Long waits for refund checks. New law delays tax refunds until Feburary 15, 2017.

A new federal law moves up the W-2 filing deadline for employers and small businesses to Jan. 31. The new law makes it easier for the IRS to find and stop refund fraud. It also delays some taxpayer refunds. Those taxpayers claiming the Earned Income Tax Credit or the Additional Child Tax Credit won’t see refunds until Feb.15, at the earliest.
Here are some key points to keep in mind:

• Protecting Americans from Tax Hikes (PATH) Act. Enacted last December, the new law means employers need to file their copies of Forms W-2  by Jan. 31. These forms also go to the Social Security Administration. The new deadline also applies to certain Forms 1099. Those reporting nonemployee compensation such as payments to independent contractors submitted to the IRS are due Jan. 31. Employers have long faced a Jan. 31 deadline in providing copies of these forms to their employees. That date won’t change.
• Different from past deadline. Employers normally had until the end of February, if filing on paper, or the end of March, if filing electronically, to send in copies of these forms. The IRS is working with the payroll community and other partners to spread the word.  
• Helps stop fraud or errors. The new Jan. 31 deadline will help the IRS to spot errors on returns filed by taxpayers. Having these W-2s and 1099s sooner will make it easier for the IRS to verify legitimate tax returns and get refunds to taxpayers eligible to receive them. The changes will allow the IRS to send some tax refunds faster.
• Some refunds delayed. Certain taxpayers will get their refunds a bit later. By law, the IRS must hold refunds for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until Feb. 15. This means the whole refund, not just the part related to the EITC or ACTC.
• File tax returns normally. Taxpayers should file their returns as they normally do. The IRS issues more than nine out of 10 refunds in less than 21 days. However, some returns may need further review. Whether or not claiming EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date. Consider this fact when making major purchases or paying debts.
• Use IRS.gov online tools. Starting Feb. 15, the best way to check the status of a refund is with the Where's My Refund? tool on IRS.gov or the IRS2Go Mobile App.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers may need their Adjusted Gross Income amount from a prior tax return to verify their identity. They can get a transcript of their return at www.irs.gov/transcript.


IRS special edition tax tips dated 11-01-16

10 Ways to Lose A Client

Accountants are the absolute worse dealing with people.

They are in the losing client business.

Don't believe me?  Why else would Accounting Today write this:


From Accounting Today:


Everyone knows how difficult it can be to find new clients – but the flip side of that is how easy it is to lose the clients you already have, through inattention, complacency, or worse.

“There are challenges that we all face, especially as we get comfortable in our client relationships,” noted Maureen Schwartz, executive director of BKR International (http://www.bkr.com), a leading global association representing  more than 160 independent accounting and business advisory firms in over 500 offices and 80 countries. “CPAs must be mindful of how they talk and act in order to keep client trust and loyalty.”



1. Only talk about yourself. Your clients do not really care that your firm won “Best Places to Work” for three years straight. Clients want to talk about their business and how you can help them. Do your homework. Review their Web site, social media pages and research their industry’s key business trends and challenges. Bring key questions to ask so that you can get the information you need to provide value.

2. Constantly check your phone. Turn your phone off and keep it in your pocket/purse during meetings. Do not keep it on the conference table or in your lap, where you will be sure to look at it. Give your client your undivided attention so you can play the role of trusted advisor.

3. Arrive late to client meetings. Always give yourself plenty of time to deal with traffic, street closings, accidents and other potential time-robbers, especially if you are meeting a client for the first time.

4. Only communicate by e-mail. Know how each of your clients wants to communicate. If you’re not sure, ask them and then note it in their file. Most importantly, know when to pick up the phone.

5. Only communicate when it’s time to bill or renew. Send relevant alerts, timely articles and specific industry information on a regular basis. Show that you’re thinking about them and share why you thought they would find the information interesting.

6. Send a large invoice with no details. Clients hate getting a large bill all at one time. Prepare accurate time reports and send interim bills for work in process on a timely basis.

7. Never own up to mistakes. Once you realize a mistake has been made, contact your client right away. (This would be the time to pick up the phone.) Apologize and offer a swift remedy. Never ignore the problem and hope it goes away. It will come back much bigger, more complicated and more difficult to fix.

8. Eat alone. Instead of wolfing down a cold sandwich or wilted salad at your desk, designate one day a week to take a client to lunch. Make it breakfast if your time or budget is tight. You can easily catch up with your clients in an hour and get to work before the business day begins.

9. Never give away free information. If you bill for every client call, you’ll never hear from them. This creates missed opportunities to discuss new products and services and ways in which you can help. These conversations also help expand your personal relationship. Marketing experts say it takes 14 touches to establish a buying relationship.

10. Excuse yourself from social events. Invited to a special client event where you won’t know anyone? Want to make a flimsy excuse and rationalize to yourself that you won’t be missed? Spoiler alert: You will be. Go prepared with information that everyone can engage in. Popular conversation starters include sports, community initiatives, kids, travel and television shows. Avoid conversations about politics and religion.

Lessons from Chik-fil-a

From our friends at Tax Coach.

"Saturday afternoon, my girlfriend and I spent much of the day painting my daughter Margaret’s bedroom. (Apparently the bright green she picked when she was 10 years old was a little “robust” for her 16-year-old taste.) At one point, I ran out for another set of rollers and some more painters tape. My girlfriend asked me to pick up a Chick-fil-a sandwich for her on my way back. I said “sure,” and headed off to Target for supplies.

 

After I picked up the supplies, I pulled into the Chick-fil-a, and my heart sank. There was a long line of cars waiting at the drive-through. I knew that a line that long at the McDonald's down the street signaled a long wait, and I would be better off parking and going in to the store.

 

But then I saw a couple of staffers approaching the cars at the end of the line with iPads in hand, and I decided to give the drive-through a try. Sure enough, taking orders like that really did speed things up, and I was back on the street with Liza’s sandwich in a jiffy.

 

That experience got me to thinking, as I often do, what lessons it might hold for us. And I started musing on the nature of franchises like Chick-fil-a in general.

 

What do you really get when you invest your start-up money ($280 - $815K, in the case of Chick-fil-a) and ongoing fees in a franchise? Mainly, two things: 1) branding and advertising, to help jump-start your sales, and 2) systems, to jump-start your operations.

 

I’ve always enjoyed Chick-fil-a’s advertising, with desperate cows begging us to “eat mor chikin.” (Who doesn’t like cows painting billboards?) But seeing those kids with iPads running outside to take orders and speed up the car line, now that’s a system.

 

Successful systems are the heart of any franchised business. They’re the key to ensuring customers are treated uniformly from store to store. When they work, customers zip through drive-throughs with smiles on their faces. And when they break down (as seems to be the case with that McDonald's I was talking about earlier and its bloated menu), customers gripe, grumble, and give up.

 

What do your systems look like?

 

Let’s say you thought about franchising yourself, just to take a good hard look at your business from an outside perspective. What sort of systems do you have in place for your franchisees? Are they written, or just verbal? Do your staff all understand them identically, or does one employee understand things one way and the other understand them a different way? (And if that’s so, does either employee get it right?) Are your systems effective enough that you could use them to attract franchisees and justify ongoing fees? Are you adapting them to keep up with technology and client demand?

 

If not, why not? Are you just “winging it”? If so, how’s that working out for you? Is a lack of clearly delineated systems slowing things down, making life harder, and keeping you from delivering your services or growing your business the way you’d like?

 

Take a few minutes to think about how you would organize your systems to franchise your business. You’ll find it makes life easier and more profitable even without taking that step!"

IRS Turns To 3rd Party Collection Agencies. Now How Do You Tell Whether it is an Imposter or the Real Thing?

From accounting today.com

 "In late 2015, Section 32102 of the Fixing America’s Surface Transportation, or FAST, Act was put into law, requiring the IRS to use private debt collectors for delinquent tax debts."

The IRS tried using private debt collectors two times previously and decided the programs were not cost effective.


"Seven facts you need to know

1. It’s coming soon. The IRS plans to select its authorized private debt collectors in the next two months and then begin using them in early 2017. The IRS will publish the names of these collectors on IRS.gov.
2. Private debt collectors will try to pursue the old, uncollectible accounts. The IRS wants private debt collectors to go after cases the IRS would never pursue – that is, outstanding, inactive receivables. The case criteria for private debt collectors are:

• More than one-third of the 10-year collection statute has expired;
• No IRS employee is assigned to collect the debt; and,
• The IRS hasn’t contacted the taxpayer in a year, and the taxpayer isn’t requesting a payment alternative or relief (such as innocent spouse relief, a collection due process hearing, an offer in compromise, an installment agreement, etc).

Private debt collectors won’t pursue taxpayers younger than 18, those who have been a victim of tax identity theft, or taxpayers in a federally declared disaster area or combat zone.

3. The private debt collectors will try to locate “missing” taxpayers. When the IRS can’t locate taxpayers, it removes them from active collection. In the FAST Act, private debt collectors will pursue those accounts. As the National Taxpayer Advocate has pointed out, the methods these collectors might use to find and collect from these taxpayers could conjure up fears about how the IRS will protect taxpayer rights, information, and privacy.

4. Private debt collectors won’t have enforcement authority. Private debt collectors won’t be able to file liens or issue levies. Keep in mind, however, that the IRS may have already filed a tax lien on some taxpayers before the private debt collector ever calls. Collectors also won’t be able to help taxpayers get liens removed. To address enforcement actions, taxpayers or their advisors will need to contact the IRS directly.

5. Collection alternatives are still available through the IRS. If taxpayers need a payment alternative, such as an installment agreement, currently not collectible status, or an offer in compromise, they should contact the IRS.

6. The IRS will notify taxpayers if a private debt collector is assigned to their case. Before starting the private collection process, the IRS and the collector will send two letters:

• First, the IRS will send a letter notifying the taxpayer that the IRS has assigned their case to a private debt collector.
• Second, after assignment and before contacting the taxpayer, the private debt collector will send a letter.

According to the IRS, these notices will also go to the taxpayer’s representative on file, if any. The IRS hopes that these steps will notify taxpayers of the impending collection and relieve their fears about IRS imposter schemes.

7. Taxpayers experiencing economic hardship aren’t included. Taxpayers who are experiencing severe economic hardship and have an outstanding tax debt can apply for a special status that suspends their obligation to pay (referred to as currently not collectible status). Taxpayers who have negotiated this status with the IRS appear to be excluded from the private debt collection program. The IRS has not finalized this exclusion, but it appears likely that these taxpayers would be treated similarly to those who have requested a payment agreement with the IRS on their outstanding debt.

Third time’s a charm?

Navigating the IRS can be difficult. With imposter schemes running rampant, adding a third-party collector to the mix could add to taxpayer confusion.
According to IRS plans, taxpayers and their advisors should expect two letters to come before a private debt collector calls. And if a legitimate collector calls for payment, taxpayers and their advisors should first consider whether the client qualifies for a payment alternative with the IRS.
Congress hopes that the third private debt collector program will work better than the previous two initiatives. Time will tell, because the third round starts soon."

TWO SMART WORDS FROM ONE SMART GUY

From our friends at Tax Coach.

Marc Andreesen is one of the smarter guys to emerge from the Silicon Valley tech world.  He coauthored Mosaic, which became the first widely-used internet browser. He co-founded Netscape and sold it to AOL for $4.2 billion. He co-founded LoudCloud and sold it to Hewlett-Packard for $1.6 billion. Today he helms the venture capital firm Andreesen Horowitz and sits on the boards of Facebook, eBay, and Hewlett-Packard. He’s even one of just six inductees in the World Wide Web Hall of Fame. (Bet you didn’t even know that was a thing!)

 

So when Marc Andreesen offers some advice, it’s probably worth listening to—even if it doesn’t seem directly relevant to you or your business.

 

Last month, “Four-Hour Work Week” author Tim Ferris sat down to interview Andreesen for his “Tim Ferris Show.” Ferris asked Andreesen what words he would put on a billboard to reach the greatest number of people. Andreesen replied that he’s actually considering hiring a skywriter to put two words in front of every startup in San Francisco.

 

And what are those two words? “Dream big”?  “Cut costs”? “Don’t be evil”? (That’s three words, and Google already claims them.)

 

No, Andreesen’s two words would be familiar to anyone who’s been around TaxCoach long enough. They’re “raise prices.” And I couldn’t agree with him more.

 

Andreesen describes the problem as “too hungry to eat”:

 

“The No. 1 thing—just the theme and we see it everywhere—the No. 1 theme our companies have when they get really struggling is they are not charging enough for their product. It has become absolutely conventional wisdom in Silicon Valley that the way to succeed is to price your product as low as possible under the theory that if it's low-priced everybody can buy it and that's how you get the volume.

 

They don't charge enough for their product to be able to afford the sales and marketing required to actually get anybody to buy it. And so they can't afford to hire the sales rep to go sell the product."

 

If startups can’t sell, they start lowering prices to boost volume. But at that point, says Andreesen, it’s a race to the bottom.

 

“It just makes the problem worse. And so, probably the single number one thing we try to get our companies to do is raise prices,” Andreessen said. “By the way, it's like, ‘Is your product any good if people won't pay more for it?’”

 

Raising prices takes confidence, and that’s a commodity that can be in short supply during times of struggle. But I can tell you that I’ve spoken with easily a hundred TaxCoach members over the years who have raised prices substantially—in many cases, by 25% or more across the board. Not one of them has told me they regret it. (Yes, it’s possible to charge too much. But it’s hard to find someone making that mistake!)

 

So . . . are you just starting a business, and hoping to stand out from the crowd as a premium provider? Raise prices.

 

Are you struggling to take your business to “the next level,” whatever that is? Raise prices.

 

Are you looking to re-invent a mature, successful business to move away from low return items and attract successful customers? Raise prices. 

Summer wedding and taxes. How the IRS can take the wind out of a beautiful thing.

As part of their summertime tax tips, the IRS had this to say about your wedding and taxes.  I kid you not.

How a Summer Wedding Can Affect Your Taxes
With all the planning and preparation that goes into a wedding, taxes may not be high on your summer wedding checklist. However, you should be aware of the tax issues that come along with marriage.

Here are some basic tips to help with your planning:

• Name change. The names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name, report it to the SSA. To do that, file Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov, by calling 800-772-1213 or from your local SSA office.

• Change tax withholding. A change in your marital status means you must give your employer a new Form W-4, Employee's Withholding Allowance Certificate. If you and your spouse both work, your combined incomes may move you into a higher tax bracket or you may be affected by the Additional Medicare Tax. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information.

• Changes in circumstances. If you or your spouse purchased a Health Insurance Marketplace plan and receive advance payments of the premium tax credit in 2016, it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace when they happen. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance credit payments are paid directly to your insurance company on your behalf to lower the out-of-pocket cost you pay for your health insurance premiums. Reporting changes now will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance, which may affect your refund or balance due when you file your tax return.

• Address change. Let the IRS know if your address changes. To do that, send the IRS Form 8822, Change of Address. You should also notify the U.S. Postal Service. You can ask them online at USPS.com to forward your mail. You may also report the change at your local post office. You should also notify your Health Insurance  Marketplace when you move out of the area covered by your current  health care plan.

• Tax filing status. If you’re married as of Dec. 31, that’s your marital status for the whole year for tax purposes. You and your spouse can choose to file your federal income tax return either jointly or separately each year. You may want to figure the tax both ways to find out which status results in the lowest tax.

• Select the right tax form. Choosing the right income tax form can help save money. Newly married taxpayers may find that they now have enough deductions to itemize on their tax returns. You must claim itemized deductions on a Form 1040, not a Form 1040A or Form 1040EZ.


So there you go.  Not high on the wedding list of things to do.  But does make a difference next April 15th. 

This is the video we mentioned in this month's client newsletter.

We know it is selling an information product, but we couldn't help but post this video from you tube. Great motivation stuff.  Great examples how this business owner increased his sales in 90 days.

Industrial Repair Center marketing video.