at least 90% of our clients and we really suggest you at least skim this email.

Congress passed a 5,593-page bill late at night on December 21 ^st , 2020 and the contents of this bill were kept secret until six hours before the first vote. This bill will have a large effect on 90% of our clients and on all public accounting firms. Please realize we are entering our busiest time of year, and we still have to meet all of our normal deadlines. We will need all of you to understand that it is going to take us longer to return your phone calls, return your emails, and to turn around all of the work we do for you.

The 5,593-page bill just became law on the evening of December 27 ^th , 2020. There will be minor changes and interpretations to the bill over the next couple of weeks. This email summarizes our current understanding of the Bill and all of us need to understand the Bill itself will be changed with technical corrections, and the Internal Revenue Service and the Small Business Administration will interpret parts of it differently than Congress.

If you want us to send emails like this to someone else or to another email address you have please send Shane Lengerich an email at Shane@sbscpagroup.com and please tell him exactly which email addresses you want him to add to our email list. If you do not want to get these emails please use the unsubscribe feature at the bottom of this email and in this case please do not send Shane an email.

This email is split into two sections. The first section is for everyone and is one third of the rest of this email and the second section is just for those people who own a business. This is a very long email because there are a lot of changes in this Bill we want you to be aware of.

First section for individuals.

Stimulus payments.

Another round of Stimulus payments are coming. If you got a stimulus payment the first time you will get another one. The 2 ^nd stimulus payment will be $600 for each taxpayer and $600 for each spouse and an additional $600 for every dependent under the age of 17. Remember to save the documentation the IRS sends you with the payment because we will need a copy of every Notice 1114 the IRS sends you (1 ^st round and 2 ^nd round). When you drop off your taxes tell us exactly how much you received for each stimulus payment and exactly when you received it.

The Stimulus payments are not taxable income to you. The IRS is guessing how much you should get based on previously filed tax returns. If the IRS pays you too much money you will not have to return the extra money paid to you. If the IRS did not pay you enough money, we will handle the additional money you are due on your 2020 income tax returns and you will get a higher refund or owe less tax depending on your personal situation.

The IRS is likely to send stimulus payments by direct deposit between now and 1/15/2021. They will use the same method of payment as they used last time. If you got a paper check last time you will get one this time and your check should be mailed by January 15 ^th , 2021. If you do not get a stimulus payment do not worry about it; instead, we think it will be handled when we file your income tax returns which are currently due to be filed by April 15 ^th , 2021. Right now, it looks like the IRS may stop sending out stimulus payments on January 16 ^th , 2021 and force them to be handled on your 2020 income tax returns we are handling for you instead. This is going to complicate things; however, it seems to be what Congress wants to happen. This section of the Bill is not clearly written and it is the section of the Bill we are least sure about.

Unemployment payments

We do not handle unemployment claims and you should direct your questions to the Indiana Department of Workforce Development (DWD). DWD is overwhelmed and this new law will likely cause them even more problems. Even though we do not deal with unemployment claims we want to make sure you understand what has happened with the unemployment programs with the new law.

The Federal Government expanded all of the unemployment programs by another 11 weeks. This includes the Pandemic Unemployment Assistance (PUA) Program and the Pandemic Emergency Unemployment Compensation Program which extended Indiana State benefits. The PUA program will provide $300 a week.

We are not sure when these payments will start and you should watch the Indiana DWD website for updates: https://www.in.gov/dwd/indiana-unemployment/individuals/faqs/

Rental Assistance.

The Federal eviction moratorium is extended to January 31 ^st , 2021. The Federal Government is going to block grant 25 Billion dollars to the State and Local Governments based on population. Then the States will distribute that money. We do not know anything about this program other than what is listed in this email. We fully expect each state will handle this program differently. It looks like Indiana and its local Governments will get about 500 Million Dollars. Each state and local Government is to setup a program and roughly speaking:

You qualify if your household makes less than 80% of the median income AND

At least one member of your household has qualified for unemployment benefits or has experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due to or during the Covid-19 pandemic AND can demonstrate a risk of homelessness or housing instability, including having past due utility or rent payment(s), an eviction notice, has unsafe or unhealthy living conditions, or has any other evidence of such risk.

Landlords can apply for their tenants as long as their tenants cosign the application. Payments will go directly to the landlord or to the utility provider on behalf of the tenant in most cases.

There are roughly 2,500,000 households in Indiana. Roughly 40% of them (1,000,000) will have income below the limits Indiana will have put into place soon. According to third party estimates as many as 250,000 households in Indiana are at risk of falling behind on rent or mortgage payments. If we guess and say half of them are behind that is 125,000 Hoosier households behind on rent. If half apply for rental assistance and if there is $500,000,000 dollars in Rental Assistance available then there would be $8,000 in rental, mortgage, and utility assistance available per household that might apply.

Indiana already has paid out 40 million in rental assistance and Marion County another 15 million. It seems likely that Indiana may use their existing rental assistance portal at: http://www.indianahousingnow.org/ .

We do not know any more about these assistance programs than is in this email. If you know someone in need of assistance paying their rent, mortgage payments, or utility bills please send them this portion of the email and we would suggest they go to the Indiana Rental Assistance Portal listed above and then immediately apply for assistance. Indiana has a wait list and they should get on that wait list today. Once the Federal money arrives it is likely Indiana and Marion county will change and replenish their existing programs with money and they will be first come first serve.

Last thoughts for individuals without a business

We have attached to this email our client letter and our 2020 tax planner. Once you have everything that we need to do your 2020 income taxes please drop everything off at our office and remember we do not want you to drop anything off unless you have everything we need. We hope you drop everything off as soon as you are sure you have everything we need. We have a 24 hour drop box and if you wish to email items to us please email your CPA and we will send you a link so you can send us everything through a secure web portal.

Second section is for those individuals with a business

Paycheck Protection Program (PPP) Loan changes

Congress has changed the PPP loan rules for the loans authorized by the Cares Act passed on March 27 ^th , 2020. This is really frustrating for all business owners, for us, for banks, and for the Small Business Administration. It is hard to believe Congress just changed the rules for a law they passed nine months ago; however, they did.

PPP Loan forgiveness and your taxes

Congress just changed the law so that the portion of the PPP loan that is forgiven does NOT count as income and the expenses paid with the PPP loans are deductible. This is a huge deal and means our business clients who received or receive future PPP loans will pay a lot less in taxes than they would have under the prior interpretation of the rules. Best shown with an example. Business 1459 got a PPP loan for $100,000. Business 1459 got all $100,000 of the PPP loan forgiven by the SBA. The $100,000 does NOT count as income and the expenses paid with the money are deductible. This is a massive benefit for businesses that received or will receive PPP loans. Please make sure the PPP loan is recorded on your books as other income in its own category.

Changes to PPP Loan forgiveness

If you have enough expenses to get your PPP loan forgiven under the old rules you need not worry about this section for the 1 ^st batch of PPP loans and this is most people reading this email.

First off EIDL loan advances now do NOT lower PPP loan forgiveness. This is a huge deal for ten of our clients.

Additional items that now qualify for loan forgiveness if paid during the covered period include:

The forms for loan forgiveness have changed for loans under $150,000 and are simpler; however, everyone has to keep all of the information and do all of the calculations listed on the old forms so we are going to continue filling out the old forms and then having you turn in the one-page new form. The new form cannot be filled out unless we verify all of the information on the old form. We have no idea what the banks and SBA are going to do with these new rules and when they will implement them.

There is now a 2 ^nd round of PPP loans available

Far fewer businesses will qualify for this second round of PPP loan funding. In order to qualify for this second round of PPP loan funding, a business has to meet all of the following rules and #5 and #6 are going to make it so most of our clients cannot apply for a second PPP loan:

How large are the 2 ^nd round PPP loans

The new 2 ^nd round of PPP loans are based on 2.5 months of average payroll costs in 2019 or on 2.5 months of average payroll costs over the 365 days prior to the date of the 2 ^nd PPP loan application. Restaurants and Hotels starting with NAICS Codes of 72 are eligible for 3.5 months of average payroll costs.

When can I apply for the 2 ^nd round PPP loans

Right now, no one knows. The 5,593-page bill just passed Congress and Banks and the SBA are currently dealing with loan forgiveness from the 1 ^st round of funding and will have to digest all of the changes in the rules for both the 1 ^st and 2 ^nd round of funding. The SBA will have to develop new forms for businesses to use to apply for 2 ^nd round funding and complicating everything is the fact that many government employees are on vacation and New Year’s Eve and New Year’s Day are at the end of this week. CPA firms are going to be swamped for the next four months and their time to help will be limited.

We might guess the SBA will have the new forms posted in early January best case and mid-January worst case. Since Congress has given almost blanket immunity to banks, we expect many banks will want to push these loans on their clients due to the fees they can collect. Each bank will handle this differently. Once the SBA has forms, we expect the banks will be ready to go a week or two after that. It is hard to say, and a new President will be coming to power at noon on January 20 ^th . Covid-19 is likely to be prevalent over the next six weeks as well and this obviously complicates everything. We are not sure when banks will be ready for applications; however, we think mid-January at the earliest and late January is more likely. Everyone is going to have to be patient, because this process is not going to get off the ground quickly.

Other items

Covid-19 sick pay has been extended to 3/31/2021.

Interestingly in 2021 and 2022 business meals purchased from a restaurant will be 100% deductible rather than 50% deductible. Entertainment is still not at all deductible.

The new law really protects banks who issued PPP loans. They are off the hook for most liability regarding these loans. This may cause the banks to push businesses to get new loans.

Last thoughts for those with a business

We need to focus on getting payroll and 1099’s out the door in January. Please get us everything we ask for quickly. The IRS has not extended any deadlines and we need to focus on payroll and 1099’s in January.

Business taxes will be more complicated this year. Once you have everything, we need for your taxes please drop everything off at once.

Please be patient with us, Congress just dropped a 5,593-page Bill written in secret on us, and it changes a lot of laws and creates a lot of issues we will need to deal with. Our turnaround times will increase and it will likely take us significantly longer to respond to emails and phone calls and you should expect this.

Mike Sylvester, CPA

The post December 28th, 2020 New Legislation Update appeared first on SBS CPA Group, Inc. .

Happy New Year from SBS CPA Group

Wed, 30 Dec 2020 15:13:00 GMT

SBS will be closed December 31 and January 1 ^st to celebrate the end of 2020 and the new year ahead. Stay safe and we will see you in 2021!

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New mileage rates in 2021

Wed, 23 Dec 2020 15:09:00 GMT

What is the standard mileage rate in 2021?

Beginning January 1, 2021 the IRS Standard Mileage Rate for personal car use will be 56 cents per mile for business use (a decrease of 1.5 cents), 16 cents per mile for medical and moving mileage (a decrease of 1 cent), and 14 cents per mile for charitable organization mileage (no change).

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SBS CPA Group September 29th Update

Tue, 29 Sep 2020 12:28:00 GMT

This email was sent to our clients on September 29 ^th , 2020 and was posted to our website via our blog.

2020 has been a difficult year due to Covid-19 and we hope you and yours are as happy and healthy as possible!

SBS CPA Group is hiring. If you or anyone you know is interested in the following positions please let us know.

Administrative Assistant. This person answers the phone, deals with the public, e-files income tax returns, works up front, files, and much more. This person must be friendly and detail oriented. This person works Tuesday – Friday from 8:30 AM – 5 PM with a 30 minute unpaid lunch break during our slow season which runs from April 16 ^th – December 31 ^st each year. This person works 40 hours a week the 1 ^st two weeks of January (Monday – Friday), 45 hours a week the second two weeks of January (Monday – Friday), and from February 1st – April 15 ^th this person works 50 hours a week which includes four hours every Saturday. Our Administrative Assistant gets 19 days paid off per year which start accruing on day one.

Staff Accountant. This person will have a four year degree in Accounting and recent or even future graduates are welcome to apply. This person will mostly deal with personal tax returns, business tax returns, payroll, and bookkeeping. Our Staff Accountants work an average of 32 hours a week during our slow season and work four days per week in our slow season. Our Staff Accountants work an average of 64 hours a week from January 15 ^th – April 15 ^th . Our Staff Accountants get 21 paid days off per year which start accruing on day one.

We offer the following benefits to all of our employees after a 90 day trial period: 401K with up to a 4% match, health insurance with the company paying 100% of the employee cost, paid time off, and life insurance.

SBS CPA Group is looking for a renter for our 1,864 square foot unit in Dawsons Creek. If you are interested or if you know someone who is interested please let us know!

PPP Loan forgiveness. A majority of our business clients applied for and received a PPP loan. It is critical that if you received a PPP loan that you ensure your CPA knows exactly how much money your business was loaned and the exact day this money was deposited in your business bank account. There are complicated forms that will need to be filled out along with a large amount of supporting documentation and submitted to your bank. There is legislation in Congress that would greatly simplify this process for those businesses who received $150,000 or less. Most banks feel that this legislation will pass; however, in an election year we cannot be sure if it will pass or when it will pass.

At this point we recommend all of our clients wait for the simplification legislation to pass. We expect to revisit this at the end of October or early November. Remember all PPP loan recipients have ten months from the date they received funds to apply for loan forgiveness. We each have a list of our clients who received PPP loans and we will reach out to you when appropriate.

Covid-19 sick pay. Congress passed Covid-19 sick pay legislation and the rules are complicated. Too make a long story short; if you have an employee that meets the below rules and the employer has 500 or fewer employees you must pay them for time spent away from work due to Covid-19 and the Federal Government will ultimately bear the cost of this sick pay and the related payroll taxes and make the employer whole.

The employer must pay up to two weeks of sick pay at full pay at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider) and/or experiencing Covid-19 symptoms and seeking a medical diagnosis.

If you need more details about Covid-19 mandated sick pay please contact your CPA directly.

Now is the time to contact your CPA for 2020 tax planning. Tax planning for 2020 and beyond is much more complicated right now due to the upcoming Presidential and Congressional Elections. According to the oddsmakers there is a 50% chance or better that the Democrats will win the November 2020 election. We are not taking a partisan position in this email; however, the Democratic platform calls for higher taxes on the upper middle class and the wealthy. We have looked at the Democratic proposals and we feel that if the Democrats win the November 2020 election income taxes would likely increase on at least a fourth of our clients; we feel this would affect those clients with higher incomes.

Almost all states and local Governmental units are experiencing large revenue shortfalls. States and localities cannot print more money like the Federal Government can and we expect most state and local governments to raise taxes over the next couple of years and this has already started in several states. Indiana has already spent its 900 million dollar surplus in the Indiana Unemployment Fund and Indiana employers will see their unemployment tax rates increase across the board over the next couple of years similar to what happened back in 2010.

The upcoming tax season is going to be very challenging for many reasons. Covid-19 seems likely to affect the next filing season. The Internal Revenue Service currently has over five million pieces of unopened mail due to Covid-19 and has issued press releases telling the public they are in some cases 1-2 years behind. The IRS is dangerously behind and there already has been a lot of legislation that has affected the 2020 tax filing season and more seems likely after the election. Many experts expect the Democrats to roll back part of the Trump tax cuts if they win election; especially those favoring those with high incomes and that could have a major effect on tax forms and tax rates.

Please make sure that you save all documentation relating to your economic stimulus payment, we will have to have this information in order to prepare your 2020 personal income taxes.

For the last couple of years our Partners have tried to convince many of our clients to take advantage of the historically low income tax rates currently in place and pay tax on income now rather than aggressively defer it into the future. Please realize it may not make sense to defer income if you defer this income into a future year with higher tax rates. 2020 may be a good year to recognize income and pay taxes at the current historically low income tax rates.

The truth of the matter is 2020 has been a difficult year for everyone and we truly hope that our clients are healthy and happy.

Please contact us with questions and you can reach us as follows:

You can call us at 260-407-5000 or you can email us at:

Mike@SBSCPAGroup.com

Brent@SBSCPAGroup.com

Karena@SBSCPAGroup.com

Thanks for listening!

Mike Sylvester, CPA

The post SBS CPA Group September 29th Update appeared first on SBS CPA Group, Inc. .

SBS CPA Group Mask, Hiring, and PPP Loan update

Fri, 24 Jul 2020 15:10:00 GMT

SBS CPA Group Mask, Hiring, and PPP Loan update

This email was sent to all of our clients on July 24 ^th , 2020 and posted on our blog/website.

We hope all is well with you and yours. We are living in strange times and we all have to adapt and do the best we can. Indiana has adopted a mask mandate that starts Monday July 27 ^th , 2020.

Starting Monday, July 27 ^th , 2020 please:

Wear a mask if you need to come into our office for any reason. You can always use our 24 hour drop box or send us a fax or send us items via email or via secure web portal; you can also mail us items if you prefer.

Our office will be open 8:30 – 5 PM Monday – Friday.

We truly hope you and your family are happy and healthy during these difficult times.

SBS CPA Group is hiring. We would like to hire a person who is a CPA with a lot of experience in public accounting. We also are willing to hire a recent college graduate or maybe someone in between who has some experience in public accounting. If you know someone who is looking for a great job in public accounting please send them our way today.

The rest of this email is for our clients who received a Paycheck Protection Program (PPP) Loan. The loan forgiveness packages that need to be turned in to the banks are long and tedious. Congress is considering a law to make this process easier and we hope they do make this process easier for smaller loans.

The Small Business Administration (SBA) is not currently accepting loan forgiveness packages and they say they will not accept them until at least August of 2020.

Since there is a significant chance Congress will ease the loan forgiveness rules for small businesses there is currently no reason to prepare the long and tedious forgiveness packages; however, you definitely do need to do an excellent job documenting forgivable expenses and saving receipts and proof of expenses. Currently businesses have to apply for loan forgiveness within ten months of the last day of the loan forgiveness covered period so there is plenty of time.

Under the current rules requiring the long and tedious loan forgiveness packages:

The PPP loan forgiveness covered period starts the day the money was deposited in your business bank account or the first day of the 1 ^st pay period after you got the money.

You will be able to pick an 8-week forgiveness period or a 24-week forgiveness period. Most of our clients will choose the 24-week period because this will allow most of our clients to have 95% or more of the loan forgiven.

Most if not all of our clients will have to have their quarterly payroll taxes completed before they apply for loan forgiveness.

5% of our clients will be able to apply for loan forgiveness before October of 2020.

Maybe 45% of our clients will be able to apply for loan forgiveness in October of

Maybe 45% of our clients will be able to apply for loan forgiveness in January of 2021 and if this is the case, we will likely have to have the packages 90% ready to go in December of 2020 due to our busy season.

Maybe 5% of our clients will be able to apply for loan forgiveness in April of 2021.

We will be watching Congress to see if they pass a law to simplify the loan forgiveness process and we hope they do. We will keep you updated and each bank will handle this a little differently and your bank will keep you updated on their process.

SBS CPA Group

Brent, Mike, and Karena

The post SBS CPA Group Mask, Hiring, and PPP Loan update appeared first on SBS CPA Group, Inc. .

SBS Hours of Operation

Fri, 12 Jun 2020 13:00:00 GMT

On June 15th we will return to our regular business hours of 8:30 am – 5:00 pm Monday through Friday.

As an added convenience our office does offer an onsite 24 hour drop box.

Stay safe!

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COVID-19 Stimulus Check Update

Mon, 20 Apr 2020 17:03:00 GMT

4/15/2020

This post discusses the payment of the IRS stimulus checks. Many of our clients have already received their stimulus checks via direct deposit.

If you have filed a 2018 or 2019 tax return, you can check the status of your stimulus check by visiting this website: https://www.irs.gov/coronavirus/economic-impact-payments . If needed, you can also use this website to update direct deposit or mailing information (if receiving a paper check). Note the IRS is planning on mailing checks starting in May and ending in September; you will be able to get your stimulus payment much quicker if you go online and give the IRS your direct deposit information.

If you have not filed a 2018 or 2019 tax return because you weren’t required to do so, you can use that same website to provide information so that you can receive your payment.

We are pleasantly shocked that the stimulus checks are already arriving and that the IRS has a tool ready to help!

(If you have questions regarding the stimulus, please reference the “SBS CPA Group COVID-19 General, and Stimulus Check Update” email sent on 3/30/2020 or you can read it on our blog at: http://www.sbscpagroup.com/blog/irs-stimulus-payments/ )

SBS CPA Group

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Business Tangible Personal Property Taxes

Fri, 17 Apr 2020 15:30:00 GMT

As tax season comes to an end and we work our way towards warmer days, the staff at SBS CPA Group faces yet another deadline in May. Indiana requires businesses to report their personal property to their county assessor by May 15th of each year. This is done through business tangible personal property taxes (PPT).

You might wonder, what exactly this is. Each county in Indiana levies a tax on personal property used in business. On a technical level, the definition of business personal property is everything which isn’t real property (buildings and land). Business personal property is everything else. Some examples include, forklifts, furniture, equipment, and so on.

There are some exemptions to paying any tax with this return. If you do not have a significant amount of personal property (40,000 of cost or less), you can be exempt. You are still required to file these forms, but these exemptions prevent you from having any tax effect.

Our firm prepares hundreds of these tax returns each year and we would be happy to help you.

If you have any questions or concerns, please feel free to contact SBS CPA Group at 260-407-5000. We are here to answer and of your questions.

Brendan Lewis

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Summary of Emergency legislation enacted in 2020

Fri, 03 Apr 2020 01:47:00 GMT

The below email was sent to our clients as the fourth email to keep our clients up to date on the new emergency legislation enacted due to Covid-19. It was posted to our blog just before 10 PM on Thursday April 2nd.

April 2, 2020

This is the 4 ^th email blast to our clients discussing the emergency legislation that was passed. This should be the last email of this type unless Congress passes new emergency legislation that affects a large number of our clients, and this is possible.

This is the email discussing the new emergency loan provisions for small businesses enacted by Congress and the new rules for sick pay and the family medical leave act for small businesses. This email is mostly for those businesses that have chosen the 2 ^nd path: to keep their employees on payroll.

We fully expect and want our clients to contact us regarding this email, and we hope to spend a lot of time working with our clients on the items discussed in this email. That being said, we need everyone to understand several things:

Please contact your CPA via email and let us know when and how to reach you.

There is only so much time in the day, and we are already working as much as we can. The best way to contact us is via email, and you should expect our response times to be significantly longer than usual.

The Government is changing the rules on these programs every day. Today, a new application form was distributed along with new regulations. By the time you read this email, the rules have likely changed at least once. Due to this, we have minimized the details in the email since we know many things are going to change in the next few days.

We will not be able to work on tax returns very much in the next 3 or 4 weeks due to all of this new legislation, and we will be doing many income tax returns in May and June since the deadlines for those returns has been extended to July 15, 2020. We have no choice but to do this due to all of the new work we have to d0 to comply with this new legislation.

We will start by discussing some tax changes that will affect all of our clients:

You can take up to $100,000 from a retirement plan in 2020 without being subject to the 10% early withdrawal penalty. Note the withdrawal is still subject to all income taxes. That being said, those income taxes can be spread over three years.

If you have a loan against your retirement plan of up to $100,000, you can defer payments for one year.

Required minimum distributions are suspended for 2020.

The amount of charitable donations you can deduct on your 2020 income tax returns has been increased dramatically to 100% on income on individual returns and 25% of income for C Corporations.

Losses incurred in 2018, 2019, or 2020 can be carried back for up to five years.

15- year qualified improvement property can now be expensed immediately.

There is a provision that allows the employer portion of social security taxes for the rest of 2020 to be deferred, so half is payable on 12/31/21, and the other half is payable on 12/31/2022. This is a terrible idea, and we do not want to do this for any of our clients unless the circumstances genuinely warrant it.

Self-Employed people will have the same option on their 1040, and this is just as bad of an idea; however, this one would at least be easier to track.

Not all of our clients need to read the rest of this email. You should read the rest of this long email if you are a small business, a not-for-profit, or an individual who is self-employed or are an independent contractor and paid via a 1099.

This email is split into several sections with the most critical parts in the beginning. If the rest of this email applies to you, we put in a procedure we want you to follow when considering these options, and your CPA can go through this with you; just send your CPA an email and give us plenty of time to respond.

Paycheck Protection Program (PPP)

This is going to affect a lot of our business clients, and it is an essential part of this email by far. $349 Billion of loans have been authorized for small businesses under this program. This program is capped and is first-come, first-serve. Note they think there are six million people who can apply, so this is an average $58,333 per application. Most experts believe the program will fill up, and that is why it is essential to apply relatively quickly.

In general, these loans will be forgiven as long as the loans are used to cover payroll costs, including benefits, mortgage interest on loans incurred before 2/15/2020, rent under lease agreements in force before 2/15/20, and utility costs in force before 2/15/20. To be forgiven, these costs must occur over the eight weeks starting the day the loan is approved AND full-time employee numbers and compensation levels must be maintained at prior-year levels.

This program is designed to cover payroll costs, and not more than 25% of the forgiven cost may be for non-payroll expenses. Payroll costs are capped at $100,000 on an annualized basis for each employee or contractor.

The loans are handled by the Small Business Administration (SBA) approved lenders. You can apply with the SBA approved lender as follows:

Friday, April 3, 2020, small businesses and sole proprietorships may apply.

Friday, April 10, 2020, independent contractors and self-employed individuals can

apply.

This is yet another program that Congress has mandated, and they want the money in the hands of businesses in days. That being said, the Small Business Administration (SBA) and the banks responsible for the loans are working hard to try and interpret the rules, and the rules are changing every day. No kidding, the worksheets we looked at two days ago are different today. No kidding, the main application form changed significantly on Thursday, the day before it is to be submitted, and the day this email was written.

You will need to submit applications through SBA approved lenders. There are a lot of local lenders who you can use, including 1 ^st Source Bank, Lake City Bank, Horizon Bank, PNC, and Chase.

The Banks are nervous about these loans right now, and they are working with the SBA to clarify the rules in writing. The banks are making less on these loans than they make on average loans, and as such, they are trying to ensure they do not get burned on the loans when many businesses default on the loans.

The banks are not earning much on these loans, and the banks are not as interested in making these loans for this reason. The banks are going to apply additional rules to keep them from getting burned by businesses that go under. There is a long list of agents business owners can hire who will, in turn, prepare the loan applications for the company, and this list includes CPAs. At SBS CPA Group, we are not bankers, and we will assist our clients who are filling out their forms; however, we will not fill in and submit anyone’s forms. Note if an agent does this form for you, they get some of the loan fees, and the bankers get less in loan fees. There is already tension between some of the agents and the banks, and we are pretty sure that many banks will not accept forms from agents because they do not want to split the fees.

We will help you fill out the forms by answering your questions and providing you data, and we will just charge you for our time, and we consider this a high-end consulting engagement.

We talked to three different local bankers with three different banks in the last 36 hours, and all three told us:

They hope to accept applications Friday, April 3; however, they are not sure that they will be able to, and they have no idea how long they will take to go through the information and submit them to the SBA.

At least, in the beginning, they are only going to do these types of loans for existing clients they know and have a banking relationship with since at least February 15, 2020.

What all of this means is you need to talk to your current banker quickly, and your current banker will need to take the lead on these loans with you. Please do not be surprised if your banker is overwhelmed with this and everyone is going to need to be patient. I honestly expect the banks to have a lot of people working this weekend; otherwise, the bank does not want these loans.

There are a lot of summaries of these laws you can read, and since they are changing so often, we are just going to hit the high-level details here:

The application form is likely to be four pages long and straightforward for you to fill out. You may well need us to help you calculate payroll costs that have specific rules and determine the maximum size of the loan. We have already developed a spreadsheet to handle this. Note this changed in the last few hours because now the application form both has a place where the applicant fills in the data; however, says explicitly, the lending bank will calculate the maximum loan amount. We think this may mean the data is put on the form by the applicant and then verified by the lender.

Most banks are going to have an additional 2-4-page form you fill out as well. These will vary by bank. We looked at one already, and this form precludes anyone from filling out the form and submitting it other than the owners or managers of the company. This bank is not accepting any applications from agents because they want the fees for themselves,

Each bank is going to require certain documents to be attached. We have looked at the list of documents from three different local banks, and all three lists are significantly different. If you need copies of forms from us, please email your CPA the exact list of documents the bank needs from you, and we will not send you documents until you send us the specific form you received from your bank; otherwise, a lot of time will be wasted, and we do not have that time right now to waste. It looks like they will only be wanting various payroll tax forms and payroll reports and will not be asking for income tax returns, and that is good news.

It is more complicated than this; however, roughly speaking, you can borrow 20.833 percent of your annual payroll and employer-paid health insurance. It is more complicated than this; however, this gets you in the ballpark.

As long as you follow the rules of the loan program and turn in documentation to support your expenses, some or all of the loan will be forgiven.

Remember, this loan is primarily for companies who are keeping employees on payroll rather than laying them off and putting them into the unemployment system.

Expenses that can be forgiven if the money is spent in the first eight weeks (beginning on the date the loan is accepted) and the proper documentation is turned into the SBA and approved by the SBA are:

Actual payroll costs for your employees, and this does not include the employer portion of Social Security and Medicare taxes. Based on our interpretation of the current rules, the maximum you can pay any employee or contractor in the eight weeks is $15,384.

Group Health Insurance portion paid by Employer only

Rent if a lease agreement is dated 2/15/20 or before.

Mortgage INTEREST (not principal) if the mortgage is dated 2/15/20 or before.

Utilities for which service began before 2/15/2020. For facilities in place since 2/15/20.

75% or more of the forgiven expenses must specifically be for payroll. Remember the point of this program is you must keep the same number of full-time employees on staff and pay them similar to before (there are specific rules).

On current application form (It may change again in the next 24 hours):

You must certify in writing that: “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” It will be interesting to see how this is interpreted.

The funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments, and you must provide specific proof regarding these payments, if funds are used for any other purpose the government can pursue fraud charges.

You can only get one loan under this unique program.

This part is a significant change in the last few hours. You have to acknowledge that the lender will calculate the available loan amount using payroll tax documents you have submitted, and you must verify these are the same documents you submitted to the IRS. It could take the bank a long time to verify these items before they submit your application.

The loan itself is a two to ten-year loan with payments deferred for the first six- to twelve months. These rules keep changing as well, so clarify with your banker. In some places, it says the interest rate is .5%, and in other places it says the interest rate is 4%. Please discuss this with your banker.

This program is an excellent program for many of our clients; however, it has been rushed through, and the rules are changing significantly every day.

Note that if you already took out an Economic Injury Disaster Loan, you can refinance this loan into a Paycheck Protection Program (PPP) loan, discuss it with your banker.

If you took a payroll tax credit for paying qualified sick and family leave pay, those wages are excluded from the PPP. You cannot double dip with these programs.

Unusual things about these loans:

Almost no documentation is required to be provided to the lender. You do NOT need income tax returns, financial statements, etc. All you need are payroll forms and payroll summary and benefit summary information.

No collateral is required.

There is no personal guarantee.

You need to certify as part of the application:

Current economic conditions make the loan necessary to support your ongoing operations. This will be interesting to see how they interpret this one sentence.

Funds will be used only to retain workers, maintain payroll, or to make mortgage, lease, and utility payments.

You will only apply for this type of loan once.

You agree to provide proof of payroll, mortgage, rent, and utility costs to the lender for the eight weeks after getting the loan.

You verify all is correct.

Please understand you need to contact your bank to get the process started. Please understand your CPA can help you with this.

Economic Injury Disaster Loan (EIDL) Program.

We are not SBA loan experts, and you need to rely on the information your banker and the SBA provides. You can and should use the Small Business Development Center (SBDC) in Indiana for more details. You can reach the Indiana SBDC at www.isbdc.org .

The SBA grants these loans at www.sba.gov/disaster .

This is a more substantial application process. Business must have been in operation on 2/15/2020. The maximum loan is two million dollars. They provide you an advance of $10,000 within three days of the SBA accepting your loan application, and you may not have to repay this advance. The loan will be for thirty years or less. The first payment is due one year from note signing. The maximum interest rate is 3.75%. Loan is for up to six months of working capital, and there are specific rules for what you can spend it on. You cannot obtain a PPP and an EIDL loan for the same purpose. They are primarily based on credit score. Loans for $25,000 or less are unsecured. Standard collateral rules apply to loans above $25,000.

If you apply for this type of loan, your 2019 business income tax returns will need to be filed . If you are using for this type of loan, please let us know, and we will prioritize finishing your 2019 business income tax returns.

Families First Coronavirus Response Act (FFCRA)

This is the second stimulus bill. Each Employer is required to post a poster in their workplace, informing their employees about these rules. You can obtain these posters online.

The Families First Coronavirus Response Act (FFCRA) requires certain employers to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. These provisions will apply from April 1, 2020, through December 31, 2020.

PAID LEAVE ENTITLEMENTS Generally, employers covered under the Act must provide employees: Up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of paid sick leave based on the higher of their regular rate of pay, or the applicable state or federal minimum wage, paid at • 100% for qualifying reasons #1-3 below, up to $511 daily and $5,110 total; • 2/3 for qualifying purposes #4 and 6 below, up to $200 daily and $2,000 total; and • Up to 12 weeks of paid sick leave and expanded family and medical leave paid at 2/3 for qualifying reason #5 below for up to $200 daily and $12,000 total. A part-time employee is eligible for leave for the number of hours that the employee is typically scheduled to work over that period.

ELIGIBLE EMPLOYEES In general, employees of private-sector employers with fewer than 500 employees, and specific public sector employers, are eligible for up to two weeks of fully or partially paid sick leave for COVID-19 related reasons (see below). Employees who have been employed for at least 30 days before their leave request may be eligible for up to an additional ten weeks of partially paid expanded family and medical leave for reason #5 below.

QUALIFYING REASONS FOR LEAVE RELATED TO COVID-19 An employee is entitled to take leave related to COVID-19 if the employee is unable to work, including unable to telework, because the employee:

Employers will receive a 100% payroll tax credit, including for Employer-paid health insurance benefits. This tax credit is taken as a credit against 941 taxes paid. You can also file a form 7200 with the IRS and ask for the money upfront; we have no idea how long this would take the IRS to process. In the end, this tax credit will make the employer whole for roughly 92% of the employers’ total payroll cost.

Some self-employed individuals will qualify, and these details have not been provided.

An employer can receive tax credits for qualified leave under both the FFCRA and the ERC; however, you cannot get more than one credit for the same wages. No double-dipping.

An employer cannot use the same wages for the FFCRA and the PPP. No double-dipping.

SBA Bridge Loan Program

You apply for this through your bank. It is a short-term bridge loan to hold you over while you are applying for other emergency loans. This is a more substantial application process. The maximum loan amount is $25,000. In many cases, the first six payments will be made by the SBA.

These loans have a much higher interest rate of 6.5% plus prime. There are bank fees on these loans. Underwritten by banks and based on their criteria. There will be personal guarantees on these loans.

Employee Retention Credit (ERC)

You can only apply for this payroll tax credit if you experience a decrease in gross receipts of 50% in a calendar quarter. This credit runs from 3/12/2020 through 12/31/2020. You compare each quarter of 2020 to the corresponding quarter of 2019. Once you start using this payroll tax

Credit, you are no longer eligible the quarter when your gross receipts go up to 80% of the prior quarter.

This payroll tax credit will be for 50% of wages, including the employer portion of health insurance. It is capped at a credit of $5,000 per employee on $10,000 of wages per employee.

This tax credit is taken as a credit against 941 taxes paid. You can also file a form 7200 with the IRS and ask for the money upfront; we have no idea how long this would take the IRS to process.

This is not available to self-employed people.

An employer can receive tax credits for qualified leave under both the FFCRA and the ERC; however, you cannot get more than one credit for the same wages. No double-dipping.

An employer cannot receive an ERC credit and a PPP loan for the same wages since they cannot double-dip.

This is a lot to digest for both you and us. These rules change every day. We ask our business clients to do the following:

First, read the email at least twice. There is a lot of information in it.

Second, do some research on the internet about the options you are considering. Some good places to look include:

The IRS The Internal Revenue Service (IRS) has a page with links to Coronavirus related items.

The SBA The Small Business Administration (SBA) has a page with links to

Coronavirus related items

Third, if you want our assistance in discussing your options with you, please send your CPA an email on Friday, April 3, or later, and in the subject line, please write, “Can we discuss my business options?” In this email, please list your phone number and availability on Friday, April 3 through Monday, April 6, 2020. Please give us information on what your current business operations are, if you have laid anyone off, and what options you want to discuss. Please give us some information on your personal and business current financial situation. We will be doing firmwide training on all three large emails we sent you to ensure our CPA’s are all on the same page from 9 AM until at least 10:30 AM on Friday, April 3, 2020. We will try to get back to as many of you as we can by Monday, April 6, by the end of the day. We will be responding to emails with phone calls this weekend for sure. Please remember the rules change every day.

Fourth after we talk, you will have an action plan, and you can pursue various items with your banker if you are applying for a loan.

Lastly, please realize that no one knows how long this virus will last. We will assume the lockdown orders end between May 1 and June 30 unless you want us to use another assumption because that is what we believe based on current CDC models.

We have spent a lot of time and effort (Mike alone has 35 hours into researching this legislation so far), so we can give you good advice. Please be patient with us, and please realize many tax returns will be completed in May and June so we can prioritize helping our clients get loans and doing the payroll and payroll taxes as well as tangible business personal property taxes that must be done before the income tax deadlines of July 15, 2020.

Please be patient with us because we are honestly totally overwhelmed.

Two last of examples of how fast the rules are changing:

The stimulus rules were written and Congress specified that people on Social Security would not have to file an income tax return if they were below the filing limits. On Monday we explained that in an email to you. On Wednesday the IRS announced all of those people would have to file 2019 income tax returns. Then today the IRS changed course and said that no those people actually do not have to file 2019 income tax returns to get the stimulus payments.

Mike wrote this email over a 24-hour period and finished at 18:30 on Thursday. Brent and Karena proof read it over the next two and a half hours. During that time there were a large number of news stories that most of America’s big banks were going to completely backout of the PPP because they were not going to make enough money off of the loans, because the SBA was not clarifying the rules, and because the rules change each and every day. At 18:00 today The Secretary of the Treasury announced that even though Congress stipulated a .5% interest rate on the PPP loans he was immediately changing the rules so the interest rate would go up to at least 1% to make the banks happy and to try to get the banks to participate in the program tomorrow.

There is no doubt the rules are going to change again tomorrow (Friday).

SBS CPA Group

The post Summary of Emergency legislation enacted in 2020 appeared first on SBS CPA Group, Inc. .

New rules for claiming Unemployment Benefits

Thu, 02 Apr 2020 16:44:00 GMT

This email was added to our Blog on 4/2/2020. If you did not get the email we sent to all of our clients please send Shane an email at Shane@sbscpagroup.com and ask Shane to please add you to our email blast list that we are using to keep our clients informed about the emergency legislation that Congress has passed.

April 1 ^st , 2020

This is a very long email and will affect many of our clients. This email will affect anyone who is filing a claim for unemployment benefits, and please realize a lot more people can qualify for these benefits under the new laws, and the benefits are much larger than they have been in the past. Please read the email entirely before contacting The Indiana Department of Workforce Development with your questions. There is a section at the end of this email that summarizes what we think you should do if you think you are eligible for unemployment benefits after reading this email. We will provide different sources for you to get more information at the end of this email; please realize we put everything we know in this email to assist you, your friends, and your relatives. Please do NOT contact us with questions about Indiana unemployment claims because this is not something we can help you with. This new emergency legislation has given us a lot more work to do in other areas, and we need to focus on those other areas.

This is our second email about the emergency legislation:

This email discusses the emergency legislation Congress passed ordering the states to expand unemployment benefits massively. These benefits will flow to many people who were not previously eligible, and the amounts paid will in many cases exceed the amount of money workers are paid via their regular jobs.

The third email will be sent by Friday and will discuss the large amounts of loans that will be available to small businesses; in some cases, these loans will be forgiven and actually be considered a grant.

______________________________________________________________

With these new laws Congress is trying to convince businesses to follow one of two paths. The first path involves encouraging businesses to lay off workers and for those workers to claim enhanced unemployment benefits. The second path is for the government to offer loans; some of which will be forgiven and function like grants, meaning some of the loans will not have to be paid back and in turn the businesses will keep their employees on payroll. Some businesses will follow a hybrid path and do some of both.

______________________________________________________________

This email is about the first path and discusses the new unemployment provisions.

The Federal government is pouring hundreds of billions of dollars into the state unemployment systems. To get this money, each state must adopt various provisions that the federal government is forcing them to make to get all of this money. We fully expect Indiana to comply with all of these provisions; and we expect most, if not all, other states to do the same.

The goal of this program is to allow more workers to apply for unemployment and for them to get their first unemployment check within three weeks of filing. Further, the federal government is enhancing these benefits.

The goal of the Indiana Department of Workforce Development is to get the first unemployment check out three weeks after the initial claim for unemployment benefits. We expect the first check to go out three weeks after you submit your claim if your claim meets the standard rules that have been in place for years. If your claim involves the new rules, we feel it will take you 3-5 weeks to get your first check because they have to reprogram their software, and they are overwhelmed with phone calls and emails. Further, they have closed their offices to the public.

The Indiana Department of Workforce Development has not had time to issue their new rules, and they are begging people not to call them with questions about the new rules since they need time to write the new Indiana rules, change their software, and train their staff.

Indiana has adopted some of the new rules listed below already, and we expect them to adopt all of the new regulations by the end of this week. These rules are:

You are eligible for benefits as of the first day you are laid off.

They have to tell you if your claim is denied through the account you set up online, and you can appeal it.

Currently, you have to file a weekly voucher telling them all the income you earned that week and listing the jobs you applied for. We expect the job search requirements to be lessened or even eliminated but not the obligation to file the weekly voucher online.

Employers will not be held accountable for employees who are laid off due to COVID-19. This means all Indiana employers will see their tax rates increase 1/1/21, not just those who lay off employees. The tax increases will be spread across all businesses.

Right now, Indiana allows 26 weeks of unemployment benefits, and we expect this to be increased to 39 weeks.

Indiana will calculate your benefits per their usual rules, and once your claim is accepted, you will be able to see these amounts in your online account.

If you qualify for Indiana unemployment benefits under the new expanded rules, you will be paid the Indiana amount and another $600 per week provided by the federal government. The additional $600 payment is for a maximum of four months. Indiana may send one payment per week or two payments per week; they have not decided yet.

Any worker who has been diagnosed with COVID-19 will qualify if they cannot work.

If you have to care for a family member or a member of your household that has been diagnosed with COVID-19, you also qualify for unemployment.

If you are providing care for a child or other person in your household that you have primary caregiving responsibility for and that individual is unable to attend school or attend another caregiving facility that is closed due to COVID-19 and this causes you to be unable to work you qualify for unemployment.

You are unable to reach work due to a COVID-19 quarantine.

You are unable to work because a health care provider has advised you to self-quarantine due to COVID-19.

Any worker who was furloughed by their employer due to COVID-19 will now qualify regardless of wage history.

Any worker that was laid off due to COVID-19 will also be eligible regardless of their work history.

A worker who was scheduled to commence work and now does not have a job due to COVID-19 or is unable to get to work due to COVID-19 qualifies.

The individual has become the primary breadwinner or significant support for a household because the head of the household has died as a direct result of COVID-19.

The worker has to quit their job as a direct result of COVID-19.

Freelancers, independent contractors, gig workers, and the self-employed, in many cases, can now file for unemployment benefits if they were laid off due to COVID-19. This is not well defined, and the rules are not clear on this. The Indiana Department of Workforce Development will issue guidelines on this in the next 7-10 days.

Remember you do not qualify for unemployment if:

You can telework with pay, OR you are receiving sick pay, or other paid leave benefits.

Note that you may qualify for partial benefits if your employer reduces your hours to less than your regular full-time workweek.

According to the FAQs posted on the Indiana Department of Workforce Development (DWD) website, “Indiana Unemployment benefits are available to any individual who is unemployed through no fault of his/her own. If an employer must lay off employees due to the loss of production caused by the Coronavirus, individuals may be eligible for unemployment benefits if they meet the monetary criteria and the weekly eligibility criteria. Employees must stay in contact with their employer and be available to work when called back.”

Your application will be a regular application under the standard rules and accepted quicker as long as:

You were laid off for lack of work or due to COVID-19 AND In the last year and a half, you earned $7,000 or more in W-2 wages (This is not the exact rules but gets you in the ballpark).

How do you apply:

You apply online through the DWD website, the required visit to a WorkOne office has been waived. Their website is busy, and their phone lines are just as busy.

When will you get benefits:

DWD says you will get your first payment within three weeks as long as your employer does not fight the claim. You must file a voucher every week listing all income and your job search efforts if still required by DWD once they implement the new rules.

It is clear that the intent of this legislation is for the federal government to provide hundreds of billions of dollars to state governments. Those state governments will then change their rules and interpret the new federal laws as best they can.

Our advice is that you do the following and please realize we do not currently know more than is in this email:

If you have questions, please do one of the next or all of the following:

Email DWD at AskUIContactCenter@DWD.com

Call DWD at 1-800-891-6499

If you contact DWD, you will need to be patient because they are overwhelmed.

Call Congressman Jim Banks’ Office at 260-702-4750, they claim to have people who are experts on the new legislation, and this might be your best bet the next couple of days.

DWD has a great website, and you can find most of your answers there. They have a COVID-19 section that was last updated on March 26 ^th , 2020. You should check their website for updates.

If you think you qualify for unemployment, you should go to the Indiana Department of Workforce Development website and file a claim immediately. The sooner you get the process started, the sooner you will get your first check. https://www.in.gov/dwd/2362.htm Filing a claim takes many people an hour or more and needs to be done from a computer or tablet. Sometimes it can be done from a powerful smartphone; however, many people are having problems using a smartphone. If you do not have a computer or tablet, you need to get a friend or family member to help you; most public buildings are closed, as are most government offices.

Once you file your claim, watch your email closely and log into your new online account frequently to monitor the status. Remember, if your request is denied, you should call them to discuss, and you should appeal it. Congressman Jim Banks’ office can help you with this.

Every week you need to log into your online account and file a weekly voucher telling them your earnings, job status, etc. This is important and must be done.

These are tough times, and we are trying to give our clients as much information as we can. If you have further questions, please reach out to DWD or the office of Congressman Jim Banks. We are overwhelmed with work due to all of this new legislation, and we honestly have put everything we know about this topic in this email!

SBS CPA Group

Mike Sylvester, CPA

The post New rules for claiming Unemployment Benefits appeared first on SBS CPA Group, Inc. .

IRS stimulus payments

Thu, 02 Apr 2020 16:36:00 GMT

March 30 ^th , 2020

This email was added to our website as a blog post on 4/1/2020.

This is the first of three long emails. These three emails will go out this week. These emails are being sent out due to the emergency legislation, and you must understand the new rules are not even written yet. Patience is going to be necessary with us, with the banks, and with all of the government agencies involved. There is no chance this money will get into people’s hands as soon as The Trump Administration is claiming. It is impossible, and that is what every expert is saying.

Please read this email entirely before contacting us with questions about stimulus payments. If you have questions about unemployment and emergency loans, please hold all of those questions until we understand the rules.

The long emails that will come out from us are:

This is the first one, and it will discuss the stimulus checks. The IRS will be mailing stimulus checks to many taxpayers. Roughly 75% of our clients will receive stimulus checks.

The second one covers unemployment, and we will try to get this email out by Wednesday of this week. Congress is ordering the states to expand unemployment benefits massively, and these benefits will flow to many people who were not previously eligible, and the amounts paid will, in many cases, exceed the amount of money workers are paid via their usual jobs.

The third one covers emergency loans, and we will try to get this email out Friday of this week. Large amounts of loans will be available to small businesses; in some cases, these loans will be forgiven and be considered a free grant.

Before we get to each of these items, we want to remind you of several issues:

Our office hours are 2 PM – 6 PM Monday – Friday only. Only one set of clients is allowed in the office at a time, and if you are sick or have had a fever in the last three days, please do not come into the office for the safety of our employees.

We are open and want you to drop off income tax returns and other work in our 24-hour dropbox; mail them to us, email them to us, or send them to us via our secure portals.

Five of us are primarily working from home. A lot is going on, and we ask for your patience; we will not be able to get back to you as quickly as we usually do. We nowhave to field hundreds of questions about this new legislation, and we will be assisting many people with emergency loan packages. 1 ^st quarter payroll taxes are due at the end of April, and tangible business personal property tax returns are due May 15 ^th . The best way to contact us is to email the person you usually deal with. The second-best way to reach us is to call us in the office and leave that person a voice mail. We will get back to you within 3 or 4 business days; however, it will take longer than usual.

These laws are new, and Congress, The Small Business Administration, The Department of Labor, Banks, The Internal Revenue Service, The Indiana Department of Workforce Development, SBS CPA Group, and many other agencies and organizations are still trying to understand the 2,000 pages of legislation and please remember the Government is issuing clarifications and procedures every day. Everyone has to be patient with not only us but all of the aforementioned agencies. This is unprecedented legislation and will take longer for the Government to enact and implement than they are claiming it will.

The Government is promising payments, unemployment benefits, and loans; all of these items will take longer to get into the hands of taxpayers than they are saying.

The IRS is mailing stimulus checks to many Americans

First off, the Federal government is claiming they will send checks or directly deposit these payments, and their goal is to have this done around April 17 ^th , 2020. Based on past experience, this seems very unlikely, and we expect the stimulus payments will be sent in late April or more likely early May 2020. They will likely be transmitted over a 2-3 week period based on last name.

The IRS will use your 2019 income tax returns if they are filed already, and they will use your 2018 income tax returns otherwise. If you are on Social Security and not required to file a Federal income tax return, you will receive a stimulus payment and need not file a 2018 or 2019 income tax return.

This is a refundable tax credit that will be reconciled on your 2020 income tax returns filed in 2021. If the IRS overpays you, there will be no adverse consequences; you will not have to pay it back. If the IRS underpays you, the additional amount you are owed will be handled on your 2020 income tax returns filed in 2021.

If the IRS has direct deposit information on file for you, they will use it; otherwise, they will mail you a check. If you have changed bank accounts, your direct deposit will not go through, and the IRS will send you a check.

The tax credit phases out based on income: Roughly speaking, 6% of Americans will not get any stimulus payment because their income is too high. Another 6% will get a reduced stimulus payment.

The rebates are based on Federal adjusted gross income. This is line 7 of your 2018 1040 or line 8b of your 2019 1040 or 2019 1040-SR. This is your adjusted gross income before most deductions.

How much you will receive is as listed below:

Filing Status AGI Amount Stimulus Check Amount

Single $75,000 or less $1,200

Married filing jointly $150,000 or less $2,400

Head of Household $112,500 or less $1,200

Dependents Under 17 N/A $500, paid to your legal guardian

The additional $500 per child is not well defined by the IRS yet, and questions regarding this will need to wait until the IRS establishes rules in the next 7-10 days. If you claim your children as dependents on your income tax return, they do not qualify for their own stimulus payment because they are your dependent. Further, the way the law is written, the children have to be sixteen years old or younger for their parents to receive an extra $500 payment. It is currently unclear how this will be handled if the IRS uses a 2018 return or even a 2019 return. If your child is 16 or under at the end of 2020, it is certain they will qualify for the additional $500 stimulus payment. It is also unclear how the IRS will handle this for children whose parents are divorced. It currently looks like parents will not phase-out of the additional $500 for their children who qualify for the $500 payment.

There are phase-outs for higher-income taxpayers. If you are single and your AGI is $99,000 or higher, you completely phase out of your stimulus payment and get nothing. If you are Head of Household and your AGI is $135,000 or higher you completely phase out of your stimulus payment and get nothing. If you are married and file a joint return and your AGI is $198,000 or more you completely phase out and get nothing.

If you are Married Filing Separately the law currently does not address this situation and the IRS will issue further guidance down the road.

Just like the stimulus payments in 2008, this is going to be a mess for the IRS to deal with. What the IRS is currently saying is:

They will let the public know when the payments are to be sent. As mentioned earlier we feel the payments will come out in late April or early May; however, the Trump Administration is claiming the payments will go out sooner.

They are not accepting any questions from the public or tax practitioners regarding the payments. They are telling the public to be patient.

The IRS is saying in May or June they will send out letters discussing the stimulus payments to each taxpayer and after you get that letter you can contact the IRS to get more information and they will tell you how to do so.

The IRS has made it clear that they are going to focus on getting as many of the stimulus payments sent as they can and then deal with questions and problems later. Unfortunately, if you do not get your stimulus payment when you expect to you will have to be patient and wait until you get a letter from the IRS and wait until they issue further guidance.

There are already scams trying to convince tax payers to make various payments in order to get their stimulus checks. These are scams.

This email was long in an effort to ensure you understand what your stimulus payment will be.

Two more emails will follow later this week.

SBS CPA Group

Mike Sylvester, CPA

The post IRS stimulus payments appeared first on SBS CPA Group, Inc. .

The New W-4 Form for 2020 and Beyond…

Sat, 29 Feb 2020 23:18:00 GMT

Starting in 2020, any new hires will be required to fill out the new and updated W-4 form. All prior employees will still be able to use the W-4 for that they filled out at the hire date.

The new W-4 form will no longer calculate your withholding using personal exemptions as the Tax Cuts and Jobs Act removed personal exemptions completely. The new W-4 will calculate withholding using the filing status of the taxpayers and the standard deduction that goes with the filing status. This new form is designed to make it easier for employees that have more than one job and married couples to be able to withhold the correct amount of taxes on each paycheck.

Employees can also choose to have their itemized deductions withheld alongside any credits that they are eligible to receive such as the child tax credit. Employees can still choose to add extra withholding from each paycheck just as you could in the prior form.

As with any new change, it will take some getting used to. If there is any confusion on what to put on your W-4 form, call SBS CPA Group at 260-407-5000 and talk to one of our CPAs to help you better understand the new W-4 form.

Michael Salazar

The post The New W-4 Form for 2020 and Beyond… appeared first on SBS CPA Group, Inc. .

Where’s My Refund?

Sat, 29 Feb 2020 01:22:00 GMT

We are in March of tax season and tax returns are flying in and out the door. A common question we hear at SBS from our customers “When will we receive our refund”. The IRS needs to process your return before they send back any money to you, they need to see that everything that is within your tax return is correct before they approve your refund.

Some refunds are being held for specific returns such as earned income credit and additional child tax credit recipients who will not see their refund until after February 22. The reason for that is… the law. The law simply does not allow the IRS to give taxpayers with those credits their money back until after February 22nd. The IRS said that they expect that taxpayers with those two credits to have their refund in their account by the first week of March assuming there is nothing wrong with the return. They also stated that Taxpayers should check the “where’s my refund” tool to get a personalized refund deposit date.

Calling the IRS to check up on your refund is a thing of the past. Now you can go online and know exactly where your refund is. “Where’s My Refund” is a tool that is now on IRS.Gov website for the public to use. That tool will let taxpayers know if their filed return has been received, if the refund has been approved, and if the refund has been sent. You need the following to access this information; taxpayer’s social security number, filing status, and the exact amount that they are to be refunded.

Please give us a call at 260-407-5000 to discuss more about tracking your refund.

Michael Salazar

The post Where’s My Refund? appeared first on SBS CPA Group, Inc. .

Have you been a victim of identity theft?

Thu, 27 Feb 2020 18:00:00 GMT

Here at SBS CPA Group, we have experience with how the IRS handles identity theft and what you need to do if you have been a victim of it.

The IRS will always contact you through the mail with either a letter, transcript and/or notice. The IRS will rarely ever call you.

The IRS will let you know of potential identity theft in the following ways:

The Notice from the IRS can mean a few different things, but are all related to Identity theft such as:

Additionally, once the IRS confirms that you have actually been a victim of Identity theft, they will issue you a unique personal identification number. You are going to need to provide the PIN number to your tax preparer every time you go to file taxes. The PIN helps prevent future Identity theft because the IRS it truly you who is filing and not a scammer.

SBS CPA Group has various clients who have experienced instances of identity theft and were issued a pin that we file annually with their tax return. If you have any more questions please give us a call at 260-407-5000.

Michael Salazar

The post Have you been a victim of identity theft? appeared first on SBS CPA Group, Inc. .

It’s almost tax time, why you should wait until you have everything….

Fri, 24 Jan 2020 15:30:00 GMT

2020 has arrived, which for every tax preparer nationwide means tax season is on its way. We have spent the first three and a half weeks working on W2’s and 1099’s which are due by January 31 ^st . We expect the next week to be slow for us, with an increase in drop-offs the first two weeks of February.

All of our clients should have received the yearly SBS tax planner in the mail. If you have not received yours, please contact us at 260-407-5000. The tax planner is very important to both the tax preparer and the individual. We require that the first page be completed when you drop off all of your tax information. This page contains various “yes/no” questions that assist us in completing your return.

One of our goals at SBS CPA group is to minimize your tax preparation fees as much as possible. Please make sure to have all information before you deliver it to us. By having everything before we begin you return, we are able to complete the return more efficiently, which means lower tax preparation fees for you.

Currently, the office hours are 8:30 to 5:00 Monday through Friday. Beginning February 3rd, we will be open from 8:30 to 6:00 Monday through Friday and 9:00 to 1:00 on Saturdays. We will go back to normal hours on Thursday, April 16th.

If you have any questions or concerns, please feel free to contact SBS CPA Group at 260-407-5000. We are here to answer your questions and make tax season as stress-free as possible for you!

Brendan Lewis

The post It’s almost tax time, why you should wait until you have everything…. appeared first on SBS CPA Group, Inc. .

2019 SBS Tax Planner

Fri, 17 Jan 2020 15:30:00 GMT

Every January, you receive a thick envelope from SBS CPA Group in your mailbox. This is a simple reminder that tax season is coming up. One of the most important aspects of this envelope is the yearly tax planner we provide for each of our clients. Many people wonder, why is it so important to complete this tax planner if the accountants at SBS have done my taxes before?

The yearly tax planner is extremely helpful to tax preparers, it is a staple for accounting firms worldwide, and the first thing we look at before we begin each return. The planner is revised each year to reflect any changes that have occurred on both the federal and state level. It is filled with questions that notify us of any changes or special circumstances involved with your taxes. As tax preparers, it ensures important questions that need to be asked, are asked. This makes sure every deduction and credit are taken to its fullest, and your 2019 tax return is filed properly and accurately.

The first page is absolutely required to be filled out. It asks for your current address, phone number and email address. We need to have your contact information so that we can reach you for questions and to let you know that your return has been completed. The “yes or no” questions are intended to remind you of events that have occurred throughout the previous year that might affect your tax return. Some examples being you started a new business, had a baby, or began contributing to a 529 plan for your children’s future education expenses. Based on the way a question is answered, we know if we need to ask for more information to complete the return.

Pages two and three ask for information that might lower your taxable income. This includes information about any estimated tax payments made, your Health Savings Account, real estate taxes, and various other tax related information. One of our goals at SBS CPA Group is to make sure you pay as little in taxes as the law allows.

The yearly tax planner is not sent out each year to be overlooked and forgotten. It is provided to help lower your tax bill and ensure filing your taxes is a smooth process. If you have any questions for us at SBS CPA Group, don’t hesitate to call us at 260-407-5000.

Brendan Lewis

The post 2019 SBS Tax Planner appeared first on SBS CPA Group, Inc. .

1099-MISC: The Why, The Penalties, and The Rules.

Fri, 10 Jan 2020 15:30:00 GMT

For the average person, January is the beginning of a new year. The month is filled with many New Year’s Resolutions. No matter the outcome of these resolutions, it is safe to say we all believe it is going to be a great year. January has many important aspects. One that comes to mind is the requirement for businesses to send out Form 1099-Misc by January 31 ^st .

There are many circumstances where a 1099-MISC must be filed. This may include rents, services performed, prizes or awards, other income payments, and a variety of other circumstances. To see a full list, please visit the IRS website, keyword 1099-MISC. A 1099-MISC must be filed for any independent contractor that was paid at least $600 in the course of your business. If you paid someone less than $600 or they are incorporated, a 1099-MISC is not required. All of which must be filed before January 31 ^st of the following tax year.

There are penalties associated with 1099-MISC. The first is for not filing correct information returns. These may apply if you file after the January 31 ^st due date, paper file when you were required to file electronically, file a return with missing or incorrect information, or file a paper return that is not machine readable. The second is for not providing correct payee statements. It may apply if you fail to provide a correct payee statement by the January 31 ^st due date, you provide a statement that is missing all of the required information, or provide a statement with incorrect information. For small businesses with gross receipts five million or less, it can range from $50 to $550 per return. This can add up if you are submitting more than a handful of 1099-MISC.

If you have any questions or concerns, please feel free to contact SBS CPA Group at 260-407-5000. We are here to answer any of your questions.

Brendan Lewis

The post 1099-MISC: The Why, The Penalties, and The Rules. appeared first on SBS CPA Group, Inc. .

Happy New Year from SBS CPA Group

Mon, 30 Dec 2019 15:19:00 GMT

Our office will be closed on January 1st in observance of New Years Day. We will reopen for business as usual on January 2nd. We wish everyone a safe and Happy New Year!

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Happy Holidays from SBS CPA Group

Fri, 20 Dec 2019 15:00:00 GMT

Our office will be closed on December 25th and December 26th in observance of the holiday. We will return to our normal business hours on Friday, December 27th. We wish everyone a safe and enjoyable holiday!

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What should I do if I receive a notice from a taxing agency?

Sat, 14 Dec 2019 20:54:00 GMT

Throughout the year, we receive a lot of correspondence from both clients and non-clients about a letter or notice they receive from a taxing agency. It could be from the IRS, The Indiana Department of Revenue, The Indiana Department of Workforce Development, another state government, Social Security, or another agency. In all cases, we recommend that they get us a copy of the notice for review as soon as possible. We cannot assist our clients until we get a copy of the notice.

The largest mistake taxpayers make is they ignore notices they receive. You should never ignore a notice.

Most notices are written poorly and are hard to understand unless you are familiar with the tax law and regularly deal with tax notices. The Internal Revenue Service (IRS) commonly asks for additional information. The IRS and other agencies honestly seem to expect that taxpayers retain all of their financial and tax records organized by year in a hermetically sealed room in case they are needed. For those clients that do not, we can gather what is necessary and send it off with a response quickly.

There are also a number of notices that people bring in that turn out to be a scam and we have dealt with several in the last few months. Scammers will send out threatening letters about tax liens or sending you to jail to scare people into sending them money. Sometimes these letters are obviously fake; littered with spelling and grammar mistakes, but they are becoming more sophisticated each year. If you pay the scammers, it is nearly impossible to get the money back. Should you fall victim to identity theft, contact the IRS via Form 10439. They will mark your account with an identify theft indicator to help protect you in the future. They may also give you an Identity Protection PIN, which is a six-digit pin that will be sent to you every year for use on your tax return. We must have the Identity Protection PIN in order to e-file your return.

If you receive a letter or notice from a taxing agency we strongly recommend you send it to us within a few days. We cannot assist you in resolving the notice until we get a copy of the actual notice. If you have any questions, please contact us at (260)407-5000. We are happy to help!

Mike Sylvester, CPA/ABV. MBA

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Charitable giving under the new tax law

Sun, 08 Dec 2019 20:29:00 GMT

The 2018 Tax Cuts and Jobs Act changed the tax world dramatically. It gave us the Qualified Business Income deduction, increased the child tax credit, lowered the corporate tax rate that C Corporations pay, and far too many changes to list here. The new tax law nearly doubled the standard deduction and this in turn means that more taxpayers are taking the standard deduction and fewer are itemizing their tax deductions. If you take the standard deduction how much you give to charity no longer effects your personal income tax return. There are certain strategies that can be implemented that will help some tax payers retain the ability to write off charitable donations.

One way that is available to everyone is the concept of ‘bunching.’ This is where instead of giving a smaller amount in years 1 and 2, instead you contribute both year 1 and 2’s amount in the same year. You would still be contributing the same amount, however, donating it all in one year may cause your itemized deductions to be greater than the standard deduction in the year that you ‘bunch’ your itemized deductions. Knowing where you stand with other itemized deductions; such as real estate taxes and deductible mortgage interest, will help you judge if it is worth it to ‘bunch’ your deductions or not.

There is another option available for those 70½ or older with traditional taxable IRAs. Instead of receiving the IRA distribution personally, you can elect to have your IRA custodian transfer money directly to a qualified charity. This is called a qualified charitable distribution (QCD). The rules for a QCD are very specific so talking with your IRA custodian is important to make sure it is handled correctly. The benefit of doing a QCD over donating the money yourself is the QCD is not an itemized deduction and is deducted on the face of the return. A QCD can also satisfy the required minimum distribution for the year it is done.

If you have questions about this or anything else please give us a call at 260-407-5000.

Mike Sylvester, CPA/ABV, MBA

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Are you having enough taxes withheld from your paychecks?

Thu, 05 Dec 2019 17:35:00 GMT

When 2018 tax returns were filed in April of 2019, many Americans were surprised to see that they would be writing a check to government instead of receiving one. This marked the first time in their life many had owed the federal government after doing their taxes. According to the IRS, they issued 1.5 million less refunds by the beginning of April 2019 as compared to the same period prior year.

What caused this shift? The answer is form W-4. Employees fill out the form, give it to their employer, and it dictates how much is withheld from their paychecks based on a table. The Trump Administration told the IRS to make changes to the table so people would take more home with each paycheck. The effect was higher take home pay at the cost of less being paid in. This lowered refunds and caused many people to owe at year end.

Financial professionals feel it is better to have more take home pay than a larger tax refund. When you get a large income tax refund you are just giving the government an interest free loan. That being said, many Americans want a large refund at the end of the year as a sort of forced savings account. Others want to be as close to $0.00 as possible. Having the correct amount withheld is a balancing act. No one wants to be caught off guard by a large bill with penalties and interest.

In order to avoid potentially owing for 2020, you need to make sure your W-4 is telling your employer the right information. Contact SBS CPA Group at 260-407-5000 and we will help you figure out how to best fill out the W-4 for your personal situation.

Mike Sylvester, CPA/ABV, MBA

The post Are you having enough taxes withheld from your paychecks? appeared first on SBS CPA Group, Inc. .

New Fort Wayne fire protection rules start on January 2nd 2020

Mon, 02 Dec 2019 16:44:00 GMT

I am not an expert regarding fire protection rules; however, a couple of my clients are. The City of Fort Wayne passed some ordinances that will change how fire code is enforced within the city limits of Fort Wayne and in the unincorporated portions of St Joseph Township. These changes will be significant and will do all of the following:

The City of Fort Wayne has met with the companies who do annual fire inspections in Fort Wayne. They have emphasized to them:

The new rules effect all structures and premises other than single family dwellings and multiple family dwellings. Basically this means it will effect all businesses within Fort Wayne (and those in the unincorporated portions of St Joseph township that are now under the purview of the Fort Wayne Fire Department). Up until this point all were required to get an annual fire inspection and that annual inspection was handed to the business owner. In some cases the business owner did not resolve the deficiencies.

What the new rules will mean to Fort Wayne businesses (and those in the unincorporated portions of St Joseph township that are now under the purview of the Fort Wayne Fire Department):

These changes will cause some businesses located in older buildings to spend a large amount of money to comply with fire code. It is likely some of these businesses will close rather than comply with fire code due to the costs.

Please give Mike Sylvester a call at 260-407-5000 if you have questions about these new rules and I can put you in contact with a local fire protection company if necessary.

Mike Sylvester, CPA/ABV, MBA

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2020 Tax Inflation Adjustments

Mon, 02 Dec 2019 01:01:00 GMT

Earlier this month, the IRS announced the annual inflation adjustments for more than 60 tax provisions for the 2020 tax year. These adjustments affect tax year 2020 which is filed by April 15, 2021.

The standard deduction jumped up $400 to $24,800 for married filing jointly taxpayers. For single taxpayers, the deduction rises to $12,400 and head of household filers will see a $18,650 standard deduction.

For 2020, the top tax rate remains 37 percent for single taxpayers with incomes higher than $518,400 ($622,050 for married filing jointly). The lowest tax rate is 10 percent for singles with incomes of $9,875 or less ($19,750 for married filing jointly).

The IRS has raised the 401(k)-contribution limit to $19,500 for 2020, up from $19,000 in 2019. The limit regarding SIMPLE retirement accounts for 2020 increased to $13,500. The limit on annual contributions to an IRA remains unchanged at $6,000. The phaseout ranges for deductible contributions to a traditional IRA for 2020 are:

Other important adjustment news for tax year 2020 include:

SBS is here to keep you up to date on current tax news. It is never too early to plan for taxes. Please give us a call at 260-407-5000 if you have any tax questions at all.

Tanner Roberson, CPA

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Tax Projection Season

Sat, 30 Nov 2019 18:25:00 GMT

Are you one to procrastinate when it comes to taxes? It is so easy for us to kick the proverbial can down the road when it comes to tax planning. However, there are deadlines for credits, deductions, etc to consider. For example, an Indiana resident who wants to take advantage of an Indiana 529 tax credit must contribute to a College Choice Indiana 529 plan by December 31 ^st .

SBS does a lot of tax projections this time of year because we want to be a year-round tax resource for our clients. Taxes are not just about April 15 ^th , they are about tax planning and having a professional firm such as SBS sit down and help prepare you.

Tax projections have many benefits including:

There are many of our clients who take advantage of our tax projection service. SBS would love to encourage more clients to come out for a tax projection and avoid any unnecessary surprises. November and December are great months to make this happen.

Let SBS keep current on tax law and legislation for your business. Tax planning affects not just short-term decisions but also long-term decisions as well. SBS is here to identify strategic tax planning opportunities that work to reduce your tax liability.

Please give us a call at 260-407-5000 and talk to any one of our CPAs. We want you to take advantage of this great tax planning tool we provide.

Tanner Roberson, CPA

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Thanksgiving Holiday

Wed, 27 Nov 2019 14:35:00 GMT

In observance of Thanksgiving, our office will be closed on Thursday, November 28th and Friday, November 29th. We will return to our normal business hours on Monday. We wish everyone a Happy Thanksgiving!

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Don’t Be Surprised by a W-2 G from Your Sports Betting App

Tue, 26 Nov 2019 21:10:00 GMT

On September 1 ^st 2019 our great state of Indiana legalized sports betting. Many Hoosiers have taken advantage of this new law. In fact, data shows that Indiana sportsbooks accepted $35.2 Million in bets during the first month of legal sports gambling. This isn’t including online mobile sports betting which began in Indiana on October 3 ^rd 2019. During that second month of legalized sports betting, almost three times more money was wagered than the prior month. This is due to $48 million in bets coming from mobile sportsbooks apps.

I know many people who have downloaded apps such as DraftKings Sportsbook on their smartphones which allows them to bet online on their mobile devices, computers, etc. Mobile sportsbooks apps will send you a W-2G if you win over $600.

Per the IRS code, taxpayers must report all gambling winnings on the other income line of the Form 1040. Gambling losses can only be deducted up to gambling winnings but here is the kicker, gambling losses are only deducted on Schedule A. So, if you don’t itemize, you can’t deduct any gambling losses from your gambling income. This is a big issue since the Standard deduction doubled back in 2018.

Before you engage in mobile online sports betting, you must understand the tax consequences. For easy math purposes, let’s say you win $2,000 on a mobile sports bet on an NFL game and you paid $1,000 to make the wager. You must report all $2,000 as gambling winnings and the $1,000 of gambling losses can only be deducted if you itemized on your tax return.

The legalization of online sports betting has made it so simple for taxpayers to place bets and make extra side money. Please come see one of our CPAs at SBS CPA Group so we can help you understand the tax consequences of online sports betting.

Call us at 260-407-5000 and schedule an appointment at your convenience.

Tanner Roberson, CPA

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The Importance of Bank Reconciliations

Thu, 31 Oct 2019 15:29:00 GMT

When I was young lad, I remember watching my mother go through her check register and mark off which checks cleared the bank each month. She would go over the bank statement and check all the deposits to make sure they were correct. Fast forward to present day, I am not sure of the last time I wrote a paper check, but I still look over the bank transactions.

Reviewing your bank and credit card transactions is important, both personally and for business. It can help you catch bank errors, though this is pretty rare, notice suspicious charges earlier, and in general give you a feeling for your cash flow. If you notice that the cash-ins are not keeping up with the cash-outs, you know something needs changing. It all starts with looking over and reconciling your accounts.

For businesses, reconciliations are generally one of the first things asked about and checked. The bank being reconciled means that all the transactions that hit the bank are on the books, even if they are not necessary in the right category. It is less likely that income and expenses are missed when preparing a tax return. Most banks make this a very easy process nowadays with online banking. Many of them let you see several months back, have scans of checks, and gives you the ability to download transactions to QuickBooks. Making a habit of doing this monthly can save a lot of time and money.

If you need assistance with reconciling your accounts, especially with QuickBooks, give us a call! Now is a good time to make sure you are caught up and ready to go for 2019 taxes.

Shane Lengerich

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Preparing for Your 2019 Tax Return

Thu, 31 Oct 2019 15:28:00 GMT

2019 is coming to a close, and now is a good time to do a check on your tax situation for April 2020 while there is time to make adjustments. Let’s discuss some of these options; however, before you do implement any of them, it would make sense to discuss with your tax preparer.

Payroll Withholding

The easiest ways to make sure you do not owe in 2020 is to look at your withholdings and see what your total taxes (federal and state respectively) due were last year. Check how many pay periods you have left, average your wages and withholdings, and with some napkin math, you should be able to see if you need to increase your withholding or if you are alright leaving it where it was.

Retirement Plans

Pre-tax retirement plans are a good way to plan for the future and pay less in taxes right now. If your company offers a form of retirement plan, and you are not contributing or can afford to put more aside, you can lower the amount of income that will be taxed by putting more into the plan. If there is a matching portion, make sure to put in enough to receive that match at the least. It is essentially free money.

Health Savings Account

A health savings account is a great vehicle for medical AND retirement if you are eligible. For 2019, you can contribute $3,500 (if you have single only coverage, $7,000 for family coverage) and have that as a deduction on your tax return. To take it as a deduction, it cannot have been deducted pre-tax via your payroll. To be eligible for an HSA, you must have a high deductible insurance plan. Make sure to consult with your insurance to check your eligibility.

Indiana 529 Plan

Contributing to an Indiana 529 is an option to save money on taxes, though it only affects the Indiana return. For every $1,000 contributed, you get a credit of 20%. The cap is reached at $5,000, for a maximum credit of $1,000. A 529 plan is a fund set up to help with future education expenses. Previously it could only be used for higher education, but was changed in the past year to apply to K-12 qualifying education expenses as well. As long as the money is used to pay for qualifying education expenses, the entire distribution is tax-free for college and up to $10,000 for K-12.

Indiana Scholarship Granting Organizations

If you contribute to an Indiana scholarship-granting organization, Indiana will let you take 50% of that contribution as a credit. There is no limit on the amount donated or the credit amount at the taxpayer level. However, Indiana does have designated funds for this credit, and once it runs out, they will no longer grant it. This is handled on a first-come, first-serve basis.

Shane Lengerich

The post Preparing for Your 2019 Tax Return appeared first on SBS CPA Group, Inc. .

What to Do If You Have Not Filed Your Income Taxes

Thu, 31 Oct 2019 15:25:00 GMT

Individual income tax returns are due on April 15 ^th . If you need additional time to complete your tax return, you can file for a 6-month extension. This puts the final due date for your individual income tax on October 15 ^th . If either 15 ^th deadline falls on a weekend, the due date moves to the next business day. That gives you approximately 319 days to file a tax return. What if you did not get your return done on time?

Even though you are late, it is still better to file a tax return than to not. Ignoring the problem will make it worse. The main reason is how high the Failure to File penalty is for taxpayers. The minimum fee is $205 or 100% of the unpaid tax if it is under $205. It can be 5% of the unpaid tax up to a maximum of 25% of the unpaid tax. If, for example, you had $1,000 in unpaid taxes, you could end up paying an extra $250 in penalties with more in interest. Everyone would agree that it is not a wise use of hard-earned money.

If you cannot afford to pay the taxes owed, file the return anyway. The IRS has options for short term and long-term payment plans. If you owe less than $50,000 in combined taxes, penalties, and interest, you can even apply online for a long-term payment plan (that number is $100,000 for a short-term plan). One of the caveats to that is that you must have all tax returns filed. On the flip side, you have three years from the deadline to claim your refund. After the deadline, that refund is forfeit and goes to the government.

If you need help getting caught up on old tax returns, now is a good time to get current! Give us a call, and we will do our best to help you.

Shane Lengerich

The post What to Do If You Have Not Filed Your Income Taxes appeared first on SBS CPA Group, Inc. .

Congratulations Tanner and Taylor

Tue, 29 Oct 2019 21:01:00 GMT

SBS would like to congratulate Tanner and wish him all the best on his marriage to Taylor on October 26th! May this be a beautiful beginning for a wonderful married life together.

The post Congratulations Tanner and Taylor appeared first on SBS CPA Group, Inc. .

QuickBooks Training and Support

Thu, 05 Sep 2019 22:11:00 GMT

One of the services we provide here at SBS CPA Group in Fort Wayne, Indiana is QuickBooks training and support. We work with hundreds of QuickBooks Desktop and QuickBooks Online users. We use QuickBooks every day. For your accounting needs, QuickBooks is the way to go! At SBS, we have multiple employees who are QuickBooks Pro Advisors and QuickBooks Online Pro Advisors. I personally am a QuickBooks Online Pro Advisor and I love to help clients get the most out of their QuickBooks software.

Here are the benefits of completing QuickBooks training with SBS:

Intuit, the company that owns QuickBooks, has been pushing QuickBooks Online hard in recent years. In fact, QuickBooks Online subscribers were up 43% on July 31, 2018 compared to July 31, 2017. We have had more and more clients using QuickBooks Online in the last few years. I am the QuickBooks Online expert at SBS CPA Group. I have worked with all areas of QuickBooks Online including payroll, invoicing, billing, etc. I would love to have you come in for a QuickBooks Online training session.

SBS has worked with QuickBooks Desktop since the founding of our company. We have multiple QuickBooks Pro Advisors that can assist with any training or support needs. In fact, I recently went to a clients office half a dozen times over a three month time period to train their in-house bookkeeper on QuickBooks Desktop.

Please give us a call today at 260-407-5000 to schedule your QuickBooks training session. SBS enjoys saving you time and helping you maximize the value of your accounting records.

Tanner Roberson, CPA

The post QuickBooks Training and Support appeared first on SBS CPA Group, Inc. .

QuickBooks Online

Wed, 04 Sep 2019 14:01:00 GMT

QuickBooks Online is a program we deal with all of the time here at SBS CPA Group. I am the QuickBooks Online expert in the office and some of our larger clients use QuickBooks Online. QuickBooks Online is all cloud-based meaning it is stored in a secure place on the internet. This is a stark difference to QuickBooks desktop where users download the program onto their desktop computer and only a few people in a short range can get into the file at once unless it is hosted on a shared server.

There are various benefits of QuickBooks Online that include:

Intuit is pushing QuickBooks Online as the future of small business accounting. In fact, that are making it harder and harder for people to purchase QuickBooks Desktop. The main reason for this is the fact that Intuit charges significantly more for QuickBooks Online than QuickBooks Desktop. We have many clients using QuickBooks Online. We would love for you to come in and take advantage of the QuickBooks Online training and support SBS CPA Group provides. Please call 260-407-5000 and talk to Tanner L Roberson, CPA.

Tanner L Roberson, CPA

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QuickBooks Desktop

Tue, 03 Sep 2019 19:57:00 GMT

Here at SBS CPA Group, we have had over 15 years of QuickBooks Desktop experience. All of us at the office get in at least five to ten different QuickBooks Desktop files a day. QB Desktop is the product that put Intuit into small business prominence and has been a huge part of small business accounting for many years. We provide a great deal QuickBooks Desktop training and support at SBS CPA Group. All of us here at SBS have worked in all areas of QB Desktop whether it is invoicing, bill pay, payroll, bank reconciliations, etc.

Here are some benefits of QuickBooks Desktop:

On a daily basis SBS CPA Group provides QuickBooks Desktop training and support in all areas. Please give one of our CPA’s a call today at 260-407-5000 and schedule your free initial consultation to learn more about how we can help your small business!

Mike Sylvester, CPA/ABV

The post QuickBooks Desktop appeared first on SBS CPA Group, Inc. .

Labor Day Holiday

Tue, 27 Aug 2019 20:29:00 GMT

It’s almost September! You know what that means . . . Labor Day! The holiday falls on Monday, September 2 ^nd this year. Our office will be closed to allow our employees one last long weekend to celebrate summer before fall arrives. We hope you make the most of your weekend as well!

Jennifer Martin

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SBS is Growing!

Fri, 09 Aug 2019 19:52:00 GMT

Summer is finally here and SBS CPA Group is growing! We have you to thank for that! We would like to welcome Brendan Lewis and Jennifer Martin to our group!

Brendan is our new staff accountant. He is a recent graduate from Purdue Fort Wayne with a degree in Accounting and Finance. Brendan is ready to hit the ground running and assist the community with any of their accounting and tax needs.

Jennifer is our new administrative assistant. You will find her at our front desk. She lives in Fort Wayne and brings with her 14+ years of administrative experience. She is eager to settle into her new position and provide you with exemplary service.

Please make sure to welcome Jennifer and Brendan to SBS next time you are in the office!

Karena Sylvester, CPA

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The End of the Windows 7 Era

Fri, 05 Jul 2019 18:02:00 GMT

Microsoft will be ending its support for its Windows 7 operating as of January 14 ^th , 2020. After that date, they will no longer be providing free updates, including ones for security. Computers that remain on 7 will become increasingly susceptible to attack from outside forces, because exploits will be found, but not be patched by Microsoft.

The easiest way to deal with Windows 7 support coming to an end is to update to Windows 10. Microsoft recommends installing this on a new PC, so it could also be a good time for a business to evaluate its technology needs and develop a technology plan for the future.

An alternative option if you need more time to make the transition from Windows 7 to something else would be to pay for Windows 7 Extended Security Updates. If you pay for this, Microsoft will still send you security updates for up to three additional years (extending the security support up to 2023). It is only available for the Professional and Enterprise versions of the operating system and is not particularly cheap at $25 per device the first year and doubling each year after.

Many people remember Windows 7 as the savior that rescued them from Vista and will be sad to see it go. Like the end of Windows XP, it is probably better cost and security wise to move onto Windows 10 rather than pay additional money to end up having to update at the end anyways. If you absolutely cannot, at least you are now aware of an alternative for a few years.

Shane Lengerich
260-407-5000

The post The End of the Windows 7 Era appeared first on SBS CPA Group, Inc. .

Business Trip Vs. Personal Trip Expenses

Fri, 05 Jul 2019 17:59:00 GMT

Let’s imagine a hypothetical situation. You are a small business owner and there is a convention in Orlando, Florida where you could setup a booth for networking and sales. The conference is Monday through Wednesday. You decide to stay through the next Monday to go to Disney World. What and how much is deductible for tax purposes? That depends on the intent of the trip.

The IRS distinguishes, in Pub 463, between how to handle travel for business with personal aspects and travel for personal reasons with business aspects. If you are primarily going for business, travel expenses to your business location and back are deductible, as well your expenses relating to business. The Airfare, lodging, Ubers from the airport to your hotel or business location, parking at the convention center, booth fees, and other expenses in the same vein would be deductible. Meals are still at 50%, and with the new tax law, entertainment is not deductible at all regardless.

If you are traveling primarily for personal reasons, but you will be handling some business, what you are allowed to deduct is much narrower. The travel expenses to your location and lodging are no longer deductible. Anything that is not business related is no longer deductible. The booth fee and parking at the convention would be examples of expenses that are still deductible regardless of your intent for the trip.

Given that this topic does have a large grey area regarding intent, if you have questions about if your trip is business or personal, reach out to us at SBS CPA Group. We will do our best to clarify what is likely deductible or not.

Shane Lengerich
260-407-5000

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Summer Time is the Perfect Tax Time

Fri, 05 Jul 2019 17:53:00 GMT

The summer season is a traditionally a slow season for accounting firms. It is a good opportunity for staff and partners to take a break and recharge their batteries before the small rush season of extended tax returns in the Fall.

If you are one of estimated 14.6 million who extended your return or just has not gotten around to filing this year, using the slow part of the year to get caught up is a great idea. This is especially true for S-Corp and Partnership returns, because their K-1s are holding up individual returns. The extended S-Corp and Partnership returns deadline is September 16 ^th . Since they can be much more complex than the average return, coming in during the summer means there is plenty of time to get questions answered and information gathered without rushing.

The deadline for Individual returns is October 15 ^th . If you did file your individual tax return and later received a K-1 form from an extended S-Corp or Partnership, the return will likely need amended. This is why it is important to get S-Corps and Partnership finished and filed before moving onto individual returns for individuals involved in those types of businesses.

We would be happy to help you get your 2018 tax year finished up and look for things that could help you for 2019 while there is still time to make adjustments.

Shane Lengerich
260-407-5000

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JULY 4TH HOLIDAY

Wed, 03 Jul 2019 12:49:00 GMT

Can you believe it is already the 4 ^th of July? Where has the summer gone? It will be time to start thinking about the kids going back to school before you know it. We would like to take this opportunity to wish everyone a wonderful and safe summer and Independence Day.

SBS CPA Group will be closed on Thursday, July 4 ^th so that we can celebrate the holiday with friends and family. The office will be open on Friday, July 5 ^th . Vacation is on everyone’s mind at this time of the year but it is never too early to get answers to your tax questions. Please feel free to contact us at 260-407-5000.

HAPPY 4 ^TH OF JULY!

Lisa Hagar

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Fort Wayne Real Estate Market is doing very well

Fri, 07 Jun 2019 20:43:00 GMT

I have had several calls from potential new clients who want to discuss the tax benefits of real estate investments. I have talked to seven people in the last six months alone and that is a record for me. There are a growing number of investors from the coasts who are investing in the Midwest and there are large social media groups discussing this topic.

The Fort Wayne real estate market is currently a sellers market in many price ranges and geographical areas. Many sellers are getting multiple offers within the first 24 hours and there have been quite a few properties sold at significantly above asking price. This is not normal in Fort Wayne, Indiana!

I have a lot of clients who own rental properties and who flip houses. Please call me at 260-407-5000 if you have tax questions regarding real estate!

Interesting Fort Wayne Rankings from Niche:

Mike Sylvester, CPA/ABV. MBA

The post Fort Wayne Real Estate Market is doing very well appeared first on SBS CPA Group, Inc. .

The new tax law really raised some people’s income taxes due to the “Kiddie Tax”

Fri, 07 Jun 2019 20:23:00 GMT

The “Kiddie Tax” has been around since 1986. Through the end of 2017 the “Kiddie Tax” caused children to have to pay higher income taxes (mostly at their parents income tax rates rather then the child’s income tax rates) on their unearned income.

The Tax Cuts and Jobs Act (TCJA) made major revisions to the Federal tax code for 2018 – 2025. A majority of these changes lowered taxes for many people; however, there were several changes that will cause some taxpayers to pay higher taxes. The “Kiddie Tax” changes in the TCJA is one area that is going to increase the taxes for many younger people with a significant amount of investment income.

The “Kiddie Tax” still effects unearned income such as dividends, interest, capital gains, most income from rentals properties, social security benefits, pension or annuity income, and income received as the beneficiary of a trust to name a few.

Generally speaking the “Kiddie Tax” must be paid if all four of the below are true:

The new law forces those subject to the “Kiddie Tax” to pay income tax rates that are the same as trusts and estates. This is a major tax increase for most of the people subject to the “Kiddie Tax.”

If you or your kids are subject to the “Kiddie Tax” please give Mike Sylvester, CPA a call at 260-407-5000.

Mike Sylvester, CPA/ABV, MBA

The post The new tax law really raised some people’s income taxes due to the “Kiddie Tax” appeared first on SBS CPA Group, Inc. .

Tax Planning in Fort Wayne Indiana

Fri, 07 Jun 2019 19:56:00 GMT

We do a lot of complicated business and personal income tax returns at SBS CPA Group. We are conveniently located on the north side of Fort Wayne, Indiana at 10351 Dawsons Creek Blvd, Suite H, Zip Code 46825. We also assist our clients with comprehensive tax planning services.

I spoke with a client today who owns a very successful small business that is treated as a sub chapter S corporation for tax purposes. They can save 59 cents on the dollar on this years taxes if they contribute $35,000 to their traditional business retirement plans. Their situation is unusual and it is rare for someone to realize this much tax savings In their specific situation they can save this much money because their business is an SSTB (Specified Service Trade or Business) and they are starting to phase out of the new 199A deductions.

I spoke with a client last week who is an active real estate investor who is purchasing many properties and they will be able to significantly lower their 2019 income taxes due to some strategies they implemented after one of our meetings.

Please give us a call at 260-407-5000 and arrange your free initial consultation with a Certified Public Accountant.

Mike Sylvester, CPA/ABV, MBA

The post Tax Planning in Fort Wayne Indiana appeared first on SBS CPA Group, Inc. .

Memorial Day Holiday

Tue, 21 May 2019 19:25:00 GMT

“To those in uniform serving today, to those who have served in the past, and to those who have lost their lives, we honor you today and every day.” – Unknown

We will be celebrating Memorial Day to show our appreciation. Our office will be closed Monday, May 27, 2019 due to the holiday. We will reopen at 8:30 a.m. on Tuesday, May 28, 2019.

Thank you to all!

Have a Wonderful Holiday!

Jenn Randle

The post Memorial Day Holiday appeared first on SBS CPA Group, Inc. .

SBS is growing and needs more outstanding accountants!

Tue, 23 Apr 2019 19:41:00 GMT

SBS CPA Group (which I have been a proud member for over 10 years) is continuing to grow and expand our client base. We now have 3 full time CPA partners, 2 CPA staff accountants, a staff accountant working towards becoming a CPA, a bookkeeper and an administrative assistant. Quite a change from 10 years ago!

We need a CPA, EA and/or an accountant with experience in public accounting. A great candidate will be someone who has:

We offer a wide range of benefits including

We work in a friendly and casual environment. We get to know our clients and they trust us to give them outstanding advice.

If you are or if you know someone who might be interested, please apply by following this hyperlink: Zip Recruiter: SBS Recruitment and Application .

We are looking forward to making our already great team even better!

Brent

The post SBS is growing and needs more outstanding accountants! appeared first on SBS CPA Group, Inc. .

Indiana Business Tangible Personal Property Taxes

Tue, 23 Apr 2019 19:35:00 GMT

You might think that tax season for SBS CPA Group is over. However, there is one more obstacle we need to overcome: Business Tangible Personal Property Taxes due on 5/15/2019.

Don’t be fooled by the name, this has nothing to do with your personal belongings. The technical definition of business personal property is everything which isn’t real property. Real property is defined by buildings and land. Thus, business personal property is everything else (fork lifts, furniture, computers, etc…). Confusing right?

If you don’t have a significant amount of personal property ($20,000 of cost or less), you can be exempt from paying any tax. However, you STILL need to file the forms.

Our firm prepares hundreds of these tax returns each year and we would be happy to help you.

Give us a call at 260-407-5000, and we would be happy to assist you.

Brent

The post Indiana Business Tangible Personal Property Taxes appeared first on SBS CPA Group, Inc. .

What happens if I didn’t pay or file my taxes by the deadline?

Tue, 23 Apr 2019 19:32:00 GMT

Tax season for 2019 (2018 taxes filed in 2019) is finally over. The staff at SBS couldn’t be happier. We worked a lot this season and helped a lot of people. We all really need a break and we are planning vacations, long weekends and reconnecting with family and friends.

Even though we prepared a lot of tax returns prior to April 15, there are still some that haven’t filed. So, what happens if you didn’t file or pay your taxes by the due date? Well, there are 2 penalties which you need to worry about: failure to file and/or failure to pay.

Failure to file comes into effect when no return is submitted before the due date. It is also the much harsher penalty, 5% of the taxes owed for every month your return is not submitted up to a 25% maximum.

Failure to pay is .5% of the tax owed for every month the taxes remain unpaid. Please note that for every month that the failure to file and failure to pay both apply, the failure to pay is waived.

As you can see, it is better to file a return and then work out how to pay rather than not filing because you might owe.

The worst thing you can do is ignore the IRS. They will work with you to resolve your tax issues. They have several programs including installment agreements and offer in compromises.

If you need help filing your tax return or other questions, give us a call at 260-407-5000.

Brent

The post What happens if I didn’t pay or file my taxes by the deadline? appeared first on SBS CPA Group, Inc. .

Why are so many Fort Wayne, Indiana residents getting lower Federal Tax refunds this year?

Mon, 25 Mar 2019 08:07:00 GMT

We have prepared close to 800 income tax returns so far at Small Business Services CPA Group. Our clients are not necessarily typical since a large number of our clients own a business or own rental properties or are relatively high income with fairly complicated income tax returns.

So far among our clients about 3% have seen their Federal income taxes increase, about 12% have seen no change (mostly lower income retirees), and 85% have seen their Federal income taxes decrease.

That being said, in March of 2018 the Internal Revenue Service created a new income tax withholding table and most Indiana employers started using this new withholding table in either March of 2018 or in April of 2018. This new withholding table was designed so that most Americans would receive more take home pay and have less money withheld and remitted for Federal income tax withholding throughout the year.

This change increased the take home pay of many employees significantly; especially those employees with higher incomes. The new withholding tables caused millions of Americans to have too little Federal income tax withheld from their paychecks and many of those individuals are getting smaller refunds than they are accustomed to or they are owing taxes and having to write checks to pay the amount they owe the IRS by April 15th, 2019.

The vast majority of my clients are paying less in Federal income taxes for 2018. It is common for one of my clients who had an effective Federal income tax rate of 20% last year to have an effective Federal income tax rate of 17% this year. That being said, most of those same people are getting lower refunds or even owing the IRS because they received their tax cut through higher take home pay throughout the year.

Mike Sylvester, CPA/ABV, MBA

The post Why are so many Fort Wayne, Indiana residents getting lower Federal Tax refunds this year? appeared first on SBS CPA Group, Inc. .

Employee fraud and theft in Fort Wayne, Indiana

Sun, 24 Mar 2019 19:51:00 GMT

SBS CPA Group specializes in businesses. We partner with over 500 local businesses and provide a wide variety of services including tax planning, tax return preparation, tangible business personal property taxes, sales tax, use tax, payroll and payroll taxes, bookkeeping, business consulting, CFO services, choosing the correct type of businesses entity from a tax perspective, business valuations, QuickBooks training, QuickBooks Online training, and more.

Unfortunately over the last several years we have had multiple clients who were taken advantage of by trusted employees who were often the office manager, the bookkeeper, or the accountant. In some cases these employees were even related to the business owners.

Technology is in many cases making fraud easier to commit. Business owners wear many hats and unfortunately get pulled in many different directions. Many times this fraud goes on for several years before it is detected.

Business owners need to be diligent and put processes into place to detect and discourage fraud.

Please give us a call if we can be of assistance to you or your business!

Mike Sylvester, CPA/ABV, MBA

The post Employee fraud and theft in Fort Wayne, Indiana appeared first on SBS CPA Group, Inc. .

Is there still time to get my 2018 income tax returns done at SBS CPA Group?

Sat, 23 Mar 2019 19:51:00 GMT

It has been a great tax season at SBS CPA Group. We really like our new office at 10351 Dawsons Creek Blvd, Suite H. We are on the north side of Fort Wayne, Indiana in the 46825 zip code.

We will get all tax returns dropped off by 6 PM Monday April 1st, 2019 done by the April 15th filing deadline. The only exception is if you bring in something that is a mess (For example maybe you have a business and need us to do the bookkeeping and payroll for all of 2018).

We will be filing a large number of extensions for those people who cannot drop off everything we need by 6 PM on April 1st, 2019. An extension is an extension of time to file; not an extension of time to pay. We will discuss with you whether or not you need to make payments with your extensions.

Please call us at 260-407-5000 if you need to file an extension.

Mike Sylvester, CPA/ABV, MBA

The post Is there still time to get my 2018 income tax returns done at SBS CPA Group? appeared first on SBS CPA Group, Inc. .

Documents Needed For Tax Preparation

Wed, 13 Feb 2019 16:27:00 GMT

It is tax season again and that means it is time to do that dreaded chore everyone has to face once a year – gathering paperwork for tax preparation! It is cold and snowy outside so it is the perfect time to complete this task.

The first step we need everyone to take is to complete the tax planner that you received in the mail in early January. The first page makes sure we have current customer contact information and the questions help immensely in letting us know what when on in your life in 2018 that may affect your taxes. The second and third pages give us information that allows us to prepare the return in a timely manner. If you did not receive your tax planner, please let us know and we will provide you with another one.

In order for SBS CPA Group to do your taxes as accurately as possible, we ask that you provide the original document or copy of those forms listed on page 3 of the tax planner. We do not need the actual receipts for medical expenses; you can add the receipts and put the total on the tax planner. We also do not need all of the receipts for donations to charity; you can list these on the tax planner. The IRS almost doubled the standard deduction so we expect fewer people to itemize this year.

Please make sure to drop-off/email/mail everything at once; it easier and more efficient for us to prepare the taxes when we have everything we need. The tax preparation fee is based on the amount of time it takes to prepare the return so the more efficient you are the lower your bill for tax preparation.

If you have any questions, please feel free to contact us and we will be more than happy to help. We are looking forward to another successful tax season and appreciate all of our clients. Stay safe and warm in this crazy weather!

Lisa Hagar

The post Documents Needed For Tax Preparation appeared first on SBS CPA Group, Inc. .

Safe Harbor Rules for Rental Properties to Qualify for a 20% Tax Deduction

Thu, 31 Jan 2019 23:46:00 GMT

Beginning in 2018 most businesses will qualify for the new 20% deduction on Qualified Business Income. In order to qualify for this deduction, you must prove your activity rises to the level of a business. The IRS considers most rental property as an investment and not a business.

If it is a self-rental, meaning my LLC owns a building that rents to my S-Corporation, my rental LLC automatically qualify as a business and gets the deduction.

The IRS did establish a safe harbor where rental properties can qualify for this deduction. If you have a rental property or properties you have to do the following:

Interestingly enough if you have a triple-net lease, you automatically do not qualify for this deduction regardless if you meet the above safe harbor rules.

In order to take advantage of the safe harbor rules, you also must keep a contemporaneous log of the time you, your agent, or your independent contractors spent on your rental property to prove you spent at least 250 hours.

Time you spend in an investor capacity such as reviewing financial statements, obtaining financing or refinancing the property, buying the property and traveling to and from the property do not count toward your 250 hours.

The IRS just released additional rules and regulations on how to take this 20% business deduction and I am sure we will see even more come out in the next couple of months. SBS CPA Group is doing our best to keep on top of these changes and clarifications as they come out so we can properly take or not take this deduction for you, so stay tuned!

Karena Sylvester, CPA

The post Safe Harbor Rules for Rental Properties to Qualify for a 20% Tax Deduction appeared first on SBS CPA Group, Inc. .

Tax Season Office Hours

Wed, 30 Jan 2019 14:10:00 GMT

We are in our busy season and to better accommodate you, we are extending our hours through April 15, 2019. We understand that you have busy lives and want to give excellent service to each and every one of you with the time you deserve.

Our new hours will be the following:

Monday-Friday: 8:30am-6:00pm

Saturday: 9:00am-1:00pm

The above hours will be in effect February 4 through April 15, 2019. Please feel free to call us at 260-407-5000 with any questions. We appreciate your business and we are looking forward to another great tax season with great clients!

Have a wonderful and blessed day!

Jenn Randle

The post Tax Season Office Hours appeared first on SBS CPA Group, Inc. .

Tax Season is almost here!

Mon, 07 Jan 2019 17:38:00 GMT

Tax Season is almost here. It always seems to be such a busy time even after the holidays.

Start prepping all of your documentation. We also need our 2018 tax planner filled out. You can find it here:

Please wait until you have everything prior to dropping off or making an appointment. But with that being said, come in as soon as you do have everything ready to go. The sooner you come in, the sooner your potential refund will hit your bank account.

We are here to help, give us a call at 260-407-5000

Thanks

Jennifer Randle

The post Tax Season is almost here! appeared first on SBS CPA Group, Inc. .

SBS CPA Group has Moved!

Mon, 07 Jan 2019 17:35:00 GMT

We have moved!!

Our old office was starting to become way too small as we continued to grow. We now have 3 CPA’s, 3 staff accountants and 2 support staff.

Our new office is beautiful and has the space we need to help serve you better.

We have moved about 1 mile west of our old location. We are in the Professional Village at Dawson’s Creek, right in front of the YMCA on Dupont.

It’s the first building and parking lot on the right once you enter the office park.

We are excited about the growth SBS CPA Group continues to see.

Thank you all, please feel free to call if needed.

Jennifer Randle, 260-407-5000

SBS CPA Group, Inc

10351 Dawson’s Creek Blvd, STE H

Fort Wayne, IN 46825

The post SBS CPA Group has Moved! appeared first on SBS CPA Group, Inc. .

The government is shutdown—including parts of the IRS! How will this affect me?

Mon, 07 Jan 2019 17:26:00 GMT

With the new year being here, many of you are probably wondering how the government shutdown is affecting the IRS. While the IRS is of course still currently accepting payments, it is not:

If the federal government shutdown doesn’t last too much longer, there shouldn’t be a significant effect on getting your tax refund or any other processing.

If the shutdown keeps going, there will start to be a ripple effect. The IRS SHOULD be gearing up and finalizing all of its forms and software in preparation of tax season. However, they are furloughed.

This means that all of that prep work isn’t happening which could delay the IRS’s official start date of tax season (the day they’ll start processing tax returns) and the finalization of the various forms necessary to file tax returns in the first place.

You as a taxpayer should still be collecting and compiling your tax information and meeting with your tax professionals as you normally would.

Isn’t it nice that our politicians are getting such a nice break! They are even still being paid!

Please let us know if you have any questions.

Jennifer Randle, 260-407-5000

The post The government is shutdown—including parts of the IRS! How will this affect me? appeared first on SBS CPA Group, Inc. .

Changing Business Checking Account and Payroll

Wed, 02 Jan 2019 15:28:00 GMT

It is January and that means that SBS CPA Group is busy processing W2’s and 1099’s for our clients. Along with the forms, we are also processing payroll taxes for the various federal and state governments. It is EXTREMELY important that we have the correct business bank account information!

The Wells Fargo/Flagstar merger has been in the news recently and this is a prime example of business checking accounts that may have been changed. Please make sure that SBS CPA Group has your current business bank routing number and account number. Even if you kept your Wells Fargo account that is now Flagstar, there is a new routing number that we need to have. We have a process in place to change the bank information for both the federal and state taxing agencies after we have received the information from the client.

If we do not have your correct bank information, the results can be costly. The federal government immediately charges a bad check fee of at least $50.00. They can then impose a 10% late filing penalty and interest charges. You will also receive letters from the IRS; SBS CPA Group can handle the correspondence needed to settle the matter but this will also incur a cost to you for bookkeeping. The state government will also charge a 10% late filing penalty and interest along with more letters that will require bookkeeping time to correct.

Please let us know IMMEDIATELY if you have changed anything with your business checking account. If you have any questions, please feel free to contact us at 260-407-5000.

Lisa Hagar

The post Changing Business Checking Account and Payroll appeared first on SBS CPA Group, Inc. .

2019 Mileage Rates

Fri, 28 Dec 2018 18:43:00 GMT

There will be some exciting changes by the IRS for the mileage deduction in the new year. These changes will increase the per mile amount when operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

Keep in mind that there have been two tax changes that affect the mileage deduction. Tax reform eliminated the itemized deduction on Schedule A for unreimbursed employee travel expenses. Also, most taxpayers will not be able to claim a deduction for moving expenses.

If you have any questions, please give our office a call at 260-407-5000.

Drive Safely!

Jenn Randle

The post 2019 Mileage Rates appeared first on SBS CPA Group, Inc. .

Do you need a new Certified Public Accountant in Fort Wayne, Indiana?

Thu, 20 Dec 2018 17:51:00 GMT

Small Business Services (SBS) CPA Group is a public accounting firm on the north side of Fort Wayne, Indiana. We have a great staff including:

We would like to congratulate Tanner Roberson on passing the last section of the CPA exam! Tanner passed each section on his first attempt and will received his license in the next couple of weeks.

In a couple of weeks we will have a total of five active Certified Public Accountants (CPA’s) on staff and we have seven full time employees and one part time employee.

We truly specialize in small and medium sized businesses. We partner with over 500 businesses in the greater Fort Wayne metropolitan area. Many of our clients are treated as a subchapter S corporations for tax purposes due to the advantages this form of business offers Indiana business owners.

We offer a wide array of services to our clients including:

We offer a free initial consultation to all new prospective clients.

Please give us a call today at 260-407-5000 to arrange your free initial consultation with a Fort Wayne Certified Public Accountant!

Mike Sylvester, CPA/ABV, MBA

The post Do you need a new Certified Public Accountant in Fort Wayne, Indiana? appeared first on SBS CPA Group, Inc. .

Thanks for all of the referrals you have given us in 2018

Thu, 20 Dec 2018 17:22:00 GMT

We sincerely thank you for all of the clients you have referred to us in 2018!

We received over 160 referrals from our clients in 2018. We spend very little money on advertising and have been able to grow our business in excess of 10% a year for the last 16 years. Most of our new clients are referrals from our existing clients and we truly appreciate your referrals.

There are many reasons we have been successful and been able to grow our business including:

Please continue referring your friends and family to us!

We always ask new clients why they switched to us and their answers are very consistent:

We value all of our clients and we hope you all have a Merry Christmas and a Happy New Year. As always please call us at 260-407-5000 or send us an email if you have questions or need some advice.

Mike Sylvester, CPA/ABV, MBA

The post Thanks for all of the referrals you have given us in 2018 appeared first on SBS CPA Group, Inc. .

Upcoming Tax Season

Thu, 20 Dec 2018 16:57:00 GMT

Congress made very large changes to the tax code that will effect 2018 income tax returns filed in 2019. These are the largest changes to the tax code in 31 years. The majority of tax returns we prepare will take longer to prepare and will be larger and include more schedules with additional information the IRS requires to take advantage of the new tax deductions. Everyone who files a separate business income tax return (C corporation, S corporation, Partnership), has a sole proprietorship, has rental properties, has an estate or trust, or has a farm is going to find that their income taxes have more schedules and significantly more information that must be reported to the IRS in order to take advantage of the new 199A 20% business deduction.

We have invested a large amount of time becoming familiar with the new tax law and we feel it will benefit 90% of our clients, 7% of our clients will see no effect, and 3% of our clients will pay higher Federal income taxes under the new tax law. Our expected percentages listed above do not match national averages because we specialize in businesses and have a large number of clients who own businesses, rental properties, and farms that will be able to take advantage of the new 20% 199A deduction. Further, Indiana is not a high tax state and this means we have fewer clients that will be effected by the $10,000 limitation on deducting state taxes on your Federal income tax returns.

We will be mailing our client letters out at year end and we are also going to email them to our clients this year. Please remember we have have moved to our new and bigger location at 10351 Dawsons Creek Blvd, Suite H. Once your have gathered all of your tax paperwork and have carefully filled out our short three page tax planner please drop everything off to our office. Jennifer Randle is our newest employee and she will take all of your documents and get them to us.

Please drop everything off to our office as soon as you have gathered all of your tax documents. Since tax returns will take longer to prepare this year we need to get started on your income tax returns as soon as possible. We are hoping you manage to drop everything off either the first week of February or the second week of February.

Please give us a call at 260-407-5000 if you have any questions about the new tax law and how it will effect you.

Mike Sylvester, CPA/ABV, MBA

The post Upcoming Tax Season appeared first on SBS CPA Group, Inc. .

Office Closings for Holidays

Wed, 19 Dec 2018 16:48:00 GMT

We are less than a week away from Christmas! Where has this year went? 2019 here we come! We hope that each and every one of you enjoys the true reason for the season. Cherish family and friends because as we all should remember – LIFE IS SHORT!

SBS CPA Group will be closed both Monday, December 24 and Tuesday, December 25 so that we can celebrate the holidays with our families. The office will be open again at 8:30 on Wednesday, December 26. Also, the office will be closed on Monday, December 31, and Tuesday, January 1, 2019 for the New Year’s holidays. We will be open again at 8:30 on Wednesday, January 2.

If you have not already learned through our postcards or emails, the office has moved and is now located at 10351 Dawsons Creek Blvd, STE H. It is about another mile west on Dupont Road from our old office. When you turn onto Dawsons Creek Blvd, take the first right and the next right and you will be in our parking lot.

Be Blessed and Be a Blessing!

Jenn Randle

The post Office Closings for Holidays appeared first on SBS CPA Group, Inc. .

Year-End Business Tax Planning

Thu, 29 Nov 2018 19:42:00 GMT

With the new tax law in affect for this year, tax planning is more crucial than ever. Most small businesses will now qualify for a new Qualified Business Income (QBI) deduction. This is a deduction you will get on your personal return equal to 20% of your business profit if you are not a specified service business. If you are a specified service business you can still get the deduction if your personal adjusted gross income is below $207,500 for single tax payers and $415,000 for married tax payers. If your income is between $157,500/$315,000 and $207,500/$415,000 your deduction will be phased out.

Therefore, the first planning point will be maximizing this deduction. Taking accelerated depreciation, paying more in wages, or accelerating expenses may not be as useful as it was in the past – unless you are trying to stay below the phase out levels mentioned above. If you are trying to stay below the phase out limits then you may also want to consider maxing out retirement savings, HSA contributions, etc. so you remain eligible for this deduction.

We also need to rethink officer wages. We want to pay enough in officer wages to stay off the IRS audit risk radar, but the more wages we pay the less profit we have. The less profit we have the less QBI deduction we get. Because there are so many other factors that go into to determining officer wages such as social security and retirement planning, fair compensation, tax withholdings, etc. determining officer wages is more complicated than ever.

And finally, if your income is above the $207,500/$415,000 and you are not a specified service business (doctors, lawyers, accountants, athletes, and performers) you can still get a deduction equal to the lesser of 50% of wages, or 25% of wages plus 2.5% of your purchase price of any property or other assets of the business. Specified service business above the threshold do not get a QBI deduction.

Simple right? Since there are so many moving parts and each business is going to have it’s own unique set of circumstances that change each year, tax planning is crucial! Please give your CPA a call to ensure you are getting the biggest deduction you can!

Karena Sylvester, CPA

The post Year-End Business Tax Planning appeared first on SBS CPA Group, Inc. .

Thanksgiving Holiday

Tue, 20 Nov 2018 17:31:00 GMT

Thursday is Thanksgiving and we all know that means none of the desserts that we eat that day have any calories! With the cold weather and snow so early this year, it will be a perfect time to stay inside and watch football. For those of you who enjoy Black Friday shopping, I hope you have a wonderful time and find all of the bargains!

SBS CPA Group will be closed both Thursday and Friday so that we can celebrate the holidays with our families. The office will be open again at 8:30 on Monday, November 26. If you have not already learned through our postcards or emails, the office has moved and is now located at 10351 Dawsons Creek Blvd, STE H. It is about another mile west on Dupont Road from our old office. When you turn onto Dawsons Creek Blvd, take the first right and the next right and you will be in our parking lot.

Have a blessed and safe Thanksgiving!

Lisa Hagar

The post Thanksgiving Holiday appeared first on SBS CPA Group, Inc. .

Retirement Contributions in 2019

Thu, 15 Nov 2018 16:11:00 GMT

The Treasury Department has decided to help retirement savers in 2019, with many of the contribution limits receiving inflation adjustments. IRS Notice 2018-83 gives the exact figures, but we have pulled out the more common retirement options.

• The IRA contribution limit will be $6,000, up from $5,500. If you are 50 or over, you will be able to contribute an extra $1,000.

• 401(k)s or other work place equivalents limits will be moved from $18,500 to $19,000, with the catch up for age 50 and over staying at an additional $6,000.

• Simple IRAs contribution limit is being raised to $13,000. The catch up for those 50 and up will remain at $3,000.

This is a boon for those looking at how to prepare for their retirement regardless of age. Many news outlets are reporting troubling statistics on American retirement savings, and now is good time to evaluate what you can do to help shore up your personal retirement plans.

Shane Lengerich

The post Retirement Contributions in 2019 appeared first on SBS CPA Group, Inc. .

Healthcare Marketplace is Now Open

Mon, 05 Nov 2018 21:09:00 GMT

The Health Insurance Marketplace officially opened on November 1 and will be available through December 15. Now is the time to shop for new Marketplace coverage or you may choose to stay with your current plan.

You can access the site by going to www.HealthCare.gov or you can call the Marketplace Call Center at 1-800-318-2596 and speak to a representative. There may be some people who would like a one-on-one appointment with an assister. Information for this is available at LocalHelp.HealthCare.gov.

When you go to the site, you will be able to do the following:

Update your application information for 2019 coverage.
Review your updated eligibility notice.
See if you qualify for new or different coverage.
Compare the available plans and costs.
Enroll in coverage for 2019.

It is important to make sure that your anticipated income for 2019 is entered correctly. If you estimate your 2019 income too low and qualify for a subsidy, you may have to return part of the subsidy when your 2019 income taxes are prepared. If your income does change considerably during the year, you should go to the Marketplace and update your information.

If you have any questions, please feel free to contact SBS CPA Group at 260-407-5000.

Lisa Hagar

The post Healthcare Marketplace is Now Open appeared first on SBS CPA Group, Inc. .

Tax Autopsy

Thu, 27 Sep 2018 01:40:00 GMT

Back in 2008, 2009, and 2010 I did quite a few tax returns that were really tax autopsies. I seem to do fewer returns of this nature today; however, I unfortunately still do several of these each year. To me a tax autopsy is when I do a return for a client or a couple who owe a very large amount of tax and they could have avoided it or deferred it if they had just talked to a tax professional before the end of the tax year. There is no reason to ever have a tax autopsy.

One example of a tax autopsy is a tax return I did for a client who withdrew a couple of hundred thousand dollars from a retirement account at age 58 to purchase a second home. Another example is a client who was laid off from work and his company retirement plan paid him a very large distribution from his 401K plan and he did not roll this into another retirement plan. A third example is a client who recently inherited several traditional retirement plans and decided to have all of the money paid to them from the inherited retirement plans not realizing that this entire amount would be taxed. Most of the tax autopsies I perform are for new clients; however, occasionally one is for a current client and these really break my heart.

If you have a major event that may effect your taxes please call a tax professional and get some advice. The tax code is complicated and a fifteen minute conversation with your Certified Public Accountant (CPA) can sometimes save you tens of thousands of dollars. I have had many such conversations with my clients who predominately live in the greater Fort Wayne, Indiana metro area.

Mike Sylvester, CPA/ABV, MBA

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1031 Exchanges

Thu, 27 Sep 2018 01:25:00 GMT

The IRS allows the sale of your primary residence to be free from taxes if you have lived there two out of the last five years and the profit is $500,00 or less for a married couple filing jointly or $250,000 if filing single. What many people do not know is that IRS Section 1031 in certain cases can allow an investor to sell a property then reinvest the proceeds in a like-kind property and defer the capital gains taxes.

There is no limit on the number of times you can do a 1031 and the code allows your investment to grow tax deferred. You are delaying the payment of taxes until the property is eventually sold. Those who pursue this strategy hope that when they sell the property they will be in a lower tax bracket and will pay less in capital gains taxes.

The 1031 exchange, also known as the Starker exchange, is only for investment and business property. There are some limited ways to swap vacation homes but the loophole is narrower and needs to be discussed with a professional well-versed in 1031 exchanges. Congress made major changes to the tax code in December of 2017 and from 1/1/18 forward real estate is the only type of property allowed for a 1031 exchange. The term like-kind encompasses many types of real estate. You can exchange similar properties and the rules regarding this can be somewhat complicated. In all cases the real estate must be in the United States.

It is rare for someone to have the exact property you want and you have the exact property they want. If this does occur, it is a swap and the deeds and exchange can occur at the same time. The majority of 1031 exchanges are delayed. In this case, a Qualified Intermediary needs to be hired. When you sell your current property, the proceeds are held by the intermediary until the closing of the replacement property. There are two important deadlines that need to be followed in this instance. Within 45 days of the sale, you must provide the intermediary in writing the specific property you want to acquire. You are allowed to designate up to three properties as long as you close on one of them. You must then also close on the acquired property within 180 days of the sale of the original property. These deadlines are strictly enforced and a gain will occur if not done correctly. You can also do a reverse exchange where you actually buy the property you want to acquire first then sell existing property to pay for the acquired purchase. The same deadlines are in effect for this transaction. Multiple properties can be used on either side of the exchange. For example, you may want to sell two rental properties to purchase an apartment building.

If you are interested in learning more about a 1031 exchange and how it would affect your taxes, please feel free to contact us. We can help you find an attorney who has done multiple 1031 exchanges; these transactions can be complicated and you want to make sure you do it correctly and do not incur any unexpected tax consequences.

Mike Sylvester, CPA/ABV, MBA

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Lowering your Adjusted Gross Income (AGI)

Thu, 27 Sep 2018 00:54:00 GMT

There are just a few months left before the end of 2018. For those with health insurance subsidies through the Marketplace, your AGI (adjusted gross income) and family size determines whether you qualify for the subsidy and how much the subsidy should have been. There are many things you can do to affect your AGI.

One of the most difficult tasks is going to the Marketplace and figuring out if you qualify for a subsidy. There is a difficult section where you have to guess what you will make in the following year. This estimate for future earnings is used for qualification and determines the amount of subsidy paid throughout the following year. You make this estimate in November or December. Then almost a year and a half later you file your annual income tax return (Form 1040) and you report what your income actually was and on your form 1040 you determine whether the subsidy you received was too high or too low. For example, in November of 2017 you had to go to the Marketplace and guess how much money you would make in 2018. Then in 2019 when you have your 2018 taxes done, you will find out if the subsidy paid was correct. If your income is higher than you estimated you were paid too much in subsidy and this is reconciled on your 1040 and you may end up owing the IRS or receiving a smaller refund than you otherwise would have received. It can be a very confusing process and you need to pay attention to your tax situation throughout the year.

The biggest difference you can make to lower your AGI is to contribute as much as possible to your 401K or similar company traditional retirement plan. This contribution is pretax and immediately lowers the amount of taxable wages on your W2. For example, an employee over 50 enrolled in a company Simple IRA can contribute up to $15,500. This contribution will lower your AGI by $15,500 and this will affect the amount of subsidy. Further it will lower the amount of income taxes that you will pay. Contributing to a Roth account does not lower your AGI.

If you take money out of a traditional retirement account this increases your AGI and will lower the amount of subsidy you should have been paid and will increase your income taxes due.

If you have an HSA compliant health insurance plan, make sure to contribute the full amount allowed to the HSA. The HSA does not have to be spent in full each year and can continue to grow. If you qualify to contribute to an HSA each dollar you contribute will lower your AGI by a dollar and this will affect your subsidy and lower your income taxes.

If you have investments with a loss and you need to lower your AGI, you can sell these before the end of the year. You can take up to $3,000 in net capital losses per year.

For those of you who have business, rental or farm income, it is important to keep track of what the net profit will be for 2018. There are many things you can do before year end to lower your business, rental and farm income.

We assist our clients with this throughout the year. Please give us a call at 260-407-5000 with any questions!

Mike Sylvester, CPA/ ABV, MBA

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Home Equity Interest Deduction

Thu, 30 Aug 2018 15:10:00 GMT

Before the Tax Cuts and Jobs Act of 2017, home equity interest was largely deductible. New for 2018 the only home equity interest that is deductible is debt that was incurred to purchase, build or substantially improve the home that secures the loan.

Additionally, you can only deduct interest of total home debt of $750,000 or less. Meaning if you buy that lake home and borrow $1,500,000 you can only deduct half of your mortgage interest or the interest on $750,000.

In the past borrowing on the equity in your home was usually the cheapest way to borrow money to consolidate debt, take a vacation, or even help finance your business. This interest is no longer deductible.

How the IRS is going to track down what your home equity debt was used for remains to be seen, especially for home equity debt that was taken out years ago. It is going to be up to you to prove what the funds were used for, so make sure you are keeping receipts if you want to deduct that interest.

If you have questions, please give your CPA a call and we can help make sure you get the deductions you are eligible for.

Karena Sylvester, CPA

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Labor Day Holiday

Wed, 29 Aug 2018 20:49:00 GMT

Can anyone believe it is already the “unofficial” end of summer? Where has the time gone? We hope everyone had a fun and safe season! School is back in session and it is time to get ready for bonfires and pumpkins!

SBS CPA Group Inc. will be celebrating Labor Day so the office will be closed on Monday, September 3. We will be open bright and early on Tuesday to answer all of your questions and concerns. It is never too early to prepare for the coming tax season. Be sure to give us a call at 260-407-5000 if you would like advice on what you can do in 2017 to make your 2018 taxes work for you!

Enjoy Labor Day!

Lisa Hagar

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Child Tax Credit for 2018

Thu, 23 Aug 2018 13:09:00 GMT

As the Tax Cuts and Jobs Act has been implemented in 2018, tax reform has made some taxpayer-friendly changes to the Child Tax Credit. The credit taxpayers receive has doubled from $1,000 to $2,000. The Child Tax Credit has higher income limits allowing more taxpayers to claim it. The refundable portion of the credit has also increased. With tax reform, the credit also includes a new “family credit” that allows you to claim an additional $500 credit for dependents that don’t meet the qualifying child requirement.

In 2018, the Child Tax Credit doubles to $2,000 per qualifying child. Taxpayers can receive this credit for each qualifying child under the age of 17. A qualifying child includes a taxpayer’s child or a descendant of the child, or sibling or stepsibling or a descendant of those two. The child must live in the home of the taxpayer for more than half the year and the taxpayer must provide more than half of the support for the child.

The income limits have been raised significantly. A taxpayer’s potential credit will begin to phase out at $400,000 Modified Adjusted Gross Income for Married Filing Joint filers and $200,000 for any other filer. Of the $2,000 credit per qualifying child, up to $1,400 can be refundable which means it can increase your refund and not just decrease your tax liability to zero. However, the $500 “family credit” is not refundable.

The Child Tax Credit changes for 2018 are beneficial to the taxpayer and should be a great tax saver at tax time! Give us a call at 260-407-5000 and we would happy to answer any other questions you have on this subject or any other tax matter.

Tanner Roberson

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College Tuition Tax Breaks

Mon, 20 Aug 2018 17:49:00 GMT

Looking at a college tuition statement for the first time can be a scary experience. The cost of higher education continues to climb. The average annual cost for tuition and board at a public in-state school is now $20,770.00 and $46,950.00 at a private four-year college according to College Board. Luckily, the IRS has three different credits/deductions that you can use to lessen the burden at tax time.

The three credits/deductions available for the 2018 tax year are the American Opportunity Credit (AOC), the Lifetime Learning Credit (LLC) and the Tuition and Fees Deduction. All of these have their own guidelines on eligibility. Some of the factors involved include adjusted gross income (AGI), year in school, full or part-time student and whether the student is enrolled in a degree or certificate program.

The AOC can be worth as much as $2,500 per student for the first 4 years of undergraduate enrollment. The credit is worth 100% of the first $2,000 in qualifying expenses and 25% of the next $2,000. This is an actual dollar-for-dollar credit so it lowers the amount of federal tax due. If your tax liability is reduced below zero, $1,000 of the credit is refundable and you receive this as a refund even if you owe no taxes.

The LLC can be worth as much as $2,000 per tax return; this is not per student. The credit is worth 20% of qualifying expenses up to $10,000. This is also a credit so it lowers the actual amount of tax due. This credit is not refundable which means if the credit takes you below zero, your tax due is zero and the additional amount is not a refund to you.

The Tuition and Fees deduction can lower your taxable income by up to $4,000 in qualifying expenses per tax return; this not per student. This is a deduction so it lowers your taxable income and will save you an amount dependent on which tax bracket you are in.

It is a MUST to include the 1098T form from the educational institution when you give your accountant your yearly tax documents. This form should be available by visiting the student’s school account. You should also keep track of the cost for books, supplies and other equipment. There may be some questions your tax preparer will ask to decide which credit you can claim.

SBS CPA Group would like to wish all students a safe and successful school year! If you have any questions concerning this very important topic, please feel free to give us a call at 260-407-5000.

Lisa Hagar

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Tax Extension Season is Winding Down

Wed, 01 Aug 2018 13:16:00 GMT

Time is almost up. The 2017 extension due date for most business tax returns is September 17th (the 15th is on a weekend). After that, the due date for personal tax returns is then October 15th.

If you are going to use a tax professional, you need to remember that the professional will also need time to prepare your taxes. (If you drop off your information the day prior to the tax deadline, the preparer probably won’t have time to knock them out).

Remember, even if you cannot pay your taxes in full, you should still file your taxes. There are different types of penalties: failure to file and failure to pay. Failure to file is usually much more severe.

Then, if you cannot pay, the IRS will work with you to manage that payment. They have Offer in Compromises and Installment Agreements if you cannot pay in full immediately. They also have various mechanisms in how to make those payments: direct pay, credit cards, etc.…

In my experience, the IRS will work with you if you work with them. The absolute worst thing you can do would be to ignore the IRS.

Please let us know how we can help. Give us a call today: 260-407-5000.

Brent Bracht, CPA

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Check your 2018 Federal Income Tax Withholding Before it’s Too Late

Wed, 01 Aug 2018 13:14:00 GMT

Tax reform happened in America during early 2018. The government changed the tax brackets, numerous credits and deductions have been tweaked and numerous other changes have occurred.

Most people will see their overall tax liability go down and again most people have seen an extra bump in their pay as employers are reducing the amount of federal income tax withheld.

However, there are reports that the government is concerned that employers aren’t withholding enough federal income tax from their employee pay. This will cause those employees to owe money at the end of the year.

Employees need to check their withholdings now, so that if necessary, there is time to make changes prior to year-end. The IRS has a withholding calculator which taxpayers can use to see if they are withholding enough. IRS Withholding Calculator

If they are not, the taxpayers can file a new W-4 with their employer.

I highly suggest you take a look now before it’s too late.

Let us know how we can help. Give us a call at 260-407-5000

Brent Bracht, CPA

The post Check your 2018 Federal Income Tax Withholding Before it’s Too Late appeared first on SBS CPA Group, Inc. .

Kids, College and Taxes

Wed, 01 Aug 2018 13:10:00 GMT

Summer is almost over and kids will soon be going back to school. Some of those will be starting a new adventure with college.

Along with books, dorms and being away from home for the first time, college students and their parents need to think about how they will pay for everything.

The government has various credits, deductions and programs to help (remember, a lot depends on your income levels):

There is simply a lot of things to think about. You need to educate yourself now to see what you qualify for–it can make a big difference.

Let us know how we can help. Give us a call today.

Brent Bracht, CPA

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4th of July Holiday

Thu, 28 Jun 2018 19:24:00 GMT

Get the grills and fireworks ready to go; July 4 ^th is just around the corner! SBS CPA Group hopes everyone has a safe and enjoyable holiday. It feels a little strange since the 4 ^th falls on Wednesday but that just gives us a chance to celebrate both the weekend before and after the actual day.

SBS CPA Group will be closed on Wednesday, July 4 ^th . The office will be open all of the other weekdays. We have people coming and going on vacation but there is always someone available to answer your questions and concerns.

Happy 4 ^th of July!

Lisa Hagar

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Roth IRA Conversions and the new tax law

Mon, 18 Jun 2018 20:09:00 GMT

The new tax law should be causing Financial Planners and Tax Advisers to have more of their clients undertake Roth IRA conversions due to the fact that many experts agree that Federal income tax rates must increase because the Federal debt is twenty trillion dollars and growing rapidly. I personally feel that I will never see lower Federal income tax rates in my life than the rates in place for 2018. These rates are scheduled to be in place until 2025; however, many experts feel that at some point Congress will increase the tax rates and this may well happen before 2026. I personally think tax rates will increase before 2026 because I think Congress will change the tax laws and increase rates due to the aging population and the sky rocketing national debt.

Roth IRA conversions are appropriate for many people who feel their Federal income tax rates will be the same or higher in retirement than they are now.

Under the new tax law the 12% Federal income tax bracket ends at:

I expect a fair number of clients to do Roth IRA conversions in 2018 and 2019. If you convert just enough so that all of your income is taxed in the 12% Federal income tax bracket this strategy makes all of the sense in the world. I am not necessarily against conversions in a higher tax bracket; however, that must be determined on a case by case basis.

You should discuss Roth IRA conversions with your Financial Planner. Your Financial Planner will often consult with the client’s CPA to determine how much can be converted while staying in a low income tax bracket.

I have already had this conversation with a couple of Financial Planners in the Fort Wayne area for clients we have in common.

Mike Sylvester, CPA/ABV, MBA

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Tax Planning due to new tax law changes

Mon, 18 Jun 2018 19:32:00 GMT

I recently met with two different small business clients and we made some changes that will allow them to save several thousand dollars per year in Federal income taxes. This is possible for both of these Indiana businesses due to the large changes to the tax code the Republicans made in December of 2017.

The first business is a sole proprietorship located in Fort Wayne. Sole proprietors should not be paying the owner wages and the owner should not receive a W-2. This is especially true now that the new tax law allows most business owners (90% or more of business owners) to pay tax on 80% of their profits instead of 100% of their profits. By no longer paying the owner wages the profits of this company will increase significantly and the owner will only pay tax on 80% of the profits.

The second business is a computer consulting company located north west of Fort Wayne. This company is a sub chapter S corporation and the owner had been paying himself entirely through wages and each year the company had a small profit or a small loss. This business significantly lowered the wages paid to the owner for 2018 and this will significantly increase the profits of the company. This business will be one of the 90% plus of business owners that can pay taxes on 80% of its profits under the new law. This business owner will save nine thousand dollars per year in Federal income taxes under the new tax law just by lowering the wages he pays himself each year.

If you have questions about how the new tax laws will effect you please give me a call today at 260-407-5000.

Mike Sylvester, CPA/ABV, MBA

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Scams where people call and claim to be Internal Revenue Service Agents

Mon, 18 Jun 2018 14:09:00 GMT

Several of our clients have received phone calls from people claiming to be with the Internal Revenue Service in the last few weeks. These phone calls are scams and recently many of the people calling are even leaving messages with call back numbers. Some of these scams threaten the taxpayer with arrest.

The Internal Revenue Service does not call taxpayers and make threats like this. There are literally hundreds of scammers making these calls; often located in foreign countries.

If you receive these calls you should ignore them entirely. The taxing agencies would like you to report these scams and you can report them at:

If you have questions about a phone call that you think is a tax scam please give me a phone call at 260-407-5000.

Mike Sylvester, CPA/ABV, MBA

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Memorial Day Holiday

Wed, 23 May 2018 16:09:00 GMT

Spring flowers have bloomed and the trees have leaves so that must mean that summer is just around the corner! Next Monday is the unofficial beginning of the season and we hope you have something planned to enjoy the holiday.

After a very successful tax season, everyone at SBS CPA Group is ready to take a day off and enjoy the weather. The office will be officially closed on Monday, May 28 ^th for Memorial Day. We will back at our desks bright and early on Tuesday, May 29 ^th .

We would like to remember and thank all those in the armed forces who have given their lives for our country. It is important to remember that freedom is never free. Have a safe and pleasant Memorial Day.

Lisa Hagar

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No Passports for Delinquent Taxpayers!

Fri, 18 May 2018 15:25:00 GMT

Planning an international trip this summer? Make sure your taxes are paid up before applying for your passport! Thanks to the FAST Act that was signed into law in December 2015, starting January 2018 the State Department has the ability to deny a passport application or revoke a delinquent taxpayer’s passport.

Delinquent tax payers who owe the IRS more than $51,000 are in jeopardy of losing their passports. If you owe the IRS more than $51,000 and you have an international destination on your agenda this summer make sure you settle up with the IRS first. You can either pay your debt in full, enter into an approved installment agreement to pay the past due tax, or pay the debt timely in an accepted offer in compromise agreement.

If you are in bankruptcy, are a victim of tax-related identity theft, in a federally declared disaster area, or have been determined by the IRS to be uncollectible, then your passport is not in jeopardy. Additionally, if you have a pending offer in compromise or a pending installment agreement, your passport rights will not be jeopardized.

This is just one more way the IRS can ensure they get paid the taxes they are owed. Do not get behind on your taxes! To enter into an installment agreement or an offer in compromise go to www.irs.gov or give SBS CPA Group a call.

Karena Sylvester, CPA

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New Reasons to set up Donor Advised Fund

Fri, 11 May 2018 15:25:00 GMT

With the new standard deduction set at $12,000 for single filers or $24,000 for married filers, less people will be able to itemize their deductions. Bunching deductions into one year has always been a tax strategy so you itemize one year and take the standard the following year. This is not very popular because most people want to donate to charity every year and state and local governments expect their tax payments every year.

A Donor Advised Fund can be a great way to get a deduction for your contributions. With a Donor Advised Fund, you can put a lump sum of money into a fund and then at your discretion, over several years you can distribute the fund to charities of your choosing. You get the charitable contribution when you contribute to the fund, not when you distribute the funds to your favorite charities.

For example, in 2018 you can establish a donor advisor fund by contributing $25,000 to this fund. You decide to give $5,000 to your church in 2018, 2019, 2020, 2021 and 2022. You will get a $25,000 charitable contribution in 2018 (and no charitable donation in years 2019-2022 for contributions made out of this fund). By taking the $25,000 charitable contribution in 2018, you can also itemize up to $10,000 of state and local taxes, your home mortgage interest, and significant medical expenses.

A donor advised fund can be an effective way to save even more on your taxes. Talk to your financial advisor to set up your Donor Advised fund.

Karena Sylvester, CPA

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HSA Contribution Limits for 2018

Thu, 03 May 2018 20:24:00 GMT

Every year the IRS announces the new contribution limits to HSA plans. For 2018, they announced that the 2018 limit for a family plan was $6,900 and the limit for an individual plan was $3,450.

For some reason, the IRS decided they made a mistake and lowered the family contribution to $6,850 for 2018. However, they received so many complaints because of the retroactive change, they have decided to waive the penalties for over-contributing to a family plan in 2018.

Confusing right? Bottom line, you can contribute $6,900 to a family plan or $3,450 to an individual plan for 2018.

Despite the confusion caused by the IRS, if you have an insurance plan that is eligible for an HSA account, you should max out your contributions if possible. If your budget does not allow you to max out your HSA contributions – you should at least contribute enough to pay your current medical expenses.

If you have any questions regarding your HSA account please give us a call.

Karena Sylvester, CPA

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Appealing Property Tax Assessment

Thu, 26 Apr 2018 19:28:00 GMT

If you own real estate in Allen County Indiana, you have recently received or will soon receive a notice from the Allen County Assessor (state forms 21366 or Form 11).

Basically, this is the annual reassessment of your real property which will be used to calculate your real estate taxes. If the assessed value has gone up, your taxes might go up. If your assessed value has gone down, your real estate taxes might go down. You also need to remember that Indiana pays its real estate taxes in arrears; thus, the assessment received in June 2017 affects the tax bills which you will pay in May and November of 2018.

If you disagree with the assessment, you need to file an appeal within 45 days of the date of the notice or within 45 days of the date the notice was mailed, whichever is earlier. If you fail to file that appeal within 45 days, you might have to wait an entire year to appeal and you will be taxed at the assessed value on your form. According to the notice I received for my property, I would have until May 28 ^th , 2018 to file an appeal.

The appeals process can be found here http://www.in.gov/dlgf/2508.htm . You are not required to have the evidence submitted with the appeal, but it can help expedite any changes.

Please let us know if you have any questions about real estate taxes or the appeals process by giving us a call at 260-407-5000.

Shane

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What happens if I didn’t pay or file my taxes by the deadline?

Wed, 25 Apr 2018 19:27:00 GMT

Tax season for 2018 is finally over. The close did not go as smoothly as expected as the IRS’s computer systems crashed on the due date. Thus, the IRS gave everyone an extra day to file and pay their taxes.

So, what happens if you didn’t file or pay your taxes by the due date? There are 2 penalties which the IRS can hit you with: failure to file and/or failure to pay.

Failure to file comes into effect when no return is submitted before the due date. It is also the much harsher penalty, at 5% of the taxes owed for every month your return is not submitted up to a 25% maximum.

Failure to pay is .5% of the tax owed for every month the taxes remain unpaid. Please note that for every month that the failure to file and failure to pay both apply, the failure to pay is waived. As you can see, it is better to file a return and then work out how to pay rather than not filing because you might owe.

When a return has not been filed timely or payment is not received, the IRS will send notices with their estimation of what you owe and demand payment.

The worst thing you can do is ignore the IRS. They will work with you to resolve your tax issues. As time goes on and if you start ignoring the IRS, they will move to lien and collections on top of the interest they are charging.

Penalties are just money that is wasted. If you do not think that you can gather all your information by the April deadline, getting an extension filed can save you the failure to file penalty as long as you get your return submitted by the October deadline. Extensions do not extend the time to pay, but that is a much lower penalty.

If you need help filing your tax return or other questions, give us a call at 260-407-5000.

Shane

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Business Tangible Personal Property Taxes

Wed, 25 Apr 2018 19:27:00 GMT

As one tax season ends, another, more local one begins: business tangible personal property taxes (PPT).

Indiana requires businesses to report their personal property to their county assessor by May 15 ^th of each year.

If you don’t have a significant amount of personal property ($20,000 of cost or less), you can be exempt from paying any tax. However, you STILL need to file the forms.

Our firm prepares hundreds of these tax returns each year and we would be happy to help you.

Give us a call at 260-407-5000, and we would be happy to assist you.

Shane

The post Business Tangible Personal Property Taxes appeared first on SBS CPA Group, Inc. .

How will the new Tax Reform Law effect my 2018 Income Taxes?

Fri, 23 Mar 2018 21:20:00 GMT

Congress passed the largest changes to the Federal tax code in over thirty years on December 15th, 2017. I have spent a lot of time reviewing this bill and I am very familiar with these tax code changes.

If you are a client of our firm and we have done your taxes already this year you already know how the new tax code will effect you. We let everyone know how the tax code changes will effect them because we always want to ensure our clients know what to expect in the future.

I have given training to quite a few people outside of our office including Financial Planners, Enrolled Agents, Certified Public Accountants, Business Owners, and Individual taxpayers.

I have been tracking how the tax code changes will effect all of the personal income tax returns I have already done with an excel spreadsheet. So far my clients on average will pay 17% LESS in Federal income taxes in 2018 as compared to what they paid in 2017 if their income and deductions are exactly the same in 2018 as 2017. So far I have four clients who will pay more income taxes under the current plan and I have four more who will break even and the rest will pay less under the new rules.

If you want to know how the new tax law will effect you please give me a call at 260-407-5000.

Mike Sylvester, CPA/ABV, MBA

The post How will the new Tax Reform Law effect my 2018 Income Taxes? appeared first on SBS CPA Group, Inc. .

Why you should have a CPA prepare your Income Tax Returns!

Fri, 23 Mar 2018 21:03:00 GMT

The tax code keeps getting more complicated. Believe it or not Congress made major changes to the tax code in February of 2018 that affected tens of millions of tax returns that had already been filed. In December of 2017 Congress made the largest changes to the tax code in over thirty years and it will take the Internal Revenue Service most of the rest of this year just to interpret the law Congress passed last December.

If your taxes are very simple you may well be able to file your own taxes successfully. If your taxes are a little more complicated you might be able to use one of the national franchises that prepare tax returns; however, those large tax franchises have a lot of weaknesses when compared to a Certified Public Accountant who specializes in tax return preparation:

We amend a lot of tax returns that are self prepared or prepared by others. Each year we have tax returns we amend that result in our clients saving thousands of dollars and sometimes tens of thousands of dollars. I recently had a client who self prepared her taxes and I amended three years of tax returns she had filed for herself and saved her twenty four thousand dollars of income taxes.

You should likely have your taxes prepared by a Certified Public Accountant if:

Mike Sylvester, CPA/ABV, MBA

The post Why you should have a CPA prepare your Income Tax Returns! appeared first on SBS CPA Group, Inc. .

2017 Federal and Indiana income tax returns

Fri, 23 Mar 2018 20:23:00 GMT

The April 17th, 2018 tax filing deadline is only three and a half weeks away. This has been a great tax filing season at Small Business Services CPA Group. We continue to grow due to referrals from satisfied customers. We provide a high quality product at a fair price. We are available year around to help you with tax planning, tax notices, and all of your business needs.

We still have plenty of time to get your Federal and Indiana income tax returns done; however, you need to ensure you get everything to us by April 1st, 2018 or preferably sooner than that. Any returns that come into our office after April 1st, 2018 this year will likely be extended.

We are conveniently located on the north side of Fort Wayne at 450 East Dupont Road. We are still taking new clients for this tax filing season. Please feel free to give us a call at 260-407-5000.

Mike Sylvester, CPA/ABV, MBA

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Indiana Use Tax

Tue, 20 Feb 2018 23:12:00 GMT

You might have noticed when you were shopping online over the holidays that some websites would add sales tax to the checkout and some would not. This might have even incentivized you to purchase from one website over another if it was a big-ticket item. The truth is however, you still owe tax on that item, but instead of the seller charging you Sales tax, the burden has moved to you in the form of Use tax.

Use tax is generated in Indiana when you purchase items, such as computers, clothing, or other items, and the seller does not meet requirements of having to collect Sales tax in Indiana. It is the ‘mirror’ of Sales tax and it therefore makes sense that it is 7%, matching the Sales tax rate.

Individuals pay Use tax in Indiana on their Indiana return, on schedule 4: Other Taxes. Consider this when you are shopping online and keep receipts of purchases made that do not charge Sales tax. There is a question on our planner where you can tell us how much you purchased that you owe Use tax on, so we can properly calculate this for you.

If you were wondering, Amazon does charge Sales tax for sales in Indiana.

Shane

The post Indiana Use Tax appeared first on SBS CPA Group, Inc. .

Tax Season Scares

Tue, 20 Feb 2018 23:08:00 GMT

Almost a full month into the filing season, which means that scams are running rampant. Most people want nothing to do with the IRS, and people who are trying to scam know this and play off of it. A quick few things to remember to help avoid having information or money stolen:

-The IRS and Indiana Department of Revenue will always send multiple letters and warnings first before moving to other actions.

-If you have not made contact and arranged a phone conversation with the IRS, they will not call you.

-The IRS will not demand immediate payment via wire transfer or prepaid debit card.

-If you have received a deposit or check from the IRS, but have not filed your return, it is possible someone has filed a fake return using your information. They then will pose as the IRS or debt collectors demanding the return of the fraudulent refund to themselves.

If you have concerns, check the IRS Tax Scams / Consumer Alerts at https://www.irs.gov/newsroom/tax-scams-consumer-alerts , or give us a call at 260-407-5000.

Shane

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What Do I Need to Have My Taxes Prepared?

Mon, 12 Feb 2018 22:36:00 GMT

It is hard to believe but tax season is back! Football is over and now is the time for everyone to go through boxes, junk piles and paper stacks to find the information needed to prepare your 2017 tax return. We want to help remind you what documents you need to drop off so that we can prepare your taxes in the most efficient manner.

The most important document we need is a completed tax planner. If you are a returning client, you should have received this in the mail in early January; please contact us if you do not have a planner. This paper asks questions that help us make sure that any events that occurred in 2017 that could affect your tax return are addressed.

We also need the actual documents that show income. These documents would include all W2’s, all 1099’s and K1’s. If you have a small business, rentals or farm income, we will need the total income and a list of total expenses. You do not have to show us the actual expense receipts – you can provide just the totals. You will need to keep these receipts in case you are audited by the IRS; they will want to see them. We will also need the student loan interest and HSA paperwork.

On the deduction side, we need the mortgage 1098’s so that we can report the mortgage interest, PMI and real estate taxes paid. We need to know the real estate taxes paid even if you do not itemize because this is a deduction on the Indiana state return. We also need the amount of excise taxes paid on vehicles, charitable contributions, and the total amount for medical expenses. You do not have to provide the actual receipts for these amounts; you can write the totals on the tax planner. If you rent, please provide the landlord’s name and address and the amount paid; this also is a deduction on the Indiana state return. If you have child/dependent care expenses, please provide the amount paid for each dependent and the name and address of the provider along with their tax ID number.

If you or any dependents attended college in 2017, please provide us with the 1098T from the educational institution. The 1098T can be found by going to the student’s school account. We also need proof of what you paid or borrowed to attend college. This can also generally be found on the student’ account. The education credits can be very beneficial to your taxes.

If you purchased insurance on the Healthcare Marketplace and received a subsidy, we must have the 1095A to prepare your income taxes. You should have received this document in the mail; if you have not gotten it, you will find it on your online Marketplace account. This document reconciles the amount you received in subsidies to your 2017 adjusted gross income. It will determine if you received too much or too little in subsidies and will adjust your tax or refund due automatically.

If you have any questions at any time, please feel free to contact us at 260-407-5000.

We are looking forward to helping you have a seamless 2017 tax preparation experience!

Lisa Hagar

The post What Do I Need to Have My Taxes Prepared? appeared first on SBS CPA Group, Inc. .

To Prepare or Not Prepare

Wed, 07 Feb 2018 01:33:00 GMT

By now you should have received most of your tax statements and you should be thinking about getting your taxes prepared. Should you head out to purchase the newest version of Turbo Tax and give it a go yourself, or should you hire a professional tax preparer?

Unfortunately, taxes are getting more and more complicated and thus harder and harder to self-prepare. Last year in tax court a defendant tried to blame turbo tax for his mistakes, but the IRS did not buy it and the taxpayer lost. If you prepare your own taxes, you are responsible for your own mistakes, which could be costly.

Therefore, why not give SBS CPA Group a call and get some help with those taxes. We are a full-service CPA firm in Fort Wayne Indiana specializing in tax preparation. We prepared over 1,000 business and personal income tax returns last year and we can prepare yours too. Give us a call today at 260-407-5000.

Karena Sylvester, CPA

The post To Prepare or Not Prepare appeared first on SBS CPA Group, Inc. .

Two ways Indiana senior citizens can save on property taxes

Wed, 10 Dec 2008 13:28:00 GMT

There are two new ways that those who are 65 or older may be able to save money on Indiana property taxes. In order to qualify for either of these for the March 1st, 2009 assessment period you must file paperwork by December 31st, 2008.

The first is the “Over 65 Deduction for assessed valuation.” Per the Allen County Assessor’s website :

If you own property or a mobile home or are buying on a recorded contract, and you are at least age 65 on or before December 31 of the year before the taxes are due, you could qualify for the following deduction if you meet the following requirements:

Have a combined adjusted gross income that does not exceed $25,000.

Have an assessed property valuation of less than $182,430.

For the surviving spouse deduction you must be over the age of 60, and the deceased spouse must have been at least age 65 at time of death. The deduction is either one half of your assessed valuation or $12,480, whichever is less. This deduction may not be combined with the Blind/Disabled or Disabled Veteran deductions.

The second property tax deduction is the “over 65 circuit breaker credit.” Per the Allen County Assessor’s website :

You may also qualify for the Over 65 Circuit Breaker Credit if you are at least age 65 on or before December 31 of the year before the taxes are due and you meet the following requirements:

Applicant must have qualified for the Homestead Credit the previous calendar year and must be qualified for the Homestead Credit during the current year.

Applicant’s adjusted gross income (AGI) may not exceed $30,000 for an individual or $40,000 for a married couple filing jointly.

The assessed gross value of the homestead on the assessment date must be less than $160,000.

Mike Sylvester, CPA/ABV “accredited in business valuation”

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