File Your Returns On Time – IRS Delinquency Penalties 101

money into an envelopeIRS Delinquency Penalties

Simply filing your tax returns on time can go a long way toward keeping you out of trouble with the IRS.  The most common IRS penalties most people encounter are delinquency penalties. These penalties are usually the result of either not filing a return or not making a payment by the due date.

Not filing a tax return on time

For individuals and corporations, the heaviest penalty surfaces when a return is not filed on time. This penalty is based on 5% of the tax due for each month the return is late. The penalty maxes out after 5 months at 25% of the balance due.  That can greatly increase your tax bill.

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How Fantasy Sports Are Taxed

pittsburgh steelers and houston texans tacklingWin big with your Fantasy Sports team? Uncle Sam wants his share.

We’ve all seen the commercials. You could win thousands—or millions—of dollars. It’s easy! All you have to do is play fantasy sports.

With the rise in online fantasy sites, of which the two most popular are FanDuel and DraftKings, the online fantasy sports industry has exploded. Some estimates show that annual spending on fantasy sports in the U.S. and Canada exceeds $25 billion.

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Social Security – Two Important Changes in 2016
Social Security

Social SecurityPhase Out Coming for Two Common Social Security Claiming Strategies

Important news for social security recipients: with the Bipartisan Budget Act of 2015 recently signed into law, tougher rules are soon to be in effect for those claiming social security.

Two claiming strategies, “restricted application” and “file and suspend,” will soon be phased out.

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Nebraska Personal Property Tax Relief Act

PersonalPropertyTaxWhat is a Personal Property Tax Return?

In Nebraska all depreciable tangible personal property used in a trade or business and depreciated for tax purposes is subject to personal property taxes.  Taxpayers must report all taxable tangible personal property that is located in Nebraska as of January 1 of each year.  It is very important that personal property tax returns are filed on or before May 1 of each year with the county assessor in each county in which the personal property has situs.  If the property has situs in more than one county, a return must be filed in each county.

There are no extensions granted for personal property returns and there are penalties for failing to file on time. Personal property returns filed after May 1 and before June 30 are subject to a 10% penalty of the tax due on the value added.  Personal property returns filed on or after July 1 will be subject to a penalty of 25% of the tax due on the value added.

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How to Make the Most of Your Non-Cash Contributions

goodwill storeCome January, many people are ready for a fresh start. Especially after the holiday season, this often means clearing out the clutter to make room for the new: in other words, finally hauling those bags of old clothes sitting in the basement to the Salvation Army, Goodwill, or another charitable organization.

Once you’ve gathered up items you’d like to donate, Charity Navigator’s guide to donating Non-cash Items recommends finding a local charity in order to reduce transportation costs that could ultimately lower the value of your donation: “Look first in your local community to find a charity to support with your non-cash contribution. Call around and ask charities if the accept the kind of items you are looking to donate, and if they don’t, find out if they have any suggestions for a charity that does.”

It’s a good idea to itemize any deductions, both cash and non-cash. However, non-cash contributions require some additional steps in order to calculate the value of goods you’ve donated throughout the year. If the total value of the items you’ve donated is under $500, you simply enter that value on line 17 of the Schedule A form. If you donated more than $500 worth of items, however, you need to fill out the charitable contributions federal deduction tax form, the 8283 form with the title “Noncash Charitable Contributions.”

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Dealing With Identity Theft

16794969011_2f725f6553_hHOW TO DEAL WITH IDENTITY THEFT

Quite often, the first indication you are a victim of identity theft is when you file a tax return only to find out a return has already filed under your name. Another common scenario is when you hear of a business (or the government) being hacked. Of course, you were a customer of the business, and the company’s records held your personal information.

At this point, you are faced with the question: What should I do? This is where I found myself last spring, as a former federal employee, after the federal government was hacked.

Unfortunately, once a thief has your information, you have to assume that the risk of it being used will never go away. When you find yourself in this situation, you have several options:

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Stay Vigilant: Be Aware of These IRS Scams This Tax Season

box full of junk mailEach year as tax season draws near, there’s an uptick in phishing scams. Far too many American citizens fall victim to these malicious scams, which take advantage of taxpayers working on their 2015 returns. While it is important to remain vigilant throughout the year, the next five months are of particular importance for both businesses and individuals.

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Changes to Filing Dates

As part of the Highway funding bill that passed earlier this year, there will be a change in the due dates of tax returns for tax years beginning after December, 2015.

For calendar year 2016 tax returns, partnership will now be due on March 15, 2017 which is a month earlier.  Previously partnership returns were not due until April 15.

C corporation returns will now be due April 15, 2016 which is a month later.  Previously these were due on March 15.

If you have any questions about these changes or how they may affect your filing, please contact our office.

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FAFSA Changes Make 2015 Very Important Tax Year

If you have a college student or high-school senior, you need to be aware of some big changes to the rules for filing a Free Application for Federal Student Aid (FAFSA). Your 2015 income will have double the impact on college aid packages since President Obama signed an Executive Order on September 14, 2015, effectively changing the method of using prior year income to a new prior-prior year method.

This new method will make it easier for most families to fill out the FAFSA and get the appropriate information to their choice colleges so that financial aid packages can be determined.

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Hancock & Dana, PC
Certified Public Accountants and Business Consultants
12829 West Dodge Road, Suite 100
Omaha, NE 68154

Phone: 402.391.1065
Fax: 402.334.9498

Email: info@hancockdana.com