Deducting Moving Expenses

By Peter D. Rudolph

To deduct moving expenses, there are three requirements:

1. Related to the start of work The move must be closely related, both in time and in place, to the start of work at your new job location. Moving expenses within one year of the start date at a new job location are typically deductible. There are other rules that apply to this requirement.

2. Distance Test The distance from your new job and your former home must be at least 50 miles farther than your previous workplace was from your previous home. For example, if you used to commute 5 miles from home to your old workplace, your new workplace must be at least 55 miles from your old home. When it is your first job or you were unemployed, the job location must be at least 50 miles from your old home.

3. Employment time test After the move, you must work full-time at your new job for at least 39 weeks the first year. For taxpayers who are self-employed, the amount of the time test is increased. Self-employed must work full-time for a total of at least 78 weeks during the first two years at the new job site. When the income tax return is due before this test has been met, you can still take deductions for moving expenses if you expect to meet it.

When these three requirements are satisfied and you are able to claim this deduction. Here are a few types of moving expenses to consider when completing your tax return:

Travel - Transportation and lodging expenses for you and members of you household while moving from the old home to the new home are deductible. Travel meal costs are not deductible.

Household contents and utilities - The costs of packing, crating and shipping your things are deductible. You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home. The cost of connecting or disconnecting utilities is also deductible.

Certain expenses that are not deductible - Taxpayers cannot deduct as moving expenses any part of the purchase price of a new home or the cost of selling a home, or the cost of entering into or breaking a lease.
Reimbursed expenses - When the employer later pays for the cost of a move that has been deducted on your tax return, you may need to include the payment as income. The taxable amount is income in the year the payment is received.

Notifying the IRS of an Address Change - To update your address with the IRS use Form 8822. Generally, it takes 4 to 6 weeks for the IRS to process your change of address.

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Experts Can Help You Understand Business Tax Rules

By Alfred Ardis

A necessary part of running your own company is your business tax. Depending on your company type and size, you may qualify for incentives or considerations regarding your local or state obligations. You will be required to file paperwork for tax purposes as well, which involves much more than a simple, straightforward return. Make sure you work with an accountant who is experienced in the tax laws and rules in your area and for your type of business.

Based on where your company is located, you may have to pay local taxes on the property. Many local governments will, however, offer a reduced rate in return for you bringing jobs or other revenue to the area. If you are a small business, this may not apply.

State government may also offer incentives if your company is large enough to bring significant jobs to the area. This would mean, hopefully, that more people move to the area and thereby increase the economy. These incentives may be in the form of credits if your business hires and performs based on certain criteria. Annual state returns must be filed, so you'll want to understand your obligations as well as all the credits you may be due.

Federal obligations will include your annual return. You may also be required to make estimated payments throughout the year. If you have employees, you must pay according to certain criteria for each person. Not only do you need an accounting professional to help you understand what applies, but you also need a competent staff that is knowledgeable about withholding and legal requirements when hiring and paying employees.

An excise tax may apply if you manufacture certain products, operate specific businesses, use various kinds of facilities, equipment or products in your operations, or receive payment for certain services. Your accounting professional should be able to tell you what applies to your company.

If you are considering opening a new business and are exploring the best locations, you will want to investigate the laws in the area that may be the best for your situation. Some areas of the country are more eager than others to have certain types of establishments open to increase the economy and bring jobs to their particular city. In addition to those incentives, however, make sure you understand the long-term implications of opening a business in that specific area as far as your business tax obligations will be.
 What may sound like a good deal to start with may turn into a larger expense for your company down the road.

No matter if your company is large or small, spanning one local area or many states, consult a professional to understand the business tax rules and credits that apply to you.

For information on all things business tax, Michigan residents visit the Michigan Chamber of Commerce. Learn more at http://www.michamber.com/explore-the-issues.
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6 Surprising Truths About Tax Preparers

By Caroline Grimm

Choosing the right tax preparer for your business is a decision best not left until April. A former tax preparer and small business mastermind offers insights into the secret world of tax preparers.

1. All tax preparers are not created equal.

It stands to reason, somewhere in the country is the Worst Tax Preparer. The bad news is you may have already booked your appointment with him. Preparing taxes is a complex activity. So complex that many of us simply throw in the towel, pack up our receipts, and head for the nearest tax office. When you arrive at the office, you fully expect our tax preparer to be highly competent and completely vested in getting you the best deal in town.

Back in my tax preparing days, I worked for one of the big name tax preparation franchises both as a preparer and as a tax return editor. I worked with seasoned professionals and total neophytes. I well remember the first time I stepped up to the plate as a new preparer. I was terrified. Terrified the customer would know I was inexperienced. Terrified I'd make a huge blunder and the customer would pick up on it. Terrified the more experienced preparers would laugh at my mistakes.

I quickly realized that as inexperienced as I was, I still knew way more than my clients did. And because the franchise had great systems, others would be checking and re-checking my work so my mistakes and oversights would be caught before I did any damage to the client.

As a tax return editor, I saw and corrected more mistakes than you would feel comfortable knowing about. Which brings me to a very important point, tax preparation is not a cut and dried, read the manual, do the formulas, follow the instructions, and poof! you're done kind of activity. The tax codes in this country are complex and open to interpretation.

Tax preparers have a wide range of experience from none to grizzled veteran. They also span the continuum from ethical to completely fraudulent. The more complex your return, the more you need a veteran preparer. And if your preparer tells you about this great deduction that you can take and it sounds suspicious to you, listen to your intuition. It's the difference between paying a little bit now or paying a whole lot later.

2. Tax preparers are not business experts.

The only business experts in the world are those who are running successful businesses. Tax preparers are trained to understand taxes. They're trained to know the proper forms and deductions. They're trained to help you with tax planning. They are not trained to understand how business works.

Now, you may have a tax preparer who is also a successful business owner. Many CPA's, accountants, bookkeepers, and tax preparers do run their own businesses. They're in a much better position to help you with your taxes because they understand the day to day challenges of running a business.

Understand that having your taxes prepared by a big name franchise, although it does ensure that your return is accurate, does not mean that your return is prepared in a way that is best for your business. Only a preparer who understands business can prepare a return that works for your business.

3. Hiring a tax preparer doesn't mean you're excused from understanding taxes.

I've seen it so many times. I sit down with a client to talk about finances or taxes. As I talk, the head is nodding, the mouth is saying, "uh huh, uh huh", but what they're really focused on is the pen in their hand. They don't want to understand, they just want to sign off on the paperwork and be done with it. "That's what I hire you for", they say.

Big mistake. I could be sentencing them to time in a federal prison. Trusting someone else to the point where you abdicate all responsibility and have no knowledge of what you're signing or what is being done in your name is a recipe for a big fat slice of disaster. That's how embezzlement happens-I trust Mary completely. Bob always takes care of that. And it's also how business owners end up in trouble-What do you mean he took a deduction for my Chihuahua as a guard dog? Hey, why didn't I get a deduction for my new computer?

You have to know enough about taxes to be able to read your return intelligently so you know what you're signing. You also need to know enough about taxes so you know what your tax preparer needs to know to prepare your return accurately and to your best advantage.

And don't get your education from your buddies. I heard a lot about these "special deductions" you can take. Usually the information is not based on facts or tax codes. It's a conglomeration of bad information that can get you into tax trouble.

4. Your tax preparer shouldn't be the one telling you how your business is doing.

It hits them hard. They couldn't be more shocked if you'd hit them upside the head with a dead fish. "I owe how much!", they gasp. "How can that be? I don't have any money!" Then the desperation sets in. The tax preparer is accused of not doing a good enough job. "You must have missed something." Or, they dig deep trying to think of anything, anything at all, that can lower their tax liability. "Did I mention that vacation, I mean, business trip I took to the Caribbean? That's deductible right?"

If the only time you know how your business is doing is on April 15th, you're doing yourself a huge disservice. If you're not tracking your tax liability and making plans to satisfy that liability, you're in for a very long, painful, tortuous lesson delivered at the hands of the Internal Revenue Service. You will pay. You will pay way more than if you'd planned ahead. And it will take you forever to get caught up.

5. Why getting your tax return prepared shouldn't be an errand you run on your lunch break.

I was in a client's office one day getting her books closed out for the year so she could have her tax return prepared. I overheard a woman in the next office telling someone, "I'm just going to run out and get my taxes done." I was horrified. Having your taxes prepared is not something you just "run out" and get done like an oil change. Good tax preparers are like good hair stylists. They have followings. People pre-book them.

If you just "run out" and have your taxes done, who do you think you'll get as a tax preparer? The best and the brightest? Hardly. You'll get the first year preparers who haven't built up a following. The ones who are fresh out of tax class and generally have no experience preparing tax returns or running a business. The ones who don't have the expertise to know the ins and outs of interpreting tax codes to your best advantage while still keeping you within the law. Sure everyone deserves a chance to gain experience but do you really want to be the first patient a surgeon operates on?

6. Procrastination is your worst enemy.

It's April 14th. You think you probably should get your tax stuff together pretty soon. So, you work late into the night, gathering receipts, pawing through stacks of paper, digging under the seat of your car until finally you've got everything you need. Off you go on your lunch break on April 15th to get your return prepared. Your tax preparer, who has been working at a feverish pitch for weeks, has deep circles under her eyes, her hands are shaking from lack of sleep and too much caffeine, and you notice a small stream of drool running down her chin. "Oh look," she exclaims laughing maniacally, "Another return!". And you think to yourself, "What's her problem?".

You, my procrastinating friend, are her problem. Now she's got to frantically race around trying to keep you out of trouble because you didn't have the courtesy or forethought to be prepared well ahead of the deadline. And then she'll have to listen to you whine because now all of a sudden you have to come up with thousands of dollars that you didn't know you owed.

Do yourself a favor, get your return done early. If you owe money, you don't have to send it until April 15th. At least you'll know that your return was prepared by a tax preparer who wasn't fatigued, you'll know ahead of time what you owe, and you'll have it off your mind so you can focus on other important things. Like getting your oil changed on your lunch break.

Called the Wizard of Cash Flow, Caroline Grimm performs cash flow makeovers and financial rescue missions for cash-strapped business owners. She is the author of two books for small business owners: Stop the Cash Flow Roller Coaster and Strength in Numbers. Her home study course, From Chaos to Control, helps entrepreneurs take control of their finances and move beyond the "always broke" syndrome that plagues so many entrepreneurs.

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No Appeal in Loving v. IRS

The IRS took no action in the matter of Loving v IRS and allowed the May 12th deadline for filing a Supreme Court appeal to pass.

In January of 2013, a federal court judge ruled that Congress had never granted the IRS authority to regulate tax return preparers, and in February of this year, the US District Court of Appeals for the District of Columbia Circuit agreed.  Writing on behalf of the court, Judge Kavanaugh summarized, “We agree with the District Court that the IRS’s statutory authority under Section 330 cannot be stretched so broadly as to encompass authority to regulate tax-return preparers. We therefore affirm the judgment of the District Court.” 

Further appeal was seen as unlikely as there was no disagreement between the district and appeals court. In addition, IRS Commissioner, John Koskinen, previously indicated in several interviews and testimony before Congress that, though the IRS was still reviewing options, a voluntary program seemed the best approach moving forward. “The idea of a voluntary program is under consideration because we believe it is important to maintain the momentum for regulation and oversight of unregulated preparers that has built up over the last five years, and to lessen the risks to taxpayers resulting from the lack of federal education requirements.“

You may read the full text of IRS Commissioner Koskinen’s April 8th testimony before Congress below:

Document Links

• Commissioner Koskinen’s Congressional Testimony
• More on Loving v. IRS

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Tax Preparers Can Help You Avoid Problems Before They Appear

What can possibly go wrong if we do our taxes ourselves? Almost everything, actually. First, you might be leaving a lot of money on the table. Just how much money? Quite a bit considering that there are many exemptions and deductions you might not be aware of. Quit giving Uncle Sam a fat tip every year when you can use this money to add to your nest egg or save up for a new car, sound system, or go on a much-deserved European vacation.

The other side of the equation, of course, is the much more serious danger of not paying enough taxes. Uncle Sam can be quite unforgiving when it comes to back taxes. Not only do you get dinged for taxes you actually owed but penalties and interests can pack quite a bit of a punch. Tax preparers can help you get the peace of mind you have been looking for since they make sure that, at the very least, all your taxes are paid correctly.

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Tax Preparers Can Help You Avoid Problems Before They Appear

Avoid Tax Preparation Hassles with the Right Accountant

Tax day shouldn't be a day of burden and dread. In fact, with the proper tax preparation, April 15th can be a day for fulfillment and success. There are certain steps you have to take to make sure you're tax-prepared and to ensure, your staff, and your company stay away from trouble. Here are a few tips:

Getting all your paperwork in order is the first step for tax preparation. Make sure that you have information from all your sources of income. If your employer neglects to send you an earnings statement in a timely fashion — hopefully at some point directly after the New Year — you must make sure that they do, preferably in writing with duplicates made for IRS corroboration in the event that they fail to respond.

Make a list of all your expenses and deductibles. If you have an accountant or personal bookkeeper, then this should be easier for you, but if you do your own books, then it's best to this early on. In many cases, there are work-related expenses that you did not even know you had made, or had forgotten about. Think back in your mind about all the things you had to buy for your job in the last year. Have a detailed list of your payroll, receipts, invoices, etc. Make sure you submit all these data to your bookkeeper or accountant so they could pen it in.

Learn to adapt. Paperless accounting and bookkeeping is a fast growing trend among big and small businesses in the US. Accounting and bookkeeping software are now easily available which makes doing taxes and your books faster and easier. For example, a lot of Certified Public Accountant firms turn to Quick Books consulting for a much more efficient way of tax preparation and doing the books monthly.

Get more familiar with the family. Who are the wage earners in your family? It is important that every tax-paying member has filed their own tax return. If you are the singular earning body of the family, then it would mean that you are entitled to certain things that your dependents are not. Tax preparation has variables so make sure you have a clear understanding of these processes. Ask a Certified Public Accountant firm for help if you need to.

Ask for n extension if it is only necessary. Yes, it is possible to ask for an extension on your tax report but, it is still better if you submit on time. Only ask for an extension if it is of dire need. Again, save time. Do with what you have or get professional help. Avail of Quick Books Consulting services or online bookkeeping companies. These are convenient and reliable means of getting your books and taxes done.

Learn the dos and don'ts of tax-filing. File with a preparer affiliated with a professional organization and make sure you file your taxes with someone you trust and have good knowledge of tax policies—like your accountant. If you're filing online like a lot of people, do it with a firm registered with Thawte and/or TrustE (security and privacy certification companies) and listed as an authorized e-file provider.

Know what to avoid. One important thing to avoid is purchase a refund anticipation loan (RAL). Do this only until you are clear about all your other options and know how much money you are losing.

Do not let tax preparation overwhelm you. Get on them early and make sure that you have all your tax forms prepared so that filing will go as easily as possible. And who knows? At the end of the day you may have a check coming your way — if you set about things the right way.



Avoid Tax Preparation Hassles with the Right Accountant

Five Great Tips for Freelance Tax Preparation

Five Great Tips for Freelance Tax Preparation
By Steve Patterson
The idea of setting your own work schedule and working where you prefer may seem like the ultimate way to make a living with freedom and mobility. Every work opportunity may have challenges, and this is true even if you work in a freelance format. The steps to a successful freelance experience may be easier than you imagine, and preparing taxes may be the ideal way to help others and earn money on your own terms.
1. Understand how taxes accrue
Paying taxes is different if you work for yourself as opposed to being an employee and receiving a W-2 form from a company. You may receive a 1099-MISC form as a record of your earnings, and this is what you will need to submit when you file your own taxes. Otherwise you need to track your income.
2. Keep a record of your expenses and income
You should think of your freelance work as a business, and this means that you should keep an accurate record of your income and operating expenses. You should keep receipts, invoices, and other pertinent information organized at all times. Keep these documents in a safe file in your office for when you start to prepare your taxes.
3. Make regular, estimated tax payments
Employees can have taxes withheld from their paychecks, but you will have to take the lead in setting aside tax payments if you work freelance. Falling behind can lead to problematic financial circumstances, and you may be faced with penalties if your tax payments fall behind as well. The good news is that you can make online payments, and this can eliminate the burden of having to come up with a large sum of cash when your return is due.
4. Understand your deductions
Business expenses come in many forms, but legitimate deductible expenses are characterized as being necessary and ordinary for the type of business in question. Business expenses may include insurance, rent, advertising, utilities, and personal vehicle usage.
5. Post an earning profit
Posting a loss each year may be cause for the IRS to view your business endeavors as a hobby as opposed to a way to earn income and make a profit. This may lead to costly audits, so you should exercise care as you conduct your freelance work. As long as you produce a good amount of revenue and have separate finances, you should be safe. Check with your tax professional.
Taxes are an annual occurrence, but having a plan can can keep this routine part of earning a living from derailing your dream of working independently. Work with professionals and purchase the tools necessary to keep good records, like Quicken, and prepare good tax documents, possibly H&R Block Business Edition.
For great tax software products available for download and for working online, take a look at 2013Taxes.org today.
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Dealing With Tax Professionals To Achieve Improved Compliance With The Laws

Dealing With Tax Professionals To Achieve Improved Compliance With The Laws
By Eduart Gjokutaj
The majority of taxpayers in EU countries use tax professionals in some shape or form, and for this obvious reason the EU tax administration recognises that they play a very important role in their tax system. As well as helping to make the system run smoothly, they play a key role in influencing and shaping the tax compliance behaviour of their clients. This influence may be positive or negative, because of their professional knowledge of our tax system and its nuances.
Through their representative bodies, tax professionals also have an important role in developing our tax system. They are influential in forming public opinion and general attitudes as to the fairness and equity of the tax system and our administration thereof.
Because of their influential role and the unique position they have in influencing taxpayer behaviour, we recognise that they are one of the primary ingredients in our pursuit of our main corporate goal: "To ensure that everyone complies with their tax and customs responsibilities".
We therefore spend a lot of time engaging with them using a combination of methods and through many different forums in our efforts to achieve improved taxpayer compliance.
WHAT CAN BE TAX STRATEGY ?
Our strategy in relation to dealing with tax professionals can be laid out in our recent Operational Strategic Programme 2007-2010. Because of the fact that the phrase "tax professional" encompasses persons with a variety of roles and responsibilities, the tax administration must prepare a response to ensure that strategy works.
I would like to give you some background on how the building relationships and partnerships strategy will come about. The relationship between taxpayers and tax administration, I must confirm that is very much an adversarial one characterised by mutual distrust and suspicion. Tax administration recognises that albanian tax professionals have a key role and that is why we have developed sophisticated consultative mechanisms to help administration engage with this wide community.
Let me give you some relevant facts about the Albanian tax system.
ALBANIA's TAX SYSTEM
Our tax system is concerned with direct and indirect taxes, customs and duties. Albania has taxes on incomes, as well as taxes on goods and services.
Businesses (limited companies and individuals) pay tax on a self-assessment basis. There are approximately 49,000 self employed individuals and 13,000 limited companies on our register.
The General Taxation Directorate is the sole central tax authority in the Republic of Albania. The General Directorate of Taxes (HQ) and its Branch Offices in the districts possess authority to implement and administer taxes. The General Directorate of Taxes is located in Tirana. The General Taxation Directorate establishes its Local Tax Offices in 36 districts and since 1998 is established in Tirana the Large Taxpayer Office. Local Tax Office Heads are appointed and discharged by the General Director of Taxes. The Local Tax Offices provide taxpayers with tax certificates, prepare draft program of tax revenues for the district, supervise and are accountable for accomplishment of the tax revenues and the program, process tax declarations, assess tax liabilities, preserve and organise documents, audit taxpayers and collect taxes as well as implement special executive decisions.
General Taxation Directorate has recently undergone a major organisational restructuring. Essentially, this agency has rebuilt the organisation around different groups of taxpayers. These groups consist of taxpayers in each of four geographic regions and a national large taxpayer group. Apart from collection and debt management functions which remain centralised every other small taxpayer is managed from 2007 from tax offices of local power, as effect of fiscal decentralization in Albania.
WHO AND WHAT ARE ALBANIAN TAX PROFESSIONALS ?
In aLBANIA, a wide range of tax professionals such as accountants, lawyers, tax consultants, businesses and freight forwarders acting on behalf of their clients, the taxpayers, interacting with tax offices. These tax professionals perform a wide variety of functions.
The variety of professionals providing a great deal of tax advice or engaging in compliance activities is generated on the activities of such professionals. For example, accountants, advising on business transactions and internal audit; lawyers such as solicitors and barristers advising on business transactions, conveyancing, estate administration and litigation; auctioneers and real estate agents advising on capital transactions, and customs agents advising on customs matters. Each of these activities in its own right involves some form of tax advice and each professional can be regarded as a "tax professional", each of which, play a very important part in ensuring that our tax administration and systems work.
Traditionally most VAT businesses and a little number of self-employed persons, i.e., businesses, professions, companies and their directors, use the accountant as tax professional, or "agent", to engage with tax officials. This high level of representation, even for small business, is because we don't operate an imputed income system. All businesses have to prepare business accounts on an "accruals" basis, and this generally requires the services of an accountant.
In Ireland we refer to our mainstream tax professionals as "tax practitioners" or "agents" and there are approximately 2,000 such "agents" registered in tax offices when they act as tax return preparers. As a result of this high level of agent representation, taxpayers in Albania tend not to be inhibited about challenging tax administration, and engage in more sophisticated business transactions and use tax professionals to this end.
Another reason for taxpayer challenges is the recent phenomenon of taxation departments being created in legal firms. Also, many corporations are employing lawyers who specialise in mainstream taxation matters and now lawyers are not just engaged in the traditional legal bastions of capital taxation and inheritance tax matters. Primarily, as a result of our Tax Investigation Department a dedicated part of tax administration which pursues the proceeds of crime, our barrister profession, who traditionally did not advocate in taxation matters, are now representing more and more taxpayers in tax matters in the civil and criminal courts.
This increasing competition from the legal profession has raised some issues as regards a level playing field between the different professions. Accountants see the prospect that lawyers might be able to claim legal professional privilege on behalf of clients against Revenue enquiries in certain circumstances as an unfair competitive advantage.
INFLUENCING COMPLIANCE BEHAVIOUR
One of the obvious benefits for tax administration from the engagements with tax professionals is the extent to which they can get them to influence good compliance behaviour. As already mentioned, tax offices regard tax professionals as being hugely influential in terms of promoting good compliance behaviour; indeed, because they may be the only point of contact that a taxpayer has in his/her interactions with tax administration.
However, it is important that tax professionals also see it as in their interest to do so. Not alone does 'non-compliance' cost money in lost taxes for tax administration, but it also puts the taxpayer, the client, at serious risk of severe consequences if caught. Being able to deal with taxpayers through their agents substantially reduces the cost of tax administration. Think of what life would be like for a tax administration if there were no tax professionals. Some people who work for tax administrations might say that life would be much easier without them. Yes, there might not be so much tax planning, or challenges to taxation, and taxpayers might be more willing to accept tax administration's view. This might make life easier for the tax officials. But given the complexity of tax system for enyone that it's no part of tax administration, despite all the efforts at simplification, think of what the disadvantages might be?
Instead of funnelling the interaction with businesses and corporations through 2,000 tax professionals, it would be necessary to interact directly with an additional 49,000 business and over 13,000 corporate taxpayers. This would have huge cost implications for tax administration, as more employees would be needed to service the substantial additional contacts and queries that would ensue.
It would also be immeasurably harder for tax administration to ensure that all taxpayers understood their obligations and this would adversely affect voluntary compliance.
For these reasons, tax structures try to make it as easy as possible for tax professionals to meet their client's compliance obligations and we provide a variety of support services and measures to support and achieving client's compliance.
SUPPORT AND SERVICE FOR TAX PROFESSIONALS
Tax professionals have a big interest in customer service efforts and are rightly critical when the tax services falls below standard. After all, the tax professional is in business to make a profit. Poor service on the tax offices costs money and the taxpayer does not always understand either.
Here are some examples of how tax administration can support and try to try to make life as easy as possible for tax professionals.
Simpler Organisational Structure
In the albanian tax structure, all taxes pertaining to a taxpayer are handled by one office. Prior to that, a taxpayer (or tax professional) could have to deal with a number of offices depending on the tax.
This tax structure makes it much easier for the tax professional to deal with their client's compliance obligations. However there are problems following the reallocation of all our taxpayer cases in the restructuring period. For some time, tax professionals are unsure which office dealt with their clients. As a result of good contacts with the various professional bodies and in a spirit of openness and co-operation, which is part of taxation strategy of building partnerships, is the possibility for tax officials to engage proactively and positively with a view to implementing practical measures to remedy difficulties.
Some of these initiatives help illustrate this:
o Contact Points
There are special contact points in each of the regions for tax professionals who are experiencing service difficulties in dealing with tax administration. These contact persons are empowered to sort out the difficulty.
o Contact Locator
There is a tool known as 'Contact Locator' ,that in albania is not a function used, but in EU countries he can be used to find out which office deals with a taxpayer.
Information Tools
Tax strategy is to ensure clear and timely communication. Some of the many information tools are ready for providing up to date informatio:
- Tax official website http://www.tatime.gov.al
- Tax Buletin
- Tax leaflets
- Seminars and workshops
o Technology
By exploiting technology opportunities as much as possible such as electronic e-filing service, tax structures are able to provide better service while at the same time reducing compliance and their administrative costs. This makes it easier and cheaper for tax professionals to file and pay.
o Fair procedure
Through mechanisms such as tax procedures and Tax Audit Practice Guidelines and other papers and circulars that help the conduct of tax strutures in confront of taxpayers and tax proffesionals.
CONSULTATION
While, everyone recognises that albanian tax administration has responsibility for the tax system and makes the final decisions, we know that we can do things more effectively, if there is a spirit of cooperation and mutual understanding with tax professionals.
Both tax structures and tax professionals have a mutual self-interest in bringing common sense and clarity to what is a complex area of business and personal life of taxpayers. The consultation is very important - our strategy is that we listen, we exchange views and ideas, and we generate ideas. On the other hand it is important to get the professional's practical business perspectives and learn from their experiences. Sometimes a more informative practical viewpoint, e.g. learning practical insights and difficulties in operating legislation, is a more valuable insight than discussions about proposals or the difficulties in implementation of current legislation in an internal vacuum.
BENEFITS TO TAX ADMINISTRATION
As well as the invaluable role, played by practitioners in promoting and fostering a pro-compliance culture in Albania, they have also been a significant catalyst and facilitator of some of the major changes in tax administration here.
Tax administration has make changes to keep pace with one of the fastest growing economies in the mediterranean region over the last 5 years which has brought enormous challenges for us on many fronts, but particularly in terms of:
- Growing number of taxpayers
- Taxpayers with increasingly complex and financial and investment profiles
All of the changes have occurred while resources have remained static. With the support (and sometimes the forbearance) of tax professionals, tax administration has managed to transform itself from an organisation that was focused on process and procedure, structurally frozen, averse to change and largely indifferent to its customers' needs to one which is trying now to customer focused, more effective in its core businesses, structurally flexible, risk driven and looking forward with enthusiasm to the challenges ahead.
I would like to illustrate this by mentioning just a few of these major changes and the role of tax professionals in facilitating them:
The near future tax declaration-on-line filing service in Albania, it's aspected to be a phenomenal success. In industrialised countries of EU, even though e-filing is not mandatory, over 53% of self employed taxpayers filed on-line last year, in order to be increased to over 60%. This is because so many of the returns are filed by tax professionals who have been active partners in our e-filing success. As a result, there have been huge benefits for both Revenue and practitioners in terms of service and cost. Tax professionals have been the most enthusiastic supporters of our on-line filing system and we are continuing to work closely with them in developing it to ensure that it continues to meet their needs and concerns re service, security and confidentiality.
CHALLENGES AHEAD
There are some serious challenges ahead for the Tax Administration -Tax Professional relationship. Some of the main ones are that come to mind are:
Tax Planning and Avoidance
It would be wrong to give the impression that tax structures accept everything that the tax professional engages in. One of the main areas of contention is 'avoidance' or aggressive tax planning. While professionals have a key role to play in relation to promoting compliance, there are problems sometimes when tax planning steps over the line. Of course tax offices understands the motive for tax planning. Naturally, all taxpayers want to pay less tax and if there are ways of avoiding tax, and some are willing to pay a lot of money for it. The problem is when such schemes have the potential to undermine the integrity and legitimacy of the tax system in the wider community.
There is an ongoing debate with tax professionals as to where that line is - what's acceptable and what's unacceptable. The tax administration's objective is to move tax professionals and their clients away from getting involved in unacceptable tax planning schemes. On the other hand, albanian tax administration are closely monitoring new developments in other countries to establish the best approach to take to change behaviour in this regard.
Integrated Revenue view of Taxpayer and Risk
The tax administration approach to tackling risk, in tax structures, is to analyse risks for a taxpayer across all taxes. This makes it more difficult for the general tax professional who may act in relation to some of the taxes only. It may present particular problems when preparing for a revenue audit when the full range of taxes and duties, from income tax to excise duties, could be reviewed.
More Professional Regulation
It's not just tax administration that tax professionals have to deal with. They have to contend with more and more statutory reporting requirements from other bodies such as the Prosecutor, money laundering department, Customs, and many other public agencies regarding company law offences, to illustrate just a few regulatory bodies. The whole compliance environment is becoming more difficult for the practitioner and this is not being made easier by duplication of requirements from the various public bodies. However, we are working with other agencies to try and streamline matters where possible.
Finishing off Legacy Business
In the last four years, tax investigation units have carried out a number of large investigation projects aimed at dealing with tax evaded on funds hidden by way of various means, such as money laundering in the registered businesses, under reporting or missing declarations of incomes etc .
As mentioned earlier, there is a new investigation scheme underway into undeclared funds hidden. Because of the numbers of taxpayers involved, approximately 1, 000 over the last 2 years, tax professionals are complaining about the strain that all this extra work is placing on them which is in addition to their normal advisory and returns preparation work. The timing and management of some of these special investigations has been a bone of contention with them and this has caused some difficulties in their relationship with tax administration.
CONCLUSION
Tax professionals sometimes ask hard questions which tax officials may not have asked themselves and, which tax administration has to answer. This ultimately is of benefit to tax administration as it focuses them on dealing with and addressing difficult issues, which may have been overlooked.
As key stakeholders they want tax professionals to have a sense of ownership in the tax system. This partnership approach with them also helps to counter relationships of distrust and enables tax administration to create real relationships. To this end, the good relationship with tax professionals can help in building public confidence in the tax administration. In terms of our objectives, we have benefited from our approach with them. However, tax officials should not get carried away. While they have a long engagement, the marriage has been more one of convenience than of love for each other. Paying tax will never be popular and there will no doubt be serious difficulties ahead. This relationship overall is on a sound footing and capable of withstanding whatever troubles lie ahead. In this conclusion I can pronounce the sentence that I'm carrying in my mind always "Tax administration need tax professionals and they need tax administration".
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Easy Way To Figure Out Next Years Tax Refund Without a Calculator

The amount of money that you receive from credits and deductions all depend on the amount of federal taxes that were deducted from your gross income on your paycheck.

 An easy way to figure out how much money you are going to get on your refund is to look at how much money was taken for your federal and state taxes.

Almost every year I do my taxes, I get back, right around the amount of money that I was taxed, minus tax preparation fees and any other fees associated with tax preparation. In the example below, the individual would probably receive 56 dollars or less.



This example will not work with everyone but for most individuals with no children or other tax problems should generally be able to figure out their refunds using this method.

Let me know if you have any cool tax preparation tips or tricks.

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