2016 Filing Deadlines

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Filing Deadlines Call our office for more information or for assistance with any required tax filings. Deadline Filing Required January 15, 2016 Due date for the fourth installment of 2015 individual estimated tax. February 1 Employers must furnish W-2 statements to employees. 1099 information statements must be furnished bypayers. (1099-B deadline is February 16.) February 1 Employers must file 2015 federal unemployment tax returns and pay any tax due. February 16 Brokers must furnish Form 1099-B and consolidated statements to customers. February 29 Payers must file information returns (such as 1099s) with the IRS. (Deadline if filing electronically is March 31.) February 29 Employers must send W-2 copies to the Social Security Administration. (Deadline if filing electronically is March 31.) March 1 Farmers and fishermen who did not make 2015 estimated tax payments must file 2015 tax returns and pay taxes in full by March 1. March 15 2015 calendar-year corporation income tax returns are due. March 15 Deadline for calendar-year corporations to elect S corporation status for 2016. April 18* Individual income tax returns for 2015 are due. April 18* 2015 partnership returns are due. April 18* 2015 annual gift tax returns are due. April 18* Deadline for making 2015 IRA contributions. April 18 First installment of 2016 individual estimated tax is due. June 15 Second installment of 2016 individual estimated tax is due. September 15 Third installment of 2016 individual estimated tax is due. September 15 Deadline for filing 2015 calendar-year corporation tax returns with extensions of the March 15 filing deadline. September 15 Deadline for filing 2015 partnership returns with extensions of the April 18 filing deadline. October 17 Deadline for filing your 2015 individual tax return if you received an extension of the April 18 deadline. January 17, 2017 Fourth installment of 2016 individual estimated tax is due. Please call us if you have any questions. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000.

ESTIMATE YOUR TAX LIABILITY BEFORE YEAR END

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Estimate your tax liability before year-end Under current pay-as-you-go federal income tax rules, you're generally required to pay taxes as you earn the related income. Failing to pay the correct amount can result in a penalty when you file your tax return. That's a good reason to estimate your 2015 tax liability now, while you can still make corrections. Here's what you need to know. • The rules. Estimated tax underpayment penalties generally do not apply when the balance due on your 2015 return is $1,000 or less. If you end up owing more than $1,000, you can avoid a penalty by paying "safe-harbor" amounts. For example, your tax payments during the year need to equal 90% of your 2015 tax or 100% of the tax on your 2014 return (110% if you file jointly and your income was over $150,000). • Your options. You can pay what you owe by having additional federal income tax withheld from your wages, social security, pensions, and other income. You could also choose to increase your final estimated tax payment or make it early. An important difference between the two is that federal withholding is treated as if you made payments evenly throughout the year. Increasing your withholding, even in December, can help you prevent an underpayment penalty. Checking your tax liability is a simple way to avoid surprises when you file your return. There's another benefit too: If you discover you've paid in more than you're going to owe, you can give yourself an early refund by reducing your payments during the last few weeks of the year. As always please call us if you have any questions. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Health Insurance will affect your 2016 tax return

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Health insurance decisions will affect your 2016 tax return December is the midpoint of the 2016 health insurance open enrollment period, which began November 1, 2015, and ends January 31, 2016. As you investigate your options on the government Marketplace, here are two ways the decisions you make could impact your 2016 federal income tax return. Penalty. If you decide not to purchase a health insurance policy for 2016, you'll pay a penalty for any month you don't have coverage and don't qualify for an exemption. You'll pay the penalty, also known as the shared responsibility payment, on your 2016 federal income tax return (the one that's due in April of 2017). The penalty is calculated as a percentage of your income or is based on the number of uninsured people in your household. You'll calculate both numbers and pay the higher of the two. For 2016, the percentage-of-income penalty is 2.5% of your household income, up to a maximum of the total average annual premium of a Bronze plan. The per-person penalty is $695 per adult ($347.50 per child under 18), up to a maximum of $2,085. Premium tax credit. If you purchase a policy on the insurance Marketplace, you may qualify for a federal tax break. The break is in the form of a credit, which reduces your federal income tax dollar for dollar. You can choose to receive the credit monthly in the form of lower premiums on your policy, or claim it on your 2016 federal income tax return. If you get the credit monthly, be sure to update your information with any changes in your family size or income so you receive the correct amount. Also be aware you'll need to file a tax return, even if you might not otherwise have to, in order to reconcile the amount of the credit you've taken with the amount you are eligible for. As always please call us if you have any questions. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Keep good records for a cash-intensive business

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Do your business transactions involve a lot of cash? Because cash transactions are, or can be, anonymous, the IRS takes a special interest in "cash intensive" businesses. One indication of this interest is the "Cash Intensive Businesses Audit Techniques Guide" developed by the IRS. The goal of the guide is to assist IRS examiners in identifying specific issues, business practices, and examination techniques for businesses that primarily deal in cash. What does that mean for your business? A cash business is generally not required under tax law to use a specific type of bookkeeping method. Still, the added scrutiny means you'll want to be particularly careful about maintaining books and records that accurately reflect your income and expenses. Here are three suggestions to get you started. • Maintain original source documents. Sales invoices and cash register tapes are records that support the amount of income received. Tie these totals to your bank deposits. Remember to track income from electronic transactions, including digital currency, as well as non-cash activity such as bartering. • Support non-income cash inflows. Document loans you make to the business with written promissory notes. Keep records of amounts you receive in the form of refunds, rebates, and insurance policy payouts. • Practice good internal control. Internal controls are the processes you put in place to maintain the integrity of your accounting information. For example, having more than one person involved in receiving and recording income can help minimize the risk of errors or inadvertent misreporting. Please call us for more recommendations and guidance on establishing and maintaining a bookkeeping system that can help you support the income and deductions you report on your tax return. As always please call us if you have any questions. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker Ten Forty plus Quality Tax Preparation & Financial Services www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

2015 Is Ending

Ten Forty Plus Quality Tax Preparation & Financial Services, inc 281-397-7777 Fax 281-397-7443 Tax Tip Tax season 2015 is just around the corner Take steps before year-end to cut your 2015 taxes The end of 2015 is rapidly approaching. Do you have everything in order so you can finalize this year's tax planning? If not, that's okay. Given the frequency of tax law changes, there is no perfect time to begin planning. There's no need to wait for certainty on laws that are in limbo either. This year, basic old-fashioned tax planning techniques can go a long way. Here are some suggestions. ● Convert to a Roth Despite the fact that you'll pay federal income tax when you convert your traditional IRA to a Roth, making the switch can be a wise part of multi-year planning. For example, if the value of the investments in your traditional IRA is at a low point, you might consider using a partial conversion to “fill” a tax bracket. As you know, brackets are based on taxable income. By watching the breakpoints, you can manage the rate you'll pay on the conversion. The idea is to pay tax at the lowest possible marginal rate. The future benefit of making a conversion comes from the removal of assets from your traditional IRA. That can help reduce taxable income in a later year when you're required to take withdrawals. ● Get your basis right Basis affects the amount of gain you report and pay tax on whenever you sell or exchange assets, so getting it right can mean tax savings. While your broker is required to track and report your basis for many securities, you are ultimately responsible for putting the correct numbers on your return. And, for tax planning to be effective, you have to be sure your basis is accurate before you decide which investment to sell. You already know basis in investments such as stock is what you paid plus costs of buying and selling such as commissions. But you'll want to keep a record of other changes to the stock too, including splits, which can affect your basis per share. Those records are especially useful if you're not selling your entire investment. For mutual funds, add reinvested dividends and capital gain distributions to your cost. Because you pay tax on those items in the year of distribution, they increase basis and reduce your overall gain. Accurate basis information can also save you money if you funded a traditional IRA with nondeductible contributions in prior years. Those contributions reduce the taxable amount of withdrawals. Maintain an up-to-date list of home improvements and renovations too. You can currently exclude up to $500,000 of gain from the sale of your home when you're married ($250,000 when you're single). But you have to meet the requirements to qualify, such as the rule that says you can claim the full exclusion only once every two years. Otherwise, you may be eligible for a partial exclusion or none at all. ● Check retirement contributions Contributions to your 401(k) plan made before year-end will reduce your adjusted gross income and may preserve credits and other tax benefits. Check now to make sure you're on track to contribute the maximum for 2015. Why? In addition to being able to spread an increased contribution over remaining paychecks, you may have to give your employer time to make the payroll change. You might also consider whether you can request that your employer put part or all of a year-end bonus into your 401(k). Just verify you're making the most of your employer's matching contributions. For 2015, the maximum 401(k) contribution when you're under age 50 is $18,000. You can add an additional $6,000 when you're 50 or older. ● Benefit from your home Consider whether accelerating real estate tax and mortgage payments can help boost your itemized deductions for the year. One caution: Be aware of your exposure to the alternative minimum tax, as some itemized deductions are not allowed under the AMT calculation. Another suggestion: Document home office use and expenses. While you have the option of choosing a simpler safe-harbor method for claiming the home office deduction, the only way to make sure you're getting the most benefit is to compare the results from both methods. ● Get your business expenses in order When calculating your business income as part of your tax planning, take time to make sure you'll be able to deduct all your expenses. For example, business expenses must be common in your field, and helpful and appropriate for your business - otherwise known as the “ordinary and necessary” rule. Remember, you'll need enhanced records such as logbooks and receipts to deduct vehicle mileage and travel and entertainment expenses. Schedule recurring bills for payment before the end of the year, and learn what expenses you can prepay and deduct on your 2015 return. Separate personal and business expenses and reimburse yourself from the company checking account for any costs you paid with your own funds. ● Plan how you'll pay what you owe Even the best planning generally can't eliminate all tax liability. If your review shows you owe more tax than you've already paid in, look into tax-smart ways of paying. You want to be careful you don't create more taxable income. That could happen if you sell stock or take distributions from retirement accounts to generate funds to pay your tax. Also be aware of the penalty rules for underpayment of federal income tax. If you receive income not subject to withholding such as alimony or rent, increasing the amount withheld from your paycheck between now and the end of the year can help avoid a penalty. If you're married and both working, remember to account for the 0.9% Medicare surtax when your joint income exceeds $250,000. For more tax planning ideas, give us a call soon to schedule your year-end review. Include Affordable Care Act provisions in your planning In June, a U.S. Supreme Court ruling allowed the Affordable Care Act to continue in its present form. That means you'll need to consider the law's provisions in your year-end planning. Here's a review. ● Premium credit for individuals This federal tax credit provides a subsidy to help pay health insurance premiums. The amount you can claim depends on income and family size. Planning tip: Adding a dependent or getting a raise can affect the amount of your credit. Run the numbers before year-end to avoid an April 15 surprise. ● Individual penalty The penalty applies when you or your dependents do not have health insurance during the year and don't qualify for an exemption. Planning tip: If you were uninsured for no more than two months during 2015, the penalty doesn't apply. ● Net investment income surtax The 3.8% surtax applies to net investment income when your adjusted gross income (AGI) exceeds $250,000 when you're married filing jointly ($200,000 when you're single or filing as head of household). Planning tip: Net investment income includes dividends, interest, and capital gains (minus related expenses). Consider tax-efficient moves such as rebalancing assets between taxable and tax-deferred accounts. ● Medicare surtax on wages The 0.9% surtax applies to wages, compensation, and self-employment income when your AGI exceeds $250,000 and you're married filing jointly ($200,000 when you're single or filing as head of household). Planning tip: Your employer is not required to withhold for the surtax unless your wages exceed $200,000. If you're married and your joint income exceeds the threshold, revise 2015 estimates or withholding to avoid penalties. ● Employer penalties These penalties apply when you don't provide health insurance and/or affordable health insurance to employees. For 2015, the penalties can apply when 100 or more full-time employees work in your business. The penalties begin in 2016 when your business employs 50 or more full-time workers. When you employ fewer than 50 workers, you're not subject to the penalties. Planning tip: Make sure workers are classified correctly as employees or independent contractors. If you have questions about the Affordable Care Act and 2015 tax planning, please call. Joseph C Becker Ten Forty plus Quality Tax Preparation & Financial Services www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Watch for scams

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Be generous and wary: Protect yourself from these tax scams As the traditional season of giving begins, scam artists are stepping up efforts to take advantage of your generosity and compassion. Here are two schemes the IRS has recently issued warnings about. • IRS impersonators. The scam: Your phone rings and a caller says, "I'm from the IRS, you owe us money, and we're going to throw you in jail if you don't pay immediately with a pre-paid debit card or wire transfer." The truth: The IRS will not make initial contact about your tax return over the phone, and will never require you to pay your taxes via debit or credit card or wire transfer. Defense: Hang up immediately. Report the scam attempt to the Treasury Inspector General for Tax Administration, the Federal Trade Commission, and the IRS. • Fake charities. The scam: You're approached via telephone call, social media, email, or in-person solicitation, and asked to donate to a newly established charity to help "educate the public" about victims of the floods in South Carolina or other major disaster. The truth: Scammers want both your money and to lure you into revealing personal information so they can compromise your financial identity. Defense: Find out if the charity is registered in your state by visiting the website of the National Association of State Charity Officials. Also check with the Better Business Bureau, Charity Navigator, GuideStar, or similar watchdog groups. Please call us if you have any questions. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker Ten Forty plus Quality Tax Preparation & Financial Services www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Estimated taxes

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Individual Estimated Tax Payments for 2016 Start Soon Our tax system is a “pay-as-you-go” system, and if your pre-paid amount is not enough, you become liable for non-deductible interest penalties. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-go” requirement. The primary among these include: • Payroll withholding for employees; • Pension withholding for retirees; and • Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding. Determining how much tax to pre-pay through withholding and estimated tax payments has always been difficult, and thanks to Congress’ constant tinkering with the tax laws, ensuring there are no underpayment penalties or tax surprises when the tax return is prepared next year can be challenging. Recently, several new tax laws and changes took effect that add complexity to estimating one’s tax liability, including: higher ordinary tax rates, higher capital gains tax rates, the phase out of exemptions and itemized deductions for higher income taxpayers, the 3.8% tax on net investment income, and .9% increase in self-employment tax for upper-income self-employed individuals, not to mention a myriad of sun setting tax provisions. When a taxpayer fails to prepay a safe harbor (minimum) amount, he or she can be subject to the underpayment of estimated tax penalty. This penalty is the short-term federal rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis. So, even if you pre-pay the correct amount for the year, if the amounts are not paid evenly, you could be subject to a penalty. Interestingly enough, withholding amounts are treated as paid ratably throughout the year, so taxpayers who are underpaid in the earlier part of the year can compensate by bumping up their withholding in the later part of the year. Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than $1,000 (referred to as the de minimis amount), no penalty is assessed. In addition, the law provides “safe harbor” prepayments. There are two safe harbors: 1. The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty. 2. The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year’s tax liability. However, for a higher income taxpayer who has AGI exceeding $150,000 ($75,000 for married taxpayers filing separately), the prior year’s safe harbor is 110%. Example: Suppose your tax for the year is $10,000 and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To find out if you owe a penalty, see if you meet the first safe harbor exception. As 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can’t avoid the penalty under this exception. However, in the above example, the safe harbor may still apply. Assume your prior year’s tax was $5,000. As you prepaid $5,600, which is greater than 110% of the prior year’s tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty. If your state has a state tax, the state’s de minimis amount and safe-harbor percentage and amount may be different. This example underscores the importance of making sure your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks, sale of property, when large bonuses are paid, or when a taxpayer retires. If you have questions regarding your pre-payments or would like to review and adjust your W-4 payroll withholding, W-4P pension withholding, and estimated tax payments to provide the desired tax result for 2016, please give this office a call. As always please call us if you have any questions. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker Ten Forty plus Quality Tax Preparation & Financial Services www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.