Tuesday, November 25, 2014

IRA Year-End Planning

Thanksgiving is this week.  December 1st is next week.  The holidays will be here before we know it and we will be ringing in 2015. As you plan your shopping and family gatherings, this is also a good time to start thinking of some year-end tax strategies that might benefit you.
  •  If you have multiple accounts, distributions do not need to be made from each account. You can total all your account balances (using last year's December 31 balances) and take the distribution from any account you choose. Just make sure you notify the custodians that you will satisfy your RMD from other accounts.
  • To calculate your RMD you can go online and search for RMD calculators, go to the IRS website at www.irs.gov and download publication 590 and use Table III in Appendix C, or contact your KOS advisor and they can provide you with a current table.
  • When taking a distribution, you must designate whether or not you want tax withheld. If you do not have tax withheld, any balance due because of the distribution will be payable when you file your tax return and might be subjected to underestimated penalties.
  • People are permitted to make a distribution and repay it within 60 days without tax or penalty. One strategy for those that underpaid their estimated taxes for 2014 is to take a distribution, have all or most of the money paid as withholding tax either to the IRS and/or your state; and then repay those funds from another source within 60 days. These withholding tax payments will be allocated by the taxing authorities as if they were made on time throughout the year and you'll avoid a penalty.
  • If you are in a low tax bracket this year, you might want to consider rolling over your traditional IRA to a Roth IRA. Once in the Roth IRA for five years, any distributions will always be tax-free and the RMD rules will not apply. All earnings in the Roth IRA will be income tax-free.
  • If you are still working and are not a more than 5% owner, you are not required to take RMD from your employer's 401(k) plan that you participate in.
Year-end planning with IRAs and retirement accounts is important and can provide opportunities to save substantial tax. Now is the time to contact your KOS advisor to help you work through any questions you may have.

Wednesday, November 19, 2014


Over the past several days we have received messages from many clients informing us that they received telephone calls stating that they were under criminal investigation by the IRS. These messages did not use the name of the taxpayer involved. The callers said that they were filing suit and providing a different telephone number to call them back.

THIS IS A SCAM and no calls should be returned. The IRS does NOT call taxpayers on their phones nor do they send emails. All correspondence initiated by the IRS in these matters are handled through the United States Postal Service.

Do not respond to any of these inquiries.

Please see the article below for more information or feel free to contact your KOS advisor if you have any questions.

Tax Scammers Up Ante With Robocalls
Posted By Sid Kirchheimer

In the four months since it made history as “the largest scam of its kind,” a now infamous IRS imposter telephone scam has escalated with a recent new spin.

As fraudsters continue to pose as agents with that agency or the U.S. Treasury Department in “live” calls that threaten arrest or deportation, along with the seizure of property, businesses and driver’s licenses, they’ve recently upped the ante to now also incorporate robocalls in this widespread ruse.

Either way, the story is the same: Scammers allege, often with abusive language, that phone call recipients owe money for back taxes and threaten drastic action if not immediately paid by Green Dot MoneyPak prepaid debit cards or wire transfer – payment methods the real IRS doesn’t request.

Still, this scam remains as convincing as it is intimidating.
To make their threats appear authentic, many incoming calls fool recipients’ caller ID to display the IRS toll-free phone number – 800-829-1040.

The scammers, who may have foreign accents, cite common all-American names and badge numbers – John Smith, Sean White and Jason Clark are recent examples used.

But their most alarming (and fear-invoking) ploy is their ability to accurately cite the last four digits of some targets’ Social Security numbers. Officials have no public explanation on how the fraudsters obtained that information for this scam, which started last fall.

Hang up on these taxmen tricksters, and you can expect a follow-up email with similar threats – or another phone call in which the same or another imposter uses a different name, this time posing as local law enforcement and threatening impending arrest for failure to pay the supposedly owed money.

That’s what recently happened to Tim Leslie of Minnesota, who received a call from alleged IRS agent Sean White. The caller claimed that Leslie improperly filed his taxes and that unless he settled the debt, “one copy of this case will be sent to your local sheriff department and one copy will be sent to your employer where you work right now to inform them of your fraudulent activity.”

Here’s the rub: Leslie is currently chief deputy of a sheriff’s department and seeking election to be county sheriff. He called a friend who works as an IRS agent, and an agency investigator told him that some 60,000 Americans have been contacted in this fast-moving scam, “and some folks lost over $10,000 to these people,” Leslie told Minnesota TV station KARE.

That’s a threefold increase in reported contacts since March, when Treasury Inspector General for Tax Administration (TIGTA) Russell George issued a renewed warning about this calling scam. At that time, frightened taxpayers had already paid at least $1 million to scammers.

What to do if you contacted by tax imposters?
Despite possible frightening but fraudulent follow-up contact, hang up on phone calls and report the incident to the TIGTA (phone: 800-366-4484) and Federal Trade Commission, which also issued a recent warning about this scam.

If you receive an email purporting to be from the IRS or Treasury Department, forward it to phishing@irs.gov without clicking on any links or attachments, which may unleash malware. Neither agency ever sends unsolicited emails to taxpayers.

If you really owe taxes or there’s been a problem with filing your returns, the IRS will notify you by U.S. mail – not telephone. If you get a letter, call the IRS at 800-829-1040. Do not respond to callback numbers provided in robocalls.

Know that the IRS doesn’t seek payment by prepaid debit card or wire transfer. But scammers prefer those methods because they are hard to trace and can be redeemed anywhere in the world.
Occasionally, scammers in this ruse may ask for credit card payment, but don’t be fooled: The IRS doesn’t request plastic payments by telephone.

If scammers recite a portion of your SSN, consider placing a fraud alert or security freeze on your credit file with the three major credit reporting bureaus to reduce risk of identity theft.

Wednesday, November 12, 2014

Partial Asset Dispositions

On September 8, 2014, the IRS updated Revenue Procedure 2014-54, which provides guidance on certain changes in methods of accounting for dispositions of tangible depreciable property.  Within this guidance, the IRS extended the time for making a late partial disposition election by one year.

A partial disposition election allows the taxpayers to treat the retirement of structural components of a building (i.e. a roof), a piece of machinery, or other "ghost assets" as a current year disposition.  The taxpayer can then take a current year loss/deduction on the remaining cost basis of the structural component.  The election typically covers the current year, however a late partial disposition election allows a taxpayer to go back in prior years and remove previously retired components.  (Note: the partial disposition deduction is not available unless the election is made.)

Consider the following example.  A calendar year taxpayer places a building in service in 1990.  In 2005, the taxpayer replaces the entire roof of the building.  Under prior rules, the new roof is required to be capitalized as an improvement and depreciated.  Therefore the old 1990 roof and the 2005 roof were being depreciated, despite the 1990 roof no longer being attached to the building.  In 2014, the taxpayer may make a late partial disposition election to stop depreciating the old roof and deduct its remaining basis.

Please contact a KOS advisor today if you would like to discuss how this election may apply to you or the next steps needed to obtain available tax benefits under the new Regulations. 


Thursday, November 6, 2014

Quickbooks Usage and Analytics Study

Has anyone seen the box below pop up when you login to your Quickbooks file?


When you open your company file in Quickbooks 2015 for the first time, the above box will appear. If you use Quickbooks on a regular basis and are used to several boxes popping up at random times, you probably just clicked “Continue” and thought nothing of it. However, once you click “Continue” and go about your daily tasks, you are automatically signed up for this study and Quickbooks is tracking your usage. This box will never appear again. Unfortunately, there is no option to opt-out on this screen.

So what exactly is the Quickbooks Usage & Analytics Study? Intuit states that this study “makes it easier for us to recommend or provide customers with new features and services that are most appropriate for them.” It also “enables us to detect errors and product failures so that the product can be continuously improved.” Intuit claims that the transmission of this data is secure and encrypted, occurs in the background and shouldn’t affect the performance of your computer.

If you are not interested in participating in this study and would like to turn it off, you can go to “Help” across the top menu bar and choose “Quickbooks Usage & Analytics Study” (see image below).  Only the administrator of the company file can turn the study on and off. Once it is turned off, it cannot be turned on again.

A box, similar to the original one that originally appeared upon your first login, will appear and you will have the option to discontinue participation in the study.

Monday, November 3, 2014

KOS Welcomes New Partner

November 3, 2014

KOS Welcomes New Partner

The Deerfield CPA firm of KOS Hires Bradley Greenberg, CPA, MST as Partner

Kessler Orlean Silver & Co., P.C. (KOS) is pleased to announce that Bradley Greenberg, CPA, MST has joined the firm as a Partner in its tax department. Brad adds to KOS’ ability to serve businesses and individuals by providing innovative and effective tax planning. His business philosophy aligns with KOS in being based on a genuine partnership with clients to provide superior service. He joins the firm from SS&G, where he served as a Tax Director.

Brad specializes in tax and business planning for closely held businesses, business owners and individuals, and represents clients in the manufacturing, distribution, service, publishing, real estate, transportation, technology and private equity sectors. He has extensive expertise in state and local taxes, international tax, mergers and acquisitions, research & development tax credits and cost segregation studies. A frequent speaker before business and professional groups, he is called upon to share his knowledge on topics such as tax law changes and business/tax planning ideas.

Brad graduated from the University of Illinois at Urbana-Champaign with a bachelor’s degree in accountancy with honors and from DePaul University with a master’s degree in taxation with distinction.  He is a Certified Public Accountant and a member of the American Institute of CPAs and the Illinois CPA Society. He has previously held the position of chair for the Illinois CPA Society State and Local Taxation Committee.
Based in Deerfield, Illinois, Kessler Orlean Silver & Co., P.C., (KOS) serves businesses and individuals in multiple states providing business consulting, auditing, accounting, bookkeeping and tax services. With an over 80 year history, the mid-sized accounting firm of KOS provides innovative accounting solutions to business owners, executives and managers, private investors, and professionals. The firm’s down-to-earth style and practical experience come from a long-time culture of helping people and feeling passionate about doing so. 
For more information, please visit www.koscpa.com