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St. Louis CPA warns of fraud, identifies big changes in tax code

St. Louis certified public accountant Lance Weiss talks to 'St. Louis on the Air' host Don Marsh on Tuesday at St. Louis Public Radio in St. Louis.
Alex Heuer | St. Louis Public Radio
St. Louis certified public accountant Lance Weiss talks to 'St. Louis on the Air' host Don Marsh on Tuesday at St. Louis Public Radio in St. Louis.

State and federal income taxes are due April 15, making this the time to be asking those pressing tax questions.

Lance Weiss, a certified public accountant with SFW Partners LLC in St. Louis, said there have been some important changes this year, but there also has been a great deal of identity theft and fraud. The IRS has put some safeguards in place to try to catch erroneous returns, including limiting the number of returns that can be deposited in a single bank account, Weiss told “St. Louis on the Air” host Don Marsh on Tuesday.

But it’s not necessarily safer to file online or offline via paper, he said.  

“I think when you file electronically, the fraud is discovered faster, so at that point it’s more immediate and you know,” he said.

One of the big hints that something is amiss: An error code that says a return already has been filed with a taxpayer’s Social Security number. A decade ago, tax preparers and taxpayers would assume someone had transposed a number. Now, Weiss said, assume someone has fraudulently filed a claim.

There also has been an increase in tax-related scams. In one of the most common, someone will call saying he or she is from the IRS and will demand that the taxpayer provide a credit card number to pay off taxes.

“Those are 100 percent scams,” Weiss said. “The IRS will not call you demanding money.”

There also are a couple of big changes for taxpayers this year, including a penalty under the Affordable Care Act and new definitions for business owners on what can be capitalized when.

For most, dealing with the Affordable Care Act’s health insurance mandate will be simple. Taxpayers who signed up for coverage through a health insurance exchange should have received Form 1095-A that shows the amount of income-based advance tax credits.

“For those individuals who received a credit from the exchange, there’s a reconciliation of the credit that was received. Do you owe some of that back? Or are you due an additional credit?” Weiss said.

Those who did not have health insurance face a penalty. For 2014, the penalty is either 1 percent of the taxpayer’s annual household income or $95 per adult and $47.50 per child — which ever amount is higher. The penalty increases in 2015.

There’s better news for some business owners.

“I really think the biggest thing that’s affected business owners, and particularly those that have real estate or other depreciable property, is the IRS finally came out with about 400 pages of regulations and definitions of when do I have to capitalize that new roof I just put on, or when can I call it a roof expense,” Weiss said. “Even better yet, they’ve said if you thought it was a roof to be capitalized three years ago but it turns out under this new definition that it’s an expense, we’ll let you take that deduction on this year’s tax return. So it was an amazingly taxpayer-friendly, business-friendly move.”

Weiss also spent time addressing specific questions about health expenses, W2s, use taxes, 401(k) and Roth IRA contributions, charitable donations and earned income tax credits.

“St. Louis on the Air” discusses issues and concerns facing the St. Louis area. The show is produced by Mary Edwards and Alex Heuer and hosted by veteran journalist Don Marsh. Follow us on Twitter: @STLonAir.

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