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What does EA mean? Why an Enrolled Agent is the Best Choice!

Posted by Felix Assivo on
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Business
What does EA mean? Why an Enrolled Agent is the Best Choice!

First created in 1884 to prepare claims against the government for the American Civil War, Enrolled Agents have been at the forefront of representing taxpayers who need the extra help with personal and business taxes. But, what exactly is an Enrolled Agent? Many taxpayers have never heard of an Enrolled Agent, much less even know what the initials “EA” mean. This program helps you to understand what an Enrolled Agent is, what is required to become an Enrolled Agent, and why it is beneficial to use an Enrolled Agent to prepare your tax return. I will explain my personal journey to join this exclusive group of tax professionals.

Click here for this very informative show.

Should I Work Abroad? The Challenge of Foreign Earned Income

Posted by Felix Assivo on
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Business
Should I Work Abroad? The Challenge of Foreign Earned Income

The world is becoming a smaller place. Sometimes an employer may ask you to work at a location outside the United States. Or, you may get a lucrative positive at a company located in a foreign country. Will taxes have to be paid to the United States and the country where I am working? Are there foreign earned income exclusions that I can take to reduce or eliminate double taxation? How do I qualify for these exclusions? What about if I am self-employed while working abroad? These questions and much more will be discussed and explained in this show

Questions to Ask When Buying a Business

Posted by presspass on
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Business
Questions to Ask When Buying a Business

Each year I learn about disasters that occur when my clients or others either buy or start a business. Why do these disasters happen? Many times the problems start because of consulting the attorney and the banker, but not consulting their tax professional. Why is it necessary to consult a tax professional when starting or buying a business? With good planning and discussion tax issues can be avoided and tax liabilities can be minimized by working with a tax professional even before buying or starting a business. If you wait until tax season to inform your tax professional, you could then be facing a large tax bill.  And, the ability to take advantage of any additional tax deductions for the start-up year is greatly reduced.

When you consider buying a business, there are many tax and accounting questions that have to be asked. You need to consult tax professional not working for the current business owner. This is even more necessary if you have been working in the accounting department for the company you are looking to buy.

Some points about buying a business you need to consider are:

  • What type of entity is the business you are looking to buy?
  • If the business is a corporation, will I be buying the stock of the corporation or the assets of the corporation?
  • What type of business entity is best for my situation?

These are only a few of the questions a prospective business owner must get answered before signing any papers to purchase a business. The answer to these and many other questions will determine how the buying and operating of the business will affect your tax situation.

I highly recommend scheduling an appointment with an Enrolled Agent, like myself  for a Free Business Discovery Session, when you consider either starting a business or buying a business. By consulting with me now, you will save on tax payments and tax headaches later.

Beware of the “Ghost” Tax Preparer!

Posted by presspass on
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Business
Beware of the “Ghost” Tax Preparer!

Each year I have people come into the office and say “So-and-So” can do my tax return cheaper. Many times I think of reminding them of the old saying, “You get what you pay for.” This saying is particularly true with tax preparation. By law a paid preparer is required to sign each tax return he or she prepares. Ghost preparers who charge maybe $25 or $50 to prepare a return will refuse to sign a return. That is an immediate red flag revealing a paid preparer who is only looking to make a fast buck.  These preparers are also unlikely to keep your tax data safe and secure as required by the Internal Revenue Service.  I recommend avoiding these unethical “ghost” tax return preparers.

Other warning signs of a “ghost” tax preparer include:

  • Requiring payment in cash and not providing a receipt
  • Inventing income to qualify their clients for the Earned Income Tax Credit and the Child Tax Credit
  • Claiming fake deductions to increase the size of the refund
  • Printing the tax return and telling the taxpayer to sign and mail the return to the IRS
  • Refusing to digitally sign e-filed tax returns
  • Having “self-prepared” entered in the paid preparers field
  • Directing refunds into their bank account and not the taxpayer’s account

Paid preparers and those assisting with federal tax returns must have a Preparer Tax Identification Number (PTIN). A paid preparer must sign and include their PTIN on the returns they prepare.

I encourage taxpayers to review their tax return carefully before signing. No matter who prepares your tax return, taxpayers are ultimately responsible for accurately reporting their income and deductions.

CRISIS-MANAGEMENT EXPERT LANNY DAVIS: ‘HISTORY PROVED CLINTON RIGHT — RAISING TAXES WAS THE RIGHT THING TO DO’

Posted by Editor on
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Business
CRISIS-MANAGEMENT EXPERT LANNY DAVIS: ‘HISTORY PROVED CLINTON RIGHT — RAISING TAXES WAS THE RIGHT THING TO DO’

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Former special counsel to President Clinton and acclaimed expert in the field of crisis management, Lanny Davis joined The Costa Report to discuss the effect a $20 trillion deficit will have on future generations of Americans and offer advice to the next president. According to Davis, in spite of inheriting a $300 billion deficit and nationwide recession, President Clinton left office with a budget surplus.

Despite receiving criticism from both sides of the aisle at the time, Clinton pressured Congress to reduce spending while raising taxes. It was a one-two punch.

“Bill Clinton turned out to be right about the effect of raising taxes in 1992,” Davis said. “It helped the country, and I look at that history as verifying that premise.”

Davis believes Clinton’s approach will work again, but this will require the next president to raise taxes. When asked whether higher taxes will discourage investment, Davis stated that even if this is shown to be the case, taxes must still be raised “because in the long term, if we go bankrupt, the incentives or disincentives to investment don’t matter — it’s bad for the country.”

When the host of The Costa Report asked Davis whether raising the capital gains tax is the equivalent of punishing success, Davis didn’t disagree.

“Oh, it certainly feels that way to people who are successful, but this is one of those arguments that sounds right until you think it through,” he responded. “In 1935, when Franklin Roosevelt said, ‘I want young people to pay taxes to support old people,’ the young people said, ‘Why should I do that? I’m not going to pay for somebody else to be able to retire and not work.'”

Davis noted that Social Security was passed despite the opposition of most conservative Republicans, and said it’s a discussion Americans have had many times before — whenever they’ve been subjected to a tax increase.

“When the progressive income tax was introduced into our vocabulary, it meant that people earning more money would pay more taxes than people earning less. That debate meant taxing success vs. taxing lack of success,” he said. “Yes, to some degree you’re penalizing people who are successful, but that’s our social contract. That’s what’s made America great. I happen to be in the upper tier of people whose taxes will be raised, and I agree to pay more if part of that is going to be dedicated to reducing our debt.”

The blame for a national debt that continues to soar shouldn’t land on our current president, Davis said, but on the shoulders of Democrats who continue to spend as if using credit cards isn’t a moral issue.

“I have two older children and six grandchildren, and then I started all over again and have a 17-year-old and a 10-year-old,” he said. “That makes me wonder if it’s fair for me to go around the world using my credit card, using first-class airfare, first-class dinners and hotels, having a great time, then coming home and dumping all of my receipts on my son’s bed.”

To hear the full interview with Lanny Davis visit www.rebeccacosta.com

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