The Way Tax Preparation

02/01/2024

01/17/2024

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01/05/2024

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We make it super convenient with your own personal link to securely upload your documents and track your progress. Your Tax Professional is ready and waiting to provide you with stellar service.

01/02/2024

🔵🎉🎊 A warm welcome to Claudia and Marie, the newest team members of The Way Tax!

01/02/2024

Delayed Implementation of New 1099-K Rules – Did You Know?

Under a new rule enacted in 2021, third-party payment processors must issue a Form 1099-K to any individual who receives $600 or more in payments for goods or services during a year. However, IRS officials have noted that this rule could potentially cause widespread confusion, since many transactions completed through online payment platforms have no tax impacts. Examples of non-taxable transactions include settling up with friends and selling used personal items.

Therefore, the IRS will not enforce the new rules for tax year 2023. Instead, third-party payment processors may operate under the prior rules, only sending 1099-K forms to users who received over $20,000 in payments through over 200 transactions. In addition, 2024 will serve as a phase-in year, with the 1099-K reporting threshold set at $5,000.

Regardless of 1099 reporting rules, payments received through third-party platforms for self-employment activities or selling goods for profit are generally taxable income. A tax professional can help you properly report your 2023 income, and prepare for the future implementation of a lower threshold for 1099-K forms.

12/28/2023

Preparing for Tax Filing Season

A new year and filing season for 2023 tax returns will soon be upon us. A little advance preparation can help prevent stressful tax time surprises. Here are some reminders of important steps you can take now to set yourself up for a more worry-free tax filing:

- Do one last withholding checkup. Time is running out to adjust your paycheck withholding to make sure you have paid enough tax throughout 2023. You can use the IRS Withholding Estimator tool (link below) to make sure your numbers are on track.
- If your name changed in 2023, report the change to the Social Security Administration (link below) as soon as possible.
- Locate your bank account information, including both your account number and the bank routing number, so you can receive your tax refund by direct deposit.
- Watch for year-end income statements, especially in late January and early February. These statements may include W-2 forms, along with 1099-NEC, 1099-MISC, 1099-INT, 1099-G and other 1099 forms. Note that some of these forms may come by mail, while others may be sent to you electronically. Keep all of the forms together and organized.
- Organize records for tax deductions and credits. These records may include Form 1095-A (Health Insurance Marketplace Statement), tuition statements (Form 1098-T), medical bills, mortgage interest statements, and home energy improvement or clean vehicle receipts or invoices.

IRS Withholding Estimator: https://www.irs.gov/individuals/tax-withholding-estimator
Social Security Administration (SSA): https://www.ssa.gov/

12/19/2023

'Tis the Season for Important Tax Paperwork

Keeping your records organized will help make sure you don't miss out on valuable deductions when it is time to file. Many taxpayers will receive year-end income statements from employers, banks, stock issuers and other sources in January and early February.

The most common documents include:

- W-2 forms from your employers, showing your wages and any taxes withheld
- Forms 1099-INT and 1099-DIV showing your interest and dividend income
- Forms 1099-MISC and 1099-NEC showing gig economy and other self-employment earnings, along with rents, royalties and other miscellaneous income
- Records of virtual currency (including crypto) transactions
- Charity donation receipts
- Health Insurance statements (like Form 1095)
- Proof of qualifying educational expenses (like Form 1098-T)
- Mortgage interest statements

12/12/2023

Healthcare Open Enrollment Deadline on December 15

This week is the last week to register for the HealthCare.gov open enrollment period with the deadline being Friday, December 15th, 2023. Once the Open Enrollment period is over, you will only be able to enroll if there's a qualifying life event for the Special Enrollment Period.

Enrollment can be done at https://Healthcare.gov, and a simple checklist of documents you'll need can be found here: https://marketplace.cms.gov/outreach-and-education/marketplace-application-checklist.pdf.

12/06/2023

Saver's Credit for 2023 Retirement Plan Contributions – Did You Know?

The Retirement Savings Contributions Credit, commonly known as the Saver's Credit, helps low- and middle-income taxpayers set aside money for retirement. Eligible taxpayers may claim a tax credit of up to $1,000 (up to $2,000 for joint filers) for their contributions to traditional or Roth IRAs, or to certain workplace retirement arrangements like 401(k) and 403(b) plans.

Eligibility for the Saver's Credit depends on a taxpayer's adjusted gross income (AGI) and filing status. The 2023 AGI limits are $73,000 for married couples filing jointly, $54,750 for head of household filers, and $36,500 for single filers and married individuals filing separately. Those with lower incomes may receive a larger credit amount. Note that some taxpayers qualify to claim both the Saver's Credit and the tax deduction for traditional IRA contributions.

In order to receive the credit for 2023, you must contribute to a 401(k), 403(b) or similar qualified plan by December 31. However, you may make 2023 IRA contributions through April 15, 2024. A tax professional can help you determine whether you qualify to claim the Saver's Credit, and if so, help you get the greatest benefit from the credit.

12/01/2023

We got you covered. We are Preparing for Your Taxes in December While You Enjoy the Holidays.

11/28/2023

Giving Tuesday and Charitable Donations - Did You Know?

Millions of Americans will contribute to their favorite charities on Giving Tuesday (November 28), and throughout the holiday season. Charitable donations are often described as tax-deductible, but whether you can claim a deduction for your contribution depends on several factors.

You generally must itemize deductions on your tax return to claim a deduction for charitable donations, therefore your donation will not be deductible if you use the standard deduction. If you do itemize deductions, you may generally deduct donations of money or property to any eligible tax-exempt charity. If you are unsure whether an organization qualifies to receive tax-deductible donations, the IRS Tax-Exempt Organization Search tool (link below) can help.

Tax-Exempt Organization Search: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search