Anthony Sykes & Company

            The pandemic caused a great disruption to many institutions, and the Internal Revenue Service ( IRS ) was not exempt from this. In fact, their mail services were paused for a time and many who had tax balances did not receive a notice for the tax years 2020 and 2021. When tax balances are not paid promptly, penalties and interest will compound the amount. How will the IRS rectify this problem?           At the end of 2023, it was announced that the IRS had created a program to provide relief for those who were not given a written notice that they had a tax balance. They will automatically waive penalties on taxed amounts of $100,000 or less. Those who have already paid may be eligible for a credit on other tax years or a refund of the tax penalty. Those with more than $100,000 in taxes assessed are not automatically enrolled, but they can apply for relief.    ...

                 Everyone wants to be treated fairly. That is an essential quality that all people have. But what is fairness? Trying to answer that question can prove to be difficult for some. While fairness is impartial and just treatment without favoritism or discrimination, applying this principle is a challenge. Each person has their own idea of what is fair. That is certainly true when it comes to the current tax system.           The Internal Revenue Service ( IRS ) is aware of that sentiment. After a year of review following the passing of the 2022 Inflation Reduction Act funding, they are determined to make a change. These changes will focus attention on the wealthy, partnerships, and other high-income earners who in recent years have had a sharp reduction in audits. The IRS is planning to use Artificial Intelligence to detect patterns in tax avoidance and new threats. They will al...

            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...

             Is your QuickBooks Online account safe? Most likely it is. There is a reason why they are the most popular cloud-based accounting software today. However, when something is popular with consumers, it is also popular with criminals looking to take advantage of any opportunity they can. Consider this real-life example of how we helped one of our clients recover from an account hack.           The following details indicate a very sophisticated hack and underscore the need to be vigilant when it comes to criminals trying to steal your money. The Administrator’s account was hacked, and the associated phone number was changed. A Payroll Core subscription plan was added. This allowed the thief to add fake contractor names and associated email addresses. That step is key because this meant W-9’s were emailed to the “contractors”, filled out, and signed via DocuSign and then added to the Administ...

          The Employee Retention Credit ( ERC ) is a tax credit for employers who kept paying employees while closed by government order or had a great decrease in income due to COVID-19. This is a credit that can only be claimed by certain businesses and organizations that had employees during specific time periods. With this set of criteria, the ERC is continuing to be the subject of a growing advertising campaign. Wild claims are being made about who can qualify for it.           The eligibility requirements should be considered closely. One sign of a scam is stating that the application process is easy, or that someone can find out if they are eligible for it in minutes. The ERC is noted for being a very complex credit. Scammers are trying to use this situation to steal personal information or run away with large upfront fees for work that will never take place. Dishonest promoters try to lure in victims ...

               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...