Archive for the ‘Strictly TAXES!’ Category

IRS Mileage Rates for 2014

The Internal Revenue Service has issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56 cents per mile for business miles driven
  • 23.5 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The business, medical, and moving expense rates decrease one-half cent from the 2013 rates.  The charitable rate is based on statute.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

About E-File Florida
E-File Florida helps individuals and small business owners to lower their tax bills and maximize their tax refunds. We actually enjoy getting to know our clients and have built a solid reputation of delivering excellent personal service while maintaining the highest level of integrity within the tax preparation industry. We welcome the opportunity to make you a Raving Fan!


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Do You Have To File A Tax Return This Year?

You are required to file a federal income tax return if your income is above a certain level, which varies depending on your filing status, age and the type of income you receive. However, the Internal Revenue Service reminds taxpayers that some people should file even if they aren’t required to because they may get a refund if they had taxes withheld or they may qualify for refundable credits.

To find out if you need to file, check the Individuals section of the IRS website at You can use the Interactive Tax Assistant that is available on the IRS website. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions. You can also check with E-File Florida for guidance.

Even if you don’t have to file for 2011, here are six reasons why you may still want to:

1. Federal Income Tax Withheld

You should file to get money back if your employer withheld federal income tax from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

2. Earned Income Tax Credit

You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit, which means you could qualify for a tax refund. To get the credit you must file a return and claim it.

3. Additional Child Tax Credit

This refundable credit may be available if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

4. American Opportunity Credit

Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.

5. Adoption Credit

You may be able to claim a refundable tax credit for qualified expenses you paid to adopt an eligible child.

6. Health Coverage Tax Credit

Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit. Eligible individuals can claim a significant portion of their payments made for qualified health insurance premiums.



About E-File Florida
E-File Florida helps individuals and small business owners to lower their tax bills and maximize their tax refunds. We actually enjoy getting to know our clients and have built a solid reputation of delivering excellent personal service while maintaining the highest level of integrity within the tax preparation industry. We welcome the opportunity to make you a Raving Fan!


Contact Us:
PH: (954) 583-8534
FAX: (954) 583-8557


Follow Us:
Like us on Facebook View our profile on LinkedIn Follow us on Twitter


Categories: Strictly TAXES!

How Long Does The IRS Have To Audit Your Tax Return?

In our tax practice, we hear this question all too often: How long does the IRS have to question and assess additional tax on my tax return? For most taxpayers who reported all their income, the IRS has three years from the date of filing the returns to examine them. This period is termed the statute of limitations. But wait – as in all things taxes, it is not that clean cut. Here are some complications:

You file before the April due date – If you file before the April due date, the three-year statute of limitations still begins on the April due date. So filing early does not start an earlier running of the statute of limitations. For example, whether you filed your 2010 return on February 15, 2011 or April 15, 2011, the statute did not start running until April 18, 2011 (because the due date was changed due to a federal holiday in Washington, DC).

You file after the April due date – The assessment period for a late-filed return starts on the day after the actual filing, whether the lateness is due to a taxpayer’s delinquency, or under a filing extension granted by IRS. For example, say your 2010 return is on extension until October 17, 2011 (October 15 falls on a weekend so the due date is the next business day), and you actually file on September 1, 2011. The statute of limitations for further assessments by the IRS will end on September 2, 2014. So the earlier you file those extension returns, the sooner you start the running of the statute of limitations.

If you want to be cautious you may wish to retain verification of when the return was filed. For electronically filed returns, you can retain the confirmation from the IRS accepting the electronically filed return. If you file a paper return, proof of mailing can be obtained from the post office at the time you mail the return.

You file an amended tax return – If after filing an original tax return you subsequently discover you made an error, an amended return is used to make the correction to the original. The filing of the amended tax return does not extend the statute of limitation unless the amended return is filed within 60 days before the limitations period expires. If that occurs, the IRS generally has 60 days from the receipt of the return to assess additional tax.

You understated your income by more than 25% – When a taxpayer underreports his or her gross income by more than 25%, the three year statute of limitations is increased to six years.

In determining if more than 25% has been omitted, capital gains and losses aren’t netted; only gains are taken into account. These “omissions” don’t include amounts for which adequate information is given on the return or attached statements. For this purpose, gross income, as it relates to a trade or business, means the total of the amounts received or accrued from the sale of goods or services, without reduction for the cost of those goods or services. In addition, any basis overstatement that leads to an understatement of gross income constitutes an omission.

You file three years late – Suppose you procrastinate and you file your return three years or more after the April due date for that return. If you owe money, you will have to pay what you owe plus interest and late filing and late payment penalties. If you have a refund due, you will forfeit that refund and perhaps get stuck with a $135 minimum late filing penalty. No refunds are issued three years after the filing due date.

10-year collection period – Once an assessment of tax has been made within the statutory period, the IRS may collect the tax by levy or court proceeding started within 10 years after the assessment or within any period for collection agreed upon by the taxpayer and the IRS before the expiration of the 10-year period.

Remember not to discard your tax records until after the statute has run its course. When disposing of old tax records, be careful not to discard records that prove the cost of items that have not been sold. For example, you may have placed home improvement records in with your annual receipts for the year the improvement was made. You don’t want to discard those records until the statute runs out for the year you sold the home. The same applies to purchase records for stocks, bonds, reinvested dividends, business assets, or anything you will sell in the future and need to prove the cost.

If you are behind on filing your returns and would like to get caught up, please contact E-File Florida. If you discovered you omitted something from your original return and would like to file an amended return, we can help with that as well.

Esther Hastings is President/CEO of E-File Florida, LLC located in Davie, FL. E-File Florida has been helping taxpayers and small business owners to maximize their tax refunds for over 19 years. E-File Florida firmly believes that the best way for anyone to legally and legitimately reduce their tax liabilities is to know the tax rules and how these rules pertain to their particular situation. “When you know the rules, then you are positioned to use them to your advantage!”

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Categories: Strictly TAXES!

Don’t Be The Victim of a Scam or ID Theft

The Internal Revenue Service is encouraging taxpayers to guard against being misled by unscrupulous individuals trying to persuade them to file false claims for tax credits or rebates.

The IRS has noted an increase in tax return-related scams, frequently involving unsuspecting taxpayers who normally do not have a filing requirement in the first place. These taxpayers are led to believe they should file a return with the IRS for tax credits, refunds or rebates to which they are not really entitled.

Most paid tax return preparers provide honest and professional service, but there are some who engage in fraud and other illegal activities. Unscrupulous preparers deceive people into paying for advice on how to file false claims. In other situations, identity theft is involved.

Taxpayers should be wary of any of the following:

  • Fictitious claims for refunds or rebates based on excess or withheld Social Security benefits.
  • Claims that Treasury Form 1080 can be used to transfer funds from the Social Security Administration to the IRS, enabling a payout from the IRS.
  • Unfamiliar for-profit tax services teaming up with local churches.
  • Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
  • Offers of free money with no documentation required.
  • Promises of refunds for “Low Income – No Documents Tax Returns.”
  • Claims for the expired Economic Recovery Credit Program or Recovery Rebate Credit.
  • Advice on claiming the Earned Income Tax Credit based on exaggerated reports of self-employment income.
  • Promises of larger tax refunds
  • Emails from the IRS asking for anything! The IRS does NOT contact anyone by email.

In some cases, nonexistent Social Security refunds or rebates have been the bait used by the con artists. In other situations, taxpayers deserve the tax credits they are promised but the preparer uses fictitious or inflated information on the return, which results in a fraudulent return.

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file with little or no documentation, have been appearing in community churches around the country. Promoters are targeting church congregations, exploiting their good intentions and credibility. These schemes also often spread by word of mouth among unsuspecting and well-intentioned people telling their friends and relatives. Promoters of these scams often prey upon low-income individuals and the elderly.

They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected or the refund barely exceeds what they paid the promoter. Meanwhile, their money and the promoters are long gone.

Unsuspecting individuals are most likely to get caught up in scams. The IRS is warning all taxpayers, and those who help others prepare returns, to remain vigilant. If it sounds too good to be true, it probably is.

If your social security number has been fraudulently used on a tax return other than your own, we recommend that you contact your local police department and file a report. We also strongly urge you to call the three major credit reporting agencies (Equifax, Experion and Trans Union) and issue a fraud alert on your file.  Doing this will prompt them to contact you when an attempt is made to fraudulently open a new credit account without your knowing.  Lastly, you should alert the IRS that your identity has been stolen by filing IRS form 14039.

Above all, remember that the IRS does not initiate taxpayer contact by e-mail. Whenever you receive an unsolicited or dubious solicitation that includes you providing your SSN, bank account number or other financial information, be skeptical. These scam artists can make communication look and sound like it is legitimate. When in doubt, call this office. Don’t let yourself be a victim of these scams.

Feel free to contact E-File Florida if you have any questions or concerns regarding scams or ID theft. We are here as a resource to you!

Categories: Strictly TAXES!

New Mileage Rates for 2011 July-Dec

The IRS has increased the mileage rate deduction from .51 cents to 55.5 cents per mile beginning  July 1, 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business purposes.

The IRS made this special adjustment in recognition of the crazy gas prices that we are all paying at the pump. They normally update and adjust the mileage rates only one time per year~usually announced  in the fall for the upcoming calendar year.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations  is set by statute, not the IRS, and remains at 14 cents a mile.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes

Purpose Rates 1/1 through 6/30/11    Rates 7/1 through 12/31/11 
Business 51 55.5
  Medical/Moving 19 23.5
Charitable 14 14
Categories: Strictly TAXES!

Is Now The Time To Consider Owning Real Estate Rental Property?

Does the decline in real estate values present a business opportunity? Real estate rentals historically have been a popular long-term investment. If you believe that this market eventually will rebound from its current slump, this may be the time to consider such an investment. This article will explain some of the tax ramifications of renting residential real estate.

One of the biggest benefits of owning rental property is that the tenants, over time, buy the property for you. In addition, if structured properly, the allowable depreciation deduction will help to shelter the rental income and you will be able to benefit in the short term with legitimately favorable tax deductions. Another historical benefit of real estate rentals is property appreciation.

Before acquiring a rental property, there are several things to consider. Here are a few:

  • After-tax cash flow
  • Losses to offset income from other sources (Wages, etc)
  • Potential for long or short term appreciation
  • Property condition (with an eye on when you might get stuck with a large repair bill)
  • Debt reduction
  • Type of tenants
  • Potential for rent increases or re-zoning
  • Whether there is an HOA restriction on renting your property, etc.

Rental real estate income is business income but is not subject to Social Security taxes. (A tax savings of roughly 16%) Real estate rentals are also considered passive activities (Your property generates income without you having to be there to run things, as you would in a business for example). Generally, passive activity losses are deductible only to the extent of passive activity income. However, where there is active participation by the taxpayer in managing the rental, the taxpayer can deduct up to $25,000 of losses each year as long as his or her Adjusted Gross Income (AGI) for the year is less than $100,000. For higher-income taxpayers, the $25,000 loss exception is ratably phased out between an AGI of $100,000 and $150,000. For most taxpayers, this can be a beautiful thing. You can actually have cash flow every month (the money you take home after all expenses are paid) and yet show a legitimate rental loss on your tax return! This loss will help to reduce other taxable income that you may have, such as wages. There is also a special allowance for real estate professionals. (Call this office for details if you are a real estate professional)  Any losses not allowed under these two exceptions are not lost but suspended and carried forward indefinitely to tax years in which your passive activities generate enough income to absorb the losses. To the extent your passive losses from an activity are not used up in this fashion, you will be allowed to use those losses in the tax year in which you sell your rental property.

When a rental property is sold, it is treated as a capital asset. The gain or profit from the sale (except for depreciation recapture) is taxed at capital gains rates. Recaptured depreciation (Contact us for details), depending upon your tax bracket, can be taxed up to 25%. Besides outright selling of a rental, there are a number of options such as exchanging the existing rental for another while deferring the gain and avoiding current taxes, selling the property in an installment sale (which spreads the taxable gain over multiple years), or even converting the property to personal use (which forestalls the taxable gain until the property ultimately is sold).

Buying, operating, and selling a rental property can have profound tax ramifications and provide some interesting options not available to other investments. Please contact this office prior to the purchase or disposition of a rental property so that the tax impact can be analyzed prior to making a financial commitment.

Categories: Strictly TAXES!

New Mileage Rates For 2011

December 23, 2010 3 comments

The IRS has released it’s mileage rates for tax year 2011. These standard mileage rates can be used for deducting qualified miles used for business, charitable, medical or moving expenses. Beginning on Jan 1, 2011 you can deduct the following:

  • 51 cents per mile for business miles driven
  • 19 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

We’ve said it before and we’ll stress it again. The IRS requires that you keep accurate records to substantiate any mileage deduction that you claim on your tax return. This includes a detailed “mileage log” as well as receipts for gas, repairs and maintenance. If you, by chance, are audited by the IRS, they will want to see these items to prove your claims for deduction. E-File Florida cannot over emphasize:  KEEP GOOD RECORDS!

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2010-51 and Notice 2010-88 contain additional details regarding the standard mileage rates.

If you have any questions or concerns, feel free to contact E-File Florida. We are here as a resource to you. Visit our website and sign up for our free Tax Tips newsletter. You can send inquiries


IRS CIRCULAR 230 Required Notice – IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s).


Categories: Strictly TAXES!
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