Free tax filing options are available to taxpayers who requested an extension of time to file their federal taxes. There’s no need to wait for the Oct.14 deadline if taxpayers are ready to file.

Here are some free tax filing options.

IRS Free File available to taxpayers with income of $79,000 or less

IRS Free File lets qualified taxpayers prepare and file federal income tax returns online using interview-based tax preparation software. Taxpayers who made $79,000 or less in 2023 will likely find an offer from a trusted IRS Free File partner that matches their needs. IRS Free File's tax preparation software can help taxpayers take advantage of any tax credits they may be eligible for, such as the Earned Income Tax Credit and the Child and Dependent Care Credit.

Taxpayers can go to the IRS Free File webpage at IRS.gov/freefile to find the right IRS Free File offer for them.

IRS Free File Fillable Forms

Electronic federal tax forms are available to everyone, regardless of income, with Free File Fillable Forms. People should be comfortable preparing their own tax returns before using these forms.

MilTax

Eligible members of the military community can also file their taxes using MilTax, a free tax resource offered through the Department of Defense. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.

Other e-filing options

Taxpayers can also use commercial software to file their taxes. The return is securely transmitted through an IRS-approved electronic channel and checked for mistakes. If the IRS finds easy-to-fix mistakes, such as a math error or an incorrect Social Security number, the IRS immediately sends it back to the taxpayer to fix it and re-file it. This saves time and prevents a simple mistake from holding up any tax refund.

To find a tax professional who’s qualified to prepare, transmit and process e-filed returns, taxpayers should consult the Authorized IRS e-file Provider database, a nationwide listing of all businesses that participate in the IRS e-file program.

Taxpayers in disaster areas may have more time to file

Extra time to file is granted automatically due to a disaster. Information on the most recent tax relief for disaster situations is available on the IRS website.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS    

There are various types of tax return preparers, including certified public accountants, enrolled agents, attorneys, and many others who don't have a professional credential. You expect your preparer to be skilled in tax preparation and to accurately file your income tax return. You trust him or her with your most personal information. They know about your marriage, your income, your children and your social security numbers – the details of your financial life.

Most tax return preparers provide outstanding and professional tax service. However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer. Be sure to check our tips for choosing a tax preparer and how to avoid unethical "ghost" return preparers.

What kind of tax preparer do I need?

Anyone can be a paid tax return preparer as long as they have an IRS Preparer Tax Identification Number (PTIN). However, tax return preparers have differing levels of skills, education and expertise.

Learn about tax preparer credentials and qualifications. Watch choose a tax preparer wisely. Get information on the Volunteer Income Tax Assistance (VITA) program.

How can I check a tax preparer's credentials?

Our directory of federal tax return preparers with credentials and select qualifications can help you find preparers in your area who currently hold professional credentials recognized by the IRS, or who hold an Annual Filing Season Program Record of Completion. You can also check the professional organizations many tax preparers belong to.

What if I have a complaint about a tax preparer?

Tax return preparer fraud is among the list of common tax scams.

The IRS provides tips on avoiding unscrupulous tax preparers and is committed to investigating paid tax return preparers who act improperly.

Make a complaint if you have been financially impacted by a tax return preparer's misconduct or improper tax preparation practices.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

El IRS recientemente compartió cinco nuevas señales de advertencia de reclamaciones incorrectas del Crédito por retención de empleados. La nueva lista surge de problemas comunes que el IRS ha visto al revisar y procesar las reclamaciones del ERC.

Los promotores agresivos convencieron a muchas empresas a reclamar este crédito de la era de la pandemia cuando no eran elegibles. El IRS insta a las empresas a revisar cuidadosamente sus presentaciones para confirmar su elegibilidad y asegurarse de que su reclamación no incluya estas señales de advertencia u otros errores.

Las empresas deben hablar con profesionales de impuestos de confianza y resolver una reclamación incorrecta a través del retiro de la reclamación (en inglés) o mediante el segundo Programa de divulgación voluntaria (en inglés) del IRS para evitar auditorias, reembolsos, multas e intereses.

Las cinco nuevas señales de alerta incluyen estas áreas:

• Empresas esenciales durante la pandemia que pudieron operar plenamente y no tuvieron una caída en sus ingresos brutos. Los promotores convencieron a muchos negocios esenciales a reclamar el ERC cuando, en muchas ocasiones no eran elegibles porque sus operaciones no fueron total o parcialmente suspendidas por una orden gubernamental calificada.
• Empresas incapaces de demostrar una orden total o parcial gubernamental que suspendiera las operaciones de sus negocios. Las suspensión total o parcial de un negocio, (en inglés) depende de su situación específica. Al solicitar pruebas de cómo la orden de gubernamental suspendió más de una parte nominal de sus operaciones (en inglés), muchas empresas no proporcionaron suficiente información para confirmar la elegibilidad.
• Empresas que reportaron los ingresos de familiares con salarios calificados Si los dueños de negocios reclamaron el ERC usando salarios pagados a familiares, esas reclamaciones probablemente sean de un monto incorrecto o no elegibles.
• Empresas que reportaron salarios ya usados para la condonación de su préstamo del Programa de protección de pago (PPP, por sus siglas en inglés). Los negocios no pueden reclamar el ERC sobre salarios que fueron declarados como gastos de nómina para obtener la condonación del préstamo PPP.
• Grandes empleadores que reclaman salarios por empleados que prestaron servicios. Los grandes empleadores elegibles solo pueden reclamar los salarios pagados a los empleados que no prestaban servicios. Muchas reclamaciones de grandes empleadores incluían incorrectamente los salarios de los empleados que prestaban servicios durante estos periodos.

El IRS previamente emitió advertencias sobre estas siete áreas:

• Demasiados trimestres fueron reclamados.
• Ordenes gubernamentales que no califican.
• Demasiados empleados y cálculos incorrectos.
• Empresas citando problemas en la cadena de suministros.
• Empresas que reclaman el ERC por un periodo tributario demasiado largo.
• Empresas que no pagaban salarios o no existían durante el periodo de elegibilidad.
• El promotor dice que no hay nada que perder.

Para detalles acerca de todas estas señalas de advertencia, consulte señales nuevas y previamente compartidas que afirman que el ERC pudiera ser incorrecto (en inglés).

Las empresas también pueden usar la lista de verificación de elegibilidad del ERC (en inglés) del IRS y revisar las Preguntas frecuentes sobre la elegibilidad del ERC, (en inglés) para ayudar a determinar reclamaciones incorrectas.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS   

The IRS recently shared five new warning signs of incorrect claims by businesses for the Employee Retention Credit. The new list comes from common issues the IRS has seen while reviewing and processing ERC claims.

Aggressive promoters convinced many businesses to claim this pandemic-era credit when they’re not eligible. The IRS urges businesses to carefully review their filings to confirm their eligibility and ensure their claim doesn’t include these warning signs or other mistakes.

Businesses should talk to a trusted tax professional and resolve incorrect claims through the IRS’s claim withdrawal program or the second ERC Voluntary Disclosure Program to avoid issues such as audits, repayment, penalties and interest.

The five new red flags cover these areas:

• Essential businesses during the pandemic that could fully operate and didn’t have a decline in gross receipts. Promoters convinced many essential businesses to claim the ERC when, in many instances, essential businesses weren’t eligible because their operations weren’t fully or partially suspended by a qualifying government order.
• Businesses unable to support how a government order fully or partially suspended business operations. Whether a business was fully or partially suspended depends on its specific situation. When asked for proof on how the government order suspended more than a nominal portion of their business operations, many businesses haven’t provided enough information to confirm eligibility.
• Businesses reporting family members’ wages as qualified wages. If business owners claimed the ERC using wages paid to related individuals, those claims are likely for the wrong amount or ineligible.
• Businesses using wages already used for Paycheck Protection Program loan forgiveness. Businesses can’t claim the ERC on wages that they reported as payroll costs to get PPP loan forgiveness.
• Large employers claiming wages for employees who provided services. Large eligible employers can only claim wages paid to employees who were not providing services. Many large employers’ claims incorrectly included wages for employees who were providing services during these periods.

The IRS previously issued warnings involving these seven areas:

• Too many quarters being claimed.
• Government orders that don’t qualify.
• Too many employees and wrong calculations.
• Businesses citing supply chain issues.
• Businesses claiming ERC for too much of a tax period.
• Businesses didn’t pay wages or didn’t exist during eligibility period.
• Promoter says there’s nothing to lose.

For details on all of these warning signs, check new and previously shared signs ERC claims may be incorrect.

Businesses can also use the IRS’s ERC Eligibility Checklist or review frequently asked questions about ERC eligibility to help identify incorrect claims.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS     

El Servicio de Impuestos Internos emitió un recordatorio acerca de empleadores que ofrecen programas de asistencia educativa pueden usarlos para ayudar a pagar las obligaciones de préstamos estudiantiles de sus empleados hasta el 31 de diciembre de 2025.

Aunque los programas de asistencia educativa se han usado por muchos años, la opción de usarlos para pagar prestamos estudiantiles ha estado disponible solo para pagos hechos después del 27 de marzo de 2020 y, bajo la ley actual, la disposición de préstamo estudiantil expirará el 31 de diciembre de 2025.

Tradicionalmente, los programas de asistencia educativa se han usado para pagar por libros, equipo, materiales, cuotas, matricula y otros gastos educativos del empleado. Estos programas ahora también se pueden usar para efectuar el pago del principal e interés de los préstamos estudiantiles elegibles de un empleado. Los pagos que se efectúan directo al prestamista, al igual que aquellos dirigidos al empleado, podrían ser elegibles.

En la mayoría de los casos, los beneficios de asistencia educativa están excluidos de la retención del impuesto federal, el impuesto del Seguro Social, el impuesto al Medicare y el impuesto al empleo (FUTA). Por ley, los beneficios exentos de impuestos bajo un programa de asistencia educativa son limitados a $5,250 por cada empleado por año. Normalmente, la asistencia que se provee por encima de ese nivel está sujeta a impuestos como salario.

Empleadores que no ofrecen un programa de asistencia educativa deben considerar establecer uno. Los beneficios complementarios de valor como los programas de asistencia educativa pueden ayudar a los empleadores a atraer y retener trabajadores capacitados.

Estos programas deben de estar por escrito y no pueden discriminar en favor a empleados con compensación alta. Para información acerca de otros requisitos, consulte la Publicación 15-B, Guía tributaria para empleadores sobre beneficios complementarios (en inglés).

Para detalles acerca de qué califica como préstamo estudiantil, consulte el capítulo 10 de la Publicación 970, Beneficios tributarios para la educación (en inglés).

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS     

El IRS y los socios de la Cumbre de Seguridad continúan viendo a ladrones de identidad que se enfocan en los profesionales de impuestos con la esperanza de obtener información tributaria valiosa de sus clientes.

Los profesionales de impuestos deben comunicarse con el IRS inmediatamente cuando hay un asunto relacionado con el robo de identidad.

Los profesionales de impuestos deben estar pendiente de estas señales de alarma cuando sus negocios atraviesen estas situaciones:

• Su computadora funciona lenta e inesperadamente o recibe una respuesta de su red como:
  • El software funciona lento o las acciones toman más tiempo en procesar de lo usual.
  • El cursor de su computadora se mueve solo o cambia números sin tocar el ratón o teclado.
  • No puede ingresar a su red o computadora inesperadamente.

• Las declaraciones de impuestos de sus clientes están siendo rechazadas ya que los números de Seguro Social ya se han usado para otras declaraciones de impuestos.

• Recibe cartas de autentificación del IRS (5071C, 6331C, 4883C, 5747C) aun cuando una declaración de impuestos no ha sido presentada.

• Recibe reconocimiento de un número mayor de declaraciones de impuestos por presentación electrónica de los que el profesional de impuestos ha presentado en actualidad.

• El IRS desactiva la cuenta en línea del profesional de impuestos.

• Se envían transcripciones al buzón de Repositorio de objetos seguros del profesional, que no ordenó.

• Recibe una notificación del IRS que el número de Archivo centralizado de autorizaciones (CAF, por sus siglas en inglés) ha sido comprometido. Si tuvo una filtración de datos, debe tomar pasos proactivos para proteger su número CAF y considere solicitar uno nuevo para su protección y la de sus clientes.

• Notificación del IRS relacionada con un cliente que no representa.

Profesionales de impuestos deben reportar el robo de identidad inmediatamente

• Reporte el incidente a su representante local del IRS (en inglés). Actuar rápido es de suma importancia. Los representantes del IRS se asegurarán de alertar a todas las oficinas adecuadas del IRS. Si se reporta rápidamente, el IRS puede tomar pasos para evitar declaraciones de impuestos fraudulentas en nombre de sus clientes y asistirá a profesionales de impuestos durante el proceso.

• Profesionales de impuestos deben trabajar con expertos en la seguridad cibernética y compañías de seguro para determinar la causa y extensión de su pérdida.

• Visitar a la Federación de Administradores de Impuestos para encontrar información de contacto por estado. Profesionales de impuestos pueden compartir información con la agencia de impuestos estatal adecuada al visitar la página Reporte una filtración de datos (en inglés).

• Profesionales de impuestos deben ser proactivos con los clientes que pudieron ser afectados y sugerir acciones adecuadas, como obtener un Número de identificación personal para la protección de la identidad o llenar un Formulario 14039 (SP), Declaración jurada sobre el robo de identidad PDF, si corresponde.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

The Internal Revenue Service is issuing a reminder that employers who offer educational assistance programs can also use them to help pay for their employees’ student loan obligations through Dec. 31, 2025.

Though educational assistance programs have been available for many years, the option to use them to pay for workers’ student loans has only been available for payments made after March 27, 2020. Under current law, this student loan provision is set to expire Dec. 31, 2025.

Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee’s qualified education loans. Payments made directly to the lender, as well as those made to the employee, may qualify.

In most cases, educational benefits are excluded from federal income tax withholding, Social Security tax, Medicare tax and federal employment (FUTA) tax. By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.

Employers who don’t have an educational assistance program may want to consider setting one up. Fringe benefits, such as educational assistance programs, can help employers attract and retain qualified workers.

These programs must be in writing and cannot discriminate in favor of highly compensated employees. For information on other requirements, see Publication 15-B, Employer’s Tax Guide to Fringe Benefits.

For details on what qualifies as a student loan, see Chapter 10 in Publication 970, Tax Benefits for Education.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

Los contribuyentes individuales que solicitaron una extensión de tiempo para presentar sus impuestos federales tienen hasta el 15 de octubre de 2024 para completar y presentar su declaración de impuestos. Aquellos que ya tienen los formularios y la información que necesitan deben presentarlos ya; no hay ninguna ventaja en esperar hasta la fecha límite.

Hay algunas cosas que los contribuyentes con prórroga deben recordar mientras se preparan para presentar su declaración de impuestos.

Presentar antes de la fecha límite

Los contribuyentes con prórroga deben presentar antes del lunes, 15 de octubre de 2024.

Los contribuyentes en áreas de desastre pueden tener más tiempo para presentar su declaración. La información acerca del alivio en situaciones de desastre más reciente está disponible en el sitio web del IRS.

Free File del IRS todavía está disponible

Muchos contribuyentes pueden presentar electrónicamente su declaración de impuestos de manera gratuita a través de Free File del IRS. El programa está disponible en IRS.gov hasta el 15 de octubre de 2024. La presentación electrónica es fácil y segura, y es la manera más precisa para que las personas presenten sus impuestos. La presentación electrónica también puede ayudar a los contribuyentes a determinar su elegibilidad para muchos créditos tributarios valiosos.

Los profesionales de impuestos están listos para ayudar

Los profesionales de impuestos están listos para ayudar a sus clientes a completar y presentar sus impuestos lo más rápido posible. La mayoría de los profesionales de impuestos brindan un servicio excelente y profesional, pero algunos contribuyentes se ven perjudicados financieramente porque eligen al preparador de declaraciones de impuestos equivocado. Para obtener ayuda para elegir un profesional de impuestos de confianza, los contribuyentes deben consultar los consejos del IRS.

Hay ayuda en persona disponible

IRS.gov ayuda a los contribuyentes a encontrar la oficina del IRS más cercana, los días y horas de operación y una lista de servicios disponibles. Los Centros de Asistencia al Contribuyente del IRS operan únicamente con cita previa. Para obtener ayuda en persona del IRS, los contribuyentes pueden simplemente llamar 844-545-5640 para programar una cita.

Preparación gratuita local de impuestos

Muchos programas todavía ofrecen preparación básica gratuita de declaraciones de impuestos a personas calificadas a través de los programas de Ayuda voluntaria a los contribuyentes y Asesoramiento tributario para ancianos, que incluyen:

• Personas que generalmente ganan $60,000 o menos
• Personas con discapacidad
• Contribuyentes con dominio limitado de inglés

Los contribuyentes obtienen su reembolso más rápido al elegir el depósito directo

Los contribuyentes deben presentar su declaración electrónicamente y elegir el depósito directo para su reembolso de impuestos: es la manera más rápida y segura de recibir su dinero.

Opciones de pago

Aquellos que adeudan impuestos y no pueden pagar el saldo completo deben pagar todo lo que puedan para reducir los intereses y las multas por pagos atrasados. El IRS tiene opciones para las personas que no pueden pagar sus impuestos, incluida la solicitud de un plan de pago en IRS.gov. Los contribuyentes pueden ver las opciones de pago o consultar el saldo de su cuenta en línea.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

The heavy highway vehicle use tax is an annual federal excise tax on heavy highway motor vehicles that operate on public highways. The deadline to file and pay this tax for 2024 is Sept. 3.

Deadline to file and pay

Taxpayers with vehicles in use on a public highway during the month of July must file Form 2290 and pay the appropriate tax between July 1 and Sept. 3, 2024. The usual Aug. 31 deadline is delayed until the next business day because it falls on a Saturday this year.

If vehicles are placed on the road during any month other than July, the tax is prorated for the months the vehicle was in service. IRS.gov has a table to help determine the filing deadline.

How to file Form 2290

All taxpayers who need to file Form 2290 are encouraged to e-file, and taxpayers with 25 or more taxed vehicles registered in their name are required to e-file Form 2290. Visit IRS.gov for a list of IRS-approved e-file providers.

If they e-file Form 2290, taxpayers can receive a stamped Schedule 1 of Form 2290 within minutes from their e-file provider. If taxpayers file by mail, they will receive their stamped Schedule 1 within six weeks after the IRS receives the form. Taxpayers who file by mail should use the correct IRS mailing address. Taxpayers use Schedule 1 of Form 2290 to report all taxable vehicles and as proof of payment when they register their vehicles in any state.

Who is subject to this tax

Anyone who has registered or is required to register large trucks and buses with a taxable gross weight of 55,000 pounds or more must report the heavy highway vehicle use tax on Form 2290, Heavy Highway Vehicle Use Tax Return PDF. Taxpayers must file Form 2290 and pay the tax by the last day of the month following the month the vehicle was first used on public highways during the taxable period.

If they expect to use a vehicle for 5,000 miles or less (7,500 for farm vehicles), they're required to file a tax return, but they don’t owe the tax. If the vehicle exceeds the mileage use limit during the tax period, then tax becomes due on that vehicle

The IRS is here to help

The IRS Form 2290 call center is available weekdays between 8 a.m. and 6 p.m. ET. The toll-free number from within the U.S. is 866-699-4096. The number for Canada and Mexico is 859-320-3581. Calls outside the U.S. are not toll free.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

El impuesto sobre el uso de vehículos pesados en las carreteras es un impuesto federal anual sobre los vehículos motorizados pesados en las carreteras que operan en las carreteras públicas. La fecha límite para presentar y pagar este impuesto para 2024 es el 3 de septiembre.

Fecha límite para presentar y pagar

Los contribuyentes con vehículos en uso en una carretera pública durante el mes de julio deben presentar el Formulario 2290 y pagar el impuesto correspondiente entre el 1^ro de julio y el 3 de septiembre de 2024. La fecha límite habitual del 31 de agosto se retrasa hasta el siguiente día hábil porque este año cae en sábado.

Si los vehículos se colocan en la carretera durante cualquier mes que no sea julio, el impuesto se prorratea por los meses en que el vehículo estuvo en servicio. IRS.gov tiene una tabla para ayudar a determinar la fecha límite de presentación.

Cómo presentar el Formulario 2290

Se anima a todos los contribuyentes que necesitan presentar el Formulario 2290 a presentar electrónicamente, y los contribuyentes con 25 o más vehículos registrados a su nombre deben presentar electrónicamente el Formulario 2290. Visite IRS.gov para obtener una lista de proveedores de presentación electrónica (en inglés) aprobados por el IRS.

Si presentan electrónicamente el Formulario 2290, los contribuyentes pueden recibir un Anexo 1 sellado del Formulario 2290 en cuestión de minutos de su proveedor de presentación electrónica. Si los contribuyentes presentan su declaración por correo, recibirán su Anexo 1 sellado dentro de las seis semanas posteriores a que el IRS reciba el formulario. Los contribuyentes que presentan su declaración por correo deben usar la dirección postal correcta del IRS. Los contribuyentes usan el Anexo 1 del Formulario 2290 para declarar todos los vehículos sujetos a impuestos y como comprobante de pago cuando registran sus vehículos en cualquier estado.

¿Quiénes están sujetos a este impuesto?

Cualquier persona que haya registrado o esté obligada a registrar camiones y autobuses grandes con un peso bruto imponible de 55,000 libras o más debe declarar el impuesto sobre el uso de vehículos pesados en las carreteras en el Formulario 2290(SP), Declaración del Impuesto sobre el Uso de Vehículos Pesados en las Carreteras PDF. Los contribuyentes deben presentar el Formulario 2290 y pagar el impuesto a más tardar el último día del mes siguiente al mes en que el vehículo se usó por primera vez en las carreteras públicas durante el período tributario.

Los contribuyentes que tienen 25 vehículos o más registrados a su nombre deben presentar electrónicamente el Formulario 2290 y pagar el impuesto. Sin embargo, en los vehículos que esperan usar por 5,000 millas o menos (7,500 para vehículos agrícolas), deben presentar una declaración, pero no pagar impuestos. Si el vehículo excede el límite de uso de kilometraje durante el período tributario, se adeuda el impuesto.

El IRS está aquí para ayudar

El centro de llamadas del Formulario 2290 del IRS está disponible de lunes a viernes entre las 8 a.m. y las 6 p.m. ET. El número gratuito desde dentro de los EE. UU. es 866-699-4096. El número para Canadá y México es 859-320-3581. Las llamadas fuera de los EE. UU. no son gratuitas.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

La fecha límite para la presentación de la declaración de impuestos de los contribuyentes que solicitaron una prórroga es el 15 de octubre de 2024, y algunos pueden optar por contratar a un preparador de declaraciones de impuestos. Aquellos que lo necesiten, deben saber cómo elegir y trabajar sabiamente con un preparador de impuestos.

Qué considerar al elegir un preparador de declaraciones de impuestos

Los contribuyentes deben tener en cuenta estas cosas cuando busquen un preparador de declaraciones de impuestos.

• Asegúrese de que el preparador esté disponible todo el año. Si surgen preguntas acerca de una declaración de impuestos, es posible que los contribuyentes deban comunicarse con el preparador una vez finalizada la temporada de presentación.
• Revise el historial del preparador. Los contribuyentes pueden consultar con la Agencia de mejores negocios (BBB, por sus siglas en inglés) (en inglés) para obtener información acerca del preparador, incluidas las medidas disciplinarias y el estado de la licencia de los preparadores acreditados. Otros recursos incluyen el sitio web de la Junta Estatal de Contabilidad para contadores públicos y el Colegio de Abogados del Estado para abogados. Los contribuyentes también pueden consultar el Directorio de Preparadores de Impuestos Federales del IRS (en inglés) para encontrar agentes inscritos o verificar el estado de un agente inscrito (en inglés).
• Pregúntele acerca de las tarifas de servicio. Los contribuyentes deben evitar a los preparadores de declaraciones de impuestos que basan sus honorarios en un porcentaje del reembolso o que ofrecen depositar todo o parte del reembolso en sus propias cuentas financieras. Tenga cuidado con los preparadores de declaraciones de impuestos que afirman que pueden obtener reembolsos mayores que sus competidores.
• Asegúrese de que su preparador ofrezca la presentación electrónica del IRS. El IRS emite la mayoría de los reembolsos en menos de 21 días para los contribuyentes que presentan su declaración electrónicamente y elijan el depósito directo.
• Entienda las credenciales y calificaciones del preparador (en inglés). Los abogados, contadores públicos y agentes inscritos pueden representar a cualquier cliente ante el IRS en cualquier situación. El Directorio de preparadores de declaraciones de impuestos federales y calificaciones selectas del IRS (en inglés) puede ayudar a identificar a muchos preparadores por tipo de credencial o calificación. Los preparadores de impuestos que participan en el Programa anual de temporada de impuestos (en inglés) pueden representar a los contribuyentes en situaciones limitadas si prepararon y firmaron la declaración de impuestos.

Consejos para cuando trabaje con un preparador de impuestos

Estas son algunas cosas que los contribuyentes deben tener en cuenta cuando trabajan con un preparador de impuestos:

• Los buenos preparadores piden ver registros y recibos. También harán preguntas para determinar los ingresos totales del cliente, deducciones, créditos tributarios y otros artículos. Los contribuyentes deben evitar a un preparador de declaraciones de impuestos que presente electrónicamente usando talones de pago en lugar de un Formulario W-2. Esto va en contra de las reglas del IRS.
• Los contribuyentes deben revisar la declaración de impuestos antes de firmarla. Deben hacer preguntas si algo no está claro o incorrecto.
• Cualquier reembolso debe ir directamente al contribuyente, no a la cuenta bancaria del preparador. Los contribuyentes deben verificar la ruta y el número de cuenta bancaria en la declaración completa y asegurarse de que sean precisos.
• Los contribuyentes son responsables de presentar una declaración de impuestos completa y correcta. Nunca deben firmar una declaración en blanco o incompleta y nunca contratar a un preparador de declaraciones de impuestos que les pida que lo hagan.
• Asegúrese de que el preparador firme e incluya su número de identificación de preparador de impuestos (PTIN, por sus siglas en inglés). Por ley, cualquier persona a la que se le pague para preparar o ayudar a preparar declaraciones de impuestos federales debe tener un PTIN válido y usar ese PTIN en cualquier declaración de impuestos que prepare. No firmar una declaración es una señal de alerta de que el preparador puede estar buscando obtener una ganancia rápida prometiendo un gran reembolso o cobrando tarifas basadas en el tamaño del reembolso. Los contribuyentes deben evitar estos preparadores de declaraciones de impuestos poco éticos.

Denuncie mala conducta

Los contribuyentes pueden denunciar la mala conducta del preparador de impuestos al IRS.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

The deadline for taxpayers who requested an extension to file is Oct. 15, 2024, and some may choose to hire a tax return preparer. Those who do need to understand how to choose a tax preparer wisely and how to work with them.

What to consider when choosing a tax return preparer

Taxpayers should keep these things in mind when looking for a tax return preparer.

• Make sure the preparer is available year-round. If questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.
• Review the preparer's history. Taxpayers can check with the Better Business Bureau for information about the preparer, including any disciplinary actions and the license status for credentialed preparers. Other resources include the State Board of Accountancy's website for CPAs and the State Bar Association for attorneys. Taxpayers can also check the IRS Directory of Federal Tax Return Preparers for enrolled agents or verify an enrolled agent's status online.
• Ask about service fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. Be wary of tax return preparers who claim they can get larger refunds than their competitors.
• Ensure their preparer offers IRS e-file. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit.
• Understand the preparer's credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. Tax return preparers who participate in the Annual Filing Season Program may represent taxpayers in limited situations if they prepared and signed the tax return.

Tips for working with a tax preparer

These are a few things taxpayers should keep in mind when they work with a tax preparer:

• Good preparers ask to see records and receipts. They'll also ask questions to determine the client's total income, deductions, tax credits and other items. Taxpayers should avoid a tax return preparer who e-files using pay stubs instead of W-2s. This is against IRS rules.
• Taxpayers should review the tax return before signing it. They should ask questions if something is unclear or inaccurate.
• Any refund should go directly to the taxpayer – not into the preparer's bank account. Taxpayers should make sure the routing and bank account numbers on the completed return are accurate.
• Taxpayers are responsible for filing a complete and correct tax return. They should never sign a blank or incomplete return and never hire a tax return preparer who asks them to do so.
• Ensure the preparer signs and includes their PTIN. By law, anyone who is paid to prepare or help prepare federal tax returns must have a valid Preparer Tax Identification Number, and they must sign and use that PTIN on any tax return they prepare. Not doing so is a red flag that the paid preparer may be looking to make a quick profit. Taxpayers should avoid these unethical tax return preparers.

Report misconduct

Taxpayers can report tax preparer misconduct to the IRS.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Internal Revenue Service announces interest rates will remain the same for the calendar quarter beginning Oct. 1, 2024.

For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily.

Here’s a complete list of the new rates:

• 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
• 5.5% for the portion of a corporate overpayment exceeding $10,000.
• 8% for underpayments (taxes owed but not fully paid).
• 10% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced are computed from the federal short-term rate determined during July 2024.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

Individual taxpayers who requested an extension of time to file their federal taxes have until Oct. 15, 2024, to complete and file their federal tax return. Those who already have the forms and information they need should file now – there's no advantage to waiting until the deadline.

There are a few things extension filers should remember as they get ready to file.

File by the deadline

Extension filers should file by Monday, Oct.15, 2024.

Taxpayers in disaster areas may have more time to file. Information on the most recent tax relief for disaster situations is available on the IRS website.

IRS Free File is still available

Many taxpayers can e-file their tax return for free through IRS Free File. The program is available on IRS.gov through Oct 15, 2024. E-filing is easy and safe, and it's the most accurate way for people to file their taxes. Filing electronically can also help taxpayers determine their eligibility for many valuable tax credits.

Tax pros are ready to help

Tax professionals are ready to help their clients get their taxes completed and filed as quickly as possible. Most tax professionals provide outstanding and professional service, but some taxpayers are hurt financially because they choose the wrong tax return preparer. To get help choosing a trusted tax professional, taxpayers should check the IRS' tips.

In-person help is available

IRS.gov helps taxpayers find the closest IRS office, the days and hours of operation and a list of services available. IRS Taxpayer Assistance Centers operate by appointment only. To get in-person help from the IRS, taxpayers can simply call 844-545-5640 to schedule an appointment.

Free local tax preparation

Many Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs still offer free basic tax return preparation to qualified individuals, including:

• People who generally make $60,000 or less.
• Persons with disabilities.
• Limited English-speaking taxpayers.

Taxpayers get their refund faster by choosing direct deposit

Taxpayers should file electronically and choose direct deposit for their tax refund – it's the fastest and safest way to receive their money.

Payment options

Those who owe taxes and can't pay their balance in full should pay as much as they can to reduce interest and penalties for late payment. The IRS has options for people who can't pay their taxes, including applying for a payment plan on IRS.gov. Taxpayers can view payment options or check their account balance online.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Internal Revenue Service reminds taxpayers that summer day camp expenses may count towards the Child and Dependent Care tax credit.

Many working parents arrange for care of their younger children under age 13 during the summer. A popular solution is a day camp program, which can sometimes also lead to a tax benefit. Taxpayers who pay for the care of a child, or other qualifying person, so they could work or look for work may be able to take the credit for child and dependent care expenses.

Unlike overnight camps, the cost of day camp may count as an expense towards the Child and Dependent Care credit.

How it works

Taxpayers must have earned income to claim this credit. The credit is calculated based on income and a percentage of expenses incurred for the care of qualifying people to enable taxpayers to work, look for work or attend school.

• Depending on income, taxpayers can get a credit worth up to 35% of their qualifying childcare expenses. At minimum, it’s 20% of those expenses. For 2024, the maximum eligible expense for this credit is $3,000 for one qualifying person and $6,000 for two or more.

• Reimbursed expenses, such as from a state social services agency, must first be deducted as work-related expenses used to calculate the amount of the credit.

• The amount of work-related expenses used to figure the credit generally cannot be more than earned income for the year if single, or the smaller of a spouse’s income, if married.

• Taxpayers who claim it must list the name and address of the day camp on their return, along with the taxpayer identification number unless an exception applies.

IRS Publication 503, Child and Dependent Care Expenses, explains all the rules, the tests needed to claim the credit and describes an exception for certain taxpayers living apart from their spouse and meeting other requirements. Taxpayers can also use the Interactive Tax Assistant on IRS.gov to determine if they can claim this credit.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Internal Revenue Service reminds those who operate large trucks and buses that the deadline for filing Form 2290, Heavy Vehicle Use Tax Return, is Tuesday, Sept. 3, 2024, for vehicles used in July 2024. The usual Aug. 31 deadline is delayed until the next business day because it falls on a Saturday this year.

The tax applies to highway vehicles with a gross weight of 55,000 pounds or more that are registered or are required to be registered under law.

Taxpayers must file Form 2290 by the last day of the month following the month in which the taxpayer first used the vehicle on a public highway during the taxable period, regardless of the vehicle's registration renewal date. The annual taxable period runs from July 1, 2024, to June 30, 2025.

Vehicles first used on a public highway during the month of July 2024 must file Form 2290 and pay the appropriate tax between July 1, 2024, and Sept. 3, 2024. For additional taxable vehicles placed on the road during any month other than July, the tax should be prorated for the months the vehicle is in service. IRS.gov has a table to help determine the filing deadline.

Taxpayers are encouraged to e-file Form 2290. Electronically filing through a provider participating in the IRS e-file program for excise taxes makes a stamped Schedule 1, proof of payment, available in minutes once the return is accepted by the IRS. Generally, a stamped Schedule 1 is required when registering vehicles with a state or entering a Canadian or Mexican vehicle into the United States.

While all taxpayers are encouraged to e-file, taxpayers who have 25 or more taxed vehicles registered in their name must e-file Form 2290. For vehicles with an expected use of 5,000 miles or less (7,500 for farm vehicles), a return is required, but no tax is due. If the vehicle exceeds the mileage use limit during the tax period, the tax becomes due.

File and pay the easy way

E-filing Form 2290 is convenient, easy, fast, safe and secure. Here are filing and payment options to consider:

Filing options:

• All Form 2290 filers are encouraged to e-file, a list of IRS-approved e-file providers is on IRS.gov.
• E-file is required when reporting 25 or more vehicles on Form 2290.
• A watermarked Schedule 1 is sent to the e-file provider within minutes after acceptance of an e-filed return. Schedule 1 is available to the taxpayers either through their e-file account or email inbox as directed by the e-file provider.
• If filing by mail, ensure that the correct mailing address is used.
• Mail filers will receive their stamped Schedule 1 within six weeks after the IRS receives the form.

Payment options:

• Credit or debit card or digital wallet.
• E-filing makes paying with electronic funds withdrawal an easy part of the process.
• Electronic Federal Tax Payment System requires advanced enrollment.
• Mail check or money order payments using Form 2290-V, Payment Voucher, to: Internal Revenue Service, P.O. Box 932500, Louisville, KY 40293-2500.

Gather required information

Having correct and complete information ready when filing a Form 2290 will make the process much faster and easier. Taxpayers should have available the following:

• Vehicle Identification Number(s).
• Employer Identification Number (EIN) – not a Social Security number. It can take about four weeks to establish a new EIN. See How to Apply for an EIN.
• Name appearing on the EIN application.
• Taxable gross weight of each vehicle.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Internal Revenue Service announces the opening of the application period for the 2025 Compliance Assurance Process (CAP) program, which will run from Sept. 4 to Oct. 31, 2024.

The IRS will inform applicants if they’re accepted into the program in February 2025.

Launched in 2005, CAP employs real-time issue resolution through transparent and cooperative interaction between taxpayers and the IRS to improve federal tax compliance by resolving issues prior to the filing of a tax return.

To be eligible to apply for CAP, applicants must:

• Have assets of $10 million or more,

• Be a U.S. publicly traded corporation with a legal requirement to prepare and submit SEC Forms 10-K, 10-Q and 8-K or a privately held C-corporation including foreign-owned. Privately held applicants will be required to submit audited financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS) or another permissible method, as deemed appropriate by the IRS, specific to the taxpayer applying to the CAP program on an annual basis and unaudited financial statements on a quarterly basis.

• Not be under investigation by, or in litigation with, any government agency that would limit the IRS’s access to current tax records.

See highlights and updates for detailed information on revisions to the CAP program for 2025, including updates on Bridge Plus, an expansion of the applicant eligibility criteria, a new eligibility exception and a new form for international issues. General program information and the 2025 application details are available on the CAP webpage.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS     

El Servicio de Impuestos Internos anuncia la apertura del periodo de solicitud para el programa de Proceso de garantía de cumplimiento (CAP, por sus siglas en inglés) (en inglés), el cual estará abierto del 4 de septiembre al 31 de octubre de 2024.

El IRS les informará a los solicitantes si fueron aceptados al programa en febrero 2025.

Iniciado en 2005, el programa CAP emplea la resolución de asuntos en tiempo real a través de la interacción transparente y cooperativa entre contribuyentes y el IRS para mejorar el cumplimiento relacionado con los impuestos federales al resolver asuntos antes de la presentación de una declaración de impuestos.

Para ser elegible para solicitar al programa CAP, solicitantes deben:

• Tener activos valorados en $10 millones o más,

• Ser una sociedad anónima que cotiza en el mercado de valores con un requisito legal de preparar y entregar Formularios SEC 10-K, 10-Q y 8-K o una sociedad anónima tipo C privada incluyendo aquellas adueñadas en el extranjero. A los solicitantes de sociedades anónimas privadas se les requerirá entregar estados financieros auditados preparados de acuerdo a los Principios de contabilidad generalmente aceptados en EE.UU. (GAAP, por sus siglas en inglés), Estándares internacionales de información financiera (IFRS, por sus siglas en inglés) u otro método permisible, como sea adecuado para el IRS, específico al contribuyente que esté solicitando al programa CAP en base anual y estados financieros no auditados en base trimestral.

• No deben estar bajo investigación, o en litigación con, cualquier agencia gubernamental que limitaría el acceso al IRS a registros tributarios actuales.

Consulte lo más destacado y actualizado (en inglés) para más información de las revisiones al programa CAP para 2025, incluyendo actualizaciones de Bridge Plus, una expansión al criterio de elegibilidad para solicitantes, una nueva excepción de elegibilidad y un nuevo formulario para asuntos internacionales. Información general del programa y los detalles de la solicitud de 2025 están disponibles en la página del programa CAP (en inglés).

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

El Servicio de Impuestos Internos les recuerda a quienes operan camiones y autobuses grandes que la fecha límite para presentar el Formulario 2290 (SP), Declaración del impuesto sobre el uso de vehículos pesados en las carreteras, es el martes, 3 de septiembre de 2024, para los vehículos usados en la vía en julio de 2024. La fecha límite es generalmente el 31 de agosto, pero se retrasa hasta el siguiente día laborable porque este año la fecha cae sábado.

El impuesto se aplica a los vehículos de carretera con un peso bruto de 55,000 libras o más que estén registrados o deban registrarse según la ley.

Los contribuyentes deberán presentar el Formulario 2290(SP) a más tardar el último día del mes siguiente al mes en que el contribuyente usó por primera vez el vehículo en la vía pública durante el período tributable, independientemente de la fecha de renovación del registro del vehículo. El período tributable cubre desde el 1ro de julio de 2024 hasta el 30 de junio de 2025.

Los vehículos usados por primera vez en una vía pública durante el mes de julio de 2024 deben presentar el Formulario 2290(SP) y pagar el impuesto correspondiente entre el 1ro de julio de 2024 y el 3 de septiembre de 2024. Para vehículos sujetos a impuestos adicionales usados en la vía durante cualquier mes que no sea julio, el impuesto debe prorratearse por los meses que el vehículo esté en servicio. IRS.gov tiene una tabla para ayudar a determinar la fecha límite de presentación.

Se anima a los contribuyentes a presentar electrónicamente el Formulario 2290 (en inglés). La presentación electrónica a través de un proveedor que participa en el programa de presentación electrónica del IRS para impuestos especiales provee una estampa de comprobación digital del Anexo 1 (en inglés), comprobante de pago, disponible en minutos una vez que el IRS acepta la declaración. Generalmente, se requiere un Anexo 1 estampado al registrar vehículos en un estado o al ingresar un vehículo canadiense o mexicano a los Estados Unidos.

Si bien se anima a todos los contribuyentes a presentar la declaración electrónicamente, los contribuyentes que tienen 25 o más vehículos tributables registrados a su nombre deben presentar electrónicamente el Formulario 2290(SP). Para vehículos con un uso esperado de 5,000 millas o menos (7,500 para vehículos agrícolas), deben presentar una declaración, pero no pagar impuestos. Si el vehículo excede el límite de uso de millas durante el período tributario, se adeuda el impuesto.

Presente y pague de manera fácil

La presentación electrónica del Formulario 2290 (SP) es conveniente, fácil, rápida y segura. Aquí hay opciones de presentación y pago a considerar:

Opciones de presentación:

• Se insta a todos los que presentan el Formulario 2290(SP) a que elijan la presentación electrónica. La lista de proveedores de presentación electrónica (en inglés) aprobada por el IRS se encuentra en IRS.gov.
• Se requiere la presentación electrónica cuando se reportan 25 o más vehículos en el Formulario 2290(SP).
• Se envía un Anexo 1 con Se requiere la presentación electrónica cuando se reportan 25 o más vehículos en el Formulario 2290(SP). El Anexo 1 está disponible para los contribuyentes ya sea a través de su cuenta de presentación electrónica o de su bandeja de entrada de correo electrónico, según lo indique el proveedor de presentación electrónica.
• Si realiza la presentación por correo, asegúrese de usar la dirección postal correcta (en inglés).
• Los contribuyentes que envían su presentación por correo recibirán su Anexo 1 sellado del IRS dentro de las 6 semanas posteriores a la recepción del formulario.

Opciones de pago:

• Tarjeta de crédito o débito o billetera digital.
• La presentación electrónica facilita el proceso del pago mediante retiro electrónico de fondos.
• Usar el Sistema de Pago Electrónico de Impuestos Federales; requiere inscripción previa.
• Envío por correo en cheque o giro postal y el Formulario 2290-V, comprobante de pago, a la dirección postal: Internal Revenue Service, PO Box 932500, Louisville, KY 40293-2500.

Reúna la información requerida

Tener lista la información correcta y completa al presentar un Formulario 2290 hará que el proceso sea mucho más rápido y sencillo. Los contribuyentes deben tener disponible lo siguiente:

• Número(s) de identificación del vehículo.
• Número de identificación del empleador (EIN): no es un número de Seguro Social. Puede tomar alrededor de cuatro semanas establecer un nuevo EIN. Consulte Cómo Solicitar un Número de Identificación del Empleador.
• Peso bruto tributable de cada vehículo.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

It is a good practice for everyone to do a paycheck check-up every year. Checking your tax withholding amounts can ensure that you aren’t paying too much or too little in federal income tax though a nice, big refund is a welcome surprise.

But, no one likes surprises come tax time. Checking your tax withholding amounts can ensure that you aren’t paying too much (or too little) in federal income tax. Doing a paycheck check-up is a great way to prepare for Tax Day – even if you just filed your taxes.

What does tax withholding mean?

Federal income tax is a pay-as-you-go tax. That means that throughout the year, you pay or have an employer, or the payer of income, withhold a portion of your taxes as you earn or receive income.

Why should I check my tax withholding?

It is a good practice for everyone to do a paycheck check-up every year.

There are essentially two ways to pay your federal income taxes:

• Withholding from your paycheck, pension, and other government payments such as Social Security; or
• If you don’t pay your tax through withholding, or don’t pay enough tax that way, making quarterly estimated tax payments.

If you don’t pay enough taxes during the year, you could be subject to estimated tax penalties. Typically, you can avoid a penalty and any applicable interest by paying at least 90 percent of your taxes during the year.

Checking and then adjusting tax withholding can help make sure you:

• Don’t owe more tax than you are expecting;
• Don’t get a surprise tax bill, and possibly a penalty, when filing next year; or
• Don’t receive a refund that is much larger or smaller than anticipated.

To avoid a large or unexpected tax bill it is also a good idea to change your withholding when you experience a big life change such as marriage, divorce, birth of a child, getting a new or second job, starting a side business, or receiving any other income that isn’t subject to withholding.

It’s important to do this as early in the year as possible, so that if a tax withholding adjustment is needed, there is more time to make up the difference during the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax.

How do I calculate the correct amount to withhold?

The IRS Withholding Estimator on IRS.gov is a free tool that can help you calculate the right amount of tax to withhold from your paycheck.

The Estimator works for most taxpayers; however, people with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax.

This includes taxpayers who owe:

• Self-employment tax;
• Alternative minimum tax;
• Tax on unearned income of dependents;
• Tax on long-term capital gains or qualified dividends; and
• Certain other investment- or household employee-related taxes.

How do I adjust my withholding, if I need to?

If you think you need to make changes to your withholding amount, the withholding estimator gives you the information you will need to fill out a new Form W–4, Employee’s Withholding Allowance Certificate. Because this form tells your employer how much you want them to withhold, submit the new W-4 to your employer as soon as possible to make the changes. Some payroll providers allow you to adjust your withholding using an online version of the Form W-4.

What if I don’t have enough taxes withheld?

If after making withholding adjustments, the amount of income tax withheld from your salary or pension is not enough, or if you don’t have any withholdings at all, you may have to make estimated tax payments. This also applies if you receive income such as interest, dividends, alimony, capital gains, prizes and awards, or other sources of income without withholding. You might also need to make estimated tax payments if you are in business for yourself.

Estimated tax payments are due four times each year:

• January 1 to March 31 – April 15
• April 1 to May 31 – June 15
• June 1 to August 31 – September 15
• September 1 to December 31 – January 15 of the following year

Note: If these due dates fall on a Saturday, Sunday, or legal holiday, the payments are due the next business day.

Your estimated tax payments should correspond to the period that any income is received. If you don’t pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.

You can use the worksheet in Form 1040-ES to figure your estimated tax. Again, it’s a good idea to do this each year, as early in the year as possible.

If you are unemployed and receive unemployment compensation, you may choose to have a flat ten percent withheld from your unemployment benefits to cover all or part of your tax liability.

• Complete and provide Form W-4V, Voluntary Withholding Request, or another withholding request form, to the agency paying the benefits – don’t send it to the IRS.

Remember, if you need to increase your withholding, even just adding a few dollars more or making a partial estimated tax payment can make a difference in the amount you may owe on your tax return.  For those who cannot afford to pay taxes through their withholding or estimated tax payments, the IRS has payment options available. Each option has different requirements, and some have fees.

Most options for paying off a tax debt work best if you are proactive. More information is available on our I Can’t Pay My Taxes Get Help Page.

Do I have to report gambling winnings?

Yes, all gambling winnings are taxable and must be reported as income on your tax return. This includes cash winnings and fair market value of prizes such as cars and trips from:

• Lotteries;
• Raffles;
• Horse Races;
• Casinos; and
• Fantasy Sports Leagues.

You should receive a Form W-2G, Certain Gambling Winnings, from a payer that shows the amount of your winnings and any taxes taken out. You must report all gambling winnings as “Other Income” on Form 1040 or Form 1040-SR , including winnings that aren’t reported on a Form W-2G. Some gambling winnings may require you to pay estimated tax.

Note: There are different rules for professional gamblers. For more information about withholding gambling winnings see Publication 505, Tax Withholding and Estimated Tax.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS      

Un programa de asistencia educativa es un plan escrito (en ingles) del empleador para proporcionar a los empleados asistencia educativa de nivel de pregrado o posgrado. Estos programas permiten a los empleadores pagar deudas de préstamos estudiantiles y otros gastos educativos sin impuestos.

Gastos elegibles

Los programas de asistencia educativa pueden ayudar a pagar:

• Libros
• Equipos
• Materiales
• Matrícula y otras tarifas
• Préstamos educativos calificados

Pagos de préstamos

Estos programas pueden usarse para pagar el capital e intereses de los préstamos educativos calificados de un empleado.

La opción está disponible solo para pagos realizados después del 27 de marzo de 2020. Según la ley actual, esta opción estará disponible hasta el 31 de diciembre de 2025.

Los pagos realizados directamente al prestamista y aquellos realizados al empleado califican bajo estos programas. Por ley, los beneficios libres de impuestos bajo un programa de asistencia educativa están limitados a $5,250 por empleado por año. Normalmente, la asistencia proporcionada por encima de ese nivel es tributable como salarios.

Para otros requisitos, consulte la Publicación 15-B, Guía Tributaria del Empleador sobre Beneficios Adicionales (en inglés). El Capítulo 10 de la Publicación 970, Beneficios Tributarios para la Educación (en inglés), proporciona detalles acerca de lo que califica como un préstamo estudiantil.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

An educational assistance program is an employer’s written plan to provide employees with undergraduate or graduate-level educational assistance. These programs allow employers to pay student loan debt and other education expenses tax-free.

Eligible expenses

Educational assistance programs can help pay for:

• Books
• Equipment
• Supplies
• Tuition and other fees
• Qualified education loans

Loan payments

These programs can be used to pay principal and interest on an employee's qualified education loans.

The option is available only for payments made after March 27, 2020. Under current law, this option will be available until Dec. 31, 2025.

Payments made directly to the lender and those made to the employee qualify under these programs. By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.

For other requirements, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Chapter 10 in Publication 970, Tax Benefits for Education, provides details on what qualifies as a student loan.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Internal Revenue Service strongly urges qualifying businesses, tax-exempt organizations, and state, local and Indian tribal governments to complete the pre-filing registration process now for projects placed in service in 2023 if they plan to claim elective pay.

Taxpayers should file their annual return after completing the pre-filing registration process. A timely filed return (including extensions) is required to make an elective payment election. Electronic return filing, if not required, is strongly encouraged.

Taxpayers who file their return electronically can review information about IRS approved-e-file providers to find a Modernized e-File (MeF) provider, and should confirm that the software chosen supports all necessary forms, such as Form 3800, General Business Credit, and forms required to figure and report each credit.

The Inflation Reduction Act and the CHIPS Act of 2022 allow taxpayers to take advantage of certain manufacturing investment, clean energy investment and production tax credits through elective pay or transfer.

Elective payment and the transfer election create alternative ways for applicable entities and eligible taxpayers who have earned one of the IRA clean energy or the CHIPS credits to get the benefit of the credit even if the taxpayer cannot use the credit to offset their tax liability.

Taxpayers who intend to make an elective payment or credit transfer election must earn the credit, which means they must make a tax credit qualifying investment or undertake tax credit qualifying production activities to earn a credit eligible for an elective payment or transfer election.

The taxpayer must complete the pre-file registration process to receive a registration number. The registration number must be included on the taxpayer’s annual return as part of making a valid election. Complete and submit the pre-filing registration request no earlier than the beginning of the tax year in which the taxpayer will earn the credit related to an elective payment election or transfer election.

The IRS recommends that taxpayers submit the pre-filing registration at least 120 days prior to when the organization or entity plans to file its tax return on which it will make its election. This should allow time for IRS review, and for the taxpayer to respond if the IRS requires additional information before issuing the registration numbers.

The IRS will share information about the status of a taxpayer’s pre-file registration package exclusively through the IRA/CHIPS Pre-Filing Registration tool. If the taxpayer affirmatively opts in to receive email communications, the IRS will notify the taxpayer by email that the status of a registration package has changed.

Taxpayers are not required to opt in to receiving email notifications. However, if they choose not to opt in to receive email notifications, they are responsible to return to the IRA/CHIPS Pre-Filing Registration tool to monitor the status of the registration packages.

The IRS is hosting office hour sessions to assist organizations with the pre-filing registration process and the IRA/CHIPS Pre-filing Registration Tool for elective payment and transferability of clean energy and CHIPS credits. Subject matter experts from Large Business & International and Tax-Exempt/Government Entities are available to answer questions.

Organizations may register to attend the following sessions.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Internal Revenue Service reminds taxpayers of the ability to submit electronic requests for relief for certain late-filed international documents.

As part of a step toward full digitalization, the electronic option introduced August 2023, applies to the following filings:

1. Gain recognition agreements,
2. Late-filed dual consolidated losses, and
3. Partnership gain deferral contributions.

How the process works

Requests can be submitted via eFax at 855-582-4842. Guidance for making each request can be found on IRS.gov using the following links:

• Relief for gain recognition agreements
• Late filing relief for dual consolidated losses
• Relief for partnership gain deferral contributions

Benefits for taxpayers and tax administration

The ability for taxpayers to securely communicate with the IRS reduces their correspondence burden while supporting IRS tax administration work. It also helps provide immediate documentation delivery to the IRS.

For IRS employees, transitioning away from the manual mailing process reduces paper documentation and improves processing time, which benefits taxpayers including those living internationally.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS     

Did You Get Married this Year or Plan to Marry Before December 31?

When you get married, your tax situation changes. Your marital status as of December 31 determines your tax filing options for the entire year. State law determines whether you are married. If you’re married at year-end, you have two filing status choices:

1. Filing jointly with your new spouse (Married Filing Jointly) or
2. Filing separate from your spouse (Married Filing Separately)

Tax Responsibility Considerations for Married Couples

Most married couples file jointly because it is simpler and often more financially beneficial. Filing jointly also makes you eligible for many tax deductions and tax credits. However, if either spouse owes back taxes, whether federal or state, or owes certain other non-tax debts, such as delinquent child support or student loans in default, the IRS may offset your joint tax refund to satisfy the individual debts. Also, individuals who file a joint return incur “joint and several liability” as explained below.

Here are some terms you should be familiar with when deciding how to file:

1. Joint and Several Liability – This arises when you file jointly with your new spouse. This means the IRS can collect a joint liability from either you or your spouse, even after you’ve divorced, if you filed a joint federal income tax return. The IRS can assert joint and several liability for you even if a divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. For any year that you file a joint return, you’re generally “jointly and severally liable” for any federal income tax underpayments, interest, and penalties caused by your new spouse’s unintentional tax errors and omissions or deliberate tax offenses. If you file separately, you’ll have no liability for your spouse’s outstanding federal tax debts.
2. Innocent Spouse – If you can prove that you didn’t know about your spouse’s tax deficiencies, had no reason to know, and didn’t personally benefit, you can file a claim for exception to the joint-and-several-liability rule under the innocent spouse provisions.

The three types of relief available are:

• Innocent spouse relief.
• Separation of liability; and
• Equitable relief.

Each type of relief has different requirements. See IRS Publication 971, Innocent Spouse Relief for more information.

So, filing separately may seem like a good idea if you’re aware of prior tax and other liabilities of your spouse and don’t want to be responsible for them, but there’s potentially a downside. Filing separately may make you ineligible to claim certain tax deductions and tax credits. For example, you can’t take the credit for child and dependent care expenses in most cases. In addition, you can’t claim the Earned Income Tax Credit (EITC). Refer to IRS Publication 501, Dependents, Standard Deduction, and Filing Information, for more information on how tax filing status effects certain potential tax benefits you could claim.

One last thing you should know about choosing a filing status — once you file a joint return, you can’t choose to file separate returns for that same year after the due date of the return.

Ultimately, the choice of filing status is up to the both of you.

Related Items to Consider and the Actions Needed

Here are some other tax filing related items to consider when you get married:

1. Social Security Number (SSN): You must update the Social Security Administration (SSA) with your new last name, if it has changed, or if both spouses hyphenate their last names after getting married. When newlyweds file a federal income tax return using their new last names but don’t update their records with the SSA first, the IRS’s computers can’t match the new name with the SSN on file, causing the IRS to reject or return the tax return for correction. If you are claiming a refund, this could delay receipt of your refund. Refer to the SSA website for more information on how to update SSA records at ssa.gov.
2. Change of Address: If you move, notify the IRS immediately of your new address so you may receive any refund or IRS notices or letters at your new address. This change will apply to account information before you got married and will ensure the IRS sends correspondence to the right address, no matter what tax year it applies to. You can change your address when you file your federal income tax return, or if you have already filed your return, you may file IRS Form 8822, Change of Address. You should also notify the U.S. Postal Service to forward your mail by going online at usps.com or visiting your local post office.
3. Adopted Children: If you adopted your spouse’s child(ren) after getting married, make sure each child has an SSN for any related tax benefit claimed on a federal income tax return. Refer to the SSA website on obtaining an SSN. You may also go to irs.gov for more information on any of these topics and others.
4. Community Property States: If you live in a community property state and file Married Filing Separately, you may need to allocate some of your income to your spouse and vice versa. The rules can get tricky. Refer to IRS Publication 555, Community Property for rules for filing a federal income tax return in this situation.
5. Home Exclusion Sales: If both spouses enter a marriage each owning a home and eventually sell one or both homes, you could each potentially claim a $250,000 gain exclusion on the sale of each home, if you meet the ownership and residence rules. The exclusion is $500,000 for a married couple filing jointly. See IRS Publication 523, Selling Your Home for more information.
6. Retirement accounts: After getting married you may want to review your retirement plans to evaluate whether any changes need to be made to maximize retirement savings (read more IRS Retirement Topics – IRA Contribution Limits or Retirement Topics – Contribution Limits) or to the named plan beneficiaries. See Changes in Your Life May Affect Retirement Planning for more information.
7. Healthcare coverage: Changes to income or family size are often called ‘changes in circumstances’ for purposes of the Premium Tax Credit (PTC). If one or both of you are receiving advance payments of the PTC credit and you have a change in circumstances, like getting married, you should promptly report it to your Marketplace as it directly affects both the amount of advanced payments you can receive and the total credit you can claim on your tax return.

The rules can be complicated when deciding the filing status, depending on each of your tax situations. If you have any questions about what filing status is best, you may refer to the IRS website or consult a tax professional.

More Life Event Information

For a full list of life events that have tax implications, see Managing Your Taxes After a Life Event.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS      

There are two education tax credits designed to help offset education costs: the American Opportunity Tax Credit and the Lifetime Learning Credit.

Eligibility requirements

For both tax credits, to be eligible:

• The taxpayer, their spouse or their dependents must take post-high school coursework in tax year 2024.
• The student must have a Form 1098-T, Tuition Statement, from an eligible educational institution. There are exceptions for some students.

Things taxpayers should know about the education tax credits

The American Opportunity Tax Credit is:

• Worth a maximum benefit of up to $2,500 per eligible student.
• Available only for the first four years at an eligible college or vocational school.
• For students pursuing a degree or other recognized education credential.
• Partially refundable. People could get up to $1,000 back.

The Lifetime Learning Credit is:

• Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify.
• Available for all years of postsecondary education and for courses to acquire or improve job skills.
• Available for an unlimited number of tax years.

Claiming the credits

To claim either credit, taxpayers must complete Form 8863, Education Credits, and file it with their federal tax return.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

Los ladrones de identidad pueden intentar comunicarse con los contribuyentes a través de llamadas fraudulentas, correos electrónicos, mensajes de texto y mensajes de redes sociales haciéndose pasar por el IRS. Aquí es como los contribuyentes pueden saber cuándo es realmente el IRS.

Correo electrónico, mensajes de texto y redes sociales

El IRS enviará una carta o aviso antes de llamar o enviar un correo electrónico. El IRS no:

• Envía mensajes de texto inesperados o no solicitados a los contribuyentes.
• Inicia contacto con los contribuyentes por correo electrónico, mensaje de texto o a través de las redes sociales.
• Envía mensajes que soliciten información personal o financiera, especialmente cuando se trata de un reembolso de impuestos.

Las estafas en línea comunes relacionadas con el IRS incluyen:

• Correos electrónicos de phishing enviados a los contribuyentes.
• Cuentas falsas de redes sociales del IRS que se comunican con los contribuyentes acerca de una factura o reembolso falso.
• Mensajes de texto enviados a los contribuyentes para falsos "créditos tributarios" o "pagos de estímulo".

Los mensajes de los estafadores a menudo dirigen a los contribuyentes a hacer clic en enlaces fraudulentos que afirman ser sitios web del IRS u otras herramientas en línea.

Llamadas telefónicas

Después de enviar un aviso o una carta a un contribuyente, los agentes del IRS pueden llamar para confirmar una cita o discutir temas para una auditoría programada. Los contribuyentes deben saber que

• El IRS no deja mensajes pregrabados, urgentes o amenazantes. Los estafadores dirán a las víctimas que, si no devuelven la llamada, se emitirá una orden de arresto contra ellos. Estas llamadas son estafas.
• Las agencias privadas de cobro contratadas por el IRS pueden llamar a los contribuyentes para cobrar ciertas deudas tributarias inactivas pendientes, pero sólo después de que el contribuyente y su representante hayan recibido una notificación por escrito.
• El IRS y sus agencias privadas de cobro autorizadas nunca le pedirán a un contribuyente que pague usando cualquier forma de tarjeta prepagada, tarjeta de regalo de una tienda o en línea. Los contribuyentes pueden revisar la IRS.gov/pagos para conocer todas las formas legítimas de realizar un pago.

Cartas y avisos

Una carta o aviso suele ser la primera forma que tiene el IRS de ponerse en contacto con un contribuyente. Cuando un contribuyente recibe una carta o aviso sospechoso, puede comprobar si realmente es el IRS:

• Acceda a su cuenta segura del IRS en línea para ver si una copia de la notificación o carta está en su archivo.
• Póngase en contacto con el servicio de atención al cliente del IRS para verificarlo, si no pudieron hacerlo en su cuenta en línea.
• Revise las cartas y avisos comunes del IRS en la página Entendiendo su Aviso o Carta del IRS en IRS.gov.
• Verifique que cualquier aviso de cobro de una agencia de cobro privada (en inglés) tenga el mismo Número de Autenticación del Contribuyente que el Aviso CP40 que el contribuyente recibió del IRS.
• Los contribuyentes pueden visitar Preguntas Frecuentes sobre Cobro de Deudas Privadas (en inglés) para obtener más información sobre la verificación de una agencia de cobro privada.

Señales de advertencia de una estafa

Si los contribuyentes reciben una carta, correo electrónico o mensaje de texto inesperado que dice ser del IRS u otra fuente confiable, como un banco, una compañía de crédito o un proveedor de software de impuestos, aquí hay algunas señales reveladoras de que se trata de una estafa:

• Errores de ortografía o gramática incorrecta.
• Un enlace o archivo adjunto que tenga una URL ligeramente mal escrita o una inusual como irs.com. Todos los enlaces del IRS van a irs.gov.
• Una solicitud amenazante o urgente para pagar ahora, seguir un enlace o abrir un archivo adjunto.

Los contribuyentes que reciben una solicitud del IRS por correo o por teléfono siempre pueden comunicarse con el servicio de atención al cliente del IRS para autenticarla.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

Balance Due $5 or More, No Math Error

The IRS is aware that some taxpayers are receiving CP14 notices indicating a balance due even though payments were made with their 2023 tax return. Lear more about what steps you may need to take.

Notice Overview

Notice of Tax Due and Demand for Payment, Notice CP14, Balance Due $5 or More, No Math Error, is the first and most common notice sent to taxpayers. The notice advises the taxpayer that there is a tax due, states the amount of tax, including interest and penalties, and requests payment within 21 days.

This notice or letter may include additional topics that have been covered here. Please check back frequently for updates.

What does this mean to me?

If you have a balance on your tax account, you’ll get a notice letting you know how much you owe, when it’s due, and how to pay. If the taxpayer does not pay the amount due, the IRS can proceed with collection activity, including the filing of a Notice of Federal Tax Lien. 

How did I get here?

Your return was filed, and the balance owing has not been paid yet.

What are my next steps?

Check the address

The first thing to do is to check the return address to be sure it’s from the Internal Revenue Service and not another agency.

If it’s from the IRS, the notice will have instructions on how to respond. If you want more details about your tax account, you can order a transcript. Also, review your notice or letter to see if there is a specific website link to visit for additional information. This is usually located at the end of the notice or letter.

If it’s from another agency, such as a state tax department, you’ll need to call that office for an explanation.

If you disagree

If you disagree with the notice, call the IRS at the toll-free number on the top right corner of your notice. Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call. See also Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don’t Agree.

Payment Options

If you can’t pay the full amount by that date, you need to figure out what might work for your situation, and contact the IRS to set up a payment plan or discuss other ways to address your balance.

If you are able to full pay the balance owed, see Payments for the various ways you can pay your IRS debt. 

Being proactive in addressing the tax debt may prevent additional penalty and interest charges and eliminate the need for the IRS to take action to collect the balance.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS      

Hay dos créditos tributarios para la educación diseñados para ayudar a compensar los costos de la educación: el Crédito tributario de oportunidad estadounidense (en inglés) y el Crédito de aprendizaje vitalicio (en inglés).

Requisitos de elegibilidad

Para ambos créditos tributarios, para ser elegible:

• El contribuyente, su cónyuge o sus dependientes deben realizar cursos posteriores a la escuela secundaria en el año tributario 2024.
• El estudiante debe tener un Formulario 1098-T, Declaración de matrícula (en inglés), de una institución educativa elegible. Hay excepciones (en inglés) para algunos estudiantes.

Cosas que los contribuyentes deben saber sobre los créditos tributarios para la educación.

El Crédito tributario de oportunidad estadounidense:

• Tiene un beneficio máximo de hasta $2,500 por estudiante elegible.
• Disponible sólo durante los primeros cuatro años en una universidad o escuela vocacional elegible.
• Para estudiantes que cursan un título u otra credencial educativa reconocida.
• Parcialmente reembolsable. Las personas podrían recuperar hasta $1,000.

El Crédito de aprendizaje vitalicio es:

• Tiene un beneficio máximo de hasta $2,000 por declaración de impuestos, por año, sin importar cuántos estudiantes califiquen.
• Disponible para todos los años de educación postsecundaria y para cursos para adquirir o mejorar habilidades laborales.
• Disponible para un número ilimitado de años tributarios.

Reclamar los créditos

Para reclamar cualquiera de los créditos, los contribuyentes deben completar el Formulario 8863, Créditos educativos (en inglés), y presentarlo con su declaración de impuestos federales.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

La deducción de gastos de educador permite a los maestros y administradores elegibles a deducir de sus impuestos parte del costo de la tecnología, los materiales y la capacitación. Pueden reclamar esta deducción solo por gastos que no fueron reembolsados por su empleador, una subvención u otras fuentes.

¿Quién es un educador elegible?

El contribuyente debe ser un maestro, instructor, consejero, director o asistente desde jardín de infantes hasta el grado 12. También deben trabajar al menos 900 horas por año escolar en una escuela que brinde educación primaria o secundaria según lo determina la ley estatal.

Qué debe saber acerca de esta deducción

Los educadores pueden deducir hasta $300 de gastos comerciales que no fueron reembolsados. Si dos educadores casados ​​presentan una declaración conjunta, el límite aumenta a $600. Estos contribuyentes no pueden deducir más de $300 cada uno.

Los gastos calificados son montos que el contribuyente pagó él mismo durante el año tributario.

Algunos de los gastos que un educador puede deducir:

• Tarifas de cursos de desarrollo profesional
• Libros y materiales
• Equipos informáticos, incluidos software y servicios relacionados
• Otros equipos y materiales usados en el salón de clases
• Artículos de protección para COVID-19 para detener la propagación de la enfermedad en el salón de clases

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS           

Following inaccurate tax advice from social media influencers can have bad consequences. Taxpayers can protect themselves from misinformation and scams by following the IRS verified social media accounts and e-news services.

IRS social media platforms

Visit IRS.gov to get direct links to IRS verified social media accounts. IRS has accounts on:

• X, formerly Twitter – Information for taxpayers, businesses, tax-exempt organizations, tax professionals and job seekers. The IRS shares updates in English, Spanish, Chinese, Haitian-Creole, Korean, Russian and Vietnamese. A special IRS X handle, @IRStaxsecurityshares information to help people avoid common scams that could put their money and information at risk.

• Facebook – Tax information for a general audience in English and Spanish.

• Instagram − Taxpayer-friendly information on a variety of topics.

• YouTube − Short videos on specific tax topics for individual taxpayers, tax professionals and small businesses. The IRS also produces videos in Spanish, Chinese, Haitian-Creole, Korean, Russian, Vietnamese and American Sign Language.

• LinkedIn – Job opportunities and key agency communications.

The IRS never contacts taxpayers on social media to ask for their personal or financial information. Taxpayers should be aware that scammers may pose as the IRS to steal a taxpayer's identity or defraud them.

Sign up for automatic email updates

The IRS e-News subscription service sends tax information by email for many different audiences, including:

• IRS Outreach Connection − Up-to-date materials for tax professionals and partner groups inside and outside the tax community. Subscribers can easily share the material with their clients or members through email, social media and the web.

• IRS Tax Tips – Tips in plain language on a wide range of general interest tax topics for taxpayers.

• IRS Newswire − News releases on tax issues from breaking news to details on legal guidance.

• IRS News in Spanish - Noticias del IRS en Español − IRS news releases, tax tips and updates in Spanish.

• e-News for the Clean Vehicle Industry – News for clean vehicle manufacturers, dealers and the auto industry. Get information to navigate clean vehicle tax credits.

• e-News for Small Businesses – Tax information for small businesses and self-employed individuals.

• e-News for Tax Professionals – A weekly roundup of news releases and legal guidance for tax professionals.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Educator Expense Deduction lets eligible teachers and administrators deduct part of the cost of technology, supplies and training from their taxes. They can claim this deduction only for expenses that weren't reimbursed by their employer, a grant or other sources.

Who is an eligible educator

The taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

Things to know about this deduction

Educators can deduct up to $300 of certain trade or business expenses that weren't reimbursed. If two married educators are filing a joint return, the limit rises to $600. These taxpayers can't deduct more than $300 each.

Qualified expenses are amounts the taxpayer paid themselves during the tax year.

Some of the expenses an educator can deduct include:

• Professional development course fees.
• Books and supplies.
• Computer equipment, including related software and services.
• Other equipment and materials used in the classroom.
• COVID-19 protective items to stop the spread of the disease in the classroom.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

El Servicio de Impuestos Internos emitió la alerta IR-2024-139SP acerca de una serie de estafas y consejos inexactos en las redes sociales. Los planes fraudulentos en las redes sociales dieron lugar a miles de reclamaciones de reembolsos inflados durante la pasada temporada de impuestos. El IRS ha aumentado sus esfuerzos de cumplimiento relacionados con créditos falsos y/o cuestionables.

Estas preguntas frecuentes se publican para proveer información general a los contribuyentes y profesionales de impuestos lo más pronto posible. En consecuencia, es posible que estas preguntas frecuentes no aborden los hechos y circunstancias específicas de ningún contribuyente en particular, y pueden actualizarse o modificarse tras una revisión adicional.

Trasfondo

El IRS advierte a los contribuyentes que no caigan en estas estafas centradas en el Crédito tributario por combustible, el Crédito por licencia familiar y enfermedad, los impuestos de empleo doméstico y las retenciones exageradas. El IRS ha visto miles de reclamaciones dudosas en las que parece que los contribuyentes reclaman créditos para los cuales no son elegibles, lo que lleva a que se retrasen los reembolsos y a la necesidad de que los contribuyentes demuestren que tienen documentación legítima para respaldar estas reclamaciones.

El IRS continúa instando a los contribuyentes a evitar estas estafas, ya que persisten los mitos de que estas son maneras de obtener un reembolso enorme. Muchas de estas estafas se destacaron durante la serie anual Docena Sucia de esta primavera, incluida la estafa del Crédito tributario por combustible, malos consejos en las redes sociales y “preparadores fantasmas”.

El IRS les recuerda a los contribuyentes que tengan en cuenta estos puntos importantes:

• Las redes sociales pueden conectar personas e información de todo el mundo. Desafortunadamente, a veces las personas proporcionan malos consejos tributarios que pueden meter en problemas a los buenos contribuyentes.
• El IRS advierte a los contribuyentes que tengan cuidado al confiar en los consejos en Internet, ya sea una táctica fraudulenta promovida por estafadores o un plan fraudulento relacionado con impuestos deliberadamente falso que es tendencia en las plataformas de redes sociales más populares.
• El IRS tiene conocimiento de varios hashtags de la temporada de presentación de declaraciones y temas de redes sociales relacionados con esta información fraudulenta. Por lo general, se trata de personas que intentan usar formularios de impuestos legítimos por motivos equivocados.

Información general

P1. ¿Qué sucede cuando el IRS identifica reclamaciones sospechosas de reembolso? (agregada el 8 de julio de 2024)

R1. Algunos contribuyentes pueden recibir una carta 5747C y/o 4883C/5071C con instrucciones para verificar su identidad y la información de su declaración de impuestos para que podamos continuar procesando su declaración de impuestos. Incluso después de esta verificación, se seguirán reteniendo reembolsos cuestionables hasta que se verifique la elegibilidad del crédito. Ejemplos de afirmaciones de las que se abusa con frecuencia incluyen:

• Crédito tributario por combustible (Formulario 4136).
• Crédito por licencia familiar y enfermedad para personas que trabajan por cuenta propia (Formulario 7202).
• Retenciones exageradas.
• Anexo H, Impuestos de empleo doméstico, incluidos los salarios de licencia por enfermedad calificada.

P2. ¿Qué debe hacer si recibe una de estas cartas del IRS, identificando que su declaración de impuestos requiere autenticación y/o es potencialmente frívola? (agregada el 8 de julio de 2024)

• 3176C Respuesta de correspondencia frívola.
• 5747C Posible robo de identidad durante el procesamiento original – TAC.
• 5071C Posible robo de identidad durante el procesamiento original con opción en línea.
• 4883C Posible robo de identidad durante el procesamiento original.

R2. Los contribuyentes que reciban una carta 3176C deben seguir las instrucciones de la correspondencia. Los contribuyentes que reciben estas cartas pueden haber recibido previamente una Carta 5747C, una Carta 5071C o una Carta 4883C. En este caso, ignore la 5747C, 5071C o 4883C. No visite un Centro de Asistencia al Contribuyente (TAC, por sus siglas en inglés) ni intente autenticarse en línea o por teléfono. En su lugar, siga las instrucciones de la Carta 3176C.

P3. ¿Qué acciones son necesarias para evitar consecuencias legales? (agregada el 8 de julio de 2024)

R3.

• Presentar una declaración completa y precisa dentro de los 30 días posteriores a la recepción de la carta o aviso del IRS. Esto puede incluir la presentación de una declaración de impuestos enmendada para cada período sujeto a impuestos en el que se presentó una reclamación inapropiada.
• Si corresponde, adjunte la carta del IRS recibida (por ejemplo, 3176C) a su declaración corregida y envíela por correo a la dirección que figura en la correspondencia.

P4. ¿Cuáles son las consecuencias legales de presentar una declaración frívola? (agregada el 8 de julio de 2024)

R4.

• Multas
  • Las reclamaciones y presentaciones que se basan en una posición identificada como frívola por el IRS -o- reflejan un deseo de retrasar o impedir la administración tributaria están sujetos a la multa 6702(a) del Código de Impuestos Internos (IRC) (en inglés). Esta multa es de $5,000 por cada declaración (o copia de la declaración) que reclame un crédito indebido como se define anteriormente. La multa se aplica a cada cónyuge en un caso de casado que presenta una declaración conjunta. (Aviso 2010-33, en inglés).
• Auditoría de cumplimiento
  • Las reclamaciones frívolas no corregidas pueden estar sujetas a una auditoría de cumplimiento. Un funcionario de inspección puede comunicarse con los contribuyentes y solicitarles que proporcionen documentación relacionada con la reclamación. Se requerirá que el contribuyente verifique la elegibilidad para el crédito según la ley.
• Enjuiciamiento criminal
  • Las personas o preparadores que, a sabiendas, presenten declaraciones de impuestos falsas pueden enfrentar multas y estar sujetos a procesamiento penal y prisión.

P5. ¿Qué es el Crédito tributario por combustible? (agregada el 8 de julio de 2024)

R5. El Crédito tributario por combustible es un crédito tributario que se reclama por diversos usos de combustible no sujetos a impuestos. Está diseñado para uso comercial, agrícola, de aviación y de pesca comercial fuera de carretera. Como tal, no está disponible para la mayoría de los contribuyentes. Es posible que se solicite a los contribuyentes que proporcionen documentación específica sobre su ocupación y recibos de combustible para verificar la elegibilidad.

P6. ¿Qué sucede si es víctima de una estafa de Crédito tributario por combustible? (agregada el 8 de julio de 2024)

R6. Si reclama una cantidad de Crédito tributario por combustible que es desproporcionada con respecto a los ingresos declarados en la declaración o presenta una reclamación que refleja una cantidad imposible de combustible para la ocupación declarada, está sujeto a una multa IRC 6702(a) de $5,000 por cada declaración que reclama un crédito indebido. Para obtener información adicional, consulte las Instrucciones para el Formulario 4136 (en inglés).

P7. ¿Qué es el Crédito por licencia familiar y enfermedad para trabajadores por cuenta propia? (agregada el 8 de julio de 2024)

R7. El Crédito por licencia familiar y enfermedad se promulgó en marzo de 2020, la Ley de Familias Primero en Respuesta al Coronavirus (FFRCA, por sus siglas en inglés) tenía como objetivo ayudar a los Estados Unidos a combatir el COVID-19 proporcionando a los pequeños y medianos empleadores créditos tributarios reembolsables que les reembolsan, dólar por dólar, por el costo de proporcionar salarios pagados por licencia familiar y enfermedad a sus empleados por licencia relacionada con COVID-19. La FFCRA también creó créditos reembolsables equivalentes por licencia familiar y enfermedad para trabajadores por cuenta propia en función del ingreso diario promedio del trabajador por cuenta propia y un número específico de días durante el año tributario en los que un individuo no pudo realizar servicios como trabajador por cuenta propia por motivos relacionados con el COVID-19.

Para ser elegible, los contribuyentes deben:

• Tener un oficio o negocio como se define en IRC 1402. Generalmente, los ingresos del trabajo por cuenta propia son el resultado de la realización de servicios personales que no pueden clasificarse como salarios porque no existe una relación empleador-empleado entre el pagador y el beneficiario.
• Reclamar sólo la cantidad elegible de días o salarios, pero no más que la cantidad permitida por la ley.
• Reclamar el crédito basándose en los ingresos de autónomos que califican, pero no más de lo permitido por la ley.

P8. ¿Cuáles son las dos variaciones principales del plan de Crédito por licencia familiar y enfermedad? (agregada el 8 de julio de 2024)

R8.

• Formulario 7202 fraudulento: Los contribuyentes usan el Formulario 7202 (SP), Los Créditos por Licencia por Enfermedad y Licencia Familiar para Ciertas Personas que Trabajan por Cuenta Propia, para reclamar un crédito basado en los ingresos obtenidos como empleado y no como trabajador por cuenta propia. Estos créditos estaban disponibles para que los trabajadores por cuenta propia los reclamaran en las declaraciones de los años tributarios 2020 y 2021 durante la pandemia. No están disponibles para reclamar en la declaración del año tributario 2022 o 2023.
• Anexo H fraudulento: Los contribuyentes “inventan” empleados domésticos ficticios y luego presentan el Anexo H (Formulario 1040) (SP), Impuestos sobre el empleo de empleados domésticos, para reclamar un reembolso basado en salarios falsos de licencia médica familiar y enfermedad que nunca pagaron.

P9. ¿Qué es la estafa de retención exagerada? (agregada el 8 de julio de 2024)

R9. La estafa de retención exagerada es un plan fraudulento reciente que circula en las redes sociales que alienta a las personas a usar software de impuestos para completar manualmente un Formulario W-2, Declaración de salarios e impuestos u otras declaraciones de información, por ejemplo, el Formulario 1099-NEC u otros Formularios 1099 que se enumeran a continuación, para incluir ingresos falsos y retenciones de información. En este fraude de retención exagerado, los estafadores sugieren que las personas generan grandes ingresos y retenciones, así como el empleador ficticio que proporciona esas cantidades. Luego, los estafadores instruyen a las personas a presentar la declaración de impuestos falsa electrónicamente, con la esperanza de obtener un reembolso sustancial debido a la gran cantidad de retenciones fraudulentas.

El IRS verifica la retención reclamada en las declaraciones de impuestos. Si el IRS no puede verificar los salarios, ingresos o créditos de retención ingresados ​​en la declaración de impuestos, el reembolso de impuestos se retendrá en espera de una revisión adicional. Los contribuyentes siempre deben presentar una declaración de impuestos completa y precisa. Use declaraciones de información legítimas, como el Formulario W-2 emitido por un empleador, para completar las declaraciones correctamente.

Existen múltiples variaciones del fraude de crédito de retención exagerada, que incluyen, entre otras, los siguientes formularios o programas:

• Formularios W-2 y W-2G.
• Formularios 1099-R, 1099-NEC, 1099-DIV, 1099-OID y 1099-B.
• Fondo de Dividendos de Alaska, Anexo K-1 con retención informada y fuente no especificada de crédito de retención reclamado.
• Detalles adicionales acerca de estas preguntas frecuentes
• Debido a que estas preguntas frecuentes no se han publicado en el Boletín de Impuestos Internos, el IRS no se basará en ellas ni las usará para resolver un caso. De manera similar, si una pregunta frecuente resulta ser una declaración inexacta de la ley aplicada al caso de un contribuyente en particular, la ley controlará la obligación tributaria del contribuyente.
• No obstante, un contribuyente que razonablemente y de buena fe confíe en estas preguntas frecuentes no estará sujeto a una sanción que proporcione un estándar de causa razonable para la reparación, incluida una multa por negligencia u otra multa relacionada con la exactitud, en la medida en que la confianza resulte en un pago insuficiente de impuestos. Cualquier actualización o modificación posterior de estas preguntas frecuentes tendrá una fecha para permitir a los contribuyentes confirmar la fecha en la que se realizaron los cambios en las preguntas frecuentes. Además, se mantendrán versiones anteriores de estas preguntas frecuentes en IRS.gov para garantizar que los contribuyentes, que pueden haber confiado en una versión anterior, puedan localizar esa versión si más adelante necesitan hacerlo.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

The Internal Revenue Service issued alert IR-2024-139 about a series of scams and inaccurate social media advice. Social media schemes led to thousands of inflated refund claims during the past tax season. The IRS has increased its compliance efforts related to false and/or questionable credits.

These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Accordingly, these FAQs may not address any particular taxpayer’s specific facts and circumstances, and they may be updated or modified upon further review.

Background

The IRS warns taxpayers not to fall for these scams centered around the Fuel Tax Credit, the Sick and Family Leave Credit, household employment taxes and overstated withholding. The IRS has seen thousands of dubious claims come in where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.

The IRS continues to urge taxpayers to avoid these scams as myths continue to persist that these are ways to obtain a huge refund. Many of these scams were highlighted during this spring’s annual Dirty Dozen series, including the Fuel Tax Credit scam, bad social media advice and “ghost preparers.”

The IRS reminds taxpayers to keep these important points in mind:

• Social media can connect people and information from all over the globe. Unfortunately, sometimes people provide bad tax advice that can lure good taxpayers into trouble.
• The IRS warns taxpayers to be wary of trusting internet advice, whether it’s a fraudulent tactic promoted by scammers or a deliberately false tax-related scheme trending across popular social media platforms.
• The IRS is aware of various filing season hashtags and social media topics related to this fraudulent information. These generally involve people trying to use legitimate tax forms for the wrong reason.

General information

Q1. What happens when the IRS identifies suspicious refund claims? (added July 8, 2024)

A1. Some taxpayers may receive a letter 5747C and/or 4883C/5071C with instructions to verify their identity and tax return information so we can continue processing their tax return. Even after this verification, questionable refunds will continue to be held until credit eligibility is verified. Examples of frequently abused claims include:

• Fuel Tax Credit (Form 4136).
• Sick and Family Leave Credit for Self Employed Individuals (Form 7202).
• Overstated withholding.
• Schedule H, Household Employment Taxes including Qualified Sick Leave Wages.

Q2. What should you do if you receive one of these letters from the IRS, identifying your tax return as requiring authentication and/or being potentially frivolous? (added July 8, 2024)

• 3176C Frivolous correspondence response.
• 5747C Potential identity theft during original processing – TAC.
• 5071C Potential identity theft during original processing with online option.
• 4883C Potential identity theft during original processing.

A2. Taxpayers in receipt of a 3176C letter should follow the directions on the correspondence. Taxpayers receiving these letters may have previously received a 5747C letter, 5071C letter or 4883C letter. In this instance, disregard the 5747C, 5071C or 4883C. Do not visit a Taxpayer Assistance Center (TAC) or try to authenticate online or over the phone. Instead, follow the directions in the 3176C letter.

Q3. What actions are needed to avoid legal consequences? (added July 8, 2024)

A3.

• File a complete and accurate return within 30 days of receiving the IRS letter or notice. This may include submitting an amended tax return for each taxable period where an inappropriate claim was filed.
• If applicable, attach the IRS letter received (such as, 3176C) to your corrected return and mail it to the address listed on the correspondence.

Q4. What are the legal consequences for filing a frivolous return? (added July 8, 2024)

A4.

• Penalties
  • Claims and filings that are based upon a position identified as frivolous by the IRS -or- reflect a desire to delay or impede tax administration are subject to the Internal Revenue Code (IRC) 6702(a) penalty. This penalty is $5,000 for each return (or copy of return) claiming an improper credit as defined above. The penalty is assessed against each spouse on a married filing joint return. (Notice 2010-33).
• Compliance audit
  • Uncorrected frivolous claims may be subject to a compliance audit. Taxpayers may be contacted by an Examination Function and asked to provide documentation related to the claim. The taxpayer will be required to verify eligibility for the credit under the law.
• Criminal prosecution
  • Individuals or preparers who knowingly file false income tax returns may face fines and be subject to criminal prosecution and imprisonment.

Q5. What is the Fuel Tax Credit? (added July 8, 2024)

A5. The Fuel Tax Credit is a tax credit claimed for various non-taxable use of fuel. It is meant for off-highway business, farming, aviation and commercial fishing use. As such, it is not available to most taxpayers. Taxpayers may be asked to provide specific documentation on their occupation and fuel receipts to verify eligibility.

Q6. What happens if you fall victim to a Fuel Tax Credit scam? (added July 8, 2024)

A6. If you claim an amount of Fuel Tax Credit that is disproportionate to the income reported on the return or file a claim reflecting an impossible quantity of fuel for the occupation reported, you are subject to an IRC 6702(a) penalty of $5,000 for each return claiming an improper credit. For additional information, refer to II.

Q7. What is the Sick and Family Leave Credit for self-employed individuals? (added July 8, 2024)

A7. The Sick and Family Leave Credit was enacted in March 2020, the Families First Coronavirus Response Act (FFRCA) intended to help the United States combat COVID-19 by providing small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. The FFCRA also created equivalent refundable sick and family leave credits for self-employed individuals based on the individual’s average daily self-employment income and a specified number of days during the tax year that an individual was unable to perform services as a self-employed individual due to reasons related to COVID-19.

To be eligible, taxpayers must:

• Have a trade or business as defined in IRC 1402. Generally, self-employment income is a result of the performance of personal services that cannot be classified as wages because an employer-employee relationship does not exist between the payer and the payee.
• Claim only the eligible number of days or wages, but no more than the amount allowed by law.
• Claim the credit based on qualifying self-employed income, but no more than allowable by law.

Q8. What are the two primary variations of the Sick and Family Leave Credit scheme? (added July 8, 2024)

A8.

• Fraudulent Form 7202: Taxpayers use the Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to claim a credit based on income earned as an employee and not as a self-employed individual. These credits were available for self-employed individuals to claim on 2020 and 2021 tax year returns during the pandemic. They are not available to claim on the 2022 or 2023 tax year return.
• Fraudulent Schedule H: Taxpayers “invent” fictional household employees and then file Schedule H (Form 1040), Household Employment Taxes, to claim a refund based on false sick and family medical leave wages they never paid.

Q9. What is the overstated withholding scam? (added July 8, 2024)

A9. The overstated withholding scam is a recent scheme circulating on social media encouraging people to use tax software to manually fill out a Form W-2, Wage and Tax Statement, or other information returns, for example Form 1099-NEC or other Form 1099s listed below, to include false income and withholding information. In this overstated withholding scheme, scam artists suggest people make up large income and withholding amounts as well as the fictional employer supplying those amounts. Scam artists then instruct people to file the bogus tax return electronically, in hopes of getting a substantial refund due to the large amount of fraudulent withholding.

The IRS verifies the withholding claimed on tax returns. If the IRS cannot verify the wages, income or withholding credits entered on the tax return, the tax refund will be held pending further review. Taxpayers should always file a complete and accurate tax return. Utilize legitimate information returns, such as Form W-2 issued from an employer, to complete returns correctly.

There are multiple variations of the overstated withholding credit scheme, including but not limited to the following forms or schedules:

• Forms W-2 and W-2G.
• Forms 1099-R, 1099-NEC, 1099-DIV, 1099-OID and 1099-B.
• Alaskan Dividend Fund, Schedule K-1 with Withholding Reported, and Unspecified Source of Withholding Credit Claimed.

Additional details on these frequently asked questions

• Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer’s case, the law will control the taxpayer’s tax liability.
• Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

Disasters can happen at any time, so it’s important to be prepared. Good recordkeeping can help you get back on your feet quickly when disaster strikes.  

One of the best things you can do to keep your records safe is to take advantage of paperless recordkeeping options in addition to your paper records. This way, you’ll always have access to things like bank statements and tax records, even if your paper copies are destroyed. Creating your online account with the IRS ensures you have access to online transcripts, notices, and other tax information.  

You’ll also want to create logs of all your valuables and any business equipment. This will help you keep track of their value in case you need to report any losses. For all your records, it is important to make sure that they are stored securely and backed up on a regular basis, and part of your disaster recovery plan should include data recovery. 

If your home or business is located within a federally declared disaster area, you may be eligible for IRS payment relief or extensions of tax deadlines. A current list of affected areas can be found on IRS.gov.  

Both TAS and the IRS have resources to help you prepare for a disaster. Here are a few resources: 

• TAS: Disaster Relief Get Help page 
• IRS: Preparing for a Disaster 
• IRS: FAQs for Disaster Victims 

Finally, DisasterAssistance.gov consolidates information from 17 U.S. government agencies where you can apply for Small Business Administration loans through online applications, receive referral information on forms of assistance that do not have online applications, or check the progress and status of applications online. 

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS      

Many businesses use independent contractors to help keep their costs down and provide flexibility for short-term needs. But the question of whether a worker is an employee or an independent contractor is complex. Be careful that your independent contractors are properly classified for federal tax and employment tax purposes, because if the IRS reclassifies them as employees, it can be an expensive mistake.

Differing obligations

If a worker is an employee, your company must withhold federal income tax and the employee’s share of Social Security and Medicare taxes, pay the employer’s share of Social Security and Medicare taxes, and pay federal unemployment tax. State tax obligations may also apply. A business generally must also provide that worker with fringe benefits if it makes them available to other employees.

However, if a worker is an independent contractor, these obligations don’t apply. In that case, the business simply sends the contractor a Form 1099-NEC for the year showing the amount paid (if it’s $600 or more). The contractor is responsible for paying self-employment tax and, generally, making estimated tax payments for income tax purposes in relation to the amount paid.

Key factors

Who’s an “employee?” Unfortunately, there’s no one definition of the term. The IRS and courts have generally ruled that one of the key factors that determines the difference between an employee and a contractor is the right to control and direct the person in the jobs they’re performing, even if that control isn’t exercised. The issue of control is evaluated by asking several questions, including:

• Who sets the worker’s schedule?
• Are the worker’s activities subject to supervision?
• Is the work technical in nature?
• Is the worker free to work for others?

Another important factor is whether the worker has the opportunity for profit or loss based on his or her managerial skills. That is, can the worker apply independent judgment and business acumen to affect the success or failure of the work being performed? If there’s a lack of such opportunity, that’s one indication of employee status.

Some employers that have misclassified workers as independent contractors may get some relief from employment tax liabilities under Section 530. This protection generally applies only if an employer meets certain requirements. For example, the employer must file all federal returns consistent with its treatment of a worker as a contractor and it must treat all similarly situated workers as contractors. Be aware, Section 530 doesn’t apply to certain types of workers.

Think carefully before asking the IRS

You can ask the IRS (on Form SS-8) to rule on whether a worker is an independent contractor or employee. However, you should also be aware that the IRS has a history of classifying workers as employees rather than independent contractors.

So, before you file Form SS-8, contact the office for a consultation. Filing this form may alert the IRS that your business has worker classification issues, and it may unintentionally trigger an employment tax audit. It may be better to properly set up a relationship with workers to treat them as independent contractors so that your business complies with the tax rules.

Workers who want an official determination of their status can also file Form SS-8. Dissatisfied workers you’ve treated as independent contractors may do so because they feel entitled to employee benefits and want to eliminate their self-employment tax liabilities. If a worker files Form SS-8, the IRS will notify the business with a letter that identifies the worker and includes a blank Form SS-8. The business will be asked to complete and return the form to the IRS, which will render a classification decision.

Need more help?

Worker classification is complex. In addition to what’s been discussed here, there are differing rules that apply for labor law purposes, which can impact minimum wage and overtime pay requirements. If you have questions, contact the office to assist you in ensuring that your workers are properly classified.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: Thomson Reuters      

The Internal Revenue Service has announced the agency will enhance the identity authentication process that financial institutions can use to register under the Foreign Account Tax Compliance Act (FATCA).

Taxpayers as of July 14 are required to sign in or register with either of the IRS’ credential service providers, Login.gov or ID.me, to access the FATCA Registration System. FATCA requires most U.S. taxpayers holding financial assets outside the U.S. and certain foreign financial institutions to report assets and financial accounts to the IRS.

Taxpayers who already have a Login.gov or an ID.me profile will be able to sign in to the FATCA Registration System as long as the email matches that of the responsible officer or point of contact on the FATCA registration.

Taxpayers that don’t already have a Login.gov or ID.me profile will need to create one to access the system. The new authentication requirement complies with National Institute of Standards and Technology digital identity guidelines.

To create a new profile with either Login.gov or ID.me, the taxpayer will need to verify an email address, create a password and set up multi-factor authentication to secure their FATCA account. Both ID.me and Login.gov have help desks to assist taxpayers who have difficulty using the systems.

For questions and assistance regarding Login.gov, please visit the Login.gov help center. For questions and assistance regarding ID.me, please visit Verifying for the Internal Revenue Service – ID.me Help Site

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source:  IRS      

Identity thieves may try to contact taxpayers through fraudulent calls, emails, texts and social media messages pretending to be the IRS. Here’s how taxpayers know when it’s the IRS that contacts them.

Email, text and social media

The IRS will mail a letter or notice before calling or emailing. The IRS does not:

• Send unexpected or unsolicited text messages to taxpayers.
• Initiate contact with taxpayers by email, text message or through social media.
• Send messages that ask for personal or financial information, especially when it comes to a tax refund.

Common IRS-related online scams include:

• Phishing emails sent to taxpayers.
• Fake IRS social media accounts that contact taxpayers about a fake bill, grant or refund.
• Text messages sent to taxpayers for fake "tax credits" or "stimulus payments."

Scammers’ messages often direct taxpayers to click fraudulent links they claim are IRS websites or other online tools.

Phone calls

After mailing a notice or letter to a taxpayer, IRS agents may call to confirm an appointment or discuss items for a scheduled audit. Taxpayers should know that:

• The IRS doesn't leave pre-recorded, urgent or threatening messages. Scammers will tell victims that if they do not call back, a warrant will be issued for their arrest. These calls are scams.
• Private collection agencies that the IRS works with may call taxpayers to collect certain outstanding inactive tax liabilities, but only after sending written notice to the taxpayer and their representative.
• The IRS and its authorized private collection agencies will never ask a taxpayer to pay using any form of pre-paid card, store or online gift card. Taxpayers can review the IRS payments page at IRS.gov/payments for all legitimate ways to make a payment.

Letters and notices

A letter or notice is usually the first contact a taxpayer gets from the IRS contacts. If a taxpayer gets a suspicious letter or notice, they can check to see if it's really the IRS:

• Log in to their secure IRS Online Account to find a copy of the notice or letter.
• Contact IRS customer service to verify it, if they weren't able to do so in their Online Account.
• Review IRS letters and notices at Understanding your IRS notice or letter.
• Confirm that collection notices from a private collection agency have the same taxpayer authentication number as the Notice CP40 the taxpayer received from the IRS.
• Visit Private debt collection frequently asked questions to learn more about verifying a private collection agency.

Warning signs of a scam

If taxpayers get an unexpected letter, email or text that claims to be from the IRS or another trusted source – like a bank, a credit company or a tax software provider – here are some tell-tale signs that it’s a scam:

• Spelling errors or incorrect grammar.
• A link or attachment with a slightly misspelled URL or an unusual one such as irs.com. All IRS links go to irs.gov.
• A threatening or urgent request to pay now, to follow a link or to open an attachment.

Taxpayers who receive a request from IRS in the mail or by phone can always contact IRS customer service to authenticate it.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

Contribuyentes que presentaron estas reclamaciones por error deben seguir instrucciones de cartas; considere presentar declaración enmendada o hablar con profesional de impuestos de confianza

El Servicio de Impuestos Internos emitió una alerta al consumidor luego de las preocupaciones constantes acerca de una serie de estafas tributarias y consejos inexactos en las redes sociales que llevaron a miles de contribuyentes a presentar reclamaciones de reembolso inflados durante la pasada temporada de impuestos.

El IRS advirtió a los contribuyentes que no caigan en estas estafas centradas en el crédito tributario por combustible, el crédito por licencia familiar y por enfermedad y los impuestos sobre el empleo doméstico. El IRS ha visto miles de reclamaciones dudosas en las que parece que los contribuyentes están reclamando créditos para los cuales no son elegibles, lo que lleva a que se retrasen los reembolsos y a la necesidad de que los contribuyentes demuestren que tienen documentación legítima para respaldar estas reclamaciones.

El IRS continúa instando a los contribuyentes a evitar estas estafas, ya que persisten los mitos de que estas son maneras de obtener un reembolso enorme. Muchas de estas estafas se destacaron durante la serie anual Docena Sucia de esta primavera, incluida la estafa del Crédito tributario por combustible, malos consejos en las redes sociales y “preparadores fantasma”.

Los contribuyentes que cayeron en estas trampas deben seguir los pasos para verificar su elegibilidad para la reclamación. Algunos contribuyentes también podrían enfrentar fuertes sanciones financieras, posibles auditorías de seguimiento o acciones penales por reclamaciones indebidas. El IRS alienta a las personas a revisar las pautas, hablar con un preparador de impuestos de confianza y, en algunos casos, presentar una declaración enmendada para eliminar reclamaciones para las cuales no son elegibles y evitar posibles sanciones.

"Los estafadores y las publicaciones en las redes sociales han perpetuado una serie de afirmaciones falsas y engañosas que han engañado a los contribuyentes bien intencionados haciéndoles creer que tienen derecho a grandes reembolsos de impuestos inesperados”, dijo el comisionado del IRS, Danny Werfel. “Estas malas afirmaciones han sido detectadas durante nuestro proceso de revisión de fraude. Los contribuyentes que presentaron estas reclamaciones deben darse cuenta de que han sido engañados y que enfrentan un extenso proceso de revisión y una posible espera larga si se les debe un reembolso por otras cosas”.

Reclamaciones problemáticas involucran Crédito tributario por combustible, crédito por licencia familiar y por enfermedad, impuestos sobre el empleo doméstico

El IRS ha identificado tres temas comunes que siguen apareciendo entre estas reclamaciones erróneas de reembolsos. Implican disposiciones tributarias legítimas, pero se limitan a situaciones muy especializadas. La gran mayoría de las reclamaciones relacionadas que se reciben no califican:

Crédito tributario por combustible: Este crédito especializado está diseñado para uso comercial y agrícola fuera de la carretera. Los contribuyentes necesitan un propósito comercial y una actividad comercial calificada, como administrar una granja o comprar gasolina de aviación, para ser elegibles para el crédito. La mayoría de los contribuyentes no califican para este crédito.

Créditos por licencia por enfermedad y licencia familiar: Este crédito especializado está disponible para trabajadores por cuenta propia para 2020 y 2021 durante la pandemia; el crédito no está disponible para las declaraciones de impuestos de 2023. El IRS está viendo casos repetidos en los que los contribuyentes usan incorrectamente el Formulario 7202, Los Créditos por Licencia por Enfermedad y Licencia Familiar para Ciertas Personas que Trabajan por Cuenta Propia, para reclamar incorrectamente un crédito basado en los ingresos obtenidos como empleado y no como trabajador por cuenta propia.

Impuestos sobre el empleo doméstico: Los contribuyentes “inventan” empleados domésticos ficticios y luego presentan el Anexo H (Formulario 1040), Impuestos sobre el Empleo de Empleados Domésticos, para reclamar un reembolso basado en salarios falsos de licencia médica familiar y por enfermedad que nunca pagaron.

"Estas afirmaciones inapropiadas han sido impulsadas por las redes sociales y por personas que comparten malos consejos", dijo Werfel. “Los estafadores constantemente se aprovechan de las esperanzas de las personas y tratan de usar la complejidad del sistema tributario para convencerlas de que existen maneras secretas de obtener un gran reembolso. Estos tres créditos ilustran que es importante revisar cuidadosamente la exactitud de la declaración de impuestos antes de presentarla y confiar en el consejo de un profesional de impuestos confiable, no en un preparador pasajero o en una fuente cuestionable que escuchan en las redes sociales”.

Reembolsos potencialmente fraudulentos congelados; reclamaciones indebidas podrían enfrentar acciones de cumplimiento de seguimiento

Dada la naturaleza cuestionable de muchas de estas reclamaciones, el IRS ha congelado los reembolsos para estos contribuyentes. Los contribuyentes deben seguir varios pasos específicos para resolver estos problemas.

Los contribuyentes cuyos reembolsos han sido congelados generalmente recibirán una de varias cartas del IRS solicitando información adicional.

Inicialmente, es posible que los contribuyentes hayan recibido una carta pidiéndoles que verifiquen su identidad. En estas situaciones, si presentaron la declaración en cuestión, deberán revisar si su declaración de impuestos es exacta. Por ejemplo, ¿realmente calificaron para uno de los tres créditos enumerados anteriormente? O si usaron un preparador de impuestos, verifique si el preparador realmente firmó la declaración de impuestos. Cuando los preparadores de impuestos no firman una declaración de impuestos, es una señal de alerta de que se está engañando al contribuyente.

Los contribuyentes que reclamaron indebidamente estos créditos aún necesitan autenticar su identidad. Una vez que se haya verificado la identidad del contribuyente, es posible que deba modificar su declaración de impuestos para eliminar el crédito reclamado incorrectamente.

Los contribuyentes deben usar la herramienta IRS.gov ¿Debo presentar una declaración enmendada? (en inglés) para determinar si deben enmendar (en inglés) su declaración. La declaración enmendada no se aceptará hasta que el contribuyente se autentique y la declaración original haya completado su procesamiento.

Varios contribuyentes que inicialmente recibieron correspondencia preguntando sobre su identidad pueden recibir una carta adicional solicitando documentación adicional para demostrar que realmente califican para los créditos que reclamaron. Los contribuyentes que verificaron su identidad en persona podrán recibir estas cartas. Los contribuyentes que aún no hayan verificado su identidad y reciban una de estas cartas solicitando documentación adicional deben seguir los consejos de la carta más reciente.

Estas cartas, Aviso 3176c del IRS, se aplican a declaraciones de impuestos potencialmente frívolas, que incluyen reclamaciones incorrectas de créditos tributarios por combustible, créditos por licencia familiar y por enfermedad e impuestos sobre el empleo doméstico.

Los contribuyentes legítimos que califican para estos créditos pueden presentar documentación que demuestre que realmente califican para el crédito. Pero las personas que no califican para estos créditos corren el riesgo de enfrentar una multa de hasta $5,000 por declaración por presentar una reclamación frívola. Los contribuyentes que presentan declaraciones inexactas también enfrentan el riesgo de una auditoría. Aquellos que, a sabiendas, presentaron una declaración de impuestos falsa también enfrentan un posible proceso penal.

Para evitar sanciones y posibles acciones de seguimiento por parte del IRS, los contribuyentes que presentaron incorrectamente estas reclamaciones deben presentar de inmediato una declaración de impuestos precisa sin las reclamaciones. Los contribuyentes pueden visitar la herramienta IRS.gov ¿Debo presentar una declaración enmendada? (en inglés) para determinar si deben enmendar (en inglés) su declaración. La declaración enmendada no se aceptará hasta que el contribuyente se autentique y la declaración original haya completado su procesamiento.

El IRS señaló que el monto total del reembolso está congelado en las declaraciones con estas reclamaciones erróneas. Los contribuyentes no recibirán ninguna parte de su reembolso, incluso si también reclamaron créditos legítimos.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS    

Are you a U.S. servicemember stationed overseas? If so, you need to be familiar with your U.S. tax filing requirements.

U.S. citizens and residents abroad are generally required to file income tax returns reporting their worldwide income in the same way as taxpayers residing in the United States. This includes U.S. military personnel serving overseas. I recently highlighted filing information and difficulties encountered by U.S. taxpayers living abroad, including IRS service deficiencies, in two of my blogs. This blog highlights information specific to taxpayers serving in the U.S. military.

As a servicemember stationed abroad, some payments and benefits you receive from the government are not taxable. These include combat pay, the housing and cost-of-living allowances abroad paid by the U.S. government or by a foreign government, the Overseas Housing Allowance, moving allowances, veterans’ education benefits, and travel allowances, including leave between consecutive overseas tours, among others. Other tax benefits that you may be able to claim include but are not limited to the Earned Income Tax Credit, education credits, the Child Tax Credit, and the Child and Dependent Care Credit. Note that you can count your combat pay as income when calculating the Earned Income Tax Credit, which could increase your credit even though combat pay is not taxable.

How to Get Help

If you need assistance, keep these helpful resources in mind:

• MilTax is a DOD program that servicemembers, including those abroad, can use to electronically file their returns and get tax preparation assistance targeted toward the circumstances of military personnel and their families. The services are free, without regard to income or rank, and available 24/7. Examples of individuals eligible to use MilTax include active-duty servicemembers and their spouses and dependents as well as a family member who is managing the affairs of a deployed servicemember. If you need assistance, you can schedule a consultation by phone (800-342-9647) or via chat services.
• In-person services. Military members serving abroad have limited access to the Volunteer Income Tax Assistance (VITA) program that assists low-income taxpayers, with the services available on installations in England and Japan according to the DOD website.

• Access to online accounts. It may be helpful to sign up for an IRS online account to access tax records, make and view payments, view your accounts and balances, create and view payment plans, obtain transcripts, and more. My recent blog on online accounts explains how to sign up.

• Paid preparers. If you determine you need to hire someone for assistance, I have recently identified some important things to consider when hiring a preparer. Also, the IRS provides a Directory of Federal Tax Return Preparers With Credentials and Select Qualifications that may be helpful. You can search for preparers by country. Depending on where you live, you may find there are few private tax return preparers to assist you, and some may come with substantial cost.

When to File

If you are a U.S. citizen or resident, and on the regular due date of your return you are on military or naval service outside the United States and Puerto Rico, you are allowed an automatic two-month extension of time to file your income tax return and pay income tax. This means that if you meet the criteria, and your return is normally due on April 15, 2024, you are allowed until June 17, 2024 (since June 15 is a Saturday), to file. To take advantage of the automatic two-month extension, you must attach a statement to your return explaining that this situation applies to you. Note that you still must pay interest on any tax not paid by the regular due date of your return even if you qualify for the extension.

You can also file Form 4868 to request an automatic six-month extension of time to file your return. This six-month extension runs concurrently with the automatic two-month extension. Therefore, if you qualify for the automatic two-month extension, you will only receive an additional four months. To qualify for the six-month extension, you must file the request by the return’s original due date or the extended due date if you qualified for the automatic two-month extension. You also may be able to request an additional two-month extension to December 15, which is discretionary and must be approved by the IRS. These extensions are not an extension of time to pay your tax. Therefore, you owe interest on any unpaid tax and may owe penalties.

If you are serving in a combat zone, you are eligible for an automatic extension of time to file your return, pay tax, claim a refund, and take other actions with the IRS. This extension is for the period you serve in the combat zone plus 180 days and the number of days that were left for you to take the action when you entered the combat zone (e.g., if you entered the combat zone on March 1, you add 46 days, which is the number of days between March 1 and the April 15 deadline, to your extension period). During this extension period, assessment and collection deadlines will also be extended, and you will not be charged interest or penalties attributable to the period. The extensions also apply if you are directly supporting those in a combat zone, serving in a contingency operation as designated by the Secretary of Defense, or are hospitalized as a result of injury sustained in a combat zone (limited to a period of five years if hospitalized in the United States). The deadline extensions will apply to your spouse with some limitations. Your command will notify the IRS of your deployment, but you can also write “COMBAT ZONE” in red on top of your return or email the IRS at combatzone@irs.gov with your name, stateside address, birth date, and date of deployment to the combat zone, along with documentation of service (do not include your Social Security number).

How to File

As mentioned above, MilTax is a DOD program that active duty servicemembers can use to e-file their returns for free. Other alternatives for e-filing that might be available, depending on your circumstances, include the Free File program, the Free File Fillable Forms, the Direct File pilot program, and commercial software providers. Be aware that a return will need to be e-filed through an electronic return transmitter (e.g., software provider or platform) before midnight of the due date, including any extensions of time, to be considered timely. If the IRS rejects an e-filed return before processing, it will not be considered timely filed if it is subsequently accepted after the filing deadline. This can cause challenges for taxpayers who file at or near the due date for their return.

You always have the option to mail your return to the IRS (and some forms, including international information returns, must be filed on paper). The IRS will accept a tax return mailed from a foreign country as timely filed if it bears an official postmark dated on or before midnight of the due date, including any extension of time for such filing. If you choose to use a private delivery service, you must similarly give your return to a designated international private delivery service before midnight on the due date, including any extensions of time. If you have an APO or FPO address, you should send your return to the IRS center listed in the Form 1040 Instructions for an APO or FPO address.

You can grant a power of attorney to an agent to file and sign your return on your behalf. You do this by filing Form 2848 and attaching it to the tax return. Or, if you are married and unable to sign a joint return due to serving in a combat zone, your spouse can sign the return for you even without a power of attorney. Your spouse should attach a signed statement explaining that you are serving in a combat zone.

How to Pay Tax

You can pay your federal taxes by making an electronic payment from a U.S. bank account, mailing a paper check to the IRS, or paying via a credit card. The IRS cannot currently accept e-payments from foreign bank accounts so you can only make an e-payment through a U.S. financial institution or corresponding bank. Similarly, you can only make international wire transfers, which can be expensive, from certain banks. If you are entitled to a refund, that refund will almost certainly be paid by a paper check mailed to you unless you have it direct deposited into a U.S. bank account.

Conclusion

This blog provides an overview of information that U.S. servicemembers stationed abroad need to know to successfully meet their U.S. tax obligations for this filing season. Of course, there are many other forms, publications, regulations, and statutes that might be applicable to your situation, as listed in the Resources section.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS      

There are many reasons why the IRS may charge penalties on your tax account. The IRS is legally required, under IRC § 6601(a), to charge interest when you fail to pay the full amount you owe on time. Interest may also accrue on penalties. Interest, and any applicable penalties, will continue to accrue until you pay your balance due in full. Here are some of the most common penalties, information on why they may have been charged, and how to request penalty abatement (removal) if applicable.

First let’s talk about some common penalty charges on individual accounts, along with interest, and why the IRS charges them.

Common penalties include:

• Failure to file – you didn’t file your tax return by the return due date or extended due date if an extension to file is requested and approved.
• Failure to pay – you didn’t pay the taxes reported on your tax return in full by the due date of the original tax return. An extension to file doesn’t extend the time to pay, so you must pay your taxes by the original due date of the tax return even if you have requested an extension of time to file your tax return. In addition, the IRS may charge a failure to pay penalty if the IRS sends a request for payment and you fail to pay on time.
• Failure to pay proper estimated tax – you didn’t pay enough taxes due for the year with your quarterly estimated tax payments, or through withholding, when required.
• Bad check – your bank doesn’t honor your check or other form of payment.

Interest

The IRS is required to charge interest on any unpaid balance owed until it is paid in full. Learn more on the IRS’s Interest page, or view the latest interest rates.

How can I dispute IRS penalties?

The IRS may be able to remove or reduce some penalties due to reasonable cause, but only if you tried to comply with the tax law but were unable to due to facts and circumstances beyond your control. If this applies to you and you have the necessary documentation to support your claim, you can call the toll-free number on your IRS notice or write a letter to request penalty relief due to reasonable cause.

The IRS may also provide administrative relief from a penalty that would otherwise be applicable under its First Time Penalty Abatement policy. In this instance, the IRS may provide relief if:

• You didn’t previously have to file a tax return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty;
• You filed all currently required returns or filed an extension of time to file; and
• You have paid, or arranged to pay, any tax due.

The IRS may also be able to waive penalties if a Statutory Exception exists. Tax legislation may provide an exception to a penalty. Specific statutory exceptions can be found in the penalty-related Internal Revenue Code (IRC) sections. These would include situations like receiving erroneous written advice from the IRS.

See the Penalty Relief page or the Penalty Relief Due to First Time Penalty Abatement or Other Administrative Waiver page for more details about when penalties can be abated or reversed.

What if the IRS denies my penalty abatement request?

If you received a notice or letter stating the IRS didn’t grant your request for penalty relief, you may be able to request a hearing with the IRS Independent Office of Appeals. Use the Penalty Appeal Online Self-help Tool for more information. You have 30 days from the date of the rejection letter to file your request for an appeal. Refer to your rejection letter for the specific deadline.

Refer to Penalty Appeal Eligibility and Publication 4576, Orientation to the Penalty Appeals Process for more details.

How do I request removal of interest charges?

If any of your tax and/or penalties are reduced, the IRS will also automatically reduce the related interest. Interest is charged by law and will accrue until your tax account is fully paid. Interest can only be reduced or removed under certain circumstances due to unreasonable IRS error or IRS delay, not because of reasonable cause nor because it’s the first time you have accrued interest on your account.

To dispute interest due to an unreasonable IRS error or IRS delay, submit Form 843, Claim for Refund and Request for Abatement or send the IRS a signed letter requesting that the IRS reduce or adjust the overcharged interest. For more information, see Instructions for Form 843.

What else do I need to know?

The IRS will continue to charge the failure-to-pay penalty up to 25% of the unpaid taxes or until the tax is paid in full, whichever comes first. In general, the IRS won’t abate the failure-to-pay penalty until the underlying tax has been paid in full. Be aware that if there is still a balance due, even after the penalty is removed, interest will continue to accrue until the account is paid in full, so the sooner you pay the balance, the less you will have to pay in penalties and interest.

There are several ways you can send a payment, including payment options if you cannot full pay right now. See the IRS Pay webpage or our Paying Taxes Get Help pages and TAS Tax Tip: Need help resolving a tax amount owed or finding the right payment option?

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS      

Your tax return may show you’re due a refund from the IRS. You can generally get your refund faster by filing electronically and requesting direct deposit. See our TAS Tax Tip: Tax return filing is as easy as 1-2-3 for more information, including direct deposit options if you don’t have a bank account. 

After you file your federal income tax return and request direct deposit, you can check on status of the refund using the Where’s My Refund tool on IRS.gov or the IRS2Go mobile app. Your refund status may be available as soon as 24 hours after the IRS receives your electronically filed tax return. You can also check your refund status and other tax information using your online account. You can even check on the status of your amended return online.  

When accessing your online account, you will need to verify your identity through an online security process. If you are signing in for the first time, see our TAS Tax Tip: Verifying your identity to access certain IRS systems for a list of information you will need to provide and how to complete the security process.  

Reasons Why You May Not Receive a Direct Deposit Refund 

There are several reasons you may not receive a direct deposit tax refund. 

• The IRS can only deposit refunds electronically into accounts in your name, your spouse’s name, or a joint account. 
• A financial institution may reject a direct deposit. 
• The IRS can’t deposit more than three electronic refunds into a single financial account.  

In these situations, the IRS will mail a paper check.  

Refund Offsets 

If you owe a federal tax debt from a prior tax year, a debt to another federal agency, or certain debts under state law, the IRS may keep (offset) some or all your tax refund to pay your debt. In fact, in many situations the IRS is legally required to forward your refund to pay the debt. For information about what to do if your refund is offset, refer to Get Help – Refund Offsets.  

If you filed a joint tax return, your refund was offset to a debt owed by your spouse or ex-spouse, and feel like you are not responsible for their debt, you may be eligible to claim your portion of the joint refund by filing an injured spouse claim or innocent spouse claim.  

For more information, including steps to take if your refund has been offset, see: 

• TAS Roadmap: Refund from Another Year Applied to Debt.  
• TAS Tax Tip: Feel like you are not responsible for a debt owed by your spouse or ex-spouse?  

Preventing Refund Offsets in Economic Hardship Situations  

Taxpayers experiencing financial hardship may request an Offset Bypass Refund (OBR). An OBR allows for an overpayment that would otherwise be applied to a prior federal tax liability to instead be refunded. If you have a federal tax liability, do not owe money to another federal or state agency, and are experiencing a significant economic hardship, the IRS may forego the refund offset and issue the refund under OBR procedures. The IRS can only forego amounts that would have been offset to a federal tax debt. 

Timing is critical. An OBR is generally only possible before the IRS applies a refund to another tax liability. Once the refund has been offset, it’s too late to request an OBR. Also, an OBR may only be issued to relieve a specific hardship, for example to prevent utility disconnection or eviction. You must establish the amount of the hardship because the IRS will only bypass enough of the offset to alleviate the hardship. 

There is no specific form used to request an OBR. If you are experiencing a financial hardship and want to request an OBR, contact the IRS at 800-829-1040 or the Taxpayer Advocate Service (TAS) before you file your tax return with the IRS. Note: You must file your tax return with the IRS. A return is not considered filed until the IRS (not TAS) receives it.  

You can contact the agency with which you have a debt to determine if the debt was submitted for refund offset by calling the Bureau of the Fiscal Service at 800-304-3107 (or TTY/TDD 800-877-8339), Monday through Friday 7:30 a.m. to 5 p.m. CST. Be sure to make this call before your refund is offset so you can decide whether or not to request an OBR while you still have time.   

TAS Resources: 

• TAS Tax Tip: Tax return filing is as easy as 1-2-3 
• TAS Tax Tip: Verifying your identity to access certain IRS systems 
• Get Help – Refund Offsets 
• TAS Roadmap: Bureau of the Fiscal Service (BFS) Offsets for Non-Tax Debts 
• TAS Roadmap: Refund from Another Year Applied to Debt 
• TAS Tax Tip: Feel like you are not responsible for a debt owed by your spouse or ex-spouse?  
• TAS Get Help: Injured Spouse 
• TAS Roadmap: Innocent Spouse 

For more refund-related information, refer to the following Get Help topics: 

• I don’t have my refund 
• Locating a Refund 
• Lost or Stolen Refund 
• Held or Stopped Refunds 
• Expediting a Refund 

 IRS Resources: 

• Where’s My Refund? 
• Your Online Account 
• Tax Season Refund Frequently Asked Questions 

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS

It is a good practice for everyone to do a paycheck check-up every year. Checking your tax withholding amounts can ensure that you aren’t paying too much or too little in federal income tax though a nice, big refund is a welcome surprise.

But, no one likes surprises come tax time. Checking your tax withholding amounts can ensure that you aren’t paying too much (or too little) in federal income tax. Doing a paycheck check-up is a great way to prepare for Tax Day – even if you just filed your taxes.

What does tax withholding mean?

Federal income tax is a pay-as-you-go tax. That means that throughout the year, you pay or have an employer, or the payer of income, withhold a portion of your taxes as you earn or receive income.

Why should I check my tax withholding?

It is a good practice for everyone to do a paycheck check-up every year.

There are essentially two ways to pay your federal income taxes:

• Withholding from your paycheck, pension, and other government payments such as Social Security; or
• If you don’t pay your tax through withholding, or don’t pay enough tax that way, making quarterly estimated tax payments.

If you don’t pay enough taxes during the year, you could be subject to estimated tax penalties. Typically, you can avoid a penalty and any applicable interest by paying at least 90 percent of your taxes during the year.

Checking and then adjusting tax withholding can help make sure you:

• Don’t owe more tax than you are expecting;
• Don’t get a surprise tax bill, and possibly a penalty, when filing next year; or
• Don’t receive a refund that is much larger or smaller than anticipated.

To avoid a large or unexpected tax bill it is also a good idea to change your withholding when you experience a big life change such as marriage, divorce, birth of a child, getting a new or second job, starting a side business, or receiving any other income that isn’t subject to withholding.

It’s important to do this as early in the year as possible, so that if a tax withholding adjustment is needed, there is more time to make up the difference during the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax.

How do I calculate the correct amount to withhold?

The IRS Withholding Estimator on IRS.gov is a free tool that can help you calculate the right amount of tax to withhold from your paycheck.

The Estimator works for most taxpayers; however, people with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax.

This includes taxpayers who owe:

• Self-employment tax;
• Alternative minimum tax;
• Tax on unearned income of dependents;
• Tax on long-term capital gains or qualified dividends; and
• Certain other investment- or household employee-related taxes.

How do I adjust my withholding, if I need to?

If you think you need to make changes to your withholding amount, the withholding estimator gives you the information you will need to fill out a new Form W–4, Employee’s Withholding Allowance Certificate. Because this form tells your employer how much you want them to withhold, submit the new W-4 to your employer as soon as possible to make the changes. Some payroll providers allow you to adjust your withholding using an online version of the Form W-4.

What if I don’t have enough taxes withheld?

If after making withholding adjustments, the amount of income tax withheld from your salary or pension is not enough, or if you don’t have any withholdings at all, you may have to make estimated tax payments. This also applies if you receive income such as interest, dividends, alimony, capital gains, prizes and awards, or other sources of income without withholding. You might also need to make estimated tax payments if you are in business for yourself.

Estimated tax payments are due four times each year:

• January 1 to March 31 – April 15
• April 1 to May 31 – June 15
• June 1 to August 31 – September 15
• September 1 to December 31 – January 15 of the following year

Note: If these due dates fall on a Saturday, Sunday, or legal holiday, the payments are due the next business day.

Your estimated tax payments should correspond to the period that any income is received. If you don’t pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.

You can use the worksheet in Form 1040-ES to figure your estimated tax. Again, it’s a good idea to do this each year, as early in the year as possible.

If you are unemployed and receive unemployment compensation, you may choose to have a flat ten percent withheld from your unemployment benefits to cover all or part of your tax liability.

• Complete and provide Form W-4V, Voluntary Withholding Request, or another withholding request form, to the agency paying the benefits – don’t send it to the IRS.

Remember, if you need to increase your withholding, even just adding a few dollars more or making a partial estimated tax payment can make a difference in the amount you may owe on your tax return.  For those who cannot afford to pay taxes through their withholding or estimated tax payments, the IRS has payment options available. Each option has different requirements, and some have fees.

Most options for paying off a tax debt work best if you are proactive. More information is available on our I Can’t Pay My Taxes Get Help Page.

Do I have to report gambling winnings?

Yes, all gambling winnings are taxable and must be reported as income on your tax return. This includes cash winnings and fair market value of prizes such as cars and trips from:

• Lotteries;
• Raffles;
• Horse Races;
• Casinos; and
• Fantasy Sports Leagues.

You should receive a Form W-2G, Certain Gambling Winnings, from a payer that shows the amount of your winnings and any taxes taken out. You must report all gambling winnings as “Other Income” on Form 1040 or Form 1040-SR , including winnings that aren’t reported on a Form W-2G. Some gambling winnings may require you to pay estimated tax.

Note: There are different rules for professional gamblers. For more information about withholding gambling winnings see Publication 505, Tax Withholding and Estimated Tax.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: TAS      

Los propietarios de viviendas que realicen mejoras, como reemplazar puertas y ventanas viejas, instalar paneles solares o actualizar un calentador de agua, pueden calificar para los créditos tributarios por energía de la vivienda.

Quién puede reclamar los créditos

Los contribuyentes que realicen mejoras en su residencia principal o, en algunos casos, secundaria, pueden ser elegibles para estos créditos. En algunos casos, los inquilinos también pueden reclamar gastos específicos. Los propietarios no pueden usar estos créditos para mejoras realizadas en las viviendas que alquilan. Consulte las instrucciones del Formulario 5695 para obtener más información.

Hay dos créditos tributarios para ayudar a compensar los gastos de realizar mejoras de eficiencia energética.

Crédito por las mejoras de eficiencia energética de la vivienda

Los contribuyentes pueden reclamar el Crédito por las mejoras de eficiencia energética de la vivienda solo para mejoras, anexos o renovaciones a una vivienda existente. No se aplica a viviendas de nueva construcción. Los costos calificados pueden incluir:

• Puertas exteriores, ventanas, claraboyas y materiales aislantes.
• Aires acondicionados centrales, calentadores de agua, calderas y bombas de calor.
• Estufas y calderas de biomasa.
• Auditorías energéticas de la vivienda.

El monto del crédito que pueden tomar los contribuyentes es un porcentaje del total de los gastos de mejora en el año de instalación:

• 2023 a 2032: 30%, hasta un máximo de $1,200 anuales.
• Las estufas y calderas de biomasa tienen un límite de crédito anual independiente de $2,000 al año sin límite de por vida.

Crédito por energía limpia residencial

Los contribuyentes también pueden reclamar el Crédito por energía limpia residencial para cubrir los costos calificados de una vivienda existente o de una vivienda recién construida. Los gastos elegibles pueden incluir:

• Equipos de generación de energía solar, eólica y geotérmica
• Calentadores de agua solares
• Celdas de combustible
• Almacenamiento de batería

El monto del crédito que pueden tomar los contribuyentes es un porcentaje del total de los gastos de mejora en el año de instalación:

• 2022-2032: 30%, sin máximo anual ni límite vitalicio.
• 2033: 26%, sin máximo anual ni límite vitalicio.
• 2034: 22%, sin máximo anual ni límite vitalicio.

Para reclamar estos créditos, los contribuyentes deben presentar el Formulario 5695, Créditos de energía residencial (en inglés), con su declaración de impuestos.

Cuidado con las estafas

Los contribuyentes deben saber lo que estos créditos pueden hacer por ellos y tener cuidado con las afirmaciones exageradas de las empresas que intentan hacerse con sus negocios.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS     

Homeowners who make improvements like replacing old doors and windows, installing solar panels or upgrading a hot water heater may qualify for home energy tax credits.

Who can claim the credits

Taxpayers making improvements to their principal, or, in some cases, secondary residence may be eligible for these credits. In some cases, renters may also be able to claim specific costs. Landlords can't use these credits for improvements made to any homes they rent out. See Form 5695 instructions for more information.

There are two tax credits to help offset costs of making energy efficient improvements.

Energy Efficient Home Improvement Credit

Taxpayers can claim the Energy Efficient Home Improvement Credit only for improvements, additions or renovations to an existing home. It doesn't apply to newly constructed homes. Qualifying costs may include:

• Exterior doors, windows, skylights and insulation materials.
• Central air conditioners, water heaters, furnaces, boilers and heat pumps.
• Biomass stoves and boilers.
• Home energy audits.

The amount of the credit taxpayers can take is a percentage of the total improvement expenses in the year of installation:

• 2023 through 2032: 30%, up to a maximum of $1,200 annually.
• Biomass stoves and boilers have a separate annual credit limit of $2,000 annually with no lifetime limit.

Residential Clean Energy Credit

Taxpayers can also claim the Residential Clean Energy Credit for qualifying costs for either an existing home or a newly constructed home. Qualifying costs may include:

• Solar, wind and geothermal power generation equipment.
• Solar water heaters.
• Fuel cells.
• Battery storage.

The amount of the credit taxpayers can take is a percentage of the total improvement expenses in the year of installation:

• 2022 - 2032: 30%, no annual maximum or lifetime limit.
• 2033: 26%, no annual maximum or lifetime limit.
• 2034: 22%, no annual maximum or lifetime limit.

To claim these credits, taxpayers should file Form 5695, Residential Energy Credits, with their tax return.

Beware of scams

Taxpayers should know what these credits can do for them and be careful of exaggerated claims from companies trying to get their business.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : IRS      

The Internal Revenue Service is warning taxpayers not to fall victim to a new emerging scam involving buying clean energy tax credits.

In this latest scam, the IRS is seeing instances where unscrupulous tax return preparers are misrepresenting the rules for claiming clean energy credits under the Inflation Reduction Act (IRA).

The transferability provisions of the IRA enable the purchase of eligible federal income tax credits from investments in clean energy to offset a buyer’s tax liability. The IRS has seen taxpayers file returns using unscrupulous return preparers who are claiming purchased clean energy credits that the taxpayer is ultimately unable to benefit from.

The scam is generally targeting individuals who file Form 1040. The preparers file returns that have individuals improperly claiming IRA credits that offset income tax from sources such as wages, Social Security and retirement account withdrawals.

Individuals purchasing tax credits under the IRA are subject to the passive activity rules for any purchased credits. Generally, this means they can only use purchased credits to offset income tax from a passive activity. Most taxpayers do not have passive income and a passive income tax liability. Most investment activities are not considered passive.

“This is another example where scammers are trying to use the complexity of the tax law to entice people into claiming credits they’re not entitled to,” said IRS Commissioner Danny Werfel. Taxpayers should be wary of promoters pushing dubious credits like this and others. The IRS is watching out for this scam, and we urge people to use a reputable tax professional before claiming complex credits like clean energy.”

The IRS noted individual taxpayers claiming inappropriate credits risk future compliance action by the IRS and are responsible for repaying the inflated credit, plus interest and possible penalties.

Individual taxpayers considering purchasing clean energy credits under the IRA should consult a trusted tax professional for advice on whether they are eligible to purchase credits and claim the tax benefits. They should also understand how the limitations under the passive activity rules, and other portions of the tax code, may apply to their particular tax situation.

More information about clean energy can be found on the Inflation Reduction Act of 2022 page on IRS.gov.

The IRS continues to warn taxpayers about other scams it continues to see that are misleading taxpayers into filing inappropriate claims for other tax credits. The IRS has warned taxpayers not to fall for scams centered around the Fuel Tax Credit, the Sick and Family Leave Credit and household employment taxes. Fueled by misleading social media advice and promoters, the IRS has seen thousands of dubious claims come in earlier this year where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.

Report fraud

The IRS is committed to investigating paid tax return preparers who act improperly. To report an abusive tax scheme or a tax return preparer, people should use the online Form 14242, Report Suspected Abusive Tax Promotions or Preparers, or mail or fax a completed Form 14242 PDF and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677 3405
Fax: 877-477-9135

Taxpayers and tax professionals can also submit this information to the IRS Whistleblower Office, where they may be eligible for a monetary award. For details, refer to Abusive tax schemes and abusive tax return preparers on IRS.gov.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

El Servicio de Impuestos Internos advirtió hoy a los contribuyentes que eviten convertirse en víctimas de una nueva estafa relacionada con la compra de Créditos tributarios por energía limpia.

En esta estafa reciente, el IRS está viendo casos en los que preparadores de declaraciones de impuestos sin escrúpulos tergiversan las reglas para reclamar los Créditos tributarios por energía limpia bajo la Ley de Reducción de Inflación (IRA).

Las disposiciones de transferibilidad (en inglés) de la IRA permiten la compra de créditos tributarios federales elegibles provenientes de inversiones en energía limpia para compensar la obligación tributaria del comprador. El IRS ha visto a contribuyentes presentar declaraciones a través de preparadores de impuestos sin escrúpulos que reclaman créditos de energía limpia comprados de los que el contribuyente finalmente no puede beneficiarse.

La estafa generalmente está dirigida a personas que presentan el Formulario 1040. Los preparadores presentan declaraciones en las que personas reclaman indebidamente créditos IRA que compensan el impuesto sobre el ingreso de fuentes como salarios, Seguro Social y retiros de cuentas de jubilación.

Las personas que compran créditos tributarios bajo IRA están sujetas a las reglas de actividad pasiva para cualquier crédito comprado. Generalmente, esto significa que sólo pueden usar los créditos adquiridos para compensar el impuesto de una actividad pasiva. La mayoría de los contribuyentes no tienen ingresos pasivos ni obligaciones tributarias pasivas. La mayoría de las actividades de inversión no se consideran pasivas.

"Este es otro ejemplo en el que los estafadores están tratando de usar la complejidad de la ley tributaria para atraer a las personas a reclamar créditos a los que no tienen derecho", dijo el comisionado del IRS, Danny Werfel. Los contribuyentes deben tener cuidado con los promotores que impulsan créditos dudosos como éste y otros. El IRS está atento a esta estafa e instamos a las personas a que recurran a un profesional de impuestos acreditado antes de reclamar créditos complejos como energía limpia”.

El IRS señaló que los contribuyentes individuales que reclaman créditos inapropiados corren el riesgo de que el IRS tome medidas de cumplimiento futuras y son responsables de reembolsar el crédito inflado, más intereses y posibles multas.

Los contribuyentes individuales que estén considerando comprar créditos de energía limpia bajo la IRA deben consultar a un profesional de impuestos de confianza para obtener asesoramiento acerca de si son elegibles para comprar créditos y reclamar los beneficios tributarios, y comprender cómo se aplican las limitaciones bajo las reglas de actividad pasiva, y otras partes del código tributario, podrán aplicarse a su situación tributaria particular.

Puede encontrar más información en la página de la Ley de Reducción de la Inflación de 2022 en IRS.gov.

El IRS continúa advirtiendo a los contribuyentes de otras estafas que continúa viendo que los inducen a presentar reclamos inapropiados para otros créditos tributarios. El IRS ha advertido a los contribuyentes que no caigan en estafas centradas en el Crédito tributario por combustible, el Crédito por licencia familiar y por enfermedad y los impuestos sobre el empleo doméstico. Impulsado por promotores y consejos engañosos en las redes sociales, el IRS ha visto miles de reclamos dudosos llegar a principios de este año en los que parece que los contribuyentes están reclamando créditos para los cuales no son elegibles, lo que lleva a que se retrasen los reembolsos y a la necesidad de que los contribuyentes demuestren que tienen documentación legítima para respaldar estas afirmaciones.

Denunciar fraude

El IRS está comprometido a investigar a los preparadores de declaraciones de impuestos remunerados que actúan de manera inapropiada. Para denunciar un plan tributario o un preparador de declaraciones de impuestos abusivo, las personas deben usar el Formulario 14242,  Informar sobre promociones o preparadores de impuestos sospechosos de abuso (en inglés) en línea o enviar por correo o fax un Formulario 14242 PDF completo y cualquier material de respaldo al Centro Principal de Desarrollo del IRS en la Oficina de Investigaciones de Promotores.

Envíe por correo:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677 3405
Fax: 877-477-9135

Los contribuyentes y profesionales de impuestos también pueden enviar esta información a la Oficina de Denuncias del IRS (en inglés), donde pueden ser elegibles para una compensación monetaria. Para obtener más detalles, consulte Planes tributarios abusivos y preparadores de declaraciones de impuestos abusivos en IRS.gov.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS     

Los contribuyentes tienen una variedad de opciones a considerar al pagar impuestos federales. Las opciones de pago electrónico son la mejor manera de realizar un pago de impuestos.

Para los contribuyentes que no pueden pagar el total, el IRS los alienta a pagar lo que puedan y a explorar una variedad de opciones de pago disponibles para el saldo restante, incluida la obtención de un préstamo para pagar el monto adeudado. En muchos casos, los costos del préstamo pueden ser más bajos que la combinación de intereses y multas que el IRS debe cobrar por ley.

El IRS también insta a los contribuyentes a no esperar para responder a un aviso. Los avisos y cartas brindan a los contribuyentes información sobre las acciones que deben tomar. Muchos avisos tienen códigos QR que ayudan a dirigir a los contribuyentes a sus cuentas tributarias en línea. Además, estas cartas informan al contribuyente sobre el estado de su saldo impago, opciones de resolución y sus derechos en el proceso de cobro.

Para los contribuyentes que no pueden pagar su factura de impuestos en su totalidad, el IRS ofrece varias opciones para ayudarlos a cumplir con sus obligaciones. Las opciones de pago del IRS están disponibles en IRS.gov/pagos.

Opciones para pagar electrónicamente

• Pago Directo – Los contribuyentes individuales pueden usar el Pago Directo para hasta dos pagos por día. Pago Directo permite a los contribuyentes pagar en línea directamente desde una cuenta corriente o de ahorros de forma gratuita y programar pagos con hasta 365 días de anticipación. Recibirán una confirmación por correo electrónico de sus pagos.
• Sistema de Pago Electrónico de Impuestos Federales (EFTPS) – La mejor opción de pago para contribuyentes individuales o empresas que realizan pagos grandes es el EFTPS, que permite hasta cinco pagos por día. El sistema requiere inscripción. Los contribuyentes pueden programar pagos con hasta 365 días de anticipación y optar por recibir notificaciones por correo electrónico sobre sus pagos.
• Retiro electrónico de fondos – Los contribuyentes individuales y las empresas pueden pagar cuando presentan su declaración electrónicamente a través de software de impuestos en línea. Si usan un preparador de impuestos, pueden pedirle que realice el pago de impuestos mediante un retiro electrónico de fondos de una cuenta bancaria.
• Procesador de pagos – Los contribuyentes individuales y las empresas pueden optar por pagar con tarjeta de crédito, tarjeta de débito o billetera digital a través de un procesador de pagos. Aunque se aplican tarifas de procesamiento, ninguna parte de ellas va al IRS.

• Cuenta en línea del IRS – Los contribuyentes individuales tienen la opción de crear e iniciar sesión en una cuenta en línea del IRS para pagar desde allí. La Cuenta en línea permite a los contribuyentes ver:
  • El monto que deben
  • Historial de pagos y cualquier pago programado o pendiente
  • Detalles del plan de pago
  • Copias digitales de avisos seleccionados del IRS

Pago con cheque, giro postal o cheque de caja

Si están pagando una obligación de impuestos que actualmente vence sin una declaración de impuestos adjunta, los contribuyentes que pagan con cheque, giro postal o cheque de caja deben incluir el Formulario 1040-V, Comprobante de pago (en inglés), con el pago.

• Envíe el pago por correo a la dirección correcta por estado o formulario. No envíe efectivo por correo. Indique en la línea de la nota de cheque el año tributario específico al que el IRS debe aplicar el pago.
• Aquellos que pagan al presentar su declaración de impuestos del año en curso no deben grapar ni sujetar con clips el pago a la declaración. Para obtener más información, vaya a Pago con cheque o giro postal en IRS.gov.

Pagos en efectivo

Las personas y empresas que prefieran pagar en efectivo pueden hacerlo en una tienda minorista participante. Hay un límite de $500 por pago y se aplican tarifas de procesamiento.

Otras opciones

La mayoría de los contribuyentes también tienen las siguientes opciones de pago si no pueden pagar el total ahora:

• Planes de pago – Los contribuyentes que adeudan, pero no pueden pagar el total no tienen que esperar a recibir una factura de impuestos para establecer un plan de pago (o acuerdo de pago a plazos) para liquidar un saldo pendiente con el tiempo. La mayoría de los contribuyentes califican y pueden configurar un plan de pago a través de la herramienta Acuerdo de pago en línea (OPA), así como a través de robots de voz o texto del IRS. Una vez que los contribuyentes completan la solicitud en línea, reciben una notificación inmediata acerca de si el IRS aprobó su plan de pago. Los contribuyentes pueden configurar un plan con OPA en minutos. No hay papeleo ni necesidad de llamar, escribir o visitar al IRS. Es posible que se apliquen tarifas de instalación para algunos tipos de planes.
• Ofrecimiento de transacción – Un ofrecimiento de transacción permite a los contribuyentes calificados liquidar sus obligaciones tributarias por menos del monto total que adeudan. Para ayudar a determinar su elegibilidad, pueden usar la herramienta de precalificación de ofrecimiento de transacción (en inglés).
• Retrasar temporalmente el cobro – Los contribuyentes pueden comunicarse con el IRS para solicitar un retraso temporal del proceso de cobro. Si el IRS determina que un contribuyente no puede pagar, puede retrasar el cobro hasta que mejore la situación financiera del contribuyente. Las multas y los intereses continúan acumulándose hasta que el contribuyente pague el monto total.

Si tiene alguna pregunta sobre contabilidad esencial para negocios, impuestos nacionales, impuestos internacionales, representación ante el IRS, implicación de impuestos nacionales en transacciones de bienes inmuebles o estados financieros, llámenos al +1-305-274-5811. 

Fuente: IRS     

If you own a C corporation, you know there’s a tax advantage to taking money out as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but it can’t deduct dividend payments. Therefore, if funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient. Money paid out as compensation is taxed only once, to the recipient employee.

However, the amount of money you can take out of the corporation this way is limited. Under tax law, only compensation deemed to be reasonable can be deducted. Any unreasonable portion isn’t deductible and may be taxed as if it were a dividend paid to a shareholder.

Steps to help protect yourself

There’s no simple way to determine what’s reasonable. If the IRS audits your tax return, it will examine the amount that companies in similar industries would pay for comparable services under comparable circumstances. Factors considered include the employee’s duties and the amount of time spent on those duties, as well as the employee’s skills, expertise and compensation history. Other factors that may be reviewed are the complexities of the business and its gross and net income.

There are steps you can take to make it more likely that the compensation you earn will be considered “reasonable” and therefore deductible by your corporation. For example, you can:

1. Keep compensation in line with what similar businesses are paying their executives. Be sure to retain whatever evidence you find about what others are paying.

2. Contemporaneously document the reasons for compensation paid in the minutes of your corporation’s board of directors. For example, if compensation is being increased in the current year to make up for earlier years when it was low, be sure the minutes reflect this. Cite any executive compensation or industry studies that back up your compensation amounts.

3. Avoid paying compensation in direct proportion to the stock owned by the corporation’s shareholders. This can look like a disguised dividend and will probably be treated as such by the IRS.

4. Pay at least some dividends if the business is profitable. This avoids giving the impression that the corporation is trying to pay out all of its profits as compensation.

Keep in mind that the IRS is generally very interested in unreasonable compensation payments made to anyone “related” to a corporation, which may include not only a shareholder-employee but also a member of a shareholder’s family.

Plan ahead

The challenges are many, but you can avoid some problems by planning ahead. Contact the office if you have questions or concerns about your situation.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: Thomson Reuters      

The Internal Revenue Service has issued Notice 2024-55, which provides guidance on exceptions to the additional tax when taking early permissible retirement plan distributions for emergency personal expenses and for victims of domestic abuse.

This was added by the SECURE 2.0 Act of 2022, and the provisions became effective on January 1, 2024.

Emergency personal expense distributions

The notice provides that a taxpayer is permitted to receive a distribution from an applicable eligible retirement plan to meet unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses. The notice:

• defines emergency personal expense distributions, including what is an unforeseeable or immediate financial need;
• provides that qualified defined contribution plans (including section 401(k) plans), section 403(a) annuity plans, section 403(b) plans, governmental section 457(b) plans or IRAs are eligible to permit emergency personal expense distributions;
• describes the limitations (both dollar amount and frequency) on receiving emergency personal expense distributions; and
• provides that individuals receiving emergency personal expense distributions are permitted to repay these distributions to certain plans.

Distributions to victims of domestic abuse

The notice also provides that a taxpayer is permitted to receive a distribution from an applicable eligible retirement plan if made during the one-year period beginning on the date on which the individual is a victim of domestic abuse by a spouse or domestic partner. The notice:

• defines domestic abuse victim distributions, including the definition of domestic abuse;
• provides that IRAs and certain retirement plans that are not subject to the spousal consent requirements under sections 401(a)(11) and 417 are eligible to permit domestic abuse victim distributions;
• describes the dollar limitation (indexed for inflation) on receiving domestic abuse victim distributions; and
• provides that domestic abuse individuals are permitted to repay domestic abuse victim distributions to certain plans.

The notice also provides guidance to applicable eligible retirement plans on the plan requirements relating to emergency personal expense distributions and domestic abuse victim distributions, including that it is optional for a plan to permit these types of distributions.

In addition, the notice provides that the Department of the Treasury and the IRS anticipate issuing regulations on the 10% additional tax (including the exceptions to the 10% additional tax) and request comments relating to the notice. Comments are specifically requested on repayments of certain distributions permitted under section 72(t)(2).

Taxpayers should know that these distributions are includible in gross income but are not subject to the 10% additional tax. Individuals report early distributions that are not subject to the 10% additional tax on line 2 of Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts. In tax year 2021, the latest year for which the IRS has statistics, about 608,000 individuals reported that early distributions from qualified plans (including IRAs) were not subject to the 10% additional tax.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : IRS      

If you’re looking for a retirement plan for yourself and your employees but worried about the financial commitment and administrative burdens involved, there are some options to consider. One possibility is a Simplified Employee Pension (SEP). This plan, which comes with relative ease of administration and the discretion to make or not make annual contributions, is especially attractive for small businesses.

There’s still time to see tax savings on your 2023 tax return by establishing and contributing to a 2023 SEP, right up to the extended due date of the return. For example, if you’re a sole proprietor who extends your 2023 Form 1040 to October 15, 2024, you have until that date to establish a SEP and make the initial contribution, which you can then deduct on your 2023 return.

SEP involves easy setup

You can set up a SEP easily using the IRS model SEP, Form 5305-SEP. This form, which doesn’t have to be filed with the IRS, satisfies the SEP requirements. (You can opt for an individually designed SEP instead, depending on your needs.)

As the employer, you’ll get a current income tax deduction for contributions you make on behalf of your employees. Your employees won’t be taxed when the contributions are made but will be taxed later when distributions are made, usually at retirement.

The maximum deductible contribution that you can make to a SEP-IRA, and that can be excluded from taxable income, is the lesser of: 1) 25% of compensation, or 2) $69,000 for 2024 (up from $66,000 for 2023) per employee. Note, however, that if you, as the business owner, don’t receive a W-2 from the business (for instance, you’re an unincorporated sole proprietor), the calculation for the contribution to be made on behalf of yourself varies slightly. The deduction for your contributions to employees’ SEP-IRAs isn’t limited by the deduction ceiling applicable to an individual’s own contribution to a regular IRA.

Your employees control their individual SEP IRAs and the investments in them as well as the tax-deferred earnings. However, they can’t contribute.

There are other requirements you’ll have to meet to be eligible to establish and make contributions to a SEP. Essentially, all regular employees must elect to participate in the program, and contributions can’t discriminate in favor of highly compensated employees. But these requirements are minor compared to the bookkeeping and other administrative burdens connected with traditional qualified retirement and profit-sharing plans.

SEPS don’t require the detailed records that traditional plans must maintain. Also, there are no annual reports to file with the IRS, and the recordkeeping that is required can be done by a trustee of the SEP-IRA, usually a bank or mutual fund.

Another option: SIMPLEs

If your business has 100 or fewer employees, you may want to consider a Savings Incentive Match Plan for Employees (SIMPLE). An advantage is that employees can also contribute. A disadvantage is that you, as the employer, are required to make certain annual contributions. Also, a SIMPLE has more limitations on when it can be set up and when it can be contributed to than a SEP.

You establish a SIMPLE IRA for each eligible employee, generally making matching contributions based on amounts elected by participating employees under a qualified salary reduction arrangement. The SIMPLE is also subject to much less stringent requirements than traditional qualified retirement plans.

Another option: An employer can adopt a SIMPLE 401(k) plan, with similar features to a SIMPLE IRA. It’s not subject to the otherwise complex nondiscrimination rules that apply to regular 401(k) plans.

For 2024, SIMPLE employee deferrals are limited to $16,000 (up from $15,500 for 2023). Additional $3,500 catch-up contributions are also allowed for employees ages 50 and older.

More information

Additional rules and limits apply to both SEPs and SIMPLEs. Contact us for more information. We can also provide information about any other aspect of your retirement planning.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : Thompson Reuters      

Generally, the IRS has three years to audit a tax return, from the later of the due date of the return or the date you file. You can also file an amended return within this time frame if you overlooked something.

Here’s what you need to know about keeping financial records involved in your tax returns.

Federal tax records

Despite the three-year guideline, many tax advisors recommend retaining copies of your finished tax returns indefinitely to prove that you filed. Even if you don’t keep returns indefinitely, at least keep them for six years after the returns are due or filed, whichever is later.

It’s a good idea to keep the records that support items on your individual tax returns until the three-year statute of limitations runs out. Examples of supporting records include canceled checks, charitable contributions receipts, and documents showing your mortgage interest payments and retirement plan contributions. These documents may also support an amended tax return if you find you overlooked something.

So which records can you throw away today? Generally, based on the three-year rule, you’ll soon be able to throw out most records associated with your 2020 return if you filed by the due date (which was extended to May 17, 2021, due to the pandemic). Extended 2020 returns could still be vulnerable to audit until October 15, 2024.

Also, some tax issues are still subject to scrutiny after the three years. If the IRS suspects that income has been understated by 25% or more, the statute of limitations for audit rises to six years. If no return was filed or if fraud is suspected, there’s no limit of time for the IRS to launch an inquiry.

Certain records that support figures that may affect multiple years, such as carryovers of charitable deductions, should be saved until the deductions no longer have effect. Also, don’t toss out records that support deductions for bad debts or worthless securities that could result in refund claims. You have up to seven years to claim them.

State tax records

The previous guidelines are geared toward complying with federal tax obligations. Contact the office for information regarding your state’s statute of limitations.

Plus, states generally have the right to resolve their own issues related to federal tax returns that have been audited. So, hold on to records related to an IRS audit for a year after it’s completed.

Real estate records

Retain real estate records for as long as you own a property, plus three years after you dispose of it and report the transaction on your tax return. Throughout ownership, keep records of the purchase, home improvements, relevant insurance claims and refinancing documents.

These documents help prove your adjusted basis in the home, which is needed to figure any taxable gain at the time of sale. They can also support rental property or home office deductions.

Investment account statements

To accurately report taxable events involving stocks and bonds, you must maintain detailed records of purchases and sales. Records should include dates, quantities, prices, dividend reinvestment and related expenses. Keep these records for as long as you own the investments plus additional time until the statute of limitations for the relevant tax returns expires.

The IRS requires you to keep copies of Forms 8606, 5498 and 1099-R until all the money is withdrawn from your IRAs. It’s even more important to retain records of all transactions relating to Roth IRAs, in case you’re ever questioned.

Purge with caution

Old tax records take up space and could lead to stolen identities if not properly disposed of. But purging too soon may leave you without a defense if the IRS has questions. When in doubt, hang on to records a little longer than you think is necessary. Contact the office with questions.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: Thomson Reuters     

The credit for other dependents is a $500 non-refundable credit available to taxpayers with dependents who are not eligible for the child tax credit. Taxpayers can claim this credit in addition to the child and dependent care credit and the Earned Income Credit.

This information can help taxpayers determine their eligibility to claim this credit on their 2023 tax return:

This credit can be claimed for dependents who:

• Are of any age, including those who are age 18 or older.
• Have Social Security numbers or Individual Taxpayer Identification Numbers.
• Are parents or other qualifying relatives supported by the taxpayer.
• Live with the taxpayer but aren't related to the taxpayer.
• Are U.S. citizens, nationals or resident aliens.

The credit begins to phase out when the taxpayer's income is above $200,000. This phaseout begins at $400,000 for married couples filing a joint tax return.

A taxpayer can claim this credit if:

• They claim the person as a dependent on the taxpayer's return.
• They cannot use the dependent to claim the child tax credit or additional child tax credit.

Taxpayers can use the Does my child/dependent qualify for the child tax credit or the credit for other dependents? tool on IRS.gov to help determine their eligibility.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : IRS      

At one time, life insurance played a much larger part in an estate plan than it does now. Why? Families would often use life insurance payouts to pay estate taxes. But with the federal gift and estate tax exemption at $13.61 million for 2024, far fewer families currently are affected by estate tax.

However, life insurance remains a powerful tool to help provide for your loved ones in the event of your death. The amount of life insurance that’s right for you depends on your personal circumstances, so it’s critical to review your life insurance needs regularly in light of changing circumstances.

Reasons to reevaluate

In addition to watching for changes to the estate tax exemption amount, consider reevaluating your insurance coverage if you’re:

• Buying a home or paying off a mortgage,
• Getting married or divorced,
• Having children,
• Approaching retirement, or
• Facing health issues.

The right amount of insurance depends on your family’s current and expected future income and expenses, as well as the amount of income your family would lose should you pass away. The events listed above can change the equation, so it’s a good idea to revisit your life insurance needs as you reach these milestones. For example, if you have kids, your current and future obligations are likely to increase significantly for expenses related not only to providing for their needs on a day-to-day basis but also potentially for childcare and college tuition.

As you get older, your expenses may go up or down, depending on your circumstances. For example, as your children become financially independent, they’ll no longer rely on you for financial support.

On the other hand, your health care expenses may increase. When you retire, you’ll no longer have a salary, but you may have new sources of income from retirement plans and Social Security. You may or may not have paid off your mortgage, student loans or other debts. And you may or may not have accumulated sufficient wealth to provide for your family.

Periodic reassessment a must

There are many factors that affect your need for life insurance, and these factors change over time. To make sure you’re not over- or underinsured, reassess your insurance needs periodically, especially when your life circumstances change. Also keep in mind that, absent Congressional action, the gift and estate tax exemption will drop to an inflation-adjusted $5 million in 2026. We can help you assess whether you have an adequate amount of life insurance coverage.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : Thomson Reuters      

Among the many challenges of parenthood is childcare for kids when school lets out. Babysitters are one option, or you might consider sending them to a day camp. There’s no one-size-fits-all answer, but if you do choose a day camp, you could be eligible for a tax break. (Unfortunately, overnight camps don’t qualify.)

Dollar-for-dollar savings

Day camp can be a qualified expense under the child and dependent care tax credit. The credit is worth 20% to 35% of the qualifying costs, subject to an income cap. The maximum amount of expenses that can be claimed is $3,000 for one qualifying child or $6,000 for two or more children, multiplied by the percentage that applies to your income level.

For those qualifying for the 35% rate with maximum expenses of $3,000, the credit equals $1,050, or $2,100 for two children with expenses of at least $6,000. The applicable credit percentage drops as adjusted gross income (AGI) rises. When AGI exceeds $43,000, the percentage is 20% of qualified expenses, subject to the $3,000 or $6,000 limit.

Tax credits are particularly valuable because they reduce your tax liability dollar-for-dollar, that is, $1 of tax credit saves $1 of taxes. This is compared to deductions, which simply reduce the amount of income subject to tax. So, if you’re in the 24% tax bracket, a $1 deduction saves you only $0.24 of taxes.

Qualifying for the credit

Only dependents under age 13 generally qualify. However, the credit may also be claimed for expenses paid to care for a dependent relative, such as an in-law or parent, who is incapable of self-care. Eligible care costs are those incurred while you work or look for work.

Expenses paid from, or reimbursed by, an employer-sponsored Flexible Spending Account can’t be used to claim the credit. The same is true for a dependent care assistance program.

Determining eligibility

Additional rules apply to this credit. Contact the office if you have questions about your eligibility for the credit and the exceptions.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : Thomson Reuters      

If you check the Internal Revenue Code, you may be surprised to find that most business deductions aren’t specifically listed there. For example, the tax law doesn’t explicitly state that you can deduct office supplies and certain other expenses. Some expenses are detailed in the tax code, but the general rule is contained in the first sentence of Section 162, which states you can write off “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.”

Basic definitions

In general, an expense is ordinary if it’s considered common or customary in the particular trade or business. For example, insurance premiums to protect a store would be an ordinary business expense in the retail industry.

A necessary expense is one that’s helpful or appropriate. For example, a car dealership may purchase an automatic defibrillator. It may not be necessary for the business operation, but it might be helpful if an employee or customer suffers a heart attack. It’s possible for an ordinary expense to be unnecessary. But to be deductible, an expense must be ordinary and necessary.

A deductible amount must be reasonable in relation to the benefit expected. For example, if you’re attempting to land a $3,000 deal, a $65 lunch with the potential client should be OK with the IRS. (The Tax Cuts and Jobs Act eliminated most deductions for entertainment expenses but retained a 50% deduction for business meals.)

How the courts may view expenses

The deductibility of some expenses is clear, while others are more complicated. Not surprisingly, the IRS and courts don’t always agree with taxpayers about what is ordinary and necessary. To illustrate, here are three recent U.S. Tax Court cases in which specific taxpayer deductions were disallowed:

1. A married couple owned an engineering firm. For two tax years, they claimed depreciation of $76,264 on three vehicles, but didn’t provide required details, including each vehicle’s ownership, cost and useful life. They claimed $34,197 in mileage deductions and provided receipts and mileage logs, but the court found they didn’t show related business purposes. The court also found the mileage claimed included commuting costs, which can’t be written off. The court disallowed these deductions and assessed taxes and penalties. (TC Memo 2023-39)

2. The court ruled that a married couple wasn’t entitled to business tax deductions because the husband’s consulting company failed to show that it was engaged in a trade or business. In fact, invoices produced by the consulting company predated its incorporation. And the court ruled that even if the expenses were legitimate, they weren’t properly substantiated. (TC Memo 2023-80)

3. A physician specializing in gene therapy deducted legal expenses of $360,295 for two years on Schedule C of his joint tax returns. The court found that most of the legal fees were to defend the husband against personal conduct issues. The court denied the deduction for personal legal expenses but allowed a deduction for $13,000 for business-related legal expenses. (TC Memo 2023-42)

These cases and others should show the importance of maintaining careful, detailed records. Make sure that only business costs are claimed.

Proceed with caution!

If an expense seems like it’s not normal in your industry or could be considered personal or extravagant, proceed with caution. Contact the office with questions about deductibility and proper documentation.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : Thomson Reuters    

Taxpayers have a variety of options to consider when paying federal taxes. Electronic payment options are the best way to make a tax payment.

For taxpayers who cannot pay in full, the IRS encourages them to pay what they can and explore a variety of payment options available for the remaining balance, including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge by law.

The IRS also urges taxpayers not to wait to respond to a notice. Notices and letters provide taxpayers with information about the actions they need to take. Many notices have QR codes that help direct taxpayers to their online tax accounts. In addition, these letters inform the taxpayer of the status of their unpaid balance, options for resolution and their rights in the collection process.

For taxpayers who can't pay their tax bill in full, the IRS offers several options to help them meet their obligations. IRS payment options are available at IRS.gov/payments.

Options for paying electronically

• Direct Pay – Individual taxpayers can use Direct Pay for up to two payments each day. Direct Pay lets taxpayers pay online directly from a checking or savings account for free and schedule payments up to 365 days in advance. They'll receive an email confirmation of their payments.
• Electronic Federal Tax Payment System (EFTPS) – The best payment option for individual taxpayers or businesses making large payments is the EFTPS, which allows up to five payments per day. The system requires enrollment. Taxpayers can schedule payments up to 365 days in advance and opt in to receive email notifications about their payments.
• Electronic funds withdrawal – Individual taxpayers and businesses can pay when they file electronically using tax software online. If they're using a tax preparer, they can ask the preparer to make the tax payment through an electronic funds withdrawal from a bank account.
• Payment processor – Individual taxpayers and businesses can choose to pay with a credit card, debit card or digital wallet through a payment processor. Although processing fees apply, no part of those go to the IRS.
• IRS Online Account – Individual taxpayers have the option to create and sign into an IRS Online Account to pay from there. Online Account allows taxpayers to view:
  • The amount they owe.
  • Payment history and any scheduled or pending payments.
  • Payment plan details.
  • Digital copies of select notices from the IRS.

Paying by check, money order or cashier's check

If they’re paying an income tax liability that's currently due without an accompanying income tax return, taxpayers paying by check, money order or cashier's check should include Form 1040-V, Payment Voucher, with the payment.

• Mail the payment to the correct address by state or form. Don't send cash through the mail. Indicate on the check memo line the specific tax year to which the IRS should apply the payment.

• Those paying when filing their current year's income tax return shouldn't staple or paperclip the payment to the return. For more information go to Pay by check or money order on IRS.gov.

Paying by cash

Individuals and businesses preferring to pay in cash can do so at a participating retail store. There's a $500 limit per payment, and processing fees apply.

Other options

Most taxpayers also have the following payment options if they can't pay in full now:

• Payment plans – Taxpayers who owe but can’t pay in full don’t have to wait for a tax bill to set up a payment plan (or installment agreement) to pay off an outstanding balance over time. Most taxpayers qualify and can set up a payment plan through the Online Payment Agreement (OPA) tool, as well as using IRS text or voice bots. Once taxpayers complete the online application, they receive immediate notification of whether the IRS has approved their payment plan. Taxpayers can set up a plan using OPA in minutes. There's no paperwork and no need to call, write or visit the IRS. Setup fees may apply for some types of plans.
• Offer in compromise – An offer in compromise allows qualifying taxpayers to settle their tax liabilities for less than the total amount they owe. To help determine their eligibility, they can use the Offer in Compromise Pre-Qualifier tool.
• Temporarily delaying collection – Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer's financial condition improves. Penalties and interest continue to accrue until the taxpayer pays the full amount.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Employer-Provided Childcare Tax Credit is an incentive for businesses to provide childcare services to their employees.

About the tax credit

This tax credit helps employers cover some costs for childcare resources and referral and for a qualified childcare facility. A qualified childcare facility is one that meets the requirements of all laws and regulations of the state or local government in which it’s located.

The credit is worth up to $150,000 per year to offset 10% of qualified childcare resource and referral costs and 25% of qualified childcare facility costs.

Who is eligible

To be eligible for the credit, an employer must have paid or incurred qualified childcare costs during the tax year to provide childcare services to employees.

Qualified childcare costs are:

• Costs associated with acquiring, constructing, rehabilitating or expanding property used as the taxpayer’s qualified childcare facility.
• Operating expenses paid by the business, including amounts paid to support childcare workers through training, scholarship programs and providing increased compensation to employees with higher levels of childcare training.
• Qualified resource and referral costs which include amounts paid or incurred under a contract with a qualified childcare facility to provide childcare services to employees of the taxpayer.

How to claim the credit

Employers should complete Form 8882, Credit for Employer-Provided Childcare Facilities and Services, to claim the credit. The credit is part of the general business credit subject to the carryback and carryforward rule. This means employers may carryback unused credit one year and then carryforward 20 years after the year of the credit. Taxpayers whose only source for the credit is from pass-through entities can report the credit directly on Form 3800, General Business Credit.

Businesses can find out more at the IRS Employer-Provided Childcare Tax Credit page on IRS.gov including, more information on claiming the credit and the requirements for qualified childcare expenditures and qualified childcare facilities.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

As part of continuing efforts to protect the senior community, the Internal Revenue Service has issued a warning about the rising threat of impersonation scams.

These scams are targeting older adults by pretending to be government officials, aiming to steal sensitive personal information and money. By posing as representatives from agencies such as the IRS, or other government agencies, these fraudsters use fear and deceit to exploit their victims.

“Scammers often target seniors, attempting to steal personal information through phone calls, emails or text messages by pretending to be from the IRS or other agencies or businesses,” said IRS Commissioner Danny Werfel. “Preventing these types of scams requires assistance from many different places. By partnering with other federal agencies and others in the tax community, we can reach more seniors and other taxpayers to help protect them against these terrible scams.”

This is part of a wider effort taking place this week leading up to World Elder Abuse Awareness Day (WEAAD) on Saturday, June 15. WEAAD, observed since June 15, 2006, aims to foster a better understanding of the neglect and abuse faced by millions of older adults, focusing attention on the contributing cultural, social, economic and demographic factors.

The IRS also has been engaged in long-term efforts to protect against scams and other related schemes, including identity theft. This has been an ongoing focus of the Security Summit partnership between the IRS, state tax agencies and the nation’s tax professional community since 2015.

Understanding the threats

The IRS has identified a concerning trend where fraudulent actors are increasingly targeting unsuspecting individuals, particularly senior citizens, by masquerading as IRS agents. Victims are pressured into making immediate payments through unorthodox methods such as gift cards or wire transfers under the pretense of resolving fictitious tax liabilities or securing false refunds.

These scammers deploy advanced techniques to fabricate a veneer of credibility, including the manipulation of caller IDs to appear legitimate. Here are just a few examples of their schemes:

• Impersonation of known entities: Fraudsters often pose as representatives from government agencies — including the IRS, Social Security Administration and Medicare — others in the tax community or familiar businesses and charities. By spoofing caller IDs, scammers can deceive victims into believing they are receiving legitimate communications.

• Claims of problems or prizes: Scammers frequently fabricate urgent scenarios, such as outstanding debts or promises of significant prize winnings. Victims may be falsely informed that they owe the IRS money, are owed a tax refund, need to verify accounts or must pay fees to claim non-existent lottery winnings.

• Pressure for immediate action: These deceitful actors create a sense of urgency, demanding that victims take immediate action without allowing time for reflection. Common tactics include threats of arrest, deportation, license suspension or computer viruses to coerce quick compliance.

• Specified payment methods: To complicate traceability, scammers insist on unconventional payment methods, including cryptocurrency, wire transfers, payment apps or gift cards, and often require victims to provide sensitive information like gift card numbers.

Scam precautions and reporting

If an individual receives an unexpected call from someone alleging to be from the IRS, but they have not been notified by mail about any issues with their IRS account, they should hang up immediately. The call is likely from a scammer.

Do not return the call using the number provided by the caller or the one displayed on their caller ID. If taxpayers are uncertain about the legitimacy of IRS communications, they can contact IRS customer service for verification at 800-829-1040, or for the hearing impaired, TTY/TDD 800-829-4059.

To view details about an individual’s tax account, they can set up or check their IRS individual online account on IRS.gov.

Electronic scams are also on the rise, with scammers sending malicious emails and texts posing as IRS representatives to steal personal information. The IRS reminds taxpayers that it does not initiate contact via email, text, or social media regarding tax bills or refunds.

Report the call or electronic scam by visiting the Hotline page of the Treasury Inspector General for Tax Administration and using an IRS Impersonation Scam Reporting form or by calling 800-366-4484. Forms to report different types of fraud are available on the Hotline page of Treasury Inspector General for Tax Administration website. Taxpayers can click the appropriate option under "IRS Scams and Fraud" and follow the instructions.

Key points to remember:

Individuals should understand how and when the IRS contacts taxpayers to help them verify whether any communication they receive is genuinely from an IRS employee.

Most IRS communications are initiated through regular mail delivered by the United States Postal Service. However, in certain situations, the IRS may make phone calls or visit homes or businesses. These situations include having an overdue tax bill, an unfiled tax return or missing employment tax deposit.

Additionally, an IRS employee might review assets or inspect a business as part of a collection investigation, audit or ongoing criminal investigation.

Remember the following:

• The IRS will never demand immediate payment via prepaid debit cards, gift cards or wire transfers. Typically, if taxes are owed, the IRS will send a bill by mail first.

• The IRS will never threaten to involve local police or other law enforcement agencies.

• The IRS will never demand payment without allowing opportunities to dispute or appeal the amount owed.

• The IRS will never request credit, debit or gift card numbers over the phone.

Remaining vigilant and informed about these scams can help protect taxpayers from financial loss and identity theft. The IRS and partnering federal agencies urge everyone to be cautious, especially when dealing with unsolicited communications concerning taxes.

In March 2020, the U.S. Department of Justice introduced the National Elder Fraud Hotline to address fraud targeting elderly Americans and support affected individuals. If an individual has fallen victim to elder fraud, they can contact the National Elder Fraud Hotline at 833-FRAUD-11 (833-372-8311).

The hotline operates Monday through Friday, from 10 a.m. to 6 p.m. Eastern Time, and services are available in English, Spanish, and other languages.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Department of the Treasury and the Internal Revenue Service issued guidance on the inappropriate use of partnership rules to inflate the basis of the underlying assets without causing any meaningful change to the economics of their business.

The guidance issued by Treasury and the IRS follows work by IRS exam teams, which have seen repeated instances of abusive basis-shifting taking place in sophisticated maneuvers by related-party partnerships.

As part of the larger IRS compliance efforts, the guidance issued relates to certain partnership transactions that the IRS believes generate inappropriate tax benefits.

Generally, these transactions may employ several steps over a period of years and use sophisticated tax technology to ensure that little or no tax is paid while large amounts of tax basis is “stripped” from certain assets and shifted to other assets to generate tax benefits. In essence, these deals allow increased depreciation deductions or reduced gain on the sale of an asset with little or no substantive economic consequence.

These basis shifting transactions targeted in the new guidance generally fall into three groups:

Transfer of partnership interest to related party: In this transaction, a partner with a low share of the partnership’s “inside” tax basis and a high “outside” tax basis transfers the interest in a tax-free transaction to a related person or to a person who is related to other partners in the partnership. This related-party transfer generates a tax-free basis increase to the transferee partner’s share of “inside” basis.

Distribution of property to a related party: In this transaction, a partnership with related partners distributes a high-basis asset to one of the related partners that has a low outside basis. After this, the distributee partner reduces the basis of the distributed asset and the partnership increases the basis of its remaining assets. The related partners can arrange this transaction so that the reduced tax basis of the distributed asset will not adversely impact the related partners, while the basis increase to the partnership’s retained assets can produce tax savings for the related parties.

Liquidation of related partnership or partner: In this transaction, a partnership with related partners liquidates and distributes (1) a low-basis asset that is subject to accelerated cost recovery or for which the parties intend to sell to a partner with a high outside basis and (2) a high-basis property that is subject to longer cost recovery (or no cost recovery at all) or for which the parties intend to hold to a partner with a low outside basis. Under the partnership liquidation rules, the first related partner increases the basis of the property with a shorter life or which is held for sale while the second related partner decreases the basis of the long-lived or non-depreciable property, with the result that the related parties generate or accelerate tax benefits.

To help address these areas, Notice 2024-54 announces two sets of upcoming regulations:

• The first set of regulations would require partnerships to treat basis adjustments arising from covered transactions in a way that would restrict them from deriving inappropriate tax benefits from the basis adjustments.
• The second set of regulations would provide rules to ensure clear reflection of the taxable income and tax liability of a consolidated group of corporations when members of the group own interests in partnerships. The notice further announces that that the covered transactions governed by these regulations would involve basis adjustments under Internal Revenue Code sections 732, 734(b) and/or 743(b).

Basis shifting identified as Transactions of Interest (TOI)

The proposed regulations Treasury and IRS issued identify certain basis shifting transactions by partnerships as reportable Transactions of Interest (TOI).

“These proposed regulations will provide the IRS with information about potentially abusive partnership transactions involving basis shifting leading to significant tax benefits without causing any meaningful change to the economics of their business,” IRS Commissioner Danny Werfel said. “Our teams are seeing these very problems. There are cases at either the litigation or the audit stage that involve transactions that are the same or similar to those described as transactions of interest in the proposed regulations issued.”

The proposed regulations identify related-party partnership basis adjustment transactions and substantially similar transactions as a TOI – a type of reportable transaction. These proposed regulations would affect partnerships that are participating in the identified transactions by distributing partnership property or by transferring an interest in the partnership transferred in an identified transaction. The affected taxpayers and material advisors would be subject to the disclosure requirements for reportable transactions.

The TOIs generally involve positive basis adjustments of $5 million or more under subchapter K of the Internal Revenue Code – specifically sections 732(b) or (d), 734(b) or 743(b) – to which no corresponding tax is paid. The transactions would include either a distribution of partnership property to a partner that is related to one or more other partners in the partnership, or the transfer of a partnership interest in which the transferor is related to the transferee, or the transferee is related to one or more of the partners.

In these transactions, the basis increase allows related parties an opportunity for decreasing their taxable income through increased cost recovery deductions or through decreasing their taxable gain (or increasing their taxable loss) on the subsequent transfer of the property in a transaction in which gain or loss is recognized in whole or in part.

The proposed regulations would affect the partnership and the partners that are participating in the identified transactions, including by receiving a distribution of partnership property, transferring a partnership interest or receiving a partnership interest.

“You can see by these descriptions that these involve complex arrangements where taxable income can be shielded from scrutiny,” Werfel said. “These proposed regulations demonstrate the agency’s commitment to use new resources to unpack complicated noncompliance by partnerships and other high-income taxpayers, which is an important part of our efforts to bring more fairness to the tax system.”

Revenue Ruling informs the public that IRS will challenge basis stripping

Revenue Ruling 2024-14 notifies taxpayers and advisors using partnerships that engage in three variations of these transactions that the IRS will apply the codified economic substance doctrine to challenge inappropriate basis adjustments and other aspects of these transactions.

Under Revenue Ruling 2024-14, the IRS announces that the economic substance doctrine will be raised in cases where related parties:

1.   create inside/outside basis disparities through various methods, including the use of certain partnership allocations and distributions,

2.   capitalize on the disparity by either transferring a partnership interest in a nonrecognition transaction or making a current or liquidating distribution of partnership property to a partner, and

3.   claim a basis adjustment under Internal Revenue Code sections 732(b), 734(b), or 743(b) resulting from the nonrecognition transaction or distribution.

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Source : IRS     

Anyone who sold crypto, received it as payment or had other digital asset transactions needs to accurately report it on their tax return

The Internal Revenue Service reminds taxpayers they must answer the digital asset question and report all digital asset related income when they file their 2023 federal income tax return. Taxpayers should also keep these reporting guidelines in mind for 2024.

The question appears at the top of Forms 1040, Individual Income Tax Return; 1040-SR, U.S. Tax Return for Seniors; and 1040-NR, U.S. Nonresident Alien Income Tax Return, and was revised this year to update wording. The question was also added to these additional forms: Forms ; 1120, U.S. Corporation Income Tax Return; and 1120-S, U.S. Income Tax Return for an S Corporation.

With appropriate variations tailored for corporate, partnership or estate and trust taxpayers, the digital asset question is:

At any time during 2023, did you:
(a) receive (as a reward, award or payment for property or services); or
(b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset)?

What is a digital asset?

A digital asset is a digital representation of value that is recorded on a cryptographically secured, distributed ledger or any similar technology. Common digital assets include:

• Convertible virtual currency and cryptocurrency.
• Stablecoins.
• Non-fungible tokens (NFTs).

Digital assets are treated as property for tax purposes, and general property tax principles apply to any of these transactions.

Everyone must answer the question correctly

Everyone who files Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120 and 1120S must check one box answering either "Yes" or "No" to the digital asset question. The question must be answered by all taxpayers, not just by those who engaged in a transaction involving a digital asset in 2023.

When to check "Yes"

Normally, a taxpayer must check the "Yes" box if they:

• Received digital assets as payment for property or services provided;
• Received digital assets resulting from a reward or award;
• Received new digital assets resulting from mining, staking and similar activities;
• Received digital assets resulting from a hard fork (a branching of a cryptocurrency's blockchain that splits a single cryptocurrency into two);
• Disposed of digital assets in exchange for property or services;
• Disposed of a digital asset in exchange or trade for another digital asset;
• Sold a digital asset; or
• Otherwise disposed of any other financial interest in a digital asset.

Report digital asset income

In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. For example, an investor who held a digital asset as a capital asset and sold, exchanged or transferred it during 2023 must use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss on the transaction and then report it on Schedule D (Form 1040), Capital Gains and Losses. A taxpayer who disposed of any digital asset by gift may be required to file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

If an employee was paid with digital assets, they must report the value of assets received as wages. Similarly, if they worked as an independent contractor and were paid with a digital asset, they must report that income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Schedule C is also used by anyone who sold, exchanged or transferred a digital asset to customers in connection with a trade or business.

Keep in mind that most income is subject to taxation. Failing to accurately report income may result in accrued interest and penalties. This includes various sources of income such as interest earnings, unemployment benefits and income derived from the service industry, gig economy and digital assets. For further details, consult Publication 525, Taxable and Nontaxable Income.

When to check "No"

Normally, a taxpayer who just owned digital assets during 2023 can check the "No" box as long as they did not engage in any transactions involving a digital asset during the year. They can also check the "No" box if their activities were limited to one or more of the following:

• Holding digital assets in a wallet or account;
• Transferring digital assets from one wallet or account they own or control to another wallet or account they own or control; or
• Purchasing digital assets using U.S. or other real currency, including through electronic platforms.

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ncial Statements, please give us a call at +1-305-274-5811

Source: IRS      

From smartphones to social media algorithms and virtual assistants, artificial intelligence (AI) has permeated nearly every aspect of our lives, even taxes. But advice you get from an AI chatbot may not be as good as you think it is. In reality, AI is a rapidly evolving new technology, and may not be able to provide accurate answers to your complex tax questions.

AI refers to simulation of human intelligence processes by machines, particularly computer systems. In the context of tax preparation companies, AI is utilized to automate various aspects of tax filing, including data entry, calculations, and even providing recommendations for deductions and credits based on the taxpayer’s responses to questions.

Recently, some leading tax preparation companies have taken AI a step further by providing generative AI assistants, often referred to as AI chatbots, to answer a wide variety of tax-related questions. A chatbot is a computer program designed to simulate conversation with human users. Some chatbots, such as those currently utilized by the IRS, provide users with pre-defined answers, whereas AI chatbots can generate responses based on user input and tailor replies to the specific scenario or inquiry. Generative AI chatbots continue to evolve and learn from user input and feedback.

The knowledge base for AI assistants used by tax preparation companies is generally comprised of current tax code, regulations, and IRS guidance, as well as information from each company’s own tax preparation experience and is reviewed by accountants and tax law experts. Despite efforts to ensure accuracy, these AI assistants may encounter difficulties interpreting complex tax laws correctly or considering unique circumstances that could impact a taxpayer’s return. As a result, taxpayers should not solely rely on AI-generated tax advice.

A recent informal review by the Washington Post found that two of the leading tax preparation companies’ chatbots provided inaccurate or irrelevant responses up to 50 percent of the time when initially asked 16 complex tax questions. Both companies include disclaimers on their sites advising the assistants are still learning and users should verify the information provided.

While AI can be a useful tool in streamlining the overall tax filing process, taxpayers should not rely on AI-generated responses to complex tax questions. Taxpayers should be vigilant when using tax preparation software and ensure they understand the limitations of AI-generated advice. Taxpayers are ultimately responsible for the information reported on their tax returns. Therefore, it is essential to review all information carefully, verify calculations, and seek assistance from qualified professionals if needed to ensure compliance with tax laws and regulations.

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Source: TAS     

Many owners of sole proprietorships, partnerships, S corporations and some trusts and estates may be eligible for a qualified business income (QBI) deduction – also called the Section 199A deduction – for tax years beginning after December 31, 2017. The deduction allows eligible taxpayers to deduct up to 20 percent of their QBI, plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned through a C corporation or by providing services as an employee is not eligible for the deduction. For more information on what qualifies as a trade or business, see Determining your qualified trades or businesses in the Instructions for Form 8995-A or Form 8995.

The deduction is available regardless of whether taxpayers itemize deductions on Schedule A or take the standard deduction. Eligible taxpayers can claim the deduction for tax years beginning after December 31, 2017, and ending on or before December 31, 2025.

The deduction has two components.

1.   QBI Component. This component of the deduction equals 20 percent of QBI from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust, or estate. The QBI Component is subject to limitations, depending on the taxpayer's taxable income which may include the type of trade or business, the amount of W-2 wages paid by the qualified trade or business, and the unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business. It may also be reduced by the patron reduction if the taxpayer is a patron of an agricultural or horticultural cooperative.

2.   REIT/PTP Component. This component of the deduction equals 20 percent of qualified REIT dividends and qualified PTP income. This component is not limited by W-2 wages or the UBIA of qualified property. Depending on the taxpayer's taxable income, the amount of PTP income that qualifies may be limited depending on the type of the PTP's trade or business.

The deduction is limited to the lesser of the QBI component plus the REIT/PTP component or 20 percent of the taxpayer's taxable income minus net capital gain.

QBI is the net amount of qualified items of income, gain, deduction, and loss from any qualified trade or business, including income from partnerships, S corporations, sole proprietorships, and certain trusts. Generally, this includes, but is not limited to, the deductible part of self-employment tax, self-employed health insurance, and deductions for contributions to qualified retirement plans (e.g., SEP, SIMPLE and qualified plan deductions).

QBI does not include items such as:

• Items that are not properly includable in taxable income
• Investment items such as capital gains or losses
• Interest income not properly allocable to a trade or business
• Wage income
• Income that is not effectively connected with the conduct of business within the United States
• Commodities transactions or foreign currency gains or losses
• Certain dividends and payments in lieu of dividends
• Income, loss, or deductions from notional principal contracts
• Annuities, unless received in connection with the trade or business
• Amounts received as reasonable compensation from an S corporation
• Amounts received as guaranteed payments from a partnership
• Payments received by a partner for services other than in a capacity as a partner
• Qualified REIT dividends
• PTP income

Solely for the purposes of section 199A, a safe harbor is available to individuals and owners of passthrough entities who seek to claim the deduction under section 199A with respect to a rental real estate enterprise. Under the safe harbor a rental real estate enterprise will be treated as a trade or business for purposes of the QBI deduction if certain criteria are met. For more information on the safe harbor, see News Release IR-2019-158

An interest in rental real estate that does not meet the requirements of the safe harbor may still be treated as a trade or business for purposes of the QBI deduction if it otherwise is a section 162 trade or business.

In addition, the rental or licensing of tangible or intangible property that does not rise to the level of a section 162 trade or business is nevertheless treated as a qualified trade or business for purposes of section 199A if the rental or licensing of property is to a commonly controlled trade or business operated by the individual or a passthrough entity as provided in Treas. Reg. § 1.199A-1(b)(14).

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Source : IRS      

The Internal Revenue Service highlights a number of options available to help taxpayers who missed the April deadline to file their 2023 federal income tax return.

To help struggling taxpayers, the IRS has important payment programs that can help those who have trouble paying the amount owed and special first-time penalty relief for those who qualify.

The IRS reminded people that paying what they can as soon as possible will limit penalty and interest charges, which can grow quickly under the tax laws. The interest rate for an individual's unpaid taxes is currently 8%, compounded daily. The late-filing penalty is generally 5% per month and the late-payment penalty is normally 0.5% per month, both of which max out at 25%.

If a return is filed more than 60 days after the due date, the minimum penalty is either $485 or 100% of the unpaid tax, whichever is less. The failure to pay penalty rate is generally 0.5% of unpaid tax owed for each month or part of a month until the tax is fully paid or until 25% is reached. The rate is subject to change. For more information, see Penalties on IRS.gov.

However, taxpayers can limit late-payment penalties and interest charges by paying their tax electronically. The fastest and easiest way to do that is with IRS Direct Pay, a free service available only on IRS.gov. Several other electronic payment options are also available. Visit Make a payment for details.

File and pay what they can to reduce penalties and interest

Taxpayers should file their tax return and pay any taxes they owe as soon as possible to reduce penalties and interest. An extension to file is not an extension to pay. An extension to file provides an additional six months with a new filing deadline of Oct. 15. Penalties and interest apply to taxes owed after April 15 and interest is charged on tax and penalties until the balance is paid in full.

Some may qualify for penalty relief

Anyone who receives a penalty notice from the IRS should read it carefully and follow the instructions for requesting relief. Visit Penalty relief for information on the types of penalties, requesting penalty relief and appealing a penalty decision.

Taxpayers who have filed and paid on time and have not been assessed any penalties for the past three years often qualify to have the penalty abated. See the First-time penalty abatement page on IRS.gov. A taxpayer who does not qualify for this relief may still qualify for penalty relief if their failure to file or pay on time was due to reasonable cause and not willful neglect.

In addition to penalties, interest will be charged on any tax not paid by the April 15 due date and any assessed penalties. Interest stops accruing as soon as the balance due is paid in full. The law does not allow for interest abatement based on reasonable cause or first-time relief.

Having trouble paying? IRS has options to help

By filing by the deadline, taxpayers avoid failure to file penalties – even if they’re unable to pay. For those who owe federal taxes, the IRS has a number of payment options available.

Taxpayers that are unable to pay in full by the tax deadline should still file their tax return, pay what they can and explore a variety of payment options available for the remaining balance. The IRS offers several options to help them meet their tax obligation, including applying for an online payment plan.

Taxpayers can receive an immediate response of payment plan acceptance or denial without calling or writing to the IRS. Online payment plan options include:

• Short-term payment plan – The total balance owed is less than $100,000 in combined tax, penalties and interest. Additional time of up to 180 days to pay the balance in full.
• Long-term payment plan – The total balance owed is less than $50,000 in combined tax, penalties and interest. Pay in monthly payments for up to 72 months. Payments may be set up using direct debit (automatic bank withdraw) which eliminates the need to send in a payment each month, saving postage costs and reducing the chance of default. For balances between $25,000 and $50,000, direct debit is required.

Though interest and late-payment penalties continue to accrue on any unpaid taxes after April 15, the failure to pay penalty is cut in half while an installment agreement is in effect. Find more information about the costs of payment plans on the IRS’ Additional information on payment plans webpage.

Some taxpayers get automatic extensions

Some taxpayers automatically qualify for extra time to file and pay taxes due without penalties and interest, including:

• Taxpayers in certain disaster areas. There’s no need for these taxpayers to submit an extension; extra time is granted automatically due to the disaster. Information on the most recent tax relief for disaster situations is available on IRS.gov.
• U.S. citizens and resident aliens who live and work outside of the United States and Puerto Rico.
• Members of the military on duty outside the United States and Puerto Rico, and those serving in combat zones.

Adjust withholding to prevent tax "surprises"

Taxpayers should check their withholding every year to protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.

The Tax Withholding Estimator helps individuals bring the tax they pay closer to what is owed. Wage earners can assess their income tax, credits, adjustments and deductions, and determine whether they need to change their withholding by submitting a new Form W-4, Employee's Withholding Allowance Certificate to their employer, not the IRS.

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Source : IRS      

Hobbies and businesses are treated differently when it comes to filing taxes. The biggest difference between the two is that businesses operate to make a profit while hobbies are for pleasure or recreation.

Whether someone is having fun with a hobby or running a business, if they are paid through payment apps for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. These payments are taxable income and must be reported on federal tax returns.

There are a few other things people should consider when deciding whether their project is a hobby or business. No single thing is the deciding factor. Taxpayers should review all the factors to make a good decision.

How taxpayers can decide if it's a hobby or business

These questions can help taxpayers decide whether they have a hobby or business:

• Does the time and effort they put into the activity show they intend to make a profit?
• Does the activity make a profit in some years, and if so, how much profit does it make?
• Can they expect to make a future profit from the appreciation of the assets used in the activity?
• Do they depend on income from the activity for their livelihood?
• Are any losses due to circumstances beyond their control or are the losses normal for the startup phase of their type of business?
• Do they change their methods of operation to improve profitability?
• Do they carry out the activity in a businesslike manner and keep complete and accurate books and records?
• Do the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business?

Whether taxpayers have a hobby or run a business, good recordkeeping throughout the year will help when they file taxes.

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Source : IRS      

Eligible contractors who build new energy efficient homes or substantially reconstruct existing homes into qualified energy efficient homes may be eligible for a tax credit up to $5,000 per home. The exact amount of the credit depends on eligibility requirements such as the type of home, the home's energy efficiency and the date when someone buys or leases the home.

Contractor eligibility

To claim the credit, contractors have to:

• Construct or substantially reconstruct and rehabilitate a qualified home.
• Own the home and have a basis in it during construction.
• Sell or rent it to a person for use as a residence.

Home requirements

For a home to qualify, it must be:

• A single family home, including manufactured or multifamily homes, as defined under certain Energy Star program requirements.
• Located in the United States.
• Purchased or rented for use as a residence.
• Certified to meet applicable energy saving requirements based on home type before the home is sold or leased to someone for use as a home.

Energy efficiency requirements and credit amounts: 2023 and after

For homes acquired through 2032, the credit amount ranges from $500 to $5,000, depending on the certification achieved and standards met, which include:

• Energy Star program requirements.
• Zero Energy Ready Home program requirements.
• Prevailing wage requirements.

Energy efficiency requirements and credit amounts: Before 2023

For homes acquired before 2023, the credit amount is $1,000 or $2,000 depending on the standard met, which include:

• 50% standard for single family, multifamily and manufactured homes: The home must have an annual level of heating and cooling energy consumption that is at least 50% less energy than a comparable home. It must also get at least 1/5 of its energy savings from building envelope components.
• 30% standard for manufactured homes: The manufactured home must have an annual level of heating and cooling energy consumption that is at least 30% less energy than a comparable home. It must also get at least 1/3 of its energy savings from building envelop components.

For both standards, the home must be certified to meet applicable energy savings standards, including the Energy Star program requirements. Manufactured homes must also meet Federal Manufactured Home Construction and Safety Standards.

How to properly claim the credit

Eligible contractors must meet all requirements before claiming the credit. Eligible contractors should review the Instructions for Form 8908, Energy Efficient Home Credit, for full details about these requirements. They must also complete Form 8908, Energy Efficient Home Credit, and submit it with their tax return to claim the credit.

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Source : IRS      

Whether someone is a current homeowner or buying a new home this summer owning a home can be expensive. There are tax benefits that can help taxpayers save money and offset some of the costs that come with homeownership. Homeowners should review the tax deductions, programs and housing allowances to see if they are eligible.

Deductible house-related expenses

Most home buyers take out a mortgage to buy their home and then make monthly payments to the mortgage holder. This payment may bundle other costs of owning a home.

The costs the homeowner can deduct are:

• State and local real estate taxes, subject to the $10,000 limit.
• Home mortgage interest, within the allowed limits.

Taxpayers must itemize their deductions to deduct homeownership expenses.

Homeowners can't deduct any of the following items:

• Insurance including fire and comprehensive coverage and title insurance.
• The amount applied to reduce the principal of the mortgage.
• Wages paid to domestic help.
• Depreciation.
• The cost of utilities, such as gas, electricity or water.
• Most settlement or closing costs.
• Forfeited deposits, down payments or earnest money.
• Internet or Wi-Fi system or service.
• Homeowners’ association fees, condominium association fees or common charges.
• Home repairs.

Mortgage Interest Credit

The Mortgage Interest Credit helps people with lower income afford homeownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid. A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government. A certificate is issued only for a new mortgage for the purchase of a main home.

Ministers and military housing allowance

Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don't have to reduce their deductions based on the allowance.

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Source: IRS     

The Department of the Treasury and the Internal Revenue Service issued proposed regulations under the Inflation Reduction Act for owners of qualified clean electricity facilities and energy storage technology that may want to claim relevant tax credits.

The Inflation Reduction Act of 2022 established the clean electricity production credit and the clean electricity investment credit; taxpayers may be eligible for a credit on electricity produced from a qualified clean electricity facility or may be eligible for a credit for a qualified investment in a qualified clean electricity facility or energy storage technology.

The proposed regulations provide guidance for these types of facilities placed in service after 2024 and invite comments from the public on the proposed regulations.

The proposed regulations provide guidance on several topics including the following:

• Calculating the amount of the credits;
• Defining qualified facilities and energy storage technology and describing property included in a qualified facility and energy storage technology and property that is an integral part of a qualified facility and energy storage technology;
• Defining metering devices;
• Defining related and unrelated persons;
• Explaining rules of general application – such as rules related to the expansion of a facility;
• Explaining rules regarding recapture;
• Defining greenhouse gas emissions and emission rates as well as the effects of carbon capture; and
• Listing certain qualified facilities that have a qualifying greenhouse gas emissions rate and explaining the path other facilities can take to obtain a provisional emissions rate.

The proposed regulations explain how the public may send comments to the IRS as well as information on the public hearing.

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Source: IRS      

While summer is a time for fun, it’s never the wrong time to be thinking about taxes – and some of those summer activities could have an impact. Here are a few summertime activities and tips on how taxpayers should consider them for filing season.

Marriage

Wedding season is upon us, and newlyweds can make their tax filing easier by taking two simple steps now:

• First, report any name change to the Social Security Administration.
• Next, notify the United States Postal Service, employers and the IRS of any address change. To officially change their mailing address with the IRS, taxpayers must complete and submit Form 8822, Change of Address. See page 2 of the form for detailed instructions.

Summer camp

If a taxpayer is sending a child to summer camp, the cost may count toward the Child and Dependent Care Credit.

Business travel

Kids may have the summer off, but parents generally don't – and business travel happens year-round. Tax deductions are available for certain people who travel away from their home or main place of work for business reasons. Whether a business traveler is away for a few nights or all summer long, it’s important for them to remember the tax rules related to business travel.

Part-time work

While summertime and part-time workers may not earn enough to owe federal income tax, they should file a tax return to get any refund they may be owed. Part-time and seasonal workers can visit IRS.gov to learn more about who should file a tax return.

Some taxpayers earn summer income with a side hustle or doing gig work. They can visit the Gig Economy Tax Center at IRS.gov to learn how participating in the gig economy can affect their taxes. If taxpayers are paid through payment apps for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. For more information, go to IRS.gov/1099k.

Home improvements

The IRS has information to help taxpayers take advantage of potential tax benefits for home improvements. If taxpayers make qualified energy efficient improvements to their home after Jan. 1, 2023, they may qualify for a tax credit up to $3,200. They can claim the credit for improvements made through 2032.

These types of improvements include Energy Efficient Home Improvement Credits for things like water heaters, exterior windows and doors and heating and air conditioning installations. Residential Clean Energy Credits are available for taxpayers who install solar water heaters, fuel cells and battery storage or solar, wind and geothermal power generation. Taxpayers can visit the Home Energy Tax Credits page on IRS.gov to learn more.

More information

How to claim these credits can be found in these step-by-step guides:

• Energy efficient home improvements
• Home energy audit
• Residential energy property

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Source: IRS     

Here are some simple things taxpayers can do throughout the year to make filing season less stressful.

Organize tax records. Create a system that keeps all important information together. Taxpayers can use a software program for electronic recordkeeping or store paper documents in clearly labeled folders. They should add tax records to their files as they receive them. Organized records will make tax return preparation easier and may help taxpayers discover overlooked deductions or credits.

Identify filing status. A taxpayer's filing status determines their filing requirements, standard deduction, eligibility for certain credits and the correct amount of tax they should pay. If more than one filing status applies to a taxpayer, they can get help choosing the best one for their tax situation with the IRS’s Interactive Tax Assistant, What is my filing status? Changes in family life — marriage, divorce, birth and death — may affect a person's tax situation, including their filing status and eligibility for certain tax credits and deductions.

Understand adjusted gross income (AGI). AGI and tax rate are important factors in figuring taxes. AGI is the taxpayer's income from all sources minus any adjustments. Generally, the higher a taxpayer's AGI, the higher their tax rate and the more tax they pay. Tax planning can include making changes during the year that lower a taxpayer's AGI.

Check withholding. Since federal taxes operate on a pay-as-you-go basis, taxpayers need to pay most of their tax as they earn income. Taxpayers should check that they're withholding enough from their pay to cover their taxes owed, especially if their personal or financial situations change during the year. To check withholding, taxpayers can use the IRS Withholding Estimator. If they want to change their tax withholding, taxpayers should provide their employer with an updated Form W-4.

Make address and name changes. Taxpayers should notify the United States Postal Service, employers and the IRS of any address change. To officially change a mailing address with the IRS, taxpayers must compete Form 8822, Change of Address, and mail it to the correct address for their area. For detailed instructions, see page 2 of the form. Report any name change to the Social Security Administration. Making these changes as soon as possible will help make filing their tax return easier.

Save for retirement. Saving for retirement can also lower a taxpayer's AGI. Certain contributions to a retirement plan at work and to a traditional IRA may also reduce taxable income.

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Source: IRS     

Summer wedding season has arrived, and newlyweds can make their tax filing easier by doing a few things now. A taxpayer's marital status as of December 31 determines their tax filing options for the entire year, but that's not all newlyweds need to know.

Report a name change

Report any name changes to the Social Security Administration. The name on a person's tax return must match what’s on file at the SSA. If it doesn't, it could delay any tax refund. To update information, taxpayers should file Form SS-5, Application for a Social Security Card. It’s available on SSA.gov, by phone at 800-772-1213 or at a local SSA office.

Update address

Notify the United States Postal Service, employers and the IRS of any address change. To officially change their mailing address with the IRS, taxpayers must compete and submit Form 8822, Change of Address. See page 2 of the form for detailed instructions.

Check withholding

Newly married couples must give their employers a new Form W-4, Employee's Withholding Certificate, within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax. They can use the Tax Withholding Estimator on IRS.gov to check their withholding and for help completing a new Form W-4.

Review filing status

Married people can choose to file their federal income taxes jointly or separately each year. While filing jointly is usually more beneficial, it's best to figure the tax both ways to find out which makes the most sense. Taxpayers should remember that if a couple is married as of December 31, the law says they're married for the whole year for tax purposes.

Beware of scams

All taxpayers should be aware of and avoid tax scams. The IRS will never contact a taxpayer using email, phone calls, social media or text messages. First contact generally comes in the mail. To find out if they owe money to the IRS, taxpayers can view their tax account.

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Source : IRS      

The Internal Revenue Service today reminded taxpayers whose income is not subject to withholding that the second quarter estimated tax payment deadline is June 17.

Taxpayers making estimated tax payments should consider this deadline to avoid falling behind on their taxes and facing possible underpayment penalties. And the IRS reminds taxpayers that third quarter payments are due Sept. 16, and the final estimated tax payment for tax year 2024 will be due on Jan. 15, 2025.

For eligible taxpayers, disaster tax relief includes the postponement of filing and payment deadlines. For current tax relief provisions, search Tax relief in disaster situations and visit the IRS news from around the nation page on IRS.gov for the current list of eligible localities.

Estimated tax payments are usually made by taxpayers who are self-employed, retirees, investors, businesses, corporations and other individuals who do not have taxes withheld.

Pay-as-you-go

Taxes are pay-as-you-go, to be paid as income is earned, during the year. There are two ways for taxpayers to do this:

1.   Withholding from pay, pension or certain government payments, such as Social Security.

2.   Making quarterly estimated tax payments throughout the year.

For taxpayers where not enough taxes are being withheld from their salary, pension or other income, estimated tax payments may have to be made. Taxpayers who are employed can avoid having to make estimated tax payments by asking their employer to withhold a larger amount from their earnings by submitting a new Form W-4, Employee's Withholding Certificate.

Who needs to pay estimated tax?

Taxpayers including sole proprietors, partners and S corporation shareholders must make estimated tax payments if they expect to have a tax liability of $1,000 or more when they file their return.

The IRS Interactive Tax Assistant is an online tool that taxpayers can use to see if they are required to make estimated tax payments. Taxpayers can also see the worksheet in Form 1040-ES, Estimated Tax for Individuals, for more information about who must pay estimated tax.

Corporations that expect to owe tax of $500 or more, generally must make estimated tax payments. For more information, corporations can see Publication 542, Corporations.

For additional details, see Publication 505, Tax Withholding and Estimated Tax. It includes worksheets and examples that can be especially useful for taxpayers who have dividend or capital gain income, owe alternative minimum or self-employment tax or have other situations.

Keep records of income reported on Form 1099-K

Individuals working a part-time job or side hustle must report their income. Earnings may be reported to the IRS on a Form W-2, or type of Form 1099. Recipients of Form 1099-K, Payment Card and Third Party Network Transactions must use it with other tax records to help report income.

Taxpayers earning income not subject to withholding are encouraged to consider making quarterly estimated tax payments during the year to stay current and avoid an unexpected tax bill.

Remember, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.

Paying estimated tax

Electronic payment is the most secure, fastest and easiest way for taxpayers to make an estimated tax payment. Taxpayers can use their online account or IRS Direct Pay to make a payment using their checking or savings account. A credit/debit card or digital wallet can also be used. When using a credit/debit card, taxpayers should be aware that payment processors, not the IRS, charge a fee to do so. Payments can be made at IRS.gov/payments and through the IRS2Go app. Both Direct Pay and credit/debit card and digital wallet options are available.

The Electronic Federal Tax Payment System (EFTPS) can also be used to make an estimated payment. Payment by check or money order made payable to the “United States Treasury” is accepted. For instructions and help figuring out their estimated tax, taxpayers should refer to Form 1040-ES, Estimated Tax for Individuals.

Electronic funds transfer must be used by corporations to make all federal tax deposits, for example deposits of employment, excise and corporate income tax. Installment payments of estimated tax must also be made via this method. Usually, an electronic funds transfer is made via the EFTPS.

Avoiding an underpayment penalty

To avoid an underpayment penalty at tax time, taxpayers should pay most of their taxes during the year, owing less than a $1000 when filing their return. Generally, for 2024 that means paying at least 90% of the tax owed on their 2024 return, or at a minimum 100% of the tax shown on their year 2023 tax return.

Exceptions to the underpayment of estimated tax penalty and special rules apply for some groups of taxpayers, such as farmers, fishermen, certain higher income taxpayers, casualty and/or disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year.

Tax Withholding Estimator

The use of the tax Tax Withholding Estimator by taxpayers will help ensure that the right amount of tax is being withheld from their paychecks or other income that is subject to withholding. Estimates provided are as accurate as the information entered by taxpayers.

This tool can help taxpayers avoid having too little tax withheld and facing an unexpected tax bill at tax time next year.

24/7 assistance at IRS.gov

For assistance, tax help is available 24/7 on IRS.gov. Taxpayers can use a variety of tools to find answers to common tax questions, including the Interactive Tax Assistant, Tax Topics and frequently asked questions.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source: IRS

The Internal Revenue Service reminds taxpayers living and working outside the United States to file their 2023 federal income tax return by Monday, June 17.

This deadline applies to both U.S. citizens and resident aliens abroad, including those with dual citizenship.

Qualifying for the June 17 extension

U.S. citizens or resident aliens residing overseas or on duty in the military outside the U.S. are allowed an automatic two-month extension to file their tax return and pay any amount due. A taxpayer qualifies for the June 17 extension to file and pay if:

• They are living outside of the United States and Puerto Rico and their main place of business or post of duty is outside the United States and Puerto Rico, or
• They are serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return.

To use the automatic two-month extension, taxpayers must attach a statement to their tax return explaining which of the two situations listed earlier applies.

Additional extensions

As a reminder, an extension of time to file a return does not grant an extension of time to pay taxes owed. Eligible taxpayers should estimate and pay any owed taxes by the June 17 deadline.

• Taxpayers who can’t meet the June 17 due date can request an automatic six-month extension by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
• Taxpayers who need an extension of more than six months to meet either the bona fide residence or the physical presence test to qualify for the foreign earned income exclusion or to exclude or deduct the foreign housing costs must file IRS Form 2350, Application for Extension of Time to File U.S. Income Tax Return.
• Businesses that need more time must file Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.
• Members of the military stationed abroad or in a combat zone during tax filing season may qualify for an additional extension of at least 180 days to file and pay taxes. More information can be found in the Extension of Deadline – Combat Zone Service Q&As.
• Spouses of individuals who served in a combat zone or contingency operation are generally entitled to the same deadline extensions with some exceptions. Extension details and more military tax information is available in IRS Publication 3, Armed Forces’ Tax Guide.

The IRS encourages anyone needing additional time to file an extension electronically. Filers may use IRS Free File, regardless of income, to request an automatic extension of time to file, or choose from several options at IRS.gov/extensions.

File to claim benefits

Many taxpayers living outside the U.S. qualify for tax benefits, such as the Foreign earned income exclusion and the Foreign Tax Credit, but they are available only if a U.S. return is filed.

In addition, the IRS encourages families to check out expanded tax benefits such as the Child Tax Credit, Credit for Other Dependents and Credit for Child and Dependent Care expenses, and claim them if they qualify. Though taxpayers abroad often qualify, the calculation of these credits differs depending upon whether they lived in the U.S. for more than half of 2023. For more information, see the instructions to Schedule 8812, Credits for Qualifying Children and Other Dependents, and the instructions to Form 2441, Child and Dependent Care Expenses.

Reporting required for foreign accounts and assets

U.S. citizens or resident aliens’ world-wide income is generally subject to U.S. income tax, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B, Interest and Ordinary Dividends, to their Form 1040 series tax return. Part III of Schedule B asks about the existence of foreign accounts such as bank and securities accounts and usually requires U.S. citizens to report the country in which each account is located.

In addition, certain taxpayers may also have to complete and attach to their return Form 8938, Statement of Specified Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. For details, see the instructions for this form.

Further, separate from reporting specified foreign financial assets on a tax return, certain foreign financial accounts, such as bank accounts or brokerage accounts, must be reported by electronically filing Form 114, Report of Foreign Bank and Financial Accounts (FBAR), with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The FBAR requirement applies to U.S. persons with an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2023.

The IRS encourages U.S. persons with foreign assets, even relatively small ones, to check if this filing requirement applies to them. The form is available only through the Bank Secrecy Act E-Filing System. The deadline for filing the annual FBAR is April 15, 2024. However, FinCEN grants those who missed the April deadline an automatic extension until Oct. 15, 2024. There’s no need to request this extension. See FinCEN’s website for further information.

Report in U.S. dollars

Any income received or deductible expenses paid in foreign currency must be reported on a U.S. tax return in U.S. dollars. Likewise, any tax payments must be made in U.S. dollars.

IRS Form 8938 requires the use of a Dec. 31 exchange rate for all transactions, regardless of the actual exchange rate on the date of the transaction. Generally, the IRS accepts any posted exchange rate that is used consistently. For more information on exchange rates, see Foreign currency and currency exchange rates.

The instructions for FinCEN Form 114 state that for accounts with non-United States currency, a filer should convert the maximum account value into United States dollars by using the U.S. Treasury Department’s Bureau of the Fiscal Service’s exchange rates as of the last day of the calendar year at issue. If no Bureau of the Fiscal Service rate is available, a filer can use another verifiable foreign currency exchange rate.

Making tax payments

To ensure tax payments are credited promptly, the IRS urges taxpayers to consider the convenience of paying their U.S. tax obligations electronically. The fastest and easiest way to do that is via their IRS Online Account, IRS Direct Pay and the Electronic Federal Tax Payment System (EFTPS). These and other electronic payment options are available at IRS.gov/payments.

Reporting for expatriates

Taxpayers who relinquished their U.S. citizenship or ceased to be lawful permanent residents of the U.S. during 2023 must file a dual-status tax return and attach Form 8854, Initial and Annual Expatriation Statement. A copy of Form 8854 must also be filed with the IRS by the due date of the tax return (including extensions). See the instructions for this form and Notice 2009-85, Guidance for Expatriates Under Section 877A, for further details.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811   

Source: IRS      

Got a tax bill for your federal tax return? One of the best tools you can use to manage your tax account is an IRS online account. When you establish your online account, you have access to your notices, account information, transcripts, and you can obtain useful information to help keep you current on your tax obligations. If you receive a tax bill, we have several resources to help you resolve it.

Is the amount due on the tax bill accurate?

If yes, see our group of payment options under our Paying Taxes Get Help pages. Start with the I Can’t Pay My Taxes. Here you can see information about and steps to follow if you:

• Can pay the full amount now or can pay it within 120 dayNeed to make monthly payments.
• Want to apply for an Offer in Compromise that may allow you to pay less than the full amount you owe.
• Can’t make any sort of payment now

You can also visit IRS’s Payments page for payment options or see this Tax Time Guide: Using electronic payment and agreement options for taxpayers who owe can help avoid penalties and interest.

For more information on penalties and interest, visit IRS.gov.

If you have a balance due, don’t delay in trying to resolve it. Sometimes, the timing of your actions is very important and you don’t want to miss a deadline and lose certain taxpayer rights.

If no, see our I Need Help Resolving My Balance Due Get Help page.

This Get Help page can guide you through the steps to take if:

• Someone has stolen your identity.
• Your IRS account doesn’t show all payments you made to the IRS.
• You need to make a change to a tax return you’ve already filed.
• You filed a tax return with your spouse and all or part of your refund was applied to a debt only your spouse owes.

• You owe tax because your spouse didn’t report deductions or didn’t include income on your joint tax return.
• The person who prepared your tax return changed your tax return information without your permission.

If the IRS sent you a notice about something being incorrect on your return, see our Issues & Errors Get Help topic pages. You can also visit the TAS Digital Roadmap and enter your notice number to find out more information about it. Also check the IRS’s Help for taxpayers and tax professionals: Special filing season alerts page for special alerts related to current year tax return processing issues.

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Source: TAS      

Here are some simple things taxpayers can do throughout the year to make filing season less stressful.

Organize tax records. Create a system that keeps all important information together. Taxpayers can use a software program for electronic recordkeeping or store paper documents in clearly labeled folders. They should add tax records to their files as they receive them. Organized records will make tax return preparation easier and may help taxpayers discover overlooked deductions or credits.

Identify filing status. A taxpayer's filing status determines their filing requirements, standard deduction, eligibility for certain credits and the correct amount of tax they should pay. If more than one filing status applies to a taxpayer, they can get help choosing the best one for their tax situation with the IRS’s Interactive Tax Assistant, What is my filing status? Changes in family life — marriage, divorce, birth and death — may affect a person's tax situation, including their filing status and eligibility for certain tax credits and deductions.

Understand adjusted gross income (AGI). AGI and tax rate are important factors in figuring taxes. AGI is the taxpayer's income from all sources minus any adjustments. Generally, the higher a taxpayer's AGI, the higher their tax rate and the more tax they pay. Tax planning can include making changes during the year that lower a taxpayer's AGI.

Check withholding. Since federal taxes operate on a pay-as-you-go basis, taxpayers need to pay most of their tax as they earn income. Taxpayers should check that they're withholding enough from their pay to cover their taxes owed, especially if their personal or financial situations change during the year. To check withholding, taxpayers can use the IRS Withholding Estimator. If they want to change their tax withholding, taxpayers should provide their employer with an updated Form W-4.

Make address and name changes. Taxpayers should notify the United States Postal Service, employers and the IRS of any address change. To officially change a mailing address with the IRS, taxpayers must compete Form 8822, Change of Address, and mail it to the correct address for their area. For detailed instructions, see page 2 of the form. Report any name change to the Social Security Administration. Making these changes as soon as possible will help make filing their tax return easier.

Save for retirement. Saving for retirement can also lower a taxpayer's AGI. Certain contributions to a retirement plan at work and to a traditional IRA may also reduce taxable income.

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Source: IRS      

Taxpayers who Filed these Claims Mistakenly Need to Follow advice on Letters; consider Filing Amended Return or Talking to a Trusted Tax Professional

The Internal Revenue Service issued a consumer is alerting following ongoing concerns about a series of tax scams and inaccurate social media advice that led thousands of taxpayers to file inflated refund claims during the past tax season.

The IRS warned taxpayers not to fall for these scams centered around the Fuel Tax Credit, the Sick and Family Leave Credit and household employment taxes. The IRS has seen thousands of dubious claims come in where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.

The IRS continues to urge taxpayers to avoid these scams as myths continue to persist that these are ways to obtain a huge refund. Many of these scams were highlighted during this spring’s annual Dirty Dozen series, including the Fuel Tax Credit scam, bad social media advice and “ghost preparers.”

For taxpayers who did fall for these traps, they need to follow steps to verify their eligibility for the claim. Some taxpayers could also face steep financial penalties, potential follow-up audits or criminal action for improper claims. The IRS encourages people to review the guidelines, talk to a trusted tax preparer and, in some cases, file an amended return to remove claims for which they’re ineligible to avoid potential penalties.

“Scam artists and social media posts have perpetuated a number of false and misleading claims that have tricked well-meaning taxpayers into believing they’re entitled to big, windfall tax refunds,” said IRS Commissioner Danny Werfel. “These bad claims have been caught during our fraud review process. Taxpayers who filed these claims should realize they’ve been tricked, and they face an extensive review process and a long potential wait if they’re owed a refund for other things.”

Problem claims involve Fuel Tax Credit, Sick and Family Leave Credit, household employment taxes

The IRS has identified three common themes that continue to pop up among these bad refund claims. They involve legitimate tax provisions, but they are limited to very specialized situations. The vast majority of the related claims coming in do not qualify:

Fuel Tax Credit: This specialized credit is designed for off-highway business and farming use. Taxpayers need a business purpose and a qualifying business activity such as running a farm or purchasing aviation gasoline to be eligible for the credit. Most taxpayers don’t qualify for this credit.

Credits for Sick Leave and Family Leave: This specialized credit is available for self-employed individuals for 2020 and 2021 during the pandemic; the credit is not available for 2023 tax returns. The IRS is seeing repeated instances where taxpayers are incorrectly using Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to incorrectly claim a credit based on income earned as an employee and not as a self-employed individual.

Household employment taxes: Taxpayers “invent” fictional household employees and then file Schedule H (Form 1040), Household Employment Taxes, to claim a refund based on false sick and family medical leave wages they never paid.

“These improper claims have been fueled by social media and people sharing bad advice,” Werfel said. “Scam artists constantly prey on people’s hopes and try to use the complexity of the tax system to convince people there are secret ways to get a big refund. These three credits illustrate that it’s important to carefully review the tax return for accuracy before filing and rely on the advice of a trusted tax professional, not some fly-by-night preparer or a questionable source they hear on social media.”

Potentially fraudulent refunds frozen; improper claims could face follow-up compliance action

Given the questionable nature of many of these claims, the IRS has frozen the refunds for these taxpayers. Taxpayers have to follow several specific steps to resolve these issues.

Taxpayers whose refunds have been frozen will generally receive one of several letters from the IRS asking for additional information.

Initially, taxpayers may have received a letter asking them to verify their identity. In these situations, if they filed the return in question, they should review whether their tax return is accurate. For example, did they actually qualify for one of the three credits listed above? Or if they used a tax preparer, check to see if the preparer actually signed the tax return. When tax preparers don’t sign a tax return, it is a red flag that the taxpayer is being misled.

Taxpayers who improperly claimed these credits do not need to visit a Taxpayer Assistance Center (TAC) to verify their identity. However, they may need to amend their tax return to remove the improperly claimed credit.

Taxpayers should use the IRS.gov tool Should I file an amended return? to determine if they should amend their return. If they submit an amended return, they do not need to visit a TAC.

A number of taxpayers who initially received correspondence asking about their identity may be receiving an additional letter seeking additional documentation to show they actually qualify for the credits they claimed. Taxpayers who verified their identity in-person may receive these letters. Taxpayers who haven’t verified their identity yet and receive one of these letters asking for additional documentation should follow the advice on the most recent letter.

These letters – IRS Notice 3176c – apply to potentially frivolous tax returns, which includes incorrect claims for Fuel Tax Credits, Sick and Family Leave Credits and household employment taxes.

Legitimate taxpayers qualifying for these credits can submit documentation showing they actually qualify for the credit. But people who don’t qualify for these credits risk facing a penalty of up to $5,000 per return for filing a frivolous claim. Taxpayers submitting inaccurate claims also face the risk of an audit. Those who knowingly filed a false tax return also face potential criminal prosecution.

To avoid penalties and potential follow-up action by the IRS, taxpayers who incorrectly filed for these claims need to promptly submit an accurate tax return without the claims. Taxpayers can visit the IRS.gov tool Should I file an amended return? to determine if they should amend their return. If they submit an amended return, they do not need to visit an IRS Taxpayer Assistance Center. Taxpayers in this situation can also visit a trusted tax professional for advice.

The IRS noted that the entire refund amount is frozen on returns with these bad claims. Taxpayers will not receive any portion of their refund, even if they also claimed legitimate credits.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

Some unscrupulous promoters have misrepresented eligibility rules for the Employee Retention Credit, luring well-intentioned businesses to claim the credit when they don’t qualify. The IRS is highlighting seven suspicious signs and urging businesses to seek a trusted tax professional to resolve an incorrect claim if they need to.

With ERC compliance work expanding, the IRS reminds businesses to quickly pursue the claim withdrawal process if they need to ask the IRS not to process an ERC claim for any tax period that hasn’t been paid yet.

Signs an ERC claim could be incorrect

These seven suspicious signs could indicate an incorrect claim:

• Too many quarters claimed. Some promoters urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon. Employers should carefully review their eligibility for each quarter.
• Government orders that don’t qualify. Some promoters told employers they can claim the ERC if any government order was in place in their area, even if their operations weren’t affected or if they chose to suspend their business operations voluntarily. This is false. Some promoters also suggested that an employer qualifies based on communications from the Occupational Safety and Health Administration. This is generally not true. Employers should review the frequently asked questions about ERC – Qualifying government orders for more information and helpful examples for these topics.
• Too many employees and wrong calculations. Employers should be cautious about claiming the ERC for all wages paid to every employee on their payroll. Employers need to meet certain rules for wages to be considered qualified wages, depending on the tax period. Employers should review all calculations to avoid overclaiming the credit. They should not use the same credit amount across multiple tax periods for each employee. For details on credit amounts, see the ERC 2020 vs 2021 comparison chart.
• Supply chain issues. A supply chain disruption by itself doesn’t qualify an employer for ERC. An employer needs to ensure that their supplier’s government order meets the requirements. Employers should carefully review the rules on supply chain issues and examples in the 2023 legal memo on supply chain disruptions.
• Claims for too much of a tax period. It's possible, but uncommon, for an employer to qualify for ERC for the entire calendar quarter if their business operations were fully or partially suspended due to a government order during a portion of a calendar quarter. A business in this situation can claim ERC only for wages paid during the suspension period, not the whole quarter. Businesses should check their claim for overstated qualifying wages and keep payroll records that support their claim.
• Didn’t pay wages or didn’t exist during eligibility period. Employers can only claim ERC for tax periods when they paid wages to employees. Records available to the IRS show some businesses that claimed ERC didn’t have any employees or they claimed ERC for tax periods before the business existed.
• Promoter says there’s nothing to lose. Businesses should be on high alert with any ERC promoter who urged them to claim ERC because they “have nothing to lose.” Businesses that incorrectly claim the ERC risk repayment, penalties, interest, audit and other expenses.

The IRS has an interactive ERC Eligibility Checklist that tax professionals and taxpayers can use to check potential eligibility for ERC. It’s also available as a printable guide.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

The Internal Revenue Service announces that interest rates will remain the same for the calendar quarter beginning July 1, 2024.

For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily. Here is a complete list of the new rates:

• 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
• 5.5% for the portion of a corporate overpayment exceeding $10,000.
• 8% for underpayments (taxes owed but not fully paid).
• 10% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced are computed from the federal short-term rate determined during April 2024. See the revenue ruling for details.

Revenue Ruling 2024-11 announcing the rates of interest will appear in Internal Revenue Bulletin 2024-24, dated June 10, 2024.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

As National Small Business Week continues, the Internal Revenue Service urges entrepreneurs to put in place data security safeguards protecting their financial, personal and employee information from scams and cybercriminals hunting for easy targets.

The IRS continues to see instances where small businesses and others face a variety of financial and identity theft related schemes that try to obtain information that can be used to file fake small business tax returns, rob business bank accounts and create stolen identities.

For example, “phishing” and “spearphishing” scams continue to target small businesses as well as tax professionals and individual taxpayers. Small businesses continue to be targets of Form W-2 scams where identity thieves try to trick company leaders into sharing sensitive data.

“Each year, the IRS sees thousands of attempts trying to attack small business owners and other taxpayers. Those who are victimized by these schemes can see serious financial consequences,” said IRS Commissioner Danny Werfel. “Cybercriminals are relentless, and anyone can be a target. The best way business owners and individuals can protect themselves is to stay well informed on the latest scams, continuously protect their computers and smart phones and install data security at home and in the business to protect sensitive information.”

Cybercriminals never sleep

Data theft and cyberattacks are global threats that can use scams and fraud schemes to victimize individuals and small businesses any time of the day or night. Cybercriminals are pros at covering their tracks and can be hiding anywhere in the world.

They use patterns of human behavior and computer systems to steal financial and personal information and snag victims. If small businesses don't properly protect their computer systems and train their staff on smart data protection practices, owners become easy targets for bad actors looking to break into bank accounts, steal identities or gain access to other sensitive financial or personal information.

The IRS urges the small business community to stay on guard against cybercrime and to understand how important it is to safeguard their business data against identity theft. They should employ robust technology tools and services to rigorously safeguard financial and trade information, as well as protect data directly connected to customers, employees and business partners.

Cybercriminals are constantly looking for weaknesses to exploit. By implementing basic cybersecurity measures and training employees, small business owners can significantly reduce their risk of a costly attack. These attacks can target a business’s most valuable data, including:

• Credit card and payment information. A data breach can damage a business’s reputation and leave owners liable for fraudulent charges.
• Business and employee identities. Stolen information can be used for a variety of crimes, including identity theft and fraud.
• Tax and financial information. Hackers can use this information to file fraudulent tax returns, costing a business owner time and money to resolve.

Taking basic cybersecurity steps early and staying vigilant, armed with information about the latest scams, will help safeguard entrepreneurs’ business investments, customers and employees.

How fraudsters target victims: scams, scams and more scams

Fraudsters and cybercriminals are clever manipulators of human behavior. They use a potential victim’s natural desire to socially interact and communicate with others as an open door to attempt data and identity theft. Using common technologies like email, texting and social media, fraudsters go “phishing” by sending messages to thousands of targets at once that are designed to steal personal information directly, or by getting the victim to click on an embedded link or attachment.

Using email as a method to manipulate behavior through “phishing” remains a timeless tactic by thieves hunting for potential victims. Small businesses should remain vigilant against tax-related “phishing” email scams, which can often be cleverly written to fool employees into opening harmful embedded links or attachments. Small businesses and consumers are encouraged to send IRS-related scams to phishing@irs.gov.

One such example is the Form W-2 theft scheme. While versions of these scams evolve and change over time, in the most common version, a thief poses as a high-ranking company executive who emails payroll employees and asks for a list of employees and their W-2s, which contain sensitive tax and financial data. As these scams become more sophisticated, small businesses may not be aware they’ve been the victim of a tax scam until fraudulent tax returns begin appearing with employees' names.

There are special reporting procedures for employers who experience the W-2 scam. Visit Identity Theft Central's business section for additional information.

The Dirty Dozen

The IRS publishes the Dirty Dozen yearly, a list of prevalent scams and fraudulent schemes that threaten small businesses and other taxpayers. These threats include unscrupulous and aggressive promoters of questionable claims for the Employee Retention Credit (ERC).

These questionable ERC claims often put unsuspecting businesses and other entities in jeopardy of penalties, interest and potentially even criminal prosecution for claiming the ERC when they don’t qualify and aren’t entitled to it.

The Dirty Dozen also provides information on what to do if an individual or small business owner suspects they may be a possible victim. For example, businesses still have an option to pull back on any unprocessed questionable ERC claims and should quickly pursue the claim withdrawal process for any tax period that hasn’t been paid yet.

Business owners can use the Dirty Dozen as a starting place for their own research on popular scams from other trusted sources.

One of the most egregious scams reported by the Dirty Dozen currently impacting small businesses is the "new client” spearphishing scam. Spearfishing targets specific individuals, organizations or businesses with malicious emails or text messages.

In the “new client” scam, cybercriminals present themselves as a new, potential client to a known tax professional or business owner, asking them to respond to their emails. If the unwitting preparer or business owner responds, the criminal then sends a malicious attachment or website address that can compromise the victim’s computer systems and allows the attacker to access sensitive customer and financial information. Here are some red flags for which to watch out:

• Grammatical oddities. Poorly written emails with unusual word choices are a serious red flag.
• Suspicious requests. Business owners should always be wary of any unusual requests or sharing information before verifying the sender's legitimacy.
• Spoofed emails. Scammers can mimic previous customer emails, making them appear genuine. Don't be fooled – verify the sender's address independently.

By staying alert and understanding these tactics, small business owners can protect themselves and their customers from falling victim to the "new client" scam. It’s always better to be cautious than compromised.

Don't be an easy target, learn cybersecurity basics

Small business owners are strongly encouraged to learn as much as possible about cybersecurity best practices, even when day-to-day information technology protection is outsourced. The IRS recommends business owners implement the Best Practices published by the U.S. Federal Trade Commission. Many will be familiar, common-sense habits and techniques, but don’t take them for granted. What works at home, also works for businesses.

Protect business files and devices:

• Update software. This includes apps, web browsers and computer operating systems. Set updates to happen automatically.
• Secure business files. Back up important files offline, on an external hard drive or in the cloud. Also make sure to store paper files securely.
• Require passwords. Use passwords for all laptops, tablets and smartphones. Don’t leave these devices unattended in public places.
• Encrypt devices. Encrypt devices and other media that contain sensitive personal information. This includes laptops, tablets, smartphones, removable drives, backup tapes and cloud storage solutions.
• Use multi-factor authentication. Require multi-factor authentication to access areas of your network with sensitive information. This requires additional steps beyond logging in with a password such as a temporary code on a smartphone or a key that’s inserted into a computer.

Protect the business wireless network:

• Secure the business router. Change the default name and password, turn off remote management and log out as the administrator once the router is set up.
• Use at least WPA2 encryption. Make sure the router offers WPA2 or WPA3 encryption and that the encryption setting is turned on. Encryption protects information sent over the network so it cannot be read by outsiders.

Make smart security “business as usual:”

• Require strong passwords. A strong password is at least 12 characters that are a mix of numbers, symbols and capital and lowercase letters. Never reuse passwords and do not share them on a phone, in texts or by email. Limit the number of unsuccessful log-in attempts to limit password-guessing attacks.
• Train the staff. Create a culture of security by implementing a regular schedule of employee training. Stay informed about the latest data security risks and vulnerabilities, and keep employees informed. Consider blocking network access to employees who disregard data security measures and training.
• Have a plan. Have a plan for saving data, running the business and notifying customers if there is a data breach. The FTC’s Data Breach Response: A Guide for Business provides steps a business owner can take in the event of a cyber breach.

More information on how business owners can protect their investments, customers and employees from cybercriminals is available at FTC's Cybersecurity for Small businesses.

What to do next if a small business is a victim of identity theft

The IRS has also published Form 14039-B, Business Identity Theft Affidavit, allowing small businesses to proactively report possible identity theft to the IRS when, for example, an e-filed tax return is rejected. Small businesses should file Form 14039-B if they receive a:

• Rejection notice for an electronically filed return because a return is already on file for that same period.
• Notice about a tax return that the entity didn't file.
• Notice about Forms W-2 filed with the Social Security Administration that the entity didn't file.
• Notice of a balance due that is not owed.

If a small business owner has been targeted by tax fraud, the IRS offers Form 14039-B to help resolve the issue quickly. This form allows the IRS to streamline communication and work faster to fix the problem. However, small businesses should not use Form 14039-B if they are the victims of a data breach with no tax-related impact. See Identity Theft Central's businesses section for more details.

The IRS also urges small business owners to keep their Employer Identification Number (EIN) application information current. Changes of address or responsible party may be reported using Form 8822-B, Change of Address or Responsible Party - Business. Changes in the responsible party must be reported to the IRS within 60 days. Current information can help the IRS find a point of contact to resolve identity theft and other issues.

Report spearphishing and other scams

Business owners should report scams immediately by sending the suspicious email or a copy of the text message as an attachment to phishing@irs.gov. The report should include the sender’s email address, the caller’s phone number, date, time and the phone number or email address that received the message.

The Report phishing and online scams page at IRS.gov provides more information on what to look out for and how to report phishing and scams.

Taxpayers can also report scams to the Treasury Inspector General for Tax Administration (TIGTA) or the Internet Crime Complaint Center. Another useful tool is the Federal Communications Commission's Smartphone Security Checker.

And depending on the scam in question, business owners and individuals may also send the information to the IRS Whistleblower Office for a possible monetary award.

Reporting scams helps identify new emerging threats. The Office of Fraud Enforcement’s Emerging Threat Mitigation Team partners with internal and external stakeholders to identify and mitigate threats to tax administration.

To report abusive promoters and preparers, complete the online Form 14242 – Report Suspected Abusive Tax Promotions or Preparers, or mail or fax a completed Form 14242 and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677 3405
Fax: 877-477-9135

Taxpayers and tax professionals can also submit this information to the IRS Whistleblower Office, where they may be eligible for an award. For details, please refer to the sections on Abusive tax schemes and abusive tax return preparers.

If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

Source : IRS     

It’s important that U.S. citizens and resident aliens living abroad understand their tax obligations.

Their worldwide income -- including wages, unearned income and tips -- is subject to U.S. income tax, regardless of where they live or where they earn their income. They also have the same income tax filing requirements as U.S. citizens or resident aliens living in the United States.

An income tax filing requirement applies even if a taxpayer qualifies for tax benefits such as the Foreign earned income exclusion or the Foreign tax credit, which reduce or eliminate U.S. tax liability. These tax benefits are available only if the eligible taxpayer files a U.S. income tax return.

Taxpayers living outside of the U.S. and Puerto Rico have an automatic extension to file – but not to pay

A taxpayer has an automatic two-month extension to June 17, 2024, if both their tax home and abode are outside the United States and Puerto Rico. Even with an extension, a taxpayer will have to pay interest on any tax that wasn’t paid by the regular April due date.

Those serving in the military outside the U.S. and Puerto Rico on the regular due date of their tax return also qualify for the extension to June 17, 2024. Taxpayers should attach a statement to their tax return if one of these two situations applies. More information is in the instructions for Form 1040 and Form 1040-SR, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, and Publication 519, U.S. Tax Guide for Aliens.

Reporting requirement for foreign accounts and assets

Federal law requires U.S. citizens and resident aliens to report their worldwide income, including income from foreign trusts and foreign bank and other financial accounts.

• Schedule B (Form 1040), Interest and Ordinary Dividends – In most cases, affected taxpayers attach Schedule B to their federal return to report foreign assets. Part III of Schedule B asks about the existence of foreign accounts such as bank and securities accounts and usually requires U.S. citizens and resident aliens to report the country in which each account is located.

• Form 8938, Statement of Foreign Financial Assets – Some taxpayers may also need to attach Form 8938 to their return to report specified foreign financial assets if the total value of those assets exceeds certain thresholds. The instructions for this form have the details.

People must also report foreign assets of $10,000 or more to the Treasury Department

U.S. persons with an interest in or signature or other authority over foreign financial accounts where the total value exceeded $10,000 at any time during 2023 must also file a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts with the Treasury Department.

The form is available only through the BSA E-filing System website.

The deadline for filing the annual Report of Foreign Bank and Financial Accounts was April 15, 2024. U.S. persons who missed the April deadline have an automatic extension until Oct. 15, 2024, to file the FBAR.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

Taxpayers and tax professionals should remain alert and aware of these common scams, schemes and cons to avoid losing money, personal information or client data.

Social media: Fraudulent form filing and bad advice

Social media can circulate inaccurate or misleading tax information, and the IRS has recently seen schemes that encourage people to submit false, inaccurate information in hopes of getting a refund or taking advantage of a credit, such as the Employee Retention Credit. Taxpayers should always remember that if something sounds too good to be true, it probably is. Taxpayers can follow the IRS on X (formerly Twitter) with @IRStaxsecurity for help avoiding common scams that could put their money and information at risk.

Online Account help from third-party scammers

Swindlers pose as a "helpful" third party and offer to create a taxpayer's IRS Online Account at IRS.gov. The scammers making these offers are trying to steal a taxpayer's personal information. Taxpayers should access their account directly through IRS.gov.

Phishing and spearphishing

Taxpayers and tax professionals should be alert to fake communications posing as legitimate organizations in the tax and financial community, including the IRS and the states. These messages arrive in the form of an unsolicited text or email to lure victims into providing valuable personal and financial information that can lead to identity theft.

Spearphishing is a tailored phishing attempt targeting a specific organization or business. Tax professionals need to be very careful about spearphishing because of the risk of a data breach. A successful spearphishing attack can ultimately steal client data and the tax preparer's identity, allowing the thief to file fraudulent returns.

Unscrupulous tax return preparers

Most tax preparers provide outstanding and professional service. However, people should be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. A major red flag or bad sign is when the tax preparer is unwilling to sign the dotted line. Avoid these "ghost" preparers, who will prepare a tax return but refuse to sign or include their IRS Preparer Tax Identification Number as required by law. Taxpayers should never sign a blank or incomplete return.

Offer in compromise mills

Offers in compromise are an important program to help people who can't pay to settle their federal tax debts for less than the full amount owed. But offer in compromise “mills" make exaggerated claims with ads about settling tax debts inexpensively. They can aggressively promote offers in compromise in misleading ways to people who clearly don't meet the qualifications. These “mills” often charge excessive fees, costing taxpayers thousands of dollars for a service they could have gotten directly from the IRS. A taxpayer can check their eligibility for free with the IRS Offer in Compromise Pre-Qualifier tool.

Employee Retention Credit scams

Some unscrupulous promoters have misrepresented eligibility rules for the Employee Retention Credit, luring well-intentioned businesses to claim the credit when they don’t qualify. The IRS is highlighting seven suspicious signs and urging businesses to seek a trusted tax professional to resolve an incorrect claim if they need to.

With ERC compliance work expanding, the IRS reminds businesses to quickly pursue the claim withdrawal process if they need to ask the IRS not to process an ERC claim for any tax period that hasn’t been paid yet.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source: IRS      

As National Small Business Week continues, the Internal Revenue Service urges entrepreneurs to put in place data security safeguards protecting their financial, personal and employee information from scams and cybercriminals hunting for easy targets.

The IRS continues to see instances where small businesses and others face a variety of financial and identity theft related schemes that try to obtain information that can be used to file fake small business tax returns, rob business bank accounts and create stolen identities.

For example, “phishing” and “spearphishing” scams continue to target small businesses as well as tax professionals and individual taxpayers. Small businesses continue to be targets of Form W-2 scams where identity thieves try to trick company leaders into sharing sensitive data.

“Each year, the IRS sees thousands of attempts trying to attack small business owners and other taxpayers. Those who are victimized by these schemes can see serious financial consequences,” said IRS Commissioner Danny Werfel. “Cybercriminals are relentless, and anyone can be a target. The best way business owners and individuals can protect themselves is to stay well informed on the latest scams, continuously protect their computers and smart phones and install data security at home and in the business to protect sensitive information.”

Cybercriminals never sleep

Data theft and cyberattacks are global threats that can use scams and fraud schemes to victimize individuals and small businesses any time of the day or night. Cybercriminals are pros at covering their tracks and can be hiding anywhere in the world.

They use patterns of human behavior and computer systems to steal financial and personal information and snag victims. If small businesses don't properly protect their computer systems and train their staff on smart data protection practices, owners become easy targets for bad actors looking to break into bank accounts, steal identities or gain access to other sensitive financial or personal information.

The IRS urges the small business community to stay on guard against cybercrime and to understand how important it is to safeguard their business data against identity theft. They should employ robust technology tools and services to rigorously safeguard financial and trade information, as well as protect data directly connected to customers, employees and business partners.

Cybercriminals are constantly looking for weaknesses to exploit. By implementing basic cybersecurity measures and training employees, small business owners can significantly reduce their risk of a costly attack. These attacks can target a business’s most valuable data, including:

• Credit card and payment information. A data breach can damage a business’s reputation and leave owners liable for fraudulent charges.
• Business and employee identities. Stolen information can be used for a variety of crimes, including identity theft and fraud.
• Tax and financial information. Hackers can use this information to file fraudulent tax returns, costing a business owner time and money to resolve.

Taking basic cybersecurity steps early and staying vigilant, armed with information about the latest scams, will help safeguard entrepreneurs’ business investments, customers and employees.

How fraudsters target victims: scams, scams and more scams

Fraudsters and cybercriminals are clever manipulators of human behavior. They use a potential victim’s natural desire to socially interact and communicate with others as an open door to attempt data and identity theft. Using common technologies like email, texting and social media, fraudsters go “phishing” by sending messages to thousands of targets at once that are designed to steal personal information directly, or by getting the victim to click on an embedded link or attachment.

Using email as a method to manipulate behavior through “phishing” remains a timeless tactic by thieves hunting for potential victims. Small businesses should remain vigilant against tax-related “phishing” email scams, which can often be cleverly written to fool employees into opening harmful embedded links or attachments. Small businesses and consumers are encouraged to send IRS-related scams to phishing@irs.gov.

One such example is the Form W-2 theft scheme. While versions of these scams evolve and change over time, in the most common version, a thief poses as a high-ranking company executive who emails payroll employees and asks for a list of employees and their W-2s, which contain sensitive tax and financial data. As these scams become more sophisticated, small businesses may not be aware they’ve been the victim of a tax scam until fraudulent tax returns begin appearing with employees' names.

There are special reporting procedures for employers who experience the W-2 scam. Visit Identity Theft Central's business section for additional information.

The Dirty Dozen

The IRS publishes the Dirty Dozen yearly, a list of prevalent scams and fraudulent schemes that threaten small businesses and other taxpayers. These threats include unscrupulous and aggressive promoters of questionable claims for the Employee Retention Credit (ERC).

These questionable ERC claims often put unsuspecting businesses and other entities in jeopardy of penalties, interest and potentially even criminal prosecution for claiming the ERC when they don’t qualify and aren’t entitled to it.

The Dirty Dozen also provides information on what to do if an individual or small business owner suspects they may be a possible victim. For example, businesses still have an option to pull back on any unprocessed questionable ERC claims and should quickly pursue the claim withdrawal process for any tax period that hasn’t been paid yet.

Business owners can use the Dirty Dozen as a starting place for their own research on popular scams from other trusted sources.

One of the most egregious scams reported by the Dirty Dozen currently impacting small businesses is the "new client” spearphishing scam. Spearfishing targets specific individuals, organizations or businesses with malicious emails or text messages.

In the “new client” scam, cybercriminals present themselves as a new, potential client to a known tax professional or business owner, asking them to respond to their emails. If the unwitting preparer or business owner responds, the criminal then sends a malicious attachment or website address that can compromise the victim’s computer systems and allows the attacker to access sensitive customer and financial information. Here are some red flags for which to watch out:

• Grammatical oddities. Poorly written emails with unusual word choices are a serious red flag.
• Suspicious requests. Business owners should always be wary of any unusual requests or sharing information before verifying the sender's legitimacy.
• Spoofed emails. Scammers can mimic previous customer emails, making them appear genuine. Don't be fooled – verify the sender's address independently.

By staying alert and understanding these tactics, small business owners can protect themselves and their customers from falling victim to the "new client" scam. It’s always better to be cautious than compromised.

Don't be an easy target, learn cybersecurity basics

Small business owners are strongly encouraged to learn as much as possible about cybersecurity best practices, even when day-to-day information technology protection is outsourced. The IRS recommends business owners implement the Best Practices published by the U.S. Federal Trade Commission. Many will be familiar, common-sense habits and techniques, but don’t take them for granted. What works at home, also works for businesses.

Protect business files and devices:

• Update software. This includes apps, web browsers and computer operating systems. Set updates to happen automatically.
• Secure business files. Back up important files offline, on an external hard drive or in the cloud. Also make sure to store paper files securely.
• Require passwords. Use passwords for all laptops, tablets and smartphones. Don’t leave these devices unattended in public places.
• Encrypt devices. Encrypt devices and other media that contain sensitive personal information. This includes laptops, tablets, smartphones, removable drives, backup tapes and cloud storage solutions.
• Use multi-factor authentication. Require multi-factor authentication to access areas of your network with sensitive information. This requires additional steps beyond logging in with a password such as a temporary code on a smartphone or a key that’s inserted into a computer.

  Protect the business wireless network:

• Secure the business router. Change the default name and password, turn off remote management and log out as the administrator once the router is set up.
• Use at least WPA2 encryption. Make sure the router offers WPA2 or WPA3 encryption and that the encryption setting is turned on. Encryption protects information sent over the network so it cannot be read by outsiders.

• Make smart security “business as usual:”

• Require strong passwords. A strong password is at least 12 characters that are a mix of numbers, symbols and capital and lowercase letters. Never reuse passwords and do not share them on a phone, in texts or by email. Limit the number of unsuccessful log-in attempts to limit password-guessing attacks.
• Train the staff. Create a culture of security by implementing a regular schedule of employee training. Stay informed about the latest data security risks and vulnerabilities, and keep employees informed. Consider blocking network access to employees who disregard data security measures and training.
• Have a plan. Have a plan for saving data, running the business and notifying customers if there is a data breach. The FTC’s Data Breach Response: A Guide for Business provides steps a business owner can take in the event of a cyber breach.

• More information on how business owners can protect their investments, customers and employees from cybercriminals is available at FTC's Cybersecurity for Small businesses.

  What to do next if a small business is a victim of identity theft

  The IRS has also published Form 14039-B, Business Identity Theft Affidavit, allowing small businesses to proactively report possible identity theft to the IRS when, for example, an e-filed tax return is rejected. Small businesses should file Form 14039-B if they receive a:

• Rejection notice for an electronically filed return because a return is already on file for that same period.
• Notice about a tax return that the entity didn't file.
• Notice about Forms W-2 filed with the Social Security Administration that the entity didn't file.
• Notice of a balance due that is not owed.

• If a small business owner has been targeted by tax fraud, the IRS offers Form 14039-B to help resolve the issue quickly. This form allows the IRS to streamline communication and work faster to fix the problem. However, small businesses should not use Form 14039-B if they are the victims of a data breach with no tax-related impact. See Identity Theft Central's businesses section for more details.

  The IRS also urges small business owners to keep their Employer Identification Number (EIN) application information current. Changes of address or responsible party may be reported using Form 8822-B, Change of Address or Responsible Party - Business. Changes in the responsible party must be reported to the IRS within 60 days. Current information can help the IRS find a point of contact to resolve identity theft and other issues.

  Report spearphishing and other scams

  Business owners should report scams immediately by sending the suspicious email or a copy of the text message as an attachment to phishing@irs.gov. The report should include the sender’s email address, the caller’s phone number, date, time and the phone number or email address that received the message.

  The Report phishing and online scams page at IRS.gov provides more information on what to look out for and how to report phishing and scams.

  Taxpayers can also report scams to the Treasury Inspector General for Tax Administration (TIGTA) or the Internet Crime Complaint Center. Another useful tool is the Federal Communications Commission's Smartphone Security Checker.

  And depending on the scam in question, business owners and individuals may also send the information to the IRS Whistleblower Office for a possible monetary award.

  Reporting scams helps identify new emerging threats. The Office of Fraud Enforcement’s Emerging Threat Mitigation Team partners with internal and external stakeholders to identify and mitigate threats to tax administration.

  To report abusive promoters and preparers, complete the online Form 14242 – Report Suspected Abusive Tax Promotions or Preparers, or mail or fax a completed Form 14242 and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

  Mail:

  Internal Revenue Service Lead Development Center
  Stop MS5040
  24000 Avila Road
  Laguna Niguel, California 92677 3405
  Fax: 877-477-9135

  Taxpayers and tax professionals can also submit this information to the IRS Whistleblower Office, where they may be eligible for an award. For details, please refer to the sections on Abusive tax schemes and abusive tax return preparers.

  If you have any questions about essential accounting for your business, domestic taxes, international taxes, representation before the IRS, tax implications of real estate transactions or financial statements, call us at +1-305-274-5811.

  Fuente : IRS     

IRS sends notices and letters when it needs to ask a question about a taxpayer’s federal tax return, let them know about a change to their account or request a payment. Don’t panic if something comes in the mail from the IRS – they’re here to help.

When a taxpayer receives mail from the IRS, they should:

Read the letter carefully. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes any steps the taxpayer needs to take. A notice may reference changes to a taxpayer's account, taxes owed, a payment request or a specific issue on a tax return. Taking prompt action could minimize additional interest and penalty charges.

Review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return and keep it for their records. Typically, a taxpayer will need to act only if they don't agree with the information, if the IRS asked for more information or if they have a balance due.

Take any requested action, including making a payment. The IRS and authorized private debt collection agencies do send letters by mail. Taxpayers can also view digital copies of select IRS notices by logging into their IRS Online Account. The IRS offers several options to help taxpayers struggling to pay a tax bill.

Reply only if instructed to do so. Taxpayers don't need to reply to a notice unless specifically told to do so. There is usually no need to call the IRS. If a taxpayer does need to call the IRS, they should use the number in the upper right-hand corner of the notice and have a copy of their tax return and letter.

Let the IRS know of a disputed notice. If a taxpayer doesn't agree with the IRS, they should follow the instructions in the notice to dispute what the notice says. The taxpayer should include information and documents for the IRS to review when considering the dispute.

Keep the letter or notice for their records. Taxpayers should keep notices or letters they receive from the IRS. These include adjustment notices when the IRS takes action on a taxpayer's account. Taxpayers should keep records for three years from the date they filed the tax return.

Watch for scams

The IRS will never contact a taxpayer using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure whether they owe money to the IRS can view their tax account information on IRS.gov.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811

Source : IRS      

If you are an employer who provides childcare services to your employees, you might be eligible for the Employer-Provided Childcare Credit. The credit is an incentive for taxpayers to provide childcare services to their employees.

To be eligible for the credit, an employer must have paid or incurred qualified childcare expenditures during the tax year to provide childcare services to employees.

Qualified childcare expenditures are:

1. Costs associated with acquiring, constructing, rehabilitating or expanding property used as the taxpayer’s qualified childcare facility.
2. Qualified childcare facility expenditures are operating expenses made by the taxpayer, including amounts paid to support childcare workers through training, scholarship programs, and providing increased compensation to employees with higher levels of childcare training.
3. Expenditures under a contract with a qualified childcare facility to provide childcare services to employees.
4. Qualified resource and referral expenditures which includes any amount paid or incurred under a contract to provide childcare resource and referral services to an employee.

To claim the credit, use Form 8882, Credit for Employer-Provided Childcare Facilities and Services.

The credit amount claimed may not exceed $150,000.

If you have any questions regarding Essential Business Accounting, Domestic Taxation, International Taxation, IRS Representation, U.S. Tax Implications of Real Estate Transactions or Financial Statements, please give us a call at +1-305-274-5811