Tips for Individuals Who Need to Reconstruct Records After a Disaster

Taxpayers who are victims of a disaster might need to reconstruct records to prove their loss. Doing this may be essential for tax purposes, getting federal assistance, or insurance reimbursement.

Here are 12 things taxpayers can do to help reconstruct their records after a disaster from you Grain Valley tax preparation office:

• Taxpayers can get free tax return transcripts by using the Get Transcript tool on IRS.gov, or use their smartphone with the IRS2Gomobile phone app. They can also call 800-908-9946 to order them by phone.
• To establish the extent of the damage, taxpayers should take photographs or videos as soon after the disaster as possible.
• Taxpayers can contact the title company, escrow company, or bank that handled the purchase of their home to get copies of appropriate documents.
• Home owners should review their insurance policy as the policy usually lists the value of a building to establish a base figure for replacement.
• Taxpayers who made improvements to their home should contact the contractors who did the work to see if records are available. If possible, the home owner should get statements from the contractors to verify the work and cost. They can also get written accounts from friends and relatives who saw the house before and after any improvements.
• For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, the taxpayer can contact the attorney who handled the trust.
• When no other records are available, taxpayers can check the county assessor’s office for old records that might address the value of the property.
• There are several resources that can help someone determine the current fair-market value of most cars on the road. These resources are all available online and at most libraries:
• Kelley’s Blue Book
• National Automobile Dealers Association
• Edmunds
• Taxpayers can look on their mobile phone for pictures that show the damaged property before the disaster.
• Taxpayers can support the valuation of property with photographs, videos, canceled checks, receipts, or other evidence.
• If they bought items using a credit card or debit card, they should contact their credit card company or bank for past statements.
• If a taxpayer doesn’t have photographs or videos of their property, a simple method to help them remember what items they lost is to sketch pictures of each room that was impacted.

More Information:

• Publication 547, Casualties, Disasters, and Thefts
• Publication 584, Casualty, Disaster, and Theft Loss Workbook
• Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook
• Publication 2194, Disaster Resource Guide for Individuals and Businesses
• Federal Emergency Management Agency
• Small Business Administration
• Disasterassistance.gov

Have questions, please contact your Grain Valley tax preparation office today.

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
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Taxpayers Should Be Wary of Unsolicited Calls from the IRS

Taxpayers who get an unexpected or unsolicited phone call from the IRS should be wary – it’s probably a scam. Phone calls continue to be one of the most common ways that thieves try to get taxpayers to provide personal information. These scammers then use that information to gain access to the victim’s bank or other account. 

For more information contact your Grain Valley or Blue Springs Income Tax Preparation office today at 816-220-2001

When a taxpayer answers the phone, it might be a recording or an actual person claiming to be from the IRS. Sometimes the scammer tells the taxpayer they owe money and must pay right away. They might also say the person has a refund waiting, and then they ask for bank account information over the phone.

Taxpayers should not take the bait and fall for this trick. Here are several tips that will help taxpayers avoid becoming a scam victim.
The real IRS will not:

• Call to demand immediate payment
• Call someone if they owe taxes without first sending a bill in the mail
• Demand tax payment and not allow the taxpayer to question or appeal the amount owed
• Require that someone pay their taxes a certain way, such as with a prepaid debit card
• Ask for credit or debit card numbers over the phone
• Threaten to bring in local police or other agencies to arrest a taxpayer who doesn’t pay
• Threaten a lawsuit

Taxpayers who don’t owe taxes or who have no reason to think they do should follow these steps:

• Use the Treasury Inspector General for Tax Administration’s IRS Impersonation Scam Reporting web page to report the incident.
• Report it to the Federal Trade Commission with the FTC Complaint Assistant on FTC.gov. 
• Taxpayers who think they might actually owe taxes should follow these steps:
• Ask for a call back number and an employee badge number.
• Call the IRS at 1-800-829-1040.

Every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are the Taxpayer Bill of Rights. Taxpayers can visit IRS.gov to explore their rights and the agency’s obligations to protect them.
IRS YouTube Videos:

• Tax Scams – English | Spanish | ASL

Share this tip on social media -- #IRSTaxTip: Taxpayers Should Be Wary of Unsolicited Calls from the IRS. https://go.usa.gov/xnqn4

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
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Investors: Beware of the Wash Sale Rule

Some helpful tax and investment planning tip from your Blue Springs Income Tax & Financial Services firm.

A tried-and-true tax-saving strategy for investors is to sell assets at a loss to offset gains that have been realized during the year. So if you’ve cashed in some big gains this year, consider looking for unrealized losses in your portfolio and selling those investments before year end to offset your gains. This can reduce your 2017 tax liability.

But what if you expect an investment that would produce a loss if sold now to not only recover but thrive in the future? Or perhaps you simply want to minimize the impact on your asset allocation. You might think you can simply sell the investment at a loss and then immediately buy it back. Not so fast: You need to beware of the wash sale rule.

The rule up close

The wash sale rule prevents you from taking a loss on a security if you buy a substantially identical security (or an option to buy such a security) within 30 days before or after you sell the security that created the loss. You can recognize the loss only when you sell the replacement security.

Keep in mind that the rule applies even if you repurchase the security in a tax-advantaged retirement account, such as a traditional or Roth IRA.

Achieving your goals

Fortunately, there are ways to avoid the wash sale rule and still achieve your goals:

• Sell the security and immediately buy shares of a security of a different company in the same industry or shares in a mutual fund that holds securities much like the ones you sold.
• Sell the security and wait 31 days to repurchase the same security.
• Before selling the security, purchase additional shares of that security equal to the number you want to sell at a loss. Then wait 31 days to sell the original portion.

If you have a bond that would generate a loss if sold, you can do a bond swap, where you sell a bond, take a loss and then immediately buy another bond of similar quality and duration from a different issuer. Generally, the wash sale rule doesn’t apply because the bonds aren’t considered substantially identical. Thus, you can achieve a tax loss with virtually no change in economic position.

For more ideas on saving taxes on your investments, please contact your Blue Springs financial advisor today at 816-220-2001.

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
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Moshe Milevsky - Why Annuities?

Tips to Keep in Mind on Income Taxes and Selling a Home

Homeowners may qualify to exclude from their income all or part of any gain from the sale of their main home.

Below are tips from your Blue Springs tax preparation office to keep in mind when selling a home:

Ownership and Use. To claim the exclusion, the homeowner must meet the ownership and use tests. This means that during the five-year period ending on the date of the sale, the homeowner must have:

• Owned the home for at least two years
• Lived in the home as their main home for at least two years

Gain.  If there is a gain from the sale of their main home, the homeowner may be able to exclude up to $250,000 of the gain from income or $500,000 on a joint return in most cases. Homeowners who can exclude all of the gain do not need to report the sale on their tax return

Loss.  A main home that sells for lower than purchased is not deductible.

Reporting a Sale.  Reporting the sale of a home on a tax return is required if all or part of the gain is not excludable. A sale must also be reported on a tax return if the taxpayer chooses not to claim the exclusion or receives a Form 1099-S, Proceeds from Real Estate Transactions.

Possible Exceptions.  There are exceptions to the rules above for persons with a disability, certain members of the military, intelligence community and Peace Corps workers, among others.

Items to Keep In Mind:

• Taxpayers who own more than one home can only exclude the gain on the sale of their main home. Taxes must paid on the gain from selling any other home.
• Taxpayers who used the first-time homebuyer credit to purchase their home have special rules that apply to the sale.
• Work-related moving expenses might be deductible.
• Taxpayers moving after the sale of their home should update their address with the IRS and the U.S. Postal Service by filing Form 8822, Change of Address.
• Taxpayers who purchased health coverage through the Health Insurance Marketplace should notify the Marketplace when moving out of the area covered by the current Marketplace plan.

If you have any questions or if we may be of any assistance please do not hesitate to contact your Blue Springs tax professionals at 816-220-2001.

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
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BENEFITS OF A FINANCIAL SERVICE REVIEW

Blue Springs Financial Adviser

Whether you’re an individual saving for retirement or a multinational corporation, taxes play a significant role in your financial picture. That’s why your finances and investments can’t be properly managed in a silo. It’s only when your finances are viewed from a holistic perspective – one that considers the impact of taxes on each financial and investment decision made – that an accurate and complete picture emerges.

WHY CONSIDER WORKING WITH AN HD VEST ADVISOR?

Our Advisors understand that building wealth for the long term requires careful analysis and deep understanding of all aspects of your financial picture. An HD Vest Advisor can help you build a comprehensive financial roadmap as you deal with common challenges such as:

• MarriageWhen a spender marries a saver, the relationship can suffer. But when both spouses can agree on common financial goals, things get easier. An HD Vest Advisor can help partners set realistic goals and create a path to pursue them.
• Having childrenThe financial responsibilities of parenthood can be intimidating. Will you be able to fund their education? What if something happens to you? HD Vest Financial Advisors can help you navigate the maze of financial decisions that arise when you have a baby.
• An aging parentThe cost of elder care is rising – whether care is delivered at home or in a facility. How can you take care of aging parents’ needs without jeopardizing your own retirement plan? Consult an HD Vest Advisor today.
• Buying a homeWhen will it make sense for you to buy? How much house can you afford? And where will you get funds for your down payment? You can work with an HD Vest Advisor to develop a savings plan that will put you in the home that’s right for you.
• Unforeseen circumstancesFor better or for worse, financial surprises can require adjustments to your long-term goals. Your trusted HD Vest Advisor can help you put an inheritance or other sudden windfall to good use – and protect yourself against the damaging financial consequences of a divorce or lawsuit.
• Job changeOnce you’ve settled into your new role, what should you do with your old 401(k) or IRA? Any decision you make can have tax implications. HD Vest Advisors have specific knowledge in this area – so consult them first.
• Managing a businessWhether you’re still in startup mode or have been running your business for decades, you probably don’t have time to deal with all the behind-the-scenes financial issues like starting a SEP-IRA or purchasing buy/sell insurance. To maximize the financial advantages of your business, talk to an HD Vest Advisor.
• Retiring with dignityWill all your savings last a lifetime? HD Vest Advisors are trained to help you plan your spending and adjust your investments for the next chapter of your life. We believe every American deserves to retire with dignity.
• Tax timeNot many people look forward to April 15 – but it’s actually an ideal time to reassess your overall financial situation each year. As independent tax professionals, many HD Vest Advisors are uniquely qualified to address your financial services needs while keeping your tax issues in mind.

Whether you’ve just begun researching financial services or are trying to connect with a financial advisor who would be a good fit for you, we can help. And there’s no better time to start than now. As you weigh your options, make sure you’re working with an Advisor who has a proven methodology for protecting your assets.*

Mike Mead, EA, CTC

Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
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* Not all Advisors are licensed to provide all products.

SIMPLE IRA Plans for Small Business

Blue Springs Financial Adviser

Of all the retirement plans available to small business owners, the SIMPLE IRA plan (Savings Incentive Match PLan for Employees) is the easiest to set up and the least expensive to manage. The catch is that you'll need to set it up by October 1st. Your Blue Springs Financial Adviser is here to help.  Here's what you need to know.

What is a SIMPLE IRA Plan?

SIMPLE IRA Plans are intended to encourage small business employers to offer retirement coverage to their employees. Self-employed business owners are able to contribute both as employee and employer, with both contributions made from self-employment earnings. In addition, if living expenses are covered by your day job (or your spouse's job), you would be free to put all of your sideline earnings, up to the ceiling, into SIMPLE IRA plan retirement investments.

How does a SIMPLE IRA Plan Work?

A SIMPLE IRA plan is easier to set up and operate than most other plans in that contributions go into an IRA you set up. Requirements for reporting to the IRS and other agencies are minimal as well. Your plan's custodian, typically an investment institution, has the reporting duties and the process for figuring the deductible contribution is a bit easier than with other plans.

SIMPLE IRA plans calculate contributions in two steps:

1. Employee out-of-salary contribution
The limit on this "elective deferral" is $12,500 in 2017, after which it can rise further with the cost of living.
Catch-up. Owner-employees age 50 or older can make an additional $3,000 deductible "catch-up" contribution (for a total of $15,500) as an employee in 2017.
2. Employer "matching" contribution
The employer match equals a maximum of three percent of employee's earnings.

Example An owner-employee age 50 or over in 2017 with self-employment earnings of $40,000 could contribute and deduct $12,500 as employee plus an additional $3,000 employee catch up contribution, plus a $1,200 (3 percent of $40,000) employer match, for a total of $16,700.

Are there any Downsides to SIMPLE IRA Plans?

Because investments are through an IRA you must work through a financial institution acting, which acts as the trustee or custodian. As such, you are not in direct control and will generally have fewer investment options than if you were your own trustee, as is the case with a 401(k).

You also cannot set up the SIMPLE IRA plan after the calendar year ends and still be able to take advantage of the tax benefits on that year's tax return, as is allowed with Simplified Employee Pension Plans, or SEPs. Generally, to make a SIMPLE IRA plan effective for a year, it must be set up by October 1 of that year. A later date is allowed only when the business is started after October 1 and the SIMPLE IRA plan must be set up as soon as it is administratively feasible.

Furthermore, once self-employment earnings become significant however, other retirement plans may be more advantageous than a SIMPLE IRA retirement plan.

Example If you are under 50 with $50,000 of self-employment earnings in 2017, you could contribute $12,500 as employee to your SIMPLE IRA plan plus an additional 3 percent of $50,000 as an employer contribution, for a total of $14,000. In contrast, a 401(k) plan would allow a $31,000 contribution.With $100,000 of earnings, the total for a SIMPLE IRA Plan would be $15,500 and $43,500 for a 401(k).

If the SIMPLE IRA plan is set up for a sideline business and you're already vested in a 401(k) in another business or as an employee the total amount you can put into the SIMPLE IRA plan and the 401(k) combined (in 2017) can't be more than $18,000 or $23,500 if catch-up contributions are made to the 401(k) by someone age 50 or over. So, someone under age 50 who puts $9,000 in her 401(k) can't put more than $9,000 in her SIMPLE IRA plan for 2017. The same limit applies if you have a SIMPLE IRA plan while also contributing as an employee to a 403(b) annuity (typically for government employees and teachers in public and private schools).

How to Get Started Setting up a SIMPLE IRA Plan

You can set up a SIMPLE IRA plan account on your own; however, most people turn to financial institutions. SIMPLE IRA Plans are offered by the same financial institutions that offer any other IRAs and 401(k) plans.

You can expect the institution to give you a plan document and an adoption agreement. In the adoption agreement, you will choose an "effective date," which is the start date for payments out of salary or business earnings. Again, that date can't be later than October 1 of the year you adopt the plan, except for a business formed after October 1.

Another key document is the Salary Reduction Agreement, which briefly describes how money goes into your SIMPLE IRA plan. You need such an agreement even if you pay yourself business profits rather than salary. Printed guidance on operating the SIMPLE IRA plan may also be provided. You will also be establishing a SIMPLE IRA plan account for yourself as participant.

Ready to Explore Retirement Plan Options for your Small Business?

SIMPLE IRA Plans are an excellent choice for home-based businesses and ideal for full-time employees or homemakers who make a modest income from a sideline business and work well for small business owners who don't want to spend a lot of time and pay high administration fees associated with more complex retirement plans.

If you are a business owner interested in discussing retirement plan options for your small business, don't hesitate to contact our Blue Springs Financial Consultants office today.

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
AFITOnline.com

Who is Alliance Financial & Income Tax