Ely, Ely & Shechet LLC

Ely, Ely & Shechet LLC Income Tax, IRS Audit Consultation, Payroll and Sales Tax Reporting, Monthly Accounting and Bookkeep

01/06/2023

Well, it’s that time of year again! With tax season around the corner, we wanted to reach out to explain how we are preparing tax returns this year. Due to the surge of RSV, flu and COVID, we have decided to prepare tax returns via drop offs and phone appointments.

If you book a phone appointment, we will schedule you a specific timeframe in which we will be calling to ask questions and go over your return. In order for us to be prepared for your phone appointment and identify what may be missing, we request that you drop off all necessary tax information to us two weeks prior to your appointment.

All drop-off returns will be prepared in the order of which they are received. We will call you with any questions we may have, or when your tax return is complete. Please be advised, if you need your tax return completed by a specific date, it’s recommended you make a phone appointment.

For those clients with significant life changes or complicated tax situations, we will allow a limited number of in-person appointments. If you believe you require an in-person appointment, please don’t hesitate to reach out to us.

Thank you for your help in keeping everyone safe and talk to you soon!

Important Filing Deadlines
• January 31st – Form 1099s; W2s.
• March 1st- Farmers
• March 15th – Partnerships; S Corporations
• April 15th – Personal Income Tax Returns (Form 1040)
• May 15th – Non-Profits

12/28/2017

Because of the 2018 $10,000 limit or cap for itemizing on Schedule A your State and Local property taxes, we are advising many of our clients to pre-pay your 2018 property taxes and/or make your 4th qtr estimates in the next few days remaining in 2017. Call us if you have questions.

10/05/2017

Treasury said it intended to withdraw the Sec. 2704 valuation discount regulations and portions of the Sec. 385 corporate inversion regulations.

03/11/2016

Parents can and do make big mistakes when reviewing tax credits for their children going to college. The American Opportunities Credit (AOC credit) can provide up to a $2,500 tax credit for going to college based upon eligible education expenses. The credit is based upon net eligible education expenses which are after scholarships and grants. The fun fact is often times you can widen or increase the credit to max it out by putting scholarships and grants into the students income for the year. If you believe that you are leaving money on the table, please contact us for more information.

12/21/2015

On December 18, 2015, the President signed into law the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).

The new law extends several tax provisions retroactive to the beginning of 2015, and also makes some provisions permanent.

The list that follows identifies tax extender items that have been reinstated retroactive to January 1, 2015:

Additional Child Tax Credit. The refundable portion of the Child Tax Credit had an income threshold amount of $10,000, indexed for inflation. The extender legislation permanently sets the threshold at an unindexed $3,000, which will allow for a higher credit for taxpayers who qualify.

Enhanced American Opportunity Tax Credit (Hope Credit). The American Opportunity Tax Credit (AOTC) is an enhanced version of the Hope Credit, allowing a credit of up to $2,500 for four years of post-secondary education. The new law makes the enhanced AOTC permanent.

Enhanced Earned Income Credit (EIC). As an extender item, the EIC credit amount was temporarily increased for taxpayers with three or more children, and the marriage penalty was reduced by increasing phaseout ranges.

Educator expenses. The new law makes the adjustment to income for qualified expenses of elementary and secondary school teachers permanent. The law also indexes the current expense cap of $250 for inflation beginning in 2016.

State and local general sales taxes. The provision allowing an itemized deduction for state and local general sales taxes instead of state and local income taxes on Schedule A, Form 1040, expired and was extended several times in the past. The new law makes the provision permanent.

Charitable contributions of IRA distributions. A qualified charitable contribution (QCD) from an IRA is nontaxable if made directly to an eligible charitable organization. This lowers the taxpayer’s AGI, reducing the negative effect of AGI phaseouts. A QCD was dependent on extender legislation in prior years. The new law makes the provision permanent.

Qualified leasehold improvements, restaurant buildings and improvements, and retail buildings and improvements. Recovery periods for qualified leasehold improvements, restaurant buildings and improvements, and retail buildings and improvements were temporarily set at 15 years under extender legislation instead of requiring longer recovery periods. The 15-year recovery period for these assets was made permanent.

Enhanced Section 179 expense. A temporary Section 179 expense limit of $500,000 and investment limit of $2 million before phaseout was made permanent.

Note: Beginning in 2016, the $250,000 cap on the Section 179 expense for qualified real property was eliminated. The provision allowing a Section 179 expense for off-the-shelf computer software was also made permanent.

Special depreciation allowance. The provision extends the special depreciation allowance for property acquired and placed in service during 2015 through 2019. The special depreciation percentage is 50% for property placed in service during 2015, 2016, and 2017, and phases down to 40% in 2018 and 30% in 2019.

Discharge of principal residence indebtedness. The provision allowing exclusion from income for discharge of qualified principal residence indebtedness was extended through 2016.

Itemized deduction for mortgage insurance premiums. The provision allowing mortgage insurance premiums to be deducted as an itemized deduction on Schedule A of Form 1040 was extended through 2016.

Tuition and fees deduction. The provision allowing an above-the-line deduction for tuition and fees paid for the taxpayer, spouse, or dependents and claimed as an adjustment to income, was extended through 2016.

Note the number of tax provisions/credits made permanent. :)

12/17/2015

Here is an interesting thought for a farmer that is in a potential 24/7 on call position.

As a farmer, you acquire or set aside 3-5 acres. You lease as Lessor these acres (land only) to your farm Corporation (Lessee) on a 20 year lease. The farm business operating as a Corporation constructs a farm house for its' employee (you) to live in as a working condition fringe benefit. You need to be present to over see livestock or prevent theft of equipment, chemicals, anhydrous, etc. on a 24/7 basis. The "norm" for most farms. The farm corporation pays 100% of the operating costs of the farm house and fully depreciates the farm house as a farm building over the correct 20 year depreciation or write off period.

At the end of the 20 year lease period (with no further lease), who do you think owns the leasehold improvements on any typical lease? Correct answer is you. The Lessee surrenders the improvements to the Lessor (land lord).

So now you live in the farm house for 2 years. At 2 years and 1 day, IRC Code Section 121 kicks in and should you sell this property (used as your principal residence) the gain is now tax free up to the first $500,000 of capital gain if married. $250,000 of capital gain, if single.

Call or email us for this and other great tax law strategies.

01/16/2015

2014 Itemized Deduction Thoughts......

Pay attention to donation regulations. The IRS requires receipts for all deductible donations. All charitable deductions, no matter how small, must be substantiated either by a cancelled check; bank record containing the charity’s name, donation amount, and date; or a detailed receipt from the charity. Otherwise the contribution cannot be an itemized deduction.

Do collect your charitable acknowledgements, receipts, and cancelled checks in one place. If you make cash donations, you'll need either a bank statement or a written communication from the charity noting the charity name, your donation amount, and the date. For more, check IRS Publication 526, "Charitable Contributions."

Don't claim donations of furniture, clothing, and other household goods that weren't in at least good condition when you gave them. While the IRS rule aims to w**d out junk donations, taxpayers may claim an itemized deduction of more than $500 for any single item in any condition as long as a qualified appraisal is included with their return.

Deduct premiums for the Medicare Part D prescription drug insurance program, as well as other health-insurance premiums you pay yourself. The premiums for long-term-care insurance are deductible on a sliding scale according to your age.

Remember to deduct gas mileage expenses for your car when used for medical reasons. The 2014 rate for such deductions was 23.5 cents per mile for medical travel.

01/09/2015

How Obamacare Effects Your 2014 Federal Income Tax Return .

Taxpayers who were covered for the entire year by health insurance obtained through their workplace will only have to check a box on line 61 of Form 1040, U.S. Individual Income Tax Return, to indicate that they had health coverage. The government estimates that over three-quarters of filers will fall into this category.

The rest of those filing individual returns either will have received health coverage through a Health Insurance Marketplace or will not have health insurance coverage. Those who obtained insurance through the Marketplace will receive Form 1095-A, Health Insurance Marketplace Statement, which will explain their coverage and detail any premium tax credit they received in advance.

Taxpayers who had no insurance coverage for any part of 2014, either through work, the government, or the Marketplace, owe a fee (called the individual shared-responsibility payment), unless they qualify for an exemption.

10/30/2013

An interesting credit that an Iowa taxpayer can use is the Monsignor Lafferty Iowa Tax Credit. It creates a deduction on the Federal and an Iowa credit that is 65% of the contribution on your Iowa return. It also saves on the Iowa School District surtax for anyone with a surtax.

So for example. Assuming a 28% marginal Federal Tax bracket. A $1000 donation equals a $650 Iowa direct credit. The school district surtax goes down by $39. The tax savings on your Federal return would be $280. So give $1000 away and $969 comes back. Net out of pocket is $31. The monies provide tuition assistance to poverty level kids in accordance with Iowa law.

A great tax trick if you live in Iowa. You get to choose whether a charity gets your tax money or Fed and State.

A taxpayer in the 39.6% marginal federal bracket when he or she combines the Iowa credit of 65% actually makes money by donating. Crazy but true.

01/20/2013

A little tax humor......

There once was a dog named Tax. I opened the door and income Tax.

01/12/2013

Tax Preparation Checklist

New Clients: Please bring a copy of last year’s tax return.

Identifying Information

Social Security Numbers for yourself, your spouse and your children. Note that all social
security numbers must agree with Social Security Administration records. If a woman is married and does not officially change her name by bringing her original marriage license to the Social
Security Administration, she must file under her maiden or prior married name.

Child and Dependent Care Provider : If it is necessary for you to have someone care for your child(ren) while you work because you are single, or you are married and both spouses work, if
the child is under age 13, you can deduct the cost of the child care. You may also deduct the cost of care if someone is caring for your disabled spouse while you work. In either case, we need
the providers name, address and tax I.D or Social Security Number.

Alimony paid: If you pay alimony or maintenance (not child support), we need the Social Security Number of your former spouse.

Employment & Income Data (Please bring originals or copies of these documents.)

W-2 forms for this year
Unemployment compensation: Forms 1099-G
Miscellaneous income: Forms 1099-MISC* (See note about business expenses below)
Partnership, S Corporation, & trust income: Schedules K-1
Pensions and annuities: Forms 1099-R
Social Security/RR1 benefits: Forms SSA-1099 or RRB-1099
Gambling and lottery winning, Form W-2G** (See note about gambling losses below.)
Prizes and awards, Form 1099-MISC
Scholarships and fellowships, Form 1099-MISC
State and local income tax refunds: Form 1099-G
Rent or Royalty Income: Form 1099-MISC
Miscellaneous Income (Please provide us with a total received from Miscellaneous Income
Sources, examples follow.)
Alimony
Jury duty pay
Rent *** (See note on rental expenses below.)

Homeowner Data

Mortgage interest from all mortgages: Form 1098
Purchase or sale of your home or other real estate: If you bought or sold a home this year, we need the HUD-1 statement from the closing package you attorney should have provided you
with.

This is a one-page, legal-size, two-column form summarizing all financial transactions.
One column should list Credits to Buyer and one Credits to Seller. There may be an attachment with details. Name, address and social security number of person holding a private mortgage you are paying. If you have an amortization schedule, please bring it. We will keep a copy in your file.

Real estate taxes paid if you mortgage is not escrowed: If you pay into an escrow account and the bank pays your real estate taxes, they are probably listed on your mortgage statement
(Form 1098). If not, you need to find the one or two tax payments which cover the calendar year 2012. You can either locate the actual receipt from the taxing authority or check through your checkbook register or cancelled checks.

Moving Expenses

If you moved more than 50 miles away from your former home and you are now working in the new location, you may be eligible to deduct the cost of moving . You need to gather the costs for
moving your family and your household items.

Investment and Bank Accounts (Please bring original forms or copies.)

Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B. If your brokerage house does not provide cost basis information (usually a separate year-end statement), you will need to gather
information on how much you paid for stocks sold. If you inherited them and you don’t have a statement of the value of the inheritance, if you can provide us with the date, we can figure it out.

Retirement plan distribution: Form 1099-R

Student loan interest paid
Early withdrawal penalties on CDs and other time deposits
Expenses (Note: You do not need to bring all of your receipts to your tax preparation appointment. You only need to bring the total amounts. Of course, if you prefer, you can bring
the receipts, and we will total them for you.)

Your medical expenses ONLY if they are likely to be more than 7.5% of your income. For most working people with decent medical insurance coverage, a medical deduction is unlikely.

However, many seniors who have significant expenses and lower income qualify for the deduction. If you fit into the former category unless you have a year with a huge dental bill or an
expensive uncovered non-cosmetic surgery (like laser eye surgery), it’s probably not worth it to gather your receipts. However if you feel you might have enough for a deduction than all doctor, dentist, hospital, lab, eyeglass, prescription drug, and medical insurance premium costs count as does the cost of getting yourself to medical facilities. You can use either the mileage method for car travel or deduct cab fares.

Gifts to charity (Note: You need a qualified written statement from charity for any single donations of $250 or more. Check the Salvation Army website for a guide for clothing and other non-cash charitable contributions. If you bring a list of the
contributed items to our office, we can compute the value or you can use the link to compute it yourself.

You may also deduct the expenses related to your volunteer work: If you use your car for volunteer work, we need mileage date. Otherwise, any supplies or telephone charges, etc can be deducted.

Unreimbursed expenses related to your job (travel expenses, uniforms or work clothing, union and professional dues, subscriptions to business publications, mobile phone charges that
relate to your work, tools or supplies your purchased for use at work, etc.)

You cannot deduct the cost of commuting to and from work, but any additional mileage is deductible. So, if, for example, you use your own car to go between two different work locations or you use your own car to run errands for your employer or visit clients, you may deduct 55.5 cents a mile for all business miles driven between Jan. 1 and Dec. 31, 2012.

Investment expenses: ( i.e., Investment publications, telephone calls to investment advisors or management fees paid to investment companies.)
Job-hunting expenses (i.e., resume printing or faxing, mileage, overnight travel)
Job-related education expenses, if education is required for your job.
Child care expenses
Adoption expenses
Alimony paid
Tax return preparation expenses and fees
*Self-Employed Business Expenses (applies to almost anyone receiving a 1099 for nonemployee
compensation.)
(Note: You do not need to bring all of your receipts to your tax preparation appointment. You only need to bring the total amounts. Of course, if you prefer, you can bring the receipts, and we will total them for you. If you have an ongoing business with expenses that cover many categories, you should probably bring your business receipts or checkbook at least a week
in advance of your tax appointment. )
Business-related expenses: Receipts, other documents & own records
Business Vehicles: Mileage log or other information regarding vehicle usage. If vehicle is leased, we need a total of lease payments made during the year plus total expenses for insurance,
gasoline and repairs. If vehicle is owned, for ease, IRS mileage method can be used to a pproximate all expenses based on mileage. You may deduct 55.5 cents a mile for all business
miles driven between Jan 1, 2012 to Dec 31, 2012.

***Rental Expenses If you rent real estatate, you will need the following information. If the rental is part of your home, you need to know the percentage of your home that is rented.
(Note: You do not need to bring all of your receipts to your tax preparation appointment. You only need to bring the total amounts. Of course, if you prefer, you can bring the receipts, and we will total them for you.)

Mortgage and real estate taxes
Repair and maintenance costs, including landscaping, snow removal.
Utility charges, if you pay them.
Insurance premiums paid.
Miscellaneous Information
(Note: You do not need to bring all of your receipts to your tax preparation appointment. You only need to bring the total amounts. Of course, if you prefer, you can bring the receipts, and we will total them for you.)

Federal, state & local estimated income tax paid for current year: Estimated tax vouchers, cancelled checks & other payment records.

IRA, Keogh and other retirement plan contributions.
Records to document casualty or theft losses
Records for any other expenditures that may be deductible
Records for any other revenue or sales of property that may be taxable or reportable

**Gambling Losses
You may deduct the amount of gambling losses up to the amount of winnings. If you have winnings, you need to be able substantiate your losses. Casinos will often supply statements if
you use their courtesy cards when you play.

01/12/2013

Medical Expenses

Generally, you can only deduct the excess over
7.5% of Adjusted Gross Income, and then only if you
can itemize on Schedule A.
This means that if you make $100,000, you can only
deduct the amount of medical expenses you spent
over $7,500.

Acupuncture
Air conditioner necessary for relief from allergies
or other respiratory problems
Alcoholism treatment
Analysis
Artificial limbs
Artificial teeth
Birth control pills prescribed by a doctor
Braille books and magazines used by a visually-
impaired person
A clarinet and lessons to treat the improper
alignment of a child’s upper and lower teeth
Contact lenses
Cosmetic surgery to improve a deformity
Dental fees and supplies
Diet, special. When prescribed by a doctor, you
can deduct the extra cost of purchasing special
food to alleviate a specific medical condition.
Doctor or physician expenses
Drug addiction treatment
Elastic hosiery to treat blood circulation problems
Exercise program if recommended by doctor to
treat a specific condition
Extra rent/utilities for a larger apartment required
in order to provide space for a nurse/attendant
Eye surgery, when it is not for cosmetic purposes
only
Guide dog
Hospital care
Household help for nursing care services only
Insurance premiums for medical care coverage
Laboratory fees
Lead-based paint removal where a child has or
had lead poisoning
Legal fees paid to authorize treatment for mental
illness
Lifetime care advance payments
Lodging expenses while away from home to
receive medical care in a hospital or medical facility
Long-term care insurance and long term care
expenses (with limitations)
Mattresses and boards bought specifically to
alleviate an arthritic condition
Medical aids. This includes wheelchairs, hearing
aids and batteries, eyeglasses, contact lenses,
crutches, braces, and guide dogs (including costs
paid for their care).
Medical conference admission costs and travel
expenses for a chronically ill person or a parent of
a chronically ill child to learn about new medical
treatments.
Medicines and prescription drugs
Nursing care.
Nursing home expenses if the there to obtain
medical care.
Oxygen and oxygen equipment.
Reclining chair bought on a doctor’s advice by a
person with a cardiac condition.
Special education tuition of mentally impaired or
physically disabled person.
Smoking cessation programs.
Swimming costs, if therapeutic and prescribed by a
physician.
Telephone cost, repair and equipment for a
hearing-impaired person.
Television equipment to display the audio part of a
TV program for hearing-impaired persons.
Transplants of an organ, but not hair transplants.
Transportation costs for obtaining medical care.
Travel expenses for parents visiting their child in a
special school for children with drug problems,
where the visits are part of the medical treatment.
Weight loss program, if it is recommended by a
doctor to treat a specific medical condition or to
cure any specific ailment or disease
Whirlpool baths prescribed by a doctor.
Wig for the mental health of a patient who lost his
or her hair due to a disease.
X-ray services.

Address

505 5th Street
Sioux City, IA
51101

Opening Hours

Monday 9am - 5pm
Tuesday 9am - 5pm
Wednesday 9am - 5pm
Thursday 9am - 5pm
Friday 9am - 5pm

Telephone

(712) 255-8519

Website

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