Anthony Sykes & Company

        In 2017, the Internal Revenue Service ( IRS ) put into action a plan to use private debt collection agencies to collect unpaid taxes from individuals that met certain criteria. This started from a 2015 law that allowed for all inactive tax debts to be sent to these companies. These companies will now have the authority to collect from businesses.           The goal is to collect unpaid employment taxes, which the IRS always contends is the legal responsibility of every employer to collect and pay. These debts are typically higher than individuals. Companies are being assigned these cases because they are considered inactive. Hundreds of cases per week will be assigned to these 4 authorized debt collection agencies. If you have a business debt that has not been resolved, the IRS has not forgotten.

          Deductions and credits help the bottom line for every self-employed person and small business owner. With most of the year still ahead, this is a good time to check your options and eligibility which will allow you the ability to plan for the future.             Business Expenses. To be considered a deductible business expense, the expense must be considered ordinary (common and acceptable in this trade) and necessary (helpful and appropriate for the business). For example, if part of a Taxpayer’s home is used for a business, some of the mortgage interest insurance, utilities and depreciation can be deducted. Usually rent can be considered a deductible expense if the property is used for the business.           Business Credits . A new credit that was created by the Tax Cuts and Jobs Act ( TCJA ) is a credit for paid family and medical leave. ...

         After a time of adjustment, the Form W-4 has been redesigned and is available for comment from the public. It is expected to be used in 2020. This is the form used to determine how much tax is to be withheld from an employee’s paycheck. This version will reflect the changes brought on by the Tax Cuts and Jobs Act ( TCJA ). A portion of the draft has been provided below.           It will require the Taxpayer to list every position they have. Essentially, they must tell their employer if they are holding another job, which is becoming increasingly common in the age of the side hustle. This might make some uncomfortable, but it is important to get the right balance on your Paycheck Withholding. This year, many were shocked to see their refunds shrink, or turn into a surprise debt. This is because the TCJA changed the withholding tables, and often this meant more take home pay during the year.  In ...

         With the activity surrounding this year’s Tax Season now at a reduced level, some might look back and realize they made a mistake on their Tax Return. This is more common than many people might think. However, there are only certain situations that would require an amended Tax Return.           If a Taxpayer noticed that they made a mathematical mistake on their Tax Return, it is not necessary to file a Form 1040X to amend it. In most cases the Internal Revenue Service ( IRS ) will automatically correct them. This is also usually true when it comes to missing forms. If the IRS does want a missing form, they will make a request in writing through the mail. Amended Tax Returns can take up to 4 months to process, so those who feel they will be due an additional refund, need to show patience. On the other hand, if the amendment will result in tax due, it must be paid immediately to penalties and intere...

         Almost 72% of all the revenue collected by the Internal Revenue Service ( IRS ) comes from Payroll Taxes . With this understanding, it easy to see why they put so much effort into making sure that every business pays their fair share. This is done in a variety of ways.           First, there is usually some educational outreach if it is determined that a business is not meeting its obligations. The IRS uses years of experience combined with data analytics to pinpoint which businesses need help. It would be wise to accept and apply the information they provide, because the next steps are not as pleasant.           Since the IRS considers payroll tax an essential part of the tax system, it will use any and every method at its disposal to make sure that this obligation is paid. This can include lawsuits, seizures of property, and criminal prosecution by the...

         The filing deadline for many tax-exempt organizations is coming soon. They normally need to file Informational Returns of the 15 th day of the 5 th month after their accounting period has finished. For those who operate their fiscal year on the calendar year, the time for them to file is May 15 .           This year the Internal Revenue Service ( IRS ) want to make sure that filers know what is and is not required. By law, most parts of these forms must be made available to the public . These organizations are strongly cautioned against using Social Security Numbers or any other personally identifying information on these forms, schedules, or attachments. Doing so will prevent their donors, clients, or benefactors from having their identities compromised.           There are a wide variety of Forms 990 that are used for tax-exempt organizations. Not...

         In this Tax Season, there have been many adjustments from previous years. One of which is related to the claiming of dependents. It came as a surprise to some that the tax filer, spouse, or dependents can no longer be claimed as personal exemptions. This has been suspended. However, dependents can still be claimed if they meet qualifying criteria.           For any dependent claimed, their name and Social Security number must be listed in the Tax Return. The Internal Revenue Service ( IRS ) is taking these steps to combat fraud. In recent years, the Child Tax Credit has been a target of criminals. A Taxpayer cannot claim any dependents, if they themselves, or even their spouse, have been claimed as a dependent. Making sure that a child or relative still qualify to be claimed as a dependent is not the same as it was a year ago. Talk to your Qualified Tax Professional to understand the nuances of this...