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New 1095-B and 1095-C due date: March 2

Posted by on Feb 19, 2018 in Health Insurance, IRS, IRS Rules, Tax Tips, Uncategorized | 0 comments

The IRS said it will allow large health insurance companies to delay sending out health insurance confirmation forms. The Jan. 31 due date has been delayed until March 2. Keep in mind that you can still fill your tax return without this form as long as you can prove you have health insurance. This change does not impact people who purchase insurance from the ACA marketplace (Form 1095-A). Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Reduce your property taxes

Posted by on Feb 14, 2018 in IRS, IRS Rules, Real Estate, Tax Break, Tax Law, Tax Planning, Tax Tips | 0 comments

With the passage of the Tax Cuts and Jobs Act, deductions of state, local and property taxes are not worth as much as they used to be. Beginning in 2018, taxpayers are limited to a total of $10,000 in combined state income, sales and property taxes as an itemized deduction. One way you can try to adapt is by lowering your property tax bill. Believe it or not, there is a way. Why you may need a property tax reassessment Property taxes are the revenue lifeblood of cities, counties, school districts and states, and they fluctuate along with house prices. Because local governments are eager to collect more tax revenue, they are quick to get property values assessed higher when times are good. But they aren’t as quick to get values lowered again when the economy falters. As a result, over time your property value tends to creep up without downward corrections. When added to increased property tax rates, your bill today can be much higher than in the past. What you can do about it If you dread the annual letter informing you that your property tax is going to go up again, one thing you can try is to approach your local assessor and ask for a property revaluation. Here are some ideas to successfully reduce your home’s appraised value: Understand process and due dates. Do some homework to understand the approved process to get your property revalued. It is typically outlined on your property tax statement. Understand the deadlines and adhere to them. Assess your property. Do some homework before you call your assessor. Talk to neighbors and honestly assess the amount of disrepair your property may be in versus other comparable properties in your neighborhood. Call a few real estate professionals. Tell them you would like a market review of your property. Try to choose a professional that will not overstate the value of your home hoping to get a listing, but will show you comparable sales for your area. Check the classification. Look at your property classification in the detailed description of your home. Oftentimes errors in this code can overstate the value of your home. For instance, if you live in a condo that was converted from an apartment, the property value could still be based on a non-owner occupied rental basis. Understand first, then clarify your position. Armed with the information you’ve collected, approach the assessor seeking first to understand the basis of their appraisal. Then position your request for a review based on the facts. Do not fall into the trap of defending your review request without first having all the information on your property. Estimate a reasonable value. Suggest a reasonable valuation to the assessor. Assessors are so used to irrational arguments, that they may readily accept a reasonable approach. Get an appraisal, if necessary. If all else fails and you still believe your home is overvalued, consider spending the money for an independent appraisal. This option could be expensive, but can provide a fairly decent defense of your position. You should be able to recoup the cost of the appraisal with many years of lower property taxes. While going through this process, remember to be aware of the pressure that these local tax authorities are under to raise revenue....

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Check your tax forms

Posted by on Feb 12, 2018 in IRS, Tax Law, Tax Tips | 0 comments

Tax time is here. That means you need to check to make sure you have all the forms you need to file your 2017 tax return. Some of the most common forms include W-2s, 1095s and 1099s. Other commonly used forms are 1098s (used to claim deductions for interest paid) and 1098-Ts (used to deduct educational expenses). Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Review your withholdings

Posted by on Feb 9, 2018 in Tax Break, Tax Law, Tax Planning, Tax Tips | 0 comments

The IRS recently announced new withholding guidelines for all employers and payroll companies. Employers are expected to update your paycheck on or before Feb. 15. That means you’ll need to review the amount withheld from your paycheck. Why? Because the Tax Cuts and Jobs Act lowered tax rates, increased standard deductions and eliminated personal exemptions. Many employees should see an increase in their paychecks. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Your new life as a pass-through entity owner

Posted by on Feb 7, 2018 in IRS, Tax Break, Tax Law | 0 comments

If you are a small business owner, your planning probably got a lot trickier after the passage of the Tax Cuts and Jobs Act (TCJA). That’s because most small businesses have legal structures that are treated as pass-through entities for tax purposes, meaning they “pass-through” income to the owners or investors, which they record on their Form 1040 individual tax returns. These entities include S corporations, partnerships and sole proprietorships. On one hand, these kinds of businesses will benefit from the TCJA’s 20 percent reduction to the taxation of business income. On the other, the rules used to determine how much of that reduction each business gets are complex. Here are some tips to help find out where your business falls in the new structure: Know your business’s QBI QBI stands for “qualified business income,” which is generally your business net income other than income in the way of compensation. QBI is the basic figure you need to determine how much of the 20 percent reduction you get. It excludes business losses, as well as factoring in amortization and capitalized expenditures. QBI is determined separately for each business activity, not per taxpayer. The first simple threshold rule is: If your taxable income is less than $157,500 as an individual filer, or $315,000 as a married couple filing jointly, you can take the full 20 percent deduction from your QBI. If your taxable income is higher than those levels, several other factors come into play. Buckle up and hold on, here is where it gets complex: Know whether your profession matters Several “specified service professions” are treated differently under the new rules. The list includes health, law consulting, athletics, financial services, brokerage services, accounting firms or “any trade or business where the principal asset … is the reputation or skill of one or more of its employees or owners.” If your business is in one of these professional areas, the 20 percent reduction to your QBI starts to phase out to zero once your taxable income passes $157,500 as an individual filer or $315,000 as a married joint filer. The phaseout range before the reduction reaches zero is $50,000 for individual filers and $100,000 for married filers. The phaseout range also determines how much of the next factor matters: Know whether wage and capital limits matter Once you go above the threshold, special wage and capital limits start to reduce your deduction. The formula for calculating the wage and capital limits is based on the greater of 50 percent of the W-2 wages paid by your business, OR 25 percent of the W-2 wages, plus 2.5 percent of the unadjusted basis of all qualified property acquired by your business over the year. These wage and capital limits are phased in over the threshold and apply in full after passing the $50,000 range for individual filers or $100,000 for married filers. Bottom line: Get help As you can see, the 20 percent pass-through reduction can be a great benefit, but taking it can get complex very quickly. If you are a small business owner, don’t try to do it yourself. The new rules apply for the 2018 tax year, so after you’ve wrapped up 2017 taxes under the old rules, contact us for a consultation to determine how to position your...

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Don’t say yes to a reverse mortgage until you read this

Posted by on Feb 5, 2018 in Real Estate, Tax Law | 0 comments

What is a reverse mortgage? As the name implies, a reverse mortgage is the opposite of a traditional mortgage. With a traditional mortgage, you borrow a sum of money to purchase a home and then pay off the debt over time. With a reverse mortgage, you receive loan proceeds (as a lump-sum payout, an annuity, a line of credit or a combination of all three) but make no payments as long as you reside in the property. The loan, with any accrued interest, comes due when you move out or pass away. To qualify for a reverse mortgage you need to be 62 or older, own your residence and generally have significant equity in your home. Unfortunately, reports of abuse regarding aggressive and predatory sales practices are common. Here are a few items to analyze if you’re thinking about a reverse mortgage: Determine if a reverse mortgage is logical for your situation. Evaluate alternatives. Conventional solutions such as a home-equity loan might be a better answer. Consider the financial ramifications. Reverse mortgages can be expensive. Upfront fees are significant. If you stay in your home just a few years, the effective interest rate can be very high. Be wary of bundled sales pitches. Commission-driven salesmen can push life insurance or various annuity products along with a reverse mortgage. You could end up with products you don’t need. If you are considering a reverse mortgage, call us. We can help you determine potential tax issues, plus other alternatives. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Is your business susceptible to payroll fraud?

Posted by on Feb 2, 2018 in Business Taxes, Business Tips, IRS | 0 comments

Unless a small business owner handles all aspects of computing and paying payroll, there is room for fraud. Even if your company has only a few employees — it does not guarantee your funds will be safe. How payroll fraud happens Perhaps one of the easiest payroll fraud techniques is the overpayment of withholding or payroll taxes. Your bookkeeper simply overpays the government. When the refund check arrives, the employee deposits it to his or her personal account. In some cases, the employee will have an account at a different bank but in the company name. Such an account could be used for the fraudulent deposit of other company receipts as well. The greater the number of employees, the easier it is for someone to pull off a scam. Perhaps the payroll clerk has invented a fictitious employee or falsifies hours or commissions for a cooperating employee who shares the stolen funds. Or perhaps the employee holds the payroll deposit funds in his or her own interest-bearing account until it is time to make the payroll deposit to the government. How to prevent payroll fraud Small businesses can be exceptionally susceptible to payroll fraud because they often lack anti-fraud controls that larger organizations have in place. Here’s a few ways you can work toward preventing this type of fraud: Get outside help. A payroll review by an independent accountant may help prevent employee schemes. Divvy up duties. Even in small companies, it is possible to divide office tasks to make employee theft more difficult. Limit payroll access. Figure out who needs to have access to payroll data. That list will likely be very small. Make sure it stays that way. Offer direct deposit. No paper checks means less opportunities for employees to handle funds, meaning greater security all around. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Does your business need cyber insurance?

Posted by on Jan 31, 2018 in Business Taxes, Business Tips, Insurance | 0 comments

It’s a nightmare scenario few small businesses consider: hackers breach your computer system, steal your customer lists and threaten to exploit sensitive data. Data breaches by malicious individuals don’t just pose a financial risk. They threaten your reputation and can trigger litigation if your customers blame you for the exposure of their data. So far, many of the victims of these high-profile attacks are large corporations. A poster child for this is the massive 2017 cyber breach of the credit reporting agency Equifax, which affected more than 143 million Americans. Equifax’s financial loss was estimated at $125 million, equal to more than a quarter of their net income during 2016. Equifax also reportedly faces more than 50 class action lawsuits, which also may be covered by the company’s insurers. Here are some things to consider regarding the management of your cyber risk with potential insurance coverage: • Do you have coverage? Your insurance policy may already cover some of the risks of cyber attacks. A good place to start is to review your policy and understand what is covered, if anything. Also spend time evaluating your potential risk to determine how it correlates to your insurance coverage. • Comprehensive or partial? Depending upon how you assess your risk, you may consider either comprehensive cyber insurance or partial coverage in the form of a rider or endorsement on an existing policy. Talk to your current insurance firm to determine your alternatives. Because cyber insurance is still a new service, your provider’s options may be limited. The cyber insurance market is currently dominated by four major insurers that offer comprehensive insurance, according to Business Insurance magazine: American International Group, Beazley, Chubb and Zurich Insurance Group. Partial coverage may include riders covering errors and omissions, and the cost of business interruption caused by cyber attacks. • Unique elements of a cyber insurance policy. Most comprehensive cyber insurance policies cover breach-response and forensic costs. This covers the cost of finding the cause of a data breach, fixing it and limiting the damage. Comprehensive policies should provide liability coverage in case you are sued by customers as a result of their data being exposed during the attack. • Know the exclusions. Some cyber insurance policies do not cover breaches caused by infrastructure failure, or attacks by state-sanctioned hackers, according to ThinkAdvisor. There have been many high-profile cyber attacks allegedly attributed to hackers affiliated with the Russian and Chinese governments in recent years, so know how your policy covers this situation. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Do you have a household employee? Don’t ignore the nanny tax

Posted by on Jan 29, 2018 in IRS, IRS Rules | 0 comments

As you review your filing requirements for 2018, make sure you don’t overlook the nanny tax related to household employees. If you have a housekeeper or any other household employee, you could be liable to pay state and federal payroll taxes. How to know if you must pay the nanny tax First, you’ll need to determine whether you have a household employee. Generally, this is someone you hire to work in or around your house. It could be a babysitter, nurse, gardener, etc. It doesn’t matter whether they work part-time or full-time, or whether you pay them hourly, weekly, or by the job. But not everyone who works around your house is an employee. For example, if a lawn service sends someone to cut your grass each week, that person is not your employee. As a general rule, workers who bring their own tools, do work for multiple customers and/or control when and how they do the work are not your household employees. Your responsibilities If you have a household employee, you’ll generally be responsible for 2017 payroll taxes if you paid that individual more than $2,000 last year. However, federal unemployment tax kicks in if you pay more than $1,000 to all domestic employees in any quarter. It’s not always easy to tell whether you have a household employee, or whether exceptions apply. If in doubt, don’t hesitate to call our office. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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Your tax-time financial review

Posted by on Jan 26, 2018 in IRS, IRS Rules | 0 comments

Now is the perfect time to review your financial affairs. You have to gather information to prepare your tax return at this time. Why not take one more step and do something positive for the wellbeing of your wallet? The following suggestions will help you with your financial review: Talk to your family. You should factor in the financial decisions and goals of your spouse and children. Put your financial goals in writing. Figure out how much money you’ll need to meet each goal, when you’ll need it and how you’ll get it. Create a net worth statement. Create a list of your assets and debts, and compare it to last year’s statement. Are you gaining ground or losing it? Review investment performance. Weigh your investment performance minus the effects of inflation, and compare your progress with your goals. Determine what investments are worth it and what may need to change this year. Protect what you have. Consider the risks of your financial strategies. Your long-term goals may be unobtainable if you lose your present assets or your income potential. Determine if you need the insurance you have — or if you’re missing something. Don’t duplicate employer-provided coverage. Review your coverage annually; don’t just automatically renew policies. Review your will and your estate plan. Did your situation change during 2017? Make appropriate changes to your will and estate plan if it did. Stay informed about the 2018 tax reform changes that affect your plan. We can help you create an effective 2018 tax strategy for your situation. Give us a call today. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

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