Professional Tax

01/23/2025

TAXFLASH - Did you know... A Sole Proprietorship is required to issue 1099-NEC to individuals and partnerships that they paid more than $600 during the year. Contact Professional Tax - we can do those for you. Reach out to [email protected]

01/21/2025

TAXFLASH - IRS provides updated frequently asked questions for the energy efficient home improvement and residential clean energy property credits.

For more information contact our office, or visit irs.gov and search for fact sheet 2025-01

01/21/2025

TAXFLASH - Did you know if you start a new job that your employer automatically has to enroll you in their 401K/403B plan ? please contact us with any questions.

01/21/2025

TAXFLASH - IRS releases new mileage rates for tax deductions:

The standard mileage rate for vehicles driven for business will increase by 3 cents in 2025. The mileage rates for vehicles used for other purposes will remain unchanged from 2024.
The updated standard mileage rates for the use of a car, van, pickup or panel truck are:
• 70 cents per mile driven for business use.
• 21 cents per mile driven for medical purposes.
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces.
• 14 cents per mile driven in service of charitable organizations.
The rates apply to fully electric and hybrid automobiles, as well as gas and diesel powered vehicles.

01/21/2025

IT'S TIME TO FILE YOUR 2024 TAXES

We are now accepting documents to process your 2024 tax returns. To make your experience as efficient as possible, please read the 2024 TAX YEAR PROCESSING PROCEDURES - FOR PERSONAL RETURNS listed below.

NOTE: The first date the IRS will accept tax returns is January 27, 2025.

IMPORTANT DEADLINES:

March 15 (LLC, Partnership & S Corps) - submit extension requests by March 8th
April 15 (Personal & C Corps) - submit extension requests by April 8th

REFERRAL INFORMATION

We look forward to working with our existing clients and are pleased that we can accept a limited number of new referrals for clients who want the benefits of experienced and affordable tax advisory services.

If you have a referral, please provide them with our email [email protected] or the office number (916) 780.1782.

10/22/2024

TAXFLASH: IRS raises tax-bracket thresholds

The IRS said Tuesday it is adjusting for inflation by raising the federal income threshold for each tax bracket, in addition to raising standard deductions. The changes, which will apply to 2025 earnings, mean that people whose income is unchanged from 2024 “would likely owe slightly less in taxes,” The Wall Street Journal explains. Thresholds also rose for long-term capital gains brackets, and estate and gift tax exemptions. However, the cap on state and local tax deductions and the maximum child tax credit are not indexed for inflation and will not change.

06/05/2024

TAXFLASH: Irs has a new document upload tool so you do not have to mail documents to the IRS when dealing with a basic letter asking for additional information.

You can securely upload information to us with the IRS documentation upload tool. Get access through an IRS notice, phone conversation or in-person visit.

03/25/2024

TAXFLASH :Time running out to claim $1 billion in refunds for tax year 2020, taxpayers face May 17 deadline

The Internal Revenue Service announced today that almost 940,000 people across the nation have unclaimed refunds for tax year 2020 but face a May 17 deadline to submit their tax returns.
The IRS estimates more than $1 billion in refunds remain unclaimed because people haven’t filed their 2020 tax returns yet. The average median refund is $932 for 2020, and the state-by-state table below shows how many people are potentially eligible for these refunds in each state along with the median average refund by state.
“There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns,” said IRS Commissioner Danny Werfel. “We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds. There’s a May 17 deadline to file these returns so taxpayers should start soon to make sure they don’t miss out.”
Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury.
But for 2020 tax returns, people have a little more time than usual to file to claim their refunds. Typically, the normal filing deadline to claim old refunds falls around the April tax deadline, which is April 15 this year for 2023 tax returns. But the three-year window for 2020 unfiled returns was postponed to May 17, 2024, due to the COVID-19 pandemic emergency. The IRS issued Notice 2023-21 on Feb. 27, 2023, providing legal guidance on claims required by the postponed deadline.
The IRS estimates the midpoint for the individual refund amounts for 2020 to be $932 — that is, half of the refunds are more than $932 and half are less. This estimate does not include the Recovery Rebate Credit or other credits that may be applicable; the IRS has previously reminded those who may be entitled to the COVID-era Recovery Rebate Credit in 2020 that time is running out to file a tax return and claim their money.

03/21/2024

TAXFLASH : On March 17, 2024, the IRS released an update requiring that a signed donee acknowledgment from every donee organization on Form 8283 be attached to the return. If this attachment is not present, the return may receive reject.... So be sure to get signed receipts for NON CASH DONATIONS!

02/29/2024

TAXFLASH: Get Tax Help Professional Tax

IRS launches new effort aimed at high-income non-filers; 125,000 cases focused on high earners, including millionaires, who failed to file tax returns with financial activity topping $100 billion

02/07/2024

TAXFLASH: Take care when choosing a tax return professional

The IRS reminds taxpayers to carefully choose a tax professional to prepare a tax return. It is vital that your personal and financial information is safe and secure and treated with care.

Most tax return preparers provide honest, high-quality service. But some may cause harm through fraud, identity theft and other scams.

It is important for taxpayers to understand who they’re choosing and what important questions to ask when hiring an individual or firm to prepare their tax return.

Another reason to choose a tax preparer carefully is because taxpayers are ultimately legally responsible for all the information on their income tax return, regardless of who prepares it.

The IRS has put together a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help individuals find a tax pro that meets high standards. There is also a special page on IRS.gov for Choosing a Tax Professional that can help guide taxpayers in making a good choice, including selecting someone affiliated with a recognized national tax association. There are different kinds of tax professionals, and a taxpayer’s needs will help determine which kind of preparer is best for them.

Taxpayers should always choose a tax professional with a valid Preparer Tax Identification Number. By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid PTIN. Paid preparers must sign and include their PTIN on any tax return they prepare.

Other tips
Here are a few other tips to consider when choosing a tax return preparer:
• Look for a preparer who’s available year-round. If questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.
• Review the preparer’s history. Check the Better Business Bureau website for information about the preparer. Look for disciplinary actions and the license status for credentialed preparers. For CPAs, check the State Board of Accountancy’s website, and for attorneys check with the State Bar Association. For enrolled agents go to IRS.gov and search for “verify enrolled agent status” or check the IRS Directory of Federal Tax Return Preparers.
• Ask about service fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. Be wary of tax return preparers who claim they can get larger refunds than their competitors.
• Find an authorized IRS e-file provider. They are qualified to prepare, transmit and process e-filed returns. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit.
• Provide records and receipts. Good preparers ask to see these documents. They’ll also ask questions to determine the client’s total income, deductions, tax credits and other items. Do not hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is against IRS e-file rules.
• Understand the preparer’s credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent taxpayers in limited situations if they prepared and signed the tax return.
• Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return.
• Review the tax return before signing it. Be sure to ask questions if something is not clear or appears inaccurate. Any refund should go directly to the taxpayer – not into the preparer’s bank account. Review the routing and bank account number on the completed return and make sure it’s accurate.

Call Don TaxKing Smith at Professional Tax for more information or email [email protected]

02/07/2024

Taxflash : IRS revises and updates frequently asked questions about Form 1099-K

The IRS revised frequently asked questions (FAQs) for Form 1099-K, Payment Card and Third Party Network Transactions in Fact Sheet FS-2024-03.
The revised FAQs provide more general information for taxpayers, including common situations, along with more clarity for industry and what organizations should send Forms 1099-K.

Following feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS announced on Nov. 21, 2023, Notice 2023-74 to delay the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.

As the IRS continues to work to implement the new law, the agency is treating 2023 as an additional transition year, which applies to taxes filed this year. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023, although taxpayers may still receive a form for amounts less than the required reporting amount.

The updates to the FAQs contain substantial changes within each section:
• General Information
• What to Do If You Receive a Form 1099-K
• Common Situations
• Third Party Filers of Form 1099-K
• Should My Organization Be Preparing, Filing and Furnishing
Form 1099-K?