3 Tax Woes and How to Survive Them

by with No Comment Tax

3 Tax Woes and How to Survive Them

The tax deadline has come and gone, but if you are filing late, can’t pay all of what you owe, or have the fear that you might be audited, don’t panic. We’ve got you covered with some smart ways to handle these three, potentially scary scenarios. 

Late Filing 

Of course, if you owe, make every effort to file as soon as possible to avoid penalties and interest. But the good news is, if you’re owed a refund, there’s no penalty for filing late. More good news: For those who qualify, Free File is still available on IRS.gov through Oct. 15 to prepare and file returns electronically. There’s more: If you have a history of paying on time and are missing this year’s deadline, there’s always Penalty Relief. This provision, called First Time Penalty Abatement, allows you to qualify if, a) You haven’t previously filed a return, or if you have had penalties in the past, you have no penalties for the three years prior to filing this year; b) You filed all currently required returns or filed an extension; c) You have paid, or arranged to pay any tax due. See? There’s hope. 

Can’t Pay All of What You Owe? 

Due to the Tax Cuts and Jobs Act, you might find that you owe because you didn’t change your withholding, as well as the fact that the law eliminated exemptions, increased child credits and limited popular deductions, to name a few of the changes. Not to worry. If you’re stuck and need help, you’ll be relieved to know that you can apply online for a Payment Plan. While you’re settling your debt, you can view your balance online and pay with IRS Direct Pay or by a debit or credit card. 

If you need further assistance, consult a professional. If this is any consolation, the Government Accountability Office estimated in a report last summer that about 30 million workers had too little withheld from their paychecks. While this increased their take home pay, it also increased their tax liability. Again, consult a tax professional if you have questions, but remember: there is light at the end of the tunnel. You will get out of this. 

If You Get Audited 

The truth is, unless your income is super high, you have less than a one percent chance of being audited. That said, if this does happen, you’ll want to be prepared. But first, a little education. There are three kinds of audits, a) Correspondence Audit: The simplest kind and it’s usually the result of you making a mistake on your return; b) Office Audit: This one is more complicated. You’ll need to go into an IRS office with required paperwork, but the bigger thing to keep in mind is that this kind of audit could be a result of some high tax deduction like, say, a large medical expense; and c) Field Audit: This one is similar to an Office Audit; however, this time, the IRS comes to you and asks to see your records. 

No matter the type of audit, don’t freak out. Simply take a deep breath, and gather all your documents: W-2s, 1099s, bank statements, proof of income, investment statements, along with bills, receipts and other proof of expenses. Next, schedule your audit or postpone it. Then, keep a cool head and strive to be compliant with IRS representatives because, after all, they are just doing their job. However, the very best option is to call a tax professional. He or she will know exactly what to do and walk you through this sometimes hairy process. 

So there you have it. There are ways to survive the difficulties you might encounter while filing your taxes. The motto to keep in mind? This, too, shall pass. 

Sources

https://www.irs.gov/newsroom/tips-for-taxpayers-who-missed-the-april-filing-deadline

https://www.cbsnews.com/news/federal-tax-refund-2019-americans-shocked-by-impact-of-new-tax-law/ 

https://twocents.lifehacker.com/what-you-should-know-if-you-get-audited-by-the-irs-1770537110

Elderly Caregiver Facts and Figures

by with No Comment Advisory

Elderly Caregiver Facts and Figures

These days, people who live to age 65 can expect to live at least another 20 years, statistically. That means many are likely to require some form of assisted caregiving. According to aging experts, the following guidelines describe characteristics of those most likely to need long-term care: 

  • Age – Risk increases as people get older
  • Gender – Women are at higher risk because they tend to live longer than men
  • Marital status – Single people are less likely to have family resources and will therefore need to pay for caregivers
  • Lifestyle – People who do not eat a healthy diet and exercise regularly are more likely to develop debilitating health conditions
  • Family history – People with compromised genetics are at higher risk¬†

As for family caregivers, the typical profile has been shifting over the past few years. The following are some interesting new statistics from Genworth Financial, a leader in long-term care insurance. 

  • Men now comprise nearly half of family caregivers
  • The average age of a family caregiver is 47 (age 53 in 2010)
  • Only 57 percent of family members who require care are 65 or older (80 percent in 2010)
  • 20 percent of long-term care recipients need help as the result of an accident rather than illness (10 percent in 2010)
  • Caregivers average 21 hours of assistance a week for a duration of three years¬†

Long-Term Services and Support

Caregiving needs can vary dramatically depending on the recipient’s condition. For the convenience of categorization, the term “long-term services and supports” (LTSS) refers to assistance with daily tasks such as bathing, dressing, preparing meals and doing household chores. A recent study reported that the average cost for people with high LTSS needs is about $10,000 a year. 

How to Pay for Elderly Caregiving

One of the biggest problems in retirement planning is how to pay for long-term caregiving. Today, only 7 percent of the $300 billion the United States spends on long-term support and services is paid for through private insurance. According to the USC Leonard Davis School of Gerontology, about half of the U.S. population will be paying out-of-pocket for LTSS expenses by 2025. 

While fees vary based on location and other benefits, the following are national averages for various types of long-term care services. 

Annual Cost

  • Adult Day Health Care: $18,720
  • Assisted Living Facility: $48,000
  • Homemaker Services: $48,048
  • Home Health Aide: $50,336
  • Semi-Private Room in a Nursing Home: $89,297
  • Private Room in a Nursing Home: $100,375¬†

Health Insurance

Regular health insurance covers only acute care, such as rehabilitation after a hospital stay. It is not designed to cover the cost of caregiving over the long haul. 

Medicare

Medicare used to pay for nursing home care only after a hospital stay, limited to 100 days. However, starting in 2019, Medicare Advantage (MA) plans are allowed to offer coverage for certain long-term care services as deemed medically appropriate by a licensed health care provider. Each insurer has the ability to define coverage options. Be aware that this new rule pertains only to MA plans, not original Medicare. 

Long-Term Care Insurance

Long-term care insurance (LTCI) is specifically designed to cover caregiving associated with serious impairment over a limited period of time, such as three years. Today, about 40 percent of employers offer some form of long-term care insurance. In most cases, the policy is offered on a voluntary basis in which employees pay the full premium. 

  • Large employers (500+ employees) generally offer traditional long-term care insurance.
  • Small- and medium-sized companies typically offer ‚Äúmulti-life” LTCI packages, which bundle individual long-term care insurance policies for a worker‚Äôs spouse and parents, offered at a discount. Note that these policies tend to require stringent medical underwriting.¬†

Retirement Community

Another option for tailored long-term caregiving is moving into a Continuing Care Retirement Community (CCRC). This type of community provides a progression of residence and care as a person’s health declines, ranging from an independent house or apartment, to assisted living, to memory care or skilled nursing for life. This type of community is typically rich in amenities, such as a community dining room, entertainment venue, fitness center and wellness programs, plus cultural arts and shopping excursions. 

There are about 2,000 CCRCs nationwide, many with waitlists, and they are quite expensive, relative to other senior living options. To qualify, generally, you must be at least 62 and healthy enough to live independently. The entry fee ranges from less than $100,000 to more than $1 million, averaging about $320,000. Residents also pay a monthly fee, which averages $3,266 nationwide and tends to increase by three to four percent each year. Once residents die, their heirs can sell the property to another buyer who meets the entry criteria, and the CCRC may be entitled to part of any home-price appreciation. 

Bear in mind that one of the primary reasons to make caregiving expenses a key part of retirement planning is to protect a household’s overall finances. In other words, you don’t want a couple’s entire nest egg used to pay for caregiving expenses of one disabled spouse – with nothing left over for the other spouse to live on.

Career Options for CPAs

by with No Comment Careers

A career in the accounting industry can be so much more than just, well, accounting!

People decide to pursue accounting careers for a wide variety of reasons. There are those that have a passion for numbers. Others see accounting as a big, complex puzzle that they’re excited to solve. And some simply choose the field for the stability and long-term career opportunities that it affords.

On the other hand, many turn up their noses at the accounting field—perhaps claiming that an accounting career would be boring or repetitive. They are wrong!

Below are some examples of the multitude of fascinating career options that abound within the accounting field. Read on to learn about the exciting paths that CPAs can take, both within a traditional accounting firm and beyond!

Within the Traditional Accounting Firm

Accounting Auditor
An auditor is an accounting professional who specializes in the preparation and examination of financial records. These professionals are charged with ensuring the accuracy of an organization’s records and assessing financial operations. Accounting auditors are the key to ensuring that organizations are running efficiently and will continue to do so in the future.

Financial Planner
Many traditional accounting firms provide specialized financial planning services to their clients. The goal of financial planning professionals is to work with their clients to establish and enhance their successful financial future. From estate planning to retirement planning to investment planning, this sub-set of accounting offers a diverse range of interesting career opportunities.

Tax Specialist
Some CPAs opt to pursue a specialty in tax. Tax specialists are responsible for tax document management and preparation. They have the option of working with a wide range of clients, including individuals, small business, large corporations, and everything in between! This particular specialty requires a deep understanding of tax code and a willingness to work with changing laws and regulations. If you’re the kind of CPA who enjoys constantly learning new things then applying what you’ve learned to your work, this is the field for you!

Forensic Specialist
Not only is forensic accounting a big field, but it’s constantly growing. The prevalence of fraud, both in the US and around the world, make this an area of increasing demand for expert CPA services. Within an accounting firm, a forensic specialist can be responsible for a variety of tasks, including uncovering fraud, quantifying financial loss, performing fact-finding interviews, and even testifying in court. Forensic specialists generally pursue further certifications in addition to their CPA license, such as Certified Fraud Examiner (CFE) and Certified in Financial Forensics (CFF) credentials.

Niche Specialization
In addition to the roles listed above, there are a multitude of options for CPAs to specialize in niche fields, working with a particular industry or type of client. Some accounting professionals concentrate on providing services to a particular local industry (for example, a Vermont-based accountant who serves exclusively local Christmas tree growers). Others choose to specialize in a larger niche field, such as construction, healthcare, or hospitality. Perhaps you have a unique niche in mind around which you dream of developing your accounting practice?

Beyond the Traditional Accounting Firm

Accounting Software Development
As technology continues to evolve at an ever-increasing rate, there is an intriguing opportunity for accountants to serve as advisors in the accounting software development field. Software developers need to work with experienced accounting professionals—people who really know how the accounting industry works—to ensure that the programs they create function fully and correctly. From advising about home accounting software for individual tax filers to large systems for accounting firms, there is a great need for knowledgeable accounting advisors in the tech field.

Environmental Accounting
As environmentally sound business practices increase in popularity, there is a growing demand for in-house environmental accounting advisors, both at large corporations and within government agencies. Environmental accounting professionals serve to help organizations become more eco-friendly and comply with environmental regulations, all while saving money and remaining profitable.

Investigative Accounting
For two of the traditional accounting firm career paths mentioned above—auditing and forensic accounting—there are parallel opportunities within law enforcement. Various law enforcement agencies employ CPAs and other accounting professionals in an investigative capacity. Have you ever considered seeking out a career at the Federal Bureau of Investigations or the Drug Enforcement Administration?

After reading about all of the opportunities that the accounting industry provides, are you still convinced that a job in the field would be routine? We certainly hope that one or more of the opportunities listed above sparked some excitement in you and will lead you to a fulfilling and enjoyable career as a CPA!

Accelerate Leadership Testimonials

by with No Comment Firm News, Careers

Austin Arrington - Ole Miss

“My favorite part of the program was having the chance to go to dinner with the staffers and seniors. It was nice to hear firsthand about their experiences with the firm. I also appreciated the chance to hear what the life of a staffer was like so we could know what to expect if we were to start working at RBG.”¬†

“I think the most valuable piece of advice I could give to someone considering the Accelerate Leadership program is this: ask all the questions you have at the program. I left the Accelerate Leadership program knowing I wanted to work at RBG because I asked questions about the uncertainties I had about working in public accounting.”¬†

Elizabeth Tavoleti - Mississippi State

“I heard about the Accelerate Leadership program through the Career Center at my school. I was drawn to it because I‚Äôm interested in working in Memphis, but chose it, ultimately, because it is one of the few programs that accepted sophomores. I feel as though getting to participate as a sophomore gave me really valuable experience that most of my peers don‚Äôt have at this point”¬†

“The program most definitely exceeded my expectations. I really enjoyed getting to know lots of staff, including partners, because everyone had such a unique perspective on working for an accounting firm. My advice to anyone considering the Accelerate Leadership program would be that they make sure to participate fully‚Äîtake advantage of the opportunity to meet everyone and ask your specific questions about both RBG and the accounting world as a whole.”¬†

Claire Cornelius - Mississippi State

“The Accelerate Leadership program gives you a well-rounded experience. You get to explore different parts of Memphis and enjoy the unique culture that the city holds. You also get to interact with everybody from the firm, from partners to staff members, in a fun and relaxed environment. Everyone I met at RBG truly made me feel like they wanted to build a relationship with me.”¬†

“The scavenger hunt was such a cool idea. It allowed me to explore different parts of Memphis while interacting with somebody from the firm. It was the coolest thing I did at any of the summer leadership conferences that I attended that summer.”¬†

Connor Shannon - Arkansas State

“I learned about the Accelerate Leadership program from one of my accounting professors. It was a great fit for me because I‚Äôm interested in working for a firm in Memphis. The program mixes learning with a lot of fun. I loved the opportunity to hear from the professionals about their jobs and what they love about public accounting. If you want to truly learn what working in public accounting is like and have all of your questions answered, I highly recommend Accelerate Leadership.”¬†

Jess Morris - Mississippi State

“Before participating in the Accelerate Leadership program, I thought that I was sold on working at a Big 4 firm for a few years and then looking for a job outside of public accounting with better hours and pay. I did not think that it was possible to find a public accounting firm where I would want to have a long-term career. I loved my experience with RBG‚ÄîI felt truly comfortable with both their culture and their people. As a result of my experience in the Accelerate Leadership program, RBG shot to the top of my list of places to secure an internship.”