Ayzenberg Consulting LLC

After Tax Reform, Which Is Right for You: S Corp or C Corp? The Tax Cuts and Jobs Act has left many of today’s businesses with big questions. Incorporation remains a hot topic, but this law is shaking things up. It’s quick to assume your company should be one or the other, but without careful consideration of the facts, your organization may end up facing financial loss, hefty tax penalties or missed tax savings. The goal of this type of incorporation is to minimize tax burd...Continue reading

Remember the IRS’s promise about being able to file your income tax return using a postcard? The reality of the new 1040 form is a far cry from a postcard. Although the administration insists that it has simplified the process of preparing your tax return, a few minutes of comparing the old 1040 to the new draft version shows that the redesign did little more than change it from the previous two-page form to two half-size pages with six schedules provided separately. All b...Continue reading

Dear Clients! Just wanted to let you know that we moved offices effective December 1st, 2017. Our new address is 433 Broadway Unit 428 New York, NY 10013.... We will be reaching out regarding the year-end planning and tax law changes later this month. Thanks and have a good week. Daniel

Is your MBA tax deductible? More and more people are going back to school to pursue the MBA in order to increase their chance of keeping their jobs, getting a job, or getting a promotion. The increase of online MBA programs in recent years has also played a big factor in the rise of the number of MBA students because online MBA programs offer greater flexibility that would work with students' work and personal schedules. The cost of an MBA program can range anywhere from $40,...000 to $100,000+ per year. Can you deduct educational expenses such as MBA tuition? It depends on many different factors. What applies to one person might not be the case for the next. This is especially true when it comes to educational expenses. Some educational expenses such as tuition qualify for American Opportunity Credit, Lifetime Learning Credit, and the Tuition and Fees Deduction while transportation costs or room and board are not. Sometimes mixing and matching different education expenses with different credits and deductions will give the best result. Working with a CPA tax practitioner can help you get the best tax return. MBA tuition may also qualify as a work-related educational expense. In some situations, education expenses, including travel to and back from school, might be deductible as unreimbursed business-related expenses in the Schedule A - Itemized Deduction. In order for work-related education expenses to qualify as business expenses, this education must meet one of the following two tests: 1) Maintenance or improvement of skills In order to be deductible, the expense must be for education that maintains or improves the taxpayer's skills or that meets legal or employer's requirements for the taxpayer to maintain his or her current employment. For example, courses that a tax professional take in order to keep up with the changes in tax laws would qualify. 2) New Trade or Business or Minimal Educational Requirements If the education qualifies the taxpayer for a new trade or business or if the education is the minimum educational requirement for the job, then those expenses are not deductible. For example, if you are an accountant and you go to law school to become a lawyer, these expenses would not be deductible. Whether or not an MBA qualifies a taxpayer for a new trade or business has been in hot debate in recent years but the positive news is that tax courts have been ruling in favor of taxpayers to allow the deduction. CAVEAT: If you are choosing to take this deduction as business expenses, be prepared to defend your position. A deduction this size would definitely cause red flags with the IRS and they would be likely to ask for support. You must be able to substantiate all costs and to provide a direct relationship between these expenses, your employment, and the aforementioned requirements.

Dear Clients, The end of the tax year is near and we wanted to ensure that you are ready for the upcoming deadlines. One of the most important deadlines that are different from the prior years is the deadline to issue forms 1099 (usually reports to the IRS payments made to nonemployees in excess of $600/year).... In the years prior to 2016 employers had to provide copies to the recipients by the end of January and then either paper file (by the end of February) or e-file (by the end of March) with the IRS. Starting the year 2016 there is one single deadline - employers have to both deliver the forms to the recipients AND file with IRS by the end of January! This means that your business's books have to be closed (or substantially closed - at least all outgoing transactions) around mid-January to ensure there is time to review and verify information for all receipts (names, addresses, socials/tax IDs and amounts) AND timely issue the forms to the receipts AND file with the IRS. Therefore, we will be reaching out shortly urging you to start year-end update/catch as soon as possible to make sure that we can meet the new deadline. Please note that there are specific questions on ALL types of business tax returns and schedules asking of the business had to issue forms 1099s and if forms were issued. Finally, IRS imposes various penalties for failure to file forms 1099 or for filing them late: $250 per each incorrect/unfiled 1099 $30 per each 1099 that is filed within 30 days after the filing date, $60 per each 1099 that is filed within 60 days after the filing date, $100 per each 1099 that is filed after August... Let us know if you have any questions and you will hear from us shortly.

Store Or Shred? How Long You Should Hang Onto Tax Records A lot of clients ask us: For how long should we keep the tax records? So we've decided to organize the requirements. First of all, maintaining tax filing documentation is critical. It contains the answers to questions the Internal Revenue Service could ask years after you file your return. Although the IRS doesn't require you to keep your records in a particular way, it does urge taxpayers to keep them "in an orderly ...fashion" and in a safe place. So, here are the rules: 1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you. 2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. 3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction. 4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return. 5. Keep records indefinitely if you do not file a return. 6. Keep records indefinitely if you file a fraudulent return. 7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

#3 Stay Healthy Medical expenses can pile up in a year. You can deduct medical expenses if they amount to more than 10% of your annual income if you itemize your deductibles. This can include contact lenses, acupuncture, clarinet lessons to help align a child’s teeth, drug addiction treatment, exercise or weight loss programs prescribed or recommended by a doctor, and artificial limbs or teeth, among many more. If you or your spouse are 65 years old or older, you can deduct medical expenses that total 7.5%of your annual income.

#2 Working Hard There are plenty of work-related expenses that can be claimed. For instance, you can deduct union dues. You can also claim the purchase and care of any uniforms or necessary work clothes that wouldn’t be considered everyday clothing. This can include uniforms for firefighters, delivery workers, musicians, actors, and professional athletes.... If you’re on the hunt for a new job in your current field, you can deduct expenses like printing and mailing resumes and costs associated with getting to and from job interviews. This includes parking and gas mileage. Teachers do a lot for their students and classrooms. For this reason, teachers can deduct any classroom expenses they covered themselves up to $250. Even if you don’t itemize it, you can claim it because it gets subtracted from your income. Using your car or home for work can be a hassle, but it pays off come tax time. You can deduct some expenses for working at home if it’s the primary location for the business or for meetings, or used for storage. You can also deduct home expenses if it’s used for child care or being rented out. If you use your car for work, you can deduct 54 cents per mile. If you run a business and make some odd purchases for its benefit, these can be tax-deductible. For instance, a junkyard owner who needs to keep mice and other rodents away from his lot might feed stray cats to keep them around. That cat food is tax deductible (believe it or not). The self-employed have a few deductions available to them, too. Paying for social security when you’re self-employed is expensive, but you can claim the employer portion of your fees on your taxes. You can also deduct your health insurance premiums. You can claim contributions to retirement accounts like a 401(k) as well.

Surprising Tax Deductions To Get A Bigger Tax Return #1 What about your home? There are many housing-related tax deductions available to homeowners and renters alike. If you have mortgage insurance, you can deduct the insurance premiums you’ve paid toward it as long as the policy was created since 2007, GOBankingRates reported. You can also count the interest you’ve paid on your mortgage if you itemize your deductions.... If you did some home improvement work last year, you might be able to deduct that as well. You are able to claim a credit for 10% of what you spent on an energy-saving improvement, or 30% if that improvement utilized alternative energy, like solar panels, according to All You. If you refinanced your mortgage, you might be able to deduct that as well if you deduct over the course of the entire loan, rather than all at once. The IRS recognizes how hard it is to move. If you moved for your job, you can deduct moving expenses your employer didn’t pay for, as long as the commute from your old home to your new job would be more than 50 miles longer than you had been traveling for work. Also, according to The Fiscal Times, you can also claim a deduction for expenses that went to moving your pet.

What to do when you receive an IRS notice? You come home from work and mixed in with the junk mail and the normal bills you find a notice from the IRS. When you open it and realize it is not an invitation to star in their next video panic sets inwhy are they not giving me my refund or even worse, they want to audit me electronically. Well the first thing to do is to calm down. Most notices simply require that you check your records to verify if you did in fact make that e...stimated tax payment or that maybe you did forget to report a few dollars of interest income or dividends. Many taxpayers receive notices asking for proof of a deduction, so yes you may have to send them a copy of your real estate tax bill or even a copy of a check you wrote to make a charitable contribution. Anyway give a call to your tax expert and he will advise you.

When taking business deductions, receipts are your magic ticket. No receipt = no deduction. When you're out, use your smartphone to take a picture of receipts. It's a whole lot easier to keep track of pictures than it is loose slips of paper. There are apps out there that will catalog your expenses using your pictures.

After Tax Reform, Which Is Right for You: S Corp or C Corp? The Tax Cuts and Jobs Act has left many of today’s businesses with big questions. Incorporation remains a hot topic, but this law is shaking things up. It’s quick to assume your company should be one or the other, but without careful consideration of the facts, your organization may end up facing financial loss, hefty tax penalties or missed tax savings. The goal of this type of incorporation is to minimize tax burd...Continue reading

Remember the IRS’s promise about being able to file your income tax return using a postcard? The reality of the new 1040 form is a far cry from a postcard. Although the administration insists that it has simplified the process of preparing your tax return, a few minutes of comparing the old 1040 to the new draft version shows that the redesign did little more than change it from the previous two-page form to two half-size pages with six schedules provided separately. All b...Continue reading

An interesting article showing how the new tax bill will affect people with various income levels: http://www.businessinsider.com/trump-tax-plan-senate-take/

Dear Clients! Just wanted to let you know that we moved offices effective December 1st, 2017. Our new address is 433 Broadway Unit 428 New York, NY 10013.... We will be reaching out regarding the year-end planning and tax law changes later this month. Thanks and have a good week. Daniel