When Can You Start Filing Taxes 2024: A Guide by Poston, Denny, and Kilpack, CPAs in Idaho Falls

 As the dawn of the 2024 tax filing season approaches, individuals and businesses alike are gearing up to navigate the intricate landscape of federal income taxes. To make this journey smoother and more rewarding, the expert CPAs at Poston, Denny, and Kilpack in Idaho Falls have compiled a comprehensive guide to help you understand the ins and outs of the upcoming tax season.

Getting Started: Key Dates and Initiatives

The excitement and anticipation surrounding the tax season often lead to the pressing question, "When can you start filing taxes in 2024?" The answer lies in the usual rhythm of the tax calendar. The tax filing season typically kicks off in late January, with the Internal Revenue Service (IRS) opening its doors to taxpayers eager to submit their federal income tax returns.

1. Opening Date for 2024 Tax Filing Season

The IRS has traditionally announced the opening date for tax season around mid-January. Keep an eye out for this announcement, as it marks the starting point for filing your returns.

2. Inflation Reduction Act Updates

The Inflation Reduction Act plays a significant role in shaping the tax landscape each year. Stay informed about any changes it brings to tax brackets, deductions, and credits for the 2024 tax season.

Leveraging the Expertise of CPAs: Why Choose Professional Assistance?

Navigating the complexities of tax laws and maximizing your returns requires expertise. Poston, Denny, and Kilpack emphasize the importance of seeking professional assistance during the tax season.

3. Tax Professionals at Your Service

Engaging the services of a qualified CPA ensures that your tax returns are accurate, compliant, and optimized for maximum benefits. Our team at Poston, Denny, and Kilpack is well-versed in the ever-evolving tax code and can provide personalized guidance tailored to your unique financial situation.

4. The Role of Tax Counseling

Tax counseling is an integral part of our services. We assist clients in understanding the implications of tax law changes, maximizing deductions, and planning for future tax obligations.

Important Considerations During Tax Season

As you prepare for the 2024 tax filing season, certain considerations demand your attention to ensure a smooth and hassle-free experience.

5. Electronic Filing: Fast and Efficient

In an era dominated by technology, filing your tax returns electronically is not only convenient but also speeds up the processing time. Learn about the IRS Free File initiative, which allows eligible taxpayers to file their federal income taxes for free using IRS-approved software.

6. Direct Deposit for Swift Refunds

Opting for direct deposit ensures that your tax refund is deposited directly into your bank account, significantly reducing the waiting time compared to receiving a paper check in the mail.

7. Child Tax Credit and Earned Income Tax Credit Updates

Stay abreast of any changes or updates to tax credits, such as the Child Tax Credit and Earned Income Tax Credit. These credits can have a substantial impact on your tax liability and potential refund.

8. Additional Child Tax Credit

For those with qualifying dependents, the Additional Child Tax Credit is a vital consideration. Poston, Denny, and Kilpack can guide you through the eligibility criteria and help you maximize this credit.

Navigating the Process: Tools and Resources

The IRS provides various tools and resources to assist taxpayers in the filing process.

9. Where's My Refund?

The "Where's My Refund?" tool offered by the IRS allows taxpayers to track the status of their refunds. Our experts recommend using this tool to stay informed about the progress of your tax return.

10. Free File Options for Eligible Taxpayers

Explore the IRS Free File options available to eligible taxpayers. This initiative provides free access to reputable tax software for those within specified income limits.

Conclusion: Empowering You for a Successful Tax Season

As the 2024 tax filing season approaches, arming yourself with the right information and professional support can make all the difference. Poston, Denny, and Kilpack are committed to guiding you through the complexities of federal income taxes, ensuring that you make informed decisions for your financial well-being.

Remember, the key to a successful tax season lies in staying informed, leveraging available resources, and partnering with trusted professionals. With Poston, Denny, and Kilpack by your side, you can navigate the 2024 tax season with confidence and achieve the best possible outcomes for your personal and business finances.

Court defines "financial interest" and makes other FBAR rulings

This article was originally published by Thompson Reuters in their Checkpoint Newsletter for Tax Preparation Professionals and CPAs on February 1st, 2019. Poston, Denney, & Killpack, PLLC does not claim any ownership or copyright of this article nor is any implied by our republishing of this material. All rights reserved by the original and respective author(s).

Horowitz, (DC MD 1/18/2019) 123 AFTR 2d ¶2019-362

A district court has ruled on various issues regarding the Report of Foreign Bank and Foreign Accounts (FBAR), including the statute of limitations for assessing FBAR penalties and the definitions of various FBAR terms, including the term "financial interest".

Background. Under 31 USC 5314(a) and 31 CFR 1010.350, every U.S. person that has a financial interest in, or signature or other authority over, a financial account in a foreign country must report the account to IRS annually on an FBAR. The penalty for violating the FBAR requirement is set forth in 31 USC 5321(a)(5). 31 USC 5321(a)(5)(A) provides that the Secretary of the Treasury may impose a civil money penalty on any person who violates, or causes any violation of 31 USC 5314(a). The maximum amount of the penalty depends on whether the violation was non-willful or willful. (31 USC 5321(a)(5)(B))

The statute of limitations for assessing civil penalties for FBAR violations of 31 USC 5314 is six years, and it begins to run on the date that the FBAR is due. (31 USC 5321(b)(1))

Facts. United States citizens Peter Horowitz and Susan Horowitz lived in Saudi Arabia for most years between '84 and 2001. Beginning in '88, they maintained a Swiss bank account at the Union Bank of Switzerland ("UBS"). When they returned to the United States they did not close their Swiss bank account; by 2008, its balance was almost $2 million. Toward the end of 2008, Peter closed the UBS account and intended to open a joint account at another Swiss bank, Finter, but Finter would not allow him to do so because Susan was not present. When Peter opened the account, he filled out a "List of Authorized Signatories and Powers of Attorney for Natural Persons", designating Susan as a person to whom he gave "an unlimited power of attorney", but that form was also not put into effect because Susan wasn't present. As a result, Peter transferred the money to Finter in his name only.

The Horowitzes did not make any additional deposits after opening the Finter account. In 2009, they traveled to Switzerland and added Susan as a joint owner of the Finter account.

The Horowitzes' tax returns, including those for 2007 and 2008, were prepared relying on summaries of information that Peter prepared and mailed to the return preparer each year; those summaries never listed the UBS or Finter accounts. Additionally, Peter, who communicated with the accountants on behalf of himself and his wife, never asked whether he should disclose either account.

The Horowitzes signed their tax returns each year without ever answering "Yes" to the income tax return question about whether they had money in an overseas account or filing a file Form TD F 90-22.1 ("FBAR") to disclose either account.

In 2010, they disclosed the funds for the first time. They requested they be accepted into the Department of the Treasury's Offshore Voluntary Disclosure Program (the "Program"), which they were that same month. As required by the Program, the Horowitzes filed an FBAR for each year 2003 through 2008 and amended Form 1040 income tax returns for 2003 through 2008. They opted out of the Program in Dec. 2012.

In June 2014, IRS assessed penalties of $247,030 against each of them for their alleged willful failure to disclose the UBS account for the 2007 tax year and penalties of $247,030 against each of them for their alleged willful failure to disclose the Finter account for the 2008 tax year.

Thereafter, Peter filed an FBAR protest, appealing the proposed FBAR penalties to the IRS Appeals division. The Appeals officer assigned to the case determined that the Horowitz case should have been in an unassessed posture for purposes of IRS Appeals review. In Oct. 2014, the appeals officer asked IRS Appeals FBAR coordinator Batman to remove/reverse the FBAR penalties as prematurely assessed. Another Appeals employee, Ms. Beasley, then removed the penalty "input date".

 IRS brought this action to collect those penalties, and it moved for summary judgment on its claims.

The Horowitzes filed a cross-motion for summary judgment, arguing that the IRS reversed the 2014 penalties, such that the penalties IRS tried to collect were not assessed until 2016, at which time they were untimely.

Taxpayers did not prove statute of limitations violation. The court found that the taxpayers did not meet their burden of proving that the statute of limitations ran before the FBAR penalties were assessed.

The parties agreed that the IRS timely assessed the FBAR penalties on June 13, 2014, and the statute of limitations for assessing FBAR penalties ran on Dec. 31, 2015. The issue was whether the penalties could have been, and in fact were, reversed.

IRS conceded that, around Oct. 24, 2014, Ms. Beasley removed the penalty input dates from the modules in her database corresponding to the penalty assessments against the Horowitzes, as well as that she took this action in response to Ms. Batman's request that she remove/reverse the assessed penalties. But, IRS did not agree that these actions amounted to an actual removal of the penalties themselves.

The court concluded that the Horowitzes did not provide sufficient evidence that Beasley reversed the assessment. It also said that the Horowitzes did not show that, even if Beasley believed she reversed the penalty, she had the authority to do so. Notably, to assess the penalties in the first place, Beasley not only had to input the data; she then printed a form that her manager signed. For Beasley to be able to reverse or remove an FBAR penalty assessment without her manager's signature would be incongruous with his initial signature required to impose the penalty in the first instance.

IRS also noted that an agency must have Department of Justice (DOJ) approval to compromise a claim of the government that exceeds $100,000. (31 USC 3711(a)(2)) And, it noted that the penalty section of the Internal Revenue Manual advises IRS employees that post-assessed FBAR cases in excess of $100,000 cannot be compromised by Appeals without approval of the DOJ.

The Horowitzes argued that removal or reversal does not fit the definition of compromise. But, the court said, the Horowitzes did not establish that, given that IRS could not "compromise" an FBAR penalty above $100,000 at all without DOJ approval, it nonetheless could eliminate the debt altogether by removing the FBAR penalties after they undisputedly were assessed.

Wife not liable for 2008 penalty. But the court held that Susan was not liable for the FBAR penalty with respect to 2008.

IRS argued that Susan had a financial interest in and authority over the Finter account, based on the Horowitzes' intent to include her as an account owner and Peter's designation of Susan as a power of attorney. Susan countered that, despite their intent, she simply was not an owner of the Finter account in 2008 and, because she had not provided a "signature specimen" on the power of attorney form, she did not have any authority over the account.

Instructions to the 2008 FBAR Form provide "A United States person has a financial interest in... [a] financial account in a foreign country for which the owner of record or holder of legal title is... a person acting as an agent, nominee, attorney, or in some other capacity on behalf of the U.S. person".

The court said that when Finter would not allow Peter to open the account in both of their names, he proceeded to take their joint funds and place them into an account in his name only, over which Susan could not exercise any control without traveling to Switzerland and providing a signature specimen. "Taking money that was in Susan's name and placing it in an account that was not in her name cannot, in any light, be seen as acting on her behalf."

Moreover, the court said, the question was whether Peter acted on her behalf with respect to the account, that is, after the Finter account existed. Peter did not make any additional deposits after opening the account. And, there was no evidence that Peter did anything with the account before Oct. 2009 when Susan became a joint account owner.

As to the issue of whether Susan had authority over the account, the taxpayer's and IRS disagreed as to what was the definition of "signature or other authority". IRS argued for an inclusive definition contained in 31 CFR 1010.350(f)(1) which provides the following: "the authority of an individual (alone or in conjunction with another) to control the disposition of money, funds or other assets held in a financial account by direct communication (whether in writing or otherwise) to the person with whom the financial account is maintained".

Without deciding the issue of which definition should apply, the court said that even under IRS's definition, Susan did not have authority over the Finter account in 2008. Without the required signature specimen, she could not write to, or otherwise directly communicate with, the bank "to control the disposition of money, funds or other assets" in the Finter account. Accordingly, she did not have authority over the Finter account in 2008.

Willfulness penalty applied. The court held that the willfulness penalty applied with respect to both taxpayers for 2007 and with respect to Peter for 2008.

Citing a large series of cases including Poole, (CA 4 2011) 107 AFTR 2d 2011-2163, the court said that willfulness may be proven through inference from conduct meant to conceal or mislead sources of income or other financial information, and it can be inferred from a conscious effort to avoid learning about reporting requirements. "Willful blindness" may be inferred where "a defendant was subjectively aware of a high probability of the existence of a tax liability, and purposefully avoided learning the facts point to such liability".

For 2007 and 2008, Schedule B of Form 1040 provided that taxpayers must complete part III of that schedule if they had either over $1500 of taxable interest in ordinary dividends or had a foreign account. The Horowitzes had to complete part III for the "unrelated reason" that they had more than $1500 in ordinary dividends. Question 7a of that part asked whether at any time during the year the taxpayer had an interest in or signature or other authority over a financial account in a foreign country. It referred taxpayers to the FBAR form. Nonetheless, they answered "no" to that question.

The Horowitzes testified that, based on conversations with other expatriates living in Saudi Arabia, they believed that income that was earned in Saudi Arabia was subject to tax only in Saudi Arabia if they banked it overseas. Peter stated that he did not think he needed to file an FBAR for 2007 or 2008. Susan stated that she did not even know what FBAR was at that time. Their tax accountants neither asked about overseas bank accounts nor explained the FBAR question about foreign accounts on Form 1040, Schedule B, which they completed on the Horowitzes' behalf. The Horowitzes insisted that neither of them had actual knowledge of the FBAR requirement and therefore penalties for willful violations were not appropriate.

The court said, "Because a taxpayer who signs a tax return will not be heard to claim innocence for not having actually read the return, as he or she is charged with constructive knowledge of its contents, their signatures are prima facie evidence that they knew the contents of the return, including the foreign accounts question and the cross-reference to filing requirements, which put them on inquiry notice of the FBAR requirement".

The Horowitzes argued that their friends told them they did not need to pay taxes on the interest in their foreign accounts. Maybe so, the court said, but there was not any information from which the court could assess whether it was reasonable for them to have accepted what their friends told them as legally correct. And, in any event, their friends' views would not override the clear instructions on Schedule B, which requires a "Yes" answer if the taxpayer has an interest in a foreign account, regardless of whether the funds within it constituted taxable income. Moreover, the fact that the Horowitzes discussed their tax liabilities for their foreign accounts with their friends demonstrated their awareness that the income could be taxable. Their failure to have the same conversation with the accountants they entrusted with their taxes for years, notwithstanding the requirement that taxpayers with foreign accounts complete Part III of Schedule B, "easily" showed a conscious effort to avoid learning about reporting requirements. On these facts, the court said, willful blindness could be inferred.

References: For foreign financial accounts reporting requirements, see FTC 2d/FIN ¶S-3650; United States Tax Reporter ¶60,114.06.

This article was originally published by Thompson Reuters in their Checkpoint Newsletter for Tax Preparation Professionals and CPAs on February 1st, 2019. Poston, Denney, & Killpack, PLLC does not claim any ownership or copyright of this article nor is any implied by our republishing of this material. All rights reserved by the original and respective author(s).

Estate Planning

Your “estate” is essentially the sum total everything you own. This includes your:

• Home (and other real estate)
• Car
• Checking and savings accounts
• Furniture and other personal possessions
• Investments
• Life insurance

It doesn’t matter the size or scope - everyone has a personal estate of some kind.

One thing we all have in common is that we can’t take anything within our estate with us when we die. While we can’t control the inevitability of death, we can control what happens to our estate after it happens through Idaho Falls estate planning. You can decide how the things within your estate are transferred to both the people and organizations you see fit. You can decide whom will receive what, and when they receive it. You can also have some control over how much will be paid in court costs, legal fees, and taxes. This can be done through specific written instructions, which are legally binding after you’ve “kicked the bucket”, so to speak.
This is what we will help you accomplish through our Idaho Falls estate planning. At Poston, Denney, and Killpack, PLLC, we will help you devise the perfect plan for your estate and your budget.

What has been explained thus far is a simple summary of estate planning, but like most things in life, it’s a bit more complicated than it first appears. That’s why we’re here.
Good Idaho Falls estate planning involves a lot of things, including:

• Time. That is to say, it’s not something that can be accomplished all in one day. It is an ongoing process. Your estate plan should be updated in accordance with your changing familial and financial situations. Laws change too, and you should not only be ensuring that you are in compliance with the law, but also finding ways in which you can turn the law to your advantage.
• Minimizing unnecessary legal fees, court costs, and taxes.
• Ensuring that your business is properly transferred at the time of disability, retirement, or death. Making sure you have life insurance so that your family can be provided for after your death. Disability income should be attained as a replacement for your current income should you lose the ability to work. Finally, long-term care insurance should also be attained to finance your care in the event of extended illness or a major injury.
• Establishing specific instructions regarding your care in the event of a disability.
• Making sure certain loved ones with specific monetary needs are cared for.
• Making sure family members who have specific needs get the care they need without disrupting any government benefits.
• Naming an inheritance manager or a guardian for minor children.
• Establishing instructions for the transfer of not just your valuables, but your values as well. By values, we mean things like religion, education, and work ethic.

You might be thinking this all seems like a daunting task. Hey, that’s what the experts are here for! Our Idaho Falls estate planning can help you attain all of this. We understand laws related to estate planning and can translate them in a way that can be easily understood. We can put things into perspective, and show you why certain moves are wiser than others.

Why Is Estate Planning Important?

• Estate planning will keep your assets from going to unintended beneficiaries. Our Idaho Falls estate planning will ensure that your assets are passed on to those you deem qualified to receive them.
• Estate planning will protect families with young children. No one wants to think about dying young, but if you are the parent of a young child, estate planning will ensure that they are taken care of in the way you intended after your death.
• Estate planning will stop heirs from paying too much in taxes. It will help ensure the smallest tax burden possible for your loved ones.
• Estate planning will ensure family infighting stays at a minimum. Few things are as ugly as family members turned against each other in the event of a person with money dying. These situations are complicated, and can result in family disasters. Our Idaho Falls estate planning will leave little room for family squabbling.

Who Needs Estate Planning?

Everyone has an estate. Therefore, our Idaho Falls estate planning will help everyone. Estate planning is always a wise move.

Generally speaking, people tend to worry about estate planning once they reach retirement age. But estate planning is something that should be done earlier than that. We don’t know the future, and illnesses and accidents happen to people no matter their age.

Is Idaho Falls estate planning only for wealthy people? Of course not. In fact, families with more modest assets would greatly benefit from estate planning, as they are likely less able to afford a loss in this regard.

What Happens If You Don’t Have An Estate Plan?

If you haven’t established a plan for your estate, there are a number of things that will happen depending on certain circumstances.

• Disability: In the event of mental or physical impairment, the court, rather than your family, will have total control over your assets. The court will decide how your assets are used to facilitate your care via a conservatorship or guardianship. This kind of situation can be costly, lengthy, indiscreet, and extremely hard to stop even if you end up recovering.
• Death: In the event of your death, the probate laws of your state will determine how your assets are distributed. This situation can lead to your loved ones missing out on a huge portion of what they would otherwise have received, and minor children will have their inheritance controlled by the court.

If you had the choice, would you rather the courts decide what happens with your estate, or your own wisdom combined with the help of a professional estate planning firm that has your best interests in mind? Our Idaho Falls estate planning will ensure the best outcome for your loved ones after you’re gone.

Conclusion

The implications of death or disability in the absence of sound Idaho Falls estate planning are very serious. When your assets are protected, and a clear, legally binding plan has been drawn, you will have peace of mind knowing that your loved ones are going to be taken care of, even if you aren’t around to see to it yourself.

At Poston, Denney, and Killpack, PLLC, we will work with you to establish a plan for your estate that is most appropriate for your life situation, your budget, your assets, and our current laws.

Don’t let the unpredictability of life put your assets or family at risk. If you require Idaho Falls estate planning, contact us today!

Personal Financial Planning

Do you want to manage your personal finances in Idaho Falls, but aren’t sure where to start? Would you like professional advice that can help you the most out of your finances, by creating a plan for your future? If you answered yes to either of these questions, then you are in the same boat that many Americans face these days. Whether you want to make a large purchase, save for retirement, or if an unexpected life event occurs, you want to be prepared. In today's economy it can be difficult to know how to create a solid personal financial plan, not to mention, all of the information available can be overwhelming to try to sift through. Why not save the headache and time, by having a professional help you with your personal financial planning? At Poston, Denney, and Killpack, PLLC, we want to give our clients the information that they want and the tools they need to create a personal financial plan that will be the best for their lifestyle. Below, you’ll find more information about why personal financial planning in Idaho Falls is vital to achieving your personal financial goals and tools to make the process just a little bit easier.

Why Is Personal Idaho Falls Financial Planning Important?

Creating a personal financial plan with a professional has numerous benefits that not only help to provide for your well-being, but the overall standard of living for your family. Some of the benefits that personal financial planning can provide, include:

Income and Cash Flow - Financial planning allows you to more easily manage your income and understand how much money you will need for things like, retirement, taxes, monthly expenditures, etc. By monitoring your income and spending habits, our Idaho Falls CPAs can help you design a budget to fit your life and goals.

Family Security - Making sure you have the proper insurance policies and coverage for your family can give you peace of mind.

Assets & Savings - Savings and assets provide a nice cushion for when emergencies occur. By hiring  Poston, Denney, and Killpack, PLLC, to create a personal financial plan, you will be able to plan for a lifetime of security.

Personal Idaho Falls Financial Tools

Organizing your Idaho Falls finances is one of the first things you will want to do when creating a personal financial plan for you and your family’s future. There are many online financial tools that can make organizing your finances a breeze. While we recommend going over your finances with a professional, these tools can make it easier to track your bills, student loans, and savings. Contact us today, to start creating a financial plan that is designed with your specific goals in mind. Organize your finances with the following tools:

Mint - Create budgets based on your spending, track and pay bills, and even check your credit score, when you sign up at Mint.com.

Shoeboxed - At Shoeboxed.com you can organize and digitize your receipts, without having to keep them in a literal shoebox.

Student Loan Hero - This site is designed to help you pay back those haunting student loans, fast and efficiently. Student Loan Hero allows you to track your loans and repayment efforts all in one easy to use interface.

Important Tax Planning Strategies

Nobody enjoys paying taxes. Our disdain for paying taxes is easily understood since taxes can prove to be one of the biggest expenses you will face over your lifetime. So when tax season does come around many people these days are scrambling to make ends meet. Even though we can’t avoid paying taxes, we can avoid the stress of owing money  by being prepared with a tax plan. Having an Idaho Falls tax planning strategy prepared by a licensed CPA can ease some of the stress when taxes come a-calling. Tax planning is a proven method to keep you from paying unnecessary taxes and by arranging your financial affairs in ways that can help to postpone and even avoid taxes. However, tax laws are more confusing than ever before, so many people don’t even know the first step in developing their own tax planning strategy. At Poston, Denney, and Killpack, PLLC, we can assist our clients in making smart choices for their financial future. Contact us today, so we can start creating the perfect tax plan for you.

Idaho Falls Tax Planning For Your Future

When planning for your future through tax planning, there are some basic strategies utilized by our licensed CPAs, these include but are not limited to:

Reducing Your Income - This tactic doesn’t mean making less money, it simply means reducing your AGI (Adjusted Gross Income) by investing money into a 401(k) or another similar retirement plan. You can also reduce your AGI by a variety of different income adjustments. Income adjustments include student loan interest paid, tuition and fee deductions, contributing to an IRA, moving expenses, self employment health insurance and more. Our CPAs can discover what types of adjustments you qualify for to save you the maximum amount of money on your Idaho Falls taxes.

Increase Your Withholding - Increasing your withholding means that more money will be taken out of your check throughout the year, but this is one way you can avoid owing money (and possibly getting a bigger refund) when tax season comes.

Increasing Your Deductions - Another key element in your Idaho Falls taxes to be aware of is your taxable income. Your taxable income is the amount of money left over after all of the deductions and exemptions have been taken out of your AGI. Many people can make basic deductions on their taxes, and some may even be able to itemize their deductions. Itemized deductions include gifts to charity, job related expenses, investment related expenses, tax preparation fees and more. Deductions and exemptions are determined by your filing status and any dependents you are claiming. One of the best ways to keep track of your potential deductions is by creating a spreadsheet for personal finance all year long.

Tax Credits - In a nutshell, tax credits can reduce the overall Idaho Falls tax you owe. These include college expenses, adopting children, and saving for retirement. Some people may qualify for credits like the Hope Credit, Lifetime Learning Credit, and the popular Earned Income Credit. At Poston, Denney, and Killpack, PLLC, we will be able to find what tax credits you qualify for and more when we design a specific tax planning strategy for you.

Financial Planning & Tax Preparation In Idaho Falls

Need help getting your taxes prepared and filed to the IRS? Poston, Denney, and Killpack, PLLC are the experts you can rely on for taxes in Idaho Falls.

We provide a number of tax services for individuals and businesses alike, including:

• Personal Financial Planning
• Estate Planning
• Elder Care
• Small Business Accounting
• Cash Flow Management

And more.

Sound Financial Planning to Maximize After-tax Income

If you want to get the most out of your taxes in Idaho Falls, it is imperative that you exercise sensible financial planning all year round. There are a number of areas in which good financial planning meets good tax planning in a way that helps people get the most out of both worlds. It is possible to maximize your after-tax income, it’s just a matter of taking advantage of all credits, deductions, and deferrals available to you.

By making use of these various options and requirements, other financial goals will be much easier to accomplish.

Idaho Falls Tax Planning Should Be a Year-Round Commitment

Not only will this help you stay out of trouble with the IRS, it will also help you get the most out of your income, allowing you to keep more of what you earn. Throughout the year, be sure to do the following:

Invest Your Tax Refund: An IRA is a wise place to invest your tax refund. Investors will often direct a percentage of their tax refund into an IRA as part of an investment strategy. They will then claim the deductions for next year’s tax time. When you invest your refund, you may get some of that back in your tax savings. This small step will yield long-term benefits.

Think a Few Moves Ahead: You may sometimes need to sell some of your investments. Whether it’s to re-balance your portfolio, or because your goals have simply changed, selling can potentially lead to taxes. That is why it’s important to choose what you are selling very carefully, in order to minimize your tax burden as much as possible.

Reorganize Your Investments: Your portfolio should be organized as wisely as possible in order to get the highest amount of growth for the least amount of taxes. For example, you will want to consider moving inefficient investments that are often taxed into a tax-deferred account (an IRA or a Roth IRA). Wise portfolio organization is one of the most important factors in financial planning for Idaho Falls taxes.

Learn How To Benefit from Your Losses: Always keep your portfolio balanced by replacing failing or slow-growing investments with better ones. Remember that it is possible to gain a tax deduction for your losses that will help make up for the taxes owed on the assets that have increased in value. This can be accomplished through a strategy known as “tax loss harvesting”.

Maintain Your Idaho Falls Tax Records

Keeping the proper documentation is imperative when it comes to Idaho Falls taxes. This will help keep you out of possible fines or penalties, as well as help you maximize your after-tax income. Keeping good records will make the entire process of analyzing and calculating your owed taxes much easier, and allows you a greater ability to report expenses that are tax deductible.

Make sure to keep your receipts organized in a secure folder. Other things you should be keeping include statements from:

-Banks
-Brokers
-Fund managers

And anyone else who provides financial information.

Get the Most Out of Your Personal Idaho Falls Tax Deductions

Getting the most out of your income means maximizing your personal tax deductions. The total amount of your tax deductions are subtracted from your taxable income, giving you your total tax bill.

As part of your Idaho Falls tax preparation habits, make sure to keep a detailed record of all deductible expenses, including keeping all receipts of tax-deductible expenditures in an organized folder, and recording gas mileage for business, medical, or charitable purposes. For owned or leased vehicles, this can include either the actual expenses, or the standard rate per mile.

There are many different expenses that can be deducted from your taxes that people often overlook, including:

Charitable contributions: Out-of-pocket charities can be written off, including the ingredients for food that is made for non-profit organizations such as food kitchens, or supply costs for school fundraisers.

Health insurance premiums: In some cases, you can deduct medical expenses that exceed 7.5 percent of your adjusted gross income.

Unusual business expenses: If your business can benefit from some special expenses, you can often write these off in your taxes. These expenses can include things such as animal food for junkyard owners who want to attract stray cats to feed on mice or rats, sunscreen protection for employees working at a car shop during the summer, or free gifts for customers.

Always keep an eye out for expenses you can write off on your taxes, and keep detailed records of them, including receipts.

Report All Idaho Falls Taxable Income

All income that is taxable needs to be reported on your tax return. Generally speaking, any amount of money that is included in your income is taxable with the exception of income that is tax-exempt by law. Non-taxable income may also need to be included on your tax return, although it will not be taxed.

The IRS understands that mistakes involving deductions and amounts can happen, and provides a number of ways to give citizens the chance to make up for these mistakes without unnecessary burden.

Failure to report income altogether, on the other hand, is a different matter. This situation can result in criminal charges for:

-Tax evasion

-Failure to report income

-Failure to supply information

Consistently reporting all taxable income will save you time, money, and energy in the long-term.

Idaho Falls Taxes

Idaho Falls Taxes For Residents

As a resident of Idaho Falls it’s important to know and understand what type of taxes you pay throughout the year. Do we need to pay estate taxes? What is our income tax rate in Idaho Falls? What credits are you eligible for to get a tax break?You can find out this information and more below. At Poston, Denney, & Killpack we want to make sure that all Idaho Falls residents and business owners are well informed about the taxes they are currently paying. If you live in Idaho Falls or any part of Idaho you are subject to the following Idaho Falls taxes:

Sales Tax

The rate of Idaho Falls sales tax is 6% ( this is the rate for the entire state of Idaho) Individuals pay this Idaho Falls tax when purchasing merchandise, goods, or services, some exemptions may apply. Sales tax in Idaho falls includes the sale, rental or lease of property and services. Prescription drugs are not taxed in Idaho Falls.

Use Tax

This Idaho Falls tax applies to goods that didn’t have sales tax that you use or store in Idaho Falls. Use tax is a tax that is usually meant for business owners. This tax is paid directly to the state and not the business owner. You can find more information about Sales and Use tax, here.

Property Tax

This tax applies to all real estate property owners. The state oversees property tax, but property taxes are collected and assessed by the county. Property taxes help to fund the local government. You can find out a rough estimate of what your property tax will be for 2017 by taking the value of your property and multiplying it by the average tax rate, minus exemptions. The current rates for Property Tax in the Idaho Falls area are:

• Average Urban Rate: 1.275%
• Average Rural Rate: .832%

Property Tax Exemptions

Homeowners Exemption - This exemption applies to owner-occupied primary dwellings. The rate for the Homeowner Exemption is determined by the Housing Price index annually.

Property Tax Reduction - Sometimes called the CIrcuit Breaker, this exemption applies to qualified low-income homeowners. To use this exemption homeowners must apply and qualify for the Property Tax Reduction each and every year.

Individual Income Tax

The rate for individual or personal income for the Idaho Falls resident varies depending on their income for the year this includes money that was made both in and out of the state). The rate for income tax in Idaho Falls is 1.6% to 7.8%. Depending on the individual's income will determine what tax bracket they fall into. The higher the earnings, the higher the tax rate. Idaho tax brackets are adjusted annually. You can find out what tax bracket you fall in for 2017, here.

There are credits that Idaho Falls  individuals can use to offset their income tax. These tax credits include:

• The Grocery Credit - To be eligible you must be an Idaho resident. The average Grocery Credit is about $100 per person.
• Credit for taxes paid to other states.
• Donation Credits - If you made donations to Idaho educational entities, rehabilitation facilities, and some non profit organizations, you are eligible for this credit.

Idaho does not tax benefits from Social Security or the Railroad Retirement Board. However, Idaho does tax all other sources of income, no matter the source.

Some states require additional taxes from their residents. Lucky for Idaho Falls residents, they don’t have to worry about paying a Inheritance, Gift, or Estate Tax.

• Inheritance/Gift Tax- Idaho Falls does not currently have an inheritance tax or gift tax.
• Estate Tax- Idaho Falls did have an Estate tax at one time, but it no longer does. The Idaho Legislature or Congress would have to change the current laws in order for an Estate tax to be reinstated.

If you would like more information on how to calculate your property tax and what exemptions you are eligible for, your Idaho Falls tax experts, Poston, Denney, & Killpack can guide you in the right direction. We also help with bookkeeping, small business tax information, and individual tax filing. Contact us today, to find out more about our tax services in Idaho Falls and how we can save you money.