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03/09/2022

It’s tax season for you and a veritable identity gold mine for thieves!

Empowered with a name and Social Security number, crafty thieves can open credit cards, take out loans, wipe out your bank account and even file a tax return in your name to get a fraudulent refund with just a few clicks on the keyboard.
How common is tax-related identity theft?
Tax identity theft is generally less common than other identity theft and fraud types, such as someone stealing and using your credit card account or opening a new credit account using your identity.
Tax identity theft has also decreased in prevalence over the past few years. In part, this is due to a joint effort by the IRS, state tax agencies, private tax preparation companies, tax professionals, payroll processors, and financial institutions. Together, they formed a Security Summit in 2015 to fight refund fraud, often perpetrated by organized crime syndicates.2
From 2015 to 2019, there was an 80% decline (677,000 to 137,000) in the number of taxpayers who filed IRS identity theft affidavits—a form you attach to your tax return if you're the victim of tax identity theft.
In addition to responding to taxpayers who report being victims of identity theft, the IRS actively identifies suspicious returns. It then reaches out to taxpayers to confirm their information before processing the return. In 2019, the IRS says it stopped 443,000 confirmed fraudulent returns (which would have resulted in $1.9 billion in refunds) from being processed.
What Are Some Signs of Tax Fraud?

· The IRS rejects your e-filed return because your Social Security number was already used to file a tax return

· The IRS sends you a tax transcript, or you receive a notice that an online account has been created, accessed, or disabled when you didn't take any action

· The IRS sends you a notice saying you owe taxes, your refund is offset, or they're taking collection actions against you because of a tax return from a year when you didn't file

· Your state unemployment agency sends you a Form 1099-G, but you didn't collect unemployment

· You receive tax forms, such as a W-2 or 1099, from a company you didn't work with during the year





Be Safe and Cautious...

03/19/2021

Remember the IRS was set up to collect taxes and issue refunds.. not mass produce millions of stimulus payments ~ so again, be patient ~

The IRS, which is set up to be a collection agency and not a payment agency, is simply overwhelmed.

03/17/2021

IRS extends tax deadline 👍

With the delayed start for filing returns... the recent changes for 2020 that came about last week and third stimulus rollout (while we still work on tax implications of the first two) ~

Some breathing room ~ a little more time to get it right 😉

03/12/2021

Some Americans should start seeing the long awaited 3rd wave of stimulus payments as early as next week...

The first people to receive the checks are likely those who have direct deposit set up with the IRS. That’s because the government already has your account information on file and doesn’t need to go through the process of printing, sorting and mailing physical checks or pre-paid debit cards.

If you don’t have direct deposit you will have to wait for the payments to be produced and sent, a process that can be time consuming.

Other issues have cropped up in the past, too. The last round of checks saw taxpayers complaining that payments had been deposited into the wrong bank accounts, which resulted in a delay in receiving the funds. Some never received one or both.

To be eligible for the full $1,400, individuals must have an adjusted gross income (AGI) below $75,000. Married couples filing jointly must have an AGI under $150,000 to receive the full $2,800.

The payments are based on either 2019 or 2020 income, depending on when a taxpayer files their 2020 tax return.

If you missed on either of the first 2, there is a form you can file with your 2020 return to have the amount credited as part of your 2020 taxes. Search for or ask your tax professional about the Recovery Rebate credit.

03/12/2021

Along with $1,400 stimulus checks and enhanced unemployment benefits, the package includes updates to the child tax credit.

In the tax year 2021 (which will be filed in 2022), under the new provisions, families are set to receive a $3,000 annual benefit per child ages 6 to 17 and $3,600 per child under 6. The credit will also be fully refundable which means even if you break even you'll still receive the benefit...

The child tax credit will be available to parents with children under the age of 18. This will be the first time those with children aged 17 will receive the tax credit. Families with children under 6 will receive a $3,600 credit per child, while those with school-aged children will receive $3,000 per child.

Basic facts...

It’s fully refundable. So right now, if taxpayers’ credit exceeds their taxes owed, they only can get up to $1,400 as a refund. Under the new rules, they could receive the full $3,000 or $3,600 per child, depending on the child’s age.

You don’t have to be employed to get it. The new provision allows households with no income to claim the credit. This is a major change, as previous rules limited the credit to those earning at least $2,500. In the past, families with very low incomes did not receive the full credit. But you will have to file to get it.

You could get an advance payment as soon as this summer. The IRS could start providing advances on the 2021 credit through periodic payments of $250 for school-aged children starting as early as July 2021, depending on what the Treasury Department determines is workable. Under the proposed schedule, which could be as frequent as monthly, families could receive half of their total 2021 child tax credit this year and claim the remaining amount on their 2021 tax returns.

It’s only a temporary increase. The legislation signed by Biden only guarantees the increase for the 2021 tax year.

03/12/2021

Part of the new provision signed today will extend benefits for some and actually waive federal taxes on the first $10,200 of unemployment benefits you received in 2020. Married couples who file jointly and both collected unemployment insurance benefits in 2020 will have taxes waived on $10,200 per person, or up to $20,400 of UI benefits total. The waiver applies to individuals and married couples who made less than $75,000/$150,000 in adjusted gross income in 2020.

States must decide if they will also offer the break on state income taxes. So you will need to check with your state about if they will or won't waive UI taxes ~

So far no word on HOW this will be processed ~ if you've already filed you may need to file an amended return, if you haven't filed and can wait a bit before you do that might be best. But that said the relief package also offers $1,400 stimulus checks to individuals who earned less than $75,000 a year and phases out at $80,000. If your 2020 income was lower than your 2019 earnings, you might be inclined to file your taxes sooner rather than later in order to get the latest stimulus check more quickly.

If you’ve already filed your return but it hasn’t been processed by the IRS, it could be delayed while they amend the return and make the adjustment. If you were expecting a refund, that could be delayed as well. However, after factoring in the $10,200 tax waiver, your refund may end up being larger than you originally expected as a result.

The rescue package also continues federally enhanced unemployment at $300 per week until Labor Day ~ The relief package adds $300 per week in federal payments on top of the amount you receive from the state. Workers who lost a W-2 job and earned at least $5,000 in self-employment income in their most recent tax year will be eligible for an extra $100 per week as part of the Mixed Earner Unemployment Compensation provision.

The Pandemic Unemployment Assistance (for gig workers and those not traditionally eligible), and the Pandemic Emergency Unemployment Compensation (for the long-term unemployed) and MEUC will both continue until Sept. 6 as noted above.

The maximum number of weeks you can draw from PUA will be 79 weeks, or up to 86 weeks in states with high levels of unemployment. The maximum amount of time you can collect PEUC increases to 53 total weeks.

02/11/2021

If one of your 2021 goals is a new home..

Here's some tips

01/21/2021

It's January and time to be on the lookout for all those tax documents ~ keep in mind companies have until January 31st to get them out so make sure you have everything before you head off to the accountant...

But I'm sure right now most of you are more interested in that second stimulus check, especially if you haven't received it... so if that payment never arrived here's some information that might help...There can be many reasons you have not received the payment ~ from a delay in last years tax processing, a changed bank account/routing number, a change of address ~ remember coa forwarding is only good for a limited time... keep in mind the irs has been severely short handed and with the delay in processing returns last year due to shutdowns, catching up on quarterlies and dealing with the additional stimulus payments ~ they have been more backed up than normal...

Your best option at this point is to file for the money as a Recovery Rebate Credit with your 2020 taxes. Even if you typically do not file, if you haven't received your stimulus this is the year to file... You will have to file add form 1040-SR to your standard 1040 to claim the missing payment... just make sure you file before the April 15th deadline. Payments will be issued in the same manner the IRS sent out tax refunds. If you don't normally file taxes it will be sent either electronically or by mail depending on your selections on the return.

Calling the IRS will NOT help. ~ The agents do not have any more information beyond what's available at IRS.gov in the Where's My Payment section. If you prefer you can go online and request a Payment Trace from the IRS.

09/16/2020

Ok so there's a meme going around... James Woods talking about Biden, Social Security and taxes... now here I am NOT backing any party, for me thats still a private issue... just stating the actual facts about the CURRENT tax... cause both sides need to keep their noses clean... what anyone has plans to do sometime in the future... I dunno, I'm not psychic...

Let's be clear...Social Security benefits are taxable ONLY if your overall income exceeds $25,000 for an individual or $32,000 for a married couple filing jointly. If the income you report is above that threshold, you could pay taxes ON UP TO 85 percent of your benefits. So though the vote is correct the verbiage represented in the meme is misleading... and confusing.

PLEASE - RESEARCH before you post ~

signed your friendly neighborhood tax lady 😉

09/14/2020

The 2020 Cares Act payroll tax deferral is not a forgiveness it will have to be paid... you can talk to your employer about their (and your) participation.

But enough issues remain that employers are not over-enthusiastic about the option, experts say.

09/14/2020

For Military and Civil Service Employees

President Donald J. Trump signed an executive order that allows employers to defer withholding Social Security taxes. 

04/21/2020

Don't forget the dates been changed but still better sooner than later!