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05/31/2023

Business Accessibility Tax Credits – Did You Know?

The IRS offers a variety of tax benefits for businesses that improve accessibility for people with disabilities and/or hire workers with disabilities. Small businesses with 30 or fewer full-time employees and annual revenues of $1 million or less may qualify to claim the Disabled Access Credit. The maximum credit amount is 50% of the cost of access improvements such as ramps, automatic doors and interpretive services like braille signage or audio interfaces.

Businesses of all sizes may also qualify for the Barrier Removal Tax Deduction. This program enables businesses to deduct up to $15,000 a year for eligible expenses to remove barriers that make it difficult for people with disabilities and the elderly to move around facilities. Ordinarily, businesses must depreciate such construction costs over a number of years.

In addition, businesses that hire veterans, workers with disabilities or other people who traditionally face obstacles to employment may qualify for the Work Opportunity Tax Credit. This credit may amount to as much as 40% of a qualifying employee's first-year wages.

A business tax professional can help you develop a strategy to take advantage of all the tax benefits available for boosting the accessibility of your business.

05/24/2023

National 529 Day on Monday, May 29th - Did You Know?

If you put money in a 529 account for education, withdrawal of earnings are tax-free if used for qualified educational expenses. Qualified educational expenses include tuition, fees, housing, meals and books. Many states offer a full or partial tax deduction for 529 plan contributions. They may also offer incentives and promotions to encourage families to open and contribute to 529 accounts this coming Monday for National 529 Day.

The 2017 Tax Cuts and Jobs Act (TCJA) also expanded eligibility for 529 savings plans. Up to $10,000 per year may be used for Kindergarten through Grade 12 education (public, private, or religious schools).

05/16/2023

Small Business Clean Energy Tax Credits – Did You Know?

The IRS recently reminded taxpayers of the clean energy tax credits available to small businesses in 2023. These credits include:

- SOLAR POWER CREDIT: Small businesses may get a credit as high as 30% of the cost of switching to solar power, which can greatly reduce or even eliminate electricity bills.
- ENERGY EFFICIENCY CREDITS: Owners of buildings that house small businesses may claim a credit of up to $5 per square foot for efficiency improvements that reduce energy usage and utility bills.
- CLEAN COMMERCIAL VEHICLE CREDIT: This credit may be as high as 30% of the cost to acquire commercial trucks and vans classified as clean vehicles. Clean vehicles include plug-in electric and hybrid vehicles, as well as vehicles powered by fuel cells.

These credits are nonrefundable, so you cannot claim a credit amount greater than the tax your business owes. Nevertheless, they could reduce your enterprise's tax bill. A business tax professional can help you determine whether your business qualifies for these credits, and if so, help you develop a plan to maximize your tax savings.

05/10/2023

Direct Deposit for Amended Returns - Did You Know?

Taxpayers may need to file amended tax returns for a variety of reasons. For example, they may have made significant errors on their original returns, or neglected to claim deductions or credits available to them. Until recently, the IRS only issued tax refunds related to amended returns by paper check. Now, taxpayers who file amended returns electronically may request direct deposit to receive refunds more quickly, and eliminate the risk of paper checks getting lost or damaged in the mail.

If needed, a tax professional can help you file an accurate amended return electronically, and set up direct deposit.

05/01/2023

Letters from the IRS - Did You Know?

If the IRS needs to contact a taxpayer, the agency will generally send a letter in the mail rather than emailing or calling. Taxpayers may receive IRS letters for many reasons, including:

- The taxpayer owes tax and did not pay it with their return or set up a payment plan.
- The IRS has a question about a tax return or needs more information to process it.
- The IRS has made an adjustment to a tax return or refund amount.
- The IRS needs to verify a taxpayer's identity.

If you receive an IRS letter in the mail, do not ignore it, but also do not panic. Some IRS notices do not require the taxpayer to take any action, while others advise the taxpayer of an issue that can be readily resolved. In many cases, you will not need to respond to the letter. For example, if an IRS notice simply informs you of a minor change made to your return or your refund amount, you can just file it with your tax records for future reference.

However, if the letter asks you to provide the IRS with additional information, you should respond as quickly as possible. Pay special attention to whether the notice includes a deadline to respond. Taxpayers who fail to reply to an IRS letter by a specified deadline may face penalties or forfeit their appeal rights.

You have the right to appeal any IRS decision about your tax return or the amount of tax you owe. If you do not understand an IRS notice or believe the IRS has made an error, a tax professional can help you figure out the situation and plan your next steps.

04/25/2023

Tax Debt Settlement Scams – Did You Know?

When a taxpayer owes more tax than they can pay without extreme hardship, the IRS sometimes accepts an offer-in-compromise (OIC). Under an OIC agreement, the taxpayer may settle their tax debt for less than the full amount owed.

However, the IRS warns taxpayers to watch out for "OIC mills," agencies that churn out stacks of OIC applications, costing the taxpayers they supposedly represent thousands of dollars. Many of these agencies make unrealistic claims in radio, TV and internet ads about settling tax debts for "pennies on the dollar." Often, a taxpayer gets talked into paying an OIC mill to file an application that the agency knows will be rejected, because the taxpayer does not qualify for the OIC program. Even when the IRS accepts an application from an OIC mill, the excessive fees charged by the agency may still cause the taxpayer great financial harm.

If you are considering an OIC to settle your tax bills, do not believe the hype. You may check your eligibility using the IRS' Offer In Compromise Pre-Qualifier tool with the link below. Working with a trusted tax professional can also determine whether you qualify for the OIC program, as well as help you prepare an application with a better chance of being accepted.

Offer In Compromise Pre-Qualifier tool: https://irs.treasury.gov/oic_pre_qualifier/

04/17/2023

Filing Extensions and Minimizing Penalties – Did You Know?

Taxpayers who request an extension to file their 2022 federal income tax returns may file anytime up until October 16th, 2023. Remember, however, that an IRS extension is only an extension to file tax returns, NOT an extension to pay any tax owed. Taxes not paid by the April 18th payment deadline may be subject to late penalties and interest charges.

Electronic payments may be made using the IRS online payment portal (link below). The IRS urges those who cannot pay what they owe at this time to pay whatever amount they can, and then apply for an installment plan to pay off the remaining balance.

If you are required to file, you should still file your taxes, even if you can't pay, as the failure-to-file penalty may be 10 times more than the failure-to-pay penalty.

IRS Online Payment Portal: https://www.irs.gov/payments

04/12/2023

Reducing Fees & Penalties - Did You Know?

If you are required to file your taxes, you should still file, even if you can't pay, as the failure-to-file penalty may be 10 times more than the failure-to-pay penalty. If you are unable to pay in full, try to file your tax return by the deadline of April 18th, 2023 and pay as much as you can.

In addition, April 18th is also the due date for Tax Year 2023 first quarter estimated tax payments for those making estimated payments.

04/10/2023

Reporting Foreign Income and Assets – Did You Know?

The IRS generally requires taxpayers to report both their income from foreign sources and any assets they hold outside the U.S. (such as a foreign bank account). Foreign income may include earned income like wages, a salary or self-employment earnings, as well as unearned income like interest or dividends. Taxpayers who qualify for the Foreign Earned Income Exclusion or Foreign Tax Credit must still report their income on a U.S. tax return to claim these benefits.

Even if you did not receive any income from foreign sources in 2022, you may still need to report foreign assets like bank and investment accounts on your tax return. In most cases, you must also file an FBAR form (Report of Foreign Bank and Financial Accounts) if the total value of your foreign assets exceeded $10,000 at any point in 2022. The FBAR filing deadline is April 15, 2023, however, if you are unable to meet this deadline, FinCEN offers an automatic extension until Oct. 15, 2023. Note that the FBAR is NOT an IRS form, and cannot be filed with your tax return. Instead, FBAR forms must be submitted separately to the Financial Crimes Enforcement Network (FinCEN).

04/05/2023

IRS Filing Deadline is April 18th – Filers in Disaster Areas May Have Additional Time

The general filing and payment deadline for 2022 federal tax returns is Tuesday, April 18, 2023.

If you live in a region covered by a federal disaster declaration, you may have additional time to file your return and pay any tax due. The IRS has extended the deadline for residents of certain counties in Alabama and Georgia affected by severe storms, along with many areas of California, to October 16, 2023. Arkansas and Mississippi residents affected by the storm may also now have until July 31 to file and pay payments. The IRS disaster relief webpage (link below) lists all counties and regions that have been granted extended deadlines.

IRS Disaster Relief Page: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

04/03/2023

IRS Online Account Setup Scams – Did You Know?

Each year, the IRS issues a list of the most prevalent scams that put taxpayers' identities and hard-earned money at risk. Some dangerous scams relate to IRS online accounts. Many taxpayers find that setting up an online account helps them stay on top of their taxes and make better planning decisions. Unfortunately, this IRS service has also drawn the attention of digital scammers.

In one common scheme, the scammer contacts a taxpayer, posing as a representative of a supposedly helpful service for people with limited computer skills. The scammer offers to help the taxpayer set up an online IRS account, asking for sensitive information like the taxpayer's address, photo ID, and Social Security number (SSN) or Individual Taxpayer Identification number (ITIN). The scammer then sells this information to criminals, who use it for tax fraud and other forms of identity theft.

The IRS warns taxpayers that ANY such offer is a scam. Most people can readily set up their own IRS online accounts by following the instructions at irs.gov. If you do need help, only seek it from a trusted person, like a family member or tax professional.

IRS Online Account: https://www.irs.gov/payments/your-online-account.

03/29/2023

Tax Refund Myths and Realities – Did You Know? (2/2)

Here are two more key facts you need to know to avoid falling for the myths.

- The refund amount displayed by the Where's My Refund tool could differ from the amount you were expecting. The IRS may need to adjust a taxpayer's refund amount for a variety of reasons, ranging from math errors on their returns to outstanding financial obligations. When such an adjustment is necessary, the IRS always sends a letter explaining the change.

- Getting a 2022 tax refund does not necessarily mean that your 2023 withholding is on track. Regardless of how your 2022 taxes came out, you should check your withholding at least once every year. Tax law changes, along with changes in your marital status, family size or many other factors can affect your withholding. You can use the IRS Withholding Estimator tool (link below) to find out if you need to make any adjustments.

If you have not yet filed your 2022 tax return, a tax professional can help you file it electronically with direct deposit, to ensure that you get your refund as quickly as possible.

IRS Where's My Refund tool: https://www.irs.gov/refunds
IRS Withholding Estimator: https://www.irs.gov/individuals/tax-withholding-estimator

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