John Lee Accounting & Tax

10/10/2024

🌟 Year-End Tax Planning – It’s Time to Get Prepared! 🌟

As we approach the end of the year, it’s important to start thinking about your tax planning. Whether you’re a business owner, farmer, or just looking to get your personal finances in order, now is the perfect time to prepare and make smart moves that can save you money.

With over 30 years of experience in both the swine industry and accounting, I understand the unique challenges and opportunities facing folks in Seward County and beyond. As a CPA, I’m here to guide you through strategies like maximizing deductions, taking advantage of tax credits, and reviewing your current financial situation.

🔹 Don’t wait until it’s too late!
🔹 Avoid the last-minute stress and surprises!

Let’s make the most of this tax season together and ensure you're ready to step into the new year with confidence.

📞 Call me today or book your year-end tax planning consultation here:

06/11/2022

The IRS has reacted to the higher cost of gasoline by increasing the standard mileage rate to 62.5 cents per mile from 58.5. The rate changes are effective for the last 6 months of 2022. See entire IRS announcement at

IR-2022-124, June 9, 2022 — The Internal Revenue Service today announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain oth...

01/12/2022

Be on the lookout for scams.

As tax season approaches we all get rushed to get that last form located and it is easy to drop our guard just a little, opening ourselves to big problems. Many of the scams attempt to contact you and get your personal information by phone and email and many of these thieves try to make you believe that they are the IRS.

Just a reminder if someone is asking for info don't provide it directly. Take the time to go through the channels you have used before. Call using a number you obtain independent of any information request to confirm the need.

Also remember that the IRS will never call or send emails asking for info and few other business will either.

Please keep your guard up for these scammers.

01/05/2022

It is important that you provide your tax preparer with the letters that is being described below to avoid delays in receiving your refund!

Issue Number: COVID Tax Tip 2022-03
IRS sending information letters to recipients of advance child tax credit payments and third Economic Impact Payments

The IRS started issuing information letters to advance child tax credit recipients in December. Recipients of the third round of the Economic Impact Payments will begin receiving information letters at the end of January. Using the information in these letters when preparing a tax return can reduce errors and delays in processing.

People receiving these letters should keep them. Do not throw them away. These letters can help taxpayers, or their tax professional prepare their 2021 federal tax return.

Advance child tax credit payments letter can help people get remainder of 2021 credit
To help taxpayers reconcile and receive all the 2021 child tax credits to which they are entitled, the IRS started sending Letter 6419, 2021 advance CTC, in late December 2021 and will continue into January. This letter includes the total amount of advance child tax credit payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payments. People should keep this and any other IRS letters about advance child tax credit payments with their tax records.

Families who received advance payments need to file a 2021 tax return and compare the advance payments they received in 2021 with the amount of the child tax credit they can properly claim on their 2021 tax return.

The letter contains important information that can make preparing their tax returns easier. People who received the advance payments can also check the amount of their payments by using the CTC Update Portal available on IRS.gov.

Eligible families who did not receive any advance child tax credit payments can claim the full amount of the child tax credit on their 2021 federal tax return. This includes families who don't normally need to file a tax return.

Economic Impact Payment letter can help people claim the 2021 recovery rebate credit
The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to EIP recipients in late January. This letter will help Economic Impact Payment recipients determine if they are entitled to and should claim the recovery rebate credit on their 2021 tax returns when they file in 2022.

Letter 6475 only applies to the third round of Economic Impact Payments, which were issued in March through December of 2021. The third round of Economic Impact Payments, including "plus-up" payments, were advance payments of the 2021 recovery rebate credit that would be claimed on a 2021 tax return. Plus-up payments were additional payments the IRS sent to people who received a third Economic Impact Payment based on a 2019 tax return or information received from the Social Security Administration, Railroad Retirement Board or Veterans Affairs. Plus-up payments were also sent to people who were eligible for a larger amount based on their 2020 tax return.

Most eligible people already received the payments. However, people who are missing stimulus payments should review information on IRS.gov to determine their eligibility and whether they need to claim a recovery rebate credit for 2020 or 2021. This includes people who don't normally need to file a tax return.

The Economic Impact Payment letters include important information that can help people quickly and accurately file their tax return.

More information about the 2021 advance child tax credit, Economic Impact Payments and other COVID-19-related tax relief is available on IRS.gov.

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COVID Tax Tip 2022-03, January 5, 2022 — The IRS started issuing information letters to advance child tax credit recipients in December. Recipients of the third round of the Economic Impact Payments will begin receiving information letters at the end of January.

12/20/2021

2022 Mileage Rates Effective January 1

58.5 cents per mile for business use, up 2.5 cents from the 2021 rate;
18 cents per mile for medical purposes or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from this year; and,
14 cents per mile in service of charitable organizations, the same as this year.

12/13/2021

A Quick reminder about tax planning
Don’t forget about the opportunity to deduct up to $600 of charitable contributions without itemizing which will save you 60, 72, 132 or more in taxes depending on your marginal tax rate. You can take advantage of this if you are unable to Itemize.
Develop or review your plan as to how you are going to collect and keep safe the documents and information you will need to prepare your return, (w2,1099, estimated tax payments, Charitable Giving, property tax statements). I know one person that puts a big envelope on the refrigerator marked tax stuff and if something comes in the mail it gets dropped right in the envelop.
One document that I like to hang onto is my last paystub of the year. The stub normally has most of the information that you will find on your W2 so you could get a head start on your return using this or it can be a backup if you don’t receive a w2 or loose one.
You should receive documents confirming the Stimulus Payments and or the Advance Child Tax Credit that you received. Having this document is important to you getting your refund quickly.
You could be proactive in preventing any processing delays for you 2021 by giving your tax preparer permission to review your tax information which will allow the preparer to know what the IRS has on record for these payments. You do this by having your preparer complete a Form 8821.
Be prepared, these gifts from the government can(will) cause you delays in receiving your return.

12/03/2021

New information your tax preparer will need to prepare your taxes.
Many taxpayers have enjoyed the payments they have received from the federal government as the government tries to negate the financial damage that COVID has inflicted in its citizens. Specifically, two of those payments were the third stimulus payment, officially named Economic Impact Payment -3 (EIP3), and Advance Child Tax Credit, ACTC. The EIP3 payment was $1400 for taxpayer, spouse, and each dependent under the age of 19, eligibility of EIP3 was, restricted by the household income and other items. You can see the eligibility requirements on the IRS website irs.gov. The ACTC payments were an advance of half of the CTC which was raised to $3600 for children under 6 years and 3000 for dependents 6 to 17. You can also see the eligibility requirements at irs.gov.
If you were one of the many households that received one of these payments, there is something you need to know about as you gather your documents for your tax preparer. Your tax preparer must reconcile the payments sent to you with the amounts you were eligible for. When there are differences between the amounts paid and the amounts you are eligible for the difference must be rectified, so you may receive additional payments or you may have to return some of what you have received, this will be done as part of the return not in separate transaction. The kicker is that if you report an amount different than what the IRS has on record your return will have to be reviewed, which in the past has caused major delays in getting a return processed which equates to your refund being slow in getting to you, like maybe by Thanksgiving.
So how do you ensure that you have the correct amount on your return? You can review your account on IRS.gov or you can be sure to save 2 documents you should be receiving in January. If you are a tax preparer it would be advisable to get authorization to review the taxpayer’s tax record at the IRS to ensure an accurate return if the taxpayer does not provide these documents. It would be wise for the taxpayer to check the accuracy of these documents when you receive them to see that you received the amounts they are reporting. You should receive a letter 6419 that will report the amount of Advance Child Tax Credit that was sent to you. The other document to be watching for is IRS Letter 6475 which will contain the amount of your 3rd stimulus payment. These are important parts of an accurate tax return and as stated earlier returns deemed inaccurate fall into having to be look at by a human at the IRS and I have clients that are still waiting for their return to surface out of the special processing pile. One last thing to consider is that if your tax preparer has to go the IRS to find the amount of these payments your cost to do the return will increase considerably.

11/24/2021

Wishing everyone a Happy Thanksgiving

11/19/2021

Estimated Tax Payments and itemized deductions.

Don't forget if you operate a corporation your last estimated tax payment is due December 15th.

Also consider that if you are 1040 filer it may be beneficial for your the make an estimated tax payment for state income taxes before the end of the year even though it is not due till January 15th. If you can Itemize you can take advantage of a larger deduction this year and then take the standard deduction next year. If you can do this then you have taken advantage of deductions this year that may have been lost next year because they get lost under the Standard Deduction that is going to be $25,900 for couple in 2022.

You can apply the same principle to any item that can be an itemized deduction, (Medical, Property Tax, State Income Tax, Charitable Contributions). Your strategy has to consider the limit on how much state tax is deductible which is capped this year at 10,000.

If you make an estimated state income tax payment before the end of the year of $2500
that would not be itemized in 2022 but will be in 2021 and you are in the 22% marginal tax bracket you have saved $550 in federal income taxes.

11/12/2021

IRS backlog snowballs into problems for the Taxpayer Advocate Office.

I a blog post1 the Tax payer Advocate Office (TAS) announced that they would not be accepting any new cases that involved unprocessed amended returns. The back log of unprocessed amended returns has grown to over 2.7 million returns. The TAS are unable to assist any taxpayer until the agency has processed the return so by accepting cases, they are not going to be able to provide any relief to the taxpayer anyway has overloaded that system as well. The TAS has issued a directive that all backlogged amended returns be processed by December 29th or present a plan to get current.
I know as a tax preparer it feels that there has been just one long tax season since January of 2020, I can only imagine the state of mind the IRS staff must have. Since it looks like Congress is going to again pass last minute law this saga will continue as Buzz Light Year of Toy Story fame says, ‘to infinity and beyond”.
So, if you are one of the 2.7 million people who are waiting on the processing of their amended return, many of which represent a refund, it doesn’t look like you will have those funds to assist you in having a Merry Christmas
1)

IRS Delays in Processing Amended Tax Returns Are Impacting TAS’s Ability to Assist Taxpayers

11/11/2021

2022 Tax year updates

The IRS has updated tax information for the 2022 tax year.
Revenue Procedure 2021-45 outlines the new standard deductions, Marginal Tax Rates and other items that adjust for inflation.
This information can be used to plan for the coming year. You can use this information to estimate your withholding and estimated tax payments.
2022 Standard Deductions will be
MFJ $25,900
Single and MFS $12,950
Head of Household $19,400

Marginal Tax Rates will be:
35%, for incomes over $215,950 ($431,900 for married couples filing jointly);
32% for incomes over $170,050 ($340,100 for married couples filing jointly);
24% for incomes over $89,075 ($178,150 for married couples filing jointly);
22% for incomes over $41,775 ($83,550 for married couples filing jointly);
12% for incomes over $10,275 ($20,550 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $10,275 or less ($20,550 for married couples filing jointly).

TIP: The tax rates take big jumps higher between 12% and 22% and then again from 24% to 32% so if you can plan your income so you don’t make move across those two hurdles you could save big on your taxes.

You can find the rest of the adjustments at:

IR-2021-219, November 10, 2021 — The Internal Revenue Service today announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2021-45 provides details about these annual adjustments.