Evan Vitale

Accounting Professional

Evan Vitale – Tax Deadline Alert

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By Evan Vitale

By the time you read this, we’ll be just a few weeks away from “tax day” in which we must file our annual tax returns.

However, the Internal Revenue Service is giving us a few extra days this year (2016) in order to get our returns completed and in the mail.

You see, normally, the much-anticipated date (or dreaded date, if you prefer) is always April 15, unless it falls on a weekend day. This year however, April 15 is on a Friday, but the due date is actually April 18, 2016.

Why?

Well, “Emancipation Day” is April 15, 2016 in the District of Columbia. It usually falls on April 16, but when April 16 is a Saturday – which it is this year – then Emancipation Day moves to the previous day (Friday, April 15).

The IRS states “The term ‘legal holiday’ includes a holiday observed in the District of Columbia – Emancipation Day, April 16, is a legal holiday in the District of Columbia. When April 16 is a Saturday, the preceding day is the observed holiday.

Now, if you live in Maine or Massachusetts, then you have until Tuesday, April 19, 2016 to file your individual income tax returns. That’s because Monday, April 18, 2016 is “Patriots Day” which is observed as a statewide legal holiday every third Monday of April. IRS offices are closed in those states on Monday, April 18 and, since taxpayers are allowed to file their returns by hand-delivering their forms to a local IRS office, the due date is extended to the next day (April 19).

And, just as a friendly reminder, the first installment payment for 2016 estimated tax is also due by April 18 – the same deadline for your 2015 Federal tax returns. Double bonus! This deadline applies to all residents (even those in Maine or Massachusetts).

Whew! Got it?

Evan Vitale – What Happens If You Get Audited?

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By Evan Vitale

Being audited by the Internal Revenue Service has not only been the punchline of many jokes and personal jabs, but it’s also one of those life moments that strikes fear into the hearts of many.

However, should you ever receive notice of an audit, here are a few steps and tips you can take in order to make the process go a little smoother for you:

  • The best way to prepare is to have a tax adviser on your side. He or she will not only help you with your questions and concerns, but it’s also the best way to be represented before the IRS. They will know how to find the solutions for your tax audit problems and will be able to respond to any auditor suspicions.
  • If you are a small business owner, your professional accountant knows how to reduce your chances of being audited. Want to avoid being audited? Don’t have a careless tax return. Keep personal deductions and business deductions separate. Keep good records of all expenses and be exact. Never round up numbers.
  • Sometimes, small businesses are audited because they deal in cash and, thus, money is sometimes not properly reported to the IRS.

In addition, small business owners often claim personal deductions and business deductions. Small business owners should always keep excellent records just in case of a potential tax audit.

Also, sometimes a small business is informed that their deductions were not allowed as the IRS may claim that their “business” is really a “hobby.” If this should happen you may need quality audit representation to review your returns and your deductions.

Should you ever be audited by the IRS, they will verify bank records, deposits, income, expenses, deductions, payroll taxes, employee classifications and other financial records.

Evan Vitale – Protecting Your Identity During Tax Season

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By Evan Vitale

As if tax season isn’t stressful enough, it’s also prime time for identity theft.

“A thief who has your personal information can file a tax return before you do, collect a fraudulent refund and leave you waiting for many months to get your own refund and clear up this problem,” said Neil Chase, vice president of education at LifeLock.

Identity thieves use stolen Social Security numbers and other personal information in order to file false tax returns. Some of their methods include:

  • Callers impersonating IRS agents calling victims and telling them they owed taxes and needed to pay by a wire transfer or by a prepaid card.
  • Sending e-mails asking for personal information, social security numbers or birth dates.
  • Untrusting employees at your doctor or dentist office asking for personal information.

If anyone asks for any personal information always ask them why they need it.

As we are now into full tax season, the Internal Revenue Service is working diligently with state tax authorities and the tax industry to address tax-related identity theft and refund theft. Stronger protections have already gone into place for this upcoming tax filing season. One of these changes will be new security requirements when you’re preparing your taxes online, especially when you sign in to your tax software account. Other changes will be invisible to taxpayers, but are in place to help federal, state and local tax offices.

Even with protections in place, the IRS doesn’t see processing time slowing down and plans on processing nine out of 10 federal refunds within 21 days.

To help protect yourself even further from identity theft, the IRS suggests the following tips:

  • File as early as you possibly can. The IRS will start taking tax returns on January 31, 2016.
  • Do not throw away financial statements, tax returns and other personal information in the trash. Instead, make sure these documents are properly shredded.

Evan Vitale – Finding A Tax Preparer (Part III)

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By Evan Vitale

In our final blog post on Finding A Tax Preparer, here are some questions you can use during your own searching process. The answers you receive will help you in finding the right fit for your business.

  • Ask your tax preparer if they have any experience in your industry? Tax laws are different and specific for different businesses, so your tax preparer should be familiar with the tax laws that impact you and your firm.
  • Who will be working on your returns? Sometimes, medium and larger firms have staff or associates repair the returns. If so, what is their level of expertise?
  • What is the firm’s tax return review process? Will your returned be reviewed for accuracy, but will it also be reviewed for missed opportunities in helping you to reduce your taxes?
  • Will your tax preparer look at your past returns? If so, what will they do (or recommend) in having something different done with your current returns? Most tax preparers can suggest a least one idea of something that could have been done (and can be done) to help reduce your taxes.
  • How much can your tax preparer save you in taxes? It will be difficult to give an accurate, on-the-spot answer, but they should have a general idea after spending some time discussing your business; your financials, and looking at past returns.
  • What are the deadlines that you need to meet in order to get the proper paperwork and information to your tax preparer? Can you, as the business owner, meet this deadline?
  • Are there any tax law changes that you should be made aware of? Your tax preparer should be on top of current changes and any upcoming changes that could impact your taxes.

Be selective! And feel 100% comfortable with the tax preparer that you choose for your business. Finding the right tax preparer can make a big difference!

Evan Vitale – Finding A Tax Preparer (Part II)

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By Evan Vitale

You should feel absolutely 100% comfortable with the tax preparer you hire for your business.

During the search and interview process, make sure your tax preparer:

  • Knows the tax law extremely well.
  • Knows how to be creative legally (no, your tax preparer isn’t going to cheat on tax returns for you).
  • Asks you many questions about your business situation, so they can better understand your financials and goals. Don’t be afraid to offer valuable information as this will only help your tax preparer in offering the best tax advice.
  • Has a review process in which at least one other person in their office also reviews the final tax returns to make sure everything is correct before the returns are signed.

Ask your potential tax preparer candidate how many times their clients have been audited by the Internal Revenue Service. What was the outcome of such audits? Were additional taxes assessed by the IRS or were there no charges? Does the tax preparer offer an audit defense plan?

In Part III, we’ll offer some other prepared questions you can use when interviewing a potential tax preparer for your company.

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Evan Vitale is a multifaceted finance and accounting professional who provides Audit, Accounting, Tax, Due Diligence and Advisory services to Venture Capital Funds, Hedge Funds, Private Equity Funds, Family Offices, Small Business Investment Companies (SBICs), Funds of Funds, Other Investment Groups and their management companies. 

Today’s market has made it extremely difficult to predict what the next day will bring.  For Funds and Other Investment Vehicles, the expectations remain to balance the different opportunities with a continued focus on value creation in existing portfolios.  The key to any successful organization is building and maintaining the trust of your investors. Evan has the expertise to help you shine in your investor’s eyes and stand apart from the competition.

Connect and network with Evan Vitale on LinkedIn.

Evan Vitale – Reasons to File Taxes On Time

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evan vitale tax deadlineVery few of us plan not to do our taxes on time, but sometimes it happens.  To try and help motivate those of you still waiting to put pen to paper (or fingertip to keyboard), here are a few reasons why filing on time is better than putting it off until later.  Courtesy of Daily Finance.

The first reason to file taxes on time is late penalties.  There’s no better motivation than trying to keep money in your wallet.  The reason there is a monetary fine on late filing is because the filing of national taxes is so important.  There’s also been reports that the IRS will hound you harder if you fail to file on time and owe a deal of money – as opposed to those expecting to receive money back.  The fine amounts to about 5% of the taxes you owe for every month you delay, with a cap at five months.  If you’re not filing on time because you can’t pay the money you know you’ll owe – still file!  The fine is significantly less for failing to pay what taxes you owe.

The next reason is delayed reimbursement.  The longer you wait to file, the longer it will take for you to receive your return.  In essence, you’re giving the government an interest-free loan.  Better that money was in your savings account accruing money for you.

Up next is forfeiture of your refund altogether.  After a generous window of three years, any money owed to you by the government just kind of…disappears.  Whatever happens to it exactly, it no longer belongs to you.  Hope you were planning on making a donation to the IRS.

Number four – if you don’t file, the IRS is allowed to file for you!  Yes, they will estimate your taxable income and file on your behalf.  This is usually not in your best interest, since they won’t be making any deductions.  If you do receive a notice that a substitute return has been filed, along with a bill, you will still have a little time to calculate your deductions.

And the last reason is the most compelling:  You will lose your freedom.  After all the letters, requests (or even a representative sent to your door), the IRS will get serious.  This means they could automatically remove money from your wages, seize assets (think vehicles), and maybe even put a warrant out for your arrest for the federal crime of tax evasion.

There really is no valid argument for not filing your taxes on time.  So take some time over the next ten days and see it through.