Archie

Here’s What’s New and What to Consider When Filing in 2022

Posted on December 20, 2021February 14, 2022 by Archie

The IRS encourages taxpayers to get informed about topics related to filing their federal tax returns in 2022. These topics include special steps related to charitable contributions, economic impact payments and advance child tax credit payments. Taxpayers can visit IRS.gov/getready for online tools, publications and other helpful resources for the filing season.

Here are some key items for taxpayers to know before they file next year.

Changes to the charitable contribution deduction

Taxpayers who don’t itemize deductions may qualify to take a deduction of up to $600 for married taxpayers filing joint returns and up to $300 for all other filers for cash contributions made in 2021 to qualifying organizations.

Check on advance child tax credit payments

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

Taxpayers who received less than the amount for which they’re eligible will claim a credit for the remaining amount of child tax credit on their 2021 tax return.
Eligible families who did not get monthly advance payments in 2021 can still get a lump-sum payment by claiming the child tax credit when they file a 2021 federal income tax return next year. This includes families who don’t normally need to file a return.

In January 2022, the IRS will send Letter 6419 with the total amount of advance child tax credit payments taxpayers received in 2021. People should keep this and any other IRS letters about advance child tax credit payments with their tax records. Individuals can also create or log in to IRS.gov online account to securely access their child tax credit payment amounts.

Economic impact payments and claiming the recovery rebate credit

Individuals who didn’t qualify for the third Economic Impact Payment (STIMULUS) or did not receive the full amount may be eligible for the Recovery Rebate Credit based on their 2021 tax information. They’ll need to file a 2021 tax return, even if they don’t usually file, to claim the credit.

Individuals will need the amount of their third economic impact payment and any plus-up payments received to calculate their correct 2021 recovery rebate credit amount when they file their tax return.

In early 2022, the IRS will send Letter 6475 that contains the total amount of the third economic impact payment and any plus-up payments received. People should keep this and any other IRS letters about their stimulus payments with other tax records. Individuals can also create or log in to IRS.gov online account to securely access their economic impact payment amounts.

More information: Tax Filing Made Easy

Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return

Tax Planning Requires Good Record Keeping

Posted on December 6, 2021December 6, 2021 by Archie

The Internal Revenue Service – IRS encourages people to plan for tax season. Like all of us, we just don’t. Below are tips recommended by the IRS

What taxpayers can do now to get ready to file taxes in 2022

There are steps people, including those who received stimulus payments or advance child tax credit payments, can take now to make sure their tax filing experience goes smoothly in 2022. They can start by visiting the Get Ready page on IRS.gov. Here are some other things they should do to prepare to file their tax return.

Gather and organize tax records
Organized tax records make preparing a complete and accurate tax return easier. They help avoid errors that lead to processing delays that slow refunds. Having all needed documents on hand before taxpayers prepare their return helps them file it completely and accurately. This includes:

Forms W-2 from employers
Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan
Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy
Form 1099-INT for interest received
Other income documents and records of virtual currency transactions

Taxpayers should also gather any documents from these types of earnings. People should keep copies of tax returns and all supporting documents for at least three years.

Income documents can help taxpayers determine if they’re eligible for deductions or credits. People who need to reconcile their advance payments of the child tax credit and premium tax credit will need their related 2021 information. Those who did not receive their full third Economic Impact Payments will need their third payment amounts to figure and claim the 2021 recovery rebate credit.

Taxpayers should also keep end of year documents including:

Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments
Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit
Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance premium tax credits for Marketplace coverage

Confirm mailing and email addresses and report name changes
To make sure forms make it to the them on time, taxpayers should confirm now that each employer, bank and other payer has their current mailing address or email address. People can report address changes by completing Form 8822, Change of Address and sending it to the IRS. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or their local post office. They should also notify the Social Security Administration of a legal name change.

View account information online
Individuals who have not set up an Online Account yet should do so soon. People who have already set up an Online Account should make sure they can still log in successfully. Taxpayers can use Online Account to securely access the latest available information about their federal tax account.

Review proper tax withholding and make adjustments if needed
Taxpayers may want to consider adjusting their withholding if they owed taxes or received a large refund in 2021. Changing withholding can help avoid a tax bill or let individuals keep more money each payday. Life changes – getting married or divorced, welcoming a child or taking on a second job – may also be reasons to change withholding. Taxpayers might think about completing a new Form W-4, Employee’s Withholding Certificate, each year and when personal or financial situations change.

People also need to consider estimated tax payments. Individuals who receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income should make quarterly estimated tax payments. The last payment for 2021 is due on Jan. 18, 2022.

Share this tip on social media — #IRSTaxTip: What taxpayers can do now to get ready to file taxes in 2022. https://go.usa.gov/xeEMp

Uber Driver’s Taxes

Posted on November 28, 2021December 6, 2021 by Archie

Filing Uber Driver’s Taxes Is Not As Easy As You Think

As a Uber Driver, you are technically Self-Employed or an Independent Contractor. Under California Laws (AB5) known as the gig workers law, employers are to classify you as an employee. Nevertheless, if you received a 1099-K or 1099-MISC or a 1099-NEC, the IRS classify you as self-employed. Meaning you would have to prepare your tax return showing your business Income (1099) and Expenses (Schedule C).

So you say to yourself this is easy, right? Uber have provided me with a annual statement that tell me my monthly income, mileage drove, etc. etc. etc. This sounds good, right? Nope. The record keeping is incomplete.

Turbotax tells you it easy, sign up and do your taxes or get Expert help. That also sounds good, Right?
Nope. Here is why. You need to speak with the Tax Expert to guide him or her as to your expenses for the year. The Tax Expert will also need to sometimes see the physical copy of the document that make up the expense so as to categorize that expense.

At PREMIER Financial Tax & Accounting Services dba Friendly Tax Services, we can help you with this.
That is what we do. WE ARE EXPERTS.

Call Us (866)542-9551 | (213)418-9600

A Tax Expert is a Phone Call Away

Can A Tax Preparer prepares Tax Returns If They Owe the IRS

Posted on November 26, 2021 by Archie

The answer is no. If you owe the IRS, you will need to pay the IRS to continue as a Tax Preparer.

Attorneys, certified public accountants, enrolled agents or anyone who gets paid to prepare tax returns may owe a penalty if they don’t follow tax laws, rules and regulations.
https://www.irs.gov/payments/tax-preparer-penalties

What is a CP53A IRS Letter?

Posted on November 26, 2021December 13, 2021 by Archie

Question: Why did I get a cp53a from the IRS if I didn’t file taxes for 2020 it came in my child name also her father filed not me?”

The IRS CP53A Letter means IRS tried to deposit your tax refund into your bank account but your bank cannot process the submission. The IRS will research your account but it will take 8-10 weeks to reissue your refund. The IRS maybe trying to get a hold of someone that’s why you are getting this letter

The letter usually ask you “please follow up your refund by calling IRS to this number 1-866-682-7451.”

Call us

Author: Archie