Sinclair Lundy, CPA

01/27/2025

From the IRS:
The Taxpayer Bill of Rights: Fundamental protection for all taxpayers
All taxpayers have rights any time they interact with the IRS. These ten rights outlined in the Taxpayer Bill of Rights. These rights cover a wide range of topics and issues and lay out what taxpayers can expect when working with the IRS.
The mission of the IRS is to provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all. Two key elements of this mission are to treat taxpayers with dignity and respect and to provide a positive customer experience. These rights protect taxpayers all year long regardless of their tax situation.
Taxpayer Bill of Rights
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. Explore these rights and the IRS’s obligations to protect them:
1. The Right to Be Informed
2. The Right to Quality Service
3. The Right to Pay No More than the Correct Amount of Tax
4. The Right to Challenge the IRS's Position and Be Heard
5. The Right to Appeal an IRS Decision in an Independent Forum
6. The Right to Finality
7. The Right to Privacy
8. The Right to Confidentiality
9. The Right to Retain Representation
10. The Right to a Fair and Just Tax System
Taxpayer Advocate Service
The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. TAS can help if people need assistance resolving an IRS problem, if a problem is causing financial difficulty or if they believe an IRS system or procedure isn't working as it should. TAS services are free.
A local advocate's number is available in the local directory and on TAS’s Contact Us page. Taxpayers may also call TAS toll-free at 877-777-4778. For more information about TAS and taxpayer rights under the Taxpayer Bill of Rights, go to the Taxpayer Advocate Service website.

01/07/2025

www.lundycpa.net

Sinclair Lundy CPA provides personalized accounting services to a broad range of clients across the Hattiesburg area. As your CPA, I’m here to ensure that all of your financial decisions are made carefully and with your best interests in mind. Whatever your accounting needs, I have the experience...

12/20/2024

MS Power will be doing maintenance on my street Monday morning, therefore my office will be closed until 1 pm.

09/17/2024

Any clients on non-subscription versions of QuickBooks Desktop Pro, Premier, or Mac that wish to remain on Desktop, we recommend they purchase a QuickBooks Desktop Pro Plus, Premier Plus, or Mac Plus subscription through our sales team before September 30, 2024. As a reminder, if your client’s current QuickBooks product is no longer supported, they do not receive critical security updates which may expose their financial data to security vulnerabilities. (From QB email)

04/05/2024

The IRS has a page with helpful tips for filing and paying your taxes.

01/09/2024

Jan. 29, 2024
WASHINGTON - The tax season officially begins on Jan. 29, 2024, marking the first day that the IRS will begin accepting and processing 2023 tax returns.5 hours ago

01/09/2024

The gift tax exclusion
from MSN post
In 2024, you can give a little more without triggering the gift tax. The new limit is $18,000, up from $17,000 for 2023. So, until the gifts you give someone exceed that limit, you will not owe any federal gift taxes.

The limit applies per recipient. So, for instance, you can give three gifts of $18,000 to three separate people in 2024 and not trigger the tax.

12/28/2023

"Are some companies exempt from the reporting requirement?

Yes, 23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.

The following table summarizes the 23 exemptions:

Exemption No. Exemption Short Title
1 Securities reporting issuer
2 Governmental authority
3 Bank
4 Credit union
5 Depository institution holding company
6 Money services business
7 Broker or dealer in securities
8 Securities exchange or clearing agency
9 Other Exchange Act registered entity
10 Investment company or investment adviser
11 Venture capital fund adviser
12 Insurance company
13 State-licensed insurance producer
14 Commodity Exchange Act registered entity
15 Accounting firm
16 Public utility
17 Financial market utility
18 Pooled investment vehicle
19 Tax-exempt entity
20 Entity assisting a tax-exempt entity
21 Large operating company
22 Subsidiary of certain exempt entities
23 Inactive entity

FinCEN’s Small Entity Compliance Guide includes this table and checklists for each of the 23 exemptions that may help determine whether a company meets an exemption (see Chapter 1.2, “Is my company exempt from the reporting requirements?”). Companies should carefully review the qualifying criteria before concluding that they are exempt. Please see additional FAQs about reporting company exemptions in “L. Reporting Company Exemptions” below.

[Issued September 18, 2023]"

Starting January 1, 2024, many companies will be required to report information to the U.S. government about who ultimately owns and controls them.

12/15/2023

Issue Number: IR-2023-242
Inside This Issue
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IRS reminds taxpayers, Jan. 16 due date for final 2023 quarterly estimated tax payments

WASHINGTON –The Internal Revenue Service today 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.
Plan ahead
It’s never too early to get ready for the tax-filing season. For more tips and resources, check out the Get Ready and Estimated Tax pages on IRS.gov.
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09/14/2023

From the IRS

To protect taxpayers from scams, the IRS orders immediate stop to new Employee Retention Credit processing amid surge of questionable claims, concerns from tax pros and aggressive marketing to ineligible applicants, posing unacceptable risk to businesses and the tax system.

Amid rising concerns about a flood of improper Employee Retention Credit claims, the Internal Revenue Service today announced an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program to protect honest small business owners from scams.

IRS Commissioner Danny Werfel ordered the immediate moratorium, beginning Sept. 14, to run through at least Dec. 31 following growing concerns inside the tax agency, from tax professionals as well as media reports that a substantial share of new claims from the aging program are ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing.

The IRS continues to work previously filed Employee Retention Credit (ERC) claims received prior to the moratorium but renewed a reminder that increased fraud concerns means processing times will be longer. On July 26, the agency announced it was increasingly shifting its focus to review these claims for compliance concerns, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. The IRS announced today that hundreds of criminal cases are being worked, and thousands of ERC claims have been referred for audit.

The IRS emphasizes that payouts for these claims will continue during the moratorium period but at a slower pace due to the detailed compliance reviews. With the stricter compliance reviews in place during this period, existing ERC claims will go from a standard processing goal of 90 days to 180 days – and much longer if the claim faces further review or audit. The IRS may also seek additional documentation from the taxpayer to ensure it is a legitimate claim.

This enhanced compliance review of existing claims submitted before the moratorium is critical to protect against fraud but also to protect the businesses from facing penalties or interest payments stemming from bad claims pushed by promoters, Werfel said. (Read more...)

09/05/2023

Issue Number: Tax Tip 2023-108
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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 Allowance 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.

01/23/2023

No drop offs, appointments only. Call 601-264-3272 to arrange meetings.