Stephen L Barkley CPA PC

05/17/2024

People ask me if I've taken time off. LOL, I had to file over 200 extensions. I'm working like mad to get their returns filed. Looking to take time off later in the year perhaps!

04/12/2024

https://insightfulaccountant.com/tax-practice-news/critical-accountant-shortage/

Accounting profession faces staffing shortages due to fewer graduates and an aging workforce. 42% of firms turn away work, 24% near burnout. First-time CPA exam candidates dropped by 33% from 2016 to 2021.

03/20/2024

Want to know about taxation of employee fringe benefits? Give IRS publication 15-B a read!!

02/23/2024

If you are transferring money from your business to yourself personally, that is an indication you are making a profit. If you have not spoken with me about paying estimated taxes, this is a stong indicator that we need to or you will get an unwelcome surprise when tax time comes.

02/23/2024

Never just assume you can make an IRA or ROTH IRA Contribution. There are rules regarding limitations and having to "unwind" the transaction after the fact can be arduous.

10/28/2021

So the Child Tax Credit was revamped for 2021. Raised to $3,000 per child from $2,000. $3,600 for children under age 6. And, increased to include 17 year olds. The higher credit (above the original $2,000 per child, begins to phase out at AGIs of $75,000 for singles and $112,500 for Head of Household and $150,000 for Married Filing Joint. The child tax payments people are receiving monthly right now is an advance payment of this credit. Which means.....you will NOT receive it on your tax return so plan accordingly.

07/16/2021

I love how they deflect by saying there's an error on the return. The biggest issue is that their elecronic system was not properly setup to review the returns and if there was a discrepancy with the amount of stimulus shown on the return as received versus what was acutally received by the taxpayer, have it automatically correct it. Instead, it kicks out for manual review creating this enormous backlog by adding those to the already manually filed or containing other issues requiring manual review. And, they absolutely need to hire more reviewers and mail openers.

IRS explains delay for federal tax refunds

07/13/2021

From the Tax Practice Advisor: Re: Car Donations

In the not-so-distant past, we were operating under a set of taxpayer-friendly rules for car donations. All you had to do is to arrange for the charity to receive the car, drop it off and then claim a deduction based on FMV. An estimated value for each make and model is listed in Kelley Blue Book (KBB) and similar car-buying guides.
But the IRS detected that some taxpayers were being overly aggressive in claiming charitable deductions for vehicles. Frequently, they would inflate the FMV without substantiating the vehicle’s condition or worth. So Congress decided to buckle up.
Under current law, if you use a buying guide such as the KBB to establish the vehicle’s FMV, the deduction may be reduced if the charity then sells the vehicle. Not surprisingly, this is a frequent occurrence. For example, if you have stated that the FMV of a car is $5,000 when you donate it and the charity subsequently sells it for $3,000, your deduction is limited to $3,000. Furthermore, if your donated vehicle sells for less than $500, the deduction is equal to its FMV, up to $500 (i.e., there’s a $500 limit).
The charity must provide you with a written substantiation of the deduction value within 30 days of your contribution or, if it sells the vehicle, within 30 days of the sale. Save this documentation as proof in case the IRS ever challenges the deduction amount. If you haven’t heard from the charity within 30 days of a vehicle donation, contact the organization immediately to obtain the written statement.
Generally, deductions for vehicles are lower than they were back in the halcyon days. One consolation: If the charity “materially improves” the vehicle for its own use – for instance, it repairs a bent fender or installs a new feature like a rearview camera – you can still deduct the vehicle’s FMV. Depending on your situation, you might search for a charitable organization that is willing to fix up the vehicle for its own use.

03/10/2021

A possible reduction in health insurance premiums?

What healthcare provisions are in the bill?
Along with virus-related provisions like vaccine and testing funds, the bill contains the largest overhaul to the Affordable Care Act in years. The bill expands eligibility for subsidies to purchase insurance to people of all incomes and caps the maximum premium at 8.5% of a person’s income. It also takes steps to lower, or even zero out, premiums for people making less than 150% of the federal poverty line.

03/10/2021

Another provision targets federal workers and smaller restaurant:

Are there other provisions targeted at certain industries or workers?

Yes. One provision would allow federal workers, including postal workers, to take as many as 600 hours of emergency paid leave related to Covid-19. Also, the restaurant industry will receive $25 billion in relief targeted at small and midsize restaurants and chains. The money would be doled out in grants that don’t need to be repaid if the restaurants use them for operating expenses, including payroll, rent and providing personal protective equipment to employees.

03/10/2021

Contained in the $1.9 Trillion rescue legislation:
The package makes a significant change to the social safety net through the tax code that could have an impact on child poverty rates and potentially form a pillar of Mr. Biden’s economic legacy. The plan would raise the $2,000 Child Tax Credit to $3,000, set the credit at $3,600 for parents of children under age 6 and make parents of 17-year-olds eligible. It would also make the credit fully refundable, so low-income households would get the full benefit, no matter how little they earn. For a household with a 4-year-old and 7-year-old that doesn’t earn enough to pay income taxes, the plan would boost their maximum child tax credit to $6,600 from $2,800.

The proposal would also authorize periodic payments, so that the credit becomes a near-universal child allowance like those in some other countries instead of part of a lump-sum tax refund.

While the package would make the child tax-credit changes only for one year, it is broadly expected that Democrats will seek to make them permanent in the future.

03/10/2021

If you received unemployment benefits last year, this new tax bill may have a provision for you exempting the first $10,200 of benefits from taxation. If you have already filed, you will need to amend. If you haven't filed, hod off and we will see how to report it. Still determining if oregon will exempt it as well.