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Julie Molek
  • Julie Molek
  • Julies Tax Service, LLC

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Julie Molek has been preparing income taxes on a professional level since 1988 and became an enrolled agent June 1998.  She is the only enrolled agent in Richland Center.   She is a member of National Association of Enrolled Agents and the 2011-2012 V.P. of WI Society of Enrolled Agents.   The EA position was created by an act of congress after the Civil War when congress recognized the need for a professional capable of assisting US citizens in their disputes with the Federal Government concerning reparations for property damage due to the war.  Duties have carried over to income tax disputes. The EA is acknowledged by all 50 states as well as US possessions.  A native of Iowa, Julie received her BA degree from Augustana College in Rock Island IL. She received her MA from Northern Illinois University in DeKalb, IL where she met her husband, Bill.  While both degrees were in psychology and she received an internship in clinical psychology from H. Douglas Singer Zone Center in Community Mental Health, the skills are useful in representing clients before the IRS.  She is not licensed for Tax Court.

Contact Information
Phone: 608-647-5764
Address: 159 South Main Street
  Richland Center, WI 53581-2332
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Taxes Questions Answered by Julie Molek »
Section: Taxes
Q:  Is there anything that I can do to protect myself from identity theft?
A: 

Interestingly enough, while technology has contributed to the issue of identity theft, it is not our personal use of technology that is causing the problems.  My understanding is that the crooks have sophisticated programs that can generate combinations that eventual prove to be live and active combinations.  Some of their equipment can read the credit card processing equipment.  That being said, there are a number of things that we can do to keep from having our identity stolen.

  1. Use a credit card rather than a debit card.  Debit cards are more vulnerable to theft.  While you are paying for your transaction, the guy behind might be talking on the phone or he could be making a movie of your debit card use obtaining the number plus the pin that you key in.  Before the cashier hands you your receipt, your information has been sped off to some distant place where everything will be replicated.
  1. Many credit cards carry protection against fraud.  They have an incredible software that differentiates between my use and someone else’s use.  My experience is that they try to contact me whenever a card of mine is of questionable use so the purchase can be declined before the thief walks off with the goods.  The issue that can happen here is that if we have not informed them of our telephone number changes they can’t stop it, but I won’t be charged if the transaction was not mine. 

  2. Debit cards do not have this same protection.  Your account can be wiped out before you know that anybody has taken it.  I think some banks are working to change this.

  1. When using your card, pull it out of your wallet with your hand covering the number.  Continue to hide the number while you swipe the card.
  2. If you have one of the new cards with a chip, use the chip and not the magnetic strip.  That feature is more difficult for thieves to take.  However, do not make the mistake of shoving the card in the machine and quickly pulling it out.  The machine needs time to read the chip.  (We are the only industrialized country that does not use these chips.  We are just now getting around to it.)
  3. Notify your credit card company’s fraud dept. ahead of time when you will be travelling, telling them when you expect to leave and what date you expect to get back.  I also give them an idea of what type of charges might occur.  For example, sometimes my transportation and rooms are prepaid, so they would not expect charges for that.  Tell them whether you are flying or driving.  (This can be done online in many cases.)
  4. Always balance your check book and your credit card statements!   Electronic is the fastest way to accomplish it.   Checks and credit/debit card information can be stolen and subsequently used by someone else.  Many times the true owner has no clue that this has happened.  If there are any unusual charges or payments, try discussing this with your spouse.  If your spouse seems defensive, try saying something like, “The check written to Blather Blat is not mine, is that something you purchased?” or “Where is all of the computer equipment being purchased with our credit card being shipped to; I never see it come here?” or “This charge from the Peking Tea Room in China, isn’t mine, is it yours?”  Most of the time such charges belong to neither spouse and really are money stolen.  If we do not look at our account statements and try to categorize the charges or payments by check, we will never know that someone else is helping themselves to our money.  By systematically categorizing our expenses, we also know how much we can deduct from our income taxes when tax time comes.  Yes, it takes time, but the payoff in the end is great!
  5. If there is an unauthorized charge, call your bank’s fraud department and report it.  Sometimes, there is an 800 phone number with the transaction listing so that we can call and get the information.  Once in a great while, we charged something and forgot about it.  I try to keep receipts long enough that I can identify what the charge is.
  6. Never use a standalone ATM machine.  If you have to use an ATM, find one that is bricked into the building.  The standalone machines might be O.K. but you might receive a NSF printout once you keyed everything in.  If you know there are sufficient funds in your account to cover your withdrawal, then you have probably just given the owner of the ATM all of your identity information.   Again, I use my credit cards for this rather than a debit card.
  7. If you are sending information via email to your tax professional, always encrypt the file requiring a password to open it.  Do not send both pieces of information together.  I ask my clients to text the password to me and email the document.
  8. Password protection should include Upper and Lower case letters, numbers and characters.  Sometimes sites do not allow us to use characters or limit use to a combination of six.  I try for 8 – 15 letters, numbers and character combinations whether I am accessing my computer, or accessing a file stored on my computer.  I do not use the same password for each account or file that I have.  That way if one thing is accidentally figured out, the rest of the files are not compromised.

 

Julie Molek, EA

Past President, Wisconsin Society of Enrolled Agents

 

Any U.S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.
The information contained in this email and/or any file transmitted with it, is intended only for the personal and confidential use of the designated recipients to whom they are addressed.
If the reader of this message is not the intended recipient or an agent responsible for delivering it, you are hereby notified that you have received this document in error, and that any review, disclosure, dissemination, distribution or copying of this message or the taking of any action in reliance on its contents, is strictly prohibited.
If you have received this communication in error, please notify the originator immediately.


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Section: Taxes
Q:  Hi! I heard that congress recently passed a new budget. Will that affect my taxes in April? Is there going to be a larger standard deduction, other help for lower to middle class taxpayers?
A: 

Hi, I am very glad that you asked that question.  President Obama signed the bill into law on December 18, 2015.  Included in the bill is the PATH – “Protecting Americans from Tax Hikes.”

The following items were made permanent tax laws (retroactively to the beginning of 2015):

1.     American Opportunity Credit;

2.     Computer and technology costs qualify as education expenses;

3.     Colleges will drop “amount billed” and report “amount paid” on the 1098T starting 2016;

4.     $250 teacher deduction (new inflation adjustment and minor changes for 2016);

5.     Larger earned income credit;

6.     State and local sales tax deduction;

7.     Trustee to charity tax-free IRA transfers that qualify as RMD;

8.     Employer wage credit for active duty military subsidy pay;

9.     Built in gains period for S corps now 5 years;

10.  100% exclusion for small business Section 1202 stock;

11.  $175 mass transit & parking exclusion for employees.

12.  Super Section 179 of $500,000.00 applies permanently (Phase out at $2,000,000.00 – now inflation adjusted starting in 2016.

 

Temporary changes extended through 12/31/2016.

1.     Principal residence mortgage debt exclusion;

2.     Mortgage insurance deduction as qualified residence interest;

3.     Tuition deductions;

4.     Indian employment tax credit;

5.     2 wheel electric vehicle credit.

6.     Primary Home Residential Energy Credit up to $500.00 lifetime credit (covers windows, doors, insulation, certain furnaces, etc.)

7.     And other lesser known credits not used in our area.

8.     Bonus depreciation at 50% through December 31, 2017.  (Phased out after that)

 

Changes in the standard deduction and exemptions were already approved earlier:

  • Personal/Dependency Exemption                               $ 4,000.00
  • Standard Deductions:

Married filing joint & Surviving Spouse                        $12,600.00

Head of Household                                         $  9,250.00

Single & Married Filing Separately                   $  6,300.00

Blind or over 65-MFJ/surviving spouse add   $  1,250.00

Blind or over 65-Unmarried                             $  1,550.00

 

The upper end of all tax brackets (including capital gains and AMT) have been increased so that you can make more before being bumped into the next bracket up.

 

Businesses need to send out 1099’s to persons with whom they have done business of $600.00 or more.  These must be in the mail on January 31, 2016.  Copies of 1099’s and W-2’s and W-3’s must be sent to Wisconsin Department of Revenue, W-2’s and W-3’s to Social Security Administration and 1099’s to IRS by January 31, 2016 and every year thereafter.  If you have used veterinary services for business purposes of $600.00 or more, then you (non-profits included) will need to issue a 1099-Misc to that Service.

 

Beginning in tax years after December 31, 2016, no refunds will be issued before February 15, if the return has Earned Income Credit and a refundable Child Tax Credit.  This will allow IRS time to do an anti-fraud investigation on these returns before the refund check is issued.  Improper claims for EIC, American Opportunity Credit, and the refundable child tax credit will result in taxpayers being denied these items for a period of 10 years.

 No 2015 returns can be filed before January 19, 2016 to allow IRS time to update their computer systems to accommodate the many changes in tax law.

 

 

Julie Molek, EA


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Section: Taxes
Q:  Hi Julie, I was just wondering what might be new for this year that could effect a poor individual home owner in Richland Center on his taxes. (Very simple, w2, standard deduction, wife and 2 kids about 35,000 in income.)
A: 



There are increases in the standard deductions as well as the exemption.  Many of the tax credits such as the residential energy credit expired December 31, 2014.  However, currently Rep. Ron Paul, WI, has introduced extensions for those credits to reward small tax payers for upgrading their homes. 


 


I am told by the insurance industry that tax returns have to be filed by October 15 each year in order to stay in the Insurance Exchange.  One thing I found that many people do not understand about the affordable care act is that any changing life situation opens the enrollment for that individual/s.  Examples are 1) Loss of job and/or reduced hours; 2) Marriage; 3) Divorce; 4) Birth of child.  This list is not all inclusive.  It is best to check with an insurance broker to make certain your life changing event qualifies.  Also, if you get more or less pay during the year than anticipated or if you withdraw money from a retirement plan to pay your taxes, you need to report this information to the exchange so that your premium assistance can be adjusted accordingly.  The assistance is based on total household income which includes money earned by minor children or withdrawals from retirement savings. 


 


Identity theft has become such an issue that it is recommended that everyone file whether they are required to or not to catch identity theft of the taxpayer.  The reason this is important is that you would not want the family estate to have a lien on it due to debts run up by another person.  The elderly, handicapped, and deceased are the most frequent targets of identity theft.


 


If you drive for your employer at all, the new standard mileage rate for 2016 is 54¢.  That is down from the 57.5¢ that was started on October 01, 2015 and expected to go through 2016.


 


 


Julie Molek, EA


Past President, Wisconsin Society of Enrolled Agents



Any U.S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.
The information contained in this email and/or any file transmitted with it, is intended only for the personal and confidential use of the designated recipients to whom they are addressed.
If the reader of this message is not the intended recipient or an agent responsible for delivering it, you are hereby notified that you have received this document in error, and that any review, disclosure, dissemination, distribution or copying of this message or the taking of any action in reliance on its contents, is strictly prohibited.
If you have received this communication in error, please notify the originator immediately.


 




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Section: Taxes
Q:  On my answering machine was a message from US File Services telling me to call them back at a certain number. Is this the part of the IRS which issues the identity theft numbers?
A: 

According to my sources at the IRS, the US File Service has no link to the Internal Revenue Service.  When I Google the name, nothing comes up, so we may presume this to be a scam.  If you suspect a scam, first determine if you do in fact owe back taxes to the IRS or WI DOR.

  1. One easy way to determine this is if you have received a refund, you generally do not owe back taxes.  They do not let the money walk out the door if they know you owe something.
  2. Is your address on your last tax return correct?  If so, you should have received letters via snail mail, informing you of an alleged discrepancy on your return and telling you what you must do if you disagree with the matter.   Over the years, I have had clients receive notices from the IRS for income that was not theirs simply because the issuer either reversed two numbers in writing down the SSN or a 1, 7, or 4 were mistaken for one of the others (1, 4, or 7).
  3. Once you determine that you do not owe back taxes or have no reason to think you do, report it to:
  1. Your local authorities, so they can alert the rest of the community that the scam has hit your area;

  2. Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident on IRS.gov; and,

  3. You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" to the comments of your report.

    Income tax return processing will probably take longer in the future.  The IRS just announced that along with States there will be a new collaborative effort to protect taxpayers from identity theft.  They will be taking new steps to validate taxpayer and tax return information at the time of filing, including looking at the ISP being used to generate the tax return.  It will also include the time it takes to prepare the return.  In other words, if the returns are prepared unreasonable fast, then they will become suspect.  There will be a number of other factors they will be taking into consideration.

    Some of it will no doubt be computer generated but some of it may have to be manually done causing a delay in a refund.  While some may consider this an inconvenience, remember, it is our identities that the longer process will be protecting.  I would rather go through a longer return process than to have to go through the hassle of proving that I am who I am in order to get my refund because someone else has already claimed it.

     

    Julie Molek, EA

    Past President, Wisconsin Society of Enrolled Agents

     

    Any U.S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.
    The information contained in this email and/or any file transmitted with it, is intended only for the personal and confidential use of the designated recipients to whom they are addressed.
    If the reader of this message is not the intended recipient or an agent responsible for delivering it, you are hereby notified that you have received this document in error, and that any review, disclosure, dissemination, distribution or copying of this message or the taking of any action in reliance on its contents, is strictly prohibited.
    If you have received this communication in error, please notify the originator immediately.


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Section: Taxes
Q:  Hi Julie! A good friend of mine recently passed away and it got me thinking about my family in the event that anything ever happened to me. Are there any particularly important tax issues that a person should know about when it comes to planning for one's family in the event of death? We don't own a lot, just the usual car, house, personal items; no stocks or anything like that.
A: 
  1. There are a few.  Many of us in this area will not have to file estate taxes but it is best to be prepared.  While many of us think of ourselves as being poor, when our estate is tallied we might be shocked to learn what it is really worth or I should say what our net worth really is.   Everything has a value and back in the day, even the chamber pot was listed as having value when someone died.  Because we use things every day does not mean they have no value.

Real Estate, stock holdings have a change in their basis for the survivor.  They become the current fair market value at the time of death.  So it is best to get an appraisal of real estate holdings.  In WI, the change in basis is complete for the surviving spouse, even though they may co-own the holdings.  That is because we are a marital property state.  What is mine is my husband’s and vice versa.  The change of basis is also complete if there is no surviving spouse. 

Let me give you an example.  Several of us inherited a house from a dear uncle.  The house was sold and we were all given the proceeds.  One family laughed and said, “It is an inheritance and therefore not taxable nor reportable.”  (While the value of the house is not taxable, the money it made when it sold is taxable and reportable.)  Another family reported it, but did not use the change in basis.  They paid a lot of tax on the sale of the property.  My spouse and I reported it and claimed a loss on our tax return.  Why did we get the loss and the others did not?  We followed tax law and tracked down the personal representative, found out what the basis of the house was (in this case, it was the same as the sales price) and also knew we were entitled to claim the costs of the sale.  The loss was the amount of the cost of the sale.

Consequently, the sale of the personal residence of the surviving spouse does not go back to the purchase date but back to the value at the date of death.

Recently the US Congress enacted an “estate portability act.”  What that means is that when one spouse dies, the other spouse can have the unused portion of the first spouse’s estate exemption.  However, the catch is that in order to get it, an estate tax must be filed.  While there may only be less than $1,000,000.00 in the decedent’s estate, an estate return would have to be filed to capture the $4,000,000.00+ excess to add to the spouse’s $5,000,000.00 exemption.  Before you laugh, keep in mind that the lottery exceeds those numbers.  What if the surviving spouse won a $12,000,000.00 lottery?  By utilizing the Portability Act and filing an estate tax return (even though one wasn’t required), the surviving spouse could have a $9,000,000.00 exemption rather than a $5,000,000.00 exemption before taxes are levied would make a significant impact on that spouse’s estate return.  Some professionals are requiring surviving spouses to sign a document stating they understand this and still choose to not have an estate return completed and filed.

Having a will is also critical.  While this is not generally considered a tax consequence it really can be.  With a will, you may have to sell the estate to pay the estate taxes.  However, that is significantly better in my view than to have to sell the estate to pay heirs that you nor the decedent never knew.  I know several recipients of intestate estates.  They were clueless as to who the decedent was . . . i.e., they never met them, never heard of them, but have some type of blood relationship.  In the trade, they are referred to as “laughing heirs.”  That is, they laugh all the way to the bank with an inheritance of someone they do not know.  While WI has tightened the reins on this, I still advise you to talk to a good attorney for writing a will to be certain, your estate goes to your family.

Julie Molek, EA

Owner/Manager

Julie’s Tax Service LLC

159 S Main St, PO BOX 642

Richland Center WI 53581

(608)647-5764

 

Any U.S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.
The information contained in this email and/or any file transmitted with it, is intended only for the personal and confidential use of the designated recipients to whom they are addressed.
If the reader of this message is not the intended recipient or an agent responsible for delivering it, you are hereby notified that you have received this document in error, and that any review, disclosure, dissemination, distribution or copying of this message or the taking of any action in reliance on its contents, is strictly prohibited.
If you have received this communication in error, please notify the originator immediately.


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Section: Taxes
Q:  I was talking to my brother the other day and he didn't file taxes last year. He makes really good money and said the govt owes him a lot so it wasn't a big deal and he will take care of it this year. He said the govt doesn't get too worked up if they owe you. I am curious if that is the case and what should people do if they didn't file last year but wanted to do so this year.
A: 

A:  We can and should catch up on past returns at any time.  On April 15, 2015, IRS will close the tax year 2011 forever.  If you have not filed and have a refund coming, you will never receive the after April 15, 2015.  Although it will be closed from the sense that we can no longer get our refunds, it is "open" until the return is actually filed.  As long as you have not filed, it will be deemed not filed, even if the government generates a return on your behalf.  Consequently, it does matter whether or not you have filed. 

 

Also, keep in mind, the government generally has a record of our income only and not our deductions.   Persons who do not file timely returns could be subject to a return generated by the government in which they owe rather than have a refund coming.  It is up to us to show that we have the refund coming.  The more timely the return the more accurate our deductions.  Even if we do not owe with the government generated return, we do need to file our own return with our numbers on them. 

 

WI, on the other hand, has a 1% per month interest for current returns and 1.5% per month interest for non-current returns.  They, too, will generate returns if we do not file but are notorious for generating returns that are designed to get our attention.  Unfortunately, WI only receives the income records and not the withholding records.  (Income and withholding records are sent to SSA who then sends the information on to both the IRS and the states but state withholding is not included, for some reason.)  Efforts are being made to correct this but until it is, we have to show that we have had enough withheld to cover our income tax.

 

 

If we have self-employment income such as odd jobs, we have to file if our gross is $400.00 or over.  It is up to us to show that we have expenses to write off against that income.

 

If you have not filed, it is important to bring your records up to date.  You might have a loss coming forward.  Also, the more returns we do not file for whatever reason, the more difficult it will be to negotiate any differences of opinion on a given return.

 

Julie Molek, EA

Owner/Manager

Julie’s Tax Service LLC

159 S Main St, PO BOX 642

Richland Center WI 53581

(608)647-5764

 

Any U.S. federal tax advice contained herein (including any attachments), unless specifically stated otherwise, is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.
The information contained in this email and/or any file transmitted with it, is intended only for the personal and confidential use of the designated recipients to whom they are addressed.
If the reader of this message is not the intended recipient or an agent responsible for delivering it, you are hereby notified that you have received this document in error, and that any review, disclosure, dissemination, distribution or copying of this message or the taking of any action in reliance on its contents, is strictly prohibited.
If you have received this communication in error, please notify the originator immediately.


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