Denver Tax Services | Bookkeeping | Net Prophet (720) 409-8227

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Includes: Access to your Prophet Platform, and monthly accounting, reconciliation, and financial statement preparation for up to 2 bank/credit card/Paypal accounts for a cumulative total of 50 transactions. Pricing does not include setup fees.

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Includes: Access to your real-time financials through your Prophet Platform, and monthly accounting, reconciliation, and financial statement preparation for up to 5 bank/credit card/Paypal accounts for a cumulative total of 125 transactions. Pricing does not include setup fees.

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TESTIMONIALS

What the New GOP Tax Bill Could Mean for You

With so many changes to the new tax laws, not only in Colorado, but all across the nation, while the new laws do not apply to your 2017 taxes, there is no better time to obtain accounting services, so you will be prepared for next year’s filing. This way you can stay one step ahead of the changes and possibly avoid paying taxes when next year’s season arrives. The new laws could also affect how you spend your money this year, particularly when it comes to such factors as itemized vs. standard deductions.

Since the new tax law is over 500 pages long, here are a few of the key changes to know about:

Standard deduction – for your 2018 taxes, the standard deduction has nearly doubled, from $6350 to $12,000 for a single person, and, from $1270 to $24,000 for a married couple filing jointly, as well as from $9350 to $18,000 for a head of household. This might be great news for those desiring to take advantage of the standard deduction, but could be bad news for those hoping to itemize their deductions, since the amount to exceed has been increased.  

Itemized deductions – For those who have obtained “acquisition indebtedness,” otherwise known as the amount owed on the purchase of an existing home or on any existing property improvements or new construction, only the interest on the first $750,000 ($375,000 if married filing separately) is deductible and the purchase must be on or after December 16, 2017. For those who acquired a loan on or before December 15, 2017, the one-million-dollar limit ($500,000 if married filing separately) applies. State/local/foreign property tax and income tax deductions remain the same with the total deduction limited to $10,000 ($5,000 if married filing separately) per year.

Medical expenses – 7.5% rather than the former 10% of your adjusted gross income is now the threshold for yearly deductions.

Personal casualty losses – deductions for those who have suffered losses as the result of a fire, storm or theft are no longer available, unless the disaster is the result of a federally declared disaster.

Personal exemptions – currently an individual exemption is $4050, while the exemption for a couple is $8100. However, with the new tax law, this exemption has been eliminated.

Child tax credit – the new tax law raises the child tax credit from the current $1,000 to $2,000, while the income phaseout has been raised from $75,000 for singles to $300,000, and from $110,000 for joint filers to $400,000.

Property tax deduction: The property tax deduction is now capped at $10,000.

Income tax:

For household incomes of more than $1 million dollars, the tax is 39.6%.

For household incomes of from $260 thousand to $1 million, the tax is 35%.

For household incomes of from $90,000 to $260,000, the tax 25%.

For household incomes of from $24,000 to $90,000, the tax is 12%.

No tax will be charge on household incomes of less than $24,000.

In the Colorado area, call Net Prophet today at (303) 396-5707. Our accounting services and experts continually work hard to stay current on every change in the tax laws. Let our knowledge and experience work in your behalf to get you all the tax breaks you deserve.

5 Things to Know Before Filing Tax-Exempt Status for Your Nonprofit

In Colorado, as a popular and reliable bookkeeping and accounting company, Net Prophet is often asked if there is a difference between a nonprofit organization and a tax-exempt organization. And we always answer, “There definitely is.” Yes, these two very different classifications do not equal the same entity, namely:

Nonprofit status means the organization is state-approved as an entity that exists with a specific purpose, cause or mission in mind as opposed to a for-profit company that exists mainly to make money or a profit.  

Tax-exempt: is a federal income tax classification, under the Internal Revenue Code, that allows a non-profit to claim exemption from paying corporate income taxes on any profits they raise if they are deemed appropriate to receive tax-exempt status.

The numbers and letters, “501(c)3” or “501(c)s,” are what the Internal Revenue Service uses to reference the code explaining the tax-exempt status.

In order for a nonprofit organization to receive their tax-exempt status, they must abide by certain requirements and apply with both the IRS and the state in which the nonprofit exists.

When it comes to filing for tax-exempt status, there are five things you should know:

  1. Creating a nonprofit organization and applying for a tax-exempt status can be a complex process that can take a lot of time. The IRS claims the average person spends 105 hours to complete the paperwork for the 1023 form alone, and then other federal forms and state filings must be completed.
  2. After the forms are filed, if the government finds any mistakes, delays can last up to a year, or more, which is why it is so important to use an account, like Net Prophet, that knows about proper bookkeeping practices for nonprofits. We have submitted countless tax-exempt forms and are familiar with the process.
  3. Typically, tax-exempt applications are processed as quickly as possible, unless an error is found. To make sure you have filed correctly, completely answer all the questions asked. The checklists found on the last pages of Form 1023 or Form 1024 will help you streamline the process. Even better and safer is to hire a professional. Sometimes the IRS will work with an organization to speed up the process, however, there must a good reason for doing so, like a pending grant that is dependent on the tax-exempt status.
  4. Just because an organization receives tax-exempt status, does not mean the classification remains in effect indefinitely. A variety of reporting documents must be submitted annually to keep your non-profit organization compliant. Each year, hundreds of thousands of organizations have their tax-exempt status revoked for failing to file the documents necessary to maintain the tax-exempt status. Once a status is revoked, the process to reverse this can be very time-consuming and involve a lot of money.
  5. To maintain tax-exempt status, a nonprofit must comply with all the rules that apply, including:
  1. Your organization must not be involved in any political activity.
  2. Remain consistent with the purpose of the exemption.
  3. Receive a mixture of funding from individual donors, corporations, and foundations.
  4. The IRS requires that at least 33 % of its funding come from a wide range of the general public.
  5. Make sure the organization is maintaining the original purpose of serving the community, and not being used to provide financial resources to a board member.

If you are interested in claiming tax-exempt status or need helping to maintain this status, call Net Prophet today at (303) 396-5707.

Recognizing IRS Email and Phone Scams

As longtime, successful Colorado accountants, at NetProphet, we hear from our clients, all the time, disturbing stories of scammers attempting to collect money from innocent taxpayers.

It’s one thing to have to pay the Internal Revenue Service (IRS) money you owe. It’s another, criminal act, to be scammed into believing you owe money you don’t.  Yet, countless people, in and around the Colorado area, continue to pay millions of dollars annually through email and phone scams.

Scammers go to great lengths to mimic the IRS, and, too often, are successful in their victimizing efforts, using a variety of approaches, including:
the postal service
your private or business phone
your email account

The number one thing to keep in mind is, the IRS will never contact taxpayers through email, text messages or social media. The IRS will also never threaten a taxpayer with a lawsuit or possible imprisonment or any other type of criminal punishment.

One of the most common ways a scammer contacts an individual is through their phone, and they usually use the following means to intimidate the victim into immediately believing the caller is a legitimate IRS agent:
Caller alters caller I.D., so communication appears legitimate
Caller states that he, or she, works for the IRS
Caller uses familiar ways to claim money is owed, as in mentioning your name and/or other personal information
Caller attempts to intimidate, and/or make demands  
Caller states that if money is not paid, victim will be arrested, deported and/or business license will be revoked
Caller demands that money owed must be paid immediately through a pre-loaded debit card or wire transfer
Caller usually speaks with urgency, or uses an overly authoritative tone and can even be hostile and/or insulting
Some callers even use the tactic that you qualified for a refund, to get your personal information.
Voicemails are commonplace, with an urgent message to return the call

The IRS never works this way. Typically, the IRS will send a bill or other form of postal service communication to discuss your specific tax situation. In addition, keep in mind that tax scammers will also try to contact taxpayers through their email accounts, sometimes mimicking your tax software, or seeking information regarding your tax refund, or demand your PIN number, or other means to gain your personal information.
The newest scam is to approach individuals with requirements to share Life Insurance or Annuity updates. Another scam involves requests for necessary information from your current tax form.
What can you do? If you are approached through a phone call, hang up. If through an email, do not respond. If you have any questions, contact the IRS to make sure the request is legitimate. If it is not, report this to phishing@irs.gov or call (800) 366-4484.
At Net Prophet, our accountants are here to help you resolve any IRS communication concerns you might have. In the Colorado area, contact us today at netprophet.biz or at (303) 396-5707.