Anthony Sykes & Company

         Federal income tax that is withheld from paychecks is generally paid over the year. The amounts withheld are shown on the Form W-2 . That has not changed. However, this has been a big issue when filing 2018 Tax Returns because of how the Tax Cuts and Jobs Act ( TCJA ) changed Withholding Tables. That directly impacted the Tax Refund or debt responsibility given to Taxpayers.           To avoid another surprise next year, the Internal Revenue Service ( IRS ) recommends a Paycheck Checkup as soon as possible. This should be done even if there are no significant changes from last year. This way, you can plan to get the refund you want next year. Withholding can be changed by filling out a Form W-4 . The amount withheld depends on the amount of income earn, along with filing status (married or single), the number of allowances (the more claimed, the less withheld), and any other additional amount request...

        This is a post for those who, for one reason or another, did not file their Tax Return on time. This does not include those who have filed extensions, because they would not be considered late. What should everybody else do? Here are some practical steps that will save you stress and money.           Do not panic. This might seem like a strange point to make, but it is helpful. Thinking too much about a missed deadline will keep you from moving forward and making progress. Just deal with the situation at hand. File as soon as you can. If you have a Refund coming, there will be no penalty for filing late. However, if you owe a Tax Debt, penalties and interest are determined by how late the Tax Return is filed. Either way, it is in your best interest to get this done promptly.           Find a Qualified Tax Professional. Since the Tax Season is over, many seasona...

         A general warning has been issued to all Taxpayers by the Internal Revenue Service ( IRS ). There are some who continue to promote what have been deemed frivolous schemes and tax arguments . Considering that this happens every year, it has earned a spot on the 2019 IRS “ Dirty Dozen ” list. These are considered the 12 most common tax scams seen during the year.           Some of the myths that continue to be promoted are that only those who work for the Federal Government are subject to income tax, the First Amendment allows for the refusal to pay taxes on religious or moral grounds, and that only foreign income is taxable. These arguments, and many others like them, have been thrown out of court repeatedly , so do not get talked into going down this path. Taxpayers have the right to contest their Tax liabilities, but they must do so legally . Using any frivolous arguments will bring stiff penalties an...

         The Internal Revenue Service ( IRS ) continues to strenuously warn taxpayers against claiming Business Tax Credits for which their companies do not qualify for . This is a tactic commonly used by Tax Preparers who are not to be trusted. This is a practice seen often, which is why falsely claiming Business Tax Credits has a spot on the IRS 2019 “Dirty Dozen” list.           There are two credits that are often claimed irresponsibly. One is the Research Credit , which is used to support scientific experimentation that improves a product or process used in the business. There are very specific guidelines that must be followed in order to successfully claim this credit and if there is no supporting documentation, failure to do so will lead to the claim being rejected. The Fuel Tax Credit is even more difficult to claim. It’s basically limited to use of farming or other vehicles not used on highways. Wit...

         Finding money hidden in unreported money in accounts outside the United States is a focal point of enforcement efforts at the Internal Revenue Service ( IRS ). As a result, Offshore Avoidance schemes have earned a place on the 2019 IRS “ Dirty Dozen ” list. The IRS has stepped up their efforts in finding these kinds of accounts, which has resulted in many millions of dollars in taxes paid due to audits. This has also led to criminal prosecutions.           There are different reasons why Taxpayer’s in the US would maintain bank accounts in other countries. If you do, they must be declared to the IRS . For those who try to use a variety of ways to get around this requirement and their tax responsibilities, success is much more difficult than it was in the past. Due to their criminal prosecutions, the IRS understands the ways Taxpayer’s and their accomplices go about hiding assets overseas. With the appl...

        Falsely inflating tax credits and deductions is something that is so easy to do. It can be tempting to lower your tax responsibility in this way, but this scheme is well-known to the Internal Revenue Service ( IRS ). Therefore, it has earned a spot on the IRS 2019 “ Dirty Dozen” list of scams.           Often this scam will manifest itself as overstating charitable contributions or very large business expenses . Sometimes Tax Credits are claimed falsely. These tactics are seen throughout the year, but they commonly peak at this time. When these deceptions are found out, the penalties are steep and severe.           The Tax filer may be cited 20% of the amount of the credit that they falsely claimed. This would be in addition to paying the full amount of the tax owed. If it is determined that a fraudulent Tax Return was filed willfully, then more fines can...