Anthony Sykes & Company

             Now is the time to make an appointment with your tax professional. It’s early in the tax season, so filing will usually be less stressful. That is especially true if you are returning to your regular tax professional. What if you are looking for someone new? Then starting early is absolutely essential. There should be a bond of trust between a taxpayer and their tax professional. This is needed because that person is entrusted with sensitive and personal information of their clients. In reality trust and respect are earned over time. How can someone choose the right tax professional for themselves right now?           There are many tips that can help in the search for a new tax professional. Making price the most important factor is not always best. If you pick a tax professional because they are the least expensive, remember that you often get what you pay for. Make sure to pick a preparer who is available th...

        The Internal Revenue Service ( IRS ) has announced that the beginning of tax season will be January 27, 2025. It would be best to organize financial and tax related documents now. It will simplify the filing process and reduce overall stress. However, it must be stated that for many of us, these times are anything but simple.         The fires across the Los Angeles area have forever changed so many lives. For this reason, LA County has been declared a federal disaster area. That has allowed the IRS to postpone the filing deadline to October 15 . This allows for those impacted directly by the fires to focus on what is most important right now and work on rebuilding their lives one step at a time.

            When it comes to paying a tax debt, dealing with the Internal Revenue Service ( IRS ) can be challenging. There are programs that are available to help in these situations. One of them is called Offer in Compromise. It allows a taxpayer to pay less than the full amount they owe when considering factors like ability to pay and income. However, an application to this program is not a guarantee of acceptance.           If the Offer in Compromise is rejected, it can be appealed. For that to be successful it must take place within 30 days of the rejection. The appeal must also be specific. There must be documentation to support each area of disagreement with the IRS . In a situation like this, it may be wise to consult a qualified tax professional .

             The Internal Revenue Service ( IRS ) continues to focus on applying the tax laws with accuracy and fairness. With that in mind, they have announced that they are restarting a program that focuses on individuals who did not file returns from 2017 to 2021 and had at least $400,000 in income. They have identified at least 125,000 cases of people who are not in compliance.           The non-filer letters will be going out every week to start the process of filing returns, collecting taxes, interest, and penalties. The basis of these letters comes from information through Forms W2, 1099 and others. Those who receive letters of this nature need to take quick action. The enforcement actions in this program are stronger than usual. That makes it critical that those who receive these letters go to a qualified tax professional . The IRS can be made aware of qualifying deductions and credits that can ch...

            With the start of the new school year upon us, educators will want their students to have a complete classroom available to them. That might mean having some out-of-pocket expenses that are not reimbursed. If that’s the case, any principal, counselor, aide, or teacher who works at a K-12 school for at least 900 hours in a year can claim the Educator Expense Deduction . The current limit is $300, but that can be adjusted in the future based on inflation.           The qualifying costs can be related to books, supplies, and other materials used in the classroom. Equipment, including computer equipment and software can qualify. COVID-19 protective items used in the classroom would also apply. This can be claimed even if you use the standard deduction on your tax return. As a reminder, it is always best practice, especially when claiming a deduction, to keep good records which would include receip...

               On July 24, 2023, the Internal Revenue Service ( IRS ) stated that it was ending the general practice of making unannounced in-person visits to taxpayers. The IRS is working on a new strategic plan in line with the passage of the Inflation Reduction Act last year. It is believed that this change will increase safety for revenue officers and taxpayers. There were tens of thousands of these types of visits each year. The goal was to help resolve delinquent tax matters.           In place of the visits, the IRS will send appointment letters and schedule meetings to deal with the tax problems. There will still be certain situations when unannounced visits will take place. This will be related to serving a summons or subpoenas and enforcement activity like seizure of property. If you want help in resolving a pressing tax issue, visit our website at help4yourtaxproblems.com .

              Until recently the Internal Revenue Service ( IRS ) had been encouraging many taxpayers to hold off on filing their tax returns. This is not because of a technical flaw, but there was a question that needed to be answered. Would state tax payments over the past year be taxable at the federal level? California is one of 21 states to provide such payments.           After discussion, it was determined that these payments would not need to be reported as income, and therefore not taxable. They will be viewed as payments for general welfare and disaster relief. This was a complex situation that had many questions for the IRS . One determining factor is that since the federal pandemic disaster declaration is ending in May 2023, there is no need to make an issue of these payments made in 2022. With that issue settled, please be sure to gather your important documents and prepare to file your t...

                 With the Internal Revenue Service ( IRS ) ready to accept tax returns, you may be wondering how to take advantage of an early start date. The best thing to do is use your time wisely. How can you do that?  The first thing you should do is to gather all of your necessary information. This is the time of year that tax information is arriving, so keep it organized and make copies to give to your Qualified Tax Professional . The earlier you start this process, the easier it will be. As a bonus, you will be less likely to be in a rush and have missing details that will prevent you from filing your tax return. If you are choosing a new Qualified Tax Professional , make appointments early to meet them and discuss your needs. The longer you wait, the less availability they will have. The best way to prepare for tax season is to gather your information and get your questions answered early.

             The tax season for this year has been established. As announced by the Internal Revenue Service ( IRS ), the first day tax returns will be accepted is January 23 . The deadline to file is April 18 . However, in light of the recent devastating storms, many counties in California were declared federal disaster areas. How does this designation change things for the affected taxpayers?           As is often stated, this allows for federal funding to care for the practical needs of disaster victims. This also makes the way for federal agencies like the ( IRS ) to have the ability to adjust deadlines as circumstances dictate. In this case, the taxpayers that live in California counties that have been declared federal disaster areas, will have until May 15 to file federal individual and business tax returns. This also postpones any estimated tax payments. This allows for time to focus on what is needed now.

                 The tax season for this year has been established. As announced by the Internal Revenue Service ( IRS ), the first day tax returns will be accepted is January 23 . The deadline to file is April 18 . After reflecting on the past 3 years, the IRS has taken steps to make improvements in the service it provides to taxpayers.           As part of the Inflation Reduction Act passed in August 2022, the IRS has hired 5,000 new employees. They will answer phone inquiries and provide in-person assistance. The date of January 23 was chosen to allow for training and needed updates to the software so IRS systems will work smoothly. Tuesday, April 18, 2023 will be the tax filing deadline in observance of Emancipation Day in the District of Columbia. Since there is more help available this year than in previous years, our next post will discuss how to best use our time in preparation f...

           Many plan on making charitable donations this time of year, especially for Giving Tuesday. Before doing so, it is always best to know if the gift is tax-deductible. It is also a good practice to research the organization to make sure it is tax-exempt and get a written acknowledgement of a donation greater than $250. Usually, a gift of cash or property given to a charity can be deducted when itemized on a tax return. However, some donations do not qualify for a tax deduction. For example, a donation carried forward from a prior year, a donation made to a supporting organization, or donations made to most private foundations will not be eligible for a tax deduction. Take time now to plan your gift and understand how it may affect your taxes.

             The Internal Revenue Service ( IRS ) provides resources to meet the needs of different groups of people. That is especially true of active members of the military, veterans, and their families. Certain benefits relate to the taxpayer’s military status. There are different rules that apply to those who are serving abroad, or in combat zones.           Depending on their situation, they may qualify for automatic deadline extensions, and the ability to claim certain moving expenses. Military members and veterans often have some of the most uniquely complex tax situations. The IRS recognizes that. If you fall into this category, take time now to be prepared before January arrives.

               For those who requested an extension to file their 2021 tax return, the deadline is Monday, October 17 . The Franchise Tax Board ( FTB ) follows the lead of the Internal Revenue Service ( IRS ) in this area. The time to file is now. However, there is no need to wait until the last minute of the last day. If you are ready before October 17, get your return filed then. When you have your information, there is no need to wait. If something unexpectedly comes up, and you file after the deadline, there will be a late filing penalty.           In some cases, there are some who are given extra time. Members of the military serving in a combat zone have extra time. They usually have up to 6 months after they leave the combat zone to file. Taxpayers who live in a declared disaster area will have extra time. In these situations, the filing date can continue to change, so those affected need ...

                 The Franchise Tax Board ( FTB ) has announced state tax relief for individuals and businesses impacted by Hurricane Ian. This means that there is a postponement for required payments and an automatic extension given to file a return. The FTB automatically follows the Internal Revenue Service ( IRS ) lead when it comes to postponement periods for presidentially declared disasters.           This means that for those who have been affected by the hurricane, the October 17 tax filing deadline has been moved to February 15, 2023. Taxpayers can also deduct a loss related to a disaster. Instructions must be closely followed in this process.

              If you have not filed your 2021 tax return yet, you do not need to wait until October and the extension filing deadline. However, if you are having some difficulties, it might be the time to hire a tax professional. There are different types of preparers, and your needs will determine who you hire.           There are some basic points to keep in mind. Ask about fees . Make sure you have a clear understanding about the fees you will be charged. Avoid preparers who promise to get greater refunds than competitors, or who base their fee on how much of a tax refund you get. This is an incentive for fraud. E-file . Make sure that your tax professional will use e-file to file your tax return with the Internal Revenue Service ( IRS ). It is much more efficient than using the mail.           Understand the preparer’s credentials . Enrolled Agents, Certif...

           Even with a large backlog, the Internal Revenue Service ( IRS ) still sends out letters and notices to Taxpayers at all times of the year. They could be for several reasons including, the tax return being changed by the IRS , the taxpayer being due a larger or smaller refund, a question about the tax return, or even the need to verify an identity.           There can be an increase in mail sent out in the weeks after Tax Season has finished. If you receive mail from the IRS , please remember some simple things. Do not ignore it . Reading the letter will explain the reason for the contact and what, if anything, should be done. Do not panic. The IRS normally contacts people by mail. The letter or notice will explain what is needed. Read carefully and completely. Everything you need to know is usually in the letter. If a response is needed, the date required will be there. You can always ask your Qua...

                 The tax filing deadline has passed. However, there are some common issues that come up that have relatively simple solutions. If a taxpayer expects a refund, they are usually processed in 21 days. Keep in mind that the Internal Revenue Service ( IRS ) will take longer to release a refund if the tax return is claiming a credit, has errors, or is affected by identity theft.           If you are not receiving a refund and are surprised by that development, then checking your withholding should be done. This will make sure that the correct amount of tax is being withheld from your paycheck.           Sometimes after filing their return, a taxpayer will realize that they made an error or forgot to attach a form. A common reaction is to amend their return. This should only be done to fix errors like filing status, income, deductions, ...

               Monday April 18 is approaching with certainty. The time left to file is reduced. If you are waiting until the very last minute, here are some things you should keep in mind.           File online. Those who file online tend to have fewer errors. Common errors will be picked up and needed information will be asked for. Additionally, any paper mail will take months to be processed. That will lead to penalties and interest. Filing online is the most practical option.           Consider an extension. This allows extra time to file a tax return, not to pay any taxes due. Any estimated tax liability must be paid by April 18 to be considered on time.           Extra information. When dealing with something like the Advance Child Tax Credit payment or trying to claim the Recovery Rebate Credit ...

               Criminals are especially active during this time of year. Their goal is to steal personal information, such as Social Security numbers, and file fraudulent tax returns. The Internal Revenue Service ( IRS ) scans tax returns for fraud, and when they find something, it is set aside for further review. The next steps are critical.           If the IRS determines there is fraud, they will send a letter to the taxpayer. Nothing will be processed until there is a response. The letter will notify them of potential identity theft and give specific instructions that must be followed. They might be online, over the phone, or even need to take place in person. Do not ignore these letters. Your Qualified Tax Professional can help guide you through the process.

            Every year there are millions of taxpayers who do not file a tax return. This leaves billions in unclaimed tax refunds. In 2018, there was an estimate of $1.5 billion in unclaimed money. A taxpayer usually has three years to claim their refund. This is assuming that they do not owe or have another issue with the Internal Revenue Service ( IRS ). If that is the situation, the IRS may apply some of the refund to any outstanding federal or state debts.           The deadline to claim any part of the waiting refunds from 2018 is April 18, 2022. That tax return must be mailed in. Given the current state at IRS mail sorting centers, it should be mailed as soon as possible. Other late tax returns can be e-filed. The refund amount might be delayed if there are other tax returns outstanding. Any money that goes unclaimed will become property of the US Treasury. A Qualified Tax Professional can help y...