Engelman Accountancy Corporation News Blog

To avoid identity theft, think before you click

RRWeb — Tue, 15 May 2012 21:13:45 +0000

The e-mail from your bank gets your attention right away. It says you need to log into your account in the next 48 hours to continue your online privileges. Something about a system upgrade. You wonder, is it legitimate? How can you know for sure?

Bogus e-mails designed to steal your identity, also known as phishing, are becoming a bigger problem these days. While they can take many different forms, most scams are designed to trick you into revealing personal information such as your social security number or online account password. Through clever use of logos and familiar-looking web addresses, these e-mails often appear to be an urgent message from your bank, mortgage lender, or e-mail provider.

You may not realize it, but thieves are especially eager to gain access to your web e-mail account. Why? Once a scammer has access to your e-mails, he or she can often figure out where you bank and detect clues to passwords you might use.

So what can you do to protect yourself? Take a moment and think before you click. Never respond to an e-mail asking for your social security number or birth date. You can almost bet that it is a scam. If an e-mail contains a website link that you are not familiar with, do not click on it. Instead, either go directly to the company’s trusted website, or contact them by phone.

Also remember that e-mail scams become more prevalent following a significant public event, such as a natural disaster or sudden stock market drop. Thieves will prey on your sympathies or fears during these times, so be extra careful when responding to appeals for charity or notices to update your financial records. Be further leery of e-mails with demanding language or incorrect grammar – both are potential signs of a counterfeit e-mail. Don’t respond to e-mail appeals for charity.

For preventive measures, try to use a different password for every online account, and change your passwords regularly. Make your passwords stronger by using combinations of letters, symbols, and numbers. Also, keep your computer anti-virus software up to date.

Finally, do your part to thwart these crimes by reporting any suspected scam e-mails to reportphishing@antiphishing.org. If you receive a bogus tax-related e-mail, forward it to the IRS at phishing@irs.gov. And of course, feel free to contact our firm if you need a second set of eyes on any suspicious-looking e-mail.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

Filing reminder for tax-exempts

RRWeb — Fri, 04 May 2012 21:19:21 +0000

Tax-exempt organizations are required to file annual reports with the IRS. Those with gross receipts below $50,000 can file an E-postcard rather than a longer version of Form 990.

The deadline for nonprofit filings is the 15th day of the fifth month after their year-end. For calendar-year organizations, the filing deadline for 2011 reports is May 15, 2012.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

Tax Alert: Plan now for changes coming in 2013

RRWeb — Tue, 01 May 2012 21:05:14 +0000

What’s the summertime forecast? From a tax perspective, the outlook calls for planning now to prepare for changes gathering on the horizon – specifically, provisions currently expected to take effect in January 2013. Here are four new rules to think about during your mid-year tax review.

A decrease in tax-free contributions to your flexible spending account. Starting in January 2013, the maximum you can contribute to your FSA will be $2,500. In addition, the “use it or lose it” feature of FSAs means you won’t be able to carry any 2012 excess remaining in your account into 2013 (unless your plan provides a 2½ month grace period for using prior-year funds).
Planning move: Schedule elective medical procedures during the last half of 2012.
An increase in the threshold for claiming the itemized medical expenses deduction. Do you itemize? For 2012, you can claim a deduction on your federal income tax return for qualified medical expenses that exceed 7.5% of your adjusted gross income (AGI).
Beginning in 2013, if you’re under age 65, your medical expenses will have to exceed 10% of your AGI to be deductible. This is the same percentage applied to qualified medical expenses when calculating the alternative minimum tax.
Planning move: Review your itemized deductions for 2012 to determine whether accelerating or delaying deductions makes the most sense for you. What to keep in mind: phase-outs and other limitations to itemized deductions that were in effect in prior years, as these may return in 2013.
An increase in Medicare tax on certain wages. The amount of Medicare tax you pay on wages and self-employment income is scheduled to go up next year. When you’re single and your wages are greater than $200,000, your employer will withhold an additional 0.9% of Medicare tax from your paycheck. Are you self-employed? The tax applies when net self-employment income exceeds the threshold. The income threshold is $250,000 for married couples.
Planning move: If you’re self-employed, review the way your business is organized. While you always want to pay yourself a reasonable amount of compensation, some entity types can allow for flexibility in the timing of wages or salary.
A new Medicare tax on unearned income. You probably associate Medicare tax with earned income – that is, the 1.45% tax your employer deducts from your pay. But a provision in the 2010 health care laws extends the Medicare tax to certain unearned income, beginning in 2013.
The new surtax is a flat rate of 3.8%, and will apply to interest, dividends, capital gains, annuities, royalties, and rents. It kicks in when your AGI exceeds $250,000 (for married filing jointly). When you file as single, the AGI threshold is $200,000.

Planning move: Consider adding tax-exempt bonds to your portfolio. The interest is not subject to the new tax. Roth conversions and selling assets with capital gains may also be a wise move in 2012.

Many other tax law changes are expected in 2013. Timely planning is essential for preserving tax- saving opportunities. Please give us a call to discuss strategies to put in place now to maximize your benefits.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

Take steps to build a better business

RRWeb — Wed, 25 Apr 2012 22:19:42 +0000

Business owners focus a lot of attention on building better products. When their products are hot, the company does well, despite other shortcomings. Certainly, new and better products are essential, but focusing on building a better business − one that readily adapts to change and quickly responds to crisis may be even more important. How can you build a better business? Consider the following strategies.

Manage capital needs. Growing businesses have an appetite for capital. Two ideas for managing capital are outsourcing some processes and managing existing capacity more effectively.
Identify the right product and customer mix. Having the products customers want at the time they want them and in the number, color, location, and quantity they need, is a challenge. Get continuous feedback from customers to help you get your mix just right.
Actively develop and maintain a network that keeps you in the mind of suppliers, present customers, and future customers.
Every business has an opportunity to distinguish itself by doing something better than its competitors. Providing the best service, shortest cycle time, most variety, or best quality requires procedures that can deliver every day to every customer. Improving your processes to deliver what no competitor is delivering to customers is a key strategy in building a better company.
Use your employees wisely. Encourage sharing of knowledge and skills. Continuously develop and train people. Measure individual performance and reward achievement and good ideas.

Building a better business requires more than a good product. Take the steps necessary to make sure your business will thrive in an ever-changing world.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

Consider better ways to use your tax refund

RRWeb — Wed, 18 Apr 2012 22:11:04 +0000

What are you going to do with your federal income tax refund this year? Instead of spending the money on things you don’t really need – like a bigger flat screen TV or the latest smart phone – you might put a sizeable refund to better use. Here are a few suggestions.

Pay down debt. Improve your overall financial situation by reducing the amount of any outstanding debts beginning with high-interest rate credit card balances.
Contribute to an IRA. For 2012, you can contribute up to $5,000 ($6,000 if you’re age 50 or over) to any combination of traditional and Roth IRAs. Contributions to a traditional IRA may be wholly or partially tax-deductible, while Roth IRAs can provide tax-free payouts in the future.
Save for your children’s education. Investigate the options, such as tax-favored Section 529 plans.
Build an emergency fund. Set aside some money that will be available in case of emergencies.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

IRS expands "Fresh Start" program for those who owe taxes

RRWeb — Thu, 05 Apr 2012 22:05:52 +0000

Taxpayers who are struggling to pay their taxes may get some relief from the IRS’s expansion of its “Fresh Start” initiative, a program started back in 2008. The new Fresh Start provisions provide penalty relief to the unemployed and make installment agreements on taxes owed available to more people.

Normally, a failure-to-pay penalty of one-half of one percent per month, up to a 25% maximum, is charged for overdue taxes. The “Fresh Start Penalty Relief” initiative gives eligible taxpayers a six-month extension to fully pay 2011 taxes – that is, until October 15, 2012, before the penalty begins to apply. Interest of 3% will still be assessed starting from April 17, 2012.

The penalty relief is available to workers who have been unemployed at least 30 consecutive days during 2011 or 2012 and to self-employed individuals who experienced a 25% or larger reduction in business income in 2011 due to the economy. Income limits apply: the relief is not available to singles with adjusted gross income over $100,000 or to couples with income over $200,000. Also, taxes due cannot exceed $50,000.

The Fresh Start program also changes the eligibility threshold for streamlined installment agreements from $25,000 to $50,000 and increases the maximum term from five to six years.

For details or assistance, contact our office.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

April 17 is a red letter day in the tax world

RRWeb — Sun, 01 Apr 2012 21:51:12 +0000

Tuesday, April 17, is the deadline for filing certain returns and taking certain tax-related actions. Here are the major deadlines.

Filing 2011 income tax returns for individuals. If you cannot file your return by this deadline, be sure to file an extension request by April 17. The automatic extension (you don’t need to explain to the IRS why you need more time) gives you until October 15, 2012, to file your return. An extension does not, generally, give you more time to pay taxes you still owe. To avoid penalty and interest charges, taxes must be paid by April 17.
Filing 2011 partnership returns for calendar-year partnerships.
Filing 2011 income tax returns for calendar-year trusts and estates.
Filing 2011 annual gift tax returns.
Making 2011 IRA contributions.
Paying the first quarterly estimate of 2012 individual estimated tax.
Amending 2008 individual tax returns (unless the 2008 return had a filing extension).
Original filing of 2008 individual income tax return to claim a refund of taxes. Some taxpayers have tax refunds due them for prior years, and unless a return is filed to claim the refund by the three-year statute of limitations, the refund is lost forever.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

Is your small business overlooking this tax credit?

RRWeb — Sun, 25 Mar 2012 15:01:17 +0000

Health care legislation passed in 2010 included a tax credit for small businesses that provide health care coverage for their employees. Recent surveys have shown that the majority of small companies that might qualify for the credit have failed to take it. The reasons given for ignoring the credit ranged from being unaware of it to finding the credit too complicated to compute.

Take another look.
If your business or nonprofit organization might be eligible, perhaps you should take another look at the requirements and be sure you’re taking advantage of this tax break.
If you qualify, you can use this tax credit to offset your federal income tax liability by up to 35% of the cost of health insurance premiums you pay for employees. Since this is a tax credit, not a deduction, it will reduce your tax bill dollar-for-dollar.
The basic requirements.
In general, the credit is available to employers that have fewer than 25 full-time equivalent (FTE) employees paying average annual wages of less than $50,000 per employee. Eligibility is based partially on FTEs, not the number of employees; therefore, an employer with fewer than 50 half-time workers could qualify for the credit.

The maximum credit goes to those employers with ten or fewer employees who pay annual average wages of $25,000 or less.

When you’re self-employed, either as a partner or a sole proprietor, or if you own more than 2% of an S corporation, you’re not considered an employee for purposes of the credit.

Tax-exempt organizations can use the credit to offset payroll tax liability (up to 25% of qualified premiums paid).

For assistance in determining eligibility for this tax credit and in doing the calculations to obtain the credit, contact our office.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

IRS reopens disclosure program

RRWeb — Tue, 20 Mar 2012 14:55:10 +0000

To encourage taxpayers with offshore accounts to get current with their tax obligations, the IRS has reopened its “offshore voluntary disclosure program (OVDP).” Similar programs in 2009 and 2011 resulted in the collection of more than $4.4 billion of taxes owed.

The 2012 program will be similar to the 2011 program; however, one difference is that there is currently no deadline by which taxpayers must apply.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402

New foreign investment reporting requirement

RRWeb — Fri, 16 Mar 2012 14:51:19 +0000

If you own foreign investments, you may have an additional federal tax filing requirement this year. Form 8938, Statement of Specified Foreign Financial Assets, is due April 17, 2012, and is filed as part of your individual tax return. You’ll use Form 8938 to disclose interests in certain foreign financial accounts when your ownership exceeds the reporting requirements.

What are the reporting requirements? They vary depending on where you live and your filing status. For example, say you’re married and live in the United States, and you’ll file a joint tax return for 2011. You’ll include Form 8938 with your tax return when the total value of your reportable assets on the last day of 2011 was more than $100,000, or if the value exceeded $150,000 at any time during the year ($50,000 and $75,000 for singles).

Tip: In some cases, you may also need to file Form 8938 for tax year 2010.

Reportable assets include investment accounts you own that are held in foreign financial institutions, interests in foreign entities, and stocks or securities issued by foreign individuals or companies.

You’ve probably noticed the reporting requirements are similar to the Report of Foreign Bank and Financial Accounts (FBAR), a separate return you may already be filing. Be aware the new Form 8938 does not replace the FBAR, which you’ll still need to complete by June 30.

Penalties for failure to file Form 8938 start at $10,000. We urge you to contact us so we can help you evaluate your filing requirements for foreign investments.

Questions?

Contact us or call: 650-344-6525 today.

ENGELMAN ACCOUNTANCY CORPORATION
520 So. El Camino Real, Suite 410
San Mateo, CA 94402