How to Fix Taxes That Were Filed Wrong

If you have received a notice from the IRS, there’s a chance that your taxes may have been filed wrong. This is very common and can be easily fixed.

A CPA can help to translate what the IRS is trying to communicate. Once they have figured that out, they will review the documents needed to file taxes and they will file a 1040-X to amend the faulty taxes and correct them.

Help put your mind at ease by contacting your local CPA.

If you are in the OC or LA area, give us a call at 714-533-2600 to schedule a free consultation today!

WARNING! FAKE IRS Calls!

WARNING! Tax time also means FAKE IRS calls. Don’t be fooled by these crooks!

The safest way to check if it is the REAL IRS is hang up and go to www.IRS.gov and call the number on that website. The IRS goes through a very formal process of gathering information and would not ask for payment information over the phone or through e-mail. If you get threatened by the callers, the IRS does not do that either. 

 

Again, the safest thing to do is hang up and if you have real concern then call the IRS from the number on their website.

State Personal Property Taxes

State Personal Property Taxes

Do you own a car? A boat? State personal property taxes on cars, boats and other personal property are deductible on Schedule A. The IRS warns that the taxes must be based on value alone and imposed on a yearly basis. For example, most car owners pay a yearly fee for car registration. If part of the fee was based on the car’s value and part was based on its weight, you can deduct the value-based portion of the registration fee.

If you want to know if you qualify for these deductions, give us a call at (714)-533-2600 to schedule a FREE consultation to make sure you are maximizing your deductions. 

Business Taxes March 15th Deadline

Businesses, remember that March 15th is the deadline for 1120, 1120-s, and 1065 tax forms to be filed with the IRS.

This means if you haven’t already started finding someone to help, do that ASAP!

A CPA can either help you make sure you have all you need to file your taxes or file an extension to give you some more time to collect all of your records.

You don’t want to rush and miss any deductions that your business qualifies for. Give us a call at (714) 533-2600 to schedule an appointment to get help with your taxes today!

Tax Tips 2017: Energy Efficient Credit

Energy Efficient Credit

This is your last chance to claim this credit for applying energy efficient equipment to your residential property for 2016. Some examples are solar hot water heaters, solar electric equipment, wind turbines or fuel cells.

What the credit gives you is 30% of the cost for the equipment installed. The amount credited does not have a limit for most types of property.

So if you installed some alternative energy equipment to your property, and want to know if you qualify for this credit, give us a call at (714)-533-2600 to schedule a FREE consultation to make sure you are maximizing your deductions.

Tax Tips 2017: Education Tax Incentives

Education Tax Incentives

College can be stressful. But it can lead to some major tax benefits when it comes to tax season. There are misconceptions of what is deductible when it comes to school expenses. There are three categories to look at for you tax situation.

     1.       American Opportunity Tax Credit

• This credit gives you $2,500 to deduct from your taxes owed. If it brings the amount you owe down to $0, then you are able to get a refund of 40% of the remainder up to $1,000.

    2.       The Lifetime Learning Credit

• This credit is similar where you are able to deduct tuition and related expenses up to $2,000 per tax return. Unfortunately, this credit cannot lead to a refund like the previous credit.

    3.       Deduction for Tuition and Fees

• If for some reason you do not qualify for the credits above, you are always able to deduct up to $4,000 of related expenses each year.

 

In addition, there are income and other eligibility requirements. Compare your three options

using this chart provided by the IRS https://www.eitc.irs.gov/Other-Refundable-Credits/educompchart

 

If you want to know if you qualify for these credits, give us a call at (714)-533-2600 to schedule a FREE consultation to make sure you are maximizing your deductions. 

Business Tax Help 2017: Preparing for Expiration of Certain Deductions

Preparing for Expiration of Certain Deductions

Certain tax deductions are allowed for a certain amount of time to help induce an action. Whether it is spending more in one industry or stimulating the economy.

Unfortunately, these temporary deductions, if not renewed, expire and are no longer available for businesses to use.

For the 2016 tax year, the following business deductions will expire if they are not renewed:

• Film and TV production expense provisions
• Energy efficient commercial building deductions
• Mine safety equipment expense election
• Additional depreciation for bio fuel plant property

So if your business uses any of the stated deductions, it is best to prepare differently for 2017 if it does indeed expire. There may be new deductions that may benefit your company and right now is the best time to look into that matter.

To check what would be best for your business, give us a call at (714) 533-2600 to schedule a FREE consultation to make sure you are getting every deduction you deserve.

Business Tax Help 2017: Vehicles for Business Use

Business Use of Vehicles

When it comes to using a vehicle for business, there are two things you should keep track of: mileage and depreciation.

For 2016 the standard mileage rate is 54 cents per mile. This means you should keep track of your business miles to be able to write them off for your taxes. Some examples of business miles are traveling from one office to the other or driving to a client site from the office.

Depreciation should also be tracked because the value of a car drops significantly just after leaving the dealership. Luckily, this drop in value can be deducted without having to spend additional money in order to get a deduction. The IRS has separate deduction caps for different types of care. Here are two popular types:

Passenger Automobiles

• First Tax Year- $3,160 (or $11,160 if bonus depreciation is claimed)
• Second Tax Year- $5,100
• Third Tax Year- $3,050
• Each Succeeding year- $1,875

Trucks and Vans

• First Tax Year- $3,560 (or $11,560 if bonus depreciation is claimed)
• Second Tax Year- $5,700
• Third Tax Year- $3,350
• Each Succeeding year- $2,075

To see how your vehicle use can qualify, give us a call at (714) 533-2600 to schedule a FREE consultation to make sure you are getting every deduction you deserve.

Business Tax Help 2017: Business Property and Depreciation

Business Tax Help 2017

The goal for doing taxes for your business is simple; maximize your tax benefits to minimize the amount of taxes you have to pay. But with tax laws always changing, how can you ensure that your tax plan is still the best option?

That is why we here at Sonny and Company CPA will be keeping you up to date with some new tax tips and strategies that may help your business save money on taxes.

Business Property and Depreciation

Whether it is a new computer or a new forklift, business property helps you business operate but can also help you save on your business taxes

The introduction of bonus depreciation has helped many business owners deduct a larger percentage of the depreciation expense of their business property. Businesses are allowed to buy new property and in that first year of putting it into use are given a 50% bonus depreciation. This type of deduction is very helpful because it is an extra expense that is allowed to be taken without having to spend any money.

However, some companies prefer or can only afford to buy second hand property. For these cases, they are not allowed to take the bonus depreciation offer because it only applies to brand new, first time use property.

Luckily, these types of businesses can choose to elect Code Sec. 179 expensing. This tax code allows the taxpayer to deduct costs related to property and be expensed instead of marking it as an asset with depreciation. This code applies not only brand new property, but secondhand property as well. These deductions are allowed up to $500,00, which is double the amount from last year.

To check which one would be best for your business, give us a call at (714) 533-2600 to schedule a FREE consultation to make sure you are getting every deduction you deserve.