Five Star Tax LLC

01/13/2026

Top IRS Audit Triggers

1. Income doesn’t match IRS records
• W-2s, 1099s, K-1s not reported or reported incorrectly
• IRS computers match your return to what employers and banks send

2. High income levels
• The higher the income, the higher the audit probability
• Especially $200,000 and significantly more at $1 million

3. Large or unusual deductions
• Deductions that are much higher than others in your income bracket
• Charitable contributions disproportionate to income
• Excessive medical, business, or casualty loss deductions

4. Schedule C (self-employed) losses
• Repeated business losses year after year
• High expenses with low income
• Home office deductions that seem aggressive

5. Cash-heavy businesses
• Hair, beauty, trucking, restaurants, bartending, rideshare, vending, etc.
• Industries known for underreporting cash income

01/11/2026

1095 FORMS

Form 1095-A – Health Insurance Marketplace

Who gets it:

• People who bought health insurance through the Health Insurance Marketplace (Healthcare.gov or a state exchange)

What it’s for:

• Shows your monthly insurance coverage
• Shows any premium tax credits (subsidies) you received
• Required to file your tax return if you had marketplace insurance

Very important:

If you received a 1095-A, you must file Form 8962 with your tax return to reconcile the tax credit.

Form 1095-B – Health Coverage

Who gets it:
• People with health insurance from:
• Private insurance companies
• Small employers
• Medicaid / CHIP
• Medicare (some cases)

What it’s for:
• Proof that you had minimum essential coverage
• Not required to file your tax return (but keep it for records)

Form 1095-C – Employer-Provided Coverage

Who gets it:
• People who worked for a large employer (50+ full-time employees)

What it’s for:

• Shows whether your employer offered health insurance
• Helps the IRS verify employer compliance
• Not required to file your tax return, but useful for records

Welcome to the Health Insurance Marketplace®. Official government website.

01/09/2026

Here are some reasons, why YOU may or may NOT get a REFUND!!!

A refund happens when the total taxes you already paid (through paycheck withholding or estimated payments) are more than what you actually owed based on your tax return.

Think of it like this:
• Taxes owed for the year: $5,000
• Taxes already paid: $6,200
• Refund: $1,200 (the overpayment)

Common ways people overpay
1. Too much withheld from paychecks
• Your W-4 settings may be conservative (single, no dependents, extra withholding).
• Employers withhold based on estimates, not your exact situation.
2. Refundable tax credits
These can create or increase a refund even if you didn’t owe much tax, such as:
• Earned Income Tax Credit (EITC)
• Child Tax Credit (refundable portion)
• American Opportunity Credit (education)
3. Estimated tax payments
• Self-employed or gig workers often pay quarterly estimates.
• If you overestimated income, you may get money back.
4. Life changes during the year
• New dependents
• Marriage or divorce
• Job change or income drop
• These reduce tax owed, but withholding didn’t adjust fast enough.

01/09/2026

These provisions apply for the 2025 tax year, but many are temporary unless Congress extends them:

1. “No Tax on Qualified Tips”
• Tipped employees and some self-employed workers can deduct up to $25,000 of qualified tips from taxable income if they work in occupations the IRS recognizes as customarily tipped.

2. New “Senior Deduction”
• Taxpayers age 65+ get an extra $6,000 deduction (or $12,000 for a married couple where both qualify), in addition to the standard deduction.

3. “No Tax on Overtime & Other Pay”
• The bill introduces tax deductions on qualified overtime pay and other employer-reported compensation up to an annual cap (e.g., $12,500 for individuals), subject to income phase-outs, though exact implementation rules are still being finalized by the IRS.

Important Note: These three deductions apply for tax years 2025 through 2028, not permanently.

01/03/2026

The maximum EITC amounts have been increased compared to recent years:

• For tax year 2025 (filed in 2026), the maximum EITC amounts are higher than in 2024 — including about $649 with no qualifying children and larger amounts with children.
• These changes help more working taxpayers qualify for a refund or larger credit if eligible.

2. IRS Refund Hold Period!!!

• If you claim the EITC or the Child Tax Credit, the IRS will hold your refund until at least mid- to late-February (even if you file early) before issuing it. This is due to an anti-fraud rule.

3. Tax Law Updates from the One Big Beautiful Bill

A big tax law passed in 2025 affects credits and deductions for 2025 & future tax returns and might indirectly impact how much credit you get!!!

Key things from this bill:
• Standard deduction increases
• Single filers get $15,750 (2025) and $16,100 (2026) — higher than before, meaning fewer people owe tax.
• Adjusted EITC rules and inflation indexing
• EITC maximums and phase-out limits increase with inflation, so income thresholds adjust yearly.
• Other refundable credits (like Child Tax Credit) also changed — though those mostly affect families with children.

4. Other Filing Tools and Updates
• New IRS programs like IRS Direct File may make filing easier for eligible taxpayers (in participating states) — and free — though this is still rolling out.
• If you haven’t already, setting up an IRS Identity Protection PIN (IP PIN) can help protect your tax return from fraud.

Bottom Line for EITC This Season

✔️ EITC eligibility rules haven’t radically changed — you still need low-to-moderate income and must meet the age/child criteria per IRS rules.
✔️ Credit amounts are slightly higher due to inflation adjustments.
✔️ Refunds for EITC are delayed until at least mid-February under IRS processing rules.
✔️ Law changes may increase standard deductions and child credits, benefiting many families and workers.

01/02/2026

W-2 vs 1099 — What’s the Difference?

✅ W-2 (Employee)

You are an employee.

What this means:
• Your employer:
• Takes out federal & state taxes
• Pays Social Security & Medicare (half of it)
• Covers things like unemployment insurance
• You usually get:
• You receive a W-2 form in January

Taxes:
• Taxes are mostly handled for you
• You usually owe little or nothing at tax time.

1099 (Independent Contractor / Self-Employed)

You are your own boss.

What this means:
• No taxes are taken out
• YOU must pay:
• Federal income tax
• Self-employment tax (Social Security & Medicare — about 15.3%)
• You control:
• You receive a 1099-NEC form

Taxes:
• You almost always owe money at tax time
• You may need to make quarterly tax payments

01/23/2024

LOOKING FOR SOMEONE TO PREPARE YOUR TAXES?

CHECK OUT 5 STAR ⭐️ TAX
960 W OWENS, 702-646-6365,
WALK IN WELCOME

01/20/2024

WHY ARE PEOPLE SO WILLING TO PAY SIDE MONEY TO SOMEONE TO PREPARE THEIR TAXES???? TAKE A GOOD LOOK AT WHAT WAS PUT ON YOUR TAX RETURN!!!! OR ASK QUESTIONS ABOUT THAT LARGE REFUND!!! YOU ARE RESPONSIBLE FOR THE INFORMATION ON YOUR RETURN, SO, YOU SPLIT THE MONEY WITH THAT PREPARER!!! YOU GET A LETTER FROM THE IRS!!! ASKING YOU TO PROVE THAT INFORMATION, CAN YOU?? NOW YOU HAVE PAY THAT MONEY BACK!!!! ALL OF IT!!! YES!!! THE PART YOU GAVE TO THE PREPARER ALSO!!!

01/20/2024

It’s TAX season, here at 5 STAR ⭐️ TAX!!! choose the RIGHT Tax Preparer for YOU!! Make sure they have your BEST INTEREST in mind. Choose wisely when making your decision.

01/11/2024

BE CAREFUL GOING TO A PERSON WHO TELL YOU THEY CAN GET YOU A BIG REFUND!!

If you get a refund for a large amount and you know you have never gotten a refund for that much!!! My first question!!! Would be, why is my refund so big? What did you do to get me this much money back???? Show me!!! explain to me!!! what you did….Make sure they explain to you what they did and you thoroughly understand what was PUT on your RETURN!!! at the end of the day you’re the ONE RESPONSIBLE for the information, on your return. If you are ever questioned for the items listed on your return are you able to explain/prove, to the IRS what is on your tax return???? are you able to pay that money back? all money ain’t good money!!! Ask that preparer!!! are YOU able to prove the information that you willingly put on my return?? Make sure you trust the person preparing your taxes.

01/08/2024

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