PENSACOLAFLTAX.COM
  • Home
  • QuickBooks Accounting
    • Payroll Processing
    • Accounting
    • Bookkeeping
    • QuickBooks Services >
      • QuickBooks Set-up
      • QuickBooks Training
      • QuickBooks Tune-up
      • QuickBooks Hybrid Bookkeeping
    • CFO Services
    • Non-Profit Organizations
    • Security
  • Income Tax Services
    • Virtual Remote Tax Service
    • Business Tax
    • Personal Tax
    • IRS payments and Problem Resolution
  • Blog
  • Contact
  • New Business Formation
  • Q&A
  • Home
  • QuickBooks Accounting
    • Payroll Processing
    • Accounting
    • Bookkeeping
    • QuickBooks Services >
      • QuickBooks Set-up
      • QuickBooks Training
      • QuickBooks Tune-up
      • QuickBooks Hybrid Bookkeeping
    • CFO Services
    • Non-Profit Organizations
    • Security
  • Income Tax Services
    • Virtual Remote Tax Service
    • Business Tax
    • Personal Tax
    • IRS payments and Problem Resolution
  • Blog
  • Contact
  • New Business Formation
  • Q&A
Search by typing & pressing enter

YOUR CART

8/27/2019

THE IRS HAS CRYPTOCURRENCY ON ITS RADAR

​THE IRS HAS CRYPTOCURRENCY ON ITS RADAR

Picture
If you own cryptocurrency, you need to know that the IRS has owners of cryptocurrency in its sights because many cryptocurrency owners are not reporting or paying taxes on their cryptocurrency transactions. In fact, the IRS is so focused on this issue that it recently issued warning letters to over 10,000 taxpayers it suspects might have an under-reporting problem.

About Cryptocurrency – If you are unfamiliar with the term cryptocurrency, the short definition is a form of digital money that is not controlled by any central authority.
The first cryptocurrency created was Bitcoin, back in 2009. Since then, over 4,000 other cryptocurrencies have been created. Cryptocurrency can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, euros, and other real or virtual currencies.
​
Tax Treatment – One of the big issues of cryptocurrency is how it is treated for tax purposes. The IRS says that it is property, so that every time it is traded, sold or used as money in a transaction, it is treated much the same way as a stock transaction would be, meaning the gain or loss over the amount of its original purchase cost must be determined and reported on the owner’s income tax return. That treatment applies for each transaction every time it is sold or used as money in a transaction.

Example A: Taxpayer buys Bitcoin (BTC) so he can make online purchases without the need for a credit card. He buys one BTC for $2,425 and later uses it to buy goods worth $500 (let’s say BTC was trading at $2,500 at the time he made his purchase). He has a $75 ($2,500 – $2,425) reportable capital gain. This is the same result that would have occurred if he had sold the BTC at the time of the purchase and used cash to purchase the goods. This example points to the complicated record-keeping requirement for tracking BTC’s basis. Since this transaction was personal in nature, no loss would be allowed if the value of BTC had been less than $2,425 at the time the goods were purchased. Of course, if the taxpayer in this example only sold a fraction of a Bitcoin – enough to cover the $500 purchase – the gain would only be $15: $500/$2500 = .2 x 2425 = 485; 500 – 485 = 15O  the bright side, for most, cryptocurrency is generally treated as a capital asset, so any gain is a capital gain, and if the gain is held for more than year and a day, any gain will be taxed at the more favorable long-term capital gains rates. If the cryptocurrency is being held as an investment and the sale results in a loss, then the loss may be deductible. Capital losses first offset capital gains during the year, and if a loss remains, taxpayers are allowed a $3,000-per-year loss deduction against other income, with a carryover to the succeeding year(s) if the net loss exceeds $3,000.
When cryptocurrency is used as payment to an employee, the usual payroll withholding and reporting still apply, and if used to make payments to an independent contractor, 1099 form reporting is still required. If the individual receiving payment in cryptocurrency is subject to backup withholding, the payer is required to withhold the required amount. In all reporting and withholding instances, the amounts must be in U.S. dollars.

IRS Compliance Program – That brings us to the issue at hand. The IRS has begun sending letters to taxpayers; by the end of August, more than 10,000 taxpayers will receive one of three varieties of letters. If you have received one of these letters, do not ignore it! The IRS compiled this list of taxpayers that it feels has not been reporting their cryptocurrency transactions from various ongoing IRS compliance efforts. The following is a synopsis of the types of letters:

Letter 6173 – Requires a response from the taxpayer, either by the taxpayer providing a statement to the IRS that they have already complied with the required reporting or by filing a return that reports their cryptocurrency transactions. For situations where the taxpayer had already filed a return but had left off the cryptocurrency transactions, an amended return (Form 1040X) will need to be filed. Taxpayers who ignore this letter may face a full-blown audit by the IRS and could be subject to penalties.

Letter 6174 – This is a “soft notice” that does not require a response, and the IRS says it won’t be following up on it. However, the notice also warns that if the taxpayer had cryptocurrency gains and fails to amend their return or continues to be noncompliant on future returns despite receiving the letter, the taxpayer will be in hot water.

Letter 6174-A – The taxpayer isn’t required to respond to the letter but does need to correct their prior returns in which cryptocurrency transactions have been omitted. The IRS warns of future enforcement action if the taxpayer doesn’t amend their return(s) or file their delinquent returns. After receiving the letter, the taxpayer can’t use an excuse of not knowing the law for failing to report their cryptocurrency gains.
Last year, the IRS announced a virtual (crypto) currency compliance campaign to address tax noncompliance related to virtual currency use through outreach and examinations of taxpayers. The IRS has announced that it will remain actively engaged in addressing non-compliance related to virtual currency transactions through a variety of efforts, ranging from taxpayer education to audits and criminal investigations.
Taxpayers who do not properly report the income tax consequences of virtual currency transactions are liable for the tax, penalties and interest. In some cases, taxpayers could be subject to criminal prosecution.

If you have received one of these IRS letters – or even if you haven’t had correspondence from the IRS but have unreported cryptocurrency transactions from past years – and need assistance in responding to the letter or in preparing the amended or late original returns to report your cryptocurrency transactions, please contact us right away.

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

8/21/2019

Obamacare Tax Nightmare - If your paying some or all your tax credits back on your income tax for prior years, your not alone. We have options for you!

The flood of phones calls to my office (McVay Business Services) has begun. Over the past 3-weeks I have received over 10 calls regarding letters from the I.R.S. that demand some or all of their current or past year health care tax credits to be repaid. These letters are just starting to arrive in taxpayers mail boxes. Ask, why now? The reason is for years this administrative nightmare of advance credits to pay for health insurance have never been reconciled properly. Now that the I.R.S. has caught up on past year tax credit reconciliations with your yearly tax return filing the damage is now coming to light. 

Why would I own money back for something I already received. The ACA law allowed the I.R.S to front credits to you and pay for your health insurance. This was great to allow the Gov. to help pay some or all of your health insurance so you had less or no out of pocket cost based on your last years income. This is fine if your income stays the same or goes down. Each year these credits are reconciled on your current years return and if you made more money than the past year you actually received more credit than was due to you. If you don't file a tax return and reconcile these credits you will now see your current health insurance credit disappear and you will be responsible for the entire cost of your monthly health insurance plan. 

Because of the good economy, many taxpayers are seeing they owe money now as their income raises. I.R.S reports that the last 2 years, installment agreement request to pay back money to the I.R.S are up over 2000%. In 2019, as of August the I.R.S is still backlogged processing 2018 installment agreements. 
 
Because the catch-up process has been completed at the I.R.S, letters are now being mailed to taxpayers that have either not filed prior year returns, missed reporting and reconciling their year end form 1095-A or made more money one year that may allow the I.R.S to demand this money back. 

I have clients having to pay as low as a few dollars to thousands and even $17,000 based on their reported income and type of healthcare plan. 

There are options however ! Mike McVay is a licensed tax preparer that not only has been in business over 20+ years, he has also teamed up with health insurance expert Richard Penrose of Coastal Family Insurance. Together Mike and Richard form a great partnership at their office located at 5336 N Blue Angel Parkway Pensacola, FL 32526. 

We have options on both sides to help figure out these situations when it comes to income tax, health insurance, tax credits, deductions and credit repayment. 

McVay has I.R.S Installment Agreements that can fit into your budget and get you back on track. 

Call us today if you need any additional information. Both McVay Business Services and Coastal Family Insurance offers free consultation to navigate you through these rough waters. 

Mike McVay, Tax Accountant 850-725-5696
Mike@ MikeMcVay.com 
www.PensacolaFLTax.com
Picture
Picture

www.benefitsflorida.com

Richard can help you figure out the Health Insurance Marketplace !

Coastal Family Insurance is owned and operated by Richard Penrose. We will take the time to explain and answer all of your questions. If we do not know the answer, we will find the answer. We strive to help our clients obtain the best possible insurance coverage at the best possible price. We will always do our very best for you our client.A service agency, Coastal Family Insurance is owned and operated by Richard Penrose. We will take the time to explain and answer all of your questions. If we do not know the answer, we will find the answer. We strive to help our clients obtain the best possible insurance coverage at the best possible price. We will always do our very best for you our client.
850.308.5705
Picture
Picture
Picture

8/18/2019

McVay Knows Business ! There is a reason our clients give us 5-stars!

Picture
Picture
Picture

8/12/2019

Not another Quickbooks Online price hike

Is there anything more frustrating than purchasing an item for more than you expected to pay? Like taking a $1 candy bar up to the cashier with exact change in hand only to find out the price was $1.50.  Today I was talking with a colleague and he was explaining how frustrated he has been with the local gas company. For the last three months, his utility gas bill was much higher than it had ever been. He called the gas company as was told by a representative that the readings on his gas meter were higher, that was that, and she could do nothing for him.  Frustrated, he did a 3-year comparison of his gas bills and found his reading had never been so high. He took that information back to the gas company and through several phone calls and investigation by the gas company, found out the gas companies readings were being double counted for the last 3 months. The gas company recalculated and refunded, to my colleague, the overpayment.   We are not all so fortunate (no the cashier would not take by $1 for the $1.50 candy bar). Moral of the story, know what you are paying for.

Are you a heavy QuickBooks Online (QBO) user? If so, you better listen up. I’ve been expecting this for a few years and started to doubt that it was coming, but here it is: Data usage pricing for QuickBooks Online. The makers of QuickBooks Online, Intuit, has created another version of QuickBooks Online called Advanced. Previously in the other versions of QBO (Self-Employed, Simple Start, Essentials, and Plus) you could have as many classes, categories, and accounts as you wanted. You were only limited by the features of each version. Now, it doesn’t matter what version you have been using, if you exceed one of the new usage limits, you will automatically be thrown into QBO Advanced beginning April 10, 2019.


So what are the limits?


CHART OF ACCOUNTS
250 accounts with Simple Start, Essentials, or Plus | UNLIMITED with Advanced


CLASSES AND LOCATIONS
40 combined in Simple Start, Essentials, or Plus | UNLIMITED with Advanced


BILLABLE USERS
1 with Simple Start | 3 with Essentials | 5 with Plus | 25 with Advanced


If you are a QBO user and exceed these limits, be prepared for a dramatic price increase with QBO Advanced. Current Intuit prices for QBO subscriptions are $20 for Simple Start, $40 for Essentials, $70 for Plus, and now $150 for Advanced.


Real world example: I do work for a local Non-Profit, who we just moved to from QuickBooks desktop to QBO Plus eight months ago. They only have one user of QBO but the move was prompted by 3rd party software as well as convivence of anywhere, anytime access. Because of the nature of the non-profit, they heavily use accounts/categories and classes. They have over 350 accounts in their chart of accounts and over 40 classes. With the new usage limits, they will be forced into QBO Advanced. Their monthly subscription cost will go from $60/month to $150/month. That is over $1,000 in increased annual costs, just for the subscription! The non-profit now has to make a decision before April 10th whether to pay the additional cost or put the candy bar back and switch back to QuickBooks Desktop.


If you don’t know where your QBO usage fits, Intuit has made it easy for you to monitor.  While logged into QBO,
select the gear icon in the Toolbar, then Account and Settings, then Usage. If you have multiple companies, you will need to check the usage for each company.


This post is not to discourage businesses from going to QBO Advanced. My business is focused on Intuit products and supporting small businesses who use Intuit products. However, I do want you to make the best software decision for you and your business. There are options and ways to save money by using Intuit products. If you are thinking of using or currently using QuickBooks and wonder if you are getting the best bang for your buck, give us a call at (850) 725-5696 and we will walk you through all the options and find the best fit for you. Mike McVay, Accountant - Mike@MikeMcVay.com
Picture
McVay has options for QuickBooks Price Increases. McVay offers FREE or reduced fee monthly QuickBooks Subscriptions for new clients. We are also starting to use other online accounting software that are close to the current QBO platform at a lower price. 
Picture
Full service bookkeeping for your small business. Only $99.00 per month. No extra fees ever ! Payroll services starting at only 75.00 per month. Over 20+ years of excellent service!
Picture

8/9/2019

McVay Announces $99.00 QuickBooks Online Bookkeeping Services

Picture
Picture
Mike McVay, has just added a new service to help small businesses with their bookkeeping task. For ONLY 99.00 a month a LLC or S-Corp company can have all their transactions posted, reconciled with full monthly financial reports. Included is 1/2 price monthly subscription to QuickBooks Online! 

Mike McVay, Accountant has been a Certified QuickBooks ProAdvisor for over 20+ years. His streamline office administration has become one of the most popular services for small to medium size companies all over the Pensacola, Florida area for years. His 5-star rating and voted one of the TOP Accounting and Tax firms in Pensacola, FL shows his compassion, trust and guaranteed services to many small business owners. 

QuickBooks Online fees have gone up again. Never pay full price again with McVay Business Services. 

*to qualify for the 99.00 per month service, you can only have 1-bank and 1-credit card account with gross sales under 100k per year. Perfect for small or start-up companies. 

Call Mike McVay, Accountant @ 850-725-5696 - Mike@MikeMcVay.com 
Picture

8/1/2019

Tax Extension Deadlines for 2019 Approaching !

Deadline to file individual tax returns (Form 1040) for the year 2018 or to request an automatic extension (Form 4868). An extension provides an extra six months to file your return. Payment of the tax is still due by April 15. You can submit payment for any taxes you owe along with the extension form

March 15, 
2019 for corporations on a calendar year. Extended deadline is Sept. 15, 2019. The deadline for S corp and partnership returns is the 15th day of the third month following the end of the fiscal year if they are on a fiscal year rather than a calendar year.
Picture

Mike McVay, Tax Accountant
Past Year Tax Return Expert
Over 25+years experience


Need an installment or offer agreement for back taxes? No problem. Complementary installment agreement with any tax filing! 

Picture
    Mike McVay, Tax Accountant Blog
    Certified ​QuickBooks ProAdvisor & Licensed Tax Accountant Pensacola, FL

    Best Price
    ​No Compromise

    Picture

    Author

    Mike McVay, Accountant Experienced IRS Tax Resolution Specialist
    With over 20-years experience working with individuals, families & small business owners. McVay has long term knowledge in taxation to help with their income tax, I.R.S tax issues and businesses management.
    850-725-5696​
    Mike@MikeMcVay.com

    Book An Appointment

    Archives

    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    August 2015
    July 2015
    February 2015
    January 2015
    December 2014
    November 2014

    Categories

    All

 ©2022 this website and all of its sub domains are owned and operated by
​McVay Consulting Services Inc. dba McVay Business Services
All Rights Reserved · Privacy Policy in place.
Pensacola Tax Services, Payroll, Accounting & QuickBooks Services
​
Mike@MikeMcVay.com

​850-725-5696

5336 N. Blue Angel Parkway
Pensacola, FL 32526


Client Portal Login

Subscribe to our newsletter