Write Off $2,500 Instead of Depreciating
Very recently, the IRS issued Notice 2015-82 revising the limit on what is too small to require depreciation treatment, things we would otherwise have to keep track of until they are disposed of.
The prior rule was for qualifying items costing $500 and less, you could “expense” an item—that is, you could deduct the $500 purchase in the year you bought an item that would normally last longer than a year, and you wouldn’t have to depreciate it on Form 4562.
Now, they say you can “expense” an item if it is $2,500 or less.
The effective date for this change is January 1, 2016. However, in the Notice, they say for taxable years before 2016, if a purchase does not exceed $2,500 per invoice item, and you otherwise qualify to use this rule, the IRS will not pursue the issue. That sounds to me like we may use this rule for returns for 2015 that we’ll file in 2016.
There are several limitations and details to work out, and I still want a list of computers and other assets if I’m preparing your return, but this change is intended to “reduce taxpayer burden” for preparing returns.
Here’s a link to more info: https://www.irs.gov/pub/irs-drop/n-15-82.pdf.
2016 Tax Days on the Move: April 18th… For What Year Now?
The IRS deadline for 2015 individual tax returns will by Monday 4/18/2016. That doesn’t mean you can get me materials on April 17th and expect to be filed or extended on time! There is no change for the due date for personal returns in general; this just happens to be a year where 4/15 is a holiday, followed by a week-end. There is an extension available to October 15th, but see the note below on my extensions policy.
Partnership returns, including LLCs, for 2015 calendar year are due April 15, 2016 (extended to April 18th because of the holiday), with possible extension to September 15, 2016. Partnership returns for 2016 calendar year are due March 15th, 2017, with possible extension to September 17th, 2017, one month earlier to file or extend than in prior years.
C Corporation returns for calendar year 2015 are due March 15th, 2016 with a possible extension to September 15th, 2016. C Corporation Returns for calendar year 2016 are due April 15th, 2017 with possible extension to September 15th, 2017—one month later than prior years to file the return or the extension. The extended due date does not change.
S Corporation returns are STILL DUE MARCH 15th and this will not change. Extensions are good until September 15th.
The change would appear to make the pass-through entities, S Corp and Partnerships, have an earlier deadline than the personal returns, so the individuals can get their information before they have to do their personal returns.
My policy of charging for extensions will remain in place for 2016 for 2015 returns. If I don’t have your extension fee, I won’t put you on extension. You should receive an Engagement Letter and terms sheet via email from me in early 2016.
Classes: Basic Payroll and Schedule C
Here’s a link to the seminars page on my website: www.taxbuddha.com/seminars.html
In conjunction with the IRS and EDD, I’m going to be doing some Basic Payroll seminars coming up in the near future.
Basic Payroll Seminar runs 9 am 3 pm with an hour for lunch
The next seminar will be:
San Francisco at the SBA office 455 Market Street, 6th floor
(I take BART to Embarcadero or Montgomery Street)
Wednesday, January 13, 9:00 am – 3:00 pm
Oakland Basic Payroll “Short Course” at 7677 Oakport Street, Suite 400, Oakland CA
Wedesday, January 27, 9:00 am – 12:30 pm
Register by going to http://www.edd.ca.gov/Payroll_Tax_Seminars/ and find your favorite location.
These seminars have proven to be very popular for business owners and bookkeepers, plus they’re free.
How to Prepare your Own Schedule C
Get ready for next year and filing your own Schedule C for last year. Review what the IRS wants to know from you and how to report it for your business. This is a class for business owners who need a basic understanding of their 1040 Schedule C tax forms. We’ll also talk about what to do with the numbers once you have them. We can’t guarantee you won’t get audited, but this class will make it less likely.
I will be at the US SBA office in San Francisco at 455 Market Street, 6th Floor.
Wednesday, February 17, 6:00 pm – 8:30 pm
You can register for this class at http://www.sbatrainings.eventbrite.com
The Eightfold Path to Pay Less Tax and Avoid an Audit
Eight basic things business owners want to know printed in a booklet in “executive summary” form. This is ten years of working with the IRS Tax Code distilled down so it doesn’t take YOU ten years.
Just another way we’re trying to simplify your life. And the purchase is tax deductible!
You can order from Amazon.com. Here’s the link to Amazon: http://www.amazon.com/Eightfold-Path-Less-Avoid-Audit/dp/0615233422/ref=sr_1_22?ie=UTF8&s=books&qid=1226611038&sr=1-22
The booklet also contains sections on how returns are selected for audit,
when to seek professional help, and how long to keep your tax records.
Little Box of Inc: Incorporations Made Easy published on Kindle
The book with tips about how the S Corporation works is now published to Amazon’s Kindle, updated with additional information about S Corporations, and can be found by searching for Andrew S Rogers as author, and click on “Kindle.” Here’s the blurb:
Considering incorporating as an S Corporation? This booklet will help you understand how the S Corporation works, what you need to do to become incorporated and what you need to do once you have a corporation to stay out of trouble. The structure and the requirements are reviewed, as well as helpful tips to use your corporation to reduce your tax liability and retain your status as an S Corporation. I’ve worked with S Corporations for many years, and as a tax preparer, I can choose the kind of entity I have for my business: I choose the S Corporation myself, and I’ve convinced many of my fellow tax preparers to incorporate as well. I’ve divided the information into clear, easy-to-understand topics, and cross-referenced sections when it might be helpful.
After you’ve read this material, you can view on-line videos via YouTube.com for free to access more advanced information about S Corporations. You may also be interested in my “Choice of Entity” class – see below.
Phone and Fax Numbers
Our northern California occasional in Alameda:
1516 Oak Street, Suite 109
Alameda CA 94501
Phone numbers are:
Phone (510) 332-0401
Fax (925) 478-2726
“You too can be enlightened about tax” — Tax Buddha