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Melville, NY 11747

Thursday, August 18, 2016

Olympians Pay Tax on Medals

Olympic Medalists Pay Tax on Medals 

Olympic medal winners must report the value of the medals as income on their US tax returns.  Gold medals are worth an estimated $600, silver medals an estimated $300 and bronze medals a mere $4. In addition to the medals, Olympic athletes also receive a cash prize.  Gold medal winners receive $25,000, silver medal winners receive $15,000 and bronze medal winners receive $10,000.  Uncle Sam wants his share of the winnings.  
good tax accountant can possibly reduce the winner's tax burden.  If the athletes consider their Olympic career a business, they can deduct certain business expenses.  Possible deductions may include the cost of training, athletic equipment and travel, to name a few.  If the athlete considers his or her sport a hobby, he or she may be entitled to deduct expenses as Miscellaneous Itemized Deductions on Schedule A.

Sandra G. Johnson, CPA
August 18, 2016

Tuesday, September 22, 2015

7 Tips to Better Bookkeeping for Your Business

7 Tips to Better Bookkeeping for Your Business

Good bookkeeping habits can help you and your business grow.

1. Get a professional to prepare your tax returns.  A good accountant will do more than file your returns.   They can spot holes in your bookkeeping and advise you on ways to improve your business.

2. Don’t step back and become uninvolved just because you have a bookkeeper and accountant.  Make sure you review their work.  Do the reports that they are issuing make sense to you and your business?

3. Make sure you have the right bookkeeping software.  Look for a system that matches your business needs and has an ease of use to you and your staff.

4. Document your bookkeeping processes.  Write down the procedures your bookkeeper should follow.  Make sure the job is done your way – a way that works best for you and your business.

5. Be sure to keep all of your receipts for your cash expenses.  Your credit card purchases can always be accounted for but if you lose a receipt for something you paid cash for the expense can be overlooked.  You should have a procedure for saving these receipts- notebooks to record them, folders to save them in or even a new app that helps you take pictures of them and stores them for future reference!  Try www.igeeksblog.com which list a few apps.

6. Keep track of your receivables.  Make sure you are getting paid for your invoices.  Keep either a detailed log or use a bookkeeping software that helps you keep track of invoices, payments and overdue amounts.

7. Work as a team with your accountant.  They can be a key to guiding your business on the right path and spotting potential problems before they arise.  A good accountant can help you bring your business to the next level.

Good practices bring good results!

By Chris Murphy, Senior Accounting Manager

Tuesday, August 25, 2015

Steps to Take if You Suspect Identity Theft

Steps to Take if You Suspect Identity Theft

In May of this year, the IRS became the latest target of hackers, who accessed more than 100,000 taxpayer accounts.  How can you protect yourself if you suspect your identity is threatened?

The IRS recommends taking these steps:

1. File a police report.

2. Go to https://www.ftccomplaintassistant.gov and file a complaint with the Federal Trade Commission.

3. Contact one of the following credit bureaus to place a “Fraud Alert” on your credit report:
Equifax, www.Equifax.com, 1-800-525-6285
Experian, www.Experian.com, 1-888-397-3742
TransUnion, www.TransUnion.com, 1-800-680-7289

4. Contact your banks and credit card issuer and close any accounts that have been opened without your authorization.

5. Contact Social Security Administration at www.ssa.gov to create an account and check your earnings statement annually.

6. If you suspect you are a victim of tax-related identity theft, respond immediately to any IRS notice, calling the number provided.  (Note that the IRS will contact you via US mail, NOT phone or email!)

7. Complete IRS Form 14039, Identity Theft Affidavit. Access form and mailing instructions here: http://www.irs.gov/pub/irs-pdf/f14039.pdf

8. Continue filing and paying your taxes, even if you must file by paper.

By: Honorine M. Campisi, Senior Tax Manager

Wednesday, August 12, 2015

How to Avoid Investment Scams

How to Avoid Investment Scams

Does someone you know have the “next big thing” and want you to come on board and invest in their business or idea?  WAIT!!  Have you fully investigated all the facts?  Here are a few tips to help you avoid the wrong investment.

1. Make sure that you understand their business plan.  What are they going to do with your money?  Is there a market for what they are selling? When and how will you get to see the profits?

2. Don’t be forced into investing if you aren’t ready.  If they insist you need to invest “right now!” than you should be careful.  All investments take time to develop.  Ask questions and consult a lawyer.

3. Talk to others who have invested.  Find out if the company has met the goals they expected.  Why did they become investors?  If you cannot get this information from the business be careful.

4. Talk to the company’s lawyers.  Do they have an attorney and do they understand the business and its plan?  Do you feel better after speaking with him?  Does he put your mind at ease?

5. Ask questions!  Have they gone to a bank for a loan?  Why do they need your funds?  Who else has been approached for funds?  Why haven’t others invested?

6. Don’t be shamed into investing.  If they make you feel “silly” for asking so many questions they might have something to hide or might be hard to work with.  The lines of communication should be open and honest.

7. Don’t feel like you are missing out if you don’t invest now.  Don’t let the company tell you this is a once in a lifetime opportunity.  You do not want to be caught up in spending the money that you are going to make on company profits before they exist.  Step back and resist the fear and urgency.

8. Get to really know the person and business you are investing in.  Check them out and make sure that all you find out makes sense.

9. If you are investing a sizable amount, hire your own attorney.  Find one who can help you make sure the deal is legitimate and you are protected.  They should have experience in this field.

Follow these steps to avoid becoming a victim.  Make sure you do your due diligence and remember that if something seems too good to be true it probably is!

Happy Investing!

By Chris Murphy, Senior Accounting Manager

Monday, July 27, 2015

Tips for Renting Your Vacation Home This Summer

Tips for Renting Your Vacation Home This Summer

One of the ways to defray the costs of owning and maintaining a vacation home, is to rent it out when you are not using it.  Income earned from those rentals may be reportable on your income tax return. For income tax purposes, a vacation home may include a house, apartment, condo, mobile home, boat, or similar property.  In order to be considered a “home”, the vacation property must have basic living accommodations, such as sleeping space, a toilet, and cooking facilities.  Read on for some helpful tips.

  1. Income and expenses related to renting a vacation home are reported on Schedule E of your personal income tax return.
  2. As long as you (or your family) also use the home, your rental expenses cannot exceed the rent you receive (meaning you cannot claim a loss.)
  3. Special rules must be followed when you rent out a home that you also use personally.  Expenses must be allocated based on the number of days the unit is rented or available for rent, and the number of days it is used by you and your family.  Any expenses that cannot be deducted on Schedule E, may be deducted on Schedule A.
  4. If you you rent a vacation home for less than 15 days a year, you are not required to report the rental income on your tax return.  In this case, any mortgage interest or real estate taxes for the home would be deducted on Schedule A.

By: Honorine M. Campisi, Senior Tax Manager