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The 20-20 Vision

20-20 Vision – February 2016

It’s February! Love is in the air, we are all probably still writing 2015 on everything, and most importantly our mailboxes are stuffed full of W-2s, 1099s, and 1098s. That’s right folks, tax time is here. We love tax time at 20-20. It’s our time to shine! If you’re needing help with all that clutter in your mailbox, give us a call at (205) 434-1272!

A Gift To Small Businesses from the IRS:

Tangible Property Expensing Threshold Increases

The safe harbor threshold for small businesses deducting certain capital items has increased from $500 to $2,500. The new $2,500 threshold takes effect starting with tax year 2016. In addition, the IRS will provide audit protection to eligible businesses by not challenging use of the new $2,500 threshold in tax years prior to 2016. This is a big deal for our small business clients! Many items purchased by small businesses such as tablets personal computers, smartphones, and machinery and equipment parts typically surpass the $500 threshold. This meant they may not be able to take the full deduction for these items in the year they were purchased and complicated the paperwork and record keeping requirements of these companies. This should make things a little easier for many of us small business owners.

The change affects businesses that do not maintain an applicable financial statement (audited financial statement) and applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item. The new $2,500 threshold applies to any item substantiated by an invoice.

Just as before, businesses can still claim otherwise deductible repair and maintenance costs, even if they exceed the $2,500 threshold.

You should keep this in mind as you keep your books in 2016. And remember, you must file the appropriate election at the time you file your return next year to take advantage of this safe harbor. We can definitely help you with both of these. Please call if you have any questions or would like additional details about this change or our services!

Product Spotlight

We are excited to be offering Protection Plus to you this tax season! Protection Plus is the leading provider of audit assistance and identity theft restoration services in the tax industry. For a one time fee of $54.95 at the time of tax preparation, their experienced professionals will provide a full year of identity theft restoration services and assist you if you receive a letter from the IRS. The audit assistance will provide coverage on your 2015 federal tax return, and the identity theft restoration services provide assistance in the event of stolen credit cards, compromised bank accounts, fraudulent tax returns, or other identity theft incidents. As the cost of dealing with identity theft or an IRS audit can cost hundreds or thousands of dollars, we strongly recommend that all of our clients purchase Protection Plus this year.

Dates to pay attention to in February

Federal

Mon 1 – Provide Forms 1098, 1099 and W-2G to recipients for certain payments during 2015.

Mon 1 – Provide W-2s to employees who worked for you during 2015.

Mon 1 – Deposit any FUTA tax owed through Dec. 2015

Mon 1 – File Forms 940, 941, 943, 944 or 945 if you did not deposit all employment taxes when due.

Wed 10 – File Forms 940, 941, 943, 944 or 945 if you did deposit all employment taxes when due.

Tue 16 – Furnish Forms 1099-B, 1099-S and certain Forms 1099-Misc to recipients.

Mon 29 – File Form 1096 with information returns, including Forms 1098, 1099, and W-2G for payments made in 2015.

Mon 29 – File Form W-3 with Copy A of all Forms W-2 issued for 2015.

Alabama

Sat 20 – State Sales, Use, and Pharmaceutical Tax Returns are due.