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ATM Transaction FAQ’s

Scarsdale tax preparer Paul Herman of Herman & Company CPA’s has all the answers to your personal finance questions! Banking ATM FAQs from Scarsdale Tax Preparer

 

As tax professionals, our Westchester CPA firm sees firsthand many shared financial questions and concerns. In our “FAQ Series,” we will discuss these common topics and share our insight.

How do ATM transactions work? 

There are a variety of electronic transactions one can execute:

  • ATMs allow you to bank electronically, get cash, make deposits, pay bills, or transfer funds between accounts. These machines are used with a debit or ATM card and a personal identification number.
  • Point of Sale Transactions. Some ATM cards and debit cards can be used in stores to charge merchandise. Money is electronically drawn from your account and paid to the store.
  • Pre-authorized transfers. This is allowing for the automatic deposit of fund or withdrawal of funds to or from your account. For example, one can authorize the direct deposit of wages, social security, or dividends directly to their account. You can also pre-authorize your bank to make automatic transfers for bill paying.
  • Telephone transfers. You can transfer funds from one of your accounts to the other, or order bill payments over the phone.
  • Most ATMs provide you with a receipt for the transaction, as do point of sale purchases. These receipts are the records of your electronic transactions and should be kept. Additionally, your periodic bank statement will show all the electronic transfers performed. This monthly statement is your proof of payment to another party and is your record for tax and other purposes. Any inconsistencies can be taken up with your bank.

▼ What should I do if I find an error on an EFT or ATM transaction?

Call your bank as soon as possible, or within 60 days of the error. They may ask you to submit your account information and the alleged error in writing. Generally they have 10 business days to investigate the error, and if they fail to come up with an answer your funds should be reimbursed. If the funds in questions were withdrawn from a point-of-service debit or a foreign electronic transfer, the bank may be allowed more time to investigate the error. In the meantime, however, you should have full access to the funds in question.

Your bank should notify you immediately of their findings. If you were correct about the error, they must immediately finalize the re-credit to your account. If there was no error, they must present in writing the findings of their investigation, and notify you of any funds they have deducted after you had been re-credited.

▼ What if my ATM card is lost or stolen?

It’s important to note the difference in how you will be reimbursed for credit cards vs. ATM or debit cards. For a credit card your loss is limited to $50.

However, for an ATM or debit card the loss is limited to $50 if you notify your institution within 2 business days after the card is lost or stolen.

Keep in mind that the loss could be up to $500 if you do not tell your bank within two business days of the loss or theft.

If you do not report unauthorized transfers within 60 days of your statement being mailed to you, you run the risk of having unlimited loss on transfers made after the 60 days.

▼ Can I use my ATM card abroad?

Yes, there are plenty of ATMs all around the world, but it is wise to check beforehand. With Visa and MasterCard, you can pinpoint ATM locations worldwide on their website.

Often it is a good idea to travel with an ATM card because you can withdraw foreign currencies at a better exchange rate, and also if you lose your card and report it promptly you will not experiences the type of losses you would with cash. Be wary of fees your bank will charge you for each withdrawal – it may be wise to withdraw larger sums to minimize the frequency of transactions.

▼ How do I know when a pre-authorized credit has been deposited into my account?

Your institution may notify your employer, or you. Many times your bank may only notify the recipient if a scheduled credit does not come through. Often, you can check your statement online or call your bank to check on your credits.

▼ How do I cancel a pre-authorized payment?

You can call or write your bank, or often stop the payment by going to your bank’s website. Do this at least 3 days before the scheduled payment. It is a good idea to request a written confirmation of giving a telephone notice to stop the transfer.

Scarsdale accountant Paul Herman is here for all your financial needs. Please contact us for all inquiries and to receive your free personal finance consultation!

Herman and Company CPA’s proudly serves Scarsdale NY, White Plains NY, Mount Kisco NY, Pound Ridge NY, North Salem NY, Mamaroneck NY and beyond.

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When to File an Amended Return

 

Filing an amended tax return can be done in several easy steps.

Filing an amended tax return can be done in several easy steps.

Westchester tax preparers at Herman & Company CPA’s have all the answers to your personal finance questions!

Oops! You discovered an error after filing your tax return. Should you file an amended return? The answer depends on the type of error. The IRS usually corrects mathematical errors or requests missing forms (such as W-2s) or schedules. In these cases, do not amend your return.

File an amended return if any of the following were reported incorrectly:

  • Your filing status
  • Your total income
  • Your deductions or credits

Use Form 1040X (Amended U.S. Individual Income Tax Return), clearly identifying the year of the return that your are amending at the top of the form, to correct a paper or electronically filed Form 1040, 1040A, or 1040EZ. A separate 1040X is required for each year that you are amending and each form must be mailed in a separate envelope to the IRS processing center for your state. Addresses for the centers can be found in the 1040X instructions.

Form 1040X has three columns: Column A for original or adjusted figures from the filed return; Column C for corrected figures; Column B to show the difference between the figures in Columns A and C. Explain the items that you are changing on the back of the form. If the changes involve another schedule or form, attach it to the 1040X. For example, if you are filing a 1040X because you have a qualifying child and want to claim the Earned Income Tax Credit, you must complete and attach a Schedule EIC to the amended return.

If you are filing to claim an additional refund, wait until receive the refund from your original form before filing Form 1040X. If you owe additional tax for the prior year, Form 1040X must have been filed and the tax paid by April 15th of this year to avoid any penalty and interest charges.

Generally, you must file Form 1040X to claim a refund within three years from the date that you filed your original return, or within two years from the date that you paid the tax, whichever is later. Please contact our Westchester tax preparation firm for more information on amending a tax return.

Deductible Home Offices

Your home office Westchester CPA firm

Your home office can be used as a tax deduction.

Westchester tax preparers at Herman & Company CPA’s have all the answers to your personal finance questions!

Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.

Your tax preparation at Herman & Company CPA’s is just a phone call away! If you seek a top Westchester CPA firm, we are there to help.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.