Okoye & Associates LLC

05/07/2021

The May 17, 2021 tax filing deadline is fast approaching. If for any reason you are unable to file that day, file an extension that will be good through October 15, 2021. If you think that you will owe, pay what you think you owe with your extension.

03/06/2021

The US Senate passes the amended Covid-19 $1.9 trillion stimulus bill.

01/14/2021

The 2021 tax filing season is almost here. Earning statements will start coming in the mail soon, and this is the right time to start thinking about how you want to organize your records. Set aside a manila folder or an envelope where you can put away the documents as they come in. This way, you will not misplace a document as well as spend less time to organize them before making an appointment with your CPA or preparer. Did you know that well organized source documents does reduce your tax preparation cost? The tax filing season is a stressful period for tax preparers and taxpayers alike. The COVID-19 pandemic and many new tax laws associated with it will even make this filing season more stressful. If you started a business in 2020, it is not yet late to call your CPA or tax preparer to make an appointment to discuss how you need to prepare in order to have a good filing experience and make the filing season less stressful. The gig economy (Uber, Lyft, Shipt, etc.) created a lot of self employment opportunities, but it also created some tax burden in the form of estimated and self employment tax payments. So as to avoid possible tax surprises when your taxes are prepared, gig economy entrepreneurs, profitable S corporation shareholders and partners in a partnership are required to be paying quarterly estimated taxes. And January 15, 2020 will be the last day to pay quarterly estimated taxes for the year 2020. For W-2 earners, if you think that you will owe or have a history of paying in the past, it is worth it to pay some estimated taxes so as to avoid potential penalties. Finally, choose your preparer wisely. You get peace of mind when you choose an experienced preparer who understands the tax laws. You should run and not walk if a preparer says that he or she will get you a big refund. Remember that complying with the tax laws should be your primary goal when filing your taxes and not receiving a big refund. Stay safe and have a healthy tax filing season!

01/02/2019

Earning Statements Will Soon Start to Trickle into Your Mailboxes

Are you ready to file your 2018 income tax returns? Did you move or unhappy and planning to change your prior year tax preparer? If you have not, now is the time to call, interview and chose a preparer. Make sure that you chose wisely. The new Tax Cuts and Jobs Act (TCJA) and the recent government shutdown will likely cause some complications and delays for the filing season. Earnings statements such as W-2s, 1099s and 1095s will soon be arriving in your mailboxes. Where and how you keep these documents will matter when the time comes for you to call your preparer for an appointment. Good organization of your source tax documents will enable you to have a good filing experience with your tax preparer. It will not only reduce stress but will ensure that your returns are complete when filed. It is your responsibility to provide your preparer with complete earning and deduction statements. If your documents are not organized, your preparer could charge you more. Misplacing your documents could lead to filing incomplete returns that could later increase your tax liabilities or significantly reduce your refunds. It could also lead to loss of valuable deductions that could save you taxes. A simple old fashioned way to keep your documents together is to get an empty box or a large envelope now and write "2018 Taxes" on it. Each time you receive any of the aforementioned earning statement in the mail, you can put it in the box or envelope and later assemble them when it is time to go to your preparer. If you have to compile your expenses for your preparer on a spreadsheet, now is the time to get started. And always review your compilation for completeness and accuracy. You have the ultimate responsibility for your tax returns. Remember that Obamacare is still alive in 2018, and you must provide your preparer with employer provided Healthcare coverage Form 1095-B or Form 1095-C so as not to be assessed Obamacare penalty. Have a pleasant filing season!

11/01/2018

Here is 2019 retirement information released by the IRS today.

Limitations Adjusted As Provided in Section 415(d), etc.
Notice 2018-83
Section 415 of the Internal Revenue Code (the Code) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under § 415. Under § 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under § 215(i)(2)(A) of the Social Security Act.
Cost-of-Living Adjusted Limits for 2019
Effective January 1, 2019, the limitation on the annual benefit under a defined benefit plan under § 415(b)(1)(A) is increased from $220,000 to $225,000.
For a participant who separated from service before January 1, 2019, the participant’s limitation under a defined benefit plan under § 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2018, by 1.0264.
The limitation for defined contribution plans under § 415(c)(1)(A) is increased in 2019 from $55,000 to $56,000.
The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of § 415(b)(1)(A). After taking into account the applicable rounding rules, the amounts for 2019 are as follows:
The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) is increased from $18,500 to $19,000.
The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $275,000 to $280,000.
The dollar limitation under § 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $175,000 to $180,000.
The dollar amount under § 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5-year distribution period is increased from $1,105,000 to $1,130,000, while the dollar amount used to determine the lengthening of the 5-year distribution period is increased from $220,000 to $225,000.
The limitation used in the definition of “highly compensated employee” under § 414(q)(1)(B) is increased from $120,000 to $125,000.
The dollar limitation under § 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in § 401(k)(11) or § 408(p) for individuals aged 50 or over remains unchanged at $6,000. The dollar limitation under § 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in § 401(k)(11) or 408(p) for individuals aged 50 or over remains unchanged at $3,000.
The annual compensation limitation under § 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost-of-living adjustments to the compensation limitation under the plan under § 401(a)(17) to be taken into account, is increased from $405,000 to $415,000.
The compensation amount under § 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.
The limitation under § 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,500 to $13,000.
The limitation on deferrals under § 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $18,500 to $19,000.
The limitation under § 664(g)(7) concerning the qualified gratuitous transfer of qualified employer securities to an employee stock ownership plan remains unchanged at $50,000.
The compensation amount under § 1.61-21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation purposes remains unchanged at $110,000. The compensation amount under § 1.61-21(f)(5)(iii) is increased from $220,000 to $225,000.
The dollar limitation on premiums paid with respect to a qualifying longevity annuity contract under § 1.401(a)(9)-6, A-17(b)(2)(i) of the Income Tax Regulations remains unchanged at $130,000.1
The Code provides that the $1,000,000,000 threshold used to determine whether a multiemployer plan is a systemically important plan under § 432(e)(9)(H)(v)(III)(aa) is adjusted using the cost-of-living adjustment provided under § 432(e)(9)(H)(v)(III)(bb). After taking the applicable rounding rule into account, the threshold used to determine whether a multiemployer plan is a systemically important plan under § 432(e)(9)(H)(v)(III)(aa) is increased from $1,087,000,000 to $1,097,000,000.
The Code also provides that several retirement-related amounts are to be adjusted using the cost-of-living adjustment under § 1(f)(3). After taking the applicable rounding rules into account, the amounts for 2019 are as follows:
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contributions credit for married taxpayers filing a joint return is increased from $38,000 to $38,500; the limitation under § 25B(b)(1)(B) is increased from $41,000 to $41,500; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $63,000 to $64,000.
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contributions credit for taxpayers filing as head of household is increased from $28,500 to $28,875; the limitation under § 25B(b)(1)(B) is increased from $30,750 to
1 Notice 2017-64, 2017-45 I.R.B. 486, raised this limit from $125,000 to $130,000 although § 1.401(a)(9)-6, A-17(d)(2) provides for increases of the $125,000 limitation only in multiples of $10,000. The limitation will remain at $130,000 until it would be adjusted to $135,000 pursuant to § 1.401(a)(9)-6, A-17(d)(2). For subsequent years, the limitation will be adjusted only in increments of $10,000.
$31,125; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $47,250 to $48,000.
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contributions credit for all other taxpayers is increased from $19,000 to $19,250; the limitation under § 25B(b)(1)(B) is increased from $20,500 to $20,750; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $31,500 to $32,000.
The deductible amount under § 219(b)(5)(A) for an individual making qualified retirement contributions is increased from $5,500 to $6,000.
The applicable dollar amount under § 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) is increased from $101,000 to $103,000. The applicable dollar amount under § 219(g)(3)(B)(ii) for all other taxpayers who are active participants (other than married taxpayers filing separate returns) is increased from $63,000 to $64,000. If an individual or the individual’s spouse is an active participant, the applicable dollar amount under § 219(g)(3)(B)(iii) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0. The applicable dollar amount under § 219(g)(7)(A) for a taxpayer who is not an active participant but whose spouse is an active participant is increased from $189,000 to $193,000.
Accordingly, under § 219(g)(2)(A), the deduction for taxpayers making contributions to a traditional IRA is phased out for single individuals and heads of household who are active participants in a qualified plan (or another retirement plan specified in § 219(g)(5)) and have adjusted gross incomes (as defined in § 219(g)(3)(A)) between $64,000 and $74,000, increased from between $63,000 and $73,000. For married couples filing jointly, if the spouse who makes the IRA contribution is an active participant, the income phase-out range is between $103,000 and $123,000, increased from between $101,000 and $121,000. For an IRA contributor who is not an active participant and is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $193,000 and $203,000, increased from between $189,000 and $199,000. For a married individual filing a separate return who is an active participant, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
The adjusted gross income limitation under § 408A(c)(3)(B)(ii)(I) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $189,000 to $193,000. The adjusted gross income limitation under § 408A(c)(3)(B)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $120,000 to $122,000. The applicable dollar amount under § 408A(c)(3)(B)(ii)(III) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.
Accordingly, under § 408A(c)(3)(A), the adjusted gross income phase-out range for taxpayers making contributions to a Roth IRA is $193,000 to $203,000 for married couples filing jointly, increased from $189,000 to $199,000. For singles and heads of household, the income phase-out range is $122,000 to $137,000, increased from $120,000 to $135,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

08/03/2018

We moved from our location in Bowie after 12 years. Our new location is at : 5010 Sunnyside Avenue, Suite 210, Beltsville, MD 20705. Other than the location change, all our contact information remain the same. At our new location, we will continue to provide the same great services that you are used to. For new clients or those clients considering a change, come to us for a great corporate and individual tax preparation experience! For small businesses, we will take care of your small business accounting. We also represent individuals and businesses before the IRS and state taxing authorities. Check out our Google reviews.

04/21/2016

The law of economics works and there are severe consequences when thwarted by a human hand.

President Buhari needs to give up the quixotic currency peg and let the naira’s value fall.

11/05/2015

THE GINGHAM DRESS
A lady in a faded gingham dress and her husband, dressed in a homespun threadbare suit, stepped off the train in Boston and walked timidly without an appointment into the Harvard University President's outer office. The secretary could tell in a moment that such backwoods, country hicks had no business at Harvard, & probably didn't even deserve to be in Cambridge.
'We'd like to see the president,' the man said softly.
'He'll be busy all day,' the secretary snapped.
'We'll wait,' the lady replied.
For hours the secretary ignored them, hoping that the couple would finally become discouraged and go away.
They didn't, and the secretary grew frustrated and finally decided to disturb the president, even though it was a chore she always regretted.
'Maybe if you see them for a few minutes, they'll leave,' she said to him!
He sighed in exasperation and nodded. Someone of his importance obviously didn't have the time to spend with them, and he detested gingham dresses and homespun suits cluttering up his outer office. The president, stern faced and with dignity, strutted toward the couple.
The lady told him, 'We had a son who attended Harvard for one year. He loved Harvard. He was happy here. But about a year ago, he was accidentally killed. My husband and I would like to erect a memorial to him, somewhere on campus.'
The president wasn't touched. He was shocked.
'Madam,' he said, gruffly, 'we can't put up a statue for every person who attended Harvard and died. If we did, this place would look like a cemetery.'
'Oh, no,' the lady explained quickly. 'We don't want to erect a statue. We thought we would like to give a building to Harvard.'
The president rolled his eyes. He glanced at the gingham dress and homespun suit, then exclaimed, 'A building! Do you have any earthly idea how much a building costs? We have over seven and a half million dollars in the physical buildings here at Harvard.'
For a moment the lady was silent. The president was pleased. Maybe he could get rid of them now. The lady turned to her husband and said quietly, 'Is that all it cost to start a university? Why don't we just start our own? '
Her husband nodded. The president's face wilted in confusion and bewilderment.
Mr. and Mrs. Leland Stanford got up and walked away, traveling to Palo Alto, California where they established the university that bears their name, Stanford University, a memorial to a son that Harvard no longer cared about.
You can easily judge the character of others by how they treat those who they think can do nothing for them.
--- A TRUE STORY by Malcolm Forbes
You just can't judge a book by it's cover!!!!!!!!!!!!

08/21/2013

Question: Despite the Affordable Care Act (ACA) employer mandate delay, what mandatory information are employers required to provide to employees by October 1, 2013?

Answer: A notice about health insurance coverage that may be available through a public exchange (Marketplace).

By law, each employer is required under ACA to provide this information free of charge to each employee.