Reaves & Co CPA PS

01/07/2025

IRS reminder: Final 2024 quarterly estimated tax payment due Jan. 15

WASHINGTON – The Internal Revenue Service today encouraged taxpayers who paid too little tax in 2024 to make a fourth quarter estimated tax payment on or before Jan. 15, 2025.

Income taxes are pay-as-you-go, meaning taxpayers must pay most of their tax throughout the year in which their income is earned or received. Usually this is done by withholding tax from paychecks or by making quarterly estimated tax payments to the IRS (or by a combination of both).

However, taxpayers who pay quarterly sometimes overlook this step, and missing a quarterly payment can result in unexpected penalties and fees when they file their returns in 2025.

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01/06/2025

Happy 2025! Tax organizers will be available the middle of the month! Please let me know if you don’t receive it by the end of January.
If you have a new email address please let me know. Otherwise you won’t get your tax organizer.
Here we go again 🤪

12/15/2023

IRS reminds taxpayers, Jan. 16 due date for final 2023 quarterly estimated tax payments

WASHINGTON –The Internal Revenue Service today reminded taxpayers who didn’t pay enough tax in 2023 to make a fourth quarter tax payment on or before Jan. 16 to avoid a possible penalty or tax bill when filing in 2024.
Taxes are normally paid throughout the year by withholding tax from paychecks, by making quarterly estimated tax payments to the IRS or by a combination of both. This is done because taxpayers need to pay most of their tax during the year as income is earned or received.
Who needs to make a payment?
Taxpayers who earn income not subject to tax withholding such as self-employed people or independent contractors should pay their taxes quarterly to the IRS.
In addition, people who owed tax when they filed their current year tax return often find themselves in the same situation again when they file the next year. Taxpayers in this situation normally include:
• Those who itemized in the past but are now taking the standard deduction,
• Two wage-earner households,
• Employees with non-wage sources of income such as dividends,
• Those with complex tax situations and/or
• Those who failed to increase their tax withholding.
What income is taxable?
The IRS reminds taxpayers that most income is taxable, whether it’s unemployment income, refund interest or income from the gig economy and digital assets. When estimating quarterly tax payments, taxpayers should include all forms of earned income, including from part-time work, side jobs or the sale of goods.
Also, various financial transactions, especially late in the year, can often have an unexpected tax impact. Examples include year-end and holiday bonuses, lottery winnings, stock dividends, capital gain distributions from mutual funds, stocks, bonds, virtual currency, real estate or other property sold at a profit.
Delay in requirement for Forms 1099-K
After feedback from taxpayers, tax professionals and payment processors the IRS announced that calendar year 2023 will be treated as another transition year for the reduced reporting threshold of $600. For calendar year 2023, third-party settlement organizations that issue Forms 1099-K are only required to report transactions where gross payments exceed $20,000 and there are more than 200 transactions. The IRS also issued a fact sheet to help people who may receive Forms 1099-K.
How to make an estimated tax payment
The fastest and easiest way to make an estimated tax payment is to do so electronically. Taxpayers have options when paying electronically from their bank account.
• Pay using IRS Direct Pay. This option allows taxpayers to schedule a payment in advance of the Jan. 16 deadline.
• Pay using IRS Online Account. This option allows taxpayers to view their payment history, pending or recent payments and other tax information.
• Pay using Electronic Filing Tax Payment System, or EFTPS. EFTPS is a free system which offers selections such as scheduling payments a year in advance, paying estimated tax payments and tracking and changing scheduled payments.
• Taxpayers also have the option to pay with their debit or credit card. The card processors, not the IRS, charge a fee for the service.
Using these or other electronic payment options ensures that a payment gets credited promptly. More information on other payment options is available at IRS.gov/payments.
Use the Tax Withholding Estimator to keep track
The Tax Withholding Estimator, available on IRS.gov, can often help taxpayers determine if they need to make an estimated tax payment. It also helps them calculate the correct amount of tax to withhold throughout the year based on their complete set of tax facts and circumstances.
Alternatively, taxpayers can use the worksheet included with Form 1040-ES, Estimated Tax for Individuals, or read through Publication 505, Tax Withholding and Estimated Tax, available on IRS.gov.
Plan ahead
It’s never too early to get ready for the tax-filing season. For more tips and resources, check out the Get Ready and Estimated Tax pages on IRS.gov.

04/11/2023

Myth: If a taxpayer requests an extension, they don’t need to do anything until Oct. 16.
Fact: It’s important to remember that an extension to file is not an extension to pay any tax due. Tax balances are still due on April 18. Taxpayers who request a six-month extension to file their taxes have until Oct. 16, 2023, to file their 2022 federal income tax return. If a taxpayer requests an extension, the IRS encourages them to file their income tax return when they’re ready instead of waiting until the Oct. 16 extension deadline.
Any taxpayer, regardless of income, can request an extension to file using IRS Free File at IRS.gov.

03/11/2023

IRS reminder to many retirees: April 1 is last day to start taking money out of IRAs and 401(k)s
WASHINGTON — The Internal Revenue Service today reminded retirees who turned 72 during 2022 that, in most cases, Sunday, April 1, 2023, is the last day to begin receiving payments from Individual Retirement Arrangements (IRAs), 401(k)s and similar workplace retirement plans.
The payments, called required minimum distributions (RMDs), are normally made by the end of the year. But anyone who reached age 72 during 2022 is covered by a special rule that allows IRA account owners and participants in workplace retirement plans to wait until as late as April 1, 2023, to take their first RMD. In other words, in general, the special April 1 rule applies to IRA owners and other participants in these plans who were born after Dec. 31,1949.
Two payments in the same year
The April 1 RMD deadline only applies to the required distribution for the first year. For all later years, the RMD must be made by Dec. 31.
This means that taxpayers who receive their first required distribution (for 2022) in 2023, on or before April 1, must receive their second RMD (for 2023) by Dec. 31, 2023. Even though the first distribution is actually the required 2022 distribution, it’s taxable in 2023 and reported on the 2023 tax return - along with the regular 2023 distribution.
Types of retirement plans requiring RMDs
These required distribution rules apply to owners of traditional, SEP and SIMPLE IRAs while the original owner is alive. They also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans. RMDs don’t apply to Roth IRAs.

03/06/2023

01/17/2023

I did just send an email, maybe two, asking for my clients to set up their web portal, and I down loaded tax organizers there!
New thing, scary, but will be good once we are over the bumps!

01/04/2023

Final 2022 quarterly estimated tax payment due Jan. 17
WASHINGTON – Many taxpayers make quarterly estimated tax payments during the year to stay current on their taxes, but many who should overlook this step. The Internal Revenue Service today urged those who paid too little tax in 2022 to make a fourth quarter payment on or before Jan. 17 to avoid an unexpected potential tax bill or penalty when they file in 2023.
Taxes are normally paid throughout the year by withholding tax from paychecks or by making quarterly estimated tax payments to the IRS or by a combination of both. Individuals do this because income taxes are pay-as-you-go, meaning taxpayers need to pay most of their tax during the year as income is earned or received.
How to make an estimated tax payment
The fastest and easiest way to make an estimated tax payment is to do so electronically using IRS Direct Pay. Taxpayers can schedule a payment in advance of the January deadline.
Taxpayers can now also make a payment through their IRS Online Account, https://www.irs.gov/payments/your-online-account. There they can see their payment history, any pending or recent payments and other useful tax information. The Electronic Filing Tax Payment System, or EFTPS, is an excellent choice as well.
The IRS does not charge a fee for these services. Plus, using these or other electronic payment options ensures that a payment gets credited promptly. More information on other payment options is available at IRS.gov/payments.

09/14/2022

The Downtown Camas Association has a new flyer, please check it out! A great way to support the DCA!

08/29/2022

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06/09/2022

Missed the April tax deadline? File and pay by June 14 to avoid a larger penalty and interest
WASHINGTON — The Internal Revenue Service today advised taxpayers who missed the April tax deadline that they can usually avoid a larger penalty by filing their 2021 federal income tax return and paying any tax due by Tuesday, June 14.
To avoid the larger penalty, the IRS must receive the return by June 14. This means that a return mailed on that date will not qualify. For that reason, the IRS urges everyone to file electronically by June 14.
In addition, taxpayers can also limit late-payment penalties and interest charges by paying their tax electronically. The fastest and easiest way to do that is with IRS Direct Pay, a free service available only on IRS.gov. Several other electronic payment options are also available. Visit IRS.gov/Payments for details.
How the penalty works
Those who miss the June 14 cutoff will normally face a minimum late-filing penalty, also known as a failure-to-file penalty. By law, If the return is more than 60 days late, the minimum penalty is either $435 or 100 percent of the unpaid tax, whichever is less. This means that the penalty will equal the tax due if the taxpayer owes $435 or less. If they owe more than $435, then the minimum penalty will be at least $435.
Under the normal calculation, this penalty is 5% of the unpaid tax for each month or part of a month that the return is late, up to a maximum of 25%. Visit IRS.gov/Penalties for details.
The late-filing penalty will stop accruing once the taxpayer files. In addition, the separate late-payment penalty and interest will stop accruing as soon as the tax is paid. The taxpayer need not figure any of these charges. Instead, the IRS will bill them for any amount due.

Understand the different types of penalties, how to avoid getting a penalty, and what you need to do if you get one.