Are you wondering where to get your taxes done? The best price?
This is a great question. You want to be sure you're spending your money wisely and getting the best help possible because of all the new tax changes. What is best for your situation. 

The point is that filing online is not the best way to go if you don't have an extremely complex knowledge of the new tax changes.  We suggest taking your information to a local full year licensed tax professional like Mike McVay, Tax Accountant in Pensacola, FL.

The bottom line is that the more complex your financial situation is (i.e. rental properties, heavy stock trades, small business, income from multiple states), the more likely it is that you should use a professional, like McVay Business Services, to help you with tax planning and filing your taxes. For the rest of us, filing online is the way to go. Survey's show the I.R.S. targets taxpayers that use retail Tax software 5 to 1 for tax audits. Most of the audit protection that comes with some tax software is a joke. If your audited these companies will not send an accountant to the audit like McVay Business Services does.  
850-725-5696 - www.PensacolaFLTax.com - www.QuickBooksPensacola.com

Prices to file taxes can be all over the map because everyone's situation is so different. I've put together some averages based on reliable sources that should give you an idea of what to expect when you go to file.

• Full-Time Tax Pros (aka your local Accountant): According to the National Society of Accountants, it will run you an average of $293 per return to work with an Accountant. That nearly $300 price tag is for an itemized 1040 filing with state tax return. An unitemized 1040 with a state tax return will only set you back $200. When I prepare taxes, I didn't charge this much (more like $99-$155). However, more complex or business returns are a little more. Most the Free or low cost retail software will lure you into an accountant on demand service or added extras they don't disclose until your ready to submit your return. A local tax accountant such as myself Mike McVay, Accountant is the best option. We are look at tax planning, seninaro's and real life options to get your refund the highest it can possibly be. McVay is tipacally 1/2 the price of large national tax prep firms. Some of these national franchises staff only have a 30-hour course and they are set to prepare your taxes. Mike McVay has been doing personal & business taxes for over 20+ years. Mr. McVay attends a 30-hour continued education class every summer just to keep up with the new tax changes. Big box tax prep firms only require a 6 hour refresher class each year to be eligible to prepare next season taxes. Don't be fooled by the bombardment of ads.  

Why Pay a Licensed Accountant?
Going to a LOCAL flesh-and-blood tax professional may be the best option for many taxpayers. That's because a professional Accountant can help you navigate the difficult tax questions like business structure, tax planning moves, etc. that pop up throughout the year.

Software has a harder time with this. You can't have lunch with and discuss your small business with software.
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Accountant  are usually the best option, your getting someone to help you with a difficult tax situation or simply to give you that extra assurance.

​What Are S Corporations and LLCs?
According to the Internal Revenue Service, which takes a special interest in how a business is classified, an S corporation is a business that opts to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.
Basically, S corporation shareholders report the flow-through of income and losses on their personal tax returns and the IRS subsequently assesses a tax at their individual income tax rates. Under this scenario, S corporations can bypass double taxation on any corporate income earned by the business.
To get Uncle Sam's stamp of approval and achieve S corporation status, a company must meet the following requirements, as laid out by the IRS:

• Be a domestic corporation
• Have only allowable shareholders
  • May be individuals, certain trusts, and estates and
  • May not be partnerships, corporations or non-resident alien shareholders
• Have no more than 100 shareholders
• Have only one class of stock
• Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).

What Is an LLC?
A limited liability corporation is a relative common, uncomplicated business structure, with a strong dose of flexibility for business owners.
The flexibility in an LLC can mainly be found in numbers, as LLCs can be owned by more than one individual (the IRS refers to LLC participants as "members"), or it can be operated by a single owner (known as a "single member LLC" by the IRS.)
Structuring a business as an LLC offers ample benefits to business owners. For starters, it offers a firewall against lawsuits in protecting personal financial assets. It also curbs paperwork, stops a company from being taxed twice by the IRS, and provides some much-needed stability for new companies.
Creating an LLC is fairly basic, even by Internal Revenue Service standards. Business owners usually launching an LLC in their home states, although many business owners form an LLC in tax-friendly states like Delaware or Nevada.
Process-wise, new applications for an LLC are handled by the specific state's secretary of state office (the office's website is a great place to start your research on LLCs.) The filing form is simple and short, requiring the names of each LLC partner and their contact information. Each state has its own way of doing business, but LLC owners can count on paying a filing fee of up to $200.
Hiring a good business and/or tax lawyer isn't necessary, but for a nominal fee, it's a good idea to have an experienced hand on the till when structuring your LLC.
Tax Benefits of an LLC Filed as S Corp.
There is a way to hit the "sweet spot" and benefit from both an LLC and an S corporation designation.
Business owners can do so by becoming an LLC and elect to have your business treated like an S corporation for tax purposes. Business owners need to make that call via an IRS Form 2553, but the reality is the process of balancing your company between an LLC and an S corporation is easy to do and offers some intriguing tax and operational benefits:

• Fewer headaches. Legally, the company will operate more like an LLC than a corporation when you go the Form 2553 route. That's an advantage for companies, as requirements for things like record keeping, paperwork, and regulatory mandates are eased.
• Tax benefits. In addition to fewer administrative obligations, business owners gain the beneficial tax treatments of being an S corporation. The company still gains the advantage of pass-through income and it avoids double taxation.
• Company structure. Basically, even though your company is not structured as a corporation, tax-wise, the IRS treats you as a corporation, with all of the tax benefits that designation entails.

For instance, the company is effectively split from the owner. That allows the business entity to pay ownership a salary and benefits, subject to FICA tax. Simultaneously, the business entity can steer additional net income from the business to ownership as passive income, and thus avoiding the Self-Employment Contributions Act (SECA that requires business owners at S corporations, partnerships, and sole proprietorships to pay the 15.3% net income tax from self-employment to pay for their own Social Security and Medicare.
By structuring your company as an LLC and then electing to be designated as an S corporation, business owners earn two primary benefits:

• A lower administration burden by operating as an LLC.
• Better tax benefits from electing to be an S corporation for tax purposes.

How to File as an S Corporation Tax Return. McVay Business Services are both expert at S-Corporation and LLC I.R.S tax filings. 

While the tax form process of applying is easy (using Form 2553), The IRS has strict rules that companies need to abide by to file as an S corporation. These S-Corporation rules for reasonable compensation is required in order to received the great tax benefits of an s-corporation. 

By and large, an S corporation will only be approved under these conditions:

• The business entity has no more than 100 shareholders.
• No business entity shareholder is a nonresident alien, i.e., a noncitizen who doesn't live in the U.S.
• The business entity has only one class of stock.
• None of the business entity's shareholders are other corporations or partnerships.

If you're applying for S corporation status for the current calendar, you must file IRS Form 2553 by March 15. Companies seeking S corporation status can elect to file IRS Form 2553 the year before an S corporation ruling takes effect.
Pros and Cons of Filing as an S Corporation
Although there are plenty of benefits of filing an LLC as an S Corporations, it isn't the best option for everyone. 
Pros of Filing as an S Corp
There are some decided benefits from electing to become an S corporation. Most benefits focus on operational and tax issues - here's a quick look:

• Limited liability. Anyone affiliated with an S corporation, including business owners, partners, and staffers, all gain limited liability protection.
• Pass-through taxation. Company owners get to record any personal profit and loss on their individual tax returns.
• Elimination of double taxation of income. With an S corporation, business income can't be taxed twice - first as a tax on corporate income and secondly as a tax on dividend income.
• Investments and asset accrual. S companies can easily attract investors via the sale of shares of stock, thus adding valuable assets to the bottom line.
• Open-ended existence. An S corporation continues to exist even if the owner decides to retire or passes away.
• Once-a-year tax filing requirement. S corporations only file taxes once annually, as opposed to a limited liability company, which has to file its taxes quarterly.

Cons of Filing as an S Corp
These are some decided disadvantages of being an S corporation:

• Must be a U.S. citizen. S corporation owners and partners must be citizens of the U.S. and live here legally.
• Shareholder limits. An S corporation cannot have more than 100 shareholders.
• Higher fees. Firms that wish to elect as an S corporation often face heavier state regulation fees (depending on the state they reside) and often have to pay extra for getting help from a registered agent.
• Tax qualifications. The IRS is very strict about following the "rules of the road" on S corporation compliance. Companies have been known to have their S corporation designation taken away for not following IRS guidelines.
• Burden of business debts. Unlike a business owner operating as an LLC, S corporation ownership doesn't give you limited liability for business debts and financial obligations.

What's Better for You?Ultimately, the choice between electing to be an S corporation or LLC comes down to your personal preference as a business owner (i.e., how you feel about tax status, compliance, and paperwork obligations.)
That said, financial issues are likely the determining factor in choosing between an S corporation and an LLC. For instance, if you want to earn a salary instead of declaring self-employment income, you want pass-through taxation, and you want to make it easier for your company to obtain investment capital, an S corporation can be a good idea.
But if you want more flexibility in operating your company and don't want the red tape associated with running a corporation, an LLC may be the way to go.
Either way, it's advisable to consult with a tax specialist (Mike McVay, Tax Accountant @ 850-725-5696) and talk to business owners who have experience in both S corporation and LLC scenarios before committing to one business structure over the other.

McVay Business Services 
5336 N Blue Angel Pkwy 
Pensacola, FL 32526
850-725-5696
Mike@MikeMcVay.com
www.PensacolaFLTax.com

Attention drivers, the 2019 standard mileage rates have been released. The IRS announced the rates today, which are used for determining the deduction for the costs of operating a vehicle for various business, charitable, moving, or medical reasons.
What are the changes for 2019?

Starting January 1st 2019, the standard mileage rates (for use of a car, van, pickup or panel truck) are:

• 58 cents for business miles driven (up from 54.5 cents per mile in 2018)
• 20 cents per mile driven for medical or moving purposes (up from 18 cents per mile in 2017)
• 14 cents per mile driven in service of charitable organizations (no change from 2018)

Important Change under the TCJA
Make note that under the Tax Cuts and Jobs Act (TCJA), taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Also, taxpayers are unable to claim a deduction for moving expenses (unless the taxpayer is a member of the armed forces on active duty moving under orders to a permanent change of station).
How are the rates calculated?

There are various factors that influence the standard mileage rates, including:

• Gas and oil prices
• Insurance costs
• The state of the economy
• The expected cost of typical wear and tear on a vehicle

Hence the rates are purposed to go over and above the amounts a consumer pays solely for gas.
How can I reduce my fuel consumption?

Looking for ways to save money and reduce fuel consumption? There are a few things you can do to make the most out of a tank of gas:

• Make a concerted effort to maintain a constant speed, as speeding up and slowing down frequently can severely lower your gas mileage. Cruise control can help!
• Stop speeding. For every 5 miles you drive over 60 miles per hour, you are reducing your fuel economy by potentially 7%.
• Though tempting, letting your car warm up for 10 minutes during the heart of winter can cost you $0.04 per minute ($2.80 per week of wasted gas).
• Consider a tune up—it can increase your mileage by 4%.
• Consider cleaning your car and removing extra cargo from both the vehicle and the roof rack. Extra weight can reduce your fuel economy as well.

Is the standard mileage rate the only way to gauge deductions?

No, taxpayers always have the option to claim deductions based on the actual costs of using a vehicle, as an alternative to using the standard mileage rates.

Questions on the standard mileage rates for 2019? Contact Mike McVay, Tax Accountant 850-725-5696 - www.PensacolaFLTax.com - Mike@MikeMcVay.com 
5336 N Blue Angel Pkwy Pensacola, FL 32526 - Pensacola Tax Service

You may have herd that I.R.S refunds will be delayed if the Gov. is shut down. NOT TRUE !

Tax refunds will go out even if the government shutdown extends into filing season, the Internal Revenue Service said late Monday, and the agency will start accepting tax returns on Jan. 28.

Mike McVay, Tax Accountant - Pensacola, FL - 850-725-5696

IRS Could Be More Taxpayer-Friendly in the New Year

Let’s face it…the IRS isn’t the most popular government agency out there. It’s not just that they take your money. They also have a (undeserved?) reputation for tough stances on deductions and credits, aggressive tax collectors, poor customer service and generally being difficult if you happen to disagree with them.
Wouldn’t it be nice to have a kinder, gentler IRS? You’d still have to pay your taxes, but at least you wouldn’t have to deal with some of the IRS’s rougher edges anymore. Well, guess what… Congress is kicking around a few ideas that would make the IRS a little more taxpayer-friendly.There’s bipartisan support for improving the IRS, so we may actually see some of them enacted.