Cherryland Accounting and Tax Service

12/23/2024

Fun news on Christmas Eve eve:
December 23, 2024 - 4:30 pm ET - The federal government's appeal of the Texas U.S. District Court ruling that had declared the Corporate Transparency Act unconstitutional and alleviated businesses fom having to file the Beneficial Ownership Information Report (BOIR) has been reversed by the U.S. 5th Circuit Court of Appeals with a stay on the injunction against enforcement of the Corporate Transparency Act.
This means all affected businesses formed before January 1, 2024 must file their BOIR by midnight on January 1, 2025. Failure to file the report carries up to a 2-year felony penalty plus heavy fines - civil penalties are up to $591 per day for each day of non-compliance.
MAKE SURE YOU ARE ONLY FILING THIS REPORT ON THE OFFICIAL GOVERNMENT WEBSITE

A final rule implementing the beneficial ownership information reporting requirements of the Corporate Transparency Act (CTA) was issued in September 2022. These regulations go into effect on January 1, 2024. Beneficial ownership information will not be accepted prior to January 1, 2024.

08/31/2023

Interesting story:
If you self-prepare your returns, you 100% should make sure there are NO tracking pixels (cookies, etc) running on your browser.
Meta (Facebook) and Google are being sued for collecting information from you while you're posting your tax return to Tax Act, TurboTax and other online services. Very personal sensitive information. All so they can figure out how much money you make, your age and the ages/existence of children so they can target you with their ads.

Nana Ama Sarfo explains ongoing U.S. litigation tied to taxpayer privacy issues and how the example of foreign tax authorities could help the United States as it plans to pilot a direct electronic filing system.

02/11/2023

We've been asked often about this IRS Notice as it's being discussed on the news.
Nutshell: Most state tax payments to taxpayers during 2022 are not taxable. MICHIGAN made no such payments. So this doesn't affect most of my clients. Below is the IRS notice for those who haven't read/heard about it.
https://www.irs.gov/newsroom/irs-issues-guidance-on-state-tax-payments-to-help-taxpayers
Additionally, here is a chart to review which state's had payments and if they are taxable:
https://www.irs.gov/newsroom/state-payments

IR-2023-23, Feb. 10, 2023 — The IRS provided details today clarifying the federal tax status involving special payments made by 21 states in 2022.

12/31/2022

I know I said I wasn't going to move for a while, but............ I was wrong! Same complex (Garfield Courts), 802-A. Former office of Katie Myers CPA.

12/23/2022

We accountants just LOVE (heavy sarcasm) when IRS and Congress make tax law change late in the year.
Just in TODAY (12/23) the IRS announced it is delaying the reduction of 1099-K threshold from $20,000 to $600.

https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-third-party-payment-platforms-forms-1099-k

11/15/2022

😆😆😆😆😆

08/26/2022

In light of a lot of misinformation regarding the increased budget to IRS, here's an article written by the head of the IRS Charles Rettig. Please read to the end.

IRS Commissioner Charles Rettig sets the record straight on the Inflation Reduction Act's funding for the agency.

08/24/2022

From the IRS today:
WASHINGTON ̶ To help struggling taxpayers affected by the COVID-19 pandemic, the Internal Revenue Service today issued Notice 2022-36, which provides penalty relief to most people and businesses who file certain 2019 or 2020 returns late.

The IRS is also taking an additional step to help those who paid these penalties already. Nearly 1.6 million taxpayers will automatically receive more than $1.2 billion in refunds or credits. Many of these payments will be completed by the end of September.

Besides providing relief to both individuals and businesses impacted by the pandemic, this step is designed to allow the IRS to focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season.

“Throughout the pandemic, the IRS has worked hard to support the nation and provide relief to people in many different ways,” said IRS Commissioner Chuck Rettig. “The penalty relief issued today is yet another way the agency is supporting people during this unprecedented time. This penalty relief will be automatic for people or businesses who qualify; there’s no need to call.”

The relief applies to the failure to file penalty. The penalty is typically assessed at a rate of 5% per month and up to 25% of the unpaid tax when a federal income tax return is filed late. This relief applies to forms in both the Form 1040 and 1120 series, as well as others listed in Notice 2022-36, posted today on IRS.gov.

To qualify for this relief, any eligible income tax return must be filed on or before Sept. 30, 2022.

Penalty relief is automatic. This means that eligible taxpayers need not apply for it. If already assessed, penalties will be abated. If already paid, the taxpayer will receive a credit or refund.

As a result, nearly 1.6 million taxpayers who already paid the penalty are receiving refunds totaling more than $1.2 billion. Most eligible taxpayers will receive their refunds by the end of September.

07/28/2022

From the IRS yesterday:
IRS Statement on Balance Due Notices (CP-14)
The Internal Revenue Service on July 27, 2022, issued the following statement on CP-14 balance due notices:

The IRS is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount.

Who is affected: Generally, these are payments made by the spouse (second taxpayer listed) on a married filed joint return submitted through their Online Account. Some other taxpayers may also be affected outside of this group.

No immediate action or phone call needed: Taxpayers who receive a notice but paid the tax they owed in full and on time, electronically or by check, should not respond to the notice at this time. The IRS is researching the matter and will provide an update as soon as possible. Taxpayers who paid only part of the tax reported due on their 2021 joint return, should pay the remaining balance or follow instructions on the notice to enter into an installment agreement or request additional collection alternatives. Taxpayers can ensure that their payment is on their account by checking Online Account under the SSN that made the payment. Note that any assessed penalties and interest will be automatically adjusted when the payment(s) are applied correctly.

Additional information for tax professionals:

In general, when certain payments are processed, programming does not move the payment to the married filing jointly account when the payment is:

not electronic and is made by the secondary spouse.
electronic, is made by the secondary spouse, and posts before the joint return indictor is present to identify the primary taxpayer.
made by the secondary spouse using the Online Account (OLA) Make a Payment functionality.

July 27, 2022 — The IRS is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount.

06/29/2022

I wanted to make sure everyone was aware of a July 1 increase to the standard mileage rate. Of course, we all know why; those pesky gas prices 😥
Here's my suggestion; please take an odometer reading when you get done on Thursday June 30 for the day, or before you roll out Friday morning, July 1. Snap a picture with your phone! Note it on your day planner or calendar; just know, I'm going to ask next year during tax prep! 😉

IR-2022-124, June 9, 2022 — The Internal Revenue Service today announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain oth...

03/02/2022

Scam alert! Remember to check the senders email address. This did NOT come from the SBA, but it sure looks like it did.

01/08/2022

Watch your mail!! You will need these letters to file your taxes correctly. Incorrectly claiming you did or did not receive the advance CTC or 3rd stimulus payment will delay processing your tax return by months. There are still people who have not received their 2020 refund because their return hasn't been processed.

sending letters to recipients of advance payments and third . Using the information in these letters when preparing your tax return can reduce errors, avoid refund delays. https://go.usa.gov/xt3mm