Barthole Consulting: Tax, Accounting, Management Consulting

04/25/2024

To help prevent and combat money laundering, tax fraud and other financial crimes, a recent law requires many companies and small businesses conducting business in the United States to report beneficial ownership information to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).

Business owners should contact their trusted advisor to inquire about complying with this law and to avoid any potential penalties.

08/16/2022

Taxpayers should be sure to have all their info before going to a tax pro

Taxpayers using a professional tax preparer should make sure they have all their information readily available before their appointment. Collecting their information and getting copies of any missing documents before taxpayers sit down to prepare their return is critical to filing an accurate tax return. Having organized records and information in hand helps prevent filing errors and will likely create a smoother filing experience.

Here’s a list of 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.
Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments.
Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit.
Information to support claiming other credits or deductions, such as receipts for child or dependent care, college expenses or donations.

Taxpayers can get information about their Economic Impact Payments and advance child tax credit payments through their IRS online account.

Taxpayers who don’t have their letters about their Economic Impact Payment to claim missing stimulus payments and advance child tax credit payments to claim their full child tax credit have an online option. They can log in to their IRS online account and get the information from the Tax Records tab.

For taxpayers who are married filing jointly, each spouse will need to have their own Economic Impact Payment and advance child tax credit information.

For more information, contact your trusted Tax Advisor.

06/08/2022

When the lemonade stand makes bank: Young entrepreneurs and taxes.

Teens and young adults often go into business for themselves. This work can include babysitting, lawn mowing, dog walking or other part-time or temporary work.

When anyone is an employee of a business, their employer withholds taxes from their paycheck. However, when they are classified as an independent contractor or are self-employed, they’re responsible for paying taxes themselves.

Things to keep in mind:

Everyone, including minors, must file a tax return if they had net earnings from self-employment of at least $400.

If they owe taxes, teens and young adults should file their own tax return, even if their parent or guardian claims them as a dependent.

Teens and young adults can prepare and sign their own tax return. There is no minimum age to sign a tax return.

Parents can’t claim a dependent’s earned income on their own tax return.

In addition to income tax, people who are self-employed are generally responsible for self-employment tax as well.

It’s like the Social Security and Medicare taxes withheld from the pay of most wage earners.

Independent contractors/self-employed persons can lower the amount of tax they owe by deducting certain expenses.

Here’s what entrepreneurs can do to keep on top of their tax responsibilities:

Keep records. It’s good to make and keep financial records and receipts during the year.

Pay estimated tax, if required. If a self-employed person expects to owe at least $1,000 in tax for 2022, they must make estimated payments on a quarterly basis.

They should be sure to pay enough tax on time to avoid a penalty.

If a taxpayer also has a job where tax is withheld by their employer, they can request that their withholding be increased to cover their estimated taxes from their self-employed income. That way, they don’t have pay estimated tax separately.

File a tax return. When tax season rolls around, they should file a tax return. When preparing to file a tax return, they should make sure to review all their records, including estimated tax they’ve already paid.

If people owe taxes, they can pay electronically through Online Account and IRS Direct Pay.

For more information, please consult your preferred Tax Advisor.

01/19/2022

2022 tax filing season begins Jan. 24

The Internal Revenue Service announced that the nation's tax season will start on Monday, Jan. 24, 2022.

April 18 tax filing deadline for most
The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022, for most taxpayers.

Awaiting processing of previous tax returns?
Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.

Key information to help taxpayers
The IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return.

By law, the IRS cannot issue a refund involving the Earned Income Tax Credit or Additional Child Tax Credit before mid-February, though eligible people may file their returns beginning on January 24.

File electronically and choose direct deposit
To speed refunds, the IRS urges taxpayers to file electronically with direct deposit.

Key filing season dates
January 18: Due date for tax year 2021 fourth quarter estimated tax payment.

January 24: IRS begins 2022 tax season. Individual 2021 tax returns begin being accepted and processing begins.

April 18: Due date to file 2021 tax return or request extension and pay tax owed due to

April 19: Due date to file 2021 tax return or request extension and pay tax owed for those who live in MA or ME due to Patriots’ Day holiday

October 17: Due date to file for those requesting an extension on their 2021 tax returns

For more information, consult your trusted Tax Advisor.

09/10/2021

Have you filed your duly extended 2020 tax returns?
If not, here are upcoming deadlines you should be aware of:

September
For Partnership (Form 1065) and S-Corporate (Form 1120S) returns, if you timely requested a 6-month extension in March, file returns by midnight Wednesday, September 15, 2021.

October
For Corporate returns (Form 1120), if you timely requested a 6-month extension in April, file returns by midnight Friday, October 15, 2021.

07/15/2021

The Child Tax Credit Update Portal allows families to update direct deposit information or unenroll

The IRS recently upgraded the Child Tax Credit Update Portal to enable families to update their bank account information so they can receive their monthly Child Tax Credit payment.

The tool also allows families to unenroll from the advance payments if they don’t want to receive them. The Update Portal is available only on IRS.gov.

Families will receive their July 15 payment by direct deposit in the bank account currently on file with the IRS.

People without current bank account information can use the online tool to update their information so they can get the payments sooner by direct deposit. Those who are not enrolled for direct deposit will receive a check.

If the Update Portal shows a family is eligible to receive payments but not enrolled to receive them by direct deposit, they will receive a mailed check each month. If they want to receive their payments by direct deposit, they can use the Update Portal to add their bank account information.

Couples who are married and file jointly must both update their bank account information the same day to the same account to continue getting joint payments.

Even after payments begin, families can stop all future monthly payments by using the unenroll feature in the Child Tax Credit Update Portal.

Eligible families who make this choice will still receive the rest of their child tax credit as a lump sum when they file their 2021 federal income tax return next year. To stop all payments starting in August and the rest of 2021, they must unenroll by August 2, 2021.

03/31/2021

WASHINGTON – To help taxpayers, the IRS will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.

The legislation excludes only 2020 unemployment benefits from taxes.

Because the change occurred after some people filed their taxes, the IRS will make the appropriate changes. The first refunds are expected to be made in May and will continue into the summer.

For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.

There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

For more information, consult your trusted Tax Advisor.

03/13/2021

IRS begins delivering third round of Economic Impact Payments to Americans

WASHINGTON – The Internal Revenue Service announced today that the third round of Economic Impact Payments will begin reaching Americans over the next week.

Following approval of the American Rescue Plan Act, the first batch of payments will be sent by direct deposit, which some recipients will start receiving as early as this weekend, and with more receiving this coming week.

Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of these payments will be by direct deposit.

No action is needed by most taxpayers; the payments will be automatic and, in many cases, similar to how people received the first and second round of Economic Impact Payments in 2020.

People can check the “Get My Payment” tool on IRS.gov on Monday to see the payment status of the third stimulus payment.

In general, most people will get $1,400 for themselves and $1,400 for each of their qualifying dependents claimed on their tax return.

The third round of Economic Impact Payments (EIP3) will be based on the taxpayer’s latest processed tax return from either 2020 or 2019.

If the IRS has received and processed a taxpayer’s 2020 return, the agency will instead make the calculation based on that return.

Get Coronavirus Tax Relief Get Your Refund Status File Your Taxes for Free Get Your Tax Record View Your Account Make a Payment Get Answers to Your Tax Questions Protect Your Identity Forms and Instructions 1040 and Schedules 1-3 Individual Tax Return Other 1040 Schedules Information About the Other...

03/13/2021

IRS begins delivering third round of Economic Impact Payments to Americans WASHINGTON – The Internal Revenue Service announced today that the third round of Economic Impact Payments will begin reaching Americans over the next week. Following approval of the American Rescue Plan Act, the first batc...

02/17/2021

WASHINGTON – The IRS announced today that, as required by law, all legally permitted first and second round of Economic Impact Payments have been issued and the IRS now turns its full attention to the 2021 filing season.

If individuals didn't receive a payment – or if they didn’t receive the full amounts – they may be eligible to claim the Recovery Rebate Credit and must file a 2020 tax return.

Contact your trusted Tax Advisor if you need any assistance.

01/15/2021

HAPPY NEW YEAR!!!

WASHINGTON ― The Internal Revenue Service announced that the nation's tax season will start on Friday, Feb. 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The Feb. 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the Dec. 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need.

This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible.”

Under the PATH Act, the IRS cannot issue a refund involving the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law provides this additional time to help the IRS stop fraudulent refunds and claims from being issued, including to identity thieves.

Overall, the IRS anticipates nine out of 10 taxpayers will receive their refund within 21 days of when they file electronically with direct deposit if there are no issues with their tax return.

April 15 will be the deadline for filing 2020 tax returns.

October 15 will be the deadline to file for those individuals requesting an extension on their 2020 tax returns.

12/23/2020

IRS issues standard mileage rates for 2021

WASHINGTON — The Internal Revenue Service today issued the 2021 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 56 cents per mile driven for business use, down 1.5 cents from the rate for 2020,

• 16 cents per mile driven for medical or moving purposes for qualified active duty members of the Armed Forces, down 1 cent from the rate for 2020, and

• 14 cents per mile driven in service of charitable organizations, the rate is set by statute and remains unchanged from 2020.