Beware of store front and non-CPA tax preparers, expecially those with "specials" or coupons. Read the fine print. Ask who will prepare the returns and their level of expertise. Find out your real cost, including hidden charges, "instant refund loan" fees and hidden interest, and other used-car type tactics. For peace of mind, use a professional. After all, it is YOUR tax return!
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TIDBITS FROM THE TAX CORNER:
New standard mileage rates. The Internal Revenue Service recently announced an increase in the optional standard mileage rates for the 2014. The rate has been decreased to 56.0 from 56.5 cents a mile for all business miles driven.
Tracking business miles: The IRS is cracking down in this area. It is absolutely critical that a mileage log be maintained to track your business miles. We’ve encountered quite a few taxpayers who fail to keep adequate records, providing instead an “estimate” of business mileage for the year. The IRS requires the following information in order to substantiate a deduction for the standard mileage rate: date of trip, destination, business purpose, mileage for each business trip and total miles for the year (business and non-business). Failure to keep such records will result in no deduction on your return. Upon IRS audit, you would owe penalties/interest on the additional tax owed because of disallowance of such deduction. We will send you a free mileage log upon request-just let us know.
Increase in penalties for failing to file 1099’s. The Small Business Jobs Act increased the penalties for failing to file 1099’s and other information returns and to provide copies to payees. The penalty per return is $100, increased from $50. Basically, you must file Form 1099 if you make a payment of $600 or more to anyone who is not a corporation in the course of your trade or business. Contact us if you have any questions regarding your specific situation.
Late filing penalty for S Corporation tax returns- For returns on which no tax is due, the penalty is $195 for each month or part of a month (up to 12 months) the return is late or does not include the required information, multiplied by the total number of persons who were shareholders in the corporation during any part of the corporation's tax year for which the return is due. If tax is due, the penalty is the amount stated above plus 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax.
North Carolina Sales and Use Tax Obligations-from NCDOR website Every person engaged in business in North Carolina is required to register with the Department and collect and remit the tax due on all taxable tangible personal property, taxable services or certain digital property sold or delivered for storage, use, or consumption in North Carolina. Every person who purchases any taxable tangible personal property, taxable services or certain digital property for storage, use, or consumption in North Carolina for business use from out-of-state vendors upon which the tax has not been fully paid must register with the Department and remit the tax due on such purchases. To register for sales and use tax purposes, Registration Application, Form NC-BR, must be completed and mailed to the Department. All registrants will be furnished returns to be used in reporting and remitting all sales and use taxes due.
Please call or e-mail Patti at 704-846-3485 or Patti@LarryAClarkCPA.com with any related questions or concerns, or if you already know you want to file extensions. We sincerely appreciate your consideration – thank you!