Funding Could Help Contacting the IRS

We have all dealt with long hold times or attempts to speak with the IRS and never getting anyone on the line. The White House is looking to change that with their recent Executive Order that will make dealing with the IRS better. A revamped IRS customer service is part of the Biden Administration’s broader vision of ensuring that the federal government works for its citizens.

The first step is simply to hire additional employees to answer a taxpayer’s call. Almost 80% of the calls to the IRS never get through to an employee, taxpayers and their preparers often become understandably frustrated and simply make their best guess about the right answer to their inquiry. That guess is sometimes wrong with the result of an underpayment of taxes owed and a resulting penalty payment for the taxpayer.

As 2022 arrived, the IRS still had piles of backlogged tax forms, some from as far back as the 2020 tax year. So the EO will take some time to be fleshed out and implemented.

Last Minute 2021 Tax Deduction

For those that use the standard deduction, charity contributions tax break can help cut your tax bill, but only if you make your donations by Dec. 31.

Taxpayers can deduct cash contributions if : 

1. A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include:

1. Canceled check,
2. Bank or credit union statement or 
3. Credit card statement.

2. A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization and the date and amount of the contribution.

3. Payroll deduction records that include a pay stub showing the contribution and a pledge card showing the name of the charitable organization. If the employer withheld $250 or more from a single paycheck, the pledge card or other document must state that the organization does not provide goods or services in return for any contribution made to it by payroll deduction.

To claim a deduction for a contribution of $250 or more, the taxpayer must have a written acknowledgment of the contribution from the qualified organization that includes the following details:

• The amount of cash contributed;
• Whether the qualified organization gave the taxpayer goods or services (other than certain token items and membership benefits) as a result of the contribution and a description and good-faith estimate of the value of any goods or services that were provided (other than intangible religious benefits); and
• A statement that the only benefit received was an intangible religious benefit, if that was the case.

Thus, for example, money dropped in a Christmas Kettle or tacked onto your purchase at a retail store would not be deductible because there is no documentation that the contribution was made.

2021 Child Tax Credit

The payments, officially known as the Advance Child Tax Credit (AdvCTC), could pose a problem at tax filing time next year. You might have to pay back some or all of the early tax credit money.

The Biden Administration as Child Tax Credit Awareness Day, seems the appropriate time to talk about the potential payback complications of getting the credit in advance.

https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/21/statement-by-president-joe-biden-on-child-tax-credit-awareness-day/

The advances are simply that — early distributions of the Child Tax Credit for which you qualify.

Some Refunds will be Delayed

Many are looking forward to having large tax refunds deposited in their bank accounts.  According to the Protecting Americans from Tax Hikes (PATH) Act, the IRS cannot issue these refunds at the time of filing.  If you file early do not to expect your refund until the week of Feb. 27.

Consult your tax prepare if you’re eligible to claim the earned income credit, or feel free to contact me with any questions.

 

2020 NEW W4

The 2020 tax season is here upon us, some things have changed, some things have remained the same.  One of the most important questions I have been asked is when will the IRS start accepting 2019 electronic federal files.  The Internal Revenue Service will start accepting, tax returns on Monday, Jan. 27.

If you’re noticing the amount of your refunds have getting smaller or starting to owe taxes, you may need to check your federal withholding’s.  The Internal Revenue Service has a new W-4 and online withholding estimator to help you get the numbers just right.

If you need additional assistance updating your w4, feel free to reach out to me. 310-283-3767

2018 Tax Deadlines

March
Form 1065, U.S. Return of Partnership Income, and Form 1120S, U.S. Income Tax Return for an S Corporation, are now due March 15. Extensions are granted until Sept. 15. Previously, these filings were due on April 15.

Schedule K-1 statements also must be provided to owners by March 15.

April
Form 1120, U.S. Corporation Income Tax Return, with extensions until Sept. 15 for tax years through 2025. Beginning in 2026, the extended due date will be Oct. 15.

Form 1041, U.S. Income Tax Return for Estates and Trusts, is due April 15, with extensions until Sept. 30.

May
Form 990, Return of Organization Exempt From Income Tax, is due May 15, with extensions until Nov. 15.

July
Form 5500 for employee benefit plans are due July 31. The Oct. 15 extension for this form remains Oct. 15.

How To Not Owe Taxes

 

With the IRS’ updates, it’s time for folks to use the calculator to make any appropriate changes to their W-4 forms and submit them to their employers.

Withholding issues can be complicated, and the calculator is designed to help employees make changes based on their personal financial situation.

If you don’t withhold enough, you’ll end up having to make up the difference when your file your annual tax return. Owing a little isn’t necessarily bad. It means you’ve have use of your money throughout the tax year. And if the tax due is relatively small, it’s not such a burden to pay when you submit your 1040.

https://www.irs.gov/payments/tax-withholding

For assistance understanding how to use the calculator, feel free to reach out to me at 310-283-3767

 

 

Corporate Filing Deadlines March 2017

2017 Corporate Filing deadlines are near for:

• Form 1065, U.S. Return of Partnership Income, and Form 1120S, U.S. Income Tax Return for an S Corporation, are now due March 15.Extensions are granted until Sept. 15.
• Schedule K-1 statements also must be provided to owners by March 15.

For additional information feel free to call 310-283-3767

 

IRS Offers Free Tax Filing

 

Anyone whose adjusted gross income in 2016 was $64,000 or less will be eligible for Free File software. The electronic version of IRS paper forms will be available for preparing taxes on January 23.

“You don’t have to be an expert on taxes. Free File software can help walk you through the steps and help you get it right,” said John A. Koskinen, IRS Commissioner. “For 14 years, this partnership between the IRS and the Free File Alliance has helped taxpayers prepare and file their federal taxes for free. The real winner in this partnership has been the nation’s taxpayers.”

Tim Hugo, executive director of the Free File Alliance, said, “We are proud to once again offer the industry’s most innovative and secure tax software at no cost to 70 percent of American taxpayers. Tax time can be stressful, but Free File makes step-by-step help accessible to everyone making $64,000 or less. Free File is the one place where taxpayers can choose from a variety of industry-leading tax software options in order to prepare and e-file their federal tax returns at absolutely no cost.”

For more information on IRS tax law changes and updates feel free to call the offices of Trojan Accounting @ 310-283-3767.

2017 IRS Tax Delays

 

Congress requires the IRS to hold refunds on tax returns claiming the Earned Income Credit until mid February. The IRS must hold the entire refund even the portion not associated with the Earned Income Credit until at least Feb. 15. The change is to help ensure that taxpayers get the refund they are owed by giving the agency more time to help detect and prevent fraud.

For more information about the recent law changes, feel free to contact the offices of Trojan Accounting @ 310-283-3767.