SAGS TAX

04/10/2026

Just 5 Days to the end of Tax Season 2026 - Send in your tax documents.

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03/22/2026

All Side Hustlers, Gig Workers, Sole Proprietors and Small business owners - This is for you.

As a self-employed individual, you make income but you do not pay any taxes throughout the year. As a self-employed you are both the employer and the employee so you pay; Income tax, state tax ( if you live in a state that requires taxes) and self-employment tax of 15.3%.

Self-employment tax is tied to you working in the business. It is the tax on active income and covers social security and Medicare just like W2 but collected differently based on how you make the income. In your case, as a schedule C filler, your taxes are collected as self-employment tax. but if your business is an S-corp or C-corp, it will be collected as pay-roll tax from the wages you pay yourself.

To avoid owing taxes and potentially going into penalty due to none or late payment of the owed taxes ... Set up a quarterly tax payment with the IRS to make payments directly from your bank account.

Here is how;
1. Calculate Your Estimated Tax: Use the worksheet in IRS Form 1040-ES to calculate your quarterly payments. This worksheet helps determine your self-employment income and required taxes.

2. Visit IRS Direct Pay: Go to IRS.gov/payments and select "Make a Payment".

3. Select Payment Details:
i) Reason for Payment: Select "Estimated Tax".
ii) Apply Payment To: Select "1040ES".
iii) Tax Year: Choose the current tax year.
iv) Verify Identity: You will need to verify your identity using information from a prior year's tax return.
v) Enter Payment Info: Enter your bank routing/account number and schedule the payment.

Important 2026 Tax Dates
If these dates fall on a weekend or holiday, the payment is due on the next business day:

April 15: Covers income from Jan 1 – March 31.
June 15: Covers income from April 1 – May 31.
Sept 15: Covers income from June 1 – Aug 31.
Jan 15 (next year): Covers income from Sept 1 – Dec 31.

Reference Sources:

1. Self-employed Individuals tax center:
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center #:~:text=Use%20the%20worksheet%20found%20in,at%20IRS.gov/payments.

2. Manage taxes for your gig work:
https://www.irs.gov/businesses/small-businesses-self-employed/manage-taxes-for-your-gig-work #:~:text=Pay%20estimated%20tax,Tax%20for%20Nonresident%20Alien%20Individuals

3. Pay business taxes from your bank account:
https://www.irs.gov/payments/pay-business-taxes-from-your-bank-account

4. About Form 1040-ES, Estimated Tax for Individuals:
https://www.irs.gov/forms-pubs/about-form-1040-es

03/20/2026

What Happens if I do not pay what I owe the IRS?
You will be placed under, Failure to Pay Penalty and Interest charges.

Key Details to Note on Failure-to-Pay Penalties:

1. Rate: 0.5% per month (or partial month) of the unpaid tax by the due date (usually April 15th) .

2. Increased Penalty: The rate increases to 1% per month if the IRS issues a notice of intent to levy property and the tax remains unpaid after 10 days.

3. Maximum Penalty: 25% of the unpaid tax balance.

4. Reduced Rate with Plan: If you file on time and have an approved installment agreement, the penalty reduces to 0.25% per month.

5. Combined with Late Filing: If both failure-to-file (5% per month) and failure-to-pay penalties apply, the failure-to-file penalty is reduced by the failure-to-pay penalty amount for that month, totaling a maximum of 5% for both combined per month.

⚡️6. Interest: The IRS charges interest on underpayments, which is separate from the penalty, and generally cannot be abated.

7. Avoidance: You may avoid the penalty if you can show reasonable cause for the failure to pay on time, such as undue hardship.

April 15th is around the corner. Send in your tax documents now.
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Reference Source: https://www.irs.gov/payments/failure-to-pay-penalty

03/05/2026

A Single with no Dependent can Claim the Earned Income Tax Credit (EITC) :
Before we see how, let us find out what the Earned Income Tax Credit (EITC) is.

The Earned Income Tax Credit (EITC) is a refundable federal tax credit designed to benefit ⭐️low- to moderate-income working individuals and couples, particularly those with children.

Because it is a refundable credit, if the EITC reduces your tax liability to zero, you can receive the remaining amount as a refund, even if you did not owe any taxes.

Now - let us see how to claim the Earned Income Tax Credit (EITC) as a single without any dependents (children).

Yes, a single person with no dependents can claim the Earned Income Tax Credit (EITC), provided they meet the EITC basic qualifying rules and specific IRS requirements regarding age, income, and residency.

Basic Qualifying Rules for EITC

1. Have earned income
2. Have investment income below the limit
3. Have a valid Social Security number by the due date of your return (including extensions)
4. Be a U.S. citizen or a resident alien all year
5. Not file Form 2555, Foreign Earned Income
6. Meet certain rules if you are separated from your spouse and not filing a joint tax return

Requirements for Single Filers Without Children to claim the EITC (2025):

⚡️1. Age: You must be at least 25 years old, but under 65 years old at the end of the year.

⚡️ 2. Income Limits: Your earned income and Adjusted Gross
Income (AGI) must both be less than $19,104 ($26,214 if married filing jointly).

⚡️3. Residency:
(a) You must lived in the United States for more than half the tax year to claim the EITC.
(b) Nonresident Alien Exception: If you were a nonresident alien for any part of the year, you generally cannot claim the EITC. However, you can claim it if you are married to a U.S. citizen or resident alien, file a joint return, and choose to be treated as a U.S. resident for the entire tax year.
(c) Dual-Status Alien: If you were a nonresident alien for part of the year and a resident alien for the rest (e.g., you received a green card during the year), you can generally claim the credit only if you make the choice to be treated as a U.S. resident for the entire year.

⚡️4. Dependency Status: You cannot be claimed as a dependent or a qualifying child on someone else's tax return.

⚡️5. Investment Income: Your investment income (e.g., interest, dividends) must be $11,950 or less.

⚡️6. Social Security Number: You must have a valid Social Security number

We can help you claim this refundable credit.
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IRS Reference Resources: Who qualifies for the Earned Income Tax Credit (EITC)
- https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-earned-income-tax-credit-eitc
- https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-earned-income-tax-credit-eitc

03/04/2026

⚡️Did you know? Money you put in to your sole proprietorship business from a personal account is NOT business income?

Really !? - Why?

⚡️It was not gotten from a sale transaction.

Ok, it is not income for my business. What is it then?

⚡️It is either
1. A capital contribution: If from your personal account. This increases your equity in the company but is not taxed as income.

or

2. A partner loan: If from a business partner in your business.

Such money is a balance sheet transaction not an income / profit & loss transaction, so it's not reported on schedule C. You should keep track of these in QuickBooks and have a separate bank account for your business. If any interest is paid by the business to you, it would be an expense for the company and income to you personally. Which will now be reportable in your tax return.

🌟Pro Tip: If filing your taxes by yourself as a sole proprietor, do this; On the bottom right of schedule C page 1 there is a box that says “all investment is at risk.” Check that box and you should be good to go. Checking that box is you telling IRS that you don’t need to report capital contributions or distributions because no one else has a stake in your business.

Why worry trying to figure this out all by yourself. Let us help you file your sole proprietorship business right. Send us your tax documents : https://app.smartwiz.io/a459b9799e/register?assigneeId=5c939d0a87

03/03/2026

Can I Deduct my Doctor Copay in my Tax Return?

Generally, Yes you can deduct doctor copays but only if you meet specific, strict IRS requirements as they fall under the category of deductible, unreimbursed medical expenses.

If you itemize your deductions for a taxable year on Schedule A (Form 1040), Itemized Deductions, you may be able to deduct the medical and dental expenses you paid for yourself, your spouse, and your dependents during the taxable year to the extent these expenses exceed 7.5% of your adjusted gross income for the year.

The deduction applies only to expenses not compensated by insurance or otherwise regardless of whether you receive the reimbursement directly or payment is made on your behalf to the doctor, hospital, or other medical provider.

Example of How It Works
If your Adjusted Gross Income (AGI) is $50,000, 7.5% of your AGI is $3,750.

1. Can Deduct : If you had $4,000 in copays and other medical expenses, you can only deduct $250 ( that is the difference from $4,000 - $3,750 which is = $250).

2. Cannot Deduct: If you had $3,000 in medical expenses, you cannot deduct any of them because they do not exceed 7.5% of your AGI which is $3,750 in this example.

⚡️Note:
You must itemize your deductions on Schedule A (Form 1040), rather than taking the standard deduction.
This is usually only beneficial if your total itemized deductions (medical, mortgage interest, state/local taxes, etc.) exceed the standard deduction for your filing status.

Hi there - Got enough expenses that will exceed the required standard deduction for your filing status? Let us help you apply those deductibles correctly. Send us your tax documents.

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Get a full list of what you Can and Cannot deduct as medical expense here : https://www.irs.gov/taxtopics/tc502

Topic No. 502, Medical and Dental Expenses

02/28/2026

With Jasmine Boney-Henderson – I just got recognized as one of their top fans! 🎉

02/28/2026

Hi,
Are you or someone you know still to file their taxes for 2025?
Get your tax return done with SAGS TAX and also receive referral bonus for every person you refer who files with us..

$50 Referral Bonus + Free Tax Quote

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02/24/2026

What is The American Opportunity Tax Credit (AOTC) :

AOTC is a partially refundable federal tax credit worth up to $2,500 per eligible student annually for the first four years of higher education.
It covers 100% of the first $2,000 and 25% of the next $2,000 in qualified education expenses.

Of the $2500, Refundable credit is $1000 (40%) if the credit exceeds tax liability, and non-refundable credit is $1,500.

Qualified Expenses: Tuition, fees, and course materials (books, supplies) required for enrollment. ☄️Note that room and board do not qualify.

Student Eligibility: Must be pursuing a degree, enrolled at least half-time, and not have completed the first four years of higher education.

Restrictions: Cannot be claimed if you have a felony drug conviction.

⚡️To claim it, your Modified Adjusted Gross Income (MAGI) must be $80,000 or less ($160,000 for married filing jointly).

02/23/2026

All Uber/ Lyft Drivers, gather here:

Congratulations you are a business owner!

Use this self-employed tax calculator to understand how much to set aside for 1099 self-employed taxes.

https://www.everlance.com/tax-calculator/uber

Because you are self-employed now, your income is subject to a 15% to 30% self-employment tax. This tax covers your required contributions to Social Security and Medicare, and functions similar to F**A taxes that are withheld from your wages and paid by your employer if you are an employee, rather than self-employed.

Thus, while it can be exciting to see the deposits in your bank account every week, keep in mind that you need to pay the taxes on this side income no matter how much you make.

Once you know how much in estimated taxes you need to pay, head over to the IRS website to start making your quarterly payments at : https://www.irs.gov/payments

Use our 1099 taxes calculator, built for Uber to understand how much to set aside for 1099 self-employed taxes, based on your 1099 tax form income and 1099 tax deductions

02/21/2026

Car Depreciation, Car Mileage ; Which Do You Claim?

You cannot claim standard car mileage and actual car depreciation at the same time for the same vehicle in the same year.

The IRS Standard Mileage Rate (67 cents per mile in 2024, 70 cents in 2025) already includes a depreciation component.

You must choose one method - either the Standard Mileage Rate or the Actual Expenses method for the tax year.

Main Difference:

⚡️Standard Mileage Method: Covers fuel, maintenance, insurance, and depreciation in one rate. You cannot add a separate depreciation deduction.

⚡️Actual Expenses Method: Allows you to deduct actual costs (gas, repairs, insurance) plus depreciation for the business-use percentage of the vehicle.

⚡️Switching Rules: If you use standard mileage in the first year a car is placed in service, you cannot switch to actual expenses later. If you start with actual expenses, you may be able to switch to mileage later.

⚡️Exceptions: Regardless of the method, you can still deduct business-related parking fees and tolls separately.

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