If you need help with your tax returns, the best time to choose a preparer is before the end of the year. That way you have time to find someone with the appropriate skill level for your situation and time to get on their schedule. Having a preparer with advance knowledge and understanding of your life can make your tax return preparation more efficient for the preparer and less stressful for you. Waiting until March can leave you at the mercy of the market. The most competent firms and preparers may not have time to do anything for you except file an extension at that point.
Starting early will give you time to sit down with a preparer and discuss your particular circumstances so the preparer can understand what services you will need and so you can understand the preparer’s knowledge level for your situation. There is also time to accomplish any tax planning that might be beneficial to you. After the end of the year there’s not much planning ability left.
What should you look for in a preparer?
The IRS issued a news release (IR2015-124) that lists some of the things to look for, and to watch out for. Here are some tips and information to consider:
As an executor/personal representative, you are responsible for carrying out the terms of the decedent’s will or Trust, which includes ensuring all debts are paid and each beneficiary receives his or her designated property from the estate. The estate administration process may include estate tax filings with the IRS and state jurisdictions, probate court filings, in addition to the funeral proceedings and wrapping up any outstanding personal matters of the decedent. Often times this is not a quick process despite adequate and appropriate estate planning.
When an estate is subject to tax at the federal or state level, a return is required nine (9) months (in most cases) following the date of death. Historically, the IRS would issue an estate tax closing letter upon completed review of the estate tax return. This closing letter would take an additional four to six months of processing time by the IRS to confirm the estate tax filing is accepted. Also, this estate tax closing letter is a final piece needed to close an estate with the probate court in some jurisdictions. The estate administration period can take longer than one year before the beneficiaries receive the residual estate property. If you are the one inheriting property from an estate, time ticks away ever so slowly.
Unfortunately, it is not uncommon to read a headline on a routine basis highlighting a private data hack (see OPM, Target, Home Depot, IRS, etc.) impacting thousands, if not millions of individuals, with each instance. More and more personal and financial data is stored electronically and this identity theft epidemic is only growing. Perhaps this is an unintended consequence to the speed and accessibility of your digital record-keeping. Although words can barely express the sense of loss when your personal and financial information is compromised or stolen. It is a frustrating experience leaving victims feeling helpless and vulnerable.
A data breach, or cybersecurity incident, as described by the Office of Personnel Management (OPM), is a different type of crime compared to tax-related identity theft. The OPM cybersecurity incident resulted in the theft of sensitive, personal information such as names, addresses, birthdates, and Social Security numbers. Even though this data was stolen, OPM has stated “there is no information to suggest misuse of the information that was stolen from OPM’s systems.” Tax-related identity theft occurs when someone ‘uses’ your stolen Social Security number to file a false return claiming a fraudulent refund.
President Obama signed into law the “Surface Transportation and Veterans Health Care Choice Improvement Act at the end of July. The Act implements due date changes for business tax returns beginning with 2016 tax returns.
Currently, partnership tax returns are due April 15 (or 3 ½ months after year-end). Under the new rules partnerships will be required to file by March 15 (or 2 ½ months after the close of its tax year). This is the same due date already in place for S Corporations. A six-month extension will be available. The new deadline will apply to returns to taxable years beginning after December 31, 2015.
Each month, the IRS provides various prescribed rates for federal income tax purposes. These rates, known as Applicable Federal Rates (AFRs), are regularly published as revenue rulings.
The AFRs for August 2015 are as follows:
|Short-Term: 1-3 years||0.48%||0.48%||0.48%||0.48%|
|Mid-Term: >3 & up to 9 years||1.77%||1.76%||1.76%||1.75%|
|Long-Term: >9 years||2.74%||2.72%||2.71%||2.70%|