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National Small Business Week: IRS Warns Entrepreneurs to Take Precautions on Data Security; Protect their Businesses, Employees, Customers

Posted by Admin Posted on May 15 2024

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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     

What Taxpayers Should Do if they Receive Mail from the IRS

Posted by Admin Posted on May 14 2024

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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      

Employer-Provided Childcare Credit

Posted by Admin Posted on May 14 2024

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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

 

Source : TAS     

Making Cents of the Educator Expense Deduction

Posted by Admin Posted on May 14 2024

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Did you know that if you’re an eligible educator, you can deduct up to $300 of unreimbursed business expenses? And if you and your spouse are both teachers and file jointly, that number goes up to $600.  

To be considered an eligible educator you must:  

  1. Work as a teacher, counselor, principal, or aid for students in kindergarten through 12 grade; and 
  1. Work at least 900 hours at a school certified by the state. 

Expenses might include professional development, books, supplies, software, or other equipment that you purchased for use in the classroom, but for which you did not receive any reimbursement. Make sure you keep your receipts and good records of your classroom expenses throughout the year to document your eligibility for this deduction at tax time.  

You can claim the Educator Expense Deduction regardless of whether you take the Standard Deduction or itemize your deductions, and even if you have filed for an extension on your taxes.  

You may also be eligible for other tax credits and deductions for pursuing higher education or job training. Check out the TAS Get Help page on Education Credits for information.  

Looking to get educated on tax issues? TAS is here to help. Check out our Get Help section for resources to make your tax filing easier or visit the news and information center to read the latest tax tips, blogs, alerts, and more.

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      

Taxpayers and Tax Pros: Beware of these Common Tax Scams

Posted by Admin Posted on May 14 2024

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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      

IRS Recommends Safeguarding Information in Casa of Natural Disasters

Posted by Admin Posted on May 14 2024

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The Internal Revenue Service reminds taxpayers that May kicks off the season of disaster preparation with National Wildfire Awareness Month and National Hurricane Preparedness Week, May 5-11.

With the tax deadline past and peak periods for disasters approaching, this is an ideal time to review and begin to protect important tax and financial information as part of a disaster emergency plan.

Disasters can have an immediate and lasting impact on individuals, organizations and businesses. Year-round preparation is critically important, and observing Hurricane Preparedness Week and Wildfire Awareness Month provides a perfect opportunity for an annual assessment of readiness. So far in 2024, the Federal Emergency Management Agency (FEMA) has issued 25 major disaster declarations in 15 states impacted by winter storms, flooding, tornadoes, wildfires, landslides and mudslides.

These are just some of the types of disasters and emergencies, whether natural or man-made, that can affect taxpayers. For current disaster declarations and information on how declarations are made, see FEMA’s Current Disasters Page.

The IRS offers tips which may help taxpayers protect personal financial and tax information in their preparedness planning. Taxpayers are also encouraged to visit Ready.gov, IRS.gov and FEMA.gov for additional disaster information.

Protect and make copies of important documents

Original documents such as tax returns, Social Security cards, marriage certificates, birth certificates and land ownership documents need to be secured in a waterproof container in a safe space. Taxpayers are encouraged to also make copies of these important documents and store them in a secondary location such as a safe deposit box or with a trusted person who lives in a different area. In addition, scanned documents can be stored on a flash drive for easy portability.

Keep a record of valuables

In this era of cell phone technology, it is highly recommended for taxpayers to use such devices to record high-value items. A simple list with current photos or videos may also help support claims for insurance or tax benefits after a disaster. The IRS disaster loss workbooks in Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) and Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook can help individuals and businesses make lists of belongings or business equipment.

Rebuilding records

Reconstructing or replacing records after a disaster may be required for tax purposes, claiming federal assistance or insurance reimbursement. The more accurately the loss is estimated, the more loan and grant money there may be available. Taxpayers who have lost some or all their records during a disaster should visit IRS’s Reconstructing Records After a Natural Disaster or Casualty Loss webpage as a first step.

Employers should check fiduciary bonds

Disasters can impact a business’ ability to make timely federal tax deposits. Employers using payroll service providers should check if the provider has a fiduciary bond in place that can protect the employer in the event of default by the payroll service provider. The IRS reminds employers to carefully choose their payroll service providers.

IRS can provide tax relief after a disaster

After FEMA issues a major disaster or an emergency measures declaration, the IRS may postpone certain tax filing and payment deadlines for taxpayers who reside or have a business in certain counties affected by the disaster. The IRS provides details on states and counties that have been issued relief on the IRS disaster relief page.

Taxpayers in the affected areas do not need to call to request this relief. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Those impacted by a disaster can contact the IRS disaster hotline at 866-562-5227 to ask their tax-related questions of an IRS specialist trained to handle disaster-related issues.

Taxpayers who do not reside or have a business in a covered disaster area but suffered impact from a disaster should call 866-562-5227 to find out if they qualify for disaster tax relief and to discuss other available options.

Associated research and disaster information

Taxpayers are encouraged to review publications and websites which may offer further assistance in advance preparation for disasters:

  • FEMA.gov
  • Publication 547, Casualties, Disasters, and Thefts
  • Publication 583, Starting a Business and Keeping Records
  • DisasterAssistance.gov
  • Ready.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     

IRS Encourages Tax-Exempt Organizations to File their Taxes Ahead of May 15 Deadline

Posted by Admin Posted on May 09 2024

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The Internal Revenue Service encouraged thousands of tax-exempt organizations to file their taxes ahead of their filing deadline.

The annual filing due date for certain returns filed by tax-exempt organizations is normally by the 15th day of the 5th month after the end of an organization's accounting period. Those operating on a calendar year (CY) basis must file a return by May 15. Returns due include:

  • Form 990-series annual information returns (Forms 990, 990-EZ, 990-PF).
  • Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ.
  • Form 990-T, Exempt Organization Business Income Tax Return (other than certain trusts).
  • Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code.

Mandatory electronic filing

Electronic filing provides fast acknowledgement that the IRS has received the return and reduces processing time, making compliance with reporting requirements easier. Note:

  • Organizations filing a Form 990, 990-EZ, 990-PF or 990-T for CY 2023 must file their returns electronically.
  • Private foundations filing a Form 4720 for CY 2023 must file the form electronically.
  • Charities and other tax-exempt organizations can file these forms electronically through an IRS authorized e-file provider.
  • Organizations eligible to submit a Form 990-N must do so electronically and can submit it through Form 990-N (e-Postcard) on IRS.gov.

Common errors

IRS encourages organizations to review their forms for accuracy and to submit complete returns. If an organization’s return is incomplete or the wrong return for the organization, the return will be rejected. Common errors include missing or incomplete schedules.

Extension of time to file

Tax-exempt organizations may request a six-month automatic extension by filing a Form 8868, Application for Extension of Time to File an Exempt Organization Return. In situations where tax is due, extending the time for filing a return does not extend the time for paying tax.

Pre-recorded workshops

IRS provides a series of pre-recorded online workshops to help exempt organizations comply with their filing requirements. These workshops are designed to assist officers, board members and volunteers with the steps they need to take to maintain their tax-exempt status, including filing annual information returns.

It's easy to stay up to date on tax information year-round with the IRS verified social media accounts and e-news services. Taxpayers can get tips, guidance and the latest tax law news delivered to their social feed or inbox.

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      

Last Chance to Claim the 2020 Recovery Rebate Credit

Posted by Admin Posted on May 09 2024

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The May 17, 2024 deadline is fast approaching for taxpayers who have not yet filed a 2020 tax return to claim a refund of withholdings, estimated taxes or their 2020 Recovery Rebate Credit. The IRS estimates that almost 940,000 of the nation’s taxpayers have unclaimed refunds totaling more than $1 billion for tax year 2020 and eligible non-filers in 2020 to claim their Recovery Rebate Credit before the May 17 deadline.

What is a Recovery Rebate Credit

During the COVID pandemic, the government issued stimulus checks (Economic Impact Payments) to tens of millions of taxpayers to minimize the negative economic impact of the pandemic. In 2020 and 2021, the IRS issued three rounds of payments: two payments for 2020 and one payment for 2021. But there are concerns that not every eligible person received their payments. If you are eligible for these payments but did not receive them, you can still file your 2020 or 2021 return and request the missing payments as a Recovery Rebate Credit. The Economic Impact Payments were advance payments of the Recovery Rebate Credit, a refundable credit that taxpayers could claim on their returns for tax years 2020 and/or 2021 if they did not receive the full amount of the Economic Impact Payments for which they were eligible. If you are entitled to receive the stimulus checks but did not receive one or more payments, you still have an opportunity to claim the payments on your 2020 or 2021 returns. However, you must file a tax return to claim and receive a Recovery Rebate Credit by the applicable deadline.

You don’t need to claim the Recovery Rebate Credit on your 2020 tax return if you were issued the full amount of that credit through the first and second round of Economic Impact Payments. You were issued the full amount of the 2020 Recovery Rebate Credit if:

  • your first Economic Impact Payment was $1,200 ($2,400 if married filing jointly) plus $500 for each qualifying child you had in 2020; and
  • your second Economic Impact Payment was $600 ($1,200 if married filing jointly) plus $600 for each qualifying child you had in 2020.

Taxpayers claiming a 2020 Recovery Rebate Credit need to know whether they received their first and second Economic Impact Payments and if so, in what amounts to correctly calculate the 2020 credit. You can find these amounts by accessing either your individual online account, Notice 1444, Your Economic Impact Payment, or your 2020 account transcript. Spouses filing a joint return for 2020 need to know the payment amounts for both spouses. The Rebate Credit Worksheet in the 2020 Form 1040 and Form 1040-SR instructions can help determine if you are eligible for the credit. Once you determine your eligibility and confirm that you did not receive one or more of the payments (or the full amount of the payment for which you were eligible) you will need to file a 2020 tax return.

Taxpayers claiming the 2020 or 2021 Recovery Rebate Credit on their Form 1040, Individual Income Tax Return, should be aware that the IRS has the authority to offset their refund and apply it to certain federal and state liabilities. Taxpayers have until April 15, 2025 to claim their 2021 Recovery Rebate Credit. The Taxpayer Advocate Service can assist taxpayers experiencing an economic hardship who need their refund to relieve the hardship by preventing the IRS from offsetting all or a portion of the refund against an outstanding federal tax liability. To learn more, see my previous blog: How to Prevent a Refund Offset if You Are Experiencing Economic Hardship.

Conclusion

The clock is ticking to receive your 2020 income tax refund or Recovery Rebate Credit. If you did not file your Form 1040, Individual Income Tax Return, or did not receive your stimulus payments you can contact a Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) site for assistance. The IRS encourages VITA/TCE sites to assist taxpayers with filing prior year returns but not all locations offer this service, so you may be referred to another location. VITA/TCE sites can use tax preparation software to assist with preparing your 2020 return but will not be able to electronically file it and must file the return on paper. Act now! 2020 returns filed on paper must be postmarked by May 17, 2024 to be considered timely.

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      

IRS provides guidance for the 2024 allocation round for the Qualifying Advanced Energy Project Credit Program

Posted by Admin Posted on May 03 2024

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The Department of Treasury and the Internal Revenue Service today issued Notice 2024-36 for owners of clean energy manufacturing and recycling projects, greenhouse gas emission reduction projects and critical material projects.

On Feb. 13, 2023, the Department of Treasury and the IRS issued Notice 2023-18 to establish the program and announce an initial allocation round of credits. On May 31, 2023, the Department of Treasury and the IRS issued Notice 2023-44 to provide additional guidance for the program. Approximately $4 billion in credits were allocated in the first allocation round.

Today’s notice announces the second round of credit allocations for the program to allocate the remaining $6 billion credits. The notice also modifies appendices A, B and C of Notice 2023-44.

Like in the prior allocation round, the Department of Treasury and the IRS are partnering with the Department of Energy (DOE) to recommend projects. The DOE section 48C portal will open no later than May 28, 2024, for taxpayers to submit a concept paper and begin the process of seeking a section 48C credit allocation.

More information about IRA guidance may be found on the Inflation Reduction Act of 2022 page on IRS.gov.

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

Taxpayers Could Settle Federal Tax Debt with an Offer in Comprise

Posted by Admin Posted on May 03 2024

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When a taxpayer can't pay their full tax debt or if paying would cause financial hardship, they should consider applying for an offer in compromise. For assistance filing for an OIC from a legitimate representative, taxpayers are encouraged to check for a licensed enrolled agent or a reputable accountant in their area.

How an offer in compromise works

This is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed.

The goal is a compromise that's in the best interest of both the taxpayer and the agency. The offer in compromise application includes a fee of $205 and an initial payment. Low-income taxpayers don't have to pay either the fee or the initial payment. Taxpayers should review the instructions for Form 656-B, Offer in Compromise, to see if they meet the qualifications to have these initial costs waved.

Who’s eligible

Taxpayers can check their eligibility and prepare a preliminary proposal with the Offer in Compromise Pre-Qualifier Tool.

Review the Offer in Compromise Booklet

Eligible taxpayers should download and review the latest version of the OIC Booklet to avoid processing delays. This booklet covers everything a taxpayer needs to know about submitting an offer in compromise including:

  • Eligibility.
  • Costs to apply.
  • Application process.
  • Forms.

Application evaluation

When reviewing applications, the IRS considers the taxpayer's unique set of facts and special circumstances affecting their ability to pay, including their:

  • Income.
  • Expenses.
  • Asset equity.

Beware of offer in compromise mills

Offer in compromise mills aggressively promote offers in compromise in misleading ways to people who clearly don't meet the qualifications, often costing taxpayers thousands of dollars.

An offer in compromise mill usually makes outlandish claims about how they can settle a person's tax debt for cheap. The promoter fees are often excessive, and eligible taxpayers pay the OIC mill to get the same deal they could have received on their own by working directly with the IRS. This takes unnecessary money out of the taxpayer's wallet.

In addition, not every taxpayer will qualify for an OIC. Some promoters knowingly advise indebted taxpayers to file an OIC application even though the promoters know the person will not qualify, costing honest taxpayers money and time.

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 Advantages of Hiring Your Minor Children for Summer Jobs

Posted by Admin Posted on May 03 2024

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If you’re a small-business owner and you hire your children this summer, you may be able to secure tax breaks and other nontax benefits. The kids can gain bona fide on-the-job experience, save for college and learn how to manage money. You may be able to shift some of your high-taxed income into tax-free or low-taxed income, and, depending on the situation, you may realize payroll tax savings. Perhaps best of all, your kids will spend time with you.

A legitimate job and tax savings, too

If you hire your child, you’ll get a business tax deduction for employee wage expenses. In turn, the deduction reduces your federal income tax bill and possibly your self-employment tax bill and your state income tax bill if they apply. However, for the wages to be a deductible business expense, the work performed by the child must be legitimate and the child’s pay must be reasonable.

Let’s say you operate as a sole proprietor in the 37% tax bracket. You hire your 16-year-old daughter to help with office work full-time during the summer and part-time in the fall. She earns $10,000 during 2024 and doesn’t have any other earnings.

You save $3,700 (37% of $10,000) in income taxes at no tax cost to your daughter. That’s because she can use her $14,600 standard deduction for 2024 to completely shelter her earnings.

Your family’s taxes are lower even if your daughter’s earnings exceed her standard deduction. Why? The unsheltered earnings will be taxed to her beginning at a rate of 10%, instead of being taxed at your higher rate.

Reduced payroll taxes

If your business isn’t incorporated and certain conditions are met, your child’s wages are exempt from Social Security, Medicare and federal unemployment taxes. Your child must be under age 18 for this to apply (or under age 21 for the federal unemployment tax exemption). Contact the office to learn how this works.

Be aware that there’s no payroll tax exemption for employing your child if your business is incorporated or is a partnership that includes nonparent partners. And payments for the services of your child are subject to income tax withholding, regardless of age, no matter what type of entity you operate.

Extra time to make your child’s retirement garden grow

An early start on saving for retirement can be key to building wealth. A child who earns income from a job can contribute to a traditional IRA or a Roth IRA and begin funding a nest egg. For the 2024 tax year, a working child can contribute the lesser of his or her earned income or $7,000 to a traditional or Roth IRA. And the money may be tapped penalty-free for certain eligible reasons, such as paying education costs and making a down payment of up to $10,000 on a first home.

What if your business has a retirement plan? Depending on its terms, your child may qualify to begin earning retirement benefits that can grow for many decades.

The importance of accurate records

Hiring your child can be a tax-smart idea. Be sure to keep the same records (such as timesheets and job descriptions) as you would for other employees to substantiate the hours worked and duties performed. Also issue your child a Form W-2. Contact the office with questions about how these rules apply to 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     

What people need to know when starting a business

Posted by Admin Posted on May 03 2024

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The IRS knows that understanding and meeting tax obligations is vital to the success of all businesses, especially a new one. IRS.gov has the resources and information to help people through the process of starting a new business.

Here are some tips for new entrepreneurs.

Choose a business structure

The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:

  • Sole proprietorship: An unincorporated business owned by an individual. There's no distinction between the taxpayer and their business.
  • Partnership: An unincorporated business with ownership shared between two or more people.
  • Corporation: Also known as a C corporation. It's a separate entity owned by shareholders.
  • S corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders.
  • Limited Liability Company: A business structure allowed by state statute.

Choose a tax year

tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:

  • Calendar year: 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year: 12 consecutive months ending on the last day of any month except December.

Apply for an Employer Identification Number (EIN)

An EIN is also called a Federal Tax Identification Number. It's used to identify a business. Most businesses need one of these numbers even if they don’t have employees.

It's important for a business with an EIN to keep the business mailing address, location and responsible party up to date. IRS regulations require EIN holders to report changes in the responsible party within 60 days. They do this by completing Form 8822-B, Change of Address or Responsible Party and mailing it to the address on the form.

Have all employees complete these forms

  • Form I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services
  • Form W-4 Employee's Withholding Allowance Certificate

Pay business taxes

The form of business determines what taxes must be paid and how to pay them.

Visit the state website

Prospective business owners should visit their state's website for info about state requirements.

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

To Get an “Early” Refund, Adjust your Withholding

Posted by Admin Posted on May 03 2024

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If you received a large refund this year, you may want to adjust your withholding. Each year, millions of taxpayers claim an income tax refund. To be sure, receiving a payment from the IRS for a few thousand dollars can be a pleasant influx of cash. But it means you were essentially giving the government an interest-free loan for close to a year, which isn’t the best use of your money.

Fortunately, there’s a way to begin collecting your 2024 refund now: You can review the amounts you’re having withheld, and any estimated tax payments you’re making, and adjust them to keep more money in your pocket during the year.

Choosing to adjust

It’s particularly important to check your withholding and/or estimated tax payments if you have:

  • Received an especially large 2023 refund,
  • Gotten married, divorced or added a dependent,
  • Bought a home, or
  • Started or lost a job.

Withholding or estimated tax payment changes might also be warranted if your investment income has changed significantly.

Making a change

You can modify your withholding at any time during the year, or even more than once a year. To do so, simply submit a new Form W-4 to your employer. Changes typically will go into effect several weeks after the new Form W-4 is submitted. For estimated tax payments, you can adjust each time quarterly payments are due.

While reducing your withholding or estimated tax payments will put more money in your pocket now, you also need to be careful that you don’t reduce them too much. If you don’t pay enough tax throughout the year on a timely basis, you could end up owing interest and penalties when you file your return, even if you pay your outstanding tax liability by the deadline in April 2025.

Getting help

One reason to consider adjusting your withholding is the passage of any new tax legislation. For example, several years ago when the Tax Cuts and Jobs Act was enacted, the IRS needed to revise withholding tables to account for the increased standard deductions, suspension of personal exemptions, and changes in tax rates and brackets. If you’d like help determining your withholding or estimated tax payments for the rest of the year, please contact the office.

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     

What the right to a fair and just tax system means for taxpayers

Posted by Admin Posted on May 03 2024

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Tax fairness means the tax system is equitable to all citizens. The right to a fair and just tax system is one of 10 rights in the Taxpayer Bill of Rights, which clearly outlines the fundamental rights of every taxpayer.

Here's what the IRS wants all taxpayers to know about what this right means:

  • Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay or ability to provide information timely.
  • Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they're experiencing financial difficulty resolving their tax issues properly and timely through normal IRS channels.
  • Taxpayers who cannot pay their tax debt in full and meet certain conditions can arrange a payment plan with the IRS. This means the taxpayer will pay a set amount over time, generally monthly.
  • Taxpayers can submit an offer in compromise asking the IRS to settle their tax debt for less than the full amount if they:
    • Believe they don't owe all or part of the tax debt.
    • Are unable to pay all the tax debt within the time permitted by law to collect.
    • Have factors such as equity, hardship or public policy they think the IRS should consider in determining whether to settle the liability.
  • The IRS has a list of national and local guidelines covering the basic costs of living that it uses when considering a settlement offer reducing someone's tax debt. IRS employees cannot use these guidelines if they would result in the taxpayer not having enough money to pay their basic living expenses. In these cases, the IRS will use the taxpayer's actual expenses.
  • The IRS cannot seize all of someone's wages to collect their unpaid tax. A portion is exempt from levy to allow the taxpayer to pay basic living expenses.
  • The IRS has the authority to decrease an excessive unpaid portion of any tax or liability assessed after the statutory period of limitations has expired or is erroneously or illegally assessed.
  • The IRS has the discretion to decrease interest on an underpayment when an IRS employee caused an unreasonable delay or error and when no significant aspect of the error is attributed to the taxpayer.

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

When a Taxpayer Should File an Amended Federal Tax Return

Posted by Admin Posted on May 03 2024

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When a taxpayer realizes that their federal tax return has a math error, missing income or other mistake, they should file an amended tax return.

A taxpayer must file an amended return if they need to correct:

  • Filing status.
  • Income.
  • Deductions.
  • Credits.
  • Tax liability.

Math errors and missing schedules

Taxpayers usually do not need to file an amended return to fix a math error or if they forgot to attach a form or schedule. The IRS will correct the math error while processing the tax return and notify the taxpayer by mail. The agency will send a letter to request any missing forms or schedules.

The IRS Interactive Tax Assistant can help taxpayers decide if an amended return is necessary

Taxpayers can use the Should I file an amended return? tool in the Interactive Tax Assistant on IRS.gov to help decide if they should file an amended return to correct an error or make other changes if they already filed.

How to file an amended tax return

Taxpayers should use Form 1040-X, Amended U.S. Individual Income Tax Return, to correct a previously filed Form 1040-series return or to change amounts previously adjusted by the IRS. Taxpayers can file Form 1040-X electronically for their 2020, 2021, 2022 and 2023 Forms 1040 or 1040-SR. Additionally, they can electronically amend Form 1040-NR and Form 1040-SS/PR for tax years 2021, 2022 and 2023.

Check the status of an amended return

Taxpayers can check the status of their Form 1040-X with the Where's My Amended Return? online tool or by calling 866-464-2050 three weeks after filing it. They can also check the status of their refund with the Where’s My Refund? tool.

When using either tool, taxpayers will need to enter their Social Security or taxpayer identification number along with their date of birth and ZIP Code to prove their identity. Once authenticated, they can view the status of their amended return across three processing stages: received, adjusted and completed.

Some tax returns may take longer to process

The IRS issues most refunds in fewer than 21 days for taxpayers who filed electronically and choose direct deposit. Some returns have errors or need more review and may take longer to process.

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      

4 Ways Corporate Business Owners Can Help Ensure Compensation is “Reasonable”

Posted by Admin Posted on Apr 26 2024

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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      

Missed the April Tax-Filing Deadline? File Quickly to Avoid Penalties and Interest; Those Owed a Refund also Shouldn’t Forget to File

Posted by Admin Posted on Apr 26 2024

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The Internal Revenue Service encourages taxpayers who missed the April tax-filing deadline to file a tax return as soon as they can.

The IRS offers different resources to help those who may be unable to pay their tax bill in total. Those who missed the deadline to file but owe taxes should file quickly to minimize penalties and interest.

Taxpayers should keep in mind that payments are still due by the April 15 deadline, even if they requested an extension of time to file a tax return. An extension to file is not an extension to pay.

File and pay amount owed to reduce penalties and interest

Taxpayers who still owe taxes should file their tax return and pay any taxes owed quickly to reduce penalties and interest. Until the balance is paid in full, interest and penalties accrue on taxes owed.

Even if a taxpayer can't afford to immediately pay the full amount of taxes owed, they should still file a tax return and pay as much as possible. This reduces interest and penalties on the outstanding amount and may help avoid a possible late-filing penalty.

There are options for taxpayers who owe the IRS but cannot afford to pay. For more information see the penalties page on IRS.gov.

Taxpayers may qualify for penalty relief if they have filed and paid timely for the past three years and meet other important requirements, including paying or arranging to pay any tax due. For more information, see the first-time penalty abatement page on IRS.gov.

Electronically pay taxes owed

A quick, easy way for individuals to pay taxes owed securely is through IRS Direct Pay, debit or credit card or digital wallet, or their IRS Online Account. Taxpayers may also apply online for a payment plan (including an installment agreement).

Those who pay electronically get immediate confirmation after submitting payment. The Electronic Federal Tax Payment System (EFTPS) and Direct Pay allow taxpayers to receive payment email notifications. Find more payment options on IRS.gov/payments.

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 the IRS website.
  • U.S. citizens and resident aliens who live and work outside of the United States and Puerto Rico get an automatic two-month extension to file their tax returns. This year they have until June 17 to file. However, tax payments are still due April 15 or interest will be charged.
  • Members of the military on duty outside the United States and Puerto Rico. Details are available in Publication 3, Armed Forces’ Tax Guide.
  • Those serving in combat zones have up to 180 days after they leave the combat zone to file returns and pay any taxes due.

Owed a refund? Don’t overlook filing a tax return; 2020 unclaimed refund deadline May 17

Taxpayers who choose not to file a return because they don't earn enough to meet the filing requirement may miss out on receiving a refund due to potential refundable tax credits. Some examples are the Earned Income Tax Credit and Child Tax Credit. Taxpayers sometimes fail to file a tax return and claim a refund for these credits and others for which they may be eligible.

There's no penalty for filing after the April 15 deadline if a refund is due. However, taxpayers due a refund should still consider filing as soon as possible. Every year, the IRS estimates that there are nearly a million taxpayers potentially due refund money who failed to file prior year tax returns.

For taxpayers who didn’t file a 2020 tax return, time is running out to claim those refunds. The deadline to file 2020 returns is May 17, 2024.

Taxpayers still needing to file for tax year 2023 are encouraged to use electronic filing options including IRS Free File, which is available on IRS.gov through Oct. 20 to prepare and file 2023 tax returns electronically.

Taxpayers can track their refund using the Where's My Refund? tool on IRS.gov, IRS2Go or by calling the automated refund hotline at 800-829-1954. To use the tool, taxpayers need the primary Social Security number on the tax return, the filing status and the expected refund amount. The refund status information updates once daily, usually overnight, so there's no need to check more frequently.

Selecting a trusted tax professional

Taxpayers who still need to file a return may wish to consult a tax preparer. The IRS has resources to help taxpayers choose a tax professional. Tools like the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications allows taxpayers to find tax return preparers who have completed IRS requirements for the Annual Filing Season Program or who hold a professional credential recognized by the IRS.

Taxpayer Bill of Rights

Taxpayers have fundamental rights under the law that protect them when interacting with the IRS. The Taxpayer Bill of Rights divides them in 10 categories. IRS Publication 1, Your Rights as a Taxpayer, reiterates these rights along with the agency's obligation to protect them.

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      

Tax Records: What Can You Toss and What Should You keep?

Posted by Admin Posted on Apr 26 2024

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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     

Filing a Federal Tax Return even if it’s Not Required Could Put Money in Taxpayer’s Pockets

Posted by Admin Posted on Apr 25 2024

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Some people choose not to file a tax return because they aren't legally required to file, but they could be missing out on refundable tax credits or an income tax refund. This could apply to someone if they:

  • Have had federal income tax withheld from their pay.
  • Made estimated tax payments.
  • Qualify to claim refundable tax credits.

Don’t miss out on valuable tax credits

A few tax credits people can claim on a federal tax return if they’re eligible include:

  • Earned Income Tax Credit – The EITC helps workers who earned $63,398 or less in 2023 when they file a federal tax return. Taxpayers can use the EITC Assistant on IRS.gov to check their eligibility.
  • Child Tax Credit – Taxpayers can claim the Child Tax Credit if they had a qualifying child under the age of 17 at the end of 2023.
  • Credit for Other Dependents – Taxpayers who don’t qualify for the Child Tax Credit may qualify for the Credit for Other Dependents. This includes people who have:
    • Dependent children who are age 18 or older at the end of 2023.
    • Parents or other qualifying individuals they support.
  • Education credits – The American Opportunity Tax Credit is for qualified education expenses for the first four years of higher education. The Lifetime Learning Credit is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution.

Get help deciding whether to file

The Interactive Tax Assistant provides answers to many common tax law questions based on an individual's specific circumstances. It can help someone decide whether they should file a tax return and if they're eligible for many common tax credits.

The tool is safe. It keeps the user anonymous and discards the information they provide when they exit a tool.

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      

Dirty Dozen: Taking Tax Advice on Social Media can be Bad News for Taxpayers: Inaccurate or Misleading Tax Information Circulating

Posted by Admin Posted on Apr 23 2024

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On day eight of the Dirty Dozen tax scam series, the Internal Revenue Service today warns about bad tax information on social media that can lure honest taxpayers with bad advice, potentially leading to identity theft and tax problems.

Social media can routinely circulate inaccurate or misleading tax information, where people on TikTok and other social media platforms share wildly inaccurate tax advice. Some involve urging people to misuse common tax documents like Form W-2, or more obscure ones like Form 8944 involving a technical e-file form not commonly used by taxpayers. Both schemes encourage people to submit false, inaccurate information in hopes of getting a refund.

The IRS warns people not to fall for these scams. Taxpayers who knowingly file fraudulent tax returns potentially face significant civil and criminal penalties.

"Social media is an easy way for scammers and others to try encouraging people to pursue some really bad ideas, and that includes ways to magically increase your tax refund,” said IRS Commissioner Danny Werfel. “There are many ways to get good tax information, including @irsnews on social media and from trusted tax professionals. But people should be careful with who they’re following on social media for tax advice. Unlike hacks to fix a leaky kitchen sink or creative makeup tips, people shouldn’t rely on made-up ways on social media to patch up their tax return and boost their refund.”

Warnings against bad advice on social media is day eight of the 2024 IRS annual Dirty Dozen campaign – a list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal information, data and more. Started in 2002, the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, but the education effort is designed to raise awareness and protect taxpayers and tax pros from common tax scams and schemes, including bad social media advice.

As a member of the Security Summit, the IRS has worked with state tax agencies and the nation’s tax industry for nine years to cooperatively implement a variety of internal security measures to protect taxpayers. The collaborative effort by the Summit partners also has focused on educating taxpayers about scams and fraudulent schemes throughout the year, which can lead to tax-related identity theft. Through initiatives like the Dirty Dozen and the Security Summit initiative, the IRS strives to protect taxpayers, businesses and the tax system from cyber criminals and deceptive activities that seek to extract information and money, including bad advice on social media.

Social media: Not the ideal place for solid tax advice

Social media can connect people and information from all over the globe. Unfortunately, sometimes people provide bad 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 it's a patently false tax-related scheme trending across popular social media platforms. While some producers of misleading content are driven by criminal profit motive, others are simply trying to gain attention and clicks. They will post anything, no matter how wrong or outlandish, if it garners more attention.

The IRS is aware of various filing season hashtags and social media topics leading to inaccurate and potentially fraudulent information. The central theme of these examples involves people trying to use legitimate tax forms for the wrong reason.

Here are just two of the recent schemes circulating online:

Fraudulent advice on Form W-2

This scheme, circulating on social media, encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information. In this W-2 scheme, scam artists suggest people make up large income and withholding figures, as well as the employer its coming from. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund – sometimes as much as five figures – due to the large amount of withholding.

There are two other variations of the W-2 scheme. Both involve misusing Form W-2 wage information in hopes of generating a larger refund:

  • Fraudulent Form 7202: This scheme involves encouraging people to use 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 for 2020 and 2021 during the pandemic; they are not available for 2023 tax returns.
  • Fraudulent Schedule H: Another scheme encourages people to 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.

The IRS, along with the Security Summit partners in the tax industry and the states, are actively watching for this scheme. In addition, the IRS works with payroll companies and large employers – as well as the Social Security Administration – to verify W-2 information.

Form 8944 scheme

Another example of bad advice circulating on social media involves Form 8944, Preparer e-file Hardship Waiver Request. Wildly inaccurate claims made about this form include its use by taxpayers to receive a refund from the IRS, even if the taxpayer has a balance due. This is false information. Form 8944 is for tax professional use only.

While Form 8944 is a legitimate IRS tax form, it is intended for tax return preparers who are requesting a waiver so they can file tax returns on paper instead of electronically. It is not a form the average taxpayer can use to avoid tax bills.

Taxpayers who intentionally file forms with false or fraudulent information can face serious consequences, including potentially civil and criminal penalties, like criminal prosecution for filing a false tax return and a frivolous return penalty of $5,000.

How taxpayers can verify information

The best place for taxpayers to learn how to properly use tax forms, and to accurately follow social media channels related to taxes, is to go to IRS.gov.

  • IRS.gov has a forms repository with legitimate and detailed instructions for taxpayers on how to fill out the forms properly.
  • Use IRS.gov to find the official IRS social media accounts, or other government sites, to fact check information.

Report fraud

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes, as well as tax return preparers who deliberately prepare improper returns.

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 and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Center in the Office of Promoter Investigations.

Mail:

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

Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary award.

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      

IRS Reminder: 2024 First Quarter Estimated Payment Deadline is April 15

Posted by Admin Posted on Apr 12 2024

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The Internal Revenue Service advises taxpayers, including self-employed individuals, retirees, investors, businesses and corporations about the April 15 deadline for first quarter estimated tax payments for tax year 2024.

Since income taxes are a pay-as-you go process, the law requires individuals who do not have taxes withheld to pay taxes as income is received or earned throughout the year. Most people meet their tax obligations by having their taxes deducted from their paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.

Generally, taxpayers who are self-employed or in the gig economy are required to make estimated tax payments. Likewise, retirees, investors and others frequently need to make these payments because a significant portion of their income is not subject to withholding.

When estimating quarterly tax payments, taxpayers should include all forms of earned income, including part-time work, side jobs or the sale of goods or services commonly reported on Form 1099-K.

Income such as interest, dividends, capital gains, alimony and rental income is normally not subject to withholding. By making quarterly estimated tax payments, taxpayers can avoid penalties and uphold their tax responsibilities.

Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income and victims of disasters are eligible for exceptions to penalties and special regulations.

Following recent disasters, eligible taxpayers in Tennessee, Connecticut, West Virginia, Michigan, California and Washington have an extended deadline for 2024 estimated tax payments until June 17, 2024. Similarly, eligible taxpayers in Alaska, Maine and Rhode Island have until July 15, 2024, and eligible taxpayers in Hawaii have until Aug. 7, 2024. For more information, visit Tax relief in disaster situations.

In addition, taxpayers who live or have a business in Israel, Gaza or the West Bank, and certain other taxpayers affected by the terrorist attacks in the State of Israel, have until Oct. 7, 2024, to make estimated tax payments.

Paying estimated taxes

Taxpayers can rely on Form 1040-ES, Estimated Tax for Individuals, for comprehensive instructions on computing their estimated taxes.

Opting for the IRS Online Account streamlines the payment process, allowing taxpayers to view their payment history, monitor pending payments and access pertinent tax information. Taxpayers have several options to make an estimated tax payment, including IRS Direct Pay, debit card, credit card, digital wallet or the Treasury Department's Electronic Federal Tax Payment System (EFTPS).

To pay electronically and for more information on other payment options, visit IRS.gov/payments. If paying by check, be sure to make the check payable to the "United States Treasury."

Publication 505, Tax Withholding and Estimated Tax, offers detailed information for individuals navigating dividend or capital gain income, alternative minimum tax or self-employment tax, or who have other special situations.

Tax Withholding Estimator

The IRS recommends taxpayers use the Tax Withholding Estimator tool to accurately determine the appropriate amount of tax withheld from paychecks.

Regularly monitoring withheld taxes helps mitigate the risk of underpayment, reducing the likelihood of unexpected tax bills or penalties during tax season. It also allows individuals to adjust withholding upfront, leading to larger paychecks during the year and potentially smaller refunds at tax time.

Filing Options

The IRS encourages people to file their tax returns electronically and choose direct deposit for faster refunds. Filing electronically reduces tax return errors because tax software does the calculations, flags common errors and prompts taxpayers for missing information.

The IRS offers free online and in-person tax preparation options for qualifying taxpayers through the IRS Free File program and the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs.

In addition, the Direct File pilot program, a new option that allows eligible taxpayers to file their federal tax returns online directly with the IRS for free, is currently available in 12 participating states.

Assistance available 24/7 on IRS.gov

IRS.gov offers tax assistance 24/7. To address general tax concerns, taxpayers can access various online tools on the IRS website, to include the Interactive Tax Assistant, tax topics and frequently asked questions to get answers to common questions.

The IRS has also posted translated tax resources in 20 other languages on IRS.gov to communicate to taxpayers who prefer to get information in other languages. For more information, see the IRS Languages page 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      

Dirty Dozen: IRS Urges Taxpayers to Not Fall Prey to Untrustworthy Tax Preparers; “Ghost Preparers’ Can Disappear with Taxpayer Cash, information

Posted by Admin Posted on Apr 12 2024

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In day seven  In day seven of the Dirty Dozen tax scam series, the Internal Revenue Service and Security Summit partners are alerting taxpayers to be on the lookout for unscrupulous tax preparers who could encourage people to file false tax returns and steal valuable personal information.

A common problem seen annually during tax season, “ghost preparers” pop up to encourage taxpayers to take advantage of tax credits and benefits for which they don’t qualify. These preparers can charge a large percentage fee of the refund or even steal the entire tax refund. After the tax return is prepared, these “ghost preparers” can simply disappear, leaving well-meaning taxpayers to deal with the consequences.

While most tax professionals offer quality service, these ghost preparers and other unscrupulous preparers try to take advantage of people and should be avoided at all costs. The IRS encourages people to use a trusted tax professional, and IRS.gov has important information to help people choose a reputable, accredited practitioner.

“Ghost preparers and other shady return preparers form a real threat every tax season to well-meaning taxpayers,” said IRS Commissioner Danny Werfel. “By trying to make a fast buck, these scammers prey on seniors and underserved communities, enticing them with bigger refunds by including bogus tax credit claims or making up income or deductions. But after the tax return is filed, these ghost preparers disappear, leaving the taxpayer to deal with consequences ranging from a stolen refund to follow-up action from the IRS. We urge people to choose a trusted tax professional that will be around if questions arise later.”

Unethical tax preparers serve as day seven of the annual IRS Dirty Dozen campaign – a list of 12 scams and schemes to help taxpayers and the tax professional community protect their personal and financial information. Compiled annually since 2002, the Dirty Dozen lists a variety of common scams that taxpayers may encounter anytime, but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.

Bogus tax preparers have been a recurring theme in the Dirty Dozen for years. Anyone can file a tax return because preparing tax returns is unregulated, which adds risks for vulnerable taxpayers during filing season. To protect taxpayers, the IRS and the Treasury Department have again proposed regulating tax practitioners as part of the proposed Fiscal Year 2025 budget.

Shady tax practitioners can also be involved in stealing taxpayer identities. As a member of the Security Summit, the IRS has worked with state tax agencies and the nation’s tax industry for nine years to cooperatively implement a variety of internal security measures to protect taxpayers. The collaborative effort by the Summit partners also has focused on educating taxpayers about scams and fraudulent schemes throughout the year, which can lead to tax-related identity theft. Through initiatives like the Dirty Dozen and the Security Summit program, the IRS strives to protect taxpayers, businesses and the tax system from cyber criminals and deceptive activities that seek to extract information and money, including ghost preparers.

Tips for taxpayers: Warning signs to look out for

Most tax return preparers provide honest, high-quality service. But some may cause harm through fraud, identity theft and other scams. Paid preparers must sign and include a valid preparer tax identification number (PTIN) on every tax return. A ghost preparer is someone who doesn't sign tax returns they prepare. These unethical tax return preparers should be avoided, especially if they refuse to sign a complete paper tax return or digital form when filing electronically.

Taxpayers are also encouraged to check the tax preparer’s credentials and qualifications to make sure they are capable of assisting with the taxpayer’s needs. The IRS offers resources for taxpayers to educate themselves on types of preparers, representation rights, as well as a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help choose which tax preparer is the best fit.

Some of the warning signs of a bad preparer include:

  • Shady fees. Taxpayers should always ask about service fees. Shady tax preparers can ask for a cash-only payment without providing a receipt. They are also known to base their fees on a percentage of the taxpayer’s refund.
  • False income. Untrustworthy tax preparers may also invent false income to try to get their clients more tax credits or claim fake deductions to boost the size of the refund.
  • Wrong bank account. Taxpayers should also be wary of a tax preparer attempting to convince them to deposit the taxpayer’s refund in their bank account rather than the taxpayer’s account.

Good preparers ask to see all relevant documents like receipts, records and tax forms. They also ask questions to determine the client’s total income, deductions, tax credits and other items. Taxpayers should never hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is also against IRS e-file rules.

File accurately and check eligibility for credits and deductions

Taxpayers are ultimately responsible for all the information on their income tax return, regardless of who prepares it. Taxpayers can visit IRS.gov to find answers to tax-related questions and access tools like the Interactive Tax Assistant, which provides answers to several tax law questions specific to individual circumstances.

Filing electronically reduces tax return errors, and people can take advantage of free online and in-person tax preparation options if they qualify through programs like IRS Free File and the Volunteer Income Tax Assistance and Tax Counseling for the Elderly.

Taxpayers should also make sure that they are taking advantage of available credits and deductions, like the Earned Income Tax Credit (EITC), which is refundable and can help low-to-moderate income workers receive up to $7,340 based on their qualifications. People need to make sure they understand which credits and deductions they are eligible to claim and keep records to show their eligibility.

Report fraudulent activity and scams

The IRS highly encourages people to report tax return preparers who deliberately prepare improper returns and any activity that promotes improper and abusive tax schemes.

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 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, CA 92677-3405
Fax: 877-477-9135

Taxpayers can also report preparer misconduct using Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.

Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary award.

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      

Dirty Dozen: Beware of Offer in Compromise “Mills” that Falsely Claim their Services are Necessary to Resolve IRS Debt

Posted by Admin Posted on Apr 12 2024

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As part of the annual Dirty Dozen list of tax scams, the Internal Revenue Service renews its warning to taxpayers concerning pricey Offer in Compromise (OIC) "mills” that aggressively mislead taxpayers into thinking their tax debts can disappear.

As in past years, companies running OIC mills continue heavily advertising their promises to settle taxpayer debt at steep discounts for pennies on the dollar. While OIC is a legitimate IRS program, many taxpayers do not meet the technical requirements for the tax resolution program, often leaving them facing excessive fees from the promoters for information they could have easily obtained for free by using the IRS's Offer in Compromise Pre-Qualifier tool.

The OIC is a valuable IRS program to help taxpayers who cannot pay their federal tax debts, and some companies offer legitimate services. But the IRS encourages individuals to take a few minutes to assess the information available on IRS.gov to determine if they meet the eligibility criteria for the OIC program and to avoid hiring expensive promoters.

"Taxpayers need to be cautious with aggressive marketing around the Offer in Compromise program that can mislead taxpayers,” said IRS Commissioner Danny Werfel. “These mills try to pull in steep fees while raising false expectations and exploiting vulnerable individuals with promises that tax debt can magically disappear.”

“The program is legitimate, but it’s not for everyone,” Werfel added. “The IRS wants to help taxpayers who qualify for this program, but there are very specific requirements for people to qualify. A good first step is for taxpayers to take a few minutes and explore our free resources on IRS.gov. They can find out if they might qualify for this program – and at the same time avoid paying someone a hefty fee.”

OIC mills are the focus of the fifth news release in the Dirty Dozen series. Started in 2002, the IRS' annual Dirty Dozen campaign lists 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal information, data and more. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, the education effort is designed to raise awareness and protect taxpayers and tax pros from common tax scams and schemes.

Beware of Offer in Compromise mills

An OIC is a legitimate IRS program that allows qualifying taxpayers to work with the IRS to settle a tax debt for less than the full amount owed. It is an option for those who may be unable to pay their full tax liability, or if doing so creates a financial hardship. In determining eligibility, the IRS considers the taxpayer’s unique situation. The OIC agreement occurs directly between the taxpayer and the IRS without a third party.

Taxpayers, however, should be cautious of OIC mills, which make exaggerated claims through radio and TV ads about settling tax debts inexpensively. In reality, these mills often charge excessive fees, and taxpayers end up paying for a service they could have obtained for free directly from the IRS.

The IRS urges individuals to spend a few minutes reviewing information on IRS.gov to determine if they may be eligible for the OIC program by using the IRS's Offer in Compromise Pre-Qualifier tool for free.

The IRS also reminds taxpayers about the First Time Penalty Abatement policy, where taxpayers can go directly to the IRS for administrative relief from a penalty that would otherwise be added to their tax debt.

Help others: Report fraud, scams and schemes

The IRS encourages taxpayers to report any individuals promoting improper, abusive or fraudulent tax schemes, as well as tax return preparers who deliberately prepare improper or fraudulent returns.

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 paper Form 14242, Report Suspected Abusive Tax Promotions or Preparers, 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

Additionally, taxpayers and tax practitioners may submit their report of improper or fraudulent practices to the IRS Whistleblower Office, which may offer a possible monetary award.

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

Tax Help for New Parents

Posted by Admin Posted on Apr 12 2024

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Parents have special tax situations and benefits. Tax breaks for parenting expenses can result in a lower tax bill and a higher refund. Here are some key things new parents need to know.

Before filing, new parents should:

  • Get the child a Social Security or Individual Tax Identification number

To claim parental tax breaks, the taxpayer must have their child’s or dependent's Social Security number, Adoption Tax Identification Number or Individual Tax Identification Number. Confirming a child's birth is the only way the IRS can verify that the parent is eligible for the credits and deductions they claim on their tax return.
 

  • Check withholding

A new family member might make taxpayers eligible for new credits and deductions, which can greatly change their tax liability. They can use the IRS Tax Withholding Estimator to check their withholding. Taxpayers should provide their employer with an updated Form W-4, Employee's Withholding Certificate, if they want to change how much tax is withheld from their paycheck.

When preparing to file, check tax credits and deductions:

  • Child Tax Credit

Taxpayers who claim at least one child as their dependent on their tax return may be eligible for the child tax credit. for help figuring out if a child qualifies for this credit, taxpayers can check Does my child/dependent qualify for the child tax credit or the credit for other dependents?
 

  • Child and Dependent Care Credit

If taxpayers paid someone to take care of their children or another member of their household while they work, they may qualify for the Child and dependent care credit regardless of their income. Taxpayers who pay for daycare expenses may be eligible to claim up to 35% of those expenses with certain limits.
 

  • Adoption Tax Credit

This credit lets families who are in the adoption process during the tax-year claim eligible adoption expenses for each eligible child. Taxpayers can apply the Adoption tax credit to international, domestic, private and public foster care adoptions.
 

  • Earned Income Tax Credit
     

The Earned Income Tax Credit helps low- to moderate-income families get a tax break. If they qualify, taxpayers can use the credit to reduce the taxes they owe – and maybe increase their tax refund. People who earned $63,398 or less in 2023 may be eligible for this valuable tax credit. For tax year 2023, the EITC is as much as $7,430 for a family with three or more children or $600 for taxpayers who don’t have a qualifying child.
 

  • Credit for Other Dependents
     

Taxpayers with dependents who don't qualify for the child tax credit may be able to claim the credit for other dependents. 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 if they are eligible to claim the credit. They can claim this credit in addition to the child and dependent care credit and the Earned Income 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      

Dirty Dozen: IRS Warns about Fake Charities Exploiting Taxpayer Generosity

Posted by Admin Posted on Apr 12 2024

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In the sixth part of the Dirty Dozen tax scams for 2024, the Internal Revenue Service warned taxpayers about groups masquerading as charitable organizations to attract donations from unsuspecting contributors.

In natural disasters and other tragic events, it’s common for compassionate individuals to donate money to help the victims. Unfortunately, scammers often use fake charities as a cover to not only obtain money but also gather sensitive personal and financial information that can be exploited for tax-related identity fraud.

“We see repeated instances of scammers using major disasters as a way to prey on well-meaning taxpayers,” said IRS Commissioner Danny Werfel. “In these tragic situations, many people want to help, but con artists too frequently come in posing as charitable groups to take advantage of the situation, stealing money and personal information. People should remember it’s important to never feel pressured to give donations immediately. They should do some research and only donate to clearly established charities that help victims.”

Fake charities mark day six of the Dirty Dozen. Started in 2002, the IRS' annual Dirty Dozen campaign lists 12 scams and schemes that put taxpayers, businesses and the tax professional community at risk of losing money, personal information, data and more. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, the education effort is designed to raise awareness and protect taxpayers and tax pros from common tax scams and schemes, including fake charities.

As a member of the Security Summit, the IRS has worked with state tax agencies and the nation’s tax industry for nine years to cooperatively implement a variety of internal security measures to protect taxpayers. The collaborative effort by the Summit partners also has focused on educating taxpayers about scams and fraudulent schemes throughout the year, which can lead to tax-related identity theft. Through initiatives like the Dirty Dozen and the Security Summit program, the IRS strives to protect taxpayers, businesses and the tax system from cyber criminals and deceptive activities that seek to extract information and money, including fake charities.

Real tragedies; fake charities

During times of disasters, fake charities become a concern. These deceitful organizations are created by scammers who take advantage of people’s generosity. They solicit money and personal information to victimize individuals through identity theft.

When taxpayers decide to contribute funds or goods to an organization, they may qualify for a deduction on their tax return, but only if they itemize their deductions. It is important to remember that charitable donations are valid when directed toward IRS-recognized tax-exempt organizations. Individuals intending to donate can utilize the Tax-Exempt Organization Search (TEOS) tool on IRS.gov to ensure legitimacy.

Beware of scammers who might use email communications or manipulate caller IDs to deceive people into donating funds to charities. These fraudsters often target groups such as seniors and those with limited English proficiency.

Here are some helpful tips to avoid getting scammed:

  • Don’t give in to pressure. Scammers often create situations to get people to make payments. Genuine charities are always grateful for donations. Donors should take their time and research before making a charitable contribution.
  • Exercise caution when making donation payments. Avoid any charity that requests gift card numbers or wire transfers. It’s better to pay by credit card or check after ensuring the charity’s authenticity.
  • Verify the legitimacy of the charity. Scammers often use similar-sounding names for charities to confuse people. Before donating, potential donors need to ask the fundraiser for the charity's name, website and mailing address so they can independently verify its authenticity. Use the special IRS TEOS tool to verify if an organization is a legitimate tax-exempt charity.
  • Avoid sharing too much information. Scammers are always on the lookout for both money and personal data. Never disclose Social Security numbers, credit card numbers or personal identification numbers. Only provide bank or credit card details after confirming the charity's legitimacy.

    Report fraud

    As part of the Dirty Dozen awareness effort regarding tax schemes and unscrupulous tax return preparers, the IRS encourages individuals to report those who promote abusive tax practices and tax preparers who intentionally file incorrect returns.

    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 paper Form 14242, Report Suspected Abusive Tax Promotions or Preparers, 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 the sections on Abusive tax schemes and abusive tax return preparers.

    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     

Get Ahead of the Tax Deadline; Act Now to File, Pay or Request Extension

Posted by Admin Posted on Apr 12 2024

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With the April 15 tax deadline approaching, the IRS reminds taxpayers there is still time file their federal income tax return electronically and request direct deposit.

Filing electronically reduces tax return errors as tax software does the calculations, flags common errors and prompts taxpayers for missing information. Most people qualify for electronic filing at no cost and, when they choose direct deposit, receive their refund within 21 days.

Free electronic filing options

Taxpayers with income of $79,000 or less in 2023 can use IRS Free File guided tax software now through Oct 15. IRS Free Fillable forms, a part of this program, is available at no cost to taxpayers of any income level and provides electronic forms for people to fill out and e-file themselves.

IRS Direct File is now open to all eligible taxpayers in 12 pilot states to decide if it is the right option for them to file their 2023 federal tax returns online, for free, directly with the IRS. Go to the Direct File website for more information about Direct File pilot eligibility and the 12 participating states.

Through a network of community partnerships, the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free tax return preparation to eligible people in the community by IRS certified volunteers.

MilTax, a Department of Defense program, generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns for all military members, and some veterans, with no income limit.

Use Where's My Refund? to check refund status

The Where's My Refund? tool will normally show a refund status within 24 hours after e-filing a 2023 tax return, three to four days after e-filing a 2021 or 2022 return and four weeks after filing a tax return by mail. To use the tool, taxpayers need their Social Security number, filing status and exact refund amount. Taxpayers can also check Where's My Refund? by downloading our free mobile app, IRS2Go, from an iPhone or Android device. The tool updates once a day, so people don't need to check more often.

Taxpayers that owe on their tax return

IRS reminds people they can avoid paying interest and some penalties by filing their tax return and, if they have a balance due, paying the total amount due by the tax deadline of Monday, April 15. For residents of Maine or Massachusetts, the tax deadline is Wednesday, April 17, due to Patriot’s Day and Emancipation Day holidays.

Payment options for individuals to pay in full

The IRS offers various options for taxpayers who are making tax payments:

  • Direct Pay – Make a payment directly from a checking or savings account without any fees or registration.
  • Pay with debit card, credit card or digital wallet – Make a payment directly from a debit card, credit card or digital wallet. Processing fees are paid to the payment processors. The IRS doesn’t receive any fees for these payments. Authorized card processors and phone numbers are available at IRS.gov/payments. 
  • Electronic Federal Tax Payment System (EFTPS) – This free service gives taxpayers a safe, convenient way to pay individual and business taxes by phone or online. To enroll and for more information, taxpayers can call 800-555-4477 or visit eftps.gov.
  • Electronic funds withdrawal – Taxpayers can file and pay electronically from their bank account when using tax preparation software or a tax professional. This option is free and only available when electronically filing a tax return.
  • Check or money order – Payments made by check or money order should be made payable to the “United States Treasury.”
  • Cash – Make a cash payment through a retail partner and other methods. The IRS urges taxpayers choosing this option to start early because it involves a four-step process. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.

    Payment options for individuals unable to pay their taxes in full

    Taxpayers that are unable to pay in full by the tax deadline, should pay what they can now and apply for an online payment plan. They 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.

    Unable to file by the April 15 deadline?

    Individuals unable to file their tax return by the tax deadline can apply for a tax-filing extension in the following ways:

  • Individual tax filers, regardless of income, can electronically request an automatic tax-filing extension through IRS Free File by filing a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
  • Make an electronic payment using Direct Pay, debit card, credit card or digital wallet and indicate the payment is for an extension.
  • Mail Form 4868 by the tax deadline.
  • Things people should know when requesting a tax-filing extension:

  • Tax-filing extension requests are due by the tax deadline date, and it does not give an extension of time to pay the taxes.
  • Avoid some penalties by estimating and paying the tax due by the tax deadline.
  • Special rules for tax deadlines and automatic tax-filing extensions may apply for taxpayers serving in a combat zone or qualified hazardous duty areas, living outside the United States, and people living in certain disaster areas. They may not need to submit a tax-filing extension; however, people should check to see if they qualify before the tax deadline.
  • 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      

Adoptive Parents: Don’t Forget about the Adoption Tax Credit

Posted by Admin Posted on Apr 12 2024

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Taxpayers who adopted or started the adoption process in 2023 may qualify for the adoption credit. This credit can be applied to international, domestic, private and public foster care adoption.

Here is some basic information to help people understand this credit and whether they can claim it when they are filing their taxes:

  • The maximum adoption credit taxpayers can claim on their 2023 tax return is $15,950 per eligible child.
  • There are income limits that could affect the amount of the credit.
  • Taxpayers should complete Form 8839, Qualified Adoption Expenses, to figure how much credit they can claim on their tax return.
  • An eligible child must be younger than 18. If the adopted person is older, they must be unable to physically take care of themselves.
  • This credit is non-refundable. This means the amount of the credit is limited to the taxpayer's taxes due for 2023. Any credit left over from their owed 2023 taxes can be carried forward for up to five years.
  • Qualified expenses include:
    • Reasonable and necessary adoption fees.
    • Court costs and legal fees.
    • Adoption related travel expenses like meals and lodging.
    • Other expenses directly related to the legal adoption of an eligible child.
  • In some cases, a registered domestic partner may pay the adoption expenses. If they live in a state that allows a same-sex second parent or co-parent to adopt their partner's child, these may also be considered qualified expenses.
  • Expenses may qualify even if the taxpayer pays them before an eligible child is identified. For example, some future adoptive parents pay for a home study at the beginning of the adoption process. These parents can claim the fees as qualified adoption expenses.
  • Taxpayers who adopt their spouse's child can't 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      

IRS Kick Off Annual Dirty Dozen with Warning about Phishing and Smishing Scams

Posted by Admin Posted on Apr 04 2024

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The Internal Revenue Service kicks off the annual Dirty Dozen list with a warning for taxpayers to be aware of evolving phishing and smishing scams designed to steal sensitive taxpayer information.

With taxpayers continuing to be bombarded by email and text scams, the IRS and the Security Summit partners warned individuals and businesses to remain vigilant against these attacks. Fraudsters and identity thieves attempt to trick the recipient into clicking a suspicious link, filling out personal and financial information or downloading a malware file onto their computer.

"Scammers are relentless in their attempts to obtain sensitive financial and personal information, and impersonating the IRS remains a favorite tactic,” said IRS Commissioner Danny Werfel. “People can be anxious to get the latest information about their refund or other tax issues, so scammers frequently try using the IRS as a way to trick people. The IRS urges people to be extra cautious about unsolicited messages and avoid clicking any links in an unsolicited email or text if they are uncertain.”

Started in 2002, the IRS' annual Dirty Dozen campaign lists 12 scams and schemes that put taxpayers, businesses and the tax professional community at risk of losing money, personal information, data and more. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, the education effort is designed to raise awareness and protect taxpayers and tax pros from common tax scams and schemes.

As a member of the Security Summit, the IRS has worked with state tax agencies and the nation’s tax industry for nine years to cooperatively implement a variety of internal security measures to protect taxpayers. The collaborative effort by the Summit partners also has focused on educating taxpayers about scams and fraudulent schemes throughout the year, which can lead to tax-related identity theft. Through initiatives like the Dirty Dozen and the Security Summit program, the IRS strives to protect taxpayers, businesses and the tax system from cyber criminals and deceptive activities that seek to extract information and money.

Phish or smish: Don’t take the bait

The IRS continues to see a barrage of email and text scams targeting taxpayers and others. These schemes frequently peak during tax season but they continue throughout the year. Taxpayers face a wide variety of these scams and schemes. And tax professionals, payroll providers and human resource departments remain favorite targets of email and text scams since they have sensitive personal and financial information. One common example remains the “new client” scam that can target tax pros and others.

That means taxpayers and tax professionals should be alert to fake communications posing as legitimate organizations in the tax and financial community, including the IRS and state tax agencies. These messages arrive in the form of unsolicited texts or emails to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft. There are two main types:

  • Phishing: An email sent by fraudsters claiming to come from the IRS. The email lures the victims into the scam with a variety of ruses such as enticing victims with a phony tax refund or threatening them with false legal or criminal charges for tax fraud.
  • Smishing: A text or smartphone SMS message where scammers often use alarming language such as, "Your account has now been put on hold," or "Unusual Activity Report," with a bogus "Solutions" link to restore the recipient's account. Unexpected tax refunds are another potential lure for scam artists.

Never click on any unsolicited communication claiming to be the IRS as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

In some cases, phishing emails may appear to come from a legitimate sender or organization that has had their email account credentials stolen. Setting up two-factor or multi-factor authentication with their email provider can reduce the risk of individuals having their email account compromised.

Posing as a trusted organization, friend or family member remains a common way to target individuals and tax preparers for various scams. Individuals should verify the identity of the sender by using another communication method, for instance, calling a number they independently know to be accurate, not the number provided in the email or text.

The IRS initiates most contacts through regular mail and will never initiate contact with taxpayers by email, text or social media regarding a bill or tax refund.

What to do

Individuals should never respond to tax-related phishing or smishing or click on the URL link. Instead, report all unsolicited email - including the full email headers - claiming to be from the IRS or an IRS-related function to phishing@irs.gov. If someone experienced any monetary losses due to an IRS-related scam incident, they should report it to the Treasury Inspector General for Tax Administration (TIGTA), the Federal Trade Commission and the Internet Crime Complaint Center (IC3).

If a taxpayer receives an email claiming to be from the IRS that contains a request for personal information, taxes associated with a large investment, inheritance or lottery.

  • Don't reply.
  • Don't open any attachments. They can contain malicious code that may infect the computer or mobile phone.
  • Don't click on any links. If a taxpayer inadvertently clicked on links in a suspicious email or website and entered confidential information, visit the IRS’ identity protection page.
  • Send the full email headers or forward the email as-is to phishing@irs.gov. Don't forward screenshots or scanned images of emails because this removes valuable information.
  • Delete the original email.

    If a taxpayer receives a text claiming to be from the IRS that contains a request for personal information, taxes associated with a large investment, inheritance or lottery.

  • Don't reply.
  • Don't open any attachments. They can contain malicious code that may infect the computer or mobile phone.
  • Don't click on any links. If a taxpayer clicked on links in a suspicious SMS and entered confidential information, they should visit Identity Theft Central.
  • Report the message to 7726 (SPAM).
  • Include both the Caller ID and the message body in an email and send to phishing@irs.gov. Copy the Caller ID from the message by pressing and holding on the body of the text message, then select Copy, paste into the email. If the taxpayer is unable to copy the Caller ID or message body, forward a screenshot of the message.
  • Delete the original text.
  • For more information see the IRS video on fake IRS-related text messages.
  • The Report phishing and online scams page at IRS.gov provides complete details. The Federal Communications Commission's Smartphone Security Checker is a useful tool against mobile security threats.

    Report fraud

    As part of the Dirty Dozen awareness effort regarding tax schemes and unscrupulous tax return preparers, the IRS urges individuals to report those who promote abusive tax practices and tax preparers who intentionally file incorrect returns.

    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 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 the sections on Abusive tax schemes and abusive tax return preparers.

    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      

Dirty Dozen: IRS Warns Taxpayers to Stay Away from “Helpful” Scammers Offering to Set Up Online Account

Posted by Admin Posted on Apr 04 2024

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The Internal Revenue Service continues its Dirty Dozen scam series warning taxpayers to watch out for scammers attempting to sell or offer help setting up an Online Account on IRS.gov.

The goal for these criminals is getting personal tax and financial information that can be used to commit identity theft.

The IRS Online Account is a tool that provides convenient access to an individual’s tax information. The information is also valuable to identity thieves who use it to submit fraudulent tax returns in a victim's name to get a big refund. These third-party online account scams are day three of the IRS annual Dirty Dozen tax scam campaign.

“As the IRS and the Security Summit partners strengthen our internal defenses, scammers evolve to come up with new ways to try to steal valuable information from taxpayers,” said IRS Commissioner Danny Werfel. “An Online Account at IRS.gov can help taxpayers view important details about their tax situation. But scammers have realized the sensitive information there is valuable to them, so they’re now focusing on tricking people that they need help setting up an account.”

“This is just an elaborate scam designed to obtain valuable and sensitive tax information that scammers will use to try to steal a refund,” Werfel added. “This is another reminder that people should be wary of unexpected reach-outs from the IRS and other financial institutions. Taxpayers should avoid sharing sensitive personal data over the phone, email or social media to protect themselves and avoid getting caught up in these scams.”

This marks the third day of the special Dirty Dozen series. Started in 2002, the IRS' annual Dirty Dozen campaign lists 12 scams and schemes that put taxpayers, businesses and the tax professional community at risk of losing money, personal information, data and more. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, the education effort is designed to raise awareness and protect taxpayers and tax pros from common tax scams and schemes.

As a member of the Security Summit, the IRS has worked with state tax agencies and the nation’s tax industry for nine years to cooperatively implement a variety of internal security measures to protect taxpayers. The collaborative effort by the Summit partners also has focused on educating taxpayers about scams and fraudulent schemes throughout the year, which can lead to tax-related identity theft. Through initiatives like the Dirty Dozen and the Security Summit program, the IRS strives to protect taxpayers, businesses and the tax system from cyber criminals and deceptive activities that seek to extract information and money, including this Online Account scheme.

IRS Online Account: Steer clear of help from third-party scammers

An IRS Online Account allows taxpayers access to the information about their tax account. They can log in and get the latest on their payment history, current balance, see copies of select IRS notices and more. It is a useful and easy to use tool that scammers target.

The third-party helper scam begins with swindlers posing as a "helpful" third party who offers to help create a taxpayer's IRS Online Account at IRS.gov. Third parties make these offers to steal a taxpayer's personal information. While they may make it seem like a complicated task needing their assistance, taxpayers can and should establish their own Online Account through IRS.gov.

These scammers often ask for the taxpayer's personal information including address, Social Security number or Individual Taxpayer Identification number (ITIN) and photo identification. They can sell the information or use the sensitive details to file fraudulent tax returns, obtain loans and open credit accounts.

The IRS encourages people to watch out for these scams. The only place individuals should go to create an IRS Online Account is IRS.gov. People should not use third-party assistance, other than the approved IRS authentication process through IRS.gov, to create their own IRS Online Account.

Report fraud

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers, 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

Alternatively, taxpayers and tax professionals may send the information to the IRS Whistleblower Office for possible monetary award. For more information, see Abusive Tax Schemes and Abusive Tax Return Preparers.

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      

Dirty Dozen: IRS Warns about False Fuel Tax Credit Claims; Taxpayers Should Be Wary of Scammers, Heightened Review

Posted by Admin Posted on Apr 04 2024

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The Internal Revenue Service warns taxpayers to watch out for promoters who push improper Fuel Tax Credits claims in the fourth day of the 2024 Dirty Dozen list of tax scams.

The Fuel Tax Credit is available only for off-highway business and farming use and not for most taxpayers. But the IRS continues to see instances where unscrupulous promoters or return preparers mislead taxpayers about fuel use and create fictitious documents or receipts for fuel.

The IRS has seen an increased number of fictitious claims for fuel tax credits on Form 4136, Credit for Federal Tax Paid on Fuels. By claiming the fuel tax, these promoters are looking out for their own financial interests by charging the taxpayers inflated fees. But taxpayers should realize the IRS has heightened scrutiny on this scam, and people claiming it improperly risk future compliance action by the IRS.

“Promoters are pushing the accelerator on bad Fuel Tax Credit claims and driving honest taxpayers to a bad choice,” said IRS Commissioner Danny Werfel. “These promoters frequently charge a large fee to the taxpayer to make these false claims. While the scammers drive away with the fees, the taxpayers are left behind with a bad claim and all the risk and responsibility to make it right. Taxpayers must remain cautious and seek out a reputable tax professional rather than a reckless promoter.”

Fuel Tax Credits mark day four of the Dirty Dozen. Started in 2002, the IRS' annual Dirty Dozen campaign lists 12 scams and schemes that put taxpayers, businesses and the tax professional community at risk of losing money, personal information, data and more. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, the education effort is designed to raise awareness and protect taxpayers and tax pros from common tax scams and schemes, including the Fuel Tax Credit.

Watch out for Fuel Tax Credit third-party promoters

The IRS continues to focus on stopping improper Fuel Tax Credit claims. Any taxpayer contemplating participating in any questionable tax scheme should know that the IRS has implemented new identity theft screening filters and processing systems that stop many suspicious Fuel Tax Credit refund claims. Falsely claiming the Fuel Tax Credit is a fraudulent practice with severe consequences, including civil and criminal penalties.

Taxpayers must exercise caution when filing their tax returns and ensure they only claim credits to which they’re entitled. Otherwise, they may face fines and be subject to federal criminal prosecution and imprisonment. If individuals have doubts about the legitimacy of a particular tax credit, they should seek advice from a qualified tax professional.

Report fraud

As part of the Dirty Dozen awareness effort regarding tax schemes and unscrupulous tax return preparers, the IRS urges individuals to report those who promote abusive tax practices and tax preparers who intentionally file incorrect returns.

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 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 the sections on Abusive tax schemes and abusive tax return preparers.

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      

What Taxpayers Need to Know about Digital Asset Reporting and Tax Requirements

Posted by Admin Posted on Apr 01 2024

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Taxpayers filing 2023 tax returns must check a box indicating whether they received digital assets as a reward, award or payment for property or services or disposed of any digital asset that was held as a capital asset through a sale, exchange or transfer.

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 virtual currency and cryptocurrency, stablecoins and non-fungible tokens.

Examples of digital assets transactions include:

  • Sale of digital assets.
  • Receipt of digital assets as payment for goods or services.
  • Receipt of new digital assets because of mining and staking activities.
  • Receipt of new digital assets because of a hard fork.
  • Exchange of digital assets for property, goods or services.
  • Exchange or trade of digital assets for another digital asset(s).
  • Any other disposition of a financial interest in digital assets.

Reporting digital assets transactions

Taxpayers must report all income related to their digital asset transactions.

  • Use Form 8949, Sales and other Dispositions of Capital Assets, to calculate a capital gain or loss and report it on Schedule D (Form 1040), Capital Gains and Losses.
  • If the transaction was a gift, file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.
  • If individuals received any digital assets as compensation for services or disposed of any digital assets they held for sale to customers in a trade or business, they must report the income as they would report other income of the same type. For example, they would report W-2 wages on Form 1040 or 1040-SR, line 1a, or inventory or services on Schedule C.
  • 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 digital assets, 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 digital assets to customers in connection with a trade or 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     
 

Siete Señales de Advertencia de Reclamaciones Incorrectas del Crédito por Retención de Empleados

Posted by Admin Posted on Mar 26 2024

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Algunos promotores sin escrúpulos han comercializado información engañosa sobre las reglas de elegibilidad del Crédito por retención de empleados a empresas bien intencionadas. El IRS está destacando siete señales sospechosas (en inglés) e instando a las empresas a buscar un profesional de impuestos de confianza, para resolver una reclamación incorrecta mientras aún puedan hacerlo sin multas o intereses.

Hay una fecha límite del 22 de marzo de 2024 para el Programa de divulgación voluntaria (en inglés) del ERC, que permite a las empresas que presentaron una reclamación por error y recibieron un pago, reembolsar solo el 80 por ciento del reclamo. Los contribuyentes que presentaron una reclamación incorrecta que no ha sido procesado, o que tienen un cheque del ERC que no han cobrado o depositado, deben seguir rápidamente el proceso de retiro de la reclamación (en inglés).

Siete señales sospechosas de que una reclamación del ERC podría ser incorrecta

  • Demasiados trimestres reclamados. Algunos promotores instaron a los empleadores a reclamar el ERC para todos los trimestres en que el crédito estaba disponible. Calificar para todos los trimestres es poco común. Los empleadores deben revisar cuidadosamente su elegibilidad (en inglés) para cada trimestre.
     
  • Órdenes gubernamentales que no califican. Algunos promotores les dijeron a los empleadores que pueden reclamar el ERC si había alguna orden gubernamental vigente en su área, incluso si sus operaciones no se vieron afectadas o si eligieron suspender voluntariamente las operaciones de su negocio. Esto es falso. Algunos promotores también sugirieron que un empleador califica según las comunicaciones de la Administración de Seguridad y Salud Ocupacional. Esto generalmente no es cierto. Los empleadores deben revisar las preguntas frecuentes sobre el ERC – Órdenes gubernamentales que califican (en inglés) para obtener más información y ejemplos útiles sobre estos temas.
     
  • Demasiados empleados y cálculos incorrectos. Los empleadores deben ser cautelosos al reclamar el ERC por todos los salarios pagados a cada empleado en su nómina. Los empleadores deben cumplir con ciertas reglas para que los salarios se consideren salarios calificados (en inglés), según el período tributario. Los empleadores deben revisar todos los cálculos para evitar reclamar en exceso el crédito. No deben usar el mismo monto de crédito en varios períodos tributarios para cada empleado. Para obtener detalles acerca de los montos de crédito, consulte la Tabla comparativa del ERC 2020 vs 2021.
     
  • Empresa citando problemas en la cadena de suministro. Una interrupción en la cadena de suministro por sí sola no califica a un empleador para el ERC. Un empleador debe asegurarse de que la orden gubernamental de su proveedor cumpla con los requisitos. Los empleadores deben revisar cuidadosamente las reglas sobre problemas en la cadena de suministro (en inglés) y los ejemplos en el memorando legal de 2023 sobre interrupciones en la cadena de suministro (en inglés)PDF.
     
  • Empresa reclamando el ERC por demasiado tiempo de un período tributario. Es posible, pero poco común, que un empleador califique para el ERC durante todo el trimestre calendario si sus operaciones comerciales se suspendieron total o parcialmente debido a una orden gubernamental durante una parte del trimestre calendario  (en inglés). Una empresa en esta situación puede reclamar el ERC solo por los salarios pagados durante el período de suspensión, no todo el trimestre. Las empresas deben verificar su reclamación por salarios calificados sobreestimados y deben conservar los registros de nómina que respaldan su reclamo.
     
  • La empresa no pagó salarios o no existía durante el período de elegibilidad. Los empleadores solo pueden reclamar el ERC por períodos tributarios en los que pagaron salarios a los empleados. Los registros disponibles para el IRS muestran que algunas empresas que reclamaron el ERC no tenían empleados o reclamaron el ERC por períodos tributarios antes de que existiera la empresa.
     
  • El promotor dice que no hay nada que perder. Las empresas deben estar en alerta máxima con cualquier promotor del ERC que les haya instado a reclamar el ERC porque "no tienen nada que perder". Las empresas que reclaman incorrectamente el ERC corren el riesgo de reembolso, multas, intereses, auditoría y otros gastos.

El IRS tiene una Lista de verificación interactiva de elegibilidad del ERC (en inglés) que los profesionales de impuestos y los contribuyentes pueden usar para verificar la elegibilidad potencial para el ERC. También está disponible como una guía imprimible (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     

Contribuyentes Deben Continuar Reportando Todos los Ingresos de Criptomonedas y Activos Digitales

Posted by Admin Posted on Mar 26 2024

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El Servicio de Impuestos Internos les recuerda a los contribuyentes que deben responder nuevamente a una pregunta acerca de activos digitales e informar todos los ingresos relacionados con los activos digitales cuando presenten su declaración de impuestos federales sobre el ingreso de 2023, como lo hicieron con sus declaraciones de impuestos federales de 2022.

La pregunta aparece en la parte superior de los Formularios 1040(SP), Declaración de Impuestos de los Estados Unidos Sobre los Ingresos Personales; 1040-SR(SP), Declaración de Impuestos de los Estados Unidos para Personas de 65 años de Edad o Más; y 1040-NR(SP), Declaración de Impuestos sobre los Ingresos de Extranjeros No Residentes de los Estados Unidos, y se revisó este año para actualizar la terminología. La pregunta también se agregó a formularios adicionales: Formularios 1041, Declaración de impuestos sobre el ingreso de EE. UU. para patrimonios y fideicomisos (en inglés); 1065, Declaración de Ingresos de Sociedades Colectivas de los Estados Unidos (en inglés); 1120, Declaración de impuestos sobre el ingreso de las sociedades anónimas de los Estados Unidos (en inglés); y 1120-S, Declaración de impuestos sobre el ingreso de EE. UU. para una corporación S (en inglés).

Dependiendo del formulario, la pregunta acerca de activos digitales, con variaciones apropiadas adaptadas a los contribuyentes corporativos, de sociedades o de sucesiones y fideicomisos, pregunta:

¿En cualquier momento durante 2023, usted: (a) recibió (como recompensa, premio o pago por bienes o servicios o (b) vender, intercambiar o disponer de otro modo de un activo digital (o un interés financiero en un activo digital)?

¿Qué es un activo digital?

Un activo digital es una representación digital de valor que se registra en un libro mayor distribuido y protegido criptográficamente o en cualquier tecnología similar. Los activos digitales comunes incluyen:

  • Moneda virtual convertible y criptomoneda
  • Monedas estables
  • Tokens no fungibles (NFT, por sus siglas en inglés)

Todos deben responder a la pregunta

Todas las personas que presenten los formularios 1040, 1040-SR, 1040-NR, 1041, 1065, 1120 y 1120S deben marcar una casilla que responda "Sí" o "No" a la pregunta acerca de activos digitales. La pregunta debe ser respondida por todos los contribuyentes, no solo por aquellos que participaron en una transacción que involucra activos digitales en 2023.

Cuando marcar "Sí"

Normalmente, un contribuyente debe marcar la casilla "Sí" si:

  • Recibió activos digitales como pago por bienes o servicios prestados;
  • Activos digitales recibidos como resultado de una recompensa o premio;
  • El recibo de un nuevo activo digital como resultado de actividades de minado o participación
  • Activos digitales recibidos como resultado de una bifurcación dura (una ramificación de la cadena de bloques de una criptomoneda que divide una sola criptomoneda en dos);
  • Disposición de activos digitales a cambio de bienes o servicios;
  • Disposición un activo digital a cambio o intercambiar por otro activo digital;
  • Vendió un activo digital;
  • Cualquier otra disposición de un interés financiero en un activo digital

Cómo declarar los ingresos de los activos digitales

Además de marcar la casilla "Sí", los contribuyentes deben declarar todos los ingresos relacionados con sus transacciones de activos digitales. Por ejemplo, un inversionista que tenía un activo digital como activo de capital y lo vendió, intercambió o transfirió durante 2023 debe usar el Formulario 8949, Ventas y otras disposiciones de activos de capital (en inglés), para calcular su ganancia o pérdida de capital en la transacción y luego informarlo en el Anexo D (Formulario 1040), Ganancias y pérdidas de capital (en inglés). Un contribuyente que haya hecho una disposición de cualquier activo digital por donación puede estar obligado a presentar el Formulario 709, Declaración de impuestos sobre donaciones (y transferencia de salto generacional) de los Estados Unidos (en inglés).

Si a un empleado se le pagó con activos digitales, debe informar el valor de los activos recibidos como salario. Del mismo modo, si trabajaron como contratistas independientes y se les pagó con activos digitales, deben declarar esos ingresos en el Anexo C (Formulario 1040), Ganancia o pérdida de negocio (Empresa por cuenta propia). El Anexo C también es usado por cualquier persona que vendió, intercambió o transfirió activos digitales a clientes en relación con un comercio o negocio.

Cuando marcar "No"

Normalmente, un contribuyente que simplemente no tuvo activos digitales durante 2023 puede marcar la casilla "No" siempre que no haya participado en ninguna transacción que involucre activos digitales durante el año. También pueden marcar la casilla "No" si sus actividades se limitaron a una o más de las siguientes:

  • Mantener activos digitales en una billetera o cuenta;
  • Transferir activos digitales de una billetera o cuenta que poseen o controlan a otra billetera o cuenta que poseen o controlan; o
  • Compra de activos digitales usando moneda estadounidense u otra moneda real, incluso a través de plataformas electrónicas.

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     

Avoid Tax Return Mistakes, Reduce Processing Delays and Refund Adjustments by Following These Guidelines

Posted by Admin Posted on Mar 26 2024

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As the April 15 filing deadline approaches, the Internal Revenue Service issued a reminder to taxpayers on ways to prevent typical errors on their federal tax returns to help speed potential refunds.

Collect all tax-related paperwork

Taxpayers should collect all key documents, including Forms W-2 and 1099, as well as any supporting paperwork for tax deductions or credits such as educational credits or mortgage interest payments. Additionally, having the previous year's tax return accessible is advisable as it may be required.

Use electronic filing

The IRS advises taxpayers and their tax advisors use electronic filing methods such as IRS Free File or alternative e-file service providers. The Direct File pilot is available for some taxpayers in 12 states. Electronic filing minimizes mathematical errors and identifies potential tax credits or deductions for which the taxpayer qualifies.

It's essential for taxpayers to carefully review their tax returns to ensure accuracy. Opting for electronic filing and selecting direct deposit is the fastest and safest way to receive a refund.

Ensure filing status is correct

Tax software serves to prevent errors in selecting a tax return filing status. For taxpayers unsure of their filing status, the Interactive Tax Assistant on IRS.gov can assist in choosing the correct status, particularly when multiple statuses might apply.

Make sure names, birthdates and Social Security numbers are correct

Taxpayers must accurately provide the name, date of birth and Social Security number for each dependent listed on their individual income tax return. The SSN and individual's name should be entered precisely as indicated on the Social Security card.

In cases where a dependent or spouse lacks a SSN and is ineligible to obtain one, an assigned Individual Tax Identification Number (ITIN) should be listed instead of a SSN.

Answer the digital assets question

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 digital assets in 2023. Taxpayers must report all income related to digital asset transactions.

See IRS.gov Digital Assets for details on when to check “yes” and how to report the income.

 

Report all taxable income

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.

Make sure banking routing and account numbers are correct

Taxpayers have the option to request direct deposit of a federal refund into one, two or even three accounts. Provide correct banking information: If expecting a refund, ensure the routing and account numbers provided for direct deposit are accurate to avoid delays or misdirected refunds.

Additionally, taxpayers can use their refund to buy U.S. Savings Bonds.

Remember to sign and date the return

When submitting a joint return, it is required for both spouses to sign and date the return. If taxpayers are preparing their taxes independently and filing electronically, they need to sign and authenticate their electronic tax return by inputting their adjusted gross income (AGI) from the prior year. Taxpayers can refer to Validating Your Electronically Filed Tax Return for guidance if they have any inquiries.

Ensure address is correct if mailing paper returns

Taxpayers and tax professionals are urged to choose electronic filing whenever possible. However, for those who must submit a paper tax return, it's essential to verify the accurate mailing address either on IRS.gov or in the instructions provided with Form 1040 to prevent processing delays.

Keep a copy of the tax return

Upon readiness to file, taxpayers should create duplicates of their signed return and any accompanying schedules for their personal records. Maintaining copies can help them prepare future tax returns and figure mathematical computations in the event of filing an amended return. Typically, taxpayers should retain records supporting income, deductions or credits claimed on their tax return until the period of limitations for that specific tax return expires.

Request an extension, if needed

Taxpayers requiring more time to file their taxes can easily request a six-month extension until October 15, thereby avoiding late filing penalties. This extension can be requested either through IRS Free File or by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by April 15. It's important to note that while an extension provides extra time for filing, tax payments are still due on April 15 for most taxpayers.

Alternatively, taxpayers can seek an extension by making a full or partial payment of their estimated income tax and indicating that the payment is for an extension. This can be done using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a debit/credit card or digital wallet. By doing so, taxpayers avoid the necessity of filing a separate extension form and receive a confirmation number for their records.

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      

Evite Errores en Declaración de Impuestos, Reduzca Demoras en Procesamiento y Ajustes en Reembolso al Seguir estas Directrices

Posted by Admin Posted on Mar 26 2024

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A medida que se acerca la fecha límite de presentación de impuestos del 15 de abril, el Servicio de Impuestos Internos emitió un recordatorio a los contribuyentes acerca de las maneras de evitar errores típicos en sus declaraciones federales de impuestos, con el objetivo de acelerar posibles reembolsos.

Recopile toda la documentación relacionada con los impuestos

Los contribuyentes deben reunir todos los documentos clave, incluidos los formularios W-2 y 1099, así como cualquier documentación justificativa de deducciones o créditos tributarios, como créditos educativos o pagos de intereses hipotecarios. Además, es aconsejable tener a mano la declaración de impuestos del año anterior, ya que puede ser necesaria.

Use la presentación electrónica

El IRS aconseja a los contribuyentes y a sus asesores de impuestos que usen métodos de presentación electrónica como Free File del IRS o proveedores alternativos de servicios de presentación electrónica. El programa piloto de Direct File (en inglés) está disponible para algunos contribuyentes en 12 estados. La presentación electrónica minimiza los errores matemáticos e identifica posibles créditos o deducciones tributarias para los cuales califica el contribuyente.

Es esencial que los contribuyentes revisen cuidadosamente sus declaraciones de impuestos para garantizar su exactitud. Optar por la presentación electrónica y seleccionar el depósito directo es la manera más rápida y segura de recibir un reembolso.

Asegúrese de que el estado civil tributario sea correcto

El software de impuestos sirve para evitar errores al seleccionar el estado civil tributario. Para los contribuyentes que no están seguros de su estado civil tributario, el Asistente tributario interactivo en IRS.gov puede ayudarle a elegir el estado correcto, particularmente cuando pueden aplicarse varios estados tributarios.

Asegúrese de que los nombres, fechas de nacimiento y números de Seguro Social sean correctos

Los contribuyentes deben proporcionar con precisión el nombre, la fecha de nacimiento y el número de Seguro Social (SSN) de cada dependiente que figura en su declaración de impuestos individual. El SSN y el nombre del individuo deben ingresarse exactamente como se indica en la tarjeta de Seguro Social.

En los casos en que un dependiente o cónyuge no tenga un SSN y no sea elegible para obtenerlo, se debe incluir un Número de identificación personal del contribuyente (ITIN) asignado en lugar de un SSN.

Responda la pregunta acerca de activos digitales

Todos los que presenten los Formularios 1040, 1040-SR, 1040-NR, 1041, 1065, 1120 y 1120S deben marcar una casilla y responder "Sí" o "No" a la pregunta sobre activos digitales. La pregunta debe ser respondida por todos los contribuyentes, no solo por aquellos que participaron en una transacción que involucra activos digitales en 2023. Los contribuyentes deben declarar todos los ingresos relacionados con las transacciones de activos digitales.

Consulte Activos digitales de IRS.gov para obtener detalles acerca de cuándo marcar “sí” y cómo declarar los ingresos.

Reporte todos los ingresos sujetos a impuestos

Tenga en cuenta que la mayoría de los ingresos son tributables (en inglés). No reportar con precisión los ingresos puede resultar en intereses acumulados y multas. Esto incluye diversas fuentes de ingresos, como ganancias por intereses, compensación por desempleo e ingresos derivados de la industria de servicios, la economía compartida y los activos digitales. Para obtener más detalles, consulte la Publicación 525, Ingresos sujetos a impuestos y no sujetos a impuestos (en inglés).

Asegúrese de que los números de ruta y de cuenta bancaria sean correctos

Los contribuyentes tienen la opción de solicitar el depósito directo de un reembolso federal en una, dos o incluso tres cuentas. Proporcione información bancaria correcta: si espera un reembolso, asegúrese de que los números de ruta y de cuenta proporcionados para el depósito directo sean correctos para evitar demoras o reembolsos mal dirigidos.

Además, los contribuyentes pueden usar su reembolso para comprar bonos de ahorro estadounidenses (en inglés).

Recuerde firmar y fechar su declaración de impuestos

Al presentar una declaración conjunta, se requiere que ambos cónyuges firmen y fechen la declaración. Si los contribuyentes preparan sus impuestos de forma independiente y los presentan electrónicamente, deben firmar y autenticar su declaración de impuestos electrónica ingresando su ingreso bruto ajustado (AGI) del año anterior. Los contribuyentes pueden consultar Cómo validar su declaración de impuestos presentada electrónicamente para obtener orientación si tienen alguna pregunta.

Asegúrese de que la dirección sea correcta si presenta una declaración en papel por correo

Se insta a los contribuyentes y profesionales tributarios a elegir la presentación electrónica siempre que sea posible. Sin embargo, para aquellos que deben presentar una declaración de impuestos en papel, es esencial verificar la dirección postal exacta ya sea en IRS.gov o en las instrucciones proporcionadas con el Formulario 1040 para evitar demoras en el procesamiento.

Guarde una copia de la declaración de impuestos

Al estar listos para presentar la declaración, los contribuyentes deben crear duplicados de su declaración firmada y los anexos adjuntos para sus registros personales. Mantener copias puede ayudarlos a preparar declaraciones de impuestos futuras y realizar cálculos matemáticos en caso de presentar una declaración enmendada. Por lo general, los contribuyentes deben guardar los registros que respalden los ingresos, las deducciones o los créditos reclamados en su declaración de impuestos hasta que expire el período de prescripción para esa declaración de impuestos específica.

Solicite una prórroga, si es necesario

Los contribuyentes que requieran más tiempo para presentar sus impuestos pueden solicitar fácilmente una prórroga de seis meses, hasta el 15 de octubre, evitando así multas por presentación tardía. Esta prórroga se puede solicitar a través de Free File del IRS o enviando el Formulario 4868 (SP), Solicitud de prórroga automática para presentar la declaración de impuestos sobre el ingreso individual de los Estados Unidos, antes del 15 de abril. Es importante tener en cuenta que, si bien una extensión proporciona tiempo adicional para la presentación, los pagos de impuestos todavía vencen el 15 de abril para la mayoría de los contribuyentes.

Alternativamente, los contribuyentes pueden solicitar una prórroga realizando un pago total o parcial de su impuesto sobre el ingreso estimado e indicando que el pago es para una prórroga. Esto se puede hacer mediante Pago Directo, el Sistema de Pago Electrónico de Impuestos Federales (EFTPS), o una tarjeta de débito/crédito o una billetera digital. Al hacerlo, los contribuyentes evitan la necesidad de presentar un formulario de prórroga por separado y reciben un número de confirmación para sus registros.

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      

IRS: Cuidado al Elegir un Profesional de Impuestos

Posted by Admin Posted on Mar 26 2024

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El Servicio de Impuestos Internos les recuerda a los contribuyentes que elegir cuidadosamente a un profesional de impuestos para preparar una declaración es vital para asegurar que su información personal y financiera esté segura y se trate con cuidado.

La mayoría de los preparadores de declaraciones de impuestos proporcionan un servicio honesto y de alta calidad. Pero algunos pueden causar daños a través del fraude, el robo de identidad y otras estafas.

Es importante que los contribuyentes sepan a quién eligen y qué preguntas importantes deben hacer cuando contratan a una persona o empresa para preparar su declaración de impuestos.

Otra razón para elegir cuidadosamente a un preparador de impuestos es que los contribuyentes son legalmente responsables de toda la información de su declaración de impuestos, independientemente de quién la prepare.

El IRS elaboró un Directorio de Preparadores de Declaraciones de Impuestos Federales con Credenciales y Calificaciones Selectas (en inglés) para ayudar a las personas a encontrar un profesional de impuestos que cumpla con altos estándares. También hay una página especial en IRS.gov para saber Cómo Elegir un Profesional de Impuestos que puede ayudar a guiar a los contribuyentes a hacer una buena elección, incluyendo la selección de alguien afiliado a una asociación nacional de impuestos reconocida (en inglés). Hay diferentes tipos de profesionales de impuestos, y las necesidades de un contribuyente ayudarán a determinar qué tipo de preparador es el mejor para ellos.

Señales de advertencia

Hay señales de advertencia que pueden ayudar a alejar a los contribuyentes de los preparadores de declaraciones de impuestos sin escrúpulos. Por ejemplo, no firmar una declaración de impuestos es una señal de que no se puede confiar en un preparador pagado. Es posible que busquen obtener un beneficio rápido al prometer un reembolso mayor o al cobrar honorarios a base de la cantidad del reembolso.

Estos preparadores "fantasmas" sin escrúpulos a menudo imprimen la declaración y hacen que el contribuyente la firme y la envíe por correo al IRS. Para las declaraciones presentadas electrónicamente, un preparador fantasma preparará la declaración de impuestos, pero se negará a firmarla digitalmente como el preparador pagado. Los contribuyentes deben evitar este tipo de preparador sin ética.

Además, los contribuyentes siempre deben elegir un profesional de impuestos con un Número de Identificación de Preparador de Impuestos (en inglés) válido. Por ley, cualquier persona a la que se le pague por preparar o asistir en la preparación de declaraciones de impuestos federales debe tener un PTIN válido. Los preparadores pagados deben firmar e incluir su PTIN en cualquier declaración de impuestos que preparen.

Otros consejos

Estos son otros consejos para tener en cuenta a la hora de elegir un preparador de declaraciones de impuestos:

  • Busque un preparador que esté disponible todo el año. Si surgen preguntas acerca de una declaración de impuestos, los contribuyentes pueden necesitar comunicarse con el preparador después de que la temporada de presentación haya terminado.
  • Revise el historial del preparador. Consulte el sitio web del Buró de Mejores Negocios (Better Business Bureau) para obtener información acerca del preparador. Busque acciones disciplinarias y el estatus de la licencia para preparadores con credenciales. Para los contadores públicos, consulte el sitio web de la Junta Directiva Estatal de Contabilidad, y para los abogados consulte con la Asociación Estatal de Abogados. Para los agentes inscritos vaya a IRS.gov y busque "verificar el estado de agente inscrito" o consulte el Directorio de Preparadores de Declaraciones de Impuestos Federales (en inglés) del IRS.
  • Pregunte por las tarifas de los servicios. Los contribuyentes deben evitar los preparadores de declaraciones de impuestos que basan sus honorarios en un porcentaje del reembolso o que ofrecen depositar la totalidad o parte del reembolso en sus propias cuentas financieras. Desconfíe de los preparadores de declaraciones de impuestos que afirman que pueden obtener reembolsos mayores que sus competidores.
  • Busque un proveedor autorizado de e-file del IRS. Estos están capacitados para preparar, transmitir y procesar declaraciones electrónicas. El IRS emite la mayoría de los reembolsos en menos de 21 días para los contribuyentes que presentan electrónicamente y eligen el depósito directo.
  • Proporcione documentos y recibos. Los buenos preparadores piden ver estos documentos. También harán preguntas para determinar los ingresos totales del cliente, las deducciones, los créditos tributarios y otros elementos. No contrate a un preparador que presente electrónicamente una declaración de impuestos con un talón de pago en lugar de un Formulario W-2. Esto va en contra de las reglas de presentación electrónica del IRS.
  • Conozca las credenciales y calificaciones del preparador. Los abogados, contadores públicos y agentes inscritos pueden representar a cualquier cliente ante el IRS en cualquier situación. Los participantes del Programa de Temporada de Presentación Anual (en inglés) pueden representar a contribuyentes en situaciones limitadas si prepararon y firmaron la declaración de impuestos.
  • Nunca firme una declaración en blanco o incompleta. Los contribuyentes son responsables de presentar una declaración de impuestos completa y correcta.
  • Revise la declaración de impuestos antes de firmarla. Asegúrese de hacer preguntas si algo no está claro o parece inexacto. Cualquier reembolso debe ir directamente al contribuyente - no a la cuenta bancaria del preparador. Revise los números de ruta y de la cuenta bancaria que aparecen en la declaración y asegúrese de que estén correctos.

Los contribuyentes pueden denunciar al IRS la conducta inapropiada del preparador mediante el Formulario 14157, Queja: Preparador de declaraciones de impuestos (en inglés). Si un contribuyente sospecha que un preparador de declaraciones de impuestos presentó o modificó su declaración de impuestos sin su consentimiento, debe presentar el Formulario 14157-A, Declaración jurada de fraude o mala conducta del preparador de declaraciones de impuestos (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     

Créditos y Deducciones para Individuos

Posted by Admin Posted on Mar 26 2024

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Los créditos tributarios y deducciones cambian el monto de la factura o reembolso de impuestos de una persona. Las personas deben conocer qué créditos y deducciones pueden reclamar y los documentos que necesitan para demostrar su elegibilidad.

Créditos tributarios

Un crédito tributario reduce la cantidad de impuestos dólar por dólar que un contribuyente debe en función de su declaración de impuestos.

Algunos créditos tributarios, como el Crédito tributario por ingreso del trabajo, son reembolsables. Si la factura de impuestos de una persona es menor que el monto de un crédito reembolsable puede recuperar la diferencia en su reembolso.

Para reclamar un crédito tributario, las personas deben:

  • Mantener archivos que demuestren su elegibilidad para los créditos tributarios que reclaman.
  • Verificar ahora si califican para reclamar algún crédito el próximo año en su declaración de impuestos.

Deducciones

Las deducciones pueden reducir la cantidad de ingresos de un contribuyente antes de que calcule el impuesto que debe.

La mayoría de las personas toman la deducción estándar. La deducción estándar cambia cada año según la inflación. El monto de la deducción estándar depende del estado civil para efectos de la declaración, la edad y si es ciego y si el contribuyente es reclamado como dependiente por otra persona.

Algunas personas deben detallar sus deducciones, y algunas personas pueden optar por hacerlo porque reduce su ingreso tributable más que la deducción estándar. Por lo general, si las deducciones detalladas de un contribuyente son mayores que su deducción estándar, tiene sentido que las detalle.

Asistente Tributario Interactivo

Encuentre ayuda con preguntas tributarias a base de circunstancias específicas con el Asistente Tributario Interactivo. Puede ayudar a una persona a decidir si es elegible para muchos créditos tributarios y deducciones populares.

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     

Transformation Work Continues: IRS Expands Business Tax Account Access to S Corporations, Partnerships; Adds Ability to View Business Tax Transcripts

Posted by Admin Posted on Mar 21 2024

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As part of continuing transformation work, the Internal Revenue Service has announced the launch of the second phase of a new online self-service tool for businesses that expands the business tax account capabilities and eligible entity types.

As a result, individual partners of partnerships and individual shareholders of S corporation businesses are now eligible for a business tax account in addition to sole proprietors.

Available at IRS.gov/businessaccount, the new business tax account is a key part of the agency's continuing service improvement initiative. This is part of the larger effort under last year's Inflation Reduction Act (IRA) and described in the multi-year Strategic Operating Plan released this spring.

"This is part of the ongoing IRS modernization effort to make improvements for business taxpayers and others," said IRS Commissioner Danny Werfel. "This next step in the evolution of the Business Tax Account will help these businesses download transcripts and other features. Ultimately, these new online options will help make interactions easier for businesses while reducing paper-based processes and the need to call the IRS."

This phase of business tax account also adds new features.

  • Users can now download a PDF of a business tax transcript:
    • For sole proprietors, this includes Forms: 940, 941, 943, 944, 945, 8752, 8288, 11-C, 730, 2290.
    • For S corporations, this includes Forms: 940, 941, 943, 944, 945, 8752, 8288, 11-C, 730, 1120S, 2290.
    • For partnerships, this includes Forms: 940, 941, 943, 944, 945, 1065, 8752, 8288, 8804, 11-C, 730, 2290.
  • Sole proprietors can also view certain notices:
    • CP080: Reminder - we have not received your return, credits may be on your account.
    • CP136: Annual notification of Federal Tax Deposit (FTD) requirements (Forms: 941, 941-SS).
    • CP216F: Application for extension of time to file an employee plan return – approved.

Individual partners and individual shareholders will be able to access business tax account information once they have filed a business return with the Schedule K-1 and it is processed by the IRS. To access business tax account, individuals must have a Schedule K-1 for a minimum of one year during the 2019-2022 period on file. They will only be able to view information for the year(s) they have a Schedule K-1 on file. New businesses won't have access until a business return is submitted, processed, and on file with the IRS.

Sole proprietors with an Employer Identification Number (EIN) qualify to access their business tax account. Also known as self-employed individuals, sole proprietors with EINs are those who file a business return under their EIN, such as reporting payroll taxes and reporting the highway use tax on trucks and buses.

Sole proprietors who have already set up an individual account under their SSN or ITIN, and have an EIN linked to their SSN or ITIN, can use their existing login to access their business tax account. At this time, sole proprietors who do not have an EIN are not eligible to set up a business tax account. Instead, they can access their tax records by setting up an IRS individual online account.

Over time, business tax account will be a one-stop application that provides business taxpayers a suite of digital products and services, including access to viewing letters or notices, requesting tax transcripts, adding third parties for power of attorney or tax information authorization, and storing bank account information to manage tax payments.

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      

Se Acaba el Tiempo: IRS Anima a Personas sin Requisito de Presentación de Impuestos en 2020 a Reclamar su Crédito de Recuperación de Reembolso antes del 17 de mayo

Posted by Admin Posted on Mar 21 2024

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El Servicio de Impuestos Internos (IRS) les recuerda a aquellos que pudieron haber reclamado el Crédito de recuperación de reembolso durante la pandemia COVID en 2020, que se está acabando el tiempo para presentar una declaración de impuestos y reclamar su dinero.

La mayoría de los contribuyentes elegibles para los Pagos de impacto económico relacionados con el alivio tributario por el coronavirus ya debieron haber recibido o reclamado sus pagos a través del Crédito de recuperación de reembolso. Pero para aquellos que todavía no han presentado su declaración de impuestos de 2020, el plazo legal es el 17 de mayo de 2024.

El Crédito de recuperación de reembolso es un crédito reembolsable para personas que no recibieron uno o más de los Pagos de impacto económico, también conocidos como pagos de estímulo, distribuidos en 2020 y 2021. Contribuyentes elegibles deben presentar una declaración de impuestos para poder reclamar el Crédito de recuperación de reembolso, aún si sus ingresos de un trabajo, negocio u otra fuente fueron mínimas o no existentes.

Las personas que desean reclamar el Crédito de recuperación de reembolso de 2021 tienen hasta el 15 de abril de 2025 para presentar la declaración de impuestos requerida.

A los contribuyentes que se les debe un reembolso tienen tres años del plazo de presentación para reclamar cualquier dinero que les corresponde. Para las declaraciones de 2020, el plazo del 17 de mayo indica el paso de tres años del plazo original del 17 de mayo de 2020.

El IRS también les recuerda a otras personas que no han presentado una declaración de 2020 que revisen sus documentos; es posible que hayan omitido un posible reembolso tributario que ya no estará disponible después de 17 de mayo. El IRS planifica proveer más información detallada para cada estado más tarde en este mes para contribuyentes que hayan pasado por alto presentar una declaración y recibir un reembolso de 2020. Estos contribuyentes también tienen el plazo de presentación del 17 de mayo.

¿Quién es elegible?

Se requiere ser un ciudadano o residente extranjero de EE. UU. en el año respectivo, no ser reclamado como dependiente de otro contribuyente y tener un número de Seguro Social emitido antes del plazo de la declaración de impuestos para ser elegible para el Crédito de recuperación de reembolso de 2020 y 2021.

Además, el Crédito de recuperación de reembolso puede ser reclamado para alguien que haya fallecido en o después de 2020.

Ayuda gratuita disponible

Contribuyentes elegibles también pueden tener acceso a ayuda gratuita de preparación de impuestos a través de los programas de Ayuda Voluntaria a los Contribuyentes (VITA, por sus siglas en inglés) y el Programa de Asesoramiento Tributario para Personas de Edad Avanzada (TCE, por sus siglas en inglés). Esto es un esfuerzo continuo del IRS para animar a personas que típicamente no tienen un requisito de presentación a explorar los beneficios potenciales bajo la ley tributaria. Pueden usar la herramienta de localización VITA (en inglés) o llamar al 800-906-9887 para encontrar el sitio VITA más cercano.

El IRS también asegura a los contribuyentes que no enfrentan una multa por reclamar el reembolso en una declaración de impuestos presentada después del plazo. Se recomienda usar depósito directo como la manera más rápida y sencilla de recibir un reembolso tributario.

Personas con una cuenta en línea del IRS pueden revisar para saber si recibieron cualquier Pago de impacto económico al igual del monto de las cantidades recibidas.

Cualquier Crédito de recuperación de reembolso recibido no cuenta como ingreso al determinar la elegibilidad para recibir beneficios federales como Seguridad de ingreso suplementario (SSI), Programa de asistencia nutricional suplementaria (SNAP), Asistencia temporal para familias necesitadas (TANF) y el Programa especial de nutrición suplementaria para mujeres, bebés y niños (WIC). Reclamar el crédito tampoco tiene ningún efecto sobre el estatus migratorio de una persona o su capacidad para obtener una tarjeta verde o beneficios de inmigración.

Personas con altos ingresos que no declaran impuestos: esperen cartas de cumplimiento del IRS

El IRS también anunció el 29 de febrero un nuevo esfuerzo enfocado en contribuyentes con altos ingresos que no han presentado una declaración de impuestos en más de 125,000 de casos desde 2017.

La nueva iniciativa, posible gracias a los fondos de la Ley de Reducción de la Inflación, comienza con cartas de cumplimiento del IRS que se envían esta semana sobre más de 125,000 casos en los que no se han presentado declaraciones de impuestos desde 2017. Los envíos por correo incluyen más de 25,000 a aquellos con más de $1 millón en ingresos, y más de 100,000 a personas con ingresos entre $400,000 y $1 millón entre los años tributarios 2017 y 2021.

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     

Concesionarios de Automóviles Deben Inscribirse con el IRS para Recibir Pagos Anticipados del Crédito Tributario para Vehículos Limpios

Posted by Admin Posted on Mar 21 2024

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Para presentar informes en el momento de la venta y recibir pagos anticipados del Crédito tributario para vehículos limpios, los concesionarios y vendedores de automóviles deben inscribir su negocio en Créditos de energía en línea del IRS. Los concesionarios y vendedores deben usar esta herramienta para presentar todos los informes en el momento de la venta de los vehículos puestos en servicio en 2024 y años futuros.

Cómo inscribirse

Para inscribir o acceder a un negocio previamente inscrito, los concesionarios y vendedores pueden ir a IRS Créditos de energía en línea. Las instrucciones paso a paso (en inglés) los guían a través del proceso para inscribirse, presentar informes en el momento de la venta e ingresar la información de pago anticipado. El proceso de inscripción puede tardar 15 días o más.

Una vez inscritos, los concesionarios y vendedores deben usar esta herramienta para ingresar los informes en el momento de la venta y proporcionar al comprador cierta información requerida (en inglés).

Qué sucede después de la inscripción

Cuando un concesionario presenta con éxito un informe en el momento de la venta, el vehículo es elegible para el crédito (en inglés). Una presentación es exitosa cuando el concesionario recibe una copia del informe y una confirmación de aceptación por parte de Créditos de energía en línea del IRS. Los compradores deben usar la copia del informe cuando presenten su declaración anual de impuestos federales.

Obtenga más información acerca de los Créditos para vehículos limpios en Créditos tributarios por vehículos limpios.

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     

Tracking Down Donation Substantiation

Posted by Admin Posted on Mar 21 2024

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If you’re like many Americans, your mailbox may have been filling up in recent weeks with letters from your favorite charities acknowledging your 2023 donations. But what happens if you haven’t received such a letter for a contribution? Can you still claim a deduction on your 2023 income tax return for the gift? It depends.

What’s required

To support a charitable deduction, you need to comply with IRS substantiation requirements. This generally includes obtaining a contemporaneous written acknowledgment from the charity stating the amount of the donation if it’s cash. If the donation is property, the acknowledgment must describe the property, but the charity isn’t required to provide a value. The donor must determine the property’s value.

“Contemporaneous” means the earlier of the date you file your tax return or the extended due date of your return. So, if you donated in 2023 but haven’t yet received substantiation from the charity, it’s not too late, as long as you haven’t filed your 2023 return. Contact the charity and request a written acknowledgment.

Keep in mind that, if you made a cash gift of under $250 with a check or credit card, generally a canceled check, bank statement or credit card statement is sufficient to support your donation. However, if you received something in return for the donation, you generally must reduce your deduction by its value and the charity is required to provide you a written acknowledgment as described earlier, listing the value of the item you received.

Itemized Deductions or Standard?

You may remember that in recent tax years (2020 and 2021) there was a special provision of tax law that allowed taxpayers who take the standard deduction on their tax returns to claim a limited deduction.

Many people don’t realize that this provision wasn’t reauthorized for subsequent years. Since the tax break has expired, it’s no longer available to non-itemizers. So, to deduct your charitable donations, you must opt to itemize deductions on your tax return, rather than taking the standard deduction.

Ask questions

If you aren’t sure about some of your donations, contact the office for answers to your questions and help determining whether you have sufficient substantiation for the donations you hope to deduct on your 2023 return. It’s also important to have the substantiation you’ll need for charitable gifts you’re planning this year to ensure you can enjoy the desired deductions when you file your 2024 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 : Thomson Reuters      

Time is Running Out: IRS Encourages Eligible Non-Filers in 2020 to Claim their Recovery Rebate Credit before May 17 Deadline

Posted by Admin Posted on Mar 21 2024

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The Internal Revenue Service reminds those who may be entitled to the COVID-era Recovery Rebate Credit in 2020 that time is running out to file a tax return and claim their money.

Most taxpayers eligible for Economic Impact Payments linked to the coronavirus tax relief have already received or claimed their payments via the Recovery Rebate Credit. But for those who haven’t yet filed a tax return for 2020, the legal deadline is May 17, 2024.

The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments, also known as stimulus payments, distributed in 2020 and 2021. Eligible taxpayers must file a tax return first to claim a Recovery Rebate Credit, even if their income from a job, business or other source was minimal or non-existent.

For individuals wanting to claim the 2021 Recovery Rebate Credit, they have until April 15, 2025, to file the required tax return.

Taxpayers owed a refund have three years after the filing due date to file and claim any money entitled to them. For 2020 tax returns, this year’s May 17 due date is three years after the original May 17, 2021, tax deadline.

The IRS also reminds other people who haven’t filed a tax return for 2020 to check their records; it’s possible they may be overlooking a potential tax refund that will no longer be available after May 17. The IRS plans to provide more detailed state-by-state information later this month for taxpayers who may have overlooked filing and getting a refund for 2020. These taxpayers will also face a May 17 deadline to file.

Who’s eligible?

Eligibility for the 2020 and 2021 Recovery Rebate Credit generally requires being a U.S. citizen or U.S. resident alien in the respective year, not being a dependent of another taxpayer and having a Social Security number issued before the tax return's due date.

Additionally, the 2020 Recovery Rebate Credit can be claimed for someone who passed away in 2020 or later.

Free help is available

Qualified taxpayers can also access free tax preparation assistance through the Volunteer Income Tax Assistance and the Tax Counseling for the Elderly programs. This is an ongoing effort by the IRS to encourage individuals who are not typically required to file tax returns to explore the potential benefits under the tax law. Use the VITA Locator Tool or call 800-906-9887 to locate the nearest VITA site.

The IRS also reassures taxpayers there is no penalty for claiming a refund on a late-filed tax return. Direct deposit is recommended as the quickest and simplest way to receive a tax refund.

Individuals with an IRS Online Account can check to see if they received any Economic Impact Payments, along with the total amounts.

Any Recovery Rebate Credit received does not count as income when determining eligibility for federal benefits such as Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Claiming the credit does not affect an individual's immigration status or their ability to secure a green card or immigration benefits.

High-income non-filers: IRS compliance letters coming

The IRS also announced Feb. 29 a new effort focused on high-income taxpayers who have failed to file federal income tax returns in more than 125,000 instances since 2017.

The new initiative, made possible by Inflation Reduction Act funding, began with IRS compliance letters going out last week on more than 125,000 cases where tax returns haven’t been filed since 2017. The mailings include more than 25,000 to those with more than $1 million in income, and over 100,000 to people with incomes between $400,000 and $1 million between tax years 2017 and 2021.

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      

Negocios Deben Presentar Formulario 8300 Electrónicamente para Reportar Pagos en Efectivo Más de $10,000

Posted by Admin Posted on Mar 15 2024

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Las empresas que presentan 10 o más declaraciones informativas deben presentar electrónicamente el Formulario 8300, Informe de Pagos en Efectivo de más de $10,000 (en inglés) en lugar de presentar una declaración en papel. Para aquellos con menos declaraciones informativas, la presentación electrónica del Formulario 8300 es opcional.

Para presentar electrónicamente el Formulario 8300, una empresa debe establecer una cuenta con el Sistema de Presentación Electrónica BSA (en inglés) de la Red de Ejecución de Delitos Financieros.

Exenciones y dispensas

Si la presentación electrónica causaría dificultades indebidas, una empresa puede solicitar una exención presentando el Formulario 8508, Solicitud de Exención de la Presentación Electrónica de Declaraciones Informativas (en inglés). Si el IRS otorga una exención de la presentación electrónica de cualquier declaración informativa, esa exención se aplica automáticamente a todos los Formularios 8300 por el resto del año calendario. Una empresa no puede solicitar una exención de la presentación electrónica solo del Formulario 8300. Si se otorga una exención, la empresa debe incluir la palabra "exención" en la parte superior central de cada Formulario 8300 al presentar una declaración en papel.

Si el uso de la tecnología de presentación electrónica entra en conflicto con las creencias religiosas de un declarante, están automáticamente exentos de la presentación electrónica. El declarante debe incluir las palabras "exención religiosa" en la parte superior de cada Formulario 8300 al presentar la declaración en papel.

La presentación electrónica es gratuita y conveniente

El sistema de presentación electrónica es una forma más conveniente y rentable de cumplir con la fecha límite de presentación de 15 días después de una transacción. Las empresas reciben un correo electrónico de confirmación cuando el IRS recibe el formulario, y pueden presentar sus informes por lotes. Esto es especialmente útil si las empresas deben presentar muchos formularios.

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     

Businesses: Electronically File Form 8300 to Report Cash Payments Over $10,000

Posted by Admin Posted on Mar 15 2024

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Businesses that file 10 or more information returns must e-file Form 8300, Report of Cash Payments Over $10,000, instead of filing a paper return. For those with fewer information returns, e-filing Form 8300 is optional.

To electronically file Form 8300, a business must set up an account with the Financial Crimes Enforcement Network's BSA E-Filing System.

Waivers and exemptions

If electronic filing would cause undue hardship, a business can request a waiver by submitting Form 8508, Application for a Waiver from Electronic Filing of Information Returns. If the IRS grants a waiver from e-filing any information return, that waiver automatically applies to all Forms 8300 for the rest of the calendar year. A business may not request a waiver from filing electronically only Form 8300. If a waiver is given, the business must include the word "waiver" on the center top of each Form 8300 when submitting a paper filed return.

If using the e-file technology conflicts with a filer's religious beliefs, they’re automatically exempt from electronic filing. The filer must include the words "religious exemption" on the top of each Form 8300 when submitting the paper return.

Electronic filing is free and convenient

The e-filing system is a more convenient and cost-effective way to meet the reporting deadline of 15 days after a transaction. Businesses get a confirmation email when the IRS receives the form, and they can batch e-file their reports. This especially helps if businesses must file many forms.

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      

Auto Dealers Must Register with the IRS to Receive Advance Payments of the Clean Vehicle Tax Credit

Posted by Admin Posted on Mar 15 2024

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To submit time-of-sale reports and receive advance payments of the Clean Vehicle Tax Credit, auto dealers and sellers must register their business with IRS Energy Credits Online. Dealers and sellers must use this tool to submit all time-of-sale reports for vehicles placed in service in 2024 and future years.

How to register

To register or access a previously registered business, dealers and sellers can go to IRS Energy Credits Online. The step-by-step instructions guide them through the process to register, submit time-of-sale reports and enter advance payment information. It may take 15 days or longer for the registration to process.

Once registered, dealers and sellers must use this tool to enter time-of-sale reports and provide the buyer certain required information.

What happens after registration

When a dealer successfully submits a time-of-sale report, the vehicle is eligible for the credit. A submission is successful when the dealer receives a copy of the report and a confirmation of acceptance by IRS Energy Credits Online. Buyers should use the copy of the report when they file their annual federal tax return.

Find out more about the Clean Vehicle Credits at IRS.gov/cleanvehicle.

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      

Seven Warnings of Incorrect Employee Retention Credit Claims

Posted by Admin Posted on Mar 15 2024

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Some unscrupulous promoters have marketed misleading information about Employee Retention Credit eligibility rules to well-intentioned businesses. The IRS is highlighting seven suspicious signs and urging business to seek a trusted tax professional to resolve an incorrect claim while they still can without penalties or interest.

There’s a deadline of March 22, 2024, for the ERC Voluntary Disclosure Program, which lets businesses who filed a claim in error and received a payment repay just 80% of the claim. Taxpayers who filed an incorrect claim that hasn’t been processed, or who have an ERC check they haven’t cashed or deposited, should quickly pursue the claim withdrawal process.

Seven suspicious signs an ERC claim could be incorrect

  • Too many quarters being 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.
     
  • Business citing 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.
     
  • Business claiming ERC 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 should keep payroll records that support their claim.
     
  • Business 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      

What Taxpayers Should Do if they Received a Form 1099-K in 2024

Posted by Admin Posted on Mar 06 2024

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If a taxpayer sold goods or services in 2023 and received payments through certain payment apps or online marketplaces or accepted payment cards, they could have received a third party reporting document Form 1099-K, Payment Card and Third Party Network Transactions.

Following feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS announced Notice 2023-74, which delayed the new federal law $600 reporting threshold for tax year 2023 on Form 1099-K, Payment Card and Third Party Network Transactions. The previous reporting thresholds remained in place for 2023, which are more than $20,000 in payments and over 200 transactions. Taxpayers could have still received forms below the threshold.

It’s important to know that regardless of if a taxpayer received a Form 1099-K or not, they must report their income. This includes payments they receive in cash, property, goods, digital assets or foreign sources or assets.

The Form 1099-K should not report personal payments like gifts and reimbursements.

What to do when filing taxes

It’s important to understand why an individual received a Form 1099-K. Taxpayers can then use it with their other tax records when it’s time to file their return. The form provides the gross amount of payment card/third party network transactions and may include a combination of different kinds of total payments received.

It's important to note, just because a payment is reported on a Form 1099-K does not mean it’s taxable.

Taxpayers should review the form or forms, determine if the amount is correct, and determine any deductible expenses associated with the payment they may be able to claim when they file their taxes.

Selling personal items at a loss

If an individual sold items at a loss, which means they paid more for the items than for what they sold them, there is not a tax liability. They’ll be able to zero out the payment on their tax return by reporting both the payment and an offsetting adjustment on a Schedule 1 (Form 1040). This will ensure if they received these forms, they don't have to pay taxes they don't owe.

Selling personal items at a gain

If an individual sold items at a gain, which means they paid less than for what they sold it, they will have to report that gain as income, and it's taxable.

See IRS.gov What to do with Form 1099-K for specific instruction on how to report personal item sales.

What to do with a Form 1099-K received in error

People may get a Form 1099-K when they shouldn't have if it:

  • Reports personal payments from family or friends like gifts or reimbursements.
  • Doesn't belong to them.
  • Duplicates a Form 1099-K or other information reporting form they already received.

If this happens:

  • Contact the issuer immediately – see "Filer" on the top left corner of Form 1099-K to find out the name and contact information of the issuer.
  • Ask for a corrected Form 1099-K that shows a zero amount.
  • Keep a copy of the original form and all correspondence with the issuer for your records.
  • Don't wait to file taxes. File even if a corrected Form 1099-K is unavailable.

What to do with an incorrect Form 1099-K

If the payee Taxpayer Identification Number (TIN) or gross payment amount is incorrect taxpayers should request a corrected form from the issuer.

  • See "Filer" on the top left corner of Form 1099-K to find the name and contact information of the issuer. If a taxpayer doesn't recognize the issuer, they should contact the Payment Settlement Entity (PSE) identified on the bottom left corner of the form above their account number.
  • Keep a copy of the corrected Form 1099-K with other tax records, along with any correspondence from the issuer or PSE.
  • Don't contact the IRS. The IRS can't correct a Form 1099-K from an issuer.

Don't wait to file taxes. To file a tax return, take these steps:

  • If the Payee Taxpayer Identification Number (TIN) is incorrect report payments from the Form 1099-K and any sources of income on the appropriate tax return you normally file.
  • If the gross payment amount is incorrect report the amount from your incorrect Form 1099-K on Schedule 1 (Form 1040), Additional Income and Adjustments to Income

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      

Sec. 179 Expensing and Bonus Depreciation: Beware of Pitfalls

Posted by Admin Posted on Mar 06 2024

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If eligible, you can elect to use Section 179 expensing or bonus depreciation to deduct a large portion of the cost (and in some cases the full cost) of eligible property in the year it’s placed in service. Alternatively, you may follow regular depreciation rules and spread deductions over several years or decades, depending on how the asset is classified under the tax code.

While taking current deductions can significantly lower your company’s taxable income, it isn’t always the smartest move.

Sec. 179 and bonus depreciation 101

Section 179 expensing may allow you to currently deduct the full cost of purchasing eligible new or used assets, such as equipment, furniture, off-the-shelf computer software, and qualified improvement property (QIP). An annual expensing limit applies ($1.16 million for 2023 and $1.22 million for 2024), which begins to phase out dollar for dollar when asset acquisitions for the year exceed the applicable threshold ($2.89 million for 2023 and $3.05 million for 2024). You can claim the election only to offset net income, not to reduce it below zero to create a net operating loss.

First-year bonus depreciation is available for qualified assets, which include new tangible property with a recovery period of 20 years or less (such as office furniture and equipment), off-the-shelf computer software and water utility property. Under the TCJA, through 2026, the definition has been expanded to include used property and qualified film, television and live theatrical productions. In addition, QIP is now eligible for bonus depreciation. For 2023, bonus depreciation was 80%. It drops to 60% for 2024, to 40% for 2025 and to 20% for 2026. After that, it will be eliminated, unless Congress acts to extend it.

When to consider forgoing these breaks

Here are two examples when it may be preferable to forgo Sec. 179 expensing and bonus depreciation:

1. You’re planning to sell QIP. If you claim Sec. 179 expense or bonus depreciation on QIP and sell the building soon, this current write-off may be a tax trap. That’s because your gain on the sale up to the amount of Sec. 179 or bonus depreciation deductions you’ve claimed will be treated as “recaptured” depreciation that’s taxable at ordinary-income tax rates, up to 37%. But if you deduct the cost of QIP under regular depreciation rules (generally, over 15 years) and sell the building, any long-term gain attributable to the deductions will be taxable at a top rate of 25%.

2. You’re eligible for the qualified business income (QBI) deduction. This deduction allows eligible business owners to deduct up to 20% of their QBI from certain pass-through entities, such as partnerships, limited liability companies and sole proprietorships. The deduction can’t exceed 20% of an owner’s taxable income, excluding net capital gains. (Other restrictions apply.)

Claiming Sec. 179 or bonus depreciation deductions reduces your taxable income, which may deprive you of an opportunity to maximize the QBI deduction. Because the QBI deduction is scheduled to expire after 2025, taking full advantage of it while you can generally will make sense.

Timing is everything

Keep in mind that only the timing of deductions is affected by the strategy you choose. You’ll still have an opportunity to write off the full cost of eligible assets if you forgo Sec. 179 expensing and bonus depreciation; it will just be over a longer time period. Your tax advisor can analyze your company’s overall tax benefit picture and help you determine the optimal strategy.

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     

¿Qué Debe Hacer si Recibe un Formulario 1099-K en 2024?

Posted by Admin Posted on Mar 06 2024

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Si un contribuyente vendió bienes o servicios en 2023 y recibió pagos a través de ciertas aplicaciones de pago o mercados en línea o tarjetas de pago aceptadas, podría haber recibido un documento de declaración de terceros Formulario 1099-K, Transacciones con tarjetas de pago y redes de terceros (en inglés).

Tras comentarios de contribuyentes, profesionales de impuestos y procesadores de pagos, y para reducir la confusión de los contribuyentes, el IRS anunció el Aviso 2023-74, que retrasó el nuevo umbral de declaración de $600 de la ley federal para el año tributario 2023 en el Formulario 1099-K, Transacciones con tarjetas de pago y redes de terceros (en inglés). Los umbrales de informes anteriores se mantuvieron vigentes para 2023, que son más de $20,000 en pagos y más de 200 transacciones. Los contribuyentes aún podrían haber recibido formularios por debajo del umbral.

Es importante saber que, independientemente de que si un contribuyente recibió un Formulario 1099-K o no, debe declarar sus ingresos. Esto incluye los pagos que reciben en efectivo, propiedades, bienes, activos digitales o fuentes o activos extranjeros.

El Formulario 1099-K no debe reportar pagos personales como regalos y reembolsos.

Qué hacer al declarar impuestos

Es importante entender por qué una persona recibió un Formulario 1099-K. Los contribuyentes pueden usarlo con sus otros registros de impuestos cuando llegue el momento de presentar su declaración. El formulario proporciona el monto bruto de las transacciones con tarjeta de pago/red de terceros y puede incluir una combinación de diferentes tipos de pagos totales recibidos.

Es importante tener en cuenta que el hecho de que un pago se informe en un Formulario 1099-K no significa que esté sujeto a impuestos.

Los contribuyentes deben revisar el formulario o formularios, determinar si la cantidad es correcta y determinar cualquier gasto deducible asociado con el pago que puedan reclamar cuando presenten sus impuestos.

Artículos personales vendidos con una pérdida

Si una persona vendió artículos con pérdidas, lo que significa que pagó más por los artículos que por lo que los vendió, no hay una obligación tributaria. Podrán poner a cero el pago en su declaración de impuestos declarando tanto el pago como un ajuste de compensación en el Anexo 1 (Formulario 1040 (SP). Esto asegurará que, si recibieron estos formularios, no tengan que pagar impuestos que no deben.

Artículos personales vendidos con una ganancia

Si una persona vendió artículos con una ganancia, lo que significa que pagó menos de lo que los vendió, tendrá que declarar esa ganancia como ingreso y está sujeta a impuestos.

Vea IRS.gov Qué debe hacer con el Formulario 1099-K para obtener instrucciones específicas acerca de cómo declarar las ventas de artículos personales.

Qué hacer con un Formulario 1099-K recibido por error

Las personas pueden recibir un Formulario 1099-K cuando no deberían haberlo recibido si:

  • Declaran pagos personales de familiares o amigos como regalos o reembolsos
  • No les pertenece.
  • Duplica un Formulario 1099-K u otro formulario de reporte de información que ya recibieron.

Si esto ocurre:

  • Comuníquese con el emisor inmediatamente – consulte el "Emisor" en la esquina superior izquierda del Formulario 1099-K para averiguar el nombre y la información de contacto del emisor.
  • Solicite un Formulario 1099-K corregido que muestre una cantidad cero.
  • Conserve una copia del formulario original y toda la correspondencia con el emisor para sus registros.
  • No espere a presentar sus impuestos. Presente incluso si no puede obtener un Formulario 1099-K corregido.

Si el Formulario 1099-K tiene la información incorrecta

Si el número de identificación del contribuyente (TIN) del beneficiario o la cantidad del pago bruto son incorrectos los contribuyentes deben solicitar un formulario corregido al emisor.

  • Consulte el "Emisor" en la esquina superior izquierda del Formulario 1099-K para encontrar el nombre y la información de contacto del emisor. Si no reconoce al emisor, comuníquese con la Entidad de liquidación de pagos (PSE) identificada en la esquina inferior izquierda del formulario, encima de su número de cuenta.
  • Conserve una copia del Formulario 1099-K corregido con sus registros, junto con cualquier correspondencia que tenga con el emisor o la PSE.
  • No se comunique con el IRS. No podemos corregir su Formulario 1099-K.

    No espere a presentar sus impuestos. Para presentar su declaración de impuestos, siga estos pasos:

  • Si el número de identificación del contribuyente (TIN) del beneficiario es incorrecto, declare los pagos del Formulario 1099-K y cualquier fuente de ingresos en la declaración de impuestos correspondiente que normalmente presenta.
  • Si la cantidad del pago bruto es incorrecto. Declare la cantidad de su Formulario 1099-K incorrecto en el Anexo 1 (Formulario 1040), Ingreso Adicional y Ajustes al Ingreso
  • 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     

Posted by Admin Posted on Mar 06 2024

Appraisals Aren’t Just for Businesses

Posted by Admin Posted on Mar 06 2024

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Whether you’re in the process of making a retirement or estate plan or you intend to donate property to charity, you’ll need to know the value of your assets. For many hard-to-value items, such as closely held business interests, real estate, art and collectibles, an appraisal may be necessary.

Retirement and estate planning

To enjoy a comfortable retirement, you’ll need to calculate the income that can support your lifestyle when you’re no longer working. This means understanding the value of the assets you own. Once you have this information, you may decide to move your retirement date up or back.

Knowing the value of your assets is also necessary to assess whether you’ll potentially be subject to gift and estate taxes. It also allows you to identify strategies for minimizing or eliminating those taxes. In addition, without appraisals of hard-to-value assets, it’s nearly impossible to divide your overall property equally among your children (if that’s your wish).

Appraisals may also be necessary to avoid running afoul of tax basis consistency rules. The rules are intended to prevent heirs from arguing that estate property was undervalued, which would raise their basis for income tax purposes. According to these rules, the income tax basis of inherited property equals the property’s fair market value as finally determined for estate tax purposes. Appraisals can help ensure that your heirs receive the basis they deserve.

Gifts and charitable giving

The IRS has an unlimited amount of time to challenge the value of gifts for gift and estate tax purposes, unless they’re “adequately disclosed,” which generally binds the IRS to a three-year statute of limitations. A qualified professional appraisal with a timely filed gift tax return is the best way to disclose the value of a gift of a hard-to-value asset.

Charitable gifts of property valued at more than $5,000 (other than publicly traded securities) must be substantiated with a qualified appraisal by a qualified appraiser. This means that the appraiser meets certain education and experience requirements.

Know what you have

Without appraisals of your hard-to-value assets, it’s difficult to develop a realistic financial plan, to create an estate plan that will achieve your desired results and to avoid unwelcome tax liabilities. Asset values can fluctuate dramatically over time, so make sure you get updated appraisals periodically.

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    

IRS Shares 7 Warning Signs Employee Retention Credit Claims may be Incorrect; Urges Businesses to Revisit Eligibility, Resolve Issues Now Before March 22

Posted by Admin Posted on Feb 29 2024

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With a key March deadline quickly approaching, the Internal Revenue Service is highlighting special warning signs that an Employee Retention Credit (ERC) claim may be questionable to help small businesses that may need to resolve incorrect claims.

The agency alerted businesses about seven suspicious warning signs that could signal future IRS problems involving ERC claims. The indicators, built on feedback from the tax professional community and IRS compliance personnel, center on misinformation some unscrupulous ERC promoters used. Many of these groups urged taxpayers to ignore advice from trusted tax professionals and claim the pandemic-era credit even though they may not qualify.

“IRS compliance activity continues increasing involving Employee Retention Credit claims, and those claiming this pandemic-era credit need to quickly review their situation to avoid future problems,” said IRS Commissioner Danny Werfel. “Many businesses were wildly misled about the qualifications, and the IRS is taking a special step to highlight common problems being seen about these claims. The IRS urges ERC claimants to get with a trusted tax professional and review their qualifications before time runs out on IRS disclosure and withdrawal programs. The ‘suspicious seven’ signs released are clear red flags that ERC claimants should carefully review.”

The alert comes as a March 22, 2024, deadline approaches for the ERC Voluntary Disclosure Program for anyone that filed a claim in error and received a payment; the disclosure program allows businesses to repay just 80% of the claim. Taxpayers who filed a claim previously that hasn’t been processed should also review the guidelines and quickly pursue the claim withdrawal process if they now see their claim is ineligible.

The IRS took steps on the ERC program after the well-intentioned pandemic-era program came under aggressive, misleading marketing that oversimplified or misrepresented eligibility rules. Promoters pushed more applicants into the program, frequently by taking a percentage of the payout. The IRS wants businesses to know about these warning signs, revisit their claim if there are questions and act quickly before the special disclosure and withdrawal programs end. Resolving an incorrect claim through the IRS’s special programs will avoid penalties and interest.

“We’ve heard from the tax pro community and others that sharing more warning signs can help point well-intentioned people in the right direction,” Werfel said. “Many of these taxpayers were misled by overzealous and unscrupulous promoters taking advantage of honest taxpayers. The most beneficial time to resolve any incorrect claims is now before this special window closes.”

The ERC, sometimes called the Employee Retention Tax Credit or ERTC, is complex, and the IRS urged claimants to talk to a reputable tax professional for help with an ERC claim. Taxpayers should avoid working with anyone who doesn’t ask for details or business records, such as payroll records.

7 suspicious signs an ERC claim could be incorrect

Here are some of the common red flags being seen on ERC claims that the IRS is focusing on:

  • Too many quarters being claimed. Some promoters have urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon, and this could be a sign of an incorrect claim. Employers should carefully review their eligibility for each quarter.
  • Government orders that don’t qualify. Some promoters have 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. To claim the ERC under government order rules:
     
    • Government orders must have been in effect and the employer’s operations must have been fully or partially suspended by the government order during the period for which they’re claiming the credit.
    • The government order must be due to the COVID-19 pandemic.
    • The order must be a government order, not guidance, a recommendation or a statement.

      Some promoters suggest that an employer qualifies based on communications from the Occupational Safety and Health Administration (OSHA). This is generally not true. See the ERC FAQ about OSHA communications and the 2023 legal memo on OSHA communications for details and examples.

      The frequently asked questions about ERC – Qualifying Government Orders section of IRS.gov has helpful examples. Employers should make sure they have documentation of the government order related to COVID-19 and how and when it suspended their operations. Employers should avoid a promoter that supplies a generic narrative about a government order.

       
  • Too many employees and wrong calculations. Employers should be cautious about claiming the ERC for all wages paid to every employee on their payroll. The law changed throughout 2020 and 2021. There are dollar limits and varying credit amounts, and employers need to meet certain rules for wages to be considered qualified wages, depending on the tax period. The IRS urges employers to carefully review all calculations and to avoid overclaiming the credit, which can happen if an employer erroneously uses the same credit amount across multiple tax periods for each employee. For details about credit amounts, see the Employee Retention Credit - 2020 vs 2021 Comparison Chart.
  • Business citing supply chain issues. Qualifying for ERC based on a supply chain disruption is very uncommon. 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.
     
  • Business claiming ERC 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 should keep payroll records that support their claim.
     
  • Business 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. Some taxpayers claimed the ERC but records available to the IRS show they didn’t have any employees. Others have claimed ERC for tax periods before they even had an employer identification number with the IRS, meaning the business didn’t exist during the eligibility period. The IRS has started disallowing these claims, and more work continues in this area as well as other aspects of ERC.
     
  • 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 requirements, penalties, interest, audit and potential expenses of hiring someone to help resolve the incorrect claim, amend previous returns or represent them in an audit.
  • Resolving incorrect ERC claims

    Businesses that are not eligible for ERC but have received it – as a check that’s been cashed or deposited, or in the form of a credit applied to a tax period – may be able to participate in the IRS’s ERC Voluntary Disclosure Program. The special program runs through March 22, 2024, and allows eligible participants to repay their incorrect ERC, minus 20%.

    If a taxpayer’s ERC is incorrect and is paid after Dec. 21, 2023, they aren’t eligible for the ERC VDP. They should not cash or deposit their check. They can withdraw the claim, return the check and avoid penalties and interest.

    The withdrawal option lets certain employers withdraw their ERC submission and avoid future repayment, interest and penalties. Businesses can use this option if they haven’t received the payment, or they've received a check but haven’t deposited or cashed it. If a taxpayer’s withdrawal request is accepted, the IRS will treat the claim as though it was never filed.

    Resources and tools to learn more about ERC eligibility

    The IRS’s frequently asked questions on ERC include links to additional resources and some helpful examples. The IRS also 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 guide.

    Eligibility highlights

    The ERC is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before Jan. 1, 2022. Eligibility and credit amounts vary depending on when the business impacts occurred. The ERC is not available to individuals.

  • For 2020 and the first two calendar quarters of 2021, an employer may qualify if their trade or business operations were fully or partially suspended due to a government order related to COVID-19 or they experienced the required decline in gross receipts.
  • For the third quarter of 2021, an employer may qualify if their trade or business operations were fully or partially suspended due to a government order related to COVID-19, they experienced the required decline in gross receipts, or they were considered a recovery startup business.
  • For the fourth quarter of 2021, only recovery startup businesses are eligible.
  • 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     

           

Tax Credits and Deductions for Individuals

Posted by Admin Posted on Feb 29 2024

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Tax credits and deductions change the amount of a person's tax bill or refund. People should understand which credits and deductions they can claim and the records they need to show their eligibility.

Tax credits

A tax credit reduces the income tax bill dollar-for-dollar that a taxpayer owes based on their tax return.

Some tax credits, such as the Earned Income Tax Credit, are refundable. If a person's tax bill is less than the amount of a refundable credit, they can get the difference back in their refund.

To claim a tax credit, people should:

  • Keep records to show their eligibility for the tax credits they claim.
  • Check now to see if they qualify to claim any credits next year on their tax return.

Deductions

Deductions can reduce the amount of a taxpayer's income before they calculate the tax they owe.

Most people take the standard deduction. The standard deduction changes each year for inflation. The amount of the standard deduction depends on a taxpayer's filing status, age and whether they're blind and whether the taxpayer is claimed as a dependent by someone else.

Some people must itemize their deductions, and some people may choose to do so because it reduces their taxable income more than the standard deduction. Generally, if a taxpayer's itemized deductions are larger than their standard deduction, it makes sense for them to itemize.

Interactive Tax Assistant

Find help with tax questions based on specific circumstances with the Interactive Tax Assistant. It can help a person decide if they're eligible for many popular tax credits and deductions.

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      

Interest Rates Remain the Same for the Second Quarter of 2024

Posted by Admin Posted on Feb 29 2024

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The Internal Revenue Service announces interest rates will remain the same for the calendar quarter beginning April 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 today are computed from the federal short-term rate determined during January 2024. See the revenue ruling for 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      

IRS Announces 2023 Form 1099-K Reporting Threshold Delay for Third Party Platform Payments; Plans for a $5,000 Threshold in 2024 to Phase in Implementation

Posted by Admin Posted on Feb 29 2024

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Following feedback from taxpayers, tax professionals, and payment processors and to reduce taxpayer confusion, the Internal Revenue Service delayed the new $600 Form 1099-K reporting threshold requirement for third party payment organizations for tax year 2023 and is planning a threshold of $5,000 for 2024 to phase in the new law.

Third party payment organizations include many popular payment apps and online marketplaces.

The agency is making 2023 another transition year to implement the new requirements under the American Rescue Plan that changed the Form 1099-K reporting threshold for payments taxpayers get selling goods or providing a service over $600. The previous reporting thresholds will remain in place for 2023.

What this means

This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements.

This phased-in approach will allow the agency to review its operational processes to better address taxpayer and stakeholder concerns.

Taxpayers should be aware that while the reporting threshold remains over $20,000 and 200 transactions for 2023, companies could still issue the form for any amount.

It's important to note that the higher threshold does not affect the actual tax law to report income on your tax return. All income, no matter the amount, is taxable unless it's excluded by law whether a Form 1099-K is sent or not.

Who gets the form

The Form 1099-K could be sent to anyone who's using payment apps or online marketplaces to accept payments for selling goods or providing services. This includes people with side hustles, small businesses, crafters and other sole proprietors.

However, it could also include casual sellers who sold personal stuff like clothing, furniture and other household items that they paid more than they sold it for. Selling items at a loss is not actually taxable income but would have generated many Forms 1099-K for many people with the $600 threshold.

This complexity contributed to the IRS decision to delay the additional year to provide the agency time to update its operations to make it easier for taxpayers to report the amounts on their forms.

What to do

The IRS Understanding your Form 1099-K webpage provides resources for taxpayers who receive a 1099-K, including what to do with a Form 1099-K and what to do if you get a Form 1099-K in error.

Taxpayers who receive a Form 1099-K should review the forms, determine if the amount is correct, and determine any deductible expenses associated with the payment they may be able to claim when they file their taxes.

The payment on a Form 1099-K may be reported in different places on your tax return depending on what kind of payment it is. For example, someone who is getting paid as a ride share driver could report it on a Schedule C.

People who sold personal items must determine if the amounts on their forms were losses or gains. If taxpayers are unsure of the original price, they can learn more on how to figure out the items worth and how to establish basis.

Selling personal items at a loss

If taxpayers sold at a loss, which means they paid more for the items than they sold them for, they'll be able to zero out the payment on their tax return by reporting both the payment and an offsetting adjustment on a Form 1040, Schedule 1. This will ensure people who unnecessarily get these forms don't have to pay taxes they don't owe.

Specifically:

If you sold personal items at a loss, you have 2 options to report the loss:

Report on Schedule 1 (Form 1040)

You can report and then zero out the Form 1099-K gross payment amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income.

Example: You receive a Form 1099-K that includes the sale of your car online for $21,000, which is less than you paid for it.

On Schedule 1 (Form 1040):

  • Enter the Form 1099-K gross payment amount (Box 1a) on Part I – Line 8z – Other Income: "Form 1099-K Personal Item Sold at a Loss, $21,000"
  • Offset the Form 1099-K gross payment amount (Box 1a) on Part II – Line 24z – Other Adjustments: "Form 1099-K Personal Item Sold at a Loss $21,000"

These 2 entries result in a $0 net effect on your adjusted gross income (AGI).

Report on Form 8949

You can also report the loss on Form 8949, Sales and Other Dispositions of Capital Assets, which carries to Schedule D, Capital Gains and Losses.

Selling personal items at a gain

If they were sold at a gain, which means they paid less than they sold it for, they will have to report that gain as income, and it's taxable.

If you receive a Form 1099-K for a personal item sold at a gain, report it on both:

What should not be reported

Reporting is not required for personal transactions such as birthday or holiday gifts, sharing the cost of a car ride or meal, or paying a family member or another for a household bill. These payments are not taxable and should not be reported on Form 1099-K.

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 Taxpayer Bill of Rights Protects All Taxpayers Year-Round

Posted by Admin Posted on Feb 22 2024

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The Taxpayer Bill of Rights is the 10 rights all taxpayers have any time they interact with the IRS. These rights cover a wide range of topics and issues, and they explain what taxpayers can expect if they need to work with the IRS on a tax matter. This includes when a taxpayer files a return, pays taxes, responds to a letter or notice, goes through an audit or appeals an IRS decision.

Taxpayer Bill of Rights

Taxpayers have a right to:

  • Be Informed – The right to know what to do to comply with the tax laws.
     
  • Quality Service – The right to receive prompt, courteous and professional assistance when working with the IRS.
     
  • Pay No More than the Correct Amount of Tax – The right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.
     
  • Challenge the IRS's Position and Be Heard – The right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions.
     
  • Appeal an IRS Decision in an Independent Forum – The right to a fair and impartial administrative appeal of most IRS decisions.
     
  • Finality – The right to know when the IRS has finished an audit.
     
  • Privacy – The right to expect that any IRS inquiry, examination or enforcement action will comply with the law and be no more intrusive than necessary.
     
  • Confidentiality – The right to expect that any information taxpayers provide to the IRS will not be disclosed unless authorized by the taxpayer or by law.
     
  • Retain Representation – The right to retain an authorized representative of the taxpayer's choice to represent them when working with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.
     
  • A Fair and Just Tax System – The right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay or ability to provide information timely.

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     

PLAN TAS TAX TIP: Don’t Forget to take Minimum Withdrawals from your Retirement Accounts Before December 31

Posted by Admin Posted on Feb 22 2024

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Required Minimum Distribution

Taxpayers generally have to start taking withdrawals from their Individual Retirement Account (IRA), Simplified Employee Pension (SEP) IRA, Savings Incentive Match Plan for Employees (SIMPLE) IRA, or retirement plan account when reaching age 72 (73 if you reach age 72 after Dec. 31, 2022). These withdrawals, called required minimum distributions (RMDs), are the minimum amounts you must withdraw from your account each year.

The first RMD must be taken by April 1 of the year after you turn 72 (or 73 if you reach the age 72 after Dec. 31, 2022). After the first RMD, subsequent withdrawals generally must be taken by December 31 of each calendar year. For example, if you reached age 72 in 2022, you should have taken your first RMD (for 2022) by April 1, 2023, and then you would have to also take a second RMD (for 2023) by Dec. 31, 2023, to avoid the 50 percent excise tax for distributions that are less than RMD amount (excess accumulations). Note that the excise tax is reduced to 25 percent for tax years beginning in 2023 and after. There is an additional reduction to 10 percent for taxpayers meeting additional requirements. See IRS Publication 590-B for more information.

 

If you are not sure whether your distributions meet the RMD requirements, you may want to consult with your tax advisor or a tax professional.

Note: Roth IRAs do not require withdrawals until after the death of the owner. However, beneficiaries of the Roth IRA are subject to the RMD rules

 

The IRS covers the rules, including ages, deadlines, and requirements by plan on https://www.irs.gov/. See the resources listed below for more information.

 

General Information About Retirement Plans

It is never too soon to start planning for retirement. There are many different types of tax-advantaged retirement plans to consider. Some of the most common retirement plans include IRAs, Roth IRAs, 401(k) plans and other employer-sponsored plans, and government employee retirement plans.

According to the IRS, there are several benefits of setting up a retirement plan:

 

  • Contributions can reduce current taxable income.
  • Contributions and investment gains are not taxed until distributed.
  • Many contributions are easy to make through payroll deductions.
  • Interest accrues over time, which allows small, regular contributions to grow to significant retirement savings.
  • Retirement assets can be carried from one employer to another.
  • The saver’s credit may be available to some employees.
  • Saving now can improve financial security in retirement.

Visit IRS.gov to get a full list of the Types of Retirement Plans to consider and resources to Help With Choosing a Retirement Plan.

Limits for 401(k) plans and other qualified retirement plans

There are limitations on the dollar amount people can contribute to their qualified retirement plans each year. The Internal Revenue Code requires the Secretary of the Treasury to annually adjust these limits for cost-of-living increases.

The IRS has announced that the 2024 contributions limit for 401(k) plans has increased to $23,000, up from $22,500 for 2023. The contribution limit on IRAs in 2024 will increase to $7,000, up from $6,500 in 2023.

Get more details about these increases and the increases for other pensions by reading the IRS’s news release on IRS.gov and IRS technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024 in Notice 2023-75.

 

Additionally, get more information about all the rules, age requirements, deadlines, calculations, contributions, and other details you need to plan out your golden years by visiting https://www.irs.gov/retirement-plans.

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     

October 2023 Update – The IRS has resumed sending CP501, CP503, and CP504 collection notices in limited circumstances.

Posted by Admin Posted on Feb 22 2024

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The IRS has resumed sending out some automated collection notices to taxpayers with outstanding balances due. For nearly two years more than a dozen automated collection letters and notices associated with the filing of a tax return or payment of tax have been on pause. The decision was made by the IRS to suspend sending these notices until it was able to eliminate the sizable backlog of processing paper tax returns and correspondence that built up during the pandemic. 

 

Recently the IRS, after catching up from the backlog, has started sending out the following collection notices in limited circumstances: 

 

  • Notice CP501, 1st Notice – Balance Due 
  • Notice CP503, 2nd Notice – Balance Due 
  • Notice CP504, Final Notice – Balance Due 

 

For individual taxpayers with balances due for tax periods ending December 31, 2022, or later, the next scheduled collection notice in the IRS’s automated stream is or will soon be in the mail. 

 

For business taxpayers a Notice CP504 is in the mail for delinquent balances due for tax periods ending August 31, 2023 or later, and for quarterly tax return (Form 941, Employer’s Quarterly Federal Tax Return) periods ending September 30, 2023, or later.   

 

It is important for taxpayers to understand that even though they were not receiving regular notices about their balances due (during the time the IRS stopped sending notices) interest and penalties (as applicable) continued to accrue. 

 

The IRS will likely resume sending collection notices on older delinquent tax periods in the near future. If you have outstanding tax balances – don’t wait. Start considering alternatives to resolve your tax debt now. Several options are available to help you pay your taxes including payment plans, Offers in Compromise, and a Not Collectible Status for those unable to pay. To proactively address unfiled returns and unpaid taxes, you can create or access your online account at IRS.gov. 

 

For help, see information about notices as well as the Taxpayer Roadmap to find out where you are in the Collection process. You can also follow the Taxpayer Advocate Service’s social media accounts and subscribe to the National Taxpayer Advocate’s blog for important tax news updates and insights. 

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      

Report Address Changes to Ensure you Receive IRS Correspondence and your Refund

Posted by Admin Posted on Feb 22 2024

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Have you moved since you filed your 2022 tax return? If so, make sure you update your address with the IRS now.

 

The IRS expects to issue all refunds for individual returns that do not have errors (or other issues that would delay processing) by direct deposit and paper checks. But if you have not received your 2022 tax refund by the end of December, you will need to update your address in order to receive it timely. That’s not the only reason you should keep your address up-to-date.

2022 Refunds to be issued by paper check in 2023

For 2022 refunds that cannot be issued in 2023 because the tax return is being corrected, reviewed, or awaiting correspondence from a taxpayer, the method of paying the refund will be changed from direct deposit to a paper check per the IRS’s normal processes in 2023.

It is critical for everyone who has had a change of address since filing a tax return in 2022 to update their address immediately, to ensure any refund is not sent to the wrong address.

Correct addresses are needed to receive IRS correspondence

It’s also important, especially if there are items on your tax return that need to be clarified, for you to receive the notifications and requests for information that the IRS mails. You may need to take reply quickly; missing correspondence from the IRS could impact your tax account. This applies to both individual taxpayers and businesses, including businesses that may have recently closed.

 

How to update your address with the IRS

Visit the IRS Change of Address page for options to update your address. TAS does not recommend waiting to update your address on your 2023 return as it may not be processed in time to affect receipt of IRS correspondence or refunds already in process for the 2022 tax year.

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      

IRS: Take Care when Choosing a Tax Return Professional

Posted by Admin Posted on Feb 13 2024

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The Internal Revenue Service reminds taxpayers that carefully choosing a tax professional to prepare a tax return is vital to ensuring that their personal and financial information is safe and secure and treated with care.

Most tax return preparers provide honest, high-quality service. But some may cause harm through fraud, identity theft and other scams.

It is important for taxpayers to understand who they’re choosing and what important questions to ask when hiring an individual or firm to prepare their tax return.

Another reason to choose a tax preparer carefully is because taxpayers are ultimately legally responsible for all the information on their income tax return, regardless of who prepares it.

The IRS has put together a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help individuals find a tax pro that meets high standards. There is also a special page on IRS.gov for Choosing a Tax Professional that can help guide taxpayers in making a good choice, including selecting someone affiliated with a recognized national tax association. There are different kinds of tax professionals, and a taxpayer’s needs will help determine which kind of preparer is best for them.

Red flags to watch out for

There are warning signs that can help steer taxpayers away from unscrupulous tax return preparers. For instance, not signing a tax return is a red flag that a paid preparer is likely not to be trusted. They may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund.

These unscrupulous “ghost” preparers often print the return and have the taxpayer sign and mail it to the IRS. For electronically filed returns, a ghost preparer will prepare the tax return but refuse to digitally sign it as the paid preparer. Taxpayers should avoid this type of unethical preparer.

In addition, taxpayers should always choose a tax professional with a valid Preparer Tax Identification Number. By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid PTIN. Paid preparers must sign and include their PTIN on any tax return they prepare.

Other tips

Here are a few other tips to consider when choosing a tax return preparer:

  • Look for a preparer who’s 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. Check the Better Business Bureau website for information about the preparer. Look for disciplinary actions and the license status for credentialed preparers. For CPAs, check the State Board of Accountancy’s website, and for attorneys check with the State Bar Association. For enrolled agents go to IRS.gov and search for “verify enrolled agent status” or check the IRS Directory of Federal Tax Return Preparers.
  • 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.
  • Find an authorized IRS e-file provider. They are qualified to prepare, transmit and process e-filed returns. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit
  • Provide records and receipts. Good preparers ask to see these documents. They’ll also ask questions to determine the client’s total income, deductions, tax credits and other items. Do not hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is against IRS e-file rules.
  • Understand the preparer’s credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent taxpayers in limited situations if they prepared and signed the tax return.
  • Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return.
  • Review the tax return before signing it. Be sure to ask questions if something is not clear or appears inaccurate. Any refund should go directly to the taxpayer – not into the preparer’s bank account. Review the routing and bank account number on the completed return and make sure it’s accurate.

Taxpayers can report preparer misconduct to the IRS using Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax return preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit

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      

Here’s Who Needs to File a Tax Return in 2024

Posted by Admin Posted on Feb 13 2024

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Most U.S. citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year.

The IRS has a variety of information available on IRS.gov to help taxpayers, including a special free help page. Here are some specific details to help people if they need to file a tax return.

Factors that affect whether someone needs to file a tax return

Here are some of the things that affect whether someone must file a tax return.

Gross income. Gross income means all income a person received in the form of money, goods, property and services that aren't exempt from tax. This includes any income from sources outside the United States or from the sale of a main home, even if you can exclude part or all of it.

Required filing threshold. People need to see if their gross income is over the required filing threshold. Filing statuses have different income thresholds, so individuals may need to consider their potential filing status as well.

There are five filing statuses:

  • Single
  • Head of household
  • Married filing jointly
  • Married filing separate
  • Qualifying surviving spouse

Find details on tax filing requirements with Publication 501, Dependents, Standard Deduction, and Filing Information.

Self-employment status. Self-employed individuals must file an annual return and pay estimated tax quarterly if they had net earnings from self-employment of $400 or more.

Status as a dependent. A person claimed as a dependent may still have to file a return. It depends on their gross income, including:

  • Earned income. This includes salaries, wages, tips, professional fees and other amounts received as pay for work performed.
  • Unearned income. This is investment-type income and includes interest, dividends and capital gains, rents, royalties, etc. Distributions of interest, dividends, capital gains and other unearned income from a trust are also unearned income to a beneficiary of the trust.

A parent or guardian must file a tax return for dependents who need to file but aren't able to file for themselves.

Potential benefits when people file a tax return

Get money back. In some cases, people may get money back when they file a tax return. For example, if their employer withheld taxes from their paycheck, the person may be due a refund.

Avoid interest and penalties. People can avoid interest and penalties by filing an accurate tax return on time and paying any tax they owe before the deadline. They should file on time or request an extension to avoid some penalties. If they owe a tax debt and can't pay all or part of it, the IRS can help.

Build Social Security benefits. Reporting income on a tax return is important for self-employed people because this information is used to calculate their Social Security benefit. Unreported income can lead to an incorrect calculation.

Get an accurate picture of income. When people report all their income, they give lenders an accurate financial picture to determine the loan amounts and rates they may receive.

Get peace of mind. When people file an accurate tax return and pay their taxes on time, they know that they're doing the right thing to follow the law.

Some people should consider filing even if they aren't required

People may want to file even if they make less than the filing threshold because they may get money back. This could apply to them if they:

  • Have had federal income tax withheld from their pay
  • Made estimated tax payments
  • Qualify to claim tax credits such as:
    • Earned Income Tax Credit
    • Child Tax Credit
    • American Opportunity Tax Credit
    • Credit for Federal Tax on Fuels
    • Premium Tax Credit
    • Health Coverage Tax Credit
    • Credits for Sick and Family Leave
    • Child and Dependent Care Credit

The Interactive Tax Assistant can help people determine if they need to file

The Interactive Tax Assistant is an online tool that provides answers to common tax law questions based on an individual's specific circumstances. Based on a user’s input, it can determine if they should file a tax return. It can also help them understand:

  • Their filing status
  • If they can claim a dependent
  • If the type of income they have is taxable
  • If they're eligible to claim a credit
  • If they can deduct expenses

The information is anonymous and only used to help answer the person's question. The tool will not share, store or use information in any other way, and it can’t identify the individual using it. The system discards the information the user provides when they exit a topic.

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      

Tax year 2023 filing thresholds by filing status

Filing status

Age at the end of 2023

A person must file a return if their gross income was at least:

Single

Under 65

$13,850

Single

65 or older

$15,700

Head of household

Under 65

$20,800

Head of household

65 or older

$22,650

Married filing jointly

Under 65 (both spouses)

$27,700

Married filing jointly

65 or older (one spouse)

$29,200

Married filing jointly

65 or older (both spouses)

$30,700

Married filing separately

Any age

$5

Qualifying surviving spouse

Under 65

$27,700

Qualifying surviving spouse

65 or older

$29,200

 

 

 

 

Quien Debe Presentar una Declaración de Impuestos en 2024

Posted by Admin Posted on Feb 13 2024

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La mayoría de los ciudadanos estadounidenses (en inglés) y residentes permanentes (en inglés) que trabajan en los Estados Unidos deben presentar una declaración de impuestos si ganan más de una cierta cantidad durante el año.

Factores que afectan si alguien necesita presentar una declaración de impuestos

Estos son algunos elementos que afectan si se requiere que una persona presente una declaración de impuestos.

Ingresos brutos. El ingreso bruto significa todos los ingresos que un individuo recibió en forma de dinero, bienes, propiedades y servicios que no están exentos de impuestos. Esto incluye cualquier ingreso de fuentes fuera de los Estados Unidos o de la venta de una casa principal, incluso si un contribuyente puede excluir parte o la totalidad.

Umbral de presentación requerido. Los contribuyentes tendrán que ver si sus ingresos brutos están por encima del umbral de presentación requerido. Los estados de presentación (en inglés) tienen diferentes umbrales de ingresos, por lo que los contribuyentes también pueden necesitar considerar su posible estado civil.

Hay cinco estados civiles:

  • Soltero
  • Cabeza de familia
  • Casado que presenta una declaración conjunta
  • Casado que presenta una declaración por separado
  • Cónyuge sobreviviente calificado

Encuentre detalles acerca de los requisitos de declaración de impuestos con la Publicación 501, Personas dependientes, deducción estándar e información sobre la presentación (en inglés).

Umbrales de presentación del año tributario 2023 por estado civil

Estado civil

Edad del contribuyente al final de 2023

Un contribuyente debe presentar una declaración de impuestos si su ingreso fue al menos

 

soltero

menos de 65 años de edad

$13,850

soltero

65 años de edad o más

$15,700

cabeza de familia

menos de 65 años de edad

$20,800

cabeza de familia

65 años de edad o más

$22,650

casado que presenta una declaración conjunta

menos de 65 años de edad (ambos cónyuges)

$27,700

casado que presenta una declaración conjunta

65 años de edad o más (un cónyuge)

$29,200

casado que presenta una declaración conjunta

65 años de edad o más (ambos cónyuges)

$30,700

casado que presenta una declaración por separado

cualquier edad

$5

cónyuge sobreviviente calificado

menos de 65 años de edad

$27,700

cónyuge sobreviviente calificado

65 años de edad o más

$29,200

Estado de trabajo por cuenta propia. Los individuos que trabajan por cuenta propia deben presentar una declaración anual y pagar impuestos estimados trimestralmente si tuvieron ganancias netas de $400 o más.

Estado como dependiente. Una persona que es reclamada como dependiente aún puede tener que presentar una declaración. Depende de sus ingresos brutos, incluyendo:

  • Ingresos del trabajo. Esto incluye sueldos, salarios, propinas, honorarios profesionales y otras cantidades recibidas como pago por trabajo realizado.
  • Ingresos no ganados. Esto es ingresos de tipo inversión e incluye intereses, dividendos y ganancias de capital, alquileres, regalías, etc. Las distribuciones de intereses, dividendos, ganancias de capital y otros ingresos no ganados de un fideicomiso también son ingresos no ganados para un beneficiario del fideicomiso.

Un padre o tutor debe presentar una declaración de impuestos para los dependientes que deben presentar, pero no pueden presentar por sí mismos.

Beneficios potenciales cuando los contribuyentes presentan una declaración de impuestos:

Se le devuelve dinero. En algunos casos, es posible que se le devuelva dinero cuando presenta una declaración de impuestos. Por ejemplo, si un empleador retuvo impuestos de su cheque de pago, es posible que se le adeude un reembolso.

Evite intereses y multas. Las personas pueden evitar intereses y multas presentando una declaración de impuestos precisa a tiempo y pagando cualquier impuesto que adeudan antes de la fecha límite. Deben presentar la declaración a tiempo o solicitar una extensión para evitar algunas multas. Si tienen una deuda tributaria y no pueden pagar la totalidad o parte de ella, el IRS puede ayudar.

Aumente sus beneficios del Seguro Social. Reclamar los ingresos del trabajo por cuenta propia en su declaración de impuestos garantiza que se incluyan en el cálculo de sus beneficios. Los ingresos no declarados pueden dar lugar a un cálculo incorrecto.

Obtenga un panorama preciso de sus ingresos. Cuando los contribuyentes informan con precisión todos sus ingresos, les dan a los prestamistas una imagen financiera precisa para determinar los montos y las tasas de préstamos que el contribuyente debería tener derecho a recibir.

Hacer lo correcto. Cuando los contribuyentes presentan una declaración de impuestos precisa y pagan sus impuestos a tiempo, sabrán que están haciendo lo correcto para cumplir con la ley.

Algunos contribuyentes deberían considerar la presentación, incluso si no son requeridos.

Es posible que las personas quieran presentar una declaración incluso si ganan menos que el umbral de presentación porque pueden recibir dinero. Esto podría aplicarse a ellos si:

  • Han tenido impuesto federal retenido de su pago
  • Hicieron pagos de impuestos estimados
  • Califican para reclamar créditos tributarios como:
    • Crédito tributario por ingreso del trabajo
    • Crédito tributario por hijos
    • Crédito tributario de la oportunidad americana
    • Crédito por impuestos federales sobre combustibles
    • Crédito tributario para primas
    • Crédito tributario para cobertura de salud
    • Créditos por licencia por enfermedad y familiar
    • Crédito por cuidado de hijos y dependientes

      El Asistente Tributario Interactivo puede ayudar a las personas a determinar si necesitan presentar una declaración

      El Asistente Tributario Interactivo es una herramienta que proporciona respuestas a muchas preguntas comunes de la ley tributaria basadas en las circunstancias específicas de un individuo. Según los datos que usted proporcione, puede determinar si debe presentar una declaración de impuestos. También puede ayudarle a entender:

    • Estado civil para efectos de la declaración
    • Si puede reclamar un dependiente
    • Si el tipo de ingreso que tienen está sujeto a impuestos
    • Si son elegibles para reclamar un crédito
    • Si puede deducir gastos
    • La información del usuario es anónima y solo permite al asistente responder a las preguntas del contribuyente. La herramienta no compartirá, almacenará o usará información de ninguna otra manera, ni puede identificar a la persona que la usa. El sistema descarta la información que el usuario proporciona cuando sale de un tema.

      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     

Traveling for Business in 2024? What’s Deductible?

Posted by Admin Posted on Feb 13 2024

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If you and your employees will be traveling for business this year, there are many factors to keep in mind. Under the tax law, certain requirements for out-of-town business travel within the United States must be met before you can claim a deduction. The rules apply if the business conducted reasonably requires an overnight stay.

Note: Under the Tax Cuts and Jobs Act, employees can’t deduct their unreimbursed travel expenses through 2025 on their own tax returns. That’s because unreimbursed employee business expenses are “miscellaneous itemized deductions” that aren’t deductible through 2025. Self-employed individuals can continue to deduct business expenses, including away-from-home travel expenses.

Rules that come into play

The actual costs of travel (for example, plane fare and cabs to the airport) are generally deductible for out-of-town business trips. You’re also allowed to deduct the cost of lodging. And a percentage of your meals is deductible even if the meals aren’t connected to a business conversation or other business function. For 2024, the law allows a 50% deduction for business meals.

No deduction is allowed for meal or lodging expenses that are “lavish or extravagant,” a term that generally means “unreasonable.” Also, personal entertainment costs on trips aren’t deductible, but business-related costs such as those for dry cleaning, phone calls and computer rentals can be written off.

Mixing business with pleasure

Some allocations may be required if the trip is a combined business/pleasure trip; for example, if you fly to a location for four days of business meetings and stay on for an additional three days of vacation. Only the costs of meals, lodging and so on incurred during the business days are deductible, not those incurred for the personal vacation days.

On the other hand, with respect to the cost of the travel itself (for example, plane fare), if the trip is primarily for business purposes, the travel cost can be deducted in its entirety and no allocation is required. Conversely, if the trip is primarily personal, none of the travel costs are deductible. An important factor in determining if the trip is primarily business or personal is the amount of time spent on each (though this isn’t the sole factor).

Suppose a trip isn’t for the actual conduct of business but is for the purpose of attending a convention or seminar. The IRS may check the nature of the meetings carefully to make sure they aren’t vacations in disguise, so retain all material helpful in establishing the business or professional nature of this travel.

Also, personal expenses you incur at home related to the trip aren’t deductible. This might include costs such as boarding a pet while you’re away.

Is your spouse joining you?

The rules for deducting the costs of a spouse who accompanies you on a business trip are very restrictive. No deduction is allowed unless the spouse is an employee of yours or of your company. If that isn’t the case, then even if there’s a bona fide business purpose for having your spouse make the trip, you probably won’t be able to fully deduct his or her travel costs (though you can deduct some costs).

Specifically, the restrictions apply only to additional costs incurred by having your non-employee spouse travel with you. For example, the expense of a hotel room or for traveling by car would likely be fully deductible since the cost to rent the room or to travel alone or with another person would be the same, even in a rented car.

Before you hit the road

Contact the office with any questions you may have about travel deductions to help you stay in the right lane.

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      

IRS Reminder to Disaster Victims with Extensions: File 2022 Returns by Feb. 15; All or Parts of 8 States and 2 Territories Affected

Posted by Admin Posted on Feb 02 2024

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The Internal Revenue Service reminds disaster-area taxpayers who received extensions to file their 2022 returns that these returns are due on Feb. 15, 2024.

Eligible taxpayers were those affected by various disasters that occurred between Aug. 8 and Oct. 9, 2023. This included Hurricane Idalia, Hurricane Lee, Tropical Storm Bolaven, the wildfires in Hawaii, the seawater intrusion in Louisiana and storms and flooding in Illinois. For extension filers, payments on these returns were not eligible for the additional time because they were originally due last spring before any of these disasters occurred.

Locations that qualify for the Feb. 15 filing deadline:

  • Forty-nine counties in Florida.
  • Thirty-two counties In Georgia.
  • All of Guam.
  • Maui and Hawaii counties in Hawaii.
  • Cook County in Illinois.  
  • Five parishes in Louisiana.
  • All 16 counties in Maine.
  • All 14 counties in Massachusetts.
  • Six islands in the Northern Mariana Islands.
  • All 46 counties in South Carolina.

The IRS normally provides relief, including postponing various tax filing and payment deadlines, for any area designated by the Federal Emergency Management Agency (FEMA). As long as their address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time, without having to ask for it. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers who assisted with relief activities who are affiliated with a recognized government or philanthropic organization.

Besides those who received extensions to file their 2022 returns, there are other returns, payments and time-sensitive tax-related actions that also qualify for the Feb. 15 deadline. For details, see the IRS disaster relief page, especially the disaster relief announcements for each state and territory.

The tax relief is part of a coordinated federal response to the damage caused by these disasters and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.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      

Recordatorio del IRS para Víctimas de Desastres con Extensiones: Presente Declaraciones de 2022 antes del 15 de febrero; Ocho Estados y Dos Territorios Afectados

Posted by Admin Posted on Feb 02 2024

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El Servicio de Impuestos Internos les recuerda a los contribuyentes ubicados en áreas de desastre declaradas por el gobierno federal que recibieron extensiones para presentar sus declaraciones de 2022, que estas declaraciones vencen el 15 de febrero de 2024.

Los contribuyentes elegibles fueron aquellos afectados por varios desastres que ocurrieron entre el 8 de agosto y el 9 de octubre de 2023. Esto incluyó los huracanes Idalia y Lee, la tormenta tropical Bolaven, los incendios forestales en Hawái, la intrusión de agua de mar en Luisiana y las tormentas e inundaciones en Illinois. Para quienes declaran impuestos con una extensión, los pagos de estas declaraciones no eran elegibles para el tiempo adicional porque originalmente debían pagarse la primavera pasada antes de que ocurriera cualquiera de estos desastres.

Ubicaciones que califican para la fecha límite de presentación del 15 de febrero:

  • 49 condados en Florida
  • 32 condados en Georgia
  • Todo Guam
  • Condados de Maui y Hawái en Hawái
  • Condado de Cook en Illinois
  • 5 parroquias en Luisiana
  • Los 16 condados de Maine
  • Los 14 condados de Massachusetts
  • 6 islas en las Islas Marianas del Norte
  • Los 46 condados de Carolina del Sur

Normalmente, el IRS brinda alivio, incluido el aplazamiento de varios plazos de presentación y pago de impuestos, para cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA). Siempre que su dirección registrada esté en una localidad del área del desastre, los contribuyentes individuales y comerciales obtienen automáticamente el tiempo adicional, sin tener que solicitarlo. La lista actual de localidades elegibles siempre está disponible en la página de alivio en situaciones de desastre en IRS.gov.

Además, el IRS trabajará con cualquier contribuyente que viva fuera del área del desastre, pero cuya documentación necesaria para cumplir con una fecha límite que ocurra durante el período de aplazamiento se encuentre en el área afectada. Los contribuyentes que califiquen para recibir ayuda y que vivan fuera del área del desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudaron con actividades de ayuda y que están afiliados a un gobierno reconocido o a una organización filantrópica.

Además de aquellos que recibieron prórrogas para presentar sus declaraciones de 2022, hay otras declaraciones, pagos y acciones relacionadas con impuestos urgentes que también califican para la fecha límite del 15 de febrero. Para obtener más detalles, consulte la página de ayuda en casos de desastre del IRS, especialmente los anuncios de ayuda en casos de desastre para cada estado y territorio.

El alivio tributario es parte de una respuesta federal coordinada a los daños causados ​​por estos desastres y se basa en evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de recuperación ante desastres, visite desastreassistance.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     

Things to Remember When Filing 2023 Tax Returns

Posted by Admin Posted on Feb 02 2024

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The Internal Revenue Service offers a checklist to help taxpayers as they prepare to file their 2023 tax returns during filing season.

These six easy tips will help make tax preparation smoother in 2024. Much of this information is also available on a special IRS.gov free help page:

1. Gather all necessary tax paperwork and records for accuracy to avoid missing a deduction or credit. Taxpayers should have all their important and necessary documents before preparing their return. This will help file a complete and accurate tax return. Errors and omissions slow down tax processing, including refund times.

Before beginning, taxpayers should have:

  • Social Security numbers for everyone listed on the tax return.
  • Bank account and routing numbers.
  • Various tax forms such as W-2s, 1099s, 1098s and other income documents or records of digital asset transactions.
  • Form 1095-A, Health Insurance Marketplace statement.
  • Any IRS letters citing an amount received for a certain tax deduction or credit.

2. Remember to report all types of income on the tax return. This is important to avoid receiving a notice or a bill from the IRS. Don’t forget to include income from:

  • Goods created and sold on online platforms.
  • Investment income.
  • Part-time or seasonal work.
  • Self-employment or other business activities.
  • Services provided through mobile apps.

3. Filing electronically with direct deposit is the fastest way to receive a refund. Avoid paper returns. Tax software helps individuals avoid mistakes by doing the math. It guides people through each section of their tax return using a question and answer format.

For those waiting on their 2022 tax return to be processed, here's a special tip to ensure their 2023 tax return is accepted by the IRS for processing. Make sure to enter $0 (zero dollars) for last year's adjusted gross income (AGI) on the 2023 tax return. Everyone else should enter their prior year's AGI from last year's return.

4. Free resources are available to help eligible taxpayers file online. Free help may also be available to qualified taxpayers. IRS Free File provides a free online alternative to filing a paper tax return. IRS Free File is available to any individual or family who earned $79,000 or less in 2023.

With IRS Free File, leading tax software providers make their online products available for free as part of a 21-year partnership with the IRS. This year, there are eight products in English and one in Spanish. Taxpayers must access these products through the IRS website.

People who make over $79,000 can use the IRS' Free File Fillable Forms. These are the electronic version of IRS paper forms. This product is best for people who are comfortable preparing their own taxes.

Qualified taxpayers can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

5. Consider which filing option to use; each one has its own benefits. Taxpayers should decide based on their personal situation and comfort level with tax preparation.

  • Personally file taxes.
  • Use online filing services.
  • Hire a tax professional. Choose a tax professional carefully. Most tax return preparers are professional, honest and provide excellent service to their clients. However, dishonest tax return preparers who file false income tax returns do exist. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications and more on choosing a tax pro on IRS.gov.

6. Don’t wait on hold when calling the IRS. Use online resources at IRS.gov to get answers to tax questions, check a refund status or pay taxes. There’s no wait time or appointment needed — online tools and resources are available 24 hours a day. The IRS’ Interactive Tax Assistant tool and Let us help you resources are especially helpful.

Stay updated

Additionally, the IRS suggests taxpayers stay up to date on important tax information online by:

  • Following the IRS’ official social media accounts and email subscription lists to stay current on the latest tax topics and alerts.
  • Downloading the IRS2Go mobile app, watching IRS YouTube videos or following the IRS on X, Facebook, LinkedIn and Instagram for the latest updates on tax changes, scam alerts, initiatives, products and services.

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      

Puntos para Recordar al Presentar Declaraciones de Impuestos de 2023

Posted by Admin Posted on Feb 02 2024

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El Servicio de Impuestos Internos ofreció hoy una lista de verificación para ayudar a los contribuyentes mientras se preparan para presentar sus declaraciones de impuestos de 2023 durante la temporada de impuestos.

Estos seis consejos sencillos ayudarán a que la preparación de impuestos sea más fácil en 2024. Gran parte de esta información también está disponible en la página especial de ayuda gratuita de IRS.gov:

1.    Reúna toda la documentación tributaria necesaria para verificar su exactitud y evitar perder una deducción o crédito (en inglés). Los contribuyentes deben tener todos sus documentos importantes y necesarios antes de preparar su declaración. Esto ayudará a presentar una declaración de impuestos completa y precisa. Los errores y omisiones retrasan el procesamiento de impuestos, incluidos los tiempos de reembolso.

Antes de comenzar, los contribuyentes deben tener:

  • Números de Seguro Social de todas las personas que figuran en la declaración de impuestos.
  • Números de cuenta bancaria y de ruta.
  • Varios formularios de impuestos, como W-2, 1099, 1098 y otros documentos de ingresos o registros de transacciones de activos digitales
  • Formulario 1095-A, Declaración del mercado de seguros médicos.
  • Cualquier carta del IRS que cite una cantidad recibida por una determinada deducción o crédito tributario.

2. Recuerde reportar todo tipo de ingresos en la declaración de impuestos. Esto es importante para evitar recibir un aviso o una factura del IRS. No olvide incluir los ingresos de:

  • Bienes creados y vendidos en plataformas en línea.
  • Ingresos de inversión.
  • Trabajo a tiempo parcial o estacional.
  • Trabajo por cuenta propia u otras actividades empresariales.
  • Servicios prestados a través de aplicaciones móviles.

3. Presentar electrónicamente con depósito directo es la manera más rápida de recibir un reembolso. Evite las declaraciones en papel. El software de impuestos ayuda a las personas a evitar errores al realizar los cálculos. Guía a las personas a través de cada sección de su declaración de impuestos a través de un formato de preguntas y respuestas.

Para aquellos que esperan que se procese su declaración de impuestos de 2022, aquí hay un consejo especial para asegurarse de que el IRS acepte su declaración de impuestos de 2023 para ser procesada. Asegúrese de ingresar $0 (cero dólares) para el ingreso bruto ajustado (AGI) del año pasado en la declaración de impuestos de 2023. Todos los demás deben ingresar su ingreso bruto ajustado del año anterior de la declaración del año pasado.

4. Hay recursos gratuitos disponibles para ayudar a los contribuyentes elegibles a presentar su declaración en línea. La ayuda gratuita también puede estar disponible para los contribuyentes calificados. Free File del IRS ofrece una alternativa gratuita en línea a la presentación de una declaración de impuestos en papel. Free File del IRS está disponible para cualquier persona o familia que haya ganado $79,000 o menos en 2023.

Con Free File del IRS, los principales proveedores de software tributario hacen que sus productos en línea estén disponibles de forma gratuita como parte de una asociación de 21 años con el IRS. Este año, hay ocho productos en inglés y uno en español. Los contribuyentes deben acceder a estos productos (en inglés) a través del sitio web del IRS.

Las personas que ganan más de $79,000 pueden usar los Formularios Interactivos de Free File del IRS. Estos son la versión electrónica de los formularios impresos del IRS. Este producto es mejor para las personas que se sienten cómodas preparando sus propios impuestos.

Los contribuyentes calificados también pueden encontrar ayuda personalizada gratuita para la preparación de impuestos en todo el país a través de los programas de Ayuda Voluntaria a los Contribuyentes (VITA) y Asesoramiento Tributario para Personas de Edad Avanzada (TCE).

5. Considere qué opción de presentación usar; cada una tiene sus propios beneficios. Los contribuyentes deben decidir en función de su situación personal y su nivel de comodidad con la preparación de impuestos.

  • Presentar personalmente los impuestos.
  • Usar los servicios de presentación en línea.
  • Contratar a un profesional de impuestos. Elija un profesional de impuestos con cuidado. La mayoría de los preparadores de declaraciones de impuestos son profesionales, honestos y brindan un excelente servicio a sus clientes. Sin embargo, existen preparadores de declaraciones de impuestos deshonestos que presentan declaraciones de impuestos falsas. El IRS tiene un Directorio de preparadores de declaraciones de impuestos federales con credenciales y calificaciones seleccionadas (en inglés) y más sobre cómo elegir un profesional de impuestos en IRS.gov.

    6. No espere cuando llame al IRS. Use los recursos en línea en IRS.gov para obtener respuestas a preguntas sobre impuestos (en inglés), verificar el estado de un reembolso(en inglés) o pagar impuestos. No se necesita tiempo de espera ni cita previa: las herramientas y los recursos en línea están disponibles las 24 horas del día. La herramienta del Asistente Tributario Interactivo del IRS y los recursos de Permítanos ayudarle son especialmente útiles.

    Estén atentos

    Además, el IRS sugiere que los contribuyentes se mantengan actualizados sobre información tributaria importante en línea:

  • Siga las cuentas oficiales de medios sociales del IRS y suscripciones a noticias electrónicas del IRS para mantenerse actualizado sobre los últimos temas y alertas de impuestos.
  • Descargar la aplicación móvil IRS2Go, ver videos de YouTube del IRS o seguir al IRS en X, Facebook, LinkedIn e Instagram para obtener las últimas actualizaciones de cambios tributarios, alertas de estafas, iniciativas, productos y servicios.
  • 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    

Taxpayers Should Continue to Report All Cryptocurrency, Digital Asset Income

Posted by Admin Posted on Feb 01 2024

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The Internal Revenue Service reminds taxpayers that they must again answer a digital asset question and report all digital asset related income when they file their 2023 federal income tax return, as they did for their 2022 federal tax returns.

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 1041, U.S. Income Tax Return for Estates and Trusts; 1065, U.S. Return of Partnership Income; 1120, U.S. Corporation Income Tax Return; and 1120-S, U.S. Income Tax Return for an S Corporation.

Depending on the form, the digital assets question asks this basic question, with appropriate variations tailored for corporate, partnership or estate and trust taxpayers:

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).

Everyone must answer the question

Everyone who files Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, 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 digital assets 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.

How to 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 digital assets, 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 digital assets to customers in connection with a trade or business.

When to check "No"

Normally, a taxpayer who merely owned digital assets during 2023 can check the "No" box as long as they did not engage in any transactions involving digital assets 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.

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      

Filing Deadline and Payment Options

Posted by Admin Posted on Jan 31 2024

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If you're trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies from the IRS Forms page under Tax Tools on our website. If you find you need more time to finish your return, you can get a six-month extension of time to file using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. And if you have trouble paying your tax bill, the IRS has several payment options available.

The extension will give you extra time to get the paperwork to the IRS, but it does not extend the time you have to pay any tax due. You have to make an accurate estimate of any tax due when you request an extension. You can also send a payment for the expected balance due, but this is not required to get the extension. However, you will owe interest on any amounts not paid by the April 15 deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.

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      

Tips and Taxes

Posted by Admin Posted on Jan 31 2024

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Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.

As taxable income, these tips are subject to federal income, Social Security and Medicare taxes, and may be subject to state income tax as well.

You must keep a running daily log of all your tip income and tips paid out. This includes cash that you receive directly from customers, tips from credit card charges from customers that your employer pays you, the value of any non-cash tips such as tickets or passes that you receive, and the amount of tips you paid out to other employees through tip pools or tip splitting and the names of those employees.

You can use IRS Publication 1244, Employee's Daily Record of Tips and Report of Tips to Employer, to record your tip income. For a free copy of Publication 1244, call the IRS toll free at 1-800-TAX-FORM (1-800-829-3676).

If you receive $20 or more in tips in any one month, you should report all your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes and to report the correct amount of your earnings to the Social Security Administration (which will affect your benefits when you retire or if you become disabled, or your family's benefits if you die).  Contact us so your wages are properly reported!

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      

Is Disability Income Taxable?

Posted by Admin Posted on Jan 31 2024

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If you may be eligible for disability income should you become disabled, it’s important to know whether that income will be taxable. As is often the case with tax questions, the answer is “it depends.”

Key factor

The key factor is who paid it. If your employer will directly pay the disability income to you, it will be taxable to you as ordinary salary and wages would be. Taxable benefits are also subject to federal income tax withholding, though, depending on the disability plan, disability benefits sometimes aren’t subject to Social Security tax.

Frequently, the payments aren’t made by an employer but by an insurer under a policy providing disability coverage or under an arrangement having the effect of accident or health insurance. In such cases, the tax treatment depends on who paid for the coverage. If your employer paid for it, the disability income will be taxed to you, as if paid directly to you by the employer. But if you paid for the policy, the payments you receive under it won’t be taxable.

Even if your employer arranges for the coverage (in other words, it’s a policy made available to you at work), the benefits won’t be taxed to you as long as you paid the premiums. For these purposes, if the premiums were paid by your employer but the amount paid was included as part of your taxable income from work, the premiums will also be treated as paid by you and the benefits won’t be taxable.

Two examples

For simplicity, let’s say your salary is $1,000 a week ($52,000 a year). Under a disability insurance arrangement made available to you by your employer, $10 a week ($520 for the year) is paid on your behalf by your employer to an insurance company. You include $52,520 in income as your wages for the year: the $52,000 paid to you plus the $520 in disability insurance premiums. In this case, the insurance is treated as paid for by you. If you become disabled and receive benefits, they won’t be taxable income to you.

Now, let’s look at an example with the same facts as above, except that the amount paid for the insurance coverage qualifies as excludable under the rules for employer-provided health and accident plans. In this case, you include only $52,000 in income as your wages for the year because the insurance is treated as paid for by your employer. So, if you become disabled and receive benefits, they will be taxable income to you.

Note: There are special rules in the case of a permanent loss (or loss of the use) of a part or function of the body, or a permanent disfigurement.

How much coverage is needed?

In deciding how much disability coverage you need to protect yourself and your family, take tax treatment into consideration. If you’re buying the policy, you need to replace only your after-tax, “take-home” income because your benefits won’t be taxed. On the other hand, if your employer pays for the benefit, you’ll lose a percentage to taxes.

If your current coverage is insufficient, you may wish to supplement an employer benefit with a policy you take out personally.

Any questions?

This discussion doesn’t cover the tax treatment of Social Security disability benefits, which may be taxed under different rules. Contact us to discuss this further or if you have questions about regular disability income.

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      

Filing Season Has Begun, Employer Wage Statement Deadline Nears

Posted by Admin Posted on Jan 31 2024

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With the start of filing season the Internal Revenue Service reminds employers of the Jan. 31 deadline to file Forms W-2 and other wage statements with the Social Security Administration (SSA).

Filing these documents timely prevents late-filing penalties for employers, helps employees file their income tax returns and prevents tax fraud.

Employers must file copies of their 2023 Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the SSA by Jan. 31, whether filing electronically or by paper forms.

Employers must also provide copies B, C and 2 of Form W-2 to their employees by Jan. 31. For more information on filing Form W-2, see General Instructions for Forms W-2 and W-3.

The Jan. 31 deadline also applies to Forms 1099-NEC filed with the IRS to report non-employee compensation to independent contractors. Employers and payers can review the Instructions for Forms 1099-MISC and 1099-NEC for details and other due dates.

Employer Identification Numbers

Employers need to make sure the employer identification number (EIN) on their wage and tax statements (Forms W-2, W-3, etc.) and their payroll tax returns (Forms 941, 943, 944, etc.) match the EIN the IRS assigned to their business.

Do not use a Social Security number (SSN) or Individual Taxpayer Identification number (ITIN) on forms that ask for an EIN, and never truncate EINs or SSNs on any forms.

Extensions

Employers may request a 30-day extension to file Forms W-2 with SSA by submitting Form 8809, Application for Extension of Time to File Information Returns, by Jan. 31. Additionally, extensions of time to furnish Forms W-2 to employees must also occur by Jan. 31.

For detailed information and instructions on how to file an extension of time to furnish Forms W-2 to employees or to request a 30-day extension with the SSA, see Form 8809 and General Instructions for Forms W-2 and W-3.

Electronic filing

Beginning Jan. 1, 2024, the electronic filing threshold for information returns reduced from 250 to 10 for filing season 2024. Filers need to combine all information return types they file to determine if they meet the 10-return threshold and if the requirement to file electronically applies to them.

The IRS offers a free e-file service for the Form 1099 series, the Information Returns Intake System (IRIS) Taxpayer Portal. IRIS is a web-based platform that is accurate, convenient, easy to use, secure and doesn't require any additional software. Learn more about e-filing information returns with IRIS and its features.

For help with filing information returns electronically, review Publication 1220, Specification for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G and the Filing Information Returns Electronically (FIRE) webpage.

E-filing is the most secure and accurate method to file returns, and saves taxpayers time and prevents delays in processing returns.

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     

Qualified Charitable Distributions Allow Eligible IRA Owners Up to $100,000 in Tax-Free Gifts to Charity

Posted by Admin Posted on Jan 24 2024

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The Internal Revenue Service reminds individual retirement arrangement (IRA) owners age 70½ or over that they can transfer up to $100,000 to charity tax-free each year.

These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to easily give to charity before the end of the year. And, for those who are at least 73 years old, QCDs count toward the IRA owner's required minimum distribution (RMD) for the year.

How to set up a QCD

Any IRA owner who wishes to make a QCD for 2023 should contact their IRA trustee soon so the trustee will have time to complete the transaction before the end of the year.

Normally, distributions from a traditional IRA are taxable when received. With a QCD, however, these distributions become tax-free as long as they're paid directly from the IRA to an eligible charitable organization.

QCDs must be made directly by the trustee of the IRA to the charity. An IRA distribution, such as an electronic payment made directly to the IRA owner, does not count as a QCD. Likewise, a check made payable to the IRA owner is not a QCD.

Each year, an IRA owner age 70½ or over when the distribution is made can exclude from gross income up to $100,000 of these QCDs. For a married couple, if both spouses are age 70½ or over when the distributions are made and both have IRAs, each spouse can exclude up to $100,000 for a total of up to $200,000 per year.

The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. Transferred amounts are not taxable, and no deduction is available for the transfer.

Report correctly

A 2023 QCD must be reported on the 2023 federal income tax return, normally filed during the 2024 tax filing season.

In early 2024, the IRA owner will receive Form 1099-R from their IRA trustee that shows any IRA distributions made during calendar year 2023, including both regular distributions and QCDs. The total distribution is shown in Box 1 on that form. There is no special code for a QCD.

Like other IRA distributions, QCDs are reported on Line 4 of Form 1040 or Form 1040-SR. If part or all of an IRA distribution is a QCD, enter the total amount of the IRA distribution on Line 4a. This is the amount shown in Box 1 on Form 1099-R.

Then, if the full amount of the distribution is a QCD, enter 0 on Line 4b. If only part of it is a QCD, the remaining taxable portion is normally entered on Line 4b.

Either way, be sure to enter "QCD" next to Line 4b. Further details will be in the instructions to the 2023 Form 1040.

Get a receipt

QCDs are not deductible as charitable contributions on Schedule A. But, as with deductible contributions, the donor must get a written acknowledgement of their contribution from the charitable organization before filing their return.

In general, the acknowledgement must state the date and amount of the contribution and indicate whether the donor received anything of value in return. For details, see the Acknowledgement section in Publication 526, Charitable Contributions.

For more information about IRA distributions and QCDs, see Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

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      

Saver’s Credit Can Help Low- and Moderate-Income Taxpayers to Save More in 2024

Posted by Admin Posted on Jan 24 2024

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The Internal Revenue Service reminds low- and moderate-income taxpayers that they can save for retirement now and possibly earn a special tax credit in 2024 and years ahead.

The Retirement Savings Contributions Credit, also known as the Saver's Credit, helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements (IRAs), 401(k) plans and similar workplace retirement programs. The credit also helps any eligible person with a disability who is the designated beneficiary of an Achieving a Better Life Experience (ABLE) account and makes a contribution to that account. For more information about ABLE accounts, see Publication 907, Tax Highlights for Persons With Disabilities.

The maximum Saver's Credit is $1,000 ($2,000 for married couples). The credit can increase a taxpayer's refund or reduce the tax owed but is affected by other deductions and credits. Distributions from a retirement plan or ABLE account reduce the contribution amount used to figure the credit.

Contribution deadlines

Individuals with IRAs have until April 15, 2024 - the due date for filing their 2023 return - to set up a new IRA or add money to an existing IRA for 2023. Both Roth and traditional IRAs qualify.

Individuals with workplace retirement plans still have time to make qualifying retirement contributions and get the Saver's Credit on their 2023 tax return. Elective deferrals (contributions) to workplace retirement plans must be made by December 31 to a:

  • 401(k) plan.
  • 403(b) plan for employees of public schools and certain tax-exempt organizations.
  • Governmental 457 plan for state or local government employees.
  • Thrift Savings Plan (TSP) for federal employees.

See the instructions to Form 8880, Credit for Qualified Retirement Savings Contributions, for a list of qualifying workplace retirement plans and additional details.

Eligibility

To be eligible, taxpayers must be 18 years of age and older, not claimed as a dependent and not a full-time student. The Saver's Credit has income limits based on a taxpayer's adjusted gross income and their marital or filing status.

2023 income limits are:

  • Married couples filing jointly with adjusted gross incomes up to $73,000.
  • Heads of household with adjusted gross incomes up to $54,750.
  • Married individuals filing separately and singles with adjusted gross incomes up to $36,500.

Taxpayers can use the Interactive Tax Assistant tool for the Saver's Credit to determine their eligibility.

Visit the Saver's Credit page on IRS.gov to learn about rules, contribution rates and credit limits.

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      

Employers Should Certify Employees Before Claiming the Work Opportunity Tax Credit

Posted by Admin Posted on Jan 24 2024

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Employers who hire people from certain groups can reduce the tax they owe when they claim the Work Opportunity Tax Credit on their federal tax return. This credit encourages employers to hire workers certified as members of any of ten groups facing barriers to employment. When hiring, employers may want to take a moment to review eligibility requirements for the Work Opportunity Tax Credit.

Pre-screening and certification requirement

To claim the credit, an employer must first get certification that an individual is a member of one of the specified groups. They do so by submitting IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to their state workforce agency within 28 days after the eligible worker begins work. Employers should not submit this form to the IRS. They should contact their state workforce agency with any questions about the processing of Form 8850.

Figuring and claiming the credit

Eligible employers claim the Work Opportunity Tax Credit on their federal income tax return. It is generally based on wages paid to eligible workers during the first year of employment. After the employer receives Form 8850 certification, they figure the credit on Form 5884, Work Opportunity Credit, and then claim the credit on Form 3800, General Business Credit.

Special rule for tax-exempt organizations

A special rule allows tax-exempt organizations to claim the credit only for hiring qualified veterans who began work for the organization before 2026. After the employer receives the Form 8850 certification, these organizations claim the credit against payroll taxes on Form 5884-C, Work Opportunity Credit for Qualified Tax Exempt Organizations.

Credit limitations

For a taxable business, the credit value is limited to the business' income tax liability.

For qualified tax-exempt organizations, the credit is limited to the amount of employer Social Security tax owed on wages paid to qualifying employees.

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      

Crédito del Ahorrador Puede Resultar en Mayores Ahorros para Trabajadores de Recursos Bajos y Moderados en 2024

Posted by Admin Posted on Jan 24 2024

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El Servicio de Impuestos Internos les recuerda a los trabajadores de recursos bajos y moderados que pueden ahorrar para su retiro desde ahora y posiblemente recibir un crédito tributario especial en 2024 y años siguientes.

El de contribuciones de ahorro para la jubilación, también conocido como el Crédito del ahorrador, ayuda a compensar parte de los primeros $2,000 que los trabajadores aportan por cuenta propia para sus Arreglos individuales de ahorro para la jubilación (IRA, por sus siglas en inglés), planes de retiro conforme a la sección 401(k) y programas de retiro similares patrocinados por un empleador. El crédito también ayuda a cualquier persona elegible con una discapacidad que es un beneficiario designado de una cuenta Experiencia de Vida Mejorada (ABLE, por sus siglas en inglés) a contribuir a esa cuenta. Para más información acerca de las cuentas ABLE, consulte la Publicación 907, Puntos destacados de impuestos para personas con discapacidades (en inglés) disponible en IRS.gov.

El crédito máximo del crédito del ahorrador es de $1,000 ($2,000 para parejas casadas). El crédito puede aumentar el reembolso o reducir la cantidad de impuestos adeudados, pero pudiera ser afectado por otras deducciones y créditos. Las distribuciones de un plan de retiro o cuenta ABLE puede reducir el monto de la contribución usada para determinar el crédito.

Fechas límites de contribución

Los contribuyentes con cuentas IRA tienen hasta el 15 de abril de 2024 – la fecha límite para presentar su declaración de 2023 – para establecer un nuevo arreglo de IRA y agregar dinero a un arreglo IRS existente para 2023. Los arreglos de IRA tradicional y Roth son elegibles.

Las personas que participan en planes de retiro patrocinados por un empleador aún tienen tiempo para hacer aportaciones y obtener el Crédito del ahorrador en su declaración de impuestos de 2023. Las elecciones de aplazamiento (aportaciones) deben realizarse para el 31 de diciembre hacia un:

  • Plan conforme a la sección 401(k).
  • Plan conforme a la sección 403(b) para empleados de escuelas públicas y ciertas organizaciones exentas a impuestos.
  • Plan gubernamental 457 para empleados estatales y de gobiernos locales.
  • Plan de ahorro para la jubilación para empleados del gobierno federal (conocido como el Thrift Savings Plan).

Consulte las instrucciones del Formulario 8880, Crédito para contribuciones calificadas de ahorros para el retiro (en inglés) para obtener una lista de planes de retiro en el lugar del trabajo elegibles y detalles adicionales.

Elegibilidad

Para ser elegible, el contribuyente debe tener 18 años o mayor, no ser reclamado como dependiente en la declaración de otra persona y no ser un estudiante de tiempo completo. El crédito del ahorrador tiene límites de ingresos a base del ingreso bruto ajustado del contribuyente y el estado civil tributario.

Los límites de ingresos para 2023 son:

  • Personas casadas que presentan en conjunto con ingresos de hasta $73,000
  • Jefes de familia con ingresos de hasta $54,750.
  • Personas casadas que presentan por separado y solteros con ingresos de hasta $36,500.

Los contribuyentes pueden usar el Asistente tributario interactivo para el Crédito del ahorrador (en inglés) para determinar su elegibilidad.

Visite la página del Crédito del ahorrador en IRS.gov para conocer las reglas, las tasas de contribuciones y los límites del crédito.

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     

IRS: Tennessee Taxpayers Impacted by Storms and Tornadoes Qualify for Tax Relief; Various Deadlines Postponed to June 17

Posted by Admin Posted on Jan 17 2024

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The Internal Revenue Service has provided tax relief for individuals and businesses in parts of Tennessee affected by severe storms and tornadoes that began on Dec. 9.

These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, this includes Davidson, Dickson, Montgomery and Sumner counties. Individuals and households that reside or have a business in these counties qualify for tax relief.

The same relief will be available to any other Tennessee localities added later to the disaster area. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and payment relief

The tax relief postpones various tax filing and payment deadlines that occurred from Dec. 9, 2023, through June 17, 2024 (postponement period). As a result, affected individuals and businesses will have until June 17, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the June 17, 2024, deadline will now apply to:

  • Individual income tax returns and payments normally due on April 15, 2024. The IRS urges anyone who needs an additional tax-filing extension, beyond June 17, for their 2023 federal income tax return to request it electronically by April 15. Though a disaster-area taxpayer qualifies to request an extension between April 15 and June 17, a request filed during this period can only be submitted on paper. Whether requested electronically or on paper, the taxpayer will then have until Oct. 15, 2024, to file, though payments are still due on June 17. Visit IRS.gov/Extensions for details.
  • 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
  • Quarterly estimated income tax payments normally due on Jan. 16 and April 15, 2024.
  • Quarterly payroll and excise tax returns normally due on Jan. 31 and April 30, 2024.
  • Calendar-year partnership and S corporation returns normally due on March 15, 2024.
  • Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
  • Calendar-year tax-exempt organization returns normally due on May 15, 2024.

In addition, penalties for failing to make payroll and excise tax deposits due on or after Dec. 9, 2023, and before Dec. 26, 2023, will be abated as long as the deposits are made by Dec. 26, 2023.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means Oct. 15, 2024. Be sure to write the FEMA declaration number – 4751-DR − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.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      

IRS Reminder: Jan. 31 Filing Deadline for Employers to File Wage Statements, Independent Contractor Forms

Posted by Admin Posted on Jan 17 2024

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With tax season rapidly approaching, the IRS reminds employers that Jan. 31 is the deadline for submitting wage statements and forms for independent contractors with the government.

Employers must file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by Jan. 31.

The Jan. 31 deadline also applies to Forms 1099-MISC, Miscellaneous Income, and Forms 1099-NEC, Nonemployee Compensation, that are filed with the IRS to report non-employee compensation to independent contractors. Various other due dates related to Form 1099-MISC, Form 1099-K and Form 1099-NEC, including dates due to the IRS, can be found on the forms' instructions.

The IRS offers a free electronic filing service for the Form 1099 series using the Information Returns Intake System (IRIS). Filers can also use this online portal to prepare payee copies for distribution, file corrections and request automatic extensions.

New filing requirements

New electronic filing requirements affect Forms W-2 that are required to be filed in 2024. Businesses that file 10 forms or more must file W-2s and certain information returns electronically. See New electronic filing requirements for Forms W-2 for more information.

E-filing is the quickest, most accurate and convenient way to file forms. For more information on e-filing Forms W-2, employers can refer to Employer W-2 Filing Instructions & Information on the Social Security Administration's website.

Key points to remember

  • Extensions to file are not automatically granted. Employers may request a 30-day extension to file Forms W-2 by submitting Form 8809, Application for Extension of Time to File Information Returns, by Jan. 31.
  • Filing Form 8809 does not extend the due date for furnishing wage statements to employees. A separate extension must be filed by Jan. 31. See Extension of time to furnish Forms W-2 to employees for more information.
  • Filing by the deadline helps the IRS to fight fraud by making it easier to verify income. Employers can help support that process and avoid penalties by filing the forms on time and without errors.
  • Penalties may be assessed for failure to file correctly and on time. For more information visit the IRS' Information Return Penalties page.
  • Form 1099-K $600 reporting threshold delayed. This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements.

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      

5 Tips for Early Preparation

Posted by Admin Posted on Jan 17 2024

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Earlier is better when it comes to working on your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers also get a faster refund.

There are five easy ways to get a good jump on your taxes long before the April 15 deadline rolls around.

  1. Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.
  2. Get the right forms. They’re available around the clock on IRS.gov in the Forms and Publications section.
  3. Take your time. Don’t forget to leave room for a coffee break when filling out your tax return. Rushing can mean making a mistake – and that can be expensive!
  4. Double-check your math and Social Security number. These are among the most common errors on tax returns. Taking care on these reduces your chances of hearing from the IRS.
  5. Get the fastest refund. When you file early, you get your refund faster. Using e-filing with direct deposit gets you a refund in half the time as paper filing.

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      

Filing an Extension

Posted by Admin Posted on Jan 16 2024

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If you can't meet the April 15 deadline to file your tax return, you can get an automatic six-month extension of time to file from the IRS. The extension will give you extra time to get the paperwork into the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.

You must make an accurate estimate of any tax due when you request an extension. You may also send a payment for the expected balance due, but this is not required to obtain the extension.

To get the automatic extension, file Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April 15 deadline, or make an extension-related electronic payment. You can file your extension request by computer or mail the paper Form 4868 to the IRS.

The system will give you a confirmation number to verify that the extension request has been accepted. Put this confirmation number on your copy of Form 4868 and keep it for your records. Do not send the form to the IRS.  As this is the area of our expertise, please contact us for more detailed information on how to file an extension properly!

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      

Tax Season Rapidly Approaching: Get Ready Now to File 2023 Federal Income Tax Return in Early 2024

Posted by Admin Posted on Jan 10 2024

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With the nation's tax season rapidly approaching, the Internal Revenue Service reminds taxpayers there are important steps they can take now to help "get ready" to file their 2023 federal tax return.

This is the first in a series of special IRS "Get Ready" reminders to help taxpayers prepare for the upcoming tax filing season in early 2024. A little advance work now can help people have the paperwork and information ready to file their tax returns quickly and accurately. As part of this education effort, the IRS has a special page outlining items taxpayers can look into now to get ready to file their 2023 tax returns.

Get helpful information to file through IRS Online Account

Taxpayers can create or access their Online Account at IRS.gov/account. New users should have their photo identification ready.

With an Online Account taxpayers can access a variety of helpful information to help them during the 2024 filing season, including:

  • View key data from the most recently filed tax return, including adjusted gross income.
  • Get account transcripts.
  • Sign power of attorney and tax information authorizations.
  • Receive notices electronically.
  • Get email notifications for new account information or activity.
  • Make and view payments.
  • View, create or change payment plans.
  • See the amount owed by year.

Gather, organize and update tax records

Organizing tax records makes it easier to prepare a complete and accurate tax return. It helps avoid errors that can slow down refunds and may also help find overlooked deductions or tax credits.

Most income is taxable, including unemployment compensation, refund interest and income from the gig economy and digital assets. Taxpayers should gather Forms W-2, Wage and Tax Statement, Forms 1099-MISC, Miscellaneous Income, and other income documents before filing their return.

Don't forget to notify the IRS of an address change and be sure to notify the Social Security Administration of any legal name changes as soon as possible.

Be sure paychecks have enough tax withheld; time running out to make 2023 changes

The Tax Withholding Estimator is a tool on IRS.gov that can help taxpayers determine the right amount of tax to have withheld from their paychecks. This tool can be helpful if an earlier tax return resulted in tax owed or a large refund. And for those that have life changes or events such as getting married or divorced or welcoming a child, or for those taking on a second job or managing self-employment income, it can help calculate estimated tax payments. To change federal tax withholding, taxpayers will need to update their withholding with their employer, either online or by submitting a new Form W-4, Employee's Withholding Allowance Certificate.

But to make adjustments in time to affect 2023 tax withholding, taxpayers need to act quickly. Only a few pay periods remain in the year, and payroll systems need time to make withholding changes.

Speed refunds with direct deposit

Direct deposit is the fastest and safest way to get a tax refund. Taxpayers can make direct deposits to bank accounts, banking apps and reloadable debit cards, but will need to provide the routing and account information associated with the account. If the routing and account number cannot be located, taxpayers should contact their bank, financial institution or app provider.

Taxpayers requesting a paper check are much more likely to report an issue getting their refund because of non-receipt, forgery, theft or checks returned for a bad address, compared to taxpayers using direct deposit.

Need a bank account? Taxpayers without a bank account can learn how to open an account at an FDIC-Insured bank or with a credit union through the National Credit Union Locator tool. Veterans can use the Veterans Benefits Banking Program to find participating banks and credit unions that offer free accounts.

Volunteer to help eligible taxpayers file their tax returns

The IRS and its community partners are looking for people around the country interested in becoming IRS-certified volunteers. Join the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs and help eligible taxpayers with free tax preparation. Visit IRS.gov/volunteers to learn more and sign up. After signing up, volunteers will receive more information about attending a virtual orientation.

Bookmark IRS.gov resources and online tools

Everyone should make IRS.gov their first stop. Here they'll find online tools to help get them the information they need. The tools are easy-to-use and available 24 hours a day. Millions of people use them to help file and pay taxes, track their refunds, find information about their accounts and get answers to tax questions.

Tips for choosing a tax pro

Tax professionals play an essential role for taxpayers and the nation's tax system. There are many types of tax return preparers, including certified public accountants, enrolled agents, attorneys and many others who don't have a professional credential. Preparers should be skilled in tax preparation and accurately filing income tax returns. Taxpayers trust them with their most personal information.

Most tax return preparers provide outstanding and professional tax service. However, choosing the wrong tax return preparer hurts taxpayers financially every year. Be sure to check tips for choosing a tax preparer and how to avoid unethical "ghost" return preparers.

People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

 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      

Interest Rates Remain the Same for the First Quarter of 2024

Posted by Admin Posted on Jan 10 2024

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The Internal Revenue Service today announced that interest rates will remain the same for the calendar quarter beginning Jan. 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 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 of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during Oct. 2023. See the revenue ruling for details.

Revenue Ruling 2023-22 announcing the rates of interest will appear in Internal Revenue Bulletin 2023-49, dated Dec. 4, 2023.

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 +1-305-274-5811.17 SW 88th ST, Mi1773

Source : IRS  

Know the Different Types of Authorizations for Third-Party Representatives

Posted by Admin Posted on Jan 10 2024

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Taxpayers can authorize a third-party representative to work with the IRS on their behalf. Sometimes this person is an unpaid family member or friend, and sometimes this is a tax professional hired by the taxpayer. Different types of representatives need different authorizations before they can represent the taxpayer to the IRS.

Taxpayers who want to have a third party represent them must formally grant them permission to do so.

Here are different types of third-party authorizations:

  • Power of Attorney – Allows someone to represent a taxpayer in tax matters before the IRS. With this authorization, the representative must be an individual authorized to practice before the IRS.
  • Tax Information Authorization – Appoints a person to review or receive a taxpayer's confidential tax information for the type of tax for a specified period.
  • Third Party Designee – Designates a person on the taxpayer's tax form to discuss that specific tax return and tax year with the IRS.
  • Oral Disclosure – Authorizes the IRS to disclose the taxpayer's tax info to a person the taxpayer brings into a phone call or meeting with the IRS about a specific tax issue. 

Revoking a third-party authorization

A taxpayer can choose to revoke any authorization at any time.

Third-Party Designees and Oral Disclosures expire automatically. An Oral Disclosure Authorization may expire at the end of the conversation but can also be granted for longer if the taxpayer wants IRS to have a continuing conversation with the designated third party until the tax matter is resolved. A Third-Party Designee authorization ends one year from the due date of the relevant tax return.

Power of Attorney and Tax Information Authorization stay in effect until the taxpayer revokes the authorization or the representative withdraws it. There are two ways for a taxpayer to revoke either of these authorizations:

1.    Authorize a new representative. If a taxpayer authorizes a new representative for the same tax matters and periods/years, the new authorization will automatically revoke the prior authorization unless the taxpayer chooses to retain the prior representative by checking the box to retain and attaching prior copies of any authorization they want to remain in effect.

2.    Send a revocation to the IRS. Taxpayers can follow the revocation instructions in Form 2848, Power of Attorney and Declaration of Representative for Power of Attorney. For Tax Information Authorizations, they should follow the revocation instructions for Form 8821, Tax Information Authorization.

Even with an authorized third party representing them, taxpayers are ultimately responsible for meeting their tax obligations.

Low-income representation

Low-Income Taxpayer Clinics are independent from the Internal Revenue Service and the Taxpayer Advocate Service. LITCs represent individuals with income below a certain level who need to resolve tax problems with the IRS. These clinics can represent taxpayers in audits, appeals and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages. Services are free or may cost a small fee.

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     

IRS Reminds Extension Filers to Have All their Info Before Visiting a Tax Professional

Posted by Admin Posted on Jan 10 2024

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The deadline is around the corner for taxpayers with an extension to file. It's important for taxpayers to gather all their records and get copies of any missing documents before they sit down to prepare their return, and taxpayers who use a professional tax preparer should make sure they have all their information ready before their appointment. This helps them file a complete and accurate tax return.

Here's the information taxpayers may need. Not all information applies to all taxpayers.

  • Social Security numbers of everyone listed on the tax return. 
  • Bank account and routing numbers for direct deposit or information to make a tax payment.
  • Forms W-2 from employer(s).
  • Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.
  • Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.
  • Form 1099-INT for interest received.
  • Other income documents and records of virtual currency transactions.
  • Form 1095-A, Health Insurance Marketplace Statement.
  • Information to support claiming other credits or deductions such as receipts for child or dependent care, college expenses or donations.

Missing documents: What taxpayers should do

To request a missing W-2 or Form 1099, taxpayers should contact the employer, payer or issuing agency. This also applies for taxpayers who received an incorrect W-2 or Form 1099.

If they still can't get the forms, taxpayers can complete Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. If a taxpayer doesn't receive the missing or correct form in time to file their tax return, they can estimate the wages or payments made to them and any taxes withheld. They can use Form 4852 to report this information on 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      

Treasury, IRS Issue Guidance on Sustainable Aviation Fuel Credit

Posted by Admin Posted on Dec 21 2023

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The Treasury Department and Internal Revenue Service have issued Notice 2024-06 for the new Sustainable Aviation Fuel (SAF) credit created by the Inflation Reduction Act of 2022.

The SAF credit applies to a qualified fuel mixture containing sustainable aviation fuel for certain sales or uses in calendar years 2023 and 2024.

The SAF credit is $1.25 for each gallon of sustainable aviation fuel in a qualified mixture. To qualify for the credit, the sustainable aviation fuel must have a minimum reduction of 50% in lifecycle greenhouse gas emissions. Additionally, there is a supplemental credit of one cent for each percent that the reduction exceeds 50%, for a maximum increase of $0.50.

The IRA provides two methods to determine the lifecycle greenhouse gas emissions reduction percentage (emissions reduction percentage) that can be used to qualify for and calculate the credit. These are the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) method and any similar method that meets certain requirements of the Clean Air Act (CAA). Additionally, the IRA requires certain aspects of each method to be certified by an unrelated party.

This notice provides additional safe harbors using the Environmental Protection Agency's Renewable Fuel Standard (RFS) program and related guidance. The RFS program uses a methodology similar to CORSIA and meets the requirements of the CAA, and the safe harbors in this notice can be used to calculate the emissions reduction percentage and for the corresponding unrelated party certification for the SAF credit.

Further, this notice explains that the current Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model of the Argonne National Laboratory and other GREET-based models do not currently satisfy the applicable statutory requirements for the SAF credit.

Finally, this notice announces that the Department of Energy is collaborating with other federal agencies to develop a modified version of the GREET model that would satisfy the statutory requirements for the SAF credit. The agencies developing this modified GREET model currently anticipate its release in early 2024.

Previously, the IRS issued Notice 2023-06, which explains the requirements for the fuel to be eligible for the SAF credit, including safe harbors for the CORSIA method and the corresponding unrelated party certification, and explained which parties must be registered for the different activities in the process.

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      

IRS Reminds Taxpayers, Jan. 16 Due Date for Final 2023 Quarterly Estimated Tax Payments

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service reminded taxpayers who didn't pay enough tax in 2023 to make a fourth quarter tax payment on or before Jan. 16 to avoid a possible penalty or tax bill when filing in 2024.

Taxes are normally paid throughout the year by withholding tax from paychecks, by making quarterly estimated tax payments to the IRS or by a combination of both. This is done because taxpayers need to pay most of their tax during the year as income is earned or received.

Who needs to make a payment?

Taxpayers who earn income not subject to tax withholding such as self-employed people or independent contractors should pay their taxes quarterly to the IRS.

In addition, people who owed tax when they filed their current year tax return often find themselves in the same situation again when they file the next year. Taxpayers in this situation normally include:

  • Those who itemized in the past but are now taking the standard deduction,
  • Two wage-earner households,
  • Employees with non-wage sources of income such as dividends,
  • Those with complex tax situations and/or
  • Those who failed to increase their tax withholding.

What income is taxable?

The IRS reminds taxpayers that most income is taxable, whether it's unemployment income, refund interest or income from the gig economy and digital assets. When estimating quarterly tax payments, taxpayers should include all forms of earned income, including from part-time work, side jobs or the sale of goods.

Also, various financial transactions, especially late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, lottery winnings, stock dividends, capital gain distributions from mutual funds, stocks, bonds, virtual currency, real estate or other property sold at a profit.

Delay in requirement for Forms 1099-K

After feedback from taxpayers, tax professionals and payment processors the IRS announced that calendar year 2023 will be treated as another transition year for the reduced reporting threshold of $600. For calendar year 2023, third-party settlement organizations that issue Forms 1099-K are only required to report transactions where gross payments exceed $20,000 and there are more than 200 transactions. The IRS also issued a fact sheet to help people who may receive Forms 1099-K.

How to make an estimated tax payment

The fastest and easiest way to make an estimated tax payment is to do so electronically. Taxpayers have options when paying electronically from their bank account.

  • Pay using IRS Direct Pay. This option allows taxpayers to schedule a payment in advance of the Jan. 16 deadline.
  • Pay using IRS Online Account. This option allows taxpayers to view their payment history, pending or recent payments and other tax information.
  • Pay using Electronic Filing Tax Payment System, or EFTPS . EFTPS is a free system which offers selections such as scheduling payments a year in advance, paying estimated tax payments and tracking and changing scheduled payments.
  • Taxpayers also have the option to pay with their debit or credit card. The card processors, not the IRS, charge a fee for the service.

Using these or other electronic payment options ensures that a payment gets credited promptly. More information on other payment options is available at IRS.gov/payments.

Use the Tax Withholding Estimator to keep track

The Tax Withholding Estimator, available on IRS.gov, can often help taxpayers determine if they need to make an estimated tax payment. It also helps them calculate the correct amount of tax to withhold throughout the year based on their complete set of tax facts and circumstances.

Alternatively, taxpayers can use the worksheet included with Form 1040-ES, Estimated Tax for Individuals, or read through Publication 505, Tax Withholding and Estimated Tax, available 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      

Red Flags for Employee Retention Credit Claims; IRS Reminds Businesses to Watch Out for Warning Signs of Aggressive Promotion that can Mislead People into Making Improper ERC Claims

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service continues to warn businesses to watch out for aggressive marketing by nefarious actors involving the Employee Retention Credit (ERC) and urged people to watch out for red flags that can signal trouble.

The credit, also called the Employee Retention Tax Credit or ERTC, is a legitimate pandemic-era tax credit but as time passes the credit has been increasingly the target of aggressive marketing to businesses that may not qualify for the credit.

Although promoters advertise that ERC submissions are "risk free," there are actually huge risks facing businesses as the IRS increases its audit and criminal investigation work. Hundreds of criminal cases are being worked, and thousands of ERC claims have been referred for audit.

The IRS reminds anyone who improperly claims the ERC that they must pay it back, possibly with penalties and interest. A business or tax-exempt group could find itself in a much worse cash position if it has to pay back the credit than if the credit was never claimed in the first place. This underscores the importance of taxpayers taking precautionary steps and avoiding being pushed by a promoter, including instances where a promoter can collect contingency fees as much as 25%.

Properly claiming the ERC

There are very specific eligibility requirements for claiming the ERC. Employers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and Dec. 31, 2021. However, to be eligible, employers must have:

  • Sustained a full or partial suspension of operations due to orders from an appropriate governmental authority limiting commerce, travel or group meetings because of COVID-19 during 2020 or the first three quarters of 2021,
  • Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
  • Qualified as a recovery startup business for the third or fourth quarters of 2021.

Warning signs of aggressive ERC marketing

The IRS sees wildly aggressive suggestions from marketers urging businesses to submit the claim because there is nothing to lose. In reality, those improperly receiving the credit could have to repay the credit – along with substantial interest and penalties.

Warning signs to avoid include:

  • Unsolicited calls or advertisements mentioning an "easy application process."
  • Statements that the promoter or company can determine ERC eligibility within minutes.
  • Large upfront fees to claim the credit.
  • Fees based on a percentage of the refund amount of Employee Retention Credit claimed. This is a similar warning sign for average taxpayers, who should always avoid a tax preparer basing their fee on the size of the refund.
  • Preparers seeking anonymity by refusing to sign the ERC return being filed by the business as well as supplying their identifying information and a tax identification number. Similar to "ghost preparers," this limits the risk to just the taxpayer claiming the credit.
  • Aggressive claims from the promoter that the business receiving the solicitation qualifies before any discussion of the group's tax situation. In reality, the Employee Retention Credit is a complex credit that requires careful review before applying.

Unscrupulous promoters may lie about eligibility requirements, including refusing to provide detailed documents supporting their computations of the ERC. In addition, those using these companies could be at risk of someone using the credit as a ploy to steal the taxpayer's identity or take a cut of the taxpayer's improperly claimed credit.

How the promoters lure victims

The IRS continues to see a variety of ways that promoters can lure businesses, tax-exempt groups and others into applying for the credit.

  • Aggressive marketing. This can be seen in countless places, including radio, television, social media, online as well as phone calls and text messages.
  • Direct mailing. Some ERC mills are sending out fake letters to taxpayers from the non-existent groups like the "Department of Employee Retention Credit." These letters can be made to look like official IRS correspondence or an official government mailing with language urging immediate action. Some solicitations even make it look like it's coming from the bank the business uses.
  • Leaving out key details. Third-party promoters of the ERC often don't accurately explain eligibility requirements or how the credit is computed, and they do not share their workpapers with the businesses claiming the credit. They may make broad arguments suggesting that all employers are eligible without evaluating an employer's individual circumstances.
    • For example, only recovery startup businesses are eligible for the ERC in the fourth quarter of 2021, but promoters fail to explain this limit.
    • Also, the promoters may not inform taxpayers that they need to reduce wage deductions claimed on their business' federal income tax return by the amount of the Employee Retention Credit. This causes a domino effect of tax problems for the business.
  • Paycheck Protection Program participation. In addition, many of these promoters don't tell employers that they can't claim the ERC on wages that were reported as payroll costs to obtain Paycheck Protection Program loan forgiveness.
  • Mistaken supply chain arguments. Contrary to advice given by unscrupulous preparers, IRS legal guidance in July makes clear that supply chain disruptions do not qualify an employer for the credit unless they are due to a government order. Employers that experienced supply chain disruptions qualify for ERC only if they had to suspend their business operations because their suppliers were unable to provide critical goods or materials due to a government order that caused the supplier to suspend its operations.

How businesses and others can protect themselves

The IRS reminds businesses, tax-exempt groups and others being approached by these promoters that there are simple steps that can be taken to protect themselves from making an improper Employee Retention Credit.

  • Work with a trusted tax professional. Eligible employers who need help claiming the credit should work with a trusted tax professional; the IRS urges people not to rely on the advice of those soliciting these credits. Promoters who are marketing this ultimately have a vested interest in making money; in many cases they are not looking out for the best interests of those applying.
  • Request a detailed worksheet explaining ERC eligibility and the computations used to determine the ERC amount.
  • Don't apply unless you believe you are legitimately qualified for this credit. Details about the credit are available on IRS.gov, and again a trusted tax professional – not someone promoting the credit – can provide critical professional advice on the ERC.

To report ERC abuse, submit Form 14242, Report Suspected Abusive Tax Promotions or Preparers

People should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers, and any supporting materials 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

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      

IRS Reminds Those Aged 73 and Older to Make Required Withdrawals from IRAs and Retirement Plans by Dec. 31; Notes Changes in the Law for 2023

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service reminds people born before 1951 of the year-end deadlines to take required minimum distributions (RMDs) from funds held in individual retirement arrangements (IRAs) and other retirement plans, and noted new requirements under the law beginning in 2023.

Required minimum distributions, or RMDs, are amounts that many retirement plan and IRA account owners must withdraw each year. RMDs are taxable income and may be subject to penalties if not timely taken. For individuals born before 1951, RMDs from IRAs and retirement plans should, for the most part, already have begun and are required for 2023.

New for 2023: The Secure 2.0 Act raised the age that account owners must begin taking RMDs. For 2023, the age at which account owners must start taking required minimum distributions goes up from age 72 to age 73, so individuals born in 1951 must receive their first required minimum distribution by April 1, 2025.

See Retirement plan and IRA required minimum distributions FAQs for more detailed information regarding the new provisions in the law.

IRAs: The RMD rules require individuals to take withdrawals from their IRAs (including SIMPLE IRAs and SEP IRAs) every year once they reach age 72 (73 if the account owner reaches age 72 in 2023 or later), even if they're still employed.

Owners of Roth IRAs are not required to take withdrawals during their lifetime. However, after the death of the account owner, beneficiaries of a Roth IRA are subject to the RMD rules.

Retirement plans: The RMD rules also apply to employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans. Participants in employer-sponsored retirement plans can delay taking their RMDs until they retire, unless they are a 5% owner of the business sponsoring the plan.

Designated Roth accounts in a 401(k) or 403(b) plan are subject to the RMD rules for 2023. Beginning in 2024, designated Roth accounts will not be subject to the RMD rules while the account owner is still alive.

The RMD comparison chart highlights several of the basic RMD rules that apply to IRAs and defined contribution plans.

RMD calculations and tax on missed distributions

An IRA trustee or plan administrator must either report the amount of the RMD to the IRA owner or offer to calculate it. An IRA owner or trustee must calculate the RMD separately for each IRA owned, but the owner can make withdrawals from the account(s) of their choice as long as the total equals or exceeds the total annual requirement. Although the IRA trustee or plan administrator may calculate the RMD, the account owner is ultimately responsible for taking the correct RMD amount.

If an account owner fails to withdraw the full amount of the RMD by the due date, the owner is subject to an excise tax equal to 25% of the amount not withdrawn for 2023 and later years. The SECURE 2.0 Act dropped the excise tax rate from 50% for distributions required for 2023 and reduces the tax rate to 10% if the error is corrected within two years. The account owner should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return for the year in which the full amount of the RMD was required but not taken.

The IRS has worksheets to calculate the RMD and payout periods.

Inherited IRAs

An RMD may be required for an IRA, retirement plan account or Roth IRA inherited from the original owner. The factors that affect the distribution requirements for inherited retirement plan accounts and IRAs include:

  • Whether the account owner died after 2019 (the SECURE Act made changes to the RMDs for beneficiaries if the death of the account holder occurred after 2019).
  • The relationship of the beneficiary to the account owner and certain characteristics of the beneficiary (spouse, minor child, disabled or chronically ill individual, entity other than an individual).
  • Whether the original account owner passed away before or after their required beginning date (the date the original account owner was required to begin taking RMDs).

IRS Notice 2023-54 provides that certain non-spouse beneficiaries subject to the 10-year distribution rule will not fail the RMD requirements because they didn't make distributions in 2023.

Retirement topics - beneficiary and Required minimum distributions for IRA beneficiaries have information on taking RMDs from an inherited IRA or retirement account and reporting taxable distributions as part of gross income. Publication 559, Survivors, Executors and Administrators, can help those in charge of the estate complete and file federal income tax returns and explains their responsibility to pay any taxes due on behalf of the person who has died.

2020 coronavirus-related distribution

Distribution requirements were waived for 2020 due to the coronavirus pandemic. An account owner or beneficiary who received an RMD in 2020 had the option of returning it to their IRA or other qualified plan to avoid paying taxes on that distribution. A 2020 RMD that qualified as a coronavirus-related distribution could be repaid over a three-year period or have the taxes due on the distribution spread over three years.

A 2020 withdrawal from an inherited IRA could not be repaid to the inherited IRA but may be spread over three years for income inclusion. For more information see Coronavirus relief for retirement plans and IRAs.

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      

Beware of Fake Charities; Check Before Donating

Posted by Admin Posted on Dec 21 2023

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With the tragic crises and natural disasters happening around the globe, many are responding to the call to give what they can to help. The Internal Revenue Service warned taxpayers to be wary of criminals soliciting donations and falsely posing as legitimate charities. When fake charities scam unsuspecting donors, the proceeds don’t go to those who need the help and those contributing to these fake charities can’t deduct their donations on their tax return.

"We all want to help innocent victims and their families," said IRS Commissioner Danny Werfel. "Knowing we're trying to aid those who are suffering, criminals crawl out of the woodwork to prey on those most vulnerable – people who simply want to help. Especially during these challenging times, don't feel pressured to immediately give to a charity you've never heard of. Check out the charity first and confirm it is authentic."

Those who wish to make donations should use the Tax-Exempt Organization Search (TEOS) tool on IRS.gov to help find or verify qualified, legitimate charities.

With the TEOS, people can:

  • Verify the legitimacy of a charity
  • Check its eligibility to receive tax-deductible charitable contributions
  • Search for information about an organization's tax-exempt status and filings

In addition, the IRS urges anyone encountering a fake or suspicious charity to see the FBI's resources on Charity and Disaster Fraud.

Fake charities

Criminals commonly set up bogus charities to take advantage of the public's generosity during international crises or natural disasters. Typically, they seek money and personal information, which can be used to further exploit victims through identity theft.

Fake charity promoters may use emails, fake websites, or alter or "spoof" their caller ID to make it look like a real charity is calling to solicit donations. Criminals often target seniors and groups with limited English proficiency.

Here are some tips to protect against fake charity scams:

  • Verify first. Scammers frequently use names that sound like well-known charities to confuse people. Potential donors should ask the fundraiser for the charity's exact name, website and mailing address so they can independently confirm the information. Use TEOS to verify if an organization is a legitimate tax-exempt charity.
  • Don't give in to pressure. Scammers often pressure people into making an immediate payment. In contrast, legitimate charities are happy to get a donation at any time. Donors should not feel rushed.
  • Don't give more than needed. Scammers are on the hunt for both money and personal information. Taxpayers should treat personal information like cash and not hand it out to just anyone.
  • Be wary about how a donation is requested. Never work with charities that ask for donations by giving numbers from a gift card or by wiring money. That's a scam. It's safest to pay by credit card or check — and only after verifying the charity is real.

Taxpayers who give money or goods to a charity can claim a deduction if they itemize deductions, but these donations only count if they go to a qualified tax-exempt organization recognized by 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      

IRS Aconseja a Personas de 73 años y Mayores que Comiencen a Retirar Fondos de Cuentas IRA y Planes de Jubilación para el 31 de Diciembre; Resalta Cambios en Ley para 2023

Posted by Admin Posted on Dec 21 2023

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El Servicio de Impuestos Internos les aconsejó a quienes nacieron antes de 1951 de los plazos de fin de año para retirar distribuciones mínimas requeridas (en inglés), o RMD, por sus siglas en inglés, de los fondos de sus arreglos individuales de jubilación (IRA, por sus siglas en inglés) y otros planes de jubilación.

Las distribuciones mínimas requeridas (en inglés) son montos que muchos propietarios de planes de jubilación y cuentas IRA deben retirar anualmente. Las RMD son ingresos sujetos a impuestos y pueden estar sujetas a multas si no se toman a tiempo. Para las personas que nacieron antes de 1951, las RMD de las cuentas IRA y planes de jubilación deben, en la mayor parte, ya haber comenzado y es un requisito para 2023.

Nuevo para 2023: La Ley SECURE 2.0 aumentó la edad para que los dueños de las cuentas puedan empezar a tomar RMD. Para 2023, la edad aumento de 72 a 73 años, de manera que las personas nacidas en 1951 deben recibir su primera distribución mínima requerida para el 1ro de abril de 2025.

Consulte la página Preguntas frecuentes sobre distribuciones mínimas requeridas de planes de jubilación y cuentas IRA (en inglés) para información detallada adicional acerca de las nuevas provisiones de la ley.

IRAs: Las reglas de las RMD requieren que los propietarios de cuentas IRA (incluyendo cuentas SIMPLE IRA y SEP) comiencen a recibir distribuciones a los 72 años (73 si el titular llega a cumplir 72 en 2023 o después) incluso si todavía están trabajando.

No se les requiere a propietarios de cuentas IRA Roth recibir distribuciones durante el tiempo que estén vivos. Sin embargo, después de que fallezca el titular, los beneficiarios de la cuenta IRA Roth están sujetos a las reglas de RMD.

Planes de jubilación: Las reglas de las RMD también aplican para los planes de jubilación patrocinados por un empleador, incluyendo los planes de distribución de utilidades, planes 401(k), 403(b) y 457(b). Participantes de los planes de jubilación patrocinados por un empleador pueden demorar recibir sus RMD hasta que se jubilen, a menos que sean dueños del 5 por ciento del negocio que patrocine el plan.

Las cuentas designadas Roth en un plan 401(k) o 403(b) están sujetas a las reglas de RMD para 2023. A partir de 2024, las cuentas designadas Roth no estarán sujetas a las reglas de RMD mientras el propietario de la cuenta esté vivo.

El gráfico de comparación de RMD (en inglés) destaca algunas de las reglas básicas de las RMD que se aplican a las cuentas IRA y los planes de contribución definida

Cálculos de RMD e impuestos sobre distribuciones no realizadas

Un fideicomisario de IRA, o administrador del plan, debe informar el monto de la RMD al propietario de la IRA u ofrecer calcularlo. El propietario de una IRA, o fideicomisario, debe calcular la RMD por separado para cada IRA que posea, pero el propietario puede hacer retiros de la cuenta de su preferencia mientras el monto sea equivalente o exceda el requisito del monto anual. Aunque el fideicomisario de IRA o el administrador del plan puede calcular la RMD, el propietario de la cuenta últimamente es responsable de retirar la cantidad correcta de la RMD.

Si el propietario de una cuenta no retira el monto entero de la RMD para el plazo, el propietario está sujeto a un impuesto sobre consumo equivalente a un 25 por ciento del monto no retirado para el 2023 y años siguientes. La Ley SECURE 2.0 redujo la tasa del impuesto por consumo del 50 por ciento para las distribuciones requeridas para el 2023 y reduce la tasa de impuesto al 10 por ciento si el error se corrige dentro de dos años. El propietario de la cuenta debe presentar el Formulario 5329, Impuestos adicionales sobre planes calificados (incluidos los arreglos de ahorros para la jubilación) y otras cuentas con beneficios tributarios (en inglés) junto con su declaración de impuestos federales para el año en el que el monto completo de la RMD fue requerido, pero no retirado.

El IRS tiene hojas de cálculo (en inglés) para calcular la RMD y los períodos de pago.

Cuentas IRA heredadas

Es posible que se requiera una RMD para una IRA, una cuenta de plan de jubilación o una cuenta IRA Roth heredada del propietario original. Los factores que afectan los requisitos de distribución para cuentas de planes de jubilación y de IRA heredadas incluyen:

  • Si el propietario de la cuenta murió después de 2019 (La Ley SECURE hizo cambios a las RMD para los beneficiarios si la muerte del propietario de la cuenta ocurrió después de 2019).
  • La relación del beneficiario con el propietario de la cuenta y ciertas características del beneficiario (cónyuge, hijo menor de edad, persona discapacitada o con enfermedad crónica, entidad que no sea una persona).
  • Si el propietario original de la cuenta falleció antes o después de la fecha de comienzo requerida (la fecha en la que el propietario original de la cuenta se le requirió comenzar a retirar las RMD).

El Aviso 2023-54 (en inglés) del IRS provee que ciertos beneficiarios no cónyuges sujetos a la regla de distribución de 10 años no dejarán de cumplir con los requisitos de las RMD porque no hicieron distribuciones en 2023.

En Temas de jubilación - Beneficiario (en inglés) y Distribuciones mínimas requeridas para beneficiarios de cuentas IRA (en inglés) existe información acerca de cómo tomar RMD de una cuenta de jubilación o IRA heredada y declarar distribuciones sujetas a impuestos como parte del ingreso bruto. La Publicación 559, Sobrevivientes, Albaceas y Administradores (en inglés), puede ayudar a los encargados del patrimonio a completar y presentar declaraciones de impuestos federales y explica su responsabilidad de pagar los impuestos adeudados en nombre de la persona fallecida.

Distribución relacionada con el coronavirus 2020

Debido a la pandemia del coronavirus, se eximieron las RMD de 2020. El titular de una cuenta o el beneficiario que recibió una RMD en 2020 tenía la opción de devolverla a su IRA u otro plan elegible para evitar pagar impuestos sobre esa distribución. Una RMD de 2020 calificada como una distribución relacionada con el coronavirus puede reembolsarse en un período de tres años o hacer que los impuestos adeudados sobre la distribución se distribuyan en tres años.

Un retiro de 2020 de una cuenta IRA heredada no se puede reembolsar a la cuenta IRA heredada, pero se puede repartir en tres años para la inclusión de ingresos. Para obtener más información, consulte la página Alivio tributario por coronavirus para planes de jubilación y planes personales de ahorro para la jubilación (IRAs).

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     

IRS HELPS Taxpayers by Providing Penalty Relief on Nearly 5 Million 2020 and 2021 Tax Returns; Restart of Collection Notices in 2024 Marks End of Pandemic-Related Pause

Posted by Admin Posted on Dec 21 2023

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In a major step to help people who owe back taxes, the Internal Revenue Service has announced new penalty relief for approximately 4.7 million individuals, businesses and tax-exempt organizations that were not sent automated collection reminder notices during the pandemic.

The IRS will be providing about $1 billion in penalty relief. Most of those receiving the penalty relief make under $400,000 a year.

Due to the unprecedented effects of the COVID-19 pandemic, the IRS temporarily suspended the mailing of automated reminders to pay overdue tax bills starting in February 2022. These reminders would have normally been issued as a follow up after the initial notice. Although these reminder notices were suspended, the failure-to-pay penalty continues to accrue for taxpayers who did not fully pay their bills in response to the initial balance due notice.

Given this unusual situation, the IRS is taking several steps in advance of resuming normal collection notices for tax years 2020 and 2021 to help taxpayers with unpaid tax bills, including some people who have not received a notice from the IRS in more than a year.

To help taxpayers as the normal processes resume, the IRS will be issuing a special reminder letter starting next month. The letter will alert the taxpayer of their liability, easy ways to pay and the amount of penalty relief, if applied. The IRS urges taxpayers who are unable to pay their full balance due to visit IRS.gov/payments to make arrangements to resolve their bill.

The IRS is also taking steps to waive the failure-to-pay penalties for eligible taxpayers affected by this situation for tax years 2020 and 2021. The IRS estimates 5 million tax returns -- filed by 4.7 million individuals, businesses, trusts, estates and tax-exempt organizations -- are eligible for the penalty relief. This represents $1 billion in savings to taxpayers, or about $206 per return.

As a first step, the IRS has adjusted eligible individual accounts and will follow with adjustments to business accounts in late December to early January, and then trusts, estates and tax-exempt organizations in late February to early March 2024. Nearly 70 percent of the individual taxpayers receiving penalty relief have income under $100,000 per year.

The IRS is releasing Notice 2024-7, which explains how the agency is providing failure-to-pay penalty relief to eligible taxpayers affected by the COVID-19 pandemic to help them meet their federal tax obligations.

"As the IRS has been preparing to return to normal collection mailings, we have been concerned about taxpayers who haven't heard from us in a while suddenly getting a larger tax bill. The IRS should be looking out for taxpayers, and this penalty relief is a common-sense approach to help people in this situation," said IRS Commissioner Danny Werfel. "We are taking other steps to help taxpayers with past-due bills, and we have options to help people struggling to pay."

This penalty relief is automatic. Eligible taxpayers don't need to take any action to get it. Eligible taxpayers who already paid their full balance will benefit from the relief, too; if a taxpayer already paid failure-to-pay penalties related to their 2020 and 2021 tax years, the IRS will issue a refund or credit the payment toward another outstanding tax liability.

The penalty relief only applies to eligible taxpayers with assessed tax under $100,000. Eligible taxpayers include individuals, businesses, trusts, estates and tax-exempt organizations that filed certain Forms 1040, 1120, 1041 and 990-T income tax returns for tax years 2020 or 2021, with an assessed tax of less than $100,000, and that were in the IRS collection notice process -- or were issued an initial balance due notice between Feb. 5, 2022, and Dec. 7, 2023. The IRS notes the $100,000 limit applies separately to each return and each entity. The failure-to-pay penalty will resume on April 1, 2024, for taxpayers eligible for relief.

Taxpayers who are not eligible for this automatic relief also have options. They may use existing penalty relief procedures, such as applying for relief under the reasonable cause criteria or the First-Time Abate program. Visit IRS.gov/penaltyrelief for details.

If the automatic relief results in a refund or credit, individual and business taxpayers will be able to see it by viewing their tax transcript. The IRS will send the first round of refunds starting now through January 2024. If a taxpayer does not receive a refund, a special reminder notice may be sent with their updated balance beginning in early 2024. Taxpayers with questions on penalty relief can contact the IRS after March 31, 2024.

Help for taxpayers needing assistance

The IRS reminds taxpayers that there are a number of payment options and online tools that can help taxpayers with unpaid tax debts, whether it's a new tax bill or a long-standing tax debt for an unfiled return.

"The IRS wants to help taxpayers and provide them easy options to deal with unpaid tax bills and avoid additional interest and penalties," said Werfel. "People receiving these notices should remember that there are frequently overlooked options that can help them set up an automatic payment plan or catch up with their tax filings. Making additional improvements in the collection area will be an important focus for the IRS going forward as we continue and accelerate our transformation work."

Following funding from the Inflation Reduction Act, it's now easier for taxpayers to get assistance with tax bills with new self-help tools, like the IRS Document Upload Tool, improved phone service with callback features and the addition of bots that can answer simple questions, set up or modify a payment plan and request a transcript. The IRS also encourages taxpayers to get an IRS Online Account, where they can see information about an unpaid tax bill or apply for an online payment plan.

Resumption of collection notices begins in 2024

In January, the IRS will begin sending automated collection notices and letters to individuals with tax debts prior to tax year 2022, and businesses, tax exempt organizations, trusts and estates with tax debts prior to 2023, with exceptions for those with existing debt in multiple years. These notices and letters were previously paused due to the pandemic and high inventories at the IRS but will gradually resume during the next several months. Current tax year 2022 individual and third quarter 2023 business taxpayers began receiving automated collection notices this fall as the IRS took steps to return to business as usual.

The pause in collection mailings affected only follow-up reminder mailings. The IRS did not suspend the mailing of the first, or initial, balance due notices for taxpayers such as the CP14 and CP161 notices.

The pause meant that some taxpayers who have long-standing tax debt have not received a formal letter or notice from the IRS in more than a year while some of this older collection work has been paused. To help the taxpayers in this category as the normal processes resume, the IRS will be issuing a special reminder letter to them starting next month.

This reminder letter will alert the taxpayer of the liability and will direct them to contact the IRS or make alternative arrangements to resolve the bill. Tax professionals and taxpayers will see these reminder letters in the form of letter LT38, Reminder, Notice Resumption.

This letter will remind taxpayers about their tax liability, giving them an opportunity to address the tax issue before the next round of letters are issued. After receiving the reminder mailing, these taxpayers with long-standing unresolved tax issues will receive the next notice, informing them of a more serious step in the tax collection process.

The IRS urges taxpayers to carefully read any letter or notice they receive before calling the IRS. There are also important resources available to get help for tax debt on IRS.gov.

The IRS will issue these balance due notices and letters in gradual stages next year to ensure taxpayers who have questions or need help are able to reach an IRS assistor. This will also provide additional time for tax professionals assisting taxpayers.

Here's what taxpayers should know about possible penalties and interest

Taxpayers who owe tax and don't file on time may be charged a failure-to-file penalty. This penalty is usually 5 percent of the tax owed for each month or part of a month that the tax return is late, up to 25 percent.

The failure-to-pay penalty applies if a taxpayer doesn't pay the taxes they report on their tax return by the due date or if the taxpayer doesn't pay the amount required to be shown on their return within 21 calendar days of receiving a notice demanding payment (or 10 business days if the amount is greater than $100,000).

The IRS is required by law to charge interest when a tax balance is not paid on time. Interest cannot be reduced due to reasonable cause. Interest is based on the amount of tax owed for each day it's not paid in full. The interest is compounded daily, so it is assessed on the previous day's balance plus the interest. Interest rates are determined every three months and can vary based on type of tax; for example, individual or business tax liabilities. More information is available on the interest page of 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      

IRS Ayuda a Contribuyentes Brindándoles Alivio de Multas en casi 5 Millones de Declaraciones de Impuestos de 2020 y 2021; Reinicio de Aviso de Cobro en 2024 Marca Fin de Pausa Relacionada con la Pandemia

Posted by Admin Posted on Dec 21 2023

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En un paso importante para ayudar a las personas que deben impuestos atrasados, el Servicio de Impuestos Internos anuncia un nuevo alivio de multas para aproximadamente 4.7 millones de personas, empresas y organizaciones exentas de impuestos a las que no se les enviaron avisos de recordatorio de cobro automatizados durante la pandemia.

El IRS proporcionará alrededor de mil millones de dólares en alivio de multas. La mayoría de los que reciben el alivio de la multa ganan menos de $400,000 al año.

Debido a los efectos sin precedentes de la pandemia de COVID-19, el IRS suspendió temporalmente el envío de recordatorios automáticos para pagar facturas de impuestos vencidas a partir de febrero de 2022. Estos recordatorios normalmente se habrían emitido como seguimiento después del aviso inicial. Aunque estos avisos recordatorios fueron suspendidos, la multa por falta de pago continúa acumulándose para los contribuyentes que no pagaron sus facturas en su totalidad en respuesta al aviso inicial de saldo adeudado.

Dada esta situación inusual, el IRS está tomando varias medidas antes de reanudar los avisos de cobro normales para los años tributarios 2020 y 2021 para ayudar a los contribuyentes con facturas de impuestos pendientes, incluidas algunas personas que no han recibido un aviso del IRS en más de un año.

Para ayudar a los contribuyentes a medida que se reanudan los procesos normales, el IRS emitirá un recordatorio especial a partir del próximo mes. La carta alertará al contribuyente sobre su responsabilidad, las maneras fáciles de pagar y el monto de su responsabilidad de pago, si se aplica. El IRS insta a los contribuyentes que no pueden pagar el saldo total adeudado a visitar IRS.gov/pagos para hacer arreglos para resolver su factura.

El IRS también está tomando medidas para eliminar las multas por falta de pago para los contribuyentes elegibles afectados por esta situación para los años tributarios 2020 y 2021. El IRS estima que 5 millones de declaraciones de impuestos, presentadas por 4.7 millones de personas, empresas, fideicomisos, patrimonios y organizaciones exentas de impuestos, son elegibles para el alivio de la multa. Esto representa mil millones de dólares en ahorros para los contribuyentes, o alrededor de $206 por declaración.

Como primer paso, el IRS ha ajustado las cuentas individuales elegibles y seguirá con ajustes a las cuentas comerciales desde finales de diciembre hasta principios de enero, y luego a los fideicomisos, patrimonios y organizaciones exentas de impuestos desde finales de febrero hasta principios de marzo de 2024. Casi el 70 por ciento de los contribuyentes individuales que reciben alivio de multas tienen ingresos inferiores a $100,000 por año.

El IRS está publicando el Aviso 2024-7 (en inglés) que explica cómo la agencia está brindando alivio de multas por falta de pago a los contribuyentes elegibles afectados por la pandemia de COVID-19 para ayudarlos a cumplir con sus obligaciones tributarias federales.

"Mientras el IRS se prepara para regresar a los envíos postales de cobro normales, nos preocupa que los contribuyentes que no han tenido noticias nuestras durante un tiempo reciban de repente una factura alta de impuestos. El IRS debería estar atento a los contribuyentes, y esta reducción de multas es un enfoque de sentido común para ayudar a las personas en esta situación", dijo el comisionado del IRS, Danny Werfel. "Estamos tomando otras medidas para ayudar a los contribuyentes con facturas vencidas y tenemos opciones para ayudar a las personas que tienen dificultades para pagar".

Esta exención de multas es automática. Los contribuyentes elegibles no necesitan realizar ninguna acción para obtenerla. Los contribuyentes elegibles que ya pagaron su saldo total también se beneficiarán del alivio; si un contribuyente ya pagó multas por falta de pago relacionadas con sus años tributarios 2020 y 2021, el IRS emitirá un reembolso o acreditará el pago para otra obligación tributaria pendiente.

El alivio de la multa solo se aplica a los contribuyentes elegibles con impuestos evaluados por debajo de $100,000. Los contribuyentes elegibles incluyen individuos, empresas, fideicomisos, sucesiones y organizaciones exentas de impuestos, y sucesiones que presentaron ciertas declaraciones de impuestos de las series 1040, 1120, 1041 y 990-T para los años tributarios 2020 o 2021, con un impuesto evaluado de menos de $100,000, y que estaban en el proceso de aviso de cobro del IRS, o recibieron un aviso de saldo inicial adeudado entre el 5 de febrero de 2022 y el 7 de diciembre de 2023. El IRS señala que el límite de $100,000 se aplica por separado a cada declaración y cada entidad. La multa por falta de pago se reanudará el 1ro de abril de 2024 para los contribuyentes elegibles para recibir alivio.

Los contribuyentes que no son elegibles para este alivio automático también tienen opciones. Pueden usar los procedimientos existentes de alivio de multas, como solicitar alivio bajo los criterios de causa razonable o el programa de reducción de multa impuesta por primera vez. Visite IRS.gov/aliviodemulta para obtener más detalles.

Si el alivio automático resulta en un reembolso o crédito, los contribuyentes individuales y comerciales podrán verlo consultando su registro tributario. El IRS enviará la primera ronda de reembolsos desde ahora hasta enero de 2024. Si un contribuyente no recibe un reembolso, se puede enviar un recordatorio especial con su saldo actualizado a partir de principios de 2024. Los contribuyentes que tengan preguntas acerca del alivio de multas pueden comunicarse con el IRS después del 31 de marzo de 2024.

Ayuda para los contribuyentes que necesitan asistencia

El IRS les recuerda a los contribuyentes que existen varias opciones de pago y herramientas en línea que pueden ayudar a los contribuyentes con deudas tributarias pendientes, ya sea una nueva factura de impuestos o una deuda tributaria de larga duración por una declaración no presentada.

"El IRS quiere ayudar a los contribuyentes y brindarles opciones fáciles para lidiar con las facturas de impuestos pendientes y evitar intereses y multas adicionales", dijo Werfel. "Las personas que reciben estos avisos deben recordar que con frecuencia se pasan por alto opciones que pueden ayudarlos a establecer un plan de pago automático o ponerse al día con sus declaraciones de impuestos. Realizar mejoras adicionales en el área de recaudación será un enfoque importante para el IRS en el futuro a medida que continuamos y aceleramos nuestro trabajo de transformación".

Gracias a la financiación de la Ley de Reducción de la Inflación, ahora es más fácil para los contribuyentes obtener asistencia con las facturas de impuestos con nuevas herramientas de autoayuda, la herramienta de carga de documentos (en inglés) del IRS, un servicio telefónico mejorado con funciones de devolución de llamadas y la adición de robots que pueden responder preguntas sencillas, configurar crear o modificar un plan de pago y solicitar una transcripción. El IRS también alienta a los contribuyentes a obtener una cuenta en línea del IRS, donde pueden ver información sobre una factura de impuestos pendiente o solicitar un plan de pago en línea.

La reanudación de los avisos de cobro comienza en 2024

En enero, el IRS comenzará a enviar cartas y avisos de cobro automatizados a personas con deudas tributarias anteriores al año tributario 2022, y a empresas, organizaciones exentas de impuestos, fideicomisos y patrimonios con deudas tributarias anteriores a 2023, con excepciones para aquellos con deudas existentes en varios años. Estos avisos y cartas se suspendieron anteriormente debido a la pandemia y los altos inventarios en el IRS, pero se reanudarán gradualmente durante los próximos meses. Los contribuyentes individuales del año tributario actual 2022 y las empresas del tercer trimestre de 2023 comenzaron a recibir avisos de cobro automatizados este otoño a medida que el IRS tomó medidas para volver a la normalidad.

La pausa en los avisos de cobro afectó únicamente a los envíos de recordatorios de seguimiento. El IRS no suspendió el envío por correo de los primeros avisos de saldo adeudado a los contribuyentes, como los avisos CP14 y CP161.

La pausa significó que algunos contribuyentes que tienen deudas tributarias de larga duración no han recibido una carta o notificación formal del IRS en más de un año, mientras que parte de este trabajo de recaudación más antiguo se ha detenido. Para ayudar a los contribuyentes en esta categoría a medida que se reanudan los procesos normales, el IRS les enviará una carta especial de recordatorio a partir del próximo mes.

Este recordatorio alertará al contribuyente sobre su responsabilidad y le indicará que se comunique con el IRS o haga arreglos alternativos para resolver la factura. Los profesionales de impuestos y los contribuyentes verán estos recordatorios en forma de carta LT38, Recordatorio, reanudación de aviso.

Esta carta recordará a los contribuyentes su obligación tributaria, brindándoles la oportunidad de abordar el asunto tributario antes de que se emita la siguiente ronda de cartas. Después de recibir el recordatorio por correo, estos contribuyentes con problemas tributarios no resueltos desde hace mucho tiempo recibirán el siguiente aviso, informándoles de un paso más serio en el proceso de recaudación de impuestos.

El IRS insta a los contribuyentes a leer detenidamente cualquier carta o aviso que reciban antes de llamar al IRS. También hay recursos importantes disponibles para obtener ayuda con la deuda tributaria (en inglés) en IRS.gov.

El IRS emitirá estos avisos y cartas de saldo adeudado en etapas graduales el próximo año para garantizar que los contribuyentes que tengan preguntas o necesiten ayuda puedan comunicarse con un asistente del IRS. Esto también proporcionará tiempo adicional para que los profesionales de impuestos ayuden a los contribuyentes.

Esto es lo que los contribuyentes deben saber acerca de posibles multas e intereses

A los contribuyentes que adeudan impuestos y no presentan la declaración a tiempo se les puede cobrar una multa por no presentar la declaración. Esta multa suele ser del 5 por ciento del impuesto adeudado por cada mes o parte de un mes de retraso en la declaración de impuestos, hasta un 25 por ciento.

La multa por falta de pago se aplica si un contribuyente no paga los impuestos que declara en su declaración de impuestos antes de la fecha de vencimiento o si el contribuyente no paga el monto requerido que debe mostrarse en su declaración dentro de los 21 días calendario posteriores a la recepción de un aviso exigiendo el pago (o 10 días laborables si el monto es mayor a $100,000).

El IRS está obligado por ley a cobrar intereses cuando un saldo de impuestos no se paga a tiempo. Los intereses no pueden reducirse por causa razonable. El interés se basa en el monto del impuesto adeudado por cada día que no se paga en su totalidad. El interés se capitaliza diariamente, por lo que se calcula sobre el saldo del día anterior más el interés. Las tasas de interés se determinan cada tres meses y pueden variar según el tipo de impuesto; por ejemplo, obligaciones tributarias individuales o comerciales. Hay más información disponible en la página de intereses de IRS.gov.

Si tiene alguna pregunta sobre la contabilidad comercial esencial, los impuestos nacionales, los impuestos internacionales, la representación del IRS, las implicaciones fiscales de las transacciones inmobiliarias o los estados financieros en los EE. UU., llámenos al +1-305-274-5811

Fuente : IRS      

IRS Extends Relief to Farmers and Ranchers in 49 States, Other Areas Impacted by Drought; More Time to Replace Livestock

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service reminded eligible farmers and ranchers forced to sell livestock due to drought may have an extended period of time in which to replace the livestock and defer tax on any gains from the forced sales.

The IRS posted Notice 2023-67 listing the applicable areas, a county or other jurisdiction, designated as eligible for federal assistance on IRS.gov. This includes 49 states, the District of Columbia, two U.S. Territories and two independent nations in a Compact of Free Association with the United States.

The relief generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes. Sales of other livestock, such as those raised for slaughter or held for sporting purposes, or poultry, are not eligible.

The sales must be solely due to drought, causing an area to be designated as eligible for federal assistance. Livestock generally must be replaced within a four-year period, instead of the usual two-year period. The IRS is authorized to further extend this replacement period if the drought continues.

The one-year extension, announced in the notice, gives eligible farmers and ranchers until the end of their first tax year after the first drought-free year to replace the sold livestock. Details, including an example of how this provision works, can be found in Notice 2006-82, available on IRS.gov.

The IRS provides this extension to eligible farmers and ranchers that qualified for the four-year replacement period, if the applicable region is listed as suffering exceptional, extreme or severe drought conditions during any week between Sept. 1, 2022, and Aug. 31, 2023. This determination is made by the National Drought Mitigation Center.

As a result, eligible farmers and ranchers whose drought-sale replacement period was scheduled to expire on Dec. 31, 2023, in most cases, now have until the end of their next tax year to replace the sold livestock. Because the normal drought-sale replacement period is four years, this extension impacts drought sales that occurred during 2019. The replacement periods for some drought sales before 2019 are also affected due to previous drought-related extensions affecting some of these localities.

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 Impactados por huracán Lee en Maine y Massachusetts son Elegibles para alivio tributario; varios plazos se extienden hasta el 15 de febrero

Posted by Admin Posted on Dec 21 2023

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El Servicio de Impuestos Internos anunció alivio tributario para las personas y empresas afectadas por el Lee en cualquier parte de Maine y Massachusetts. Estos contribuyentes ahora tienen hasta el 15 de febrero de 2024 para presentar varias declaraciones de impuestos federales individuales y comerciales y realizar pagos de impuestos.

El IRS está ofreciendo alivio a cualquier área designada por la Agencia Federal para el Manejo de Emergencias (FEMA, por sus siglas en inglés). Todos los 16 condados de Maine y todos los 14 condados en Massachusetts son elegibles. Las personas y hogares que residen o tienen un negocio en estos condados son elegibles para alivio tributario. La lista actual de localidades elegibles siempre está disponible en la página de Alivio en situaciones de desastre en IRS.gov.

Alivio de presentación y pago

El alivio tributario pospone varios plazos de presentación y pago de impuestos que ocurrieron a partir del 15 de septiembre de 2023, hasta el 15 de febrero de 2024 (periodo de extensión). Como resultado, las personas y empresas afectadas tendrán hasta el 15 de febrero de 2024 para presentar declaraciones y pagar los impuestos que originalmente adeudaban durante este período.

Esto significa, por ejemplo, que el plazo del 15 de febrero de 2024 ahora aplica a:

  • Individuos que tenían una extensión válida para presentar su declaración de 2022 que vencía el 16 de octubre de 2023. Sin embargo, el IRS señaló que debido a que los pagos de impuestos relacionados con estas declaraciones de 2022 vencían el 18 de abril de 2023, esos pagos no elegibles para este alivio. Esto brinda más tiempo para declarar, no para pagar.
  • Pagos trimestrales de impuestos estimados que normalmente vencen el 15 de septiembre de 2023 y el 16 de enero de 2024.
  • Las declaraciones trimestrales de impuestos sobre la nómina y el consumo que normalmente vencen el 31 de octubre de 2023 y el 31 de enero de 2024.
  • Asociaciones de año calendario y corporaciones S cuyas extensiones de 2022 vencen el 15 de septiembre de 2023.
  • Corporaciones de año calendario cuyas extensiones de 2022 vencen el 16 de octubre de 2023.
  • Organizaciones exentas de impuestos de año calendario cuyas prórrogas vencen el 15 de noviembre de 2023.

Además, las multas por no realizar depósitos de impuestos sobre la nómina y el consumo adeudados a partir del 15 de septiembre de 2023 y antes del 2 de octubre de 2023 se reducirán siempre que los depósitos se realicen antes del 2 de octubre de 2023.

La página de Ayuda y alivio por emergencia en casos de desastre para las personas y los negocios tiene detalles acerca de otras declaraciones, pagos y acciones relacionadas con impuestos que son elegibles para el tiempo adicional.

El IRS proporciona automáticamente la presentación y el alivio de multas a cualquier contribuyente con una dirección registrada con el IRS ubicada en el área del desastre. Por lo tanto, los contribuyentes no necesitan comunicarse con la agencia para obtener este alivio.

Es posible que un contribuyente afectado no tenga una dirección ubicada en el área del desastre registrada con el IRS, por ejemplo, porque se mudó al área del desastre después de presentar su declaración. En este tipo de circunstancias únicas, el contribuyente afectado podría recibir un aviso de multa por presentación tardía o pago atrasado del IRS por el período de aplazamiento. El contribuyente debe llamar al número que figura en el aviso para que se elimine la multa.

Adicionalmente, el IRS trabajará con cualquier contribuyente que viva fuera del área del desastre, pero cuyos archivos necesarios para cumplir con una fecha límite que ocurra durante el período de aplazamiento se encuentren en el área afectada. Contribuyentes elegibles para el alivio que viven fuera del área de desastre deben comunicarse con el IRS al 866-562-5227. Esto también incluye a los trabajadores que ayudan en las actividades de socorro que están afiliados a un gobierno reconocido como una organización filantrópica.

Alivio tributario adicional

Las personas y empresas en un área de desastre declarada por el gobierno federal que sufrieron pérdidas relacionadas con el desastre no aseguradas o no reembolsadas pueden optar por reclamarlas en la declaración del año en que ocurrió la pérdida (en este caso, la declaración de 2023 que normalmente se presenta el próximo año), o la declaración del año anterior (2022). Los contribuyentes tienen tiempo adicional, hasta seis meses después de la fecha de vencimiento de la declaración de impuestos federales del contribuyente para el año del desastre (sin tener en cuenta cualquier extensión del tiempo para presentar) para hacer la elección. Deben asegurarse de escribir el número de declaración de FEMA – 3598-EM para Maine o 3599-EM para Massachusetts − en cualquier declaración que reclama una pérdida. Consulte la Publicación 547 (SP), Hechos Fortuitos, Desastres y Robos para detalles.

Los pagos calificados de ayuda en casos de desastre generalmente se excluyen del ingreso bruto. En general, esto significa que los contribuyentes afectados pueden excluir de sus ingresos brutos las cantidades recibidas de una agencia gubernamental para gastos personales, familiares, de manutención o funerarios razonables y necesarios, así como para la reparación o rehabilitación de su vivienda, o para la reparación o reposición de su contenido. Ver la Publicación 525 (en inglés) para detalles. 

Los pagos calificados de ayuda en casos de desastre generalmente se excluyen del ingreso bruto. En general, esto significa que los contribuyentes afectados pueden excluir de sus ingresos brutos las cantidades recibidas de una agencia gubernamental para gastos personales, familiares, de manutención o funerarios razonables y necesarios, así como para la reparación o rehabilitación de su vivienda, o para la reparación o reposición de su contenido. Ver la Publicación 525 (en inglés) para detalles.

Es posible que haya alivio adicional disponible para los contribuyentes afectados que participen en un plan de jubilación o un acuerdo de jubilación individual (IRA). Por ejemplo, un contribuyente puede ser elegible para recibir una distribución especial por desastre que no estaría sujeta al impuesto adicional de distribución anticipada del 10% y le permite al contribuyente distribuir los ingresos en tres años. Los contribuyentes también pueden ser elegibles para realizar un retiro por dificultades económicas. Cada plan o IRA tiene reglas y pautas específicas que deben seguir sus participantes.

El IRS puede brindar ayuda adicional en casos de desastre en el futuro.

El alivio tributario es parte de una respuesta federal coordinada a causa de los daños por estas tormentas y se basa en las evaluaciones de daños locales realizadas por FEMA. Para obtener información acerca de la recuperación ante desastres, visite DisasterAssistance.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     

Taxpayers Impacted by Hurricane Lee in Maine and Massachusetts qualify for tax relief

Posted by Admin Posted on Dec 21 2023

https://secure.emochila.com/swserve/siteAssets/site9268/files/Tax_payments_for_storm_Lee_man-5799574_750x356.jpgThe Internal Revenue Service announced tax relief for individuals and businesses affected by Hurricane Lee anywhere in Maine and Massachusetts. These taxpayers now have until Feb. 15, 2024, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). All 16 counties in Maine and all 14 counties in Massachusetts qualify. Individuals and households that reside or have a business in these counties qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Filing and Payment Relief

The tax relief postpones various tax filing and payment deadlines that occurred from Sept. 15, 2023, through Feb. 15, 2024 (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, this is more time to file not to pay.
  • Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, 2023.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
  • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.

In addition, penalties for the failure to make payroll and excise tax deposits due on or after Sept. 15, 2023, and before Oct. 2, 2023, will be abated as long as the deposits are made by Oct. 2, 2023.

The IRS disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional Tax Relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. Be sure to write the FEMA declaration number – 3598-EM for Maine or 3599-EM for Massachusetts − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by this storm and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.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      

Taxpayers Impacted by Seawater Intrusion in Parts of Louisiana Qualify for Tax Relief: Various Deadlines Postponed to Feb.15

Posted by Admin Posted on Dec 21 2023

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The Internal Revenue Service announced tax relief for individuals and businesses affected by seawater intrusion in parts of Louisiana. These taxpayers now have until Feb. 15, 2024, to file various federal individual and business tax returns and make tax payments.

Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), individuals and households affected by the seawater intrusion that reside or have a business in Jefferson, Orleans, Plaquemines and St. Bernard parishes qualify for tax relief. The current list of eligible localities is always available and updated on the disaster relief page on IRS.gov.

Filing and payment relief

The tax relief postpones various tax filing and payment deadlines that occurred from Sept. 20, 2023, through Feb. 15, 2024 (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, this is more time to file, not to pay.
  • Quarterly estimated income tax payments normally due on Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
  • Calendar-year, tax-exempt organizations whose extensions run out on Nov. 15, 2023.

In addition, penalties for the failure to make payroll and excise tax deposits due on or after Sept. 20, 2023, and before Oct. 5, 2023, will be abated as long as the deposits are made by Oct. 5, 2023.

The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. Be sure to write the FEMA declaration number – 3600-EM − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts,  for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by this disaster and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.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      

Do You Run a Business from Home?

Posted by Admin Posted on Dec 14 2023

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The pandemic changed the landscape of work for a lot of people, including the numerous business owners who began running their businesses from their homes. Many are still working from their home offices, whether full-time or on a hybrid basis. If you’re self-employed and run your business from home, or perform certain functions there, you might be able to claim deductions for home office expenses against your business income.

How to qualify

In general, self-employed taxpayers qualify for home office deductions if part of their home is used “regularly and exclusively” as the principal place of business.

If your home isn’t your principal place of business, you may still be able to deduct home office expenses if:

1. You physically meet with patients, clients or customers on your premises, or

2. You use a storage area in your home (or a separate free-standing structure, such as a garage) exclusively and regularly for business.

Keep in mind the requirement that the space be used exclusively for business. For example, if your home office is also a guest bedroom, you can’t deduct the entire space as a home office expense. But if you use the desk area of the room exclusively for business, you can deduct that portion of the room, as long as you otherwise qualify.

Expenses you can deduct

Many eligible taxpayers deduct actual expenses when they claim home office deductions. Deductible home office expenses may include:

  • Direct expenses, such as the cost of painting and carpeting a room used exclusively for business,
  • A proportionate share of indirect expenses, including mortgage interest, rent, property taxes, utilities, repairs and insurance, and
  • Depreciation.

But keeping track of actual expenses can take time, and it requires organized recordkeeping.

The simpler method

Fortunately, there’s a simplified method: You can deduct $5 for each square foot of home office space, up to $1,500.

The cap can make the simplified method less valuable for larger home office spaces. Even for small spaces, taxpayers may qualify for bigger deductions using the actual expense method. So tracking your actual expenses can be worth it.

When claiming home office deductions, you’re not stuck with a particular method. For instance, you might have chosen the actual expense method when you filed your 2022 return, but then use the simplified method when you file your 2023 return next year, and the following year switch back to the actual expense method. The choice is yours.

More considerations

The amount of your deductions is subject to limitations based on the income attributable to your use of the office. Other rules and limitations may apply. But eligible home office expenses that can’t be deducted because of these limitations can be carried forward and may be able to be deducted in later years.

Also be aware that, if you sell a home on which you claimed home office deductions, there may be tax implications. Contact us for more information.

A valuable deduction

You might be wondering why only business owners and the self-employed have been addressed here. Unfortunately, the Tax Cuts and Jobs Act suspended home office deductions from 2018 through 2025 for employees, even if you’re currently working from home because your employer doesn’t provide office space.

But the home office deduction can be valuable to those who’re eligible for it. We can help you determine if you’re eligible and the best method for claiming the deduction in 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 : Thompson Reuters      

El IRS Insta a las Personas Elegibles que No Tienen un Requisito de Presentación de 2020 y 2021 a Reclamar el Crédito de Reembolso Antes de que se Acabe el Tiempo

Posted by Admin Posted on Dec 14 2023

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El Servicio de Impuestos Internos alienta a aquellos que puedan tener derecho al Crédito de recuperación de reembolso a presentar una declaración de impuestos y reclamar su dinero antes de que sea demasiado tarde.

La gran mayoría de las personas elegibles para los Pagos de impacto económico relacionados con el alivio tributario por coronavirus ya los han recibido o reclamado a través del Crédito de recuperación de reembolso. Las fechas límite para presentar una declaración y reclamar los créditos de 2020 y 2021 son el 17 de mayo de 2024 y el 15 de abril de 2025, respectivamente.

El Crédito de recuperación de reembolso es un crédito reembolsable para aquellos que no recibieron uno o más pagos de impacto económico. Los Pagos de impacto económico, también conocidos como pagos de estímulo, se emitieron en 2020 y 2021. El IRS estima que algunas personas y familias aún son elegibles para los pagos. Sin embargo, los contribuyentes primero deben presentar una declaración de impuestos para hacer su reclamo, incluso si tenían pocos o ningún ingreso de un trabajo, negocio u otra fuente.

¿Quién es elegible?

Por lo general, para reclamar el Crédito de recuperación de reembolso de 2020, una persona debe:

  • Haber sido ciudadano estadounidense o extranjero residente de EE. UU. en 2020.
  • No haber sido dependiente de otro contribuyente para el año 2020.
  • Tener un número de Seguro Social emitido antes de la fecha de vencimiento de la declaración de impuestos que sea válido para trabajar en los Estados Unidos.

Por lo general, para reclamar el Crédito de recuperación de reembolso de 2021, una persona debe:

  • Haber sido ciudadano estadounidense o extranjero residente de EE. UU. en 2021.
  • No haber sido dependiente de otro contribuyente para el año 2021.
  • Tener un número de Seguro Social emitido antes de la fecha de vencimiento de la declaración de impuestos, reclamar a un dependiente que tenga un número de Seguro Social emitido antes de la fecha de vencimiento de la declaración de impuestos, o reclamar a un dependiente con un Número de Identificación del Contribuyente de Adopción.

El Crédito de recuperación de reembolso de 2020 se puede reclamar para alguien que falleció en 2020. El Crédito de recuperación de reembolso de 2020 y 2021 se pueden reclamar para alguien que falleció en 2021 o después.

Plazos de presentación si aún no ha presentado una declaración de impuestos

Para reclamar:

  • Crédito de recuperación de reembolso de 2020, presente una declaración de impuestos antes del 17 de mayo de 2024.
  • Crédito de recuperación de reembolso de 2021, presente una declaración de impuestos antes del 15 de abril de 2025.

Obtén ayuda gratuita

Los contribuyentes calificados también pueden encontrar ayuda personalizada gratuita para la preparación de impuestos en todo el país a través de los programas de Ayuda Voluntaria a los Contribuyentes del Impuesto sobre el Ingreso y el Programa de Asesoramiento Tributario para los Ancianos. Utilice la herramienta de localización VITA (en inglés) o llame al 800-906-9887 para localizar el sitio más cercano.

Esto es parte de un esfuerzo continuo del IRS para alentar a las personas que normalmente no están obligadas a presentar una declaración a investigar los posibles beneficios disponibles para ellos bajo la ley tributaria. Cada año, las personas pueden no presentar una declaración de impuestos, incluso cuando pueden tener derecho a créditos tributarios y un reembolso. El IRS recuerda a los contribuyentes que no hay multa por reclamar un reembolso en una declaración de impuestos presentada después de su fecha de vencimiento. La forma más rápida y fácil de obtener un reembolso es elegir el depósito directo.

Las personas también pueden usar Su cuenta en línea del IRS para ver si recibieron algún pago de impacto económico y los montos totales.

Cualquier Crédito de recuperación de reembolso recibido no se puede contar como ingreso al determinar la capacidad de alguien para ser elegible para beneficios federales como Seguridad de Ingreso Suplementario (SSI), Programa de Asistencia Nutricional Suplementaria (SNAP), Asistencia Temporal para Familias Necesitadas (TANF) y el Programa Especial de Nutrición Suplementaria para Mujeres, Bebés y Niños (WIC). Reclamar el crédito tampoco tiene ningún efecto sobre el estatus migratorio de una persona o su capacidad para obtener una tarjeta verde o beneficios de inmigración.

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     

Treasury and IRS Issue Proposed Regulations Defining Energy Property

Posted by Admin Posted on Dec 14 2023

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The Department of the Treasury and the Internal Revenue Service today issued proposed regulations updating rules for the investment tax credit under section 48 (ITC) that have been unchanged since 1987. The proposed rules update the types of energy properties eligible for the section 48 ITC, reflecting changes in the energy industry, technological advances, and updates from the Inflation Reduction Act of 2022 (IRA).

Energy industry participants will appreciate that the proposed regulations provide definitions of energy properties for which the ITC was available before the IRA. These include, but are not limited to, solar process heat, fiber-optic solar property, combined heat and power system property, qualified fuel cell property, and qualified microturbine property.

These proposed regulations also address technologies that were added to the ITC as energy property by the IRA, including electrochromic glass, energy storage technology, microgrid controllers, and biogas property. Importantly, the IRA added new provisions to the ITC to allow smaller projects to include the cost of certain types of interconnection property in their credit amount.

Additionally, the proposed regulations provide general rules for the ITC including the application of the "80/20" Rule to retrofitted energy property, dual use property, and issues related to multiple owners of an energy property.

Additional information about guidance issued under the IRA is available at Inflation Reduction Act of 2022.

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     

Treasury, IRS Propose Regulations Implementing Disallowance of Deductions for Certain Conservation Easement Contributions by Parterships, S Corporations

Posted by Admin Posted on Dec 14 2023

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The Department of the Treasury and the Internal Revenue Service issued proposed regulations that provide guidance under a new section of the law that disallows deductions for certain charitable conservation contributions by partnerships and other pass-through entities. Syndicated conservation easements have been included in the IRS' annual list of Dirty Dozen tax schemes for many years.

The SECURE 2.0 Act of 2022 added new subsections to the part of the tax law that provides rules for deductions for charitable contributions under Internal Revenue Code section 170.

"The IRS is focusing its new compliance efforts on those who evade taxes through complex partnership structures and overvalued conservation easement contributions. The regulations issued today will stem the tide of certain syndicated conservation easements that are nothing more than retail tax shelters, while protecting the integrity of legitimate conservation easements and helping law-abiding taxpayers more easily meet their obligations," said IRS Commissioner Danny Werfel.

Generally, these regulations affect partnerships and S corporations that make conservation contributions and upper-tier partnerships, upper-tier S corporations, partners and S corporation shareholders that are allocated a portion of these contributions. The regulations provide definitions, explanations, computational guidance and examples of the new law, which disallows deductions if the amount of the contribution is more than two and a half times the sum of each partner's or shareholder's relevant basis in the partnership or S corporation.

The proposed regulations also provide guidance on the statutory exceptions to the new disallowance rule, particularly the exception for family partnerships and S corporations and the exception for contributions made outside a three-year holding period. The proposed regulations also provide updates concerning substantiation and reporting rules for certain charitable contributions.

The commitment to making sure that partnerships, other pass-through entities and their owners comply with the tax law is a significant part of the agency's strategic plan.

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 Retirement Accounts Can Be Important Tools in Retirement Planning

Posted by Admin Posted on Dec 07 2023

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It is never too early to begin planning for retirement. Individual retirement accounts provide tax incentives for people to make investments that can provide financial security when they retire. These accounts can be with a bank or other financial institution, a life insurance company, mutual fund or stockbroker.

A traditional IRA is the most common type of individual retirement account. IRAs let earnings grow tax deferred. Individuals pay taxes on investment gains only when they make withdrawals. Depositors may be able to claim a deduction on their individual federal income tax return for the amount they contributed to an IRA.

What to consider before investing in a traditional IRA

  • A traditional IRA is a tax-advantaged personal savings plan where contributions may be tax deductible.
  • Generally, the money in a traditional IRA isn't taxed until it's withdrawn.
  • There are annual limits to contributions depending on the person's age and the type of IRA.
  • When planning when to withdraw money from an IRA, taxpayers should know that:
    • They may face a 10% penalty and a tax bill if they withdraw money before age 59½ unless they qualify for an exception.
    • Usually, they must start taking withdrawals from their IRA when they reach age 73 (age 72 if they turned 72 in 2022). For tax years 2019 and earlier, that age was 70½.
    • Special distribution rules apply for IRA beneficiaries.

Differences between a Roth and a traditional IRA

A Roth IRA is another tax-advantaged personal savings plan with many of the same rules as a traditional IRA, but there are exceptions:

  • A taxpayer can't deduct contributions to a Roth IRA.
  • Qualified distributions are tax free.
  • Roth IRAs don't require withdrawals until after the death of the owner.

Other types of IRAs

  • Simplified Employee Pension – A SEP IRA is set up by an employer. The employer makes contributions directly to an IRA set up for each employee.
  • Savings Incentive Match Plan for Employees – A SIMPLE IRA allows the employer and employees to contribute to an IRA set up for each employee. It is suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
  • Payroll Deduction IRA – Employees set up a traditional or a Roth IRA with a financial institution and authorize a payroll deduction agreement with their employer.
  • Rollover IRA – The IRA owner receives a payment from their retirement plan and deposits it into an IRA within 60 days.

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      

Tip to Help Taxpayers Make Sure their Donations Go to Legitimate Charities

Posted by Admin Posted on Dec 07 2023

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When disaster strikes, Americans can always be counted on to help. That help comes in countless ways, but often the easiest way to help is by donating money to charities.

Sadly, criminals are just as likely to answer the call after a disaster or emergency as the millions of people who open their wallets. Scammers solicit donations to fake charities and can pose as employees of legitimate charities or federal agencies to dupe disaster victims trying to get disaster relief.

Although some legitimate charities do contact people out of the blue, people should always be suspicious of unsolicited contact.

Taxpayers donating money should keep a few things in mind:

  • Use the IRS Tax Exempt Organization Search tool to find or verify qualified charities. Donations to these real charities may be tax deductible.
  • Research a charity before sending a donation to confirm that the charity is real and to know whether the donation is tax deductible.
  • Always get a receipt and keep a record of the donation.
  • Review bank and credit card statements closely to make sure donation amounts are accurate.

Keep scammers' tricks in mind:

  • Legitimate charities do not ask for gift cards, cash, or wire transfers.
  • Scammers may claim to work for the IRS or another government agency.
  • Thieves may pose as a representative of a legitimate charity to ask for money or private information from well-intentioned taxpayers.
  • Scammers can change their caller ID to make it appear they are a legitimate organization calling from a legitimate phone number.
  • Scammers make vague and sentimental claims but give no specifics about how your donation will be used.
  • Scammers set up bogus websites using names that sound like real charities.
  • Bogus organizations often claim a donation is tax deductible when it's not.

Disaster victims should know:

Disaster victims can call the IRS disaster assistance line at 866-562-5227. IRS representatives will answer questions about tax relief or disaster-related tax issues.

Donating to a charity is a great way to help others after a disaster or emergency. If taxpayers suspect a scam or fraud, they can report it to The Federal Trade Commission

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      

IRS Provide Tax Inflation Adjustments for Tax Year 2024

Posted by Admin Posted on Dec 07 2023

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The Internal Revenue Service announced the annual inflation adjustments for more than 60 tax provisions for tax year 2024, including the tax rate schedules and other tax changes. Revenue Procedure 2023-34 provides detailed information about these annual adjustments.

New for 2024

 

Starting in calendar year 2023, the Inflation Reduction Act reinstates the Hazardous Substance Superfund financing rate for crude oil received at U.S. refineries, and petroleum products that entered into the United States for consumption, use, or warehousing. The tax rate is the sum of the Hazardous Substance Superfund rate and the Oil Spill Liability Trust Fund financing rate. For calendar years beginning in 2024, the Hazardous Substance Superfund financing rate is adjusted for inflation. For calendar year 2024 crude oil or petroleum products entered after

Dec. 31, 2016, will have a tax rate of $0.26 cents a barrel.

Highlights of changes in Revenue Procedure 2023-34:

The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:

  • The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
     
  • Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).

The other rates are:

35% for incomes over $243,725 ($487,450 for married couples filing jointly)
32% for incomes over $191,950 ($383,900 for married couples filing jointly)
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)

The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
 

  • The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).
     
  • The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 for tax year 2023. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
     
  • For tax year 2024, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $315, an increase of $15 from the limit for 2023.
     
  • For the taxable years beginning in 2024, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
     
  • For tax year 2024, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,800, an increase of $150 from tax year 2023, but not more than $4,150, an increase of $200 from tax year 2023. For self-only coverage, the maximum out-of-pocket expense amount is $5,550, an increase of $250 from 2023. For tax year 2024, for family coverage, the annual deductible is not less than $5,550, an increase of $200 from tax year 2023; however, the deductible cannot be more than $8,350, an increase of $450 versus the limit for tax year 2023. For family coverage, the out-of-pocket expense limit is $10,200 for tax year 2024, an increase of $550 from tax year 2023.
     
  • For tax year 2024, the foreign earned income exclusion is $126,500, increased from $120,000 for tax year 2023.
     
  • Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.
     
  • The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.
           
  • The maximum credit allowed for adoptions for tax year 2024 is the amount of qualified adoption expenses up to $16,810, increased from $15,950 for 2023.
  • Items unaffected by indexing:

    By statute, certain items that were indexed for inflation in the past are currently not adjusted.

  • The personal exemption for tax year 2024 remains at 0, as it was for 2023. This elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
     
  • For 2024, as in 2023, 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
     
  • The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).
  • 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 +1-305-274-5811.17 SW 88th ST, Mi1773

      

    Source : IRS 

  •  

IRS Supports International Efforts to Fight Fraud during Charity Fraud Awareness Week

Posted by Admin Posted on Dec 07 2023

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On Giving Tuesday and as part of Charity Fraud Awareness Week, the Internal Revenue Service highlighted its continued support of international efforts to fight fraud and charity scams.

The IRS supports this effort as part of its ongoing commitment to fight fraud against charities, businesses and individuals. It's estimated that charitable organizations lose 5% of their revenue each year to fraud, according to the Fraud Advisory Panel, a UK-based organization that leads the effort in organizing Charity Fraud Awareness Week, which runs from Nov. 27-Dec. 1.

Charities, regulators, agencies, law enforcement and other not-for-profit stakeholders around the world work together to raise awareness about fraud and cybercrime that affect charities. During this week of awareness, supporters actively discuss fraud and cybercrime, share best practices and offer helpful resources.

"We thank the Fraud Advisory Panel for the important work that goes into Charity Fraud Awareness Week and for reminding donors to remain vigilant," said IRS Director of Exempt Organizations and Government Entities Robert Malone. "Unfortunately, charity scammers look for opportunities to take advantage of situations, such as natural disasters, when exempt organizations are making an effort to help. Donors and charitable organizations alike should remain vigilant to protect their assets from fraudsters. I urge donors to verify a charity's tax-exempt status at Tax Exempt Organization Search before donating goods, services or money."

Be aware of fake charities

In addition to cybercrime targeting charities, criminals also create fake charities. To learn more about how scammers use fake charities, read the IRS' Dirty Dozen tax scams for 2023. Taxpayers should verify legitimate and qualified charities using the Tax Exempt Organization Search tool. Donors should never feel pressured to give immediately.

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     

IRS Launches New Initiatives Using Inflation Reduction Act Funding to Ensure Large Corporations Pay Taxes Owed; Continues to Improve Service and Modernize Technology with Launch of Business Tax Account

Posted by Admin Posted on Dec 01 2023

IRS Launches New Initiatives Using Inflation Reduction Act Funding to Ensure Large Corporations Pay Taxes Owed; Continues to Improve Service and Modernize Technology with Launch of Business Tax Account

Following a dramatically improved 2023 filing season thanks to Inflation Reduction Act (IRA) investments, the Internal Revenue Service has targeted IRA resources on strengthening enforcement, with announcements on new initiatives to pursue high-income, high-wealth individuals who do not pay overdue tax bills and complex partnerships.

The IRS announced new initiatives to ensure large corporations pay taxes owed. As these initiatives to improve compliance among high-income individuals, complex partnerships and large corporations ramp up, the IRS is continuing its work to improve customer service and modernize core technology infrastructure, most notably with the launch of business tax account.

Ensuring large corporations and high-income, high-wealth individual taxpayers pay taxes owed

The IRS is working to ensure large corporate and high-income individual filers pay the taxes they owe. Prior to the Inflation Reduction Act, more than a decade of budget cuts prevented the IRS from keeping pace with the increasingly complicated set of tools that the wealthiest taxpayers use to hide their income and evade paying their share. The IRS is now taking swift and aggressive action to close this gap.

  • Large foreign-owned corporations transfer pricing initiative: The IRS is increasing compliance efforts on the U.S. subsidiaries of foreign companies that distribute goods in the U.S. and do not pay their fair share of tax on the profit they earn of their U.S. activity. These foreign companies report losses or exceedingly low margins year after year through the improper use of transfer pricing to avoid reporting an appropriate amount of U.S. profits. To crack down on this strategy, the IRS is sending compliance alerts to approximately 150 subsidiaries of large foreign corporations to reiterate their U.S. tax obligations and incentivize self-correction.
  • Expansion of the Large Corporate Compliance program: The IRS' Large Business & International Division's (LB&I) Large Corporate Compliance (LCC) program focuses on noncompliance by using data analytics to identify large corporate taxpayers for audit. LCC includes the largest and most complex corporate taxpayers with average assets of more than $24 billion and average taxable income of approximately $526 million per year. As new accountants come on board in early 2024, LB&I is expanding the program by starting an additional 60 audits of the largest corporate taxpayers selected using a combination of artificial intelligence and subject matter expertise in areas such as cross-border issues and corporate planning and transactions.
  • Cracking down on abuse of repealed corporate tax break: Following the 2017 repeal of a provision of the code that provided a deduction for producing goods in the U.S., the IRS received hundreds of claims collectively seeking more than $6 billion in refunds, with a significant portion of filers claiming the deduction for the first time. The IRS launched a campaign to address noncompliance and review high-risk claims in this area. IRS efforts have been incredibly successful in ensuring revenue is collected. The efforts have recently been supported by a significant win in the Tenth Circuit Court of Appeals, which sided with the Tax Court and IRS in denying a refund claim based on a $1.8 billion deduction. This will have far-reaching benefits to the IRS' ongoing efforts in this space.
  • Prioritization of high-income cases: The IRS has been ramping up efforts to pursue high-income, high-wealth individuals who have either not filed their taxes or failed to pay recognized tax debt. These efforts are concentrated among taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt. Building off earlier successes that collected $38 million from more than 175 high-income earners, dozens of revenue officers are focusing on these high-end collection cases in the coming fiscal year. As announced in September, the IRS has begun contacting about 1,600 new taxpayers in this category that owe hundreds of millions of dollars in taxes.

·       The IRS has now collected $122 million dollars in 100 of these already assigned 1,600 cases. Examples of cases closed since the Inflation Reduction Act passed follow:

·        

o   An individual last month was ordered to pay more than $15 million in restitution. The individual falsified millions of dollars of personal expenses as deductible business expenses and financed construction of a 51,000-square-foot mansion, including expenses of interior and exterior construction costs; an outdoor pool and pool house; and tennis, basketball and bocce courts. The individual falsified millions of dollars of expenses for luxury vehicles, artwork, country club memberships and homes for his children.
 

o   An individual last week pled guilty to filing false tax returns and skimming more than $670,000 from his business. The individual spent $110,000 on personal expenses and $502,000 on gambling.
 

o   An individual was sentenced to 54 months in federal prison for fraudulently obtaining $5 million in COVID relief loans for sham businesses. The individual then spent the money on himself, purchasing Ferrari, Bentley and Lamborghini cars.

Improving taxpayer service

The IRS is focused on helping taxpayers get it right the first time — claiming the credits and deductions for which they're eligible and avoiding back-and-forth with the agency when errors arise. To help taxpayers get it right, the IRS is working toward taxpayers being able to seamlessly interact with the agency in the ways that work best for them on the phone, in-person and online.

The IRS is expanding in-person service and meeting taxpayers where they are, particularly those in underserved and rural communities. The IRS is continuing to expand Taxpayer Assistance Centers across the country while also starting a special series of events to help taxpayers living in areas far from the agency's in-person offices.

  • Community Assistance Visits: In these new Community Assistance Visits, the IRS will set up a temporary Taxpayer Assistance Center to give taxpayers from hard-to-reach areas an opportunity to meet face-to-face with IRS customer service representatives. The IRS has conducted seven events in Paris, Texas; Alpena, Michigan; Hastings, Nebraska; Twin Falls, Idaho; Juneau, Alaska; Lihue, Hawaii; and Baker City, Oregon. Many of the taxpayers served at these events had exhausted all other options for IRS services. The feedback from IRS employees, taxpayers and the host sites have all been very positive. Currently, two additional locations have been identified to host Community Assistance Visits in Ciales, Puerto Rico and Gallup, New Mexico.

  

Opening Taxpayer Assistance Centers: Currently, the IRS has opened or reopened the following 50 Taxpayer Assistance Centers since the passage of the Inflation Reduction Act, including eight additional centers since the first anniversary of the law's enactment:

Taxpayer Assistance Center

Date opened/reopened 

Waco, Texas

Oct. 10, 2023

Missoula, Montana

Oct. 2, 2023

Martinsburg, West Virginia

Oct. 2, 2023

Monroe, Louisiana

Sept. 25, 2023

York, Pennsylvania

Sept. 18, 2023

Topeka, Kansas

Sept. 5, 2023

Utica, New York

Aug. 28, 2023

Fayetteville, Arkansas

Aug. 14, 2023

Hickory, North Carolina

Aug. 7, 2023

Rome, Georgia

Aug. 7, 2023

Plantation, Florida

Aug. 3, 2023

Panama City, Florida

July 31, 2023

Cranberry Township, Pennsylvania

July 31, 2023

Peoria, Illinois

July 24, 2023

Huntington, West Virginia

July 5, 2023

Lincoln, Nebraska

May 23, 2023

La Vale, Maryland

May 15, 2023

Altoona, Pennsylvania

May 8, 2023

Fredericksburg, Virginia

May 1, 2023

Parkersburg, West Virginia

May 1, 2023

Bend, Oregon

April 17, 2023

Greenville, Mississippi

April 10, 2023

Trenton, New Jersey

April 10, 2023

Bellingham, Washington

April 3, 2023

Augusta, Maine

March 30, 2023

Jackson, Tennessee

March 28, 2023

Joplin, Missouri

March 28, 2023

Colorado Springs, Colorado

March 27, 2023

Glendale, Arizona

March 27, 2023

Cranberry Township, Pennsylvania

March 22, 2023

La Crosse, Wisconsin

March 20, 2023

Charlottesville, Virginia

March 17, 2023

Queensbury, New York

March 9, 2023

Santa Fe, New Mexico

Feb. 27, 2023

Longview, Texas

Jan. 17, 2023

Overland Park, Kansas

Jan. 17, 2023

West Nyack, New York

Jan. 5, 2023

Binghamton, New York

Jan. 3, 2023

Casper, Wyoming

Jan. 3, 2023

Fort Myers, Florida

Dec. 19, 2022

Grand Junction, Colorado

Dec. 19, 2022

Rockford, Illinois

Dec. 12, 2022

Hagerstown, Maryland

Dec. 1, 2022

DASE (Guaynabo), Puerto Rico

Nov. 28, 2022

Johnson City, Tennessee

Nov. 28, 2022

Prestonsburg, Kentucky

Nov. 28, 2022

Vienna, Virginia

Nov. 28, 2022

Greensboro, North Carolina

Nov. 22, 2022

Bloomington, Illinois

Nov. 21, 2022

Ponce, Puerto Rico,

Nov. 14, 2022

  • Taxpayer Assistance Center hiring update: As of September 23, the IRS has hired 745 employees to staff Taxpayer Assistance Centers. This represents a 31% net increase in Taxpayer Assistance Center staffing compared to fiscal year 2022, and IRS continues to hire to replace departing staff. Taxpayer Assistance Centers have served about 235,000 more taxpayers in fiscal year 2023 than fiscal year 2022, an 18% increase.

Taxpayers deserve the same functionality in their online accounts that they experience with their bank or other financial institutions. As detailed in the Strategic Operating Plan, in the next five years, taxpayers will be able to securely file all documents and respond to all notices online and securely access and download their data and account history. The IRS has hit or has in-progress several milestones toward this goal, including the launch of business tax account, the expansion of its Document Upload Tool to accept responses to nearly all notices and letters, and the launch of digital mobile-adaptive forms.

  • Business tax account: IRS launched the first phase of business tax account that over time will allow business taxpayers to check their tax payment history, make payments, view notices, authorize powers of attorney and conduct other business with the IRS. This initial phase allows unincorporated sole proprietors who have an active Employer Identification Number to set up a business tax account, where they can view their business profile and manage authorized users. Future improvements will allow taxpayers to use their business tax accounts to view letters or notices, request tax transcripts, add third parties for power of attorney or tax information authorizations, schedule or cancel tax payments and store bank account information.
  • Respond to notices online: Taxpayers are now able to respond to notices online. Until filing season 2023, when taxpayers received notices for things like document verification, they had to respond through the mail. During filing season 2023, taxpayers were able to respond to 10 of the most common notices for credits like the Earned Income and Health Insurance Tax Credits online, saving them time and money. As of September 29, the IRS has received more than 32,000 responses to notices via the online tool.
  • Enable taxpayers to submit mobile-friendly forms: The IRS is enabling taxpayers to submit mobile-friendly forms with the launch of the first three forms. These forms are adaptive for mobile device screen and can be submitted electronically when completed. This is also an important milestone toward the IRS goal of meeting taxpayers where they are and allowing them to interact with the IRS in the ways that work best for them. An estimated 15% of Americans rely solely on mobile phones for their internet access — they do not have broadband at home — so it is important to make forms available in mobile-friendly formats. The first three forms launched at the end of September.
     
    • Form 15109, Request for Tax Deferment. Taxpayers can provide information related to their entry and exit from service in combat ones, contingency operations or hazardous duty stations.
       
    • Form 14039, Identity Theft Affidavit. Taxpayers can provide information related to the fraudulent use of their and/or dependent identity.
       
    • Form 14242, Reporting Abusive Tax Promotions and/or Preparers. Taxpayers use this form to provide detail information about tax schemes.
       
    • A fourth form, Form 13909, Tax-Exempt Organization Complaint, will launch later this fall. At least 20 of the most-used tax forms will launch in early 2024.

In addition, the IRS continues to expand the functionality of several online platforms:

  • Individual account: The IRS continues to deploy enhanced capabilities for individual accounts, following the May launch of virtual assistance and live chat. Taxpayers can now validate their bank accounts and save multiple accounts, eliminating the need to re-enter bank account information every time they make a payment. This feature launched at the end of September.
  • Tax professional account: The IRS continues to provide enhanced capabilities for tax professionals' online accounts, helping practitioners manage their active client authorizations on file with the Centralized Authorization File (CAF) database, which stores the information on individuals authorized to act on a taxpayer's behalf. Other enhancements put into place in September 2023 allow tax professionals to view their client's tax information, including balance due amounts. Tax Pro Account users can now also withdraw from their active authorizations online in real time.

Modernizing Technology

On the technology side, the IRS is modernizing decades-old technology to drive the agency's efforts to provide world class customer service and protect taxpayers' data.

  • Enable taxpayers to submit mobile-friendly forms: The IRS is enabling taxpayers to submit mobile-friendly forms with the launch of the first three forms. These forms are adaptive for mobile device screen and can be submitted electronically when completed. This is also an important milestone toward the IRS goal of meeting taxpayers where they are and allowing them to interact with the IRS in the ways that work best for them. An estimated 15% of Americans rely solely on mobile phones for their internet access — they do not have broadband at home — so it is important to make forms available in mobile-friendly formats. The first three forms launched at the end of September.
     
    • Form 15109, Request for Tax Deferment. Taxpayers can provide information related to their entry and exit from service in combat ones, contingency operations or hazardous duty stations.
       
    • Form 14039, Identity Theft Affidavit. Taxpayers can provide information related to the fraudulent use of their and/or dependent identity.
       
    • Form 14242, Reporting Abusive Tax Promotions and/or Preparers. Taxpayers use this form to provide detail information about tax schemes.
       
    • A fourth form, Form 13909, Tax-Exempt Organization Complaint, will launch later this fall. At least 20 of the most-used tax forms will launch in early 2024.

In addition, the IRS continues to expand the functionality of several online platforms:

  • Individual account: The IRS continues to deploy enhanced capabilities for individual accounts, following the May launch of virtual assistance and live chat. Taxpayers can now validate their bank accounts and save multiple accounts, eliminating the need to re-enter bank account information every time they make a payment. This feature launched at the end of September.
  • Tax professional account: The IRS continues to provide enhanced capabilities for tax professionals' online accounts, helping practitioners manage their active client authorizations on file with the Centralized Authorization File (CAF) database, which stores the information on individuals authorized to act on a taxpayer's behalf. Other enhancements put into place in September 2023 allow tax professionals to view their client's tax information, including balance due amounts. Tax Pro Account users can now also withdraw from their active authorizations online in real time.

Modernizing Technology

On the technology side, the IRS is modernizing decades-old technology to drive the agency's efforts to provide world class customer service and protect taxpayers' data.

  • Enable taxpayers to submit mobile-friendly forms: The IRS is enabling taxpayers to submit mobile-friendly forms with the launch of the first three forms. These forms are adaptive for mobile device screen and can be submitted electronically when completed. This is also an important milestone toward the IRS goal of meeting taxpayers where they are and allowing them to interact with the IRS in the ways that work best for them. An estimated 15% of Americans rely solely on mobile phones for their internet access — they do not have broadband at home — so it is important to make forms available in mobile-friendly formats. The first three forms launched at the end of September.
     
    • Form 15109, Request for Tax Deferment. Taxpayers can provide information related to their entry and exit from service in combat ones, contingency operations or hazardous duty stations.
       
    • Form 14039, Identity Theft Affidavit. Taxpayers can provide information related to the fraudulent use of their and/or dependent identity.
       
    • Form 14242, Reporting Abusive Tax Promotions and/or Preparers. Taxpayers use this form to provide detail information about tax schemes.
       
    • A fourth form, Form 13909, Tax-Exempt Organization Complaint, will launch later this fall. At least 20 of the most-used tax forms will launch in early 2024.

In addition, the IRS continues to expand the functionality of several online platforms:

  • Individual account: The IRS continues to deploy enhanced capabilities for individual accounts, following the May launch of virtual assistance and live chat. Taxpayers can now validate their bank accounts and save multiple accounts, eliminating the need to re-enter bank account information every time they make a payment. This feature launched at the end of September.
  • Tax professional account: The IRS continues to provide enhanced capabilities for tax professionals' online accounts, helping practitioners manage their active client authorizations on file with the Centralized Authorization File (CAF) database, which stores the information on individuals authorized to act on a taxpayer's behalf. Other enhancements put into place in September 2023 allow tax professionals to view their client's tax information, including balance due amounts. Tax Pro Account users can now also withdraw from their active authorizations online in real time.

 

Modernizing Technology

On the technology side, the IRS is modernizing decades-old technology to drive the agency's efforts to provide world class customer service and protect taxpayers' data.

  • Digitalization: The IRS also continues to make significant progress scanning and e-filing paper returns.
     
    • As of October, the IRS had scanned more than 1 million forms during the 2023 calendar year — more than 480,000 Forms 940, 579,000 Forms 941 and more than 90,000 Forms 1040. Digitization has far-reaching implications for improving IRS service. Digitizing paper returns will eliminate errors that result from manually inputting data from paper returns, which will speed up processing, reduce storage costs and allow IRS to focus more resources on customer service. Once paper returns are digitized, extracting the data will enable IRS customer service employees to answer taxpayer questions and resolve issues more quickly and accurately. Customer service employees do not currently have easy access to the information from paper returns and other correspondence submitted by mail. Digitization and data extraction will give them access to that information they need to better serve taxpayers.

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      

 

Reminder: Educational Assistance Programs Can Help Workers’ Student Loans

Posted by Admin Posted on Nov 29 2023

Employers that offer educational assistance programs can also use those programs to help pay their employees' student loans.

Though educational assistance programs have been available for many years, the option to use them to pay student loans is available only for payments made after March 27, 2020. Under current law, this option will be available until 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, qualify. 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.

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      

Recordatorio: Programas de Asistencia Educativa Pueden Ayudar a Pagar Préstamos Estudiantiles de Trabajadores

Posted by Admin Posted on Nov 29 2023

Recordatorio: Programas de Asistencia Educativa Pueden Ayudar a Pagar Préstamos Estudiantiles de Trabajadores

Los empleadores que ofrecen programas de asistencia educativa también pueden usar esos programas para ayudar a pagar los préstamos estudiantiles de sus empleados.

Aunque los programas de asistencia educativa han estado disponibles durante muchos años, la opción de usarlos para pagar préstamos estudiantiles 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.

Tradicionalmente, los programas de asistencia educativa se han usado para pagar libros, equipos, materiales, cuotas, matrícula y otros gastos educativos del empleado. Estos programas ahora también se pueden usar para pagar el capital y los intereses de los préstamos educativos calificados de un empleado. Los pagos realizados directamente al prestamista, así como los realizados al empleado, califican. 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 está sujeta a impuestos como salario.

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 Deductibility of Medical Expenses

Posted by Admin Posted on Nov 29 2023

The Deductibility of Medical ExpensesThe Deductibility of Medical Expenses

 

Individual taxpayers may be able to claim medical expense deductions on their tax returns. However, the rules can be challenging, and qualifying can be difficult.

5 key points

Here are five points to keep in mind:

1. You must itemize to claim the deduction and have a lot of expenses. The medical expense deduction can be claimed only to the extent your unreimbursed costs exceed 7.5% of your adjusted gross income. If your total itemized deductions in 2023 will exceed your standard deduction, moving or “bunching” nonurgent medical procedures and other controllable expenses into this year may allow you to exceed the 7.5% floor and benefit from the deduction.

2. Health insurance premiums may help. These can total thousands of dollars a year. You may be able deduct the portion of the premiums that you pay for employer-provided health coverage, but only if they aren’t taken out of your paycheck pre-tax. Long-term care insurance premiums are also included as medical expenses, subject to limits based on age.

3. Transportation counts. The cost of getting to and from medical appointments counts as a medical expense. This includes taxis, public transportation or using your own vehicle. Vehicle costs can be calculated at 22 cents a mile for miles driven in 2023, plus tolls and parking. Alternatively, you can deduct certain actual costs (such as for gas and oil) that directly relate to your medical transportation.

4. Controllable costs are key. These include the costs of glasses, hearing aids, dental work, mental health counseling and other ongoing expenses in connection with medical needs. Purely cosmetic expenses generally aren’t eligible. Prescription drugs (including insulin) qualify, but over-the-counter medications and supplements such as aspirin and vitamins don’t. The services of therapists and nurses can qualify if they relate to medical conditions.

5. Don’t overlook smoking-cessation and weight-loss programs. Amounts paid for participating in smoking-cessation programs and for prescribed drugs designed to alleviate nicotine withdrawal are deductible. However, nonprescription nicotine gum and patches aren’t. A weight-loss program is deductible if undertaken as treatment for a disease diagnosed by a physician. Deductible expenses include fees paid to join a program and attend periodic meetings. The cost of diet food isn’t deductible.

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      

IRS Issues Guidance on State Tax Payments

Posted by Admin Posted on Nov 07 2023

IRS Issues Guidance on State Tax Payments

The IRS provided guidance on the federal tax status of refunds of state or local taxes and certain other payments made by state or local governments to individuals. The IRS previously provided guidance on state payments made in 2022 in news release IR-2023-23, IRS issues guidance on state tax payments to help taxpayers.

The guidance is being issued as part of the IRS's efforts to provide additional certainty to states and their residents regarding the federal income tax consequences of state payments made to taxpayers.

In 2022, a number of states implemented programs to provide payments to certain individuals residing in their states. Many of these programs were related, directly or indirectly, to the various consequences of the Coronavirus Disease 2019 (COVID-19) pandemic, and the programs varied in terms of the types of payments, payment amounts and eligibility criteria. IRS issues guidance on state tax payments to help taxpayers addressed the federal tax treatment of these 2022 payments.

Notice 2023-56 describes certain types of state payments to individuals and the federal tax treatment of those payments. This updates the previous guidance, which only described the taxability of payments made during 2022. Today's notice also requests comments regarding the application of the rules described in this notice, as well as specific aspects of state payment programs or additional situations on which federal income tax guidance would be helpful.

Most taxpayers receiving state tax refunds do not have to include the state tax refund in income for federal tax purposes. As a general rule, taxpayers who choose the standard deduction on their federal income tax returns do not owe federal income tax on state tax refunds.

The vast majority of taxpayers claim the standard deduction. For instance, in tax year 2021, 90% of individuals claimed the standard deduction instead of itemizing their deductions.

Taxpayers who itemize their deductions on their federal income tax returns and receive a state tax refund must include the refund in income only if they deducted the state tax paid. Because of the $10,000 limit on itemized deductions for state income and property taxes, some itemizers are not able to deduct all of the state taxes they paid and do not need to include a refund in income.

Spillover payments under 2022 programs covered by IRS issues guidance on state tax payments to help taxpayers

Some of the 2022 programs included in IRS issues guidance on state tax payments to help taxpayers provided for certain state payments under the program to be made in early 2023. To the extent that the news release provided that taxpayers can exclude the state payment received in 2022 from federal income, this treatment also applies in 2023. This means taxpayers who did not get a payment under the program during 2022 may exclude from federal income a state payment provided under the 2022 program but actually received in 2023.

State general welfare programs

Payments made by states under legislatively provided social benefit programs for the promotion of the general welfare are not included as income on an individual recipient's federal income tax return.

To qualify for the general welfare exclusion, state payments must be paid from a governmental fund, be for the promotion of general welfare (that is, based on the need of the individual or family receiving such payments), and not represent compensation for services.

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      

Educator Expense Deduction Helps Teachers Cut Classroom Costs

Posted by Admin Posted on Nov 06 2023

Educator Expense Deduction Helps Teachers Cut Classroom Costs

Teachers often buy classroom supplies with their own money. The Educator Expense Deduction helps them get some of that money back. Eligible teachers and administrators can 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 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.

Here are some of the expenses an educator can deduct

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

IRS: Constructores de Viviendas Nuevas con Eficiencia Energética Calificada Podrían Ser Elegibles para Crédito Tributario Expandido bajo Sección 45L

Posted by Admin Posted on Nov 06 2023

IRS: Constructores de Viviendas Nuevas con Eficiencia Energética Calificada Podrían Ser Elegibles para Crédito Tributario Expandido bajo Sección 45L

El Servicio de Impuestos Internos les recuerda a los contratistas elegibles que construyen o reconstruyen sustancialmente viviendas calificadas como viviendas de eficiencia energética, que podrían calificar para un crédito tributario de hasta $5,000 por vivienda.

El monto del crédito depende de los requisitos de elegibilidad tal como el tipo de vivienda, la eficiencia energética de la vivienda y la fecha en que alguien compra o renta. Este importante crédito se amplió como parte de la Ley de Reducción de la Inflación de 2022.

Elegibilidad para constructores y viviendas

Para calificar, los contratistas elegibles deben construir o reconstruir sustancialmente una vivienda con eficiencia energética calificada. También deben ser propietarios de la vivienda y tener una base en ella durante la construcción, y deben venderla o rentarla a una persona para usarla como residencia.

Las viviendas también deben ser categorías específicas de viviendas unifamiliares (incluidas las prefabricadas) o viviendas multifamiliares bajo los programas conocido como Energy Star. Además, deben estar ubicadas en los Estados Unidos y cumplir con los requisitos de ahorro de energía aplicables según el tipo de vivienda y la fecha de venta.

Requisitos y cantidad del crédito para 2023 y años posteriores

Para viviendas adquiridas entre 2023 y 2032, el monto del crédito oscila entre $500 y $5,000 según los estándares que se cumplan, que incluyen:

  • Requisitos del programa Energy Star
  • Requisitos del programa de vivienda lista para el consumo de cero energía
  • Requisitos salariales vigentes

Requisitos y montos del crédito antes de 2023

Para viviendas adquiridas antes de 2023, el monto del crédito es de $1,000 o $2,000, dependiendo de los estándares cumplidos, que incluyen:

  • Certificar que la casa tiene un nivel anual de consumo de energía de calefacción y refrigeración que es al menos un 50% (o un 30% para ciertas casas prefabricadas) menor que el de una casa comparable que cumple con ciertos estándares de energía, con mejoras en los componentes de la envolvente del edificio que representan al 1/5 (o 1/3 para ciertas casas prefabricadas) de la reducción
  • Cumplir con ciertas reglas federales de casas prefabricadas
  • Cumplir con ciertos requisitos de Energy Star

Cómo reclamar el crédito correctamente

Los contratistas elegibles deben cumplir con todos los requisitos bajo la Sección 45 L del Código de Impuestos Internos (IRS, por sus siglas en inglés) antes de reclamar el crédito. Puede encontrar directrices de cómo interpretar la Sección 45L en el Aviso 2008-35 (en inglés) (y el Aviso 2008-36 (en inglés) para viviendas fabricadas).

Use el  Formulario 8908, Crédito por la construcción de nuevas viviendas con eficiencia energética (en inglés), para reclamar el crédito bajo la Sección 45L. 

El IRS alienta a los contratistas elegibles a que tengan un buen mantenimiento de registros de todos los documentos requeridos para respaldar un reclamo por el Crédito de la Sección 45L.

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     

Tax Basics for Setting Up a Business

Posted by Admin Posted on Nov 06 2023

Tax Basics for Setting Up a Business

Starting a new business can seem overwhelming for new entrepreneurs or even seasoned professionals. The IRS has resources to help new business owners understand the tax responsibilities of running a business.

Here are a few things any entrepreneur needs to do when starting their business.

Choose a business structure

The form of business determines which income tax return a business needs to file. The most common business structures are:

  • Sole proprietorship: An unincorporated business owned by an individual. There's no distinction between the taxpayer and their business.
  • Partnership: An unincorporated business with ownership shared between two or more members.
  • Corporation: Also known as a C corporation. It's a separate entity owned by shareholders.
  • S Corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders.
  • Limited Liability Company: A business structure allowed by state statute. If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC's activities should be reflected on its owner's federal tax return as a sole proprietorship.

Choose a tax year

A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:

  • Calendar year: 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year: 12 consecutive months ending on the last day of any month except December.

If an individual files their first tax return using the calendar tax year and later begins business as a sole proprietor, becomes a partner in a partnership, or becomes a shareholder in an S corporation, they must continue to use a calendar tax year unless they get IRS approval to change it or meet one of the exceptions listed in the instructions to Form 1128, Application To Adopt, Change, or Retain a Tax Year.

Apply for an Employer Identification Number

An EIN is also called a Federal Tax Identification Number. It's used to identify a business. Most businesses need one of these numbers, but some don't. For example, a sole proprietor without employees who doesn't file any excise or pension plan tax returns doesn't need an EIN. The EIN checklist on IRS.gov can help business owners know if they need an EIN.

It's important for a business with an EIN to keep the business mailing address, location and responsible party up to date. EIN holders should report changes in the responsible party to the IRS within 60 days.

Have all employees complete these forms:

  •  I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services
  •  W-4, Employee's Withholding Certificate

Pay business taxes

The form of business determines what taxes should be paid and how to pay them.

Visit the state's website

Prospective business owners should visit their state's website for info about state tax requirements.

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      

Keeping Vital Records Safe Can Make Disaster Recovery Easier

Posted by Admin Posted on Nov 06 2023

Keeping Vital Records Safe Can Make Disaster Recovery Easier

Natural disasters can strike without warning. Sometimes even the most diligent taxpayers are left without the important personal and financial records they need. People may need documentation for tax purposes, federal or state assistance programs or insurance claims.

Here are some steps that can help them reconstruct their important records.

Tax records

  • Taxpayers can get free federal tax return transcripts immediately using Get Transcript on IRS.gov.
  • They can also order transcripts by calling 800-908-9946 and following the prompts.
  • People who use a tax professional to file taxes should keep their contact information in a safe place.

Financial statements

Financial statements from credit card companies or banks are usually available online. People can also contact their bank to get paper copies of statements.

Property records

  • Homeowners may be able to contact the title company, escrow company or bank that handled the purchase of their home or other property to get documents related to their home.
  • Many property records are available online from tax assessors or other government agencies. Check local government websites for information.
  • Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
  • For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
  • Insurance companies often keep records related to property maintained in a home. Taxpayers should keep their property insurance contacts handy.
  • Car owners can research the current fair-market value of most vehicles via resources available online and at most libraries. These include Kelley's Blue Book, the National Automobile Dealers Association and Edmunds.

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 Impacted by the Terrorist Attacks in Israel Qualify for Tax Relief: Oct. 16 Deadline, Other Dates Postponed to Oct. 7, 2024

Posted by Admin Posted on Oct 19 2023

Taxpayers Impacted by the Terrorist Attacks in Israel Qualify for Tax Relief:  Oct. 16 Deadline, Other Dates Postponed to Oct. 7, 2024

The Internal Revenue Service announced tax relief for individuals and businesses affected by the terrorist attacks in the State of Israel. These taxpayers now have until Oct. 7, 2024, to file various federal returns, make tax payments and perform other time-sensitive tax-related actions.

IRS provided relief to certain taxpayers who, due to the terrorist attacks, may be unable to meet a tax-filing or tax-payment obligation, or may be unable to perform other time-sensitive tax-related actions. The IRS will continue to monitor events and may provide additional relief.

Filing and Payment Relief

This notice postpones various tax filing and payment deadlines that occurred or will occur during the period from Oct. 7, 2023, through Oct. 7, 2024 (postponement period). As a result, affected individuals and businesses will have until Oct. 7, 2024, to file returns and pay any taxes that were originally due during this period. Among other things, this includes:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. So, these individuals filing on extension have more time to file, but not to pay.
  • Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023. Similarly, these corporations have more time to file, but not to pay.
  • 2023 individual and business returns and payments normally due on March 15 and April 15, 2024. So, these individuals and businesses have both more time to file and more time to pay.
  • Quarterly estimated income tax payments normally due on Jan. 16, April 15, June 17 and Sept. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, April 30 and July 31, 2024.
  • Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.
  • Retirement plan contributions and rollovers.

In addition, the penalty for failure to make payroll and excise tax deposits due on or after Oct. 7, 2023 and before Nov. 6, 2023, will be abated as long as the deposits are made by Nov. 6, 2023.

Who Qualifies for Relief?

  • Any individual whose principal residence or business entity or sole proprietor whose principal place of business is in Israel, the West Bank or Gaza (the covered area).
  • Any individual, business or sole proprietor, or estate or trust whose books, records or tax preparer is located in the covered area.
  • Anyone killed, injured, or taken hostage due to the terrorist attacks.
  • Any individual affiliated with a recognized government or philanthropic organization and who is assisting in the covered area, such as a relief worker.

The IRS automatically identifies taxpayers whose principal residence or principal place of business is located in the covered area based on previously filed returns and applies relief. Other eligible taxpayers can obtain this relief by calling the IRS disaster hotline at 866-562-5227. Alternatively, international callers may call 267-941-1000.

If an affected taxpayer receives a late filing or late payment penalty notice from the IRS for the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

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      

For California Storm Victims, IRS Postpones Tax-Filing and Tax-Payment Deadline to Nov. 16

Posted by Admin Posted on Oct 19 2023

For California Storm Victims, IRS Postpones Tax-Filing and Tax-Payment Deadline to Nov. 16

The Internal Revenue Service further postponed tax deadlines for most California taxpayers to Nov. 16, 2023. In the wake of last winter's natural disasters, the normal spring due dates had previously been postponed to Oct. 16.

As a result, most individuals and businesses in California will now have until Nov. 16 to file their 2022 returns and pay any tax due. Fifty-five of California's 58 counties—all except Lassen, Modoc and Shasta counties—qualify. IRS relief is based on three different FEMA disaster declarations covering severe winter storms, flooding, landslides, and mudslides over a period of several months.

The IRS normally provides relief, including postponing various tax filing and payment deadlines, for any area designated by the Federal Emergency Management Agency (FEMA). As long as their address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time, without having to ask for it. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

What returns and payments qualify for the Nov. 16 deadline?

Eligible returns and payments include:

  • 2022 individual income tax returns and payments normally due on April 18.
  • For eligible taxpayers, 2022 contributions to IRAs and health savings accounts.
  • Quarterly estimated tax payments normally due on April 18, June 15 and Sept. 15.
  • Calendar-year 2022 partnership and S corporation returns normally due on March 15.
  • Calendar-year 2022 corporate and fiduciary income tax returns and payments normally due on April 18.
  • Quarterly payroll and excise tax returns normally due on May 1, July 31 and Oct. 31.
  • Calendar-year 2022 returns filed by tax-exempt organizations normally due on May 15.

Other returns, payments and time-sensitive tax-related actions also qualify for the extra time. See the IRS disaster relief page for details.

Do taxpayers need to do anything to benefit from this relief?

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Additional tax relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022). Taxpayers have extra time – up to six months after the due date of the taxpayer's federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The tax relief is part of a coordinated federal response to the damage caused by these disasters and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.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      

Treasury and IRS Issue Proposed Regulations on Prevailing Wage and Apprenticeship Requirements for Increased Energy Credit or Deduction Amounts

Posted by Admin Posted on Oct 18 2023

Treasury and IRS Issue Proposed Regulations on Prevailing Wage and Apprenticeship Requirements for Increased Energy Credit or Deduction Amounts

The Treasury Department and Internal Revenue Service issued proposed regulations related to the increased tax credit or deduction amounts for clean energy facilities and projects if taxpayers satisfy certain prevailing wage and registered apprenticeship (PWA) requirements.

Generally, these new proposed rules provide guidance on the PWA requirements, enacted as part of the Inflation Reduction Act, for certain green energy facilities or projects.

The Inflation Reduction Act provides increased credit or deduction amounts that generally apply for taxpayers who satisfy certain PWA requirements regarding the construction, installation, alteration or repair of a qualified facility, qualified property, qualified project, qualified equipment or for certain energy facilities.

Under the tax law, the increased credit or deduction amount is generally equal to the base amount multiplied by five if the taxpayer satisfies the PWA requirements. There are certain limited exceptions where a taxpayer may be eligible for an increased credit amount without satisfying the PWA requirements.

The proposed regulations would provide guidance to taxpayers intending to claim the increased credit or deduction amounts and those intending to transfer increased credit amounts. Additionally, the proposed regulations would provide guidance for taxpayers that initially fail to satisfy the PWA requirements but seek to cure the failure by complying with certain correction and penalty procedures. Finally, the proposed regulations would provide rules concerning specific PWA recordkeeping and reporting requirements.

Also, the IRS released frequently asked questions and Publication 5855 which is an overview of the prevailing wage and apprenticeship requirements and the applicable 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     

Conocer Cómo los Estafadores se Hacen Pasar por el IRS Puede Ayudar a los Contribuyentes a Protegerse

Posted by Admin Posted on Oct 18 2023

Conocer Cómo los Estafadores se Hacen Pasar por el IRS Puede Ayudar a los Contribuyentes a Protegerse

Los ladrones siempre buscan nuevas maneras para estafar a los contribuyentes desprevenidos. Los estafadores se hacen pasar por el IRS por teléfono o correo electrónico, en persona, por correo o servicio de entrega, y le cuestan a la gente su tiempo y dinero. Al mantenerse alerta contra estafas, los contribuyentes pueden protegerse.

Los estafadores pueden hacerse pasar por el IRS por correo; los contribuyentes deben conocer los hechos

Una de las estafas más recientes implica que el correo llegue en un sobre de cartón de un servicio de entrega o del Servicio Postal de los Estados Unidos (USPS). La carta adjunta incluye el encabezado del IRS y la redacción de que el aviso es "en relación con su reembolso no reclamado". La información de contacto no pertenece al IRS, pero el correo parece oficial. Esta estafa busca información personal confidencial de los contribuyentes, incluidas las fotos de la licencia de conducir, que los ladrones de identidad pueden usar para robar el reembolso del contribuyente y otra información financiera confidencial.

Ahora es más fácil detectar cuando se trata de un estafador en la puerta y no el IRS

Los estafadores también pueden aparecer en la puerta haciéndose pasar por agentes del IRS y crear confusión, no solo para los contribuyentes, sino también para las agencias locales de cumplimiento de la ley. A medida que esta estafa se ha desarrollado, ha aumentado la confusión de los contribuyentes acerca de las visitas domiciliarias de los funcionarios de cobros de impuestos del IRS.

Para ayudar a combatir estas estafas, el IRS anunció recientemente que pondrá fin a la mayoría de las visitas no anunciadas a los contribuyentes por parte de los funcionarios de cobros de impuestos de la agencia. En lugar de las visitas no anunciadas, los funcionarios de cobros de impuestos se comunicarán con los contribuyentes a través de una carta de cita, conocida como Carta 725-B, y programarán una reunión de seguimiento. Esto ayudará a los contribuyentes a sentirse más preparados cuando sea el momento de reunirse.

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

Los estafadores también pueden comunicarse con los contribuyentes electrónicamente

Los contribuyentes deben estar atentos a una ola de estafas tributarias durante el verano, ya que los ladrones de identidad continúan enviando correos electrónicos y mensajes de texto prometiendo reembolsos de impuestos u ofertas para ayudar a "arreglar" los problemas tributarios. Pueden hacerse pasar por el IRS o profesionales de impuestos, instando al contribuyente a hacer clic en enlaces fraudulentos para que los ladrones de identidad puedan robar información personal valiosa.

Los contribuyentes deben recordar: el IRS nunca inicia el contacto con respecto a una factura o reembolso de impuestos por correo electrónico, mensaje de texto o redes sociales.

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     

Treasury and IRS Issue Proposed Regulations Identifying Certain Monetized Installment Sales as Listed Transaction

Posted by Admin Posted on Oct 18 2023

Treasury and IRS Issue Proposed Regulations Identifying Certain Monetized Installment Sales as Listed Transaction

The Department of the Treasury and the Internal Revenue Service issued proposed regulations identifying certain monetized installment sale transactions and substantially similar transactions as listed transactions – abusive tax transactions that must be reported to the IRS.

Material advisors and certain participants in these listed transactions are required to file disclosures with the IRS and are subject to penalties for failure to disclose these transactions.

The IRS listed monetized installment sales this year as part of the agency's Dirty Dozen list of common tax scams and schemes.

Monetized installment sale transactions generally include the following elements:

  • A seller of appreciated property, or a person acting on the seller's behalf, identifies a buyer who is willing to purchase the property in exchange for cash or other property. 
     
  • The seller enters into an agreement to sell the property to an intermediary in exchange for an installment obligation, which provides for interest payments from the intermediary to the seller. 
     
  • The seller then purportedly transfers the property to the intermediary, although the intermediary never actually takes title or takes title to the property only briefly before transferring title to the buyer in exchange for the buyer's cash or other property. 
     
  • The seller also obtains a loan with an agreement that provides for interest payments from the seller to the lender that equal the amount of interest that the intermediary pays the seller under the installment obligation. 
     
  • Both the installment agreement and the loan provide for interest due over the same periods, with principal due in a balloon payment at or near the end of the term of the installment agreement and loan. 
     
  • The sales proceeds received by the intermediary from the buyer, reduced by certain fees, are provided to the lender to fund the loan to the seller or transferred to an escrow account of which the lender is a beneficiary. 
     
  • The lender agrees to repay these amounts to the intermediary over the course of the term of the installment obligation.
     
  • The seller then treats the sale as an installment sale under section 453 on a federal income tax return for the year of the purported sale and defers recognition of gain until the year in which the seller receives the principal balloon payment.

Written comments regarding the proposed regulations must be submitted by Sept. 3, 2023. A public hearing has been scheduled for Oct. 12, 2023.

Report tax fraud

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers and any supporting materials 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

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      

Everyone has the Right to Finality when Working with the IRS

Posted by Admin Posted on Oct 18 2023

Everyone has the Right to Finality when Working with the IRS

By law, all taxpayers have the right to finality of tax matters. For example, taxpayers have the right to know when the IRS has finished an audit. This is one of ten basic rights — known collectively as the Taxpayer Bill of Rights.

Here's what taxpayers should know about their right to finality:

  • Taxpayers have the right to know:
    • The maximum amount of time they have to challenge the IRS's position.
    • The maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. 
    • When the IRS has finished an audit.
       
  • The IRS generally has three years from the date taxpayers file their returns to assess any additional tax for that tax year.
     
  • There are some limited exceptions to the three-year rule, including when taxpayers fail to file returns for specific years or file false or fraudulent returns. In these cases, the IRS can assess tax for that tax year at any time.
     
  • The IRS generally has 10 years from the assessment date to collect unpaid taxes. The IRS can't extend this 10-year period unless the taxpayer agrees to extend the period as part of an installment agreement to pay tax debt or a court judgment allows the IRS to collect unpaid tax after the 10-year period.
     
  • There are circumstances when the 10-year collection period may be suspended. This can happen when the IRS can't collect unpaid tax due to the taxpayer's bankruptcy or there's an ongoing collection due process proceeding involving the taxpayer.
     
  • A statutory notice of deficiency is a letter proposing additional tax the taxpayer owes. This notice must include the deadline for filing a petition with the tax court to challenge the amount proposed.
     
  • Generally, a taxpayer can be subject to only one audit per tax year. The IRS may reopen an audit for a previous tax year if the agency finds it necessary. This could happen, for example, if a taxpayer files a fraudulent 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      

Knowing How Scammers Pose as the IRS Can Help Taxpayers Protect Themselves

Posted by Admin Posted on Oct 18 2023

Knowing How Scammers Pose as the IRS Can Help Taxpayers Protect Themselves

Crooks are always looking for new ways to scam unsuspecting taxpayers. Scammers impersonate the IRS by phone or email, in person, or by mail or delivery service – and cost people their time and money. By staying vigilant against schemes and scams, taxpayers can protect themselves.

Scammers can pose as the IRS by mail – taxpayers should know the facts

One of the newest and more devious schemes involves mail coming in a cardboard envelope from either a delivery service or the United States Postal Service (USPS). The enclosed letter includes the IRS masthead and wording that the notice is "in relation to your unclaimed refund." The contact information does not belong to the IRS, but the mailing looks official. This scheme seeks sensitive personal information from taxpayers – including driver's license photos – that can be used by identity thieves to steal the taxpayer's refund and other sensitive financial information.

It's now easier to spot when it's a scammer at the door and not the IRS

Scam artists may also appear at the door posing as IRS agents, creating confusion for not just the taxpayers but also local law enforcement agencies. As this scam has grown, taxpayer confusion about home visits by IRS revenue officers has increased.

To help combat these scams, the IRS recently announced that it is ending most unannounced visits to taxpayers by agency revenue officers. In place of the unannounced visits, revenue officers will instead contact taxpayers through an appointment letter, known as a 725-B Letter, and schedule a follow-up meeting. This will help taxpayers feel more prepared when it is time to meet.

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

Scammers may also contact taxpayers electronically

Taxpayers should be on the lookout for a summer surge of tax scams as identity thieves continue sending email and text messages promising tax refunds or offers to help "fix" tax problems. They may pose as the IRS or tax professionals, urging the taxpayer to click fraudulent links so the identity thieves can steal valuable personal information.

Taxpayers should remember: the IRS never initiates contact regarding a bill or tax refund by email, text or social media.

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      

IRS: Builders of Qualified New Energy Efficient Homes Might Qualify for an Expanded Tax Credit under Section 45L

Posted by Admin Posted on Oct 18 2023

IRS: Builders of Qualified New Energy Efficient Homes Might Qualify for an Expanded Tax Credit under Section 45L

The Internal Revenue Service reminds eligible contractors who build or substantially reconstruct qualified new energy efficient homes that they might qualify for a tax credit up to $5,000 per home.

The actual 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. This important credit was expanded as part of the Inflation Reduction Act of 2022.

Eligibility for builders and homes

To qualify, eligible contractors must construct or substantially reconstruct a qualified new energy efficient home. They also must own the home and have a basis in it during the construction, and they must sell or lease the home to a person for use as a residence.

The homes must also be specified categories of single-family (including manufactured) or multifamily homes under Energy Star programs, be located in the United States, and meet applicable energy saving requirements based on home type and acquisition date.

Requirements and credit amounts for 2023 and after

For homes acquired in 2023 through 2032, the credit amount ranges from $500 to $5,000, depending on the standards met, which include:

  • Energy Star program requirements
  • Zero energy ready home program requirements
  • Prevailing wage requirements

Requirements and credit amounts before 2023

For homes acquired before 2023, the credit amount is $1,000 or $2,000, depending on the standards met, which include:

  • Certifying that the home has an annual level of heating and cooling energy consumption that is at least 50% (or 30% for certain manufactured homes) less than that of a comparable home that meets certain energy standards, with building envelope component improvements accounting for at least 1/5 (or 1/3 for certain manufactured homes) of the reduction
  • Meeting certain federal manufactured home rules
  • Meeting certain Energy Star requirements

Properly claiming the credit

Eligible contractors must meet all requirements under Internal Revenue Code Section 45L prior to claiming the credit. Guidance interpreting Section 45L may be found in Notice 2008-35 (and Notice 2008-36, for manufactured homes).

Use Form 8908, Energy Efficient Home Credit, to claim the Section 45L credit. 

The IRS encourages eligible contractors to practice good recordkeeping of all documents required to support a claim for the Section 45L 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     

Taxes – What to Do

Posted by Admin Posted on Oct 17 2023

Taxes – What to Do

Being Self- Employed, What Sort of Deductions Can I Take?

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.