Assurance Accounting & Tax Services

09/23/2024

I have had several clients, especially those on fixed incomes, question their property tax bills this year. I just had one client who's tax increase was almost $1,200. There were several factors that caused this, and I am hoping to give others some perspective on why these increases are so high. These homeowners had no increase in their property valuation, it has remained at $497,000. The tax bill for 2022-2023 was $6,914 with the mil rate for Kennebunk at $14.60 per thousand of value and homestead exemption of $23,500 which decreased their taxable valuation to $473,500.

For the 2023-2024 property tax year, the mil rate in Kennebunk jumped to $16.05 and the homestead exemption dropped to $19,800 meaning the taxable valuation on a property with no value increase was $3,700 higher, $477,200. The property tax for 2023-2024 would be $7,659.06 (a $745 increase), however these homeowners did not see this increase because of the Property Tax Stabilization program through the state of Maine that kept property tax amounts frozen at the 2022-2023 values. Their bill for 2023-2024 was $6,914. This program has been discontinued and now seniors are facing pretty significant hits this year.

For these homeowners in Kennebunk, the mil rate went up an additional $.90 per thousand for the 2024-2025 tax year to a total of $16.95 and the homestead exemption decreased again to $18,500. Though their "value" remained the same, their taxable value increased to $478,500. Their taxes this year are $8,111, an increase of $1,197 over what they paid last year. I feel like this is going to create some confusion and anxiety in much of the older community and I am hoping that this explanation may help people understand some of the significant increases they are seeing, even though it does not make paying these increases any easier.

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02/14/2024

This is an important reminder to all businesses that took advantage of the Employee Retention Credit (ERC). The IRS will be reviewing all claims and it is likely that many businesses will find themselves in the position of facing penalties, interest and possible fines if they do not voluntarily report and return funds that were received but they were not qualified to receive. Please look very carefully at the red flags below. I think most companies that promoted the credit to businesses made the mistake of filing for all quarters available, and the most common thing I have heard from people arguing with me about being eligible is that these companies claim that supply chain issues alone make them qualified for all quarters. If you recognize that any of these red flags apply to you, you should review the details of your refunds to determine what your liability is.

The Voluntary program currently available allows you to pay back 80% of the refund you received, with the IRS understanding many businesses paid 20% or more to many of the companies that were promoting this credit. The program also will not charge businesses penalties and interest if these amounts are repaid. The deadline for this Voluntary Program is March 22, 2024.

The other reminder is that if you did receive this credit, you need to make sure you have amended your returns for 2020 and 2021 for any quarters you claimed the credit for, as the wages you paid need to be reduced by the amount of the credit which creates taxable income in the amount of this credit. This will generate additional penalties and interest as well if you are just making these adjustments. If you have not amended those returns and choose to voluntarily return the amounts you received, you will not have the amend those returns.

The IRS wants to help businesses know when they don't qualify for an Employee Retention Credit.

02/03/2023

Love my clients! 😍 Beautiful twice per month fresh flower deliveries ordered for me by a client from another client Stem & Vine who does an amazing job! 💐

11/24/2022

I hope all of our clients have a happy & blessed Thanksgiving. We are thankful for all of our wonderful clients! 🍁🦃

01/26/2022

Lengthy post alert!!!!

Tax Season is underway!! I want to begin by saying I am looking forward to working with all of my clients this tax season to get your returns processed and submitted timely and accurately. Based on the craziness of the COVID activity, I am actively trying to work remotely on a regular basis in order to preserve my ability to meet everyone's tax preparation needs. I am limiting most in person interaction, as it only takes one person to potentially eliminate my ability to provide timely services for the rest of my clients. Any in person interactions will be masked interactions at least for now. I am requesting clients either upload their information to their secure client portal or drop off at the office with Michelle or in the lockbox outside of our door. If you would like to meet, I am happy to schedule either a phone call or a Zoom call.

In order to provide the level of service we pride ourselves on, we need your help by providing us with all of the information we need to prepare your returns. Probably the 2 most important pieces of information we need this year that must be correct are the amount of the third stimulus check that you received around March of 2021 and the amount of Advanced Child Tax Credit you recieved. I can say that the stimulus issue was probably the one item that caused most of the delays and backlog last year because many people did not correctly report (or forgot) the stimulus amount they received. Any returns with questionable information that does not match the IRS records may be delayed indefinitely.

The Recovery Rebate Credit (Stimulus checks) were issued for $1,400 per taxpayer ($2,800 for joint filers) . . . plus $1,400 for each claimed dependent. The IRS has indicated that they will be sending letters to taxpayers who received payments, however with their current backlogs from last year, I am not sure how soon these may be sent out. I am highly recommending that my clients consider creating an online account with the IRS to be able to view details of activity in your tax account. This also allows you to view stimulus payments and Child Tax Credit activity, but also allows you to monitor to make sure there was not unauthorized activity from someone attempting to steal your identity by filing a false return. The initial process to setup this account may be lengthy but worth the effort.

Advanced Child Tax Credit has complicated this credit in 2021. The credit increased for some families, dependent upon income levels, and the increased amount depends on the age of the children. To complicate this even further, in July the government began distributing advance payments of these credits. This year, in addition to calculating the amount of the credit available based on the ages of the children and family income, we will now need to reconcile those amounts against the advanced payments already received. The IRS will be issuing Letter 6419 to parents who the agency says received these payments in 2021.

Please be aware, if your previous returns produced refunds that were primarily due to the child tax credit you received, your refund may be significantly reduced this year or you may potentially have an amount due. An additional complication may come from a family who has higher income this year that would decrease the Child Tax Credit they would be eligible for, but the advance payments were at a higher rate, that family would have to pay back that difference. For divorced individuals who alternate years to claim children, this could become even more complicated if the parent who claimed the children last year did not opt out of Advanced Child Tax Credit, and the other parent claims the children in 2021.

I will update any additional information as it comes in. Thank you for your business and support through these crazy times we are living in.

Have a great day! 😊

06/17/2021

So let's talk Advance Child Tax Credits and the portal being setup by the IRS. Beginning in mid-July, the IRS will be issuing advance child tax credits in the amount of $300/month for each child under the age of 6 and $250/month for each child between the ages of 6-17. These are considered advances against the increased child tax credits on the 2021 tax returns of $3,600 for under 6 years of age and $3,000 for 6-17 year olds. Basically the advances would provide half of the credit up front. This sounds great, but for those who may have been close to the thresholds in 2020 and may be over the threshold in 2021, it could mean that you will have to repay some of this money at tax time.

The thresholds for the increased credit are $75,000 for individual taxpayers, $112,500 for head of household and $150,000 for married filing jointly. If you income is above these limits, but less than $200,000 for individuals and less than $400,000 for married filing jointly, you will still be able to claim the $2,000 child tax credit on your return.

The IRS has created a portal for people to login and decline the advance payments if they so choose. Why would someone decline the advance payments? If you know that your income may be close to the thresholds at year end, it may make sense to decline and if you are eligible for the larger amount you will receive it at tax time. If you are self-employed or even an employee, but know that you do not have sufficient withholding and the child tax credits help to minimize your tax due or allow you to get a refund at tax time, the advance payments could create a tax liability for you at tax time, so you may want to consider declining. My understanding at this time is that if your income levels from your 2020 return qualify you for the advance payment, you will receive it unless you log into the portal and decline.

Due to the fact that the advance payments are only for half of the year, there may be less impact on amounts having to be paid back, but your overall tax situation should be taken into account when decided whether to decline or not.

Please reach out to us with any questions. I hope you are all enjoying this beautiful summer.

05/17/2021

Have I mentioned that I love my clients!! As the initial deadline comes to a close, I need to thank my clients for their patience through the craziness, although I’m pretty sure the craziness is not quite done with the IRS holding 29 million refunds due to manual processing. I’m hoping that backlog clears quickly so people can get their refunds. I appreciate the trust you place in us to handle your tax and other financial needs.
Thank you to my staff for their help during this tax season as well. There are days where it takes a village & my tribe is there (Michelle Nielsen & Carolann McEwen).
I also need to thank my family for their support, these months are not easy & they understand & accept that there are not a lot of normal days. John is always helping to pick up the slack, Sam understands that I can’t just drop everything to do things for her & Dad (Bernard Beaudoin) does a great job entertaining my fur baby although I’m pretty sure it’s mutual entertainment. Thanks again! Enjoy this beautiful week! I will be out of the office for a couple of days to destress and start working on my next project! 😊❤️☀️

03/11/2021

My clients Rock!!! What a beautiful surprise! 😍 Thank you Marysue, Sue & Brianne. It is my pleasure to help you with your business. The most important part of my job is making a difference for people and that is by far the most rewarding part.

For many a tax return is just another annual job, but this work along with ongoing business consulting is really about so much more, it’s about making connections & doing everything you can to have a positive impact on your clients. The ending result on a particular tax return may not always be what they are hoping for but the relationship allows us to create a plan for a better future outcome. I always hope to leave my clients in a better position and more informed about their circumstances than when they first walk through the door! Enjoy this beautiful Thursday!

This gorgeous arrangement was from Stem & Vine, another great client!

03/08/2021

Good Morning! Patience and Flexibility are very important virtues right now! I wanted to take a moment today to explain the status of the world I live in at this moment. As we struggle to meet the deadlines laid out for us to prepare taxes, working 12-14 hour days, 7 days a week to get everyone's returns done in a reasonable turn around time, we are being faced with additional challenges this year that require both patience and flexibility on our part and on the part of our clients.

Unfortunately, these struggles may be made drastically worse this week when it is likely that the President signs the COVID relief bill. Although $1,400 stimulus checks will be a great thing for so many, the bill also contains a provision for $10,200 of unemployment payments to be tax free. Again, great, HOWEVER, we are already half way through tax season and if this adjustment happens, I have approximately 25 returns that I have done will have to be amended. This comes of the heels of a delayed beginning to tax season that caused us to have to begin returns and hold until software was finalized, then review and complete once all changes were approved.

The status of the State of Maine just adds more uncertainty, as a decision has not been finalized on the taxability of PPP Loan forgiveness for businesses and now the proposal at the state level is to potentially exempt all unemployment from income tax. The being different from the federal proposal creates additional adjustments that will have to done to prepare the state return. All of these changes will require software changes that will delay our ability to file returns and as of now, there is no movement on behalf of either level of government to extend the tax filing deadline. As for the returns that may need to be amended, those are not able to be filed yet as the government's software is not accepting those at this time either.

Patience and Flexibility! That is what I ask of my clients. We are currently working through mostly corporate returns this week as that deadline is fast approaching March 15, although many will be on an automatic extension that will allow us to complete them in line with the personal deadline. Then we can put the focus back on personal returns. We will get it all done, we just have to keep adjusting to the rules changing while providing you with the best service we can. Happy Monday! 😊❤

03/06/2021

Have I mentioned. . . I love my clients!!! 🤩 Thank you Judy Libby! ❤️

02/20/2021

I love my clients! This guy made my day yesterday, who am I kidding, he made my week! Back story, this guy is a self employed, hard working guy, who several years ago started making me laugh by coming in for his appointment carrying a briefcase. When I would ask him what he had for info for that year, he would open the briefcase & pull out a single sheet of paper that he had documented everything on. This cracked me up!!! Every year since he arrives with “the briefcase” and single sheet of paper. Of course over the years a few more papers have been added but he goes into the briefcase for all of the documents I request. Well yesterday, he upped his game!!! Big time!!!! Arriving in a leisure suit, and white dress shoes, with the briefcase of course! 😂. I laughed about this all day!! Thanks for bringing a smile & a laugh to long stressful days! ❤️😊

01/27/2021

Excited to share the completed expansion of our offices! Huge shout out to Coastal Custom Builders LLC for a great job on creating a doorway & hanging this beautiful barn door! So happy with the end result! If only tax season could be this easy! 😬

Because if so many changes & some still unknown tax consequences for some things, there are a few things I am requestyof my clients this year. If at all possible, the more we can do through the portal file, the better! If you do not have a portal file and would like to communicate or receive your tax returns securely this way, please e-mail Michelle Nielsen at [email protected].

Anyone who has a portal file will have an organizer uploaded to assist with gathering documents for preparing returns this year. The organizer includes the engagement letter which is normally signed when clients pick up their returns but really should be done in advance of preparation. The organizer also includes questions that directly pertain to changes that occurred in 2020.

I am requesting that people try to bring in information once they have received everything. It often creates unnecessary duplication of work having to step back from a return and work on something else until more information is provided. There are 2 critical items that people need to provide. I need the amount of both stimulus checks you received. This is needed for calculating whether any additional stimulus may be available for you.

The second item is for self-employed individuals or businesses who received PPP Loans, or EIDL loans/grants. I will need the EIDL amounts & amount of PPP funds received & whether forgiven in 2020 or 2021! This information is critical to complete the returns. If your loan was forgiven in 2020, it us considered non taxable income for Federal purposes, HOWEVER the State of Maine is still following the tax code guidelines from 2019 & the governor is proposing that this stand & not adjust to conform with federal tax code! Based on this uncertainty, we are put in a position of not really being able to complete many returns that have had their PPP forgiven in 2020 because there currently no form or guidance to add that back to the Maine return. This may impact S Corporation returns as well, because the add back to Maine would need to be reported on a shareholder basis on K-1 forms. At this point, we are not able to file personal returns until February 12. If Maine legislature does not vote on this item until mid February it may delay our ability to file these returns until even later! In the meantime, our deadline for filing Corporate returns is March 15. This creates a potentially huge problem. I’m not sure how this will be resolved, but will keep you updated!

Thank you all for your support and patience as we navigate the craziness!