Bertz, Hess & Co., LLP

The Partners & Staff at Bertz, Hess & Co., LLP would like to wish everyone a Happy Thanksgiving holiday!

Business Expense Deductions for Meals, Entertainment As the end of the year approaches, taxpayers should be reminded that business expense deduction for meals and entertainment have changed due to tax law changes in the Tax Cuts and Jobs Act (TCJA) of 2017. Until proposed regulations clarifying when business meal expenses are deductible and what constitutes entertainment are in effect, taxpayers should rely on transitional guidance that was issued by the IRS late last year. P...rior to 2018, a business could deduct up to 50 percent of entertainment expenses directly related to the active conduct of a trade or business or, if incurred immediately before or after a bona fide business discussion, associated with the active conduct of a trade or business. However, the TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation. Taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact. Please note that food and beverages that are provided during entertainment events will not be considered entertainment if purchased separately from the even and the cost is stated separately from the entertainment on one or more bills, invoices or receipts.

New Twist on the Social Security Number (SSN) Scam New variations of tax-related scams show up at regular intervals, the most recent one related to Social Security numbers. Don't be fooled, however; it's nothing more than a new twist on an old scam and yet another attempt to frighten people into returning "robocall" voicemails. How the Scam Works... Con artists claim to be able to suspend or cancel the victim's SSN and may mention overdue taxes in addition to threatening to cancel the person's SSN. The following are actions that the IRS and its authorized private collection agencies will never undertake, but are the telltale signs of this and many other scams: Call to demand immediate payment using a specific payment method such as a prepaid debit card, iTunes gift card or wire transfer. The IRS does not use these methods for tax payments. Ask a taxpayer to make a payment to a person or organization other than the U.S. Treasury. Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying. Demand taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed. What to Do If taxpayers receive a call threatening to suspend their SSN for an unpaid tax bill, they should just hang up. Taxpayers should not give out sensitive information over the phone unless they are positive they know the caller is legitimate. Taxpayers who don't owe taxes and have no reason to think they do should: Report the call to the Treasury Inspector General for Tax Administration. Report the caller ID and callback number to the IRS by sending it to [email protected]. The taxpayer should write "IRS Phone Scam" in the subject line. Report the call to the Federal Trade Commission. When reporting it, they should add "IRS Phone Scam" in the notes. Taxpayers who owe tax or think they do should: View tax account information online at IRS.gov to see the actual amount owed and review their payment options. Call the number on the billing notice Call the IRS at 800-829-1040.

Are you considering QuickBooks for your business? Talk to one of our QuickBooks Pro Advisors and see how easy it is to get started. Bertz, Hess & Co, LLP will be happy to assist you! From installation, day-to-day accounting or technical support, our certified staff is here to help!

Tax Preparation vs. Tax Planning Many people assume tax planning is the same as tax preparation but the two are actually quite different. Let's take a closer look: What is Tax Preparation? Tax preparation is the process of preparing and filing a tax return. Generally, it is a one-time event that culminates in signing your return and finding out whether you owe the IRS money or will be receiving a refund.... For most people, tax preparation involves one or two trips to your accountant (CPA), generally around tax time (i.e., between January and April), to hand over any financial documents necessary to prepare your return and then to sign your return. They will also make sure any tax reporting on your return complies with federal and state tax law. Alternately, Individual taxpayers might use an enrolled agent, attorney, or a tax preparer who doesn't necessarily have a professional credential. For simple returns, some individuals prepare and file their own tax forms with the IRS. No matter who prepares your tax return, however, you expect them to be trustworthy (you will be entrusting them with your personal financial details), skilled in tax preparation and to accurately file your income tax return in a timely manner. What is Tax Planning? Tax planning is a year-round process (as opposed to a seasonal event) and is a separate service from tax preparation. Both individuals and business owners can take advantage of tax planning services, which are typically performed by a CPA and accounting firm with in-depth experience and knowledge of tax law, rather than a tax preparer. Examples of tax planning include bunching expenses (e.g., medical) to maximize deductions, how to use tax-loss harvesting to offset investment gains, increasing retirement plan contributions to defer income, and best timing for capital expenditures to reap the tax benefits. Good recordkeeping is also an important part of tax planning and makes it easier to pay quarterly estimated taxes, for example, or prepare tax returns the following year. Tax planning is something that most taxpayers do not take advantage of - but should - because it can help minimize their tax liability on next year's tax return by planning ahead. While it may mean spending more time with an accountant, say quarterly or even monthly, the tax benefit is usually worth it. By reviewing past returns an accountant will have a more clear picture of what can be done this year to save money on next year's tax return. If you're ready to learn more about what strategies you can use to reduce your tax bill next year, help is just a phone call away.

Happy holidays from the partners and staff at Bertz, Hess & Co., LLP!