Our Manhattan small business CPA firm would like to alert you to some significant changes in the way the IRS targets small businesses, LLCs, S-corps and C-corps for  New York tax audits, and how it conducts them. When you read statistics about the percentage of returns that are audited, you might feel justified in playing the odds that your business won’t be among those selected by the IRS for scrutiny. But the numbers are very misleading, because the IRS is getting a lot smarter about how it chooses returns for audit and how its examiners conduct their audits. Our team of  New York City CPAs can help your small business avoid this.

Over the past few years, the IRS has dramatically stepped up its efforts to study specific industries, and to educate its examiners about business practices, terminology, accounting methods, and common industry practices. It has also identified areas of inquiry that produce audit results. Examiners are told specifically to look out for certain red flags to get at what is really going on in a business or transaction. The IRS is also updating its tax gap figures (the estimated $300 billion difference between what taxpayers owe and what they pay). Several research studies are underway into various segments of the taxpayer population.

The result is that examinations are more sharply focused on potential areas that will generate increased taxes, penalties, and interest. Fortunately, there is a positive side to all of this. The IRS has made public a number of its Industry Specialization Program papers and Market Segment Specialization Program manuals. These help us keep up on the areas that the IRS will be targeting in its audits. So far it has issued detailed audit guide information on a range of industries, from general ones, such as retailing, to more specific ones, such as law firms, restaurants, entertainment, communications and petroleum. Much more information on specific industries is expected to be issued as the IRS continues to devote resources to the development of these programs.

Another IRS initiative tries to improve compliance by meeting with representatives of various industries to work out understandings with them about specific tax problems. For example, the IRS and the food service industry have come to an understanding about properly determining and reporting employee tips. Employers that comply will face reduced IRS scrutiny on this issue.

A review of your small business practices done by our NYC CPAs, with a view toward making some changes in light of the new IRS audit and compliance initiatives, may help keep your Manhattan income tax returns from being selected for examination, or help you survive if your return is audited. Please call one of our CPAs today if you feel that we can be of assistance to your LLC, S-corp or other small business in these matters.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

Congratulations on your recent acquisition of  your new small business in New York. Acquiring a small business is often an emotionally exhausting, confusing and exhilarating experience. Further, acquiring a business can put a strain on the new company’s cash flow. As Manhattan CPAs experienced in working with S-corps, C-corps and LLCs in NYC, we can advise you on ways to improve your cash flow.
One way to improve cash flow is to reduce the amount of New York income taxes your small business is currently paying. One possible way to reduce NYC income taxes is to accelerate the deduction of costs currently capitalized as acquisition related costs. Generally, professional fees and other costs associated with the purchase of a business are “capitalized” in the stock or assets that are purchased. For income tax purposes, deduction of these costs may be over 15 years, on sale of the business, or the costs may never be deducted. Because invoices often do not clearly allocate fees among all the services performed by professionals, or costs associated with travel and other miscellaneous expenses, costs that are not associated with the purchase can be capitalized as acquisition costs.

If costs unrelated to the acquisition have inadvertently been capitalized, then properly re-characterizing these costs can permit them to be deducted in the year they were incurred. Further, in certain instances, costs incurred to expand your business can be deducted over 5 years, rather than 15 years. A thorough analysis of capitalized acquisition costs often results in a significant New York tax refund and/or a decrease in the Manhattan income tax paid in the years immediately following the acquisition.

Our CPAs would like to talk to you about the potential for accelerating the deduction of some of the costs you currently have capitalized, to better help your New York City LLC, S-corp, C-corp or other small business. Please contact one of our NYC LLC CPAs at our office to arrange a convenient meeting time.

Sincerely yours,
Jonathan Medows, CPA

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

The American Recovery and Reinvestment Tax Act of 2009 (2009 Recovery Act), which provides billions of dollars of tax relief, includes a New York City tax credit for individuals seeking a college education. This provision may benefit your income taxes in Manhattan as a parent of a child working toward a college degree.
There are many federal tax incentives available to help reduce the costs of higher education. Some of these incentives offer tax breaks for current educational expenses, such as the above-the-line deduction for qualified tuition and related expenses, and the Hope scholarship and lifetime learning credits. In lieu of claiming the Hope scholarship credit, the 2009 Recovery Act provides an “American Opportunity” tax credit for 2009 and 2010. This credit may be able to help you save money on your income taxes in New York if you qualify.

Eligible Manhattan taxpayers may claim an American Opportunity tax credit up to $2,500. The credit is determined as 100% of the first $2,000, and 25% of the next $2,000 of tuition and related expenses paid during the year. Forty percent of the credit is refundable.

Unlike the Hope credit, the American Opportunity credit is not limited to the first two years of post-secondary education. Also, the American Opportunity credit covers “course materials” such as books. This credit phases out for taxpayers with adjusted gross income in excess of $80,000 ($160,000 for married couples filing jointly).

Educational incentives can provide significant New York City income tax relief for families. The American Opportunity credit is one of several tax options related to saving and paying for higher education. Some may be more beneficial than others in your specific circumstances. Maximizing the benefits of the education tax breaks requires careful planning, particularly because of the interrelationship between the rules that apply to each provision. It is important to go to a CPA who is experienced in dealing with income taxes in New York. At MEDOWS CPA,We can help you sort through the options. Please call our office of income tax CPAs in Manhattan to arrange an appointment at your earliest convenience.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

We like to tell you about how great we are over here in the office of Manhattan CPA Jonathan Medows, but we thought we should share with you a for-real first-hand account from one of our New York income tax clients, a NYC small business owner who works in multiple fields.

When I met Jonathan Medows I had outstanding New York income tax issues. I was behind by three years, thanks to a previous accountant who wasn’t very responsible. The problem with taxes is that it’s intimidating. The documents aren’t hard to read—they’re just not fun. This is the least pleasant stuff in the world. With Jonathan Medows, you know you’re taken care of, and that takes a load off your back because you don’t have to worry about the government taking everything you own. And this gives you time to focus on your business, which is crucial to its growth.

I know this because I own multiple small businesses in New York City, each of which  has thrived since Jonathan Medows got me straightened out. After cleaning up all the old stuff, he got me on a schedule and taught me how to legitimize myself. As far as Manhattan small business income tax CPAs go, he’s the best.

A lot of people worry about New York income taxes, especially the legal issues around them, and this fear holds them back. Maybe you think the numbers are too much, or you won’t have the opportunity to keep up with everything. It’s a myth that it’s good to pay and get paid in cash, and just keep quiet about it. There’s a danger in avoidance, and in the long run it prohibits you from expanding as an entrepreneur and embarking on new projects. You can do so much better by being legitimate than by avoiding the issue. Don’t worry if you don’t know how to do it—Manhattan income tax CPA Jonathan Medows does.

At this point I just give him a stack of paperwork that the government sends to me and he deals with it. He does all the Manhattan tax planning, delivers everything, and keeps track of deadlines—and is professional about getting back to me via email or phone. He’s totally web friendly, so you can make an appointment online and know that it’s going to go through and be kept. Some accountants aren’t that organized—Jonathan Medows just takes care of stuff. You never hear any excuses or runarounds from the guy, which is almost unheard of from income tax CPAs in NYC.

So yeah, Jonathan’s there to help you out with all of your New York income tax needs. You can do it. There’s no danger. If you have money issues, he’ll work out a payment plan. Spend a little money now  on his NYC income tax CPA services to set a solid foundation for the future, and in the long run it’ll enable you to do a lot of the things you need to do to function and grow.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

If you have young children, you should consider the cost of higher education well in advance, and how it will effect your NYC income taxes. Two educational savings vehicles allow individuals to save for education on a tax-favored basis in New York: a qualified tuition program and a Coverdell education savings account. Also, you may be able to exclude from your  Manhattan income taxes a limited amount of bond interest received from qualified U.S. savings bonds in the year you pay higher education expenses. Parents may also use funds from an individual retirement account or a traditional form of savings to pay tuition costs. Generally, the payment of higher education costs is supplemented with scholarships, loans and grants. However, having a viable plan as early as possible in a child’s life will make maximum use of a family’s financial resources and may provide some New York City income tax benefit.

Section 529 plans. The Tax Code allows New York State and some educational institutions to offer so-called “529″ plans (known for the section of the Tax Code that governs them). They are also sometimes called qualified tuition programs (QTPs). They allow you to either prepay or contribute to an account for paying a student’s post-secondary education expenses. An eligible educational institution generally includes colleges, universities, vocational schools or other post-secondary educational institutions. In addition, distributions from state programs, even to the extent of earnings, are now entirely tax-free to the extent used for qualified higher education expenses. This tax-free treatment also has been available for distributions from private college and university programs.

Coverdell education savings accounts. Coverdell education savings accounts (also sometimes called education IRAs) are similar to IRAs. You can save today for future educational expenses, not just higher educational expenses. Funds in a Coverdell ESA can also be used for K-12 and related expenses. The maximum annual Coverdell ESA contribution is $2,000 per beneficiary. Contributions are not deductible by the donor and distributions are not included in the beneficiary’s income as long as they are used to pay for qualified education expenses. Earnings accumulate tax-free. Contributions generally must stop when the beneficiary turns age 18, except for individuals with special needs. Parents can maximize benefits, however, by transferring older siblings’ accounts for use by a younger brother, sister or first cousin, thereby maximizing the tax-free growth period. Excess contributions are subject to an excise tax on NYC income tax returns.

Although the amounts of adjusted gross income allowed for a contributor to a Coverdell ESA are subject to phase-out, the limits are generous. The annual contribution starts to phase out for married couples filing jointly with modified AGI at or above $190,000 and less than $220,000 and at or above $95,000 and less than $110,000 for single individuals.

Undoubtedly, some of these provisions will be more important to you than others, depending upon your personal circumstances. If you would like to explore how these opportunities can work for you and how they may effect your future income tax returns in New York, please do not hesitate to call.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

In recent years, many options have become available to self-employed individuals, LLCs, S-corps and small businesses owners in Manhattan to provide for their retirement. New York Tax planning for retirement can include deductible contributions to a Keogh plan, traditional or Roth IRA, SEP plan, SIMPLE plan or a one-person 401(k) plan. You may wish to consider implementing one of these plans for yourself and/or your employees to benefit from a current tax year deduction and accumulate tax-deferred retirement savings.

Each of these plans has advantages and disadvantages, and some may not be applicable to your situation. For example, a sole-owner 401(k) retirement plan allows a contribution for you as both an employer and as an employee. Therefore, a sole-owner 401(k) plan may provide for the largest deductible contribution. However, a sole-owner 401(k) is not available to the self-employed in New York with employees other than a spouse or relative. As an alternative, a Keogh plan provides more flexibility, but is more complicated to maintain than a SEP or SIMPLE plan and may have additional administrative costs. Which plan would work for you depends on your unique New York income tax situation.

Ultimately, the choice of savings vehicle will depend on factors related to your NYC small business and your retirement needs. Regardless of which plan you qualify for or what your retirement needs are, it is important to begin planning now for your retirement.

Please call our Manhattan office to arrange an appointment with one of our CPAs who are experienced in giving advice to self-employed individuals in your situation. We will be happy to discuss the various retirement plan options and how they might apply to your small business and New York income tax return.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

Generally, if you use your vehicle in pursuit of a trade or small business, you are allowed to deduct the ordinary and necessary expenses incurred while operating the vehicle on your new York income tax return. However, any expenses associated with the personal use of the vehicle are not deductible on your NYC income taxes. For purposes of these deductions, “car” includes a passenger vehicle, van, pickup or panel truck.

Personal vs. business miles. Business use of your car can include traveling from one work location to another work location within your New York City tax home area; visiting customers; attending a business meeting away from the regular workplace; and traveling from home to a temporary workplace if you have one or more regular places of work. The costs of travel between home and a regular place of work, however, are nondeductible commuting expenses and you will not be able to deduct them on your Manhattan income tax return.

Standard mileage rate vs. actual cost method. In lieu of proving the actual costs of operating an automobile owned by them, employees and small business owners may compute the deductible costs for their business use of an auto using a standard mileage rate. The 2010 standard mileage rate is 50 cents per mile. You may not depreciate your car or deduct lease payments on your NYC income taxes if you use the standard mileage rate method. If you use the actual cost method, you may take deductions for depreciation, lease payments, registration fees, licenses, gas, insurance, oil, repairs, garage rent, tolls, tires and parking fees on your income taxes in Manhattan. Regardless of the method used, if the vehicle is driven for personal as well as business purposes, only expenses or mileage attributable to the percentage of business use are deductible. There are separate considerations involved in leasing a car for your New York small business.

Substantiation. If you are using your car for business purposes, whether owned or leased, proper recordkeeping is critical. The recordkeeping requirements vary depending upon which method you use. If you use the standard mileage rate, you should keep a daily log showing the miles traveled, destination and business purpose. Recordkeeping under the actual cost method is somewhat more onerous. You should also keep a mileage log if you use the actual cost method in order to establish business use percentage. In addition, you must keep receipts, invoices and other documentation to verify expenses. Finally, you must be able to prove the original cost of the vehicle and the date it was placed in service for business use in order to claim depreciation on your income tax return in New York City.

Motor vehicle credits. Since 2005, Congress has enacted numerous tax incentives to encourage development of alternative fuels for motor vehicles, including the alternative motor vehicle credit (AMV), the alternative fuel vehicle refueling property credit, the plug-in electric vehicle credit, and the plug-in electric drive motor vehicle credit. The AMV credit is actually the total of the following five credit components:
•    the qualified fuel cell motor vehicle credit,
•    the advanced lean burn technology motor vehicle credit,
•    the qualified hybrid motor vehicle credit,
•    the qualified alternative fuel motor vehicle credit, and
•    the plug-in conversion credit.

The technology and federal emission standards required for each vehicle credit varies, as well as the credit amounts and the effective dates.

Vehicle fringe benefits. The fact that an employer allows an employee to use an employer-provided car for personal purposes generally does not deprive the employer of a vehicle expense deduction on their Manhattan income taxes. An employer who provides a vehicle to an employee as a fringe benefit may use one of the special valuation rules, rather than the fair market value (FMV) of leasing a comparable car, to calculate the amount of the benefit that is attributable to the employee’s personal use of the car. These special rules include the lease, cents-per-mile, commuting, and fleet-average valuation rules. An employer is not required to use the same valuation rule for all of the vehicles that are provided to employees. However, once a valuation method for a particular vehicle is elected, it must be used for New York income tax, employment tax, and reporting purposes for all employees who share the vehicle, as well as those who use it in subsequent periods.

Employers must report their employees’ personal use of the car on their W-2, Wage and Tax Statement. They are not required to withhold  Manhattan income taxes on this income, although social security and railroad retirement taxes must be withheld. An election not to withhold income taxes may be made on an employee-by-employee basis. However, affected employees must be notified in writing by the later of January 31st of the applicable year, or 30 days after the day on which the employee receives a car.

A small business owner in New York with an employer-provided car must substantiate the business use of the car with adequate records or evidence in order to claim a fringe benefit exclusion from income for personal use of the car. An employee who uses a personal car in the performance of services for his or her employer is entitled to deduct the car expenses on their New York income taxes if the car is used for the convenience of the employer, and is required as a condition of employment. Any unreimbursed employee expenses attributable to such use are deductible only to the extent that they exceed two percent of the employee’s adjusted gross income (AGI).

Whether you are an a small business owner, a S-corporation, a LLC, an employee, or a self-employed individual, we would like to evaluate the business use of your vehicle(s) in order to provide guidance in claiming and substantiating these expenses towards your New York City income taxes. Please call us at your earliest convenience to arrange an appointment with one of our experienced small business CPAs in Manhattan.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

If your New York home or other property is damaged as a result of a fire, earthquake, flood, hurricane, vandalism or similar event, you may be able to take a deduction for the loss on your New York City income tax return. To be deductible as a casualty loss, the property must be damaged, lost or destroyed by a sudden, unexpected or unusual event. Therefore, using the term “tax planning” when referring to a casualty loss may seem inappropriate. However, if you have suffered a loss, there are several New York tax issues that you need to consider, such as determining the year in which to take the loss, the benefit of married individuals filing separately, valuation of the property, limitations and adjustments to the loss, and finally the tax consequences of any insurance reimbursements or recoveries.

A casualty loss is not allowed when the loss is gradual, such as insect damage to trees or water damage from a leaky roof. Therefore, damage or destruction resulting from progressive deterioration of property, such as beachfront erosion, would not qualify as a casualty loss. Loss of property through theft is deductible on your Manhattan income tax return, but merely misplacing property is not.

The amount of a deduction is generally determined by the difference in the fair market value of the property before and after the loss, or by the cost of the necessary repairs to restore the property to its original condition. However, the amount of a loss cannot exceed your basis. Even with the destruction of a home or building, the loss is actually not a total loss since the land retains its value.
The amount of the loss is further reduced by any amounts covered by your insurance company, regardless of whether or not you file a claim . After the loss is determined and the insurance reimbursement is subtracted, the loss deduction is generally reduced by $100 for each casualty, any casualty gains, and 10 percent of your adjusted gross income. If the loss occurred as a result of a federally declared disaster, these limitations may not apply and the loss may be included in your standard deduction if you do not itemize.

Recovering from a casualty loss takes time and planning. There are many things to consider, but our office is available to answer any questions regarding how casualty loss relates to your unique Manhattan income tax situation. Please call our experienced CPAs to discuss your NYC casualty loss tax issues and determine your best options to recovery.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

The IRS recently released guidance addressing the tax treatment of losses for individuals, LLCs, S-corporations and other small business owners in New York affected by ponzi investment schemes. The IRS clarified that the guidance is not specifically for Madoff victims but for all individuals who have experienced losses from ponzi-type investment schemes. Because of the economic downturn, the IRS reports that dozens of schemes have surfaced and that thousands of investors have been burned. Many hardworking Manhattan taxpayers and  New York City small business owners have been effected by these schemes.

A ponzi scheme for IRS purposes is considered a “specified fraudulent arrangement” that makes payments to investors from their own funds or funds paid by subsequent investors. Fictitious income is reported as there is no actual profit earned. Such schemes pay and offer high returns to keep money flowing in from investors. They are not just bad investments in which your broker picked the wrong stocks. If you were actually invested in securities, your losses are governed by separate  NYC tax rules.

Ordinary theft loss
The guidance provides that investors in fraudulent investment arrangements are entitled to an ordinary theft loss under Code Sec. 165 rather than just a capital loss. As a result, not only is the loss not restricted to a maximum $3,000 offset against ordinary income, but it can offset any ordinary income, including wages, with no limit. The loss is not subject to the personal loss limitations; however, only those who itemize deductions on their New York income taxes may claim it. If an investment advisor made poor investment decisions (as opposed to never making any investments), the investor would only be entitled to a capital loss rather than a theft loss.

The amount of the theft loss deduction on their NYC taxes includes the amount invested in the scheme, less any amounts withdrawn, any reimbursements, and any claims as to which there is a reasonable prospect of recovery. The deductible amount also includes any fictitious income reported to the investor in any year prior to the discovery of the theft that the investor included in gross income and paid tax on for that year.

To the extent an investor’s theft loss deduction creates or increases a net operating loss in the year the loss is deducted, the investor normally may carry back up to three years and forward up to 20 years the portion of the net operating loss (NOL) attributable to the theft loss. If the loss is discovered in 2008, however, a special, more generous rule applies: the individual investor or proprietorship is treated as a small business that is eligible for the extended five-year NOL carryback period under the American Recovery and Reinvestment Tax Act .

Safe harbor treatment
Bilked investors of ponzi schemes also have been given a streamlined, safe-harbor route to take theft loss deductions on their New York City income tax returns. This safe-harbor route simplifies the investors burden in proving when the loss took place and it also expedites the process for the IRS’s handling of these thousands of cases. The safe-harbor, which the vast majority of investors are expected to use, provides a uniform approach for determining the year in which the loss occurred and a simplified method for calculating the loss amount.

The safe harbor allows the loss to be taken when a criminal complaint is issued against a promoter, rather than waiting until a conviction is handed down. Under the safe harbor, as much as 95 percent of the loss may be deducted, however, the loss amount cannot take into account the investor’s net investment plus any actual recovery in the year of discovery and the amount of any recovery expected from private or other insurance (including insurance under the Securities Investor Protection Corporation (SIPC). The 95 percent applies to investors suing the promoter of the scheme. For investors suing third parties (persons other than the promoter), the percentage is reduced to 75 percent.

To take advantage of the safe harbor, an investor must complete the safe harbor statement, “Appendix A.” An investor claiming the safe harbor recovery amount must claim the entire loss for the year of discovery. An investor who previously filed original or amended prior year returns to claim the investment losses may claim the safe harbor amount but must identify the inconsistent prior year returns.
If you would like additional information about how to deduct investment fraud losses as theft losses,  and how this relates to your LLC or S-corporation NYC income taxes, please give us a call. We would be happy to schedule an appointment to discuss the issue further with you.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

To best be prepared for your Manhattan income taxes, now may be a good time to evaluate the expenses you incur as an employee in connection with your work. While your employer may be reimbursing you for some of these expenses, there may be others for which you are bearing the cost yet not utilizing the NYC income tax benefit. Through proper substantiation, it is possible that you may be able to obtain greater reimbursement from your employer. Alternatively, you may be entitled to deduct such expenses as miscellaneous itemized deductions on your income taxes in New York.

In order to be reimbursed and/or deducted, the trade or business expenses  on your New York City income taxes must be ordinary, necessary, and reasonable. They also must be properly substantiated. Examples of qualifying expenses include:

•    Travel, transportation, meal, or entertainment expenses
•    Safety equipment, small tools, or supplies
•    Uniforms required by your employer that are not suitable for everyday wear
•    Required protective clothing
•    Dues to professional organizations
•    Subscriptions to professional journals
•    Certain job hunting expenses
•    Certain expenses for the business use of your home
•    Computer costs
•    Work-related educational expenses

You may also benefit from a review of the business expenses related to the use of your home. If you qualify for the home office deduction on your New York  income tax return, you may be able to deduct part of your home’s normal operating expenses, such as utilities and insurance. The Manhattan tax saving opportunities available to you are dependent not only on the type of work you do at home, but where in your home you perform it.

The rules for deducting these expenses, as well as substantiating your deduction, vary according to the type of expense involved. To make your New York tax preparation go as smoothly as possible, it is important to retain all records and receipts that document the time, place, and business purpose of each expense. Don’t hesitate to call our firm of experienced NYC accountants to schedule a consultation.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses