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Is it too late to file my taxes?

Posted on June 2, 2023June 2, 2023 by Archie

Generally, it’s never too late to file your taxes. Now here is the catch. If you are due a refund and you don’t file, you have three (3) years to do so. If you do not file within the 3 years period, you lose your refund.

Now, if you owe the IRS, it’s better to file. Why, because the IRS will access penalty and interest.

The IRS provide these situations where someone may not be required to file a tax return, but they may still be eligible for a refund:

Have federal income tax withheld

Excess tax withholdings are only returned in the form of a refund when you file a tax return. This can affect students and part-time workers where the tax withheld from your wages is at a rate that is too high.

Make estimated tax payments

Seniors and retirees who make estimated tax payments or have money withheld from their retirement fund and Social Security disbursements may also be eligible for a refund.

Qualify to claim and receive refundable tax credits

While most tax credits can be used to reduce the tax you owe, there are a few credits that allow you to receive money beyond what you owe. The most common examples of these refundable credits are the Earned Income Tax Credit and Child Tax Credit. Taxpayers often fail to take advantage of these refundable credits.

Taxpayers can get current and prior year tax forms and instructions on the IRS.gov Forms and Publications page.

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 should request copies from their employer, bank or other payer.

Taxpayers who are unable to get missing forms from their employer or other payer can access their tax records including transcripts of past tax returns, tax account information, wage and income statements, and verification of non-filing letters by:

viewing their tax records in their Online Account
requesting their transcript using the Get Transcript Online tool, or
requesting a transcript by mail.

Some taxpayers may be able to get free tax help from volunteers with preparing and filing their tax returns, including prior-year returns.

Again, in cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury.

What Is Tax Planning for Uber Drivers?

Posted on June 2, 2023June 2, 2023 by Archie

So I asked Google what is tax planning? I got this from financebuzz.com

Tax planning is the analysis and organization of a person’s financial situation with the goal of ensuring the most “tax-efficient” outcome. In other words, the goal of tax planning is to make sure you are legally paying as little in taxes as possible.

For UberPeople, tax planning require keeping good record of your expenses. Try to separate your personal expense from your business expense. This is hardest this for most gig workers to do. Why? Because UberPeople use their personal bank accounts as their business account. That’s ok. But you will eventually have to separate your business expenses from your personal expenses.

In the tax preparation world, tax planning for UberPeople means good record keeping. So then, how do you do this? We recommend you do the following

Use a debit card or credit card to make purchases and record your transactions.
Get an accounting software (Quickbooks Self-Employed, Patriot Software, Waveapps or some free expense ledger
Diligently categorize your monthly expenses. Which ones are business or personal. I mean monthly do this.
Print out a Profit and Loss Statement Monthly and review the statement for accuracy.

By doing these four items above, you will cut half the fee to prepare your taxes by about $300. You have don’t the leg work. Without doing this, you end up paying a higher tax prep fees. It’s all about keeping good records.

Hope this helps……

IRS Rules Regarding 1099’s

Posted on June 15, 2022June 15, 2022 by Archie

Below are the IRS 1099-Misc. rules regarding paying someone for services they provide.

File Form 1099-MISC for each person to whom you have paid during the year:

At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
At least $600 in:
- Rents.
- Prizes and awards.
- Other income payments.
- Medical and health care payments.
- Crop insurance proceeds.
- Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
- Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
- Payments to an attorney.
- Any fishing boat proceeds.

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

Source: IRS Rules for 1099-Misc

Accountant | Tax Preparer for Uber or Lyft Drivers

Posted on March 23, 2022May 6, 2023 by Archie

We came across this post on uberpeople.net and commented on it. The questions asked is below.

Discussion Starter · #1 · Oct 3, 2018

Any clues on how to find the best recordkeeping, tax filing advice? Key word search shows a lot of info on this from 2016. Bah-humbug. I’m thinking I might get a CPA’s help once, and see how they organize and arrange…and do my own work after. But maybe there are tax magicians to be found.

I save receipts and records, and am moderately educated on common deductions. I have been hammered with car expenses over and over and have not contacted the IRS at all this year (last year I did not earn enough to get a 1099 and just used TurboTax).

Perhaps I’m equipped to handle it on my own. I use Excel, although I’m kinda playing catch-up with logging everything and thinking my bookkeeping may not need to be as meticulous as I’m making it. I enter weekly earnings. I copy & paste fueling records from Speedway. I document mileage at every fill-up. My mileage is for sure 95% rideshare–maybe higher (I record exceptions)!

Not looking for app suggestions, by the way. I know the best rated ones and am not interested.

I’m not real big on traveling far from New Lenox/Mokena for help. But I suppose it’s a 1x or 2x consult and maybe there’s a real magician out there with Illinois-specific advice.

Here is our response:

Here is our advice. Coming from an Accountant, Tax Expert and a former Uber Driver.

Most of us drive ourselves to work and to other destinations. If we do not have a car, we use public transportation. There is a difference between driving yourself and driving as a Uber or Lyft driver.

Here is the difference

When we are driving ourselves, all we do is to sit at the wheel, turn on the engine and get going. We do not put any thoughts into what the rules of the road are. The rules are subconsciously programmed into our heads. That is, we start the engine and go to where ever we are heading. We stopped at the stop lights, stop signs, and signal left or right and get to where we want to go. That is so easy. It’s routine !!!

When I am driving for uber, I do much the same as above. The difference being is that I am more conscientious of the laws that governs driving. I tend to drive for Uber with my antenna up. I now know that have the responsibility of taking my passenger to his/her destination safely. The same applies to Do-it-Yourself taxes and have a Tax Expert do your taxes.

A Tax Professional is much more verse in the laws that govern preparing taxes. He or She can save you time and money. He or she has been trained to know what is allowable or not allowable. What is deductible or not deductible. For example, you can not say I made $50,000 driving and my expenses are $45,000. Like how do you support yourself? Are you married or single? What makes up the $45,000 allowable expenses?

That knowledge the Tax Preparer has comes from education, training and experience. You can not do taxes without knowing the ramifications and consequences of taking non-deductible expenses.

We can help you with your taxes.

We can help save you money and time.

We are Tax Experts. We are LA PREMIER Tax Service.

Call us (213) 418-9600 or set an appointment | FRIENDLY Tax Services (Accountants and Tax Preparers)

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Home Office Deduction Self-Employed

Posted on January 20, 2022January 20, 2022 by Archie

The home office deduction allows qualified taxpayers to deduct certain home expenses when they file taxes. To claim the home office deduction on their 2021 tax return, taxpayers generally must exclusively and regularly use part of their home or a separate structure on their property as their primary place of business.

Here are some details about this deduction to help taxpayers determine if they can claim it:

Employees are not eligible to claim the home office deduction.
The home office deduction, calculated on Form 8829, is available to both homeowners and renters.
There are certain expenses taxpayers can deduct. These may include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent.
Taxpayers must meet specific requirements to claim home expenses as a deduction. Even then, the deductible amount of these types of expenses may be limited.
The term “home” for purposes of this deduction:
- Includes a house, apartment, condominium, mobile home, boat or similar property.
- Also includes structures on the property. These are places like an unattached garage, studio, barn or greenhouse.
- Doesn’t include any part of the taxpayer’s property used exclusively as a hotel, motel, inn or similar business.
Generally, there are two basic requirements for the taxpayer’s home to qualify as a deduction:
- There generally must be exclusive use of a portion of the home for conducting business on a regular basis. For example, a taxpayer who uses an extra room to run their business can take a home office deduction only for that extra room so long as it is used both regularly and exclusively in the business.
- The home must generally be the taxpayer’s principal place of business. A taxpayer can also meet this requirement if administrative or management activities are conducted at the home and there is no other location to perform these duties. Therefore, someone who conducts business outside of their home but also uses their home to conduct business may still qualify for a home office deduction.
Expenses that relate to a separate structure not attached to the home may qualify for a home office deduction. They will qualify only if the structure is used exclusively and regularly for business.
Taxpayers who qualify may choose one of two methods to calculate their home office expense deduction:
- The simplified option has a rate of $5 a square foot for business use of the home. The maximum size for this option is 300 square feet. The maximum deduction under this method is $1,500.
- When using the regular method, deductions for a home office are based on the percentage of the home devoted to business use. Taxpayers who use a whole room or part of a room for conducting their business need to figure out the percentage of the home used for business activities to deduct indirect expenses. Direct expenses are deducted in full.

Share this tip on social media — #IRSTaxTip: How small business owners can deduct their home office from their taxes. https://go.usa.gov/xtbkP

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Category: Tax

Is it too late to file my taxes?

What Is Tax Planning for Uber Drivers?

IRS Rules Regarding 1099’s

Accountant | Tax Preparer for Uber or Lyft Drivers

Home Office Deduction Self-Employed

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