Leah’s Accounting & Business Solutions Facebook Feed
*** Worry Free Wednesday ***![]()
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The end of the year is just around the corner! If you haven't been doing this all year, now is the time to review your business profit and loss. There are still ways to take full advantage of the deductions this year, such as accelerated depreciation on that piece of equipment you have been looking at all year!![]()
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Use your annual gift exclusion, you can give up to $15,000 to each person this year without paying gift tax or having it affect your lifetime estate-and-gift-tax exemption. A married couple can give $15,000 EACH, that's a total of $30,000 they can give to individual people.![]()
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Make donations to charitable organizations.![]()
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We have a few more ideas, if you would like to know more call and schedule an appointment, there is still time!
*** Tax Tip Tuesday ***![]()
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You guessed it! More Tax Inflation updates for Tax Year 2022!![]()
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- For 2022 there is no limitation on itemized deductions, that limitation was eliminated by the Tax Cuts and Jobs Act.![]()
- The AMT exemption amount for 2022 is $75,900 and begins to phase out at $539,900 ($118,100 for married couples with phase out beginning at $1,047,200)![]()
- 2022 Maximum Earning Income Tax Credit is $6,935 for qualifying taxpayer who have three or more qualifying children.![]()
- The annual exclusion for gifts increases to $16,000 for calendar year 2022![]()
- The maximum credit allowed for qualified adoption expenses is $14,890 for tax year 2022
***Just in*** ![]()
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It's not a rumor if it's true! My family and I are off on another great adventure! Leah will be out of the office from November 29th returning December 13th. Don't worry, Wendy will be here holding down the fort with all the dogs!
*** Worry Free Wednesday ***![]()
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Don't worry, the pies are in the oven and the side dishes will be done by midnight! We hope you all have a warm and Happy Thanksgiving! We are thankful for all of you, without you there wouldn't be an us. Have a weekend filled with love, laughter and family!
Closed for the Holiday![]()
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Our offices are closing at 11 am today so we can spend time with our families for the Thanksgiving Holiday.
*** Tax Tip Tuesday ***![]()
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Marginal Rates for Individuals for the upcoming 2022 Tax Year:![]()
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- 10% of income for single with $10,275 or less, $20,550 for married filing joint![]()
- 12% of income for single over $10,275, and over $20,550 for married filing joint![]()
- 22% of income for single over $41,775, and over $83,550 for married filing joint![]()
- 24% of income for single over $89,075, and over $178,150 for married filing joint![]()
- 32% of income for single over $170,050, and over $340,100 for married filing joint![]()
- 35% of income for single over $215,950, and over $431,900 for married filing joint![]()
- 37% of income for single over $539,900, and over $647,850 for married filing joint![]()
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Stay tuned for more great updates next week!
*** Worry Free Wednesday ***![]()
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Families can now report income changes using the Child Tax Credit Update Portal. This portal can be access on the IRS website. If families expect or have had changes in income, or changes in which parent is claiming the children this year, be sure to make all updates no later than Monday, November 29th for them to be reflected on the December payment.
*** Tax Tip Tuesday ***![]()
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IRS has provided tax inflation adjustments for Tax Year 2022:![]()
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- Standard Deduction for Married Filing Joint is $25,900![]()
- Standard Deduction for Single and Married filing Separately is $12,950![]()
- Standard Deduction for Head of Households is $19,400![]()
- Personal exemption is still at Zero![]()
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Stay tuned for more updates next week!
*** Worry Free Wednesday ***![]()
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IRS has issued another 430,000 refunds for adjustments that are directly related to unemployment income that was taxed in 2020. So far, the IRS has identified and refunded the money for over 16 million taxpayers that were eligible for the adjustment. Depending on the individuals tax situation, they either received refunds direct deposited, checks in the mail, or the overpayment was applied to taxes due or other debts that can garnish a tax refund. ![]()
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Impacted taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made and the amount of the adjustment. ![]()
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The IRS is ALSO (this is new) making corrections for Earned Income Tax Credits, Additional Child Tax Credits, American Opportunity Credits, Premium Tax Credits and Recovery Rebate Credit amounts that were affected by the exclusion. The IRS will send notices in November and December to the individuals affected by these changes. The notices need to be RESPONDED to, to determine if they are eligible for the credits, rather than filing an amended return. ![]()
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If you do not receive a notice and think you are eligible for any of these credits, check with your tax preparer, you will need to file an Amended tax return.
*** Tax Tip Tuesday ***![]()
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Updates for 2022 Tax Year!![]()
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Starting in 2022, the 401(k), 403(b) and most 457 plans is increasing to $20,500 up from $19,500 limits for 2019 and 2020.![]()
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Traditional IRA contribution phase out ranges are increasing. If you would like a quick snapshot of the new phase out ranges, send us a message and we will send you the specifics.![]()
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Income phase-our range for taxpayers contributing to Roth IRAS is increasing: $129k to $144k for singles and head of households; $204k to $214k for married filing jointly.![]()
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Income limit for the Saver's Credit is $68k for married filing joint, $51k for Head of Households, $34k for single and married filing separate.![]()
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Contributions to SIMPLE account has increased to $14,000.
*** Tax Tip Tuesday ***![]()
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Retirement Plans - Tips for 2021![]()
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RMDs are back for 2021. In 2020 seniors were allowed to sip Required Minimum Distributions without taking a penalty, but this only applied for one year. Anyone who is at least 72 years old by the end of the year is required to take and RMD for 2021.![]()
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Maximum contributions for 401(k), 403(b) and 457 plans are $19,500 if you were born before 1972 you can add a catch up contribution of $6,500.![]()
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SIMPLE IRA contributions are $13,500 plus an extra $3,000 for people 50 and older![]()
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Traditional IRA and Roth IRA contributions $6,000, plus $1,000 catch up contributions for 50 and older. Income ceiling on Roth IRAs will begin to phase out at AGI's for $198,000 to $208,000 for couples and $125,000 to $140,000 for single.![]()
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Keep in mind you have until April 15, 2022 to take advantage of some of these contributions. Plan ahead, check with your tax professional and see if making a contribution will help with your bottom line.
*** Tax Tip Tuesday ***![]()
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Student Loan Forgiveness -![]()
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Starting in 2021, student loan debt that was canceled, forgiven, or otherwise discharged for less than the amount owed will not be considered income. This change is temporary through 2026. If you have student loans and qualify for any of the cancellations, or forgiveness relief programs, now is the time to act on it!
*** Worry Free Wednesday ***![]()
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When operating a small business, there are some perks to hiring your spouse as an employee. Here are four ways to receive benefits of hiring your spouse as an employee:![]()
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1. Build a retirement nest egg. Following all company qualified retirement plans, the spouse can participate and the company can match the contributions, while electing to defer up to $19,5000 of wages in 2021.![]()
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2. Tax mileage on business travel, traveling with your spouse as an employee, as long as the travel is for business purposes 100% is deductible in 2021. This includes all air fare and lodging. In 2022, the deductible amount is set to revert to 50%.![]()
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3. Health Insurance costs. Your spouse would qualify for health coverage through the company. If your company policy is to pay health coverage for your employees, then up to 100% of the cost can be deducted for covering your spouse. ![]()
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4. Life insurance groups. If you offer life insurance coverage to your employees, you can offer it to your spouse once they are employed. The first $50,000 of employer paid group life-insurance coverage is tax free to the employee.
*** Tax Tip Tuesday ***![]()
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Unemployment income WILL be taxable this year. The exemption from the American Rescue Plan Act made up to $10,200 for unemployment compensation per individual exempt from federal income tax for households with and Adjusted Gross Income less than $150,000. This exemption ONLY applied to compensation received in 2020. If you have been receiving unemployment during 2021, it is highly recommended to withholding taxes. If you have not, estimated tax payments may need to be made.
*** Worry Free Wednesday ***![]()
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2021 has been a record year for a number of things, including math-error correction notices being issued to Individuals by the IRS. About 9 million letters have been mailed to taxpayers from January 1st to July 15th. This is compared to 628,997 of math errors for the prior year in the same time period. The vast majority of the errors have been directly related to the recovery rebate calculations.![]()
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If you receive any of these notices, make sure to keep them with your 2021 tax documents, as your preparer may need to review them prior to preparing your 2021 tax return.
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*** Tax Tip Tuesday ***![]()
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ADVANCE Child Tax Credits are just that, an ADVANCE on a credit that can be claimed for dependents. COVID Tax Tip 2021-147 states that parents receiving the ADVANCE of the child tax credit WILL have to pay back any payments that were not entitled to claim. ![]()
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This will be a HUGE issue for parents that alternate claiming their child on their tax returns since the credit is based off what was filed in 2020 and 2019. The election to not receive the payment must be done on a monthly basis. ![]()
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For more information you can read the summary on the following IRS website:![]()
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www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-...
www.irs.gov
ACTC FAQs about Commonly Asked Shared-Custody Questions
Happy Friday!!!!! Just letting people know, if you heard I will be out of the office for a bit, the rumor is true! I am leaving on vacation and will be gone until Thursday October 28th! Crazy....I have never taken this much time off!![]()
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While I'm out, the office will still be up and running, Wendy is holding down the fort and making sure there is no delay for any of our clients, or monthly processes. Be patient with her....she's also in charge of the dog crew while I'm gone!
*** Worry Free Wednesday ***![]()
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COVID Home testing are considered medical expenses. Medical expenses also include personal protective equipment, including face masks and cost associated with making them, hand sanitizers and wipes. These deductions are not just for small businesses, but they can also be claimed by individuals who are able to itemize on Schedule A. The extent of medical costs that exceed 7.5% of adjusted gross income can be deducted. These type of expenses can also be paid for using HSA and health flexible spending accounts.
*** Tax Tip Tuesday ***![]()
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Thinking about starting a new business and not sure where to even start? Here are a few tips from the IRS on starting and setting up a new business.![]()
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1. Choose a business structure. Business structure will determine the type of tax return you are required to file. The most common are: Sole Proprietors, Partnerships, Corporations, S Corporations and Limited Liability Companies.![]()
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2. Choose a tax year. The tax year is the annual accounting period that you want to use when keeping records and filing tax returns. Most business operate on a Calendar year, January to December. A Fiscal Year can be helpful if you are seasonal, farming, or an industry where is it more effective for true revenue recognition to chose another 12 month period.![]()
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3. Apply for an EIN with the IRS. You can due this online which is the fastest, most efficient manner. ![]()
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4. Decide if you are hiring employees. If you are, make sure to set up all state required information, and have employees complete IRS forms I9 ad W4 for withholding.![]()
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5. Decide on how you will be tracking your accounting records, and set up an accurate system.![]()
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If you need any assistance in any of these areas, please feel free to contact our offices. We are happy to get you started in the right direction.
October 15th Deadline![]()
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October 15th is the deadline taking several important actions:![]()
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First and foremost, filing returns. For Individuals and calendar year C-Corporations that are on extension must be filed.![]()
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Setting up SEP-IRAs for your business and contributing money into it for 2020.![]()
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Making a 2020 pay in to a Keogh plan that was established before January 1, 2021.![]()
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Withdrawing excess IRA contributions
*** Worry Free Wednesday ***![]()
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Per Diems for 2022 can be applied to business operations as early as October 1, 2021. In high-cost locales, employees can get up to $296 tax-free daily. The daily stiped is capped at $202 in low cost areas. ![]()
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For meals and incidentals only the rates are $74 a day in high cost areas and $64 per day elsewhere. Self-employed can apply these same rates when traveling to these areas. (for meals, not lodging)![]()
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If you would like to review all rates, please let me know, I'm happy to provide IRS Notice 2021-52.
*** Tax Tip Tuesday ***![]()
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IRS has established contracts with three private collection agencies to collect overdue taxes. Taxpayers with unpaid tax bills may be contacted by one of the following three agencies:![]()
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CBE Group, Inc![]()
Coast Professional, Inc![]()
ConServe![]()
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Keep in mind the IRS will always notify a taxpayer in writing prior to transferring their account to a private collection agency. Don't disregard these notices, or you may be caught off guard.
Looking for some feedback....![]()
What do you enjoy about Tax Tip Tuesday's and Worry Free Wednesday? ![]()
Are there topics that I haven't touched enough on?![]()
Is once a week preferred, or twice a month? ![]()
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With the ever changing laws, rules and regulations, we want to share as much information as we can without overloading your news feeds! ![]()
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We also want to make it as seamless for our staff as possible! There are times during the year that our Facebook feed stops simply because there are not enough hours in the day when working with deadlines.
For those that received our emails, just a reminder, for those that didn't; next week our offices will be closed from Tuesday, September 14th to Friday September 17th. We will have limited access to the internet and phone. Thank you for your understanding!
If you are trying to reach us and the phone keeps on ringing, please send and email. Yesterday there was an incident down the road that caused our phone and internet lines to go down. We are currently operating with a hot spot, so we are able to check email. ![]()
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Fingers crossed Ziply is supposed to be here tomorrow to get us back up and running! Thank you for the understanding.
*** Worry Free Wednesday ***![]()
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PayPal Receipts fall short....![]()
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A self employed recently was denied expenses even after producing receipts from PayPal. Even though the receipts substantiated the amounts, vendors paid and the dates there was no definitive information regarding the type of expense that was being paid thus proving it was ordinary and necessary for operating his business. ![]()
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These type of details are crucial for explaining exactly what is being purchased and how it was used in the operations of the business. It's all in the details! Make notes, document, document, document!
*** Tax Tip Tuesday ***![]()
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Estimated Tax Payments - should I be making them?![]()
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Small business owners, self-employed and some wage earners should be making estimated tax payments depending on each situation. ![]()
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Here are the guidelines if you will be assessed penalties for not making estimated tax payments:![]()
- If you expect to owe $1,000 or more after any withholding![]()
- 100% of the prior year tax must be paid, or 90% of the current year liability. ![]()
- Safe Harbor rule, if your prior year AGI was greater than $150,000, your estimated payments should be the lesser of 110% of the prior year tax liability or 90% of the current year liability.![]()
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Due dates for Estimated payments:![]()
April 15th![]()
June 15th![]()
September 15th![]()
January 15th![]()
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With a due date right around the corner, if you aren't sure where you stand this year, give our office a call, we are happy to run some figures to see where you are at!
Our offices will be closing early today, at noon to allow our employees a little extra time for the holiday weekend! We will be back on Tuesday! ![]()
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We would like to wish everyone a happy, fun and safe Labor Day Weekend! Love lives here, build some memories with those you love!
***Idaho Businesses***![]()
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Idaho Businesses, did you know that the state of Idaho has released a revised Precentage Computation Method and Wage Brackets for payroll withholding tables and supplemental wages? These tax rates are retroactive to January 1, 2021 and the revision was updated 07/07/2021. ![]()
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If you are not using a payroll program, make sure you update your calculations. If you are, make sure you run any and all applicable updates to ensure proper withholding from your employees wages.![]()
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tax.idaho.gov/pubs/EPB00744_07-07-2021.pdf![]()
tax.idaho.gov/pubs/EPB00745_07-13-2021.pdf
tax.idaho.gov
*** Worry Free Wednesday ***![]()
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IRS will be doubling the amount of employees focusing on examining small business activities. What is the IRS out to examine....?![]()
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Employment Taxes - this is one of the major sources of income for the IRS, and it will be a major target. The IRS believes that many employers owe more than they are actually paying.![]()
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Taxes and Penalties - These have been put on the back burner through the pandemic. Beginning soon, the IRS will aggressively begin collections on overdue amounts, levying assets and garnishing salaries and other income. ![]()
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Bottom line, if you get a notice from the IRS, don't ignore it. If your books aren't in order, now is the time to get them in order. Contact our office if you need assistance. We can address organization along with setting up payment plans to avoid levies.
*** Tax Tip Tuesday ***![]()
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Highway Vehicle Use Tax deadline to Pay and File is due today! If you operate a motor vehicle with a gross weight of 55,000 pounds or greater, then you are required to file this form. ![]()
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All taxpayers required to file Form 2290 are encouraged to do so electronically. You will need the following information:![]()
- Your Business EIN; a social security number is no longer and option.![]()
- VIN for each vehicle![]()
- Taxable gross weight of each vehicle
*** Worry Free Wednesday ***![]()
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With all the fires burning through multiple states right now, the last thing on a person's mind when they are told to evacuate are, "better grab those tax records". The reality is, you will need those at some point in the future. ![]()
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After a natural disaster, taxpayers do have the ability to reconstruct some of those tax records. Transcripts can be ordered directly from the IRS by using their online tool, or contacting them at 800-908-9946. ![]()
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People can gather information by contacting banks and credit cards to get statements. Property records can be gathered by contacting the title company or escrow company that handled the purchase and/or sale of their home. ![]()
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Just keep in mind, there are resources and source documents for transactions, it just may take doing some leg work. ![]()
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If you have been affected by any of these natural disasters, please contact our office, we are more than welcome to brainstorm with you to find your solution.
*** Worry Free Wednesday ***![]()
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Here's why taxpayers should have an IRS online account:![]()
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Taxpayers can view: their payoff amounts, balances or each tax year in which they owe taxes, payment history, key information from their most current tax return as originally filed (prior to amendments or changes by the IRS), payment plan details if they have one, digital IRS notices, Economic Impact Payments, and their address on file. Taxpayers can set up electronic payment options, online payment agreements and request transcripts.
*** Tax Tip Tuesday ***![]()
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Tips for working high school and college students. During the summer many students choose to work part-time or full-time jobs. Most parents can still claim their children as dependents that work full-time and part-time summer jobs. Some key things to keep in mind:![]()
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* If they earned less than $12,550 (standard deduction) they do not need to file a tax return.![]()
* To be claimed as a dependent while employed, they must be under 19, or under 24 if a full time student. ![]()
* Students who take on jobs like baby-sitting, lawn care, or gig economy are consider self-employed. ![]()
* Tip income is considered taxable, even if it is not reported to employers or reported on the W2.
Attention FULL Year Idaho Residents for 2019 and 2020![]()
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If you have filed a tax return for 2019 and 2020 and you are a FULL year Idaho resident, starting August 2, 2021 Idaho State Tax Commission will start sending out Tax Rebates.![]()
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You are only eligible if you were a Full-year Resident in both 2019 and 2020 AND filed an Idaho Individual Income Tax Return or Grocery Credit Refund Return.![]()
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The amount of the tax rebate is based on your 2019 Tax Return information and it's one of the following, whichever is greater:![]()
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* $50 per taxpayer and each dependent![]()
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* 9% of the tax amount reported on Form 40, line 20 or line 42 for eligible Idaho residents and service members using Form 43.![]()
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For those that had direct deposit, the rebate will be processed the same way. All other taxpayers will receive a check sent to the most recent address on file.
*** Worry Free Wednesday ***![]()
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Where’s my Refund????![]()
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Still waiting for your tax refund on your timely filed 2019 or 2020 return? MILLIONS of taxpayers are in the same boat, if that makes you feel any better. ![]()
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As of June 25, IRS has a backlog of 16.7 million 2019 and 2020 individual returns that require manual processing by agency employees. Some of these are paper returns, other’s were suspended during electronic processing and need further review. ![]()
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Unfortunately, there is not much that taxpayers or preparers can do about the delays. IRS expects to complete the processing of 2019 Forms 1040 that were filed on paper sometime this summer. ![]()
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Bottom line, just hang in there…COVID affected every industry….including tax returns. They are working as quickly as possible to catch up!
*** Tax Tip Tuesday ***![]()
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The IRS urges families to use a special online tool, available only on IRS.gov, to help them determine whether they qualify for the child tax credit and the special monthly advance payments beginning July 15.![]()
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The Child Tax Credit Eligibility Assistant is interactive and easy to use. By answering a series of questions about themselves and their family members, a parent or other family member can quickly determine whether they qualify for the credit.
Our offices will be closed on Monday, July 5th to observe the holiday. We hope everyone has a fun and safe holiday weekend! Stay cool out there!
*** Worry Free Wednesday ***![]()
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Construction Industry Audits![]()
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The IRS has updated a guide for examining the construction industry with a big focuse on accounting methods. Agents auditing construction companies are looking to ensure that companies are properly reporting income from long term contracts.![]()
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Agents are also focusing on unreported income and improper deductions. If you are operating a construction business and have questions about how to properly record income and expenses, contact our office we are happy to offer guidance and recommended bookkeeping practices.
*** Tax Tip Tuesday ***![]()
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American Rescue Plan Affect on 2021 Taxes![]()
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For 2021 only, the earned income credit has been expanded to more workers without qualifying children. This is a fully refundable tax benefit that helps low and moderate income workers. For the first time, there is no age limit cap on claiming the Earned Income Credit.![]()
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For 2021, EITC is available to filers without qualifying children who are at least 19 years old with earned income belwe $21,430; $27,380 for spouses filing a joint return. The maximum EITC with no qualifying children is $1,502.![]()
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Effective for tax years 2020 and 2021 individuals can use their 2019 Earned Income if it was higher than the current year, to calculate claiming the earned income credit. In some instances this could provide a larger refundable credit.
*** Worry Free Wednesday ***![]()
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Amended Returns![]()
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Amended income tax returns can now be electronically filed in most situations. If filing an amended return reflects a different social security number or filing status, it must be filed on paper. ![]()
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It can take up to 16 weeks for an Amended return to be processed by the IRS. In the Post-COVID world, this timeframe has been significantly increased to 24 to 36 weeks.![]()
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You generally have 3 years from the date you filed your original return to amend or claim a refund. If amending for multiple years, each amended return must be filed on their own 1040X.
*** Tax Tip Tuesday ***![]()
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American Rescue Plan Affect on 2021 Taxes![]()
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Child and dependent care credit is increased for 2021 only. Eligible taxpayers can claim qualifying employment related expenses up to $8,000 for one qualifying individual (up from $3,000) or $16,000 for two or more qualifying individuals (up from $6,000). ![]()
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The credit is fully refundable for the first time in 2021. This means that the taxpayer can receive it, even if they own no federal income tax.
*** Worry Free Wednesday ***![]()
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Working College Grads![]()
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Just graduated and looking to work this summer? Talk to your employer about using part-year withholding to have less taxes withheld. Most payroll programs assume that you will have a full year of income, and these figures are used to calculate the tax liability and withholding from payroll. Select the part year method, and your withholding will be according to what you earn during the part of the year you are actually working, instead of the full year. ![]()
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Most students, high-school and college, who choose to work during the summer are exempt from income tax withholding. If you fall in this category, you can simply write "Exempt" on your W4 submitted to your employer and no taxes will be withheld![]()
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If you have any questions if you are exempt, or how much should you withhold, feel free to contact our offices, we are happy to assist with estimating tax liabilities.
*** Tax Tip Tuesday ***![]()
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Taxpayers assistance on paying the right amount of tax![]()
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Federal taxes are considered a pay as you go. This means that as you are making income, you should be making payments on the tax liability that will be due when filing tax returns for the year. This can be done through employee withholding, or estimated tax payments on a quarterly basis. ![]()
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Taxpayers can use the IRS Tax Withholding Estimator to decide if they should make estimated payments, increase or decrease their withholding from wages. If you need assistance or have more complex situations, contact our office, we are always happy to help with Tax Planning.![]()
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www.irs.gov/individuals/tax-withholding-estimator
Tax Withholding Estimator | Internal Revenue Service
www.irs.gov
Check your tax withholding with the IRS Tax Withholding Estimator, a tool that helps ensure you have the right amount of tax withheld from your paycheck.
Good morning! Happy first day of June! I keep asking myself how did that happen? ![]()
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We made it through tax season, and now we are busy playing the catch up game on everything around the office. The plan is to start up Tax Tip Tuesday's and Worry Free Wednesday's again next week!![]()
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Thank you for all the support! It's you that makes this small business thrive!
Even on Vacation we get updates.....A few more changes that were implemented with the passing of The American Rescue Plan Act of 2021:![]()
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IRS suspends requirement to repay excess advance payments of the 2020 Premium Tax Credit![]()
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Taxpayers with excess advance payments of the Premium Tax Credit (excess APTC) for 2020 are not required to file Form 8962, Premium Tax Credit, or report an excess APTC repayment on their 2020 Form 1040 or Form 1040-SR, Schedule 2, Line 2, when they file. The American Rescue Plan Act of 2021 suspends the requirement that taxpayers increase their tax liability by all or a portion of their excess advance payments of the Premium Tax Credit (PTC) for tax year 2020. The process remains unchanged for taxpayers claiming a net PTC for 2020. They must file Form 8962 when they file their 2020 tax return. Taxpayers who have already filed their 2020 tax return and who have excess APTC for 2020 don’t need to file an amended tax return or contact the IRS. The IRS will reduce the excess APTC repayment amount to zero with no further action needed by the taxpayer.
*** Tax Tip Tuesday ***![]()
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Unclaimed 2017 Tax Refunds. The IRS has announced they have an estimated 1.3. million taxpayers that did not file a 2017 Form 1040 Individual Income Tax Return and are due a refund.![]()
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If you fall in this category, here are the key points you need to know:![]()
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* In order to collect the refunds, you must file your return by this year's tax deadline, May 17th.![]()
* The law requires taxpayers to properly address and mail the tax return to the IRS. It must be postmarked by the May deadline.![]()
* The IRS may hold the 2017 refunds of taxpayers who have not filed tax returns for 2018 and 2019.![]()
* Taxpayers who are missing forms W2, 1098, 1099 or 5498 for the 2017 tax year should request copies from their employer, bank or other payer. If they are unable to get the forms from those outsources, they can order a free wage and income transcript from the IRS online.![]()
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If you need help with any of these processes, please feel free to contact our office, we are always happy to help!
We have been a little quiet the last couple weeks. Have our noses to the grindstone around here! ![]()
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Just announced by the IRS - they will be taking the steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation. Once this is completed, it is up to the taxpayer to determine if they return then needs to be amended to receive any additional federal credits and deductions not already included on the original tax return. ![]()
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If you fall into that category...give our office a call, we are happy to help.
Changes every second of every day around here.....Just in.....![]()
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Idaho’s income tax, property tax relief applications deadlines extended to May 17![]()
Mar 25, 2021 03:13 am![]()
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BOISE, IDAHO — March 25, 2021 — The Idaho State Tax Commission voted today to extend the 2020 Idaho income tax filing and payment deadlines from April 15, 2021, to May 17, 2021, to match the federal extended deadline. ![]()
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The extension applies to all taxpayers subject to Idaho’s individual income tax (i.e., individuals, trusts, and estates), regardless of the amount owed. Penalty and interest won’t apply if taxpayers file their return and pay the income tax they owe by May 17.![]()
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What does this mean for my clients.....? NOTHING is changing. I am still focused on getting you completed or on extension by April 15th. I need a vacation like no other right now!!!!!
It has been crazy busy around here this week, so we didn’t get our normal postings out. For the local people we did get this out in the paper!!! ❤️❤️❤️❤️ our shop dog!
IRS to Handle Unemployment Returns, Don't Amend![]()
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Returns filed with unemployment benefits prior to the $10,200 exclusion should not be amended. The IRS has indicated it will refigure taxes on these returns and adjust the taxpayer's account accordingly. The IRS will then send any refund amount directly to the taxpayer.![]()
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The IRS has not yet communicated a timeline for making adjustments and sending refunds.![]()
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States are still making decisions on whether to follow....As of my last update, Idaho will be taxing the unemployment, but this could change.....
American Rscue Plan Act 2021![]()
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The IRS urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time.![]()
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The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021.![]()
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Additional information will be made available as soon as possible about:![]()
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Unemployment (IRS emphasizes not filing amended returns, until it issues additional guidance)![]()
New round of Economic Impact Payments![]()
Child Tax Credit, including advance payments![]()
Other tax provisions
Our offices will be closing early today for a long weekend, returning next Tuesday. The question is why would we close during the busy season....? For Puppies!!!!!! We will be traveling to pick up the new addition to our office/family! Potato and Chip are all packed and ready to pick up Salsa!
Okay, so my new motto is “I know nothing”.....why...because things are changing so rapidly I can’t seem to keep up.....![]()
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Just released today, the deadline to file AND pay federal taxes has been automatically extended to May 17, 2021. We are to hold tight as the IRS will provide formal guidance in the next few days.![]()
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What does that mean for all my clients....NOTHING! 🥰🤣😬![]()
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The reality is this....I have worked hard since everything changed in the last year, and Wendy and I will still be taking our scheduled time off. We are still closing the office April 15th at noon, and running away for the weekend. Wendy will still return to the office on April 19th and continue working. I on the other hand am taking a MUCH needed vacation and getting away from it all! I will be back in the office May 6th....we plan on getting as much completed before we leave, and we will work just as hard when we return. ![]()
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We are happy to file extensions and we can deal with it all later.
*** Unemployment Income 2020 ***![]()
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With the passing of the American Rescue Plan the new provision that $10,200 of unemployment benefits received in 2020 are exempt from federal taxable income is going to affect a TON of people that have already filed returns. If you fall into this category, just HANG IN THERE! It has not yet been determined or released as to how the IRS will rectify the confusion and chaos. ![]()
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For individuals filing tax returns from today forward, this will automatically apply for Federal income, but States have NOT yet decided if they are following suit. There may be a delay between state and federal filing as states begin to make decisions on how to address/accept and work with the significant changes being made in the middle of tax season.![]()
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This has been an extremely tough year for a multitude of industries...so remember be kind to each other as we continue to wade through the BS 🙂
*** Worry Free Wednesday ***![]()
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Paycheck Protection Program (PPP) - Not taxable income![]()
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The debt forgiveness is not taxable, and businesses can deduct expenses paid for with forgiven loan amounts. ![]()
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Typically cancellation of debt is considered a taxable event. Congress has provided an exception for businesses that took out the PPP loan offered with the Cares ACT. State taxation is not as clear cut and is contingent upon the state determination. Not all states have decided, even though we are in the middle of tax season. Many states do follow federal law, however there are some that do not. Be sure to check the laws in the state you are required to file tax returns.
*** Tax Tip Tuesday ***![]()
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Energy-Saving Home Improvements![]()
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Tax Credits have been extended through 2021. The credit remains at 10%, with a $500 maximum. Any credits taken in prior years will count against the $500. Individual's can claim up to $150 for water heaters, and furnances and $200 for windows and skylights
If you plan on returning to our office this year for the 2020 tax year, I have some important deadlines for you to keep in mind. ![]()
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We are closing the office this year at 12pm on Thursday, April 15th so that Wendy and I can take long weekend after this grueling tax year! What does this mean for you…..? In order to provide enough time for us to accurately prepare your Individual Income Tax Returns we are asking that you have all of your information into our office by Thursday, April 1st. If we receive your information after this date, we will do our best to get it completed in a timely manner, but do not guarantee completing your return without filing a 6-month extension. If you want to file an extension and you know this is your plan for the year, please let me know as soon as possible so we can get it filed.![]()
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April is also the month that quarterly reports are due for all business clients, so the first two weeks around here will be a little hectic. Wendy will be returning to the office on Monday, April 19th after our extended weekend, I will not be returning to full days until after Wednesday, May 5th. Rest assured for our monthly clients, we will have all of your quarterly reports filed, and I will be checking in remotely to ensure everything gets out accordingly. ![]()
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Please let me know if you have any questions and contact us as soon as you can for an appointment or drop off time!
*** Tax Tip Tuesday ***![]()
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Don't wait till the last minute to bring your taxes in! We are still accepting appointments, so call to get in, or if you are are a returning client, just drop your information off so we can get started!
Deadline Quickly Approaching!![]()
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March 15th is the deadline for Partnerships filing Form 1065, S Corporations and LLC's that have elected to be viewed as an S Corporation. ![]()
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If you don't have all of your information together yet, contact our office and we can file a 6 month extension for you!
*** Worry Free Wednesday ***![]()
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Standard Deduction vs Itemized Deductions![]()
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Deductions reduce the amount of taxable income when filing a federal income tax return, resulting in a reduction of the amount of tax a taxpayer owes.![]()
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The Standard Deduction adjusts annually and varies based on your filing status, age and if they can be claimed as a dependent or not. A taxpayer benefits from the standard deduction when it is more than the allowable itemized deduction. ![]()
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Itemized Deductions are a compiliation of medical expenses (based on a % of AGI), interest and taxes paid on their home mortgage, uninsured casualty or theft losses and large contributions. There are limits on some of these deductions. ![]()
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For the 2020 tax year, cash donations up to $300 are deductible without having to itemize.
*** Tax Tip Tuesday ***![]()
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Self Employed May Qualify for Sick Leave Credits![]()
Are you a self-employed small business that had to take time off in 2020 due to COVID19? ![]()
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The Families First Coronavirus Response Act was intended to help by providing small employers refundable tax credits that would reimburse them dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.![]()
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Of course there are forms and requirements that need to be met to determine eligibility. Contact our office for an appointment, we are always happy to help!
*** Worry Free Wednesday ***![]()
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Client Refund's - Better have Proof![]()
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If refunding income to customers, make sure you have proof. A ledger simply tracking the refund is not enough and will not hold up for an IRS audit. It is highly recommended you reimburse customer's with transactions that either post to your bank account, or through the credit card it was originally charged to.![]()
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Third party merchants issue 1099K's at the end of the year to the IRS and to the small businesses utilizing their services for processing credit card transactions. If there is a discrepancy between the 1099K gross receipts and the taxpayers Schedule C, there is a high probability of being flagged for an audit.![]()
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Always reconcile your Schedule C gross receipts with 1099K's received from credit card processors or other third parties. If there is a discrepancy that you can prove, you can notify this issuer and request an amended form to be issued. If you do not receive one and you use your figures that do not match, make sure you have documentation other than a tracking log proving the reimbursements. These can be return receipts or bank statements. The most difficult to prove is cash, we recommend never refund with cash unless it has been processed through your cash register and you have proof.
*** Tax Tip Tuesday ***![]()
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Business Meals 100% ![]()
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To encourage more restaurant and small business support during these trouble times business meals can be 100% deducted for all client meals and employees on business travel.![]()
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Remember, this does not include self-employed just grabbing lunch during the workday! These meals must be associated with conducting business. Business meetings with clients or employees do qualify.
*** Worry Free Wednesday ***![]()
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"Our CPA did it"![]()
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Our CPA did it, does not excuse late filing. A lawyer used a CPA to prepare and filed his 1040. Every year the CPA filed for an automatic extension, then completed and filed the return that summer.![]()
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One year the CPA prepared the extension and sent a draft to the Lawyer but, unbeknownst to the lawyer, the CPA never filed the extension. In August, the CPA completed and filed the return. The IRS assessed a penalty for late filing, and the Lawyer appealed. ![]()
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Held for the IRS. The argument of the taxpayer was he had a reasonable cause for failing to file on time because he believed the CPA had filed the extension and relied on the CPA to do so. IRS held that taxpayers have a personal duty to ensure that tax returns and other documents are filed on time, a duty which cannot be delegated. ![]()
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If you suspect issues with your returns, issue with a return, refund not being received, reach out to your tax preparer, it's your duty.
*** Tax Tip Tuesday ***![]()
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PPP Loans![]()
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Good news for firms that took out Paycheck Protection Program loans: The debt forgiveness is NOT taxable, and businesses can deduct expense that result in forgiveness of the loan.![]()
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This is going to result in double tax benefit for employer's! Income that is not recorded yet expenses are still used to reduce gross sales. ![]()
What's more, the PPP loans are on their second round. If your business is still struggling they can receive additional funding if they meet the following qualifications:![]()
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1. Previosly received a First Draw PPP Loan and will or has used the full amount only for authorized uses.![]()
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2. Has no more than 300 employees; and![]()
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3. Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
*** Worry Free Wednesday ***![]()
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Employers can provide tax-free disaster relief to employees affected by COVID![]()
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IRC 139, Disaster relief payments, allows employee to receive a "Qualified Disaster Relief Payment" from an employer tax-free, exempt from payroll taxes and fully deductible by the employer.![]()
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Qualified Disaster Relief Payments:![]()
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Includes any amount paid or reimbursed to an individual:![]()
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1. for reasonable and necessary personal, family, funeral, or living expenses incurred as the result of a qualified disaster;![]()
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2. for reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for the repair, rehabilitation or replacement is attributable to a qualified disaster.![]()
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Examples include reimbursement for the cost of personal protection items, the cost of creating or improving a home office, telecommunications and internet upgrades, additional child care because schools were close, and home security upgrades.
*** Tax Tip Tuesday ***![]()
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New this Season for EIC![]()
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Earned Income tax credit is an additional credit issued to qualifying worker with low-to moderate income. This is a refundable credit, and usually gives taxpayers a little boost to the refunds they receive.![]()
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There's a new rule to help people impacted by a job loss or change in income for 2020. Taxpayers can use their 2019 Earned income to calculate their 2020 EIC, if there 2019 Earned Income was more than their 2020 Earned Income. The same rules apply for the additional Child Tax Credit
*** Worry Free Wednesday ***![]()
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You may not have to pay that IRS penalty.![]()
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Taxpayers who missed one or more deadlines in 2020 may qualify for the IRS's First Time Penalty Abatement policy. Under the policy, the IRS might relieve penalties for failing to file a tax return, pay taxes on time or deposit when due.![]()
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To Qualify the following is required:![]()
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* You did not previously have to file a return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty![]()
* You either filed all currently required returns or an extension.![]()
* You have paid, or arranged to pay, tax due.![]()
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It is recommended to call the phone number on the penalty notice to see if you qualify
*** Tax Tip Tuesday ***![]()
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Taxpayer Bill of Rights![]()
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All taxpayers have fundamental rights when interacting with the IRS. These rights apply all year long, not just during tax season. Below is a summary of these rights:![]()
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1. The right to be informed![]()
2. The right to quality service![]()
3. The right to pay no more than the correct amount of tax![]()
4. The right to challenge the IRS's position and be heard![]()
5. The right to appeal an IRS decision in an independent forum![]()
6. The rigth to finality![]()
7. The right to privacy![]()
8. The right to confidentiality![]()
9. The right to retain representation![]()
10 The right to a fair and just tax system![]()
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Remember the people of the IRS are just like you, they are doing a job that they have been trained form. We have been groomed to be fearful of the IRS and fearful of an audit. Most times, when a taxpayer is being questioned it's simply for verification, or proof. If you receive a notice that you don't understand, contact our offices, we are happy to help.
Tis the Season.....Are you ready? Bring on the boxes, Tax Season is upon us....See ya soon!
*** Worry Free Wednesday ***![]()
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More Audits of 401(k) loan to employees are coming in 2021. An IRS offical has said many employers allow 401(k) loans that do not comply with the tax code.![]()
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The tax code allows the loans, but to be valid, retirement plan documents must allow them too. ![]()
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Bottom line: Be sure your retirement plan specifically allows loans and that loans made comply with the plan documents and the tax code.
*** Tax Tip Tuesday ***![]()
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February 1st is the deadline for employers to issue and file wage statements.![]()
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Keep in mind, for those employers that are mailing a W2, as long as it's postmarked by February 1st, then it's not late. Just hang in there, E-filing doesn't even open until February 12th. ![]()
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If you have received your W2's, or 1099's contact our offices, we can get started so your return is ready to click-file on the 12th!
Leah's Accounting Solutions updated their info in the about section.
www.facebook.com
*** Worry Free Wednesday *** ![]()
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Text Scam, Beware!![]()
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IRS warns about the latest scheme from fraudsters to steal your financial information. The text message reads as follows: “You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account.” It links to a fake site mimicking IRS’s “Get My Payment” tool. Do not respond to the text or open the link! Instead, take a screen shot and e-mail it to IRS at phishing@irs.gov. Include the date and time you received the text.
*** Tax Tip Tuesday ***![]()
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Got a Letter? Owing Taxes? ![]()
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Check if there’ a barcode on it. The Service is adding a QR barcode to its CP14 balance due notices. Taxpayers who receive the letter can use their smartphones to scan the QR code to go directly to the IRS’s website for information on resolving the balance due online.
*** JUST IN ***![]()
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IRS Announced - Tax Season will begin February 12th!!!!![]()
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The Internal Revenue Service (IRS) has announced that tax season will open on Friday, February 12, 2021. Yes, on a Friday.![]()
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The IRS will begin accepting paper and electronic tax returns that day. This is about two weeks later than had been expected. The delay allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes - especially those involving a second round of stimulus checks (Economic Impact Payments, or EIPs).![]()
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Are you ready? We are! If you receive your information PRIOR to, we can still get it entered into our tax program so when it’s time we “click-file”. ![]()
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Our offices will resume normal business hours next week once our power has been restored. Call, or email for an appointment!
Happy Friday! The wind storms that came through here did a ton of damage. Yesterday I took a drive and saw multiple downed power lines, tress and all that fun stuff! The good news is, we are safe, we are warm and we are simply camping indoors! Our offices are still without power and internet...I guess we needed a long weekend! ![]()
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Hopefully will be back up and running by tomorrow....that doesn’t mean we are open, we will be closed until Monday. I am receiving emails, and Wendy is able to work a little from her home (she has power and internet restored) but she has limited access to information, and can only get onto our server. ![]()
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Stay safe, stay warm, be kind.
Good morning! Happy to hear that a ton of places in town have power back....sorry to say our office isn’t one of them! Another day of rest....maybe this is what we need before tax season is in full swing! Happy Friday Eve everyone....stay safe, stay warm and be kind.
Good morning! We hope you are all safe and warm! Our offices are closed for the day, we have no internet and no power. Hoping things will be restored soon, but high winds are expected all day!
*** Worry Free Wednesday ***![]()
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Victim of Scam?![]()
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The victim of scam has more time to roll over withdrawn IRA funds, as the IRS privately rules. For example, a woman took money out of the IRA to comply with the demands of fraudster posing as an enforcement official, who threatened her if she didn’t pay up. She later wanted to put money back into her IRA, but 60 days had already passed. The Service granted her 60 days from the date of the ruling to complete her rollover.
*** Tax Tip Tuesday ***![]()
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Economic Impact Payments![]()
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Here is a recent one: A parent claimed their 21-year-old daughter as a dependent on their 2019 Form 1040, but they won’t be eligible to claim her on their 2020 return. She plans to file her own return for 2020, and her income will be below the threshold for getting the $1,200 stimulus payment. Will she get the rebate? Yes, but not this year. She can instead claim the amount as a refundable credit on her 2020 Form 1040.
*** Worry Free Wednesday ***![]()
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Can’t Pay Your Tax Debts? ![]()
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Get help form a Kinder – Gentler IRS in the new taxpayer’s relief initiatives. This will give taxpayers, who qualify for a short –term payment plans an additional 60 days to pay their tax debts, increasing from the original 120 days to the new 180 days to pay. Easing the paperwork requirements with respect to certain installment agreements in turn allowing some folks who owe less than $250,000 in 2019 taxes, penalties, and interest to set up an installment agreement without IRS filing a notice of federal tax lien. Suspending collection efforts for some taxpayers who are unable to pay.
*** Tax Tip Tuesday ***![]()
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IRA’s New Life Expectancy Tables for Required Distributions![]()
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For the first time since 2002, the tables have been updated by the IRS. This will account for more-current individual mortality rates and allow distribution to be spread over more years. For example, a 72-year-old IRA owner currently uses a distribution period of 25.6 years to calculate RMDs. Under the new table, a 72-year-old would use a period of 27.4 years. (Note that the government stimulus law waives RMDs for 2020.) Basing the RMDs on longer life expectancies allows plan participants and IRA owners to take out smaller annual payouts and lets them keep money in their accounts longer. The updated tables apply to computing withdrawals for 2022 and beyond, even for those people who have been using a shorter life expectancy in prior years.
Looking for a monthly planner to help you budget your family, your life, your business. Live planner at it's finest!![]()
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Give us a call and let us know how we can help.
Year End is here! Time to get rolling on W2's, 1099's and year-end forms! If you aren't a regular client, and need help, give us a call before it's too late!🤓
Our Offices will be closing early today, so we can ring in the New Year!![]()
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Happy New Year! ![]()
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Stay safe out there! Love lives here!
*** Worry Free Wednesday *** ![]()
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Is my purchase really business related, or would the IRS deem it a personal purchase? ![]()
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Of course every situation is different in nature and will have specifics for justification of questionable purchases. Coleman v. Commissioner, 2020-146 a laptop deduction was denied by the IRS under Section 274(d) Substantiation Required ![]()
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IRC 274(d) Substantiation required states, "No deduction or credit shall be allowed under section 162 or 212 for any traveling expense (including meals and lodging with away from home), for any expense for gifts, or with respect to any listed property (as defined in Section 280F(d)(4), unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer's own statement (A) The amount of such expense or other item, (B) the time and place of the travel or the date and description of the gift, (C) the business purpose of the expense or other item, and (D) the business relationship to the taxpayer of the person receiving the benefit. The Secretary may by regulations provide that some or all of the requirements of the preceding sentence shall not apply in the case of an expense which does not exceed an amount prescribed pursuant to such regulations." ![]()
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What does this mean? Record keeping is imperative for ALL deductions, if you can't prove it you loose it! If you need some assistance setting up adequate accounting services, contact our office. We are happy to help keep your records so that if you need them, you have them accessible!