Business Tax

The Work Opportunity Tax Credit gives employers tax benefits for hiring people who fall within certain qualifying categories. This can be a big boon to companies and employers! Click through to learn the ins and outs.

In December 2015, an extension to the Work Opportunity Tax Credit was signed in law. It helps match employers with qualifying candidates, such as veterans, and provides a tax incentive for continued employment. What do you need to know about WOTC and how it can affect you and your business? Here are some basics.

• Qualifying veterans. To qualify for WOTC, the new employee must be a veteran who received SNAP (food stamp) benefits for a designated period of time, or a disabled or unemployed vet. For more details about these categories, the length of time to qualify for eligibility and more, review the WOTC page at the Department of Labor Employment and Training Administration website.
• Nonveteran qualifying candidates. There are also WOTC programs available for individuals who have not served in the United States military. To qualify, an individual must be a Temporary Assistance for Needy Families (TANF) recipient, a SNAP recipient, a resident of a qualifying community such as Rural Renewal Counties, an ex-felon or a Supplemental Security Income recipient. The official website can provide more on these target groups.
• Nonqualifying candidates. Besides individuals not listed among the target groups, there are certain individuals who are specifically disqualified from the WOTC programs. These include relatives or dependents, majority owners of the business and former employees of the company.
• Tax credit extension period. The WOTC program was renewed as part of the vote that avoided a government shutdown at the end of 2015. This included retroactively renewing the program from Jan. 1, 2015; a five-year extension through December 2019; and a new target group of long-term unemployed individuals.

Do you want to know whether your company can qualify for the WOTC program?

Find out how we can decrease your Federal and State taxes. Call us today at 480-945-6158 to learn more or request a consultation through our website now and we’ll contact you.

You’ve opened the mail and your heart sinks. Your business just received an audit notification from the IRS. Click through to learn how to keep your cool and prepare for what happens next.

You may be surprised to learn that not every audit notification you receive will be legitimate. So, first, make sure you received an official audit notification. The Internal Revenue Service (IRS) will notify you either by letter or by a phone call followed by a letter. The IRS does not notify taxpayers about audits through email, so if you do get an email saying you’ve been selected for an audit, it’s probably fraudulent. If you’ve determined that you’re definitely getting audited, your next step is to learn what’s involved.

What Exactly Is an Audit?

According to the IRS, an audit is “a review/examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is substantially correct.”

That’s it. It’s an audit — not an arrest and not a trial — so don’t panic. Contrary to popular belief, an audit doesn’t automatically mean you made a mistake. Yes, an inconsistency can trigger an audit if there’s a discrepancy between what’s on a tax form and what you actually reported. But the IRS may choose to audit a taxpayer based on random selection or a statistical formula. Also, an audit may be less intrusive than you feared. For example, it may be entirely through the mail, although in some cases, it may be at an office or the taxpayer’s home or place of business. And not all audits result in your owing money. In fact, your audit may lead to no changes at all.

Both businesses and individuals may be audited (even sole proprietorships), and there may be some differences in how they are handled. One thing that virtually all audits have in common, however, is access to records. The IRS is going to want to check some of your records, and maybe a lot of them. Did you deduct business expenses? Make some substantial charitable contributions? You’ll need to show the IRS some receipts. The good news is that in many cases the IRS accepts electronic records.

What Happens Next?

There is no typical length of time for an IRS audit, but if you have your records handy and cooperate fully and quickly, you increase your chances that it will be as brief and painless as possible. Ultimately, the IRS may determine that you owe more money. At this point, you can pay it or you can appeal. The audit doesn’t have to be the end of the road. There is a substantial appeal process and a long and expensive court trial may not even be necessary.

The important thing to remember is that you don’t have to go it alone! Your accountant can work with you throughout the audit process, including any appeals. The key factor is to call us as soon as you receive the notification about your audit. We’re ready to work through the details and help you gather any records you may need.

Find out why small businesses and individuals in the Scottsdale area trust Scott H. Miller Company, PC for tax services. Request a consultation online now or call us at 480-945-6158 to learn more.