EHTC's 28th Annual Chipping for Charity!

Posted on Fri, Jul 25, 2014
EHTC's 28th Annual Chipping for Charity!
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Tags: EHTC Article, Chipping for Charity, Community Outreach, Scott Lake Country Club, Registration, Golf Outing, Ele's Place, Golf, Sponsorship, Newsletter, Articles

Inundated with Tax Clutter? Here's What You Can Toss

Posted on Sun, Apr 27, 2014

E-filing is on the upswing. According to the Data Book recently released by the IRS, the agency processed 240 million returns during its last fiscal year, of which 59 percent, or 151 million, were filed electronically. Of the 146 million individual income tax returns filed, almost 83 percent were e-filed.

Business Record Guidelines

Employee earnings

Maintain for at least four years, to meet various state and federal requirements. (However, don't throw away records that might involve unclaimed property, such as a final paycheck not claimed by a former employee.)

Employee time cards

Keep for at least three years if your business is subject to the Fair Labor Standards Act (engaged in interstate commerce). It is a best practice for all businesses to keep the files for several years in case questions arise.

Personnel records

Retain three years after an employee has been terminated.

Employment tax records

Keep four years from the date the tax was due, or the date it was paid -- whichever is longer.

Employee business expenses

For travel and transportation expenses supported by mileage logs and other receipts, keep supporting documents for the three-year statute of limitations.

Sales tax returns

State regulations vary. For example, New York generally requires sales tax records to be retained for three years, while California requires four years, and Arkansas, six. Check with your tax adviser.

Business property

Records used to substantiate the cost and deductions (such as depreciation, amortization and depletion) associated with business property must be maintained to determine the basis and gain (or loss) on the sale. Keep these for as long as you own the asset, plus seven years, according to IRS guidelines.

You might think those numbers suggest we are close to becoming a paperless society, at least when it comes to the IRS. That would be a wrong assumption. Even if you recently filed your 2013 tax return electronically, you probably printed out a hard copy for your files. Add that paper to the financial reports, bank statements and other documents you've been holding on to for years and it is likely your filing cabinets are overflowing with paper.

Now that you have filed your tax return, take time to do some spring cleaning.

But you cannot just dump old tax records without giving the process some thought. Some of the documents may still be valuable in case the IRS ever comes calling.

Audits and Amended Returns

You should generally keep records supporting items claimed on your individual tax return until the statute of limitations runs out. Typically, that is three years from the due date of the return or the date you filed, whichever is later. So this year you can generally toss out your tax records for the 2010 tax year and most paperwork you have left from earlier years, but keep your files for the past three tax years.

This is because the IRS can audit your returns for a minimum of three years. You can also file an amended return on Form 1040X during this time period if you missed a deduction, overlooked a credit or misreported income.

But you are not necessarily safe from an audit after three years have passed. There are a couple of key exceptions to this general rule:

1. The statute of limitations increases to six years if the IRS has reason to believe you understated your income by 25 percent or more, and

2. There is no time limit if the IRS suspects fraud or you do not file a tax return.

Various Retention Requirements

Keeping records for three years is the general rule. There are exceptions for certain records. Perhaps not surprisingly, there is no easy answer to the question of how long you should keep specific papers. The IRS does not require you to keep records in any particular way. But here are some basic guidelines for individuals to follow. (See right-hand box for business guidelines.)

Completed tax returns. Some tax advisers recommend that you hold onto copies of completed, filed returns for your lifetime. The reason is so you can prove to the IRS that you actually filed if there's ever a question about it. Even if you don't keep the returns indefinitely, you should hang onto them for at least six years after they are due or filed, whichever is later.

Backup records. Any written evidence that supports figures on your tax return, such as receipts, expense logs, bank notices and sales records, should generally be kept for at least three years.

Exceptions. There are times when you may be entitled to more than the usual three years to file an amended return. For instance, you have up to seven years to take deductions for bad debts or worthless securities, so don't toss out records that could result in refund claims for those items.

Real estate records. Keep real estate records for as long as you own the property, plus three years after you sell (or otherwise dispose of) it and report the transaction on your tax return. Throughout ownership of the property, keep records of the purchase, as well as receipts for home improvements, insurance claims, and documents relating to refinancing. These may help prove your adjusted basis in the home, which is needed to calculate the taxable gain at the time of sale, or to support calculations for rental property or home office deductions.

Securities. To accurately report taxable events involving stocks and bonds, you must maintain detailed records of purchases and sales. These records should include dates, quantities, prices, dividend reinvestment, and investment expenses, such as broker fees. Keep these records for as long as you own the investments, plus the statute of limitations on the relevant tax returns.

Individual Retirement Accounts (IRAs). The IRS requires you to keep copies of Forms 8606, 5498 and 1099-R until all the money is withdrawn from your IRA accounts. Now that Roth IRAs have been added into the mix for some retirement savers, it's more important than ever to hold onto all IRA records pertaining to contributions and withdrawals in case you're ever questioned. If an account is closed, treat IRA records with the same rules as securities. Don't dispose of any ownership documentation until the statute of limitations expires.

Issues affecting more than one year. Records that support figures affecting multiple years, such as carryovers of charitable deductions, net operating loss carrybacks or carryforwards or casualty losses, should be saved until the deductions no longer have an effect, plus seven years, according to IRS instructions.

These general recordkeeping guidelines are for individual tax purposes. Businesses, insurance companies and creditors may have other requirements. Contact your advisers for more information.

Last word: One critical step to take when cleaning out financial documents is to shred them thoroughly before you toss them out.

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Tags: Tax, EHTC Article, Tax Laws, Articles

Potential Tax Credits and Savings for Not-for-Profit Entities

Posted on Thu, Feb 27, 2014

Could your not-for-profit be in line for tax credits with the enactment of the Affordable Care Act? Are you paying unnecessary taxes? Be sure to take note of the following money saving ideas for not-for-profit entities.

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Tags: Tax Credits For Nonprofits, EHTC Blog, Elevate with EHTC, Affordable Care Act (ACA), business consulting

Don't Lose Your Tax Exempt Status

Posted on Wed, Feb 12, 2014

While often less discussed, not-for-profit organizations have their own filing responsibilities with the Internal Revenue Service. These filing requirements vary from one organization to another and can depend on location and operation. To avoid losing the tax-exempt status, it’s imperative that organizations take note of these tips.

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Tags: Elevate with EHTC, EHTC Article, Not-for-Profit Series, Form 990, Tax Exempt, CPA Firm, EHTC

Critical IRS Steps for Not-for-Profit Status

Posted on Wed, Jan 29, 2014

“I filed my Articles of Incorporation with the State of Michigan, which is all I have to do, right?"

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Tags: Elevate with EHTC, Internal Revenue Code, 501(C)(3), Not-for-Profit, IRS, business consulting

CRM: Engaging Customers Today

Posted on Tue, Jan 14, 2014

In the last five years, how companies connect with customers has undergone extreme change. In almost every aspect, one way marketing communication is going away. How customers engage with your organization is more important than collecting the one way marketing messages that have been sent out.

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Tags: Dan Holzgen, Engaging Customers, Customer Relationships, Business Technology, SBS Group Grand Rapids, CRM

Food for Thought When Making Year-End Charitable Contributions

Posted on Tue, Dec 03, 2013

'Tis the season for charitable gift giving. Studies show that the average charity receives about 40% of its annual contributions between Thanksgiving and New Year's Day. This article provides tips to ensure your contributions are tax deductible in 2013 and that they will actually go to a legitimate charity, not a scam.

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Tags: Bogus Charities, Not-for-Profit, CPA Firm, Echelbarger, Charitable Contributions, Tax Deductible, Scam Charities, EHTC

Nine Bright Year-End Tax Planning Strategies for Individuals

Posted on Tue, Nov 05, 2013

The end of another year is coming up, and with it, some of the last opportunities to minimize your individual 2013 taxable income. The good news: There's still time to take advantage of some tax-saving strategies before December 31st. Here are nine ideas to consider that involve charitable contributions, medical expenses, investments, college tuition bills and more. 

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Tags: Year-End Tax Planning Strategies, Individual Taxes, business consulting, CPA Firm, Echelbarger, EHTC

Reduce Your Company's Credit Card Fees by 10-25%

Posted on Tue, Nov 05, 2013

If you accept credit cards for payment, odds are that you're paying too much for processing. In fact, an estimated 85% of businesses could be paying less.

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Tags: EHTC Services, Business Resource Network, Added Value, Financial Management, business consulting, Articles, EHTC

Gaining a Competitive Edge with Video - Complimentary Whitepaper

Posted on Thu, Mar 28, 2013

No matter what business or organization you work in, the competition is becoming fierce.  Whether you are a not-for-profit attracting donors or a business in an extremely competitive industry, the time to make that first impression is shrinking. In addition, the method we engage with our customers is changing significantly.   

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Tags: Elevate-Performance, Marketing, CRM