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  • P. Diggs-Costen EA, MBA

Updated: Jan 5

It's that time again! Soon you will start receiving your 2019 tax documents. January 28th is the official IRS date for electronically filing tax returns. How do you get organized? Here are 9 steps that will hopefully streamline the process for you.

  1. Prepare an envelope or electronic folder and label 2019 taxes.

  2. Scan tax documents when received. Do not toss your IRS notices- you may need for tax filing.

  3. Categorize and total your expenses such as medical expenses or contributions.

  4. Separate business expenses and rental properties (do not lump all the properties together) using an accounting software or excel spreadsheet. If you have more than one business- each business must be itemized separately.

  5. Do a Scope Review of your tax organizer or last year's tax return to actual documents received. This will trigger what could be outstanding.

  6. A tax organizer is a great resource to use for compiling your tax documents and triggering life changes that could impact your taxes.

  7. Compile a list of questions for me or your accountant.

  8. Remember extensions are to extend the deadline to file; not to pay. Late payments after April 15th will result in penalties and interest.

  9. Schedule your appointment early or upload your documents to a secure portal. Keep in mind complex tax returns require more time to prepare.

Maximize your deductions

Poor record keeping can cause you to lose valuable tax deductions. The above steps will ensure we can better minimize your tax liability, and or optimize your refund, and provide proper tax planning for you in the coming year.


Contact our office at 770-575-9737 should you have specific questions regarding your taxes.

Upcoming Tax Deadlines

  • 4th Qtr Estimated Tax Payment January 15, 2020

  • 1099's and W2's deadline January 31, 2020


Updated: Nov 26, 2019

I have been successful at negotiating an offer in compromise for many of my clients. Unpaid IRS debt can result in tax liens, poor credit rating, and wage and bank account levies. Settling your debt will give you a peace of mind so that you can live your best life! However, there are strict guidelines that warrant such an arrangement with the IRS which I will discuss below.


WHAT IS OFFER IN COMPROMISE?

The IRS will allow you to settle the debt for less than what you owe based on financial hardship. The IRS will consider the following:

  • Education/Occupation

  • Ability to Pay

  • Income

  • Allowable Expenses according to the IRS National Standards

  • Assets

  • Compliant with all tax filings and payments while offer is under consideration

Based on these guidelines, the IRS will determine if they can reasonably expect payment over a certain amount of time. If not, you may qualify to settle your debt. I know it sounds weird, but the more you owe the better your chances of an offer in compromise. Use the https://irs.treasury.gov/oic_pre_qualifier/ to determine if you qualify.


Probation Period

If your offer in compromise is accepted-you must file and pay all current taxes timely for 5 years including estimated tax payments if applicable. Should you default, the offer will revert to the original amount owed.


Contact our office at 770-575-9737 for a free 30-minute consultation to determine if an offer in compromise is right for your situation.


End of Year Checklist

  • Business owners-check that you have completed W9s for your contractors

  • Order 1099s and W2s

  • Review your financial statements


  • P. Diggs-Costen EA, MBA

I have represented many clients in an audit. The majority of tax returns not prepared by me; I might add! My rule is to prepare a return as though there will be an audit. The good news is the IRS is auditing less returns due to budget cuts. But, don't roll the dice. I have observed these five most common red flags:


  1. Excessive Auto Mileage

Let me ask you, could you substantiate your records detailing trip purpose and business miles driven? Do you record beginning and ending mileage? Do you use your vehicle for business and personal? If so, how many miles are personal use? When these records are not available, the auditor will disallow your deduction.


I know it is a hassle to keep a log, but technology has made this task more palatable. Also, many employers have accountable plans (require documentation for reimbursement).


2. Meals


Meals that are not for client meetings or provided for employees are non-deductible unless you are on a business trip. In other words, if you go to McDonald's alone for lunch in your tax home- this is not tax deductible. There are two tiers 50% and 100% deductible.

50% Deductible

A meal with client where work is discussed

Employee meals

Travel meals

100% Deductible

Company-wide holiday party

Food and drinks provided to public


Write the purpose of expense on receipts and or bank and credit card statements


3. Travel


In an audit you must substantiate time and place of expense along with the business purpose of trip. Your receipts or bank and credit card statement records will not sufficiently prove business travel.


4. Home Mortgage Interest Claimed on Schedule C (Business Return)


Yes, I represented a client in an audit where his tax preparer added his mortgage interest as a business expense. Naturally, the deduction was disallowed. Unless you own your office building, mortgage interest is a personal expense.


5. Fraudulent Tax Preparers


Over the years, I have obtained new clients because their tax preparer is under criminal investigation by the IRS or State agency for filing fraudulent tax returns. These preparers overstate deductions to increase their client's refunds. Their business model is to build a reputation on charging less to prepare the returns and obtaining large refunds for their clients. Thereby, building their practice on sheer volume. The problem is when they are caught, the IRS and or state will audit every return filed by them. Subsequently, the taxpayer is left with a huge tax bill. If it sounds too good to be true; it likely is!


To avoid these pitfalls and getting hit with a large tax bill post audit- remember to be prepared to substantiate all claims made on your taxes. Further, ensure your tax professional practices due diligence, too.


I have provided a short summary for this article. For more information, contact us at 770-575-9737 for a free consultation.




UPCOMING DEADLINES


  • Individual Tax Return (Extension) October 15, 2019

  • C Corporation Tax Return (Extension) October 15, 2019


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Costen Tax Group, Inc.​


Tel: 770-575-9737
Email: Taxes@CostenTaxGroup.com
Address: 3101 Cobb Pkwy, Suite 124

Atlanta, GA 30339

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