Anthony Sykes & Company

     The new COVID relief package ( Consolidated Appropriations Act, 2021 ) was signed on December 27. A Bill like this is unlikely to be changed after it has been signed. This means we have a much clearer understanding of what it will provide.      This is actually part of a larger piece of legislation that includes funding the government until September 2021. The COVID relief part of the law renews many of the programs created with the Coronavirus Relief and Economic Security ( CARES ) Act. For example, the Paycheck Protection Program ( PPP ) will continue. There is also a clarification that businesses can deduct expenses paid with funds from a forgiven PPP loan. There will be an extension of Federal Pandemic Unemployment Assistance ( FPUA ). This allows for Unemployment Insurance for Independent Contractors and those who work in the Gig Economy. This will go in effect 1 week later due to the delay in signing the Bill. Another round of Economic Impact Payments can be expected,

     On December 20, new information about another round of COVID relief was released. This is certainly welcome news. Not everything is known at this time about the deal in Congress, but there are some details that have surfaced.      Unemployment assistance will be extended by about 11 weeks. However, it will only be at $300 per week. The Paycheck Protection Program ( PPP ) would continue and even expand to allow some businesses to apply for a second loan. It is still unclear if paying for business expenses with these loans is fully tax deductible. There would be a simplified process for those seeking a loan of less than $150,000. The Employee Retention Credit will continue. Student loan forbearance on Federal Student Loans would be extended. There is also a report of a provision to increase business meal deductions from 50% to 100%. Remember that nothing is final until it is written down and voted on, so a lot can still change.

     The Internal Revenue Service ( IRS ) is trying to make Taxpayers everywhere aware of a new COVID-19 related scam. Some are still waiting for news about their Economic Impact Payment ( EIP ), and this text message plays on those feelings. The IRS will never send a text message asking for information. This message claims that a direct deposit has been received from the “COVID-19 TREAS FUND” and more information is needed to claim the money. The included link sends you to a phishing website where your banking information will be taken.      The link will look like it comes from a state agency. The website will be an imitation of the IRS page that shows where you can track your EIP . If you are sent this text, take a screenshot and send it to phishing@irs.com . Make sure to include information like the date and time it was sent. We must all continue to remain vigilant during these challenging times.

       All Taxpayers and even Tax Professionals need to be very careful during this time of year. It is the time when scams and identity theft concerns grow to one of the highest points of the year. When you add to that holiday shopping and COVID-19 related schemes, this is a combination that has never been experienced before.      With the increase of working from home, there are new vulnerabilities that may be exposed. The Internal Revenue Service ( IRS ) along with state tax agencies to get the word out about what everyone can do to protect themselves. This is especially important since Tax Season will be upon us sooner rather than later. Some simple things to remember are to keep an eye out for phishing scams (imposter emails and texts). These are the #1 way criminals compromise security. Many of them are now related to COVID-19 and Economic Impact Payments ( EIP ). Use security programs on your phones and computers – and make sure it is updated .      Only shop at websites

     The Internal Revenue Service ( IRS ) is making a special effort to make sure that taxpayers know about a special charity deduction that is available this year. The year of 2020 has affected all of us in different ways. However, because of the unique challenges faced this year, some may feel even more motivated to give to charities. The Coronavirus Aid, Relief and Economic Security ( CARES ) Act gives extra encouragement to do so.      This special tax law allows for a $300 tax deduction without the need to itemize your Tax Return. This special deduction will allow for some extra tax savings while using the standard deduction. To qualify, these donations must be made by cash, check, debit or credit card. Good records must be kept, including having a receipt or acknowledgement letter from the charity to file with your Tax Return. Please check to make sure that the organization you choose is eligible for tax-deductible donations. Make an appointment with your Qualified Tax Professi

     About this time the Internal Revenue Service ( IRS ) releases its new tax rates for the upcoming year. These will apply starting January 1, 2021 . They are a good way to estimate what your tax responsibility might be if you don’t plan on any changes in the coming year. However, if you are planning on major changes, like marriage or starting a business, this is the best time to adjust your withholding and avoid a tax surprise in 2022.      There will still be seven tax brackets and the rates will range from 10% to 37%. The only way taxes can change is by an act of Congress or a sunset clause in the law, whichever comes first. The Standard Deduction will increase to $12,550 for Single Taxpayers. The rules on deducting State and Local Taxes ( SALT ) put in place by the Tax Cuts and Jobs Act ( TCJA ) will remain at $10,000. Other adjustments have been made for 2021. Now is the time to reach out to your Qualified Tax Professional and prepare for next year.

     This is normally the time of year to reflect on what has happened during the previous months. There is much to consider on that topic if you choose to do so. For many, this is also a time to make donations, and perhaps use those donations as tax deductions.      The Internal Revenue Service ( IRS ) has changed some of those rules for 2020. This is due to the passage of the Coronavirus Aid, Relief and Economic Security ( CARES ) Act earlier this year. Taxpayers can now deduct charitable contributions even if they do not itemize their deductions. However, they must still go to qualifying organizations that are religious, charitable, educational, scientific, or literary in purpose. They need to meet certain requirements and Taxpayers need to have the right documentation to present to the IRS . Your Qualified Tax Professional can help you make sure that your valued gift goes to the right place.

     Millions of Taxpayers have had to deal with unemployment for the first time in 2020. Some who were eligible in certain states qualified for Lost Wages Assistance ( LWA ) which added an extra $300 to $400 to unemployment benefits. This is provided by the Federal Emergency Management Agency ( FEMA ). However, the Department of Labor guidance clearly stated that LWA will be taxed, just like normal income.        This might come as a surprise since LWA is a new program that is under the direction of FEMA , which does not consider itself to be unemployment insurance. Historically, unemployment benefits have always been taxed by the Internal Revenue Service ( IRS ). LWA is still considered to be taxable income, as it does not meet the requirements for disaster relief. Qualified disaster relief does not include income to replace lost wages. This situation can create an unexpected tax surprise next year. You can choose to have Federal Tax withheld from your payments now to avoid that

     The Internal Revenue Service ( IRS ) is working very hard to make sure that as many as possible are able to receive their Economic Impact Payments ( EIP ). This would include Taxpayers who have not filed in the past 3 years. This is the primary way to determine eligibility for a payment. So many filed this year to make sure they received a payment.            However, there was a good chance that they owed some taxes to the IRS . When the bill is sent in the mail, it now comes with a QR code. It can simply be scanned with any mobile device. This process takes the Taxpayer securely to IRS.gov where they can find out the status of their EIP . In addition they will be able to create or access their account. While this is a step forward for the IRS , these tools are not available 24 hours.

     The Internal Revenue Service ( IRS ) is working very hard to make sure that as many as possible are able to receive their Economic Impact Payments ( EIP ). This would include those in low-income and underserved communities. They often do not normally need to file Tax Returns and may not be aware that they can qualify for this payment. The deadline to register to receive this payment has been moved back to November 21 .      To speed up this process and make it as successful as possible, the IRS has declared November 10 as “ National EIP Registration Day ”. It is estimated that 8 million people have registered for the EIP using the Non-Filers tool on IRS.gov since the spring, and many more still need to be reached. That is the reason for this special push, which will include reaching out to those experiencing homelessness. Information explaining what is needed will be translated in 35 languages. What about those who need to file, but haven’t done so in the past 3 years or jus

     The Paycheck Protection Program ( PPP ) has been a very useful tool to help many businesses stay open during these challenging times. However, there are many questions surrounding when is the best time to submit the applications for forgiveness of these loans. There are different ideas, but this series of posts has shed some light on what to do in different situations.      This post will give the best reason why a borrower might want to wait to submit their application. Some businesses have potential forgiveness reductions . Our last post discussed how fewer full-time employees or reductions in salary would impact the qualified expenses that could be claimed.      It may be best for some of these businesses to wait until after December 31 to file their applications to see if they were able to restore any of their employees and/or salaries. That would allow them to qualify for what are known as Safe Harbors and not have to reduce their forgiveness amounts. Applying too early

     The Paycheck Protection Program ( PPP ) has been a very useful tool to help many businesses stay open during these challenging times. However, there are many questions surrounding when is the best time to submit the applications for forgiveness of these loans. There are different ideas, but this series of posts will shed some light on what to do in different situations.      The last post shared why a borrower might apply early and may want to wait. Another reason to wait is if the borrower has reductions to forgiveness due to fewer full-time employees or reductions in salary . It would be best to wait until the end of their covered period. This is because the reduction applies to all qualified expenses, not loan forgiveness. At the end of the covered period all the expenses can be added and then reduced by the necessary amount. If this is greater than the loan, a borrower can still qualify for full forgiveness. A Qualified Tax Professional is essential in guiding you through

     The Paycheck Protection Program ( PPP ) has been a very useful tool to help many businesses stay open during these challenging times. However, there are many questions surrounding when is the best time to submit the applications for forgiveness of these loans. There are different ideas, but this post and the ones that follow will shed some light on what to do in different situations.      If you are using the last of funds or coming to the end of the forgiveness period, the application is not required until 10 months after the end of that forgiveness period. With that understanding, you do not have to wait. If the money’s all gone and you are confident that full forgiveness can be reached, it makes sense to apply. This is one reason why it makes sense to wait.      Applying early will not change forgiveness reductions . For example, if a business has reduced salaries of employees by 25%, that must be accounted for during the entire 8 or 24 week period. It will reduce the ove

     With so many businesses and employees working remotely, security have become a much greater concern. There are a variety of phishing tactics designed to steal the tax information from employers and tax professionals. This is why Payroll and HR Scams has earned a spot on the Internal Revenue Service ( IRS ) Dirty Dozen list of 2020.        The goals of these scams are accomplished by Business Email Compromise ( BEC ) or Business Email Spoofing ( BES ). There are two well-known scams that are currently being used. A compromised email account is used to send requests for gift cards in different amounts. The other uses the victims email account to change their direct deposit information to an account that the criminal controls. Often fake IRS documents are used.      The specific methods may change over time, but the goals are always the same. If you feel that a request is suspicious, look into it further. There are often little details that give away the fact that it is a scam. If

     A tax professional is entrusted with the most sensitive personal data of the Taxpayer, so it is critical to select the right preparer. Most are honest and provide high-quality service. However, there are some who are intent on committing fraud, harming others, and talking Taxpayers into making choices that they will regret later. These activities have earned a place on the Internal Revenue Service ( IRS ) Dirty Dozen list of 2020.      This year Taxpayers should be especially vigilant because of the COVID-19 pandemic possibly making it more difficult to get in contact with their tax professional. This can leave them vulnerable to “ghost” preparers. They make serious mistakes, expose their clients to tax fraud, and then disappear. They never sign the tax returns they work on. By law they must sign and use their Preparer Tax Identification Number ( PTIN).      They may make promises of large refunds, often by using tax credits that do not apply, this leaves the Taxpayer at risk

     Criminals are always finding new ways to get people to believe their scams. This now includes putting money into the bank accounts of Taxpayers. Fake payments with repayment demands is the next entry on the Internal Revenue Service ( IRS ) Dirty Dozen list of 2020.      After stealing a Taxpayers Social Security number or their Individual Taxpayer Identification Number ( ITIN ) and bank account information, a con artist will file a fake tax return and have the refund deposited into their account. Later they will call pretending to be the IRS and claiming there was a mistake and demanding the refund be returned immediately. They will always be told to use gift cards.      Taxpayers have the right to many payment options and the IRS will never demand a specific one. Taxpayers always have the right to question how much in tax responsibility they owe. If you ever receive a surprise phone call about a refund repayment, reach out to your Qualified Tax Professional , call the IRS an

     Millions of Taxpayers have, or are currently, receiving unemployment funds. Many are doing so for the first time due to the COVID-19 pandemic. Those who are taking part in this compensation need to know that it is taxable income. These benefits will be reported to the Internal Revenue Service ( IRS ) and must be stated on your Federal Income Tax Return for the year it was received. This would include the extra compensation provided by the Coronavirus Aid, Relief, and Economic Security ( CARES ) Act.      To avoid surprises next year, Taxpayers can choose to have tax withholdings applied right now. Usually the agency has their own form for this use. If you do not choose voluntary withholding, estimated quarterly payments can be made. Either way, for those who have received any unemployment compensation this year can expect a Form 1099-G next January. It will list the amount of unemployment income for this year and the amount of tax that was withheld. This income must be include

     For many years the Internal Revenue Service ( IRS ) has placed impersonating phone calls on the Dirty Dozen list of scams for Taxpayers to watch out for. These calls come in many forms, the most common is one where the criminal claims to be with the IRS and demand immediate payment. The goal is to create fear and a sense of urgency in the victim. The IRS will never surprise anyone with a payment demand.      These kinds of tactics are also called vishing (voice phishing). Calls that threaten arrest or deportation for not paying a surprise tax bill are fake. Often they are recorded messages that give instructions about how to return the call. You will not receive a “robocall” from the IRS . They will also never ask for your financial information over the phone or call to ask you about your Economic Impact Payment. If you have a tax problem, talk to the IRS , or your Qualified Tax Professional .

     The Internal Revenue Service ( IRS ) is sending out a special letter to make sure as many as possible know about the Economic Impact Payment ( EIP ). For US citizens and alien residents with Social Security numbers and low or no earned income, the IRS is sending out letters to encourage them to check their eligibility. Just because they receive a letter does not mean they qualify, but there are many who can receive a payment who may not realize it. Depending on the situation, they may be able to use a tool on the IRS website, or need to file their 2018 or 2019 Tax Return.        This is a situation that is filled with potential for fraud. The letter will have a return address of an IRS office. The IRS will never send a text, email, or make a phone call related to EIP . They will never ask you to open any attachments or share personal financial information. Go directly to the IRS and their website ( www.irs.gov ) if you have any questions, never click on a link that takes

     Those who try to impersonate the Internal Revenue Service ( IRS ) often target groups at higher risk than others. Some who are particularly vulnerable are those who have a limited knowledge of English. These scams are used year round which has earned them a place on the Dirty Dozen list.      These scams are often threatening and create a sense of urgency to force the victim to pay a surprise amount of taxes owed. Often the criminals have some real information like an address or part of their Social Security number making the call seem legitimate. The threats of deportation or arrest increase the anxiety for those with limited access to information that would help them to understand how the IRS really communicates. They never use “robocalls” to tell people how to call back. They will never call and ask for personal financial information. Simply hang up on someone asking for these things, you will not go to jail.

It’s never too early to plan for the future. That is especially true when it comes to taxes. People are always looking for the best, legal ways, to reduce what they owe. One way is to take a close look at deductions. There are two choices when it comes to this area, a Taxpayer can Itemize or take the Standard Deduction . To make the right decision, you need to know how much the Standard Deduction will be worth. It changes every year, usually to keep up with inflation. The amount also varies depending on the filing status you choose. For 2020, the Standard Deduction will increase . For example, for someone who will file as “Single” the deduction will rise by $200 to $12,400. If the Standard Deduction is claimed, then most other deductions like property taxes or charitable contributions cannot be claimed. If someone would like to claim deductions in excess of what the Standard Deduction amount is, then they should Itemize . This would require much more detailed information, bu

When the Paycheck Protection Program ( PPP ) was first announced, many saw it as the answer to their COVID-19 related business issues. There was a rush to get applications in, especially when it was revealed that these loans may not have to be paid back if certain requirements were met. Now, as the dust begins to settle, we are getting a better idea about who makes these decisions. The Small Business Administration ( SBA ) has a great deal of discretion over how a PPP loan will be paid back. They decide if the loan can be forgiven or how much will be paid back. In addition, there is currently little guidance on how to appeal their written final decisions. The only SBA decisions that can be appealed are if the borrower was determined ineligible for a PPP loan, for the loan amount received, if the loan amount was used for ineligible purposes, or if the borrower was ineligible for full or partial loan forgiveness. This process is handled by a special SBA office. They will not rev

      As senior citizens become more familiar and comfortable using technology, this group becomes a prime target for criminals. The Internal Revenue Service ( IRS ) strongly cautions seniors and those who care for them to be careful. Senior fraud has earned a place on the Dirty Dozen list for 2020 because this group is the most likely to be targeted for fraud.      This year phishing scams related to COVID-19 are being used to a great extent. There is an endless surge of emails, texts, fake websites, and social media messages all being used in an attempt to gain personal information. The tactics of these criminals change, but their basic goal remains the same. However, evidence shows that when there is someone who takes an active role in caring for the professional needs of an elderly friend or relative, the risk of fraud goes down. Let’s take time to watch out and care for each other especially during these challenging times. 

There is much discussion at this time regarding the United States Postal Service ( USPS ) and how its capacity does not meet certain needs. This particular government agency touches almost all areas of life and it is the essential communication lifeline for the Internal Revenue Service ( IRS ). Many of our posts have been dedicated to helping Taxpayers understand how to identify and avoid tax related fraud. One constant truth is that the IRS only sends official communication through the USPS system. It is through these letters that Taxpayers will find out if they have tax responsibilities to care for and how to do so. There are also some who still file their tax returns on paper, through the mail. Many care for these things online, but for those who do not, a slow postal system wreaks havoc with IRS communication. If someone is sending a payment to the IRS , they will consider the postmark on the envelope as the date it was received. However a slower mail system will keep the c

       People want to help each other. This is the fundamental feeling that criminals want to exploit whenever there is a disaster. The COVID-19 pandemic is no different. Scam artists will set up fake charities, often with names very similar to legitimate ones, to accept money from unwitting Taxpayers telling them it will be a tax write off. The rise of these schemes this year has led Fake Charities to earn a place on the Internal Revenue Service ( IRS ) Dirty Dozen list.      One sign that you might be dealing with a fake charity is if you receive an unexpected text, phone call, or social media message. These links will lead Taxpayers to fake websites designed to trick visitors into giving up their personal information. Some might even claim that they are working with the IRS . If the name of this organization is similar to, but not the same, as one that is nationally known, you should be wary. This is often a clue that they are fake. A true organization with non-profit status ca

     The Dirty Dozen is a list that the Internal Revenue Service ( IRS ) publishes every year of the most common tax schemes and crimes that Taxpayers should be on the watch for. They peak during Tax Season, but are seen throughout the entire year. One entry on this year’s list has to do with debt resolution companies that heavily promote the Offer in Compromise ( OIC ) program. The fact that they advertise this program with very strict standards as something that can help anyone with tax problems is deceptive and therefore earns a place on the Dirty Dozen list.      These companies will send OIC applications to the IRS . The advertisements will play to hearts of distressed who owe large debts, telling them that they will pay “pennies on the dollar”. The OIC program does allow those who are accepted to pay a compromised amount to the IRS . However, the IRS has many other payment programs that have a much higher likelihood of getting approval for. In one recent year, there were

           A growing threat today involves cybercrime. One example of this is Ransomware. This is software designed for an evil purpose. It will target human or technical weaknesses in a computer, network, or server. Most of the time, people are not even aware of downloading it. This relates to our recent Phishing blogpost .           Once inside, the Ransomware will track activity to lock and encrypt critical files. Then a demand message will appear. It will usually have payment details and contain the threat of the losing the data, or making it public. They may even be able to impact the entire computer network. To avoid this situation be careful about the links and attachments you open. There are many fake COVID-19 charities being promoted. This is a particular concern for Tax Professionals because they deal with the personal information of many individuals. The Internal Revenue Service ( IRS ) has guidelines meant to protect Taxpayers from this item on the Dirty Dozen list. As

          Identity Theft continues to be a problem. In previous years, a fraudulent tax return would be filed with the Internal Revenue Service ( IRS ) to steal a tax refund. This type of scam goes on every year. Now there is a new variation related to COVID-19 relief that has been provided.           Criminals are doing their best to steal Economic Impact Payments ( EIP ) being sent to Taxpayers. Remember that there is no fee to receive these funds. Do not pay anyone to find out when you will receive your payment. Never sign over your check to someone. If your identity has been stolen, make sure to let the IRS know and make sure they have your correct address and bank information.           The IRS has recently warned a number of care facilities and nursing homes that these EIP funds belong to the residents and not the business providing their care. These payments do not count as income and are not to be used for determining eligibility for any aid programs. The times we live

     The use of deceptive tactics, including fake emails, text messages, links, and websites, to gain personal information is called phishing. New phishing scams using pandemic related terms is one of the fastest growing scams according to the Internal Revenue Service ( IRS ). Remember that the IRS will never contact Taxpayers using Social Media or text message, and will never initiate contact through email.      Many are anxious and seeking the latest news about how the COVID-19 pandemic will impact them, their business, and other financial matters. These new phishing schemes use terms like “coronavirus” and “stimulus” to draw in Taxpayers looking for answers to their questions. Please remember that the official term is Economic Impact Payment. Do not open strange emails, click on links, or open attachments from people you don’t know or that are unexpected. Criminals feel that everyone is a target and this is one of their tools.

     One of the key features of the Paycheck Protection Program ( PPP ) was that these business loans could be partially or entirely forgiven. This would be based on whether the funds were spent on wages, keeping employment levels the same as they were before the COVID-19 pandemic, and other factors. Of course, proof would have to be provided that these requirements have been met and an application needs to be submitted. All of that has now been put on pause.      Those Forgiveness Applications will not be accepted until August 10 at the earliest. Part of the reason is that the Treasury Department has not yet issued the final guidance on those applications. That may be because the US Senate is looking into another round of economic stimulus, which will certainly change the procedures related to forgiving PPP loans. What will happen remains to be seen, so for now we will all need to exercise some patience.

     Taxpayers need to protect themselves at all times, especially when communicating online. The Internet allows anyone to share information with everyone. This is the basic principle that scammers exploit when using Social Media scams. Information becomes their tool of choice when trying to steal personal information.        This is especially true during a crisis like COVID-19 . The Internal Revenue Service ( IRS ) states that the current health crisis has been used extensively by criminals in attempts to steal information from Taxpayers. Often it starts with the victim getting an email or text that has a link to something they are interested in. By clicking on that link, you will be exposing yourself to all sorts of malicious code. Some will seek out your passwords, user names, or banking information. So make sure you know what you are clicking on and who the source is. Make sure you look closely at the message, there may be clear indications that give away that it’s a fake. Sadl

     Every year the Internal Revenue Service ( IRS ) announces a “Dirty Dozen” list of scams and crimes that Taxpayers should be aware of. These are most commonly seen during Tax Season, but can be used at any time. This year, with the COVID-19 pandemic, the focus is on how criminals are using everything related to the Coronavirus to prey on the fear and uncertainty around us.      The goal of these tax scams is to steal your personal information and money. Criminals feel that everyone is a potential target, so please do not engage with these individuals. We all must be on guard against these frauds, and try to watch out for each other. Our next few blog posts will highlight some of the more recent trends in this area of tax crime.

     If you find yourself in a situation where you owe taxes to the Internal Revenue Service ( IRS ), there are a variety of payment options available to you. First, you should understand that a tax responsibility for 2019 and an estimated tax payment for 2020 are 2 separate payments, even if they are due at the same time. Do not combine them.      Like most businesses today, the IRS would prefer “no contact” payments through credit or debit cards, or even using bank accounts. These methods will update your account in the fastest way possible. Checks are still accepted, but they might take some time to process. For those who cannot pay their tax responsibility in full, you are encouraged to pay what you can at the time of filing. This will prevent a “Non-Filing” penalty being added to your debt.      There are a variety of payment options that are available to most Taxpayers. We have written about some in previous blog posts . When considering how to pay, it’s also a good time

     A variety of circumstances can come together that make Tax Season a very difficult and challenging time for many individuals and business owners. With that understood, there is one action that must be taken. File your Tax Return on time! Taking this seemingly simple step will save much anxiety and some money.      For those who know they will owe taxes, but are unable to pay the full amount, filing your Tax Return on-time is a very important step. Not doing so may add special penalties and interest to your debt. If you pay what you can at the time of filing, the Internal Revenue Service ( IRS ) will take this into consideration. Remember that a tax filing extension is not an extension to pay tax responsibilities. For help to make sure that you are in the best position when dealing with the IRS , please consult your Qualified Tax Professional . 

     The Franchise Tax Board ( FTB ) is reminding Taxpayers that the time to pay is now upon us. Any individual Income Tax payment must be made by Wednesday July 15 . There has also been adjustment for those who make Quarterly tax payments. Two Quarterly estimates must be made as one , and that is also due on July 15. The individual and Quarterly tax payments must not be combined.      Those who do not owe or who are not required to file a Tax Return may benefit from filing. It is not too late to file and claim credits you may qualify for. It’s always best to seek out the help of a Qualified Tax Professional in this matter.

     There is only a 3 year window to claim a Tax Refund. With the unique circumstances of this year, that window of opportunity has been extended to July 15 . The Internal Revenue Service ( IRS ) estimates that unclaimed refunds for 2016 total about $1.5 Billion. These refunds can be claimed by about 1.4 Million Taxpayers.      These refunds have gone unclaimed because the Taxpayers have failed to file their 2016 Tax Returns. They are urged to do so as soon as possible. There is no penalty to file late if you receive a refund. This year, it might be the key to getting your Economic Impact Payment ( EIP ). If you have not filed for a few years, you may be in this situation. It’s not too late to talk to a Qualified Tax Professional , and find out what needs to be done.

     The Internal Revenue Service ( IRS ) is reminding Taxpayers who took part in tax payment relief provided due to the COVID-19 pandemic that those owed tax payments, which stopped on March 25, must now resume. The IRS is starting to reopen their offices, as many businesses are reopening, and it is necessary to restart these payments to avoid penalties and interest. There are a few details that Taxpayers must understand when going forward.      Installment Agreements . For those who had paused payments, understand that while interest continued to accrue on these amounts, but the IRS never defaulted your agreement. Contact your financial institution to make sure they restart the direct debit payments if you had them stopped.       Offer in Compromise . If the offer in question is still pending with the IRS , the Taxpayer should simply restart making their normal payments by July 15. The offer will be amended to involve the skipped payments if it’s accepted. If the offer wa

     For those who provide on-demand work or services, it can be difficult at times to get all your paperwork together to file your taxes. Keep in mind that no matter what your activity is in this field, all income is taxable. The biggest concern is that you are classified correctly as either an employee, or an independent contractor. Lawsuits have been filed over this issue because states have different standards they apply to make this determination.      An employer will withhold some income from their Employees to pay their share of Social Security, Medicare, and Medicaid taxes. Independent Contractors must estimate those payments every Quarter. They must keep good records to make sure they are current with their tax responsibilities. If you were providing ride-sharing or home rentals or any other access economy activity in 2019, make sure to report it all on your Tax Return by July 15 .

     With so many staying home due to the COVID-19 pandemic, there is a steep rise in demand for food delivery services. Different companies are available in most major markets, but all of them are seeing a boom in business. For some restaurants, it is the only way they can try to stay afloat. When any industry sees major growth, state tax agencies are always ready to take a close look at their accounting practices.      One focus of many agencies will be taxes related to marketing, delivery, and processing fees. Are they being collected and paid? Since almost every state and most cities have different laws, this is a concern that must be addressed. This is similar to the situation that Online Marketplaces found themselves in 5 years ago when the US Supreme Court ruled that they must collect and pay Sales Tax wherever their items are bought, even if they do not have a physical presence in that state. Food delivery services may begin to have each transaction taxed in different ways

     Soon information related to Paycheck Protection Program ( PPP ) loans will be made public. Specifically, the names of businesses that received over $150,000. It will also include business names, types, and addresses. This list may not be very long since the majority of loan borrowers were under $150,000. However, 75% of the $500 billion in loans went to businesses that were approved for more than $150,000.      In the beginning, no information was going to be released. When the first round of loans ran out in record time, many insisted on disclosure of who was receiving the funds. This was not expected, and the results of knowing these details is going to make some uncomfortable. There will now be a very public scrutiny for some.

     Some Federal tax refunds will be paid with interest this year. Does that sound strange? While most of this year has been strange, but there is a reason for this announcement from the Internal Revenue Service ( IRS ). For those who filed their Tax Return before the July 15 deadline and received a Tax Refund after April 15, the IRS will be giving interest on the refund amount. Why?      This normally only happens if it takes over 45 days to release a refund after the Tax Return has been filed. In this case, the IRS is honoring the original April 15 tax deadline. Every day from April 15 to the day your tax refund is sent interest will be applied to that amount. That could be anywhere from 3%-5%. That interest may be sent separately and it is taxable income. This should be an encouragement to file on time and consult your Qualified Tax Professional to make sure you don’t miss the July 15 deadline.

     As the tax filing deadline draws closer, many Taxpayers begin to think about their expected Tax Refunds. The Internal Revenue Service ( IRS ) gets a few common myths every year regarding Tax Refunds.     If I get a refund, then I don’t need to adjust my Withholding this year. A Taxpayer should always be prepared to change their Withholding. This is especially true if their Tax Refund was an unexpected amount. This could be because of the employer withholding too much or too little in 2019. Making a change now will improve the situation when filing next year. Talk to your Qualified Tax Professional to find out how.     There is a secret to finding out my Tax Refund deposit date. No, there is not. Calling the IRS or your Tax Professional will not speed the process. The funds are usually sent after 21 days, but each situation is different. The IRS made a mistake on my Tax Refund. That might be the case, but there are other reasons why your Tax Refund might be smaller than ex

     As so many thoughts and concerns dominate our hearts and minds, let’s not forget that Tax Returns for the year 2019 must be filed in less than a month. There are many credits that can be claimed, which may provide some financial relief this year. For example, the Child and Dependent Care Tax Credit can help to offset major expenses.      According to the Internal Revenue Service ( IRS ), Taxpayers can claim a credit of up to 35% of their costs. To qualify, this care must have been provided for someone who is under the age of 13. If they are over 13 , this person must be a dependent who lived with the Taxpayer for over half of the year. To find out more details about this credit to see if you qualify, talk to your Qualified Tax Professional . The time to prepare to file your Tax Return is now. The deadline is fast approaching and it’s best to find out what credits you qualify for as soon as possible.

     This is a time of great instability. Many businesses are still closed, people are waiting for Economic Impact Payment ( EIP ) checks (or debit cards ), and are still concerned about their health and safety. If someone approaches them with information to help during a time of need, they want to believe them. That is what criminals are counting on. The Internal Revenue Service ( IRS ) is warning all to be on the watch for an increase of COVID-19 related scams.      The Criminal Investigation Division ( IRS-CI ) is aware of schemes regarding EIP and Taxpayers looking to receive faster payment. There is no “processing fee” that will allow anyone speed up their payment. The IRS will never reach out to you by means of text, Social Media, or email. There have been reports of letters coming through the mail using terms like “Stimulus” and “Corona Virus”. Some are being told they need to apply for a second impact payment. The goal of these interactions is to steal your personal infor

     With all of the problems that the newly created Paycheck Protection Program ( PPP ) has faced, you can add large amounts of fraud to the list. After the first round of payments, the Department of Justice began to investigate and prosecute fraudulent claims regarding businesses that did not exist, or fictional employees.       In these cases, individuals were able to create documentation that allowed them to receive loans. However, state agencies told investigators about the lack of actual Payroll records to prove that these businesses were active. These criminals are quickly being caught and charged with counts of Bank Fraud among other counts. While it may be tempting, in the end it never pays to cheat and steal. You always end up paying back a lot more.

     Many companies are concerned about their employees stranded or sheltered in places they do not normally work. By working in states or countries where the company does not already do business, there could be unexpected tax bills in the near future. The Internal Revenue Service ( IRS ) has already extended some tax relief for foreign travelers stranded in the US. However, this is limited and there is a similar concern for domestic businesses as well.      Very few states have volunteered how they will view remote workers stranded and forced to work in different areas. Some countries are creating tax treaties to help off-set the liabilities that may be created by COVID-19 related travel restrictions. There is nothing like that being discussed at the Federal level. While many are concerned, it is not considered a priority yet. Mostly because the time requirements have not been met for triggering a tax liability. In many cases that would be 180 days of work. But that time may c

     For those looking for help with COVID-19 relief, it looks like more help is on the way. Last week the Paycheck Protection Program ( PPP ) Flexibility Act of 2020 was passed in Congress. This will improve the PPP experience by making rules for getting loan forgiveness a little easier.      One major change is the amount of time given to businesses to use the proper loan amount. Originally, business owners had 8 weeks from the time the loan was given to spend 75% of it on Payroll costs. If this obligation was met, it could qualify for complete loan forgiveness. Many felt this was unrealistic considering the need to pay rent and utilities. With the PPP Flexibility Act, borrowers can take up to 24 weeks to spend 60% on Payroll costs and potentially reach the same outcome.      This new Flexibility Act changes many aspects of how PPP is calculated. It now becomes a more attractive option for COVID-19 relief as it was intended, instead of a burden that had to be used by th