Anthony Sykes & Company

         This week, on January 28, 2019, the Internal Revenue Service ( IRS ) did open up fully staffed for the beginning of the tax filing season. This is good news, and it means that all of their services are available (for now). It also means that IRS employees will have a lot of work to catch up on. Here are some reasons why Taxpayers need to exercise some patience.           The IRS has stated that they are doing everything possible to make sure that the filing Tax Returns, and receiving Tax Refunds, will be a smooth process. With that understood, there is a lot of work still to be done in the area of audits . These activities were paused during the shutdown. Now they are being rescheduled. If you missed a due date because of the shutdown, talk with your Qualified Tax Professional about the options you have.           Payments were still required...

        Many business owners now have more information to make informed decisions for their Tax Returns. Even during the partial Federal Government shutdown, the IRS had been issuing some guidance and rules regarding this Tax filing Season and how the Tax Cuts and Jobs Act ( TCJA ) will be applied. Part of that guidance involved a clarified understanding of the 20% pass-through deduction for businesses.           Shedding light on Section 199A had been a concern for the past few months. There had been theories, but no clear understanding about how it would really work in application. For example, the rules state that income from originating and selling mortgages is eligible for the deduction. However, the purpose of this provision was to give a break to businesses whose owners pay taxes on their personal returns.           If a taxpayer earns more than the set amount, an...

         It has been stated many times on this blog and from many other Tax news sources, the Tax Cuts and Jobs Act ( TCJA ) has been a game changer. Even basic calculations now need to be looked in a different way. Nothing will be done the same way. One example is tax withholding and estimated payments.           In general, when it comes to tax withholding from paychecks, things are very simple. A Form W-4 is filled out and given to your employer and that determines how much in taxes are withheld from your wages earned. However, when the TCJA went into effect, the withholding tables were adjusted, which meant less would be held from your pay. Most people saw an increase in wages last year. The real reasons for this were a suspension of certain exemptions and deductions.           What many Taxpayers may not have realized is that they needed to submit a revised W-4 to...

         There has been a mix of confusion and anxiety as the partial Federal Government shutdown has continued this month. What seemed to bring clarity were the announcements that Tax Returns would be accepted starting January 28 and that Tax Refunds will be issued. However, the actual details paint a different picture.           After the IRS contingency plan ran out on December 31, it was only replaced on January 15. This was an outline that described how the returns and refunds would be handled. 46,000 employees would be recalled without pay to will handle paper and electronic Tax Returns. While that sounds good, these employees will start their time by focusing on notices sent in before the government shutdown started. At the same time, there will be no way to contact the IRS to answer questions related to Tax Season. It will be as if, someone is home, but they are not answering the phone or opening the doo...

         It has been well documented that the partial shutdown of the Federal Government has placed a great burden on the Federal employees who are not receiving a paycheck. Some of whom are being forced to work without pay, such as the Transportation Safety Administration , United States Coast Guard and Air Traffic Controllers . Many in the IRS will soon be called back to work in order to process Tax Returns without pay as well. However, as this shutdown has now continued for a full month, the ripple effect is now growing.           In the state of California, Non-Profit organizations are being directly impacted by this shutdown. Housing organizations are unable to tell if their applications have been received or approved by the Department of Commerce. This is a great concern because they are directly related to the fires last year in Northern California. The Tax Preparation Assistance programs that Non-Profi...

         There seems to be chaos everywhere we look in the business landscape. From uncertainty in the stock market to an abundance of (unanswered) questions about how to simply file taxes this year, it can feel overwhelming. Considering this is the longest Federal government shutdown in history, we may feel like we are living in unprecedented times and have no way of making an informed decision. It can be frustrating, but you are not alone.           Change is good because it can challenge us to grow. We will look at the world, not as we want it to be, but as it really is. As we learn more, we might see the need for a clear perspective to help us make the right choices. This is the time to reach out and communicate, build connections and help each other.           We are in the middle of it just like all of you reading this. At Anthony Sykes and Company , we are ...

       As the IRS has dealt with the partial Federal government shutdown, its impact has had a ripple effect. For example, companies who finance or refinance loans have no way of verifying information from potential consumers. So this would stall the application process. Now that they have been ordered to reopen, these services are starting to come back online. However, there is a huge backlog in many cases. The wise course is to understand that the wait will be long, up to 2 ½ months for certain requests.           There are some free services that Taxpayers have used in the past. However, as of this writing, they are either showing error messages online or recorded messages over the phone saying that no help is available. There is a need to check on a regular basis to see if/when different services are opened up.           With this being the first year of ...

          The current state of partial Federal government shutdown has caused great anxiety. Many government employees are unsure of when they will be able to go back to work, others are required to work and do not know when they will see their next paycheck. Thrown into this mix of uncertainty was the announcement on January 7 that the IRS would process individual Tax Returns and provide Tax Refunds as normal.           The IRS has essentially run on a skeleton crew basis since December 31. They only had enough workers to keep the computers working, handle some criminal investigations, and provide support related to disaster relief. Everyone else had been furloughed and sent home. However, with that announcement many employees have now been ordered back to work (without pay) to handle the normal workload for this time of year. The next day, the American Federation of Government Employees ( AFGE ) and the Nationa...

          After the federal changes made by the Tax Cuts and Jobs Act, many people are looking to see what moves their states will make. Some states have a relatively simple tax system (no state income tax or low property tax), and they want to keep it that way. Other states made their own changes that impacted tax collection in 2018. For example, Kentucky made adjustments that now allow for more taxes to be collected from the activities of non-profits.           Then there are the other states that want to do something but are not sure what. The state of California can fall into this category. The last major change to the state tax code occurred in 1935, and property tax has been limited since 1978 due to voter passed Proposition 13. This means that the majority of California’s income comes from personal income taxes. With its progressive nature, those who make the most, also pay the most. That is also true of b...

        With the IRS operating at 12% capacity, there are some concerns among taxpayers. Since this is the first tax year filing under using the TCJA , many may have questions to ask, but there are no employees to answer them. Until they are fully funded, the IRS will be limited to issues related to disaster relief, criminal investigations, and the critical employees who are required to keep the computers functioning. While this is an unusual state of affairs, it should not keep you from regular tax routine.           Remember that the IRS is still partially open, and the computers are still being maintained. This allows for Tax Returns to be filed. This is especially true for businesses. Keep in mind that the Tax Cuts and Jobs Act made a massive overhaul for individual taxes (new forms, SALT deductions), and just a few adjustments to businesses. The IRS is now accepting Business Tax Returns by means of E-File, but r...

          As the Federal Government shutdown has continued, a greater impact is being felt in many departments. One clear example is the Treasury Department. The IRS had a plan to continue with many services until December 31. Now that date has past, and more services must be cut until full funding is restored. Now at this point, the IRS is mostly closed.           Up to the end of last month, the IRS was still processing certain Tax Returns and accepting payments. They were not issuing refunds or making progress on any audits or examinations. Until more funding is approved, the IRS will basically only deal with issues relating to disaster relief. Everything else will have to wait.           This presents a fundamental issue. We are at the beginning of the first tax filing season under the Tax Cuts and Jobs Act. With so many potential variables to consider, and guid...