Your federal income tax filing status can affect exemptions, reportable income, deductions, credits, tax rates, liability, the type of form you file, and whether you need to file at all. In addition, some states require that you use the status reported on your federal return. That can affect the amount of state tax you pay.
 
Five filing statuses are available under current tax law. Here's an overview to help you determine which one is right for you.

• Single. You're considered single if you're unmarried, divorced, or legally separated as of the last day of your taxable year (generally December 31).

• Married filing jointly. When you're legally married under the laws of your state, you and your spouse can elect to combine your income and file a joint return. In cases of divorce or separate maintenance decrees, the laws of your state determine whether you're considered married. Under proposed regulations issued in 2015, same-sex marriages are recognized for federal income tax purposes when the marriage is recognized by any state.

• Married filing separately. As a married couple, you can choose to file joint or separate returns. When you file separately, you can change your mind later and amend your return to file jointly. However, you can't switch from joint status to married filing separately after the due date of the original return. Joint returns offer benefits such as a higher standard deduction. But separating your tax liability from your spouse's by filing separate returns can be beneficial in some situations. Just be aware that certain breaks, such as the child and dependent care credit, may not be available if you chose this filing status.

• Head of household. This is the filing status to use if you're single and provide more than half the cost of maintaining a household for a dependent who lives with you. You may also be able to use head of household status when you're single and maintaining a separate household for a parent - including one living in a nursing home. Head of household tax brackets are more generous than those for single filers, but less broad than the brackets for married filers who complete a joint return.

• Qualifying widow or widower. If you were widowed during the year and have not remarried, you have the option of filing jointly with your late spouse. When you're widowed and have dependent children, you can continue to use joint tax rates for two additional years following the year your spouse died. This status lets you benefit from the favorable tax rates of joint filers and claim the highest standard deduction.

Contact us for help in determining which filing status fits your situation.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

The extenders law passed in late December did more than increase the amount of Section 179 depreciation expensing for 2015. The law also made changes to the rules that took effect as of January 1, 2016. Here's an overview of some of the modifications.

Maximum expensing amounts made permanent. When you buy machinery, equipment, or furniture for your business, Section 179 lets you take an immediate deduction instead of depreciating the cost over the useful life of the asset. For 2015, the maximum amount you can expense is $500,000 of the cost of qualifying property you placed in service during the year. The $500,000 is reduced (but not below zero) when the cost of the property exceeds $2,000,000.

The extenders law made these amounts permanent. Beginning in 2016, both caps will be adjusted annually for inflation.

Note that the law did not change the requirement that your deduction is limited to the amount of your taxable income for the year. You can still carry unused amounts to future years.

Qualifying property definition expanded. The definition of qualifying property now permanently includes off-the-shelf software and qualified real property such as leasehold, restaurant, and retail property.

For 2015, the maximum Section 179 expense deduction you can elect for qualified real property is $250,000. This expensing cap is eliminated as of January 1, 2016.
​
In addition, starting in 2016, you can write off the cost of air conditioning and heating units. They're now considered qualifying property.
​
Got questions about Section 179? Give us a call. We're here to help.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

If you receive Social Security benefits, you may have to pay federal income tax on part of your benefits. These IRS tips will help you determine if you need to pay taxes on your benefits.

• Form SSA-1099.  If you received Social Security benefits in 2015, you should receive a Form SSA-1099, Social Security Benefit Statement, showing the amount of your benefits.
• Only Social Security.  If Social Security was your only income in 2015, your benefits may not be taxable. You also may not need to file a federal income tax return. If you get income from other sources you may have to pay taxes on some of your benefits.
• Free File.  Use IRS Free File to prepare and e-file your tax return for free. If you earned $62,000 or less, you can use brand-name software. The software does the math for you and helps avoid mistakes. If you earned more, you can use Free File Fillable Forms. This option uses electronic versions of IRS paper forms. It’s best for people who are used to doing their own taxes. Free File is available only by going to IRS.gov/freefile.
• Interactive Tax Assistant.  You can get answers to your tax questions with this helpful tool and see if any of your benefits are taxable.  Visit IRS.gov and use the Interactive Tax Assistant tool.
• Tax Formula.  Here’s a quick way to find out if you must pay taxes on your Social Security benefits: Add one-half of your Social Security to all your other income, including tax-exempt interest. Then compare the total to the base amount for your filing status. If your total is more than the base amount, some of your benefits may be taxable.
• Base Amounts.  The three base amounts are:
  • $25,000 – if you are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from your spouse for all of 2015
  • $32,000 – if you are married filing jointly
  • $0 – if you are married filing separately and lived with your spouse at any time during the year

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
Additional IRS Resources:

• Social Security Income - Frequently Asked Questions
• Publication 915, Social Security and Equivalent Railroad Retirement Benefits

IRS YouTube Videos:

• Is Social Security Taxable? - English | Spanish | ASL

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicago land area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Art Bradley CPA & Janice Papais CPA 
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

Expect to hear from the IRS again about phone calls regarding tax debts. What will differentiate this announcement from those made in the past? This time the IRS may say that some calls can be legitimate. Under a law that went into effect in December, the IRS is required to use private debt collectors to arrange payment of certain back taxes. Does that mean your phone will be ringing?

Maybe, as scammers try to capitalize on the new requirement. But here's a good rule of thumb: Generally, if you're not expecting to hear from the IRS, the caller is probably not the IRS.

The type of debt the law requires the IRS to turn over to the collectors is known as "inactive tax receivables." Those are amounts that are potentially collectible, yet are not being actively pursued by the IRS. The debt must meet certain criteria such as the IRS not being able to collect due to a lack of resources or to the inability to locate the person who owes the back taxes.

The law also specifies what debt the IRS cannot turn over to collectors. For example, if you have a pending or active offer-in-compromise or installment agreement, the IRS can't send your tax bill to a private collection center.

Contact us if you receive any communication from the IRS — or from someone purporting to represent the IRS. We're here to help.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Art Bradley CPA & Janice Papais CPA 
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

Are you ready to establish an Achieve a Better Life Experience (ABLE) account? If so, a recent IRS notice can help ease the administrative requirements. Here's what you need to know.

ABLE accounts were created by the Tax Increase Prevention Act of 2014. These tax-advantaged accounts are designed to help you build savings to care for yourself or a loved one with disabilities while maintaining eligibility for benefit programs such as Medicaid. Generally you'll qualify for an ABLE account if your disability occurred before age 26.

While states will create the programs that allow ABLE accounts, the IRS issues the tax guidance, and the rules are similar to those for Section 529 college savings plans. That means ABLE accounts grow tax-deferred and you can take tax-free distributions when you use the funds to pay qualified disability expenses. Anyone can contribute to an ABLE account, up to the maximum limit of $14,000 for 2016.
​
Under the latest notice from the IRS, three ABLE account requirements have been changed.

• Use of distributions. The ABLE program no longer needs to determine whether distributions from the accounts will be used for qualified disability expenses. However, you or the family member you've designated as the account beneficiary must maintain records that substantiate the tax status of your withdrawals.

• Request for taxpayer identification numbers. The ABLE program no longer needs to ask for a taxpayer identification number from account contributors. Note that amounts in excess of the annual limit of $14,000 must be returned to the contributor, and an identification number may need to be provided at that time.

• Less restrictive documentation of eligibility. Instead of providing private medical information to establish an account, ABLE account beneficiaries can sign a statement of qualification under penalty of perjury. The beneficiary must keep the detailed medical records proving eligibility, and provide the documents to the IRS if requested.

Give us a call for more information about these accounts and other tax-related disability benefits.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicago land area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Art Bradley CPA & Janice Papais CPA 
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

No matter when you need tax help or information, start by visiting IRS.gov. A variety of tools and services are only a click away on our website. Here are ten great ways to use IRS.gov:

1. Get Answers to Your Tax Questions. The Interactive Tax Assistant covers many common tax topics. Type in your question or search terms, and it can lead you step-by-step to the answer. Or, try the IRS Tax Map. It gives you a list of tax law subjects to review. It combines tax topics, forms, instructions and publications into one research tool.

2. Get Forms and Publications. View, download and print federal tax forms and publications anytime. Approximately 100 IRS publications will be available for download in ePub format this year.
3. Use IRS Free File. If you need to file your tax return, you can file a federal tax return for free using IRS Free File. If you earned $62,000 or less, you can prepare and e-file your taxes using free brand-name tax software. If you e-file your tax return, you don't need to prepare or mail any paper forms to the IRS.

4. Get Information on the Affordable Care Act. Find out how to:

• Report health care coverage.
• Claim an exemption from the coverage requirement.
• Make an individual shared responsibility payment.
• Claim the premium tax credit.
• Reconcile advance payments of the premium tax credit.

Use the Interactive Tax Assistant tool to determine if you qualify for an exemption from the coverage requirement or need to make an individual shared responsibility payment.

5. Check on Your Refund. The Where’s My Refund? tool is a fast and easy way to check on your tax refund. Use the IRS2Go mobile app to access the tool, or click on the ‘Refunds’ tab on IRS.gov.

6. Use IRS Direct Pay. If you owe taxes, pay with IRS Direct Pay. It’s a safe, easy and free way to pay from your checking or savings account. Go to IRS.gov/directpay to pay your federal tax bill.

7. Apply for an IRS Payment Plan. If you can’t pay all your taxes at once, apply for an IRS Online Payment Agreement.

8. Check Out a Charity. You must donate to a qualified charity if you want to deduct the donation on your tax return. Use the IRS EO Select Check tool to see if a charity is qualified.

9. Calculate your Tax Withholding. If you get a larger refund or owe more taxes than expected, you may want to change your tax withholding. Use the IRS Withholding Calculator tool to help you figure it out. 

10.  Get a Transcript. The quickest way to get a copy of your tax transcript is to use the Get Transcript tool on IRS.gov. You should receive your transcript in the mail within five to 10 days from the time the IRS receives your request online. Plan ahead to ensure you have it when you need it.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Additional IRS Resources:

• Payment Plans, Installment Agreements
• Affordable Care Act Tax Provisions

IRS YouTube Videos:

• Welcome to Free File – English
• Interactive Tax Assistant – English | ASL
• Exempt Organizations Select Check – English | Spanish | ASL
• When Will I Get My Refund? – English | Spanish | ASL

IRS Podcasts:

• Interactive Tax Assistant – English
• When Will I Get My Refund? – English | Spanish
• Exempt Organizations Select Check – English | Spanish

http://content.govdelivery.com/accounts/USIRS/bulletins/133e56e?reqfrom=share

​We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicago land area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Art Bradley CPA & Janice Papais CPA 
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

We have just posted the FEBRUARY 2016 issue of the 
ONLINE ADVISOR newsletter on our website. Here are a few 
headlines from that issue. To read any of these articles, 
click on the link at the end of this email. 

ARE YOU OVERLOOKING THE DOMESTIC PRODUCTION ACTIVITIES DEDUCTION?
If you manufacture, produce, grow, or extract products in 
the U.S., you may be eligible to claim a tax deduction for 
domestic production activities.  

BE SURE TO USE UPDATED TAX NUMBERS IN YOUR 2016 PLANNING
By law, the IRS must adjust certain tax numbers for inflation 
each year. Here are some of the tax numbers to use in your 
2016 tax planning.

MAKE CUSTOMER SERVICE MORE THAN MERE TALK
How can you teach every employee that a goal of your business 
is to meet, and preferably exceed, customer expectations 
as often as possible? Here are four ways to help employees 
understand that customer service is part of everyone's job.

TAKE CHARGE OF YOUR DEBT
Looking for ways to manage your debt? Here are seven practical 
suggestions.


Just click here to read the full articles. 

Art Bradley CPA & Janice Papais CPA
Office: (630) 320-3720
art@monarchaccountinggroup.com
janice@monarchaccountinggroup.com
  

It's January — time to update your capitalization policy! A recent IRS notice increased the safe harbor amount for deducting tangible property expenses currently, starting January 1. That means you'll need to review the written policy you use to set a threshold for which qualifying costs you'll record as assets and which you'll charge to expense.

As you may remember, the "repair regulations" became effective in January 2014. This guidance from the IRS on the capitalization and repair of assets applies to all businesses, including sole proprietorships, rentals, and farms. The guidance explains the federal income tax treatment of expenditures you make for materials and supplies, repairs and maintenance, and business property you buy, produce, or improve. In general, you're required to capitalize these items.

However, the regulations provide a de minimis safe harbor for expensing certain costs. The amount of the safe harbor depends on the type of financial statement you have prepared. For instance, if you have an applicable financial statement, the safe harbor is $5,000. (An example of an applicable financial statement is a certified audited statement with a report by an independent CPA that you use for credit or reporting purposes.)
​
If your business does not have an applicable financial statement, the de minimis safe harbor was originally set at $500. Beginning January 1, 2016, the safe harbor is $2,500 per invoice or item with a supporting invoice.

Please give us a call to discuss how this change to the capitalization and repair regulations will affect your business and what you need to do to update your accounting policy.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicago land area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Art Bradley CPA & Janice Papais CPA 
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
​

Plan your 529 account withdrawals

January is the start of a new college semester, and parents and grandparents may want a refresher course on 529 college savings plan withdrawals. Here are two things to consider.

• Qualified withdrawals are tax-free. "Qualified" withdrawals are those you use to pay for college education expenses such as tuition, fees, books, supplies, and equipment. Be aware that some withdrawals may be taxable, such as when the account beneficiary receives a scholarship or other tax-free assistance. In addition, you must coordinate 529 withdrawals with Hope and lifetime learning credits, as well as distributions from Coverdell education savings accounts. These rules prevent the use of the same expenses to obtain multiple tax benefits.

• Non-tax implications may affect timing of withdrawals. Financial aid may play a role in when you take money from your 529 account. For example, when grandparents own a 529 plan, withdrawals to pay for a student-grandchild's college costs may affect the amount of income the grandchild must report on a federal financial aid form.
  
  Planning for this generally means waiting to use grandparent-owned 529 funds in the student's last year or two, or transferring ownership of the account to the student's parents. A recent change to financial aid rules may also help. Starting with the 2017-2018 school year, the federal financial aid form will use income data from an earlier tax year than is used under the present rules. This change means some financial gifts — such as distributions from grandparent-owned 529 plans — may be made earlier.

Please give us a call to discuss how this change to the capitalization and repair regulations will affect your business and what you need to do to update your accounting policy.We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicago land area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Art Bradley CPA & Janice Papais CPA 
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
​