Anthony Sykes & Company

         After much confusion during the COVID-19 pandemic, and as we have seen it touch every aspect of life, the Internal Revenue Service ( IRS ) has moved the deadline to file tax returns. The deadline has been extended from April 15 to July 15 . This is only reasonable since COVID-19 are on the rise and we all need to follow directions from officials to protect our health. However, with this provision, other things have changed.           At the press conference on the morning of March 17 , it was stated that businesses and individuals could defer tax payments ($1 Million for individuals and $10 Million for corporations ) without the fear of penalties or interest for 90 days. At that time, people were still being strongly encouraged to file by April 15. Now that the filing date has been moved, there is no limit on the amount that can deferred. Penalties and interest will not begin to accrue until July 16. At this point, these changes only apply to Federal Tax Payments and

          As tax filing season is kicking into high gear, Taxpayers receiving a refund will have a choice to make. Do you want Direct Deposit or a paper check? This is a personal choice, but there are several benefits when it comes to choosing Direct Deposit. Here are a few to consider.           This is a free service that is secure . The Internal Revenue Service ( IRS ) uses the same system that Social Security and Veterans Affairs depends on to send benefits to millions of accounts. It can be trusted. The refund can be deposited into multiple accounts . This is the fastest way to receive a refund. You will not have to wait for anything to come through the mail. This option can be chosen when using e-file or filing by paper. These are some of the facts to keep in mind if you still wait for a paper check to get your tax refund.

         Ever since Federal Tax Law was changed by the Tax Cuts and Jobs Act ( TCJA ) the states have been struggling to catch up. This is true in many ways, but one way is in how they tax global income. The TCJA created the title Global Intangible Low-Taxed Income ( GILTI ). This is applied to the act of taking income from things like patents or trademarks and sending it to a foreign corporation controlled by the original US based business. This foreign corporation would be in a low tax country and allow for more profits to be shielded from taxation. How have states adjusted to this form of tax avoidance?           While this strategy has been around for a long time, the GILTI category under Section 951A has been the best effort so far at discouraging that kind of behavior from businesses. With that said, most states have done very little to follow up with their own guidance. That might be because they have very little in the way of international commerce within their borders

As the 2019 Novel Coronavirus ( COVID-19 ) spreads, people are doing one of two things. They are either changing their routines completely hoping that it does not directly affect them, or they are making slight modifications ready to get tested if they feel the onset of symptoms. The information and direction from sources like the Centers for Disease Control ( CDC ) is clear. People may wonder if getting a COVID-19 test would change their deductible medical expenses. Are these tests covered?          The Internal Revenue Service ( IRS ) has determined that High Deductible Health Plans ( HDHP ) can pay for COVID-19 testing and treatments. In a previous post, we discussed the details of Health Savings Accounts ( HSA ) and how they affect a person’s tax responsibilities. Simply put, these plans and accounts will cover the testing needed if you feel it necessary to go to the doctor. Do not let worries about taxes keep you from seeking medical help that you or your family needs. 

We have all seen the world change in unprecedented ways due to the spread of the 2019 Novel Coronavirus ( COVID-19 ). Every area of life has been touched and certainly we have not seen the last of what is going to happen. With that understood one area that seems to be unfazed is taxes. With the March 15 (Business) and April 15 (Individual) deadlines officially unchanged, there is a growing movement to adjust due to the pandemic of COVID-19 . What will this mean? First, remember that the Internal Revenue Service ( IRS ) always has the power to change the final filing date for Tax Returns. In 2018 the IRS gave Taxpayers an extra day when the agencies computer system failed on April 15. This power is found in the code that created the IRS , which states that the Secretary of the Treasury “ may grant a reasonable extension of time for filing any return, declaration, statement, or other document required by this title or by regulations . ” Congress sent a letter, dated March 10, ask

        A new variation of an old scam is reportedly showing up in many email in-boxes. This one talks about a supposedly new tax form that needs to be filled out and returned to the Internal Revenue Service ( IRS ) as soon as possible. You are instructed to download the attachment and send it back with all the information requested, along with scanned copies of passports and other forms of identification. There are several problems with this scenario, let’s take a closer look so you will be able to protect yourself if you are in the same situation.           First, the IRS does not initiate contact through email. If an email or text leaves you confused, it’s a scam. The tax forms that are being discussed are real. However, the scammers are creating fake versions to gather account numbers from banks and other information to steal identities. Another point to consider is the actual content of the message. If the grammar is poor, the information is not consistent, or you are asked

        The Internal Revenue Service ( IRS ) will be making more in-person visits to Taxpayers in 2020. They will be focusing on high income individuals who have not filed a Tax Return in the past few years. The purpose of these visits is to prevent civil or criminal action. The goal is to visit at least 800 before the end of March. This number will increase as the year goes on.           This type of action is really an effort to educate Taxpayers on their responsibilities. However, this comes with its own unique set of challenges. If someone shows up unannounced at your home claiming to be from a government agency, you should rightly be suspicious. This would most likely be a scam. The IRS is putting some precautions in place. Anyone visited by the IRS will have been contacted by them through the mail. They will not be surprised to hear they have a tax problem. Any IRS employee who makes a visit will present 2 forms of identification, including a photo ID and a serial nu

         When it comes to choosing your filing status on a Tax Return, there are a few options, and most are easy to understand. “ Single ” does not need an explanation. “ Married, filing jointly ” applies if you were married as of December 31 of the tax year in question. “ Married, filing separately ” takes more work but can be done. “ Qualifying Widow(er), with Dependent Child ” will apply if the death has occurred within the past 2 years and the surviving spouse has not remarried. What makes the “ Head of Household ” designation different?           Head of Household would apply to those who are not legally married or are legally separated/divorced according to state law. The Head of Household status has created some confusion because different standards need to be met to be able to qualify. This status is entitled to a larger standard deduction and lower tax rates. To be claimed, the spouses must have lived apart for at least 6 months during the tax year and the one clai