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Announcement: Office Space Available

ASY has one office space available for lease at our office.  It is approximately 150 sqft.  This includes all utilities and Internet service. You would also have access to our spacious conference room for meetings. Contact David for more information.

 

 

Divorce or separation may have an effect on taxes

Taxpayers should be aware of tax law changes related to alimony and separation payments. These payments are made after a divorce or separation. The Tax Cuts and Jobs Act changed the rules around them, which will affect certain taxpayers when they file their 2019 tax returns next year.

Here are some facts that will help people understand these changes and who they will impact:

  • The law relates to payments under a divorce or separation agreement. This includes:
    • Divorce decrees.
    • Separate maintenance decrees.
    • Written separation agreements.
  • In general, the taxpayer who makes payments to a spouse or former spouse can deduct it on their tax return. The taxpayer who receives the payments is required to include it in their income.
  • Beginning Jan. 1, 2019, alimony or separate maintenance payments are not deductible from the income of the payer spouse, or includable in the income of the receiving spouse, if made under a divorce or separation agreement executed after Dec. 31, 2018. 
  • If an agreement was executed on or before Dec. 31, 2018 and then modified after that date, the new law also applies. The new law applies if the modification does these two things:
    • It changes the terms of the alimony or separate maintenance payments.
    • It specifically says that alimony or separate maintenance payments are not deductible by the payer spouse or includable in the income of the receiving spouse.
  • Agreements executed on or before Dec. 31, 2018 follow the previous rules. If an agreement was modified after that date, the agreement still follows the previous law as long as the modifications don’t do what’s described above.

Tips to help taxpayers recognize tax scams

New versions of well-known tax-related scams appear every year…and 2019 is no different. No matter what time of year, taxpayers should be on the lookout for scams. Here are some things taxpayers should remember to help them spot scams and avoid becoming a victim.

Phone scams

  • The IRS does not leave pre-recorded, urgent or threatening messages.
  • In many versions of phone scams, potential victims are told if they do not call back, a warrant will be issued for their arrest. Other verbal threats include law-enforcement agency intervention, deportation and revocation of licenses.
  • Criminals can fake or “spoof” caller ID numbers to appear to be anywhere in the country. Scammers can even spoof an IRS office phone number, or the numbers of various local, state, federal or tribal government agencies.

Email phishing scams

  • The IRS does not initiate contact with taxpayers by email to request personal or financial information.
  • The IRS initiates most contacts through regular mail delivered by the United States Postal Service.
  • There are special circumstances when the IRS will call or come to a home or business. These visits include times when a taxpayer has an overdue tax bill, a delinquent tax return, or a delinquent employment tax payment.
  • If a taxpayer receives an unsolicited email that appears to be a scam, they should report it to the IRS. They can forward the email message to phishing@irs.gov. They should not open any attachments, click on any links, reply to the sender, or take any other actions that could put them at risk.

Telltale signs of a scam

Taxpayers should remember that the IRS generally first mails a bill to a taxpayer who owes taxes. The IRS and its authorized private collection agencies will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments.
  • Ask for checks to third parties. The IRS has specific instructions on how to pay taxes. All tax payments should only be made payable to the U.S. Treasury.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

If a taxpayer receives a phone call, but doesn’t owe taxes and has no reason to think they do, they should:

If a taxpayer owes tax or thinks they do, they should:

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Here’s what people should know about reporting cash payments

Federal law requires a person to report cash transactions of more than $10,000 to the IRS. Here are some facts about reporting these payments.

Who’s covered
For purposes of cash payments, a “person” is defined as an individual, company, corporation, partnership, association, trust or estate. For example:

  • Dealers of jewelry, furniture, boats, aircraft, automobiles, art, rugs and antiques
  • Pawnbrokers
  • Attorneys
  • Real estate brokers
  • Insurance companies
  • Travel agencies

How to report
People report the payment by filing Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business.

A person can file Form 8300 electronically using the Financial Crimes Enforcement Network’s BSA E-Filing System. E-filing is free, quick and secure. Filers will receive an electronic acknowledgement of each form they file. Those who prefer to mail Form 8300 can send it to the IRS at the address listed on the form.

What’s cash
Cash includes coins and currency of the United States or any foreign country. For some transactions, it’s also a cashier’s check, bank draft, traveler’s check or money order with a face amount of $10,000 or less.

A person must report cash of more than $10,000 they received:

  • In one lump sum
  • In two or more related payments within 24 hours
  • As part of a single transaction within 12 months
  • As part of two or more related transactions within 12 months

When to file
A person must file Form 8300 within 15 days after the date they received the cash. If they receive payments toward a single transaction or two or more related transactions, they file when the total amount paid exceeds $10,000.

Taking care of business: recordkeeping for small businesses

Small business owners should keep good records. This applies to all businesses, whether they have a couple dozen employees or just a few. Whether they install software or make soft-serve. Whether they cut hair or cut lawns. Keeping good records is an important part of running a successful business.

Here are some questions and answers to help business owners understand the ins and outs of good recordkeeping.

Why should business owners keep records?
Good records will help them:

  • Monitor the progress of their business
  • Prepare financial statements
  • Identify income sources
  • Keep track of expenses
  • Prepare tax returns and support items reported on tax returns

What kinds of records should owners keep?
Small business owners may choose any recordkeeping system that fits their business. They should choose one that clearly shows income and expenses. Except in a few cases, the law does not require special kinds of records. .

How long should businesses keep records?
How long a document should be kept depends on several factors. These factors include the action, expense and event recorded in the document. The IRS generally suggests taxpayers keep records for three years.

How should businesses record transactions?
A good recordkeeping system includes a summary of all business transactions. These are usually kept in books called journals and ledgers, which business owners can buy at an office supply store. All requirements that apply to hard copy books and records also apply to electronic business records.

What is the burden of proof?
The responsibility to validate information on tax returns is known as the burden of proof. Small business owners must be able to prove expenses to deduct them.

How long should businesses keep employment tax records?
Business owners should keep all records of employment taxes for at least four years.

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Local IRS Offices

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2670 Industrial Hwy, York, PA 17402
Monday-Friday 8:30am - 4:30pm
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(717) 757-4977

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228 Walnut St, Harrisburg, PA 17101
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1720 Hempstead Rd, Lancaster, PA 17601
Monday-Friday 8:30am - 4:30pm
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(717) 291-1994










NATP

National Association of Tax Professionals