About Padgett Team

Our firm is a leader in outstanding accounting, tax payroll and business services. Our dedication to the 3 dominating business requirements of Professionalism, Timeliness and Excellence dictate the day-to day service we provide equally to each client. No small business is too small.

Take Care of Yourself!

No doubt, running a business drains you both physically and mentally. As a business owner, you’re always focused on the health of your business, and that’s normal since it’s your financial stability. But to be the best leader, it’s important to take care of yourself first. Here are some areas of personal health which need regular attention.

  • Reduce stress by taking control of your time. Schedule time to address the problems and stressors, so that you can manage them. Allocate time to what you need to get done and learn to say “no” when you need to.
  • Establish a daily routine and stick to it. This means going to bed at relatively the same time every night and getting up at the same time every morning, even on weekends. Find a balance in your daily routine and maintain it.
  • Spend quality time with family and friends. Social beings need to regularly disconnect from electronic devices and focus on building relationships with real people.
  • Find humor every day because laughter is good for you! Seek things which make you laugh, even at work. Your health will appreciate it.
  • Stretch and grow your mind. You can always learn more. Even if you have already learned a lot and accomplished a lot, push yourself and expand your brain power! Try something new…perhaps learn a new language or try out a new hobby.
  • Eat healthy. Eating a nutritious diet helps to provide strength and stability to your mind and body. Pack a healthy lunch…your brain will thank you, and so will your wallet!
  • Exercise regularly. 30 minutes of daily exercise increases your mental health, decreases stress, lowers blood pressure, and reduces anxiety. Even little steps like taking the stairs instead of an elevator can help. Consider taking a walk on your lunch hour.
  • Get rest. Take time off when your body tells you to and get a good night’s sleep every night. Strive for 7-8 hours.
  • Mental health is necessary for your success. Maintain a journal to track your mental health. Log daily items such as your diet, sleep habits, and social activity, and make lifestyle adjustments when needed.
  • Visit doctors for regular checkups. Routine checkups are beneficial, as they can help find problems before they start. By getting the right health services and treatments, you’re taking steps to help your chances of living a longer, healthier life.

Rental Property Held as Tenant-in-Common

You don't have to form a corporation, partnership or other entity to own a rental property with a friend, relative, or business associate. You can own the property as tenants-in-common. And interests don't have to be on a 50-50 (or other amount based solely on the number of tenants) basis.

For example, Sandy can put up 70% of the capital and Jack 30%. If that's the case, Sandy is entitled to 70% of the income and is responsible for 70% of the expenses. And that's how each should report the income and expenses on their respective tax returns. If Sandy doesn't pay her full 70% share of the expenses, the additional amount paid by Jack is considered a loan to Sandy. Jack can't deduct the amount he paid for Sandy. Talk to your attorney about the best way to handle the agreement. In most cases the split should be spelled out in the deed. You may want to have a side agreement as to the responsibilities of each tenant.

3rd Quarter 2019 Due Dates

July 31:

  • Employers. File Form 941 for 2nd quarter 2019. File Form 5500 or 5500-EZ for calendar-year 2018 if you maintain an employee benefit plan, or file Form 5558 to request an extension.

September 16:

  • Individuals. 3rd installment of 2019 estimated tax due.
  • Calendar-year C Corporations. 3rd installment of 2019 estimated tax due.
  • Corporations. Calendar-year 2018 return due (Form 1120S) if on extension.
  • Partnerships. Calendar-year 2018 return due (Form 1065) if on extension.

Summertime Child Care Expenses May Qualify for a Tax Credit

The child and dependent care credit is available for expenses incurred during the lazy hazy days of summer and throughout the rest of the year. Here are seven facts the IRS wants you to know about a tax credit available for child care expenses.

  1. Applicable for care of dependents under the age of 13 (some exceptions apply). 
  2. The expenses must be paid so that both you and your spouse (if married) can work or look for work.
  3. Day camp costs may count as an expense towards the child and dependent care credit.
  4. Expenses for overnight camps don’t qualify.
  5. If your childcare provider is a sitter at your home or a daycare facility outside the home, you'll get some tax benefit if you qualify for the credit.
  6. The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.
  7. When figuring the credit, you may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals.

For more information on Child and Dependent Care Expenses, contact your Padgett Office today.

Prepare for Summer Storms!

Power outages can wreak havoc on electronic files. Safeguard your personal and business assets by taking the following steps:

Back up your records electronically. Keep a set of backup records stored away from the original set. Remember to scan paper documents into an electronic format!

Document valuables. Photograph or video the contents of your home or business, especially items of higher value, to prove the market value of items for insurance and casualty loss claims.

Update emergency plans. Emergency plans should be reviewed annually and distributed to all employees. Don’t forget the new hires!

Maintain current contact information for employees and customers. Ensure that you can communicate with employees and clients in the event of business disruption. Email is your best method when the phones are down!

Know how to get help. Federal and State agencies can offer assistance, such as FEMA, the Small Business Association, and the Department of Homeland Security. IRS publication 2194, Disaster Resource Guide for Individuals & Businesses, contains information and form needed to claim a casualty loss.

Under Audit?

While IRS audits are actually rare, it can be overwhelming when it happens to you. Here are some tips for surviving an IRS audit.

  • Do not ignore the IRS correspondence. IRS audit letters will state what’s being questioned, how to respond and when to respond. It’s important you follow the instructions to provide the information in a timely manner. Ignoring the letter will only result in additional penalties and the IRS will continue to pursue, even if they don’t hear back from you.
  • Lying to an IRS auditor is a criminal offense! Being honest and truthful about your tax reporting is the only avenue. If there was a misstatement on the return, now is the time to fess up!
  • Don’t be bullied. If you disagree with the auditor, you can challenge the decision and dispute the ruling in the IRS Court of Appeals. You also have the right to ask to speak to the auditors superior if you’re concerned about the audit engagement.
  • Stay current on your tax filings. Failure to file returns isn’t going to win you brownie points. Be sure to file returns, even if you can’t pay. Also, if you’re on an installment agreement, be sure to make your payments timely.
  • Be prepared for the audit. The IRS audit letter will indicate specific areas under audit. You should be prepared to support these items and answer questions related to these accounts. Do your homework and be ready. If you need extra time to gather your documents, ask for an extension.

Lastly, remember to take a deep breath and relax… most audits are quite simple and merely require you to supply documentation. If you wish to discuss an audit matter, give us a call.

Should I Panic if I Receive an IRS Notice?

No, absolutely not! Each year, the IRS sends millions of letters and notices to taxpayers for a variety of reasons. Many can be dealt with simply and painlessly. Here are some tips:

  • Notices may request payment of taxes, notify you of changes to your account, or request additional information. The notice will likely cover a specific issue about your account or tax return and provide specific instructions on what you’re asked to do to satisfy the inquiry.
  • If you receive a correction notice, you should review the correspondence and compare it with the information on your return. If you agree with the correction, then usually no reply is necessary unless a payment is due or the notice directs otherwise.
  • If you don’t agree with the correction the IRS made, it is important that you respond as requested. You should send a written explanation of why you disagree and include any documents and information you want the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
  • Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call to help them respond to your inquiry.
  • Always keep a copy of the notice (and any correspondence) for your records.

Employer Alert!

As of January 2019, the Social Security Administration (SSA) will once again be sending out mismatch letters to employers who incorrectly reported their workers social security number (SSN). This practice was “paused” several years ago, but it is back in an attempt to enforce immigration laws. So, how can you avoid these notices?

  • Be sure to have Form W-4 for each employee and/or Form W-9 for each independent contractor on file before you pay them! Also, confirm with the employee/contractor annually the information on these forms is still accurate and update for any changes.
  • Take advantage of the Social Security Number Verification Service (SSNVS). This is a free online service that will verify the name and SSNs of employees using SSA file records. Alternatively, use the automated telephone service, Telephone Number Employer Verification (TNEV). These two verification services can only be used for confirming wage reporting issues, not to verify work authorization.

While often the mismatch is a simple mistake that can easily be corrected, we recommend responding timely since both the IRS and the SSA will be involved. If you would like to discuss your hiring procedures, please give us a call.

Statute of Limitations

After you file your taxes, you’ll have many records that may help document items on your tax return. You’ll need these documents should the IRS select your return for examination. Generally, this means you must keep records that support items shown on your return until the statute of limitations for that return runs out.

The statute of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax. Generally, this is the later of three years from the date the return was due or filed. The statue for claiming a refund is the later of three years from the date the return was filed or two years from the date the tax was paid, if no return was filed. Returns filed before the due date are treated as being filed on the due date.

Unable to Pay?

April 15th, 2019 is the official filing deadline for Form 1040, U.S. Individual Income Tax Return. Whether you submitted a return or filed an extension, many taxpayers find they cannot pay the full amount of taxes owed. You also should contact the IRS to discuss your payment options, such as a short-term extension to pay, an installment agreement or an offer in compromise. In some cases, the IRS may even be willing to waive penalties. Remember though, no matter what option you choose, don’t ignore your tax obligations; they won’t go away but will likely get worse, resulting in tax liens or garnishment of wages. Remember, the IRS is far more willing to work with you if they believe you’re making reasonable efforts to resolve the issue on your end!

Facing a Tax Audit?
We can Help! Don't Delay!
Contact our Enrolled Agents today!!