357 Marion Avenue
Mansfield, OH 44903
Telephone +1.419.522.1111
Fax +1.419.525.4646
secpas.com

Campbell-Rose & Company CPA's News

03.05.17

Recent IRS changes to the system of processing returns meant that 2016 Forms 1040 that did not provide information about the taxpayer's health insurance coverage would be rejected for processing. However, as a result of a January 20, 2017, Executive Order relating to the Affordable Care Act, the IRS has changed its tax return processing procedures and will not reject any Forms 1040 that do not provide information regarding a taxpayer's health insurance coverage.

01.16.17

With sharply increased information reporting penalties in their second year (as high as $260 per late Form 1099), timely issuance of Form 1099s has become a critical imperative for many businesses. The urgency for timely reporting is compounded by the continued presence of questions on Forms 1065, 1120, 1120S, and 1040, asking whether the taxpayer made any payments in 2016 that would require the taxpayer to file Form(s) 1099. Starting this year, taxpayers also face earlier deadlines for reporting W-2 and 1099 information to the Social Security Administration and the IRS.

12.20.16

Beginning on January 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 53.5 cents per mile driven for business purposes;
  • 17 cents per mile driven for medical or moving purposes; and
  • 14 cents per mile driven in service of charitable organizations

12..12.16

The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or debit cards until the week of February 27 -- if there are no processing issues with the tax return and the taxpayer chose direct deposit. This additional period is due to several factors, including banking and financial systems needing time to process deposits.

Where's My Refund? ‎on IRS.gov and the IRS2Go phone app will be updated with projected deposit dates for early EITC /ACTC refund filers a few days after Feb. 15. Taxpayers will not see a refund date on Where's My Refund? ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so Where’s My Refund? remains the best way to check the status of a refund.

Why is my refund being held?

Beginning in 2017, if you claim the EITC or ACTC on your tax return, the IRS must hold your refund until Feb. 15. This new law requires the IRS to hold the entire refund — even the portion not associated with the EITC or ACTC. Like previous years, some tax refunds may be held if there are questions about the tax return or the IRS needs more information.

Will I get my refund on Feb. 15?

While the IRS will begin to issue EITC/ACTC refunds starting Feb. 15, you should not count on actually seeing your refund until the week of Feb. 27 -- if you chose direct deposit or a debit card and there are no processing issues with your tax return.

Why does it take so long for the funds to show up in my account?

It takes additional time for refunds to be processed after leaving the IRS, and for financial institutions to accept and deposit them to bank accounts and products like debit cards. Also many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day affects their refund timing.

How do I check the status of my refund?

Where's My Refund ‎on IRS.gov and the IRS2Go phone app remains the best way to check the status of a refund. Where’s My Refund will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after Feb. 15. Taxpayers will not see a refund date on Where's My Refund ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so taxpayers should not contact or call them about refunds before the end of February.

11.06.16

The tax items for tax year 2017 of greatest interest to most taxpayers include the following dollar amounts:

  • The standard deduction for married filing jointly rises to $12,700 for tax year 2017, up $100 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $6,350 in 2017, up from $6,300 in 2016, and for heads of households, the standard deduction will be $9,350 for tax year 2017, up from $9,300 for tax year 2016.

  • The personal exemption for tax year 2017 remains as it was for 2016: $4,050.  However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500 ($313,800 for married couples filing jointly). It phases out completely at $384,000 ($436,300 for married couples filing jointly.)

  • For tax year 2017, the 39.6 percent tax rate affects single taxpayers whose income exceeds $418,400 ($470,700 for married taxpayers filing jointly), up from $415,050 and $466,950, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds for tax year 2017 are described in the revenue procedure.

  • The limitation for itemized deductions to be claimed on tax year 2017 returns of individuals begins with incomes of $287,650 or more ($313,800 for married couples filing jointly).

  • The Alternative Minimum Tax exemption amount for tax year 2017 is $54,300 and begins to phase out at $120,700 ($84,500, for married couples filing jointly for whom the exemption begins to phase out at $160,900). The 2016 exemption amount was $53,900 ($83,800 for married couples filing jointly).  For tax year 2017, the 28 percent tax rate applies to taxpayers with taxable incomes above $187,800 ($93,900 for married individuals filing separately).

  • The tax year 2017 maximum Earned Income Credit amount is $6,318 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,269 for tax year 2016. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phase-outs.

  • For tax year 2017, the monthly limitation for the qualified transportation fringe benefit is $255, as is the monthly limitation for qualified parking.

  • For calendar year 2017, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is $695.

  • For tax year 2017 participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,250 but not more than $3,350; these amounts remain unchanged from 2016. For self-only coverage the maximum out of pocket expense amount  is $4,500, up $50 from 2016. For tax year 2017 participants with family coverage, the floor for the annual deductible is $4,500, up from $4,450 in 2016, however the deductible cannot be more than $6,750, up $50 from the limit for tax year 2016. For family coverage, the out of pocket expense limit is $8,250 for tax year 2017, an increase of $100 from  tax year 2016.

  • For tax year 2017, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $112,000, up from $111,000 for tax year 2016.

  • For tax year 2017, the foreign earned income exclusion is $102,100, up from $101,300 for tax year 2016.

  • Estates of decedents who die during 2017 have a basic exclusion amount of $5,490,000, up from a total of $5,450,000 for estates of decedents who died in 2016.

10.10.16

The IRS has provided the 2016-2017 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. Notice 2016-58.

In Notice 2016-58, the IRS issued the annual update on special per diem rates used in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. Specifically, the notice provides: (1) the special transportation industry meal and incidental expenses rates (M&IE rates), (2) the rate for the incidental expenses only deduction, and (3) the rates and lists of high-cost localities for purposes of the high-low substantiation method.

Taxpayers using the rates and the list of high-cost localities provided in Notice 2016-58 must comply with Rev. Proc. 2011-47, which provides rules for using a per diem rate to substantiate, under Code Sec. 274(d) and Reg. Sec. 1.274-5, the amount of ordinary and necessary business expenses paid or incurred while traveling away from home.

For purposes of the high-low substantiation method, the per diem rates are $282 for travel to any high-cost locality and $189 for travel to any other locality within the continental U.S. (up from $275 and $185, respectively). The amount of the $282 high rate and $189 low rate that is treated as paid for meals for purposes of Code Sec. 274(n) is $68 for travel to any high-cost locality and $57 for travel to any other locality within the continental U.S.

The per diem rates for the meal and incidental expenses only substantiation method are $68 for travel to any high-cost locality and $57 for travel to any other locality within the continental U.S. (same as last year).

Notice 2016-58 is effective for per diem allowances for lodging, meal and incidental expenses, or for meal and incidental expenses only that are paid to any employee on or after October 1, 2016, for travel away from home on or after October 1, 2016. Rates for the period of October 1, 2015 through September 30, 2016, can be found in Notice 2015-63.

For a discussion of the substantiation rules for expenses incurred while traveling away from home, see Parker Tax ¶91,130.

12.20.15

Beginning on Jan. 1, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 54 cents per mile for business miles driven, down from 57.5 cents for 2015
  • 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
  • 14 cents per mile driven in service of charitable organizations

    12.12.14

    Beginning Jan. 1, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

    • 57.5 cents per mile for business miles driven, up from 56 cents in 2014.
    • 23 cents per mile driven for medical or moving purposes, down half a cent from 2014.
    • 14 cents per mile driven in service of charitable organizations.

    12.09.13

    Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

    • 56 cents per mile for business miles driven
    • 23.5 cents per mile driven for medical or moving purposes
    • 14 cents per mile driven in service of charitable organizations

    10.24.13

    Tax season delayed

    The start of the 2014 tax season will be delayed one to two weeks due to the government shutdown. Exactly how much of a delay won’t be announced until December. The April 15 tax deadline will remain in place.

    The original start date of the 2014 filing season was Jan. 21, meaning the new start should be between Jan. 28 and Feb. 4. The IRS will not process paper tax returns before then.

    10.17.13

    Even if a same-sex couple is married elsewhere, they still have to file state returns separately, according to the Ohio Department of Taxation.

    Ohio usually follows federal code, allowing Ohioans to use federal adjusted gross incomes as the starting point for state returns. However, the Ohio Constitution's ban on legal recognition of same-sex unions prevents that. 

    01.19.13

    The Internal Revenue Service today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.

    The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

    Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

    The new simplified option is available starting with the 2013 return.

    11.24.12

    • Beginning on Jan. 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

      56.5 cents per mile for business miles driven
      24 cents per mile driven for medical or moving purposes
      14 cents per mile driven in service of charitable organizations

    10.28.12

    • The annual exclusion for gifts rises to $14,000 for 2013, up from $13,000 for 2012.
    • The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500.
    • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $5,500.
    • The limit on annual contributions to an Individual Retirement Arrangement (IRA) rises to $5,500, up from $5,000 in prior years.
    • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $59,000 and $69,000, up from $58,000 and $68,000 in 2012. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $95,000 to $115,000, up from $92,000 to $112,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $178,000 and $188,000, up from $173,000 and $183,000.
    • The AGI phase-out range for taxpayers making contributions to a Roth IRA is $178,000 to $188,000 for married couples filing jointly, up from $173,000 to $183,000 in 2012. For singles and heads of household, the income phase-out range is $112,000 to $127,000, up from $110,000 to $125,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.
    • The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $59,000 for married couples filing jointly, up from $57,500 in 2012; $44,250 for heads of household, up from $43,125; and $29,500 for married individuals filing separately and for singles, up from $28,750.

    01.05.12

    Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends through Feb. 29, 2012, the two percentage point payroll tax cut for employees, continuing the reduction of the Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits.

    Ohio raises minimum wage for 2011
    In accordance with an Ohio Constitutional mandate, the Ohio Department of Commerce is increasing the state’s minimum wage by 5 to 10 cents an hour effective Jan. 1, 2011. Increases for 2011 are:

    • Non-tipped employees increase from $7.30 hour to $7.40 per hour
    • Tipped employees increase from $3.65 to $3.70 per hour

    The increased wage applies to employers who gross more than $271,000 per year. Ohio’s minimum wage currently applies to employers who gross more than $267,000 per year.

    06.26.11

    The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.

    The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

    IRS sets 2011 standard mileage rates

    IRS set the 2011 standard mileage rates for business miles driven at 51 cents per mile beginning Jan. 1, 2011.

    Additional mileage rates set for 2011 include:

    • 19 cents per mile driven for medical or moving purposes
    • 14 cents per mile driven in service of charitable organizations

    12.18.09

    Beginning Jan. 1, 2010 paid tax preparers in Ohio who filed more than 75 tax returns during the 2008 calendar year (or any year after) must electronically file their client’s state income tax returns.

    12.09.09

    Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

    • 50 cents per mile for business miles driven
    • 16.5 cents per mile driven for medical or moving purposes, and
    • 14 cents per mile driven in service of charitable organizations

    A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.  The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.

    11.11.09

    Nonbusiness Energy Property Credit

    This credit equals 30 percent of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these items does not count.

    By spending as little as $5,000 before the end of the year on eligible energy-saving improvements, a homeowner can save as much as $1,500 on his or her 2009 federal income tax return. Due to limits based on tax liability, other credits claimed by a particular taxpayer and other factors, actual tax savings will vary. These tax savings are on top of any energy savings that may result.

    Residential Energy Efficient Property Credit

    Homeowners going green should also check out a second tax credit designed to spur investment in alternative energy equipment. The residential energy efficient property credit, equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when calculating this credit.  Also, no cap exists on the amount of credit available except in the case of fuel cell property.

    Not all energy-efficient improvements qualify for these tax credits. For that reason, homeowners should check the manufacturer’s tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer’s website or with the product packaging. Normally, a homeowner can rely on this certification.  The IRS cautions that the manufacturer’s certification is different from the Department of Energy’s Energy Star label, and not all Energy Star labeled products qualify for the tax credits.

    Eligible homeowners can claim both of these credits when they file their 2009 federal income tax return. Because these are credits, not deductions, they increase a taxpayer’s refund or reduce the tax he or she owes. An eligible taxpayer can claim these credits, regardless of whether he or she itemizes deductions on Schedule A. Use Form 5695, Residential Energy Credits, to figure and claim these credits. A draft version of this form is available now on IRS.gov.

    10.19.2009

    IRS Announces Pension Plan Limitations for 2010

    The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) will be $16,500 for 2010, which is the same amount as for 2009.  This limitation affects elective deferrals to Section 401(k) plans and to the Federal Government’s Thrift Savings Plan, among others.

    By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits are subject to inflation adjustments each year, but because recent inflation factors have been minimal, many of these benefits will remain unchanged or change only slightly for 2010.

    04.13.2009

    Taxpayers who find they can’t make a full payment by the April 15 deadline may consider applying for an installment agreement.

    An installment agreement allows taxpayers to pay any remaining balance in monthly installments. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Or they may attach Form 9465, Installment Agreement Request, to the front of their tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges $105 for setting up the agreement or $52 if the payments are deducted directly from the taxpayer’s bank account ($43 for qualified lower-income taxpayers).

    The IRS will automatically give taxpayers the low income installment agreement fee if they qualify. The taxpayer does not have to request it. Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty.

    04.06.2009

    The Recovery Act  includes deducting state and local sales and excise taxes paid on the purchase of a new car, light truck, motor home or motorcycle.

    03.30.2009

    Every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 when they file their tax return next year. For a married couple, the exclusion applies to each spouse separately.

    03.03.2009

    Taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 may claim the tax credit either on their 2008 tax returns due April 15, or on their 2009 tax returns next year. They could get up to $8,000.

    02.23.2009

    Recovery Act Highlights

    02.02.2009

    Many of your investor clients will receive their year-end tax statements later than in past years. A law enacted last fall changed the deadline from Jan. 31 to Feb. 15, when brokers, including brokerage firms, mutual fund companies and barter exchanges, must furnish year-end Forms 1099-B to their customers.

    01.06.2009

    RECOVERY REBATE CREDIT

    The recovery rebate credit is a one-time benefit for people who didn't receive the full economic stimulus payment last year and whose circumstances may have changed, making them eligible now for some or all of the unpaid portion.

    Generally, a credit adds to the amount of a tax refund or decreases the amount of taxes owed. Therefore, the amount you receive for the recovery rebate credit will be included as part of your refund, as shown on your tax return. Unlike the 2008 economic stimulus payment, it will not be issued as a separate check.

    People who fall into the categories described below may be eligible for the recovery rebate credit this year:

    • Individuals who did not receive an economic stimulus payment.

    • Those who received less than the maximum economic stimulus payment in 2008 — $600 per taxpayer; $1,200 if married filing jointly — because their qualifying or gross income was either too high or too low.

    • Families who gained an additional qualifying child in 2008.

    • Individuals who could be claimed as a dependent on someone else’s tax return in 2007, but who cannot be claimed as a dependent on another return in 2008.

    • Individuals who did not have a valid Social Security number in 2007 but who did receive one in 2008.

    You need to claim the recovery rebate credit on Form 1040, 1040A or 1040EZ.  Unlike the economic stimulus payment, the recovery rebate credit will be included in your tax refund for 2008 and will not be issued as a separate payment.

    01.05.2009

    Personal property tax returns are a thing of the past beginning in 2009.

    For 2009, most corporations will file their final Ohio franchise tax return.

    2009 is the fourth of five year personal Ohio State income tax reduction. Ohio income taxes will be reduced 4.2% this year.

    12.29.2008

    Ohio’s minimum wage increases from $7.00 per hour to $7.30 per hour on Jan. 1, 2009 for non-tipped employees and from $3.50 per hour to $3.65 per hour for tipped employees, plus tips. 

    The increased minimum wage will apply to employers who gross more than $267,000 per year. In 2008, Ohio’s minimum wage had applied to employers who gross over $255,000 per year. 

    The constitutional amendment passed by voters in November 2006 states that Ohio’s minimum wage shall increase on Jan. 1 of each year by the rate of inflation. 

    For employees of smaller companies (grossing $255,000 and less per year in 2008 and $267,000 or less after January 1, 2009) and for 14- and 15-year-olds, the state minimum wage is currently $6.55 per hour and will increase to $7.25 per hour on July 24, 2009.

    12.01.2008

    Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

    • 55 cents per mile for business miles driven
    • 24 cents per mile driven for medical or moving purposes
    • 14 cents per mile driven in service of charitable organizations

    The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half. 

    Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

    All rights reserved. © 2008-14 Campbell-Rose & Company CPA's
    Design by: Lone Wolf Media Design
    Email Login