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Wednesday, March 30, 2016

Special Notice for Ranchers Who Received IRS Correspondence Assessing Estimated Tax Penalties

We have become aware of several of our "early rancher" filers who have received IRS correspondence assessing penalties for failure to pay estimated tax. DO NOT PAY OR IGNORE THIS CORRESPONDENCE.  If you meet the Qualified Farmer criteria, you are not required to pay estimated taxes and the penalties will be waived.  However, you must respond to the notice in order for the penalties to be abated.  

You should always bring any official correspondence to the attention of your tax preparer BEFORE paying.  We are always available to review your correspondence and to respond on your behalf.  

The information below is from the IRS website and discusses the Special Estimated Tax Rules for Qualified Farmers:

Special Estimated Tax Rules for Qualified Farmers
Special rules apply to the payment of estimated tax by individuals who are qualified farmers. If you are not a qualified farmer as defined next, see Pub. 505 for the estimated tax rules that apply.

Qualified Farmer
An individual is a qualified farmer for 2015 if at least two-thirds of his or her gross income from all sources for 2014 or 2015 was from farming. See Gross Income , for information on how to figure your gross income from all sources and see Gross Income From Farming , for information on how to figure your gross income from farming. See also Percentage From Farming , for information on how to determine the percentage of your gross income from farming.

Special Rules for Qualified Farmers

The following special estimated tax rules apply if you are a qualified farmer for 2015.

  • You do not have to pay estimated tax if you file your 2015 tax return and pay all the tax due by March 1, 2016.
  • You do not have to pay estimated tax if your 2015 income tax withholding (including any amount applied to your 2015 estimated tax from your 2014 return) will be at least 662/3% (.6667) of the total tax shown on your 2015 tax return or 100% of the total tax shown on your 2014 return.
  •  If you must pay estimated tax, you are required to make only one estimated tax payment (your required annual payment) by January 15, 2016, using special rules to figure the amount of the payment. See Required Annual Payment for details.

Estimated Tax Penalty for 2015

If you do not pay all your required estimated tax for 2015 by January 15, 2016, or file your 2015 return and pay any tax due by March 1, 2016, you may owe a penalty. Use Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, to determine if you owe a penalty. See the Instructions for Form 2210-F. Also, see the Instructions for Form 2210-F for information on how to request a waiver of the penalty.

If you receive a penalty notice, do not ignore it, even if you think it is in error. You may get a penalty notice even though you filed your return on time, attached Form 2210-F, and met the gross-income-from-farming requirement. If you receive a penalty notice for underpaying estimated tax and you think it is in error, write to the address on the notice and explain why you think the notice is in error.

Figure 15-1. Estimated Tax for Farmers 

Thursday, March 24, 2016

Should I Itemize?

There are two ways you can take deductions: you can itemize deductions or use the standard deduction. Deductions reduce the amount of your taxable income.

The Federal standard deduction amount varies depending on your income, age and filing status, and changes each year; see Topic 551 for more information.

Table 20-1.Standard Deduction Chart for Most People*
If your filing status is...
Your standard deduction is:
Single or Married filing separately
$ 6,300
Married filing jointly or Qualifying widow(er) with dependent child
Head of household
*Don't use this chart if you were born before January 2, 1951, are blind, or if someone else can claim you (or your spouse if filing jointly) as a dependent. Use Table 20-2 or 20-3 instead.

You should considering itemizing if your allowable itemized deductions are greater than your standard deduction or if you must itemize deductions because you cannot use the standard deduction.    Be aware that some people do not qualify to use the itemized deduction and must use the standard deduction.

It is also important to remember that the standard deduction for the State of Montana is typically lower than the Federal standard deduction.  So it might be beneficial to itemize your Montana return, even if your deductions aren’t enough to itemize on your federal return. 

List of Common Itemized Deductions
  • Medical, dental, prescription drugs, and other health care costs long term care,
  • State and local income taxes or state and local sales taxes,
  • Real estate (property) taxes,
  • Personal property taxes (such as motor vehicle registration fees),
  • Interest paid on a home mortgage,
  • Interest paid on investments (such as margin interest),
  • Cash contributions to charities and churches,
  • The fair market value of non-cash contributions to charities and churches,
  • Personal losses because of theft or casualty,
  • Job-related expenses that your employer did not reimburse you for,
  • Union dues,
  • Cost of purchasing or cleaning uniforms,
  • Job-related education and professional development,
  • Job-related travel,
  • Home office expenses,
  • Tax preparation fees,
  • Investment fees and expenses (such as IRA custodial fees and annual brokerage fees)
  • Safe deposit box fees,
  • Gambling losses (only to the extent of gambling winnings).

Thursday, March 17, 2016

Happy St. Patrick's Day!

Wishing each of you hefty tax refunds to weigh down those pockets this Paddy's Day! 

Thursday, March 10, 2016

MT Dept of Revenue - Where's My Refund?

Check the status of your Montana refund with Taxpayer Access Point. Select Where's My Refund under the Individual section. Checking the status of your return does not require a TAP account.

Where's My Refund Frequently Asked Questions

How long will it take to receive my refund?
You will usually have your refund or hear from the department within 2 weeks if you filed electronically or within 8 weeks if you filed on paper.

We are taking extra care to ensure the returns we receive are valid because of an increasing number of identity thefts. TAP will show you the status of your return and refund. The status of your refund depends on where your return is in the process.

How soon after filing can I check the status of my refund?
Wait at least
• 1 week if you filed electronically
• 6 weeks if you filed a paper return

What can slow down my refund?
Your refund could seem slow or be delayed because:
• You filed your return during busy processing time such as late March and April. Filing electronically and filing early will help you avoid busy filing processing times.
• In response to security measures in place to protect you from identify theft, we may have sent you an identify verification letter. Your refund cannot be processed until the steps included in the letter are completed.
• Your return has line item or calculation errors to be reviewed.
• Your refund may have been offset to pay another state debt. You will receive a letter if this happens.

Tips for using Where’s My Refund
Be sure to use the same information from your current year's tax return:
• Social Security Number
• Refund Amount
You can find your refund amount on: 

  • Line 74 of Form 2
  • Line 21 of Form 2EZ
  • Line 13 of Form 2EC

Will I get more information if I call?
No, Where’s My Refund has up-to-date information available about your refund. The information you see in Where's My Refund is similar information available to our phone representatives when you call.

If it has been more than eight weeks, our representatives may have additional information. Call us toll free at (866) 859-2254 (in Helena (406) 444-6900) between the hours of 8 a.m. and 5 p.m., Monday through Friday.

Which returns are available in Where’s My Refund?
You can only check on the current year individual income tax return in Where's My Refund.

When is the information updated?
Information is updated overnight, Monday through Friday, so you don't need to check more than once a day.

Wednesday, March 2, 2016

Welcome to March, which means the Corporation Filing Deadline is approaching!

It's always a big push to meet the Early Rancher filing deadline by March 1st and now without taking a breath, we're pushing onward to the March 15th Corporation filing deadline!  

All calendar year 1120 and 1120S Corporations are due to be filed by 3/15.  Make sure we have received the all the information necessary to complete your corporate tax returns!