Security and Finances Part 1

Financial Security.

I’m not talking about Financial Security the way we generally are used to hearing about it as in retirement and investments. Instead I would like to discuss security in terms of hackers stealing your information, or your credit card being copied when you go out to dinner. These are just a few of the tactics used by criminals nowadays to exploit your credit and your finances of their own gain. This new series by Vaughn CPA is going expos ways that your finances can be exploited by nefarious people.

At Vaughn CPA we want our clients to maintain a healthy financial lifestyle. Part of maintaining this healthy lifestyle is to keep your finances secure; to help us do that, Devon a systems and IT analyst for Vaughn CPA is going to help us look good cyber crime in how it affects your finances.

Vaughn CPA as a tax accounting and financial consulting firm that services Loveland Colorado and Albuquerque in Mexico

It used to be that you can just deposit your money in a bank account, add a savings account and some investments and as long as your money was in one of these places it was relatively safe. Now we have cyber crime; and beating the way in cyber crime is identity theft. Identity theft any activity and uses your credit and/or your identity without your permission. A number one crime for identity theft is stolen credit card information. There are a number of ways in which criminals and require your credit card information and use it to purchase goods and or wire transfer themselves Monday using your credit card without actually being in possession of a credit card.

This week I would like to discuss beyond the ordinary cyber crime. We all can easily relate to the above example of credit card fraud without knowing how criminals steal our credit card information we are aware that happens with regularity. (Next week I’ll talk a little bit about how to secure credit cards.) Two day I want to dig into something that I hope is a not so common occurrence but still crosses into the realm of Financial Security and cyber crime. Recently Wells Fargo has just uncovered evidence that millions of new bank accounts and credit accounts have been created by employees trying to boost their sales.

 

 

The most baffling thing about this is over 5000 employees committed identity theft /cyber crime with the sole purpose of boosting sales. It is very concerning that this happened at all to institution like Wells Fargo. A bank is the one place where we should be safe from this kind of activity and the last place where something like that should happen. While the majority of these accounts were set up, opened, and closed with little money actually leaving the victims accounts this kind of thing can never happen in financial institution. Tons customers now have credit issues that they have to deal with because the customers had payments that they were unaware of. Let’s face the facts if someone could easily do this just to boost sales what’s to stop somebody from doing it if they’ve encountered financial hardship?

So how do you protect yourself? A something like this to not be limited just one bank as it can happen to anyone under any circumstance at any bank. Gonna give you the tools and advice to stay on top of your financial resources so you don’t become a victim.

1. Check your bank account with regularity. At least once a week login online and verify all the accounts under your name are correct.

2. Read your mail, you know when you open or close a bank account. You also know when you apply for credit cards or credit. If you receive a letter in the mail in their congratulating you or apologizing that you couldn’t can get a new account or credit. It’s time to contact the institution that wrote your letter.

3. Check your credit report your credit report will show you a list of all open and closed accounts. It will also show you all recent activity as it relates to recent credit inquiries.

These three simple steps will go a long way to protecting you are becoming a victim of this and other kinds of identity theft.

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Northern Colorado Enterprise Zone Tax Credits

Colorado’s Enterprise Zone Program is created to stimulate economic and neighborhood advancement in targeted locations around the state. Personal businesses located within an Enterprise Zone may receive incentives associated with business investment, business expansion, and/or brand-new business relocation. Your Local CPA can help you determine if you can apply for Enterprise zone credits for your business. Additional information is provided below to help you determine your eligibility.

Check out the Colorado Workplace of Economic Advancement & International Trade (OEDIT) site for a detailed list of company tax credits.
Please keep in mind that business must be pre-approved with the State prior to carrying out an activity that will earn them an Enterprise Zone tax credit. Please take a minute to submit your 2014 electronic pre-certification today!

The State of Colorado recently made changes to the Enterprise Zone pre-certification and accreditation website.

Enterprise Zone Pre-Certification and Certification Application Website
We encourage you to review the User Guides prior to going into the Application Portal. The User Guides step you through the application procedures and will reveal you what info you’ll need to finish the applications.
* User Guide – Pre-Certification *.
* User Guide – Accreditation *.


IMPORTANT MODIFICATIONS CONCERNING THE ENTERPRISE ZONE!
For 2014-2015, there might be considerable changes concerning the Larimer County Enterprise Zone. If you are a Certified Public Accountant, your company has applied for or has actually considered getting, or you just would like to know more about Enterprise Zone Tax Credits, please contact Jacob Castillo, Enterprise Zone Administrator.
For more information about Business Tax Credits, check out these links:

What are the Enterprise Zones in Larimer County?800px-Map_of_Colorado_highlighting_Larimer_County.svg

Larimer County has four subzones:.
Berthoud.
Fort Collins.
Loveland.
Wellington.
________________________________________.
How do I know if my company address is located in the Enterprise Zone?
To figure out if your business address is located within the Enterprise Zone, use this locator map. Enter your full address in the box. If your address falls within the orange shaded area, you are in the zone. (For an example of exactly what an address in the Enterprise Zone resembles insert: “200 West Oak Street, Fort Collins,” in the box.).
________________________________________.
Do I have to do anything special to take the Enterprise Zone Business Tax Credits?
Pre-certification is needed in 2012– If your company will perform an activity on or after January 1, 2012 that may earn an Enterprise Zone business tax credit Pre-certification is required prior to beginning the activity that earns the credit. Click here for details.
________________________________________.
What if I finish the Pre-certification and after that choose not to take the tax credits?
Pre-certification does not obligate you to take Enterprise Zone Business Tax Credits. If you make an application for the Pre-certification and do not make use of the tax credits, you do not need to do anything even more.
________________________________________.

Contribution Tax Credit.

In addition to tax credits for personal companies, the Enterprise Zone Program encourages contributions to non-profit organizations that serve an Enterprise Zone and the population therein.
Taxpayers who make a financial contribution to an approved Enterprise Zone Project may claim a 25 % state earnings tax credit based upon the value of the contribution (as much as an optimal $100,000 credit.) In-kind contributions might likewise qualify the taxpayer to assert a 12.5 % state income tax credit based on the value of the contribution.
To learn more on Contribution Tax Credits, check out these links:.
Contribution Tax Credit Frequently asked questions.
List of Approved Enterprise Zone Projects.

Non-Profit Organizations.

Are you a non-profit company that lies within the zone and/or services a population within the zone and would like to discover how to end up being a licensed Enterprise Zone project?
Please contact:
James Vaughn
Vaughn CPA, LLC
970-667-2123
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Colorado Enterprise Zone Tax Credits

The information listed below supplies web links to the application or process to get credits, CO Department of Revenue FYI Publication and Regulation, and statute for each EZ reward.
After examining these files, you may want to seek advice from a tax expert like a local CPA. You can also get a CO Department of Earnings Letter Judgment for situational responses.
If you would like help with your enterprise tax credits contact one of our local Colorado Tax Advisors – 970-667-2123.
Colorado Enterprise Tax Credit Introduction Table
* FYI Income Rules
Investment Tax Credit (ITC).
3 % of equipment purchases.
Application: Online.
FYI: FYI Income 11.
Laws: EZ Laws.
Statute: C.R.S. 39-30-104.
Task Training Tax Credit.
12 % of certified training costs (new rate 1/1/2014).
Application: Online.
FYI: FYI Income 31.
Policy: EZ Laws.
Statute: C.R.S. 39-30-104(4)
Investment Tax Credit (ITC).
3 % of equipment purchases.
Application: Online.
FYI: FYI Earnings 11.
Laws: EZ Laws.
Statute: C.R.S. 39-30-104.
Task Training Tax Credit.
12 % of certified training costs (new rate 1/1/2014).
Application: Online.
FYI: FYI Income 31.
Policy: EZ Laws.
Statute: C.R.S. 39-30-104(4)
New Staff member Credit.
$1,100 per new task (brand-new 1/1/2014).
Application: Online.
FYI: FYI Income 10.
Policy: EZ Regulations.
Statute: C.R.S. 39-30-105.1.
Agricultural Processor New Employee Credit.
$500 total per new a.p. task (new 1/1/2014).
Application: Online.
FYI: FYI Earnings 10.
Policy: EZ Laws.
Statute: C.R.S. 39-30-105.1.
Employer Sponsored Medical insurance Credit.
$1,000 per guaranteed job (brand-new 1/1/2014).
available for very first 2 years in EZ.
Application: Online.
FYI: FYI Income 10.
Policy: EZ Laws.
Statute: C.R.S. 39-30-105.1
R&D Boost Tax Credit.
3 % of enhanced R&D expenses.
Application: Online.
FYI: FYI Income 22.
Regulation: EZ Laws.
Statute: C.R.S. 39-30-105.5.
Vacant Structure Rehabilitation Tax Credit.
25 % of rehab expenses.
Application: Online.
FYI: FYI Income 24.
Regulation: EZ Laws.
Statute: C.R.S. 39-30-105.6.
Manufacturing/Mining Sales & Use Tax Exemption.
Application: For 100+ Kind DR1192 or Type DR1191 .
FYI: FYI Sales 10 (statewide details).
FYI: FYI Sales 69 (Expanded in EZ details).
Policy: EZ Laws.
Statute: C.R.S. 39-30-106.
Process: No Pre-cert. or Accreditation required
Industrial Car Financial investment Tax Credit.
1.5 % of comm. car purchases.
Application: CVITC Application.
FYI: FYI Earnings 11.
Policy: EZ Regulations.
Statute: C.R.S. 39-30-104.
Process: Commercial Automobile Tax Credit Process.
Contribution Tax Credit.
25 % of Cash Contribution, 12.5 % of In-Kind.
Application: DR0075 form provided by task. See list here.
FYI: FYI Earnings 23.
Regulation: EZ Regulations.
Statute: C.R.S. 39-30-103.5.
Process: Contribution Tax Credit Process.
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Play or Pay, Affordable Health Care

Is your business ready for play-or-pay?
If you’re a “large” employer, time is running out to prepare for the Affordable Care Act’s (ACA’s) shared responsibility provision, commonly referred to as “play-or-pay.” It’s scheduled to go into effect in 2015.Under transitional relief the IRS issued earlier this year, for 2015, large employers generally include those with at least 100 full-time employees or the equivalent, as defined by the ACA. However, the threshold is scheduled to drop to 50 beginning in 2016, and that threshold will apply beginning in 2015 for the ACA’s information-reporting provision.The play-or-pay provision imposes a penalty on large employers if just one full-time employee receives a premium tax credit. The credit is available to employees who enroll in a qualified health plan through a government-run Health Insurance Marketplace and meet certain income requirements — but only if:

  • They don’t have access to “minimum essential coverage” from their employer, or
  • The employer coverage offered is “unaffordable” or doesn’t provide “minimum value.”

The IRS has issued detailed guidance on what these terms mean and how employers can determine whether they’re a large employer and, if so, whether they’re offering sufficient coverage to avoid the risk of penalties.

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What about taxes when I sell my home?

If you’ve put your home on the market, you need to know the tax consequences of a sale
Summer is a common time to put a home on the market. If you’re among those who are following this trend, it’s important to be aware of the tax consequences.If you’re selling your principal residence, you can exclude up to $250,000 ($500,000 for joint filers) of gain — as long as you meet certain tests. Gain that qualifies for exclusion also is excluded from the Affordable Care Act’s 3.8% net investment income tax.

A loss on the sale of your principal residence generally isn’t deductible. But if part of your home is rented out or used exclusively for your business, the loss attributable to that portion may be deductible.

If you’re selling a second home, be aware that it won’t be eligible for the gain exclusion. But if it qualifies as a rental property, it can be considered a business asset, and you may be able to defer tax on any gains through an installment sale or a Section 1031 exchange. Or you may be able to deduct a loss.

If you have a home on the market, please contact us to learn more about the potential tax consequences of a sale.

© 2014

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Why you need to know the value of your assets

 

With the gift and estate tax exemptions currently at $5.34 million, you might think that estate valuations are less important. But even if you believe that your estate’s value is under the exemption amount, it’s still important to know the value of your assets.First, your estate might be worth more than you think. For example, if you own an insurance policy on your life, the death benefit will be included in your estate, which may be enough to trigger estate tax liability.Second, obtaining a qualified appraisal can limit the IRS’s ability to revalue your assets. If you make gifts that exceed the $14,000 annual gift tax exclusion, you’ll need to file a gift tax return, even if the gift is within your lifetime exemption. Generally, the IRS has three years to audit gift tax returns and challenge reported values for gifted assets. But that period doesn’t begin until the gift has been “adequately disclosed.”For assets that are difficult to value — such as closely held business interests or real estate — the best way to satisfy the adequate-disclosure requirements and avoid an IRS challenge is to include a qualified professional appraisal with your return.

Please contact us for more information on properly valuing your assets. We can help you comply with IRS requirements and keep taxes to a minimum.

© 2014

+1 866 240 8477             pdiglobal.com   |   bizactions.com

 

 

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Have you misclassified employees as independent contractors?

Have you misclassified employees as independent contractors?

An employer enjoys several advantages when it classifies a worker as an independent contractor rather than as an employee. For example, it isn’t required to pay payroll taxes, withhold taxes, pay benefits or comply with most wage and hour laws. However, there’s a potential downside: If the IRS determines that you’ve improperly classified employees as independent contractors, you can be subject to significant back taxes, interest and penalties.

To determine whether a worker is an employee or an independent contractor, the IRS considers three categories of factors related to the degree of control and independence:

1. Behavioral. Does the employer control, or have the right to control, what the worker does and how the worker does his or her job?

2. Financial. Does the employer control the business aspects of the worker’s job? Does the employer reimburse the worker’s expenses or provide the tools or supplies to do the job?

3. Type of relationship. Will the relationship continue after the work is finished? Is the work a key aspect of the employer’s business?

Determining the proper classification under these factors may not be easy. If you’re concerned you may have misclassified workers, please contact us.

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What to do with your old retirement plan when you change jobs

First and foremost, don’t take a lump-sum distribution from your old employer’s retirement plan. It generally will be taxable and, if you’re under age 59½, subject to a 10% early-withdrawal penalty. Here are three alternatives:

1. Stay put. You may be able to leave your money in your old plan. But if you’ll be participating in your new employer’s plan or you already have an IRA, keeping track of multiple plans can make managing your retirement assets more difficult. Also consider how well the old plan’s investment options meet your needs.

 

2. Roll over to your new employer’s plan. This may be beneficial if it leaves you with only one retirement plan to keep track of. But evaluate the new plan’s investment options.

 

3. Roll over to an IRA. If you participate in a new employer’s plan, this will require keeping track of two plans. But it may be the best alternative because IRAs offer nearly unlimited investment choices.

 

There are additional issues to consider when deciding what to do with your old retirement plan. We can help you make an informed decision — and avoid potential tax traps.

 

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Cost Segregation Studies

A great way to save some money on taxes if you own property. It basically moves the depreciation forward so you get the benefit now rather than later. Call us about it.

Jim Vaughn

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Summer Camp — Might save you taxes

The passing of Memorial Day marks the beginning of summer in the minds of many Americans. Although the kids might still be in school for another week or two, summer day camp is rapidly approaching for many families. Summer Camp — might save you taxes, what a great double benefit.  If yours is among them, did you know that sending your child to day camp might make you eligible for a tax break?

Day camp is a qualified expense under the child and dependent care credit, which is worth 20% of qualifying expenses (more if your adjusted gross income is less than $43,000), subject to a cap. For 2014, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more.

Be aware, however, that overnight camp costs don’t qualify for the credit.

Additional rules apply, so please contact us to determine whether you’re eligible.

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