Hurricane Harvey

8/30/2017

Hurricane Harvey, I.R.S. and Tax Relief Areas

Mike McVay and McVay Business Services want you to know that our thoughts and prayers are with those who’ve been affected by Hurricane Harvey – our clients, friends, family members, and all who have suffered injury, damage or loss from the devastating impact of this storm.
We want to share with you that so far, the Internal Revenue Service has announced significant tax relief for Hurricane Harvey victims in parts of Texas. Taxpayers in the officially designated federal disaster area will have until January 31, 2018, to file individual or business tax returns for 2016.

We will keep up to date with all the changes and tax relief codes that will be offered to all our clients affected by this devastation. If we can do anything to help you, please let us know. Mike McVay, Accountant. McVay Business Services - Pensacola, FL & Houston, TX 850-725-5696

Turbo Tax Made Me Do It! Why Turbo Tax may not be your best option.

8/23/2017

Turbo Tax Made Me Do It!
Why Turbo Tax may not be your best option.

One of the highlights of living in our technologically-advanced age is the ability to buy tools to do almost anything. If your kid fractures his arm playing baseball, you can hop on over to Amazon and order an orthopedic bone saw for less than the cost of a tank of gas. Then you can (probably) head over to YouTube and watch a video explaining how to smooth off the rough edges and set it for best results. You might not want to do that all yourself. But the tools are there if you want them.

Here in the tax business, there's no shortage of similar tools you can use to help satisfy your obligations with your friends at the IRS. TurboTax, TaxCut, and similar programs give you much the same power as professional tax-prep systems. If your circumstances are simple enough, and you're familiar with the process, you might be able to do a perfectly serviceable job of preparing your own return. You might not want to write off an entire weekend wrestling with the various questions, forms, and procedures — but the tool is there if you want to.

But sometimes, doing it yourself really isn't the best idea. We just learned that the hard way, to the tune of a trip to Tax Court (where he represented himself, of course). Carry used to use accountants to prepare her taxes. But two years ago she wanted to try it herself and see the value in hiring a professional to prepare a pretty complicated return. Here's how his DIY tax prep worked out:

He deducted $79,000 in mortgage interest in 2011 and 2012, for a loan that was due to be paid off in 2008. The court could see that Bulatikes had paid something, but he couldn't cough up the paperwork to show the amount of interest or even why he was obligated to pay. The court disallowed it all.
He deducted $100,000 in alimony he paid over the same period. His separation agreement specified $2,000 per month, but he and his ex- orally agreed to bump it to $5,000. Unfortunately, the law specifies oral agreements aren't enough to qualify, so the court disallowed the excess.
He deducted $185,673 for "other expenses" in 2011, which he claimed was a net operating loss carryforward from a previous year that he put on the wrong line of his return. Too bad he failed to file the required "concise statement setting forth the amount of the net operating loss deduction claimed and all material and pertinent facts relative thereto, including a detailed schedule showing the computation of the net operating loss deduction." The court allowed just $142.

Carry admitted that she deducted things he shouldn't have and overstated things that he could. But then he threw TurboTax under the bus for "luring her into" claiming them! We can just imagine what that would have looked like. Did it dare him to stretch that alimony deduction by an extra $3,000 per month? Did it challenge him: "are you man enough to deduct this net operating loss?" In the end, the court concluded that "[t]ax preparation software is only as good as the information one inputs into it."

Here's the real irony, at least as far as we're concerned. Preparing your taxes, on your own or with a professional, is important. But all that really does is record history. The real value comes from planning your taxes to pay less in the first place. So call us when you're ready for planning, and don't let cheap office-supply store software bully you into paying more than you have to! We have helped 6 individuals just this summer that have been audited by the I.R.S. after using Turbo Tax for their 2015 returns. It appears that more audits from the I.R.S are being conducted by people using Turbo Tax.

For a true Professional Tax Accountant that keeps up with all the latest I.R.S laws and regulations, call Mike McVay at 850-725-5696. Mike@MikeMcVay.com - Free review and 30% off your tax return for 2016.

PMI Employer Payroll in Panama City owes I.R.S 27 Million in payroll taxes

8/15/2017

PMI Employer Payroll in Panama City owes I.R.S 27 Million in payroll taxes - McVay has a better option for you!

See this link about a local PEO payroll company not paying their clients tax obligations. McVay uses a PEO that is 100 % compliant with I.R.S. taxes for their clients. If you find your your self with PMI you should seek a new PEO company immediately! Call Mike McVay today for a PEO company that have your back and the capital that makes them one of the top PEO's in the country.
Watch video below:

http://www.mypanhandle.com/news/payroll-company-owes-irs-almost-27-million/789108039

Mike McVay, PEO/Payroll Expert 850-725-5696 Mike@MikeMcVay.com

New Business Lease requirements and how to handle the changes in QuickBooks

8/10/2017

The new FASB lease standard will have a major impact on how both lessees and lessors recognize, measure, and present assets, liabilities and expenses arising from leases. Mike McVay, Accountant in Pensacola Florida will update you on the new lease accounting standard and detail how its changes will affect lease transactions. With so many QuickBooks Online & Tax clients soon to be affected, now is the time to learn the new rules and gain the answers to the many questions you will be asked. Also learn how the standards will affect balance sheets.

Lessees must now recognize operating lease assets and liabilities on the balance sheet. This is the most significant change, since it will require all organizations and their accountants to take a different approach to lease accounting. Before this standard, U.S. GAAP only required this type of recognition for capital leases. Operating lease amounts were generally shown in the financial statements as rent expense on the income statement and in disclosures to the financial statements. In implementing the new guidance, entities will have to reconsider the ways they identify lease arrangements.
The difference between a service contract and an operating lease will be important. Practitioners may be called on to help entities distinguish between the two, since organizations typically would not be required to recognize assets and liabilities related to a service contract.
The lease term matters. Lessors are only required to recognize lease assets and liabilities for leases with terms of more than 12 months. When a lease has a shorter term, a lessee can elect not to recognize lease assets and lease liabilities, if it’s reasonably certain that the lessee will not exercise any option to buy the asset. The lessee must recognize expense for these leases generally on a straight-line basis over the lease term.
The standard will have a broad reach. Affected leased assets include all property, plant and equipment, which might include anything from real estate and manufacturing equipment to the office printer.
Some things will remain the same. As was the case under previous guidance, the way that a lessee recognizes, measures and presents lease-related expenses and cash flows will depend on whether it is a finance or operating lease. In addition, the accounting for lessors will also be relatively unchanged, but practitioners should prepare for potential challenges when accounting for significant variable lease payments

McVay Business Services is a QuickBooks, Payroll & Tax firm serving clients in multiple states.

Mike McVay, GAAP Tax Accountant
850-725-5696
Mike@MikeMcVay.com

New Business Offer QuickBooks

8/2/2017

Congratulations on starting your new business!

McVay Business Services has been providing accounting and tax solutions for over 20 years and want to help you be more productive and successful. We offer a simple flat-free monthly service that is customized for your specific industry. We customize a plan that provides only the services you need.

Bookkeeping: Certified QuickBooks ProAdvisor can set-up and maintain an online or desktop accounting system specific to your needs that is secure with access from any location.
Payroll, HR & Workers Comp Services: Payroll processing benefits your valued employees with direct deposit, optional insurance benefits and workers compensation coverage at group rates for optimal liability protection. Complete payroll and HR services specific to your industry.
Taxes: Federal and State taxes. Quarterly estimated tax and annual tax preparation and filing.
Security: Bank grade 256-bit encryption, ensures safe data processing with 24/7 monitoring.
QuickBooks: All weekly or monthly clients receive a full QuickBooks Plus online subscription with complete support & training.

Our firm understands the demands of today’s competitive climate that is why we offer services specific to your needs. We will work within your budget and you can add services as your business grows. Call today and let us show you how you can improve your productivity and profitability with our bookkeeping, accounting, payroll and tax services. We are looking forward to adding you to the list of many long term successful clients that have benefited from years of personal professional service.
*Respond within 30-days and receive a free on-site consultation and a preview of our services.

Sincerely,
Mike McVay

www.VirtualBookkeepersUSA.com

7 Mid Year Tax Moves

8/2/2017

7 Mid-Year Tax Moves for Business and Individuals

After April 15, most of us are happy to ban all thoughts of income tax until next April’s deadline looms. But taking a little time to do a mid-year check-in and tuneup can really be worth it – saving you last-minute panic and big bucks. “Summer is a good time to make sure you’re on track because, for a lot of people, the pace is a little slower,” says Barbara Weltman, attorney and author of “J.K. Lasser’s 1001 Deductions & Tax Breaks 2014.” “If you wait until year-end to check on your tax status, you’ll be right in the middle of holiday season. And summer is your tax advisor’s slow time, too.” Here are some points Weltman and other experts recommend you cover in a mid-year checkup.
1. If you have an extension to file your 2016 tax return, do it now.Why wait until Oct. 15, when the return is due? If you’re expecting a refund, the money should be earning interest for you, not the government. And if by some chance you’ve miscalculated (and underpaid) the tax you owe, the sooner you pay up the better. Penalties and interest start to accrue the day after the April tax deadline, even if you have filed for an extension. And if the reason you’ve been procrastinating about filing is because you can’t pay what you owe, “don’t let that stop you,” urges Weltman. “File the return – you can always ask for an installment plan to pay.”
2. Are you on track with tax payments so far?If you’ve had, or expect to have, any life-changing events during the year – marriage, divorce, having a child, buying a house, a spouse taking or leaving a job – you may need to adjust the amount of tax that’s being withheld from your paycheck. You don’t want to give Uncle Sam a big interest-free loan, but you don’t want any underpayment penalties, either (although they’re only 3% right now). The IRS has a withholding calculator, so you can get it right. If you need to make any adjustments, file a new W-4 form with your employer.
If you’re self-employed and make estimated tax payments, it’s helpful to closely monitor your income and expenses throughout the year, so that you know what you owe and set aside enough money to make the quarterly installments. There’s a “safe harbor” with no underpayment penalties if you pay at least 100% of the tax you owed last year (110% if your adjusted gross income last year was more than $150,000) or 90% of the current year’s tax.
But “there may be surprises in store for high-income taxpayers, especially if you’re landing in that category for the first time,” says Weltman. It’s not so hard for a married couple to find themselves hitting the $250,000 threshold. When that happens, new tax issues come up, such as additional Medicare taxes and the phaseout of personal exemptions and itemized deductions, which you’ll need to account for in your estimated taxes and withholding.
3. Eyeball your retirement accounts.Could you afford to bump up your contributions or even max them out? “Some companies are limiting and cutting back on their 401(k) contributions,” says Weltman, “but that doesn’t mean you should.” Check on your investments and asset allocation.
4. Are you close to the itemize/don’t-itemize point for deductions?If so, you may want to use a strategy called bunching, in which you push discretionary write-offs into a year when you’re going to itemize, rather than one when you take the standard deduction. Think of scenarios such as the following, suggests Weltman: At mid-year, it looks like you’re almost at the point where you could itemize. You usually give $1,000 to a particular charity each year. You’re close to retirement, so next year you won’t need the deductions to offset as much income. So this year you double up on your contribution to take advantage of itemization when you need it.
5. Get organized – there’s an app for that.Who hasn’t vowed on April 16, “next year I’m going to stay on top of my tax receipts.” If you still haven’t acted on that vow, avoid another marathon session of receipt logging next April by enlisting the help of an app. For instance, Shoeboxed Receipt and Mileage Tracker lets you scan receipts (valid for IRS documentation) with your iPhone, iPad or Android mobile device, making it easy to track your expenses and deductions as you go along. The DIY program is free, or you can choose a paid plan (starting at $9.95/month after a free trial) that lets you mail in your receipts. Keeping up-to-date with expenses and maximizing your tax deductions is particularly important if you have business travel and entertainment expenses, or need to track business use of your personal car.
6. Are you within tax limits for renting out your vacation home?If you rent out your vacation home when you’re not using it, you can generally deduct expenses such as mortgage interest, real estate taxes, casualty losses, maintenance, utilities, insurance and depreciation against your rental income. But you won’t be able to take a loss if you make personal use of the home for more than 14 days a year, or 10% of the days it is rented to others at a fair rental price (whichever is greater). If you spend the day at your home making repairs, it’s not considered personal use, even if your family is there for other reasons. But if you rent the home to a close family member, even at market rate, it is.
7. Could you be taking advantage of the 25D energy credit?The 25C energy credit expired at the end of 2013, but the 25D credit has been extended to last through Dec. 31, 2021. It covers 30% of the cost of solar water heaters, solar panels that generate electricity directly for your home, small wind turbines, "qualified fuel cell property" and geothermal heat pumps. It can be used for a primary residence or a vacation home that you own.
The Bottom Line: Take advantage of summer to lock in tax breaks and catch up with any payments you owe. It’s the slow period in the world of tax advising, and, therefore, a good time to plan ahead before the year speeds up in December.
McVay Business Services - Tax and Accounting Experts in Pensacola, Florida. 850-725-5696

Hurricane Harvey