Posted by: Garcia & Cuadra, PA | August 16, 2016

Estate Planning Tips and Tricks

Estate Planning Tips and TricksWhen most people hear the words “estate planning” they either cringe, or try to change the subject. Sure, you may not think of it as the most thrilling of topics to discuss, but it is something that everyone needs to talk about at some point. Sooner is better than later because it is better to prepare for the worst and hope for the best than to pretend nothing bad can happen in Tampa. Read on to discover some tips and tricks for making this process easier.

1. Take Account of Your Estate

Though you may think an estate is a large, stately home in the countryside, it also means everything you own. Your assets do include any owned property, but they include other things, too, such as cars, boats, checking and savings accounts, investments, and personal possessions. Before you jump into the estate planning process, try to create a list of the financially valuable belongings in your name. Many Tampa residents forget to include things like life insurance, IRAs, and even jewelry. Consult with a professional to make sure you cover all of your bases.

2. Consider a Revocable Living Trust

A will provides instructions for dividing up your property once you are no longer alive or in a state to control it, and it does not necessarily preclude the probate process. For effective estate planning that avoids the probate process, consider a revocable living trust. This is “revocable” because you can change it during your lifetime if you change your mind about something or come into new circumstances. The document will need to be signed by the trust maker and a notary official, and you will need to name all of your property in Tampa and the trustee who will take care of it once you have passed.

3. Enlist the Help of an Estate Planning Professional

When you are not sure about what estate planning measures are best for you, calling in the assistance of a professional is the best move. The law is tricky, and you do not want to think you are set only to leave a complicated mess for your beneficiaries when the time comes. In Tampa, Garcia and Cuadra, P.A. is the independent accountant and tax advisor service you can rely on. We have helped Tampa residents with their estate planning preparation for many years and have caught many mistakes that have saved people a lot of stress. It is never too early– give us a call today to prepare at (813) 415-2431.

Posted by: Garcia & Cuadra, PA | April 25, 2016

How To Prepare with Retirement Planning

Retirement Planning SolutionsLet’s face it—retirement planning can be overwhelming and difficult. However, if it’s done properly, carefully preparing in advance will be your key to a stress-free, enjoyable retirement in Tampa—exactly what you dreamt it could and should be.

When Should I Start Retirement Planning?

No time is too early when it comes to retirement planning in Tampa. Think about it this way—the sooner you start saving, the more money you will have in the long run (provided you can afford to save, that is). For example, if you start saving:

  • $20,000/year at the age of 30, you will have $700,000 saved by age 65.
  • $20,000/year at the age of 35, you will have $600,000 saved by age 65.

Similarly, for some, beginning to save later on in life, but saving more money per year, may be a more sensible option. For example, if you start saving:

  • $25,000/year at the age of 35, you will have $750,000 saved by age 65.
  • $25,000/year at the age of 40, you will have $625,000 saved by age 65.

How Much Money Is Enough?

The amount of money you will need for retirement in Tampa is entirely unique to you, your needs, and your lifestyle. However, most advisors suggest retirees replace around 80 to 85% of their income during the first year of retirement. For the sake of responsible retirement planning, is important to keep in mind, life can be expensive—not to mention the cost of additional assistance and care, if needed.

In Tampa, and in the entire state of Florida, there is no state income tax, no inheritance tax, and a number of other tax breaks, too, like real estate exemptions. For those reasons, Florida is often considered to be one of the best states in which to retire.

What Can I Expect from Social Security Benefits?

As of January 2016, the average Social Security benefit for a retired person was $1,341/month (or $16,092/year), according to GO Banking Rates.

When it comes to retirement planning, it’s crucial to know what you can expect, and what you can plan for. Current data from the National Academy of Social Insurance reveals early Social Security benefits are available starting at age 62, although they are reduced. Furthermore, the full benefit age is 66 for individuals born between 1943 and 1964, although for those born after 1960, the full benefit age will rise to 67.

Garcia and Cuadra: Your Retirement Planning Experts

At Garcia and Cuadra, we are dedicated to helping you make the most educated decisions, when it comes to your financial planning. If you are living in the Tampa area, and need help with retirement planning—from budgeting, to looking at investment options, to establishing a timeline—give us a call today at 813-415-2431.

Posted by: Garcia & Cuadra, PA | March 11, 2016

The 3 Benefits of Tax Advisors

Tax Advisors TampaMany people are opting to hire professional tax advisors this year. Tampa residents tend feel hurried during the three and a half month period as they gather papers and file documents. Sure, there are useful software programs and numerous blog posts on the subject of return preparation, but these cannot promise to help you avoid mistakes while saving time and money.

Avoid Mistakes

Anxiety can mount at the mention of April 15th, but it doesn’t have to rule your thinking for the first quarter of the year— you have other responsibilities and values that deserve your energy. By hiring a tax advisor, you can help reduce your stress and avoid mistakes. They know what to look for, so oversights aren’t even an option. Too often, an individual in Tampa will file their paperwork after failing to note additional income or forget to sign the document. Mistakes like these can lead to headaches for you and unwanted attention from the IRS. Penalties are given for:

  • Filing after the deadline
  • Mathematical errors
  • Inapplicable charitable donations
  • Self-employment oversights

A single snafu can result in an audit, so triple-check your taxable contributions and consider hiring a pro to assist you with this tedious process.

Save Time and Money

Life is full in Tampa, and your time is valuable. Do you want to spend it filing federal and state documentation? While a handful of people may enjoy the challenge, most view it as an obligation or a necessary evil. With professional return preparation, you gain hours, and you increase the opportunity to discover potential deductions and credits. Detailed situations, like changes in marital status or trust fund transactions, are unfamiliar to most. Without the expertise of a seasoned tax advisor, you could miss out on potential profit and savings.

Garcia and Cuadra: Tax Advisors

With the help of trusted tax advisors, you minimize the opportunity for mistakes and anxiety. The team at Garcia and Cuadra will help you understand the filing process while taking on the full brunt of the responsibility. You can rest easy knowing your paperwork will be filed correctly in a timely fashion. In addition to return preparation, we offer services to individuals and commercial businesses in Tampa, like accounting and bookkeeping. Contact us by calling 813-415-2431 to learn more!

Posted by: Garcia & Cuadra, PA | February 19, 2016

Classification of Workers: Employee Vs. Independent Contractor (Part 2 of 2)

Employee Vs. Independent ContractorThere are avenues of relief when an employer has misclassified workers when doing the hiring and staffing in their business.   Section 530 of the Revenue Act of 1978 provides safe harbors under which a business can take refuge when there is no statutory designation for the worker.  The requirements are:

  1. The employer must not have treated the worker, or any other individual holding a substantially similar position, as an employee for any period, and
  2. The employer filed all required federal tax returns, including information returns (Forms 1099MISC) for the worker for all periods after 1978 on a basis consistent with treating the worker as an independent contractor.

The safe harbor will not apply if the business or its predecessor has treated any other worker holding a substantial similar position as an employee for employment tax purposes for any period beginning after 1997.   A business must also have a reasonable basis for treating an individual as an independent contractor.  Under Section 530, “reasonable basis” exists if any one of the following items exists when characterizing a worker:

  1. Judicial precedent, published IRS rulings, technical advice with respect to the taxpayer, or a private IRS letter ruling to the taxpayer (the judicial precedent safe harbor).
  2. Long-standing, recognized practice of a significant segment of the industry in which the worker was engaged (industry practices safe harbor), or
  3. A past IRS audit of the business in which there was no assessment attributable to the treatment (for employment tax purposes) of the individual holding positions substantially similar to the position held by this individual (the prior audit safe harbor).

Another avenue of relief from paying back payroll taxes and penalties to the taxing authorities is available under the Voluntary Classification Settlement Program.  This is an optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future tax periods for employment tax purposes with partial relief from federal employment taxes for those who agree to prospectively treat their workers (or a class or group of workers) as employees.  To participate in this new voluntary program, the taxpayer must meet certain eligibility requirement, apply to participate by filing IRS Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.  The eligibility requirements include:

  1. The taxpayer must have consistently treated the workers as independent contractors.
  2. The taxpayer must have filed all required Form 1099MISC for the workers to be reclassified under the VSCP for the previous three years to participate.
  3. The taxpayer cannot currently be under employment tax audit by the IRS, the Department of Labor, or by a state government agency.
  4. The taxpayer participating in the VSCP must agree to prospectively treat the class of workers as employees for future periods.

In exchange for this relief (once all requirements are met to qualify under this program), the taxpayer will:

  • Pay only 10% of the employment tax liability that would have been due on compensation paid for the workers for the most recent tax years had the employer been audited on the subject by the IRS.
  • Not be liable for any interest and penalties on the amount; and
  • Not be subject to an employment tax audit with respect to the worker classification of the workers being reclassified under the VCSP for prior years.
Posted by: Garcia & Cuadra, PA | January 13, 2016

Health Savings Account

Posted by: Garcia & Cuadra, PA | January 11, 2016

Business & Personal Use of Automobiles

Tax Planning AutomobilesTaxpayers who use a passenger automobile, including “luxury” automobiles, in the pursuit of business or in an income-producing activity can deduct certain costs related to its acquisition and maintenance. The deductible items include gas, oil, tolls, parking fees, insurance, and depreciation. All of the expenses must be allocated between business use and nondeductible personal use. Use of an automobile for commuting to and from work is a personal, nondeductible use. You can deduct actual expenses incurred as a result of the business use or you can use the standard mileage rate.

Instead of figuring actual expenses you can use the standard mileage rate for travel. The standard mileage rate in 2015 for the use of a car (also vans, pickups or panel trucks) was 57.5 cents per mile. The standard mileage deduction is in lieu of deducting operating and fixed costs of the automobile. Depreciation is a component of the standard mileage rate; therefore, the basis in the automobile must be reduced by the depreciation allowed. However, if you use the standard mileage deduction, you can still deduct parking fees, tolls, and interest relating to the automobile’s purchase, and state and local taxes. Up to four cars used simultaneously can be computed using the standard mileage rate beginning after 2003.

If you want to use the standard mileage rate for a car in any year, you must choose to use it in the first year you place the car in service in your business. After the first year you can optimize to deducting actual expenses.
If you choose to deduct actual expenses, you can deduct such items as oil, gas, insurance, depreciation, etc. However, there are special rules that apply if you use your car 50% or less in your business. Generally, you must use a car more than 50% for business to qualify for the §179 deduction (election to treat a portion of the cost of the car as an expense – see below) and the depreciation deduction. Using your car as an employee is treated as business use only if that use is for the convenience of your employer and required as a condition of your employment.

Generally, the cost of an automobile is a capital expenditure, however, you can elect to treat a portion of the cost, subject to yearly limits, as an expense in the year the automobile is placed in service. To make this election, you must use the automobile more than 50% for business purposes. The yearly limit allowed is determined by the year the automobile is placed in service and the percentage of business use. For example, if an automobile is placed in service in 2015, the expense deduction and the depreciation deduction cannot be more than $3,160 for the first year (the placed-in-service year); $5,100 for the second year; $3,050 for the third year, or $1,875 for any year thereafter.  A deduction for additional bonus depreciation for the first year of use may apply.  This limit is reduced if the taxpayer uses the automobile more than 50% but less than 100%, for business use.  Vans and trucks placed in service after 2014 are subject to a higher limitation than passenger automobiles.  $3,460 for first year; $5,600 for second year; $3,350 for third year; and $1,975 for each succeeding year.

You may also compute the automobile expense deduction based on a mileage allowance. A mileage allowance is an amount paid by an employer for expenses he reasonably anticipates the employee will incur, calculated not to exceed the amount of the expenses, and paid at the applicable standard mileage rate, a flat rate, or in accordance with any IRS-specified rate or schedule. The allowance may be paid periodically at a fixed rate, at a cents-per-mile rate, at a variable rate based on a stated schedule, at a rate that combines any of these rates, or on any other basis that is consistently applied and is in accordance with reasonable business practice.

Employee Vs. Independent ContractorThis is a question many employers ask themselves when doing the hiring and staffing in their business.  The answer to this question depends on the facts and circumstances on each case and varies among different employers, even within the same industry.

So-called ’employee misclassification’ has become a hot topic recently as the economy has changed and hundreds of growing businesses turn away from traditional hiring practices and rely increasingly on contract workers. Many companies in the construction, technology and other industries that depend on contract workers have said they classify workers as independent contractors because they need the workers’ specialized skills on demand instead of full time.  However, businesses are supposed to factor in several so-called “economic realities” when determining how to classify a worker.

These factors are provided (and similarly enforced) by the IRS and the Florida Department of Revenue, Reemployment Tax Division.  The IRS guidelines to determine whether the individuals providing services are employees or independent contractors are contained in the 20 Common Law Factors provided in Revenue Ruling 87-41.  These twenty factors are designed only as guides in making the determination as there are certain available exceptions, as well as preventive measures to avoid the expensive consequences in being assessed back payroll and unemployment taxes and penalties from a workers’ payroll audits in this regard.  The most salient among all these factors to evaluate in making the proper worker classification are:

  • Instructions. A worker who is required to comply with other persons’ instructions about when and how he or she is to perform the work is ordinarily an employee.
  • Payment by Hour, Week, Month. Payment by the hour, week or month generally points to an employer-employee relationship.  Payment made by the job or on straight commission generally indicates that the worker is an independent contractor.
  • Set Hours of Work. The establishment of set hours of work by the person for whom the services are performed is a factor indicating control which tends to show the existence of an employer-employee relationship.
  • Doing Work on Employer’s Premises. If the work is performed on the premises of the person or company for whom the services are performed, that factor suggests control over the worker.  Work done off the premises of the person or company receiving the services, such as the office of the worker, indicates some freedom from control.  Many times control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route, to canvass a territory within a certain time, or to work at specific places as required.
  • Furnishing of Tools and Materials. The fact that the person for whom the services are performed furnishes significant tools, materials and other equipment tends to show the existence of an employer-employee relationship.
  • Making Services Available to the General Public. The fact that a worker makes his or her services available to the general public on a regular and consistent basis indicates an independent contractor relationship.
  • Right to Discharge. The right to discharge a worker is a factor indicating that the worker is an employee, and the person possessing the right is an employer.  An independent contractor cannot be fired so long as the independent contractor produces a result that meets the contract specifications.
  • Right to Terminate. If the worker has the right to end his or her relationship with the person for whom the services are performed at any time he or she wishes without incurring liability, that factor indicates an employer-employee relationship.
Posted by: Garcia & Cuadra, PA | December 9, 2015

In Search of a Tax Professional

Tax Professional | Garcia and CuadraDecember means excitement for holidays such as Christmas, Hanukkah and New Year’s. But when January comes, it means tax season has arrived. It’s a period where taxpayers are gathering their W-2 forms, 1099s and other documents. For many Tampa residents, the filing process can be a daunting task and confusing with phrases such as itemized deductions along with endless forms or codes. For that, people search for a tax advisor, a financial expert who is specially trained in tax laws, helping their client to minimize taxation, write a proper form of income, and explain details of complicated laws in difficult financial situations.

Choosing a Tax Advisor

While it is important to find an expert in Tampa who can save their clients’ money and avoid potential trouble with the IRS, it is also important to search for one who can provide useful information for your business. Shopping for a tax advisor can be confusing. Here are some tips to get you started:

  • Know what you need. Do you need help with planning? Do you need someone to prepare your taxes or file them? Depending on the situation, a tax advisor can aid you on the process and show you legal ways to minimize the amount you have to pay.
  • Research. When it comes to searching for a professional, research is important. There are various databases such as the National Association of Enrolled Agents and the Accreditation Council for Accountancy and Taxation or Florida’s CPA society that have a list of qualified agents in Tampa.
  • Credentials. While searching, check the consultant’s credentials. Recently, the IRS passed a number of requirements that advisors must adhere to protect the taxpayer from fraud and poor preparation; they have to pass a rigorous test and meet continuing education requirements.
  • Get opinions. Ask your family, friends, your lawyer, or your neighbors in Tampa who they use to prepare their taxes. Word of mouth is one of the best ways to find a seasoned tax advisor and who to avoid as well. While it is the best way, don’t take their opinion as salt. Always do research.
  • Pick someone who will stick around. The majority of tax preparation companies are gone most of the year. According to Forbes Magazine, it is recommended that you find a company that is more available and won’t give you the run-around if you have a question. No matter what time of year it is, you should have support for your finances.

Searching for a tax advisor can be daunting and exhausting task, but with research and word of mouth of other professionals, that task can be simplified. Contact the professionals at Garcia and Cuadra if you need assistance in Tampa with your finance preparation. Call (813) 415-2431; they are available to help you all year long.


Posted by: Garcia & Cuadra, PA | December 1, 2015

3 Simple Steps to Help You Prepare for Tax Season

Prepare for Tax SeasonFiling taxes is a fact of life, and it’s important to be prepared for the approaching season. Proper organization and guidance from a tax advisor will put you in a position to file your return in Tampa as soon as possible.

Start a File Folder

Procrastination seems to be the theme of most people’s yearly filing party. But the earlier you file, the sooner you get your refund, which is a reward worth celebrating! You don’t have to wait for W-2’s to trickle in through the mail. Jumpstart the process by:

  • Collecting social security numbers; include spouse or dependents, if applicable.
  • Making a list of income sources within the household.
  • Obtaining statements from account holders.
  • Identifying which forms you will need.
  • Documenting donation records.

If self-employed, you have to be even more organized than the average taxpayer. The last thing you would want is to file papers incorrectly, so consider hiring a tax advisor. You already bear the brunt of running a business in Tampa, so let the pros handle the particulars.

Think About Your Payment Plan

Nothing is certain but death and taxes, but many overlook the predictable payment that is due each spring in Tampa. Save yourself the panic and budget so you can pay dues in full. This can be done directly from your bank account in one easy deposit online. You can also send a check or money order, a same-day wire, or make an Electronic Funds Withdrawal. If you are unable to make payment on time, there are some options:

  • Monthly installment plan
  • Offer in compromise
  • Temporary Collection delay

If you qualify for an offer in compromise, you may be able to settle your debt for less than the full amount you owe. You may also be approved to request a temporary collection delay collection until your financial situation improves. It is wise to involve a tax advisor in Tampa because waiting will increase your debt. Those who choose to defer will be charged for penalties and interest until the full amount is paid.

Meet with a Tax Advisor

Filing papers and navigating financial statements can be confusing, so consult a tax advisor. They are essential to understanding any agreement you enter into. You may be reluctant because it seems like an added expense, but you don’t want your situation to become any worse. Inability to pay is a source of anxiety, so avoid added stress by consulting an expert.

Garcia & Cuadra P.A.

At Garcia & Cuadra P.A. in Tampa, our independent accountants and tax advisors work to get you every possible benefit so that you owe as little as possible. We also offer assistance with estate or retirement planning, business startups, and bookkeeping, among other services. Contact us at 813-415-2431 to learn how our experts can save you money, stress, and time!

Posted by: Garcia & Cuadra, PA | October 28, 2015

What You Need to Know About Tax Penalty Abatement

Tax Penalty AbatementMany people in Tampa receive penalties from the IRS; however few file for tax penalty abatement, since many are unaware that they qualify to receive a reduction or dismissal of the fines.  Talking with a personal tax adviser can help you figure out if you qualify for abatement and what steps to take to strengthen your case to the IRS.

Causes for Abatement

There are a variety of ways to qualify in the Tampa area:

  1. First-Time Tax Penalty Abatement Rule – You may qualify for this rule if you are filing your first tax return or have never had an IRS penalty previously. The First-Time Abate reduction is an Administrative Waiver and must be requested in writing.
  2. Reasonable cause – This has the largest variety of reasons to reduce a penalty, including:
    • Death, serious illness, or unavoidable absence
    • Undue hardship
    • Doing everything you could to meet reasonable business obligations, yet were still unable to meet legal standards
    • Fire, casualty, natural disaster, or being in an official disaster area in Tampa
    • Not being able to obtain financial records
    • Written or oral advice from the IRS or a tax professional
    • Claiming that you had made a filing mistake
    • Being ignorant of the law
    • Forgetfulness or taxpayer oversight
  3. Correction of IRS error – Even the government makes mistakes. If you can prove that they made an error, you can be eligible for tax penalty abatement for your statement.
  4. Statutory exceptions – You may be able to claim abatement through legislation that the IRS previously passed.
  5. Administrative waivers – This is provided by the IRS if they have a delay in printing or mailing forms, publishing their guideline, and other such conditions.

The Garcia and Cuadra Advantage

If you have any questions about qualifying for tax penalty abatement in Tampa, contact Garcia and Cuadra today.  They have over 35 years of tax service experience and can guide you down the proper path when it comes to dealing with the IRS.  To start working with them, they can be reached at 813-415-2431.  They’ll do everything they can to keep the money in your wallet and bank accounts.  Make Garcia and Cuadra a part of your financial team today.

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