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Each year, many people get a larger refund than they expected. Some find they owe a lot more tax than they thought they would. If this happened to you, review your situation to prevent another tax surprise. Did you marry? Have a child? Have a change in income? Some life events can have a major effect on your taxes. You can bring the tax you pay closer to the amount you owe. Here are some key IRS tips to help you come up with a plan of action:

• New Job.   When you start a new job, you must fill out a Form W-4, Employee’s Withholding Allowance Certificate and give it to your employer. Your employer will use the form to figure the amount of federal income tax to withhold from your pay. Use the IRS Withholding Calculator on IRS.gov to help you fill out the form. This tool is easy to use and it’s available 24/7.
• Estimated Tax.  If you earn income that is not subject to withholding you may need to pay estimated tax. This may include income such as self-employment, interest, dividends or rent. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay this tax. You normally pay it four times a year. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to figure the tax.
• Life Events.  Check to see if you need to change your Form W-4 or change the amount of estimated tax you pay when certain life events take place. A change in your marital status, the birth of a child or buying a new home can change the amount of taxes you owe. In most cases, you can submit a new Form W–4 to your employer anytime.
• Changes in Circumstances.   If you are receiving advance payments of the premium tax credit, it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

For help with any income tax question call one of our offices:                                               Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

With temperatures soaring across the country, the NHTSA urges everyone to remember that heatstroke can be deadly to kids left in hot cars. Heatstroke is the leading cause of death for children under 14 in motor vehicle incidents  (other than crashes) . There have already been 10 deaths in 2015. Follow these tips to prevent heatstroke:

• Never leave an infant or child unattended in a vehicle, even if the windows are partly open, or the engine is running and the air conditioning is on.
• Don’t let children play in an unattended vehicle.
• Make a habit of looking in the vehicle before locking the door and walking away.
• Take steps to remember not to leave a child in a vehicle by leaving a note or placing a purse or briefcase in the back seat.
• If you see a child alone in a vehicle, call 911 or your local emergency number immediately. If they are in distress due to heat, get them out as quickly as possible.

For help with any tax question call one of our offices:                                       

Plymouth 734.454.4100,    Allen Park 313.388.7180, Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

Millions of people enjoy hobbies. They can also be a source of income. Some of these types of hobbies include stamp or coin collecting, craft making and horse breeding. You must report any income you get from a hobby on your tax return. How you report the income is different than how you report income from a business. There are special rules and limits for deductions you can claim for a hobby. Here are five basic tax tips you should know if you get income from your hobby:

1. Business versus Hobby.  A key feature of a business is that you do the activity to make a profit. This differs from a hobby that you may do for sport or recreation. There are nine factors to consider when you determine if you do the activity to make a profit. Make sure you base your decision on all the facts and circumstances of your situation. Refer to Publication 535, Business Expenses to learn more. You can also visit IRS.gov and type “not-for-profit” in the search box.
2. Allowable Hobby Deductions.  You may be able to deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is helpful or appropriate. See Publication 535 for more on these rules.
3. Limits on Expenses.  As a general rule, you can only deduct your hobby expenses up to the amount of your hobby income. If your expenses are more than your income, you have a loss from the activity. You can’t deduct that loss from your other income.
4. How to Deduct Expenses.  You must itemize deductions on your tax return in order to deduct hobby expenses. Your costs may fall into three types of expenses. Special rules apply to each type. See Publication 535 for how you should report them on Schedule A, Itemized Deductions.
5. Use IRS Free File.  Hobby rules can be complex. IRS Free File can make filing your tax return easier. IRS Free File is available until Oct. 15. If you make $60,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. You can only access Free File through IRS.gov.

For help with any income tax question call one of our offices:                                               Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

If you are in the U. S. Armed Forces, special tax breaks may apply to you. For example, some types of pay are not taxable. Certain rules apply to deductions or credits that you may be able to claim that can lower your tax. In some cases, you may get more time to file your tax return. You may also get more time to pay your income tax. Here are the top 10 IRS tax tips about these rules:

1. Deadline Extensions.  Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.
2. Combat Pay Exclusion.  If you serve in a combat zone, certain combat pay you get is not taxable. You won’t need to show the pay on your tax return because combat pay is not part of the wages reported on your Form W-2, Wage and Tax Statement. If you serve in support of a combat zone, you may qualify for this exclusion.
3. Earned Income Tax Credit or EITC.  If you get nontaxable combat pay, you can include it to figure your EITC. Doing so may boost your credit. Even if you do, the combat pay stays nontaxable.
4. Moving Expense Deduction.  You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station.
5. Uniform Deduction.  You can deduct the costs of certain uniforms that you can’t wear while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.
6. Signing Joint Returns.  Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return.
7. Reservists’ Travel Deduction.  If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.
8. ROTC Allowances.  Some amounts paid to ROTC students in advanced training are not taxable. This applies to allowances for education and subsistence. Active duty ROTC pay is taxable. For instance, pay for summer advanced camp is taxable.
9. Civilian Life.  If you leave the military and look for work, you may be able to deduct some job search expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.
10. Tax Help.  Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after April 15.

For help with any income tax question call one of our offices:                                               Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

The IRS does not have unlimited time to collect back taxes. The law provides the agency 10 years to collect any tax debt. This collection period of 10 years is known as the statute of limitations.

Even though the IRS usually closes a tax debt case after the 10-year statute of limitations expires, it can, if it wishes to, collect back taxes even after that. However, that is rare.

Usually, after the expiry of the statute of limitations, the entire tax debt is forgiven and the case closed. There can be various reasons for the IRS’ inability to collect back taxes for 10 years, including inability to track down the taxpayer, and the taxpayer’s poor financial condition that doesn’t allow any payment.

The IRS is particularly strict with non-payment of income tax, but they are even more aggressive with non-payment of payroll taxes. The IRS closely watches small employers. The tax code places a 100% penalty on “responsible persons” who do not withhold employee taxes, or who withhold and do not transfer the tax money to the IRS. Employers and even employees that are required to withhold payroll taxes are required to pay payroll taxes on time.

If a taxpayer has the ability to pay and can be located, the IRS will usually collect back taxes well before the statute of limitations. Ability to pay includes income, equity in assets, and the ability to take loan.

Taxpayers that do not have the ability to pay any amount in back taxes may be assigned the status of Currently Not Collectible (CNC). This stops collection actions and allows the taxpayer more time to pay. If the financial condition of the taxpayer under CNC does not improve significantly by the expiry of the statute of limitations, the tax debt is forgiven and the case closed.

For help with any income tax question including unpaid taxes call one of our offices:      Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

With the severe storms that went through Michigan yesterday, the IRS wants you to know it stands ready to help. If you suffer damage to your home or personal property, you may be able to deduct the losses you incur on your federal income tax return. Here are 10 tips you should know about deducting casualty losses:

1. Casualty loss.  You may be able to deduct losses based on the damage done to your property during a disaster. A casualty is a sudden, unexpected or unusual event. This may include natural disasters like hurricanes, tornadoes, floods and earthquakes. It can also include losses from fires, accidents, thefts or vandalism.
2. Normal wear and tear.  A casualty loss does not include losses from normal wear and tear. It does not include progressive deterioration from age or termite damage.
3. Covered by insurance.  If you insured your property, you must file a timely claim for reimbursement of your loss. If you don’t, you cannot deduct the loss as a casualty or theft. You must reduce your loss by the amount of the reimbursement you received or expect to receive.
4. When to deduct.  As a general rule, you must deduct a casualty loss in the year it occurred. However, if you have a loss from a federally declared disaster area, you may have a choice of when to deduct the loss. You can choose to deduct the loss on your return for the year the loss occurred or on an amended return for the immediately preceding tax year. Claiming a disaster loss on the prior year’s return may result in a lower tax for that year, often producing a refund.
5. Amount of loss.  You figure the amount of your loss using the following steps:
   • Determine your adjusted basis in the property before the casualty. For property you buy, your basis is usually its cost to you. For property you acquire in some other way, such as inheriting it or getting it as a gift, you must figure your basis in another way. For more see Publication 551, Basis of Assets.
   • Determine the decrease in fair market value, or FMV, of the property as a result of the casualty. FMV is the price for which you could sell your property to a willing buyer. The decrease in FMV is the difference between the property’s FMV immediately before and immediately after the casualty.
   • Subtract any insurance or other reimbursement you received or expect to receive from the smaller of those two amounts.
6. $100 rule.  After you have figured your casualty loss on personal-use property, you must reduce that loss by $100. This reduction applies to each casualty loss event during the year. It does not matter how many pieces of property are involved in an event.
7. 10 percent rule.  You must reduce the total of all your casualty or theft losses on personal-use property for the year by 10 percent of your adjusted gross income.
8. Future income.  Do not consider the loss of future profits or income due to the casualty as you figure your loss.
9. Form 4684.  Complete Form 4684, Casualties and Thefts, to report your casualty loss on your federal tax return. You claim the deductible amount on Schedule A, Itemized Deductions.
10. Business or income property.  Some of the casualty loss rules for business or income property are different than the rules for property held for personal use.

For help with any income tax question including disaster damage call one of our offices:  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

I filed under the incorrect filing status. I forgot to include a second income on my tax return. I forgot to add a dependent and missed out on a tax credit.

Did you prepare your own taxes this year and realize you made a mistake that may have affected your overall tax after it was submitted to the IRS? There’s still time if you need to amend, or revise, a tax return. FYI … if you made a simple mathematical error or forgot to include certain forms or schedules with your return, there’s no need to file an amendment! The IRS usually corrects miscalculations and sometimes lets returns with missing forms slide.

Follow these steps to go about filing an amendment:

1. Print Form 1040X, Amended U.S. Individual Income Tax Return, and mail it to the IRS. This form cannot be electronically completed.
2. Attach all needed documentation, including W-2s.
3. Once the IRS receives the form, it can take up to 12 weeks for them to process it.
4. The status of your amended return can be checked using the IRS’s “Where’s My Amended Return?” tool or toll-free number 866-464-2050. You can start checking the status 3 weeks after you have mailed the form.

Keep in mind that Form 1040X must be filed within 3 years after the date in which your original return was due or 2 years after the date you paid the tax, whichever is greater. There is an exception for those who filed for extensions – the form is then due 3 years after the date you filed your return. See the IRS website for more information.

Do you have questions about filing an amendment or what should be attached? Call or stop into your local ATS Advisors office for assistance.

Remember, we’re here all year!

Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

Paperwork is normal part of life, school, work and taxes. Owning a home is no different. It’s important that you keep records of anything relating to your home.

• If you need to file a disaster, casualty, or theft loss, you’ll need paperwork.
• If you install energy-efficient appliances, you’ll need the receipts.
• Deducting mortgage interest? You’ll need a Form 1098 or other statement showing how much interest you paid.

All of these plus many other tax breaks and advantages require a paper trail, and having a way of keeping records is the first important step.

What Should You Keep?

Bank statements show both when and how much was withdrawn for mortgage payments.

Credit and debit card receipts can be your records for any renovations or upgrades you did to the home. Receipts are also a record for deducting the residential energy credit. If you installed medically required equipment or upgrades, the receipts are supporting documents when deducting the expenses. The receipts are also helpful in valuing property if you file a disaster, casualty, or theft loss.

Paperwork for selling a home: Any documents you receive or create while selling your home should be kept. This includes any appraisals, legal paperwork, mortgage documents, and receipts for improvement or repairs.

How Long Should You Keep Records?

The IRS recommends that you keep any records or documents used for deductions or credits at least seven years after filing the return. Keeping the records helps in case of a questionable return or even an audit.

How Should You Store Your Records?

This is the age of the Internet, there are lots of options here, such as Google Drive or Dropbox. As your paper documents and important papers come to you, just scan and upload to your storage. And if you receive bank and credit card statements by email, take the time to save those records to your storage.

No scanner? Do you have a digital camera, cellphone, or other device with a camera? The IRS will accept digital photographs as valid records. Just snap and upload.

If you have paper documents, at a minimum you should store them in a home fireproof safe. Keep it in a place where you can easily grab it if you need to evacuate your home quickly. Storage outside the home is a good idea, such as in a bank safe deposit box.

For more information about taxes or filing your 2015 return contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

Mark your calendars: Next year, Tax Day falls on April 18. Taxpayers in most states will get an extra three days to file their federal returns. The deadline is being delayed because the District of Columbia will celebrate Emancipation Day on April 15.

By law, local holidays in the nation’s capital impact tax deadlines the same way federal holidays would. Emancipation Day marks the date President Abraham Lincoln signed into law a bill ending slavery in the District of Columbia.

Lincoln signed the bill on April 16, 1862, more than eight months before he signed the Emancipation Proclamation, which eventually led to all slaves being freed. Next year, April 16 falls on a Saturday, so the city is celebrating the holiday on April 15.

For more information about taxes or filing your 2015 return contact one of our offices:                  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600