Summer hours are in effect: Our offices close at NOON on Fridays from May 17th to July 12th
Please Note: Our office will be closed Wednesday, April 16th.
Summer hours are in effect: Our offices close at NOON on Fridays from May 17th to July 12th
Please Note: Our office will be closed Wednesday, April 16th.
Fall is upon us and kids are back at school. Working parents may need childcare before, during or after school. And we all know that the costs of childcare can certainly add up.
1. Care for Qualifying Persons. Your expenses must be for the care of one or more qualifying persons. Your dependent child or children under age 13 usually qualify. For more about this rule see Publication 503, Child and Dependent Care Expenses.
2. Work-related Expenses. Your expenses for care must be work-related. This means that you must pay for the care so you can work or look for work. This rule also applies to your spouse if you file a joint return. Your spouse meets this rule during any month they are a full-time student. They also meet it if they’re physically or mentally incapable of self-care.
3. Earned Income Required. You must have earned income, such as from wages, salaries and tips. It also includes net earnings from self-employment. Your spouse must also have earned income if you file jointly. Your spouse is treated as having earned income for any month that they are a full-time student or incapable of self-care. This rule also applies to you if you file a joint return.
4. Joint Return if Married. Generally, married couples must file a joint return. You can still take the credit, however, if you are legally separated or living apart from your spouse.
5. Type of Care. You may qualify for the credit whether you pay for care at home, at a daycare facility or at a day camp.
6. Credit Amount. The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on the amount of your income.
7. Expense Limits. The total expense that you can use for the credit in a year is limited. The limit is $3,000 for one qualifying person or $6,000 for two or more.
8. Certain Care Does Not Qualify. You may not include the cost of certain types of care for the tax credit, including:
9. Keep Records and Receipts. Keep all your receipts and records. Make sure to note the name, address and Social Security number or employer identification number of the care provider. You must report this information when you claim the credit on your tax return.
10. Dependent Care Benefits. Special rules apply if you get dependent care benefits from your employer. See Publication 503, Child and Dependent Care Expenses.
These tips are taken from IRS Special Edition Tax Tip 2015-12
You may already contribute to an organization here in Colorado that helps children. But did you know that your donation may qualify for a sizable 
tax credit? The Colorado Child Care Contribution Tax Credit is available for Colorado donors who make a contribution to a qualifying child care organization or fund. Such a donation can generate a Colorado tax credit of up to 50% of your total donation. However, please note that in-kind donations (non-cash gifts like school supplies, snacks, etc.) don’t qualify.
To qualify for this tax credit, your donation(s) must be made to an organization that promotes the establishment or operation of a licensed child care facility or program. For example:
*Registered child care programs that provide services similar to licensed programs may also qualify.
Here’s how your child care donation gives back to you, the taxpayer. Let’s say you are in the 25% Federal income tax bracket, itemize your deductions, and make a $5,000 donation to a not-for-profit licensed agency that provides child care to children under 12. When you file your federal taxes, you’ll receive a $5,000 charitable deduction, which will reduce your federal liability by $570 and your Colorado liability by $230. You will then receive a $2,500 credit against your remaining Colorado liability when you file your state taxes. The credit will either reduce your payment or increase your refund. So, although you may have written your donation check for $5,000, your contribution actually cost you only $1,700. (See the chart below.)
| Check written to Child Care agency | $5,000 |
| Reduction of Federal Taxes | -$570 |
| Reduction of Colorado Taxes | -$230 |
| Credit against Colorado Taxes | -$2,500 |
| Net cost of Donation | $1,700 |
As you can see, when you give a financial gift to a child care organization, you not only help improve the lives of local families, but also help yourself save by utilizing an effective tax strategy. If you have any questions about the Colorado Child Care Contribution Tax Credit, please do not hesitate to contact us.
A U.S. charity recently made the news when it was accused of reporting an inaccurately high percentage of every donated dollar that went to its program services. The media outlet that uncovered the discrepancy looked beyond that claim, though, to scrutinize the organization’s outcomes — a strong sign of the growing importance of outcome measurement. Savvy stakeholders, as well as savvy not-for-profit's, realize that outcomes can convey a more complete picture of an organization’s performance than figures pulled from financial statements.
Outcome (or performance) measurement is essentially a method of determining the impact of a program or activity. Unlike traditional measures, such as number of clients served or the amount of donations received, outcome measures allow an organization to assess whether a program is achieving its intended results. An “outcome” is generally described as a specific desirable result or quality of a not-for-profit’s services.
Outcome measures should gauge the level of accomplishment of a program goal in terms of changes in the lives of individuals, families or the community at large. For example:
Bear in mind, though, that outcome measurement won’t prove that the results — good or bad — are due solely to your efforts.
An outcome measurement program will require an organization to identify appropriate outcomes and indicators of those outcomes. It will also involve the collection of data relevant to the indicators and analysis of that data. This is done utilizing surveys or interviews of clients, program dropouts and their family members
The not-for-profit should release regular user-friendly reports of its findings to stakeholders. And, of course, the organization must take appropriate action based on the findings.
Some not-for-profit's may have no choice when it comes to outcome measurement — grant makers or other stakeholders often require it. But even organizations free of such demands should consider engaging in the process.
Outcome measurement can act as a check that the not-for-profit is successful in reinforcing its mission and goals for board members, staff and volunteers. Measuring and reporting outcomes can take the focus away from how resources are being allocated, such as the percentage of funds spent on “program related activities.” Achieving sustainable success may include investing in such non-program-related activities as training, leadership development and strengthening internal controls, all of which improve outcomes.
The results of outcome measurement can be shared with other existing and potential stakeholders to demonstrate the impact of the organization’s programs and activities and, in turn, support marketing and fundraising efforts. The results can also prove helpful with short and long term planning. It makes it easier for the not-for-profit to identify effective programs and activities, as well as those in need of improvement.
Yes. Outcomes need to be measured on an ongoing basis, rather than examining client or other conditions only shortly after the completion of service. A not-for-profit should also return to evaluate the conditions down the road.
Additionally, not every important outcome will be immediately measurable. Some outcomes take years or longer to materialize. In such cases, a not-for-profit can identify milestones to measure progress as time goes by. For example, stronger relationships among community members can be difficult or impossible to measure but still merit regular consideration.
Finally, while outcome measurement can be helpful for planning, organizations should remember that it’s an approach used for looking backwards. Budgeting, policymaking and other long-range planning decisions, on the other hand, are about the future, and conditions should be treated as such.
While different organizations will take different approaches to outcome measurement, every not-for-profit can expect some stumbles along the way. Nothing is written in stone, though. The process can be adjusted as necessary. The important thing is to make outcome measurement a regular, ongoing activity that reflects the organization’s mission-driven priorities.
Outcome measurement isn’t only effective for larger organizations — in fact, it might be even more important for smaller not-for-profit's with fewer resources. Organizations that need to make every dollar and staff or volunteer hour count can use outcome measurement to determine which programs and efforts truly work and then either eliminate or strive to improve those that don’t.
Moreover, smaller not-for-profits can’t afford to stick with traditional metrics such as overhead ratios while larger organizations move on to outcome measurement. Like it or not, those organizations tend to set the trends. As larger not-fot-profit's increasingly make their outcome measures available, grant makers, social investors and individual donors will increasingly expect to see such measures before they pull out their wallets. Smaller organizations that fail to adopt outcome measurement risk being left behind when it comes to funding support.
Feel free to contact us with questions, clarifications, or assistance with Outcome Measurement.
Your practice has grown to the point that same-day appointment slots have all but disappeared. Your established patients are requiring more time and attention than you can comfortably provide, and new patients are being turned away. Big picture: you're losing revenue and risking the loss of patients to other practices.
If you’ve recently sought new employment, you may be able to offset some of the expenses related to the search. Expenses related to job hunting may qualify for a deduction on your individual income tax return. If you move for business or employment purposes you may be able to deduct many of the expenses incurred. Potential deductions include the cost of travel and moving your household goods and personal effects.
If you are seeking a new job in your same occupation, you may be able to deduct the following expenses incurred in your search:
It is important to remember that these deductions are only available to taxpayers seeking new employment in their current occupation, not to individuals seeking a first job in a new line of work.
When you move for business or employment purposes, many of the following expenses incurred may qualify for tax deductions:
In order to deduct moving expenses, the IRS requires that three basic tests are met. These tests are the distance test, the time test, and that your move closely relates to the start of work. These can be met as follows:
A great resource for information on the deductibility of moving expenses is IRS Publication 521.
If you have any questions on deduction, don’t hesitate to reach out to us.
Tax-related identity theft occurs when someone uses your Social Security number to file a tax return in order to claim a fraudulent refund. Generally, the identity thief will file the fraudulent tax return early in the filing season, typically during January. You will most likely be unaware you have even been victimized until you file your tax return and learn that someone has already filed using your Social Security number.
You should be on alert for possible identity theft when:
When our firm suspects an identity theft issue with your tax return (typically due to an e-file rejection by the IRS), we will contact you to inform you of the occurrence.There will then need to be follow-up with the IRS to determine if they have already issued Letter 5071C (Identity Verification Letter). This letter will inform you of two methods of providing verification of your identity. This can be accomplished by calling the Identity Verification line (1-800-830-5084) or by using the online IRS Identity Verification Service. The online service is the quickest method and will ask you multiple-choice questions to verify whether or not the return flagged for further scrutiny was filed by you or someone else. Please bear in mind that the IRS will only send Letter 5071C by mail. The IRS will never request that you verify your identity by contacting you by phone or email. If you receive such calls or emails, they are likely a scam.
If Letter 5071C has not been issued, we will likely need to prepare Form 14039 Identity Theft Affidavit for you to submit to the IRS on a paper filed tax return. Form 14039 alerts the IRS that someone has accessed your personal information and it has affected your tax account since they have filed a return using your identifying information. As an attachment to Form 14039, you will need to provide a copy of your Social Security card, driver’s license, U.S. Passport, military ID, or other government-issued ID card in order to prove your identity. Unfortunately, the filing of Form 14039 will delay the processing of your tax return as the normal processing time for an identity theft return can run 120 days or longer.
After Form 14039 has been processed by the IRS, they will generally issue you a six-digit Identity Protection pin number for you to use in filing your tax returns going forward. The IRS has stated that they will issue a new pin number each year, in December. If working with the IRS has not brought a satisfactory resolution or you do not receive your six-digit pin number, you should contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.
When someone has enough of your personal information to file a fraudulent tax return, they can use your identity to commit other crimes. In addition to alerting the IRS as described above, you should also take the following steps:
Identity theft is one of the fastest growing crimes in the United States and around the world. It is a persistent and evolving threat and the harm it causes victims cannot be overstated. Today’s thieves are a formidable enemy. They are an adaptive adversary, constantly learning and changing their tactics to circumvent the safeguards put in place to stop them. Tax-related identity theft is no longer random individuals stealing personal information. We are dealing more and more with organized crime syndicates here and around the world.
IRS Commissioner John Koskinen recently stated that no priority is higher for the IRS than making sure the tax system is secure and that they are continuing to do everything within their power to safeguard taxpayers and their personal information.
If you have any questions or concerns regarding identity theft don’t hesitate to contact us!
The active involvement of a physician owner is ultimately the most effective control against fraud. However, in the current demanding environment for physicians and dentists, the reality is that this responsibility may need to be delegated to a practice manager.
Tip: Throw away all signature stamps!
On July 31, 2015, President Obama signed into law P.L. 114-41, the “Surface Transportation and Veterans Health Care Choice Improvemen
t Act of 2015.” This included many updated tax provisions, including revised due dates for partnership and C corporation returns as well as revised extended due dates for several tax returns. This article includes an overview of these new tax provisions.
Currently corporations (including S corporations) must file their returns by the 15th day of the third month after the end of their tax year. For corporations using a calendar year, the due date currently is March 15. Partnership tax returns have been due on the 15th day of the fourth month after the partnership’s tax year, or April 15 for calendar year partnerships.
Under the new law, effective generally for returns filed for tax years beginning after December 31, 2015, the new filing dates are:
These new filing dates generally will not go into effect until the 2016 returns have to be filed. There is also a special rule for certain C corporations with fiscal years ending on June 30 – the change will not apply until tax years beginning after December 31, 2025.
Effective for tax years beginning after December 31, 2015, the new law includes a longer extension period for a number of tax returns. To qualify, a taxpayer must have filed an application for an automatic extension by the original due date of the tax return.
Partnership returns (Form 1065) will have the same extended due date as under current law, or September 15. However, the new laws allows for a maximum extension of six months. Current law only allows for a five month extension.
Trust and estates filing Form 1041 will have a maximum extension of five and a half months under the new law. Under current law these returns can only extend for five months. The extended due date will be September 30 for calendar year taxpayers.
The Form 5500 series (Annual Return/Report of Employee Benefit Plan) will have a maximum extension of three and a half months. Under current law these returns can be extended for two and a half months. The extended due date will be November 15 for calendar year filers.
Taxpayers with a financial interest or signature authority over certain foreign financial accounts must file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Under current law, the due date is June 30 of the year immediately following the calendar year being reported, and there are no extensions allowed.
Under the new law, for returns for tax years beginning after December 31, 2015, the due date of FinCEN Report 114 will be April 15. However, taxpayers can receive an extension of up to six months. The extended due date will be October 15.
The AICPA and state CPA societies have been advocating for the new due dates included in P.L. 114-41 for several years. The idea is to create a more logical flow of information while allowing for taxpayers and tax professionals to file timely and accurate tax returns. While these due dates will not take effect for a couple of years, we feel it is important to relay this information to our clients as early as possible. Should you have any questions, please don’t hesitate to contact us.