Showing posts from February, 2021

Deductions: Standard vs. Itemized

                 This is a decision that some struggle with each year. Is it better to itemize or use the Standard Deduction? There is no one answer that fits everyone in every situation. Deductions can lower the amount of taxable income in a given year. Does that mean that itemized is best? Not always.           Itemized deductions. This is often used when the amount of deductions claimed will be greater than the Standard Deduction or if Itemization is the only option. For example, if a Taxpayer had large uninsured medical expenses, uninsured theft or losses, or large contributions to qualified charities, they may choose to itemize.           Standard deduction . This is considered to be the quick and easy option. However, this amount will change every year and is determined by the Taxpayer’s age, filing status and other factors. Something else to consider is that this year, up to $300 could be claimed as a contribution while still using the Standard Deduction. Usually the best wa

New Paycheck Protection Program Opportunity?

                 For those who felt left out of the last 2 Paycheck Protection Program ( PPP ) openings, there is another chance. Starting on February 24, and continuing for 2 weeks, there is an exclusive window for Small Businesses with 20 employees or less to apply for a PPP loan. This is a particular group that has felt shut out of the program to this point.           This means that sole proprietors and independent contractors will have an even greater opportunity to receive this funding. However, the calculations that would increase the amounts of the loans for these Small Businesses will not be updated by the Small Business Administration ( SBA ) until March 1 . Specific written guidance will also be issued at that time. So it might be best for business owners to wait until that time so their applications will be subject to the most updated rules.

More Tips on Choosing A Tax Preparer

           Now that we are 2 weeks into the 2021 Tax Season, it is clear that finding an honest and ethical Tax Professional is essential. You will be trusting this person with your most sensitive personal information. Here is some more guidance on finding the best Tax Preparer for you.           Beware of what are called “Ghost Preparers”. They are called this because they have a tendency to disappear after the work is done. Beyond that, some red flags to look out for are if they require payment in cash and do not give a receipt, are willing to claim fake deductions to increase the refund, direct the refund into their own bank account, or refuse to sign the Tax Return after they prepare it. These are individuals you want to avoid.           As a Taxpayer, you have the right to ask questions. Everyone hopes for a simple and easy filing, but sometimes complications come up. Will the preparer you are considering be around to help? How can they represent you before the Internal Revenu

Tips on Choosing A Tax Preparer

              With the 2021 Tax Season starting this week, and being 2 weeks shorter than normal, it is essential that you find a Tax Professional who knows what they are doing. Tax law continues to change, so you’ll want to find someone who is up to date on what is current. There are also signs that will give you an idea on who to avoid.           You have the right to know what you will be paying for tax services in the beginning. If they say it will be based on your refund, that gives and incentive for the Tax Preparer to lie and make fraudulent claims to increase the refund. Remember that the Taxpayer is always responsible for what the Tax Return says. A previous post discusses why this is so important. Take the time to find someone who is honest. An honest preparer will always ask for past records so they can meet the standards set by the Internal Revenue Service ( IRS ). Anything less will only lead to problems. Please take a look at our detailed post and YouTube video on th

New Tax Deduction!

            On the eve of the official start of Tax Season, the Internal Revenue Service ( IRS ) has just announced a new deduction that is appropriate to the times we are living in. Teachers and other qualified educators can deduct expenses related to COVID-19 personal protective equipment bought last year. This change took effect with the passage of the Omnibus Appropriations Act in December 2020.         No more than $250 can be deducted, and this only applies to expenses that were not reimbursed. This would include things like face masks, hand sanitizer, physical barriers, or tape and chalk to mark physical distancing guidelines. This deduction may apply to anyone who works at a K-12 school at least 900 hours during the school year. If you have not done so already, gather your records and make an appointment with your Qualified Tax Professional . Having all your documents prepared beforehand will make the tax filing process much smoother.