Guide to Safe Holiday Shopping

Whether you prefer to shop in person or online, at large stores or local sellers, we offer you tips to make the most of your holiday budget and protect yourself from scams.

Black Friday (November 24)

Black Friday marks the unofficial start of the holiday shopping season. Many large retailers advertise sales on popular gift items, like electronics, jewelry, and clothes. Check out these tips before you finish your Thanksgiving meal and go store hopping:

• Read the fine print - There may be quantity limits or other conditions that apply to the sales. Report misleading ads to your state consumer protection office.
• Compare before you shop - Compare prices for the same item between competing stores. Don’t forget to check for differences in a product’s features and accessories.  
• Research upsells - Ask if multi-year contracts, warranties, or subscriptions must be purchased in order to get the advertised offer. Don’t feel pressured to buy services that you don’t need or want.

Small Business Saturday (November 25)

Small Business Saturday is a great time to explore the local shops in town. Local shops tend to offer unique merchandise and a more personal shopping experience. Before you shop small:  

• Verify the accepted methods of payment - Most small businesses accept major branded credit cards and even some payment apps. However, some may only accept cash.
• Read return policies - Small businesses may not allow you to return products or have stricter rules for exchanging items you have purchased.
• Is the location permanent? - Some sellers open pop-up shops in temporarily in spaces during the holiday season. Find how to contact the store after the pop-up shop closes, in case you need to return an item or dispute a purchase.

Cyber Monday (November 27)

Cyber Monday is the day with sales and discounts across online retailers. Like Black Friday, online retailers advertise major savings. While looking for deals online, be sure to protect yourself:

• Beware of ads on search engines or social media- Scammers advertise popular items at deep discounts, but fail to deliver and steal your payment information.
• Use legitimate apps - Download retailer’s apps directly from their website to be sure you have the real one. Scammers can create imposter apps to steal your payment information.  
• Choose credit over debit - Protect your right to dispute a charge by paying with a credit card.
• Secure your internet connection - Avoid using public wifi networks when shopping online. Check the URLs (especially on the submit payment screen).

Giving Tuesday (November 28)

Many charities set up campaigns to raise money during the holidays. Take these steps to make sure your donations go to a reputable charity:

• Research - Be sure that you are giving to a legitimate charity and not scammer with a similar name or web address.
• Verify tax-deductible status- The IRS the maintains a database of 501(c)3 organizations. You can write off donations to these organizations on you.
• Be wary of high pressure tactics- Don’t give in to high pressure sales tactics or demands to act now. You have a right to think about the money you give, even for charity.

Source: USA Gov

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5 Reasons Why Attentive Bookkeeping Is Crucial for Small Business Success

Maintaining your books isn’t something you should do solely as a tax-savings strategy. If done right, it can also prevent you from losing your sanity, as well as getting dragged into a potential lawsuit because you commingled your business and personal funds.

Here are five significant reasons for maintaining a separate checkbook and set of books for each of your businesses.

1. Corporate Veil
Maintaining a separate checkbook substantiates the corporate veil, which is one of the primary reasons for forming a new corporation. Having a separate checkbook shows that you recognize the company as its own distinct entity. Furthermore, separate checkbooks should encourage you not to commingle personal and business funds.

2. Tax Savings 
Separate banking will improve bookkeeping procedures, prevent payments from being missed and provide better records to improve your tax return.  We all know that “bad books” will cost us on our tax return, so why not stop that cost from being incurred in the first place?

3. Audit Protection
In the event of an IRS audit, having a separate checkbook will improve your chances of passing it without consequence. The IRS will often disallow a number of expenses when personal and business expenses are commingled in a single checkbook.

4. Less Stress and More Sanity
When your books are disorganized, you’ll feel constant stress to take care of it, and this ultimately can cause you to come undone. While having separate checking and bookkeeping for a new company will save you time and money in the long run, consider the price and value of having a clear head. Those that rely on your decision-making process will thank you.

5. Improved Decision-Making
As alluded to above, having a separate checkbook starts the process of better bookkeeping, expense tracking and budgeting, which leads to quality decision making. How can you expect to be a successful business owner without accurate records? Furthermore, how can you project future success without being able to see facets of your business clearly today?

Source: Quickbooks

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Individual Taxpayers: Seven Things to Do When an IRS Letter Arrives

The IRS mails millions of letters to taxpayers every year for many reasons. Here are seven simple suggestions on how individuals can handle a letter or notice from the IRS:

1. Don’t panic. Simply responding will take care of most IRS letters and notices.
    
2. Read the entire letter carefully. Most letters deal with a specific issue and provide specific instructions on what to do.
3. Compare it with the tax return. If a letter indicates a changed or corrected tax return, the taxpayer should review the information and compare it with their original return. 
4. Only reply if necessary. There is usually no need to reply to a letter unless specifically instructed to do so, or to make a payment.
5. Respond timely. Taxpayers should respond to a letter with which they do not agree. They should mail a letter explaining why they disagree. They should mail their response to the address listed at the bottom of the letter. The taxpayer should include information and documents for the IRS to consider. The taxpayer should allow at least 30 days for a response.

When a specific date is listed in the letter, there are two main reasons taxpayers should respond by that date:

• To minimize additional interest and penalty charges.

• To preserve appeal rights if the taxpayers doesn’t agree.

6. Don’t call. For most letters, there is no need to call the IRS or make an appointment at a taxpayer assistance center. If a call seems necessary, the taxpayer can use the phone number in the upper right-hand corner of the letter. They should have a copy of the tax return and letter on hand when calling.  
7. Keep the letter. A taxpayer should keep copies of any IRS letters or notices received with their tax records.  

Source: Internal Revenue Service

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Review Your W-4

Taxpayers Should do an End-of-Year Withholding Check-up

As the end of the year approaches, the IRS encourages taxpayers to consider a tax withholding checkup. When taxpayers take a close look to make sure the right amount of tax is withheld now, they can avoid an unexpected tax bill next year.

Here are five examples of taxpayers who would benefit from a withholding check-up:• Taxpayers who received large tax refunds in past years When a taxpayer has too much tax withheld from their paycheck, they pay too much tax during the year. They can change their withholding to have money upfront rather than waiting for a bigger refund.

• Taxpayers who owed taxes in years past Taxpayers with too little tax withheld might owe money. Under-withholding can lead to both a tax bill and an additional penalty.

• People with a second job This includes people who work in the sharing or ‘gig’ economy. Taxpayers who work more than one job should check the total amount of taxes they have withheld and make adjustments as necessary. This will ensure their withholding covers the total amount of the taxes they owe, based on their combined income from all their jobs.

• Taxpayers who make estimated tax payments Some taxpayers make quarterly estimated tax payments throughout the year. This includes self-employed individuals, partners, and S corporation shareholders.  If these taxpayers also work for an employer, they can often forgo making these quarterly payments by instead having more tax taken out of their pay.

• People with a new job Taxpayers who start a new job should check their withholding to make sure they are having enough taxes withheld. Their total withholding should cover the income tax owed from their new and old jobs combined.

To make sure their employer withholds the right amount of tax, employees can adjust their Form W-4, Employee’s Withholding Allowance Certificate. In many cases, this is all they need to do. The employer uses the form to figure the amount of federal income tax to be withheld from pay. This takes time, so taxpayers should make adjustments as soon as possible so the changes can take affect during the final pay periods of 2017.The IRS has several resources that help taxpayers determine if they are having the right amount of tax withheld from their pay.

• IRS Withholding Calculator – Online tool that helps determine the correct amount of tax to withhold.

• IRS Publication 505, Tax Withholding and Estimated Tax

• Tax Withholding – Find FAQs and complete information on withholding and estimated taxes.

Source: Internal Revenue Service

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10 Steps to Starting a Business in San Diego

There are several key steps to starting a business in the City of San Diego. The steps may vary depending on the type of business you intend to launch. Following the 10 Key Steps to Starting a Business will give you a general idea and help the process run smoothly.

Many steps can be researched and processed online through the websites listed, saving you the time of calling or visiting department or agency offices. The City’s Central Library and all branches provide Internet access during library hours.

1. Get Basic Information with help from the City of San Diego Public Library.
2. Select a Site and Determine zoning and site permit requirements with help from the City’s Development Services Department. If you plan to operate out of your home, obtain information about requirements for Home Occupations.
3. Determine a Business Name and register at County of San Diego, Assessor/Recorder/County Clerk’s Office(link is external).
4. Create a Business Plan with help from the Small Business Development Centers (SBDC) South San Diego, North San Diego and U.S. Small Business Administration(link is external).
5. Determine the Business Activity Type from the list provided by the Office of City Treasurer's  Business Tax Certification application.
6. Determine the Legal Structure of the business.
7. Obtain any special licenses and permits. (Read more about this in the  complete version of 10 Key Steps.)
8. Get tax information from the California Tax Information Center (link is external)(link is external), and the Internal Revenue Service(link is external).
9. Learn about Employer Responsibilities at the City level (Earned Sick Leave and Mininum Wage Ordinance) from the Office of the City Treasurer. Learn about Employer Responsibilities at the State and Federal levels from the Employment Development Department(link is external) and Internal Revenue Service(link is external). 
10. Apply for a Business Tax Certificate (Business License) from the Office of the City Treasurer, Business Tax Division.

For those business startups that do not have access to the Internet, the City's Central Library and all branch libraries provide access to the Internet during hours the library is open.

Source: SanDiego.Gov

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Who Needs an ITIN?

ITINs are used by people who have tax filing requirements under U.S. law but are not eligible for a Social Security number. ITIN holders should visit the ITIN information page on IRS.gov and take a few minutes to understand the guidelines.

Who Should Renew an ITIN?

Taxpayers with ITINs set to expire at the end of the year and who need to file a tax return in 2018 must submit a renewal application. Others do not need to take any action.

• ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.

• Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.

• Taxpayers who are eligible for, or who have, a Social Security number (SSN) should not renew their ITIN, but should notify IRS both of their SSN and previous ITIN, so that their accounts can be merged.

• Taxpayers whose ITINs have middle digits 78 or 79 that have expired should renew their ITIN if they will have a filing requirement in 2018.

How to Renew an ITIN

To renew an ITIN, taxpayers must complete a Form W-7 and submit all required documentation. Although a Form W-7 is normally attached to the tax return, a taxpayer is not required to attach a return to one of these ITIN renewal applications.

There are three ways to submit the W-7 application package:

1. Mail the Form W-7, along with original identification documents or copies certified by the issuing agency, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.
2. Taxpayers have the option to work with Certified Acceptance Agents (CAAs) authorized by the IRS to help them apply for an ITIN. CAAs can certify all identification documents for primary and secondary taxpayers and certify that an ITIN application is correct before submitting it to the IRS for processing. A CAA can also certify passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
3. In advance, taxpayers can call and make an appointment at a designated IRS Taxpayer Assistance Center instead of mailing original identification documents to the IRS. When making an appointment, make sure to let telephone assistors know the visit involves an ITIN renewal application.

Source:Internal Revenue Service

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