The Parallels of Business and Sports

In an article that was published in Forbes Magazine by Ryan Westwood on July 8, 2015, a comparison was made between Sports and Business.  Four of the main points were as follows:  “1) Appoint a Team Captain, 2) Smart Passing Keeps the Ball Moving Forward, 3) If A Play Stops Working, Smart Players Change It, and 4) Well matched positions make great players”.  This morning as I was attending a business networking meeting, the feature presentation also discussed a parallel between business and sports.  Some additional comments included “Start With a Purpose”, “Run a good Huddle”, “Don’t Coast on Last Year’s Successes”, “Develop a Mentoring Culture” and “Education through Questions”. 

 

I thought that these were great items to chat about in our weekly article.  When your employees are on the same page as you are, and everyone is working towards a common goal or purpose, there isn’t confusion about what should be done or where everyone is headed.  It’s important to include your employees in the conversation of your long-term goals so they can also have purpose and help you achieve your own goals. I also thought the line about “Don’t Coast on Last Year’s Successes” was worth mentioning as well.  While it is really important to focus on the future and obtaining new clients, it is equally as important to focus on the clients we have.  Retention is very important because it takes less effort to keep a happy customer than it is to go out, recruit, market, on-board a brand new client.  So we want to keep our current clients happy and if there is something we can do to improve our service, we should definitely address it. 

  

 

Tommy Lasorda once said, “There are 3 types of baseball players:  Those who make it happen; Those who watch it happen; and those who wonder what happens.”  In running a business, I think it is safe to say that we all want to be in the group who “makes it happen”.  If we are “watching it happen,” then we may be losing clients to our competition, not making changes that we should and not keeping an eye on the “game” and in this topic, that means our company’s books, accounting and tax planning.  And if you are wondering “what happened” when you finished filing your taxes, then you want to make a proactive change so you understand your business, your tax structure and what you can do to reduce your tax liability.  By speaking with a trusted tax advisor, go from “what happened” to “make it happen” and take charge of your taxes!

Filing a Tax Extension (For Time)

As the filing deadline approaches for individual tax filers and C-Corporation Tax Filers (both on April 17th), you may find yourself in need of an Extension.  It is important to note that a Tax Extension is one of time, and not an extension to pay.  If you are going to owe taxes, you must pay them by your tax deadline to avoid interest and penalties.  For example, if you know you will owe tax and file your tax return in July (with a valid extension of time accepted by the IRS), that amount due was still due on April 17th. 

 

Something that we’ve been made aware of is that the IRS could reject your extension if you knew you had tax liability and listed zero tax liability on the extension form.  The new extension forms require tax filers to list any potential tax liability.  If you simply write zero, the IRS could reject the extension based on the following court case.

 

Crocker v. Commissioner, 92 TC 899 (1989) -- the court held that if a taxpayer files an extension reflecting an anticipated tax liability of zero, but had in his possession at the time of the filing enough evidence to know that the liability would not in fact be zero, the Form 4868 is invalid.

 

So what does this mean for you?  When completing an extension of time, at least use your prior year tax liability as a minimum guideline and make sure to send some estimated tax payment to the IRS prior to your filing date.

 

If you are unsure about your tax liability, filing an extension, or any other tax-specific question, make sure to reach out to your Tax Professional with enough time prior to the deadline to answer your questions and provide the help you need. 

Filed Your Taxes Early? You May Need To Amend!

If you liked to be one of the first people to submit your taxes, you may need to amend your 2017 tax return.  For many people who already submitted their taxes, they now are needing to amend the tax returns because several expiring “extender provisions” that were expired were retroactively reinstated through December 31, 2017.  This may affect your tax return so make sure you ask your Tax Professional if these apply to you and if you already submitted your return, how you can amend it.     

 

The following list summarizes the most “notable” items as summarized by the National Association of Tax Professionals

 

Notable Extenders:

Exclusion for discharge of indebtedness on a principal residence

The provision extends the exclusion from gross income of a discharge of qualified principal residence indebtedness through 2017. The provision also modifies the exclusion to apply to qualified principal residence indebtedness that is discharged pursuant to a binding written agreement entered into in 2017.

 

Premiums for mortgage insurance (PMI) deductible as mortgage interest

The provision extends the treatment of qualified mortgage insurance premiums as interest for purposes of the mortgage interest deduction through 2017. This deduction phases out ratably for taxpayers with adjusted gross income of $100,000 to $110,000.

 

Above-the-line deduction for qualified tuition and related expenses

The provision extends the above-the-line deduction for qualified tuition and related expenses for higher education through 2017. The deduction is capped at $4,000 for an individual whose adjusted gross income (AGI) does not exceed $65,000 ($130,000 for joint filers) or $2,000 for an individual whose AGI does not exceed $80,000 ($160,000 for joint filers).

 

Three-year depreciation for race horses 2-years-old or younger

The provision extends the 3-year recovery period for race horses to property placed in service during 2017.

 

If you have questions about the changes in the 2018 tax law or any provisions reinstated for 2017, please contact your tax professional or call our office at 407-922-0918 or email info@onestopconsultingshop.com and remember, you should always ask your tax professional any questions if you are unsure!  They would much rather you ask now while any problems can be fixed versus in the future when the solution may be more costly and difficult. 

Learn From Your Clients

A few weeks back I sent out one reminder to a client requesting information for a task that was not yet due.  I was anxious to complete the project for the client and when asked when I would like the information, I replied, “As Soon As Possible Would Be Great!”.  Now, that is really what I meant at the time.  The sooner the better is always what is preferred for an accountant.  We love early birds!  And, because the deadline was weeks away, I had not yet established a hard deadline to submit the information to me (at the time).  Now, for other tasks that are “date driven”, we do have hard submittal dates.  For example, if you do not have your tax information to us prior to April 1st, any new clients after April 1st will automatically go on an extension to ensure proper time to file the extension as well as have adequate time to review the return.  Filling an extension takes time so if 50 clients called on April 14th, it would be difficult to ensure all extensions were filed on time so we have deadlines. 

 

 

Back to my original point of the client conversation!  The client responded to me by stating, “What does ASAP mean to you” and I replied, “One Week”.  Their response was that they only work with hard deadlines for every request because “As Soon As Possible” can mean different things to different people.  Point well taken!  So rather than ignore the great advice as I have learned that we all learn from each other every single day, we will make sure that every request for information (even those far in advance and not deadline driven really), have “drop dead dates” tied to them.  It’s good communication.  So why have deadlines for some projects and not others?  We should all follow our own procedures in every case.  It can be tied back to “Smart Goals”.  Goals should be Specific, Measurable, Attainable, Relevant and Timely.  So while we learn to apply this concept to our own workflows, we should also make sure we apply it to our client relations.  By doing so, it makes for a more transparent and effective communication which in turn established trust and solidifies long-term relationships.  So let’s all be SMART this tax season and make sure to ask your accountant what their own deadline requirements are proactively if they are not reaching out to you!  Know your own time frames, challenges and restrictions and plan accordingly.  And if you think you may not have your information ready as a tax deadline is approaching (March 15th for S-Corps & Partnerships and April 17th for Individuals & C-Corps), request an extension at least two weeks before the deadline approaches.  Your Tax Professional will thank you!

So Where's My Refund?

Now that the 2018 Filing Season is open for 2017 Tax Return Preparation, many people are anxious to get their returns in early and receive their refund!  There are a lot of myths circulating about refunds, delays and ways to “navigate the system”. 

 

The first myth is that all refunds are going to be delayed.  Most refunds are issued with 21 days and while some could be delayed for many reasons, the majority are not.  Also, using e-filing and direct deposit not only speed up the entire process but ensure that your return is filed faster than someone else who may be trying to steal your identity and filing on your behalf.  E-filing is safe and the fastest way to process your return and direct deposit ensures a “check” cannot be “lost in the mail”. 

 

Another myth is that refunds with the EITC or ACTC are going to be delayed as well.  By law, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. Returns with these credits will begin on February 15th and if processed electronically and there are no other issues, tax payers should begin seeing the refunds hit their banks around February 27th.

 

Another myth is that the IRS will call or email a tax payer about their refund.  This is not true and if you ever receive a phone call from the IRS, it is most likely a scam.  The IRS will send you written notification (and not by email) if they need to communicate with you.  The best way to find out about your refund is to check the “Where’s My Refund” link on the IRS website located at https://www.irs.gov/refunds and follow the instructions.  Calling the IRS will not speed up the process but if it has been an unusually long time period, then you definitely should call to make sure everything was received and processed if their website is not giving you the answer you need. 

 

 

If you think you are due a refund and are anxious to receive it, the best way is to ensure you keep good records of your tax information so you can file on time and if you are using a Tax Professional, make sure you provide all the necessary information and are quick to respond to any questions they may have.  Questions could delay the completion of your tax return.  And finally, if you are unsure how to prepare your taxes or handle a specific situation, then it may be time to seek advice or assistance from a licensed Tax Professional.