Tuesday, June 10, 2014

Hass Associates Accounting Financial fraud in 25 years: A virtual Madoff at lightning speed

From the very moment that people started using money, perhaps, some have uncovered ways of stealing it. And so, as sure as there will still be money after 25 years — or in some other form — corporate fraudsters will still be plying their trade. But innovative technologies could produce an environment where, as one retired law-enforcement official warns, “There will be no boundaries in relation to what fraud can be perpetrated.”

Crime investigators state that the crimes per se do not completely change. From our common frauds and Ponzi schemes to intricate security breaches, tax avoidance and money laundering, there are still various ways a criminal can make a dirty buck. When CNBC began in 1989, junk bond king Michael Milken was being accused of securities fraud charges in a sensational investigation. After 25 years, a new Wall Street insider-trading investigation — this time centering on hedge funds — has victimized 79 people, perhaps, more.

Imagine a world where an inside-trader can obtain his information not from an insider who works in a firm but from a hacker working outside and stealing data from the organization’s data systems in the cloud. He shares the data to others through a bunch of intricately encrypted, untraceable instant messages. The unlawful act is done in nanoseconds. The money is disbursed through virtual currency. And the criminals thrive happily plying their trade and stealing from other victims any new day.

And imagine a Ponzi schemer — a future-generation Bernie Madoff – except that he is not human at all but a poser for a rogue nation with the ability to rob you, spend your money and stash it away in a split second.

Enter the world of white-collar crime, 2039.

“Simply use your imagination as to the form of fraud you wish to perpetrate,” said Thomas G.A. Brown, who assisted in launching cyber investigations in the U.S. Attorney’s Complex Frauds Unit in Manhattan.

Brown, presently a senior managing director at FTI Consulting, said the future white-collar criminal will be quicker and more highly invisible than before — allowing the possibility for “nearly the perfect crime.”

In truth, cybercriminals can already perform some of those heists today.

“Crime in cyberspace is not merely the coming trend of the future; it is here with us now,” said E. Danya Perry, also a former senior deputy in the Manhattan U.S. Attorney’s office, now practicing privately. “I believe we will be seeing more of how this chameleon will evolve into a raging dragon.”

Cyberspace crimes already cost the U.S. economy about $120 billion yearly and the entire globe about $1 trillion, as revealed by a study published in 2013 by McAfee and the Center for Strategic and International Studies. And all that in a crime onslaught that is comparatively only new.

Prosecutors obtained a view of what the future will look like from last year’s taking down of Silk Road — a clandestine website which officials authorities claimed was “the most advanced and widespread illegal marketplace online.”

Although Silk Road specialized on the lucrative prohibited drug trafficking, Brown of FTI Consulting reported that agents uncovered methods that could “skyrocket financial crime’s spread.”

Virtual stash

The primary technique among several promising tools is the new virtual currency called bitcoin, which is already changing the face of the global payment structure.

“Bitcoin is so hard to manage,” Brown said.

In the Silk Road case, which Brown built with others, the federal government has captured an amount of over $33 million bitcoin money from the computers of the site’s accused founder, Ross William Ulbricht. However, that amount is a small part the $1.2 billion in sales the system allegedly generated within less than three years of operation. And detecting where the rest of the money is located is almost impossible.

“Imagine every bitcoin as being a gold bar,” Brown said. No one knows where that gold bar originated, and anyone can readily sell it for cash. “Anyone can steal it and run away with it.”

Even if agents can locate bitcoin in a certain account, that clue will not mean the owner can be traced. “No one is required to register a bitcoin account in a genuine name,” Brown said.

There exist other virtual currencies aside from Bitcoin. Back in 2013 as well, a federal grand jury in New York charged Liberty Reserve for trafficking in the currency referred to as LR. Officials captured five Internet domains and charged 35 currency-trading websites in what was billed by Manhattan U.S. Attorney Preet Bharara as one of the biggest global money-laundering cases in legal history.

The implications of the virtual money revolution on white-collar crime are vast. At the bottom, Brown said, the virtual cash could make tax avoidance become easier than before.

“I can enter into any kind of deal I want to derive income without paying taxes since no one is aware of what I’m doing,” Brown said.

“The financial rewards are going to be very compelling for any person to want to trespass the law ,” Perry said.

Exactly how regulators and law enforcers will clamp down on those tempting baits — and what government agencies will head the move — remains unresolved.

In March, the Internal Revenue Service released its first advisory on virtual currencies such as LR and bitcoin.

“Virtual money is considered as property for U.S. federal tax purposes,” the IRS stated in a March 25 announcement. “A disbursement with virtual cash is covered by information reporting within the same limitations imposed upon any other disbursement made in property,” the announcement stated.

Yet, in our world where financial crimes are perpetrated by faceless people, where do we point an accusing finger?

Fraudsters anonymous

“Locating people in an environment of uncertain identities is a difficult task,” said Perry. “When you have a place where you can make deals incognito, this sort of problem will keep going.”

In the Silk Road investigation, officials say numerous drug dealers and over 100,000 of their customers covered their identities by utilizing what are called tumblers, which jumbled their personal identity information to produce anonymous transactions.

Cybercriminals now also often use a technology called Tor — formerly the acronym for The Onion Router, for its multi-layered complexity — to hide their online tracks.

Tor software, which is free online, lets the user to hide his PC’s IP address — its virtual fingerprint — as well as every server’s IP address to which the PC connects.

“Imagine a gigantic pinball machine,” Brown said, where your PC is the silver ball bouncing around. Each time the ball touches a bumper, its identity — or IP address — changes and so with the bumper, making it “functionally impossible” to trace the traffic.

Aside from making illegal deals and underground websites invisible, Tor provides criminals —whether the financial kind or otherwise — a means to interact and pass on data more easily than before.

“Traditionally, you have to identify ‘Harry from Bensonhurst’ or ‘Johnny from the block’ to round up a robbery group,” Brown said.

Today, with their virtual masks covering their faces using all the new technology, white-collar criminals, hackers and identity robbers can assemble and exchange information without fear in so-called carding venues. For such bandits, chat rooms are not merely for socializing. They are sources of stolen identities, software code and even cash beyond the scope of authorities.

“A savvy crook utilizing effective functional security is almost impossible to locate,” said Brown.

Falling prey to the schemes of tomorrow’s crook, he said, are firms that are already forced to share more and more of their valuable information in the web and in the cloud so their workers and clients can readily get that information — a signal for hackers to prowl for victims.

“Many firms concentrate on merely the collecting and using of the information instead of securing that information,” Brown clarified.

Fighting back

The future white-collar cybercriminal may not be a single person. It could actually be a whole country. Brown is apprehensive of the coming “nation-state” in financial crime. “Much of this is not talked about extensively, if at all, due to its confidential nature,” he said.

Friday, May 23, 2014

Hass and Associates Accounting Tax News and Tips: 'Tax office' e-mail scam is foiled by pensioner

THIS savvy pensioner was a step ahead of scammers who tried to access his details through a fake tax email.

Former railway worker Ken Fuller, 80, received an email claiming to be from Her Majesty's Revenue and Customs, inviting him to claim a 'tax refund' of £469, following 'annual calculations of his fiscal activity'.

To claim his rebate, all he had to do was fill in the attached refund form and submit it by the following day.

Like most scams, it sounded too good to be true, and it was. Mr Fuller, of Grimsby, suspected all was not as it seemed, and called HMRC which confirmed it was a fake.

Ken, of Timberley Drive, said he wanted to warn others to be vigilant against such scam attempts, so people don't fall victim to their cons.

He said: "It came out of the blue. I was just checking my e-mails on my computer when I saw it had come through.

"It looked bona fide. It had the exact logo that you get on tax letters. But something about it wasn't right, I was immediately suspicious.

"I contacted HMRC the next morning and they asked me to send it to their 'phishing' email address, so they could take a look at it."

The tax office sent a reply confirming it would never contact people via email about being eligible for a repayment or to ask for personal information or payment.

According to consumer site Money Saving Expert, clicking on the attached link risks uploading a virus to the person's computer.

Often, these are designed to steal your banking and other sensitive login details.

Figures show that during 2013, customers reported more than 91,000 phishing e-mails to HMRC.

Ken said: "It's sad to know someone is out there trying to deceive you. There are a lot of scams out there, you are always hearing about them, but this was an unusual one.

"I'm not particularly computer savvy but I suspected something wasn't right about it.

"It did look very official though. I know because I normally fill out my tax reconciliation at the end of each financial year.

"It definitely makes you more wary about what you are receiving. It came out of the blue for me."

A spokesman for HMRC said: "We only ever contact customers who are due a tax refund in writing by post. We don't use telephone calls, e-mails or external companies.

"Anyone who receives an email claiming to be from HMRC should send it to phishing@hmrc.gsi.gov.uk before deleting it permanently."

Ken reiterated the message that other people should be extra careful when responding to e-mails claiming to be from reputable origins..

"It's really important that people are aware," he said.

"If I can help one person from getting scammed and getting into hassle, then I'll be happy."

Gareth Lloyd, head of digital security at HMRC, said the organisation was working to track and down close the rogue websites responsible for such scams.

"HMRC never contacts customers who are due a tax refund via email – we always send a letter through the post," he said.

"We can, and do, close these websites down, and do all we can to ensure taxpayers stay safe online by working with law enforcement agencies around the world to target the criminals behind these scams."

Wednesday, May 21, 2014

2015 IRS Budget: What it Means for Taxpayers by Hass and Associates Accounting Tax News and Tips

If you have experienced long hold times and inefficient service from the IRS, please know that you aren’t alone. Even professionals have sat on hold for lengthy periods.

Just a few years ago, tax experts could usually count on speaking with a human almost immediately after dialing the agency. That’s no longer the case.

IRS customer service personnel are not happy with the situation either. Budget cuts have led to staffing limitation, and existing workers are feeling the impact. The situation not only creates stress for IRS employees, but also for taxpayers who must tolerate what feels like an endless wait to get a resolution of their tax problems.

A great part of this problem came from the agency’s 2013 $618 million budget cut. As a result, customer service was vastly reduced and employee compensation was reduced by $276 million. This included furloughing employees for three days.

Enforcement personnel and audit staff also received cuts. Audits went down 5% and individual return audits declined to 1,404,931 from 1,481,966 in full year 2012. Collection activities such as “taxpayer liens, levies, and property seizures declined from 3,669,663 in FY 2012 to 2,457,647 in FY 2013, an approximately 33 percent decrease,” according to Treasury Inspector General for Tax Administration (TIGTA).

But all of that is about to change.

President Obama has revealed his proposed 2015 budget, which includes a $1.2 billion increase to $12.5 billion from the current $11.3 billion—an 11% increase.

At the end of April, TIGTA said the IRS wants to focus on improving customer services, increase compliance and combat fraud.  “The IRS’s role is unique within the Federal Government in that it collects the revenue that funds the Government and administers the Nation’s tax laws. It also works to protect Federal revenue by detecting and preventing the growing risk of fraudulent tax refunds and other improper payments,” TIGTA said in the statement.

The IRS is tasked with enforcing the Affordable Care Act’s  penalties and policing its subsidies. The president’s signature legislation requires most Americans to have insurance by March 31 for 2014 or face a penalty of $95 a year or 1% of their income for failing to comply.

Several years ago, the IRS received a budget increase but the monies were allocated primarily to systems modernization (computers) and enforcement. In fact, customer service received a cut to their operations at that time. However, the allocation tables for 2015 show a different story. Customer service will receive an injection of 7.5% increase to their budget. Article source.

Tuesday, May 20, 2014

Hass and Associates Accounting Tax News and Tips: IRS Stonewalling FOIA Request Surrounding Correspondence

On May 21, 2013 the National Republican Senatorial Committee sent the IRS a Freedom of Information Act request asking for "any and all documents or records, including but not limited to electronic documents, e-mails, paper documents, photographs (electronic or hard copy), or audio files," related to correspondence from January 1, 2009 and May 21, 2013 between thirteen different Democrat members of Congress and top IRS officials. Those officials include former IRS Commissioner Doug Shulman, former Commissioner Steven Miller, senior IRS official Joseph Grant and former head of tax exempt groups Lois Lerner. Members of Congress named in the request include Sen. Schumer (D-NY), Sen. Reid (D-NV), DSCC Chair Sen. Bennet (D-CO), Sen. Landrieu (D-LA), Sen. Pryor (D-AR), Sen. Hagan (D-NC), Sen. Begich (D-AK), Sen. Shaheen (D-NH), Sen. Mark Udall (D-CO), Sen. Franken (D-MN), Sen. Warner (D-VA), Rep. Braley and Rep. Peters (D-MI).

Since that request was received by the IRS nearly one year ago, IRS Tax Law Specialists Robert Thomas and Denise Higley have asked for more time to fulfill the request six times.

"I am responding to your Freedom of Information Act (FOIA) request dated May 21, 2013, and received in our office on May 30, 2013," Higley wrote in a letter to NRSC Attorney Megan Sowards last year. "I am unable to send the information requested by June 27, 2013, which is the 20 business day period allowed by law. I apologize for any inconvenience this delay may cause."

Thomas and Higley have sent six letters with the same language and different dates to Sowards requesting more time to locate information in order to fulfill the FOIA request. Most recently, the IRS has asked for a deadline of August 1, 2014 to produce information.

Earlier this week Judicial Watch released documents showing Democratic Michigan Senator Carl Levin was in contact with former Deputy IRS Commissioner Steven Miller repeatedly throughout 2012 and was working with the agency on how conservative groups, specifically those working against his reelection, could be targeted through IRS rules and regulations. Last month we learned the staff of Ranking Member of the House Oversight Committee Elijah Cummings had been in touch with the IRS about voter fraud prevention group True the Vote, despite direct denials from Cummings any contact with the IRS had ever occurred.

Monday, May 19, 2014

Hass and Associates Accounting Tax News and Tips: U.S. Charges Credit Suisse Over Tax Fraud Scheme

Credit Suisse pleaded guilty to Federal criminal charges Monday, for helping clients avoid tax payment by sending money overseas. The global banking giant will pay a total of $2.6 billion in penalties

The Swiss bank Credit Suisse pleaded guilty Monday to helping U.S. citizens commit tax evasion over the course of several decades, the Department of Justice announced. Credit Suisse will pay the Department of Justice, the Federal Reserve and the New York State Department of Financial Services a total of $2.6 billion in penalties, the largest payment ever in a U.S. criminal tax case. The banking giant is the first global financial institution to face a criminal conviction from U.S. authorities in more than a decade, Bloomberg reports.

Credit Suisse bankers aided thousands of wealthy Americans in concealing their money from U.S. authorities, the Department of Justice said. The bank helped American clients set up shell accounts to shuttle their money overseas and then solicited false IRS documents to make the accounts seem legitimate. According to a U.S. Senate subcommittee report released in February, Credit Suisse recruited new clients at bank-sponsored events, like golf tournaments in Florida and a gala in New York. In one instance, a Credit Suisse employee handed a client secret bank statements hidden in a copy of Sports Illustrated during a breakfast meeting. Credit Suisse had 22,000 U.S. customers with about $13.5 billion in their Swiss accounts in 2006, the “vast majority” of which was undeclared to U.S. authorities, according to the report.

“This case shows that no financial institution, no matter its size or global reach, is above the law,” Attorney General Eric Holder said in a release announcing the conviction. “Credit Suisse conspired to help U.S. citizens hide assets in offshore accounts in order to evade paying taxes. When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here.”

As part of its deal, Credit Suisse must disclose its cross-border activities and cooperate in requests for account information from the U.S. government. The bank must also provide info about other banks that helped transer funds into secret accounts and close the accounts of Americans who improperly report their assets to the U.S. government.

The move comes as part of an overall crackdown by the Department of Justice on offshore bank accounts. As part of the same investigation, the Department of Justice has indicted eight Credit Suisse executives since 2011. Two of them have pleaded guilty to criminal acts.

Sunday, March 2, 2014

Hass and Associates Accounting Tax Preparation New tax test on foreign takeovers

Hass and Associates Accounting Tax Preparation New tax test on foreign takeovers

FOREIGN investors face a new hurdle as Joe Hockey declares he will take their tax affairs into account when considering their Australian deals amid a global crackdown on corporate tax avoidance.

Alarmed at the potential loss of federal revenue, the Treasurer warned that tax arrangements would become a major factor in foreign investment approvals, given their growing impact on the national interest.

Mr Hockey, who has the final say on all big foreign investments, took the new stance as he stepped up the case for global action on the “significant risk” to revenue from profit-shifting by large companies.

The comments to The Australian are an important signal on foreign investment rules, given the Treasurer’s wide discretion to veto transactions and advice from Treasury about the revenue at stake.

“The risk is significant, not just because the digital economy helps to facilitate tax minimisation or tax liability shifting to other jurisdictions,” Mr Hockey said in an interview. “It has an impact on other decision-making. Ultimately, it will have some impact on foreign investment decisions.”

The Abbott government is pushing ahead with curbs on “base erosion and profit-shifting” as chair of the G20 this year, hosting a summit in Sydney last weekend that approved global measures to tackle the problem.

Behind the international agenda is a domestic fear, including within Treasury, that big takeovers would lead to changes in tax arrangements that could wipe out billions of dollars in revenue.

Mr Hockey did not refer to any specific proposal before the Foreign Investment Review Board but sent a clear signal to investors about how he would decide on future deals.

“If you’re advised that an Australian company is a major taxpayer and if it is purchased by someone overseas and therefore its tax liability would be reduced domestically to zero, that feeds into a decision about what is contrary to the national interest,” he said. “You’d lose potentially a substantial lick of revenue. And that does have an impact on the national interest.”

The G20 communique released on Sunday promised global action on the tax leakage by insisting “profits should be taxed where economic activities deriving the profits are performed”.

OECD tax director Pascal Saint-Amans outlined two tranches of changes to be decided in September this year and September next year.

Labor has welcomed the G20 progress but challenged Mr Hockey to live up to the communique, noting the government had abandoned some of former treasurer Wayne Swan’s actions to close tax loopholes.

“Three-quarters of a billion dollars have been dropped because the government wasn’t willing to go hard on multinational profit-shifting,” opposition assistant Treasury spokesman Andrew Leigh said. “So that’s $700 million, around the cost of a new hospital.

“The government is walking away from good moves on multinational profit-shifting and they’re walking back on transparency of multinational tax paid, which has really got to leave you asking the question: how serious are they about making sure that all companies pay their fair share of tax?” KPMG national corporate tax leader David Linke said the G20 agenda was significant for all businesses operating across borders and the biggest concern was avoid countries going it alone in ways that led to double-taxation of companies.

“Generally tax reform takes a decade and here they’re trying to get it done in two years, so the time frame is challenging.”

Treasury has warned the government in recent years about the danger to the tax base from large transactions, particularly when BHP Billiton and Rio Tinto contemplated a merger of their iron ore interests in 2010.

Rio estimated its Australian tax liability at $9 billion last year, and Treasury feared the bulk of that could be lost if the iron ore merger had gone ahead.

Another transaction, the 2009 sale of Myer by private equity owners, triggered a court case when the Australian Taxation Office tried unsuccessfully to collect tax on the $1.5bn repatriated to offshore tax havens.

The policy guiding the FIRB requires the agency - which operates within Treasury - to consider the impact of a takeover on the government’s revenue.

However, foreign investment counsel for King & Wood Mallesons Malcolm Brennan said tax had not been one of the central considerations until now. “It is rare to see tax gaining the heaviest weighting in measuring the national interest impact,” he said. “It is more what is the effect on the community, on jobs, on management and wanting to see Australian involvement maintained rather than the impact on government revenue.”

Mr Hockey’s stance may cause concern for the US, which argued it should not be a national interest consideration when it was negotiating the Australia-US Free Trade Agreement.

Mr Brennan said US multinationals wanting to reorganise subsidiaries in Australia often had to seek FIRB approval, even though there was no change in ownership, because the government wanted to vet tax implications. He said the threshold for US takeovers was raised to more than $1bn under the FTA so that US companies would have greater latitude to reorganise their operations without involving the ATO in foreign investment approval.

Mr Brennan said a growing number of African-based mining companies were listing on the Australian Securities Exchange, despite having no assets in Australia. They pay tax here, but if taken over by a foreign company the tax would disappear.

Mr Hockey has demonstrated a willingness to risk political and industry criticism by rejecting takeover proposals, vetoing a $3.4bn bid for Graincorp by Archer Daniels Midland in November.

While Australia hosts the G20 talks on the tax agenda this year, Mr Hockey was cautious about acting unilaterally to fix the tax leakage, when speaking to The Australian before last weekend’s summit of finance ministers and central bank governors.

“Domestically I think we’ve got to keep working away on it, but I want to see where we get to on a global level first so that we don’t create an inconsistent regime,” he said. “Given we’re in the box seat globally, there’s a great opportunity to get a closer, better understanding of where it’s heading.”
Hass and Associates Accounting Tax Preparation New tax test on foreign takeovers
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Saturday, March 1, 2014

Hass and Associates Accounting Tax Preparation What the New Obamacare Taxes Mean for Your Return

We all knew the Affordable Care Act was going to affect more than the type of medical insurance we can have, and if you are in one of the top two tax brackets, you’re among the lucky ones paying for much of the ACA through two new taxes. The new Medicare tax is an additional 0.9% taken from the paychecks of everyone who earns more than the threshold amount, and the tax on Net Investment Income (NII) takes an extra 3.8% on profits from investments. (The latter is in addition to the higher capital gains tax that upper-income taxpayers are already paying.)

What's more, because the threshold amounts for both the additional Medicare tax and the NII tax are not going to increase based upon inflation, like the Alternative Minimum Tax, more taxpayers will find themselves subject to these new taxes as time goes by and incomes rise.
The additional 0.9% Medicare tax applies once your income from a job (“wages”) exceeds a certain amount:

“A lot of people didn’t fully understand the new tax laws,” says Karen Goodfriend, a CPA and Personal Financial Specialist (PFS) who works in Los Altos, Calif. “It’s complicated. There are new taxes and new thresholds."
As more and more Americans are completing their 2013 tax returns, they are waking up to just how big a bite these taxes can have.

The additional 3.8% Net Investment Income tax applies if: a) you have net investment income, and 2) your modified adjusted gross income exceeds the following thresholds. Note that with the exception of “qualifying widow(er) with dependent child,” these are the same dollar amounts as above.

Note: the thresholds for both new taxes are not indexed to increase with inflation.
Reducing the impact of the additional Medicare tax is difficult unless you're your own boss. One advantage of being self-employed is that you can often control the timing of your income. If you’re able to push income into the following year, you might be able to keep your wages from exceeding the threshold for your filing status. If you work for someone else, then the best you can hope is that your company gives you some flexibility to delay receipt of your bonus until Jan. 1.

By law, your employer must automatically withhold the extra Medicare tax when your income exceeds the threshold. The problem is that if you and your spouse both work outside the home and neither of you individually earns more than the threshold, you will still be liable for this tax if your joint income is more than $250,000. If you haven’t had this taken out of your paychecks, you’ll need to write a check for this amount when you file your tax return. Additionally, you might be subject to a penalty for underpaying your taxes for the previous year. To avoid this, the American Institute of CPAs recommends you increase your payroll withholding or make quarterly estimated tax payments.

Max Out Your Retirement Contributions
Since money you contribute to your employer-sponsored retirement plan is deductible, you might be wondering if this is a way to reduce your wages so they are below the level where the additional 0.9% Medicare tax kicks in. Nice try. Medicare and Social Security taxes are calculated before your retirement plan contributions are taken into account.

But that’s no reason to slack off on your 401(k). Contributions to company-sponsored plans as well as traditional IRAs will still reduce your taxable income. And, that will impact whether you are subject to the Net Investment Income tax.

“The sooner you make a contribution to a tax-deferred retirement account, the better. Not only does this reduce your taxable income, it helps build retirement income,” says John Sweeney, executive vice president at Fidelity Investments. If you have a 401(k), 403(b) or 457 plan through work, in addition to the maximum amount you can contribute is $17,500. However, if you are age 50 or older, the maximum is $23,000 thanks to the $5,500 “catch-up contribution.”

The most you can contribute to a traditional or Roth IRA is $5,500, plus another $1,000 if you qualify for a catch-up contribution.

Last Hope (for 2013)
At this point, says Sweeney, ”you can’t do a lot to affect your 2013 return other than make an IRA contribution.” But instead of waiting until this time next year to come up with the money for your 2014 IRA contribution, he suggests you get started now. “Put a couple of hundred bucks a month in [your IRA].” Virtually every mutual fund company has a free, automatic investing plan and will deduct whatever amount you specify from your bank account on a certain date each month.

The benefit of this approach, called “dollar cost averaging,” is two-fold: not only do you reap whatever gains the markets deliver throughout this year, you also start to live on less income. “You figure out how to make small adjustments so you are saving 10-15% of your income,” says Sweeney. He maintains that if you can learn to live on 85% to 90% of what you earn, “you’ll be better off in the long run. By the time you’re retired, your spending level will be adjusted lower and you’ll have a nice nest egg.”

Got HSA?
If your employer gives you the choice of contributing to a Health Savings Account, this can also help reduce your taxable income. Think of an HSA as an IRA for medical expenses. It reduces your current tax bill because contributions are deductible and it reduces your future taxes because withdrawals are tax-free, provided they are used for qualified medical expenses.  If you are still working and can afford it, Sweeney recommends not using your HSA account to cover smaller medical expenses such as prescriptions and co-pays. The less you withdraw from your HSA today, the more money you’ll potentially have in the future. Medical expenses tend to increase as you age. When you’re retired and no longer getting a paycheck, he says your HSA represents “a pool of money that has grown tax-free.”

Think of the Kids (or Grandkids)
While it won’t have any impact on the amount of income that is currently subject to tax, Goodfriend encourages clients--many of whom come from the wealthy Silicon Valley area--to consider a 529-college savings plan.  The money invested inside these accounts grows tax free if it’s used for qualified expenses and as she points out, “you minimize the income that can be subject to investment income tax” in the future.

Give It Away- Smartly
If you are charitably inclined, don’t write a check! Instead, donate appreciated property to the charity instead of selling it yourself. This prevents you from being pushed into a higher tax bracket and potentially over the threshold for the investment income tax. And, since a charity does not pay tax when it sells securities, it receives all of the proceeds--not just the after-tax amount.

Ms. Buckner is a Retirement and Financial Planning Specialist and an instructor in Franklin Templeton Investments' global Academy. The views expressed in this article are only those of Ms. Buckner or the individual commentator identified therein, and are not necessarily the views of Franklin Templeton Investments, which has not reviewed, and is not responsible for, the content.
Hass and Associates Accounting Tax Preparation What the New Obamacare Taxes Mean for Your Return
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Thursday, February 27, 2014

National Insurance, a 100-year old charge on employers and employees, will be renamed “earnings tax”, the Chancellor has signalled.

Hass and Associates Accounting Tax Preparation  Goodbye National Insurance. Hello Earnings Tax

National Insurance, a 100-year old charge on employers and employees, will be renamed “earnings tax”, the Chancellor has signalled.
The change, which will be proposed in legislation to be published on Tuesday, is the first step towards merging income tax with National Insurance.
Ben Gummer MP, a rising star Tory backbencher who has been campaigning on tax transparency, will propose the change in a Commons Bill on Tuesday.
The plans have Treasury backing. A source told The Daily Telegraph that George Osborne, the Chancellor, “is attracted to the idea”.
Mr Gummer said: “I am very pleased the Government is interested in the idea. They have been very receptive to trying to make the tax system more transparent.

“This would be a really good step forward in making what the Government takes from taxpayers clearer and simpler.”
Mr Gummer said he hoped the name change would begin the process of merging National Insurance with Income Tax into one single charge.
He said: “The most important part is changing the name so in the public mind we can begin the two as the same, which they are. This is a first step.”
National Insurance, which is charged on top of income tax, was first introduced in the National Insurance Act by Lloyd George in 1913 as a way for workers and employees to contribute towards certain benefits, such as a state pension.
Unlike income tax, MPs are not allowed to vote on whether it should be levied every year. Instead they are only asked to approve level of the charge.

National Insurance rakes in billions every year for the Treasury. Anyone who is employed and earns between £149 and £797 a week pays 12 per cent of their income in National Insurance. A further 2 per cent is paid on all earnings over that level.
People who are self-employed pay National Insurance at a flat rate or as a percentage of the individual’s annual taxable profits.
Hass and Associates Accounting Tax Preparation Goodbye National Insurance. Hello Earnings Tax
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Tuesday, February 25, 2014

Tax Benefits at Hass and Associates Accounting: Cal State Long Beach Accounting Majors Offer Free Tax Preparation

Jennfer Mae Formeloza is coordinating Cal State Long Beach’s Volunteer Income Tax Assistance, which offers free tax preparation to low- and moderate-income filers. 
LONG BEACH >> Football season is over and tax season is upon us.

Those looking for help can try a free tax preparation service offered by accounting majors at Cal State Long Beach through the Volunteer Income Tax Assistance program.

The outreach runs through March 28 at the university and offers income tax assistance to low- and moderate-income taxpayers, the disabled, elderly and those who speak limited English.

VITA is a cooperative effort with the Internal Revenue Service. Funded through the campus Beta Alpha Psi and Accounting Society chapters, the program aims to help those who can’t afford to pay for tax preparation.

Campus officials said each year hundreds of tax returns are filed through the program, which has the added benefit of giving students valuable experience in accounting.

Sudha Krishnan, a professor in the Accountancy Department at CSULB and director of VITA, said the program gives students the opportunity to work with the public, something employers look for on resumes.

“It’s service back to society,” she said. “They learn how to give back and they learn to take that first step in their careers. Many of these students end up going to tax firms. They go out to work and they’ve taken that first step. They don’t need to be trained from scratch.”

Sixty student volunteers with IRS training and certification are available this year to prepare and electronically file basic income tax returns and foreign student tax returns. They can also ask questions or discuss concerns.

“Students have the opportunity to interact face to face with members of the community and make a direct impact,” said Jennifer Mae Formeloza, this year’s student VITA coordinator, in a news release. “Our profession is based on ethics. It takes a lot of trust to share something so personal, and that’s why I think this program helps students further understand their responsibilities to the public.”

VITA is designed for those who earned $51,567 or less in 2013. The program doesn’t do itemized or business tax returns.

To make use of the program, taxpayers should bring their wage, earnings and dividend statements, as well as proof of identification and their Social Security cards, including those of their spouses and dependents.

Clients are also encouraged to bring a copy of their federal and state returns from last year, if available. They will need to have their bank routing numbers and account numbers for direct deposit. If filing taxes electronically on a married filing joint tax return, both spouses must be present to sign the required forms.

Those who used day-care should bring the provider’s business employer identification or Social Security number. Renters need to bring the rental dates and landlord’s name, address and phone number.

The CSULB VITA program operates out of Room 237 on the second floor of the College of Business Administration Building off Bellflower Boulevard. Volunteers prepare returns from 8 a.m. to 5 p.m. Monday through Thursday, and 9 a.m. to 3 p.m. on Fridays. The site will be closed on Monday, Feb. 17.

Walk-ins are welcome, and CSULB advises the public to use the metered parking in Lot 15, adjacent to the CBA Building. The cost is $2 per hour.

For more information, e-mail vita.csulb@gmail.com.

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Wednesday, February 12, 2014

Hass Associates Accounting Tips for Preparing Taxes Online

OTTAWA, ONTARIO--(Market wired - Feb. 10, 2014) - Did you know?
Filing your taxes online is increasing in popularity as Canadians discover how fast, easy, and secure filing online really is. Last year, over 74% of Canadians filed their income tax and benefit return electronically. Are you ready to join them?

Get ready: following these steps will make filing your taxes easy!
·         Go to www.cra.gc.ca/getready to find out about non-refundable credits you might be eligible for to reduce your taxes this year.

·         Gather all your information slips and receipts (T4s, T5s, etc.), as well as a copy of last year's return to use as a reference for this year. No need to send your receipts in with your return! If we need to see them, we will let you know.

·         Have your social insurance number and date of birth on hand.

·         Sign up for direct deposit to receive your refund faster and any benefit or credit payments owed to you, deposited directly into your bank account. Go to www.cra.gc.ca/directdeposit to learn how to sign up for direct deposit.

·         Make sure the Canada Revenue Agency (CRA) has your updated address and direct deposit information before you file. The fastest way to update both is by using My Account. To register for My Account, go to www.cra.gc.ca/myaccount. You can also use this service later to view your tax slip information, look up your RRSP deduction limit, and check the status of your refund or your Canada child tax benefit or GST/HST credit payments.

·         To file online, you need to complete your return using certified software or a certified web application. This may even help you identify benefits and credits that you may have missed if you filed on paper! The CRA has a list of software options-some that you have to buy and some that you can use for free-at www.netfile.gc.ca/software.

Monday, February 10, 2014

Hass Associates Accounting Tax Tips

Tax season is officially underway (Jan. 31 - April 15) and while it may be a painful process for some, delaying it can only bring a bigger headache.

John Ams, executive vice president for the National Society of Accountants (NSA) says whether you owe money or anticipate a refund, getting it done early can prove beneficial. If you are owed money, your chances of getting it faster are better when you file early. If you owe money, you will at least know how much you owe and can begin saving to pay for it, says Ams.

Anyone who hopes to file an extension should remember, it is only an extension of time to file your return, not an extension of time to pay. "You have to file the extension and the money you think you are going to owe. If you substantially underpay, you get a substantial underpayment penalty," Ams says. Taxes are due on April 15, period. And yes, the IRS does charge interest.

Here are seven reasons why you may want to file early:

1.       If you think you have a refund coming, filing early often makes your refund show up faster. In recent years, early filers have received refunds in 21 days. Taxpayers filing nearer the deadline day waited an average of 31 days.

2.       If you think you’ll owe taxes, you find out sooner how much you’ll owe. This gives you more time to save up money before the balance comes due. You may also file early and not pay the tax bill until the April 15 deadline – and you have until that date to arrange a payment schedule with the IRS.

3.       Your tax preparer has a lot more time – and energy – early in the tax-filing season to talk to you. If preparing your taxes is going to mean several meetings with your preparer and questions for them to answer or research, start ASAP. You also gain more time to correct any errors that crop up during preparation.

4.       Filing early forces you to organize such tax documents as your wage and earning statements (forms W-2, K-1, 1099-MISC and 1099-R) and your receipts for deductions and credits. The more time you have to put these documents in order the better you’ll feel about justifying deductions that the IRS often scrutinizes, such as those for home office space or charitable contributions.

5.       The last minute is no time to discover a wrinkle that complicatesyour tax situation. Nor is the last minute the time to make a hurried and careless mistake in your return – a mistake that could trigger an audit.

6.       About three out of 10 taxpayers still mail paper returns. Filing early spares you from the early-April crowds at the post office.

7.       Filing early reduces the risk of some identity thief filing in your name later in the season to steal a refund. Identity thieves can use yoru name and social security number to file a falsified return in your name and claim whatever credits they want to get a refund, says Ams. They may then have it sent to a P.O. Box and by the time you find out, they have disappeared.

If your return is not fairly simply, you may want to consult a tax professional for help. You can spend a lot of time spinning your wheels on complex issues, Ams says. If you need tax-preparation help this coming season, you can find a qualified tax preparer in your area, on the NSA website at www.nsacct.org. Click on “Find a Professional” or call 800-966-6679. [Discover More]

You can also ask friends or relatives for recommendations, but be sure to find someone with expertise that matches your own financial situation, Ams says. Any tax preparer you use should have a professional tax identification number which he or she uses upon signing your return. You may also qualify for free tax preparation assistance. Click to read