Anthony Sykes & Company

         Now that Tax Season is over and you have filed your Tax Return or received an extension, it can seem to be a time to rest. However, some may be concerned about a potential audit in the future. That is never an enjoyable process, but let us take a closer look at what the odds actually are.           In reality, just over 0.5% of all individual Tax Returns are selected for an audit. Most people do not need to have a morbid fear of this occurring to them. But there are different factors that can change this percentage. For example, those who do not own a business, claim no Tax Credits, or make less than $200,000 have about 0.2% chance of getting an audit. These individual tax filers will have simple returns that are less likely to set off any IRS red flags. The opposite can also be true.           Areas of Tax Credit, business and rental income, along with the fo...

          In this series of articles detailing suggestions for businesses, there is one point that has become abundantly clear: running a business is hard. That difficultly is only increased when it has anything to do with cannabis. It’s legal in some states, being considered in others, but is still illegal at the Federal level. This is just one reason why these businesses have the odds stacked against them.           This underlying fact has led to a situation where Cannabis entrepreneurs do not have access to typical business options. Due to their Federal status, lenders and banks will not deal with them. Having a cash-only business is not necessarily bad, as long as meticulous records are kept. A business in this industry must be extra careful that there are no errors in its financial records. These firms may be well served by outsourcing their accounting and bookkeeping needs. In this way they can focus on mar...

         Every business has a level of risk involved. That might seem to be an obvious statement, but it is a fact that must be considered for every business venture. The risk is also varied when it comes to different types of businesses. When it comes to retail, the risk is high because there is so much to consider with this type of business.           Considering the wide scope of the issues that all retailers face, this post will briefly discuss changing regulations and the role that taxation plays in this area. Generally speaking, the government wants legitimate businesses and their owners to succeed. The reason is that if a business does well, then they will pay taxes and the government will do well. It’s the perfect win-win scenario. However, in practice this can become complicated. Depending on the state, certain items are subject to State Sales Tax , while others are exempt or taxed at the Alternate Rat...

         Congratulations on making it through another Tax Season! We did it together. After going through all the records and receipts to put together a complete Tax Return, there are probably a lot of papers that have been put in files. A logical question to ask is: How long do I need to keep all these records? Since the Tax Return has been filed, can I throw the documents away? Every situation is different and State taxes are not treated the same as Federal, but in general you should hold on to them.           Tax records should be kept for at least 2-3 years. In the event of an audit, its scope usually goes back 3 years. Having the records on hand and ready to hand over will speed up the process. If a Taxpayer were to claim a loss from a bad debt deduction, that Tax Return should be kept at least 7 years. For those who do not file a Tax Return, their records should not be thrown away. These figures are just ...

          The United States Bill of Rights was written to protect the freedom of every citizen. In a similar way, the Taxpayer Bill of Rights is in place to protect the rights of all Taxpayers. Did you know that these 10 fundamental rights existed? Many do not. For our post today, we will examine just one of them.           The Right to Privacy comes in at #7 in the Taxpayer Bill of Rights. This means that every Taxpayer has the right to expect every IRS inquiry, audit, or other action will be lawful, and never be more invasive than necessary. This provides certain guarantees. The IRS cannot seize personal items like clothing or mail. During an audit, if it is determined that there is no unreported income, the IRS will not seek extra information about a Taxpayer’s lifestyle. If a Taxpayer makes an offer to settle the Tax Debt they owe, they do not need to submit financial documents.     ...

          A simple assumption can lead to big problems when it comes to taxes. Tax Law is quite complicated, so it pays to take a little time and review your forms before submitting them. Here are a few basic mistakes that can cost a lot down the road.           One very common and ultimately painful mistake (#1) is the idea that a Taxpayer should not file a Tax Return until they can pay taxes owed . This is never true. By making this choice, a Taxpayer will not only have to pay the taxes owed, but they will also have to pay the failure-to-file penalty. This is often a more expensive fine. There are always solutions to tax problems, but ignoring them will never lead to a good outcome.           Another mistake (#2) that can arise from a misconception, or not realizing how circumstances have changed, is the thought that married couples must always file jointly . W...

Certain businesses have very unique needs, no matter their size. This is directly affected by the industry they are in. This is true of construction firms. Large or small, they have the same abilities and the same challenges. They each have to pay salaries, office expenses, insurance, and rent. The differences may seem appear in equipment and material costs. From the outside, it may seem that construction firms with 20-50 employees would take on only smaller jobs and not be in direct competition with large companies. This could not be further from the truth. With the state of technology, almost any small company can produce a finished product of quality. Here is where a problem can present itself. Due to a variety of factors, costs of raw materials have been rising. This can lead to a shortage of cash before payment. When there is more demand, all costs will rise.         One solution to lowering costs would be to take advantage of technology solu...

         With the changes going on at the Federal level, taxes can seem very confusing and challenging. While this is true, we must never forget that State taxes are completely separate. This fact can add stress for business owners in certain industries or lead consumers to feel that they are being cheated. In this post, we will take a brief look at some of the more unique taxes found in different states.           People can buy almost anything from a vending machine. However, in California consumers can buy fruit from vending machines for a 33% sales tax. It’s far more financially responsible to go to a store instead. In Illinois , there is a 6.25% sales tax on certain candy. The difference is based on whether the product has any flour in it. If the answer is “Yes”, then there is no added tax. Not only are blueberries a superfood, they are also a huge industry for the state of Maine . Since this state provi...

     In the news, hardly a day goes by without hearing of or reading about a new type of Tax scam. They seem to get more deceptive as time goes by, and as a result it can be difficult to know if or when we have become a target of criminals. With that said, there are a few points that we can keep in mind that will indicate whether or not we are really dealing with the IRS, or just an impersonator. 1.    A Surprise Deposit in Your Bank Account. This is a new variation of a time tested trick. Fraudulent Tax Returns being filed with stolen identities is nothing new. The goal has always been to receive the Tax Refund before the IRS knew that a crime had taken place. The new aspect is that the Refund is being sent to the real Taxpayer, into their bank account. If you find yourself in this situation do not spend that money. Contact your bank, local police, the FBI, and the IRS. Inform them of the situation, as this is evidence of Identity Theft and bank fraud. A...