The Tax E Man Blog, along with our website http://www.PatTax.net, are designed to be year-round resources for your tax consultation, preparation and representation concerns. The resources are provided by Pat Tax Inc and its President Enrolled Agent Patrick White.

Pat can be contacted at (347) 949-TAXE(8293) or email: PatTaxHelp@gmail.com with any questions or concerns.

Your Rights as a Taxpayer

As stated by the Internal Revenue Service, their mission is to

Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

It was toward this end that the Taxpayer Bill of Rights were created by the IRS and incorporated into Publication 1. The Taxpayer Bill of Rights contain 10 provisions compiled by the Internal Revenue Service that “Take the multiple existing rights embedded in the tax code and groups them into 10 broad categories making them more visible and easier for taxpayers to find.”

Read Taxpayer Bill of Rights Here

The 10 Taxpayer Rights are

1. The Right to Be Informed
2. The Right to Quality Service
3. The Right to Pay No More than the Correct Amount of Tax
4. The Right to Challenge the IRS’s Position and be Heard
5. The Right to Appeal an IRS Decision in an Independent Forum
6. The Right to Finality
7. The Right to Privacy
8. The Right to Confidentiality
9. The Right to Retain Representation
10. The Right to a fair and Just Tax System

Read Taxpayer Bill of Rights Here

As stated in Right 9, taxpayers have “The Right to Retain Representation.” Enrolled Agent Patrick White, President of Pat Tax Inc, is empowered by the United States Department of the Treasury to represent taxpayers before the Internal Revenue Service in regard to tax matters. Pat can be contacted at (347) 949-TAXE(8293) or email: Pattaxhelp@gmail.com.

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog is a publication of Baldwin NY Tax Preparation and Representation firm Pat Tax Inc. Pat Tax and Enrolled Agent Patrick White provide tax consultation, preparation, and representation services to the Long Island communities of Baldwin NY, Freeport NY, Roosevelt NY, Uniondale NY and Hempstead NY and the Queens communities of Saint Albans NY, Cambria Heights NY, Laurelton NY, and Springfield Gardens NY.

Visit us at http://www.PatTax.net for the latest tax preparation tools and information. We can be contacted at PatTaxHelp@gmail.com or mobile: 917 533-8475.

High-Income Taxpayers

In addition to being subject to higher federal tax rates, taxpayers whose income exceeds certain levels have tax deductions and credits that are reduced or eliminated. The provisions listed may have additional qualifications and restrictions. Other provisions of the tax code, such as fringe benefit limitations and taxation on the sale of a principal residence, may further restrict a taxpayer’s ability to take deductions or cause the taxpayer to pay additional tax. Ask your tax professional for more details.

Capital Gains Tax Rates

Read High Income Taxpayers 2017 Here

2017 Itemized Deduction Phase-out

2017  Personal Exemptions

The personal exemption per is -$4,050

Read High Income Taxpayers 2017 Here

Any accounting, business, or tax advice contained in the Tax E Man Blog or http://www.PatTax.net, including attachments, links, and enclosures, are not intended as a thorough in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website http://www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 347 949-8293 or email: PatTaxHelp@gmail.com.

Expense and Tax Tracker on the Go-Get the Tax E Man App

Need a handy mobile expense and tax organizing tool ? Give the free Tax E Man App a try !

It’s time again to organize all of those expense and tax documents. Keeping complete records helps in preparing the most accurate tax returns and decreases the possibility of being the target of an IRS audit.

The Tax E Man App for Android and iPhone makes your phone, iPad or Android device a “personal assistant”, collecting, organizing, storing and sending your yearly tax records.

The App, available under the Tax Pocket general app, was developed by App Giraffe in collaboration with the National Association of Tax Professionals. The Tax E Man App has been customized by Enrolled Agent Patrick White of Pat Tax Inc. And is provided free of charge.

Features

1. Tax Organizer
2. GPS Mileage Tracker
3. My Tracker-allows for specific tracker creation and customization such as business, medical and childcare expenses
4. Organizer and tracker information can be downloaded securely and displayed on spreadsheets or quick books.
5. Transmit information securely to your tax preparer
6. Contact information and office schedule
7. http://www.PatTax.net website access, filled with tax preparation tools and information.

Download Instructions

1. Visit www.TaxPocket.com here.

2. On bottom of page, choose Google Play for Android devices and Apple Store for iPhone or iPad
3. Download TaxPocket App-it is free.
4. On top of the next page, next to “Tax Professionals”, tap magnifying glass which is search icon.
5. Under Search by Zip Code, enter 11510
6. Select Patrick White
7. Select “Make This my Tax Professional”.
8. You Got It !! Thanks !

The Tax E Man Blog, along with our website http://www.PatTax.net are designed to be year round resources for tax consultation, preparation, and representation services provided by Pat Tax Inc., Please feel free to contact us with any questions or concerns.

Pat can be contacted at 347 949-8293 or email: PatTaxHelp@gmail.com with any questions or concerns.

Tax Treatment of Fringe Benefits

The term “fringe benefit” refers to any benefit provided to an employee that is in addition to money. All benefits provided to an employee are taxable unless the law specifically excludes or defers tax on the benefit. Thus, a fringe benefit can either be taxable, tax-deferred, or excluded from taxation.

 
The personal use of an employer-provided vehicle is an example of a taxable fringe benefit. An employer contribution to a qualified retirement plan on behalf of the
employee is an example of a tax-deferred fringe benefit. Employer-provided health insurance for an employee is an example of a tax-free fringe benefit.

Business Owner

A small business owner in a corporate setting may be both the owner and an employee of his or her business. By taking advantage of excludable fringe benefits, the owner receives a double benefit. First, the cost of the benefit is deductible by the business. Second, the cost
of the benefit is tax free to the employee-owner.

Read 2016 Fringe Benefits Here

Nondiscrimination Rules for Fringe Benefits

Nondiscrimination rules are designed to prevent business owners from offering tax-favored fringe benefits to themselves but not their employees. In general,
if fringe benefits are offered to all employees, then all employees, including the top paid employees, receive tax-favored treatment on employee benefits. However, if a plan favors highly-compensated employees or key employees, the value of the benefit must be included in their taxable wages. The terms highly-compensated employees and key employees can mean different things depending on the applicable plan. Special restrictions apply for fringe benefits for sole proprietors, partners, certain LLC members, and S corporation shareholders.Consult your tax advisor if you are a business owner
considering providing fringe benefits to yourself and your employees.

Employer-Provided Vehicles

If an employer provides an employee with a company owned vehicle, and the employee uses the vehicle for personal purposes, the value of that personal use must be included as taxable income on the employee’s Form W-2. Under the general rule, the taxable amount equals the fair market value of the total use, minus the amount the employee pays for the use.

Employer-Provided Cell Phones

The value of an employer-provided cell phone, provided primarily for non-compensatory business reasons, is excludable from an employee’s income.

Non-compensatory Business Purposes

An employer needs substantial business reasons for providing the cell phone. Examples include:

•  Need to contact the employee at all times for work-related emergencies,
• Requirement that the employee be available to speak with clients at times when the employee is away from the office, and
• Need to speak with clients located in other time zones at times outside the employee’s normal workday.

Read 2016 Fringe Benefits Here

Any accounting business or tax advice contained in the Tax E Man Blog or http://www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc. would be please to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website http://www.PatTax.net are designed to be year round resources for tax consultation, preparation, and representation services provided by Pat Tax Inc., Please feel free to contact us with any questions or concerns.

Pat can be contacted at 347 949-8293 or email: PatTaxHelp@gmail.com with any questions or concerns.

Identity Theft and Your Taxes

Your identity and money can be stolen in a tax-related scam via email (“phishing”), fax, phone, or letters. Some recent examples of identity theft scams are:

• Refund scam. A bogus email, claiming to come from the IRS, tells you that you are eligible to receive a tax refund for a given amount if you just follow the instructions
  in the email.
• Inherited funds, lottery winnings, and cash consignment scams. A bogus email, claiming to come from the U.S. Department of the Treasury, notifies you that you will receive millions of dollars if you follow the instructions in the email. This may be a multi-step scheme that includes instructions for you to deposit taxes on the funds before they can be paid out or the issuance of a phony check on which you must pay 10% tax before the check can be deposited.
• EFTPS scam. A bogus email, claiming to come from the IRS, contains a realistic-looking screenshot of the IRS website with a message about fraud attempts regarding your bank account. The email states that the bank account can be unblocked if you just click a link and provide information.
• EIN scam. A bogus fax, claiming to be from the IRS, informs you that you have failed to submit required bank account details. You are asked to fax back a form that requests your EIN, bank information, and officer signatures.

Notify the IRS

If you receive a tax-related phishing email, do not click on the links or open any attachments. Forward the email to phishing@irs.gov or call the IRS at 800-829-1040.
How the IRS Contacts Taxpayers

• The IRS will never initiate contact with you by email or any social media tools to request personal or financial information.
• It is unusual for the IRS to initiate contact by fax or phone call. You can call the IRS at 800-829-1040 to verify that an unexpected fax or phone call is legitimate.

Read Identity Theft and Your Taxes 2017 Here

Fraudulent Tax Returns

An identity thief might use your Social Security number to fraudulently file a tax return and claim a refund. You could be completely unaware that your identity has been stolen until your return is rejected for e-filing or you get an IRS notice or letter.

Rejected e-File

Your electronically filed return is rejected because the Social Security number belonging to you, your spouse, or a dependent has already been used on a tax return.

• This situation can occur because of a mistyped number or dispute about claiming a dependency exemption.Such cases do not necessarily indicate identity theft
• If your return has been rejected because of a previously used Social Security number, it cannot be e-filed. You must file a paper return.

IRS Notice

You receive an IRS notice or letter stating that:

• More than one return was filed in your name for the year,
• You have a balance due, refund offset, or initiation of collection action for a year when you did not file a return, or
• IRS indicates that you received wages from an employer you didn’t work for

You should respond immediately to the name and phone number printed on the IRS notice or letter. You will be asked to complete Form 14039, Identity Theft Affidavit, and provide identifying information.

Read Identity Theft and Your Taxes 2017 Here

Any accounting business or tax advice contained in the Tax E Man Blog or http://www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc. would be please to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website http://www.PatTax.net are designed to be year round resources for tax consultation, preparation, and representation services provided by Pat Tax Inc., Please feel free to contact us with any questions or concerns.

Pat can be contacted at 347 949-8293 or email: PatTaxHelp@gmail.com with any questions or concerns.

The Tax E Man Blog, along with our website www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 917 533-8475 or email: PatTaxHelp@gmail.com with any questions or concerns regarding tax consultation, preparation or representation.

Taxable Social Security Benefits

Some taxpayers have to pay federal income taxes on their Social Security benefits. This usually happens only if they have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to Social Security benefits.

Taxable Benefits

To determine the amount of Social Security or Railroad Retirement benefits that may be taxable, taxpayers must compare the base amount with the total of:

• One-half of the benefits received, plus
• All other income, including tax-exempt interest.

Other income is not reduced by any exclusions for:

• Interest from qualified U.S. Savings Bonds,
• Employer-provided adoption benefits,
• Foreign earned income or foreign housing, or
• Income earned by bona fide residents of American Samoa or Puerto Rico.

Read 2016 Taxable Social Security Benefits Here

Any accounting, business or tax advice contained in the Tax E Man Blog or  www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax, Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 917 533-8475 or email: PatTaxHelp@gmail.com with any questions or concerns regarding tax consultation, preparation or representation.

The Tax E Man Blog, along with our website www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 917 533-8475 or email: PatTaxHelp@gmail.com with any questions or concerns regarding tax consultation, preparation or representation.

Employee or Independent Contractor?

Employee or Independent Contractor?

In order for a business owner to know how to treat payments made to workers for services, he or she must first know the business relationship that exists between the business and the person performing the services. A worker’s status determines what taxes are paid and who is responsible for reporting and paying those taxes. A worker performing services for a business is generally an employee or an independent contractor. If a worker is classified incorrectly, the IRS may assess penalties on the employer for nonpayment of certain taxes.

Penalties and Interest
When the IRS determines that a worker is actually an employee rather than an independent contractor, the employer is subject to penalties for failure to withhold
and remit income, FICA (Social Security and Medicare) and FUTA (federal unemployment tax) taxes, interest on the underpaid amounts, and penalties for failure to file information returns. The state will also seek to collect workers’ compensation and unemployment compensation premiums for unreported wages.

Read 2016 Employee or Independent Contractor Here

Independent Contractor
An independent contractor is self-employed and is generally responsible for paying his or her own taxes through estimated tax payments. A business issues Form 1099-MISC, Miscellaneous Income, to any one independent contractor, subcontractor, freelancer, etc.,
to whom the business made $600 or more in payments over the course of the tax year. The business is not generally responsible for withholding income tax or FICA.

 
Employee
A worker treated as an employee will be issued Form W-2 for wages paid. The business hiring the worker is responsible for withholding income tax and FICA. The employer is also liable for FUTA and various state employment taxes. Also, the employee may be eligible for certain fringe benefits offered by the employer, such as health care.

Read 2016 Employee or Independent Contractor Here

Any accounting, business or tax advice contained in the Tax E Man Blog or  www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax, Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 917 533-8475 or email: PatTaxHelp@gmail.com with any questions or concerns regarding tax consultation, preparation or representation.

The Tax E Man Blog, along with our website www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax Inc. . Please feel free to contact us with any questions or concerns.

Enrolled Agent and National Tax Practice Institute Fellow Pat White can be contacted at 917 533-8475 or email: PatTaxHelp@gmail.com with any questions or concerns regarding tax consultation, preparation or representation.

Saving for College

Custodial Accounts (UTMA/UGMA)

Assets in a custodial account belong to the minor. A custodian, usually an adult relative, controls the assets until the minor reaches the age set by state law (21 in most states).
Assets in a custodial account can be used to pay for education expenses for the minor.

Read 2016 Saving for College Here

Savings Bond Interest Exclusion

Exclusion Rules
Interest from qualified savings bonds redeemed by the taxpayer can be excluded from income if:

• The taxpayer paid qualified education expenses during the year for the taxpayer, spouse, or a dependent claimed on the taxpayer’s return.
• Filing status is not Married Filing Separate. If proceeds from the redemption (interest and principal) are more than adjusted qualified education expenses, only a percentage of the interest is excludable.

Example: Marty redeemed qualified bonds for $10,000, including accrued interest of $5,500. He paid $8,000 of qualified education expenses during the year. His excludable interest is:

$ 5,500 interest × $ 8,000 qualified expenses/$10,000 redemption proceeds = $ 4,400 tax-free interest

Income Limit
The exclusion is limited by adjusted gross income. Check with your tax preparer for income limitations.

Qualified Savings Bonds

• Series EE bonds issued after 1989 and Series I bonds. • Issued to a person who was age 24 before the bond’s issue date. The issue date is the first day of the month in which the bond was purchased (for example, a bond purchased on May 25 has a May 1 issue date). The issue date is printed on the front of the bond.
• Issued in the name of the taxpayer and/or spouse. There can be no other co-owners, including the taxpayer’s child. The bond can have a pay‑on-death (POD) beneficiary, including a child.

Qualified Education Expenses

• Tuition and fees required for enrollment or attendance at an eligible educational institution. Qualified expenses do not include courses involving sports, games, or hobbies, unless part of the student’s degree program.
• Contributions to a qualified tuition program.
• Contributions to a Coverdell education savings account.

Qualified Tuition Plans (529 Plans) & Educational Savings Accounts (ESAs)

QTP and ESA Tax Benefits
Contributions to a QTP or ESA are not deductible. Earnings accumulate tax free. Distributions are not taxable if less than the beneficiary’s adjusted qualified education
expenses in the year of distribution. Contributors can contribute to both a QTP and an ESA in the same year for the same designated beneficiary.

Read 2016 Saving for College Here

Any accounting, business or tax advice contained in the Tax E Man Blog or  www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax, Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 917 533-8475 or email: PatTaxHelp@gmail.com with any questions or concerns regarding tax consultation, preparation or representation.

Single

A taxpayer is unmarried in 2016 if:

The taxpayer has never married,

• The taxpayer was legally separated, according to state law, under a decree of divorce or separate maintenance.
• The taxpayer’s spouse died before January 1, 2016, and the taxpayer did not remarry in 2016.
• If the taxpayer meets the definition of unmarried, file as  Single unless the requirements for one of the following  filing statuses are met.
• Head of Household, or
• Qualifying Widow(er) with Dependent Child.

 Read 2016 Filing Status New Here

Married Filing Joint (MFJ)

A taxpayer can file a joint return in 2016 with a spouse if:

• The taxpayer was married at the end of 2016, even if the taxpayer did not live with the spouse at the end of 2016.
• The taxpayer’s spouse died in 2016, and the taxpayer did not remarry in 2016.
• The taxpayer was married at the end of 2016, and the spouse died in 2017 before filing a 2016 return
• The taxpayer lived with a person in a common-law marriage recognized in the state where they live or in the state where the common-law marriage began.

A taxpayer can file MFJ if both spouses agree, otherwise a married taxpayer may file:

• Married Filing Separately (MFS), or
• Head of Household (HOH) if the taxpayer meets the requirements to be “Considered Unmarried.” See Head of Household, later.

Read 2016 Filing Status New Here

Any accounting, business or tax advice contained in the Tax E Man Family Blog or  www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax, Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Family Blog, along with our website www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 917 533-8475 or email: PatTaxHelp@gmail.com with any questions or concerns regarding tax consultation, preparation or representation.